AT&T (T) 10-K risk factor changes: FY2023 vs FY2022

Adverse changes in the U.S. securities markets, [added: increasing] interest rates, rising inflation and medical costs could materially increase our benefit plan costs and future funding requirements.

Beginning in 2021 and continuing through the early part of [removed: 2023,] [added: 2024,] the costs of these inputs and the costs of labor necessary to develop, deploy and maintain our networks and our products and services [removed: rapidly] increased.

Adverse changes in global financial markets could limit our ability and our larger customers’ [added: and suppliers’] ability to access capital or increase the cost of capital needed to fund business operations.

During [removed: 2022,] [added: 2023,] uncertainty surrounding global growth rates, inflation, [added: and] an increasing interest rate environment [removed: and the impact of the COVID-19 pandemic] continued to produce volatility in the credit, currency and equity markets.

In addition, we contract with large financial institutions to support our own treasury operations, including contracts to hedge our exposure [removed: on] [added: to] interest rates and foreign exchange and the funding of credit lines and other short-term debt obligations, including commercial paper.

A company’s cost of borrowing is [removed: also] affected by evaluations given by various credit rating agencies and these agencies have been applying tighter credit standards when evaluating debt levels and future growth prospects.

[removed: Involvement with foreign firms also exposes us to the risk of being unable to control the] actions of those firms and therefore exposes us to risks associated with our obligation to comply with the Foreign Corrupt Practices Act (FCPA).

Our business is subject to risks related to [removed: the COVID-19 virus.][added: public health crises.]

[removed: The COVID-19 pandemic] [added: Public health crises] and resulting mitigation measures have [removed: caused,] [added: in the past,] and may [removed: continue to cause,] [added: in the future, cause] a negative effect on our operating results.

These effects include, but are not limited [removed: to] [added: to,] closure of retail stores; impact on our customers’ ability to pay for our products and services; reduction in international roaming revenue; and reduced staffing levels in call centers and field operations.

Adverse regulations and rulings by the FCC relating to broadband and wireless [removed: deployment] [added: deployment, including the proposed rules regarding net neutrality,] could impede our ability to manage our networks and recover costs and lessen incentives to invest in our networks.

[added: The continuing growth of IP-based services, especially when accessed by wireless] devices, has created or potentially could create conflicting regulation between the FCC and various state and local authorities, which may involve lengthy litigation to resolve and may result in outcomes unfavorable to us.

In addition, in response to the [removed: FAA] [added: Federal Aviation Administration (FAA)] questioning whether [removed: our 5G] [added: cell sites transmitting] C-band [removed: launch] [added: spectrum] could impact radio altimeter equipment on airplanes, we voluntarily committed to [removed: a series of] temporary, precautionary [removed: measures, in addition to deferring turning on a limited number of towers around] [added: measures near] certain airports [removed: to allow the FAA more time] [added: through January 1, 2028, which may have limited impacts] to [removed: evaluate.][added: deployments and services.]

Enactment of new privacy laws and regulations could, among other things, adversely affect our ability to collect [added: data] and offer targeted advertisements or result in additional costs of compliance or litigation.

Further, customers, consumers, [removed: investors] [added: investors, governments] and other stakeholders are increasingly focusing on environmental issues, including climate change, water use, deforestation, plastic waste and other sustainability concerns.

The COVID-19 pandemic [removed: has] accelerated these changes and also resulted in higher network utilization, as more customers consume bandwidth from changes in work and learn from home trends.

[removed: In order to stem] broadband subscriber losses to cable competitors in our non-fiber wireline areas, we have been expanding our all-fiber wireline network.

We expect market saturation to continue [removed: to] [added: which may] cause the wireless industry’s customer growth rate to moderate in comparison with historical growth rates, leading to increased competition for customers.

Our ability to [removed: respond] [added: address these issues] will depend, among other things, on continued improvement in network quality and customer service and our ability to price our products and services competitively as well as effective marketing of attractive products and services.

We may need to spend significant amounts of money to protect our [added: intellectual property] rights.

Incidents [added: or public assertions] leading to damage to our [removed: reputation,] [added: reputation or questions about our business conduct,] and any resulting lawsuits, claims or other legal proceedings, could have a material adverse effect on our business.

Negative public opinion [added: and increased regulatory scrutiny or litigation] could result from actual or alleged conduct by us or those currently or formerly associated with us, and from any number of activities or circumstances, including operations, employment-related offenses (such as sexual harassment and discrimination), regulatory compliance and actions taken by regulators or others in response to such conduct.

Any damage to our reputation or payments of significant [removed: amounts,] [added: amounts as a result of any of these issues,] even if reserved, could materially and adversely affect our business, [added: ability to serve customers,] reputation, financial condition, results of operations and cash flows.

We have spent, and continue to spend, significant capital to shift our wired network to software-based technology [removed: to manage this demand] and are expanding 5G wireless technology to address these [removed: consumer] demands.

These suppliers could fail to provide equipment on a timely or cost effective basis, or fail to meet our performance expectations, for a number of reasons, including difficulties in obtaining export licenses for certain technologies, inflationary pressures, inability to secure component parts, general business disruption, natural disasters, safety issues, economic and political instability, including the outbreak of war and other hostilities, and public health [removed: emergencies such as the COVID-19 pandemic.][added: emergencies.]

We are transitioning services from our [removed: old] copper-based network and seeking regulatory approvals, where needed, at both the state and federal levels.

We have been and will be undertaking certain transformation initiatives, including the WarnerMedia/Discovery Transaction, which are designed to reduce costs, [added: enable legacy rationalization,] streamline and modernize distribution and customer service, remove redundancies and simplify and improve processes and support functions.

We are subject to a number of lawsuits both in the United States and in foreign countries, including, at any particular time, claims relating to antitrust, patent infringement, wage and hour, personal injury, [added: environmental,] customer privacy violations, [added: cyberattacks,] regulatory proceedings, breach of contract, and selling and collection practices.

In the wireless [added: and wireline] area, we also face current and potential litigation relating to alleged adverse health effects on customers or employees who use such technologies including, for example, wireless devices.

Cyberattacks impacting our networks or systems may have a material adverse [removed: affect] [added: effect] on our operations.

[removed: Cyberattacks,] [added: Cyberattacks –] including through the use of malware, computer viruses, distributed denial of services attacks, ransomware attacks, credential harvesting, social engineering and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service [removed: providers,] [added: providers –] could have a material adverse effect on our operations.

Cyberattacks can cause equipment or network failures, loss of information, including sensitive personal information of customers or employees or proprietary information, as well as disruptions to our or our customers’, suppliers’ or vendors’ operations, which could result in significant expenses, potential investigations and legal liability, a loss of [added: current or future customers and reputational damage.]

[removed: Our wired network in particular is] [added: As our networks evolve, they are] becoming increasingly reliant on software [removed: as it evolves] to handle growing demands for [removed: video transmission.][added: data consumption.]

Our business operations could be subject to interruption by equipment failures, power outages, terrorist or other hostile acts, [added: including acts of war,] and natural disasters, such as flooding, hurricanes and forest fires, whether caused by discrete severe weather events and/or precipitated by long-term climate change.

In many cases, the application of existing, newly enacted or amended tax laws (such as the U.S. Tax Cuts and Jobs Act of 2017 and the Inflation Reduction Act of 2022) may be uncertain and subject to differing interpretations, especially when evaluated against [removed: ever changing] [added: ever-changing] products and services provided by our global telecommunications and technology businesses.

In connection with the WarnerMedia/Discovery Transaction, AT&T received a favorable Private Letter Ruling from the [removed: IRS.][added: Internal Revenue Service (IRS).]

- Adverse [removed: economic,] [added: economic and] political [removed: and/or capital access changes or] [added: changes, including inflation and rising interest rates,] war or other [removed: hostilities in the markets served by us or in countries in which we have investments and/or operations, including inflationary pressures, the impact on customer demand] [added: hostilities,] and [removed: our ability] [added: public health emergencies,] and our [removed: suppliers’] ability to access financial markets at favorable rates and terms.

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

- The final outcome of FCC and other federal, state or foreign government agency proceedings (including judicial [removed: review, if any,] [added: review] of such proceedings) and legislative [added: and regulatory] efforts involving issues [removed: 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; rules concerning digital discrimination; competition policy; privacy; net neutrality; copyright protection; availability of new spectrum on fair and balanced terms; and wireless and satellite license awards and [removed: renewals.][added: renewals, and our response to such legislative and regulatory efforts.]

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

Most, if not all, of these factors are beyond our ability to control.

Involvement with foreign firms also exposes us to the risk of being unable to control the

While we currently do not believe the potential losses or costs associated with the physical effects of climate change will be material, it is difficult to accurately and precisely calculate the future impacts of the physical effects of climate change given the dynamic nature of climate change’s impacts on the environment.

In order to stem

Additionally, we may not be able to accurately predict future consumer demands or the success of new services in markets.

In 2023, *The* *Wall Street Journal* published a series of articles alleging that lead-clad telecommunications cables are a public-health hazard or may pose environmental risks.

We are currently subject to litigation and have received inquiries from government authorities as a result of these assertions.

We may be subject to additional litigation, government investigations and potentially new regulation or legislation relating to lead-clad cables.

We also have in the past, and may in the future, incur significantly higher expenses attributable to infrastructure investments and increased labor costs.

In some instances, we depend on key single-source suppliers to provide important inputs where there are few alternative suppliers available.

Further, we intend to use artificial intelligence (AI)-driven efficiencies in our network design, software development and customer support services.

The models used in those products, particularly generative AI models, may produce output or take action that is incorrect, release private or confidential information, reflect biases included in the data on which they are trained, infringe on the intellectual property rights of others, or be otherwise harmful.

Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures.

Further, the use of artificial intelligence and machine learning by cybercriminals may increase the frequency and severity of cybersecurity attacks against us or our suppliers, vendors and other service providers.

Additionally, as cyberattacks become increasingly sophisticated, a post-attack investigation may not be able to ascertain the entire scope of the attack’s impact.

Extensive and costly efforts are undertaken to develop and test systems before deployment and to conduct ongoing monitoring and updating to prevent and withstand such attacks.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| AT&T Inc. | | | | | | | | |

| Dollars in millions except per share amounts | | | | | | | | |

We recognize that most of these factors are beyond our ability to control and therefore we cannot predict an outcome.

The U.K. Financial Conduct Authority, which regulates the London Interbank Offering Rate (LIBOR), has announced that it intends to phase out LIBOR in 2023.

Although our securities and other debt obligations may provide for alternative methods of calculating the interest rate payable on such indebtedness, uncertainty as to the extent and manner of future changes may adversely affect the current trading market for LIBOR-based securities and the value of variable rate indebtedness in general.

We may also incur significantly higher expenses attributable to infrastructure investments required to meet higher network utilization from more customers consuming bandwidth from changes in work from home trends; extended cancellation periods; and increased labor costs if the COVID-19 pandemic continues for an extended period.

The COVID-19 pandemic and mitigation measures have caused, and may continue to cause, adverse impacts on global supply chains and economic conditions.

These impacts could affect our network development, deployment and maintenance, and the demand for our products and services.

The extent to which the COVID-19 pandemic impacts our business, results of operations, cash flows and financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning other strains of the virus and the actions to contain its impact.

