10-Q

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 June 30, 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

		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
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. 2.050% Global Notes due May 19, 2032	T 32A	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. 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 [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 July 31, 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				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Operating Revenues
Service	$	37,051	$	41,023	$	75,934	$	81,707
Equipment		3,899		3,934		7,795		8,077
Total operating revenues		40,950		44,957		83,729		89,784
Operating Expenses
Cost of revenues
Equipment		3,978		4,061		8,070		8,563
Broadcast, programming and operations		5,889		7,730		12,643		15,382
Other cost of revenues (exclusive of depreciation and
amortization shown separately below)		8,116		8,721		16,458		17,306
Selling, general and administrative		9,831		9,844		18,591		19,493
Asset impairments and abandonments		2,319		-		2,442		-
Depreciation and amortization		7,285		7,101		14,507		14,307
Total operating expenses		37,418		37,457		72,711		75,051
Operating Income		3,532		7,500		11,018		14,733
Other Income (Expense)
Interest expense		(2,041)		(2,149)		(4,059)		(4,290)
Equity in net income (loss) of affiliates		(10)		40		(16)		33
Other income (expense) – net		1,017		(318)		1,820		(32)
Total other income (expense)		(1,034)		(2,427)		(2,255)		(4,289)
Income Before Income Taxes		2,498		5,073		8,763		10,444
Income tax expense		935		1,099		2,237		2,122
Net Income		1,563		3,974		6,526		8,322
Less: Net Income Attributable to Noncontrolling Interest		(282)		(261)		(635)		(513)
Net Income Attributable to AT&T	$	1,281	$	3,713	$	5,891	$	7,809
Less: Preferred Stock Dividends		(52)		-		(84)		-
Net Income Attributable to Common Stock	$	1,229	$	3,713	$	5,807	$	7,809
Basic Earnings Per Share Attributable to
Common Stock	$	0.17	$	0.51	$	0.81	$	1.06
Diluted Earnings Per Share Attributable to
Common Stock	$	0.17	$	0.51	$	0.81	$	1.06
Weighted Average Number of Common Shares
Outstanding – Basic (in millions)		7,145		7,323		7,166		7,318
Weighted Average Number of Common Shares
Outstanding – with Dilution (in millions)		7,170		7,353		7,192		7,347
See Notes to Consolidated Financial Statements.

3

AT&T INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Dollars in millions
(Unaudited)
	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Net income	$	1,563	$	3,974	$	6,526	$	8,322
Other comprehensive income (loss), net of tax:
Foreign currency:
Translation adjustment (includes $(8), $2, $(59) and $2
attributable to noncontrolling interest), net of taxes of
$(135), $(1), $(197) and $48		305		(127)		(1,549)		161
Securities:
Net unrealized gains (losses), net of taxes of $5, $10, $27
and $15		14		26		80		42
Derivative instruments:
Net unrealized gains (losses), net of taxes of $168, $(165),
$(803) and $(131)		631		(617)		(3,026)		(490)
Reclassification adjustment included in net income,
net of taxes of $4, $3, $4 and $5		17		6		17		17
Defined benefit postretirement plans:
Amortization of net prior service credit included in net
income, net of taxes of $(150), $(107), $(301)
and $(220)		(461)		(342)		(922)		(688)
Other comprehensive income (loss)		506		(1,054)		(5,400)		(958)
Total comprehensive income		2,069		2,920		1,126		7,364
Less: Total comprehensive income attributable to
noncontrolling interest		(274)		(263)		(576)		(515)
Total Comprehensive Income Attributable to AT&T	$	1,795	$	2,657	$	550	$	6,849
See Notes to Consolidated Financial Statements.

4

AT&T INC.
CONSOLIDATED BALANCE SHEETS
Dollars in millions except per share amounts
	June 30,		December 31,
	2020		2019
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	16,941	$	12,130
Accounts receivable - net of related allowances for credit loss of $1,606 and $1,235		19,127		22,636
Prepaid expenses		1,439		1,631
Other current assets		19,048		18,364
Total current assets		56,555		54,761
Noncurrent Inventories and Theatrical Film and Television Production Costs		14,514		12,434
Property, plant and equipment		332,883		333,538
Less: accumulated depreciation and amortization		(203,938)		(203,410)
Property, Plant and Equipment – Net		128,945		130,128
Goodwill		143,651		146,241
Licenses – Net		98,763		97,907
Trademarks and Trade Names – Net		23,757		23,567
Distribution Networks – Net		14,704		15,345
Other Intangible Assets – Net		18,452		20,798
Investments in and Advances to Equity Affiliates		2,302		3,695
Operating Lease Right-Of-Use Assets		24,692		24,039
Other Assets		21,563		22,754
Total Assets	$	547,898	$	551,669
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	15,576	$	11,838
Accounts payable and accrued liabilities		41,881		45,956
Advanced billings and customer deposits		5,723		6,124
Accrued taxes		2,548		1,212
Dividends payable		3,741		3,781
Total current liabilities		69,469		68,911
Long-Term Debt		153,388		151,309
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		58,387		59,502
Postemployment benefit obligation		18,167		18,788
Operating lease liabilities		22,230		21,804
Other noncurrent liabilities		32,804		29,421
Total deferred credits and other noncurrent liabilities		131,588		129,515
Stockholders’ Equity
Preferred stock ($1 par value, 10,000,000 authorized ):
Series A (48,000 issued and outstanding at June 30, 2020 and December 31, 2019)		-		-
Series B (20,000 issued and outstanding at June 30, 2020
and 0 issued and outstanding at December 31, 2019)		-		-
Series C (70,000 issued and outstanding at June 30, 2020
and 0 issued and outstanding at December 31, 2019)		-		-
Common stock ($1 par value, 14,000,000,000 authorized at June 30, 2020 and
December 31, 2019: issued 7,620,748,598 at June 30, 2020 and December 31, 2019)		7,621		7,621
Additional paid-in capital		130,046		126,279
Retained earnings		56,045		57,936
Treasury stock (495,425,902 at June 30, 2020 and 366,193,458 December 31, 2019,
at cost)		(17,945)		(13,085)
Accumulated other comprehensive income		129		5,470
Noncontrolling interest		17,557		17,713
Total stockholders’ equity		193,453		201,934
Total Liabilities and Stockholders’ Equity	$	547,898	$	551,669
See Notes to Consolidated Financial Statements.

5

AT&T INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions
(Unaudited)
	Six months ended
	June 30,
	2020		2019
Operating Activities
Net income	$	6,526	$	8,322
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,507		14,307
Amortization of television and film costs		3,985		5,199
Undistributed earnings from investments in equity affiliates		64		76
Provision for uncollectible accounts		1,199		1,216
Deferred income tax expense		653		1,080
Net (gain) loss on investments, net of impairments		(705)		(905)
Pension and postretirement benefit expense (credit)		(1,495)		(808)
Actuarial (gain) loss on pension and postretirement benefits		-		2,131
Asset impairments and abandonments		2,442		-
Changes in operating assets and liabilities:
Receivables		2,522		3,584
Other current assets, inventories and theatrical film and television production costs		(5,592)		(5,422)
Accounts payable and other accrued liabilities		(3,847)		(3,056)
Equipment installment receivables and related sales		226		1,144
Deferred customer contract acquisition and fulfillment costs		322		(614)
Postretirement claims and contributions		(228)		(424)
Other - net		346		(494)
Total adjustments		14,399		17,014
Net Cash Provided by Operating Activities		20,925		25,336
Investing Activities
Capital expenditures:
Purchase of property and equipment		(9,372)		(10,542)
Interest during construction		(60)		(112)
Acquisitions, net of cash acquired		(1,174)		(320)
Dispositions		347		3,593
(Purchases), sales and settlements of securities and investments, net		47		396
Advances to and investments in equity affiliates, net		(66)		(314)
Net Cash Used in Investing Activities		(10,278)		(7,299)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less		498		119
Issuance of other short-term borrowings		8,440		3,067
Repayment of other short-term borrowings		(5,975)		(3,148)
Issuance of long-term debt		21,060		10,030
Repayment of long-term debt		(17,284)		(16,124)
Payment of vendor financing		(1,354)		(1,836)
Issuance of preferred stock		3,869		-
Purchase of treasury stock		(5,480)		(240)
Issuance of treasury stock		84		455
Dividends paid		(7,474)		(7,436)
Other		(2,295)		330
Net Cash Used in Financing Activities		(5,911)		(14,783)
Net increase in cash and cash equivalents and restricted cash		4,736		3,254
Cash and cash equivalents and restricted cash beginning of year		12,295		5,400
Cash and Cash Equivalents and Restricted Cash End of Period	$	17,031	$	8,654
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						Six months ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
	Shares	Amount		Shares	Amount		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 period	7,621	$	7,621	7,621	$	7,621	7,621	$	7,621	7,621	$	7,621
Issuance of stock	-		-	-		-	-		-	-		-
Balance at end of period	7,621	$	7,621	7,621	$	7,621	7,621	$	7,621	7,621	$	7,621
Additional Paid-In Capital
Balance at beginning of period		$	129,966		$	125,174		$	126,279		$	125,525
Repurchase and acquisition of common stock			-			-			67			-
Issuance of preferred stock			-			-			3,869			-
Issuance of treasury stock			(7)			(50)			(54)			(127)
Share-based payments			87			(15)			(115)			(289)
Balance at end of period		$	130,046		$	125,109		$	130,046		$	125,109
Retained Earnings
Balance at beginning of period		$	58,534		$	59,424		$	57,936		$	58,753
Net income attributable to AT&T			1,281			3,713			5,891			7,809
Preferred stock dividends			(36)			-			(68)			-
Common stock dividends ( $0.52, $0.51,
$1.04, and $1.02 per share)			(3,734)			(3,748)			(7,421)			(7,489)
Cumulative effect of accounting change
and other adjustments			-			-			(293)			316
Balance at end of period		$	56,045		$	59,389		$	56,045		$	59,389
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						Six months ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Treasury Stock
Balance at beginning of period	(496)	$	(17,957)	(324)	$	(11,452)	(366)	$	(13,085)	(339)	$	(12,059)
Repurchase and acquisition of common stock	-		(34)	(2)		(72)	(148)		(5,581)	(9)		(280)
Issuance of treasury stock	1		46	10		373	19		721	32		1,188
Balance at end of period	(495)	$	(17,945)	(316)	$	(11,151)	(495)	$	(17,945)	(316)	$	(11,151)
Accumulated Other Comprehensive
Income Attributable to AT&T, net of tax
Balance at beginning of period		$	(385)		$	4,345		$	5,470		$	4,249
Other comprehensive income
attributable to AT&T			514			(1,056)			(5,341)			(960)
Balance at end of period		$	129		$	3,289		$	129		$	3,289
Noncontrolling Interest
Balance at beginning of period		$	17,670		$	9,839		$	17,713		$	9,795
Net income attributable to
noncontrolling interest			282			261			635			513
Interest acquired by noncontrolling owners			-			1			1			10
Distributions			(387)			(279)			(726)			(525)
Translation adjustments attributable to
noncontrolling interest, net of taxes			(8)			2			(59)			2
Cumulative effect of accounting change
and other adjustments			-			-			(7)			29
Balance at end of period		$	17,557		$	9,824		$	17,557		$	9,824
Total Stockholders’ Equity at beginning
of period		$	195,449		$	194,951		$	201,934		$	193,884
Total Stockholders’ Equity at end
of period		$	193,453		$	194,081		$	193,453		$	194,081
See Notes to Consolidated Financial Statements.

8

AT&T INC.

JUNE 30, 2020

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, media 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, 2019. 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 for periods ended within up to one quarter of our period end. We also record our proportionate share of our equity method investees’ other comprehensive income (OCI) items.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions, including potential impacts arising from the COVID-19 pandemic, that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain prior period amounts have been conformed to the current period’s presentation, including the combination of our prior Xandr segment with the WarnerMedia segment.

In the tables throughout this document, percentage increases and decreases that are not considered meaningful are denoted with a dash.

Adopted and Pending Accounting Standards and Other Changes

Credit Losses As of January 1, 2020, we adopted, through modified retrospective application, the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13, as amended), which replaces the incurred loss impairment methodology under prior GAAP with an expected credit loss model. ASU 2016-13 affects trade receivables, loans, contract assets, certain beneficial interests, off-balance-sheet credit exposures not accounted for as insurance and other financial assets that are not subject to fair value through net income, as defined by the standard. Under the expected credit loss model, we are required to consider future economic trends to estimate expected credit losses over the lifetime of the asset. Upon adoption, we recorded a $293 reduction to “Retained earnings,” $395 increase to “allowances for doubtful accounts” applicable to our trade and loan receivables, $10 reduction of contract assets, $105 reduction of net deferred income tax liability and $7 reduction of “Noncontrolling interest” as an opening adjustment. Our adoption of ASU 2016-13 did not have a material impact on our financial statements.

Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (ASU 2020-04), which provides optional expedients, and allows for certain exceptions to existing GAAP, for contract modifications triggered by the expected market transition of certain benchmark interest rates to alternative reference rates. ASU 2020-04 applies to contracts, hedging relationships and other arrangements that reference the London Interbank Offering Rate (LIBOR) or any other rates ending after December 31, 2022. We are evaluating the impact of our adoption of ASU 2020-04, including optional expedients, to our financial statements.

Intangible Assets Driven by significant and adverse economic and political environments in Latin America, including the impact of the COVID-19 pandemic, we have experienced accelerated subscriber losses and revenue decline in the region, as well as closure of our operations in Venezuela. When combining these business trends and higher weighted-average cost of capital resulting from the increase in country-risk premiums in the region, we concluded that it is more likely than not that the

9

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

fair value of the Vrio reporting unit, estimated using discounted cash flow and market multiple approaches, is less than its carrying amount. We recorded a $2,212 goodwill impairment in the reporting unit, with $105 attributable to noncontrolling interest. The impairment is not deductible for tax purposes and resulted in an increase in our effective tax rate.

During the first quarter of 2020, we reassessed and changed the estimated economic lives of certain trade names in our Latin America business from indefinite to finite-lived and began amortizing them using the straight-line method over their average remaining economic life of 15 years. This change had an insignificant impact on our financial statements.

Also during the first quarter of 2020, in conjunction with the nationwide launch of AT&T TV and our customers’ continued shift from linear to streaming video services, we reassessed the estimated economic lives and renewal assumptions for our orbital slot licenses. As a result, we have changed the estimated lives of these licenses from indefinite to finite-lived, effective January 1, 2020, and began amortizing our orbital slot licenses using the sum-of-months-digits method over their average remaining economic life of 15 years. This change in accounting increased amortization expense $379, or $0.04 per diluted share available to common stock during the second quarter and $765, or $0.08, per diluted share available to common stock for the first six months of 2020.

NOTE 2. EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted earnings per share for the three months and six months ended June 30, 2020 and 2019, is shown in the table below.

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerators
Numerator for basic earnings per share:
Net Income	$	1,563	$	3,974	$	6,526	$	8,322
Less: Net income attributable to noncontrolling interest		(282)		(261)		(635)		(513)
Net Income attributable to AT&T		1,281		3,713		5,891		7,809
Less: Preferred stock dividends		(52)		-		(84)		-
Net income attributable to common stock		1,229		3,713		5,807		7,809
Dilutive potential common shares:
Share-based payment		5		4		11		10
Numerator for diluted earnings per share	$	1,234	$	3,717	$	5,818	$	7,819
Denominators (000,000)
Denominator for basic earnings per share:
Weighted average number of common shares outstanding		7,145		7,323		7,166		7,318
Dilutive potential common shares:
Share-based payment (in shares)		25		30		26		29
Denominator for diluted earnings per share		7,170		7,353		7,192		7,347
Basic earnings per share attributable to Common Stock	$	0.17	$	0.51	$	0.81	$	1.06
Diluted earnings per share attributable to Common Stock	$	0.17	$	0.51	$	0.81	$	1.06

In the first quarter of 2020, we completed an accelerated share repurchase agreement with a third-party financial institution to repurchase AT&T common stock. Under the terms of the agreement, we paid the financial institution $4,000 and received 104.8 million shares.

10

AT&T INC.

JUNE 30, 2020

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
Balance as of December 31, 2019		$	(3,056)		$	48		$	(37)		$	8,515		$	5,470
Other comprehensive income
(loss) before reclassifications			(1,490)			80			(3,026)			-			(4,436)
Amounts reclassified
from accumulated OCI			-	1		-	1		17	2		(922)	3		(905)
Net other comprehensive
income (loss)			(1,490)			80			(3,009)			(922)			(5,341)
Balance as of June 30, 2020		$	(4,546)		$	128		$	(3,046)		$	7,593		$	129
		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
Balance as of December 31, 2018		$	(3,084)		$	(2)		$	818		$	6,517		$	4,249
Other comprehensive income
(loss) before reclassifications			159			42			(490)			-			(289)
Amounts reclassified
from accumulated OCI			-	1		-	1		17	2		(688)	3		(671)
Net other comprehensive
income (loss)			159			42			(473)			(688)			(960)
Balance as of June 30, 2019		$	(2,925)		$	40		$	345		$	5,829		$	3,289
1	(Gains) losses are included in "Other income (expense) - net" in the consolidated statements of income.
2	(Gains) losses are included in "Interest expense" in the consolidated statements of income (see Note 7).
3	The 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).

11

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

NOTE 4. SEGMENT INFORMATION

Our segments are strategic business units that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We analyze our segments based on segment operating contribution, which consists of operating income, excluding acquisition-related costs and other significant items (as discussed below), and equity in net income (loss) of affiliates for investments managed within each segment. We have three reportable segments: (1) Communications, (2) WarnerMedia and (3) Latin America.

We have recast our segment results for all prior periods to include our prior Xandr segment within our WarnerMedia segment.

We also evaluate segment and business unit performance based on EBITDA and/or EBITDA margin, which is defined as operating contribution excluding equity in net income (loss) of affiliates and depreciation and amortization. We believe EBITDA to be a relevant and useful measurement to our investors as it is part of our internal management reporting and planning processes and it is an important metric that management uses to evaluate operating performance. EBITDA does not give effect to 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 revenues.

The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. and businesses globally. This segment contains the following business units:

 Mobility provides nationwide wireless service and equipment.

 Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communications services primarily to residential customers. This segment also sells advertising on distribution platforms.

 Business Wireline provides advanced IP-based services, as well as traditional voice and data services to business customers.

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Historical financial results from Xandr, previously a separate reportable segment, have been combined with the WarnerMedia segment within Eliminations and other. This segment contains the following business units:

 Turner primarily operates multichannel basic television networks and digital properties. Turner also sells advertising on its networks and digital properties.

 Home Box Office consists of premium pay television and OTT and streaming services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment.

 Warner Bros. primarily consists of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.

The Latin America segment provides entertainment and wireless services outside of the U.S. This segment contains the following business units:

 Vrio provides video services primarily to residential customers using satellite technology in Latin America and the Caribbean.

 Mexico provides wireless service and equipment to customers in Mexico.

Corporate and Other reconciles our segment results to consolidated operating income and income before income taxes, and includes:

 Corporate, which consists of: (1) businesses no longer integral to our operations or which we no longer actively market, (2) corporate support functions, (3) impacts of corporate-wide decisions for which the individual operating segments are not being evaluated, and (4) the reclassification of the amortization of prior service credits, which we continue to report with segment operating expenses, to consolidated “Other income (expense) – net.”

 Acquisition-related items which consists of items associated with the merger and integration of acquired businesses, including amortization of intangible assets.

12

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

 Certain significant items includes (1) employee separation charges associated with voluntary and/or strategic offers, (2) losses resulting from abandonment of network assets and impairments and (3) other items for which the segments are not being evaluated.

 Eliminations and consolidations, which (1) removes transactions involving dealings between our segments, including content licensing between WarnerMedia and Communications, and (2) includes adjustments for our reporting of the advertising business.

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

13

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended June 30, 2020
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,149	$	9,332	$	7,817	$	2,012	$	5,805	$	-	$	5,805
Entertainment Group		10,069		7,730		2,339		1,309		1,030		-		1,030
Business Wireline		6,374		3,779		2,595		1,318		1,277		-		1,277
Total Communications		33,592		20,841		12,751		4,639		8,112		-		8,112
WarnerMedia
Turner		2,988		1,347		1,641		69		1,572		-		1,572
Home Box Office		1,627		1,489		138		25		113		(5)		108
Warner Bros.		3,256		2,583		673		40		633		(19)		614
Eliminations and other		(1,057)		(685)		(372)		33		(405)		28		(377)
Total WarnerMedia		6,814		4,734		2,080		167		1,913		4		1,917
Latin America
Vrio		752		661		91		127		(36)		8		(28)
Mexico		480		538		(58)		115		(173)		-		(173)
Total Latin America		1,232		1,199		33		242		(209)		8		(201)
Segment Total		41,638		26,774		14,864		5,048		9,816	$	12	$	9,828
Corporate and Other
Corporate		437		933		(496)		93		(589)
Acquisition-related items		-		211		(211)		2,145		(2,356)
Certain significant items		-		3,084		(3,084)		-		(3,084)
Eliminations and consolidations		(1,125)		(869)		(256)		(1)		(255)
AT&T Inc.	$	40,950	$	30,133	$	10,817	$	7,285	$	3,532

14

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,292	$	9,522	$	7,770	$	2,003	$	5,767	$	-	$	5,767
Entertainment Group		11,368		8,515		2,853		1,339		1,514		-		1,514
Business Wireline		6,607		3,975		2,632		1,242		1,390		-		1,390
Total Communications		35,267		22,012		13,255		4,584		8,671		-		8,671
WarnerMedia
Turner		3,410		2,217		1,193		39		1,154		11		1,165
Home Box Office		1,716		1,131		585		12		573		15		588
Warner Bros.		3,389		2,918		471		31		440		-		440
Eliminations and other		320		170		150		22		128		29		157
Total WarnerMedia		8,835		6,436		2,399		104		2,295		55		2,350
Latin America
Vrio		1,032		881		151		165		(14)		12		(2)
Mexico		725		813		(88)		119		(207)		-		(207)
Total Latin America		1,757		1,694		63		284		(221)		12		(209)
Segment Total		45,859		30,142		15,717		4,972		10,745	$	67	$	10,812
Corporate and Other
Corporate		450		765		(315)		170		(485)
Acquisition-related items		(30)		316		(346)		1,960		(2,306)
Certain significant items		-		94		(94)		-		(94)
Eliminations and consolidations		(1,322)		(961)		(361)		(1)		(360)
AT&T Inc.	$	44,957	$	30,356	$	14,601	$	7,101	$	7,500

15

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2020
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,551	$	18,901	$	15,650	$	4,057	$	11,593	$	-	$	11,593
Entertainment Group		20,584		15,621		4,963		2,598		2,365		-		2,365
Business Wireline		12,706		7,730		4,976		2,619		2,357		-		2,357
Total Communications		67,841		42,252		25,589		9,274		16,315		-		16,315
WarnerMedia
Turner		6,150		3,057		3,093		138		2,955		6		2,961
Home Box Office		3,124		2,542		582		46		536		15		551
Warner Bros.		6,496		5,533		963		81		882		(27)		855
Eliminations and other		(1,108)		(711)		(397)		65		(462)		25		(437)
Total WarnerMedia		14,662		10,421		4,241		330		3,911		19		3,930
Latin America
Vrio		1,639		1,444		195		274		(79)		12		(67)
Mexico		1,183		1,252		(69)		249		(318)		-		(318)
Total Latin America		2,822		2,696		126		523		(397)		12		(385)
Segment Total		85,325		55,369		29,956		10,127		19,829	$	31	$	19,860
Corporate and Other
Corporate		825		1,807		(982)		180		(1,162)
Acquisition-related items		-		393		(393)		4,201		(4,594)
Certain significant items		-		2,426		(2,426)		-		(2,426)
Eliminations and consolidations		(2,421)		(1,791)		(630)		(1)		(629)
AT&T Inc.	$	83,729	$	58,204	$	25,525	$	14,507	$	11,018

16

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,655	$	19,563	$	15,092	$	4,016	$	11,076	$	-	$	11,076
Entertainment Group		22,696		17,042		5,654		2,662		2,992		-		2,992
Business Wireline		13,085		8,007		5,078		2,464		2,614		-		2,614
Total Communications		70,436		44,612		25,824		9,142		16,682		-		16,682
WarnerMedia
Turner		6,853		4,353		2,500		99		2,401		36		2,437
Home Box Office		3,226		2,052		1,174		34		1,140		30		1,170
Warner Bros.		6,907		5,837		1,070		83		987		6		993
Eliminations and other		654		347		307		44		263		50		313
Total WarnerMedia		17,640		12,589		5,051		260		4,791		122		4,913
Latin America
Vrio		2,099		1,747		352		334		18		12		30
Mexico		1,376		1,538		(162)		250		(412)		-		(412)
Total Latin America		3,475		3,285		190		584		(394)		12		(382)
Segment Total		91,551		60,486		31,065		9,986		21,079	$	134	$	21,213
Corporate and Other
Corporate		883		1,426		(543)		374		(917)
Acquisition-related items		(72)		389		(461)		3,948		(4,409)
Certain significant items		-		342		(342)		-		(342)
Eliminations and consolidations		(2,578)		(1,899)		(679)		(1)		(678)
AT&T Inc.	$	89,784	$	60,744	$	29,040	$	14,307	$	14,733

17

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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

			Three months ended June 30,				Six months ended June 30,
			2020		2019		2020		2019
Communications		$	8,112	$	8,671	$	16,315	$	16,682
WarnerMedia			1,917		2,350		3,930		4,913
Latin America			(201)		(209)		(385)		(382)
Segment Contribution			9,828		10,812		19,860		21,213
Reconciling Items:
Corporate and Other			(589)		(485)		(1,162)		(917)
Merger and integration items			(211)		(346)		(393)		(461)
Amortization of intangibles acquired			(2,145)		(1,960)		(4,201)		(3,948)
Impairments			(2,319)		-		(2,442)		-
Gain on spectrum transaction1			-		-		900		-
Employee separation costs and benefit-related losses			(765)		(94)		(884)		(342)
Segment equity in net income of affiliates			(12)		(67)		(31)		(134)
Eliminations and consolidations			(255)		(360)		(629)		(678)
AT&T Operating Income			3,532		7,500		11,018		14,733
Interest Expense			2,041		2,149		4,059		4,290
Equity in net income (loss) of affiliates			(10)		40		(16)		33
Other income (expense) - net			1,017		(318)		1,820		(32)
Income Before Income Taxes		$	2,498	$	5,073	$	8,763	$	10,444
1	Included as a reduction of "Selling, general and administrative expenses" in the consolidated statement of income.

The following table presents intersegment revenues by segment:

Intersegment Reconciliation
	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020			2019
Intersegment Revenues
Communications	$	2	$	8	$	4	$	8
WarnerMedia		774		861		1,591		1,719
Latin America		-		-		-		-
Total Intersegment Revenues		776		869		1,595		1,727
Consolidations		349		453		826		851
Eliminations and consolidations	$	1,125	$	1,322	$	2,421	$	2,578

18

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

NOTE 5. REVENUE RECOGNITION

Revenue Categories
The following tables set forth reported revenue by category and by business unit:
For the three months ended June 30, 2020
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	13,611	$	-	$	-	$	-	$	-	$	58	$	-	$	3,480	$	17,149
Entertainment Group		-		2,092		560		6,682		-		294		397		44		10,069
Business Wireline		-		3,320		2,067		-		-		-		782		205		6,374
WarnerMedia
Turner		-		-		-		1,804		334		796		54		-		2,988
Home Box Office		-		-		-		1,441		181		-		5		-		1,627
Warner Bros.		-		-		-		16		3,179		1		60		-		3,256
Eliminations and other		-		-		-		71		(1,516)		378		10		-		(1,057)
Latin America
Vrio		-		-		-		752		-		-		-		-		752
Mexico		345		-		-		-		-		-		-		135		480
Corporate and Other		178		10		152		-		-		-		62		35		437
Eliminations and
consolidations		-		-		-		-		(765)		(294)		(66)		-		(1,125)
Total Operating Revenues	$	14,134	$	5,422	$	2,779	$	10,766	$	1,413	$	1,233	$	1,304	$	3,899	$	40,950

19

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended June 30, 2019
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	13,753	$	-	$	-	$	-	$	-	$	71	$	-	$	3,468	$	17,292
Entertainment Group		-		2,109		658		7,636		-		399		563		3		11,368
Business Wireline		-		3,208		2,324		-		-		-		897		178		6,607
WarnerMedia
Turner		-		-		-		1,943		111		1,266		90		-		3,410
Home Box Office		-		-		-		1,516		198		-		2		-		1,716
Warner Bros.		-		-		-		23		3,175		10		181		-		3,389
Eliminations and other		-		-		-		54		(237)		494		9		-		320
Latin America
Vrio		-		-		-		1,032		-		-		-		-		1,032
Mexico		479		-		-		-		-		-		-		246		725
Corporate and Other		150		14		7		-		-		-		210		39		420
Eliminations and
consolidations		-		-		-		-		(840)		(399)		(83)		-		(1,322)
Total Operating Revenues	$	14,382	$	5,331	$	2,989	$	12,204	$	2,407	$	1,841	$	1,869	$	3,934	$	44,957

20

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2020
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	27,503	$	-	$	-	$	-	$	-	$	134	$	-	$	6,914	$	34,551
Entertainment Group		-		4,201		1,141		13,664		-		707		816		55		20,584
Business Wireline		-		6,595		4,196		-		-		-		1,535		380		12,706
WarnerMedia
Turner		-		-		-		3,853		420		1,753		124		-		6,150
Home Box Office		-		-		-		2,779		338		-		7		-		3,124
Warner Bros.		-		-		-		26		6,239		3		228		-		6,496
Eliminations and other		-		-		-		134		(2,162)		887		33		-		(1,108)
Latin America
Vrio		-		-		-		1,639		-		-		-		-		1,639
Mexico		812		-		-		-		-		-		-		371		1,183
Corporate and Other		295		24		286		-		-		-		145		75		825
Eliminations and
consolidations		-		-		-		-		(1,559)		(707)		(155)		-		(2,421)
Total Operating Revenues	$	28,610	$	10,820	$	5,623	$	22,095	$	3,276	$	2,777	$	2,733	$	7,795	$	83,729

21

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2019
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	27,315	$	-	$	-	$	-	$	-	$	138	$	-	$	7,202	$	34,655
Entertainment Group		-		4,179		1,341		15,360		-		749		1,063		4		22,696
Business Wireline		-		6,380		4,721		-		-		-		1,647		337		13,085
WarnerMedia
Turner		-		-		-		3,908		246		2,527		172		-		6,853
Home Box Office		-		-		-		2,850		371		-		5		-		3,226
Warner Bros.		-		-		-		44		6,507		20		336		-		6,907
Eliminations and other		-		-		-		103		(389)		928		12		-		654
Latin America
Vrio		-		-		-		2,099		-		-		-		-		2,099
Mexico		921		-		-		-		-		-		-		455		1,376
Corporate and Other		272		27		14		-		-		-		419		79		811
Eliminations and
consolidations		-		-		-		-		(1,677)		(749)		(152)		-		(2,578)
Total Operating Revenues	$	28,508	$	10,586	$	6,076	$	24,364	$	5,058	$	3,613	$	3,502	$	8,077	$	89,784

22

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Deferred Customer Contract Acquisition and Fulfillment Costs

Costs to acquire and fulfill customer contracts, including commissions on service activations, for our wireless, business wireline and video entertainment services, are deferred and amortized over the contract period or expected customer relationship life, which typically ranges from three years to five years. For contracts with an estimated amortization period of less than one year, we expense incremental costs immediately.

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

		June 30,		December 31,
Consolidated Balance Sheets		2020		2019
Deferred Acquisition Costs
Other current assets	$	2,630	$	2,462
Other Assets		3,117		2,991
Total deferred customer contract acquisition costs	$	5,747	$	5,453
Deferred Fulfillment Costs
Other current assets	$	4,362	$	4,519
Other Assets		5,980		6,439
Total deferred customer contract fulfillment costs	$	10,342	$	10,958

The following table presents deferred customer contract acquisition and fulfillment cost amortization included in “Other cost of revenue” for the six months ended:

		June 30,		June 30,
Consolidated Statements of Income		2020		2019
Deferred acquisition cost amortization	$	1,278	$	1,026
Deferred fulfillment cost amortization		2,636		2,381

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., “buy one get one free”) the difference between revenue recognized and consideration received is recorded as a contract asset to be amortized over the contract term.

When consideration is received in advance of the delivery of goods or services, a contract liability is recorded for deferred revenue. 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:

		June 30,		December 31,
Consolidated Balance Sheets		2020		2019
Contract asset	$	2,546	$	2,472
Contract liability		6,533		6,999

Our beginning of period contract liability recorded as customer contract revenue during 2020 was $5,004.

23

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Our consolidated balance sheets at June 30, 2020 and December 31, 2019 included approximately $1,638 and $1,611, respectively, for the current portion of our contract asset in “Other current assets” and $5,616 and $5,939, respectively, for the current portion of our contract liability in “Advanced billings and customer deposits.”

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, video 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 June 30, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $36,362, of which we expect to recognize approximately 82% by the end of 2021, 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 2020.

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.

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

24

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Pension cost:
Service cost – benefits earned during the period	$	258	$	243	$	515	$	483
Interest cost on projected benefit obligation		422		508		844		1,057
Expected return on assets		(890)		(880)		(1,779)		(1,731)
Amortization of prior service credit		(29)		(24)		(57)		(57)
Actuarial (gain) loss		-		1,699		-		2,131
Net pension (credit) cost	$	(239)	$	1,546	$	(477)	$	1,883
Postretirement cost:
Service cost – benefits earned during the period	$	13	$	18	$	26	$	36
Interest cost on accumulated postretirement benefit obligation		104		186		208		372
Expected return on assets		(45)		(56)		(89)		(112)
Amortization of prior service credit		(582)		(426)		(1,164)		(852)
Net postretirement (credit) cost	$	(510)	$	(278)	$	(1,019)	$	(556)
Combined net pension and postretirement (credit) cost	$	(749)	$	1,268	$	(1,496)	$	1,327

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 $19 and $25 in the second quarter and $38 and $50 for the first six months of 2020 and 2019, 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, 2019.

25

AT&T INC.

JUNE 30, 2020

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:

		June 30, 2020				December 31, 2019
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Notes and debentures1		$	164,099	$	190,284	$	161,109	$	182,124
Commercial paper			3,001		3,001		-		-
Bank borrowings			-		-		4		4
Investment securities2			3,632		3,632		3,723		3,723
1	Includes credit agreement borrowings.
2	Excludes 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 June 30, 2020 and December 31, 2019. Derivatives designated as hedging instruments are reflected as “Other assets,” “Other noncurrent liabilities,” “Other current assets” and “Accounts payable and accrued liabilities” on our consolidated balance sheets.

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	832	$	-	$	-	$	832
International equities		141		-		-		141
Fixed income equities		230		-		-		230
Available-for-Sale Debt Securities		-		1,522		-		1,522
Asset Derivatives
Cross-currency swaps		-		67		-		67
Foreign exchange contracts		-		14		-		14
Liability Derivatives
Interest rate swaps		-		(3)		-		(3)
Cross-currency swaps		-		(6,767)		-		(6,767)
Foreign exchange contracts		-		(10)		-		(10)

26

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	844	$	-	$	-	$	844
International equities		183		-		-		183
Fixed income equities		229		-		-		229
Available-for-Sale Debt Securities		-		1,444		-		1,444
Asset Derivatives
Interest rate swaps		-		2		-		2
Cross-currency swaps		-		172		-		172
Interest rate locks		-		11		-		11
Foreign exchange contracts		-		89		-		89
Liability Derivatives
Cross-currency swaps		-		(3,187)		-		(3,187)
Interest rate locks		-		(95)		-		(95)

Investment Securities

Our investment securities include both equity and debt securities that are measured at fair value, as well as equity securities without readily determinable fair values. A substantial portion of the fair values of our investment securities is estimated based on quoted market prices. Investments in equity securities not traded on a national securities exchange are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. Investments in debt securities not traded on a national securities exchange are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

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

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Total gains (losses) recognized on equity securities	$	161	$	50	$	(42)	$	210
Gains (Losses) recognized on equity securities sold		9		9		(24)		27
Unrealized gains (losses) recognized on equity securities
held at end of period		152		41		(18)		183

At June 30, 2020, available-for-sale debt securities totaling $1,522 have maturities as follows - less than one year: $64; one to three years: $175; three to five years: $156; five or more years: $1,127.

Our cash equivalents (money market securities), short-term investments (certificate and time deposits) and nonrefundable customer deposits are recorded at amortized cost, and the respective carrying amounts approximate fair values. Short-term investments and nonrefundable customer deposits are recorded in “Other current assets” and our investment securities are recorded in “Other Assets” on the consolidated balance sheets.

Derivative Financial Instruments

We enter into derivative transactions to manage certain market risks, primarily interest rate risk and foreign currency exchange risk. This includes the use of interest rate swaps, interest rate locks, foreign exchange forward contracts and combined interest rate foreign exchange contracts (cross-currency swaps). We do not use derivatives for trading or speculative purposes. We record derivatives on our consolidated balance sheets at fair value that is derived from observable market data, including yield curves and foreign exchange rates (all of our derivatives are Level 2). Cash flows associated with derivative instruments are presented in the same category on the consolidated statements of cash flows as the item being hedged.

27

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Fair Value Hedging Periodically, we enter into and designate fixed-to-floating interest rate swaps as fair value hedges. The purpose of these swaps is to manage interest rate risk by managing our mix of fixed-rate and floating-rate debt. These swaps involve the receipt of fixed-rate amounts for floating interest rate payments over the life of the swaps without exchange of the underlying principal amount.

We also designate some of our foreign exchange contracts as fair value hedges. The purpose of these contracts is to hedge currency risk associated with foreign-currency-denominated operating assets and liabilities.

Accrued and realized gains or losses from fair value hedges impact the same category on the consolidated statements of income as the item being hedged. Unrealized gains on fair value hedges are recorded at fair market value as assets, and unrealized losses are recorded at fair market value as liabilities. Changes in the fair value of derivative instruments designated as fair value hedges are offset against the change in fair value of the hedged assets or liabilities through earnings. In the six months ended June 30, 2020 and 2019, no ineffectiveness was measured on fair value hedges.

Cash Flow Hedging We designate our cross-currency swaps as cash flow hedges. We have entered into multiple cross-currency swaps to hedge our exposure to variability in expected future cash flows that are attributable to foreign currency risk generated from the issuance of our foreign-denominated debt. These agreements include initial and final exchanges of principal from fixed foreign currency denominated amounts to fixed U.S. dollar denominated amounts, to be exchanged at a specified rate that is usually determined by the market spot rate upon issuance. They also include an interest rate swap of a fixed or floating foreign currency-denominated interest rate to a fixed U.S. dollar denominated interest rate.

We also designate some of our foreign exchange contracts as cash flow hedges. The purpose of these contracts is to hedge certain film production costs denominated in foreign currencies.

Unrealized gains on derivatives designated as cash flow hedges are recorded at fair value as assets, and unrealized losses are recorded at fair value as liabilities. For derivative instruments designated as cash flow hedges, changes in fair value are reported as a component of accumulated OCI and are reclassified into the consolidated statements of income in the same period the hedged transaction affects earnings.

Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into income over the life of the related debt. Over the next 12 months, we expect to reclassify $98 from accumulated OCI to “Interest expense” due to the amortization of net losses on historical interest rate locks.

We settled all interest rate locks in May 2020 in conjunction with issuance of fixed rate debt obligations that the interest rate locks were hedging. We paid $731 that was largely offset by the return of collateral at the time of settlement. Cash flows from the interest rate lock settlements and return of collateral were reported as Financing Activities in our Statement of Cash Flows, consistent with our accounting policy for these instruments.

Net Investment Hedging We have designated €1,450 million aggregate principal amount of debt as a hedge of the variability of some of the Euro-denominated net investments of our subsidiaries. The gain or loss on the debt that is designated as, and is effective as, an economic hedge of the net investment in a foreign operation is recorded as a currency translation adjustment within accumulated OCI, net on the consolidated balance sheet. Net losses on net investment hedges recognized in accumulated OCI in the second quarter were $30 and for the first six months of 2020 were $5.

Collateral and Credit-Risk Contingency We have entered into agreements with our derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. At June 30, 2020, we had posted collateral of $694 (a deposit asset) and held collateral of $16 (a receipt liability). Under the agreements, if AT&T’s credit rating had been downgraded one rating level by Fitch Ratings, before the final collateral exchange in June, we would have been required to post additional collateral of $76. If AT&T’s credit rating had been downgraded four ratings levels by Fitch Ratings, two levels by S&P, and two levels by Moody’s, we would have been required to post additional collateral of $5,487. If DIRECTV

28

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Holdings LLC’s credit rating had been downgraded below BBB- by S&P, we would have been required to post additional collateral of $321. At December 31, 2019, we had posted collateral of $204 (a deposit asset) and held collateral of $44 (a receipt liability). We do not offset the fair value of collateral, whether the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) exists, against the fair value of the derivative instruments.

Following are the notional amounts of our outstanding derivative positions:

	June 30,		December 31,
	2020		2019
Interest rate swaps	$	21	$	853
Cross-currency swaps		45,606		42,325
Interest rate locks		-		3,500
Foreign exchange contracts		298		269
Total	$	45,925	$	46,947

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

Effect of Derivatives on the Consolidated Statements of Income
	Three months ended				Six months ended
	June 30,				June 30,
Fair Value Hedging Relationships	2020		2019		2020		2019
Interest rate swaps (Interest expense):
Gain (Loss) on interest rate swaps	$	(14)	$	35	$	(4)	$	59
Gain (Loss) on long-term debt		14		(35)		4		(59)

In addition, the net swap settlements that accrued and settled in the quarters ended June 30, 2020 and 2019 were offset against interest expense.

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

	Three months ended				Six months ended
	June 30,				June 30,
Cash Flow Hedging Relationships	2020		2019		2020		2019
Cross-currency swaps:
Gain (Loss) recognized in accumulated OCI	$	809	$	(763)	$	(3,170)	$	(595)
Foreign exchange contracts:
Gain (Loss) recognized in accumulated OCI		2		4		(11)		(3)
Other income (expense) - net reclassified from
accumulated OCI into income		(3)		7		13		10
Interest rate locks:
Gain (Loss) recognized in accumulated OCI		(12)		(23)		(648)		(23)
Interest income (expense) reclassified from
accumulated OCI into income		(18)		(16)		(34)		(32)

29

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

NOTE 8. ACQUISITIONS, DISPOSITIONS AND OTHER ADJUSTMENTS

Acquisitions

HBO Latin America Group (HBO LAG) In May 2020, we acquired the remaining interest in HBO LAG for $141, net of cash acquired. At acquisition, we remeasured the fair value of the total business, which exceeded the carrying amount of our equity method investment and resulted in a pre-tax gain of $68. We consolidated that business upon close and recorded those assets at fair value, including $640 of trade names, $271 of distribution networks and $343 of goodwill that is reported in the WarnerMedia segment. These estimates are preliminary in nature and subject to adjustments, which will be finalized within one year from the date of acquisition.

Spectrum Auctions In June 2020, we completed the acquisition of $2,379 of 37/39 GHz spectrum in a Federal Communications Commission (FCC) auction. Prior to the auction, we exchanged the 39 GHz licenses with a book value of approximately $300 that were previously acquired through FiberTower Corporation for vouchers to be applied against the winning bids and recorded a $900 gain in the first quarter of 2020. These vouchers yielded a value of approximately $1,200, which was applied toward our gross bids. In the second quarter of 2020, we made the final cash payment of $949, bringing the total cash payment to $1,186.

NOTE 9. SALES OF RECEIVABLES

We have agreements with various third-party financial institutions pertaining to the sales of certain types of our accounts receivable. The most significant of these programs are discussed in detail below and generally consist of (1) receivables arising from equipment installment plans, which are sold for cash and a deferred purchase price, and (2) revolving service and trade receivables. Under these programs, we transfer receivables to purchasers in exchange for cash and additional consideration upon settlement of the receivables, where applicable. Under the terms of our agreements for these programs, we continue to bill and collect the payments from our customers on behalf of the financial institutions.

The sales of receivables did not have a material impact on our consolidated statements of income or to “Total Assets” reported on our consolidated balance sheets. We reflect cash receipts on sold receivables as cash flows from operations in our consolidated statements of cash flows. Cash receipts on the deferred purchase price are classified as cash flows from investing activities.

Our equipment installment and revolving receivable programs are discussed in detail below. The following table sets forth a summary of the receivables and accounts being serviced:

		June 30, 2020				December 31, 2019
		Equipment				Equipment
		Installment		Revolving		Installment		Revolving
Gross receivables:		$	3,931	$	3,745	$	4,576	$	3,324
Balance sheet classification
Accounts receivable
Notes receivable			2,056		-		2,467		-
Trade receivables			496		3,547		477		2,809
Other Assets
Noncurrent notes and trade receivables			1,379		198		1,632		515
Outstanding portfolio of receivables derecognized from
our consolidated balance sheets			8,917		5,300		9,713		4,300
Cash proceeds received, net of remittances1			6,429		5,300		7,211		4,300
1	Represents amounts to which financial institutions remain entitled, excluding the deferred purchase price.

30

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Equipment Installment Receivables Program

We offer our customers the option to purchase certain wireless devices in installments over a specified period of time and, in many cases, once certain conditions are met, they may be eligible to trade in the original equipment for a new device and have the remaining unpaid balance paid or settled.

We maintain a program under which we transfer a portion of these receivables through our bankruptcy-remote subsidiary in exchange for cash and additional consideration upon settlement of the receivables, referred to as the deferred purchase price. In the event a customer trades in a device prior to the end of the installment contract period, we agree to make a payment to the financial institutions equal to any outstanding remaining installment receivable balance. Accordingly, we record a guarantee obligation for this estimated amount at the time the receivables are transferred.

The following table sets forth a summary of equipment installment receivables sold under this program during the three and six months ended June 30, 2020 and 2019:

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Gross receivables sold		$	1,506	$	2,244	$	3,873	$	4,945
Net receivables sold1			1,449		2,133		3,722		4,679
Cash proceeds received			1,225		1,920		3,175		4,195
Deferred purchase price recorded			232		261		585		570
Guarantee obligation recorded			27		93		71		194
1	Receivables net of allowance, imputed interest and equipment trade-in right guarantees.

The deferred purchase price and guarantee obligation are initially recorded at estimated fair value and subsequently adjusted for changes in present value of expected cash flows. The estimation of their fair values is based on remaining installment payments expected to be collected and the expected timing and value of device trade-ins. The estimated value of the device trade-ins considers prices offered to us by independent third parties that contemplate changes in value after the launch of a device model. The fair value measurements used for the deferred purchase price and the guarantee obligation are considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 7).

The following table presents the previously transferred equipment installment receivables, which we repurchased in exchange for the associated deferred purchase price during the three and six months ended June 30, 2020 and 2019:

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Fair value of repurchased receivables		$	285	$	235	$	573	$	658
Carrying value of deferred purchase price			281		225		558		632
Gain on repurchases1		$	4	$	10	$	15	$	26
1	These gains are included in “Selling, general and administrative” in the consolidated statements of income.

At June 30, 2020 and December 31, 2019, our deferred purchase price receivable was $2,319 and $2,336, respectively, of which $1,591 and $1,569 are included in “Other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at June 30, 2020 and December 31, 2019 was $315 and $384, respectively, of which $213 and $148 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our deferred purchase price and guarantee obligation.

31

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Revolving Receivables Program

In 2019, we entered into a one-year revolving agreement to transfer up to $4,300 of certain receivables through our bankruptcy-remote subsidiaries to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred. In the first quarter of 2020, we expanded the program limit to $5,300. In the second quarter of 2020, we extended the agreement by one year. As customers pay their balances, we transfer additional receivables into the program, resulting in our gross receivables sold exceeding net cash flow impacts (e.g., collect and reinvest). The transferred receivables are fully guaranteed by our bankruptcy-remote subsidiaries, which hold additional receivables in the amount of $3,745 that are pledged as collateral under this agreement. The transfers are recorded at fair value of the proceeds received and obligations assumed less derecognized receivables. The obligation is subsequently adjusted for changes in estimated expected credit losses and interest rates. Our maximum exposure to loss related to these receivables transferred is limited to the amount outstanding.

The fair value measurement used for the obligation is considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 7).

The following table sets forth a summary of receivables sold:

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Gross receivables sold/cash proceeds received1		$	3,805	$	4,452	$	8,027	$	5,852
Collections reinvested under revolving agreement			3,805		2,127		7,027		2,127
Net cash proceeds received (remitted)		$	-	$	2,325	$	1,000	$	3,725
Net receivables sold2		$	3,819	$	4,134	$	7,957	$	5,497
Obligations recorded (reversed)			(12)		384		114		436
1	Includes initial sale of receivables of $0 and $2,325 for the three months and $1,000 and $3,725 for the six months ended
	June 30, 2020 and 2019, respectively.
2	Receivables net of allowance, return and incentive reserves and imputed interest

NOTE 10. LEASES

We have operating and finance leases for certain facilities and equipment used in operations. Our leases generally have remaining lease terms of up to 15 years. Some of our real estate operating leases contain renewal options that may be exercised, and some of our leases include options to terminate the leases within one year.

We have recognized a right-of-use asset for both operating and finance leases, and an operating lease liability that represents the present value of our obligation to make payments over the lease term. The present value of the lease payments is calculated using the incremental borrowing rate for operating and finance leases, which was determined using a portfolio approach based on the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate in the currency of the lease, which will be updated on a quarterly basis for measurement of new lease liabilities.

32

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The components of lease expense were as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	1,449	$	1,610	$	2,826	$	2,852
Finance lease cost:
Amortization of right-of-use assets	$	73	$	70	$	140	$	136
Interest on lease obligation		36		42		77		84
Total finance lease cost	$	109	$	112	$	217	$	220

Supplemental balance sheet information related to leases is as follows:

	June 30,		December 31,
	2020		2019
Operating Leases
Operating lease right-of-use assets	$	24,692	$	24,039
Accounts payable and accrued liabilities	$	3,474	$	3,451
Operating lease obligation		22,230		21,804
Total operating lease obligation	$	25,704	$	25,255
Finance Leases
Property, plant and equipment, at cost	$	3,468	$	3,534
Accumulated depreciation and amortization		(1,347)		(1,296)
Property, plant and equipment, net	$	2,121	$	2,238
Current portion of long-term debt	$	180	$	162
Long-term debt		1,683		1,872
Total finance lease obligation	$	1,863	$	2,034
Weighted-Average Remaining Lease Term (years)
Operating leases		8.5		8.4
Finance leases		10.2		10.7
Weighted-Average Discount Rate
Operating leases		4.2	%	4.7	%
Finance leases		8.2	%	8.5	%

33

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Future minimum maturities of lease obligations are as follows:

At June 30, 2020	Operating		Finance
	Leases		Leases
Remainder of 2020	$	2,447	$	190
2021		4,582		309
2022		4,277		291
2023		3,889		262
2024		3,357		242
Thereafter		13,031		1,632
Total lease payments		31,583		2,926
Less imputed interest		(5,879)		(1,063)
Total	$	25,704	$	1,863

NOTE 11. PREFERRED SHARES

We have authorized 10 million preferred shares of AT&T stock, each with a par value of $1.00 per share. Cumulative perpetual preferred shares consist of the following:

 Series A: 48 thousand shares outstanding at June 30, 2020 and December 31, 2019, with a $25,000 per share liquidation preference and a dividend rate of 5.00%.

 Series B: 20 thousand shares outstanding at June 30, 2020 and zero issued and outstanding at December 31, 2019, with a €100,000 per share liquidation preference, and an initial dividend rate of 2.875%, subject to reset beginning on May 1, 2025.

 Series C: 70 thousand shares outstanding at June 30, 2020 and zero issued and outstanding at December 31, 2019, with a $25,000 per share liquidation preference and a dividend rate of 4.75%.

So long as the preferred dividends are declared and paid on a timely basis on each series of preferred shares, there are no limitations on our ability to declare a dividend on or repurchase AT&T common shares. The preferred shares are optionally redeemable by AT&T at the liquidation price generally on or after five years from the issuance date, or upon certain other contingent events.

NOTE 12. ADDITIONAL FINANCIAL INFORMATION

Cash and Cash Flows

We typically maintain our restricted cash balances for purchases and sales of certain investment securities and funding of certain deferred compensation benefit payments:

	June 30,				December 31,
		2020		2019		2019		2018
Cash and cash equivalents	$	16,941	$	8,423	$	12,130	$	5,204
Restricted cash in Other current assets		3		15		69		61
Restricted cash in Other Assets		87		216		96		135
Cash and Cash Equivalents and Restricted Cash	$	17,031	$	8,654	$	12,295	$	5,400

34

AT&T INC.

JUNE 30, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Consolidated Statements of Cash Flows	Six months ended
	June 30,
Cash paid (received) during the period for:		2020		2019
Interest	$	4,202	$	4,410
Income taxes, net of refunds		(214)		(32)

	Six months ended
	June 30,
	2020		2019
Cash Flows from Operating Activities
Cash paid for amounts included in lease obligations
Operating cash flows from operating leases	$	2,424	$	2,464
Supplemental Lease Cash Flow Disclosures
Operating lease right-of-use assets obtained
in exchange for new operating lease obligations		2,895		3,899

Other Noncash Investing and Financing Activities In connection with capital improvements and the acquisition of other productive assets, we negotiate favorable payment terms (referred to as vendor financing), which are reported as financing activities when paid. For the first six months, we recorded vendor financing commitments related to capital investments of approximately $1,680 in 2020 and $1,265 in 2019.

Financing Activities

Debt Transactions At June 30, 2020, our total long-term debt obligations totaled $168,964. Our debt activity primarily consisted of the following:

 Net borrowings of approximately $2,960 of debt under our commercial paper program.

 In April 2020, entry into and draw on a $5,500 Term Loan Credit Agreement, with certain commercial banks and Bank of America, N.A., as lead agent, which was redeemed in May 2020 (originally due on December 31, 2020).

 Issuance of $16,545 of AT&T global notes due 2027 to 2060.

 Issuance of €3,000 million global notes ($3,281 at issuance) due 2028 to 2038.

 Redemptions of $12,689 of AT&T global notes due 2020 to 2047.

 Redemptions of $1,800 under term loan credit agreements with certain banks.

 Redemptions of $1,000 annual put reset securities issued by BellSouth.

Our long-term debt issuances carried a weighted average interest rate of 3.5%, and our long-term debt redemptions had a weighted average interest rate of 3.4%.

Subsequent Events In July 2020, we completed redemptions of $4,264 of AT&T, WarnerMedia and DIRECTV notes due 2022, with an average interest rate of 3.4%.

In August 2020, we issued $11,000 of global notes due 2028 to 2061, with an average interest rate of 2.7%.

35

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

OVERVIEW

AT&T Inc. is referred to as “we,” “AT&T” or the “Company” throughout this document, 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, media and technology industries. You should read this discussion in conjunction with the consolidated financial statements and accompanying notes (Notes).

We have three reportable segments: (1) Communications, (2) WarnerMedia and (3) Latin America. Our segment results presented in Note 4 and discussed below follow our internal management reporting. We analyze our segments based on segment operating contribution, which consists of operating income, excluding acquisition-related costs and other significant items and equity in net income (loss) of affiliates for investments managed within each segment. Percentage increases and decreases that are not considered meaningful are denoted with a dash.

We have recast our segment results for all prior periods to include our prior Xandr segment within our WarnerMedia segment.

	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating Revenues
Communications	$	33,592	$	35,267	(4.7)	%	$	67,841	$	70,436	(3.7)	%
WarnerMedia		6,814		8,835	(22.9)			14,662		17,640	(16.9)
Latin America		1,232		1,757	(29.9)			2,822		3,475	(18.8)
Corporate and other		437		420	4.0			825		811	1.7
Eliminations and consolidation		(1,125)		(1,322)	14.9			(2,421)		(2,578)	6.1
AT&T Operating Revenues		40,950		44,957	(8.9)			83,729		89,784	(6.7)
Operating Contribution
Communications		8,112		8,671	(6.4)			16,315		16,682	(2.2)
WarnerMedia		1,917		2,350	(18.4)			3,930		4,913	(20.0)
Latin America		(201)		(209)	3.8			(385)		(382)	(0.8)
Segment Operating Contribution	$	9,828	$	10,812	(9.1)	%	$	19,860	$	21,213	(6.4)	%

The Communications segment provides services to businesses and consumers located in the U.S. and businesses globally. Our business strategies reflect bundled 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.

 Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communications services primarily to residential customers. This segment also sells advertising on distribution platforms.

 Business Wireline provides advanced IP-based services, as well as traditional voice and data services to business customers.

36

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Historical financial results from Xandr, previously a separate reportable segment, have been combined with the WarnerMedia segment within Eliminations and other. This segment contains the following business units:

 Turner primarily operates multichannel basic television networks and digital properties. Turner also sells advertising on its networks and digital properties.

 Home Box Office consists of premium pay television and OTT and streaming services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment.

 Warner Bros. primarily consists of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.

The Latin America segment provides entertainment and wireless services outside of the U.S. This segment contains the following business units:

 Vrio provides video services primarily to residential customers using satellite technology in Latin America and the Caribbean.

 Mexico provides wireless service and equipment to customers in Mexico.

COVID-19 Update

In March 2020, the World Health Organization designated the coronavirus (COVID-19) a pandemic and the President of the United States declared a national emergency. To date, COVID-19 has surfaced in nearly all regions around the world and resulted in travel restrictions and business slowdowns or shutdowns.

Disruptions caused by COVID-19 and measures taken to prevent its spread or mitigate its effects both domestically and internationally have impacted our results of operations. We recorded approximately $320, or $0.03 per diluted share, in the second quarter and $750, or $0.08 per diluted share, for the first six months of 2020, of incremental costs associated with voluntary corporate actions taken primarily to protect and compensate front-line employees and contractors, and WarnerMedia production disruption costs.