The continuing growth of IP-based services, especially when accessed by wireless

These measures have been subsequently modified from time to time.

The FAA’s continued evaluation may impact our planned 5G C-band launch in certain areas.

We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.

Effective intellectual property protection may not be available in every country where we operate.

We strive to create a culture in which our colleagues act with integrity and respect and feel comfortable speaking up to report instances of misconduct or other concerns.

current or future customers and reputational damage.

The development and maintenance of systems to prevent such attacks is costly and requires ongoing monitoring and updating.

- 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.

- Our response to competition and regulatory, legislative and technological developments.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this document generally discusses [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] items and year-to-year comparisons between [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

Discussions of [removed: 2020] [added: 2021] items and year-to-year comparisons between [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] that are not included in this document can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form [removed: 10-K] [added: 10‑K] for the fiscal year ended December 31, [removed: 2021.][added: 2022.]

On April 8, 2022, we closed our transaction to combine substantially all of our [added: previous] WarnerMedia segment (WarnerMedia) with a subsidiary of Discovery, Inc (Discovery).

For discontinued operations, we also evaluated transactions that were components of AT&T’s single plan of a strategic shift, including dispositions that did not individually meet the criteria due to materiality, and [removed: have] determined discontinued operations to be comprised of WarnerMedia, Vrio, Xandr and Playdemic.

(See Notes 6 and [removed: 23)][added: 24)]

(See Note [removed: 6)][added: 22)]

| | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: 2022 vs. 2021] [added: 2023 vs. 2022] | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | |

| [removed: Operating Revenues] [added: Segment Operating revenues] | | | | | | | | | | | | | | | | | |

| Communications | | | $ | [removed: 117,067] [added: 118,038] | | $ | [removed: 114,730] [added: 117,067] | | $ | [removed: 109,965] [added: 114,730] | | [removed: 2.0] [added: 0.8] | | % | [removed: 4.3] [added: 2.0] | | % |

| Latin America | | | [removed: 3,144] [added: 3,932] | | | [removed: 2,747] [added: 3,144] | | | [removed: 2,562] [added: 2,747] | | | [removed: 14.5] [added: 25.1] | | | [removed: 7.2] [added: 14.5] | | |

| Corporate | | | [removed: 530] [added: 458] | | | [removed: 731] [added: 530] | | | [removed: 766] [added: 731] | | | [removed: (27.5)] [added: (13.6)] | | | [removed: (4.6)] [added: (27.5)] | | |

| Video | | | — | | | [removed: 15,513] [added: —] | | | [removed: 28,610] [added: 15,513] | | | — | | | [removed: (45.8)] [added: —] | | |

| Held-for-sale and other reclassifications | | | — | | | [removed: 453] [added: —] | | | [removed: 1,414] [added: 453] | | | — | | | [removed: (68.0)] [added: —] | | |

| Eliminations and consolidations | | | — | | | [removed: (136)] [added: —] | | | [removed: (267)] [added: (136)] | | | — | | | [removed: 49.1] [added: —] | | |

| AT&T Operating Revenues | | | $ | [removed: 120,741] [added: 122,428] | | $ | [removed: 134,038] [added: 120,741] | | $ | [removed: 143,050] [added: 134,038] | | [removed: (9.9)] [added: 1.4] | | % | [removed: (6.3)] [added: (9.9)] | | % |

| Latin America | | | [removed: (326)] [added: (141)] | | | [removed: (510)] [added: (326)] | | | [removed: (587)] [added: (510)] | | | [removed: 36.1] [added: 56.7] | | | [removed: 13.1] [added: 36.1] | | |

| Held-for-sale and other reclassifications | | | — | | | [removed: 143] [added: —] | | | [removed: 681] [added: 143] | | | — | | | [removed: (79.0)] [added: —] | | |

| Certain significant items | | | [removed: (28,107)] [added: (1,238)] | | | [removed: (296)] [added: (28,107)] | | | [removed: (19,118)] [added: (296)] | | | [removed: —] [added: 95.6] | | | [removed: 98.5] [added: —] | | |

| AT&T Operating Income (Loss) | | | $ | [removed: (4,587)] [added: 23,461] | | $ | [removed: 25,897] [added: (4,587)] | | $ | [removed: 8,372] [added: 25,897] | | — | | % | — | | % |

The Communications segment accounted for approximately 97% of our [added: 2023 and] 2022 total segment operating revenues [removed: compared to 98% in 2021] and accounted for all segment operating income in [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

Our business strategies reflect [removed: bundled] [added: integrated] product offerings that cut across product lines and utilize shared assets.

- Consumer Wireline provides broadband services, including fiber connections that provide [removed: our] multi-gig services to residential customers in select [removed: locations.][added: locations and our fixed wireless access product that provides home internet services delivered over our 5G wireless network where available.]

The Latin America segment accounted for approximately 3% of our [added: 2023 and] 2022 total segment operating [removed: revenues compared to 2% in 2021.][added: revenues.]

We also discuss our expected revenue and expense trends for [removed: 2023] [added: 2024] in the “Operating Environment and Trends of the Business” section.

| | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | |

[removed: | Operating revenues | | | | | | | | | | | | | | | | | |][added: Operating revenues increased in 2023.]

| Service | | | $ | [removed: 97,831] [added: 99,649] | | $ | [removed: 111,565] [added: 97,831] | | $ | [removed: 124,057] [added: 111,565] | | [removed: (12.3)] [added: 1.9] | | % | [removed: (10.1)] [added: (12.3)] | | % |

| Equipment | | | [removed: 22,910] [added: 22,779] | | | [removed: 22,473] [added: 22,910] | | | [removed: 18,993] [added: 22,473] | | | [removed: 1.9] [added: (0.6)] | | | [removed: 18.3] [added: 1.9] | | |

| Total Operating Revenues | | | [removed: 120,741] [added: 122,428] | | | [removed: 134,038] [added: 120,741] | | | [removed: 143,050] [added: 134,038] | | | [removed: (9.9)] [added: 1.4] | | | [removed: (6.3)] [added: (9.9)] | | |

| [added: Segment] Operating expenses | | | | | | | | | | | | | | | | | |

| Operations and support | | | [removed: 79,809] [added: 78,997] | | | [removed: 90,076] [added: 79,809] | | | [removed: 96,468] [added: 90,076] | | | [removed: (11.4)] [added: (1.0)] | | | [removed: (6.6)] [added: (11.4)] | | |

| Asset impairments and abandonments and restructuring | | | [removed: 27,498] [added: 1,193] | | | [removed: 213] [added: 27,498] | | | [removed: 15,687] [added: 213] | | | [removed: —] [added: (95.7)] | | | [removed: (98.6)] [added: —] | | |

| Depreciation and amortization | | | [removed: 18,021] [added: 18,777] | | | [removed: 17,852] [added: 18,021] | | | [removed: 22,523] [added: 17,852] | | | [removed: 0.9] [added: 4.2] | | | [removed: (20.7)] [added: 0.9] | | |

| Total Operating Expenses | | | [removed: 125,328] [added: 98,967] | | | [removed: 108,141] [added: 125,328] | | | [removed: 134,678] [added: 108,141] | | | [removed: 15.9] [added: (21.0)] | | | [removed: (19.7)] [added: 15.9] | | |

| Operating Income (Loss) | | | [removed: (4,587)] [added: 23,461] | | | [removed: 25,897] [added: (4,587)] | | | [removed: 8,372] [added: 25,897] | | | — | | | — | | |

| Interest expense | | | [removed: 6,108] [added: 6,704] | | | [removed: 6,716] [added: 6,108] | | | [removed: 7,727] [added: 6,716] | | | [removed: (9.1)] [added: 9.8] | | | [removed: (13.1)] [added: (9.1)] | | |

| Equity in net income of affiliates | | | [removed: 1,791] [added: 1,675] | | | [removed: 603] [added: 1,791] | | | [removed: 89] [added: 603] | | | [removed: —] [added: (6.5)] | | | — | | |

| Other income (expense) – net | | | [removed: 5,810] [added: 1,416] | | | [removed: 9,387] [added: 5,810] | | | [removed: (1,088)] [added: 9,387] | | | [removed: (38.1)] [added: (75.6)] | | | [removed: —] [added: (38.1)] | | |

| Income (Loss) from Continuing Operations Before Income Taxes | | | [removed: (3,094)] [added: 19,848] | | | [removed: 29,171] [added: (3,094)] | | | [removed: (354)] [added: 29,171] | | | — | | | — | | |

| Income (Loss) from Continuing Operations | | | $ | [removed: (6,874)] [added: 15,623] | | $ | [removed: 23,776] [added: (6,874)] | | $ | [removed: (1,522)] [added: 23,776] | | — | | % | — | | % |

| Operating Revenues | | | 2023 | | | 2022 | | | 2021 | | | 2023 vs. 2022 | | | 2022 vs. 2021 | | |

| Communications | | | $ | 27,801 | | $ | 26,736 | | $ | 26,293 | | 4.0 | | % | 1.7 | | % |

| Segment Operating Income | | | 27,660 | | | 26,410 | | | 25,783 | | | 4.7 | | | 2.4 | | |

| Corporate | | | (2,961) | | | (2,890) | | | (1,990) | | | (2.5) | | | (45.2) | | |

| Video | | | — | | | — | | | 2,257 | | | — | | | — | | |

The increase reflects growth in Mobility and Consumer Wireline revenues, partially offset by continued declines in Business Wireline revenues.

Revenue increases also reflect higher revenues in our Mexico business unit, including favorable impacts from foreign exchange.

Operations and support expenses decreased in 2023, reflecting benefits of our continued transformation efforts, including lower personnel costs, partially offset by inflationary increases.

The decrease also reflects lower Mobility equipment and associated selling costs, driven by lower device sales in 2023 and 3G network shutdown costs in the first quarter of 2022, higher returns on benefit-related assets and lower customer support costs.

Partially offsetting the decreases were higher amortization of deferred customer acquisition costs and unfavorable impact of foreign exchange.

Noncash charges in 2023 primarily relate to severance and restructuring charges, as well as the abandonment of non-deployed wireless equipment associated with our recently announced plans to collaborate with Ericsson to deploy commercial scale open radio access network (Open RAN), which will further the telecommunications industry efforts and align with the federal government’s goal to build a more robust ecosystem of network infrastructure providers and suppliers.

This network transformation is expected to result in additional cash charges in 2024.

We expect depreciation expense to increase due to continued fiber and 5G investment and approximately $850 in 2024 due to the expected shortening of estimated economic lives of wireless equipment that will be replaced earlier than originally anticipated with our deployment of Open RAN.

Interest expense in 2023 also includes the reclassification of Mobility preferred interests distributions, which were repurchased on April 5, 2023 (see Note 16).

Mobility preferred interest distributions were recorded as noncontrolling interest in 2022.

Late in the third quarter of 2023, C-band incumbents completed their transition out of the spectrum band, allowing us to use all C-band licenses awarded to us in the Federal Communications Commission (FCC) auction in 2021, and we have ceased capitalization of interest for licenses that have been placed into service.

We expect interest expense to increase approximately $400 in 2024 as a result.

Equity in net income of affiliates decreased in 2023.