In addition to these incremental costs, we estimate that our operations and comparability were impacted by approximately $510, or $0.06 per diluted share, in the second quarter and $470, or $0.05 per diluted share, for the first six months of 2020, for the following COVID-19 related pressures: (1) the cancellation and postponement of televised sporting events, resulting in lower advertising revenues and associated expenses, (2) the closure of movie theaters and postponement of theatrical releases, leading to lower content revenues and associated expenses, (3) the imposition of travel restrictions, driving significantly lower international wireless roaming services that do not have a directly correlated expense reduction and most significantly impact profitability and (4) closures of retail stores, contributing to lower wireless equipment sales, with a corresponding reduction in equipment expense.

All subscriber counts at and for the period ended June 30, 2020, exclude customers who we have agreed not to terminate service under the FCC’s “Keep Americans Connected Pledge.” For reporting purposes, we count the following nonpaying subscribers as if they had disconnected, even though they are still receiving service:

 Postpaid subscribers totaling 466,0000 (including 338,000 postpaid phone) in the second quarter and 521,000 (including 382,000 postpaid phone) for the first six months;

 Premium TV connections totaling 91,000 in the second quarter and 157,000 for the first six months; and

 Broadband connections totaling 159,000 (including 48,000 fiber) in the second quarter and 194,000 (including 58,000 fiber) for the first six months.

The economic effects of the pandemic and resulting societal changes are currently not predictable. There are a number of uncertainties that could impact our future results of operations, including the effectiveness of COVID-19 mitigation measures; the duration of the pandemic; global economic conditions; changes to our operations; changes in consumer confidence, behaviors and spending; work from home trends; and the sustainability of supply chains. We expect operating results and cash flows to continue to be adversely impacted by COVID-19 for at least the duration of the pandemic. We expect our third-quarter results to be impacted by the following:

37

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

 The shift in timing of advertising revenues from the postponement, restarting or cancellation of sporting events and the related timing of the sports costs;

 Lower revenues from the closure of movie theaters and postponement of theatrical releases, partially offset by lower production and marketing costs, and other programming expenses;

 The decline in revenues from international roaming wireless services due to reduced travel;

 Higher expenses to protect front-line employees, contractors and customers; and

 The continued transition of customers to our fiber broadband services and the acceleration of the disconnection of linear TV services due to the pandemic.

RESULTS OF OPERATIONS

Consolidated Results Our financial results are summarized in the discussions that follow. Additional analysis is discussed in our “Segment Results” section. Certain prior period amounts have been reclassified to conform to the current period’s presentation.

	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating Revenues
Service	$	37,051	$	41,023	(9.7)	%	$	75,934	$	81,707	(7.1)	%
Equipment		3,899		3,934	(0.9)			7,795		8,077	(3.5)
Total Operating Revenues		40,950		44,957	(8.9)			83,729		89,784	(6.7)
Operating expenses
Operations and support		30,133		30,356	(0.7)			58,204		60,744	(4.2)
Depreciation and amortization		7,285		7,101	2.6			14,507		14,307	1.4
Total Operating Expenses		37,418		37,457	(0.1)			72,711		75,051	(3.1)
Operating Income		3,532		7,500	(52.9)			11,018		14,733	(25.2)
Interest expense		2,041		2,149	(5.0)			4,059		4,290	(5.4)
Equity in net income (loss)
of affiliates		(10)		40	-			(16)		33	-
Other income (expense) – net		1,017		(318)	-			1,820		(32)	-
Income Before Income Taxes		2,498		5,073	(50.8)			8,763		10,444	(16.1)
Net Income		1,563		3,974	(60.7)			6,526		8,322	(21.6)
Net Income Attributable to AT&T		1,281		3,713	(65.5)			5,891		7,809	(24.6)
Net Income Attributable to
Common Stock	$	1,229	$	3,713	(66.9)	%	$	5,807	$	7,809	(25.6)	%

Operating revenues decreased in the second quarter and in the first six months of 2020, driven by declines in our WarnerMedia, Communications and Latin America segments. Lower WarnerMedia segment revenues reflect lower advertising revenue from cancelled and postponed live sports programming and lower revenue due to postponed theatrical releases. Communications segment revenue declines were driven by continued declines in video and legacy services, and lower wireless revenues from the imposition of international travel restrictions and closure of retail stores. Latin America segment revenue declines were primarily due to foreign exchange rate pressure and store closures related to COVID-19. Partially offsetting these decreases were revenue increases in strategic and managed business service in our Communications segment.

Operations and support expenses decreased in the second quarter and in the first six months of 2020. The decreases were driven by lower broadcast and programming costs in our Communications and WarnerMedia segments. Expense declines in the first six months were also driven by a noncash gain of $900 on a spectrum transaction, reduced wireless equipment costs

38

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

resulting from lower device sales and our continued focus on cost management. Partially offsetting expense declines were charges for a goodwill impairment at our Vrio business unit, employee separation charges and incremental costs related to COVID-19, including increased first-quarter 2020 bad debt expense. As part of our cost and efficiency initiatives, we expect operations and support expense improvements to continue as we size our operations to reflect the new economic activity level.

Depreciation and amortization expense increased in the second quarter and for the first six months of 2020.

Depreciation expense increased $36, or 0.7% in the second quarter and $65, or 0.6% for the first six months of 2020, primarily due to ongoing capital spend for network upgrades and expansion in our Communications segment.

Amortization expense increased $148, or 7.1% in the second quarter and $135, or 3.2% for the first six months of 2020 primarily due to the amortization of orbital slot licenses, which began in the first quarter of 2020 (see Note 1).

Operating income decreased in the second quarter and the first six months of 2020. Our operating income margin for the second quarter decreased from 16.7% in 2019 to 8.6% in 2020 and for the first six months decreased from 16.4% in 2019 to 13.2% in 2020.

Interest expense decreased in the second quarter and first six months of 2020, primarily due to lower debt balances and interest rates.

Equity in net income of affiliates decreased in the second quarter and for the first six months of 2020, reflecting changes in our investment portfolio, including our second-quarter 2020 acquisition of the remaining interest in HBO Latin America Group (HBO LAG).

Other income (expense) – net increased in the second quarter and for the first six months of 2020. The increases were primarily due to the recognition of actuarial losses in 2019, with no comparable interim remeasurement in 2020, totaling $1,699 and $2,131 in the second quarter and for the first six months of 2019, respectively, and higher prior service credit amortization in 2020 (see Note 6). The increase was partially offset by the write-off of certain investments in 2020 and the second-quarter 2019 gain on sale of our interest in Hulu.

Income taxes decreased in the second quarter and increased for the first six months of 2020. The decrease in income tax expense in the second quarter was primarily attributable to lower income before tax.

Our effective tax rate was 37.5% for the second quarter and 25.5% for the first six months of 2020, versus 21.7% and 20.3% for the comparable year-prior periods, respectively. The increases in our effective tax rates were primarily due to the Vrio goodwill impairment, which is not deductible for tax purposes.

39

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

COMMUNICATIONS SEGMENT	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Segment Operating Revenues
Mobility	$	17,149	$	17,292	(0.8)	%	$	34,551	$	34,655	(0.3)	%
Entertainment Group		10,069		11,368	(11.4)			20,584		22,696	(9.3)
Business Wireline		6,374		6,607	(3.5)			12,706		13,085	(2.9)
Total Segment Operating Revenues		33,592		35,267	(4.7)			67,841		70,436	(3.7)
Segment Operating Contribution
Mobility		5,805		5,767	0.7			11,593		11,076	4.7
Entertainment Group		1,030		1,514	(32.0)			2,365		2,992	(21.0)
Business Wireline		1,277		1,390	(8.1)			2,357		2,614	(9.8)
Total Segment Operating Contribution	$	8,112	$	8,671	(6.4)	%	$	16,315	$	16,682	(2.2)	%

Selected Subscribers and Connections
		June 30,
(000s)		2020	2019
Mobility Subscribers1		171,407	158,622
Total domestic broadband connections1		15,201	15,698
Network access lines in service		7,878	9,207
U-verse VoIP connections		4,058	4,766
1	Excludes 521 wireless and 194 broadband customers who we have agreed not to terminate service under the FCC's "Keep Americans
	Connected Pledge," which was implemented March 13, 2020.

Operating revenues decreased in the second quarter and for the first six months of 2020, driven by declines in each of our business units, Entertainment Group, Business Wireline and Mobility. The decreases reflect the continued shift away from linear video and legacy services, lower wireless service revenues from a decline in international travel and waived fees, and suppressed equipment sales in the first quarter of 2020 attributable to store closures. Partially offsetting these declines was growth in our prepaid subscriber base.

Operating contribution decreased in the second quarter and for the first six months of 2020, reflecting declines in our Business Wireline and Entertainment Group business units, largely offset by improvement in our Mobility business unit. Our Communications segment operating income margin in the second quarter decreased from 24.6% in 2019 to 24.1% in 2020 and for the first six months increased from 23.7% in 2019 to 24.0% in 2020.

40

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Communications Business Unit Discussion
Mobility Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues
Service	$	13,669	$	13,824	(1.1)	%	$	27,637	$	27,453	0.7	%
Equipment		3,480		3,468	0.3			6,914		7,202	(4.0)
Total Operating Revenues		17,149		17,292	(0.8)			34,551		34,655	(0.3)
Operating expenses
Operations and support		9,332		9,522	(2.0)			18,901		19,563	(3.4)
Depreciation and amortization		2,012		2,003	0.4			4,057		4,016	1.0
Total Operating Expenses		11,344		11,525	(1.6)			22,958		23,579	(2.6)
Operating Income		5,805		5,767	0.7			11,593		11,076	4.7
Equity in Net Income (Loss)
of Affiliates		-		-	-			-		-	-
Operating Contribution	$	5,805	$	5,767	0.7	%	$	11,593	$	11,076	4.7	%

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

Subscribers
		June 30,		Percent
(in 000s)		2020	2019	Change
Postpaid		74,919	75,478	(0.7)	%
Prepaid		18,008	17,434	3.3
Reseller		6,718	7,323	(8.3)
Connected devices1		71,762	58,387	22.9
Total Mobility Subscribers2		171,407	158,622	8.1	%
1	Includes data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile systems.
2	Excludes 521 customers who we have agreed not to terminate service under the FCC's "Keep Americans Connected Pledge."

41

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Net Additions
		Second Quarter				Six-Month Period
				Percent				Percent
(in 000s)		2020	2019	Change		2020	2019	Change
Postpaid Phone Net Additions		(151)	74	-	%	12	153	(92.2)	%
Total Phone Net Additions		(16)	357	-		104	525	(80.2)
Postpaid2, 5		(154)	(146)	(5.5)		(127)	(353)	64.0
Prepaid		165	341	(51.6)		120	442	(72.9)
Reseller		(58)	(204)	71.6		(248)	(446)	44.4
Connected devices3		2,255	3,959	(43.0)		5,773	7,047	(18.1)
Mobility Net Subscriber Additions1, 5		2,208	3,950	(44.1)	%	5,518	6,690	(17.5)	%
Postpaid Churn4, 5		1.05	1.07	(2)	BP	1.06	1.12	(6)	BP
Postpaid Phone-Only Churn4, 5		0.84	0.86	(2)	BP	0.85	0.89	(4)	BP
1	Excludes acquisition-related additions during the period.
2	In addition to postpaid phones, includes tablets and wearables and other. Tablet net (losses) were (159) and (357) for the three months
	and (426) and (767) for the six months ended June 30, 2020 and 2019, respectively. Wearables and other net adds were 155 and 137 for
	the three months and 287 and 264 for the six months ended June 30, 2020 and 2019, respectively.
3	Includes data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile systems. Excludes
	postpaid tablets.
4	Calculated by dividing the aggregate number of wireless subscribers who canceled service during a month divided by the total number
	of wireless subscribers at the beginning of that month. The churn rate for the period is equal to the average of the churn rate for
	each month of that period.
5	The second quarter and six-month period ended June 30, 2020, exclude 466 (338 phone) and 521 (382 phone), respectively, who we
	have agreed not to terminate service under the FCC’s “Keep Americans Connected Pledge.” The second quarter and six-month
	period ended June 30, 2020, postpaid churn includes 21 bps (18 bps phone) and 22 bps (19 bps phone) pressure for these customers.

Service revenue decreased in the second quarter and increased for the first six months of 2020. The second quarter decrease is due to lower roaming revenue from decreased international travel and waived fees, reflecting a full quarter of pandemic-related impacts. Revenues from the first six months were not as affected by the pandemic, with approximately 15 days of impact in the first quarter. Increases in postpaid phone average revenue per subscriber (ARPU) and gains in prepaid subscribers, largely offset by impacts of the pandemic for the first six months.

ARPU

Postpaid ARPU decreased in the second quarter and increased for the first six months. ARPU during 2020 has been pressured by the decline in international roaming revenues and waived fees.

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-only churn were lower in the first six months due to migrations to unlimited plans, continued network improvements and industry-wide store closures from COVID-19, partially offset by higher accrual for subscriber disconnections under the “Keep Americans Connected Pledge.”

Equipment revenue was stable in the second quarter and decreased for the first six months of 2020 driven by lower postpaid smartphone sales reflecting store closures.

Operations and support expenses decreased in the second quarter and for the first six months of 2020. The decreases were primarily due to higher bad debt expense in 2019 resulting from prior-year charges in response to credit easing policies, cost initiatives and asset optimization, and lower marketing and sales costs, partially offset by higher commission deferral

42

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

amortization, including the impacts of second-quarter 2020 updates to extend the expected economic life of our Mobility customers.

Depreciation expense increased in the second quarter and for the first six months of 2020 primarily due to ongoing capital spending for network upgrades and expansion partially offset by fully depreciated assets.

Operating income increased in the second quarter and for the first six months of 2020. Our Mobility operating income margin in the second quarter increased from 33.4% in 2019 to 33.9% in 2020, and for the first six months increased from 32.0% in 2019 to 33.6% in 2020. Our Mobility EBITDA margin in the second quarter increased from 44.9% in 2019 to 45.6% in 2020, and for the first six months increased from 43.5% in 2019 to 45.3% in 2020. EBITDA is defined as operating contribution excluding equity in net income (loss) of affiliates and depreciation and amortization.

Subscriber Relationships

As the wireless industry has matured, future wireless growth will depend on our ability to offer innovative services, plans and devices that take advantage of our premier 5G wireless network, which recently went nationwide (in July 2020), and to provide these services in bundled product offerings. Subscribers that purchase two or more services from us have significantly lower churn than subscribers that purchase only one service. To support higher mobile data usage, our priority is to best utilize a wireless network that has sufficient spectrum and capacity to support these innovations on as broad a geographic basis as possible.

To attract and retain subscribers in a mature and highly competitive market, we have launched a wide variety of plans, including our FirstNet and prepaid products, and arrangements that bundle our video services. Virtually all of our postpaid smartphone subscribers are on plans that provide for service on multiple devices at reduced rates, and such subscribers tend to have higher retention and lower churn rates. We offer unlimited data plans and such subscribers also tend to have higher retention and lower churn rates. Our offerings are intended to encourage existing subscribers to upgrade their current services and/or add devices, attract subscribers from other providers and/or minimize subscriber churn.

Connected Devices

Connected devices include data-centric devices such as wholesale automobile systems, monitoring devices, fleet management and session-based tablets. The number of connected device subscribers increased in 2020, and during the second quarter and for the first six months of 2020, we added approximately 1.3 million and 3.6 million wholesale connected cars through agreements with various carmakers, and experienced strong growth in other Internet of Things (IoT) connections. We believe that these connected car agreements give us the opportunity to create future retail relationships with the car owners.

43

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Entertainment Group Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues
Video entertainment	$	6,976	$	8,035	(13.2)	%	$	14,371	$	16,109	(10.8)	%
High-speed internet		2,092		2,109	(0.8)			4,201		4,179	0.5
Legacy voice and data services		560		658	(14.9)			1,141		1,341	(14.9)
Other service and equipment		441		566	(22.1)			871		1,067	(18.4)
Total Operating Revenues		10,069		11,368	(11.4)			20,584		22,696	(9.3)
Operating expenses
Operations and support		7,730		8,515	(9.2)			15,621		17,042	(8.3)
Depreciation and amortization		1,309		1,339	(2.2)			2,598		2,662	(2.4)
Total Operating Expenses		9,039		9,854	(8.3)			18,219		19,704	(7.5)
Operating Income		1,030		1,514	(32.0)			2,365		2,992	(21.0)
Equity in Net Income (Loss)
of Affiliates		-		-	-			-		-	-
Operating Contribution	$	1,030	$	1,514	(32.0)	%	$	2,365	$	2,992	(21.0)	%

44

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

The following tables highlight other key measures of performance for Entertainment Group:

Connections
						June 30,		Percent
(in 000s)						2020	2019	Change
Video Connections
Premium TV1						17,690	21,581	(18.0)	%
AT&T TV Now						720	1,340	(46.3)
Total Video Connections						18,410	22,921	(19.7)
Total Broadband Connections						13,944	14,420	(3.3)
Fiber Broadband Connections						4,321	3,378	27.9
Retail Consumer Switched Access Lines						3,096	3,630	(14.7)
U-verse Consumer VoIP Connections						3,480	4,211	(17.4)
Total Retail Consumer Voice Connections						6,576	7,841	(16.1)	%
1	Excludes 157 premium TV and 194 broadband connections who we have agreed not to terminate service under the FCC's "Keep
	Americans Connected Pledge."
Net Additions
		Second Quarter				Six-Month Period
				Percent				Percent
(in 000s)		2020	2019	Change		2020	2019	Change
Video Net Additions
Premium TV1		(886)	(778)	(13.9)	%	(1,783)	(1,322)	(34.9)	%
AT&T TV Now		(68)	(168)	59.5		(206)	(251)	17.9
Net Video Additions1		(954)	(946)	(0.8)		(1,989)	(1,573)	(26.4)
Net Broadband Additions1		(102)	(34)	-		(175)	11	-
Fiber Broadband Net Additions		225	318	(29.2)	%	434	615	(29.4)	%
1	The second quarter and six-month period ended June 30, 2020, exclude 91 and 157 premium TV and 159 and 194 broadband (48 and 58
	fiber) connections, respectively, who we have agreed not to terminate service under the FCC's "Keep Americans Connected Pledge."

Video entertainment revenues are comprised of subscription and advertising revenues. Revenues decreased in the second quarter and for the first six months of 2020, largely driven by a decline in premium TV and OTT subscribers as we continue to focus on retention of existing subscribers with a particular focus on our high-value subscribers, and lower subscription-based advertising revenues driven by impacts of the pandemic. Consistent with the rest of the industry, our customers continue to shift from a premium linear service to more economically priced OTT and subscription video on demand services, which has pressured our video revenues.

High-speed internet revenues decreased in the second quarter and increased for the first six months of 2020. The decrease in the second quarter was driven by a decline in the average subscriber base, partially offset by higher ARPU. The increase for the six months reflects higher ARPU resulting from an increase in high-speed fiber and pricing.

Legacy voice and data service revenues decreased in the second quarter and for the first six months of 2020, reflecting the continued decline in the number of customers.

45

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Operations and support expenses decreased in the second quarter and for the first six months of 2020. Contributing to the decreases were lower content and selling costs largely due to fewer subscribers, lower marketing costs and our ongoing focus on cost initiatives. Partially offsetting the decreases were annual content rate increases, higher amortization of fulfillment cost deferrals, including the impact of second-quarter 2020 updates to decrease the estimated economic life for our Entertainment Group customers, and pandemic-related compassion payments.

Depreciation expense decreased in the second quarter and for the first six months of 2020 due to network assets becoming fully depreciated. Partially offsetting the decreases was ongoing capital spending for network upgrades and expansion.

Operating income decreased in the second quarter and for the first six months of 2020. Our Entertainment Group operating income margin in the second quarter decreased from 13.3% in 2019 to 10.2% in 2020, and for the first six months decreased from 13.2% in 2019 to 11.5% in 2020. Our Entertainment Group EBITDA margin in the second quarter decreased from 25.1% in 2019 to 23.2% in 2020, and for the first six months decreased from 24.9% in 2019 to 24.1% in 2020.

Business Wireline Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues
Strategic and managed services	$	3,943	$	3,834	2.8	%	$	7,822	$	7,613	2.7	%
Legacy voice and data services		2,067		2,324	(11.1)			4,196		4,721	(11.1)
Other service and equipment		364		449	(18.9)			688		751	(8.4)
Total Operating Revenues		6,374		6,607	(3.5)			12,706		13,085	(2.9)
Operating expenses
Operations and support		3,779		3,975	(4.9)			7,730		8,007	(3.5)
Depreciation and amortization		1,318		1,242	6.1			2,619		2,464	6.3
Total Operating Expenses		5,097		5,217	(2.3)			10,349		10,471	(1.2)
Operating Income		1,277		1,390	(8.1)			2,357		2,614	(9.8)
Equity in Net Income (Loss)
of Affiliates		-		-	-			-		-	-
Operating Contribution	$	1,277	$	1,390	(8.1)	%	$	2,357	$	2,614	(9.8)	%

Strategic and managed services revenues increased in the second quarter and for the first six months of 2020. Our strategic services are made up of (1) data services, including our VPN, dedicated internet ethernet and broadband, (2) voice service, including VoIP and cloud-based voice solutions, (3) security and cloud solutions, and (4) managed, professional and outsourcing services. Revenue increases were primarily attributable to growth in our security and cloud solutions, dedicated internet and managed services and also includes the impact of higher demand for connectivity due to the pandemic.

Legacy voice and data service revenues decreased in the second quarter and for the first six months of 2020, primarily due to lower demand as customers continue to shift to our more advanced IP-based offerings or our competitors.

Other service and equipment revenues decreased in the second quarter and for the first six months of 2020, reflecting prior-year licensing of intellectual property assets. Revenue trends are impacted by the licensing of intellectual property assets, which vary from period-to-period. Other service revenues include project-based revenue, which is nonrecurring in nature, as well as revenues from customer premises equipment.

Operations and support expenses decreased in the second quarter and for the first six months of 2020, primarily due to our continued efforts to drive efficiencies in our network operations through automation and reductions in customer support expenses through digitization.

46

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Depreciation expense increased in the second quarter and for the first six months of 2020, primarily due to increases in capital spending for network upgrades and expansion.

Operating income decreased in the second quarter and for the first six months of 2020. Our Business Wireline operating income margin in the second quarter decreased from 21.0% in 2019 to 20.0% in 2020, and for the first six months decreased from 20.0% in 2019 to 18.6% in 2020. Our Business Wireline EBITDA margin in the second quarter increased from 39.8% in 2019 to 40.7% in 2020, and for the first six months increased from 38.8% in 2019 to 39.2% in 2020.

WARNERMEDIA SEGMENT	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Segment Operating Revenues
Turner	$	2,988	$	3,410	(12.4)	%	$	6,150	$	6,853	(10.3)	%
Home Box Office		1,627		1,716	(5.2)			3,124		3,226	(3.2)
Warner Bros.		3,256		3,389	(3.9)			6,496		6,907	(6.0)
Eliminations and other		(1,057)		320	-			(1,108)		654	-
Total Segment Operating Revenues		6,814		8,835	(22.9)			14,662		17,640	(16.9)
Cost of revenues
Turner		965		1,796	(46.3)			2,285		3,476	(34.3)
Home Box Office		1,095		839	30.5			1,911		1,509	26.6
Warner Bros.		2,233		2,492	(10.4)			4,579		4,922	(7.0)
Selling, general and administrative		1,324		1,344	(1.5)			2,788		2,716	2.7
Eliminations and other		(883)		(35)	-			(1,142)		(34)	-
Depreciation and amortization		167		104	60.6			330		260	26.9
Total Operating Expenses		4,901		6,540	(25.1)			10,751		12,849	(16.3)
Operating Income		1,913		2,295	(16.6)			3,911		4,791	(18.4)
Equity in Net Income (Loss) of Affiliates		4		55	(92.7)			19		122	(84.4)
Total Segment Operating Contribution	$	1,917	$	2,350	(18.4)	%	$	3,930	$	4,913	(20.0)	%

Our WarnerMedia segment includes our Turner, Home Box Office (HBO) and Warner Bros. business units. The order of presentation reflects the consistency of revenue streams, rather than overall magnitude as that is subject to timing and frequency of studio releases.

Operating revenues decreased in the second quarter and for the first six months of 2020, primarily due to lower advertising revenues from the postponement or cancellation of televised sporting events at Turner; lower theatrical product revenues, reflecting the pandemic-related closure of movie theaters and postponement of theatrical releases, and unfavorable programming comparisons, including strong carryover revenues in the first quarter of 2019 at Warner Bros.; and lower linear subscription revenue at HBO.

Operating contribution decreased in the second quarter and for the first six months of 2020. The WarnerMedia segment operating income margin in the second quarter increased from 26.0% in 2019 to 28.1% in 2020 and for the first six months decreased from 27.2% in 2019 to 26.7% in 2020.

47

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

WarnerMedia Business Unit Discussion
Turner Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues
Subscription	$	1,804	$	1,943	(7.2)	%	$	3,853	$	3,908	(1.4)	%
Advertising		796		1,266	(37.1)			1,753		2,527	(30.6)
Content and other		388		201	93.0			544		418	30.1
Total Operating Revenues		2,988		3,410	(12.4)			6,150		6,853	(10.3)
Operating expenses
Cost of revenues		965		1,796	(46.3)			2,285		3,476	(34.3)
Selling, general and administrative		382		421	(9.3)			772		877	(12.0)
Depreciation and amortization		69		39	76.9			138		99	39.4
Total Operating Expenses		1,416		2,256	(37.2)			3,195		4,452	(28.2)
Operating Income		1,572		1,154	36.2			2,955		2,401	23.1
Equity in Net Income (Loss) of Affiliates		-		11	-			6		36	(83.3)
Operating Contribution	$	1,572	$	1,165	34.9	%	$	2,961	$	2,437	21.5	%

Operating revenues decreased in the second quarter and for the first six months of 2020, primarily due to decreases in advertising revenue largely resulting from the postponement of the NBA season and the cancellation of the NCAA Division I Men’s Basketball Tournament, in the first quarter of 2020. Subscription revenue declines reflect lower regional sports network revenue and unfavorable exchange rates. These decreases were partially offset by higher content and other revenue, including internal sales to HBO Max, which are eliminated in consolidation within the WarnerMedia segment.

Cost of revenues decreased in the second quarter and for the first six months of 2020, primarily due to lower programming costs, including a decline of approximately $850 in the second quarter and $1,125 for the first six months in sports costs resulting from the postponement of the NBA season, the cancellation of the NCAA tournament and other smaller items.

Selling, general and administrative decreased in the second quarter and for the first six months of 2020, primarily due to lower marketing costs.

Operating income increased in the second quarter and for the first six months of 2020. Our Turner operating income margin in the second quarter increased from 33.8% in 2019 to 52.6% in 2020, and for the first six months increased from 35.0% in 2019 to 48.0% in 2020.

48

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Home Box Office Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues
Subscription	$	1,441	$	1,516	(4.9)	%	$	2,779	$	2,850	(2.5)	%
Content and other		186		200	(7.0)			345		376	(8.2)
Total Operating Revenues		1,627		1,716	(5.2)			3,124		3,226	(3.2)
Operating expenses
Cost of revenues		1,095		839	30.5			1,911		1,509	26.6
Selling, general and administrative		394		292	34.9			631		543	16.2
Depreciation and amortization		25		12	-			46		34	35.3
Total Operating Expenses		1,514		1,143	32.5			2,588		2,086	24.1
Operating Income		113		573	(80.3)			536		1,140	(53.0)
Equity in Net Income (Loss) of Affiliates		(5)		15	-			15		30	(50.0)
Operating Contribution	$	108	$	588	(81.6)	%	$	551	$	1,170	(52.9)	%

Operating revenues decreased in the second quarter and for the first six months of 2020, primarily due to decreases in subscription revenue resulting from domestic linear subscriber decline, including Cinemax depackaging, partially offset by growth in digital and international, including HBO Latin America Group, following our May 2020 acquisition of the remaining interest in this entity. At June 30, 2020, we had 36.3 million U.S. subscribers from HBO Max and HBO, up from 34.6 million at December 31, 2019.

Cost of revenues increased in the second quarter and for the first six months of 2020, primarily due to higher programming costs and expenses related to HBO Max.

Selling, general and administrative increased in the second quarter and for the first six months of 2020, primarily due to higher marketing costs associated with HBO Max.

Operating income decreased in the second quarter and for the first six months of 2020. Our HBO operating income margin in the second quarter decreased from 33.4% in 2019 to 6.9% in 2020, and for the first six months decreased from 35.3% in 2019 to 17.2% in 2020.

49

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Warner Bros. Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues
Theatrical product	$	1,029	$	1,527	(32.6)	%	$	2,135	$	3,033	(29.6)	%
Television product		1,876		1,310	43.2			3,645		2,923	24.7
Games and other		351		552	(36.4)			716		951	(24.7)
Total Operating Revenues		3,256		3,389	(3.9)			6,496		6,907	(6.0)
Operating expenses
Cost of revenues		2,233		2,492	(10.4)			4,579		4,922	(7.0)
Selling, general and administrative		350		426	(17.8)			954		915	4.3
Depreciation and amortization		40		31	29.0			81		83	(2.4)
Total Operating Expenses		2,623		2,949	(11.1)			5,614		5,920	(5.2)
Operating Income		633		440	43.9			882		987	(10.6)
Equity in Net Income (Loss) of Affiliates		(19)		-	-			(27)		6	-
Operating Contribution	$	614	$	440	39.5	%	$	855	$	993	(13.9)	%

Operating revenues decreased in the second quarter and for the first six months of 2020, primarily due to lower theatrical product resulting from the absence of theatrical releases in the second quarter of 2020 and, for the six months, unfavorable comparisons to the prior year, which included, in 2019, carryover revenues from the theatrical release of Aquaman. Games and other revenue declines were primarily due to unfavorable games comparison to the prior year, which included the release of Mortal Kombat 11, and other revenue decreased due to reduced studio operations. Partially offsetting these decreases were higher television product revenues, driven by licensing, including internal sales to HBO Max, partially offset by lower initial telecast revenues resulting from pandemic-related television production delays.

Cost of revenues decreased in the second quarter and for the first six months of 2020, primarily due to lower marketing of theatrical product, partially offset by incremental costs incurred due to the production hiatus.

Selling, general and administrative decreased in the second quarter and increased for the first six months of 2020. The decrease in the quarter was primarily due to lower distribution fees and favorable collection experience that allowed us to reduce our first quarter bad debt estimates for COVID-19. The increase for the six months primarily resulted from higher first-quarter pandemic-related bad debt expense and other charges.

Operating income increased in the second quarter and decreased for the first six months of 2020. Our Warner Bros. operating income margin in the second quarter increased from 13.0% in 2019 to 19.4% in 2020, and for the first six months decreased from 14.3% in 2019 to 13.6% in 2020.

50

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

LATIN AMERICA SEGMENT	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Segment Operating Revenues
Vrio	$	752	$	1,032	(27.1)	%	$	1,639	$	2,099	(21.9)	%
Mexico		480		725	(33.8)			1,183		1,376	(14.0)
Total Segment Operating Revenues		1,232		1,757	(29.9)			2,822		3,475	(18.8)
Segment Operating Contribution
Vrio		(28)		(2)	-			(67)		30	-
Mexico		(173)		(207)	16.4			(318)		(412)	22.8
Total Segment Operating Contribution	$	(201)	$	(209)	3.8	%	$	(385)	$	(382)	(0.8)	%

Operating Results

Our Latin America operations conduct business in their local currency and operating results are converted to U.S. dollars using official exchange rates, subjecting results to foreign currency fluctuations. In May 2020, we found it necessary to close our DIRECTV operations in Venezuela due to political instability in the country and to comply with sanctions of the U.S. government.

Operating revenues decreased in the second quarter and for the first six months of 2020 primarily driven by foreign exchange pressures and the impact of COVID-19.

Operating contribution increased in the second quarter and decreased for the first six months of 2020, reflecting foreign exchange pressures and the impact of COVID-19. Our Latin America segment operating income margin in the second quarter decreased from (12.6)% in 2019 to (17.0)% in 2020, and for the first six months decreased from (11.3)% in 2019 to (14.1)% in 2020.

Latin America Business Unit Discussion
Vrio Results
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating revenues	$	752	$	1,032	(27.1)	%	$	1,639	$	2,099	(21.9)	%
Operating expenses
Operations and support		661		881	(25.0)			1,444		1,747	(17.3)
Depreciation and amortization		127		165	(23.0)			274		334	(18.0)
Total Operating Expenses		788		1,046	(24.7)			1,718		2,081	(17.4)
Operating Income		(36)		(14)	-			(79)		18	-
Equity in Net Income (Loss)
of Affiliates		8		12	(33.3)			12		12	-
Operating Contribution	$	(28)	$	(2)	-	%	$	(67)	$	30	-	%

51

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

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

						June 30,		Percent
(in 000s)						2020	2019	Change
Vrio Video Subscribers						10,664	13,473	(20.8)	%
		Second Quarter				Six -Month Period
				Percent				Percent
(in 000s)		2020	2019	Change		2020	2019	Change
Vrio Video Net Additions1		(312)	(111)	-	%	(426)	(143)	-	%
1	The second-quarter and six-month period ended June 30, 2020, exclude the impact of 2.2 million subscriber disconnections resulting
	from the closure of our DIRECTV operations in Venezuela.

Operating revenues decreased in the second quarter and for the first six months of 2020, primarily driven by foreign exchange and COVID-19 pressures.

Operations and support expenses decreased in the second quarter and for the first six months of 2020, primarily driven by foreign exchange and COVID-19 pressures. Approximately 21% of Vrio expenses are U.S. dollar based, with the remainder in the local currency.

Depreciation expense decreased in the second quarter and for the first six months of 2020, primarily due to changes in foreign exchange rates.

Operating income decreased in the second quarter and for the first six months of 2020. Our Vrio operating income margin in the second quarter decreased from (1.4)% in 2019 to (4.8)% in 2020, and for the first six months decreased from 0.9% in 2019 to (4.8)% in 2020. Our Vrio EBITDA margin in the second quarter decreased from 14.6% in 2019 to 12.1% in 2020, and for the first six months decreased from 16.8% in 2019 to 11.9% in 2020.

Mexico Results
	Second Quarter						Six-Month Period
	2020		2019		Percent Change		2020		2019		Percent Change
Operating revenues
Service	$	345	$	479	(28.0)	%	$	812	$	921	(11.8)	%
Equipment		135		246	(45.1)			371		455	(18.5)
Total Operating Revenues		480		725	(33.8)			1,183		1,376	(14.0)
Operating expenses
Operations and support		538		813	(33.8)			1,252		1,538	(18.6)
Depreciation and amortization		115		119	(3.4)			249		250	(0.4)
Total Operating Expenses		653		932	(29.9)			1,501		1,788	(16.1)
Operating Income (Loss)		(173)		(207)	16.4			(318)		(412)	22.8
Equity in Net Income (Loss)
of Affiliates		-		-	-			-		-	-
Operating Contribution	$	(173)	$	(207)	16.4	%	$	(318)	$	(412)	22.8	%

52

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

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

							June 30,		Percent
(in 000s)							2020	2019	Change
Mexico Wireless Subscribers
Postpaid							4,771	5,489	(13.1)	%
Prepaid							12,777	12,180	4.9
Reseller							425	352	20.7
Total Mexico Wireless Subscribers							17,973	18,021	(0.3)	%
		Second Quarter					Six-Month Period
					Percent				Percent
(in 000s)			2020	2019	Change		2020	2019	Change
Mexico Wireless Net Additions1
Postpaid			(191)	(153)	(24.8)	%	(332)	(222)	(49.5)	%
Prepaid			(915)	401	-		(807)	515	-
Reseller			21	51	(58.8)		53	99	(46.5)
Mexico Wireless Net Additions			(1,085)	299	-	%	(1,086)	392	-	%
1	The second-quarter and six-month period ended June 30, 2020, exclude the impact of 101 subscriber disconnections resulting from
	conforming our policy on reporting of fixed wireless resellers.

Service revenues decreased in the second quarter and for the first six months of 2020, primarily due to foreign exchange pressures, as well as lower volumes and store traffic related to COVID-19.

Equipment revenues decreased in the second quarter and for the first six months of 2020, primarily due to lower equipment sales volumes related to COVID-19 and foreign exchange rates.

Operations and support expenses decreased in the second quarter and for the first six months of 2020, primarily due to changes in foreign exchange rates and lower equipment sales. Approximately 8% of Mexico expenses are U.S. dollar based, with the remainder in the local currency.

Depreciation and amortization expense decreased in the second quarter and for the first six months of 2020, primarily due to foreign exchange pressures.

Operating income increased in the second quarter and first six months of 2020. Our Mexico operating income margin in the second quarter decreased from (28.6)% in 2019 to (36.0)% in 2020, and for the first six months increased from (29.9)% in 2019 to (26.9)% in 2020. Our Mexico EBITDA margin in the second quarter was stable at (12.1)% in 2019 and 2020, and for the first six months increased from (11.8)% in 2019 to (5.8)% in 2020.

53

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

SUPPLEMENTAL TOTAL ADVERTISING REVENUE INFORMATION

As a supplemental presentation, we are providing a view of total advertising revenues generated by AT&T. See revenue categories tables in Note 5 for a reconciliation.

Total Advertising Revenues
	Second Quarter						Six-Month Period
					Percent						Percent
	2020		2019		Change		2020		2019		Change
Operating Revenues
Turner	$	796	$	1,266	(37.1)	%	$	1,753	$	2,527	(30.6)	%
Entertainment Group		294		399	(26.3)			707		749	(5.6)
Xandr		362		485	(25.4)			851		911	(6.6)
Other		75		90	(16.7)			173		175	(1.1)
Eliminations		(294)		(399)	26.3			(707)		(749)	5.6
Total Advertising Revenues	$	1,233	$	1,841	(33.0)	%	$	2,777	$	3,613	(23.1)	%

SUPPLEMENTAL COMMUNICATIONS OPERATING INFORMATION

As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and wireline operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Results have been recast to conform to the current period's classification of consumer and business wireless subscribers. See “Discussion and Reconciliation of Non-GAAP Measure” for a reconciliation of these supplemental measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Business Solutions Results
	Second Quarter						Six-Month Period
	2020		2019		Percent Change		2020		2019		Percent Change
Operating revenues
Wireless service	$	1,884	$	1,881	0.2	%	$	3,833	$	3,658	4.8	%
Strategic and managed services		3,943		3,834	2.8			7,822		7,613	2.7
Legacy voice and data services		2,067		2,324	(11.1)			4,196		4,721	(11.1)
Other service and equipment		364		449	(18.9)			688		751	(8.4)
Wireless equipment		585		617	(5.2)			1,295		1,207	7.3
Total Operating Revenues		8,843		9,105	(2.9)			17,834		17,950	(0.6)
Operating expenses
Operations and support		5,424		5,512	(1.6)			11,134		11,126	0.1
Depreciation and amortization		1,637		1,545	6.0			3,262		3,070	6.3
Total Operating Expenses		7,061		7,057	0.1			14,396		14,196	1.4
Operating Income		1,782		2,048	(13.0)			3,438		3,754	(8.4)
Equity in Net Income (Loss)
of Affiliates		-		-	-			-		-	-
Operating Contribution	$	1,782	$	2,048	(13.0)	%	$	3,438	$	3,754	(8.4)	%

54

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

OTHER BUSINESS MATTERS

Spectrum Auction In March 2020, we were the winning bidder of high-frequency 37/39 GHz licenses in FCC Auction 103 covering an average of 786 MHz nationwide for approximately $2,400. Prior to the auction, we exchanged the 39 GHz licenses with a book value of approximately $300 that were previously acquired through FiberTower Corporation for vouchers to be applied against the winning bids and recorded a $900 gain in the first quarter of 2020. These vouchers yielded a value of approximately $1,200 which was applied toward our $2,400 gross bids. We made our final payment of approximately $950 for the Auction 103 payment in April 2020. The FCC granted the licenses in June 2020.

Labor Contracts As of June 30, 2020, we employed approximately 243,000 persons. Approximately 40% of our employees are represented by the Communications Workers of America (CWA), the International Brotherhood of Electrical Workers (IBEW) or other unions. After expiration of the collective bargaining agreements, work stoppages or labor disruptions may occur in the absence of new contracts or other agreements being reached.

 A contract covering approximately 7,000 Mobility employees expired in February 2020. In March 2020, a new 4-year contract was ratified by employees and will expire in February 2024.

 A contract covering approximately 13,000 wireline employees in our West region expired in April 2020. In March 2020, a tentative agreement was reached on a new 4-year contract. The tentative agreement is subject to ratification by employees.

 A contract covering approximately 14,000 employees in the Southwest region scheduled to expire in April 2021 was extended 4 years and will now expire in April 2025.

COMPETITIVE AND REGULATORY ENVIRONMENT

Overview AT&T subsidiaries operating within the United States are subject to federal and state regulatory authorities. AT&T subsidiaries operating outside the United States are subject to the jurisdiction of national and supranational regulatory authorities in the markets where service is provided.

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, over the ensuing two decades, the FCC and some state regulatory commissions have maintained or expanded certain regulatory requirements that were imposed decades ago on our traditional wireline subsidiaries when they operated as legal monopolies. More recently, the FCC has pursued a more deregulatory agenda, eliminating a variety of antiquated and unnecessary regulations and streamlining its processes in a number of areas. In addition, we are pursuing, at both the state and federal levels, additional legislative and regulatory measures to reduce regulatory burdens that are no longer appropriate in a competitive telecommunications market and that inhibit our ability to compete more effectively and offer services wanted and needed by 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.

Communications Segment

Internet The FCC currently classifies fixed and mobile consumer broadband services as information services, subject to light-touch regulation. The D.C. Circuit upheld the FCC’s current classification, although it remanded three discrete issues to the FCC for further consideration. No party sought Supreme Court review of the D.C. Circuit’s decision, so that decision is final, although the FCC’s consideration of the three issues remains pending.

Some states have adopted legislation or issued executive orders that would reimpose net neutrality rules repealed by the FCC. Suits have been filed concerning such laws in two states. In October 2016, the FCC adopted new rules governing the use of customer information by providers of broadband internet access service. Those rules were more restrictive in certain respects than those governing other participants in the internet economy, including so-called “edge” providers such as Google and

55

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

Facebook. In April 2017, the President signed a resolution passed by Congress repealing the new rules under the Congressional Review Act.

Privacy-related legislation has been considered or adopted in a number of states. Legislative and regulatory action and ballot initiatives could result in increased costs of compliance, claims against broadband internet access service providers and others, and increased uncertainty in the value and availability of data. Effective as of January 1, 2020, a California state law gives consumers the right to know what personal information is being collected about them, and whether and to whom it is sold or disclosed, and to access and request deletion of this information. Subject to certain exceptions, it also gives California consumers the right to opt out of the sale of personal information.

Wireless The industry-wide deployment of 5G technology, which is needed to satisfy extensive demand for video and internet access, will involve significant deployment of “small cell” equipment and therefore increase the need for local permitting processes that allow for the placement of small cell equipment on reasonable timelines and terms. Federal regulations also can delay and impede the deployment of infrastructure used to provide telecommunications and broadband services, including small cell equipment. In March, August and September 2018, the FCC adopted orders to streamline federal and local wireless infrastructure review processes in order to facilitate deployment of next-generation wireless facilities. Specifically, the FCC’s March 2018 Order streamlined historical, tribal, and environmental review requirements for wireless infrastructure, including by excluding most small cell facilities from such review. The Order was appealed and in August 2019, the D.C. Circuit Court of Appeals vacated the FCC’s finding that most small cell facilities are excluded from review, but otherwise upheld the FCC’s Order. The FCC’s August and September 2018 Orders simplified the regulations for attaching telecommunications equipment to utility poles and clarified when local government right-of-way access and use restrictions can be preempted because they unlawfully prohibit the provision of telecommunications services. Those orders were appealed to the 9th Circuit Court of Appeals, where they remain pending. In addition to the FCC’s actions, to date, 28 states and Puerto Rico have adopted legislation to facilitate small cell deployment.

In December 2018, we introduced the nation’s first commercial mobile 5G service. In July 2020, we announced nationwide 5G coverage. We anticipate the introduction of 5G handsets and devices will contribute to a renewed interest in equipment upgrades.

56

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

LIQUIDITY AND CAPITAL RESOURCES

We had $16,941 in “Cash and cash equivalents” available at June 30, 2020. “Cash and cash equivalents” included cash of $3,781 and money market funds and other cash equivalents of $13,160. Approximately $2,529 of our “Cash and cash equivalents” were held by our foreign entities in accounts predominantly outside of the U.S. and may be subject to restrictions on repatriation.

The Company's liquidity and capital resources were not materially impacted by COVID-19 and related economic conditions during the first six months of 2020. We will continue to monitor impacts on the COVID-19 pandemic on our liquidity and capital resources.

“Cash and cash equivalents” increased $4,811 since December 31, 2019. In the first six months of 2020, cash inflows were primarily provided by the cash receipts from operations, including cash from our sale and transfer of our receivables to third parties, and the issuances of commercial paper, long-term debt and cumulative preferred stock. These inflows were offset by cash used to meet the needs of the business, including, but not limited to, payment of operating expenses, spectrum acquisitions, debt repayments, funding capital expenditures and vendor financing payments, collateral posted to banks and other participants in derivative arrangements, share repurchase and dividends to stockholders.

Cash Provided by or Used in Operating Activities

During the first six months of 2020, cash provided by operating activities was $20,925, compared to $25,336 for the first six months of 2019. Lower operating cash flows in 2020 were primarily driven by lower incremental receivable securitization (see Note 9).

We actively manage the timing of our supplier payments for non-capital items to optimize the use of our cash. Among other things, we seek to make payments on 90-day or greater terms, while providing the suppliers with access to bank facilities that permit earlier payments at their cost. In addition, for payments to a key supplier, we have arrangements that allow us to extend payment terms up to 90 days at an additional cost to us (referred to as supplier financing). The net impact of supplier financing on cash from operating activities was to decrease working capital $1,452 and $496 for the six months ended June 30, 2020 and 2019, respectively. All supplier financing payments are due within one year.

Cash Used in or Provided by Investing Activities

For the first six months of 2020, cash used in investing activities totaled $10,278, and consisted primarily of $9,432 (including interest during construction) for capital expenditures, final payment of approximately $950 for wireless spectrum licenses won in Auction 103, and $141 for acquiring the remaining interest in HBO LAG.

For capital improvements, we have negotiated favorable vendor payment terms of 120 days or more (referred to as vendor financing) with some of our vendors, which are excluded from capital expenditures and reported as financing activities. For the first six months of 2020, vendor financing payments were $1,354, compared to $1,836 for the first six months of 2019. Capital expenditures in the first six months of 2020 were $9,432, and when including $1,354 cash paid for vendor financing and excluding $79 of FirstNet reimbursements, gross capital investment was $10,865 ($1,728 lower than the prior-year comparable period).

The vast majority of our capital expenditures are spent on our networks, including product development and related support systems. During the first six months, we placed $1,681 of equipment in service under vendor financing arrangements (compared to $1,265 in the prior-year comparable period) and approximately $640 of assets related to the FirstNet build (compared to $600 in the prior-year comparable period). The amount of capital expenditures is influenced by demand for services and products, capacity needs and network enhancements.

Cash Provided by or Used in Financing Activities

For the first six months of 2020, cash used in financing activities totaled $5,911 and was comprised of debt issuances and repayments, issuances of preferred stock, share repurchase, payments of dividends and required collateral deposits.

57

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

During the first six months of 2020, debt issuances included proceeds of $8,440 in short-term borrowings and $21,060 of net proceeds from long-term debt. Borrowing activity consisted of approximately $2,940 in commercial paper draws and the following issuances:

Issued and redeemed in 2020:

 March draw of $750 on a private financing agreement (repaid in the second quarter).

 April draw of $5,500 on a term loan credit agreement with certain commercial banks and Bank of America, N.A., as lead agent (repaid in the second quarter).

Issued and outstanding in 2020:

 February issuance of $2,995 of 4.000% global notes due 2049.

 March borrowings of $665 from loan programs with export agencies of foreign governments to support network equipment purchases in those countries.

 May issuances totaling $12,500 in global notes, comprised of $2,500 of 2.300% global notes due 2027, $3,000 of 2.750% global notes due 2031, $2,500 of 3.500% global notes due 2041, $3,000 of 3.650% global notes due 2051 and $1,500 of 3.850% global notes due 2060.

 May issuances totaling €3,000 million in global notes (approximately $3,281 at issuance), comprised of €1,750 million of 1.600% global notes due 2028, €750 million of 2.050% global notes due 2032 and €500 million of 2.600% global notes due 2038.

 June issuance of $1,050 of 3.750% global notes due 2050.

During the first six months of 2020, repayments of debt included $5,975 of short-term borrowings and $17,284 of long-term debt. Repayments were comprised of $475 in commercial paper and the following:

Notes redeemed at maturity:

 $800 of AT&T floating-rate notes in the first quarter.

 $687 of AT&T floating-rate notes in the second quarter.

Notes redeemed prior to maturity:

 $2,619 of 4.600% AT&T global notes with original maturity in 2045, in the first quarter.

 $2,750 of 2.450% AT&T global notes with original maturity in 2020, in the second quarter

 $1,000 of annual put reset securities issued by BellSouth, in the second quarter.

 $683 of 4.600% AT&T global notes with original maturity in 2021, in the second quarter.

 $1,695 of 2.800% AT&T global notes with original maturity in 2021, in the second quarter.

 $853 of 4.450% AT&T global notes with original maturity in 2021, in the second quarter.

 $1,172 of 3.875% AT&T global notes with original maturity in 2021, in the second quarter.

 $1,430 of 5.500% AT&T global notes with original maturity in 2047, in the second quarter.

Credit facilities repaid and other borrowings:

 $750 of borrowings under a private financing agreement, in the first quarter.

 $750 of borrowings under a private financing agreement, in the second quarter.

 $5,500 under our April 2020 term loan credit agreement with certain commercial banks and Bank of America, in the second quarter.

 $1,300 under our term loan credit agreement with Bank of America, in the second quarter.

 $500 under our term loan credit agreement with Bank of Communications Co., in the second quarter.

Our weighted average interest rate of our entire long-term debt portfolio, including the impact of derivatives, was approximately 4.3% as of June 30, 2020 and 4.4% as of December 31, 2019. We had $164,099 of total notes and debentures outstanding at June 30, 2020, which included Euro, British pound sterling, Canadian dollar, Swiss franc, Australian dollar, Brazilian real, and Mexican peso denominated debt that totaled approximately $44,798.

58

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

At June 30, 2020, we had $15,576 of debt maturing within one year, consisting of $3,001 of commercial paper borrowings and $12,575 of long-term debt issuances. Debt maturing within one year includes the following notes that may be put back to us by the holders:

 An accreting zero-coupon note that may be redeemed each May until maturity in 2022. If the remainder of the zero-coupon note (issued for principal of $500 in 2007 and partially exchanged in the 2017 debt exchange offers) is held to maturity, the redemption amount will be $592.

For the first six months of 2020, we paid $1,354 of cash under our vendor financing program, compared to $1,836 in the first six months of 2019. Total vendor financing payables included in our June 30, 2020 consolidated balance sheet were approximately $1,556, with $718 due within one year (in “Accounts payable and accrued liabilities”) and the remainder predominantly due within two to three years (in “Other noncurrent liabilities”).

Financing activities in the first six months of 2020 also included $3,869 for the February issuance of Series B and Series C preferred stock (see Note 11).

We repurchased approximately 142 million shares of common stock, predominantly in the first quarter, and completed the share repurchase authorization approved by the Board of Directors in 2013. In March 2020, we cancelled an accelerated share repurchase agreement that was planned for the second quarter and other repurchases to maintain flexibility and focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including 5G. At June 30, 2020, we had approximately 178 million shares remaining from our share repurchase authorizations approved by the Board of Directors in 2014.

We paid dividends on common and preferred shares of $7,474 during the first six months of 2020, compared with $7,436 for the first six months of 2019. Dividends were higher in 2020, primarily due to dividend payments to preferred stockholders and the increase in our quarterly dividend on common stock approved by our Board of Directors in December 2019, partially offset by fewer shares outstanding.

Dividends on common stock declared by our Board of Directors totaled $1.04 per share in the first six months of 2020 and $1.02 per share for the first six months of 2019. Our dividend policy considers the expectations and requirements of stockholders, capital funding requirements of AT&T and long-term growth opportunities. It is our intent to provide the financial flexibility to allow our Board of Directors to consider dividend growth and to recommend an increase in dividends to be paid in future periods. All dividends remain subject to declaration by our Board of Directors.

Financing Activities Subsequent to the Second Quarter

Taking advantage of attractive rates, we completed the following financing activities subsequent to the second quarter of 2020.

In July 2020, we redeemed a total of $4,264 in notes:

 $1,457 of 3.000% global notes due 2022 issued by AT&T.

 $1,250 of 3.200% global notes due 2022 issued by AT&T.

 $1,012 of 3.800% global notes due 2022 issued by AT&T.

 $422 of 4.000% global notes due 2022 issued by AT&T.

 $60 of 3.800% senior notes due 2022 issued by DIRECTV.

 $63 of 4.00% notes due 2022 issued by WarnerMedia.

In August 2020, we issued a total of $11,000 in global notes and will use the proceeds to pay down near-term debt:

 $2,250 of 1.650% global notes due 2028.

 $2,500 of 2.250 % global notes due 2032.

 $2,500 of 3.100% global notes due 2043.

 $2,250 of 3.300% global notes due 2052.

 $1,500 of 3.500% senior notes due 2061.

59

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

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. In December 2018, we amended our five-year revolving credit agreement (the “Amended and Restated Credit Agreement”) and concurrently entered into a new five-year agreement (the “Five Year Credit Agreement”) such that we now have two $7,500 revolving credit agreements totaling $15,000. The Amended and Restated Credit Agreement terminates on December 11, 2021 and the Five Year Credit Agreement terminates on December 11, 2023. No amounts were outstanding under either agreement as of June 30, 2020.

In September 2019, we entered into and drew on a $1,300 term loan credit agreement containing (i) a 1.25 year $400 facility due in 2020 (BAML Tranche A Facility), (ii) a 2.25 year $400 facility due in 2021 (BAML Tranche B Facility), and (iii) a 3.25 year $500 facility due in 2022 (BAML Tranche C Facility), with Bank of America, N.A., as agent. These facilities were repaid and terminated in the second quarter of 2020.

On April 6, 2020, we entered into and drew on a $5,500 Term Loan Credit Agreement (Term Loan) with 11 commercial banks and Bank of America, N.A. as lead agent. We repaid and terminated the Term Loan in May 2020.

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.

Each of our credit and loan agreements contains covenants that are customary for an issuer with an investment grade senior debt credit rating as well as a net debt-to-EBITDA financial ratio covenant requiring AT&T to maintain, as of the last day of each fiscal quarter, a ratio of not more than 3.5-to-1. As of June 30, 2020, we were in compliance with the covenants for our credit facilities.

Collateral Arrangements

During 2019 and 2020, we amended collateral arrangements with certain counterparties to require cash collateral posting by AT&T only when derivative market values exceed certain thresholds. Under these arrangements, counterparties are still required to post collateral. During the first six months of 2020, we deposited approximately $518 of cash collateral, on a net basis as we exceeded the market value thresholds with some of the counterparties. Cash postings under these arrangements vary with changes in credit ratings and netting agreements. (See Note 7)

Other

Our total capital consists of debt (long-term debt and debt maturing within one year) and stockholders’ equity. Our capital structure does not include debt issued by our equity method investments. At June 30, 2020, our debt ratio was 46.6%, compared to 46.8% at June 30, 2019 and 44.7% at December 31, 2019. Our net debt ratio was 41.9% at June 30, 2020, compared to 44.5% at June 30, 2019 and 41.4% at December 31, 2019. The debt ratio is affected by the same factors that affect total capital, and reflects our recent debt issuances and repayments and debt acquired in business combinations.

During the first six months of 2020, we have received $347 from the disposition of assets, and when combined with working capital monetization initiatives, which include the sale of receivables, total cash received from monetization efforts, net of $1,046 of spectrum acquisitions, was approximately $300. We plan to continue to explore similar opportunities throughout 2020.

60

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

DISCUSSION AND RECONCILIATION OF NON-GAAP MEASURE

We believe the following measure is relevant and useful information to investors as it is used by management as a method of comparing performance with that of many of our competitors. This supplemental measure should be considered in addition to, but not as a substitute of, our consolidated and segment financial information.

Business Solutions Reconciliation

We provide a supplemental discussion of our Business Solutions operations that is calculated by combining our Mobility and Business Wireline business units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results.

		Three Months Ended
		June 30, 2020								June 30, 2019
		Mobility		Business Wireline		Adjustments1		Business Solutions		Mobility		Business Wireline		Adjustments1		Business Solutions
Operating Revenues
Wireless service	$	13,669	$	-	$	(11,785)	$	1,884	$	13,824	$	-	$	(11,943)	$	1,881
Strategic and managed services		-		3,943		-		3,943		-		3,834		-		3,834
Legacy voice and data services		-		2,067		-		2,067		-		2,324		-		2,324
Other service and equipment		-		364		-		364		-		449		-		449
Wireless equipment		3,480		-		(2,895)		585		3,468		-		(2,851)		617
Total Operating Revenues		17,149		6,374		(14,680)		8,843		17,292		6,607		(14,794)		9,105
Operating Expenses
Operations and support		9,332		3,779		(7,687)		5,424		9,522		3,975		(7,985)		5,512
EBITDA		7,817		2,595		(6,993)		3,419		7,770		2,632		(6,809)		3,593
Depreciation and amortization		2,012		1,318		(1,693)		1,637		2,003		1,242		(1,700)		1,545
Total Operating Expense		11,344		5,097		(9,380)		7,061		11,525		5,217		(9,685)		7,057
Operating Income		5,805		1,277		(5,300)		1,782		5,767		1,390		(5,109)		2,048
Equity in net income (loss) of affiliates		-		-		-		-		-		-		-		-
Operating Contribution	$	5,805	$	1,277	$	(5,300)	$	1,782	$	5,767	$	1,390	$	(5,109)	$	2,048
1Non-business wireless reported in the Communications segment under the Mobility business unit.

61

AT&T INC.

JUNE 30, 2020

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

Dollars, subscribers and connections in millions, except per share and per subscriber amounts

		Six Months Ended
		June 30, 2020								June 30, 2019
		Mobility		Business Wireline		Adjustments1		Business Solutions		Mobility		Business Wireline		Adjustments1		Business Solutions
Operating Revenues
Wireless service	$	27,637	$	-	$	(23,804)	$	3,833	$	27,453	$	-	$	(23,795)	$	3,658
Strategic and managed services		-		7,822		-		7,822		-		7,613		-		7,613
Legacy voice and data services		-		4,196		-		4,196		-		4,721		-		4,721
Other service and equipment		-		688		-		688		-		751		-		751
Wireless equipment		6,914		-		(5,619)		1,295		7,202		-		(5,995)		1,207
Total Operating Revenues		34,551		12,706		(29,423)		17,834		34,655		13,085		(29,790)		17,950
Operating Expenses
Operations and support		18,901		7,730		(15,497)		11,134		19,563		8,007		(16,444)		11,126
EBITDA		15,650		4,976		(13,926)		6,700		15,092		5,078		(13,346)		6,824
Depreciation and amortization		4,057		2,619		(3,414)		3,262		4,016		2,464		(3,410)		3,070
Total Operating Expense		22,958		10,349		(18,911)		14,396		23,579		10,471		(19,854)		14,196
Operating Income		11,593		2,357		(10,512)		3,438		11,076		2,614		(9,936)		3,754
Equity in net income (loss) of affiliates		-		-		-		-		-		-		-		-
Operating Contribution	$	11,593	$	2,357	$	(10,512)	$	3,438	$	11,076	$	2,614	$	(9,936)	$	3,754
1Non-business wireless reported in the Communications segment under the Mobility business unit.

62

AT&T INC.

JUNE 30, 2020

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Dollars in millions except per share amounts

At June 30, 2020, we had interest rate swaps with a notional value of $21 and a fair value of $(3).

We have fixed-to-fixed and floating-to-fixed cross-currency swaps on foreign currency-denominated debt instruments with a U.S. dollar notional value of $45,606 to hedge our exposure to changes in foreign currency exchange rates. These derivatives have been designated at inception and qualify as cash flow hedges with a net fair value of $(6,700) at June 30, 2020. We have no rate locks at June 30, 2020.

We have foreign exchange contracts with a U.S. dollar notional value of $298 to provide currency at a fixed rate to hedge a portion of the exchange risk involved in foreign currency-denominated transactions. These foreign exchange contracts include fair value hedges, cash flow hedges and economic (nonqualifying) hedges with a total net fair value of $4 at June 30, 2020.

We have designated €1,450 million aggregate principal amount of debt as a hedge of the variability of some of the Euro-denominated net investments of our subsidiaries. The gain or loss on the debt that is designated as, and is effective as, an economic hedge of the net investment in a foreign operation is recorded as a currency translation adjustment within accumulated other comprehensive income, net on the consolidated balance sheet.

Item 4. Controls and Procedures

The registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the registrant is recorded, processed, summarized, accumulated and communicated to its management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The chief executive officer and chief financial officer have performed an evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of June 30, 2020. Based on that evaluation, the chief executive officer and chief financial officer concluded that the registrant’s disclosure controls and procedures were effective as of June 30, 2020.

There have not been any changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Due to the COVID-19 pandemic, most of our corporate employees are working remotely. We continue to monitor and assess the COVID-19 situation on our internal controls over financial reporting to address any potential impact on their design and operating effectiveness.

63

AT&T INC.

JUNE 30, 2020

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this report contains forward-looking statements that are subject to risks and uncertainties, and actual results could differ materially. Many of these factors are discussed in more detail in the “Risk Factors” section. We claim the protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995.

The following factors could cause our future results to differ materially from those expressed in the forward-looking statements:

• The severity, magnitude and duration of the COVID-19 pandemic and containment, mitigation and other measures taken in response, including the potential impacts of these matters on our business and operations.

• Our inability to predict the extent to which the COVID-19 pandemic and related impacts will continue to impact our business operations, financial performance and results of operations.

• Adverse economic, political and/or capital access changes in the markets served by us or in countries in which we have significant investments and/or operations, including the impact on customer demand and our ability and our suppliers’ ability to access financial markets at favorable rates and terms.

• Increases in our benefit plans’ costs, including increases due to adverse changes in the United States and foreign securities markets, resulting in worse-than-assumed investment returns and discount rates; adverse changes in mortality assumptions; adverse medical cost trends; and unfavorable or delayed implementation or repeal of healthcare legislation, regulations or related court decisions.

• The final outcome of FCC and other federal, state or foreign government agency proceedings (including judicial review, if any, of such proceedings) and legislative efforts involving issues that are important to our business, including, without limitation, pending Notices of Apparent Liability; the transition from legacy technologies to IP-based infrastructure, including the withdrawal of legacy TDM-based services; universal service; broadband deployment; wireless equipment siting regulations and, in particular, siting for 5G service; E911 services; competition policy; privacy; net neutrality; multichannel video programming distributor services and equipment; content licensing and copyright protection; availability of new spectrum on fair and balanced terms; and wireless and satellite license awards and renewals.

• Enactment of additional state, local, federal and/or foreign regulatory and tax laws and regulations, or changes to existing standards and actions by tax agencies and judicial authorities including the resolution of disputes with any taxing jurisdictions, pertaining to our subsidiaries and foreign investments, including laws and regulations that reduce our incentive to invest in our networks, resulting in lower revenue growth and/or higher operating costs.

• Potential changes to the electromagnetic spectrum currently used for broadcast television and satellite distribution being considered by the FCC could negatively impact WarnerMedia’s ability to deliver linear network feeds of its domestic cable networks to its affiliates, and in some cases, WarnerMedia’s ability to produce high-value news and entertainment programming on location.

• U.S. and foreign laws and regulations regarding intellectual property rights protection and privacy, personal data protection and user consent are complex and rapidly evolving and could result in adverse impacts to our business plans, increased costs, or claims against us that may harm our reputation.

• The ability of our competitors to offer product/service offerings at lower prices due to lower cost structures and regulatory and legislative actions adverse to us, including non-regulation of comparable alternative technologies and/or government-owned or subsidized networks.

• Disruption in our supply chain for a number of reasons, including, difficulties in obtaining export licenses for certain technology, inability to secure component parts, general business disruption, natural disasters, safety issues, economic and political instability and public health emergencies.

• The continued development and delivery of attractive and profitable wireless, video and broadband offerings and devices, and, in particular, the success of our new HBO Max platform; the extent to which regulatory and build-out requirements apply to our offerings; our ability to match speeds offered by our competitors and the availability, cost and/or reliability of the various technologies and/or content required to provide such offerings.

• Our ability to generate advertising revenue from attractive video content, especially from WarnerMedia, in the face of unpredictable and rapidly evolving public viewing habits and legal restrictions on the use of personal data.

• The availability and cost and our ability to adequately fund additional wireless spectrum and network upgrades; and regulations and conditions relating to spectrum use, licensing, obtaining additional spectrum, technical standards and deployment and usage, including network management rules.

• Our ability to manage growth in wireless data services, including network quality and acquisition of adequate spectrum at reasonable costs and terms.

64

AT&T INC.

JUNE 30, 2020

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

• The outcome of pending, threatened or potential litigation (which includes arbitrations), including, without limitation, patent and product safety claims by or against third parties.

• The impact from major equipment or software failures on our networks, including satellites operated by DIRECTV; the effect of security breaches related to the network or customer information; our inability to obtain handsets, equipment/software or have handsets, equipment/software serviced in a timely and cost-effective manner from suppliers; and in the case of satellites launched, timely provisioning of services from vendors; or severe weather conditions including flooding and hurricanes, natural disasters including earthquakes and forest fires, pandemics, energy shortages, wars or terrorist attacks.

• The issuance by the Financial Accounting Standards Board or other accounting oversight bodies of new accounting standards or changes to existing standards.

• Our ability to successfully integrate our WarnerMedia operations, including the ability to manage various businesses in widely dispersed business locations and with decentralized management.

• Changes in our corporate strategies, such as changing network-related requirements or acquisitions and dispositions, which may require significant amounts of cash or stock, to respond to competition and regulatory, legislative and technological developments.

• The uncertainty surrounding further congressional action to address spending reductions, which may result in a significant decrease in government spending and reluctance of businesses and consumers to spend in general.

Readers are cautioned that other factors discussed in this report, although not enumerated here, also could materially affect our future earnings.

65

AT&T INC.

JUNE 30, 2020

PART II – OTHER INFORMATION

Dollars in millions except per share amounts

Item 1A. Risk Factors

We discuss in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 various risks that may materially affect our business. We use this section to update this discussion to reflect material developments. For the second quarter of 2020, there were no such material developments.

66

AT&T INC.

JUNE 30, 2020

PART II – OTHER INFORMATION - CONTINUED

Dollars in millions except per share amounts

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) A summary of our repurchases of common stock during the second quarter of 2020 is as follows:
		(a)	(b)		(c)	(d)
Period		Total Number of Shares (or Units) Purchased 1, 2, 3	Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs1	Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under The Plans or Programs
April 1, 2020 - April 30, 2020		48,894	$	33.41	-	177,942,230
May 1, 2020 - May 31, 2020		145,630		33.33	-	177,942,230
June 1, 2020 - June 30, 2020		937,490		29.85	-	177,942,230
Total		1,132,014	$	30.45	-
1	In March 2014, our Board of Directors approved an authorization to repurchase up to 300 million shares of our common
	stock. The authorization has no expiration date.
2	Of the shares repurchased, 556,889 shares were acquired through the withholding of taxes on the vesting of restricted stock
	and performance shares or on the exercise price of options.
3	Of the shares repurchased, 575,125 shares were acquired through reimbursements from AT&T maintained Voluntary Employee Benefit
	Association (VEBA) trusts.

Item 6. Exhibits
The following exhibits are filed or incorporated by reference as a part of this report:
Exhibit
Number	Exhibit Description
3.1	Bylaws (Exhibit 3.1 to Form 8-K filed on June 26, 2020)
4.1	Description of AT&T's Securities Registered Under Section 12 of the Exchange Act
10.1	Supplemental Life Insurance Plan (Exhibit 10.1 to Form 8-K filed on June 26, 2020)
10.2	Agreement between Jason Kilar and WarnerMedia LLC
31	Rule 13a-14(a)/15d-14(a) Certifications
	31.1 Certification of Principal Executive Officer
	31.2 Certification of Principal Financial Officer
32	Section 1350 Certifications
101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL: (i) Consolidated Statements of Cash Flows, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Balance Sheets, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, (formatted as Inline XBRL and contained in Exhibit 101).

67

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

        August 5, 2020 AT&T Inc.       /s/ John J. Stephens John J. Stephens Senior Executive Vice President and Chief Financial Officer

68

EX-4.1

1

DESCRIPTION OF SECURITIES OF AT&T INC. REGISTERED UNDER SECTION 12 OF THE

EXCHANGE ACT AS OF DECEMBER 31, 2019

TABLE OF CONTENTS

DESCRIPTION OF THE COMPANY’S COMMON STOCK ..................................................................................... 1

DESCRIPTION OF THE DEPOSITARY SHARES AND 5.000% PERPETUAL PREFERRED STOCK, SERIES A4

DESCRIPTION OF THE FLOATING RATE GLOBAL NOTES DUE 2020 AND THE FLOATING RATE

GLOBAL NOTES DUE 2023 ................................................................ ................................................................ ..... 13

DESCRIPTION OF THE 1.875% GLOBAL NOTES DUE 2020, 2.500% GLOBAL NOTES DUE 2023 AND THE

3.550% GLOBAL NOTES DUE 2032 ................................................................ ........................................................ 22

DESCRIPTION OF THE 2.650% GLOBAL NOTES DUE 2021, THE 2.400% GLOBAL NOTES DUE 2024, THE

3.500% GLOBAL NOTES DUE 2025 AND THE 3.375% GLOBAL NOTES DUE 2034 ................................ ....... 31

DESCRIPTION OF THE 1.450% GLOBAL NOTES DUE 2022, THE 2.750% GLOBAL NOTES DUE 2023, THE

1.050% GLOBAL NOTES DUE 2023, THE 1.300% GLOBAL NOTES DUE 2023, THE 1.950% GLOBAL

NOTES DUE 2023, THE 1.800% GLOBAL NOTES DUE 2026, THE 2.350% GLOBAL NOTES DUE 2029, THE

2.600% GLOBAL NOTES DUE 2029, THE 2.450% GLOBAL NOTES DUE 2035 AND THE 3.150% GLOBAL

NOTES DUE 2036 ................................................................ ................................................................ ...................... 40

DESCRIPTION OF THE 0.250% GLOBAL NOTES DUE 2026, THE 0.800% GLOBAL NOTES DUE 2030 AND

THE 1.800% GLOBAL NOTES DUE 2039 ................................................................ ............................................... 52

DESCRIPTION OF THE 4.250% GLOBAL NOTES DUE 2050 ................................................................ .............. 61

DESCRIPTION OF THE 5.350% GLOBAL NOTES DUE 2066 AND THE 5.625% GLOBAL NOTES DUE 206768

DESCRIPTION OF THE 7.000% GLOBAL NOTES DUE 2040 AND THE 4.875% GLOBAL NOTES DUE 204476

DESCRIPTION OF THE 4.250% GLOBAL NOTES DUE 2043 ................................................................ .............. 84

DESCRIPTION OF THE 2.900% GLOBAL NOTES DUE 2026, THE 4.375% GLOBAL NOTES DUE 2029 AND

THE 5.200% GLOBAL NOTES DUE 2033 ................................................................ ............................................... 92

1

DESCRIPTION OF THE COMPANY’S COMMON STOCK

The following summary of AT&T Inc.’s (“AT&T”) common stock is based on and qualified by the Company’s

Restated Certificate of Incorporation and Bylaws as of December 31, 2019. For a complete description of the terms and

provisions of the Company’s equity securities, including its common stock, refer to the Restated Certificate of Incorporation

and the Bylaws, both of which are filed as exhibits to AT&T’s Annual Report on Form 10-K for the year ended December 31,

2019. Throughout this exhibit, references to “we,” “our,” “us” and “the Company” refer to AT&T.

General

Our authorized share capital consists of 14,010,000,000 shares, of which 14,000,000,000 are common shares having

a par value of $1.00 per share and 10,000,000 are shares of preferred stock, par value $1.00 per share. As of December 31,

2019, 7,254,555,140 shares of common stock were outstanding and 48,000 shares of preferred stock were outstanding.

Our common stock is listed on the New York Stock Exchange under the symbol “T”.

The transfer agent for the common stock is Computershare Trust Company, N.A., P.O. Box 505005, Louisville,

Kentucky 40233.

We typically do not issue physical stock certificates. Instead, we record evidence of stock ownership solely on our

corporate records. However, we will issue a physical stock certificate if a stockholder so requests.

Holders of common stock do not have any conversion, redemption, preemptive or cumulative voting rights. In the

event of our dissolution, liquidation or winding-up , common stockholders share ratably in any assets remaining after all

creditors are paid in full, including holders of our debt securities and after the liquidation preference of holders of preferred

stock has been satisfied.

Some of the provisions of our Restated Certificate of Incorporation and our Bylaws may tend to deter any potential

unfriendly tender offers or other efforts to obtain control of us. At the same time, these provisions will tend to assure

continuity of management and corporate policies and to induce any persons seeking control or a business combination with

us to negotiate on terms acceptable to our then-elected board of directors.

Dividends

Common stockholders are entitled to participate equally in dividends when dividends are declared by our board of

directors out of funds legally available for dividends.

Voting Rights

Each holder of common stock is entitled to one vote for each share for all matters voted on by common

stockholders.

Election of Directors

Holders of common stock may not cumulate their votes in the election of directors. In an election of directors, each

director must be elected by the vote of the majority of the votes cast with respect to that director’s election. If a nominee for

director is not elected and the nominee is an incumbent director, such incumbent director must promptly tender his or her

resignation to the board of directors, subject to acceptance by the board of directors. The Corporate Governance and

Nominating Committee of the board of directors (the “Corporate Governance and Nominating Committee”) will make a

recommendation to the board of directors as to whether to accept or reject the tendered resignation, or whether other action

should be taken. The board of directors will act on the tendered resignation, taking into account the Corporate Governance

and Nominating Committee’s recommendation, and publicly disclose (by a press release, a filing with the Securities and

Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered

resignation and the rationale behind the decision within 90 days from the date of certification of election results. The

Corporate Governance and Nominating Committee in making its recommendation and the board of directors in making its

decision may each consider any factors or other information that they consider appropriate and relevant. Any incumbent

director who tenders his or her resignation following such failure to be elected will not participate in the recommendation of

2

the Corporate Governance and Nominating Committee or the decision of the board of directors with respect to his or her

resignation.

If the number of persons properly nominated for election as directors as of the date that is 10 days before the record

date for the meeting at which such vote is to be held exceeds the number of directors to be elected, then the directors shall be

elected by a plurality of the votes cast.

For purposes of the election of directors, a majority of votes cast shall mean that the number of shares voted “for”

the election of a director exceeds the number of votes cast “against” the election of such director.

Other Matters

Except with respect to the election of directors as described above, all other matters are determined by a majority of

the votes cast, unless otherwise required by law or the certificate of incorporation for the action proposed.

For these purposes, a majority of votes cast shall mean that the number of shares voted “for” a matter exceeds the

number of votes cast “against” such matter.

Quorum

At least 40% of the shares entitled to vote at the meeting must be present in person or by proxy, in order to

constitute a quorum.

Board of Directors

Our Bylaws provide that all directors are required to stand for re-election every year. At any meeting of our board of

directors, a majority of the total number of the directors constitutes a quorum.

Action without Stockholder Meeting

Our Restated Certificate of Incorporation also requires that stockholders representing at least two-thirds of the total

number of shares outstanding and entitled to vote thereon must sign a written consent for any action without a meeting of the

stockholders.

Advance Notice Bylaws

Our Bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of

candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures

provide that notice of such stockholder proposals must be timely given in writing to the Secretary of AT&T prior to the

meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices

not less than 90 days nor more than 120 days prior to the anniversary date of the annual meeting for the preceding year. The

notice must contain certain information specified in the Bylaws.

Proxy Access

Our Bylaws permit any stockholder or group of up to twenty stockholders who have maintained continuous

qualifying ownership of 3% or more of our outstanding common stock for at least the previous three years to include up to a

specified number of director nominees in our proxy materials for an annual meeting of stockholders. The maximum number

of stockholder nominees permitted under the proxy access provisions of our Bylaws shall be the greater of two or 20% of the

total number of directors of AT&T on the last day a notice of nomination may be submitted. 

Notice of a nomination pursuant to the proxy access provisions of our Bylaws must be submitted to the Secretary of

AT&T at our principal executive office no earlier than 150 days and no later than 120 days before the anniversary of the date

that we mailed our proxy statement for the previous year’s annual meeting of stockholders. The notice must contain certain

information specified in our Bylaws.

3

Section 203 of the General Corporation Law of the State of Delaware

We are also subject to Section 203 of the General Corporation Law of the State of Delaware. Section 203 prohibits

us from engaging in any business combination (as defined in Section 203) with an “interested stockholder” for a period of

three years subsequent to the date on which the stockholder became an interested stockholder unless:

●

prior to such date, our board of directors approves either the business combination or the transaction in

which the stockholder became an interested stockholder; 

●

upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the

interested stockholder owns at least 85% of the outstanding voting stock (with certain exclusions); or 

●

the business combination is approved by our board of directors and authorized by a vote (and not by written

consent) of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder. 

For purposes of Section 203, an “interested stockholder” is defined as an entity or person beneficially owning 15%

or more of our outstanding voting stock, based on voting power, and any entity or person affiliated with or controlling or

controlled by such an entity or person.

A “business combination” includes mergers, asset sales and other transactions resulting in financial benefit to a

stockholder. Section 203 could prohibit or delay mergers or other takeover or change of control attempts with respect to us

and, accordingly, may discourage attempts that might result in a premium over the market price for the shares held by

stockholders.

Such provisions may have the effect of deterring hostile takeovers or delaying changes in control of management or

us.

4

DESCRIPTION OF THE DEPOSITARY SHARES

AND 5.000% PERPETUAL PREFERRED STOCK, SERIES A

The following summary of AT&T’s above referenced securities is based on and qualified by the pertinent sections of

our Restated Certificate of Incorporation, including the Certificate of Designations creating the 5.000% Perpetual Preferred

Stock, Series A (the “Series A”). For a complete description of the terms and provisions of the depositary shares and the

Series A, please refer to our Restated Certificate of Incorporation, which is filed as an exhibit to AT&T’s Annual Report on

Form 10-K for the year ended December 31, 2019 and to the Certificate of Designations, which is filed an exhibit to a Form

8-A filed with the Securities and Exchange Commission on December 12, 2019.

References to the “holders” of the Series A shall mean Computershare Inc. and Computershare Trust Company,

N.A., (the “Depositary”). References to “holders” of depositary shares mean those who own depositary shares registered in

their own names, on the books that we or the Depositary maintain for this purpose, and not indirect holders who own

beneficial interests in depositary shares registered in street name or issued in book-entry form through the Depositary Trust

Company (“DTC”). Holders of the depositary shares are entitled through the Depositary to exercise their proportional

rights and preferences of the Series A, as described under “Description of the Depositary Shares.”

DESCRIPTION OF THE 5.000% PERPETUAL PREFERRED STOCK, SERIES A

General

Under our Restated Certificate of Incorporation, we have the authority to issue up to 10,000,000 shares of preferred

stock, par value $1.00 per share. Our board of directors (or a duly authorized committee of the board) is authorized without

further stockholder action to cause the issuance of shares of preferred stock, including the Series A. The Series A represents a

single series of our authorized preferred stock.

We have issued 48,000 shares of the Series A, which remains the amount outstanding, subject to our ability to

reopen and issue additional shares and/or increase or decrease the number of designated shares of Series A as described

below. The shares of Series A are fully paid and nonassessable and are not convertible into, or exchangeable for, shares of

our common stock or any other class or series of our other securities and are not subject to any sinking fund or any other

obligation of us for their repurchase or retirement. The shares of Series A have a “stated amount” per share of $25,000 and

are held solely by the Depositary as described under “Description of the Depositary Shares” below.

The number of designated shares of Series A may from time to time be increased (but not in excess of the total

number of shares of preferred stock authorized under our Restated Certificate of Incorporation, less shares of any other series

of preferred stock designated at the time of such increase) or decreased (but not below the number of shares of Series A then

outstanding) by resolution of the board (or a duly authorized committee of the board), without the vote or consent of the

holders of the Series A. Shares of Series A that are redeemed, purchased or otherwise acquired by us will be cancelled and

shall revert to authorized but unissued shares of preferred stock undesignated as to series. We have the authority to issue

fractional shares of Series A.

Ranking

With respect to the payment of dividends and distributions of assets upon any liquidation, dissolution or winding up,

the Series A ranks:

●

senior to our common stock and any class or series of our stock that ranks junior to the Series A in the

payment of dividends or in the distribution of assets upon our liquidation, dissolution or winding up

(including our common stock, “junior stock”);

●

senior to or on a parity with each other series of our preferred stock we may issue (except for any senior

series that may be issued upon the requisite vote or consent of the holders of at least two thirds of the shares

of the Series A at the time outstanding and entitled to vote, voting together with any other series of preferred

stock that would be adversely affected by such issuance substantially in the same manner and entitled to vote

as a single class in proportion to their respective stated amounts) with respect to the payment of dividends

and distributions of assets upon any liquidation, dissolution or winding up of the Company; and

5

●

junior to all existing and future indebtedness and other non-equity claims on us.

Dividends

Holders of Series A shall be entitled to receive, when, as and if declared by our board (or a duly authorized

committee of the board), but only out of funds legally available therefor, cumulative cash dividends at the annual rate of

5.000% of the stated amount per share, and no more, payable quarterly in arrears on the 1st day of each February, May,

August and November, respectively, in each year, beginning on February 1, 2020 (each, a “dividend payment date”), with

respect to the dividend period (or portion thereof) ending on the day preceding such respective dividend payment date, to

holders of record on the 15th calendar day before such dividend payment date or such other record date not more than 60 nor

less than 10 days preceding such dividend payment date fixed for that purpose by our board (or a duly authorized committee

of the board) in advance of payment of each particular dividend. The amount of the dividend per share of Series A for each

dividend period (or portion thereof) is calculated on the basis of a 360-day year consisting of twelve 30-day months. If any

dividend payment date is not a business day, the applicable dividend will be paid on the first business day following that day

without adjustment. We will not pay interest or any sum of money instead of interest on any dividend payment that may be in

arrears on the Series A.

“Dividend period” means each period commencing on (and including) a dividend payment date and continuing to

(but not including) the next succeeding dividend payment date, except that the first dividend period for the initial issuance of

shares of Series A shall commence on (and include) the original issue date.

A “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in

The City of New York are not authorized or obligated by law, regulation or executive order to close.

Restrictions on Dividends, Redemption and Repurchases

So long as any share of Series A remains outstanding, unless full accrued dividends on all outstanding shares of

Series A through and including the most recently completed dividend period have been paid or declared and a sum sufficient

for the payment thereof has been set aside for payment:

(i) no dividend may be declared or paid or set aside for payment on any junior stock, other than a dividend

payable solely in stock that ranks junior to the Series A in the payment of dividends and in the distribution of assets

on any liquidation, dissolution or winding up of the Company; and

(ii) no monies may be paid or made available for a sinking fund for the redemption or retirement of junior

stock, nor shall any shares of junior stock be purchased, redeemed or otherwise acquired for consideration by us,

directly or indirectly, other than:

●

as a result of (x) a reclassification of junior stock, or (y) the exchange or conversion of one share of junior

stock for or into another share of stock that ranks junior to the Series A in the payment of dividends and in

the distribution of assets on any liquidation, dissolution or winding up of the Company; or

●

through the use of the proceeds of a substantially contemporaneous sale of other shares of stock that ranks

junior to the Series A in the payment of dividends and in the distribution of assets on any liquidation,

dissolution or winding up of the Company; or

●

purchases, redemptions or other acquisitions of shares of junior stock in connection with any employment

contract, benefit plan, or other similar arrangement with or for the benefit of employees, officers, directors

or consultants.

“Accrued dividends” means, with respect to shares of Series A, an amount computed at the annual dividend rate for

Series A from, as to each share, the date of issuance of such share to and including the date to which such dividends are to be

accrued (whether or not such dividends have been declared), less the aggregate amount of all dividends previously paid on

such share.

If our board (or a duly authorized committee of the board) elects to declare only partial instead of full dividends for

a dividend payment date and related dividend period on the shares of Series A or any class or series of our stock that ranks on

6

a parity with Series A in the payment of dividends (“dividend parity stock”), then to the extent permitted by the terms of the

Series A and each outstanding series of dividend parity stock such partial dividends shall be declared on shares of Series A

and dividend parity stock, and dividends so declared shall be paid, as to any such dividend payment date and related dividend

period in amounts such that the ratio of the partial dividends declared and paid on each such series to full dividends on each

such series is the same. As used in this paragraph, “full dividends” means, as to the Series A and any dividend parity stock

that bears dividends on a cumulative basis, the amount of dividends that would need to be declared and paid to bring the

Series A and such dividend parity stock current in dividends, including undeclared dividends for past dividend periods (that

is, for Series A, full accrued dividends). To the extent a dividend period with respect to the Series A or any series of dividend

parity stock (in either case, the “first series”) coincides with more than one dividend period with respect to another series as

applicable (in either case, a “second series”), for purposes of the immediately preceding sentence our board (or a duly

authorized committee of the board) may, to the extent permitted by the terms of each affected series, treat such dividend

period for the first series as two or more consecutive dividend periods, none of which coincides with more than one dividend

period with respect to the second series, or may treat such dividend period(s) with respect to any dividend parity stock and

dividend period(s) with respect to the Series A for purposes of the immediately preceding sentence in any other manner that it

deems to be fair and equitable in order to achieve ratable payments of dividends on such dividend parity stock and the Series

A.

Subject to the foregoing, and not otherwise, such dividends (payable in cash, stock or otherwise) as may be

determined by our board (or a duly authorized committee of the board) may be declared and paid on any junior stock from

time to time out of any funds legally available therefor, and the shares of Series A shall not be entitled to participate in any

such dividend.

Optional Redemption

The Series A is perpetual and has no maturity date. We may, at our option, redeem the shares of Series A:

(i)

in whole or in part, at any time on or after December 12, 2024, at a cash redemption price equal to

the stated amount (

i.e.

, $25,000 per share of Series A) (equivalent to $25.00 per depositary share), plus (except as

otherwise provided herein) an amount equal to all accrued and unpaid dividends thereon (whether or not declared),

to, but not including, the date fixed for redemption; or

(ii)

in whole but not in part at any time within 90 days after the conclusion of any review or appeal

process instituted by us following the occurrence of a ratings event at a cash redemption price equal to $25,500 per

share of Series A (equivalent to $25.50 per depositary share), plus (except as otherwise provided herein) an amount

equal to all accrued and unpaid dividends thereon (whether or not declared) to, but not including, the date fixed for

redemption.

“Ratings event” means that any nationally recognized statistical rating organization as defined in Section 3(a)(62) of

the Exchange Act or in any successor provision thereto, that then publishes a rating for us (a “rating agency”) amends,

clarifies or changes the criteria it uses to assign equity credit to securities such as the Series A, which amendment,

clarification or change results in:

(i)

the shortening of the length of time the Series A is assigned a particular level of equity credit by

that rating agency as compared to the length of time they would have been assigned that level of equity credit by that

rating agency or its predecessor on the initial issuance of the Series A; or

(ii)

the lowering of the equity credit (including up to a lesser amount) assigned to the Series A by that

rating agency as compared to the equity credit assigned by that rating agency or its predecessor on the initial

issuance of the Series A.

The redemption price for any shares of Series A shall be payable on the redemption date to the holder of such shares

against surrender of the certificate(s) evidencing such shares to us or our agent, if the shares of Series A are issued in

certificated form. Any accrued but unpaid dividends payable on a redemption date that occurs subsequent to the applicable

record date for a dividend period shall not be paid to the holder entitled to receive the redemption price on the redemption

date, but rather shall be paid to the holder of record of the redeemed shares on such record date relating to the applicable

dividend payment date.

7

In case of any redemption of only part of the shares of Series A at the time outstanding, the shares to be redeemed

shall be selected either

pro rata

from the holders of record of Series A in proportion to the number of shares of Series A held

by such holders or by lot. Subject to the provisions hereof, our board (or a duly authorized committee of the board) shall have

full power and authority to prescribe the terms and conditions on which shares of Series A shall be redeemed from time to

time. If we shall have issued certificates for the Series A and fewer than all shares represented by any certificates are

redeemed, new certificates shall be issued representing the unredeemed shares without charge to the holders thereof.

Redemption Procedures

A notice of every redemption of shares of Series A shall be given by first class mail, postage prepaid, addressed to

the holders of record of the shares to be redeemed at their respective last addresses appearing on our books. Such mailing

shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in

this paragraph shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but

failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of

Series A designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of

Series A. Notwithstanding the foregoing, if the Series A or any depositary shares representing interests in the Series A are

issued in book-entry form through The Depository Trust Company or any other similar facility, the Depositary Trust

Company or such other facility will provide notice of redemption by any authorized method to holders of record of the

applicable Series A or depositary shares representing interests in the Series A not less than 30, nor more than 60, days prior to

the date fixed for redemption of the Series A and related depositary shares.

Each notice of redemption given to a holder shall state:

●

the redemption date;

●

the number of shares of the Series A to be redeemed and, if less than all shares of the Series A held by such

holder are to be redeemed, the number of shares to be redeemed from such holder;

●

the redemption price;

●

the place or places where certificates for such shares are to be surrendered for payment of the redemption

price; and

●

that dividends will cease to accrue on the redemption date.

If notice of redemption has been duly given, and if on or before the redemption date specified in the notice all funds

necessary for the redemption have been set aside by us, separate and apart from our other funds, in trust for the

pro rata

benefit of the holders of the shares called for redemption, so as to be and continue to be available for that purpose, then,

notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation in the

case that the shares of Series A are issued in certificated form, on and after the redemption date dividends shall cease to

accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and

all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the

holders thereof to receive the amount payable on such redemption, without interest. Any funds unclaimed at the end of two

years from the redemption date, to the extent permitted by law, shall be released from the trust so established and may be

commingled with our other funds, and after that time the holders of the shares so called for redemption shall look only to us

for payment of the redemption price of such shares.

The Series A is not subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Series

A do not have the right to require redemption of any shares of Series A.

Liquidation Right

In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or

involuntary, before any distribution or payment out of our assets may be made to or set aside for the holders of any junior

stock, holders of Series A will be entitled to receive out of our assets legally available for distribution to our stockholders an

amount equal to the stated amount per share, together with an amount equal to all accrued dividends to the date of payment

whether or not earned or declared (the “liquidation preference”).

8

If our assets are not sufficient to pay the liquidation preference in full to all holders of Series A and all holders of

any class or series of our stock that ranks on a parity with Series A in the distribution of assets on liquidation, dissolution or

winding up of the Company (the “liquidation preference parity stock”), the amounts paid to the holders of Series A and to the

holders of all liquidation preference parity stock shall be

pro rata

in accordance with the respective aggregate liquidation

preferences of Series A and all such liquidation preference parity stock. In any such distribution, the “liquidation preference”

of any holder of our stock other than the Series A means the amount otherwise payable to such holder in such distribution

(assuming no limitation on our assets available for such distribution), including an amount equal to any declared but unpaid

dividends in the case of any holder of stock on which dividends accrue on a noncumulative basis and, in the case of any

holder of stock on which dividends accrue on a cumulative basis, an amount equal to any unpaid, accrued, cumulative

dividends, whether or not earned or declared, as applicable. If the liquidation preference has been paid in full to all holders of

Series A and all holders of any liquidation preference parity stock, the holders of junior stock will be entitled to receive all of

our remaining assets according to their respective rights and preferences.

For purposes of the liquidation rights, the merger, consolidation or other business combination of us with or into any

other corporation, including a transaction in which the holders of Series A receive cash, securities or property for their shares,

or the sale, conveyance, lease, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or

substantially all of our assets, shall not constitute a liquidation, dissolution or winding up of the Company.

Voting Rights

Except as indicated below or otherwise required by law, the holders of the Series A do not have any voting rights.

Right to Elect Two Directors on Nonpayment Events

. If and whenever dividends payable on Series A have not been

declared and paid in an aggregate amount equal to full dividends for at least six quarterly dividend periods or their equivalent

(whether or not consecutive) (a “nonpayment event”), the number of directors then constituting our board shall be

automatically increased by two and the holders of Series A, together with the holders of any and all other series of

outstanding voting preferred stock then entitled to vote for additional directors, voting together as a single class in proportion

to their respective stated amounts, shall be entitled to elect the two additional directors (the “preferred stock directors”);

provided

that our board shall at no time include more than two preferred stock directors (including, for purposes of this

limitation, all directors that the holders of any series of voting preferred stock are entitled to elect pursuant to like voting

rights).

“Voting preferred stock” means any other class or series of preferred stock that ranks equally with the Series A as to

the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up of the affairs of the

Company and upon which like voting rights have been conferred and are exercisable.

In the event that the holders of Series A and such other holders of voting preferred stock shall be entitled to vote for

the election of the preferred stock directors following a nonpayment event, such directors shall be initially elected following

such nonpayment event only at a special meeting called at the request of the holders of record of at least 20% of (i) the stated

amount of the Series A and (ii) each other series of voting preferred stock then outstanding (unless such request for a special

meeting is received less than 90 days before the date fixed for the next annual or special meeting of our stockholders, in

which event such election shall be held only at such next annual or special meeting of stockholders), and at each subsequent

annual meeting of our stockholders. Such request to call a special meeting for the initial election of the preferred stock

directors after a nonpayment event shall be made by written notice, signed by the requisite holders of Series A or voting

preferred stock, and delivered to our Secretary in such manner as provided for in the certificate of designations creating the

Series A, or as may otherwise be required or permitted by applicable law. If our Secretary fails to call a special meeting for

the election of the preferred stock directors within 20 days of receiving proper notice, any holder of Series A may call such a

meeting at our expense solely for the election of the preferred stock directors, and for this purpose and no other (unless

provided otherwise by applicable law) such Series A holder shall have access to our stock ledger.

At each meeting of stockholders at which holders of the Series A and such other holders of voting preferred stock

are entitled to vote for the election of the preferred stock directors, the holders of record of 40% of the total number of the

Series A and voting preferred stock (determined on a series by series basis) entitled to vote at the meeting, present in person

or by proxy, will constitute a quorum for the transaction of business. Each preferred stock director will be elected by a vote of

the majority of the votes cast with respect to that preferred stock director’s election.

When (i) accrued dividends have been paid in full on the Series A after a nonpayment event, and (ii) the rights of

holders of any voting preferred stock to participate in electing the preferred stock directors shall have ceased, the right of

9

holders of the Series A to participate in the election of preferred stock directors shall cease (but subject always to the

revesting of such voting rights in the case of any future nonpayment event), the terms of office of all the preferred stock

directors shall immediately terminate, and the number of directors constituting our board shall automatically be reduced

accordingly.

Any preferred stock director may be removed at any time without cause by the holders of record of a majority of the

outstanding shares of Series A and voting preferred stock, when they have the voting rights described above (voting together

as a single class in proportion to their respective stated amounts). The preferred stock directors elected at any such special

meeting shall hold office until the next annual meeting of the stockholders if such office shall not have previously terminated

as above provided. In case any vacancy shall occur among the preferred stock directors, a successor shall be elected by our

board to serve until the next annual meeting of the stockholders on the nomination of the then remaining preferred stock

director or, if no preferred stock directo r remains in office, by the vote of the holders of record of a majority of the

outstanding shares of Series A and such voting preferred stock for which dividends have not been paid, voting as a single

class in proportion to their respective stated amounts. The preferred stock directors shall each be entitled to one vote per

director on any matter that shall come before our board for a vote.

Other Voting Rights

So long as any shares of the Series A are outstanding, in addition to any other vote or consent of stockholders

required by law or by our Restated Certificate of Incorporation, the vote or consent of the holders of at least two-thirds of the

shares of Series A at the time outstanding, voting together with any other series of preferred stock that would be adversely

affected in substantially the same manner and entitled to vote as a single class in proportion to their respective stated amounts

(to the exclusion of all other series of preferred stock), given in person or by proxy, either in writing without a meeting or by

vote at any meeting called for the purpose, will be necessary for effecting or validating:

●

Amendment of Restated Certificate of Incorporation or Bylaws

. Any amendment, alteration or repeal of

any provision of our Restated Certificate of Incorporation or Bylaws that would alter or change the voting

powers, preferences or special rights of the Series A so as to affect them adversely;

provided

,

however

, that

the amendment of the Restated Certificate of Incorporation so as to authorize or create, or to increase the

authorized amount of, any class or series of stock that does not rank senior to the Series A in either the

payment of dividends or in the distributi on of assets on any liquidation, dissolution or winding up of the

Company shall not be deemed to affect adversely the voting powers, preferences or special rights of the

Series A;

●

Authorization of Senior Stock

. Any amendment or alteration of the certificate of incorporation to authorize

or create, or increase the authorized amount of, any shares of any class or series or any securities convertible

into shares of any class or series of our capital stock ranking prior to Series A in the payment of dividends or

in the distribution of assets on any liquidation, dissolution or winding up of the Company; or

●

Share Exchanges, Reclassifications, Mergers and Consolidations and Other Transactions

. Any

consummation of (x) a binding share exchange or reclassification involving the Series A or (y) a merger or

consolidation of the Company with another entity (whether or not a corporation), unless in each case (A) the

shares of Series A remain outstanding or, in the case of any such merger or consolidation with respect to

which we are not the surviving or resulting entity, the shares of Series A are converted into or exchanged for

preference securities of the surviving or resulting entity or its ultimate parent and such surviving or resulting

entity or ultimate parent, as the case may be, is organized under the laws of the United States or a state

thereof, and (B) such shares remaining outstanding or such preference securities, as the case may be, have

such rights, preferences, privileges and voting powers, and limitations and restrictions, and limitations and

restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights,

preferences, privileges and voting powers, and restrictions and limitations thereof, of the Series A

immediately prior to such consummation, taken as a whole.

To the fullest extent permitted by law, without the consent of the holders of the Series A, so long as such action does

not adversely affect the special rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of

the Series A, we may amend, alter, supplement or repeal any terms of the Series A contained in our Restated Certificate of

Incorporation or the certificate of designations for the following purposes:

10

(i)

to cure any ambiguity, omission, inconsistency or mistake in any such instrument; or

(ii)

to make any provision with respect to matters or questions relating to the Series A that is not

inconsistent with the provisions of the certificate of designations.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which the vote

would otherwise be required shall be effected, all outstanding shares of the Series A have been redeemed or called for

redemption on proper notice and sufficient funds have been set aside by us for the benefit of the holders of the Series A to

effect the redemption, unless in the case of a vote or consent required to authorize senior stock if the shares of Series A are

being redeemed with the proceeds from the sale of the stock to be authorized.

Under current provisions of the Delaware General Corporation Law, the holders of issued and outstanding preferred

stock are entitled to vote as a class, with the consent of the majority of the class being required to approve an amendment to

our Restated Certificate of Incorporation if the amendment would increase or decrease the aggregate number of authorized

shares of such class or increase or decrease the par value of the shares of such class.

No Preemptive and Conversion Rights

Holders of the Series A do not have any preemptive rights. The Series A is not convertible into or exchangeable for

property or shares of any other series or class of our capital stock.

Additional Classes or Series of Stock

We have the right to create and issue additional classes or series of stock ranking equally with or junior to the Series

A as to dividends and distribution of assets upon our liquidation, dissolution, or winding up without the consent of the

holders of the Series A, or the holders of the related depositary shares.

Transfer Agent and Registrar

Computershare Trust Company, N.A. is the transfer agent and registrar for the Series A as of the original issue date.

We may terminate such appointment and may appoint a successor transfer agent and/or registrar at any time and from time to

time, provided that we will use our best efforts to ensure that there is, at all relevant times when the Series A is outstanding, a

person or entity appointed and serving as transfer agent and/or registrar. The transfer agent and/or registrar may be a person

or entity affiliated with us.

DESCRIPTION OF THE DEPOSITARY SHARES

General

We have issued fractional interests in shares of the Series A in the form of depositary shares. Each depositary share

represents a 1/1,000th ownership interest in a share of the Series A and is evidenced by a depositary receipt.

The Series A represented by depositary shares has been deposited under a deposit agreement among us,

Computershare Inc. and Computershare Trust Company, N.A., as the Depositary, and the holders from time to time of the

depositary receipts evidencing the depositary shares. Subject to the terms of the deposit agreement, each holder of a

depositary share is entitled, through the Depositary, in proportion to the applicable fraction of a share of the Series A

represented by such depositary shares, to all the rights and preferences of the Series A represented thereby (including

dividend, voting, redemption and liquidation rights).

The depositary shares are listed on the NYSE under the symbol “T PRA”.

Dividends and Other Distributions

Each dividend on a depositary share will be in an amount equal to 1/1,000th of the dividend declared on the related

share of the Series A.

11

The Depositary distributes any cash dividends or other cash distributions received in respect of the deposited Series

A to the record holders of depositary shares relating to the underlying Series A in proportion to the number of depositary

shares held by each holder on the relevant record date. The Depositary distributes any property received by it other than cash

to the record holders of depositary shares entitled to those distributions in proportion to the number of depositary shares held

by each such holder, unless it determines that the distribution cannot be made proportionally among those holders or that it is

not feasible to make such distribution. In that event, the Depositary may, with our approval, sell such property received by it

and distribute the net proceeds from the sale to the holders of the depositary shares entitled to such distribution in proportion

to the number of depositary shares they hold.

Record dates for the payment of dividends and other matters relating to the depositary shares are the same as the

corresponding record dates for the Series A.

The amounts distributed to holders of depositary shares are reduced by any amounts required to be withheld by the

Depositary or by us on account of taxes or other governmental charges.

Redemption of Depositary Shares

If we redeem the Series A represented by the depositary shares, in whole or in part, a corresponding number of

depositary shares will be redeemed from the proceeds received by the Depositary resulting from the redemption of the Series

A held by the Depositary. The redemption price per depositary share will be equal to 1/1,000th of the redemption price per

share payable with respect to the Series A, plus an amount equal to any dividends thereon that, pursuant to the provisions of

the Certificate of Designations, are payable upon redemption. Whenever we redeem shares of the Series A held by the

Depositary, the Depositary will redeem, as of the same redemption date, the number of depositary shares representing shares

of the Series A so redeemed.

In case of any redemption of less than all of the outstanding depositary shares, the depositary shares to be redeemed

will be selected by the Depositary either

pro rata

or by lot. In any such case, we will redeem depositary shares only in

increments of 1,000 depositary shares and any integral multiple thereof.

The Depositary will provide notice of redemption by any authorized method to holders of the depositary shares not

less than 30 and not more than 60 days prior to the date fixed for redemption of the Series A and the related depositary

shares.

After the date fixed for redemption, the depositary shares called for redemption will no longer be deemed to be

outstanding, and all rights of the holders of those shares will cease, except the right to receive the amount payable and any

other property to which the holders were entitled upon the redemption. To receive this amount or other property, the holders

must surrender the depositary receipts evidencing their depositary shares to the depositary. Any funds that we deposit with

the Depositary for any depositary shares that the holders fail to redeem will be returned to us after a period of two years from

the date we deposit the funds.

Voting the Shares

Because each depositary share represents a 1/1,000th interest in a share of the Series A, holders of depositary shares

are entitled to a 1/1,000th of a vote per depositary share under those limited circumstances in which holders of the Series A

are entitled to a vote, as described above in “Description of the 5.000% Perpetual Preferred Stock, Series A—Voting Rights.”

When the depositary receives notice of any meeting at which the holders of the Series A are entitled to vote, the

Depositary will mail (or otherwise transmit by an authorized method) the information contained in the notice to the record

holders of the depositary shares relating to the Series

Each record holder of the depositary shares on the record date, which will be the same date as the record date for the

Series A, may instruct the Depositary to vote the amount of the Series A represented by the holder’s depositary shares.

Although each depositary share is entitled to 1/1,000th of a vote, the Depositary can only vote whole shares of Series A. To

the extent possible, the Depositary will vote the amount of the Series A represented by depositary shares in accordance with

the instructions it receives. We will agree to take all reasonable actions that the Depositary determines are necessary to enable

the Depositary to vote as instructed. If the Depositary does not receive specific instructions from the holders of any

depositary shares representing the Series A, it will not vote the amount of the Series A represented by such depositary shares.

12

Form of the Depositary Shares

The depositary shares are issued in book-entry form through DTC. The Series A is issued in registered form to the

Depositary.

13

DESCRIPTION OF THE FLOATING RATE GLOBAL NOTES DUE 2020 AND THE FLOATING RATE GLOBAL

NOTES DUE 2023

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company , N.A., acting as trustee (the “Indenture”) and

the Floating Rate Global Notes due 2020 (the “Floating Rate 2020 Notes”) and Floating Rate Global Notes due 2023 (the

“Floating Rate 2023 Notes” and, together with the Floating Rate 2020 Notes, the “Notes”). For a complete description of

the terms and provisions of the Notes, please refer to the Indenture, which is filed as an exhibit to AT&T’s Annual Report on

Form 10-K for the year ended December 31, 2019 and to the forms of Notes, which are filed as exhibits to the Form 8-A filed

with the Securities and Exchange Commission on June 21, 2017 and August 3, 2018. 

General 

The Floating Rate 2020 Notes:

●

were issued in an aggregate initial principal amount of €2,250,000,000, which remains the amount

outstanding, subject to our ability to issue additional Floating Rate 2020 Notes which may be of the same

series as the Floating Rate 2020 Notes as described under “— Further Issues”;

●

mature on August 3, 2020;

●

bear interest at the applicable interest rate on the Floating Rate 2020 Notes in effect for each day of an

Interest Period (as defined below) equal to the Applicable EURIBOR Rate plus 40 basis points (0.400%),

payable quarterly in arrears; 

●

are repayable at par at maturity;

●

are redeemable by us in connection with certain tax events as described below under “— Redemption Upon

a Tax Event”; and

●

are not subject to any sinking fund. 

The Floating Rate 2023 Notes:

●

were issued in an aggregate initial principal amount of €878,507,000, which remains the amount

outstanding, subject to our ability to issue additional Floating Rate 2023 Notes which may be of the same

series as the Floating Rate 2023 Notes as described under “— Further Issues”;

●

mature on September 5, 2023;

●

bear interest at the applicable interest rate on the Floating Rate 2023 Notes in effect for each day of an

Interest Period (as defined below) equal to the Applicable EURIBOR Rate plus 85 basis points (0.850%),

payable quarterly in arrears; 

●

are repayable at par at maturity;

●

are redeemable by us in connection with certain tax events as described below under “— Redemption Upon

a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are our unsecured and unsubordinated obligations and rank

pari passu

 with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. Principal

and interest payments on the Notes are payable by us in euro. Payments of principal, interest and additional amounts, if any,

in respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or common depositary,

14

as the case may be, as registered holder thereof. Under the terms of the Indenture, if the euro ceases to exist when payments

on the Notes are due under any circumstances, AT&T may supplement the Indenture to allow for payment in U.S. dollars.

The principal and interest payable in U.S. dollars on a Note at maturity, or upon redemption, will be paid by wire transfer of

immediately available funds against presentation of a Note at the office of the paying agent.

Interest

The Floating Rate 2020 Notes bear interest from August 3, 2018 at a floating rate determined in the manner

provided below, payable on February 3, May 3, August 3 and November 3 of each year (each such day, an “interest payment

date”), commencing on November 3, 2018, to the persons in whose names the Floating Rate 2020 Notes are registered at the

close of business on the 15th day preceding the respective interest payment date, subject to certain exceptions. The per annum

interest rate on the Floating Rate 2020 Notes in effect for each day of an Interest Period is equal to the Applicable EURIBOR

Rate plus 40 basis points (0.400%). The interest rate for the Floating Rate 2020 Notes for each Interest Period is set on

February 3, May 3, August 3 and November 3 of each year, and was set for the initial Interest Period on August 3, 2018 (each

such date, a “2020 Interest Reset Date”) until the principal on the Floating Rate 2020 Notes is paid or made available for

payment (the “2020 Principal Payment Date”). If any 2020 Interest Reset Date (other than the initial 2020 Interest Reset Date

occurring on August 3, 2018) and interest payment date would otherwise be a day that is not a EURIBOR business day, such

2020 Interest Reset Date and interest payment date shall be the next succeeding EURIBOR business day, unless the next

succeeding EURIBOR business day is in the next succeeding calendar month, in which case such 2020 Interest Reset Date

and interest payment date shall be the immediately preceding EURIBOR business day. 

The Floating Rate 2023 Notes bear interest from December 4, 2018 at a floating rate determined in a manner

provided below, payable on March 4, June 4, September 4 and December 4 of each year (each such day, an “interest payment

date”), commencing on March 4, 2019, to the persons in whose names the Floating Rate 2023 Notes are registered at the

close of business on the 15th day preceding the respective interest payment date, subject to certain exceptions, including that

the last interest payment date will be made on the maturity date, rather than the final interest payment date (a difference of

one day). The per annum interest rate on the Floating Rate 2023 Notes in effect for each day of an Interest Period is equal to

the Applicable EURIBOR Rate plus 85 basis points (0.850%). The interest rate for the Floating Rate 2023 Notes for each

Interest Period is set on March 4, June 4, September 4 and December 4 of each year, and was set for the initial Interest Period

on December 4, 2018 (each such date, a “2023 Interest Reset Date” and, together with a 2020 Interest Reset Date, such

individual date, an “Interest Reset Date”) until the principal on the Floating Rate 2023 Notes is paid or made available for

payment (the “2023 Principal Payment Date” and, together with the 2020 Principal Payment Date, the “Principal Payment

Date”); provided that the last 2023 Interest Reset Date will be on June 4, 2023, and will be calculated for the entire Interest

Period, which for the avoidance of doubt, will include one additional day. If any 2023 Interest Reset Date (other than the

initial 2023 Interest Reset Date which occurred on December 4, 2018) and interest payment date would otherwise be a day

that is not a EURIBOR business day, such 2023 Interest Reset Date and interest payment date shall be the next succeeding

EURIBOR business day, unless the next succeeding EURIBOR business day is in the next succeeding calendar month, in

which case such 2023 Interest Reset Date and interest payment date shall be the immediately preceding EURIBOR business

day.

“EURIBOR business day” means any day that is not a Saturday or Sunday and that, in the City of New York or the

City of London, is not a day on which banking institutions are generally authorized or obligated by law to close, and is a day

on which the TARGET System, or any successor thereto, operates. 

“Interest Period” means, with respect to each series of Notes, the relevant period from and including an Interest

Reset Date to but excluding the next succeeding Interest Reset Date and, in the case of the last such period, from and

including the relevant Interest Reset Date immediately preceding the maturity date or Principal Payment Date, as the case

may be, to but not including such maturity date or Principal Payment Date, as the case may be. If the Principal Payment Date

or maturity date is not a EURIBOR business day, then the principal amount of the Notes plus accrued and unpaid interest

thereon shall be paid on the next succeeding EURIBOR business day and no interest shall accrue for the maturity date,

Principal Payment Date or any day thereafter. 

The “Applicable EURIBOR Rate” means the rate determined in accordance with the following provisions: 

(1) Two prior TARGET days on which dealings in deposits in euros are transacted in the euro-zone

interbank market preceding each Interest Reset Date (each such date, an “Interest Determination Date”), The Bank

of New York Mellon, London Branch (the “Calculation Agent”), as agent for AT&T, will determine the Applicable

EURIBOR Rate which shall be the rate for deposits in euro having a maturity of three months commencing on the

15

first day of the applicable interest period that appears on (i) the Bloomberg Screen BBAM Page, with respect to the

Floating Rate 2020 Notes, or (ii) the Reuters Screen EURIBOR01 Page, with respect to the Floating Rate 2023

Notes, as of 11:00 a.m., Brussels time, on such Interest Determination Date. “Bloomberg Screen BBAM Page”

means the display designated on page “BBAM” on Bloomberg (or such other page as may replace the “BBAM”

page on that service or any successor service for the purpose of displaying euro-zone interbank offered rates for

euro-denominated deposits of major banks). “Reuters Screen EURIBOR01 Page” means the display designated on

page “EURIBOR01” on Reuters (or such other page as may replace the EURIBOR01 page on that service or any

successor service for the purpose of displaying euro-zone interbank offered rates for euro-denominated deposits of

major banks). If the Applicable EURIBOR Rate on such Interest Determination Date does not appear on the

Bloomberg Screen BBAM Page or the Reuters Screen EURIBOR01 Page, as applicable, the Applicable EURIBOR

Rate will be determined as described in (2) below. 

(2) With respect to an Interest Determination Date for which the Applicable EURIBOR Rate does not

appear on the Bloomberg Screen BBAM Page or the Reuters Screen EURIBOR01 Page, as applicable, as specified

in (1) above, the Applicable EURIBOR Rate will be determined on the basis of the rates at which deposits in euro

are offered by four major banks in the euro-zone interbank market selected by AT&T (the “Reference Banks”) at

approximately 11:00 a.m., Brussels time, on such Interest Determination Date to prime banks in the euro-zone

interbank market having a maturity of three months, and in a principal amount equal to an amount of not less than

€1,000,000 that is representative for a single transaction in such market at such time. The Calculation Agent, upon

direction from AT&T, will request the principal euro-zone office of each of such Reference Banks to provide a

quotation of its rate. If at least two such quotations are provided, the Applicable EURIBOR Rate on such Interest

Determination Date will be the arithmetic mean (rounded upwards) of such quotations. If fewer than two quotations

are provided, the Applicable EURIBOR Rate on such Interest Determination Date will be the arithmetic mean

(rounded upwards) of the rates quoted by three major banks in the euro-zone selected by AT&T at approximately

11:00 a.m., Brussels time, on such Interest Determination Date for loans in euro to leading European banks, having a

maturity of three months, and in a principal amount equal to an amount of not less than €1,000,000 that is

representative for a single transaction in such market at such time; provided, however, that if the banks so selected

as aforesaid by AT&T are not quoting as mentioned in this sentence, the relevant interest rate for the Interest Period

commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate in effect

on such Interest Determination Date (i.e., the same as the rate determined for the immediately preceding Interest

Reset Date). 

The amount of interest for each day that the Notes are outstanding (the “Daily Interest Amount”) is calculated by

dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Note (known

as the “Actual/360” day count). The amount of interest paid on the Notes for any Interest Period is calculated by adding the

Daily Interest Amount for each day in such Interest Period.