The decrease was primarily due to the performance of our investment in DIRECTV, which included our share of a gain on a sale-leaseback transaction by DIRECTV of approximately $100 in 2023 (see Notes 6, 10 and 19).

The decrease was primarily driven by actuarial remeasurement of pension plan assets and obligations, with net actuarial and settlement losses of $1,594 in 2023, compared to gains of $1,999 in 2022 (see Note 14).

Also contributing to the decrease was a $450 impairment of an equity investment in a Latin America satellite business and lower net pension and postretirement benefit credits in 2023 (see Note 14).

Partially offsetting the decrease were higher returns on other benefit-related investments.

Income tax expense increased in 2023, primarily driven by higher income before income tax in 2023, partially offset by deferred tax benefits related to updated estimates.

Effective for the first quarter of 2023, we stopped recording prior service credits to our individual business units or the corresponding charge to Corporate and Other, and segment operating expenses were recast to remove prior service credits from our historical reporting.

Prior service credits are, and will continue to be, recorded as other income in our consolidated income statement in accordance with U.S. generally accepted accounting principles (see Note 14).

| Mobility | | | $ | 25,861 | | $ | 23,812 | | $ | 22,679 | | 8.6 | | % | 5.0 | | % |

| Business Wireline | | | 1,289 | | | 2,290 | | | 3,092 | | | (43.7) | | | (25.9) | | |

| Consumer Wireline | | | 651 | | | 634 | | | 522 | | | 2.7 | | | 21.5 | | |

| Total Segment Operating Income | | | $ | 27,801 | | $ | 26,736 | | $ | 26,293 | | 4.0 | | % | 1.7 | | % |

| | | | 2023 | | | 2022 | | | 2021 | | | 2023 vs. 2022 | | | 2022 vs. 2021 | | |

| Operations and support | | | 49,604 | | | 49,770 | | | 47,453 | | | (0.3) | | | 4.9 | | |

| Total Operating Expenses | | | 58,121 | | | 57,968 | | | 55,575 | | | 0.3 | | | 4.3 | | |

| Operating Income | | | $ | 25,861 | | $ | 23,812 | | $ | 22,679 | | 8.6 | | % | 5.0 | | % |

Postpaid churn and postpaid phone-only churn were consistent with 2022.

Equipment revenue decreased in 2023, primarily driven by a lower volume of devices sold.

Operations and support expenses decreased in 2023, largely due to lower equipment costs, driven by lower device sales and associated selling costs, and 3G network shutdown costs in the first quarter of 2022.

These decreases were offset by increased network expenses and higher amortization of deferred customer acquisition costs.

We expect increased depreciation expense in 2024 due to the expected shortening of estimated economic lives of wireless equipment that will be replaced earlier than originally anticipated with our Open RAN deployment and our network transformation and continued 5G investment.

| | | | 2023 | | | 2022 | | | 2021 | | | 2023 vs. 2022 | | | 2022 vs. 2021 | | |

| Operations and support | | | 14,217 | | | 14,934 | | | 15,653 | | | (4.8) | | | (4.6) | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| AT&T Inc. | | | | | | | | |

| Dollars in millions except per share amounts | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Communications | | | $ | 29,107 | | $ | 28,393 | | $ | 29,062 | | 2.5 | | % | (2.3) | | % |

| Segment Operating Income | | | 28,781 | | | 27,883 | | | 28,475 | | | 3.2 | | | (2.1) | | |

| Corporate | | | (2,570) | | | (1,644) | | | (1,398) | | | (56.3) | | | (17.6) | | |

| Video | | | — | | | 2,491 | | | 2,174 | | | — | | | 14.6 | | |

| Reclassification of prior service credits | | | (2,691) | | | (2,680) | | | (2,442) | | | (0.4) | | | (9.7) | | |

Certain prior-period amounts have been reclassified to conform to the current period’s presentation.

Operating revenues decreased in 2022 and 2021.

The 2022 decline reflects the July 31, 2021 separation of the U.S. video business, other business divestitures that were not included in discontinued operations and lower Business Wireline revenues driven by lower demand for legacy services and product simplification.

Partially offsetting declines were higher Mobility service and equipment revenues and, to a lesser extent, gains in broadband service in our Communications segment and growth in Mexico wireless operations.

The 2021 decline reflects the 2021 separation of the U.S. video business and the October 2020 sale of wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands.

Also contributing to revenue declines was lower Business Wireline revenues due in part to higher demand for pandemic-related connectivity in the prior year.

Partially offsetting declines were higher Mobility equipment and service revenues and gains in broadband service, and growth in Mexico wireless operations including favorable foreign exchange impacts.

The 2022 decline reflects the separation of U.S. video and lower personnel costs associated with ongoing transformation initiatives, partially offset by higher bad debt expense, the elimination of Connect America Fund Phase II (CAF II) government credits and increased wholesale network access charges.

Wireless equipment costs were up slightly, with higher sales volumes and the sale of higher-priced smartphones largely offset by lower 3G shutdown costs in 2022.

In the first quarter of 2022, we updated the expected economic lives of customer relationships, which extended the amortization period of deferred acquisition and fulfillment costs and reduced expenses approximately $395, with $150 recorded to Mobility, $115 to Business Wireline and $130 to Consumer Wireline.

The 2021 decline reflects our 2021 business divestitures, lower bad debt expense and lower personnel costs associated with our transformation initiatives.

Declines were mostly offset by increased domestic wireless equipment expense from higher volumes.

declines also impacting Business Wireline growth rates (see Note 9).

Impairment charges in 2021 were lower than 2020, reflecting a fourth-quarter 2020 impairment charge of $15,508 resulting from our assessment of the recoverability of the long-lived assets and goodwill associated with our U.S. video business.

Depreciation and amortization expense increased in 2022 and decreased in 2021.

*Depreciation* expense increased $218, or 1.2%, in 2022.

Depreciation expense decreased $1,394, or 7.3%, in 2021, primarily due to ceasing depreciation on U.S. video held-for-sale assets.

*Amortization* expense decreased $49, or 22.5%, in 2022 and $3,277, or 93.8%, in 2021.

Lower amortization reflects our accelerated method of amortization of intangible assets from previous acquisitions and ceasing amortization on U.S. video held-for-sale assets in 2021.

Interest expense decreased in 2021 primarily due to lower interest rates and higher capitalized interest associated with spectrum acquisitions, partially offset by higher debt balances.

Equity in net income of affiliates increased in 2022 and 2021, primarily due to the close of our transaction with TPG related to the U.S. video business, which resulted in our accounting for our investment in DIRECTV under the equity method of accounting beginning August 1, 2021 (see Notes 6, 10 and 19).

The decrease in 2022 was primarily due to lower actuarial gains ($1,999 in 2022 compared to $4,140 in 2021), lower pension and postretirement benefit credits and lower returns on other benefit-related investments.

Pension and postretirement benefit credits decreased as a result of higher assumed discount rates and lower returns on benefit plan assets.

Our 2022 benefit expense also includes approximately $280 favorable impact from a retirement benefit plan change, with $230 resulting from prior service credits (approximately $100 for Business Wireline, $80 for Consumer Wireline and $40 for Mobility) (see Note 14).

The increase in 2021 was primarily due to the recognition of $4,140 in actuarial gains, compared to losses of $4,169 in 2020, and the recognition of $1,405 of debt redemption costs in 2020.

Also contributing to increased income in 2021 were higher net pension and postretirement benefit credits from higher prior service credit amortization (see Note 14).

Income tax expense decreased in 2022 and increased in 2021.

The increase in 2021 was primarily due to increased income before income taxes, offset primarily by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) benefit of U.S. federal Net Operating Loss (NOL) carryback and benefits of divestitures in 2021.

The effective tax rate was impacted by our goodwill impairments associated with our Business Wireline, Consumer Wireline and Mexico reporting units in 2022, and Video goodwill impairment in 2020, which are not deductible for tax purposes.

In the first quarter of 2022, we reclassified into “Corporate” certain administrative costs borne by AT&T where the business units do not influence decision making to conform with the current period presentation.

In managing interest expense, we control our mix of [removed: fixed] [added: fixed-] and [removed: floating rate] [added: floating-rate] debt through term loans, floating rate notes, and interest rate swaps.

[removed: Most of our] [added: Our] foreign-denominated long-term debt has been swapped from fixed-rate or floating-rate foreign currencies to fixed-rate U.S. dollars at issuance through cross-currency swaps, removing interest rate risk and foreign currency exchange risk associated with the underlying interest and principal payments.

We expect gains or losses [removed: in] [added: on] our cross-currency swaps and interest rate locks to offset the losses and gains in the financial instruments they hedge.

We had no interest rate [removed: swaps and no interest rate] locks at December 31, [removed: 2022.][added: 2023.]

Through cross-currency swaps, [removed: most of] our foreign-denominated debt has been swapped from fixed-rate or floating-rate foreign currencies to fixed-rate U.S. dollars at issuance, removing interest rate and foreign currency exchange risk associated with the underlying interest and principal payments.

We had cross-currency swaps with a notional value of [removed: $38,213] [added: $38,006] and a fair value of [removed: $(5,982)] [added: $(3,177)] outstanding at December 31, [removed: 2022.][added: 2023.]

We had [added: no] foreign exchange forward contracts [removed: with a notional value of $617 and a fair value of $(23) outstanding] at December 31, [removed: 2022.][added: 2023.]

AT&T management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Based on its assessment, AT&T management believes that, as of December 31, [removed: 2022,] [added: 2023,] the company’s internal control over financial reporting is effective based on those criteria.

We have audited the accompanying consolidated balance sheets of AT&T Inc. (the Company) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of income, comprehensive income, cash flows and changes in stockholders’ equity for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes and financial statement schedule listed in Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 13, 2023] [added: 23, 2024] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | At December 31, [removed: 2022,] [added: 2023,] the Company’s defined benefit pension obligation was [removed: $42,828] [added: $33,227] million and exceeded the fair value of pension plan assets of [removed: $40,874] [added: $30,098] million, resulting in an unfunded benefit obligation of [removed: $1,954] [added: $3,129] million. Additionally, at December 31, [removed: 2022,] [added: 2023,] the Company’s postretirement benefit obligation was [removed: $7,280] [added: $6,693] million and exceeded the fair value of postretirement plan assets of [removed: $2,160] [added: $1,763] million, resulting in an unfunded benefit obligation of [removed: $5,120] [added: $4,930] million. As explained in Note 14 to the consolidated financial statements, the Company updates the assumptions used to measure the defined benefit pension and postretirement benefit obligations, including discount rates, at December 31 or upon a remeasurement event. The Company determines the discount rates used to measure the obligations based on the development of a yield curve using high-quality corporate bonds selected to yield cash flows that correspond to the expected timing and amount of the expected future benefit payments. | | |

| | | | Auditing the defined benefit pension and postretirement benefit obligations was complex due to the judgmental nature of the actuarial assumptions made by management, primarily the discount [removed: rate,] [added: rates,] used in the Company’s measurement process. The discount [removed: rate has] [added: rates have] a significant effect on the measurement of the defined benefit pension and postretirement benefit obligations, and auditing the discount [removed: rate] [added: rates] was complex because it required an evaluation of the credit quality of the corporate bonds used to develop the discount [removed: rate] [added: rates] and the correlation of those bonds’ cash inflows to the timing and amount of future expected benefit payments. | | |

| To test the determination of the discount [removed: rate] [added: rates] used in the calculation of the defined benefit pension and postretirement benefit obligations, we performed audit procedures that focused on evaluating, with the assistance of our actuarial specialists, the determination of the discount rates, among other procedures. For example, we evaluated the selected yield curve used to determine the discount rates applied in measuring the defined benefit pension and postretirement benefit obligations. As part of this assessment, we considered the credit quality of the corporate bonds that comprised the yield curve and compared the timing and amount of cash flows at maturity with the expected amounts and duration of the related benefit payments. | | | | | |

| *Description of the Matter* | | | At December 31, [removed: 2022,] [added: 2023,] the Company’s goodwill balance was [removed: $67,895] [added: $67,854] million. As discussed in Note 1 to the consolidated financial statements, reporting unit goodwill is tested at least annually for impairment. Estimating fair values in connection with these impairment evaluations involves the utilization of discounted cash flow and market multiple approaches. [removed: As described in Note 9 to the consolidated financial statements, impairment charges of $13,478 million in the Business Wireline reporting unit, $10,508 million in the Consumer Wireline reporting unit and $826 million in the Mexico reporting unit were recorded during the year.] | | |

We have audited AT&T Inc.’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, AT&T Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2022] [added: 2023] consolidated financial statements of the Company and our report dated February [removed: 13, 2023] [added: 23, 2024] expressed an unqualified opinion thereon.

| Dollars in millions except per share amounts | | | | | | | | |

Below are our interest rate derivatives subject to material interest rate risk as of December 31, 2023.

The interest rates illustrated below refer to the average rates we expect to pay based on current and implied forward rates and the average rates we expect to receive based on derivative contracts.

The notional amount is the principal amount of the debt subject to the interest rate swap contracts.

The fair value asset (liability) represents the amount we would receive (pay) if we terminated the contracts as of December 31, 2023.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Maturity | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | Thereafter | | | Total | | | Fair Value 12/31/2023 | | |

| Interest Rate Derivatives | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Interest Rate Swaps: | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Receive Fixed/Pay Variable Notional Amount Maturing2 | | | $ | — | | $ | — | | $ | 1,750 | | $ | — | | $ | — | | $ | — | | $ | 1,750 | | $ | (2) | |

| Weighted-Average Variable Rate Payable1,2 | | | 5.0 | | % | 3.6 | | % | 3.3 | | % | — | | % | — | | % | — | | % | | | | | | |

| Weighted-Average Fixed Rate Receivable | | | 5.5 | | % | 5.5 | | % | 5.5 | | % | — | | % | — | | % | — | | % | | | | | | |

| 1Interest payable based on implied forward rates for the secured overnight financing rate (SOFR) plus a spread of approximately 14 basis points. | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 2Derivative is cancelable by the counterparty beginning in 2024. | | | | | | | | | | | | | | | | | | | | | | | | | | |

February 23, 2024

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| AT&T Inc. | | | | | | | | |

| | | | | | | | | |

February 23, 2024

February 13, 2023

We also make available on that website, and in print, if any stockholder or other person so requests, our “Code of Ethics” applicable to all employees and Directors, our “Corporate Governance Guidelines,” and the charters for all committees of our Board of Directors, including Audit, Human Resources and [removed: Corporate] Governance and [removed: Nominating.][added: Policy committees.]

Following our formation, we expanded our communications footprint and [removed: operations and invested in entertainment businesses,] [added: operations,] most significantly:

- From 2018 through April 2022, we acquired and held various investments in entertainment businesses, namely Time Warner Inc., which comprised a substantial portion of our [added: previous] WarnerMedia segment.

Our business strategies reflect [removed: bundled] [added: integrated] product offerings that cut across product lines and utilize shared assets.

- Consumer Wireline provides broadband services, including fiber connections that provide [removed: our] multi-gig services to residential customers in select [removed: locations.][added: locations and our fixed wireless access product that provides home internet services delivered over our 5G wireless network where available.]

Building on that fiber foundation is our solid spectrum portfolio, strengthened through [removed: recent years’] Federal Communications Commission (FCC) auction acquisitions and 5G deployment.

We believe our [removed: hybrid] fixed wireline and mobile approach will differentiate our services and provide us with additional [added: convergence] growth opportunities in the future as bandwidth demands continue to grow.

During [removed: 2023,] [added: 2024,] we [removed: will] [added: plan to] continue to develop and provide high-value, integrated mobile and broadband solutions.

In North America, our network covers over [removed: 441] [added: 438] million people with 4G LTE and over [removed: 285] [added: 302] million with 5G technology.

In the United States, our network covers all major metropolitan areas and more than [removed: 337] [added: 334] million people with our LTE technology and more than [removed: 285] [added: 302] million people with our 5G technology.

As the wireless industry has matured, [added: with nearly full penetration of smartphones in the U.S. population,] future wireless growth will [removed: increasingly] depend on our ability to offer innovative [removed: data services on a wireless network] [added: services, plans and devices] that [removed: has sufficient spectrum] [added: bundle product offerings] and [removed: capacity to support these innovations.][added: take advantage of our 5G wireless network.]

At December 31, [removed: 2022,] [added: 2023,] we had more than [removed: 7] [added: 8.3] million fiber consumer wireline broadband customers, adding [removed: more than 1.2] [added: 1.1] million during the year.

Our Communications services and products are marketed under the AT&T, [added: AT&T Business,] Cricket, AT&T PREPAIDSM and AT&T Fiber brand names.

The Communications segment provided approximately 97% of [removed: 2022] [added: 2023] segment operating revenues and accounted for all of our [removed: 2022] [added: 2023] total segment income.

As of December 31, [removed: 2022,] [added: 2023,] we served [removed: 217] [added: 242] million Mobility subscribers, including [removed: 85] [added: 87] million postpaid [removed: (70] [added: (71] million phone), 19 million prepaid, [removed: 6] [added: 7] million reseller and [removed: 107] [added: 128] million connected devices.

Through [removed: FirstNet] [added: FirstNet®] services, we also provide a nationwide wireless broadband network dedicated to public safety.

An increasing number of our subscribers are using more advanced [removed: integrated and data-centric] devices, including embedded computing systems and/or software, commonly called the Internet of Things (IoT).

We offer [added: unlimited] plans that include [removed: unlimited] features allowing for the sharing of voice, text and data across multiple devices, which attracts subscribers from other providers and helps minimize subscriber churn.

We also sell accessories, such as carrying [removed: cases] [added: cases/protective covers] and [removed: hands-free devices.][added: wireless chargers.]

Like other wireless service providers, we also provide [removed: a limited number of] postpaid contract subscribers [removed: substantial] [added: promotional] equipment [removed: subsidies] [added: offers] to initiate, renew or upgrade service.

Some of the services we have offered historically are in secular decline [removed: and] [added: and,] going [removed: forward] [added: forward,] we will focus on our owned and operated connectivity services powered by 5G and fiber.

We provide broadband and internet services to approximately 15 million customer locations, with [removed: 7] [added: 8] million fiber broadband connections at December 31, [removed: 2022.][added: 2023.]

With changes in video viewing preferences and the [removed: recent] [added: impacts of remote] work and [removed: learn from home] [added: learning] trends, we are experiencing increasing demand for high-speed broadband services.

[removed: Our] [added: We believe our] investment in expanding our industry-leading fiber network positions us to be a leader in wired connectivity.

Other service revenues include [removed: AT&T U-verse voice services (which use] VoIP [removed: technology),] [added: services,] customer fees and equipment.

| | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | |

| Wireless service | | | [removed: 50] [added: 52] | | % | [removed: 43] [added: 50] | | % | [removed: 39] [added: 43] | | % |

| Business service | | | [removed: 18] [added: 17] | | | [removed: 17] [added: 18] | | | 17 | | |

| Equipment | | | [removed: 18] [added: 17] | | | [removed: 16] [added: 18] | | | [removed: 12] [added: 16] | | |

| Wireless service | | | 2 | | | [removed: 1] [added: 2] | | | 1 | | |

| Video services1 | | | — | | | [removed: 12] [added: —] | | | [removed: 20] [added: 12] | | |

| 1U.S. video operations were separated in July 2021. [removed: See] [added: (See] Note [removed: 6] [added: 6)] | | | | | | | | | | | |

The Communications Act of 1934 and other related laws give the FCC broad authority to regulate the U.S. operations of our [removed: satellite and] interstate telecommunications services.

In addition, our ILEC subsidiaries are subject to regulation by state governments, which have the power to regulate intrastate rates and services, including local, long-distance and network access [added: services, provided such state regulation is consistent with federal law.]

For a discussion of significant regulatory issues directly affecting our operations, please see the information contained under the headings “Operating Environment Overview” and “Regulatory [removed: Developments”] [added: Landscape”] of Item 7, which information is incorporated herein by reference.

Additional information relating to [removed: regulation] [added: regulations] affecting those rights is contained under the heading [removed: “Operating Environment Overview,” of Item 7.]

We actively pursue patents, [removed: trademarks] [added: trademarks,] and service marks to protect our intellectual property within the United States and abroad.

We maintain a significant global portfolio of patents, [removed: trademarks] [added: trademarks,] and service mark registrations.

We have also entered into [removed: agreements] [added: licenses] that permit other [removed: companies,] [added: companies to utilize certain of our patents, trademarks, service marks, and technologies,] in exchange for [removed: fees and rights,] [added: payments] and subject to appropriate safeguards and [removed: restrictions, to utilize certain of our patents, trademarks and service marks.][added: restrictions.]

We periodically [removed: receive offers from third parties to obtain licenses for] [added: license third-party] patents and other intellectual rights in exchange for [removed: royalties or other] payments.

Corporate support costs, including administrative support costs borne by AT&T where business units do not influence decision making, divested businesses and results from business no longer integral to our operations are reported as *Corporate* and *Other*, which reconciles our segment results to consolidated operating income and income before income taxes.

In December 2023, we announced plans to collaborate with Ericsson to lead the U.S. in commercial scale open radio access network (Open RAN) deployment to build a more robust ecosystem of network infrastructure providers and suppliers, fostering lower network costs, improved operational efficiencies and allowing for continued investment in our fast-growing broadband network.

We plan for about 70% of our wireless network traffic to flow across open-capable platforms by late 2026, and to have fully-integrated Open RAN sites operating starting in 2024.

Beginning in 2025, we expect to scale this Open RAN environment throughout our wireless network in coordination with multiple suppliers.

We believe the move to an open, agile, programmable wireless network positions us to quickly capitalize on the next generation of wireless technology and spectrum when it becomes available.

These innovative technologies are expected to enable lower-power, sustainable networks with higher performance to deliver enhanced user experiences.

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.

Additionally, this business unit offers AT&T Internet Air, which is a fixed wireless access product that provides home internet services delivered over our 5G wireless network where available.

“Operating Environment Overview,” of Item 7.

In most U.S. markets, we compete for customers with large cable companies and other smaller telecommunications companies for both long-distance and local services.