The interest rate and amount of interest paid on the Notes for each Interest Period is determined by the Calculation

Agent. With respect to the Floating Rate 2020 Notes, the interest rate will in no event be lower than zero or higher than the

maximum rate permitted by New York law as the same may be modified by United States law of general application. The

Calculation Agent will, upon the request of any holder of the Notes, provide the interest rate then in effect with respect to the

Notes. All calculations made by the Calculation Agent shall in the absence of manifest error be conclusive for all purposes

and binding on AT&T and the holders of the Notes. So long as the Applicable EURIBOR Rate is required to be determined

with respect to the Notes, there will at all times be a Calculation Agent. In the event that any then acting Calculation Agent

shall be unable or unwilling to act, or that such Calculation Agent shall fail to duly establish the Applicable EURIBOR Rate

for any Interest Period, or that AT&T proposes to remove such Calculation Agent, AT&T shall appoint itself or another

person which is a bank, trust company, investment banking firm or other financial institution to act as the Calculation Agent. 

Payment of Additional Amounts

We will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such

additional amounts as are necessary so that the net payment by us or our paying agent of the principal of and interest on the

Notes to a person that is a United States Alien, after deduction for any present or future tax, assessment or governmental

charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with

respect to the payment, will not be less than the amount that would have been payable in respect of the Notes had no

withholding or deduction been required. As used herein, “United States Alien” means any person who, for United States

federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a

16

foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax

purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust. 

Our obligation to pay additional amounts shall not apply: 

(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust

or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder: 

(a) is or was present or engaged in a trade or business in the United States, has or had a permanent

establishment in the United States, or has any other present or former connection with the United States or

any political subdivision or taxing authority thereof or therein; 

(b) is or was a citizen or resident or is or was treated as a resident of the United States; 

(c) is or was a foreign or domestic personal holding company, a passive foreign investment

company or a controlled foreign corporation with respect to the United States or is or was a corporation that

has accumulated earnings to avoid United States federal income tax; 

(d) is or was a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue

Code of 1986, as amended (the “Code”); or 

(e) is or was an actual or constructive owner of 10% or more of the total combined voting power

of all classes of stock of AT&T entitled to vote; 

(2) to any holder that is not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary

or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary,

or a member of the partnership would not have been entitled to the payment of an additional amount had such

beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment; 

(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge; 

(4) to any tax, assessment or governmental charge that is imposed other than by deduction or withholding

by AT&T or a paying agent from the payment; 

(5) to any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that is announced or becomes effective after the day on

which the payment becomes due or is duly provided for, whichever occurs later; 

(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,

assessment or governmental charge; 

(7) to any tax, assessment or other governmental charge any paying agent (which term may include us)

must withhold from any payment of principal of or interest on any Note, if such payment can be made without such

withholding by any other paying agent; or 

(8) in the case of any combination of the above items. 

In addition, any amounts to be paid on the Notes will be paid net of any deduction or withholding imposed or

required pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations

thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or

17

practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such

Sections of the Code, and no additional amounts will be required to be paid on account of any such deduction or withholding. 

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial

interpretation applicable. Except as specifically provided under this heading “— Payment of Additional Amounts” and under

the heading “— Redemption Upon a Tax Event”, we do not have to make any payment with respect to any tax, assessment or

governmental charge imposed by any government or a political subdivision or taxing authority. 

Any reference in the terms of the Notes of each series to any amounts in respect of the Notes shall be deemed also to

refer to any additional amounts which may be payable under this provision.

Redemption Upon a Tax Event 

If (a) we become or will become obligated to pay additional amounts with respect to any Notes as described herein

under the heading “— Payment of Additional Amounts” as a result of any change in, or amendment to, the laws (or any

regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or

therein), or any change in, or amendments to, any official position regarding the application or interpretation of such laws,

regulations or rulings, which change or amendment is announced or becomes effective, on or after February 15, 2018 with

respect to the Floating Rate 2023 Notes and July 30, 2018 with respect to the Floating Rate 2020 Notes, or (b) a taxing

authority of the United States takes an action on or after February 15, 2018 with respect to the Floating Rate 2023 Notes and

July 30, 2018 with respect to the Floating Rate 2020 Notes, whether or not with respect to us or any of our affiliates, that

results in a substantial probability that we will or may be required to pay such additional amounts, then we may, at our

option, redeem, as a whole, but not in part, the applicable series of Notes on any interest payment date on not less than 30 nor

more than 60 calendar days’ prior notice, at a redemption price equal to 100% of their principal amount, together with

interest accrued thereon to the date fixed for redemption. No redemption pursuant to (b) above may be made unless we shall

have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States

results in a substantial probability that we will or may be required to pay the additional amounts described herein under the

heading “— Payment of Additional Amounts” and we shall have delivered to the trustee a certificate, signed by a duly

authorized officer, stating that based on such opinion we are entitled to redeem the Notes pursuant to their terms. 

Further Issues 

We may from time to time, without notice to or the consent of the holders of any series of the Notes, create and issue

further notes ranking equally and ratably with such series in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as, and will be fungible for United States federal

income tax purposes with, the Notes of the applicable series. Any further notes shall be issued pursuant to a resolution of our

board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture. 

Governing Law 

The Notes will be governed by and interpreted in accord ance with the laws of the State of New York. 

Special Situations Covered by Our Indenture 

Mergers and Similar Transactions 

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met: 

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia.

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

18

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “ —Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions. 

Modification and Waiver of Holders’ Contractual Rights 

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders

. First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes: 

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture;

●

to reduce the rate of interest on any security or change the time for payment of interest;

●

to reduce the principal due on any security or change the fixed maturity of any security;

●

to waive a default in the payment of principal or interest on any security;

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders;

●

to change the right of holders to waive an existing default by majority vote;

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote

. The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders

. The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security: 

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

19

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as global

securities, should consult their banks or brokers for information on how approval may be granted or denied if we seek

to change the Indenture or the securities or request a waiver. 

Discharge of Our Obligations 

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates. 

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent. 

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations. 

Liens on Assets 

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries. 

Default and Related Matters 

Ranking Compared to Other Creditors 

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default. 

Events of Default 

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection. 

What Is an Event of Default?

 The term “event of default” with respect to any series of securities means any of the

following: 

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days.

20

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days.

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur.

Remedies if an Event of Default Occurs 

Holders and the trustee will have the following remedies if an event of default occurs: 

Acceleration

. If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived. 

Special Duties of Trustee

. If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs. 

Other Remedies of Trustee

. If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit. 

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests.

 The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture. 

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur: 

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a written request

that the trustee take action because of the default, and must offer indemnity reasonably satisfactory to the trustee

against the cost and other liabilities of taking that action.

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do not give the

trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date. 

Waiver of Default 

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval. 

21

We Will Give the Trustee Information About Defaults Annually 

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default. 

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest. 

 Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration. 

Regarding the Trustee 

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of

The Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment

banking services for us and our subsidiaries from time to time in the ordinary course of business.

22

DESCRIPTION OF THE 1.875% GLOBAL NOTES DUE 2020, 2.500% GLOBAL NOTES DUE 2023 AND THE

3.550% GLOBAL NOTES DUE 2032

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture, dated as of

November 1, 1994, with The Bank of New York Mellon acting as trustee (the “Indenture”) and the 1.875% Global Notes due

2020 (the “1.875% 2020 Notes”), 2.500% Global Notes due 2023 (the “2.500% 2023 Notes”), and the 3.550% Global Notes

due 2032 (the “2032 Notes” and, together with the 1.875% 2020 Notes and the 2.500% 2023 Notes, the “Notes”). For a

complete description of the terms and provisi ons of the Notes, please refer to the Indenture, which is filed as an exhibit to

AT&T’s Annual Report on Form 10-K for the year ended December 31, 2019 and to the forms of Notes, which are filed as

exhibits to the Form 8-As filed with the Securities and Exchange Commission on December 6, 2012, December 17, 2012 and

March 13, 2013.

General

The 1.875% 2020 Notes:

●

were issued in an aggregate initial principal amount of €1,000,000,000, which remains the amount

outstanding, subject to our ability to issue additional 1.875% 2020 Notes which may be of the same series

as the 1.875% 2020 Notes as described under “— Further Issues”;

●

mature on December 4, 2020;

●

bear interest at the rate of 1.875% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2.500% 2023 Notes:

●

were issued in an aggregate initial principal amount of €1,250,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2.500% 2023 Notes which may be of the same series

as the 2.500% 2023 Notes as described under “— Further Issues”;

●

mature on March 15, 2023;

●

bear interest at the rate of 2.500% per annum, payabl e annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2032 Notes:

●

were issued in an aggregate initial principal amount of €1,000,000,000 and an additional aggregate

principal amount of €400,000,000 was subsequently issued such that €1,400,000,000 remains the amount

outstanding, subject to our ability to issue additional 2032 Notes which may be of the same series as the

2032 Notes as described under “— Further Issues”;

●

mature on December 17, 2032;

23

●

bear interest at the rate of 3.550% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. Principal

and interest payments on the Notes are payable by us in euro. Payments of principal, interest and additional amounts, if any,

in respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or common depositary,

as the case may be, as registered holder thereof. 

For purposes of the Notes, a business day means a business day in the City of New York and London. 

Interest

The 1.875% 2020 Notes bear interest at the rate of 1.875% per annum, the 2.500% 2023 Notes bear interest at the rate of

2.500% per annum and the 2032 Notes bear interest at the rate of 3.550% per annum. 

We pay interest on the 1.875% 2020 Notes annually in arrears on December 4, commencing on December 4, 2013,

to the persons in whose names the 1.875% 2020 Notes are registered at the close of business on the November 15 preceding

the interest payment date. We pay interest on the 2.500% 2023 Notes annually in arrears on March 15, commencing on

March 15, 2014, to the persons in whose names the 2.500% 2023 Notes are registered at the close of business on the March 1

preceding the interest payment date. We pay interest on the 2032 Notes annually in arrears on December 17, commencing on

December 17, 2013, to the persons in whose names the 2032 Notes are registered at the close of business on the December 1

preceding the interest payment date. 

The 1.875% 2020 Notes will mature on December 4, 2020, the 2.500% 2023 Notes will mature on March 15, 2023

and the 2032 Notes will mature on December 17, 2032. 

Interest on the Notes is computed on the basis of the actual number of days in the period for which interest is being

calculated and the actual number of days from and including the last date on which interest was paid on the Notes, to but

excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA)

as defined in the rulebook of the International Capital Market Association.

Optional Redemption

At any time prior to the applicable Par Call Date (as set forth in the table below), the Notes will be redeemable, as a

whole or in part, at our option, at any time and from time to time on at least 30 days’, but not more than 60 days’, prior notice

mailed to the registered address of each holder of the Notes of such series to be redeemed. The redemption price will be equal

to the greater of (1) 100% of the principal amount of the Notes of such series to be redeemed or (2) the sum of the present

values of the Remaining Scheduled Payments (as defined below) discounted to the redemption date, on an annual basis

(ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined below) plus a number of basis points equal to

the applicable Make-Whole Spread (as set forth in the table below). In either case, accrued interest will be payable to the

redemption date. At any time on or after the applicable Par Call Date (as set forth in the table below), we have the option to

redeem the Notes, as a whole or in part, on at least 30 days’, but not more than 60 days’, prior notice mailed to the registered

address of each holder of the Notes of such series to be redeemed, at a redemption price equal to 100% of the principal

amount of such series of Notes to be redeemed. Accrued interest will be payable to the redemption date.

24

Series

Par Call Date

Make-Whole Spread

1.875% 2020 Notes

September 4, 2020

15 bps

2.500% 2023 Notes

December 15, 2022

15 bps

2032 Notes

September 17, 2032

25 bps

“

Treasury Rate

” means the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded

upwards), at which the gross redemption yield on the Notes of the applicable series, if they were to be purchased at such price

on the third dealing day prior to the date fixed for redemption, would be equal to the gross redemption yield on such dealing

day of the Reference Bond (as defined below) on the basis of the middle market price of the Reference Bond prevailing at

11:00 a.m. (London time) on such dealing day as determined by the trustee with respect to the 1.875% 2020 Notes and as

determined by either the Company or an investment bank appointed by the Company with respect to the 2.500% 2023 Notes

and the 2032 Notes. 

“

Reference Bond

” means, in relation to any Treasury Rate calculation, a German government bond whose maturity

is closest to the maturity of the Notes of the applicable series, or if (i) the trustee in its discretion with respect to the 1.875%

2020 Notes or (ii) the Company or an investment bank appointed by the Company with respect to the 2.500% 2023 Notes and

2032 Notes considers that such similar bond is not in issue, such other German government bond as (i) the trustee in its

discretion with respect to the 1.875% 2020 Notes or (ii) the Company or an investment bank appointed by the Company with

respect to the 2.500% 2023 Notes, and 2032 Notes may, with the advice of three brokers of, and/or market makers in,

German government bonds selected by (i) the trustee in its discretion with respect to the 1.875% 2020 Notes or (ii) the

Company or an investment bank appointed by the Company with respect to the 2.500% 2023 Notes and the 2032 Notes,

determine to be appropriate for determining such Treasury Rate. 

“

Remaining Scheduled Payments

” means, with respect to each Note of a series to be redeemed, the remaining

scheduled payments of principal of and interest on such Note that would be due after the related redemption date but for the

redemption. If that redemption date is not an interest paym ent date with respect to the applicable series of Notes, the amount

of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the

Notes to the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with a paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on the

Notes to be redeemed on that date.

In the case of any partial redemption, selection of the Notes of any series to be redeemed will be made by the trustee

by lot or by such other method as the trustee in its sole discretion deems to be fair and appropriate.

Redemption for Taxation Reasons 

If (a) as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction (as defined

below under “Interpretation”), or any change in the official interpretation of the laws or regulations of a Relevant

Jurisdiction, which change or amendment becomes effec tive after November 28, 2012 with respect to the 1.875% 2020

Notes, March 6, 2013 with respect to the 2.500% 2023 Notes and December 11, 2012 with respect to the 2032 Notes, on the

next Interest Payment Date we would be required to pay additional amounts as provided or referred to below under “—

Payment Without Withholding” and (b) the requirement cannot be avoided by our taking reasonable measures available to us,

we may at our option, having given not less than 30 nor more than 60 days’ notice to the holders of the Notes (which notice

shall be irrevocable), redeem all, but not a portion of, the Notes at any time at their principal amount together with interest

accrued to, but excluding, the date of redemption provided that no such notice of redemption shall be given earlier than 90

days prior to the earliest date on which we would be obliged to pay such additional amounts were a payment in respect of the

Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, we shall deliver to the trustee

a certificate signed by two of our executive officers stating that the requirement referred to in (a) above will apply on the next

Interest Payment Date and setting forth a statement of facts showing that the conditions precedent to the right of AT&T so to

redeem have occurred, cannot be avoided by us taking reasonable measures available to us and an opinion of independent

legal advisers of recognized international standing to the effect that AT&T has or will become obliged to pay such additional

amounts as a result of the change or amendment, in each case to be held by the trustee and made available for viewing at the

offices of the trustee on request by any holder of the Notes.

25

Payment Without Withholding 

All payments in respect of the Notes by or on behalf of AT&T shall be made without withholding or deduction for,

or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (“Taxes”)

imposed, collected, withheld, assessed or levied by or on behalf of the Relevant Jurisdiction, unless the withholding or

deduction of the Taxes is required by law. In that event, we will pay such additional amounts to a holder who is a United

States Alien (as defined below) as may be necessary in order that the net amounts received by the holder after the

withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes in the

absence of the withholding or deduction; except that no such additional amounts shall be payable in relation to any payment

in respect of any Note:

(a) where such withholding or deduction would not have been so imposed but for:

(i) in the case of payment by AT&T, the existence of any present or former connection between

the holder of the Note (or between a fiduciary, settlor, shareholder, beneficiary or member of the holder of

the Note, if such holder is an estate, a trust, a corporation or a partnership) and the United States, including,

without limitation, such holder (or such fiduciary, settlor, shareholder, beneficiary or member) being or

having been a citizen or resident or treated as a resident thereof, or being or having been engaged in trade

or business or presence therein, or having or having had a permanent establishment therein;

(ii) in the case of payment by AT&T, the present or former status of the holder of the Note as a

personal holding company, a foreign personal holding company, a passive foreign investment company, or

a controlled foreign corporation for United States federal income tax purposes or a corporation which

accumulates earnings to avoid United States federal income tax;

(iii) in the case of payment by AT&T, the past or present or future status of the holder of the Note

as the actual or constructive owner of 10% or more of either the total combined voting power of all classes

of stock of AT&T entitled to vote if AT&T was treated as a corporation, or the capital or profits interest in

AT&T, if AT&T is treated as a partnership for United States federal income tax purposes or as a bank

receiving interest described in Section 881(c) (3) (A) of the Internal Revenue Code of 1986, as amended; or

(iv) the failure by the holder of the Note to comply with any certification, identification or other

reporting requirements concerning the nationality, residence, identity or connection with the United States

(in the case of payment by AT&T) of such holder, if compliance is required by statute or by regulation as a

precondition to exemption from such withholding or deduction;

(b) in the case of payment by AT&T to any United States Alien, if such person is a fiduciary or partnership

or other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to

such fiduciary, a member of such partnership or the beneficial owner would not have been entitled to the additional

amounts had such beneficiary, settlor, member or beneficial owner been the bearer of such Note. As used herein,

“United States Alien” means any person who, for United States federal income tax purposes, is a foreign

corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign

partnership one or more of the members of which is, for United States federal income tax purposes, a foreign

corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust;

(c) to the extent that the withholding or deduction is as a result of the imposition of any gift, inheritance,

estate, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(d) to, or to a third party on behalf of, a holder who is liable for the Taxes in respect of the Notes by reason

of his having any or some present or former connection, including but not limited to fiscal residency, fiscal deemed

residency and substantial interest shareholdings, with the Relevant Jurisdiction, other than the mere holding of the

Notes;

(e) presented for payment more than 30 days after the Relevant Date except to the extent that a holder

would have been entitled to additional amounts on presenting the relevant Notes for payment on the last day of the

period of 30 days assuming that day to have been an Interest Payment Date;

26

(f) any tax, assessment or other governmental charge required to be withheld by any paying agent from any

payment of principal or of interest on any Notes, if such payment can be made without withholding by any other

paying agent;

(g) any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of our Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge;

(h) any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the

payment becomes due or is duly provided for, whichever occurs later; or

(i) any combination of (a), (b), (c), (d), (e), (f), (g) or (h). 

Interpretation 

As used in this description:

(a) “Relevant Date” means the date on which the payment first becomes due but, if the full amount of the

money payable has not been received by the trustee on or before the due date, it means the date which is seven days

after the date on which, the full amount of the money having been so received, notice to that effect shall have been

duly given to the holders of Notes by us; and

(b) “Relevant Jurisdiction” means the State of Delaware and the United States or any political subdivision

or any authority thereof or therein having power to tax or any other jurisdiction or any political subdivision or any

authority thereof or therein having power to tax to which we become subject in respect of payments made by it of

principal and interest on the Notes.

Additional Amounts 

Any reference in the terms of the Notes of each series to any amounts in respect of the Notes shall be deemed also to

refer to any additional amounts which may be payable under this provision.

Further Issues 

We may from time to time, without notice to or the consent of the holders of the Notes, create and issue further

notes ranking equally and ratably with such series of Notes in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as the Notes. Any further notes shall be issued

pursuant to a resolution of our board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to

the Indenture.

Governing Law

The Notes will be governed by and interpreted in accordance with the laws of the State of New York. 

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company, or to buy substantially all of the assets of another company. However, we

may not take any of these actions unless all the following conditions are met:

27

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except for clarifying changes and certain other changes that would not adversely affect holders

of the securities. The same vote would be required for us to obtain a waiver of an existing default. However, we cannot

obtain a waiver of a payment default unless we obtain each holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms and other changes that would not

materially adversely affect holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

28

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

29

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all event s of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

30

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or broker s for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon is the trustee under the Indenture. In addition, affiliates of The Bank of New York

Mellon may perform various commercial banking and investment banking services for us and our subsidiaries from time to

time in the ordinary course of business.

31

DESCRIPTION OF THE 2.650% GLOBAL NOTES DUE 2021, THE 2.400% GLOBAL NOTES DUE 2024, THE

3.500% GLOBAL NOTES DUE 2025 AND THE 3.375% GLOBAL NOTES DUE 2034

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 2.650% Global Notes due 2021 (the “2021 Notes”), the 2.400% Global Notes due 2024 (the “2024 Notes”), the 3.500%

Global Notes due 2025 (the “2025 Notes”) and the 3.375% Global Notes due 2034 (the “2034 Notes” and, together with the

2021 Notes, the 2024 Notes and the 2025 Notes, the “Notes”). For a complete description of the terms and provisions of the

Notes, please refer to the Indenture, which is filed as an exhibit to AT&T’s Annual Report on Form 10-K for the year ended

December 31, 2019 and to the forms of Notes, which are filed as exhibits to the Form 8-As filed with the Securities and

Exchange Commission on November 13, 2013 and June 11, 2014. 

General 

The 2021 Notes:

●

were issued in an aggregate initial principal amount of €1,000,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2021 Notes which may be of the same series as the

2021 Notes as described under “— Further Issues”;

●

mature on December 17, 2021;

●

bear interest at the rate of 2.650% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2024 Notes:

●

were issued in an aggregate initial principal amount of €1,600,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2024 Notes which may be of the same series as the

2024 Notes as described under “— Further Issues”;

●

mature on March 15, 2024;

●

bear interest at the rate of 2.400% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2025 Notes:

●

were issued in an aggregate initial principal amount of €1,000,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2025 Notes which may be of the same series as the

2025 Notes as described under “— Further Issues”;

●

mature on December 17, 2025;

32

●

bear interest at the rate of 3.500% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2034 Notes:

●

were issued in an aggregate initial principal amount of €500,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2034 Notes which may be of the same series as the

2034 Notes as described under “— Further Issues”;

●

mature on March 15, 2034;

●

bear interest at the rate of 3.375% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. Principal

and interest payments on the Notes are payable by us in euro. Payments of principal, interest and additional amounts, if any,

in respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or common depositary,

as the case may be, as registered holder thereof. Under the terms of the Indenture, if the euro ceases to exist when payments

on the Notes are due under any circumstances, AT&T may supplement the Indenture to allow for payment in U.S. dollars.

The principal and interest payable in U.S. dollars on a Note at maturity, or upon redemption, will be paid by wire transfer of

immediately available funds against presentation of a Note at the office of the paying agent.

For purposes of the Notes, a business day means a business day in the City of New York and London.

Interest

The 2021 Notes bear interest at the rate of 2.650% per annum, the 2024 Notes bear interest at the rate of 2.400% per

annum, the 2025 Notes bear interest at the rate of 3.500% per annum and the 2034 Notes bear interest at the rate of 3.375%

per annum. 

We pay interest on the 2021 Notes and 2025 Notes annually in arrears on December 17, commencing on December

17, 2014, to the persons in whose names the 2021 Notes and 2025 Notes are registered at the close of business on the

December 1 preceding the interest payment date. The 2021 Notes will mature on December 17, 2021 and the 2025 Notes will

mature on December 17, 2025.

We pay interest on the 2024 Notes and 2034 Notes annually in arrears on March 15, commencing on March 15,

2015, to the persons in whose names the 2024 Notes and 2034 Notes are registered at the close of business on the business

day preceding the interest payment date. The 2024 Notes will mature on March 15, 2024 and the 2034 Notes will mature on

March 15, 2034. 

Interest on the Notes is computed on the basis of the actual number of days in the period for which interest is being

calculated and the actual number of days from and including the last date on which interest was paid on the Notes, to but

33

excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA)

as defined in the rulebook of the International Capital Market Association.

Optional Redemption

At any time prior to the applicable Par Call Date (as set forth in the table below), the Notes will be redeemable, as a

whole or in part, at our option, at any time and from time to time on at least 30 days’, but not more than 60 days’, prior notice

mailed to the registered address of each holder of the Notes of such series to be redeemed. The redemption price will be equal

to the greater of (1) 100% of the principal amount of the Notes of such series to be redeemed or (2) the sum of the present

values of the Remaining Scheduled Payments (as defined below) discounted to the redemption date, on an annual basis

(ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined below) plus a number of basis points equal to

the applicable Make-Whole Spread (as set forth in the table below). In either case, accrued interest will be payable to the

redemption date. At any time on or after the applicable Par Call Date (as set forth in the table below), we have the option to

redeem the Notes, as a whole or in part, at our option, at any time and from time to time, on at least 30 days’, but not more

than 60 days’, prior notice mailed to the registered address of each holder of the Notes of such series to be redeemed, at a

redemption price equal to 100% of the principal amount of such series of Notes to be redeemed. Accrued interest will be

payable to the redemption date.

Series

Par Call Date

Make-Whole Spread

2021 Notes

September 17, 2021

25 bps

2024 Notes

December 15, 2023

15 bps

2025 Notes

September 17, 2025

30 bps

2034 Notes 

December 15, 2033

20 bps

“

Treasury Rate

” means the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded

upwards), at which the gross redemption yield on the Notes of the applicable series, if they were to be purchased at such price

on the third dealing day prior to the date fixed for redemption, would be equal to the gross redemption yield on such dealing

day of the Reference Bond (as defined below) on the basis of the middle market price of the Reference Bond prevailing at

11:00 a.m. (London time) on such dealing day as determined by the Company or an investment bank appointed by the

Company. 

“

Reference Bond

” means, in relation to any Treasury Rate calculation, a German government bond whose maturity

is closest to the maturity of the Notes of the applicable series, or if the Company or an investment bank appointed by the

Company considers that such similar bond is not in issue, such other German government bond as the Company or an

investment bank appointed by the Company, with the advice of three brokers of, and/or market makers in, German

government bonds selected by the Company or an investment bank appointed by the Company, determine to be appropriate

for determining such Treasury Rate. 

“

Remaining Scheduled Payments

” means, with respect to each Note of a series to be redeemed, the remaining

scheduled payments of principal of and interest on such Note that would be due after the related redemption date but for the

redemption. If that redemption date is not an interest payment date with respect to the applicable series of Notes, the amount

of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the

Notes to the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with a paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on the

Notes to be redeemed on that date.

In the case of any partial redemption, selection of the Notes of a series to be redeemed will be made by the trustee

by lot or by such other method as the trustee in its sole discretion deems to be fair and appropriate.

34

Redemption for Taxation Reasons

If (a) as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction (as defined

below under “Interpretation”), or any change in the official interpretation of the laws or regulations of a Relevant

Jurisdiction, which change or amendment becomes effective after November 5, 2013 with respect to the 2021 Notes and 2025

Notes and after June 4, 2014 with respect to the 2024 Notes and 2034 Notes, on the next Interest Payment Date we would be

required to pay additional amounts as provided or referred to below under “— Payment Without Withholding” and (b) the

requirement cannot be avoided by our taking reasonable measures available to us, we may at our option, having given not

less than 30 nor more than 60 days’ notice to the holders of the Notes (which notice shall be irrevocable), redeem all, but not

a portion of, the Notes at any time at their principal amount together with interest accrued to, but excluding, the date of

redemption provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which

we would be obliged to pay such additional amounts were a payment in respect of the Notes then due. Prior to the publication

of any notice of redemption pursuant to this paragraph, we shall deliver to the trustee a certificate signed by two of our

executive officers stating that the requirement referred to in (a) above will apply on the next Interest Payment Date and

setting forth a statement of facts showing that the conditions precedent to the right of AT&T so to redeem have occurred,

cannot be avoided by us taking reasonable measures available to us and an opinion of independent legal advisers of

recognized international standing to the effect that AT&T has or will become obliged to pay such additional amounts as a

result of the change or amendment, in each case to be held by the trustee and made available for viewing at the offices of the

trustee on request by any holder of the Notes.

Payment Without Withholding 

All payments in respect of the Notes by or on behalf of AT&T shall be made without withholding or deduction for,

or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (“Taxes”)

imposed, collected, withheld, assessed or levied by or on behalf of the Relevant Jurisdiction, unless the withholding or

deduction of the Taxes is required by law. In that event, we will pay such additional amounts to a holder who is a United

States Alien (as defined below) as may be necessary in order that the net amounts received by the holder after the

withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes in the

absence of the withholding or deduction; except that no such additional amounts shall be payable in relation to any payment

in respect of any Note:

(a) where such withholding or deduction would not have been so imposed but for:

(i) in the case of payment by AT&T, the existence of any present or former connection between

the holder of the Note (or between a fiduciary, settlor, shareholder, beneficiary or member of the holder of

the Note, if such holder is an estate, a trust, a corporation or a partnership) and the United States, including,

without limitation, such holder (or such fiduciary, settlor, shareholder, beneficiary or member) being or

having been a citizen or resident or treated as a resident thereof, or being or having been engaged in trade

or business or presence therein, or having or having had a permanent establishment therein;

(ii) in the case of payment by AT&T, the present or former status of the holder of the Note as a

personal holding company, a foreign personal holding company, a passive foreign investment company, or

a controlled foreign corporation for United States federal income tax purposes or a corporation which

accumulates earnings to avoid United States federal income tax;

(iii) in the case of payment by AT&T, the past or present or future status of the holder of the Note

as the actual or constructive owner of 10% or more of either the total combined voting power of all classes

of stock of AT&T entitled to vote if AT&T was treated as a corporation, or the capital or profits interest in

AT&T, if AT& T is treated as a partnership for United States federal income tax purposes or as a bank

receiving interest described in Section 881(c) (3) (A) of the Internal Revenue Code of 1986, as amended; or

(iv) the failure by the holder of the Note to comply with any certification, identification or other

reporting requirements concerning the nationality, residence, identity or connection with the United States

(in the case of payment by AT&T ) of such holder, if compliance is required by statute or by regulation as a

precondition to exemption from such withholding or deduction;

(b) in the case of payment by AT&T to any United States Alien, if such person is a fiduciary or partnership

or other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to

35

such fiduciary, a member of such partnership or the beneficial owner would not have been entitled to the additional

amounts had such beneficiary, settlor, member or beneficial owner been the bearer of such Note. As used herein,

“United States Alien” means any person who, for United States federal income tax purposes, is a foreign

corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign

partnership one or more of the members of which is, for United States federal income tax purposes, a foreign

corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust;

(c) to the extent that the withholding or deduction is as a result of the imposition of any gift, inheritance,

estate, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(d) to, or to a third party on behalf of, a holder who is liable for the Taxes in respect of the Notes by reason

of his having any or some present or former connection, including but not limited to fiscal residency, fiscal deemed

residency and substantial interest shareholdings, with the Relevant Jurisdiction, other than the mere holding of the

Notes;

(e) presented for payment more than 30 days after the Relevant Date except to the extent that a holder

would have been entitled to additional amounts on presenting the relevant Notes for payment on the last day of the

period of 30 days assuming that day to have been an Interest Payment Date;

(f) any tax, assessment or other governmental charge required to be withheld by any paying agent from any

payment of principal or of interest on any Notes, if such payment can be made without withholding by any other

paying agent;

(g) any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of our Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge;

(h) any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the

payment becomes due or is duly provided for, whichever occurs later; or

(i) any combination of (a), (b), (c), (d), (e), (f), (g) or (h). 

Interpretation 

As used in this description:

(a) “Relevant Date” means the date on which the payment first becomes due but, if the full amount of the

money payable has not been received by the trustee on or before the due date, it means the date which is seven days

after the date on which, the full amount of the money having been so received, notice to that effect shall have been

duly given to the holders of Notes by us; and

(b) “Relevant Jurisdiction” means the State of Delaware and the United States or any political subdivision

or any authority thereof or therein having power to tax or any other jurisdiction or any political subdivision or any

authority thereof or therein having power to tax to which we become subject in respect of payments made by it of

principal and interest on the Notes.

Additional Amounts 

Any reference in the terms of the Notes to any amounts in respect of the Notes shall be deemed also to refer to any

additional amounts which may be payable under this provision.

36

Further Issues 

We may from time to time, without notice to or the consent of the holders of the Notes, create and issue further

notes ranking equally and ratably with such series of Notes in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as the Notes. Any further notes shall be issued

pursuant to a resolution of our board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to

the Indenture.

Governing Law

The Notes will be governed by and interpreted in accordance with the laws of the State of New York.

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

37

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

38

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

39

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and bring such

holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such holder’s

interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The

Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services

for us and our subsidiaries from time to time in the ordinary course of business.

40

DESCRIPTION OF THE 1.450% GLOBAL NOTES DUE 2022, THE 2.750% GLOBAL NOTES DUE 2023, THE

1.050% GLOBAL NOTES DUE 2023, THE 1.300% GLOBAL NOTES DUE 2023, THE 1.950% GLOBAL NOTES

DUE 2023, THE 1.800% GLOBAL NOTES DUE 2026, THE 2.350% GLOBAL NOTES DUE 2029, THE 2.600%

GLOBAL NOTES DUE 2029, THE 2.450% GLOBAL NOTES DUE 2035 AND THE 3.150% GLOBAL NOTES DUE

2036

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 1.450% Global Notes due 2022 (the “2022 Notes”), the 2.750% Global Notes due 2023 (the “2.750% 2023 Notes”), the

1.050% Global Notes due 2023 (the “1.050% 2023 Notes”), the 1.300% Global Notes due 2023 (the “1.300% 2023 Notes”),

the 1.950% Global Notes due 2023 (the “1.950% 2023 Notes”), the 1.800% Global Notes due 2026 (the “1.800% 2026

Notes”), the 2.350% Global Notes due 2029 (the “2.350% 2029 Notes”), the 2.600% Global Notes due 2029 (the “2.600%

2029 Notes”), the 2.450% Global Notes due 2035 (the 2035 Notes”) and the 3.150% Global Notes due 2036 (the “2036

Notes” and, together with the 2022 Notes, 2.750% 2023 Notes, 1.050% 2023 Notes, 1.300% 2023 Notes, 1.950% 2023 Notes,

the 1.800% 2026 Notes, the 2.350% 2029 Notes, the 2.600% 2029 Notes and the 2035 Notes, the “Notes”). For a complete

description of the terms and provisions of the Notes, please refer to the Indenture, which is filed as an exhibit to AT&T’s

Annual Report on Form 10-K for the year ended December 31, 2019 and to the forms of Notes, which are filed as exhibits to

the Form 8-As filed with the Securities and Exchange Commission on December 2, 2014, March 9, 2015, March 24, 2016,

June 21, 2017, December 19, 2018 and June 5, 2019.

General

The 2022 Notes:

●

were issued in an aggregate initial principal amount of €1,500,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2022 Notes which may be of the same series as the

2022 Notes as described under “— Further Issues”;

●

mature on June 1, 2022;

●

bear interest at the rate of 1.450% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2.750% 2023 Notes:

●

were issued in an aggregate initial principal amount of €426,473,000, which remains the amount

outstanding, subject to our ability to issue additional 2.750% 2023 Notes which may be of the same series

as the 2.750% 2023 Notes as described under “— Further Issues”;

●

mature on May 19, 2023;

●

bear interest at the rate of 2.750% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

41

The 1.050% 2023 Notes:

●

were issued in an aggregate initial principal amount of €450,273,000, which remains the amount

outstanding, subject to our ability to issue additional 1.050% 2023 Notes which may be of the same series

as the 1.050% 2023 Notes as described under “— Further Issues”;

●

mature on September 5, 2023;

●

bear interest at the rate of 1.050% per annum, payab le annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 1.300% 2023 Notes:

●

were issued in an aggregate initial principal amount of €1,250,000,000, which remains the amount

outstanding, subject to our ability to issue additional 1.300% 2023 Notes which may be of the same series

as the 1.300% 2023 Notes as described under “— Further Issues”;

●

mature on September 5, 2023;

●

bear interest at the rate of 1.300% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 1.950% 2023 Notes:

●

were issued in an aggregate initial principal amount of €535,591,000, which remains the amount

outstanding, subject to our ability to issue additional 1.950% 2023 Notes which may be of the same series

as the 1.950% 2023 Notes as described under “— Further Issues”;

●

mature on September 15, 2023;

●

bear interest at the rate of 1.950% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 1.800% 2026 Notes:

●

were issued in an aggregate initial principal amount of €1,489,219,000, which remains the amount

outstanding, subject to our ability to issue additional 1.800% 2026 Notes which may be of the same series

as the 1.800% 2026 Notes as described under “— Further Issues”;

42

●

mature on September 5, 2026;

●

bear interest at the rate of 1.800% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2.350% 2029 Notes:

●

were issued in an aggregate initial principal amount of €1,260,469,000, which remains the amount

outstanding, subject to our ability to issue additional 2.350% 2029 Notes which may be of the same series

as the 2.350% 2029 Notes as described under “— Further Issues”;

●

mature on September 5, 2029;

●

bear interest at the rate of 2.350% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2.600% 2029 Notes:

●

were issued in an aggregate initial principal amount of €800,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2.600% 2029 Notes which may be of the same series

as the 2.600% 2029 Notes as described under “— Further Issues”;

●

mature on December 17, 2029;

●

bear interest at the rate of 2.600% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2035 Notes:

●

were issued in an aggregate initial principal amount of €1,250,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2035 Notes which may be of the same series as the

2035 Notes as described under “— Further Issues”;

●

mature on March 15, 2035;

●

bear interest at the rate of 2.450% per annum, payable annually in arrears;

●

are repayable at par at maturity;

43

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2036 Notes:

●

were issued in an aggregate initial principal amount of €1,750,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2036 Notes which may be of the same series as the

2036 Notes as described under “— Further Issues”;

●

mature on September 4, 2036;

●

bear interest at the rate of 3.150% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

 with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. Principal

and interest payments on the Notes are payable by us in euro. Payments of principal, interest and additional amounts, if any,

in respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or common depositary,

as the case may be, as registered holder thereof. Under the terms of the Indenture, if the euro ceases to exist when payments

on the Notes are due under any circumstances, AT&T may supplement the Indenture to allow for payment in U.S. dollars.

The principal and interest payable in U.S. dollars on a Note at maturity, or upon redemption, will be paid by wire transfer of

immediately available funds against presentation of a Note at the office of the paying agent.

For purposes of the 2022 Notes, 1.050% 2023 Notes, 2.750% 2023 Notes, 1.950% 2023 Notes, 1.800% 2026 Notes,

2.350% 2029 Notes, 2.600% 2029 Notes and the 2036 Notes, a business day means any day other than a Saturday or Sunday

and that, in the City of New York or the City of London, is not a day on which banking institutions are generally authorized

or obligated by law to close, and is a day on which the Trans-European Automated Real-time Gross Settlement Express

Transfer (TARGET) System, or any successor thereto, operates. 

For purposes of the 1.300% 2023 Notes and the 2035 Notes, a business day means a business day in the City of New

York and London. 

Interest

The interest rate per annum, annual interest payment date, date of commencement of interest payment and the

maturity date of each series of Notes are set forth in the table below. We pay interest on the Notes annually in arrears to the

persons in whose names the Notes are registered at the close of business on the business day preceding the respective interest

payment date.

44

Series

Interest

Rate

Interest Payment

Date

Commencement of Interest

Payment

Maturity Date

2022 Notes

1.450%

June 1

June 1, 2015

June 1, 2022

2.750% 2023 Notes

2.750%

May 19

May 19, 2016

May 19, 2023

1.050% 2023 Notes

1.050%

September 4*

September 4, 2019

September 5, 2023

1.300% 2023 Notes

1.300%

September 5

September 5, 2015

September 5, 2023

1.950% 2023 Notes

1.950%

September 15

September 15, 2019

September 15, 2023

1.800% 2026 Notes

1.800%

September 4*

September 4, 2019

September 5, 2026

2.350% 2029 Notes

2.350%

September 4*

September 4, 2019

September 5, 2029

2.600% 2029 Notes

2.600%

December 17

December 17, 2015

December 17, 2029

2035 Notes

2.450%

March 15

March 15, 2016

March 15, 2035

2036 Notes

3.150%

September 4

September 4, 2017

September 4, 2036

* We will also pay interest on this series of Notes on its maturity date in an amount calculated for the one day period since

the last annual interest payment date.

Interest on the Notes is computed on the basis of the actual number of days in the period for which interest is being

calculated and the actual number of days from and including the last date on which interest was paid on the Notes, to but

excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA)

as defined in the rulebook of the International Capital Market Association. 

Optional Redemption 

Each series of Notes (other than the 2.750% 2023 Notes) may be redeemed at any time prior to the applicable Par

Call Date (as set forth in the table below), as a whole or in part, at our option, at any time and from time to time on at least 30

days’, but not more than 60 days’ (or, with respect to the 1.950% 2023 Notes, at least 15 days’, but not more than 45 days’),

prior notice sent to the registered address of each holder of the Notes of such series to be redeemed. The redemption price

will be calculated by us and will be equal to the greater of (1) 100% of the principal amount of the Notes of such series to be

redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to the

redemption date, on an annual basis (ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined below)

plus a number of basis points equal to the applicable Make-Whole Spread (as set forth in the table below). In the case of each

of clauses (1) and (2), accrued interest will be payable to the redemption date. Each series of Notes (other than the 2.750%

2023 Notes) may be redeemed at any time on or after the applicable Par Call Date, as a whole or in part, at our option, at any

time and from time to time, on at least 30 days’, but not more than 60 days’ (or, with respect to the 1.950% 2023 Notes, at

least 15 days’, but not more than 45 days’), prior notice sent to the registered address of each holder of the Notes of such

series, at a redemption price equal to 100% of the principal amount of such series of Notes to be redeemed. Accrued interest

will be payable to the redemption date. We will calculate the redemption price in connection with any redemption hereunder.

Series

Par Call Date

Make-Whole Spread

2022 Notes

March 1, 2022

20 bps

1.050% 2023 Notes

August 4, 2023

20 bps

1.300% 2023 Notes

June 5, 2023

20 bps

1.950% 2023 Notes

June 15, 2023

25 bps

1.800% 2026 Notes

June 4, 2026

25 bps

2.350% 2029 Notes

June 4, 2029

35 bps

2.600% 2029 Notes

September 17, 2029

25 bps

2035 Notes

December 15, 2034

25 bps

2036 Notes

June 4, 2036

35 bps

45

The 2.750% 2023 Notes may be redeemed as a whole or in part, at our option, at any time and from time to time, on

at least 30 days’, but not more than 60 days’, prior notice sent to the registered address of each holder of the 2.750% 2023

Notes. The redemption price will be equal to the greater of (1) 100% of the principal amount of the 2.750% 2023 Notes to be

redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to the

redemption date, on an annual basis (ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined below)

and 25 basis points. In either case, accrued but unpaid interest will be payable to the redemption date. We will calculate the

redemption price in connection with any redemption hereunder.

“

Treasury Rate

” means the price, expressed as a percentage (and, with respect to the 2022 Notes, 2.750% 2023

Notes, 1.950% 2023 Notes and 2.600% 2029 Notes, rounded to three decimal places, 0.0005 being rounded upwards), at

which the gross redemption yield on the Notes of the applicable series, if they were to be purchased at such price on the third

dealing day prior to the date fixed for redemption, would be equal to the gross redemption yield on such dealing day of the

applicable Reference Bond (as defined below) on the basis of the middle market price of the Reference Bond prevailing at

11:00 a.m. (London time) on such dealing day as determined by the Company or an investment bank appointed by the

Company.

“

Reference Bond

” means, in relation to any Treasury Rate calculation, a German government bond whose maturity

is closest to the maturity of the Notes of the applicable series, or if the Company or an investment bank appointed by the

Company considers that such similar bond is no t in issue, such other German government bond as the Company or an

investment bank appointed by the Company, with the advice of three brokers of, and/or market makers in, German

government bonds selected by the Company or an investment bank appointed by the Company, determine to be appropriate

for determining such Treasury Rate.

“

Remaining Scheduled Payments

” means, with respect to each Note of a series to be redeemed, the remaining

scheduled payments of principal of and interest on such Note that would be due after the related redemption date but for the

redemption. If that redemption date is not an interest payment date with respect to the applicable series of Notes, the amount

of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the

Notes to, but not including, the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with a paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on the

Notes to be redeemed on that date. 

In the case of any partial redemption, selection of the Notes of a series to be redeemed will be made by the trustee

by lot or (i) with respect to the 1.050% 2023 Notes, 1.800% 2026 Notes, 2.350% 2029 Notes and 2036 Notes, pursuant to

applicable depositary procedures and (ii) with respect to the 2022 Notes, 2.750% 2023 Notes, 1.300% 2023 Notes, 1.950%

2023 Notes, 2.600% 2029 Notes and 2035 Notes, by such other method as the trustee in its sole discretion deems to be fair

and appropriate. 

Payment of Additional Amounts 

We will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such

additional amounts as are necessary so that the net payment by us or our paying agent of the principal of and interest on the

Notes to a person that is a United States Alien, after deduction for any present or future tax, assessment or governmental

charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with

respect to the payment, will not be less than the amount that would have been payable in respect of the Notes had no

withholding or deduction been required. As used herein, “United States Alien” means any person who, for United States

federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a

foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax

purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust. 

Our obligation to pay additional amounts shall not apply: 

(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust

or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder:

46

(a) is or was present or engaged in a trade or business in the United States, has or had a permanent

establishment in the United States, or has any other present or former connection with the United States or

any political subdivision or taxing authority thereof or therein;

(b) is or was a citizen or resident or is or was treated as a resident of the United States; 

(c) is or was a foreign or domestic personal holding company, a passive foreign investment

company or a controlled foreign corporation with respect to the United States or is or was a corporation that

has accumulated earnings to avoid United States federal income tax; 

(d) is or was a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue

Code of 1986, as amended (the “Code”); or 

(e) is or was an actual or constructive owner of 10% or more of the total combined voting power

of all classes of stock of AT&T entitled to vote; 

(2) to any holder that is not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary

or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary,

or a member of the partnership would not have been entitled to the payment of an additional amount had such

beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment; 

(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge; 

(4) to any tax, assessment or governmental charge that is imposed other than by deduction or withholding

by AT&T or a paying agent from the payment; 

(5) to any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that is announced or becomes effective after the day on

which the payment becomes due or is duly provided for, whichever occurs later; 

(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,

assessment or governmental charge; 

(7) to any tax, assessment or other governmental charge any paying agent (which term may include us)

must withhold from any payment of principal of or interest on any Note, if such payment can be made without such

withholding by any other paying agent; or 

(8) in the case of any combination of the above items. 

In addition, any amounts to be paid on the Notes will be paid net of any deduction or withholding imposed or

required pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations

thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or

practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such

Sections of the Code, and no additional amounts will be required to be paid on account of any such deduction or withholding. 

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial

interpretation applicable. Except as specifically provided under this heading “—Payment of Additional Amounts” and under

the heading “—Redemption Upon a Tax Event,” we do not have to make any payment with respect to any tax, assessment or

governmental charge imposed by any government or a political subdivision or taxing authority. 

Any reference in the terms of the Notes of each series to any amounts in respect of the Notes shall be deemed also to

refer to any additional amounts which may be payable under this provision. 

47

Redemption Upon a Tax Event

If (a) we become or will become obligated to pay additional amounts with respect to any Notes as described herein

under the heading “—Payment of Additional Amounts” as a result of any change in, or amendment to, the laws (or any

regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or

therein), or any change in, or amendments to, any official position regarding the application or interpretation of such laws,

regulations or rulings, which change or amendment is announced or becomes effective, on or after the date set forth in the

table below with respect to the relevant series of Notes or (b) a taxing authority of the United States takes an action on or

after the date set forth in the table below with respect to the relevant series of Notes, whether or not with respect to us or any

of our affiliates, that results in a substantial probability that we will or may be required to pay such additional amounts, then

we may, at our option, redeem, as a whole, but not in part, the Notes on any interest payment date on not less than 30 nor

more than 60 calendar days’ prior notice, at a redemption price equal to 100% of their principal amount, together with

interest accrued thereon to, but not including, the date fixed for redemption. No redemption pursuant to (b) above may be

made unless we shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of

the United States results in a substantial probability that we will or may be required to pay the additional amounts described

herein under the heading “—Payment of Additional Amounts” and we shall have delivered to the trustee a certificate, signed

by a duly authorized officer, stating that based on such opinion we are entitled to redeem the Notes pursuant to their terms. 

Series

Relevant Date of Taxation Change

2022 Notes

November 20, 2014 

2.750% 2023 Notes

March 21, 2016

1.050% 2023 Notes

February 15, 2018

1.300% 2023 Notes

February 23, 2015 

1.950% 2023 Notes

June 5, 2019

1.800% 2026 Notes

February 15, 2018

2.350% 2029 Notes

February 15, 2018

2.600% 2029 Notes

November 20, 2014 

2035 Notes

February 23, 2015

2036 Notes

June 7, 2017 

Further Issues 

We may from time to time, without notice to or the consent of the holders of any series of the Notes, create and issue

further notes ranking equally and ratably with such series in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as, and will be fungible for United States federal

income tax purposes with, the Notes of the applicable series. Any further notes shall be issued pursuant to a resolution of our

board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture. 

Governing Law

The Notes will be governed by and interpreted in accordance with the laws of the State of New York.

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

48

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

49

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

50

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

51

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel a

declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The Bank

of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services for us

and our subsidiaries from time to time in the ordinary course of business.

52

DESCRIPTION OF THE 0.250% GLOBAL NOTES DUE 2026, THE 0.800% GLOBAL NOTES DUE 2030 AND

THE 1.800% GLOBAL NOTES DUE 2039

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 0.250% Global Notes due 2026 (the “0.250% 2026 Notes”), the 0.800% Global Notes due 2030 (the “2030 Notes”) and

the 1.800% Global Notes due 2039 (the “2039 Notes” and, together with the 0.250% 2026 Notes and the 2030 Notes, the

“Notes”). For a complete description of the terms and provisions of the Notes, please refer to the Indenture, which is filed as

an exhibit to AT&T’s Annual Report on Form 10-K for the year ended December 31, 2019 and to the forms of Notes, which

are filed as exhibits to the Form 8-A filed with the Securities and Exchange Commission on September 11, 2019.

General

The 0.250% 2026 Notes:

●

were issued in an aggregate initial principal amount of €1,000,000,000, which remains the amount

outstanding, subject to our ability to issue additional 0.250% 2026 Notes which may be of the same series

as the 0.250% 2026 Notes as described under “— Further Issues”;

●

mature on March 4, 2026;

●

bear interest at the rate of 0.250% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redem ption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2030 Notes:

●

were issued in an aggregate initial principal amount of €1,250,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2030 Notes which may be of the same series as the

2030 Notes as described under “— Further Issues”;

●

mature on March 4, 2030;

●

bear interest at the rate of 0.800% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2039 Notes:

●

were issued in an aggregate initial principal amount of €750,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2039 Notes which may be of the same series as the

2039 Notes as described under “— Further Issues”;

●

mature on September 14, 2039;

●

bear interest at the rate of 1.800% per annum, payable annually in arrears;

53

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. Principal

and interest payments on the Notes are payable by us in euro. Payments of principal, interest and additional amounts, if any,

in respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or common depositary,

as the case may be, as registered holder thereof. Under the terms of the Indenture, if the euro ceases to exist when payments

on the Notes are due under any circumstances, AT&T may supplement the Indenture to allow for payment in U.S. dollars.

The principal and interest payable in U.S. dollars on a Note at maturity, or upon redemption, will be paid by wire transfer of

immediately available funds against presentation of a Note at the office of the paying agent.

For purposes of the Notes, a business day means any day that is not a Saturday or Sunday and that, in the City of

New York or the City of London, is not a day on which banking institutions are generally authorized or obligated by law to

close.

Interest

The 0.250% 2026 Notes bear interest at the rate of 0.250% per annum, the 2030 Notes bear interest at the rate of

0.800% per annum and the 2039 Notes bear interest at the rate of 1.800% per annum. We pay interest on the 0.250% 2026

Notes and the 2030 Notes annually in arrears on each March 4, commencing on March 4, 2020, to the persons in whose

names the 0.250% 2026 Notes and the 2030 Notes are registered at the close of business on the business day preceding the

interest payment date. We pay interest on the 2039 Notes annually in arrears on each September 14, commencing on

September 14, 2020, to the persons in whose names the 2039 Notes are registered at the close of business on the business day

preceding the interest payment date. The 0.250% 2026 Notes will mature on March 4, 2026, the 2030 Notes will mature on

March 4, 2030 and the 2039 Notes will mature on September 14, 2039.

Interest on the Notes will be computed on the basis of the actual number of days in the period for which interest is

being calculated and the actual number of days from and including the last date on which interest was paid on the Notes (or

September 11, 2019, if no interest has been paid on the Notes), to but excluding the next scheduled interest payment date.

This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International

Capital Market Association.

Because the first payment of interest on the 2039 Notes is more than one year from the issue date of the 2039 Notes,

the 2039 Notes will be treated for U.S. federal income tax purposes as issued with original issue discount (“OID”) in an

amount equal to the excess of the principal amount and interest payments on the 2039 Notes over the issue price for the 2039

Notes. Accordingly, United States holders of the 2039 Notes will generally be required to accrue such OID for U.S. tax

purposes on a constant yield basis over the term of the 2039 Notes even if the holder is otherwise subject to the cash basis

method of tax accounting. Such holders, however, will generally not be required to include the stated interest payments on

the 2039 Notes in income for U.S. tax purposes.

Optional Redemption

Each series of Notes may be redeemed at any time prior to the applicable Par Call Date (as set forth in the table

below), as a whole or in part, at our option, at any time and from time to time on at least 30 days’, but not more than

60 days’, prior notice sent to the registered address of each holder of the Notes of such series to be redeemed. The redemption

price will be calculated by us and will be equal to the greater of (1) 100% of the principal amount of the Notes of such series

to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to

the redemption date, on an annual basis (ACTUAL/ACTUAL (ICMA)), at a rate equal to the sum of the Treasury Rate (as

defined below) plus a number of basis points equal to the applicable Make-Whole Spread (as set forth in the table below). In

the case of each of clauses (1) and (2), accrued but unpaid interest will be payable to the redemption date. At any time on or

after the applicable Par Call Date (as set forth in the table below), the Notes may be redeemed, as a whole or in part, at our

54

option, at any time and from time to time, on at least 30 days’, but not more than 60 days’, prior notice sent to the registered

address of each holder of the Notes of such series to be redeemed, at a redemption price equal to 100% of the principal

amount of such series of Notes to be redeemed. Accrued interest will be payable to the redemption date.

Series

Par Call Date

Make-Whole Spread

0.250% 2026 Notes

February 4, 2026

20 bps

2030 Notes

December 4, 2029

25 bps

2039 Notes

March 14, 2039

35 bps

“

Treasury Rate

” means the price, expressed as a percentage, at which the gross redemption yield on the Notes of the

applicable series, if they were to be purchased at such price on the third dealing day prior to the date fixed for redemption,

would be equal to the gross redemption yield on such dealing day of the applicable Reference Bond (as defined below) on the

basis of the middle market price of the Reference Bond prevailing at 11:00 a.m. (London time) on such dealing day as

determined by the Company or an investment bank appointed by the Company.

“

Reference Bond

” means, in relation to any Treasury Rate calculation, a German government bond whose maturity

is closest to the maturity of the Notes of the applicable series, or if the Company or an investment bank appointed by the

Company considers that such similar bond is not in issue, such other German government bond as the Company or an

investment bank appointed by the Company, with the advice of three brokers of, and/or market makers in, German

government bonds selected by the Company or an investment bank appointed by the Company, determine to be appropriate

for determining such Treasury Rate.

“

Remaining Scheduled Payments

” means, with respect to each Note of a series to be redeemed, the remaining

scheduled payments of principal and interest on such Note that, but for the redemption, would be due after the related

redemption date through the applicable Par Call Date, assuming the applicable series of Notes matured on the Par Call Date

(not including any portion of payments of interest accrued as of the redemption date). If that redemption date is not an

interest payment date with respect to the applicable series of Notes, the amount of the next succeeding scheduled interest

payment on the Notes will be reduced by the amount of interest accrued on the Notes to the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with our paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on

the Notes to be redeemed on that date.

In the case of any partial redemption, selection of the Notes of a series to be redeemed will be made by the trustee

by lot or pursuant to applicable depositary procedures.

Payment of Additional Amounts

We will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such

additional amounts as are necessary so that the net payment by us or our paying agent of the principal of and interest on the

Notes to a person that is a United States Alien, after deduction for any present or future tax, assessment or governmental

charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with

respect to the payment, will not be less than the amount that would have been payable in respect of the Notes had no

withholding or deduction been required. As used herein, “United States Alien” means any person who, for United States

federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a

foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax

purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust.

Our obligation to pay additional amounts shall not apply:

(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust

or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder:

55

(a) is or was present or engaged in a trade or business in the United States, has or had a permanent

establishment in the United States, or has any other present or former connection with the United States or

any political subdivision or taxing authority thereof or therein;

(b) is or was a citizen or resident or is or was treated as a resident of the United States;

(c) is or was a foreign or domestic personal holding company, a passive foreign investment

company or a controlled foreign corporation with respect to the United States or is or was a corporation that

has accumulated earnings to avoid United States fed eral income tax; 

(d) is or was a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue

Code of 1986, as amended (the “Code”); or

(e) is or was an actual or constructive owner of 10% or more of the total combined voting power

of all classes of stock of AT&T entitled to vote;

(2) to any holder that is not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary

or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary,

or a member of the partnership would not have been entitled to the payment of an additional amount had such

beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment;

(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge;

(4) to any tax, assessment or governmental charge that is imposed other than by deduction or withholding

by AT&T or a paying agent from the payment;

(5) to any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that is announced or becomes effective after the day on

which the payment becomes due or is duly provided for, whichever occurs later;

(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,

assessment or governmental charge;

(7) to any tax, assessment or other governmental charge any paying agent (which term may include us)

must withhold from any payment of principal of or interest on any Note, if such payment can be made without such

withholding by any other paying agent; or

(8) in the case of any combination of the above items.

In addition, any amounts to be paid on the Notes will be paid net of any deduction or withholding imposed or

required pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations

thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or

practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such

Sections of the Code, and no additional amounts will be required to be paid on account of any such deduction or withholding.