The main contracts set to expire in 2024 include the following: a contract covering approximately 5,000 Mobility employees in Arkansas, Kansas, Missouri, Oklahoma and Texas is set to expire in February; a wireline contract covering approximately 8,500 employees in California and Nevada is set to expire in April; and three wireline contracts covering approximately 15,000 employees in the southeastern United States are set to expire in August.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| AT&T Inc. | | | | | | | | |

| Dollars in millions except per share amounts | | | | | | | | |

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

Corporate includes:

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

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

- *Securitization fees* associated with our sales of receivables (see Note 17).

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

Other items consist of*:*

*•Video,* which includes our former U.S. video operations that were contributed to DIRECTV on July 31, 2021, and our share of DIRECTV’s earnings as equity in net income of affiliates (see Note 19).

- *Held-for-sale and other reclassifications,* which includes our former Crunchyroll, Government Solutions and wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands.

- *Reclassification of prior service credits,* which includes the reclassification of prior service credit amortization, where we present the impact of benefit plan amendments in our business unit results.

Prior service credit amortization is presented in “Other income (expense) - net” in the consolidated statements of income and therefore has no impact on consolidated operating income or EBITDA (EBITDA is defined as operating income excluding depreciation and amortization).

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

*•Eliminations and consolidations*, which removes transactions involving dealings between Mobility and our Video business, prior to the July 31, 2021 separation of Video.

Communications

Our

5G service went nationwide in July 2020, and with that availability, the introduction of 5G handsets and devices has contributed to a renewed interest in equipment upgrades.

In January 2022, we began to deploy our C-band spectrum, subject to certain voluntary limitations.

Latin America

We believe that the wireless model in the U.S., with accelerating demand for mobile internet service and the associated economic benefits, will be repeated around the world as companies invest in high-speed mobile networks.

We acquired Mexican wireless operations in 2015 to establish a seamless, cross-border North American wireless network which now covers an area with over 441 million people and businesses in the United States and Mexico.

With the increased capacity from our LTE network, we also expect additional wholesale revenue in the coming years.

Our 4G LTE network in Mexico now covers approximately 104 million people and businesses.

We also provide state-of-the-art security solutions like threat management and intrusion detection.

services, provided such state regulation is consistent with federal law.

The main contracts included the following: A contract covering approximately 7,000 Mobility employees in nine states, for which we reached tentative agreement in February 2023.

A contract covering approximately 400 employees supporting internet-based products is set to expire in July 2023.

A contract covering approximately 200 employees in Illinois is set to expire in May 2023.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

| | | | | | | For the fiscal year ended December 31, [removed: 2022] [added: 2023] | | | | | | | | |

[removed: Akard St., Dallas, Texas, 75202][added: | Dallas, Texas | | | | | | 75202 | | |]

[removed: Telephone Number 210-821-4105][added: Registrant’s telephone number, including area code 210-821-4105]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| AT&T Inc. [removed: 2.500%] [added: Floating Rate] Global Notes due March [removed: 15, 2023] [added: 6, 2025] | | | T [removed: 23] [added: 25A] | | | New York Stock Exchange | | |

| AT&T Inc. [removed: 2.750%] [added: 3.550%] Global Notes due [removed: May 19, 2023] [added: November 18, 2025] | | | T [removed: 23C] [added: 25B] | | | New York Stock Exchange | | |

| AT&T Inc. [removed: Floating Rate] [added: 3.950%] Global Notes due [removed: September 5, 2023] [added: April 30, 2031] | | | T [removed: 23D] [added: 31F] | | | New York Stock Exchange | | |

| AT&T Inc. [removed: 1.050%] [added: 4.300%] Global Notes due [removed: September 5, 2023] [added: November 18, 2034] | | | T [removed: 23E] [added: 34C] | | | New York Stock Exchange | | |

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 [added: (§ 232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Based on the closing price of [removed: $20.96] [added: $15.95] per share on June 30, [removed: 2022,] [added: 2023,] the aggregate market value of our voting and non-voting common stock held by non-affiliates was [removed: $149] [added: $114] billion.

(1)Portions of AT&T Inc.’s Notice of [removed: 2022] [added: 2024] Annual Meeting and Proxy Statement dated on or about April [removed: 3, 2023] [added: 4, 2024] to be filed within the period permitted under General Instruction G(3) (Part III).

| [removed: [1A.](#ie584a9deaa72439f8729a2dc6244438c_31)] [added: [1A.](#i0d12995231184538879373166b6a2300_37)] | | | [Risk [removed: Factors](#ie584a9deaa72439f8729a2dc6244438c_31)] [added: Factors](#i0d12995231184538879373166b6a2300_37)] | | | [removed: [8](#ie584a9deaa72439f8729a2dc6244438c_31)] [added: [7](#i0d12995231184538879373166b6a2300_37)] | | |

| [removed: [3.](#ie584a9deaa72439f8729a2dc6244438c_37)] [added: [3.](#i0d12995231184538879373166b6a2300_46)] | | | [Legal [removed: Proceedings](#ie584a9deaa72439f8729a2dc6244438c_37)] [added: Proceedings](#i0d12995231184538879373166b6a2300_46)] | | | [removed: [15](#ie584a9deaa72439f8729a2dc6244438c_37)] [added: [16](#i0d12995231184538879373166b6a2300_46)] | | |

| [removed: [4.](#ie584a9deaa72439f8729a2dc6244438c_40)] [added: [4.](#i0d12995231184538879373166b6a2300_49)] | | | [Mine Safety [removed: Disclosures](#ie584a9deaa72439f8729a2dc6244438c_40)] [added: Disclosures](#i0d12995231184538879373166b6a2300_49)] | | | [removed: [15](#ie584a9deaa72439f8729a2dc6244438c_40)] [added: [16](#i0d12995231184538879373166b6a2300_49)] | | |

| | | | [Information about our Executive [removed: Officers](#ie584a9deaa72439f8729a2dc6244438c_43)] [added: Officers](#i0d12995231184538879373166b6a2300_52)] | | | [removed: [16](#ie584a9deaa72439f8729a2dc6244438c_43)] [added: [17](#i0d12995231184538879373166b6a2300_52)] | | |

| [removed: [5.](#ie584a9deaa72439f8729a2dc6244438c_49)] [added: [5.](#i0d12995231184538879373166b6a2300_58)] | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of [removed: Equity](#ie584a9deaa72439f8729a2dc6244438c_49) [Securities](#ie584a9deaa72439f8729a2dc6244438c_49)] [added: Equity](#i0d12995231184538879373166b6a2300_58) [Securities](#i0d12995231184538879373166b6a2300_58)] | | | [removed: [17](#ie584a9deaa72439f8729a2dc6244438c_49)] [added: [18](#i0d12995231184538879373166b6a2300_58)] | | |

| [removed: [6.](#ie584a9deaa72439f8729a2dc6244438c_58)] [added: [6.](#i0d12995231184538879373166b6a2300_67)] | | | [Item 6. [removed: \[Reserved\]](#ie584a9deaa72439f8729a2dc6244438c_58)] [added: \[Reserved\]](#i0d12995231184538879373166b6a2300_67)] | | | [removed: [18](#ie584a9deaa72439f8729a2dc6244438c_58)] [added: [19](#i0d12995231184538879373166b6a2300_67)] | | |

| [removed: [7.](#ie584a9deaa72439f8729a2dc6244438c_61)] [added: [7.](#i0d12995231184538879373166b6a2300_70)] | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ie584a9deaa72439f8729a2dc6244438c_61)] [added: Operations](#i0d12995231184538879373166b6a2300_70)] | | | [removed: [18](#ie584a9deaa72439f8729a2dc6244438c_61)] [added: [19](#i0d12995231184538879373166b6a2300_70)] | | |

| [removed: [7A.](#ie584a9deaa72439f8729a2dc6244438c_148)] [added: [7A.](#i0d12995231184538879373166b6a2300_151)] | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#ie584a9deaa72439f8729a2dc6244438c_148)] [added: Risk](#i0d12995231184538879373166b6a2300_151)] | | | [removed: [38](#ie584a9deaa72439f8729a2dc6244438c_148)] [added: [37](#i0d12995231184538879373166b6a2300_151)] | | |

| [removed: [8.](#ie584a9deaa72439f8729a2dc6244438c_160)] [added: [8.](#i0d12995231184538879373166b6a2300_163)] | | | [Financial Statements and Supplementary [removed: Data](#ie584a9deaa72439f8729a2dc6244438c_160)] [added: Data](#i0d12995231184538879373166b6a2300_163)] | | | [removed: [43](#ie584a9deaa72439f8729a2dc6244438c_160)] [added: [43](#i0d12995231184538879373166b6a2300_163)] | | |

| [removed: [9.](#ie584a9deaa72439f8729a2dc6244438c_310)] [added: [9.](#i0d12995231184538879373166b6a2300_337)] | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ie584a9deaa72439f8729a2dc6244438c_310)] [added: Disclosure](#i0d12995231184538879373166b6a2300_337)] | | | [removed: [98](#ie584a9deaa72439f8729a2dc6244438c_310)] [added: [96](#i0d12995231184538879373166b6a2300_337)] | | |

| [removed: [9A.](#ie584a9deaa72439f8729a2dc6244438c_313)] [added: [9A.](#i0d12995231184538879373166b6a2300_340)] | | | [Controls and [removed: Procedures](#ie584a9deaa72439f8729a2dc6244438c_313)] [added: Procedures](#i0d12995231184538879373166b6a2300_340)] | | | [removed: [98](#ie584a9deaa72439f8729a2dc6244438c_313)] [added: [96](#i0d12995231184538879373166b6a2300_340)] | | |

| [removed: [9B.](#ie584a9deaa72439f8729a2dc6244438c_316)] [added: [9B.](#i0d12995231184538879373166b6a2300_343)] | | | [Other [removed: Information](#ie584a9deaa72439f8729a2dc6244438c_316)] [added: Information](#i0d12995231184538879373166b6a2300_343)] | | | [removed: [98](#ie584a9deaa72439f8729a2dc6244438c_316)] [added: [96](#i0d12995231184538879373166b6a2300_343)] | | |

| [removed: [10.](#ie584a9deaa72439f8729a2dc6244438c_322)] [added: [10.](#i0d12995231184538879373166b6a2300_349)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#ie584a9deaa72439f8729a2dc6244438c_322)] [added: Governance](#i0d12995231184538879373166b6a2300_349)] | | | [removed: [99](#ie584a9deaa72439f8729a2dc6244438c_322)] [added: [97](#i0d12995231184538879373166b6a2300_349)] | | |

| [removed: [11.](#ie584a9deaa72439f8729a2dc6244438c_325)] [added: [11.](#i0d12995231184538879373166b6a2300_352)] | | | [Executive [removed: Compensation](#ie584a9deaa72439f8729a2dc6244438c_325)] [added: Compensation](#i0d12995231184538879373166b6a2300_352)] | | | [removed: [99](#ie584a9deaa72439f8729a2dc6244438c_325)] [added: [97](#i0d12995231184538879373166b6a2300_352)] | | |

| [removed: [12.](#ie584a9deaa72439f8729a2dc6244438c_328)] [added: [12.](#i0d12995231184538879373166b6a2300_355)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ie584a9deaa72439f8729a2dc6244438c_328)] [added: Matters](#i0d12995231184538879373166b6a2300_355)] | | | [removed: [100](#ie584a9deaa72439f8729a2dc6244438c_328)] [added: [98](#i0d12995231184538879373166b6a2300_355)] | | |

| [removed: [13.](#ie584a9deaa72439f8729a2dc6244438c_331)] [added: [13.](#i0d12995231184538879373166b6a2300_358)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ie584a9deaa72439f8729a2dc6244438c_331)] [added: Independence](#i0d12995231184538879373166b6a2300_358)] | | | [removed: [101](#ie584a9deaa72439f8729a2dc6244438c_331)] [added: [99](#i0d12995231184538879373166b6a2300_358)] | | |

| [removed: [14.](#ie584a9deaa72439f8729a2dc6244438c_334)] [added: [14.](#i0d12995231184538879373166b6a2300_361)] | | | [Principal Accountant Fees and [removed: Services](#ie584a9deaa72439f8729a2dc6244438c_334)] [added: Services](#i0d12995231184538879373166b6a2300_361)] | | | [removed: [101](#ie584a9deaa72439f8729a2dc6244438c_334)] [added: [99](#i0d12995231184538879373166b6a2300_361)] | | |

| [removed: [15.](#ie584a9deaa72439f8729a2dc6244438c_340)] [added: [15.](#i0d12995231184538879373166b6a2300_367)] | | | [Exhibits and Financial Statement [removed: Schedules](#ie584a9deaa72439f8729a2dc6244438c_340)] [added: Schedules](#i0d12995231184538879373166b6a2300_367)] | | | [removed: [101](#ie584a9deaa72439f8729a2dc6244438c_340)] [added: [99](#i0d12995231184538879373166b6a2300_367)] | | |