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial

interpretation applicable. Except as specifically provided under this heading “— Payment of Additional Amounts” and under

the heading “— Redemption Upon a Tax Event,” we do not have to make any payment with respect to any tax, assessment or

governmental charge imposed by any government or a political subdivision or taxing authority.

Any reference in the terms of the Notes of each series to any amounts in respect of the Notes shall be deemed also to

refer to any additional amounts which may be payable under this provision.

56

Redemption Upon a Tax Event

If (a) we become or will become obligated to pay additional amounts with respect to any Notes as described herein

under the heading “— Payment of Additional Amounts” as a result of any change in, or amendment to, the laws (or any

regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or

therein), or any change in, or amendments to, any official position regarding the application or interpretation of such laws,

regulations or rulings, which change or amendment is announced or becomes effective, on or after September 4, 2019 or (b) a

taxing authority of the United States takes an action on or after September 4, 2019, whether or not with respect to us or any of

our affiliates, that results in a substantial probability that we will or may be required to pay such additional amounts, then we

may, at our option, redeem, as a whole, but not in part, the applicable series of Notes on any interest payment date on not less

than 30 nor more than 60 calendar days’ prior notice, at a redemption price equal to 100% of their principal amount, together

with interest accrued thereon to the date fixed for redemption. No redemption pursuant to (b) above may be made unless we

shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States

results in a substantial probability that we will or may be required to pay the additional amounts described herein under the

heading “— Payment of Additional Amounts” and we shall have delivered to the trustee a certificate, signed by a duly

authorized officer, stating that based on such opinion we are entitled to redeem the Notes pursuant to their terms.

Further Issues

We may from time to time, without notice to or the consent of the holders of any series of the Notes, create and issue

further notes ranking equally and ratably with such series in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as, and will be fungible for United States federal

income tax purposes with, the Notes of the applicable series. Any further notes shall be issued pursuant to a resolution of our

board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture.

Governing Law

The Notes will be governed by and interpreted in accordance with the laws of the State of New York.

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

57

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

58

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

59

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the relevant

series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a payment default

on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or her

knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines that

withholding notice is in holders’ interest.

60

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee 

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The

Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services

for us and our subsidiaries from time to time in the ordinary course of business.

61

DESCRIPTION OF THE 4.250% GLOBAL NOTES DUE 2050

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 4.250% Global Notes due 2050 (the “Notes”). For a complete description of the terms and provisions of the Notes,

please refer to the Indenture, which is filed as an exhibit to AT&T’s Annual Report on Form 10-K for the year ended

December 31, 2019 and to the forms of Notes, which are filed as exhibits to the Form 8-A filed with the Securities and

Exchange Commission on December 12, 2019.

General

The Notes:

●

were issued in an aggregate initial principal amount of $1,265,000,000, which remains the amount

outstanding, subject to our ability to issue additional Notes which may be of the same series as the Notes as

described under “— Further Issues”;

●

mature on March 1, 2050;

●

bear interest at the rate of 4.250% per annum, payable semiannually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund.

The Notes are unsecured and unsubordinated obligations and rank pari passu with all other indebtedness issued

under our Indenture. The Notes constitute a single series under the Indenture. The Notes are issued in fully registered form

only and in minimum denominations of $100,000 and integral multiples of $1,000 thereafter. Principal and interest payments

on the Notes registered in the name of the depositary or its nominee will be made to the depositary or its nominee, as the case

may be, as the registered owner. 

For purposes of the Notes, a business day means a business day in The City of New York and Taipei, Taiwan.

Interest

The Notes bear interest at the rate of 4.250% per annum. We will pay interest on our Notes in arrears on each March

1 and September 1 commencing on March 1, 2020 to the persons in whose names the Notes are registered at the close of

business on the fifteenth day preceding the respective interest payment date. The Notes will mature on March 1, 2050. 

Optional Redemption 

We have the option to redeem all, but not less than all, of the Notes then outstanding on each March 1 on or after

March 1, 2025. In addition, on the first redemption date on which we opt to redeem Notes, we also have the option to instead

only redeem 50% of the aggregate principal amount of the Notes then outstanding. If we opt to redeem 50% of the aggregate

principal amount of the Notes then outstanding on a redemption date, any remaining Notes can be redeemed at our option on

a future redemption date in whole but not in part. Any redemption described in this paragraph must be on not less than 10 nor

more than 40 days’ notice and will be at a redemption price equal to 100% of the principal amount of the Notes being

redeemed plus accrued and unpaid interest to, but excluding, the date of redemption. 

On and after the redemption date, interest will cease to accrue on the Notes or the portion of the Notes called for

redemption, unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with our paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on

the Notes to be redeemed on that date. If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be

selected pro rata or in accordance with applicable depositary procedures.

62

Payment of Additional Amounts

We will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such

additional amounts as are necessary so that the net payment by us or our paying agent of the principal of and interest on the

Notes to a person that is a United States Alien, after deduction for any present or future tax, assessment or governmental

charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with

respect to the payment, will not be less than the amount that would have been payable in respect of the Notes had no

withholding or deduction been required. As used herein, “United States Alien” means any person who, for United States

federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a

foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax

purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust.

Our obligation to pay additional amounts shall not apply:

(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust

or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder:

(a) is or was present or engaged in a trade or business in the United States, has or had a permanent

establishment in the United States, or has any other present or former connection with the United States or

any political subdivision or taxing authority thereof or therein;

(b) is or was a citizen or resident or is or was treated as a resident of the United States;

(c) is or was a foreign or domestic personal holding company, a passive foreign investment

company or a controlled foreign corporation with respect to the United States or is or was a corporation that

has accumulated earnings to avoid United States federal income tax; 

(d) is or was a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue

Code of 1986, as amended (the “Code”); or

(e) is or was an actual or constructive owner of 10% or more of the total combined voting power

of all classes of stock of AT&T entitled to vote;

(2) to any holder that is not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary

or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary,

or a member of the partnership would not have been entitled to the payment of an additional amount had such

beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment;

(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge;

(4) to any tax, assessment or governmental charge that is imposed other than by deduction or withholding

by AT&T or a paying agent from the payment;

(5) to any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that is announced or becomes effective after the day on

which the payment becomes due or is duly provided for, whichever occurs later;

(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,

assessment or governmental charge;

63

(7) to any tax, assessment or other governmental charge any paying agent (which term may include us)

must withhold from any payment of principal of or interest on any Note, if such payment can be made without such

withholding by any other paying agent; or

(8) in the case of any combination of the above items.

In addition, any amounts to be paid on the Notes will be paid net of any deduction or withholding imposed or

required pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations

thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or

practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such

Sections of the Code, and no additional amounts will be required to be paid on account of any such deduction or withholding.

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial

interpretation applicable. Except as specifically provided under this heading “—Payment of Additional Amounts” and under

the heading “—Redemption Upon a Tax Event,” we do not have to make any payment with respect to any tax, assessment or

governmental charge imposed by any government or a political subdivision or taxing authority.

Any reference in the terms of the Notes to any amounts in respect of the Notes shall be deemed also to refer to any

additional amounts which may be payable under this provision.

Redemption Upon a Tax Event

If (a) we become or will become obligated to pay additional amounts with respect to the Notes as described herein

under the heading “—Payment of Additional Amounts” as a result of any change in, or amendment to, the laws (or any

regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or

therein), or any change in, or amendments to, any official position regarding the application or interpretation of such laws,

regulations or rulings, which change or amendment is announced or becomes effective, on or after December 3, 2019 or (b) a

taxing authority of the United States takes an action on or after December 3, 2019, whether or not with respect to us or any of

our affiliates, that results in a substantial probability that we will or may be required to pay such additional amounts, then we

may, at our option, redeem, as a whole, but not in part, the Notes on any interest payment date on not less than 10 nor more

than 40 calendar days’ prior notice, at a redemption price equal to 100% of their principal amount, together with interest

accrued thereon to the date fixed for redemption. No redemption pursuant to (b) above may be made unless we shall have

received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States results in

a substantial probability that we will or may be required to pay the additional amounts described herein under the heading

“—Payment of Additional Amounts” and we shall have delivered to the trustee a certificate, signed by a duly authorized

officer, stating that based on such opinion we are entitled to redeem the Notes pursuant to their terms.

Further Issues

We may from time to time, without notice to or the consent of the holders of the Notes, create and issue further

notes ranking equally and ratably with such Notes in all respects, or in all respects except for the payment of interest accruing

prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any further

notes will have the same terms as to status, redemption or otherwise, and, to the extent permitted by applicable authorities in

the Republic of China and subject to the receipt of all necessary regulatory and listing approvals from such authorities,

including but not limited to the Taipei Exchange and the Taiwan Securities Association, will be fungible for United States

federal income tax purposes with, the Notes. Any further notes shall be issued pursuant to a resolution of our board of

directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture.

Notices

Notices to holders of the Notes will be given only to the depositary, in accordance with its applicable policies as in

effect from time to time.

Prescription Period

Any money that we deposit with the trustee or any paying agent for the payment of principal or any interest on a

Note that remains unclaimed for two years after the date upon which the principal and interest are due and payable will be

64

repaid to us upon our request unless otherwise required by mandatory provisions of any applicable unclaimed property law. 

After that time, unless otherwise required by mandatory provisions of any unclaimed property law, the holder of the Note

will be able to seek any payment to which that holder may be entitled to collect only from us.

Governing Law

The Notes are governed by and interpreted in accordance with the laws of the State of New York.

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be organized

under the laws of a foreign country. It must be a corporation organized under the laws of the United States, any State

thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not already be

in default, unless the merger or other transaction would cure the default. For purposes of this no-default test, a

default would include an event of default that has occurred and not been cured, as described below under “—

Default and Related Matters — Events of Default — What Is an Event of Default?” A default for this purpose would

also include any event that would be an event of default if the requirements for giving us default notice or our

default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

65

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

66

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be canc elled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

67

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The

Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services

for us and our subsidiaries from time to time in the ordinary course of business.

68

DESCRIPTION OF THE 5.350% GLOBAL NOTES DUE 2066 AND THE 5.625% GLOBAL NOTES DUE 2067

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 5.350% Global Notes due 2066 (the “2066 Notes”) and 5.625% Global Notes due 2067 (the “2067 Notes” and, together

with the 2066 Notes, the “Notes”). For a complete description of the terms and provisions of the Notes, please refer to the

Indenture, which is filed as an exhibit to AT&T’s Annual Report on Form 10-K for the year ended December 31 2019 and to

the forms of Notes, which are filed as exhibits to the Form 8-As filed with the Securities and Exchange Commission on

October 27, 2017 and August 1, 2018. 

General 

The 2066 Notes:

●

were issued in an aggregate initial principal amount of $1,322,500,000, which remains the amount

outstanding, subject to our ability to issue additional 2066 Notes which may be of the same series as the

2066 Notes as described under “— Further Issues”;

●

mature on November 1, 2066;

●

bear interest at the rate of 5.350% per annum, payable quarterly in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund.

The 2067 Notes:

●

were issued in an aggregate initial principal amount of $825,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2067 Notes which may be of the same series as the

2067 Notes as described under “— Further Issues”;

●

mature on August 1, 2067;

●

bear interest at the rate of 5.625% per annum, payable quarterly in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund.

The Notes are unsecured and unsubordinated obligations and rank pari passu with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of $25 and integral multiples of $25 thereafter. Principal and interest

payments on the Notes registered in the name of the depositary or its nominee will be made to the depositary or its nominee,

as the case may be, as the registered owner of the global notes.

For purposes of the Notes, a business day means a business day in the City of New York. 

69

Interest

The 2066 Notes bear interest at the rate of 5.350% per annum and the 2067 Notes bear interest at the rate of 5.625%

per annum. We pay interest on our Notes in arrears on each February 1, May 1, August 1 and November 1, commencing on

February 1, 2018 with respect to the 2066 Notes and commencing on November 1, 2018 with respect to the 2067 Notes, to

the persons in whose names the Notes are registered at the close of business on the fifteenth day preceding the respective

interest payment date. The 2066 Notes will mature on November 1, 2066 and the 2067 Notes will mature on August 1, 2067. 

Optional Redemption 

We may, at our option, redeem the 2066 Notes, in whole or in part, at any time and from time to time on or after

November 1, 2022, and redeem the 2067 Notes, in whole or in part, at any time and from time to time on or after August 1,

2023, in each case, on at least 30 days’, but not more than 60 days’, prior notice mailed (or otherwise transmitted in

accordance with The Depository Trust Company (“DTC”) procedures) to the registered address of each holder of the Notes to

be redeemed. The redemption price will be equal to 100% of the principal amount of the Notes to be redeemed plus accrued

but unpaid interest to, but excluding, the redemption date. 

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption, unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with our paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on

the Notes to be redeemed on that date. In the case of any partial redemption, selection of the Notes of a series to be redeemed

will be made in accordance with applicable procedures of DTC. 

Payment of Additional Amounts 

We will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such

additional amounts as are necessary so that the net payment by us or our paying agent of the principal of and interest on the

Notes to a person that is a United States Alien, after deduction for any present or future tax, assessment or governmental

charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with

respect to the payment, will not be less than the amount that would have been payable in respect of the Notes had no

withholding or deduction been required. As used herein, “United States Alien” means any person who, for United States

federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a

foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax

purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust. 

Our obligation to pay additional amounts shall not apply: 

(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust

or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder: 

(a) is or was present or engaged in a trade or business in the United States, has or had a permanent

establishment in the United States, or has any other present or former connection with the United States or

any political subdivision or taxing authority thereof or therein; 

(b) is or was a citizen or resident or is or was treated as a resident of the United States; 

(c) is or was a foreign or domestic personal holding company, a passive foreign investment

company or a controlled foreign corporation with respect to the United States or is or was a corporation that

has accumulated earnings to avoid United States federal income tax; 

(d) is or was a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue

Code of 1986, as amended (the “Code”); or 

(e) is or was an actual or constructive owner of 10% or more of the total combined voting power

of all classes of stock of AT&T entitled to vote; 

70

(2) to any holder that is not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary

or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary,

or a member of the partnership would not have been entitled to the payment of an additional amount had such

beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment; 

(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge; 

(4) to any tax, assessment or governmental charge that is imposed other than by deduction or withholding

by AT&T or a paying agent from the payment; 

(5) to any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that is announced or becomes effective after the day on

which the payment becomes due or is duly provided for, whichever occurs later; 

(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,

assessment or governmental charge; 

(7) to any tax, assessment or other governmental charge any paying agent (which term may include us)

must withhold from any payment of principal of or interest on any Note, if such payment can be made without such

withholding by any other paying agent; or 

(8) in the case of any combination of the above items. 

In addition, any amounts to be paid on the Notes will be paid net of any deduction or withholding imposed or

required pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations

thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or

practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such

Sections of the Code, and no additional amounts will be required to be paid on account of any such deduction or withholding. 

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial

interpretation applicable. Except as specifically provided under this heading “— Payment of Additional Amounts” and under

the heading “— Redemption Upon a Tax Event,” we do not have to make any payment with respect to any tax, assessment or

governmental charge imposed by any government or a political subdivision or taxing authority. 

Any reference in the terms of the Notes of each series to any amounts in respect of the Notes shall be deemed also to

refer to any additional amounts which may be payable under this provision. 

Redemption Upon a Tax Event 

If (a) we become or will become obligated to pay additional amounts with respect to any Notes as described herein

under the heading “— Payment of Additional Amounts” as a result of any change in, or amendment to, the laws (or any

regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or

therein), or any change in, or amendments to, any official position regarding the application or interpretation of such laws,

regulations or rulings, which change or amendment is announced or becomes effective, on or after October 25, 2017 with

respect to the 2066 Notes or on or after July 25, 2018 with respect to the 2067 Notes or (b) a taxing authority of the United

States takes an action on or after October 25, 2017 with respect to the 2066 Notes or on or after July 25, 2018 with respect to

the 2067 Notes, whether or not with respect to us or any of our affiliates, that results in a substantial probability that we will

or may be required to pay such additional amounts, then we may, at our option, redeem, as a whole, but not in part, the

applicable series of Notes on any interest payment date on not less than 30 nor more than 60 calendar days’ prior notice, at a

redemption price equal to 100% of their principal amount, together with interest accrued thereon to the date fixed for

redemption. No redemption pursuant to (b) above may be made unless we shall have received an opinion of independent

counsel to the effect that an act taken by a taxing authority of the United States results in a substantial probability that we will

or may be required to pay the additional amounts described herein under the heading “— Payment of Additional Amounts”

71

and we shall have delivered to the trustee a certificate, signed by a duly authorized officer, stating that based on such opinion

we are entitled to redeem the Notes pursuant to their terms.

Further Issues 

We may from time to time, without notice to or the consent of the holders of any series of the Notes, create and issue

further notes ranking equally and ratably with such series in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as, and will be fungible for United States federal

income tax purposes with, the Notes of the applicable series. Any further notes shall be issued pursuant to a resolution of our

board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture. 

Notices 

Notices to holders of the Notes will be given only to the depositary, in accordance with its applicable policies as in

effect from time to time. 

Prescription Period 

Any money that we deposit with the trustee or any paying agent for the payment of principal or any interest on any

global note of any series that remains unclaimed for two years after the date upon which the principal and interest are due and

payable will be repaid to us upon our request unless otherwise required by mandatory provisions of any applicable unclaimed

property law. After that time, unless otherwise required by mandatory provisions of any unclaimed property law, the holder

of the global note will be able to seek any payment to which that holder may be entitled to collect only from us. 

Governing Law 

The Notes will be governed by and interpreted in accordance with the laws of the State of New York. 

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

72

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securi ties without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

73

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days.

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

74

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

75

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel a

declaration of acceleration.

Regarding the Trustee 

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The

Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services

for us and our subsidiaries from time to time in the ordinary course of business.

76

DESCRIPTION OF THE 7.000% GLOBAL NOTES DUE 2040 AND THE 4.875% GLOBAL NOTES DUE 2044

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of November 1, 1994, with The Bank of New York Mellon, acting as trustee (the “Indenture”) and the 7.000%

Global Notes due 2040 (the “2040 Notes”) and the 4.875% Global Notes due 2044 (the “2044 Notes” and, together with the

2040 Notes, the “Notes”). For a complete description of the terms and provisions of the Notes, please refer to the Indenture,

which is filed as an exhibit to AT&T’s Annual Report on Form 10-K for the year ended December 31, 2019 and to the forms

of Notes, which are filed as exhibits to the Form 8-As filed with the Securities and Exchange Commission on May 1, 2009

and May 30, 2012.

General 

The 2040 Notes:

●

were issued in an aggregate initial principal amount of £1,100,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2040 Notes which may be of the same series as the 2040

Notes as described under “— Further Issues”;

●

mature on April 30, 2040;

●

bear interest at the rate of 7.000% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2044 Notes:

●

were issued in an aggregate initial principal amount of £1,250,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2044 Notes which may be of the same series as the 2044

Notes as described under “— Further Issues”;

●

mature on June 1, 2044;

●

bear interest at the rate of 4.875% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and (i) with respect to the 2040 Notes, in minimum denominations of £50,000 and integral multiples of

£50,000 thereafter and (ii) with respect to the 2044 Notes, in minimum denominations of £100,000 and integral multiples of

£1,000 in excess thereof. Principal and interest payments of the Notes are payable by us in pound sterling. Payments of

principal, interest and additional amounts, if any, in respect of the Notes will be made to the Depository Trust Company,

Euroclear System, Clearstream Banking S.A. or such nominee or common depositary, as the case may be, as registered

holder thereof.

77

For purposes of the 2040 Notes, a business day means any day other than a Saturday or Sunday or a day on which

banking institutions in the City of New York or the City of London are authorized or required by law or executive order to

close.

For purposes of the 2044 Notes, a business day means a business day in the City of New York and London.

Interest

The 2040 Notes bear interest at the rate of 7.000% per annum and the 2044 Notes bear interest at the rate of 4.875%

per annum. 

We pay interest on the 2040 Notes annually in arrears on April 30, commencing on April 30, 2010, to the persons in

whose names our 2040 Notes are registered at the close of business on the April 15 preceding each interest payment date. We

pay interest on the 2044 Notes annually in arrears on June 1, commencing on June 1, 2013, to the persons in whose names the

2044 Notes are registered at the close of business on the May 15 preceding the interest payment date. 

The 2040 Notes mature on April 30, 2040 and the 2044 Notes will mature on June 1, 2044. 

Interest on the Notes is computed on the basis of the actual number of days in the period for which interest is being

calculated and the actual number of days from and including the last date on which interest was paid on the Notes, to but

excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA)

as defined in the rulebook of the International Capital Market Association.

Optional Redemption of the Notes 

The Notes of each series will be redeemable, as a whole or in part, at our option, at any time and from time to time

on at least 30 days’, but not more than 60 days’, prior notice mailed to the registered address of each holder of the Notes of

that series. The redemption price will be equal to the greater of (1) 100% of the principal amount of the Notes of that series to

be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to the

redemption date, on an annual basis (actual/actual (ICMA)), at a rate equal to the Treasury Rate (as defined below) and 25

basis points for each series of the Notes. In either case, accrued interest will be payable to the redemption date.

“

Treasury Rate

” means the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded

upwards), at which the gross redemption yield (as calculated by the trustee) on the Notes of the applicable series, if they were

to be purchased at such price on the third dealing day prior to the date fixed for redemption, would be equal to the gross

redemption yield on such dealing day of the Reference Bond (as defined below) on the basis of the middle market price of the

Reference Bond prevailing at 11:00 a.m. (London time) on such dealing day as determined by the trustee.

“

Reference Bond

” means, in relation to any Treasury Rate calculation, at the discretion of the trustee, a United

Kingdom government bond whose maturity is closest to the maturity of the Notes of the applicable series, or if the trustee in

its discretion considers that such similar bond is not in issue, such other United Kingdom government bond as the trustee

may, with the advice of three brokers of, and/or market makers in, United Kingdom government bonds selected by the

trustee, determine to be appropriate for determining the Treasury Rate.

“

Remaining Scheduled Payments

” means, with respect to each Note of a series to be redeemed, the remaining

scheduled payments of principal of and interest on the Note that would be due after the related redemption date but for the

redemption. If that redemption date is not an interest payment date with respect to the applicable series of Notes, the amount

of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the

Notes to the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with a paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on the

Notes to be redeemed on that date.

In the case of any partial redemption, selection of the Notes of a series will be made by the trustee by lot or by such

other method as the trustee in its sole discretion deems to be fair and appropriate.

78

Redemption for Taxation Reasons 

If (a) as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction (as defined

below under “Interpretation”), or any change in the official interpretation of the laws or regulations of a Relevant

Jurisdiction, which change or amendment becomes effective after April 24, 2009 with respect to the 2040 Notes and May 22,

2012 with respect to the 2044 Notes, on the next Interest Payment Date we would be required to pay additional amounts as

provided or referred to below under “— Payment Without Withholding” and (b) the requirement cannot be avoided by our

taking reasonable measures available to us, we may at our option, having given not less than 30 nor more than 60 days’

notice to the holders of Notes of each applicable series (which notice shall be irrevocable), redeem all, but not a portion of,

the applicable series of Notes at any time at their principal amount together with interest accrued to, but excluding, the date of

redemption provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which

we would be obliged to pay such additional amounts were a payment in respect of the applicable series of Notes then due.

Prior to the publication of any notice of redemption pursuant to this paragraph, we shall deliver to the trustee a certificate

signed by two of our executive officers stating that the requirement referred to in (a) above will apply on the next Interest

Payment Date and setting forth a statement of facts showing that the conditions precedent to the right of AT&T so to redeem

have occurred, cannot be avoided by us taking reasonable measures available to us and an opinion of independent legal

advisers of recognized international standing to the effect that AT&T has or will become obliged to pay such additional

amounts as a result of the change or amendment, in each case to be held by the trustee and made available for viewing at the

offices of the trustee on request by any holder of each applicable series of Notes.

Payment Without Withholding 

All payments in respect of the Notes by or on behalf of AT&T shall be made without withholding or deduction for,

or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (“Taxes”)

imposed, collected, withheld, assessed or levied by or on behalf of the Relevant Jurisdiction, unless the withholding or

deduction of the Taxes is required by law. In that event, we will pay such additional amounts to a holde r who is a United

States Alien (as defined below) as may be necessary in order that the net amounts received by the holder after the

withholding or deduction shall equal the respective amounts which would have been receivable in respect of each applicable

series of the Notes in the absence of the withholding or deduction; except that no such additional amounts shall be payable in

relation to any payment in respect of any Note: 

(a) where such withholding or deduction would not have been so imposed but for:

(i) in the case of payment by AT&T, the existence of any present or former connection between

the holder of the Note (or between a fiduciary, settlor, shareholder, beneficiary or member of the holder of

the Note, if such holder is an estate, a trust, a corporation or a partnership) and the United States, including,

without limitation, such holder (or such fiduciary, settlor, shareholder, beneficiary or member) being or

having been a citizen or resident or treated as a resident thereof, or being or having been engaged in trade

or business or presence therein, or having or having had a permanent establishment therein;

(ii) in the case of payment by AT&T, the present or former status of the holder of the Note as a

personal holding company, a foreign personal holding company, a passive foreign investment company, or

a controlled foreign corporation for United States federal income tax purposes or a corporation which

accumulates earnings to avoid United States federal income tax;

(iii) in the case of payment by AT&T, the past or present or future status of the holder of the Note

as the actual or constructive owner of 10% or more of either the total combined voting power of all classes

of stock of AT&T entitled to vote if AT&T was treated as a corporation, or the capital or profits interest in

AT&T, if AT&T is treated as a partnership for United States federal income tax purposes or as a bank

receiving interest described in Section 881(c) (3) (A) of the Internal Revenue Code of 1986, as amended; or

(iv) the failure by the holder of the Note to comply with any certification, identification or other

reporting requirements concerning the nationality, residence, identity or connection with the United States

(in the case of payment by AT&T) of such holder, if compliance is required by statute or by regulation as a

precondition to exemption from such withholding or deduction;

(b) in the case of payment by AT&T to any United States Alien, if such person is a fiduciary or partnership

or other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to

79

such fiduciary, a member of such partnership or the beneficial owner would not have been entitled to the additional

amounts had such beneficiary, settlor, member or beneficial owner been the bearer of such Note. As used herein,

“United States Alien” means any person who, for United States federal income tax purposes, is a foreign

corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign

partnership one or more of the members of which is, for United States federal income tax purposes, a foreign

corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust;

(c) to the extent that the withholding or deduction is as a result of the imposition of any gift, inheritance,

estate, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(d) to, or to a third party on behalf of, a holder who is liable for the Taxes in respect of the Notes by reason

of his having any or some present or former connection, including but not limited to fiscal residency, fiscal deemed

residency and substantial interest shareholdings, with the Relevant Jurisdiction, other than the mere holding of the

Notes;

(e) presented for payment more than 30 days after the Relevant Date except to the extent that a holder

would have been entitled to additional amounts on presenting the relevant Notes for payment on the last day of the

period of 30 days assuming that day to have been an Interest Payment Date;

(f) any tax, assessment or other governmental charge required to be withheld by any paying agent from any

payment of principal or of interest on any Notes, if such payment can be made without withholding by any other

paying agent;

(g) any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of our Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge;

(h) any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the

payment becomes due or is duly provided for, whichever occurs later; or

(i) any combination of (a), (b), (c), (d), (e), (f), (g) or (h).

Interpretation 

As used in this description:

(a) “Relevant Date” means the date on which the payment first becomes due but, if the full amount of the

money payable has not been received by the trustee on or before the due date, it means the date which is seven days

after the date on which, the full amount of the money having been so received, notice to that effect shall have been

duly given to the holders of Notes by us; and

(b) “Relevant Jurisdiction” means the State of Delaware and the United States or any political subdivision

or any authority thereof or therein having power to tax or any other jurisdiction or any political subdivision or any

authority thereof or therein having power to tax to which we become subject in respect of payments made by it of

principal and interest on the Notes.

Additional Amounts 

Any reference in the terms of the Notes to any amounts in respect of the Notes shall be deemed also to refer to any

additional amounts which may be payable under this provision.

80

Further Issues 

We may from time to time, without notice to or the consent of the holders of any series of the Notes, create and issue

further notes ranking equally and ratably with such series in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as the Notes of the applicable series. Any further

notes shall be issued pursuant to a resolution of our board of directors, a supplement to the Indenture, or under an officers’

certificate pursuant to the Indenture.

Governing Law 

The Notes will be governed by and interpreted in accordance with the laws of the State of New York. 

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company, or to buy substantially all of the assets of another company. However, we

may not take any of these actions unless all the following conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

81

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except for clarifying changes and certain other changes that would not adversely affect holders

of the securities. The same vote would be required for us to obtain a waiver of an existing default. However, we cannot

obtain a waiver of a payment default unless we obtain each holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms and other changes that would not

materially adversely affect holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

82

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all event s of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

83

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and bring such

holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such holder’s

interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon is the trustee under the Indenture. In addition, affiliates of The Bank of New York

Mellon may perform various commercial banking and investment banking services for us and our subsidiaries from time to

time in the ordinary course of business.

84

DESCRIPTION OF THE 4.250% GLOBAL NOTES DUE 2043

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 4.250% Global Notes due 2043 (the “Notes”). For a complete description of the terms and provisions of the Notes,

please refer to the Indenture, which is filed as an exhibit to AT&T’s Annual Report on Form 10-K for the year ended

December 31, 2019 and to the form of Notes, which is filed as an exhibit to the Form 8-A filed with the Securities and

Exchange Commission on May 15, 2013.

General

The Notes:

●

were issued in an aggregate initial principal amount of £1,000,000,000, which remains the amount

outstanding, subject to our ability to issue additional Notes which may be of the same series as the Notes as

described under “— Further Issues”;

●

mature on June 1, 2043;

●

bear interest at the rate of 4.250% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

with all other indebtedness issued

under our Indenture. The Notes constitute a single series under the Indenture. The Notes are issued in fully registered form

only and in minimum denominations of £100,000 and integral multiples of £1,000 in excess thereof. Principal and interest

payments on the Notes are payable by us in pound sterling. Payments of principal, interest and additional amounts, if any, in

respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or common depositary, as

the case may be, as registered holder thereof. Under the terms of the Indenture, if the pound sterling ceases to exist when

payments on the Notes are due under any circumstances, AT&T may supplement the Indenture to allow for payment in U.S.

dollars. The principal and interest payable in U.S. dollars on a Note at maturity, or upon redemption, will be paid by wire

transfer of immediately available funds against presentation of a Note at the office of the paying agent.

For purposes of the Notes, a business day means a business day in the City of New York and London.

Interest

The Notes bear interest at the rate of 4.250% per annum. We pay interest on the Notes annually in arrears on June 1,

commencing on June 1, 2014, to the persons in whose names the Notes are registered at the close of business on the May 15

preceding the interest payment date. The Notes will mature on June 1, 2043.

Interest on the Notes is computed on the basis of the actual number of days in the period for which interest is being

calculated and the actual number of days from and including the last date on which interest was paid on the Notes, to but

excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA)

as defined in the rulebook of the International Capital Market Association. 

Optional Redemption 

At any time prior to December 1, 2042, the Notes will be redeemable, as a whole or in part, at our option, at any

time and from time to time on at least 30 days’, but not more than 60 days’, prior notice mailed to the registered address of

each holder of the Notes. The redemption price will be equal to the greater of (1) 100% of the principal amount of the Notes

to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to

85

the redemption date, on an annual basis (ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined

below) and 20 basis points for the Notes. In either case, accrued interest will be payable to the redemption date. At any time

on or after December 1, 2042, we have the option to redeem the Notes, as a whole or in part, on at least 30 days’, but not

more than 60 days’, prior notice mailed to the registered address of each holder of the Notes at a redemption price equal to

100% of the principal amount of the Notes to be redeemed. Accrued interest will be payable to the redemption date.

“

Treasury Rate

” means the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded

upwards), at which the gross redemption yield on the Notes, if they were to be purchased at such price on the third dealing

day prior to the date fixed for redemption, would be equal to the gross redemption yield on such dealing day of the Reference

Bond (as defined below) on the basis of the middle market price of the Reference Bond prevailing at 11:00 a.m. (London

time) on such dealing day as determined by the Company or an investment bank appointed by the Company.

“

Reference Bond

” means, in relation to any Treasury Rate calculation, a United Kingdom government bond whose

maturity is closest to the maturity of the Notes, or if the Company or an investment bank appointed by the Company

considers that such similar bond is not in issue, such other United Kingdom government bond as the Company or an

investment bank appointed by the Company, with the advice of three brokers of, and/or market makers in, United Kingdom

government bonds selected by the Company or an investment bank appointed by the Company, determine to be appropriate

for determining such Treasury Rate.

“

Remaining Scheduled Payments

” means, with respect to each Note to be redeemed, the remaining scheduled

payments of principal of and interest on the Note that would be due after the related redemption date but for the redemption.

If that redemption date is not an interest payment date with respect to a Note, the amount of the next succeeding scheduled

interest payment on the Note will be reduced by the amount of interest accrued on the Note to the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with a paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on the

Notes to be redeemed on that date.

In the case of any partial redemption, selection of the Notes will be made by the trustee by lot or by such other

method as the trustee in its sole discretion deems to be fair and appropriate.

Redemption for Taxation Reasons

If (a) as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction (as defined

below under “Interpretation”), or any change in the official interpretation of the laws or regulations of a Relevant

Jurisdiction, which change or amendment becomes effective after May 8, 2013, on the next Interest Payment Date we would

be required to pay additional amounts as provided or referred to below under “— Payment Without Withholding” and (b) the

requirement cannot be avoided by our taking reasonable measures available to us, we may at our option, having given not

less than 30 nor more than 60 days’ notice to the holders of Notes (which notice shall be irrevocable), redeem all, but not a

portion of, the Notes at any time at their principal amount together with interest accrued to, but excluding, the date of

redemption provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which

we would be obliged to pay such additional amounts were a payment in respect of the Notes then due. Prior to the publication

of any notice of redemption pursuant to this paragraph, we shall deliver to the trustee a certificate signed by two of our

executive officers stating that the requirement referred to in (a) above will apply on the next Interest Payment Date and

setting forth a statement of facts showing that the conditions precedent to the right of AT&T so to redeem have occurred,

cannot be avoided by us taking reasonable measures available to us and an opinion of independent legal advisers of

recognized international standing to the effect that AT&T has or will become obliged to pay such additional amoun ts as a

result of the change or amendment, in each case to be held by the trustee and made available for viewing at the offices of the

trustee on request by any holder of the Notes. 

Payment Without Withholding 

All payments in respect of the Notes by or on behalf of AT&T shall be made without withholding or deduction for,

or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (“Taxes”)

imposed, collected, withheld, assessed or levied by or on behalf of the Relevant Jurisdiction, unless the withholding or

deduction of the Taxes is required by law. In that event, we will pay such additional amounts to a holder who is a United

States Alien (as defined below) as may be necessary in order that the net amounts received by the holder after the

86

withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes in the

absence of the withholding or deduction; except that no such additional amounts shall be payable in relation to any payment

in respect of any Note:

(a) where such withholding or deduction would not have been so imposed but for:

(i) in the case of payment by AT&T, the existence of any present or former connection between

the holder of the Note (or between a fiduciary, settlor, shareholder, beneficiary or member of the holder of

the Note, if such holder is an estate, a trust, a corporation or a partnership) and the United States, including,

without limitation, such holder (or such fiduciary, settlor, shareholder, beneficiary or member) being or

having been a citizen or resident or treated as a resident thereof, or being or having been engaged in trade

or business or presence therein, or having or having had a permanent establishment therein; 

(ii) in the case of payment by AT&T, the present or former status of the holder of the Note as a

personal holding company, a foreign personal holding company, a passive foreign investment company, or

a controlled foreign corporation for United States federal income tax purposes or a corporation which

accumulates earnings to avoid United States federal income tax; 

(iii) in the case of payment by AT&T, the past or present or future status of the holder of the Note

as the actual or constructive owner of 10% or more of either the total combined voting power of all classes

of stock of AT&T entitled to vote if AT&T was treated as a corporation, or the capital or profits interest in

AT&T, if AT&T is treated as a partnership for United States federal income tax purposes or as a bank

receiving interest described in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended; or 

(iv) the failure by the holder of the Note to comply with any certification, identification or other

reporting requirements concerning the nationality, residence, identity or connection with the United States

(in the case of payment by AT&T) of such holder, if compliance is required by statute or by regulation as a

precondition to exemption from such withholding or deduction; 

(b) in the case of payment by AT&T to any United States Alien, if such person is a fiduciary or partnership

or other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to

such fiduciary, a member of such partnership or the beneficial owner would not have been entitled to the additional

amounts had such beneficiary, settlor, member or beneficial owner been the bearer of such Note. As used herein,

“United States Alien” means any person who, for United States federal income tax purposes, is a foreign

corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign

partnership one or more of the members of which is, for United States federal income tax purposes, a foreign

corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust;

(c) to the extent that the withholding or deduction is as a result of the imposition of any gift, inheritance,

estate, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(d) to, or to a third party on behalf of, a holder who is liable for the Taxes in respect of the Notes by reason

of his having any or some present or former connection, including but not limited to fiscal residency, fiscal deemed

residency and substantial interest shareholdings, with the Relevant Jurisdiction, other than the mere holding of the

Notes;

(e) presented for payment more than 30 days after the Relevant Date except to the extent that a holder

would have been entitled to additional amounts on presenting the relevant Notes for payment on the last day of the

period of 30 days assuming that day to have been an Interest Payment Date;

(f) any tax, assessment or other governmental charge required to be withheld by any paying agent from any

payment of principal or of interest on any Notes, if such payment can be made without withholding by any other

paying agent;

(g) any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of our Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

87

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge;

(h) any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the

payment becomes due or is duly provided for, whichever occurs later; or

(i) any combination of (a), (b), (c), (d), (e), (f), (g) or (h).

Interpretation 

As used in this description:

(a) “Relevant Date” means the date on which the payment first becomes due but, if the full amount of the

money payable has not been received by the trustee on or before the due date, it means the date which is seven days

after the date on which, the full amount of the money having been so received, notice to that effect shall have been

duly given to the holders of Notes by us; and

(b) “Relevant Jurisdiction” means the State of Delaware and the United States or any political subdivision

or any authority thereof or therein having power to tax or any other jurisdiction or any political subdivision or any

authority thereof or therein having power to tax to which we become subject in respect of payments made by it of

principal and interest on the Notes. 

Additional Amounts 

Any reference in the terms of the Notes to any amounts in respect of the Notes shall be deemed also to refer to any

additional amounts which may be payable under this provision. 

Further Issues 

We may from time to time, without notice to or the consent of the holders of the Notes, create and issue further

notes ranking equally and ratably with such Notes in all respects, or in all respects except for the payment of interest accruing

prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any further

notes will have the same terms as to status, redemption or otherwise as the Notes. Any further notes shall be issued pursuant

to a resolution of our board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the

Indenture. 

Governing Law

The Notes will be governed by and interpreted in accordance with the laws of the State of New York. 

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

88

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifica tions of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

89

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

90

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

91

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The

Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services

for us and our subsidiaries from time to time in the ordinary course of business.

92

DESCRIPTION OF THE 2.900% GLOBAL NOTES DUE 2026, THE 4.375% GLOBAL NOTES DUE 2029 AND

THE 5.200% GLOBAL NOTES DUE 2033

The following summary of AT&T’s above referenced debt securities is based on and qualified by the indenture,

dated as of May 15, 2013, with The Bank of New York Mellon Trust Company, N.A., acting as trustee (the “Indenture”) and

the 2.900% Global Notes due 2026 (the “2.900% 2026 Notes”), the 4.375% Global Notes due 2029 (the “4.375% 2029

Notes”) and the 5.200% Global Notes due 2033 (the “2033 Notes” and, together with the 2.900% 2026 Notes and the

4.375% 2029 Notes, the “Notes”). For a complete description of the terms and provisions of the Notes, please refer to the

Indenture, which is filed as an exhibit to AT&T’s Annual Report on Form 10-K for the year ended December 31, 2019 and to

the forms of Notes, which are filed as exhibits to the Form 8-As filed with the Securities and Exchange Commission on March

24, 2016 and September 11, 2018. 

General

The 2.900% 2026 Notes:

●

were issued in an aggregate initial principal amount of £750,000,000, which remains the amount

outstanding, subject to our ability to issue additional 2.900% 2026 Notes which may be of the same series

as the 2.900% 2026 Notes as described under “— Further Issues”;

●

mature on December 4, 2026;

●

bear interest at the rate of 2.900% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 4.375% 2029 Notes:

●

were issued in an aggregate initial principal amount of £745,000,000, which remains the amount

outstanding, subject to our ability to issue additional 4.375% 2029 Notes which may be of the same series

as the 4.375% 2029 Notes as described under “— Further Issues”;

●

mature on September 14, 2029;

●

bear interest at the rate of 4.375% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The 2033 Notes:

●

were issued in an aggregate initial principal amount of £342,361,000, which remains the amount

outstanding, subject to our ability to issue additional 2033 Notes which may be of the same series as the

2033 Notes as described under “— Further Issues”;

●

mature on November 18, 2033;

93

●

bear interest at the rate of 5.200% per annum, payable annually in arrears;

●

are repayable at par at maturity;

●

are redeemable by us at the time described below under “— Optional Redemption” and in connection with

certain tax events as described below under “— Redemption Upon a Tax Event”; and

●

are not subject to any sinking fund. 

The Notes are unsecured and unsubordinated obligations and rank

pari passu

with all other indebtedness issued

under our Indenture. Each series of Notes constitutes a separate series under the Indenture. The Notes are issued in fully

registered form only and in minimum denominations of £100,000 and integral multiples of £1,000 in excess thereof. Principal

and interest payments on the Notes are payable by us in pound sterling. Payments of principal, interest and additional

amounts, if any, in respect of the Notes will be made to Euroclear System, Clearstream Banking S.A. or such nominee or

common depositary, as the case may be, as registered holder thereof. Under the terms of the Indenture, if the pound sterling

ceases to exist when payments on the Notes are due under any circumstances, AT&T may supplement the Indenture to allow

for payment in U.S. dollars. The principal and interest payable in U.S. dollars on a Note at maturity, or upon redemption, will

be paid by wire transfer of immediately available funds against presentation of a Note at the office of the paying agent.

For purposes of the 2.900% 2026 Notes, a business day means a business day in the City of New York or the City of

London.

For purposes of the 4.375% 2029 Notes and 2033 Notes, a business day means any day other than a Saturday or

Sunday and that, in the City of New York or London, is not a day on which banking institutions are generally authorized or

obligated by law to close, and is a day on which the Trans-European Automated Real-time Gross Settlement Express

Transfer (TARGET) System, or any successor thereto, operates. 

Interest

The 2.900% 2026 Notes bear interest at the rate of 2.900% per annum, the 4.375% 2029 Notes bear interest at the

rate of 4.375% per annum and the 2033 Notes bear interest at the rate of 5.200% per annum. 

We pay interest on the 2.900% 2026 Notes annually in arrears on each December 4, commencing on December 4,

2018, to the persons in whose names the 2.900% 2026 Notes are registered at the close of business on the business day

preceding the interest payment date. The 2.900% 2026 Notes will mature on December 4, 2026.

We pay interest on the 4.375% 2029 Notes annually in arrears on September 14, commencing on September 14,

2016, to the persons in whose names the 4.375% 2029 Notes are registered at the close of business on the business day

preceding the interest payment date. The 4.375% 2029 Notes will mature on September 14, 2029.

We pay interest on the 2033 Notes annually in arrears on November 18, commencing on November 18, 2016, to the

persons in whose names our 2033 Notes are registered at the close of business on the business day preceding the interest

payment date. The 2033 Notes will mature on November 18, 2033. 

Interest on the Notes is computed on the basis of the actual number of days in the period for which interest is being

calculated and the actual number of days from and including the last date on which interest was paid on the Notes, to but

excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA)

as defined in the rulebook of the International Capital Market Association. 

Optional Redemption

At any time prior to September 4, 2026, the 2.900% 2026 Notes may be redeemed, as a whole or in part, at our

option, at any time and from time to time on at least 30 days’, but not more than 60 days’, prior notice sent to the registered

address of each holder of the Notes to be redeemed. The redemption price will be calculated by us and will be equal to the

greater of (1) 100% of the principal amount of the Notes to be redeemed or (2) the sum of the present values of the

Remaining Scheduled Payments (as defined below) discounted to the redemption date, on an annual basis

(ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined below) plus 25 basis points. In either case,

94

accrued but unpaid interest will be payable to the redemption date. At any time on or after September 4, 2026, the Notes may

be redeemed, as a whole or in part, at our option, at any time and from time to time on at least 30 days’, but not more than 60

days’, prior notice sent to the registered address of each holder of the Notes, at a redemption price equal to 100% of the

principal amount of the Notes to be redeemed. Accrued but unpaid interest will be payable to the redemption date. 

The 4.375% 2029 Notes and the 2033 Notes may be redeemed as a whole or in part, at our option, at any time and

from time to time on at least 30 days’, but not more than 60 days’, prior notice mailed to the registered address of each holder

of the applicable series of Notes. The redemption price will be equal to the greater of (1) 100% of the principal amount of the

applicable series of Notes to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as

defined below) discounted to the redemption date, on an annual basis (ACTUAL/ACTUAL (ICMA)), at a rate equal to the

Treasury Rate (as defined below) plus, for the 4.375% 2029 Notes, 35 basis points, and for the 2033 Notes, 25 basis points.

In either case, accrued but unpaid interest will be payable to the redemption date. We will calculate the redemption price in

connection with any redemption hereunder. 

“

Treasury Rate

” means the price, expressed as a percentage (and, with respect to the 4.375% 2029 Notes and the

2033 Notes, rounded to three decimal places, 0.0005 being rounded upwards), at which the gross redemption yield on the

Notes of the applicable series, if they were to be purchased at such price on the third dealing day prior to the date fixed for

redemption, would be equal to the gross redemption yield on such dealing day of the Reference Bond (as defined below) on

the basis of the middle market price of the Reference Bond prevailing at 11:00 a.m. (London time) on such dealing day as

determined by the Company or an investment bank appointed by the Company.

“

Reference Bond

” means, in relation to any Treasury Rate calculation, a United Kingdom government bond whose

maturity is closest to the maturity of the Notes of the applicable series, or if the Company or an investment bank appointed by

the Company considers that such similar bond is not in issue, such other United Kingdom government bond as the Company

or an investment bank appointed by the Company, with the advice of three brokers of, and/or market makers in, United

Kingdom government bonds selected by the Company or an investment bank appointed by the Company, determine to be

appropriate for determining such Treasury Rate.

“

Remaining Scheduled Payments

” means, with respect to each Note of a series to be redeemed, the remaining

scheduled payments of principal of and interest on the Note that would be due after the related redemption date but for the

redemption. If that redemption date is not an interest payment date with respect to the applicable series of Notes, the amount

of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the

Notes to the redemption date.

On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for

redemption unless we default in the payment of the redemption price and accrued interest. On or before the redemption date,

we will deposit with a paying agent or the trustee money sufficient to pay the redemption price of and accrued interest on the

Notes to be redeemed on that date.

In the case of any partial redemption, selection of the Notes of a series to be redeemed will be made by the trustee

by lot or, with respect to the 2.900% 2026 Notes, pursuant to applicable depositary procedures and, with respect to the

4.375% 2029 Notes and the 2033 Notes, by such other method as the trustee in its sole discretion deems to be fair and

appropriate.

Payment of Additional Amounts 

We will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such

additional amounts as are necessary so that the net payment by us or our paying agent of the principal of and interest on the

Notes to a person that is a United States Alien, after deduction for any present or future tax, assessment or governmental

charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with

respect to the payment, will not be less than the amount that would have been payable in respect of the Notes had no

withholding or deduction been required. As used herein, “United States Alien” means any person who, for United States

federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a

foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax

purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust. 

Our obligation to pay additional amounts shall not apply: 

95

(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust

or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder:

(a) is or was present or engaged in a trade or business in the United States, has or had a permanent

establishment in the United States, or has any other present or former connection with the United States or

any political subdivision or taxing authority thereof or therein;

(b) is or was a citizen or resident or is or was treated as a resident of the United States; 

(c) is or was a foreign or domestic personal holding company, a passive foreign investment

company or a controlled foreign corporation with respect to the United States or is or was a corporation that

has accumulated earnings to avoid United States federal income tax; 

(d) is or was a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue

Code of 1986, as amended (the “Code”); or 

(e) is or was an actual or constructive owner of 10% or more of the total combined voting power

of all classes of stock of AT&T entitled to vote; 

(2) to any holder that is not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary

or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary,

or a member of the partnership would not have been entitled to the payment of an additional amount had such

beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment; 

(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial

owner or any other person failed to comply with certification, identification or information reporting requirements

concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner

of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an

applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,

assessment or other governmental charge; 

(4) to any tax, assessment or governmental charge that is imposed other than by deduction or withholding

by AT&T or a paying agent from the payment; 

(5) to any tax, assessment or governmental charge that is imposed or withheld solely because of a change in

law, regulation, or administrative or judicial interpretation that is announced or becomes effective after the day on

which the payment becomes due or is duly provided for, whichever occurs later; 

(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,

assessment or governmental charge; 

(7) to any tax, assessment or other governmental charge any paying agent (which term may include us)

must withhold from any payment of principal of or interest on any Note, if such payment can be made without such

withholding by any other paying agent; or 

(8) in the case of any combination of the above items. 

In addition, any amounts to be paid on the Notes will be paid net of any deduction or withholding imposed or

required pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations

thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or

practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such

Sections of the Code, and no additional amounts will be required to be paid on account of any such deduction or withholding. 

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial

interpretation applicable. Except as specifically provided under this heading “—Payment of Additional Amounts” and under

96

the heading “—Redemption Upon a Tax Event,” we do not have to make any payment with respect to any tax, assessment or

governmental charge imposed by any government or a political subdivision or taxing authority. 

Any reference in the terms of the Notes of each series to any amounts in respect of the Notes shall be deemed also to

refer to any additional amounts which may be payable under this provision. 

Redemption Upon a Tax Event 

If (a) we become or will become obligated to pay additional amounts with respect to any Notes as described herein

under the heading “—Payment of Additional Amounts” as a result of any change in, or amendment to, the laws (or any

regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or

therein), or any change in, or amendments to, any official position regarding the application or interpretation of such laws,

regulations or rulings, which change or amendment is announced or becomes effective, on or after March 21, 2016 with

respect to the 4.375% 2029 Notes and the 2033 Notes and September 6, 2018 with respect to the 2.900% 2026 Notes or (b) a

taxing authority of the United States takes an action on or after March 21, 2016 with respect to the 4.375% 2029 Notes and

the 2033 Notes and September 6, 2018 with respect to the 2.900% 2026 Notes, whether or not with respect to us or any of our

affiliates, that results in a substantial probability that we will or may be required to pay such additional amounts, then we

may, at our option, redeem, as a whole, but not in part, the applicable series of Notes on any interest payment date on not less

than 30 nor more than 60 calendar days’ prior notice, at a redemption price equal to 100% of their principal amount, together

with interest accrued thereon to the date fixed for redemption. No redemption pursuant to (b) above may be made unless we

shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States

results in a substantial probability that we will or may be required to pay the additional amounts described herein under the

heading “—Payment of Additional Amounts” and we shall have delivered to the trustee a certificate, signed by a duly

authorized officer, stating that based on such opinion we are entitled to redeem the Notes pursuant to their terms. 

Further Issues 

We may from time to time, without notice to or the consent of the holders of any series of the Notes, create and issue

further notes ranking equally and ratably with such series in all respects, or in all respects except for the payment of interest

accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any

further notes will have the same terms as to status, redemption or otherwise as, and will be fungible for United States federal

income tax purposes with, the Notes of the applicable series. Any further notes shall be issued pursuant to a resolution of our

board of directors, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture. 

Governing Law 

The Notes will be governed by and interpreted in accordance with the laws of the State of New York. 

Special Situations Covered by Our Indenture

Mergers and Similar Transactions

We are generally permitted to consolidate or merge with another company. We are also permitted to sell

substantially all of our assets to another company. However, we may not take any of these actions unless all the following

conditions are met:

●

Where we merge out of existence or sell our assets, the company we merge into or sell to may not be

organized under the laws of a foreign country. It must be a corporation organized under the laws of the

United States, any State thereof, or the District of Columbia. 

●

The company we merge into or sell to must agree to be legally responsible for our debt securities. 

●

The merger, sale of assets or other transaction must not cause a default on the securities, and we must not

already be in default, unless the merger or other transaction would cure the default. For purposes of this no-

default test, a default would include an event of default that has occurred and not been cured, as described

below under “— Default and Related Matters — Events of Default — What Is an Event of Default?” A

97

default for this purpose would also include any event that would be an event of default if the requirements

for giving us default notice or our default having to exist for a specific period of time were disregarded.

Further, we may buy substantially all of the assets of another company without complying with any of the foregoing

conditions.

Modification and Waiver of Holders’ Contractual Rights

Under certain circumstances, we can make changes to the Indenture and the securities (including the Notes). Some

types of changes require the approval of each security holder affected, some require approval by a majority vote, and some

changes do not require any approval at all. 

Changes Requiring Approval of Holders.

 First, there are changes that cannot be made to the securities without

specific approval of holders. The following is a list of those types of changes:

●

to reduce the percentage of holders of securities who must consent to a waiver or amendment of the

Indenture; 

●

to reduce the rate of interest on any security or change the time for payment of interest; 

●

to reduce the principal due on any security or change the fixed maturity of any security; 

●

to waive a default in the payment of principal or interest on any security; 

●

to change the currency of payment on a security, unless the security provides for payment in a currency that

ceases to exist;

●

in the case of convertible or exchangeable securities, to make changes to conversion or exchange rights that

would be adverse to the interests of holders; 

●

to change the right of holders to waive an existing default by majority vote; 

●

to reduce the amount of principal or interest payable to holders following a default or change any

conversion or exchange rights, or impair the right of holders to sue for payment; and 

●

to make any change to this list of changes that requires specific approval of holders.

Changes Requiring a Majority Vote.

 The second type of change to the Indenture and the securities is the kind that

requires a vote in favor by security holders owning a majority of the principal amount of the particular series affected. Most

changes fall into this category, except as set forth in the following paragraph. The same vote would be required for us to

obtain a waiver of an existing default. However, we cannot obtain a waiver of a payment default unless we obtain each

holder’s individual consent to the waiver. 

Changes Not Requiring Approval of Holders.

 The third type of change does not require any vote by holders of

securities. This type includes, among others, clarifications of ambiguous contract terms, changes to make securities payable

in U.S. dollars (if the stated denomination ceases to exist) and other changes that would not materially adversely affect

holders of the securities. 

Further Details Concerning Voting.

 When taking a vote, we will use the following rules to decide how much

principal amount to attribute to a security:

●

For securities denominated in one or more foreign currencies or currency units, we will use the U.S. dollar

equivalent determined on the date of original issuance of these securities. 

Securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in

trust for the applicable holders money for their payment or redemption. A security does not cease to be outstanding because

we or an affiliate of us is holding the security. 

98

We will generally be entitled to set any day as a record date for the purpose of determining the holders of

outstanding securities that are entitled to vote or take other action under the Indenture. However, the Indenture does not

oblige us to fix any record date at all. If we set a record date for a vote or other action to be taken by holders of a particular

series, that vote or action may be taken only by persons who are holders of outstanding securities of that series on the record

date and must be taken within 90 days following the record date. 

Holders who hold in “street name” and other indirect holders, including holders of any securities issued as

global securities, should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the Indenture or the securities or request a waiver.

Discharge of Our Obligations

We can fully discharge ourselves from any payment or other obligations on the securities of any series if we make a

deposit for the applicable holders with the trustee and certain other conditions are met. The deposit must be held in trust for

the benefit of all direct holders of the securities and must be a combination of money and U.S. government or U.S.

government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the

securities on their various due dates.

However, we cannot discharge ourselves from the obligations under any convertible or exchangeable securities,

unless we provide for it in the terms of these securities.

If we accomplish full discharge, as described above, holders will have to rely solely on the trust deposit for

repayment of the securities. Holders could not look to us for repayment in the unlikely event of any shortfall. Conversely, the

trust deposit would most likely be protected from claims of our lenders and other creditors if we ever become bankrupt or

insolvent.

We will indemnify the trustee and holders against any tax, fee or other charge imposed on the U.S. government

obligations we deposited with the trustee or against the principal and interest received on these obligations.

Liens on Assets

The Indenture does not restrict us from pledging or otherwise encumbering any of our assets and those of our

subsidiaries.

Default and Related Matters

Ranking Compared to Other Creditors

The securities are not secured by any of our property or assets. Accordingly, ownership of securities means each

holder is one of our unsecured creditors. The securities are not subordinated to any of our other debt obligations and therefore

they rank equally with all our other unsecured and unsubordinated indebtedness. However, the trustee has a right to receive

payment for its administrative services prior to any payment to security holders after a default.

Events of Default

Holders will have special rights if an event of default occurs and is not cured, as described later in this subsection.

What Is an Event of Default?

The term “event of default” with respect to any series of securities means any of the

following:

●

We fail to make any interest payment on the securities of such series when it is due, and we do not cure this

default within 90 days. 

●

We fail to make any payment of principal when it is due at the maturity of such series of securities or upon

redemption. 

99

●

We fail to comply with any of our other agreements regarding a particular series of securities or with a

supplemental indenture, and after we have been notified of the default by the trustee or holders of 25% in

principal amount of the series, we do not cure the default within 90 days. 

●

We file for bankruptcy, or other events in bankruptcy, insolvency or reorganization occur. 