(Exact name of registrant as specified in its charter)

| Delaware | | | | | | 43-1301883 | | |

| (State or other jurisdiction of incorporation or organization) | | | | | | (I.R.S. Employer Identification No.) | | |

| 208 S. Akard St. | | | | | | | | |

| (Address of principal executive office) | | | | | | (Zip Code) | | |

| Securities registered pursuant to Section 12(b) of the Act (continued): | | | | | | Name of each exchange | | |

At February 7, 2024, common shares outstanding were 7,152,792,253.

| | | | [PART I](#i0d12995231184538879373166b6a2300_19) | | | | | |

| 1. | | | [Business](#i0d12995231184538879373166b6a2300_22) | | | [1](#i0d12995231184538879373166b6a2300_22) | | |

| [1](#i0d12995231184538879373166b6a2300_40)[B](#i0d12995231184538879373166b6a2300_40)[.](#i0d12995231184538879373166b6a2300_40) | | | [U](#i0d12995231184538879373166b6a2300_40)[nr](#i0d12995231184538879373166b6a2300_40)[esolved Sta](#i0d12995231184538879373166b6a2300_40)[ff](#i0d12995231184538879373166b6a2300_40) [Comments](#i0d12995231184538879373166b6a2300_40) | | | [1](#i0d12995231184538879373166b6a2300_40)[5](#i0d12995231184538879373166b6a2300_40) | | |

| [1C.](#i0d12995231184538879373166b6a2300_2694) | | | [Cybersecurity](#i0d12995231184538879373166b6a2300_2694) | | | [15](#i0d12995231184538879373166b6a2300_2694) | | |

| [2.](#i0d12995231184538879373166b6a2300_43) | | | [Properties](#i0d12995231184538879373166b6a2300_43) | | | [16](#i0d12995231184538879373166b6a2300_43) | | |

| | | | [PART II](#i0d12995231184538879373166b6a2300_55) | | | | | |

| | | | [PART III](#i0d12995231184538879373166b6a2300_346) | | | | | |

| | | | [PART IV](#i0d12995231184538879373166b6a2300_364) | | | | | |

| [16.](#i0d12995231184538879373166b6a2300_373) | | | [Form 10-K Summary](#i0d12995231184538879373166b6a2300_373) | | | [101](#i0d12995231184538879373166b6a2300_373) | | |

Incorporated under the laws of the State of Delaware

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

208 S.

| | | | | | | Name of each 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 February 8, 2023, common shares outstanding were 7,129,870,323.

| AT&T Inc. | | | | | | | | |

| Dollars in millions except per share amounts | | | | | | | | |

| | | | [PART I](#ie584a9deaa72439f8729a2dc6244438c_13) | | | | | |

| 1. | | | [Business](#ie584a9deaa72439f8729a2dc6244438c_16) | | | [1](#ie584a9deaa72439f8729a2dc6244438c_16) | | |

| [2.](#ie584a9deaa72439f8729a2dc6244438c_34) | | | [Properties](#ie584a9deaa72439f8729a2dc6244438c_34) | | | [15](#ie584a9deaa72439f8729a2dc6244438c_34) | | |

| | | | [PART II](#ie584a9deaa72439f8729a2dc6244438c_46) | | | | | |

| | | | [PART III](#ie584a9deaa72439f8729a2dc6244438c_319) | | | | | |

| | | | [PART IV](#ie584a9deaa72439f8729a2dc6244438c_337) | | | | | |

| [16.](#ie584a9deaa72439f8729a2dc6244438c_346) | | | [Form 10-K Summary](#ie584a9deaa72439f8729a2dc6244438c_346) | | | [104](#ie584a9deaa72439f8729a2dc6244438c_346) | | |

Governance

Board and Audit Committee Oversight

Our Board of Directors has delegated to the Audit Committee the oversight responsibility to review and discuss with management the Company’s privacy and data security, including cybersecurity, risk exposures, policies and practices, and the steps management has taken to detect, monitor and control such risks and the potential impact of those exposures on our business, financial results, operations and reputation.

The full Board and Audit Committee regularly receives reports and presentations on privacy and data security, which address relevant cybersecurity issues and risks and span a wide range of topics.

These reports and presentations are provided by officers with responsibility for privacy and data security, who include our Chief Information Security Officer (CISO), Chief Technology Officer (CTO) and AT&T’s Legal team.

In addition to regular reports to the Audit Committee, we have protocols by which certain security incidents are escalated within the Company and, where appropriate, reported in a timely manner to the Audit Committee.

Chief Security Office/CISO

We maintain a Chief Security Office (CSO), which is charged with management-level responsibility for all aspects of network and information security within the Company.

Led by our CISO and comprised of a large team of highly trained security professionals across multiple countries, the CSO is responsible for:

a.establishing the policies, standards and requirements for the security of AT&T’s computing and network environments;

b.protecting AT&T-owned and -managed assets and resources against unauthorized access by monitoring potential security threats, correlating network events, and overseeing the execution of corrective actions;

c.promoting compliance with AT&T’s security policies and network and information security program in a consistent manner on network systems and applications; and

d.providing security thought leadership in the global security arena.

Our CISO plays the key management role in assessing and managing our material risks from cybersecurity threats.

The CISO also works closely with AT&T Legal to oversee compliance with legal, regulatory and contractual security requirements.

The CISO has extensive technical leadership experience and cybersecurity expertise, gained from approximately 20 years of experience, including serving as the Chief Information Security Officer and Director of the Office of Cybersecurity at a U.S. government agency, in addition to serving as the Chief Information Security Officer of two large public companies.

Prior to that, he served for 20 years in the U.S. military, in various information technology roles of increasing seniority.

The security professionals in the CSO have cybersecurity backgrounds and expertise relevant to their roles, including, in certain circumstances, relevant industry certifications.

Risk Management and Strategy

We maintain a network and information security program that is reasonably designed to protect our information, and that of our customers, from unauthorized risks to their confidentiality, integrity, or availability.

Our program encompasses the CSO and its policies, platforms, procedures, and processes for assessing, identifying, and managing risks from cybersecurity threats, including third-party risk from vendors and suppliers; and the program is generally designed to identify and respond to security incidents and threats in a timely manner to minimize the loss or compromise of information assets and to facilitate incident resolution.

We maintain continuous and near-real-time security monitoring of the AT&T network for investigation, action and response to network security events.

This security monitoring leverages tools, where available, such as near-real-time data correlation, situational awareness reporting, active incident investigation, case management, trend analysis and predictive security alerting.

We assess, identify, and manage risks from cybersecurity threats through various mechanisms, which from time to time may include tabletop exercises to test our preparedness and incident response process, business unit assessments, control gap analyses, threat modeling, impact analyses, internal audits, external audits, penetration tests and engaging third parties to conduct analyses of our information security program.

We conduct vulnerability testing and assess identified vulnerabilities for severity, the potential impact to AT&T and our customers, and likelihood of occurrence.

We regularly evaluate security controls to maintain their functionality in accordance with security policy.

We also obtain cybersecurity threat intelligence from recognized forums, third parties, and other sources as part of our risk assessment process.

In addition, as a critical infrastructure entity, we collaborate with numerous agencies in the U.S. government to help protect U.S. communications networks and critical infrastructure, which, in turn, informs our cybersecurity threat intelligence.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| AT&T Inc. | | | | | | | | |

| Dollars in millions except per share amounts | | | | | | | | |

With respect to incident response, the Company has adopted a Cybersecurity Incident Response Plan, as well as a Data Privacy Incident Response Plan that applies if customer information has been compromised (together, the “IRPs”), to provide a common framework for responding to security incidents.

This framework establishes procedures for identifying, validating, categorizing, documenting and responding to security events that are identified by or reported to the CSO.

The IRPs apply to all AT&T personnel (including contractors and partners) that perform functions or services that require securing AT&T information and computing assets, and to all devices and network services that are owned or managed by the Company.

The IRPs set out a coordinated, multi-functional approach for investigating, containing, and mitigating incidents, including reporting findings to senior management and other key stakeholders and keeping them informed and involved as appropriate.

In general, our incident response process follows the NIST (National Institute of Standards and Technology) framework and focuses on four phases: preparation; detection and analysis; containment, eradication and recovery; and post-incident remediation.

Impact of Cybersecurity Risk

In 2023, we did not identify and were not aware of any cybersecurity breaches that we believe have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.

For a discussion of cybersecurity risk, please see the information contained under the heading “Cyberattacks impacting our networks or systems may have a material adverse effect on our operations” of Item 1A.

At December 31, [removed: 2022,] [added: 2023,] of our total property, plant and equipment, central office equipment represented [removed: 30%;] [added: 29%;] outside plant (including cable, wiring and other non-central office network equipment) represented [removed: 26%;] [added: 27%;] other equipment, comprised principally of wireless network equipment attached to towers, furniture and office equipment and vehicles and other work equipment, represented 25%; land, building and wireless communications towers represented 12%; and other miscellaneous property represented 7%.

| John T. Stankey | | | [removed: 60] [added: 61] | | | Chief Executive Officer and President | | | 7/2020 | | |

| F. Thaddeus Arroyo | | | [removed: 59] [added: 60] | | | Chief Strategy and Development Officer | | | 5/2022 | | |

| Pascal Desroches | | | [removed: 58] [added: 59] | | | Senior Executive Vice President and Chief Financial Officer | | | 4/2021 | | |

| Edward W. Gillespie | | | [removed: 61] [added: 62] | | | Senior Executive Vice President - External and Legislative Affairs, AT&T Services, Inc. | | | 4/2020 | | |

| David [removed: S. Huntley] [added: R. McAtee II] | | | [removed: 64] [added: 55] | | | Senior Executive Vice President and [removed: Chief Compliance Officer] [added: General Counsel] | | | [removed: 12/2014] [added: 10/2015] | | |

| Kellyn S. Kenny | | | [removed: 45] [added: 46] | | | Chief Marketing and Growth Officer | | | 5/2022 | | |

| Lori M. Lee | | | [removed: 57] [added: 58] | | | Global Marketing Officer and Senior Executive Vice President - [added: Human Resources and] International | | | [removed: 12/2022] [added: 8/2023] | | |

| Jeremy Legg | | | [removed: 53] [added: 54] | | | Chief Technology Officer, AT&T Services, Inc. | | | 5/2022 | | |

| Jeffery S. McElfresh | | | [removed: 52] [added: 53] | | | Chief Operating Officer | | | 5/2022 | | |

The above executive officers have held high-level managerial positions with AT&T or its subsidiaries for more than the past five years, except for Mr. Desroches, Mr. Gillespie, Ms. [removed: Kenny, Mr. Legg,] [added: Kenny] and [removed: Ms. Santone.][added: Mr. Legg.]