Remedies if an Event of Default Occurs

Holders and the trustee will have the following remedies if an event of default occurs:

Acceleration.

 If an event of default has occurred and has not been cured or waived, then the trustee or the holders of

25% in principal amount of the securities of the affected series may declare the entire principal amount of and any accrued

interest on all the securities of that series to be due and immediately payable. An acceleration of maturity may be cancelled

by the holders of at least a majority in principal amount of the securities of the affected series, if all events of default have

been cured or waived.

Special Duties of Trustee.

 If an event of default occurs, the trustee will have some special duties. In that situation,

the trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and

skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.

Other Remedies of Trustee.

 If an event of default occurs, the trustee is authorized to pursue any available remedy to

collect defaulted principal and interest and to enforce other provisions of the securities and the Indenture, including bringing

a lawsuit.

Majority Holders May Direct the Trustee to Take Actions to Protect Their Interests

. The trustee is not required to

take any action under the Indenture at the request of any holders unless the holders offer the trustee reasonable protection

from expenses and liability. This is called an “indemnity”. If the trustee is provided with an indemnity reasonably satisfactory

to it, the holders of a majority in principal amount of the relevant series of debt securities may direct the time, method and

place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority

holders may also direct the trustee in performing any other action under the Indenture.

Individual Actions Holders May Take if the Trustee Fails to Act.

 Before a holder bypasses the trustee and brings

such holder’s own lawsuit or other formal legal action or take other steps to enforce such holder’s rights or protect such

holder’s interests relating to the securities, the following must occur:

●

Such holder must give the trustee written notice that an event of default has occurred and remains uncured. 

●

The holders of 25% in principal amount of all outstanding securities of the relevant series must make a

written request that the trustee take action because of the default, and must offer indemnity reasonably

satisfactory to the trustee against the cost and other liabilities of taking that action. 

●

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity. 

●

During the 60-day period, the holders of a majority in principal amount of the securities of that series do

not give the trustee a direction inconsistent with the request.

However, a holder is entitled at any time to bring an individual lawsuit for the payment of the money due on such

holder’s security on or after its due date.

Waiver of Default

The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all the

relevant series of debt securities. If this happens, the default will be treated as if it had not occurred. No one can waive a

payment default on a holder’s debt security, however, without such holder’s individual approval.

100

We Will Give the Trustee Information About Defaults Annually

Every year we will give to the trustee a written statement of one of our officers certifying that to the best of his or

her knowledge we are in compliance with the Indenture and all the securities under it, or else specifying any default.

The trustee may withhold from holders notice of any uncured default, except for payment defaults, if it determines

that withholding notice is in holders’ interest.

Holders who hold in “street name” and other indirect holders should consult their banks or brokers for

information on how to give notice or direction to or make a request of the trustee and how to make or cancel

a declaration of acceleration.

Regarding the Trustee

The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indenture. In addition, affiliates of The

Bank of New York Mellon Trust Company, N.A. may perform various commercial banking and investment banking services

for us and our subsidiaries from time to time in the ordinary course of business.

EX-10.2

1

EXHIBIT 10.2

John Stankey 208 S. Akard St.

President and Chief Operating Officer Dallas, TX 75202

AT&T Inc.

March 20, 2020

Private & Confidential

Jason Kilar

Dear Jason:

This letter confirms our offer of full-time employment with WarnerMedia LLC (“WarnerMedia” or

“Company”) as the Company’s Chief Executive Officer reporting to me. The compensation and benefits

set forth herein are contingent upon your acceptance of the terms of this offer letter as indicated by your

signature on the last page of this letter.

Your employment would be as a full-time employee and you would not perform any duties as an

employee, contractor, sub -contractor, agent or otherwise for any other person, corporation, partnership

or other entity during the term of your employment with AT&T other than certain corporate, civic and

charitable boards and other activities that you have previously disclosed.

Place of Employment and Effective Date

You would begin employment effective May 1, 2020 in Los Angeles, California. Your actual first day

of employment is referred to in this letter as the “Effective Date.”

Compensation (Base Salary, Short Term Award and Long Term Award)

Base Salary. Your starting base salary for full-time employment would be at the annual rate of $2,500,000

(the "Base Salary”). The level of your Base Salary would be subject to review as part of our normal

review process.

Annual Bonus. You would be eligible for an annual cash target bonus award of $2,500,000. Your actual

bonus is payable at the discretion of the AT&T Inc. Board of Directors or its delegate (collectively, the

Board) and is subject to adjustment based on accomplishment of business objectives and other

performance factors, including your individual performance. For 2020, your annual cash target bonus

award will be prorated based on the actual number of days from the Effective Date through December

31, 2020 divided by 366. The level of your annual cash target bonus award would be subject to review

as part of our normal review process. Bonuses are paid between January 1 and March 15 of the calendar

year immediately following the performance year.

Long Term Compensation. You would receive a one-time long-term compensation award granted in the

form of Restricted Stock Units (“RSUs”) under the AT&T 2018 Incentive Plan (or successor to such

plan) as amended by this letter. Your award will be a grant of RSUs valued on the grant date at

2

$48,000,000 determined in the sole discretion of the Board. One-fourth (1/4) of the RSU grant will vest

on February 15 of each year, starting in 2021, and will be fully vested on February 15, 2024. RSUs are

granted subject to the terms and conditions of the 2018 Incentive Plan as they apply to similarly situated

executive employees of WarnerMedia and amended as provided in this job offer letter, including that the

RSUs are eligible for dividend equivalents from the date of grant, distribution on the vesting date,

distribution in the form of AT&T Inc. common stock, and the Confidentiality, Non-compete and Non-

solicit Covenants of this job offer letter apply in lieu of the Loyalty provisions in the 2018 Incentive Plan.

A copy of the prospectus for the 2018 Incentive Plan is included with this letter.

Benefits

You would be eligible to participate in benefit plans and programs generally on the same terms and

conditions that the Company makes them available to its similarly situated executive employees from

time-to-time, to the extent that your position, tenure, salary, and other qualifications make you eligible to

participate. These include comprehensive medical, supplemental medical, dental, vision, prescription

drug, mental health, disability, and life insurance group coverage as well as 401(k) and nonqualified

deferred compensation benefits. Your participation would be under the standard terms and conditions of

these plans as they may be amended from time-to-time. All rights of all employees under the plans are

governed in all respects by the plan documents establishing the benefits provided under each. AT&T

reserves the right to amend or terminate its employee benefit plans, programs, and policies at any time.

Death or Disability. In the event your employment terminates as a result of your death or disability, you

or your estate (in the event of your death) would receive your Base Salary earned through your

termination date and a pro rata portion of your target Annual Bonus through your termination date. Also,

all of your unvested RSUs will vest on the date of your termination of employment as a result of your

death or disability and will pay out promptly.

Severance Benefits. This section is operative in the event the Company terminates your employment

without cause or if you elect to terminate your employment within six (6) months following the sale of all

or substantially all of the business and assets of the Company without the Company causing the successor

to expressly assume the Company’s obligations under this job offer letter.

In that event, you will receive your Base Salary earned through your termination date and a pro rata

portion of your annual cash target bonus through your termination date, adjusted for performance.

In addition, any unvested RSUs that are scheduled to vest during the Severance Period will vest.

Moreover, if your Severance Period extends beyond the next February 15th following your termination,

vesting of your RSU grant will be prorated for the portion of the Severance Period following such date,

and in the event your Severance Period does not extend beyond the next February 15th following your

termination, vesting of your RSU grant will be prorated for the period from the most recent February

15th through the end of the Severance Period. These vested RSUs become payable upon your termination

of employment, subject to all other terms and conditions of such grants. Any RSUs that are not vested

pursuant to the provisions of this paragraph shall be completely forfeited upon your termination of

employment.

Moreover, so long as you continue to comply with the Confidentiality, Non-compete and Non-solicit

covenants, you would also continue to be treated like an employee of the Company for twelve (12)

months after your termination of employment if your period of employment continued for two or more

3

years or for six (6) months after your termination of employment if your period of employment continued

for less than two (2) years. During such twelve (12) or six (6) month period, as applicable (the “Severance

Period”), so long as you continue to comply with the Confidentiality, Non-compete and Non-solicit

covenants, you shall be entitled to receive, whether or not you become disabled or die during such period:

a)

Base Salary (on the Company’s normal payroll payment dates as in effect immediately

prior to your termination of employment) at an annual rate equal to your Base Salary in

effect immediately prior to your termination;

b)

an annual bonus (on the date such annual bonus is paid to the Company’s employees) in

respect of each calendar year or portion thereof (in which case a pro rata portion of such

bonus will be payable) during such period equal to your annual cash target bonus award

as of the date immediately preceding your termination; and

c)

continued participation in the Company’s health and welfare benefit plans (other than

disability), subject to their terms as they may be amended from time-to-time.

Finally, so long as you continue to comply with the Confidentiality, Non-compete and Non-solicit

covenants, you shall be entitled to receive, beginning in the month after your termination, twelve equal

monthly payments that, taken together, total the cash amount described in (a) or (b) below:

a)

if your period of employment is two or more years but less than three years, one times (1x)

the sum of your annual Base Salary and your annual cash target bonus as of the date

immediately preceding your termination; or

b)

if your period of employment is three or more years, 1.99 times (1.99x) the sum of your

annual Base Salary and your annual cash target bonus as of the date immediately preceding

your termination.

If, at the time of your termination of employment with the Company you are a “specified employee” as

defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder),

the Company will defer for six months the commencement of the payments described above (without

any reduction in such payments or benefits ultimately paid or provided to you) until the earliest date as

is permitted under Section 409A of the Code, if applicable.

If you voluntarily terminate your employment, you are not eligible for severance benefits.

Confidentiality, Non-compete and Non-solicit Covenants

Confidentiality Covenant . You acknowledge that your employment by the Company will, throughout

your employment, bring you into close contact with many confidential affairs of the Company, AT&T

and their respective Affiliates (collectively, the “AT&T Group”), including information about costs,

profits, markets, sales, products, key personnel, organizational plans, pricing policies, operational

methods, technica l processes, trade secrets, plans for future development, strategic plans of the most

valuable nature and other business affairs and methods and other information not readily available to the

public. You further acknowledge that the services to be performed under this Agreement are of a special,

unique, unusual, extraordinary and intellectual character. 

4

You agree to keep secret all confidential matters of the AT&T Group and shall not disclose such matters

to anyone outside of the AT&T Group, or to anyone inside the AT&T Group who does not have a need

to know or use such information, and shall not use such information for personal benefit or the benefit of

a third party except with the written consent of the Chief Operating Officer or Chief Executive Officer of

AT&T, provided that (i) you shall have no such obligation to the extent such matters are or become

publicly known other than as a result of your breach of your obligations hereunder and (ii) you may, after

giving prior notice to the AT&T Group to the extent practicable under the circumstances, disclose such

matters to the extent required by applicable laws or governmental regulations or judicial or regulatory

process. For the avoidance of doubt, such confidential matters include any oral or written information

relating to AT&T Group or any of its officers, directors, employees, agents and joint venture partners. In

addition, you agree that the terms of this Agreement shall be deemed confidential and shall not be

discussed or disclosed by you with any person other than your spouse (if applicable), attorney, or

accountant, provided that such discussions or disclosures shall be conditioned upon the agreement of the

person to whom the terms are disclosed to maintain the confidentiality of such terms, or as provided in

clauses (i) or (ii) above. This confidentiality covenant is not intended to, and shall be interpreted in a

manner that does not, limit or restrict you from exercising any legally protected whistleblower rights

under any applicable law and receiving compensation therefore if provided by applicable law or rule.

Moreover, you acknowledge and agree that you shall not at any time denigrate, ridicule, criticize or

disparage the AT&T Group or any of its respective current or former officers, directors, employees or

joint venture partners to any third party (whether through non-public communication with any person,

social media or in any public communication to the media).

Non-compete Covenant. You further acknowledge that the business of WarnerMedia and its direct and

indirect subsidiaries (collectively, the “Warner Media Group”) is global in scope, that its products and

services are marketed throughout the world, that the Warner Media Group competes in nearly all of its

business activities with other entities that are or could be located in nearly any part of the world and that

the nature of your services, position and expertise are such that you are capable of competing with the

Warner Media Group from nearly any location in the world.

During your employment, you agree that you will not, directly or indirectly, without the prior written

consent of the Chief Operating Officer or Chief Executive Officer of AT&T: (x) render any services to,

manage, operate, control or act in any capacity (whether as a principal, partner, director, officer, member,

agent, employee, consultant, owner, independent contractor or otherwise and whether or not for

compensation) for, any person or entity that is a Competitive Entity, or (y) acquire, on a prospective

basis, any interest of any type in any Competitive Entity, including without limitation as an owner, holder

or beneficiary of any stock, stock options or other equity interest.

“Competitive Entity” means a business (whether conducted through an entity or by individuals including

employee in self-employment) that is engaged in any business that competes, directly or indirectly

through any parent, subsidiary, affiliate, joint venture, partnership or otherwise, with (x) any of the

business activities carried on by the Warner Media Group in any geographic location where the Warner

Media Group conducts business (including without limitation a Competitive Activity as defined below),

(y) any business activities being planned by the Warner Media Group or in the process of development at

the time of your termination of employment (as evidenced by written proposals, market research, RFPs

and similar materials) or (z) any business activity that the Warner Media Group has covenanted, in

writing, not to compete with in connection with the disposition of such a business.

5

“Competitive Activity” means business activities within the lines of business of the Warner Media

Group, including without limitation, (a) the operation of domestic and international networks, premium

pay television services and direct-to-consumer video content providers (including the production,

provision and/or delivery of programming to cable system operators, satellite distribution services,

telephone companies, Internet Protocol Television systems, mobile operators, broadband and other

distribution platforms and outlets or directly to consumers) and websites and digital applications

associated with such networks, services and providers; (b) the sale, licensing and/or distribution of

content on DVD and Blu -ray discs, video on demand, electronic sell-through, applications for mobile

devices, the Internet or other digital services; and (c) the production, distribution and licensing of motion

pictures and other entertainment assets, television programming, animation, interactive games (whether

distributed in physical form or digitally) and other video products and the operation of websites and

digital applications associated with the foregoing.

Nothing in this job offer letter is intended to (and shall not be interpreted to) provide for any restriction

on your ability to seek employment with a Competitive Entity after your termination of employment.

Non-solicit Covenant. For a period of one year after your termination of employment, without the prior

written consent of the Chief Operating Officer or Chief Executive Officer of AT&T Inc., you shall not

employ, and shall not cause any entity of which you are an affiliate to employ, any person who was a

full-time employee of the Warner Media Group at the date of such termination of employment or within

six months prior thereto, but such prohibition shall not apply to your secretary or executive assistant or to

any other employee eligible to receive overtime pay.

General

Ownership of Work Product . You acknowledge that during your employment, you may conceive of,

discover, invent or create inventions, improvements, new contributions, literary property, material, ideas

and discoveries, whether patentable or copyrightable or not (all of the foregoing being collectively referred

to herein as “Work Product”), and that various business opportunities shall be presented to you by reason

of your employment by the Company. You acknowledge that all of the foregoing shall be owned by and

belong exclusively to the Company and that you shall have no personal interest therein, provided that

they are either related in any manner to the business (commercial or experimental) of the Company, or

are, in the case of Work Product, conceived or made on the Company’s time or with the use of the

Company’s facilities or materials, or, in the case of business opportunities, are presented to you for the

possible interest or participation of the Company. You shall (i) promptly disclose any such Work Product

and business opportunities to the Company; (ii) assign to the Company, upon request and without

additional compensation, the entire rights to such Work Product and business opportunities; (iii) sign all

papers necessary to carry out the foregoing; and (iv) give testimony in support of your inventorship or

creation in any appropriate case. You agree that you will not assert any rights to any Work Product or

business opportunity as having been made or acquired by you prior to the date of this Agreement except

for Work Product or business opportunities, if any, disclosed to and acknowledged by the Company in

writing prior to the date hereof.

6

Covenants to Others. You have indicated to us that there are no agreements that would impact your ability

to be employed by WarnerMedia in this position, or in any way would prevent you from performing the

functions of this position. If you accept this offer, we specifically instruct you not to use any trade secrets,

confidential information or proprietary information obtained from third parties, including any former

employer or any other entity or person. We also instruct you not to use any unpublished documents or

any other property belonging to any former employer or any other party to whom you have an obligation

of confidentiality. To the extent we discover that any of such materials have been brought with you or

are being used by you in connection with performing your job duties, this will be grounds for disciplinary

action.

Withholding Taxes. Payments made to you pursuant to this job offer letter shall be subject to withholding

and social security taxes and other ordinary and customary payroll deductions.

Compliance with IRC Section 409A. This job offer letter is intended, and will be interpreted, to comply

with Section 409A of the Internal Revenue Code. Notwithstanding anything herein to the contrary, (i) if

at the time of your termination of employment with the Company you are a “specified employee” as

defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder)

and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a

result of such termination of employment is necessary in order to prevent any accelerated or additional

tax under Section 409A of the Code, then the Company will defer the commencement of the payment of

any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately

paid or provided to you) until the date that is six months following your termination of employment with

the Company (or the earliest date as is permitted under Section 409A of the Code); and (ii) if any other

payments of money or other benefits due to you hereunder could cause the application of an accelerated

or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if

deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise

such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the

Company, that does not cause such an accelerated or additional tax. To the extent any reimbursements

or in- kind benefits due to you under this Agreement constitutes “deferred compensation” under Section

409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner

consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). To the extent necessary to comply with Section

409A of the Code, neither you nor any of your creditors or beneficiaries shall have the right to subject

any “deferred compensation” under Section 409A of the Code payable under this Agreement to any

anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.

Each payment made under this Agreement shall be designated as a “separate payment” within the

meaning of Section 409A of the Code. References in this Agreement to your termination of active

employment or your Effective Terminatio n Date shall be deemed to refer to the date upon which you

have a “separation from service” with the Company and its Affiliates within the meaning of Section 409A

of the Code. The Company shall consult with you in good faith regarding the implementation of the

provisions of this Section 12.17; provided that neither the Company nor any of its employees or

representatives shall have any liability to you with respect thereto.

Management Arbitration Agreement. By signing this job offer letter, you accept and agree to the terms

of the Management Arbitration Agreement, which is attached hereto and incorporated herein for all

purposes as Attachment A.

7

Indemnification. You would be entitled throughout your employment (and after your termination of

employment, to the extent relating to service during your employment) to the benefit of the exculpation

and indemnification provisions contained in the Company’s bylaws (not including any amendments or

additions after the Effective Date that limit or narrow, but including any that add to or broaden, the

protection afforded to you by those provisions).

AT&T Stock Trading Policy. You would be subject to the AT&T Stock Trading Policy, as it may be

amended from time-to-time (“Policy”), as applicable to executive level employees. The Policy currently

prohibits acquiring the stock of AT&T’s competitors while employed with the Company. While the

current Policy would not require you to liquidate any of your existing holdings, you agree to consult with

AT&T’s Senior Executive Vice President and General Counsel prior to any sale of stock you hold in an

AT&T competitor.

Termination of Employment. Notwithstanding any other provision of this offer letter, your employment

would be employment at will. Accordingly, either party may terminate your employment, with or without

cause; provided, if you elect to terminate your employment, you will first give the Chief Operating Officer

or the Chief Executive Officer of AT&T Inc. at least sixty (60) days advance written notice, during which

time your employment shall continue unless mutually agreed otherwise. Upon your termination of

employment, no further compensation shall be paid to you except as described in this job offer letter and

pursuant to any employee benefit plans or policies as they apply to you at the time of your termination

of employment.

Any questions you have regarding your specific compensation and benefits may be directed to John

Palmer, Senior Vice President – Human Resources.

On behalf of WarnerMedia LLC, we look forward to working with you.

/s/ John

Attachments Accepted

and Agreed:

/s/ Jason Kilar March 20, 2020

Jason Kilar Date

1

Attachment A

MANAGEMENT ARBITRATION AGREEMENT

Please carefully review this Management Arbitration Agreement.

Summary

Under this Agreement, you and WarnerMedia LLC, the company that employs you (“the

Company”), agree that any dispute to which this Agreement applies will be decided by final and

binding arbitration instead of court litigation. Arbitration is more informal than a lawsuit in court, and

may be faster. Arbitration uses a neutral arbitrator instead of a judge or jury, allows for more limited

discovery than in court, and is subject to very limited review by courts. Under this Agreement,

Arbitrators can award the same damages and relief that a court can award. Any arbitration under this

Agreement will take place on an individual basis; class arbitrations and class actions are not permitted.

Except for a filing fee if you initiate a claim, the Company pays all the fees and costs of the Arbitrator.

Moreover, in arbitration you are entitled to recover attorneys’ fees from AT&T to the same extent as

you would be in court.

How This Agreement Applies

This Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 and following, and

evidences a transaction involving commerce. This agreement applies to any claim that you may have

against any of the following: (1) any AT&T company, (2) its present or former officers, directors,

employees or agents in their capacity as such or otherwise, (3) the Company's parent, subsidiary and

affiliated entities, and all successors and assigns of any of them; and this agreement also applies to any

claim that the Company or any other AT&T company may have against you. Unless stated otherwise

in this Agreement, covered claims include without limitation those arising out of or related to your

employment or termination of employment with the Company and any other disputes regarding the

employment relationship, trade secrets, unfair competition, compensation, breaks and rest periods,

termination, defamation, retaliation, discrimination or harassment and claims arising under the

Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans With Disabilities Act, Age

Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, Genetic

Information Non-Discrimination Act, and state statutes and local laws, if any, addressing the same or

similar subject matters, and all other state and local statutory and common law claims. This Agreement

survives after the employment relationship terminates. Nothing contained in this Agreement shall be

construed to prevent or excuse you from utilizing the Company's or employee benefit plans’ existing

internal procedures for resolution of complaints.

Except as it otherwise provides, this Agreement is intended to apply to the resolution of

disputes that otherwise would be resolved in a court. This Agreement requires all such disputes to be

resolved only by an arbitrator through final and binding arbitration and not by way of a court or jury

trial. Such disputes include without limitation disputes arising out of or relating to interpretation or

application of this Agreement, but not as to the enforceability, revocability or validity of the

Agreement or any portion of the Agreement, which shall be determined only by a court of competent

jurisdiction.

2

Attachment A

Limitations On How This Agreement Applies

This Agreement does not apply to claims for workers compensation, state disability insurance

and unemployment insurance benefits. In order to ensure that employee benefit plan claims procedures

comply fully with Department of Labor regulations (for example, 29 C.F.R. § 2560.503-1(c)(4)), this

Agreement also does not apply to claims arising under the Employee Retirement Income Security Act

(“ERISA”).

Regardless of any other terms of this Agreement, you may still bring certain claims before

administrative agencies or government offices or officials if applicable law permits access to such an

agency, office, or official, notwithstanding the existence of an agreement to arbitrate. Examples would

include, but not be limited to, claims or charges brought before the Equal Employment Opportunity

Commission (www.eeoc.gov ), the U.S. Department of Labor (www.dol.gov), the National Labor

Relations Board www.nlrb.gov), or the Office of Federal Contract Compliance Programs

(www.dol.gov/esa/ofccp). Nothing in this Agreement shall be deemed to preclude or excuse a party

from bringing an administrative claim before any agency or employee benefit plan in order to fulfill

the party's obligation to exhaust administrative remedies before making a claim in arbitration.

Disputes that may not be subject to a pre-dispute arbitration agreement, such as provided by

the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111 -203), also are

excluded from the coverage of this Agreement.

To the maximum extent permitted by law, you hereby waive any right to bring on behalf

of persons other than yourself, or to otherwise participate with other persons in: any class

action; collective action; or representative action, including but not limited to any representative

action under the California Private Attorneys General Act (“PAGA”) or other, similar state

statute. You retain the right, however, to bring claims in arbitration, including PAGA claims,

but only for yourself as an individual. If a court determines that you cannot waive your right to

bring a representative action under PAGA, any such claim may only be brought in court and

not in arbitration.

Arbitration Rules, Selecting The Arbitrator, And Location Of Hearing

The arbitration will be held under the auspices of a third party which will manage the

arbitration process: JAMS, Inc. or any successor. The arbitration shall be in accordance with its

Employment Arbitration Rules & Procedures (and no other JAMS rules), which are currently available

at http://www.jamsadr.com/rules -employment-arbitration. The Company will supply you with a

printed copy of those rules upon your request. Unless you and the Company mutually agree otherwise,

the Arbitrator shall be either a retired judge, or an attorney who is experienced in employment law and

licensed to practice law in the state in which the arbitration is convened (the “Arbitrator”), selected

pursuant to JAMS rules or by mutual agreement of the parties.

The Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the

state in which the claim arose, or federal law, or both, as applicable to the claim(s) asserted. The

Arbitrator is without jurisdiction to apply any different substantive law or law of remedies. The

Federal Rules of Evidence shall apply. The arbitration shall be final and binding upon the parties,

except as provided in this Agreement.

3

Attachment A

Unless each party to the arbitration agrees in writing otherwise, the location of the arbitration

proceeding shall be a facility chosen by JAMS within the county (or parish) where you work or last

worked for the Company. If you so choose, and if your residence is not in the same county (or parish)

where you work or last worked for the Company, you may designate that the proceeding will occur

within the county (or parish) where you reside.

Notice Requirements And Starting An Arbitration

The Company must, and you may, notify the other party of a claim to be arbitrated by using the

forms provided on the JAMS website (http://www.jamsadr.com ). Alternatively, you may commence

an arbitration against the Company, its officers, directors, employees, or agents by sending to the

Company a written Notice of Dispute (“Notice”). The Notice to AT&T should be addressed to: AT&T

Legal Department, 208 S. Akard St., Room 3305, Dallas, TX 75202 (“Notice Address”). The Notice

must (a) identify all parties, (b) describe the nature and basis of the claim or dispute; and (c) set forth

the specific relief sought (“Demand”). Any party giving written notice of a claim to be arbitrated must

do so no later than the expiration of the statute of limitations (deadline for filing) that the law prescribes

for the claim.

The Arbitrator shall resolve all disputes regarding the timeliness or propriety of the demand for

arbitration. To the extent permitted by law, a party may apply to a court of competent jurisdiction for

temporary or preliminary injunctive relief in connection with an arbitrable controversy, but only upon

the ground that the award to which that party may be entitled would be rendered ineffectual without

such provisional relief.

Paying For The Arbitration

The Company will be responsible for paying any filing fee and the fees and costs of the

Arbitrator; provided, however, that if you are the party initiating the claim, you will contribute an

amount equal to the filing fee to initiate a claim in the court of general jurisdiction in the state in which

you are (or were last) employed by the Company. Each party shall pay in the first instance its own

litigation costs and attorneys’ fees, if any. However, if any party prevails on a statutory claim which

affords the prevailing party attorneys’ fees and litigation costs, or if there is a written agreement

providing for attorneys’ fees and/or litigation costs, the Arbitrator shall rule upon a motion for

attorneys’ fees and/or litigation costs under the same standards a court would apply under the law

applicable to the claim(s) at issue.

How Arbitration Proceedings Are Conducted

In arbitration, the parties will have the right to conduct limited civil discovery, bring

dispositive motions, and present witnesses and evidence as needed to present their cases and defenses,

and any disputes in this regard shall be resolved by the Arbitrator.

Each party shall have the right to take depositions of up to three fact witnesses and any expert

witness designated by another party. Each party also shall have the right to make one request for

production of documents to any party. Requests for additional depositions or discovery may be made

to the Arbitrator selected pursuant to this Agreement. The Arbitrator may grant such additional

discovery if the Arbitrator finds the party has demons trated that it needs the requested discovery to

adequately arbitrate the claim, taking into account the parties’ mutual desire to have a fast, cost-

effective dispute-resolution mechanism. Each party shall have the right to subpoena

4

5

Attachment A

documents and witnesses from third parties subject to any limitations the Arbitrator shall impose for

good cause shown.

The Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes and is authorized

to hold pre-hearing conferences by telephone or in person, as the Arbitrator deems advisable. The

Arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary

judgment by any party and shall apply the standards governing such motions under the Federal Rules

of Civil Procedure.

Should any party refuse or neglect to appear for, or participate in, the arbitration hearing, the

Arbitrator shall have the authority to decide the dispute based upon whatever evidence is presented.

Either party shall have the right to file a post-hearing brief. The time for filing such a brief shall

be set by the Arbitrator.

The Arbitration Award

The Arbitrator may award any party any remedy to which that party is entitled under applicable

law, but such remedies shall be limited to those that would be available to a party in his or her individual

capacity in a court of law for the claims presented to and decided by the Arbitrator.

The Arbitrator will issue a decision or award in writing, stating the essential findings of fact

and conclusions of law. A court of competent jurisdiction shall have the authority to enter a judgment

upon the award made pursuant to the arbitration.

Non-Retaliation

It is against Company policy for any Employee to be subject to retaliation if he or she exercises

his or her right to assert claims under this Agreement. If you believe that you have been retaliated

against by anyone at the Company, you should immediately report this to the AT&T Hotline at 1-888-

871-2622, or go to www.tnwgrc.com/att

.

Sole and Entire Agreement

This is the complete agreement of the parties on the subject of arbitration of disputes. This

Agreement supersedes any prior or contemporaneous oral or written understandings on the subject. No

party is relying on any representations, oral or written, on the subject of the effect, enforceability or

meaning of this Agreement, except as specifically set forth in this Agreement.

Construction and Severability

If any provision of this Agreement is adjudicated to be void or otherwise unenforceable, in

whole or in part, such adjudication shall not affect the validity of the remainder of the Agreement. All

provisions shall remain in full force and effect based on the parties’ mutual intent to create a binding

agreement to arbitrate their disputes.

Voluntary Agreement

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I

UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS

BETWEEN THE COMPANY AND ME RELATING TO THE SUBJECTS COVERED IN THE

6

Attachment A

AGREEMENT ARE CONTAINED IN IT, AND THAT I HAVE ENTERED INTO THE

AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR

REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS

AGREEMENT ITSELF.

I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT

TO A JURY TRIAL.

I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO

DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED

MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.

Employee:

/s/ Jason Kilar 

Jason Kilar

March 20, 2020 

Date

EX-31.1

1

Exhibit 31.1

CERTIFICATION

I, John T. Stankey, certify that:

1.

I have reviewed this report on Form 10-Q of AT&T Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material

fact necessary to make the statements made, in light of the circumstances under which such statements were made, not

misleading with respect to the period covered by this report; 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the

periods presented in this report; 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is

being prepared; 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the

registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or

persons performing the equivalent functions): 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial

information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

Date: August 5, 2020

/s/ John T. Stankey 

..

John T. Stankey

Chief Executive Officer and

 President 

EX-31.2

1

Exhibit 31.2

CERTIFICATION

I, John J. Stephens, certify that:

1.

I have reviewed this report on Form 10-Q of AT&T Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material

fact necessary to make the statements made, in light of the circumstances under which such statements were made, not

misleading with respect to the period covered by this report; 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the

periods presented in this report; 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is

being prepared; 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the

registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or

persons performing the equivalent functions): 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial

information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

Date: August 5, 2020

/s/ John J. Stephens 

..

John J. Stephens

Senior Executive Vice President

 and Chief Financial Officer

EX-32

1

Exhibit 32

Certification of Periodic Financial Reports

Pursuant to 18 U.S.C. Section 1350, each of the undersigned officers of AT&T Inc. (the “Company”) hereby certifies

that the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2020 (the “Report”) fully complies

with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that information

contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the

Company.

August 5, 2020

August 5, 2020

By: /s/ John T. Stankey

 John T. Stankey

 Chief Executive Officer

 and President

By: /s/ John J. Stephens

 John J. Stephens

 Senior Executive Vice President

 and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the

Report or as a separate disclosure document. This certification shall not be deemed “filed” for purposes of Section 18 of the

Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to liability under that section. This certification shall

not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to

the extent this Exhibit 32 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or

otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by

Section 906, has been provided to AT&T Inc. and will be retained by AT&T Inc. and furnished to the Securities and

Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares shares in Millions	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2020
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0000732717
Entity File Number	001-8610
Entity Registrant Name	AT&T INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	43-1301883
Entity Address, Address Line One	208 S. Akard St.
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75202
City Area Code	210
Local Phone Number	821-4105
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock Shares Outstanding		7,125
Common Stock [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Common Shares (Par Value $1.00 Per Share)
Trading Symbol	T
Security Exchange Name	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of 5.000% Perpetual Preferred Stock, Series A
Entity Listings [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/1000th interest in a share of 5.000% Perpetual Preferred Stock, Series A
Trading Symbol	T PRA
Security Exchange Name	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of 4.750% Perpetual Preferred Stock, Series C
Entity Listings [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/1000th interest in a share of 4.750% Perpetual Preferred Stock, Series C
Trading Symbol	T PRC
Security Exchange Name	NYSE
AT&T Inc. Floating Rate Due August 3, 2020 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. Floating Rate Global Notes due August 3, 2020
Trading Symbol	T 20C
Security Exchange Name	NYSE
AT&T Inc. 1.875% Global Notes due December 4, 2020 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.875% Global Notes due December 4, 2020
Trading Symbol	T 20
Security Exchange Name	NYSE
AT&T Inc. 2.650% Global Notes due December 17, 2021 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.650% Global Notes due December 17, 2021
Trading Symbol	T 21B
Security Exchange Name	NYSE
AT&T Inc. 1.450% Global Notes due June 1, 2022 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.450% Global Notes due June 1, 2022
Trading Symbol	T 22B
Security Exchange Name	NYSE
AT&T Inc. 2.500% Global Notes due March 15, 2023 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.500% Global Notes due March 15, 2023
Trading Symbol	T 23
Security Exchange Name	NYSE
AT&T Inc. 2.750% Global Notes due May 19, 2023 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.750% Global Notes due May 19, 2023
Trading Symbol	T 23C
Security Exchange Name	NYSE
AT&T Inc. Floating Rate Due September 5, 2023 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. Floating Rate Global Notes due September 5, 2023
Trading Symbol	T 23D
Security Exchange Name	NYSE
AT&T Inc. 1.050% Global Notes due September 5, 2023 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.050% Global Notes due September 5, 2023
Trading Symbol	T 23E
Security Exchange Name	NYSE
AT&T Inc. 1.300% Global Notes due September 5, 2023 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.300% Global Notes due September 5, 2023
Trading Symbol	T 23A
Security Exchange Name	NYSE
AT&T Inc. 1.950% Global Notes due September 15, 2023 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.950% Global Notes due September 15, 2023
Trading Symbol	T 23F
Security Exchange Name	NYSE
AT&T Inc. 2.400% Global Notes due March 15, 2024 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.400% Global Notes due March 15, 2024
Trading Symbol	T 24A
Security Exchange Name	NYSE
AT&T Inc. 3.500% Global Notes due December 17, 2025 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 3.500% Global Notes due December 17, 2025
Trading Symbol	T 25
Security Exchange Name	NYSE
AT&T Inc. 0.250% Global Notes due March 4, 2026 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 0.250% Global Notes due March 4, 2026
Trading Symbol	T 26E
Security Exchange Name	NYSE
AT&T Inc. 1.800% Global Notes due September 5, 2026 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.800% Global Notes due September 5, 2026
Trading Symbol	T 26D
Security Exchange Name	NYSE
AT&T Inc. 2.900% Global Notes due December 4, 2026 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.900% Global Notes due December 4, 2026
Trading Symbol	T 26A
Security Exchange Name	NYSE
AT&T Inc. 1.600% Global Notes due May 19, 2028 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.600% Global Notes due May 19, 2028
Trading Symbol	T 28C
Security Exchange Name	NYSE
AT&T Inc. 2.350% Global Notes due September 5, 2029 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.350% Global Notes due September 5, 2029
Trading Symbol	T 29D
Security Exchange Name	NYSE
AT&T Inc. 4.375% Global Notes due September 14, 2029 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 4.375% Global Notes due September 14, 2029
Trading Symbol	T 29B
Security Exchange Name	NYSE
AT&T Inc. 2.600% Global Notes due December 17, 2029 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.600% Global Notes due December 17, 2029
Trading Symbol	T 29A
Security Exchange Name	NYSE
AT&T Inc. 0.800% Global Notes due March 4, 2030 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 0.800% Global Notes due March 4, 2030
Trading Symbol	T 30B
Security Exchange Name	NYSE
AT&T Inc. 2.050% Global Notes due May 19, 2032 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.050% Global Notes due May 19, 2032
Trading Symbol	T 32A
Security Exchange Name	NYSE
AT&T Inc. 3.550% Global Notes due December 17, 2032 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 3.550% Global Notes due December 17, 2032
Trading Symbol	T 32
Security Exchange Name	NYSE
AT&T Inc. 5.200% Global Notes due November 18, 2033 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 5.200% Global Notes due November 18, 2033
Trading Symbol	T 33
Security Exchange Name	NYSE
AT&T Inc. 3.375% Global Notes due March 15, 2034 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 3.375% Global Notes due March 15, 2034
Trading Symbol	T 34
Security Exchange Name	NYSE
AT&T Inc. 2.450% Global Notes Due March 15, 2035 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.450% Global Notes due March 15, 2035
Trading Symbol	T 35
Security Exchange Name	NYSE
AT&T Inc. 3.150% Global Notes due September 4, 2036 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 3.150% Global Notes due September 4, 2036
Trading Symbol	T 36A
Security Exchange Name	NYSE
AT&T Inc. 2.600% Global Notes due May 19, 2038 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 2.600% Global Notes due May 19, 2038
Trading Symbol	T 38C
Security Exchange Name	NYSE
AT&T Inc. 1.800% Global Notes due September 14, 2039 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 1.800% Global Notes due September 14, 2039
Trading Symbol	T 39B
Security Exchange Name	NYSE
AT&T Inc. 7.000% Global Notes Due April 30, 2040 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 7.000% Global Notes due April 30, 2040
Trading Symbol	T 40
Security Exchange Name	NYSE
AT&T Inc. 4.250% Global Notes due June 1, 2043 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 4.250% Global Notes due June 1, 2043
Trading Symbol	T 43
Security Exchange Name	NYSE
AT&T Inc. 4.875% Global Notes due June 1, 2044 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 4.875% Global Notes due June 1, 2044
Trading Symbol	T 44
Security Exchange Name	NYSE
AT&T Inc. 4.000% Global Notes due June 1, 2049 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 4.000% Global Notes due June 1, 2049
Trading Symbol	T 49A
Security Exchange Name	NYSE
AT&T Inc. 4.250% Global Notes due March 1, 2050 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 4.250% Global Notes due March 1, 2050
Trading Symbol	T 50
Security Exchange Name	NYSE
AT&T Inc. 3.750% Global Notes due September 1, 2050 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 3.750% Global Notes due September 1, 2050
Trading Symbol	T 50A
Security Exchange Name	NYSE
AT&T Inc. 5.350% Global Notes due November 1, 2066 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 5.350% Global Notes due November 1, 2066
Trading Symbol	TBB
Security Exchange Name	NYSE
AT&T Inc. 5.625% Global Notes due August 1, 2067 [Member]
Entity Listings [Line Items]
Title of 12(b) Security	AT&T Inc. 5.625% Global Notes due August 1, 2067
Trading Symbol	TBC
Security Exchange Name	NYSE

XML

Consolidated Statements Of Income - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating Revenues
Total operating revenues	$ 40,950	$ 44,957	$ 83,729	$ 89,784
Cost of Revenues
Other cost of revenues (exclusive of depreciation and amortization shown separately below)	8,116	8,721	16,458	17,306
Selling, general and administrative	9,831	9,844	18,591	19,493
Asset impairments and abandonments	2,319	0	2,442	0
Depreciation and amortization	7,285	7,101	14,507	14,307
Total operating expenses	37,418	37,457	72,711	75,051
Operating Income	3,532	7,500	11,018	14,733
Other Income (Expense)
Interest expense	(2,041)	(2,149)	(4,059)	(4,290)
Equity in net income (loss) of affiliates	(10)	40	(16)	33
Other income (expense) - net	1,017	(318)	1,820	(32)
Total other income (expense)	(1,034)	(2,427)	(2,255)	(4,289)
Income Before Income Taxes	2,498	5,073	8,763	10,444
Income tax expense	935	1,099	2,237	2,122
Net Income	1,563	3,974	6,526	8,322
Less: Net Income Attributable to Noncontrolling Interest	(282)	(261)	(635)	(513)
Net Income Attributable to AT&T	1,281	3,713	5,891	7,809
Less: Preferred Stock Dividends	(52)	0	(84)	0
Net Income Attributable to Common Stock	$ 1,229	$ 3,713	$ 5,807	$ 7,809
Basic Earnings Per Share Attributable to Common Stock	$ 0.17	$ 0.51	$ 0.81	$ 1.06
Diluted Earnings Per Share Attributable to Common Stock	$ 0.17	$ 0.51	$ 0.81	$ 1.06
Weighted Average Number of Common Shares Outstanding - Basic (in millions)	7,145	7,323	7,166	7,318
Weighted Average Number of Common Shares Outstanding - with Dilution (in millions)	7,170	7,353	7,192	7,347
Service
Operating Revenues
Total operating revenues	$ 37,051	$ 41,023	$ 75,934	$ 81,707
Equipment
Operating Revenues
Total operating revenues	3,899	3,934	7,795	8,077
Cost of Revenues
Cost of Goods and Services Sold	3,978	4,061	8,070	8,563
Broadcast, programming and operations
Cost of Revenues
Cost of Goods and Services Sold	$ 5,889	$ 7,730	$ 12,643	$ 15,382

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 1,563	$ 3,974	$ 6,526	$ 8,322
Foreign currency:
Translation adjustment (includes $(8), $2, $(59) and $2 attributable to noncontrolling interest), net of taxes of $(135), $(1), $(197) and $48	305	(127)	(1,549)	161
Securities:
Net unrealized gains (losses), net of taxes of $5, $10, $27 and $15	14	26	80	42
Derivative instruments:
Net unrealized gains (losses), net of taxes of $168, $(165), $(803) and $(131)	631	(617)	(3,026)	(490)
Reclassification adjustment included in net income, net of taxes of $4, $3, $4 and $5	17	6	17	17
Defined benefit postretirement plans:
Amortization of net prior service credit included in net income, net of taxes of $(150), $(107), $(301) and $(220)	(461)	(342)	(922)	(688)
Other comprehensive income (loss)	506	(1,054)	(5,400)	(958)
Total comprehensive income	2,069	2,920	1,126	7,364
Less: Total comprehensive income attributable to noncontrolling interest	(274)	(263)	(576)	(515)
Total Comprehensive Income Attributable to AT&T	$ 1,795	$ 2,657	$ 550	$ 6,849

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Consolidated Statements of Comprehensive Income [Abstract]
Foreign currency translation adjustments, attributable to noncontrolling interest, net of taxes	$ (8)	$ 2	$ (59)	$ 2
Foreign currency translation adjustments, tax effect	(135)	(1)	(197)	48
Unrealized gains (losses) on securities - tax effect	5	10	27	15
Unrealized gains (losses) on derivatives - tax effect	168	(165)	(803)	(131)
Reclassification adjustment included in net income on derivatives - tax effect	4	3	4	5
Amortization of net prior service credit included in net income, tax effect	$ (150)	$ (107)	$ (301)	$ (220)

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 16,941	$ 12,130
Accounts receivable - net of allowances for doubtful accounts of $1,606 and $1,235	19,127	22,636
Prepaid expenses	1,439	1,631
Other current assets	19,048	18,364
Total current assets	56,555	54,761
Noncurrent Assets
Noncurrent Inventories and Theatrical Film and Television Production Costs	14,514	12,434
Property, plant and equipment	332,883	333,538
Less: accumulated depreciation and amortization	(203,938)	(203,410)
Property, Plant and Equipment - Net	128,945	130,128
Goodwill	143,651	146,241
Licenses - Net	98,763	97,907
Other Intangible Assets - Net	18,452	20,798
Investments in and Advances to Equity Affiliates	2,302	3,695
Operating Lease Right-of-Use Assets	24,692	24,039
Other Assets	21,563	22,754
Total Assets	547,898	551,669
Current Liabilities
Debt maturing within one year	15,576	11,838
Accounts payable and accrued liabilities	41,881	45,956
Advanced billings and customer deposit	5,723	6,124
Accrued taxes	2,548	1,212
Dividends payable	3,741	3,781
Total current liabilities	69,469	68,911
Long-Term Debt	153,388	151,309
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes	58,387	59,502
Postemployment benefit obligation	18,167	18,788
Operating lease liabilities	22,230	21,804
Other noncurrent liabilities	32,804	29,421
Total deferred credits and other noncurrent liabilities	131,588	129,515
Stockholders' Equity
Common stock ($1 par value, 14,000,000,000 authorized at June 30, 2020 and December 31, 2019: issued 7,620,748,598 at June 30, 2020 and December 31, 2019)	7,621	7,621
Additional paid-in capital	130,046	126,279
Retained earnings	56,045	57,936
Treasury stock (495,425,902 at June 30, 2020 and 366,193,458 at December 31, 2019, at cost)	(17,945)	(13,085)
Accumulated other comprehensive income	129	5,470
Noncontrolling interest	17,557	17,713
Total stockholders' equity	193,453	201,934
Total Liabilities and Stockholders' Equity	547,898	551,669
Series A (48,000 issued and outstanding at June 30, 2020 and December 31, 2019)
Stockholders' Equity
Preferred stock ($1 par value, 10,000,000 authorized):	0	0
Series B (20,000 issued and outstanding at June 30, 2020 and 0 issued and outstanding at December 31, 2019)
Stockholders' Equity
Preferred stock ($1 par value, 10,000,000 authorized):	0	0
Series C (70,000 issued and outstanding at June 30, 2020 and 0 issued and outstanding at December 31, 2019)
Stockholders' Equity
Preferred stock ($1 par value, 10,000,000 authorized):	0	0
Trademarks and Trade Names - Net [Member]
Noncurrent Assets
Finite-Lived Intangible Assets, Net	23,757	23,567
Distribution Networks - Net
Noncurrent Assets
Finite-Lived Intangible Assets, Net	$ 14,704	$ 15,345

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Allowances for doubtful accounts	$ 1,606	$ 1,235
Preferred stock, par value	$ 1.00	$ 1
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Common stock, par value	$ 1	$ 1
Common stock, authorized	14,000,000,000	14,000,000,000
Common stock, issued	7,620,748,598	7,620,748,598
Treasury stock, held	495,425,902	366,193,458
Series A Preferred Stock [Member]
Preferred stock, par value	$ 1	$ 1
Preferred stock, issued (in shares)	48,000	48,000
Preferred stock, outstanding (in shares)	48,000	48,000
Series B Preferred Stock [Member]
Preferred stock, par value	$ 1
Preferred stock, issued (in shares)	20,000	0
Preferred stock, outstanding (in shares)	20,000	0
Series C Preferred Stock [Member]
Preferred stock, par value	$ 1
Preferred stock, issued (in shares)	70,000	0
Preferred stock, outstanding (in shares)	70,000	0

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating Activities
Net income	$ 6,526	$ 8,322
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,507	14,307
Amortization of television and film costs	3,985	5,199
Undistributed earnings from investments in equity affiliates	64	76
Provision for uncollectible accounts	1,199	1,216
Deferred income tax expense	653	1,080
Net (gain) loss on investments, net of impairments	(705)	(905)
Pension and postretirement benefit expense (credit)	(1,495)	(808)
Actuarial (gain) loss on pension and postretirement benefits	0	2,131
Asset impairments and abandonments	2,442	0
Changes in operating assets and liabilities:
Receivable	2,522	3,584
Other current assets, inventories and theatrical film and television production costs	(5,592)	(5,422)
Accounts payable and other accrued liabilities	(3,847)	(3,056)
Equipment installment receivables and related sales	226	1,144
Deferred customer contract acquisition and fulfillment costs	322	(614)
Postretirement claims and contributions	(228)	(424)
Other - net	346	(494)
Total adjustments	14,399	17,014
Net Cash Provided by Operating Activities	20,925	25,336
Investing Activities
Purchase of property and equipment	(9,372)	(10,542)
Interest during construction	(60)	(112)
Acquisitions, net of cash acquired	(1,174)	(320)
Dispositions	347	3,593
(Purchases) sales and settlements of securities and investments, net	47	396
Advances to and investments in equity affiliates, net	(66)	(314)
Net Cash Used in Investing Activities	(10,278)	(7,299)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less	498	119
Issuance of other short-term borrowings	8,440	3,067
Repayment of other short-term borrowings	(5,975)	(3,148)
Issuance of long-term debt	21,060	10,030
Repayment of long-term debt	(17,284)	(16,124)
Payment of vendor financing	(1,354)	(1,836)
Issuance of preferred stock	3,869	0
Purchase of treasury stock	(5,480)	(240)
Issuance of treasury stock	84	455
Dividends paid	(7,474)	(7,436)
Other	(2,295)	330
Net Cash Used in Financing Activities	(5,911)	(14,783)
Net increase (decrease) in cash and cash equivalents and restricted cash	4,736	3,254
Cash and cash equivalents and restricted cash beginning of year	12,295	5,400
Cash and Cash Equivalents and Restricted Cash End of Period	$ 17,031	$ 8,654

XML

Consolidated Statement Of Changes In Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member] Series B Preferred Stock [Member]	Preferred Stock [Member] Series C Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Additional Paid-In Capital [Member] Preferred Stock [Member]	Additional Paid-In Capital [Member] Common Stock [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income Attributable to AT&T, net of tax [Member]	Noncontrolling Interest [Member]
Balance at beginning of period at Dec. 31, 2018	$ 193,884	$ 0	$ 0	$ 0	$ 7,621	$ 125,525			$ 58,753	$ (12,059)	$ 4,249	$ 9,795
Balance at beginning of period (in shares) at Dec. 31, 2018		0	0	0	7,621					(339)
Issuance of stock		$ 0	$ 0	$ 0	$ 0		$ 0
Issuance of stock (in shares)		0	0	0	0
Issuance of treasury stock						(127)				$ 1,188
Issuance of treasury stock, (in shares)										32
Share-based payments						(289)
Repurchase and acquisition of common stock								$ 0
Repurchase and acquisition of common stock										$ (280)
Repurchase and acquisition of common stock (in shares)										(9)
Net Income attributable to AT&T	7,809								7,809
Common stock dividends ($0.52, $0.51, $1.04 and $1.02 per share)									(7,489)
Other comprehensive income attributable to AT&T											(960)
Net income attributable to noncontrolling interest	513											513
Interest acquired by noncontrolling owners												10
Distributions												(525)
Translation adjustments attributable to noncontrolling interest, net of taxes	2											2
Balance at end of period at Jun. 30, 2019	194,081	$ 0	$ 0	$ 0	$ 7,621	125,109			59,389	$ (11,151)	3,289	9,824
Preferred stock dividends									0
Balance at end of period (in shares) at Jun. 30, 2019		0	0	0	7,621					(316)
Balance at beginning of period at Mar. 31, 2019	194,951	$ 0	$ 0	$ 0	$ 7,621	125,174			59,424	$ (11,452)	4,345	9,839
Balance at beginning of period (in shares) at Mar. 31, 2019		0	0	0	7,621					(324)
Issuance of stock		$ 0	$ 0	$ 0	$ 0		0
Issuance of stock (in shares)		0	0	0	0
Issuance of treasury stock						(50)				$ 373
Issuance of treasury stock, (in shares)										10
Share-based payments						(15)
Repurchase and acquisition of common stock								0
Repurchase and acquisition of common stock										$ (72)
Repurchase and acquisition of common stock (in shares)										(2)
Net Income attributable to AT&T	3,713								3,713
Common stock dividends ($0.52, $0.51, $1.04 and $1.02 per share)									(3,748)
Other comprehensive income attributable to AT&T											(1,056)
Net income attributable to noncontrolling interest	261											261
Interest acquired by noncontrolling owners												1
Distributions												(279)
Translation adjustments attributable to noncontrolling interest, net of taxes	2											2
Balance at end of period at Jun. 30, 2019	194,081	$ 0	$ 0	$ 0	$ 7,621	125,109			59,389	$ (11,151)	3,289	9,824
Preferred stock dividends									0
Balance at end of period (in shares) at Jun. 30, 2019		0	0	0	7,621					(316)
Balance at beginning of period at Dec. 31, 2019	201,934	$ 0	$ 0	$ 0	$ 7,621	126,279			57,936	$ (13,085)	5,470	17,713
Balance at beginning of period (in shares) at Dec. 31, 2019		0	0	0	7,621					(366)
Balance at end of period at Mar. 31, 2020	195,449	$ 0	$ 0	$ 0	$ 7,621	129,966			58,534	$ (17,957)	(385)	17,670
Balance at end of period (in shares) at Mar. 31, 2020		0	0	0	7,621					(496)
Balance at beginning of period at Dec. 31, 2019	201,934	$ 0	$ 0	$ 0	$ 7,621	126,279			57,936	$ (13,085)	5,470	17,713
Balance at beginning of period (in shares) at Dec. 31, 2019		0	0	0	7,621					(366)
Issuance of stock		$ 0	$ 0	$ 0	$ 0		3,869
Issuance of stock (in shares)		0	0	0	0
Issuance of treasury stock						(54)				$ 721
Issuance of treasury stock, (in shares)										19
Share-based payments						(115)
Repurchase and acquisition of common stock								67
Repurchase and acquisition of common stock										$ (5,581)
Repurchase and acquisition of common stock (in shares)										(148)
Net Income attributable to AT&T	5,891								5,891
Common stock dividends ($0.52, $0.51, $1.04 and $1.02 per share)									(7,421)
Other comprehensive income attributable to AT&T											(5,341)
Net income attributable to noncontrolling interest	635											635
Interest acquired by noncontrolling owners												1
Distributions												(726)
Translation adjustments attributable to noncontrolling interest, net of taxes	(59)											(59)
Balance at end of period at Jun. 30, 2020	193,453	$ 0	$ 0	$ 0	$ 7,621	130,046			56,045	$ (17,945)	129	17,557
Preferred stock dividends									(68)
Balance at end of period (in shares) at Jun. 30, 2020		0	0	0	7,621					(495)
Balance at beginning of period at Mar. 31, 2020	195,449	$ 0	$ 0	$ 0	$ 7,621	129,966			58,534	$ (17,957)	(385)	17,670
Balance at beginning of period (in shares) at Mar. 31, 2020		0	0	0	7,621					(496)
Issuance of stock		$ 0	$ 0	$ 0	$ 0		$ 0
Issuance of stock (in shares)		0	0	0	0
Issuance of treasury stock						(7)				$ 46
Issuance of treasury stock, (in shares)										1
Share-based payments						87
Repurchase and acquisition of common stock								$ 0
Repurchase and acquisition of common stock										$ (34)
Repurchase and acquisition of common stock (in shares)										0
Net Income attributable to AT&T	1,281								1,281
Common stock dividends ($0.52, $0.51, $1.04 and $1.02 per share)									(3,734)
Other comprehensive income attributable to AT&T											514
Net income attributable to noncontrolling interest	282											282
Interest acquired by noncontrolling owners												0
Distributions												(387)
Translation adjustments attributable to noncontrolling interest, net of taxes	(8)											(8)
Balance at end of period at Jun. 30, 2020	$ 193,453	$ 0	$ 0	$ 0	$ 7,621	$ 130,046			56,045	$ (17,945)	$ 129	$ 17,557
Preferred stock dividends									$ (36)
Balance at end of period (in shares) at Jun. 30, 2020		0	0	0	7,621					(495)

XML

Consolidated Statement Of Changes In Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited)
Dividends to stockholders, per share	$ 0.52	$ 0.51	$ 1.04	$ 1.02

XML

Preparation Of Interim Financial Statements

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

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, media 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, 2019. 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 for periods ended within up to one quarter of our period end. We also record our proportionate share of our equity method investees’ other comprehensive income (OCI) items.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions, including potential impacts arising from the COVID-19 pandemic, that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain prior period amounts have been conformed to the current period’s presentation, including the combination of our prior Xandr segment with the WarnerMedia segment.

In the tables throughout this document, percentage increases and decreases that are not considered meaningful are denoted with a dash.

Adopted and Pending Accounting Standards and Other Changes

Credit Losses As of January 1, 2020, we adopted, through modified retrospective application, the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13, as amended), which replaces the incurred loss impairment methodology under prior GAAP with an expected credit loss model. ASU 2016-13 affects trade receivables, loans, contract assets, certain beneficial interests, off-balance-sheet credit exposures not accounted for as insurance and other financial assets that are not subject to fair value through net income, as defined by the standard. Under the expected credit loss model, we are required to consider future economic trends to estimate expected credit losses over the lifetime of the asset. Upon adoption, we recorded a $293 reduction to “Retained earnings,” $395 increase to “allowances for doubtful accounts” applicable to our trade and loan receivables, $10 reduction of contract assets, $105 reduction of net deferred income tax liability and $7 reduction of “Noncontrolling interest” as an opening adjustment. Our adoption of ASU 2016-13 did not have a material impact on our financial statements.

Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (ASU 2020-04), which provides optional expedients, and allows for certain exceptions to existing GAAP, for contract modifications triggered by the expected market transition of certain benchmark interest rates to alternative reference rates. ASU 2020-04 applies to contracts, hedging relationships and other arrangements that reference the London Interbank Offering Rate (LIBOR) or any other rates ending after December 31, 2022. We are evaluating the impact of our adoption of ASU 2020-04, including optional expedients, to our financial statements.

Intangible Assets Driven by significant and adverse economic and political environments in Latin America, including the impact of the COVID-19 pandemic, we have experienced accelerated subscriber losses and revenue decline in the region, as well as closure of our operations in Venezuela. When combining these business trends and higher weighted-average cost of capital resulting from the increase in country-risk premiums in the region, we concluded that it is more likely than not that the

fair value of the Vrio reporting unit, estimated using discounted cash flow and market multiple approaches, is less than its carrying amount. We recorded a $2,212 goodwill impairment in the reporting unit, with $105 attributable to noncontrolling interest. The impairment is not deductible for tax purposes and resulted in an increase in our effective tax rate.