As of February 1, 2024

| | | | | | | | | | | | |

(As of February 1, 2023)

| David R. McAtee II | | | 54 | | | Senior Executive Vice President and General Counsel | | | 10/2015 | | |

| Angela R. Santone | | | 51 | | | Senior Executive Vice President - Human Resources | | | 12/2019 | | |

Ms. Santone was previously Chief Administrative Officer of AT&T from May 2019 to December 2019, Executive Vice President and Global Chief Human Resources Officer of Turner from February 2016 to April 2019, and Senior Vice President and Chief Human Resources Officer of Turner from June 2013 to January 2016.

The number of stockholders of record as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] was [removed: 784,110] [added: 749,207] and [removed: 817,330.][added: 784,110.]

The number of stockholders of record as of February [removed: 8, 2023,] [added: 7, 2024,] was [removed: 781,511.][added: 746,395.]

We declared dividends on common stock, on a quarterly basis, totaling $1.11 per share in [removed: 2022] [added: 2023] and [removed: $2.08] [added: $1.11] per share in [removed: 2021.][added: 2022.]

[removed: ][added: ]

The comparison above assumes $100 invested on December 31, [removed: 2017,] [added: 2018,] in AT&T common stock and the following Standard & Poor’s (S&P) Indices: S&P 500 Index and S&P 500 Communication Services Index.

Our Board of Directors has approved the following authorization to repurchase common stock: March 2014 authorization program for 300 million shares, with 144 million outstanding at December 31, [removed: 2022.][added: 2023.]

To implement this authorization, we [added: have] used open market repurchases, relying on Rule 10b5-1 of the Securities Exchange Act of 1934, where feasible.

We [added: have] also used accelerated share repurchase agreements with large financial institutions to repurchase our stock.

Our [removed: 2023] [added: 2024] financing activities will focus on managing our debt level and paying dividends, subject to approval by our Board of Directors.

A summary of our repurchases of common stock during the fourth quarter of [removed: 2022] [added: 2023] is as follows:

| Period | | | Total Number of Shares (or Units) [removed: Purchased1,2,3] [added: Purchased1,2] | | | 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 | | |

[removed: 1In] [added: | 1 In] March 2014, our Board of Directors approved an authorization to repurchase up to 300 million shares of our common stock. [added: The authorization has no expiration date. | | | | | | | | | | | | | | |]

[removed: 2Of] [added: | 2 Of] the shares purchased, [removed: 891,463] [added: 264,463] shares were acquired through the withholding of taxes on the vesting of restricted stock and performance shares or in respect of the exercise price of options. [added: | | | | | | | | | | | | | | |]

| October 1, 2023 – | | | | | | | | | | | | | | |

| October 31, 2023 | | | 185,638 | | | $ | 14.99 | | — | | | 143,731,972 | | |

| November 1, 2023 – | | | | | | | | | | | | | | |

| November 30, 2023 | | | 2,674 | | | $ | 15.81 | | — | | | 143,731,972 | | |

| December 1, 2023 – | | | | | | | | | | | | | | |

| December 31, 2023 | | | 76,151 | | | $ | 16.55 | | — | | | 143,731,972 | | |

| Total | | | 264,463 | | | $ | 15.45 | | — | | | | | |

| October 1, 2022 - | | | | | | | | | | | | | | |

| October 31, 2022 | | | 400,261 | | | $ | 15.23 | | — | | | 143,731,972 | | |

| November 1, 2022 - | | | | | | | | | | | | | | |

| November 30, 2022 | | | 344,935 | | | $ | 18.41 | | — | | | 143,731,972 | | |

| December 1, 2022 - | | | | | | | | | | | | | | |

| December 31, 2022 | | | 146,267 | | | $ | 19.16 | | — | | | 143,731,972 | | |

| Total | | | 891,463 | | | $ | 17.10 | | — | | | | | |

The authorization has no expiration date.

3Of the shares repurchased or transferred, no shares were transferred from AT&T maintained Voluntary Employee Benefit Association (VEBA) trusts.

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Service | | | $ | [removed: 97,831] [added: 99,649] | | | | | $ | [removed: 111,565] [added: 97,831] | | | | | $ | [removed: 124,057] [added: 111,565] | |

| Equipment | | | [removed: 22,910] [added: 22,779] | | | | | | [removed: 22,473] [added: 22,910] | | | | | | [removed: 18,993] [added: 22,473] | | |

| Total operating revenues | | | [removed: 120,741] [added: 122,428] | | | | | | [removed: 134,038] [added: 120,741] | | | | | | [removed: 143,050] [added: 134,038] | | |

| Equipment | | | [removed: 24,009] [added: 23,136] | | | | | | [removed: 23,685] [added: 24,009] | | | | | | [removed: 19,585] [added: 23,685] | | |

| Broadcast, programming and operations | | | — | | | | | | [removed: 8,106] [added: —] | | | | | | [removed: 16,077] [added: 8,106] | | |

| Other cost of revenues (exclusive of depreciation and amortization shown separately below) | | | [removed: 26,839] [added: 26,987] | | | | | | [removed: 28,616] [added: 26,839] | | | | | | [removed: 29,989] [added: 28,616] | | |

| Selling, general and administrative | | | [removed: 28,961] [added: 28,874] | | | | | | [removed: 29,669] [added: 28,961] | | | | | | [removed: 30,817] [added: 29,669] | | |

| Asset impairments and abandonments and restructuring | | | [removed: 27,498] [added: 1,193] | | | | | | [removed: 213] [added: 27,498] | | | | | | [removed: 15,687] [added: 213] | | |

| Depreciation and amortization | | | [removed: 18,021] [added: 18,777] | | | | | | [removed: 17,852] [added: 18,021] | | | | | | [removed: 22,523] [added: 17,852] | | |

| Total operating expenses | | | [removed: 125,328] [added: 98,967] | | | | | | [removed: 108,141] [added: 125,328] | | | | | | [removed: 134,678] [added: 108,141] | | |

| Operating Income (Loss) | | | [removed: (4,587)] [added: 23,461] | | | | | | [removed: 25,897] [added: (4,587)] | | | | | | [removed: 8,372] [added: 25,897] | | |

| Interest expense | | | [removed: (6,108)] [added: (6,704)] | | | | | | [removed: (6,716)] [added: (6,108)] | | | | | | [removed: (7,727)] [added: (6,716)] | | |

| Equity in net income of affiliates | | | [removed: 1,791] [added: 1,675] | | | | | | [removed: 603] [added: 1,791] | | | | | | [removed: 89] [added: 603] | | |

| Other income (expense) – net | | | [removed: 5,810] [added: 1,416] | | | | | | [removed: 9,387] [added: 5,810] | | | | | | [removed: (1,088)] [added: 9,387] | | |

| Total other income (expense) | | | [removed: 1,493] [added: (3,613)] | | | | | | [removed: 3,274] [added: 1,493] | | | | | | [removed: (8,726)] [added: 3,274] | | |

| Income (Loss) from Continuing Operations Before Income Taxes | | | [removed: (3,094)] [added: 19,848] | | | | | | [removed: 29,171] [added: (3,094)] | | | | | | [removed: (354)] [added: 29,171] | | |

| Income tax expense on continuing operations | | | [removed: 3,780] [added: 4,225] | | | | | | [removed: 5,395] [added: 3,780] | | | | | | [removed: 1,168] [added: 5,395] | | |

| Income (Loss) from Continuing Operations | | | [removed: (6,874)] [added: 15,623] | | | | | | [removed: 23,776] [added: (6,874)] | | | | | | [removed: (1,522)] [added: 23,776] | | |

| Loss from discontinued operations, net of tax | | | [removed: (181)] [added: —] | | | | | | [removed: (2,297)] [added: (181)] | | | | | | [removed: (2,299)] [added: (2,297)] | | |

| Net Income (Loss) | | | [removed: (7,055)] [added: 15,623] | | | | | | [removed: 21,479] [added: (7,055)] | | | | | | [removed: (3,821)] [added: 21,479] | | |

| Less: Net Income Attributable to Noncontrolling Interest | | | [removed: (1,469)] [added: (1,223)] | | | | | | [removed: (1,398)] [added: (1,469)] | | | | | | [removed: (1,355)] [added: (1,398)] | | |

| Net Income (Loss) Attributable to AT&T | | | $ | [removed: (8,524)] [added: 14,400] | | | | | $ | [removed: 20,081] [added: (8,524)] | | | | | $ | [removed: (5,176)] [added: 20,081] | |

| Less: Preferred Stock Dividends | | | [removed: (203)] [added: (208)] | | | | | | [removed: (207)] [added: (203)] | | | | | | [removed: (193)] [added: (207)] | | |

| Net Income (Loss) Attributable to Common Stock | | | $ | [removed: (8,727)] [added: 14,192] | | | | | $ | [removed: 19,874] [added: (8,727)] | | | | | $ | [removed: (5,369)] [added: 19,874] | |

| Basic Earnings (Loss) Per Share from continuing operations | | | $ | [removed: (1.10)] [added: 1.97] | | | | | $ | [removed: 3.07] [added: (1.10)] | | | | | $ | [removed: (0.45)] [added: 3.07] | |

| Basic Loss Per Share from discontinued operations | | | $ | [removed: (0.03)] [added: —] | | | | | $ | [removed: (0.30)] [added: (0.03)] | | | | | $ | (0.30) | |

| Basic Earnings (Loss) Per Share Attributable to Common Stock | | | $ | [removed: (1.13)] [added: 1.97] | | | | | $ | [removed: 2.77] [added: (1.13)] | | | | | $ | [removed: (0.75)] [added: 2.77] | |

| Diluted Earnings (Loss) Per Share from continuing operations | | | $ | [removed: (1.10)] [added: 1.97] | | | | | $ | [removed: 3.02] [added: (1.10)] | | | | | $ | [removed: (0.45)] [added: 3.02] | |

| Diluted Loss Per Share from discontinued operations | | | $ | [removed: (0.03)] [added: —] | | | | | $ | [removed: (0.29)] [added: (0.03)] | | | | | $ | [removed: (0.30)] [added: (0.29)] | |