During the first quarter of 2020, we reassessed and changed the estimated economic lives of certain trade names in our Latin America business from indefinite to finite-lived and began amortizing them using the straight-line method over their average remaining economic life of 15 years. This change had an insignificant impact on our financial statements.

Also during the first quarter of 2020, in conjunction with the nationwide launch of AT&T TV and our customers’ continued shift from linear to streaming video services, we reassessed the estimated economic lives and renewal assumptions for our orbital slot licenses. As a result, we have changed the estimated lives of these licenses from indefinite to finite-lived, effective January 1, 2020, and began amortizing our orbital slot licenses using the sum-of-months-digits method over their average remaining economic life of 15 years. This change in accounting increased amortization expense $379, or $0.04 per diluted share available to common stock during the second quarter and $765, or $0.08, per diluted share available to common stock for the first six months of 2020.

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share

Earnings Per Share [Text Block]

NOTE 2. EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted earnings per share for the three months and six months ended June 30, 2020 and 2019, is shown in the table below.

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerators
Numerator for basic earnings per share:
Net Income	$	1,563	$	3,974	$	6,526	$	8,322
Less: Net income attributable to noncontrolling interest		(282)		(261)		(635)		(513)
Net Income attributable to AT&T		1,281		3,713		5,891		7,809
Less: Preferred stock dividends		(52)		-		(84)		-
Net income attributable to common stock		1,229		3,713		5,807		7,809
Dilutive potential common shares:
Share-based payment		5		4		11		10
Numerator for diluted earnings per share	$	1,234	$	3,717	$	5,818	$	7,819
Denominators (000,000)
Denominator for basic earnings per share:
Weighted average number of common shares outstanding		7,145		7,323		7,166		7,318
Dilutive potential common shares:
Share-based payment (in shares)		25		30		26		29
Denominator for diluted earnings per share		7,170		7,353		7,192		7,347
Basic earnings per share attributable to Common Stock	$	0.17	$	0.51	$	0.81	$	1.06
Diluted earnings per share attributable to Common Stock	$	0.17	$	0.51	$	0.81	$	1.06

In the first quarter of 2020, we completed an accelerated share repurchase agreement with a third-party financial institution to repurchase AT&T common stock. Under the terms of the agreement, we paid the financial institution $4,000 and received 104.8 million shares.

XML

Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2020

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income [Text Block]

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
Balance as of December 31, 2019		$	(3,056)		$	48		$	(37)		$	8,515		$	5,470
Other comprehensive income
(loss) before reclassifications			(1,490)			80			(3,026)			-			(4,436)
Amounts reclassified
from accumulated OCI			-	1		-	1		17	2		(922)	3		(905)
Net other comprehensive
income (loss)			(1,490)			80			(3,009)			(922)			(5,341)
Balance as of June 30, 2020		$	(4,546)		$	128		$	(3,046)		$	7,593		$	129
		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
Balance as of December 31, 2018		$	(3,084)		$	(2)		$	818		$	6,517		$	4,249
Other comprehensive income
(loss) before reclassifications			159			42			(490)			-			(289)
Amounts reclassified
from accumulated OCI			-	1		-	1		17	2		(688)	3		(671)
Net other comprehensive
income (loss)			159			42			(473)			(688)			(960)
Balance as of June 30, 2019		$	(2,925)		$	40		$	345		$	5,829		$	3,289
1	(Gains) losses are included in "Other income (expense) - net" in the consolidated statements of income.
2	(Gains) losses are included in "Interest expense" in the consolidated statements of income (see Note 7).
3	The 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).

XML

Segment Information

6 Months Ended

Jun. 30, 2020

Segment Information

Segment Information [Text Block]

NOTE 4. SEGMENT INFORMATION

Our segments are strategic business units that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We analyze our segments based on segment operating contribution, which consists of operating income, excluding acquisition-related costs and other significant items (as discussed below), and equity in net income (loss) of affiliates for investments managed within each segment. We have three reportable segments: (1) Communications, (2) WarnerMedia and (3) Latin America.

We have recast our segment results for all prior periods to include our prior Xandr segment within our WarnerMedia segment.

We also evaluate segment and business unit performance based on EBITDA and/or EBITDA margin, which is defined as operating contribution excluding equity in net income (loss) of affiliates and depreciation and amortization. We believe EBITDA to be a relevant and useful measurement to our investors as it is part of our internal management reporting and planning processes and it is an important metric that management uses to evaluate operating performance. EBITDA does not give effect to 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 revenues.

The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. and businesses globally. This segment contains the following business units:

 Mobility provides nationwide wireless service and equipment.

 Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communications services primarily to residential customers. This segment also sells advertising on distribution platforms.

 Business Wireline provides advanced IP-based services, as well as traditional voice and data services to business customers.

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Historical financial results from Xandr, previously a separate reportable segment, have been combined with the WarnerMedia segment within Eliminations and other. This segment contains the following business units:

 Turner primarily operates multichannel basic television networks and digital properties. Turner also sells advertising on its networks and digital properties.

 Home Box Office consists of premium pay television and OTT and streaming services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment.

 Warner Bros. primarily consists of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.

The Latin America segment provides entertainment and wireless services outside of the U.S. This segment contains the following business units:

 Vrio provides video services primarily to residential customers using satellite technology in Latin America and the Caribbean.

 Mexico provides wireless service and equipment to customers in Mexico.

Corporate and Other reconciles our segment results to consolidated operating income and income before income taxes, and includes:

 Corporate, which consists of: (1) businesses no longer integral to our operations or which we no longer actively market, (2) corporate support functions, (3) impacts of corporate-wide decisions for which the individual operating segments are not being evaluated, and (4) the reclassification of the amortization of prior service credits, which we continue to report with segment operating expenses, to consolidated “Other income (expense) – net.”

 Acquisition-related items which consists of items associated with the merger and integration of acquired businesses, including amortization of intangible assets.

 Certain significant items includes (1) employee separation charges associated with voluntary and/or strategic offers, (2) losses resulting from abandonment of network assets and impairments and (3) other items for which the segments are not being evaluated.

 Eliminations and consolidations, which (1) removes transactions involving dealings between our segments, including content licensing between WarnerMedia and Communications, and (2) includes adjustments for our reporting of the advertising business.

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

For the three months ended June 30, 2020
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,149	$	9,332	$	7,817	$	2,012	$	5,805	$	-	$	5,805
Entertainment Group		10,069		7,730		2,339		1,309		1,030		-		1,030
Business Wireline		6,374		3,779		2,595		1,318		1,277		-		1,277
Total Communications		33,592		20,841		12,751		4,639		8,112		-		8,112
WarnerMedia
Turner		2,988		1,347		1,641		69		1,572		-		1,572
Home Box Office		1,627		1,489		138		25		113		(5)		108
Warner Bros.		3,256		2,583		673		40		633		(19)		614
Eliminations and other		(1,057)		(685)		(372)		33		(405)		28		(377)
Total WarnerMedia		6,814		4,734		2,080		167		1,913		4		1,917
Latin America
Vrio		752		661		91		127		(36)		8		(28)
Mexico		480		538		(58)		115		(173)		-		(173)
Total Latin America		1,232		1,199		33		242		(209)		8		(201)
Segment Total		41,638		26,774		14,864		5,048		9,816	$	12	$	9,828
Corporate and Other
Corporate		437		933		(496)		93		(589)
Acquisition-related items		-		211		(211)		2,145		(2,356)
Certain significant items		-		3,084		(3,084)		-		(3,084)
Eliminations and consolidations		(1,125)		(869)		(256)		(1)		(255)
AT&T Inc.	$	40,950	$	30,133	$	10,817	$	7,285	$	3,532

For the three months ended June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,292	$	9,522	$	7,770	$	2,003	$	5,767	$	-	$	5,767
Entertainment Group		11,368		8,515		2,853		1,339		1,514		-		1,514
Business Wireline		6,607		3,975		2,632		1,242		1,390		-		1,390
Total Communications		35,267		22,012		13,255		4,584		8,671		-		8,671
WarnerMedia
Turner		3,410		2,217		1,193		39		1,154		11		1,165
Home Box Office		1,716		1,131		585		12		573		15		588
Warner Bros.		3,389		2,918		471		31		440		-		440
Eliminations and other		320		170		150		22		128		29		157
Total WarnerMedia		8,835		6,436		2,399		104		2,295		55		2,350
Latin America
Vrio		1,032		881		151		165		(14)		12		(2)
Mexico		725		813		(88)		119		(207)		-		(207)
Total Latin America		1,757		1,694		63		284		(221)		12		(209)
Segment Total		45,859		30,142		15,717		4,972		10,745	$	67	$	10,812
Corporate and Other
Corporate		450		765		(315)		170		(485)
Acquisition-related items		(30)		316		(346)		1,960		(2,306)
Certain significant items		-		94		(94)		-		(94)
Eliminations and consolidations		(1,322)		(961)		(361)		(1)		(360)
AT&T Inc.	$	44,957	$	30,356	$	14,601	$	7,101	$	7,500

For the six months ended June 30, 2020
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,551	$	18,901	$	15,650	$	4,057	$	11,593	$	-	$	11,593
Entertainment Group		20,584		15,621		4,963		2,598		2,365		-		2,365
Business Wireline		12,706		7,730		4,976		2,619		2,357		-		2,357
Total Communications		67,841		42,252		25,589		9,274		16,315		-		16,315
WarnerMedia
Turner		6,150		3,057		3,093		138		2,955		6		2,961
Home Box Office		3,124		2,542		582		46		536		15		551
Warner Bros.		6,496		5,533		963		81		882		(27)		855
Eliminations and other		(1,108)		(711)		(397)		65		(462)		25		(437)
Total WarnerMedia		14,662		10,421		4,241		330		3,911		19		3,930
Latin America
Vrio		1,639		1,444		195		274		(79)		12		(67)
Mexico		1,183		1,252		(69)		249		(318)		-		(318)
Total Latin America		2,822		2,696		126		523		(397)		12		(385)
Segment Total		85,325		55,369		29,956		10,127		19,829	$	31	$	19,860
Corporate and Other
Corporate		825		1,807		(982)		180		(1,162)
Acquisition-related items		-		393		(393)		4,201		(4,594)
Certain significant items		-		2,426		(2,426)		-		(2,426)
Eliminations and consolidations		(2,421)		(1,791)		(630)		(1)		(629)
AT&T Inc.	$	83,729	$	58,204	$	25,525	$	14,507	$	11,018

For the six months ended June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,655	$	19,563	$	15,092	$	4,016	$	11,076	$	-	$	11,076
Entertainment Group		22,696		17,042		5,654		2,662		2,992		-		2,992
Business Wireline		13,085		8,007		5,078		2,464		2,614		-		2,614
Total Communications		70,436		44,612		25,824		9,142		16,682		-		16,682
WarnerMedia
Turner		6,853		4,353		2,500		99		2,401		36		2,437
Home Box Office		3,226		2,052		1,174		34		1,140		30		1,170
Warner Bros.		6,907		5,837		1,070		83		987		6		993
Eliminations and other		654		347		307		44		263		50		313
Total WarnerMedia		17,640		12,589		5,051		260		4,791		122		4,913
Latin America
Vrio		2,099		1,747		352		334		18		12		30
Mexico		1,376		1,538		(162)		250		(412)		-		(412)
Total Latin America		3,475		3,285		190		584		(394)		12		(382)
Segment Total		91,551		60,486		31,065		9,986		21,079	$	134	$	21,213
Corporate and Other
Corporate		883		1,426		(543)		374		(917)
Acquisition-related items		(72)		389		(461)		3,948		(4,409)
Certain significant items		-		342		(342)		-		(342)
Eliminations and consolidations		(2,578)		(1,899)		(679)		(1)		(678)
AT&T Inc.	$	89,784	$	60,744	$	29,040	$	14,307	$	14,733

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

			Three months ended June 30,				Six months ended June 30,
			2020		2019		2020		2019
Communications		$	8,112	$	8,671	$	16,315	$	16,682
WarnerMedia			1,917		2,350		3,930		4,913
Latin America			(201)		(209)		(385)		(382)
Segment Contribution			9,828		10,812		19,860		21,213
Reconciling Items:
Corporate and Other			(589)		(485)		(1,162)		(917)
Merger and integration items			(211)		(346)		(393)		(461)
Amortization of intangibles acquired			(2,145)		(1,960)		(4,201)		(3,948)
Impairments			(2,319)		-		(2,442)		-
Gain on spectrum transaction1			-		-		900		-
Employee separation costs and benefit-related losses			(765)		(94)		(884)		(342)
Segment equity in net income of affiliates			(12)		(67)		(31)		(134)
Eliminations and consolidations			(255)		(360)		(629)		(678)
AT&T Operating Income			3,532		7,500		11,018		14,733
Interest Expense			2,041		2,149		4,059		4,290
Equity in net income (loss) of affiliates			(10)		40		(16)		33
Other income (expense) - net			1,017		(318)		1,820		(32)
Income Before Income Taxes		$	2,498	$	5,073	$	8,763	$	10,444
1	Included as a reduction of "Selling, general and administrative expenses" in the consolidated statement of income.

The following table presents intersegment revenues by segment:

Intersegment Reconciliation
	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020			2019
Intersegment Revenues
Communications	$	2	$	8	$	4	$	8
WarnerMedia		774		861		1,591		1,719
Latin America		-		-		-		-
Total Intersegment Revenues		776		869		1,595		1,727
Consolidations		349		453		826		851
Eliminations and consolidations	$	1,125	$	1,322	$	2,421	$	2,578

XML

Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

NOTE 5. REVENUE RECOGNITION

Revenue Categories
The following tables set forth reported revenue by category and by business unit:
For the three months ended June 30, 2020
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	13,611	$	-	$	-	$	-	$	-	$	58	$	-	$	3,480	$	17,149
Entertainment Group		-		2,092		560		6,682		-		294		397		44		10,069
Business Wireline		-		3,320		2,067		-		-		-		782		205		6,374
WarnerMedia
Turner		-		-		-		1,804		334		796		54		-		2,988
Home Box Office		-		-		-		1,441		181		-		5		-		1,627
Warner Bros.		-		-		-		16		3,179		1		60		-		3,256
Eliminations and other		-		-		-		71		(1,516)		378		10		-		(1,057)
Latin America
Vrio		-		-		-		752		-		-		-		-		752
Mexico		345		-		-		-		-		-		-		135		480
Corporate and Other		178		10		152		-		-		-		62		35		437
Eliminations and
consolidations		-		-		-		-		(765)		(294)		(66)		-		(1,125)
Total Operating Revenues	$	14,134	$	5,422	$	2,779	$	10,766	$	1,413	$	1,233	$	1,304	$	3,899	$	40,950

For the three months ended June 30, 2019
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	13,753	$	-	$	-	$	-	$	-	$	71	$	-	$	3,468	$	17,292
Entertainment Group		-		2,109		658		7,636		-		399		563		3		11,368
Business Wireline		-		3,208		2,324		-		-		-		897		178		6,607
WarnerMedia
Turner		-		-		-		1,943		111		1,266		90		-		3,410
Home Box Office		-		-		-		1,516		198		-		2		-		1,716
Warner Bros.		-		-		-		23		3,175		10		181		-		3,389
Eliminations and other		-		-		-		54		(237)		494		9		-		320
Latin America
Vrio		-		-		-		1,032		-		-		-		-		1,032
Mexico		479		-		-		-		-		-		-		246		725
Corporate and Other		150		14		7		-		-		-		210		39		420
Eliminations and
consolidations		-		-		-		-		(840)		(399)		(83)		-		(1,322)
Total Operating Revenues	$	14,382	$	5,331	$	2,989	$	12,204	$	2,407	$	1,841	$	1,869	$	3,934	$	44,957

For the six months ended June 30, 2020
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	27,503	$	-	$	-	$	-	$	-	$	134	$	-	$	6,914	$	34,551
Entertainment Group		-		4,201		1,141		13,664		-		707		816		55		20,584
Business Wireline		-		6,595		4,196		-		-		-		1,535		380		12,706
WarnerMedia
Turner		-		-		-		3,853		420		1,753		124		-		6,150
Home Box Office		-		-		-		2,779		338		-		7		-		3,124
Warner Bros.		-		-		-		26		6,239		3		228		-		6,496
Eliminations and other		-		-		-		134		(2,162)		887		33		-		(1,108)
Latin America
Vrio		-		-		-		1,639		-		-		-		-		1,639
Mexico		812		-		-		-		-		-		-		371		1,183
Corporate and Other		295		24		286		-		-		-		145		75		825
Eliminations and
consolidations		-		-		-		-		(1,559)		(707)		(155)		-		(2,421)
Total Operating Revenues	$	28,610	$	10,820	$	5,623	$	22,095	$	3,276	$	2,777	$	2,733	$	7,795	$	83,729

For the six months ended June 30, 2019
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	27,315	$	-	$	-	$	-	$	-	$	138	$	-	$	7,202	$	34,655
Entertainment Group		-		4,179		1,341		15,360		-		749		1,063		4		22,696
Business Wireline		-		6,380		4,721		-		-		-		1,647		337		13,085
WarnerMedia
Turner		-		-		-		3,908		246		2,527		172		-		6,853
Home Box Office		-		-		-		2,850		371		-		5		-		3,226
Warner Bros.		-		-		-		44		6,507		20		336		-		6,907
Eliminations and other		-		-		-		103		(389)		928		12		-		654
Latin America
Vrio		-		-		-		2,099		-		-		-		-		2,099
Mexico		921		-		-		-		-		-		-		455		1,376
Corporate and Other		272		27		14		-		-		-		419		79		811
Eliminations and
consolidations		-		-		-		-		(1,677)		(749)		(152)		-		(2,578)
Total Operating Revenues	$	28,508	$	10,586	$	6,076	$	24,364	$	5,058	$	3,613	$	3,502	$	8,077	$	89,784

Deferred Customer Contract Acquisition and Fulfillment Costs

Costs to acquire and fulfill customer contracts, including commissions on service activations, for our wireless, business wireline and video entertainment services, are deferred and amortized over the contract period or expected customer relationship life, which typically ranges from three years to five years. For contracts with an estimated amortization period of less than one year, we expense incremental costs immediately.

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

		June 30,		December 31,
Consolidated Balance Sheets		2020		2019
Deferred Acquisition Costs
Other current assets	$	2,630	$	2,462
Other Assets		3,117		2,991
Total deferred customer contract acquisition costs	$	5,747	$	5,453
Deferred Fulfillment Costs
Other current assets	$	4,362	$	4,519
Other Assets		5,980		6,439
Total deferred customer contract fulfillment costs	$	10,342	$	10,958

The following table presents deferred customer contract acquisition and fulfillment cost amortization included in “Other cost of revenue” for the six months ended:

		June 30,		June 30,
Consolidated Statements of Income		2020		2019
Deferred acquisition cost amortization	$	1,278	$	1,026
Deferred fulfillment cost amortization		2,636		2,381

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., “buy one get one free”) the difference between revenue recognized and consideration received is recorded as a contract asset to be amortized over the contract term.

When consideration is received in advance of the delivery of goods or services, a contract liability is recorded for deferred revenue. 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:

		June 30,		December 31,
Consolidated Balance Sheets		2020		2019
Contract asset	$	2,546	$	2,472
Contract liability		6,533		6,999

Our beginning of period contract liability recorded as customer contract revenue during 2020 was $5,004.

Our consolidated balance sheets at June 30, 2020 and December 31, 2019 included approximately $1,638 and $1,611, respectively, for the current portion of our contract asset in “Other current assets” and $5,616 and $5,939, respectively, for the current portion of our contract liability in “Advanced billings and customer deposits.”

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, video 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 June 30, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $36,362, of which we expect to recognize approximately 82% by the end of 2021, with the balance recognized thereafter.

XML

Pension And Postretirement Benefits

6 Months Ended

Jun. 30, 2020

Pension And Postretirement Benefits

Pension and Other Postretirement Benefits Disclosure [Text Block]

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 2020.

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.

The following table details pension and postretirement benefit costs included in the accompanying consolidated statements of income. The service cost component of net periodic pension cost (benefit) 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				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Pension cost:
Service cost – benefits earned during the period	$	258	$	243	$	515	$	483
Interest cost on projected benefit obligation		422		508		844		1,057
Expected return on assets		(890)		(880)		(1,779)		(1,731)
Amortization of prior service credit		(29)		(24)		(57)		(57)
Actuarial (gain) loss		-		1,699		-		2,131
Net pension (credit) cost	$	(239)	$	1,546	$	(477)	$	1,883
Postretirement cost:
Service cost – benefits earned during the period	$	13	$	18	$	26	$	36
Interest cost on accumulated postretirement benefit obligation		104		186		208		372
Expected return on assets		(45)		(56)		(89)		(112)
Amortization of prior service credit		(582)		(426)		(1,164)		(852)
Net postretirement (credit) cost	$	(510)	$	(278)	$	(1,019)	$	(556)
Combined net pension and postretirement (credit) cost	$	(749)	$	1,268	$	(1,496)	$	1,327

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 $19 and $25 in the second quarter and $38 and $50 for the first six months of 2020 and 2019, respectively.

XML

Fair Value Measurements And Disclosure

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures

Fair Value Measurements And Disclosure [Text Block]

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, 2019.

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:

		June 30, 2020				December 31, 2019
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Notes and debentures1		$	164,099	$	190,284	$	161,109	$	182,124
Commercial paper			3,001		3,001		-		-
Bank borrowings			-		-		4		4
Investment securities2			3,632		3,632		3,723		3,723
1	Includes credit agreement borrowings.
2	Excludes 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 June 30, 2020 and December 31, 2019. Derivatives designated as hedging instruments are reflected as “Other assets,” “Other noncurrent liabilities,” “Other current assets” and “Accounts payable and accrued liabilities” on our consolidated balance sheets.

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	832	$	-	$	-	$	832
International equities		141		-		-		141
Fixed income equities		230		-		-		230
Available-for-Sale Debt Securities		-		1,522		-		1,522
Asset Derivatives
Cross-currency swaps		-		67		-		67
Foreign exchange contracts		-		14		-		14
Liability Derivatives
Interest rate swaps		-		(3)		-		(3)
Cross-currency swaps		-		(6,767)		-		(6,767)
Foreign exchange contracts		-		(10)		-		(10)

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	844	$	-	$	-	$	844
International equities		183		-		-		183
Fixed income equities		229		-		-		229
Available-for-Sale Debt Securities		-		1,444		-		1,444
Asset Derivatives
Interest rate swaps		-		2		-		2
Cross-currency swaps		-		172		-		172
Interest rate locks		-		11		-		11
Foreign exchange contracts		-		89		-		89
Liability Derivatives
Cross-currency swaps		-		(3,187)		-		(3,187)
Interest rate locks		-		(95)		-		(95)

Investment Securities

Our investment securities include both equity and debt securities that are measured at fair value, as well as equity securities without readily determinable fair values. A substantial portion of the fair values of our investment securities is estimated based on quoted market prices. Investments in equity securities not traded on a national securities exchange are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. Investments in debt securities not traded on a national securities exchange are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

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

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Total gains (losses) recognized on equity securities	$	161	$	50	$	(42)	$	210
Gains (Losses) recognized on equity securities sold		9		9		(24)		27
Unrealized gains (losses) recognized on equity securities
held at end of period		152		41		(18)		183

At June 30, 2020, available-for-sale debt securities totaling $1,522 have maturities as follows - less than one year: $64; one to three years: $175; three to five years: $156; five or more years: $1,127.

Our cash equivalents (money market securities), short-term investments (certificate and time deposits) and nonrefundable customer deposits are recorded at amortized cost, and the respective carrying amounts approximate fair values. Short-term investments and nonrefundable customer deposits are recorded in “Other current assets” and our investment securities are recorded in “Other Assets” on the consolidated balance sheets.

Derivative Financial Instruments

We enter into derivative transactions to manage certain market risks, primarily interest rate risk and foreign currency exchange risk. This includes the use of interest rate swaps, interest rate locks, foreign exchange forward contracts and combined interest rate foreign exchange contracts (cross-currency swaps). We do not use derivatives for trading or speculative purposes. We record derivatives on our consolidated balance sheets at fair value that is derived from observable market data, including yield curves and foreign exchange rates (all of our derivatives are Level 2). Cash flows associated with derivative instruments are presented in the same category on the consolidated statements of cash flows as the item being hedged.

Fair Value Hedging Periodically, we enter into and designate fixed-to-floating interest rate swaps as fair value hedges. The purpose of these swaps is to manage interest rate risk by managing our mix of fixed-rate and floating-rate debt. These swaps involve the receipt of fixed-rate amounts for floating interest rate payments over the life of the swaps without exchange of the underlying principal amount.

We also designate some of our foreign exchange contracts as fair value hedges. The purpose of these contracts is to hedge currency risk associated with foreign-currency-denominated operating assets and liabilities.

Accrued and realized gains or losses from fair value hedges impact the same category on the consolidated statements of income as the item being hedged. Unrealized gains on fair value hedges are recorded at fair market value as assets, and unrealized losses are recorded at fair market value as liabilities. Changes in the fair value of derivative instruments designated as fair value hedges are offset against the change in fair value of the hedged assets or liabilities through earnings. In the six months ended June 30, 2020 and 2019, no ineffectiveness was measured on fair value hedges.

Cash Flow Hedging We designate our cross-currency swaps as cash flow hedges. We have entered into multiple cross-currency swaps to hedge our exposure to variability in expected future cash flows that are attributable to foreign currency risk generated from the issuance of our foreign-denominated debt. These agreements include initial and final exchanges of principal from fixed foreign currency denominated amounts to fixed U.S. dollar denominated amounts, to be exchanged at a specified rate that is usually determined by the market spot rate upon issuance. They also include an interest rate swap of a fixed or floating foreign currency-denominated interest rate to a fixed U.S. dollar denominated interest rate.

We also designate some of our foreign exchange contracts as cash flow hedges. The purpose of these contracts is to hedge certain film production costs denominated in foreign currencies.

Unrealized gains on derivatives designated as cash flow hedges are recorded at fair value as assets, and unrealized losses are recorded at fair value as liabilities. For derivative instruments designated as cash flow hedges, changes in fair value are reported as a component of accumulated OCI and are reclassified into the consolidated statements of income in the same period the hedged transaction affects earnings.

Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into income over the life of the related debt. Over the next 12 months, we expect to reclassify $98 from accumulated OCI to “Interest expense” due to the amortization of net losses on historical interest rate locks.

We settled all interest rate locks in May 2020 in conjunction with issuance of fixed rate debt obligations that the interest rate locks were hedging. We paid $731 that was largely offset by the return of collateral at the time of settlement. Cash flows from the interest rate lock settlements and return of collateral were reported as Financing Activities in our Statement of Cash Flows, consistent with our accounting policy for these instruments.

Net Investment Hedging We have designated €1,450 million aggregate principal amount of debt as a hedge of the variability of some of the Euro-denominated net investments of our subsidiaries. The gain or loss on the debt that is designated as, and is effective as, an economic hedge of the net investment in a foreign operation is recorded as a currency translation adjustment within accumulated OCI, net on the consolidated balance sheet. Net losses on net investment hedges recognized in accumulated OCI in the second quarter were $30 and for the first six months of 2020 were $5.

Collateral and Credit-Risk Contingency We have entered into agreements with our derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. At June 30, 2020, we had posted collateral of $694 (a deposit asset) and held collateral of $16 (a receipt liability). Under the agreements, if AT&T’s credit rating had been downgraded one rating level by Fitch Ratings, before the final collateral exchange in June, we would have been required to post additional collateral of $76. If AT&T’s credit rating had been downgraded four ratings levels by Fitch Ratings, two levels by S&P, and two levels by Moody’s, we would have been required to post additional collateral of $5,487. If DIRECTV

Holdings LLC’s credit rating had been downgraded below BBB- by S&P, we would have been required to post additional collateral of $321. At December 31, 2019, we had posted collateral of $204 (a deposit asset) and held collateral of $44 (a receipt liability). We do not offset the fair value of collateral, whether the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) exists, against the fair value of the derivative instruments.

Following are the notional amounts of our outstanding derivative positions:

	June 30,		December 31,
	2020		2019
Interest rate swaps	$	21	$	853
Cross-currency swaps		45,606		42,325
Interest rate locks		-		3,500
Foreign exchange contracts		298		269
Total	$	45,925	$	46,947

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

Effect of Derivatives on the Consolidated Statements of Income
	Three months ended				Six months ended
	June 30,				June 30,
Fair Value Hedging Relationships	2020		2019		2020		2019
Interest rate swaps (Interest expense):
Gain (Loss) on interest rate swaps	$	(14)	$	35	$	(4)	$	59
Gain (Loss) on long-term debt		14		(35)		4		(59)

In addition, the net swap settlements that accrued and settled in the quarters ended June 30, 2020 and 2019 were offset against interest expense.

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

	Three months ended				Six months ended
	June 30,				June 30,
Cash Flow Hedging Relationships	2020		2019		2020		2019
Cross-currency swaps:
Gain (Loss) recognized in accumulated OCI	$	809	$	(763)	$	(3,170)	$	(595)
Foreign exchange contracts:
Gain (Loss) recognized in accumulated OCI		2		4		(11)		(3)
Other income (expense) - net reclassified from
accumulated OCI into income		(3)		7		13		10
Interest rate locks:
Gain (Loss) recognized in accumulated OCI		(12)		(23)		(648)		(23)
Interest income (expense) reclassified from
accumulated OCI into income		(18)		(16)		(34)		(32)

XML

Acquisitions, Dispositions And Other Adjustments

6 Months Ended

Jun. 30, 2020

Acquisitions, Dispositions And Other Adjustments

Acquisitions, Dispositions And Other Adjustments [Text Block]

NOTE 8. ACQUISITIONS, DISPOSITIONS AND OTHER ADJUSTMENTS

Acquisitions

HBO Latin America Group (HBO LAG) In May 2020, we acquired the remaining interest in HBO LAG for $141, net of cash acquired. At acquisition, we remeasured the fair value of the total business, which exceeded the carrying amount of our equity method investment and resulted in a pre-tax gain of $68. We consolidated that business upon close and recorded those assets at fair value, including $640 of trade names, $271 of distribution networks and $343 of goodwill that is reported in the WarnerMedia segment. These estimates are preliminary in nature and subject to adjustments, which will be finalized within one year from the date of acquisition.

Spectrum Auctions In June 2020, we completed the acquisition of $2,379 of 37/39 GHz spectrum in a Federal Communications Commission (FCC) auction. Prior to the auction, we exchanged the 39 GHz licenses with a book value of approximately $300 that were previously acquired through FiberTower Corporation for vouchers to be applied against the winning bids and recorded a $900 gain in the first quarter of 2020. These vouchers yielded a value of approximately $1,200, which was applied toward our gross bids. In the second quarter of 2020, we made the final cash payment of $949, bringing the total cash payment to $1,186.

XML

Sale of Equipment Installment Receivables

6 Months Ended

Jun. 30, 2020

Other Assets [Abstract]

Finance Receivables Disclosure[Text Block]

NOTE 9. SALES OF RECEIVABLES

We have agreements with various third-party financial institutions pertaining to the sales of certain types of our accounts receivable. The most significant of these programs are discussed in detail below and generally consist of (1) receivables arising from equipment installment plans, which are sold for cash and a deferred purchase price, and (2) revolving service and trade receivables. Under these programs, we transfer receivables to purchasers in exchange for cash and additional consideration upon settlement of the receivables, where applicable. Under the terms of our agreements for these programs, we continue to bill and collect the payments from our customers on behalf of the financial institutions.

The sales of receivables did not have a material impact on our consolidated statements of income or to “Total Assets” reported on our consolidated balance sheets. We reflect cash receipts on sold receivables as cash flows from operations in our consolidated statements of cash flows. Cash receipts on the deferred purchase price are classified as cash flows from investing activities.

Our equipment installment and revolving receivable programs are discussed in detail below. The following table sets forth a summary of the receivables and accounts being serviced:

		June 30, 2020				December 31, 2019
		Equipment				Equipment
		Installment		Revolving		Installment		Revolving
Gross receivables:		$	3,931	$	3,745	$	4,576	$	3,324
Balance sheet classification
Accounts receivable
Notes receivable			2,056		-		2,467		-
Trade receivables			496		3,547		477		2,809
Other Assets
Noncurrent notes and trade receivables			1,379		198		1,632		515
Outstanding portfolio of receivables derecognized from
our consolidated balance sheets			8,917		5,300		9,713		4,300
Cash proceeds received, net of remittances1			6,429		5,300		7,211		4,300
1	Represents amounts to which financial institutions remain entitled, excluding the deferred purchase price.

Equipment Installment Receivables Program

We offer our customers the option to purchase certain wireless devices in installments over a specified period of time and, in many cases, once certain conditions are met, they may be eligible to trade in the original equipment for a new device and have the remaining unpaid balance paid or settled.

We maintain a program under which we transfer a portion of these receivables through our bankruptcy-remote subsidiary in exchange for cash and additional consideration upon settlement of the receivables, referred to as the deferred purchase price. In the event a customer trades in a device prior to the end of the installment contract period, we agree to make a payment to the financial institutions equal to any outstanding remaining installment receivable balance. Accordingly, we record a guarantee obligation for this estimated amount at the time the receivables are transferred.

The following table sets forth a summary of equipment installment receivables sold under this program during the three and six months ended June 30, 2020 and 2019:

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Gross receivables sold		$	1,506	$	2,244	$	3,873	$	4,945
Net receivables sold1			1,449		2,133		3,722		4,679
Cash proceeds received			1,225		1,920		3,175		4,195
Deferred purchase price recorded			232		261		585		570
Guarantee obligation recorded			27		93		71		194
1	Receivables net of allowance, imputed interest and equipment trade-in right guarantees.

The deferred purchase price and guarantee obligation are initially recorded at estimated fair value and subsequently adjusted for changes in present value of expected cash flows. The estimation of their fair values is based on remaining installment payments expected to be collected and the expected timing and value of device trade-ins. The estimated value of the device trade-ins considers prices offered to us by independent third parties that contemplate changes in value after the launch of a device model. The fair value measurements used for the deferred purchase price and the guarantee obligation are considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 7).

The following table presents the previously transferred equipment installment receivables, which we repurchased in exchange for the associated deferred purchase price during the three and six months ended June 30, 2020 and 2019:

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Fair value of repurchased receivables		$	285	$	235	$	573	$	658
Carrying value of deferred purchase price			281		225		558		632
Gain on repurchases1		$	4	$	10	$	15	$	26
1	These gains are included in “Selling, general and administrative” in the consolidated statements of income.

At June 30, 2020 and December 31, 2019, our deferred purchase price receivable was $2,319 and $2,336, respectively, of which $1,591 and $1,569 are included in “Other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at June 30, 2020 and December 31, 2019 was $315 and $384, respectively, of which $213 and $148 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our deferred purchase price and guarantee obligation.

Revolving Receivables Program

In 2019, we entered into a one-year revolving agreement to transfer up to $4,300 of certain receivables through our bankruptcy-remote subsidiaries to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred. In the first quarter of 2020, we expanded the program limit to $5,300. In the second quarter of 2020, we extended the agreement by one year. As customers pay their balances, we transfer additional receivables into the program, resulting in our gross receivables sold exceeding net cash flow impacts (e.g., collect and reinvest). The transferred receivables are fully guaranteed by our bankruptcy-remote subsidiaries, which hold additional receivables in the amount of $3,745 that are pledged as collateral under this agreement. The transfers are recorded at fair value of the proceeds received and obligations assumed less derecognized receivables. The obligation is subsequently adjusted for changes in estimated expected credit losses and interest rates. Our maximum exposure to loss related to these receivables transferred is limited to the amount outstanding.

The fair value measurement used for the obligation is considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 7).

The following table sets forth a summary of receivables sold:

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Gross receivables sold/cash proceeds received1		$	3,805	$	4,452	$	8,027	$	5,852
Collections reinvested under revolving agreement			3,805		2,127		7,027		2,127
Net cash proceeds received (remitted)		$	-	$	2,325	$	1,000	$	3,725
Net receivables sold2		$	3,819	$	4,134	$	7,957	$	5,497
Obligations recorded (reversed)			(12)		384		114		436
1	Includes initial sale of receivables of $0 and $2,325 for the three months and $1,000 and $3,725 for the six months ended
	June 30, 2020 and 2019, respectively.
2	Receivables net of allowance, return and incentive reserves and imputed interest

XML

Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

NOTE 10. LEASES

We have operating and finance leases for certain facilities and equipment used in operations. Our leases generally have remaining lease terms of up to 15 years. Some of our real estate operating leases contain renewal options that may be exercised, and some of our leases include options to terminate the leases within one year.

We have recognized a right-of-use asset for both operating and finance leases, and an operating lease liability that represents the present value of our obligation to make payments over the lease term. The present value of the lease payments is calculated using the incremental borrowing rate for operating and finance leases, which was determined using a portfolio approach based on the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate in the currency of the lease, which will be updated on a quarterly basis for measurement of new lease liabilities.

The components of lease expense were as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	1,449	$	1,610	$	2,826	$	2,852
Finance lease cost:
Amortization of right-of-use assets	$	73	$	70	$	140	$	136
Interest on lease obligation		36		42		77		84
Total finance lease cost	$	109	$	112	$	217	$	220

Supplemental balance sheet information related to leases is as follows:

	June 30,		December 31,
	2020		2019
Operating Leases
Operating lease right-of-use assets	$	24,692	$	24,039
Accounts payable and accrued liabilities	$	3,474	$	3,451
Operating lease obligation		22,230		21,804
Total operating lease obligation	$	25,704	$	25,255
Finance Leases
Property, plant and equipment, at cost	$	3,468	$	3,534
Accumulated depreciation and amortization		(1,347)		(1,296)
Property, plant and equipment, net	$	2,121	$	2,238
Current portion of long-term debt	$	180	$	162
Long-term debt		1,683		1,872
Total finance lease obligation	$	1,863	$	2,034
Weighted-Average Remaining Lease Term (years)
Operating leases		8.5		8.4
Finance leases		10.2		10.7
Weighted-Average Discount Rate
Operating leases		4.2	%	4.7	%
Finance leases		8.2	%	8.5	%

Future minimum maturities of lease obligations are as follows:

At June 30, 2020	Operating		Finance
	Leases		Leases
Remainder of 2020	$	2,447	$	190
2021		4,582		309
2022		4,277		291
2023		3,889		262
2024		3,357		242
Thereafter		13,031		1,632
Total lease payments		31,583		2,926
Less imputed interest		(5,879)		(1,063)
Total	$	25,704	$	1,863

XML

Preferred Shares

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note

Stockholders' Equity Note Disclosure [Text Block]

NOTE 11. PREFERRED SHARES

We have authorized 10 million preferred shares of AT&T stock, each with a par value of $1.00 per share. Cumulative perpetual preferred shares consist of the following:

 Series A: 48 thousand shares outstanding at June 30, 2020 and December 31, 2019, with a $25,000 per share liquidation preference and a dividend rate of 5.00%.

 Series B: 20 thousand shares outstanding at June 30, 2020 and zero issued and outstanding at December 31, 2019, with a €100,000 per share liquidation preference, and an initial dividend rate of 2.875%, subject to reset beginning on May 1, 2025.

 Series C: 70 thousand shares outstanding at June 30, 2020 and zero issued and outstanding at December 31, 2019, with a $25,000 per share liquidation preference and a dividend rate of 4.75%.

So long as the preferred dividends are declared and paid on a timely basis on each series of preferred shares, there are no limitations on our ability to declare a dividend on or repurchase AT&T common shares. The preferred shares are optionally redeemable by AT&T at the liquidation price generally on or after five years from the issuance date, or upon certain other contingent events.

XML

Additional Financial Information

6 Months Ended

Jun. 30, 2020

Additional Financial Information [Abstract]

Additional Financial Information [Text Block]

NOTE 12. ADDITIONAL FINANCIAL INFORMATION

Cash and Cash Flows

We typically maintain our restricted cash balances for purchases and sales of certain investment securities and funding of certain deferred compensation benefit payments:

	June 30,				December 31,
		2020		2019		2019		2018
Cash and cash equivalents	$	16,941	$	8,423	$	12,130	$	5,204
Restricted cash in Other current assets		3		15		69		61
Restricted cash in Other Assets		87		216		96		135
Cash and Cash Equivalents and Restricted Cash	$	17,031	$	8,654	$	12,295	$	5,400

Consolidated Statements of Cash Flows	Six months ended
	June 30,
Cash paid (received) during the period for:		2020		2019
Interest	$	4,202	$	4,410
Income taxes, net of refunds		(214)		(32)

	Six months ended
	June 30,
	2020		2019
Cash Flows from Operating Activities
Cash paid for amounts included in lease obligations
Operating cash flows from operating leases	$	2,424	$	2,464
Supplemental Lease Cash Flow Disclosures
Operating lease right-of-use assets obtained
in exchange for new operating lease obligations		2,895		3,899

Other Noncash Investing and Financing Activities In connection with capital improvements and the acquisition of other productive assets, we negotiate favorable payment terms (referred to as vendor financing), which are reported as financing activities when paid. For the first six months, we recorded vendor financing commitments related to capital investments of approximately $1,680 in 2020 and $1,265 in 2019.

Financing Activities

Debt Transactions At June 30, 2020, our total long-term debt obligations totaled $168,964. Our debt activity primarily consisted of the following:

 Net borrowings of approximately $2,960 of debt under our commercial paper program.

 In April 2020, entry into and draw on a $5,500 Term Loan Credit Agreement, with certain commercial banks and Bank of America, N.A., as lead agent, which was redeemed in May 2020 (originally due on December 31, 2020).

 Issuance of $16,545 of AT&T global notes due 2027 to 2060.

 Issuance of €3,000 million global notes ($3,281 at issuance) due 2028 to 2038.

 Redemptions of $12,689 of AT&T global notes due 2020 to 2047.

 Redemptions of $1,800 under term loan credit agreements with certain banks.

 Redemptions of $1,000 annual put reset securities issued by BellSouth.

Our long-term debt issuances carried a weighted average interest rate of 3.5%, and our long-term debt redemptions had a weighted average interest rate of 3.4%.

Subsequent Events In July 2020, we completed redemptions of $4,264 of AT&T, WarnerMedia and DIRECTV notes due 2022, with an average interest rate of 3.4%.

In August 2020, we issued $11,000 of global notes due 2028 to 2061, with an average interest rate of 2.7%.

XML

Preparation Of Interim Financial Statements (Policy)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Principles of Consolidation [Policy Text Block]

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 for periods ended within up to one quarter of our period end. We also record our proportionate share of our equity method investees’ other comprehensive income (OCI) items.

Basis of Accounting [Policy Text Block]

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions, including potential impacts arising from the COVID-19 pandemic, that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain prior period amounts have been conformed to the current period’s presentation, including the combination of our prior Xandr segment with the WarnerMedia segment.

Credit Loss, Financial Instrument [Policy Text Block]

Credit Losses As of January 1, 2020, we adopted, through modified retrospective application, the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13, as amended), which replaces the incurred loss impairment methodology under prior GAAP with an expected credit loss model. ASU 2016-13 affects trade receivables, loans, contract assets, certain beneficial interests, off-balance-sheet credit exposures not accounted for as insurance and other financial assets that are not subject to fair value through net income, as defined by the standard. Under the expected credit loss model, we are required to consider future economic trends to estimate expected credit losses over the lifetime of the asset. Upon adoption, we recorded a $293 reduction to “Retained earnings,” $395 increase to “allowances for doubtful accounts” applicable to our trade and loan receivables, $10 reduction of contract assets, $105 reduction of net deferred income tax liability and $7 reduction of “Noncontrolling interest” as an opening adjustment. Our adoption of ASU 2016-13 did not have a material impact on our financial statements.

Reference Rate Reform [Policy Text Block]

Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (ASU 2020-04), which provides optional expedients, and allows for certain exceptions to existing GAAP, for contract modifications triggered by the expected market transition of certain benchmark interest rates to alternative reference rates. ASU 2020-04 applies to contracts, hedging relationships and other arrangements that reference the London Interbank Offering Rate (LIBOR) or any other rates ending after December 31, 2022. We are evaluating the impact of our adoption of ASU 2020-04, including optional expedients, to our financial statements.

Spectrum Licenses [Policy Text Block]

During the first quarter of 2020, we reassessed and changed the estimated economic lives of certain trade names in our Latin America business from indefinite to finite-lived and began amortizing them using the straight-line method over their average remaining economic life of 15 years. This change had an insignificant impact on our financial statements.

Also during the first quarter of 2020, in conjunction with the nationwide launch of AT&T TV and our customers’ continued shift from linear to streaming video services, we reassessed the estimated economic lives and renewal assumptions for our orbital slot licenses. As a result, we have changed the estimated lives of these licenses from indefinite to finite-lived, effective January 1, 2020, and began amortizing our orbital slot licenses using the sum-of-months-digits method over their average remaining economic life of 15 years. This change in accounting increased amortization expense $379, or $0.04 per diluted share available to common stock during the second quarter and $765, or $0.08, per diluted share available to common stock for the first six months of 2020.

XML

Pension And Postretirement Benefits (Policy)	6 Months Ended
	Jun. 30, 2020
Pension And Postretirement Benefits
Recognition Of Actuarial Gains And Losses	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.

XML

Fair Value Measurements And Disclosure (Policy)	6 Months Ended
	Jun. 30, 2020
Fair Value Disclosures
Derivatives, Offsetting Fair Value Amounts, Policy [Policy Text Block]	We do not offset the fair value of collateral, whether the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) exists, against the fair value of the derivative instruments.

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerators
Numerator for basic earnings per share:
Net Income	$	1,563	$	3,974	$	6,526	$	8,322
Less: Net income attributable to noncontrolling interest		(282)		(261)		(635)		(513)
Net Income attributable to AT&T		1,281		3,713		5,891		7,809
Less: Preferred stock dividends		(52)		-		(84)		-
Net income attributable to common stock		1,229		3,713		5,807		7,809
Dilutive potential common shares:
Share-based payment		5		4		11		10
Numerator for diluted earnings per share	$	1,234	$	3,717	$	5,818	$	7,819
Denominators (000,000)
Denominator for basic earnings per share:
Weighted average number of common shares outstanding		7,145		7,323		7,166		7,318
Dilutive potential common shares:
Share-based payment (in shares)		25		30		26		29
Denominator for diluted earnings per share		7,170		7,353		7,192		7,347
Basic earnings per share attributable to Common Stock	$	0.17	$	0.51	$	0.81	$	1.06
Diluted earnings per share attributable to Common Stock	$	0.17	$	0.51	$	0.81	$	1.06

XML

Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2020

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

		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
Balance as of December 31, 2019		$	(3,056)		$	48		$	(37)		$	8,515		$	5,470
Other comprehensive income
(loss) before reclassifications			(1,490)			80			(3,026)			-			(4,436)
Amounts reclassified
from accumulated OCI			-	1		-	1		17	2		(922)	3		(905)
Net other comprehensive
income (loss)			(1,490)			80			(3,009)			(922)			(5,341)
Balance as of June 30, 2020		$	(4,546)		$	128		$	(3,046)		$	7,593		$	129
		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
Balance as of December 31, 2018		$	(3,084)		$	(2)		$	818		$	6,517		$	4,249
Other comprehensive income
(loss) before reclassifications			159			42			(490)			-			(289)
Amounts reclassified
from accumulated OCI			-	1		-	1		17	2		(688)	3		(671)
Net other comprehensive
income (loss)			159			42			(473)			(688)			(960)
Balance as of June 30, 2019		$	(2,925)		$	40		$	345		$	5,829		$	3,289
1	(Gains) losses are included in "Other income (expense) - net" in the consolidated statements of income.
2	(Gains) losses are included in "Interest expense" in the consolidated statements of income (see Note 7).
3	The 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).

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2020

Segment Information

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

For the three months ended June 30, 2020
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,149	$	9,332	$	7,817	$	2,012	$	5,805	$	-	$	5,805
Entertainment Group		10,069		7,730		2,339		1,309		1,030		-		1,030
Business Wireline		6,374		3,779		2,595		1,318		1,277		-		1,277
Total Communications		33,592		20,841		12,751		4,639		8,112		-		8,112
WarnerMedia
Turner		2,988		1,347		1,641		69		1,572		-		1,572
Home Box Office		1,627		1,489		138		25		113		(5)		108
Warner Bros.		3,256		2,583		673		40		633		(19)		614
Eliminations and other		(1,057)		(685)		(372)		33		(405)		28		(377)
Total WarnerMedia		6,814		4,734		2,080		167		1,913		4		1,917
Latin America
Vrio		752		661		91		127		(36)		8		(28)
Mexico		480		538		(58)		115		(173)		-		(173)
Total Latin America		1,232		1,199		33		242		(209)		8		(201)
Segment Total		41,638		26,774		14,864		5,048		9,816	$	12	$	9,828
Corporate and Other
Corporate		437		933		(496)		93		(589)
Acquisition-related items		-		211		(211)		2,145		(2,356)
Certain significant items		-		3,084		(3,084)		-		(3,084)
Eliminations and consolidations		(1,125)		(869)		(256)		(1)		(255)
AT&T Inc.	$	40,950	$	30,133	$	10,817	$	7,285	$	3,532

For the three months ended June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,292	$	9,522	$	7,770	$	2,003	$	5,767	$	-	$	5,767
Entertainment Group		11,368		8,515		2,853		1,339		1,514		-		1,514
Business Wireline		6,607		3,975		2,632		1,242		1,390		-		1,390
Total Communications		35,267		22,012		13,255		4,584		8,671		-		8,671
WarnerMedia
Turner		3,410		2,217		1,193		39		1,154		11		1,165
Home Box Office		1,716		1,131		585		12		573		15		588
Warner Bros.		3,389		2,918		471		31		440		-		440
Eliminations and other		320		170		150		22		128		29		157
Total WarnerMedia		8,835		6,436		2,399		104		2,295		55		2,350
Latin America
Vrio		1,032		881		151		165		(14)		12		(2)
Mexico		725		813		(88)		119		(207)		-		(207)
Total Latin America		1,757		1,694		63		284		(221)		12		(209)
Segment Total		45,859		30,142		15,717		4,972		10,745	$	67	$	10,812
Corporate and Other
Corporate		450		765		(315)		170		(485)
Acquisition-related items		(30)		316		(346)		1,960		(2,306)
Certain significant items		-		94		(94)		-		(94)
Eliminations and consolidations		(1,322)		(961)		(361)		(1)		(360)
AT&T Inc.	$	44,957	$	30,356	$	14,601	$	7,101	$	7,500

For the six months ended June 30, 2020
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,551	$	18,901	$	15,650	$	4,057	$	11,593	$	-	$	11,593
Entertainment Group		20,584		15,621		4,963		2,598		2,365		-		2,365
Business Wireline		12,706		7,730		4,976		2,619		2,357		-		2,357
Total Communications		67,841		42,252		25,589		9,274		16,315		-		16,315
WarnerMedia
Turner		6,150		3,057		3,093		138		2,955		6		2,961
Home Box Office		3,124		2,542		582		46		536		15		551
Warner Bros.		6,496		5,533		963		81		882		(27)		855
Eliminations and other		(1,108)		(711)		(397)		65		(462)		25		(437)
Total WarnerMedia		14,662		10,421		4,241		330		3,911		19		3,930
Latin America
Vrio		1,639		1,444		195		274		(79)		12		(67)
Mexico		1,183		1,252		(69)		249		(318)		-		(318)
Total Latin America		2,822		2,696		126		523		(397)		12		(385)
Segment Total		85,325		55,369		29,956		10,127		19,829	$	31	$	19,860
Corporate and Other
Corporate		825		1,807		(982)		180		(1,162)
Acquisition-related items		-		393		(393)		4,201		(4,594)
Certain significant items		-		2,426		(2,426)		-		(2,426)
Eliminations and consolidations		(2,421)		(1,791)		(630)		(1)		(629)
AT&T Inc.	$	83,729	$	58,204	$	25,525	$	14,507	$	11,018

For the six months ended June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,655	$	19,563	$	15,092	$	4,016	$	11,076	$	-	$	11,076
Entertainment Group		22,696		17,042		5,654		2,662		2,992		-		2,992
Business Wireline		13,085		8,007		5,078		2,464		2,614		-		2,614
Total Communications		70,436		44,612		25,824		9,142		16,682		-		16,682
WarnerMedia
Turner		6,853		4,353		2,500		99		2,401		36		2,437
Home Box Office		3,226		2,052		1,174		34		1,140		30		1,170
Warner Bros.		6,907		5,837		1,070		83		987		6		993
Eliminations and other		654		347		307		44		263		50		313
Total WarnerMedia		17,640		12,589		5,051		260		4,791		122		4,913
Latin America
Vrio		2,099		1,747		352		334		18		12		30
Mexico		1,376		1,538		(162)		250		(412)		-		(412)
Total Latin America		3,475		3,285		190		584		(394)		12		(382)
Segment Total		91,551		60,486		31,065		9,986		21,079	$	134	$	21,213
Corporate and Other
Corporate		883		1,426		(543)		374		(917)
Acquisition-related items		(72)		389		(461)		3,948		(4,409)
Certain significant items		-		342		(342)		-		(342)
Eliminations and consolidations		(2,578)		(1,899)		(679)		(1)		(678)
AT&T Inc.	$	89,784	$	60,744	$	29,040	$	14,307	$	14,733

Reconciliation of Operating Income (Loss) from Segments to Consolidated Statements of Income [Table Text Block]

			Three months ended June 30,				Six months ended June 30,
			2020		2019		2020		2019
Communications		$	8,112	$	8,671	$	16,315	$	16,682
WarnerMedia			1,917		2,350		3,930		4,913
Latin America			(201)		(209)		(385)		(382)
Segment Contribution			9,828		10,812		19,860		21,213
Reconciling Items:
Corporate and Other			(589)		(485)		(1,162)		(917)
Merger and integration items			(211)		(346)		(393)		(461)
Amortization of intangibles acquired			(2,145)		(1,960)		(4,201)		(3,948)
Impairments			(2,319)		-		(2,442)		-
Gain on spectrum transaction1			-		-		900		-
Employee separation costs and benefit-related losses			(765)		(94)		(884)		(342)
Segment equity in net income of affiliates			(12)		(67)		(31)		(134)
Eliminations and consolidations			(255)		(360)		(629)		(678)
AT&T Operating Income			3,532		7,500		11,018		14,733
Interest Expense			2,041		2,149		4,059		4,290
Equity in net income (loss) of affiliates			(10)		40		(16)		33
Other income (expense) - net			1,017		(318)		1,820		(32)
Income Before Income Taxes		$	2,498	$	5,073	$	8,763	$	10,444
1	Included as a reduction of "Selling, general and administrative expenses" in the consolidated statement of income.

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Intersegment Reconciliation
	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020			2019
Intersegment Revenues
Communications	$	2	$	8	$	4	$	8
WarnerMedia		774		861		1,591		1,719
Latin America		-		-		-		-
Total Intersegment Revenues		776		869		1,595		1,727
Consolidations		349		453		826		851
Eliminations and consolidations	$	1,125	$	1,322	$	2,421	$	2,578

XML

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue [Table Text Block]

Revenue Categories
The following tables set forth reported revenue by category and by business unit:
For the three months ended June 30, 2020
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	13,611	$	-	$	-	$	-	$	-	$	58	$	-	$	3,480	$	17,149
Entertainment Group		-		2,092		560		6,682		-		294		397		44		10,069
Business Wireline		-		3,320		2,067		-		-		-		782		205		6,374
WarnerMedia
Turner		-		-		-		1,804		334		796		54		-		2,988
Home Box Office		-		-		-		1,441		181		-		5		-		1,627
Warner Bros.		-		-		-		16		3,179		1		60		-		3,256
Eliminations and other		-		-		-		71		(1,516)		378		10		-		(1,057)
Latin America
Vrio		-		-		-		752		-		-		-		-		752
Mexico		345		-		-		-		-		-		-		135		480
Corporate and Other		178		10		152		-		-		-		62		35		437
Eliminations and
consolidations		-		-		-		-		(765)		(294)		(66)		-		(1,125)
Total Operating Revenues	$	14,134	$	5,422	$	2,779	$	10,766	$	1,413	$	1,233	$	1,304	$	3,899	$	40,950

For the three months ended June 30, 2019
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	13,753	$	-	$	-	$	-	$	-	$	71	$	-	$	3,468	$	17,292
Entertainment Group		-		2,109		658		7,636		-		399		563		3		11,368
Business Wireline		-		3,208		2,324		-		-		-		897		178		6,607
WarnerMedia
Turner		-		-		-		1,943		111		1,266		90		-		3,410
Home Box Office		-		-		-		1,516		198		-		2		-		1,716
Warner Bros.		-		-		-		23		3,175		10		181		-		3,389
Eliminations and other		-		-		-		54		(237)		494		9		-		320
Latin America
Vrio		-		-		-		1,032		-		-		-		-		1,032
Mexico		479		-		-		-		-		-		-		246		725
Corporate and Other		150		14		7		-		-		-		210		39		420
Eliminations and
consolidations		-		-		-		-		(840)		(399)		(83)		-		(1,322)
Total Operating Revenues	$	14,382	$	5,331	$	2,989	$	12,204	$	2,407	$	1,841	$	1,869	$	3,934	$	44,957

For the six months ended June 30, 2020
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	27,503	$	-	$	-	$	-	$	-	$	134	$	-	$	6,914	$	34,551
Entertainment Group		-		4,201		1,141		13,664		-		707		816		55		20,584
Business Wireline		-		6,595		4,196		-		-		-		1,535		380		12,706
WarnerMedia
Turner		-		-		-		3,853		420		1,753		124		-		6,150
Home Box Office		-		-		-		2,779		338		-		7		-		3,124
Warner Bros.		-		-		-		26		6,239		3		228		-		6,496
Eliminations and other		-		-		-		134		(2,162)		887		33		-		(1,108)
Latin America
Vrio		-		-		-		1,639		-		-		-		-		1,639
Mexico		812		-		-		-		-		-		-		371		1,183
Corporate and Other		295		24		286		-		-		-		145		75		825
Eliminations and
consolidations		-		-		-		-		(1,559)		(707)		(155)		-		(2,421)
Total Operating Revenues	$	28,610	$	10,820	$	5,623	$	22,095	$	3,276	$	2,777	$	2,733	$	7,795	$	83,729

For the six months ended June 30, 2019
	Service Revenues
		Wireless		Advanced Data		Legacy Voice & Data		Subscription		Content		Advertising		Other		Equipment		Total
Communications
Mobility	$	27,315	$	-	$	-	$	-	$	-	$	138	$	-	$	7,202	$	34,655
Entertainment Group		-		4,179		1,341		15,360		-		749		1,063		4		22,696
Business Wireline		-		6,380		4,721		-		-		-		1,647		337		13,085
WarnerMedia
Turner		-		-		-		3,908		246		2,527		172		-		6,853
Home Box Office		-		-		-		2,850		371		-		5		-		3,226
Warner Bros.		-		-		-		44		6,507		20		336		-		6,907
Eliminations and other		-		-		-		103		(389)		928		12		-		654
Latin America
Vrio		-		-		-		2,099		-		-		-		-		2,099
Mexico		921		-		-		-		-		-		-		455		1,376
Corporate and Other		272		27		14		-		-		-		419		79		811
Eliminations and
consolidations		-		-		-		-		(1,677)		(749)		(152)		-		(2,578)
Total Operating Revenues	$	28,508	$	10,586	$	6,076	$	24,364	$	5,058	$	3,613	$	3,502	$	8,077	$	89,784

Capitalized Contract Cost [Table Text Block]

		June 30,		December 31,
Consolidated Balance Sheets		2020		2019
Deferred Acquisition Costs
Other current assets	$	2,630	$	2,462
Other Assets		3,117		2,991
Total deferred customer contract acquisition costs	$	5,747	$	5,453
Deferred Fulfillment Costs
Other current assets	$	4,362	$	4,519
Other Assets		5,980		6,439
Total deferred customer contract fulfillment costs	$	10,342	$	10,958

		June 30,		June 30,
Consolidated Statements of Income		2020		2019
Deferred acquisition cost amortization	$	1,278	$	1,026
Deferred fulfillment cost amortization		2,636		2,381

Contract with Customer, Asset and Liability [Table Text Block]

		June 30,		December 31,
Consolidated Balance Sheets		2020		2019
Contract asset	$	2,546	$	2,472
Contract liability		6,533		6,999

XML

Pension And Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2020

Pension And Postretirement Benefits

Pension and postretirement benefit costs included in operating expenses [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Pension cost:
Service cost – benefits earned during the period	$	258	$	243	$	515	$	483
Interest cost on projected benefit obligation		422		508		844		1,057
Expected return on assets		(890)		(880)		(1,779)		(1,731)
Amortization of prior service credit		(29)		(24)		(57)		(57)
Actuarial (gain) loss		-		1,699		-		2,131
Net pension (credit) cost	$	(239)	$	1,546	$	(477)	$	1,883
Postretirement cost:
Service cost – benefits earned during the period	$	13	$	18	$	26	$	36
Interest cost on accumulated postretirement benefit obligation		104		186		208		372
Expected return on assets		(45)		(56)		(89)		(112)
Amortization of prior service credit		(582)		(426)		(1,164)		(852)
Net postretirement (credit) cost	$	(510)	$	(278)	$	(1,019)	$	(556)
Combined net pension and postretirement (credit) cost	$	(749)	$	1,268	$	(1,496)	$	1,327

XML

Fair Value Measurements And Disclosure (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures

Long-term debt and other financial instruments [Table Text Block]

		June 30, 2020				December 31, 2019
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Notes and debentures1		$	164,099	$	190,284	$	161,109	$	182,124
Commercial paper			3,001		3,001		-		-
Bank borrowings			-		-		4		4
Investment securities2			3,632		3,632		3,723		3,723
1	Includes credit agreement borrowings.
2	Excludes investments accounted for under the equity method.

Fair Value Leveling [Table Text Block]

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	832	$	-	$	-	$	832
International equities		141		-		-		141
Fixed income equities		230		-		-		230
Available-for-Sale Debt Securities		-		1,522		-		1,522
Asset Derivatives
Cross-currency swaps		-		67		-		67
Foreign exchange contracts		-		14		-		14
Liability Derivatives
Interest rate swaps		-		(3)		-		(3)
Cross-currency swaps		-		(6,767)		-		(6,767)
Foreign exchange contracts		-		(10)		-		(10)

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	844	$	-	$	-	$	844
International equities		183		-		-		183
Fixed income equities		229		-		-		229
Available-for-Sale Debt Securities		-		1,444		-		1,444
Asset Derivatives
Interest rate swaps		-		2		-		2
Cross-currency swaps		-		172		-		172
Interest rate locks		-		11		-		11
Foreign exchange contracts		-		89		-		89
Liability Derivatives
Cross-currency swaps		-		(3,187)		-		(3,187)
Interest rate locks		-		(95)		-		(95)

Unrealized Gain (Loss) on Investments [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Total gains (losses) recognized on equity securities	$	161	$	50	$	(42)	$	210
Gains (Losses) recognized on equity securities sold		9		9		(24)		27
Unrealized gains (losses) recognized on equity securities
held at end of period		152		41		(18)		183

Notional Amount of Outstanding Derivative Positions [Table Text Block]

	June 30,		December 31,
	2020		2019
Interest rate swaps	$	21	$	853
Cross-currency swaps		45,606		42,325
Interest rate locks		-		3,500
Foreign exchange contracts		298		269
Total	$	45,925	$	46,947

Effect on Derivatives on the Consolidated Statements of Income [Table Text Block]

Effect of Derivatives on the Consolidated Statements of Income
	Three months ended				Six months ended
	June 30,				June 30,
Fair Value Hedging Relationships	2020		2019		2020		2019
Interest rate swaps (Interest expense):
Gain (Loss) on interest rate swaps	$	(14)	$	35	$	(4)	$	59
Gain (Loss) on long-term debt		14		(35)		4		(59)

	Three months ended				Six months ended
	June 30,				June 30,
Cash Flow Hedging Relationships	2020		2019		2020		2019
Cross-currency swaps:
Gain (Loss) recognized in accumulated OCI	$	809	$	(763)	$	(3,170)	$	(595)
Foreign exchange contracts:
Gain (Loss) recognized in accumulated OCI		2		4		(11)		(3)
Other income (expense) - net reclassified from
accumulated OCI into income		(3)		7		13		10
Interest rate locks:
Gain (Loss) recognized in accumulated OCI		(12)		(23)		(648)		(23)
Interest income (expense) reclassified from
accumulated OCI into income		(18)		(16)		(34)		(32)

XML

Sale of Equipment Installment Receivables (Tables)

6 Months Ended

Jun. 30, 2020

Accounts, Notes, Loans and Financing Receivable [Line Items]

Finance Receivables [Table Text Block]

		June 30, 2020				December 31, 2019
		Equipment				Equipment
		Installment		Revolving		Installment		Revolving
Gross receivables:		$	3,931	$	3,745	$	4,576	$	3,324
Balance sheet classification
Accounts receivable
Notes receivable			2,056		-		2,467		-
Trade receivables			496		3,547		477		2,809
Other Assets
Noncurrent notes and trade receivables			1,379		198		1,632		515
Outstanding portfolio of receivables derecognized from
our consolidated balance sheets			8,917		5,300		9,713		4,300
Cash proceeds received, net of remittances1			6,429		5,300		7,211		4,300
1	Represents amounts to which financial institutions remain entitled, excluding the deferred purchase price.

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Gross receivables sold		$	1,506	$	2,244	$	3,873	$	4,945
Net receivables sold1			1,449		2,133		3,722		4,679
Cash proceeds received			1,225		1,920		3,175		4,195
Deferred purchase price recorded			232		261		585		570
Guarantee obligation recorded			27		93		71		194
1	Receivables net of allowance, imputed interest and equipment trade-in right guarantees.

Transfer of Financial Assets Accounted for as Sales [Table Text Block]

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Gross receivables sold/cash proceeds received1		$	3,805	$	4,452	$	8,027	$	5,852
Collections reinvested under revolving agreement			3,805		2,127		7,027		2,127
Net cash proceeds received (remitted)		$	-	$	2,325	$	1,000	$	3,725
Net receivables sold2		$	3,819	$	4,134	$	7,957	$	5,497
Obligations recorded (reversed)			(12)		384		114		436
1	Includes initial sale of receivables of $0 and $2,325 for the three months and $1,000 and $3,725 for the six months ended
	June 30, 2020 and 2019, respectively.
2	Receivables net of allowance, return and incentive reserves and imputed interest

Deferred Purchase Price [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Finance Receivables [Table Text Block]

		Three months ended				Six months ended
		June 30,				June 30,
		2020		2019		2020		2019
Fair value of repurchased receivables		$	285	$	235	$	573	$	658
Carrying value of deferred purchase price			281		225		558		632
Gain on repurchases1		$	4	$	10	$	15	$	26
1	These gains are included in “Selling, general and administrative” in the consolidated statements of income.

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Lease, Cost [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	1,449	$	1,610	$	2,826	$	2,852
Finance lease cost:
Amortization of right-of-use assets	$	73	$	70	$	140	$	136
Interest on lease obligation		36		42		77		84
Total finance lease cost	$	109	$	112	$	217	$	220

	June 30,		December 31,
	2020		2019
Operating Leases
Operating lease right-of-use assets	$	24,692	$	24,039
Accounts payable and accrued liabilities	$	3,474	$	3,451
Operating lease obligation		22,230		21,804
Total operating lease obligation	$	25,704	$	25,255
Finance Leases
Property, plant and equipment, at cost	$	3,468	$	3,534
Accumulated depreciation and amortization		(1,347)		(1,296)
Property, plant and equipment, net	$	2,121	$	2,238
Current portion of long-term debt	$	180	$	162
Long-term debt		1,683		1,872
Total finance lease obligation	$	1,863	$	2,034
Weighted-Average Remaining Lease Term (years)
Operating leases		8.5		8.4
Finance leases		10.2		10.7
Weighted-Average Discount Rate
Operating leases		4.2	%	4.7	%
Finance leases		8.2	%	8.5	%

Schedule Of Maturities Of Operating And Finance Leases Liabilities [Table Text Block]

At June 30, 2020	Operating		Finance
	Leases		Leases
Remainder of 2020	$	2,447	$	190
2021		4,582		309
2022		4,277		291
2023		3,889		262
2024		3,357		242
Thereafter		13,031		1,632
Total lease payments		31,583		2,926
Less imputed interest		(5,879)		(1,063)
Total	$	25,704	$	1,863

XML

Additional Financial Information (Tables)

6 Months Ended

Jun. 30, 2020

Additional Financial Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	June 30,				December 31,
		2020		2019		2019		2018
Cash and cash equivalents	$	16,941	$	8,423	$	12,130	$	5,204
Restricted cash in Other current assets		3		15		69		61
Restricted cash in Other Assets		87		216		96		135
Cash and Cash Equivalents and Restricted Cash	$	17,031	$	8,654	$	12,295	$	5,400

Consolidated Statements of Cash Flows	Six months ended
	June 30,
Cash paid (received) during the period for:		2020		2019
Interest	$	4,202	$	4,410
Income taxes, net of refunds		(214)		(32)

	Six months ended
	June 30,
	2020		2019
Cash Flows from Operating Activities
Cash paid for amounts included in lease obligations
Operating cash flows from operating leases	$	2,424	$	2,464
Supplemental Lease Cash Flow Disclosures
Operating lease right-of-use assets obtained
in exchange for new operating lease obligations		2,895		3,899

XML

Preparation Of Interim Financial Statements (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jan. 01, 2020	Dec. 31, 2019
Change in Accounting Estimate [Line Items]
Diluted Earnings Per Share Attributable to Common Stock	$ 0.17	$ 0.51	$ 0.81	$ 1.06
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Retained earnings	$ 56,045		$ 56,045			$ 57,936
Contract asset	2,546		2,546			2,472
Deferred income taxes	58,387		58,387			59,502
Goodwill, Impairment Loss	2,319	$ 0	2,442	$ 0
Noncontrolling interest	17,557		$ 17,557			$ 17,713
Communications [Member] | Orbital Slots [Member] | Intangible Assets, Amortization Period [Member]
Change in Accounting Estimate [Line Items]
Change in Accounting Estimate, Description			Also during the first quarter of 2020, in conjunction with the nationwide launch of AT&T TV and our customers’ continued shift from linear to streaming video services, we reassessed the estimated economic lives and renewal assumptions for our orbital slot licenses. As a result, we have changed the estimated lives of these licenses from indefinite to finite-lived, effective January 1, 2020, and began amortizing our orbital slot licenses using the sum-of-months-digits method over their average remaining economic life of 15 years.
Estimated economic useful life			15 years
Amortization expense	$ 379		$ 765
Diluted Earnings Per Share Attributable to Common Stock	$ 0.04		$ 0.08
Latin America [Member] | Vrio [Member] | Venezuela
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Disposal Date			Jun. 30, 2020
Goodwill, Impairment Loss			$ 2,212
Noncontrolling interest	$ (105)		$ (105)
Latin America [Member] | Trade Names [Member] | Intangible Assets, Amortization Period [Member]
Change in Accounting Estimate [Line Items]
Change in Accounting Estimate, Description			During the first quarter of 2020, we reassessed and changed the estimated economic lives of certain trade names in our Latin America business from indefinite to finite-lived and began amortizing them using the straight-line method over their average remaining economic life of 15 years.
Estimated economic useful life			15 years
ASU 2016-13 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
ASU Adoption Date [CCYY-MM-DD format]					Jan. 01, 2020
ASU Early Adoption [true/false]					false
Transition Option Elected [Prospective/Retrospective/Modified Prospective/Modified Retrospective]					Modified Retrospective
Prior Period Not Restated [true/false]			true
Significant effect on the financial statements [Yes/No]			No
Retained earnings					$ (293)
Allowance for doubtful accounts					395
Contract asset					(10)
Deferred income taxes					(105)
Noncontrolling interest					$ (7)

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share
Net income	$ 1,563	$ 3,974	$ 6,526	$ 8,322
Less: Net income attributable to noncontrolling interest	(282)	(261)	(635)	(513)
Net Income attributable to AT&T	1,281	3,713	5,891	7,809
Less: Preferred stock dividends	(52)	0	(84)	0
Net income attributable to common stock	1,229	3,713	5,807	7,809
Share-based payment	5	4	11	10
Numerator for diluted earnings per share	$ 1,234	$ 3,717	$ 5,818	$ 7,819
Weighted average number of common shares outstanding	7,145	7,323	7,166	7,318
Share-based payment (in shares)	25	30	26	29
Denominator for diluted earnings per share	7,170	7,353	7,192	7,347
Basic earnings per share attributable to Common Stock	$ 0.17	$ 0.51	$ 0.81	$ 1.06
Diluted earnings per share attributable to Common Stock	$ 0.17	$ 0.51	$ 0.81	$ 1.06

XML

Earnings Per Share (Narrative) (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Line Items]
Repurchase of common stock		$ 5,480	$ 240
Stock Repurchase Program [Member]
Earnings Per Share [Line Items]
Repurchase of common stock	$ 4,000
Repurchase of common stock (in shares)	104,800

XML

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, beginning balance				$ 5,470	$ 4,249
Other comprehensive income (loss) before reclassification, net of tax				(4,436)	(289)
Amounts reclassifed from accumulated OCI, net of tax				(905)	(671)
Net other comprehensive income (loss), net of tax		$ 514	$ (1,056)	(5,341)	(960)
Accumulated other comprehensive income, ending balance		129	3,289	129	3,289
Foreign Currency Translation Adjustment [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, beginning balance				(3,056)	(3,084)
Other comprehensive income (loss) before reclassification, net of tax				(1,490)	159
Amounts reclassifed from accumulated OCI, net of tax	[1]			0	0
Net other comprehensive income (loss), net of tax				(1,490)	159
Accumulated other comprehensive income, ending balance		(4,546)	(2,925)	(4,546)	(2,925)
Net Unrealized Gains (Losses) on Securities [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, beginning balance				48	(2)
Other comprehensive income (loss) before reclassification, net of tax				80	42
Amounts reclassifed from accumulated OCI, net of tax	[1]			0	0
Net other comprehensive income (loss), net of tax				80	42
Accumulated other comprehensive income, ending balance		128	40	128	40
Net Unrealized Gains (Losses) on Derivative Instruments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, beginning balance				(37)	818
Other comprehensive income (loss) before reclassification, net of tax				(3,026)	(490)
Amounts reclassifed from accumulated OCI, net of tax	[2]			17	17
Net other comprehensive income (loss), net of tax				(3,009)	(473)
Accumulated other comprehensive income, ending balance		(3,046)	345	(3,046)	345
Defined Benefit Postretirement Plans [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, beginning balance				8,515	6,517
Other comprehensive income (loss) before reclassification, net of tax				0	0
Amounts reclassifed from accumulated OCI, net of tax	[3]			(922)	(688)
Net other comprehensive income (loss), net of tax				(922)	(688)
Accumulated other comprehensive income, ending balance		$ 7,593	$ 5,829	$ 7,593	$ 5,829

[1] (Gains) losses are included in "Other income (expense) - net" in the consolidated statements of income.

[2] (Gains) losses are included in "Interest expense" in the consolidated statements of income (see Note 7).

[3] The 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).

XML

Segment Information (Summary Of Operating Revenues And Expenses) (Narrative) (Details)	6 Months Ended
	Jun. 30, 2020
Segment Information
Number of Reportable Segments	3

XML

Segment Information (Summary Of Operating Revenues And Expenses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information [Line Items]
Revenue	$ 40,950	$ 44,957	$ 83,729	$ 89,784
Operations and Support Expenses	30,133	30,356	58,204	60,744
EBITDA	10,817	14,601	25,525	29,040
Depreciation and Amortization	7,285	7,101	14,507	14,307
Operating Income (Loss)	3,532	7,500	11,018	14,733
Equity in Net Income (Loss) of Affiliates	(10)	40	(16)	33
Segment Contribution	2,498	5,073	8,763	10,444
Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	41,638	45,859	85,325	91,551
Operations and Support Expenses	26,774	30,142	55,369	60,486
EBITDA	14,864	15,717	29,956	31,065
Depreciation and Amortization	5,048	4,972	10,127	9,986
Operating Income (Loss)	9,816	10,745	19,829	21,079
Equity in Net Income (Loss) of Affiliates	12	67	31	134
Segment Contribution	9,828	10,812	19,860	21,213
Consolidations [Member]
Segment Reporting Information [Line Items]
Operating Income (Loss)	(589)	(485)	(1,162)	(917)
Eliminations and consolidations [Member]
Segment Reporting Information [Line Items]
Revenue	(1,125)	(1,322)	(2,421)	(2,578)
Operations and Support Expenses	(869)	(961)	(1,791)	(1,899)
EBITDA	(256)	(361)	(630)	(679)
Depreciation and Amortization	(1)	(1)	(1)	(1)
Operating Income (Loss)	(255)	(360)	(629)	(678)
Certain Significant Items [Member]
Segment Reporting Information [Line Items]
Revenue	0	0	0	0
Operations and Support Expenses	3,084	94	2,426	342
EBITDA	(3,084)	(94)	(2,426)	(342)
Depreciation and Amortization	0	0	0	0
Operating Income (Loss)	(3,084)	(94)	(2,426)	(342)
Communications [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	33,592	35,267	67,841	70,436
Operations and Support Expenses	20,841	22,012	42,252	44,612
EBITDA	12,751	13,255	25,589	25,824
Depreciation and Amortization	4,639	4,584	9,274	9,142
Operating Income (Loss)	8,112	8,671	16,315	16,682
Equity in Net Income (Loss) of Affiliates	0	0	0	0
Segment Contribution	8,112	8,671	16,315	16,682
Communications [Member] | Mobility [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	17,149	17,292	34,551	34,655
Operations and Support Expenses	9,332	9,522	18,901	19,563
EBITDA	7,817	7,770	15,650	15,092
Depreciation and Amortization	2,012	2,003	4,057	4,016
Operating Income (Loss)	5,805	5,767	11,593	11,076
Equity in Net Income (Loss) of Affiliates	0	0	0	0
Segment Contribution	5,805	5,767	11,593	11,076
Communications [Member] | Entertainment Group [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	10,069	11,368	20,584	22,696
Operations and Support Expenses	7,730	8,515	15,621	17,042
EBITDA	2,339	2,853	4,963	5,654
Depreciation and Amortization	1,309	1,339	2,598	2,662
Operating Income (Loss)	1,030	1,514	2,365	2,992
Equity in Net Income (Loss) of Affiliates	0	0	0	0
Segment Contribution	1,030	1,514	2,365	2,992
Communications [Member] | Business Wireline [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	6,374	6,607	12,706	13,085
Operations and Support Expenses	3,779	3,975	7,730	8,007
EBITDA	2,595	2,632	4,976	5,078
Depreciation and Amortization	1,318	1,242	2,619	2,464
Operating Income (Loss)	1,277	1,390	2,357	2,614
Equity in Net Income (Loss) of Affiliates	0	0	0	0
Segment Contribution	1,277	1,390	2,357	2,614
WarnerMedia [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	6,814	8,835	14,662	17,640
Operations and Support Expenses	4,734	6,436	10,421	12,589
EBITDA	2,080	2,399	4,241	5,051
Depreciation and Amortization	167	104	330	260
Operating Income (Loss)	1,913	2,295	3,911	4,791
Equity in Net Income (Loss) of Affiliates	4	55	19	122
Segment Contribution	1,917	2,350	3,930	4,913
WarnerMedia [Member] | Turner [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	2,988	3,410	6,150	6,853
Operations and Support Expenses	1,347	2,217	3,057	4,353
EBITDA	1,641	1,193	3,093	2,500
Depreciation and Amortization	69	39	138	99
Operating Income (Loss)	1,572	1,154	2,955	2,401
Equity in Net Income (Loss) of Affiliates	0	11	6	36
Segment Contribution	1,572	1,165	2,961	2,437
WarnerMedia [Member] | Home Box Office [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	1,627	1,716	3,124	3,226
Operations and Support Expenses	1,489	1,131	2,542	2,052
EBITDA	138	585	582	1,174
Depreciation and Amortization	25	12	46	34
Operating Income (Loss)	113	573	536	1,140
Equity in Net Income (Loss) of Affiliates	(5)	15	15	30
Segment Contribution	108	588	551	1,170
WarnerMedia [Member] | Warner Bros. [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	3,256	3,389	6,496	6,907
Operations and Support Expenses	2,583	2,918	5,533	5,837
EBITDA	673	471	963	1,070
Depreciation and Amortization	40	31	81	83
Operating Income (Loss)	633	440	882	987
Equity in Net Income (Loss) of Affiliates	(19)	0	(27)	6
Segment Contribution	614	440	855	993
WarnerMedia [Member] | Other [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	(1,057)	320	(1,108)	654
Operations and Support Expenses	(685)	170	(711)	347
EBITDA	(372)	150	(397)	307
Depreciation and Amortization	33	22	65	44
Operating Income (Loss)	(405)	128	(462)	263
Equity in Net Income (Loss) of Affiliates	28	29	25	50
Segment Contribution	(377)	157	(437)	313
Latin America [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	1,232	1,757	2,822	3,475
Operations and Support Expenses	1,199	1,694	2,696	3,285
EBITDA	33	63	126	190
Depreciation and Amortization	242	284	523	584
Operating Income (Loss)	(209)	(221)	(397)	(394)
Equity in Net Income (Loss) of Affiliates	8	12	12	12
Segment Contribution	(201)	(209)	(385)	(382)
Latin America [Member] | Vrio [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	752	1,032	1,639	2,099
Operations and Support Expenses	661	881	1,444	1,747
EBITDA	91	151	195	352
Depreciation and Amortization	127	165	274	334
Operating Income (Loss)	(36)	(14)	(79)	18
Equity in Net Income (Loss) of Affiliates	8	12	12	12
Segment Contribution	(28)	(2)	(67)	30
Latin America [Member] | Mexico [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	480	725	1,183	1,376
Operations and Support Expenses	538	813	1,252	1,538
EBITDA	(58)	(88)	(69)	(162)
Depreciation and Amortization	115	119	249	250
Operating Income (Loss)	(173)	(207)	(318)	(412)
Equity in Net Income (Loss) of Affiliates	0	0	0	0
Segment Contribution	(173)	(207)	(318)	(412)
Corporate [Member]
Segment Reporting Information [Line Items]
Revenue	437	420	825	811
Corporate [Member] | Consolidations [Member] | Acquisition-related items [Member]
Segment Reporting Information [Line Items]
Revenue	0	(30)	0	(72)
Operations and Support Expenses	211	316	393	389
EBITDA	(211)	(346)	(393)	(461)
Depreciation and Amortization	2,145	1,960	4,201	3,948
Operating Income (Loss)	(2,356)	(2,306)	(4,594)	(4,409)
Corporate [Member] | Certain Significant Items [Member]
Segment Reporting Information [Line Items]
Revenue	437	450	825	883
Operations and Support Expenses	933	765	1,807	1,426
EBITDA	(496)	(315)	(982)	(543)
Depreciation and Amortization	93	170	180	374
Operating Income (Loss)	$ (589)	$ (485)	$ (1,162)	$ (917)

XML

Segment Information (Reconciliation Of Operating Income Loss to Consolidated Statement Of Income) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		$ 3,532	$ 7,500	$ 11,018	$ 14,733
Interest expense		2,041	2,149	4,059	4,290
Equity in net income (loss) of affiliates		(10)	40	(16)	33
Other income (expense) - net		1,017	(318)	1,820	(32)
Income Before Income Taxes		2,498	5,073	8,763	10,444
Operating Segments [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		9,816	10,745	19,829	21,079
Equity in net income (loss) of affiliates		12	67	31	134
Income Before Income Taxes		9,828	10,812	19,860	21,213
Operating Segments [Member] | Communications [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		8,112	8,671	16,315	16,682
Equity in net income (loss) of affiliates		0	0	0	0
Income Before Income Taxes		8,112	8,671	16,315	16,682
Operating Segments [Member] | WarnerMedia [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		1,913	2,295	3,911	4,791
Equity in net income (loss) of affiliates		4	55	19	122
Income Before Income Taxes		1,917	2,350	3,930	4,913
Operating Segments [Member] | Latin America [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(209)	(221)	(397)	(394)
Equity in net income (loss) of affiliates		8	12	12	12
Income Before Income Taxes		(201)	(209)	(385)	(382)
Certain Significant Items [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(3,084)	(94)	(2,426)	(342)
Certain Significant Items [Member] | Corporate and Other [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(589)	(485)	(1,162)	(917)
Certain Significant Items [Member] | Merger and intergration items [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(211)	(346)	(393)	(461)
Certain Significant Items [Member] | Amortization of intangibles acquired [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(2,145)	(1,960)	(4,201)	(3,948)
Certain Significant Items [Member] | Impairments [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(2,319)	0	(2,442)	0
Certain Significant Items [Member] | Gain on spectrum transactions [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income	[1]	0	0	900	0
Certain Significant Items [Member] | Employee separate costs and benefit-related losses [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(765)	(94)	(884)	(342)
Certain Significant Items [Member] | Segment equity in net (income) loss of affiliates
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(12)	(67)	(31)	(134)
Consolidations [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		(589)	(485)	(1,162)	(917)
Eliminations and consolidations [Member]
Segment Reporting Reconciling Item For Operating Income (Loss) From Segment To Consolidated Statements Of Income [Line Items]
AT&T Operating Income		$ (255)	$ (360)	$ (629)	$ (678)

[1] Included as a reduction of "Selling, general and administrative expenses" in the consolidated statement of income.

XML

Segment Information (Intersegment Details) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues [Abstract]
Total revenues	$ (40,950)	$ (44,957)	$ (83,729)	$ (89,784)
Operating Segments [Member]
Revenues [Abstract]
Total revenues	(41,638)	(45,859)	(85,325)	(91,551)
Total Intersegment Revenues [Member]
Revenues [Abstract]
Total revenues	776	869	1,595	1,727
Eliminations and consolidations [Member]
Revenues [Abstract]
Total revenues	1,125	1,322	2,421	2,578
Communications [Member] | Operating Segments [Member]
Revenues [Abstract]
Total revenues	(33,592)	(35,267)	(67,841)	(70,436)
Communications [Member] | Total Intersegment Revenues [Member]
Revenues [Abstract]
Total revenues	2	8	4	8
WarnerMedia [Member] | Operating Segments [Member]
Revenues [Abstract]
Total revenues	(6,814)	(8,835)	(14,662)	(17,640)
WarnerMedia [Member] | Total Intersegment Revenues [Member]
Revenues [Abstract]
Total revenues	774	861	1,591	1,719
Latin America [Member] | Operating Segments [Member]
Revenues [Abstract]
Total revenues	(1,232)	(1,757)	(2,822)	(3,475)
Latin America [Member] | Total Intersegment Revenues [Member]
Revenues [Abstract]
Total revenues	0	0	0	0
Consolidations [Member]
Revenues [Abstract]
Total revenues	(437)	(420)	(825)	(811)
Consolidations [Member] | Total Intersegment Revenues [Member]
Revenues [Abstract]
Total revenues	$ 349	$ 453	$ 826	$ 851

XML

Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Contract with Customer, Asset and Liability [Abstract]
Beginning of period contract liability recorded as customer contract revenue during period	$ 5,004
Contract asset balance - current portion (in millions)	1,638	$ 1,611
Contract liability balance - current portion (in millions)	5,616	$ 5,939
Revenue, Performance Obligation [Abstract]
Aggregate amount of the transaction price allocated to remaining performance obligations (in millions)	$ 36,362
Aggregate amount of the transaction price allocated to remaining performance obligations (percentage)	82.00%
Deferred Customer Contract Acquisition Costs [Member]
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization Method	For contracts with an estimated amortization period of less than one year, we expense incremental costs immediately.
Deferred Customer Contract Acquisition Costs [Member] | Minimum [Member]
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization Period	3 years
Deferred Customer Contract Acquisition Costs [Member] | Maximum [Member]
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization Period	5 years
Deferred Customer Contract Fulfillment Cost [Member]
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization Method	For contracts with an estimated amortization period of less than one year, we expense incremental costs immediately.
Deferred Customer Contract Fulfillment Cost [Member] | Minimum [Member]
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization Period	3 years
Deferred Customer Contract Fulfillment Cost [Member] | Maximum [Member]
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization Period	5 years

XML

Revenue Recognition (Revenue Categories) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Total operating revenues	$ 40,950	$ 44,957	$ 83,729	$ 89,784
Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	14,134	14,382	28,610	28,508
Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	5,422	5,331	10,820	10,586
Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	2,779	2,989	5,623	6,076
Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	10,766	12,204	22,095	24,364
Content
Disaggregation of Revenue [Line Items]
Total operating revenues	1,413	2,407	3,276	5,058
Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	1,233	1,841	2,777	3,613
Other
Disaggregation of Revenue [Line Items]
Total operating revenues	1,304	1,869	2,733	3,502
Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	3,899	3,934	7,795	8,077
Corporate and Other [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	437	420	825	811
Corporate and Other [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	178	150	295	272
Corporate and Other [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	10	14	24	27
Corporate and Other [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	152	7	286	14
Corporate and Other [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Corporate and Other [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Corporate and Other [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Corporate and Other [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	62	210	145	419
Corporate and Other [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	35	39	75	79
Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	41,638	45,859	85,325	91,551
Operating Segments [Member] | Communications [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	33,592	35,267	67,841	70,436
Operating Segments [Member] | Communications [Member] | Mobility [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	17,149	17,292	34,551	34,655
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	13,611	13,753	27,503	27,315
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	58	71	134	138
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Mobility [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	3,480	3,468	6,914	7,202
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	10,069	11,368	20,584	22,696
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	2,092	2,109	4,201	4,179
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	560	658	1,141	1,341
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	6,682	7,636	13,664	15,360
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	294	399	707	749
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	397	563	816	1,063
Operating Segments [Member] | Communications [Member] | Entertainment Group [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	44	3	55	4
Operating Segments [Member] | Communications [Member] | Business Wireline [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	6,374	6,607	12,706	13,085
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	3,320	3,208	6,595	6,380
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	2,067	2,324	4,196	4,721
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	782	897	1,535	1,647
Operating Segments [Member] | Communications [Member] | Business Wireline [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	205	178	380	337
Operating Segments [Member] | WarnerMedia [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	6,814	8,835	14,662	17,640
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	2,988	3,410	6,150	6,853
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	1,804	1,943	3,853	3,908
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	334	111	420	246
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	796	1,266	1,753	2,527
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	54	90	124	172
Operating Segments [Member] | WarnerMedia [Member] | Turner [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	1,627	1,716	3,124	3,226
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	1,441	1,516	2,779	2,850
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	181	198	338	371
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	5	2	7	5
Operating Segments [Member] | WarnerMedia [Member] | Home Box Office [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	3,256	3,389	6,496	6,907
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	16	23	26	44
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	3,179	3,175	6,239	6,507
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	1	10	3	20
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	60	181	228	336
Operating Segments [Member] | WarnerMedia [Member] | Warner Bros. [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	(1,057)	320	(1,108)	654
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	71	54	134	103
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	(1,516)	(237)	(2,162)	(389)
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	378	494	887	928
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	10	9	33	12
Operating Segments [Member] | WarnerMedia [Member] | Eliminations and other [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	1,232	1,757	2,822	3,475
Operating Segments [Member] | Latin America [Member] | Vrio [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	752	1,032	1,639	2,099
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	752	1,032	1,639	2,099
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Vrio [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	480	725	1,183	1,376
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	345	479	812	921
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Operating Segments [Member] | Latin America [Member] | Mexico [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	135	246	371	455
Eliminations and consolidations [Member]
Disaggregation of Revenue [Line Items]
Total operating revenues	(1,125)	(1,322)	(2,421)	(2,578)
Eliminations and consolidations [Member] | Wireless service
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Eliminations and consolidations [Member] | Advanced Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Eliminations and consolidations [Member] | Legacy Voice and Data
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Eliminations and consolidations [Member] | Subscription
Disaggregation of Revenue [Line Items]
Total operating revenues	0	0	0	0
Eliminations and consolidations [Member] | Content
Disaggregation of Revenue [Line Items]
Total operating revenues	(765)	(840)	(1,559)	(1,677)
Eliminations and consolidations [Member] | Advertising
Disaggregation of Revenue [Line Items]
Total operating revenues	(294)	(399)	(707)	(749)
Eliminations and consolidations [Member] | Other
Disaggregation of Revenue [Line Items]
Total operating revenues	(66)	(83)	(155)	(152)
Eliminations and consolidations [Member] | Equipment
Disaggregation of Revenue [Line Items]
Total operating revenues	$ 0	$ 0	$ 0	$ 0

XML

Revenue Recognition (Deferred Contract Acquisition and Fulfillment Costs) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Deferred Customer Contract Acquisition Costs [Member]
Capitalized Contract Cost, Net [Abstract]
Capitalized Contract Cost, Net (in millions)	$ 5,747		$ 5,453
Capitalized Contract Cost, Amortization (in millions)	1,278	$ 1,026
Deferred Customer Contract Acquisition Costs [Member] | Other Current Assets [Member]
Capitalized Contract Cost, Net [Abstract]
Capitalized Contract Cost, Net (in millions)	2,630		2,462
Deferred Customer Contract Acquisition Costs [Member] | Other Assets [Member]
Capitalized Contract Cost, Net [Abstract]
Capitalized Contract Cost, Net (in millions)	3,117		2,991
Deferred Customer Contract Fulfillment Cost [Member]
Capitalized Contract Cost, Net [Abstract]
Capitalized Contract Cost, Net (in millions)	10,342		10,958
Capitalized Contract Cost, Amortization (in millions)	2,636	$ 2,381
Deferred Customer Contract Fulfillment Cost [Member] | Other Current Assets [Member]
Capitalized Contract Cost, Net [Abstract]
Capitalized Contract Cost, Net (in millions)	4,362		4,519
Deferred Customer Contract Fulfillment Cost [Member] | Other Assets [Member]
Capitalized Contract Cost, Net [Abstract]
Capitalized Contract Cost, Net (in millions)	$ 5,980		$ 6,439

XML

Revenue Recognition (Contract Assets and Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Contract with Customer, Asset and Liability [Abstract]
Contract asset	$ 2,546	$ 2,472
Contract liability	$ 6,533	$ 6,999

XML

Pension And Postretirement Benefits (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net supplemental retirement pension benefits costs	$ 19	$ 25	$ 38	$ 50

XML

Pension And Postretirement Benefits (Pension And Postretirement Benefit Costs Included In Operating Expenses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Defined Benefit Plan Disclosure [Line Items]
Actuarial (gain) loss			$ 0	$ 2,131
Qualified Plan [Member] | Funded Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net (credit) cost	$ (749)	$ 1,268	(1,496)	1,327
Pension Benefit [Member] | Qualified Plan [Member] | Funded Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost - benefits earned during the period	258	243	515	483
Interest cost on benefit obligation	422	508	844	1,057
Expected return on assets	(890)	(880)	(1,779)	(1,731)
Amortization of prior service credit	(29)	(24)	(57)	(57)
Actuarial (gain) loss	0	1,699	0	2,131
Net (credit) cost	(239)	1,546	(477)	1,883
Postretirement Benefit [Member] | Qualified Plan [Member] | Funded Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost - benefits earned during the period	13	18	26	36
Interest cost on benefit obligation	104	186	208	372
Expected return on assets	(45)	(56)	(89)	(112)
Amortization of prior service credit	(582)	(426)	(1,164)	(852)
Net (credit) cost	$ (510)	$ (278)	$ (1,019)	$ (556)

XML

Fair Value Measurements And Disclosure (Narrative) (Details) € in Millions, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 EUR (€)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Fair Value Disclosures [Line Items]
Collateral received from counterparty				$ 16	$ 44
Collateral submitted to counterparty				694	204
Collateral contingently payable to the counterparty					76
Available-for-sale Securities Debt Securities				1,522	$ 1,444
Fixed income investments - maturities less than 1 year				64
Fixed income investments - maturities within 1 to 3 years				175
Fixed income investments - maturities within 3 to 5 years				156
Fixed income investments - maturities for 5 or more years				1,127
Anticipated reclassification of holding losses during the next 12 months - cash flow hedges				98
Net gains (losses) on net investment hedges recognized in accumulated OCI	$ (30)	$ (5)
Interest Rate Locks [Member]
Fair Value Disclosures [Line Items]
Payments for Hedge, Financing Activities	$ 731
Measurement Input, Entity Credit Risk [Member]
Fair Value Disclosures [Line Items]
Collateral contingently payable to the counterparty				5,487
Net Investment Hedge [Member]
Fair Value Disclosures [Line Items]
Debt Instrument, Face Amount | €			€ 1,450
DIRECTV [Member]
Fair Value Disclosures [Line Items]
Collateral contingently payable to the counterparty				$ 321

XML

Fair Value Measurements And Disclosure (Long-Term Debt And Other Financial Instruments) (Details) - USD ($) $ in Millions		Jun. 30, 2020	Dec. 31, 2019
Carrying Amount [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Notes and debentures	[1]	$ 164,099	$ 161,109
Commercial paper		3,001	0
Bank borrowings		0	4
Investment securities	[2]	3,632	3,723
Fair Value [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Commercial paper		3,001	0
Bank borrowings		0	4
Investment securities	[2]	3,632	3,723
Fair Value [Member] | Level 2 [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Notes and debentures	[1]	$ 190,284	$ 182,124

[1] Includes credit agreement borrowings.

[2] Excludes investments accounted for under the equity method.

XML

Fair Value Measurements And Disclosure (Fair Value Leveling) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities Debt Securities	$ 1,522	$ 1,444
Securities Investment [Member] | United States [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	832	844
Securities Investment [Member] | Non-US [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	141	183
Fixed Income Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	230	229
Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)		2
Liability Derivatives (at fair value)	(3)
Cross-Currency Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	67	172
Liability Derivatives (at fair value)	(6,767)	(3,187)
Interest Rate Locks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability Derivatives (at fair value)		(95)
Foreign Exchange Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	14	89
Liability Derivatives (at fair value)	(10)
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities Debt Securities	0	0
Level 1 [Member] | Securities Investment [Member] | United States [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	832	844
Level 1 [Member] | Securities Investment [Member] | Non-US [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	141	183
Level 1 [Member] | Fixed Income Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	230	229
Level 1 [Member] | Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)		0
Liability Derivatives (at fair value)	0
Level 1 [Member] | Cross-Currency Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	0	0
Liability Derivatives (at fair value)	0	0
Level 1 [Member] | Interest Rate Locks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability Derivatives (at fair value)		0
Level 1 [Member] | Foreign Exchange Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	0	0
Liability Derivatives (at fair value)	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities Debt Securities	1,522	1,444
Level 2 [Member] | Securities Investment [Member] | United States [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	0	0
Level 2 [Member] | Securities Investment [Member] | Non-US [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	0	0
Level 2 [Member] | Fixed Income Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	0	0
Level 2 [Member] | Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)		2
Liability Derivatives (at fair value)	(3)
Level 2 [Member] | Cross-Currency Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	67	172
Liability Derivatives (at fair value)	(6,767)	(3,187)
Level 2 [Member] | Interest Rate Locks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability Derivatives (at fair value)		(95)
Level 2 [Member] | Foreign Exchange Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	14	89
Liability Derivatives (at fair value)	(10)
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities Debt Securities	0	0
Level 3 [Member] | Securities Investment [Member] | United States [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	0	0
Level 3 [Member] | Securities Investment [Member] | Non-US [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	0	0
Level 3 [Member] | Fixed Income Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities (at fair value)	0	0
Level 3 [Member] | Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)		0
Liability Derivatives (at fair value)	0
Level 3 [Member] | Cross-Currency Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	0	0
Liability Derivatives (at fair value)	0	0
Level 3 [Member] | Interest Rate Locks [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability Derivatives (at fair value)		0
Level 3 [Member] | Foreign Exchange Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset Derivatives (at fair value)	0	$ 0
Liability Derivatives (at fair value)	$ 0

XML

Fair Value Measurement and Disclosure (Gain and Losses on Equity Securities) (Details) - Equity Securities [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Schedule of Available-for-sale Securities [Line Items]
Total gains (losses) recognized on equity securities	$ 161	$ 50	$ (42)	$ 210
Gains (Losses) recognized on equity securities sold	9	9	(24)	27
Unrealized gains (losses) recognized on equity securities held at end of period	$ 152	$ 41	$ (18)	$ 183

XML

Fair Value Measurements And Disclosure (Notional Amount Of Our Outstanding Derivative Positions) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Notional Amount of Outstanding Derivative Positions	$ 45,925	$ 46,947
Interest Rate Swaps [Member]
Derivative [Line Items]
Notional Amount of Outstanding Derivative Positions	21	853
Cross-Currency Swaps [Member]
Derivative [Line Items]
Notional Amount of Outstanding Derivative Positions	45,606	42,325
Interest Rate Locks [Member]
Derivative [Line Items]
Notional Amount of Outstanding Derivative Positions	0	3,500
Foreign Exchange Contracts [Member]
Derivative [Line Items]
Notional Amount of Outstanding Derivative Positions	$ 298	$ 269

XML

Fair Value Measurements And Disclosure (Effect Of Derivatives On The Consolidated Statements Of Income) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Fair Value Hedging Relationships [Member] | Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on interest rate swaps	$ (14)	$ 35	$ (4)	$ 59
Gain (Loss) on long-term debt	14	(35)	4	(59)
Cash Flow Hedging Relationships [Member] | Cross-Currency Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) recognized in accumulated OCI	809	(763)	(3,170)	(595)
Cash Flow Hedging Relationships [Member] | Interest Rate Locks [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) recognized in accumulated OCI	(12)	(23)	(648)	(23)
Cash Flow Hedging Relationships [Member] | Interest Rate Locks [Member] | Interest expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest income (expense) reclassified from accumulated OCI into income	(18)	(16)	(34)	(32)
Cash Flow Hedging Relationships [Member] | Foreign Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) recognized in accumulated OCI	2	4	(11)	(3)
Cash Flow Hedging Relationships [Member] | Foreign Exchange Contracts [Member] | Other income expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest income (expense) reclassified from accumulated OCI into income	$ (3)	$ 7	$ 13	$ 10

XML

Acquisitions, Dispositions And Other Adjustments (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended	6 Months Ended
	Jun. 30, 2020	May 31, 2020	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Acquisition and Dispositions [Line Items]
Acquisitions, net of cash acquired				$ 1,174	$ 320
Acquisition of business - Goodwill	$ 143,651		$ 143,651	143,651		$ 146,241
FCC Licenses [Member]
Acquisition and Dispositions [Line Items]
Acquisition of business - acquisition date	Jun. 30, 2020
Payments to Acquire Intangible Assets				2,379
37 GHz Licenses [Member]
Acquisition and Dispositions [Line Items]
Payments to Acquire Intangible Assets			949	1,186
FiberTower Corporation [Member] | FCC Licenses [Member]
Acquisition and Dispositions [Line Items]
Value of consideration received in a noncash transaction				1,200
FiberTower Corporation [Member] | 39 GHz Licenses [Member]
Acquisition and Dispositions [Line Items]
Indefinite-lived Intangible Assets - value	$ 300		$ 300	300
Gain (Loss) on disposition of intangible asset				$ 900
WarnerMedia [Member] | HBO LAG [Member]
Acquisition and Dispositions [Line Items]
Acquisition of business - acquisition date		May 31, 2020
Acquisitions, net of cash acquired		$ 141
Acquisition of business, remeasurement gain		68
Acquisition of business - Goodwill		343
Acquisition of intangible assets, trade names		640
WarnerMedia [Member] | HBO LAG [Member] | Distribution Networks - Net
Acquisition and Dispositions [Line Items]
Acquisition of other intangible assets		$ 271

XML

Sale Of Equipment Installment Receivable (Equipment Installment and AT&T Revolving Programs) (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Payable And Accrued Liabilities, Current	$ 41,881			$ 41,881		$ 45,956
Guarantee Obligations [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Payable And Accrued Liabilities, Current	213			213		148
Guarantee Obligation	315			315		384
Finance Receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Supplemental Deferred Purchase Price	232		$ 261	585	$ 570
Other Assets [Member] | Deferred Purchase Price [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other Assets	2,319			2,319		2,336
Other Current Assets [Member] | Deferred Purchase Price [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other Assets	1,591			1,591		1,569
Revolving [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Agreement Amount With Purchaser To Transfer Financial Assets Accounted For As Sales		$ 5,300				$ 4,300
Receivables pledged as collateral	$ 3,745			$ 3,745

XML

Sale Of Equipment Installment Receivables (Equipment Installment and AT&T Revolving Programs) (Details) - USD ($) $ in Millions		Jun. 30, 2020	Dec. 31, 2019
Finance Receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross receivables:		$ 3,931	$ 4,576
Outstanding portfolio of receivables derecognized from our consolidated balance sheets		8,917	9,713
Cash proceeds received, net of remittances	[1]	6,429	7,211
Finance Receivables [Member] | Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable		2,056	2,467
Finance Receivables [Member] | Trade receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable		496	477
Finance Receivables [Member] | Other Noncurrent Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross receivables:		1,379	1,632
Trade receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross receivables:		3,745	3,324
Outstanding portfolio of receivables derecognized from our consolidated balance sheets		5,300	4,300
Cash proceeds received, net of remittances	[1]	5,300	4,300
Trade receivables [Member] | Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable		0	0
Trade receivables [Member] | Trade receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable		3,547	2,809
Trade receivables [Member] | Other Noncurrent Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross receivables:		$ 198	$ 515

[1] Represents amounts to which financial institutions remain entitled, excluding the deferred purchase price.

XML

Sale Of Equipment Installment Receivables (Finance Receivables) (Details) - Finance Receivables [Member] - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross receivables sold		$ 1,506	$ 2,244	$ 3,873	$ 4,945
Net receivables sold	[1]	1,449	2,133	3,722	4,679
Cash proceeds received		1,225	1,920	3,175	4,195
Deferred purchase price recorded		232	261	585	570
Guarantee obligation recorded		$ 27	$ 93	$ 71	$ 194

[1] Receivables net of allowance, imputed interest and equipment trade-in right guarantees.

XML

Sale Of Equipment Installment Receivables (Finance Receivables Repurchased) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair value of repurchased receivables		$ 285	$ 235	$ 573	$ 658
Carrying value of deferred purchase price		281	225	558	632
Gain (Loss) on repurchases	[1]	$ 4	$ 10	$ 15	$ 26

[1] These gains are included in “Selling, general and administrative” in the consolidated statements of income.

XML

Sale of Equipment Installment Receivables (Summary of Receivables Sold) (Details) - WarnerMedia [Member] - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Transfer Of Financial Assets Accounted For As Sales [Line Items]
Gross receivables sold/cash proceeds received	[1]	$ 3,805	$ 4,452	$ 8,027	$ 5,852
Collections reinvested under revolving agreement		3,805	2,127	7,027	2,127
Net cash proceeds received (remitted)		0	2,325	1,000	3,725
Net receivables sold	[2]	3,819	4,134	7,957	5,497
Guarantee obligation recorded		(12)	384	114	436
Initial sale of receivables		$ 0	$ 2,325	$ 1,000	$ 3,725

[1] Includes initial sale of receivables of $0 and $2,325 for the three months and $1,000 and $3,725 for the six months ended June 30, 2020 and 2019, respectively.

[2] Receivables net of allowance, return and incentive reserves and imputed interest

XML

Leases (Narrative) (Details)	6 Months Ended
	Jun. 30, 2020
Leases [Line Items]
Operating lease, option to terminate leases	Some of our operating leases include options to terminate within one year.
Finance Lease, option to terminate leases	Some of our finance leases include options to terminate within one year.
Maximum [Member]
Leases [Line Items]
Operating Lease, remaining term of contract	15 years
Finance Lease, remaining term of contract	15 years

XML

Leases (Components of Lease Expense) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating Lease [Abstract]
Operating Lease Cost	$ 1,449	$ 1,610	$ 2,826	$ 2,852
Finance Lease [Abstract]
Amortization of right-of-use assets	73	70	140	136
Interest on lease obligation	36	42	77	84
Finance Lease [Member]
Finance Lease [Abstract]
Total finance lease cost	$ 109	$ 112	$ 217	$ 220

XML

Leases (Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Operating Lease [Abstract]
Operating Lease Right-of-Use Assets	$ 24,692	$ 24,039
Accounts payable and accrued liabilities	41,881	45,956
Operating lease liabilities	22,230	21,804
Total	25,704	25,255
Finance Lease [Abstract]
Property, plant and equipment, at cost	332,883	333,538
Accumulated depreciation and amortization	(203,938)	(203,410)
Property, plant and equipment - net	128,945	130,128
Current portion of long-term debt	180	162
Long-term debt	1,683	1,872
Total finance lease obligation	$ 1,863	$ 2,034
Operating Lease, Weighted Average Remaining Lease Term	8 years 6 months	8 years 4 months 24 days
Finance Lease, Weighted Average Remaining Lease Term	10 years 2 months 12 days	10 years 8 months 12 days
Operating Lease, Weighted Average Discount Rate, Percent	4.20%	4.70%
Finance Lease, Weighted Average Discount Rate, Percent	8.20%	8.50%
Operating Lease
Operating Lease [Abstract]
Accounts payable and accrued liabilities	$ 3,474	$ 3,451
Finance Lease
Finance Lease [Abstract]
Property, plant and equipment, at cost	3,468	3,534
Accumulated depreciation and amortization	(1,347)	(1,296)
Property, plant and equipment - net	$ 2,121	$ 2,238

XML

Leases (Future Minimum Maturities of Lease Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Operating Leases [Abstract]
Remainder of 2020	$ 2,447
2021	4,582
2022	4,277
2023	3,889
2024	3,357
Thereafter	13,031
Total lease payments	31,583
Less imputed interest	(5,879)
Total	25,704	$ 25,255
Finance Leases [Abstract]
Remainder of 2020	190
2021	309
2022	291
2023	262
2024	242
Thereafter	1,632
Total lease payments	2,926
Less inputed interest	(1,063)
Total	$ 1,863	$ 2,034

XML

Preferred Shares (Narrative) (Details) $ / shares in Units, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Jun. 30, 2020 € / shares
Class of Stock [Line Items]
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, par value | $ / shares	$ 1.00	$ 1
Preferred stock, dividend payment terms	So long as the preferred dividends are declared and paid on a timely basis on each series of preferred shares, there are no limitations on our ability to declare a dividend on or repurchase AT&T common shares.
Preferred Stock, Redemption Terms	The preferred shares are optionally redeemable by AT&T at the liquidation price generally on or after five years from the issuance date, or upon certain other contingent events.
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, par value | $ / shares	$ 1	$ 1
Preferred stock, outstanding (in shares)	48,000	48,000
Preferred stock, issued (in shares)	48,000	48,000
Preferred stock, value, issued | $	$ 0	$ 0
Preferred stock, liquidation preference per share | $ / shares	$ 25,000	$ 25,000
Preferred stock, dividend rate	5.00%	5.00%
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, par value | $ / shares	$ 1
Preferred stock, outstanding (in shares)	20,000	0
Preferred stock, issued (in shares)	20,000	0
Preferred stock, value, issued | $	$ 0	$ 0
Preferred stock, liquidation preference per share | € / shares			€ 100,000
Preferred stock, dividend rate	2.875%
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, par value | $ / shares	$ 1
Preferred stock, outstanding (in shares)	70,000	0
Preferred stock, issued (in shares)	70,000	0
Preferred stock, value, issued | $	$ 0	$ 0
Preferred stock, liquidation preference per share | $ / shares	$ 25,000
Preferred stock, dividend rate	4.75%

XML

Additional Financial Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 16,941	$ 8,423	$ 12,130	$ 5,204
Restricted cash in Other current assets	3	15	69	61
Restricted cash in Other Assets	87	216	96	135
Cash and cash equivalents and restricted cash	17,031	8,654	$ 12,295	$ 5,400
Cash Paid for Amounts Included in the Measurement of Lease Liabilities [Abstract]
Operating cash flows from operating leases	2,424	2,464
Operating lease right-of-use assets obtained in exchange for new operating lease obligations	2,895	3,899
Cash paid (refunded) during the year for:
Interest	4,202	4,410
Income taxes, net of refunds	$ (214)	$ (32)

XML

Additional Financial Information (Narrative) (Details) € in Millions, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2020 USD ($)	Jun. 30, 2020 EUR (€)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Apr. 01, 2020 USD ($)
Additional Financial Information [Line Items]
Long-Term Debt Obligation			$ 168,964	$ 168,964
Repayment of long-term debt				17,284	$ 16,124
Notes And Debentures [Member]
Additional Financial Information [Line Items]
Commercial paper			$ 2,960	$ 2,960
Notes And Debentures [Member] | Long-Term Debt Issuance [Member]
Additional Financial Information [Line Items]
Weighted Average Interest Rate			3.50%	3.50%
Notes And Debentures [Member] | Long-Term Debt Redemptions [Member]
Additional Financial Information [Line Items]
Weighted Average Interest Rate			3.40%	3.40%
Term Credit Agreements [Member]
Additional Financial Information [Line Items]
Repayment of long-term debt			$ 1,800
Term Credit Agreements [Member] | Bank of America, N.A. [Member]
Additional Financial Information [Line Items]
Short-Term Borrowings						$ 5,500
Repayment of Short Term	$ 5,500
AT&T Global Notes Due 2027 To 2060 [Member]
Additional Financial Information [Line Items]
Proceeds from Issuance of Debt			16,545
AT&T Global Notes Due 2028 To 2038 [Member]
Additional Financial Information [Line Items]
Proceeds from Issuance of Debt		€ 3,000	3,281
AT&T Global Notes Due 2020 To 2047 [Member]
Additional Financial Information [Line Items]
Repayment of long-term debt			12,689
Other Debt [Member]
Additional Financial Information [Line Items]
Repayment of long-term debt			$ 1,000
Vendor Financing Program [Member]
Additional Financial Information [Line Items]
Noncash Investing Activities				$ 1,680	$ 1,265

XML

Additional Financial Information - Subsequent Event (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended		6 Months Ended
	Aug. 31, 2020	Jul. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Subsequent Event [Line Items]
Repayment of long-term debt			$ 17,284	$ 16,124
Global Notes Due 2022 [Member]
Subsequent Event [Line Items]
Subsequent Event, Description		In July 2020, we completed redemptions of $4,264 of AT&T, WarnerMedia and DIRECTV notes due 2022, with an average interest rate of 3.4%.
Repayment of long-term debt		$ 4,264
Weighted Average Interest Rate		3.40%
AT&T Global Notes Due 2028 To 2061 [Member]
Subsequent Event [Line Items]
Subsequent Event, Description	In August 2020, we issued $11,000 of global notes due 2028 to 2061, with an average interest rate of 2.7%.
Proceeds from Issuance of Debt	$ 11,000
Weighted Average Interest Rate	2.70%
Subsequent Event [Member] | Global Notes Due 2022 [Member]
Subsequent Event [Line Items]
Subsequent Event, Date		Jul. 31, 2020
Subsequent Event [Member] | AT&T Global Notes Due 2028 To 2061 [Member]
Subsequent Event [Line Items]
Subsequent Event, Date	Aug. 31, 2020

XML

Label	Element	Value
Retained Earnings [Member]
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 0
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(293,000,000)
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	0
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	316,000,000
Noncontrolling Interest [Member]
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	0
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(7,000,000)
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	0
Cumulative effect of accounting changes, net of taxes	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 29,000,000