| Diluted Earnings (Loss) Per Share Attributable to Common Stock | | | $ | [removed: (1.13)] [added: 1.97] | | | | | $ | [removed: 2.73] [added: (1.13)] | | | | | $ | [removed: (0.75)] [added: 2.73] | |

| Net income (loss) | | | $ | [removed: (7,055)] [added: 15,623] | | | | | $ | [removed: 21,479] [added: (7,055)] | | | | | $ | [removed: (3,821)] [added: 21,479] | |

| Translation adjustment (includes $0, [removed: $(2)] [added: $0] and [removed: $(59)] [added: $(2)] attributable to noncontrolling interest), net of taxes of [removed: $90, $(44)] [added: $143, $90] and [removed: $(42)] [added: $(44)] | | | [removed: 346] [added: 463] | | | | | | [removed: (127)] [added: 346] | | | | | | [removed: (929)] [added: (127)] | | |

| Reclassification adjustment included in net income (loss), net of taxes of $0, [removed: $204 and] $0 [added: and $204] | | | — | | | | | | [removed: 2,087] [added: —] | | | | | | [removed: —] [added: 2,087] | | |

| Distributions of WarnerMedia, net of taxes of [removed: $(38), $0] [added: $0, $(38)] and $0 | | | [removed: (182)] [added: —] | | | | | | [removed: —] [added: (182)] | | | | | | — | | |

| Net unrealized gains (losses), net of taxes of [removed: $(49), $(21)] [added: $8, $(49)] and [removed: $27] [added: $(21)] | | | [removed: (143)] [added: 22] | | | | | | [removed: (63)] [added: (143)] | | | | | | [removed: 78] [added: (63)] | | |

| Reclassification adjustment included in net income (loss), net of taxes of [removed: $3, $(1)] [added: $4, $3] and [removed: $(5)] [added: $(1)] | | | [removed: 8] [added: 11] | | | | | | [removed: (3)] [added: 8] | | | | | | [removed: (15)] [added: (3)] | | |

| Net unrealized gains (losses), net of taxes of [removed: $(183), $(192)] [added: $228, $(183)] and [removed: $(212)] [added: $(192)] | | | [removed: (648)] [added: 922] | | | | | | [removed: (715)] [added: (648)] | | | | | | [removed: (811)] [added: (715)] | | |

| Reclassification adjustment included in net income (loss), net of taxes of [removed: $25, $19] [added: $12, $25] and [removed: $18] [added: $19] | | | [removed: 96] [added: 47] | | | | | | [removed: 72] [added: 96] | | | | | | [removed: 69] [added: 72] | | |

| Distributions of WarnerMedia, net of taxes of [removed: $(12), $0] [added: $0, $(12)] and $0 | | | [removed: (24)] [added: —] | | | | | | [removed: —] [added: (24)] | | | | | | — | | |

| | | | 2023 | | | | | | 2022 | | |

| Redeemable Noncontrolling Interest | | | 1,973 | | | | | | — | | |

| Total stockholders’ equity | | | 117,442 | | | | | | 106,457 | | |

| Depreciation and amortization | | | 18,777 | | | | | | 18,021 | | | | | | 17,852 | | |

| (Purchases), sales and settlements of securities and investments - net | | | (902) | | | | | | 82 | | | | | | 44 | | |

| Preferred stock dividends | | | | | | | | | (205) | | | | | | | | | | | | — | | | | | | | | | | | | — | | |

| Common stock dividends ($1.11 per share in 2023) | | | | | | | | | (7,991) | | | | | | | | | | | | — | | | | | | | | | | | | — | | |

1 Excludes redeemable noncontrolling interest.

We elected to adopt the annual rollforward requirement for the year ended December 31, 2023, with prospective application (see Note 22).

Prior to the April 2023 repurchase, settlement of our Series A Cumulative Perpetual Membership Interests in AT&T Mobility II LLC (Mobility preferred interests) could have resulted in additional

Segment Reporting In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (ASU 2023-07), which requires that a public entity disclose, on an interim and annual basis, significant segment expense categories and amounts that are regularly provided to its chief operating decision maker (CODM) and included in each reported measure of segment profit or loss.

An entity must also disclose, by reportable segment, the amount and composition of other expenses.

The standard requires an entity disclose the title and position of its CODM and explain how the CODM uses these reported measures in assessing segment performance and determining how to allocate resources.

The standard allows early adoption of these requirements; we are currently evaluating the disclosure impacts of our adoption.

Income Taxes In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (ASU 2023-09), which requires that a public entity disclose specific categories in its annual income tax rate reconciliation table and provide additional qualitative information for reconciling items representing at least 5% of pre-tax income or loss from continuing operations, using the federal statutory tax rate.

The standard also requires an annual breakdown of income taxes paid by jurisdiction (i.e., federal, state and foreign), with further disaggregation by jurisdictions representing at least 5% of total income taxes paid.

ASU 2023-09 will be effective for annual periods beginning after December 15, 2024, with prospective application.

methodology.

| Loss from discontinued operations, net of tax | | | — | | | | | | (181) | | | | | | (2,297) | | |

On April 5, 2023, we repurchased all our Mobility preferred interests (see Note 16).

| Net other comprehensive income (loss) | | | 463 | | | | | | 33 | | | | | | 969 | | | | | | (1,931) | | | | | | (466) | | |

| Balance as of December 31, 2023 | | | $ | (1,337) | | | | | $ | (57) | | | | | $ | (1,029) | | | | | $ | 4,723 | | | | | $ | 2,300 | |

Effective for the first quarter of 2023, we stopped recording prior service credits to our individual business units or the corresponding charge to Corporate and Other, and segment operating expenses were recast to remove prior service credits from our historical reporting.

Prior service credits are, and will continue to be, recorded as other income in our consolidated income statement in accordance with GAAP.

This recast increased Communications segment operations and support expenses by approximately $2,400 in 2022 and $2,100 in 2021.

| Mobility | | | $ | 83,982 | | | | | $ | 49,604 | | | | | $ | 34,378 | | | | | $ | 8,517 | | | | | $ | 25,861 | |

| Business Wireline | | | 20,883 | | | | | | 14,217 | | | | | | 6,666 | | | | | | 5,377 | | | | | | 1,289 | | |

| Consumer Wireline | | | 13,173 | | | | | | 9,053 | | | | | | 4,120 | | | | | | 3,469 | | | | | | 651 | | |

| Total Communications | | | 118,038 | | | | | | 72,874 | | | | | | 45,164 | | | | | | 17,363 | | | | | | 27,801 | | |

| Latin America – Mexico | | | 3,932 | | | | | | 3,349 | | | | | | 583 | | | | | | 724 | | | | | | (141) | | |

| Segment Total | | | 121,970 | | | | | | 76,223 | | | | | | 45,747 | | | | | | 18,087 | | | | | | 27,660 | | |

| DTV-related retained costs | | | — | | | | | | 686 | | | | | | (686) | | | | | | 586 | | | | | | (1,272) | | |

| Parent administration support | | | (7) | | | | | | 1,416 | | | | | | (1,423) | | | | | | 6 | | | | | | (1,429) | | |

| Value portfolio | | | 380 | | | | | | 99 | | | | | | 281 | | | | | | 22 | | | | | | 259 | | |

| Total Corporate | | | 458 | | | | | | 2,805 | | | | | | (2,347) | | | | | | 614 | | | | | | (2,961) | | |

| Certain significant items | | | — | | | | | | 1,162 | | | | | | (1,162) | | | | | | 76 | | | | | | (1,238) | | |

| Total Corporate and Other | | | 458 | | | | | | 3,967 | | | | | | (3,509) | | | | | | 690 | | | | | | (4,199) | | |

| AT&T Inc. | | | $ | 122,428 | | | | | $ | 80,190 | | | | | $ | 42,238 | | | | | $ | 18,777 | | | | | $ | 23,461 | |

| Mobility | | | $ | 81,780 | | | | | $ | 49,770 | | | | | $ | 32,010 | | | | | $ | 8,198 | | | | | $ | 23,812 | |

| Parent administration support | | | (32) | | | | | | 1,378 | | | | | | (1,410) | | | | | | 16 | | | | | | (1,426) | | |

| Assets from discontinued operations | | | — | | | | | | 119,776 | | |

| Liabilities from discontinued operations | | | — | | | | | | 33,555 | | |

| Issuance of preferred stock | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,869 | | |

| Cumulative effect of accounting changes and other adjustments | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (293) | | |

| Adjusted beginning balance | | | | | | | | | 42,350 | | | | | | | | | | | | 37,457 | | | | | | | | | | | | 57,643 | | |

| Repurchase and acquisition of common stock | | | (44) | | | | | | (890) | | | | | | (8) | | | | | | (237) | | | | | | (150) | | | | | | (5,631) | | |

| Issuance of treasury stock | | | 31 | | | | | | 1,088 | | | | | | 23 | | | | | | 867 | | | | | | 21 | | | | | | 806 | | |

| Cumulative effect of accounting changes and other adjustments | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (7) | | |

| Adjusted beginning balance | | | | | | | | | 17,523 | | | | | | | | | | | | 17,567 | | | | | | | | | | | | 17,706 | | |

| Total Stockholders’ Equity at beginning of year | | | | | | | | | $ | 183,855 | | | | | | | | | | | $ | 179,240 | | | | | | | | | | | $ | 201,934 | |

| | | |

| --- | --- | --- |

| AT&T Inc. | | |

| Dollars in millions except per share amounts | | |

The following table presents the impact of the adoption of ASU 2020-06 on our diluted earnings per share from continuing operations:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | Historical Accounting Method | | | | | | Effect of Adoption of ASU 2020-061 | | | | | | Under ASU 2020-06 | | | | | | | | |

| Diluted earnings per share from continuing operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Year ended December 31, 2021 | | | | | | | | | | | | | | | $ | 3.07 | | | | | $ | (0.05) | | | | | $ | 3.02 | |

| Year ended December 31, 2020 | | | | | | | | | | | | | | | $ | (0.45) | | | | | $ | — | | | | | $ | (0.45) | |

| 1See Note 2 for a discussion of the numerator and denominator adjustments. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Government Assistance In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (ASU 2021-10), which requires annual disclosures (e.g., terms and conditions, accounting treatment, impacted financial statement lines), in the notes to the financial statements, about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy to other guidance.

We adopted ASU 2021-10 effective for the annual reporting period ended December 31, 2022, as required, under prospective application, with no required updates to our disclosures.

Credit Losses As of January 1, 2020, we adopted, through modified retrospective application, ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or Accounting Standards Codification (ASC) 326 (ASC 326), which replaces the incurred loss impairment methodology under prior GAAP with an expected credit loss model.

ASC 326 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 on January 1, 2020, we recorded a $293 reduction to “Retained earnings,” $395 increase to “Allowances for credit losses” 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.” Our adoption of ASC 326 did not have a material impact on our financial statements.

The standard allows early adoption of all requirements.

We are in the process of evaluating the impact of our adoption of ASU 2022-04.

deferred income tax liabilities on our consolidated balance sheets), for which the realization is uncertain.

As of January 1, 2021, we adopted, with modified retrospective application, the FASB’s ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (ASU 2019-12), which simplified income tax accounting requirements in areas deemed costly and complex.

ASU 2019-12 did not have a material impact on our financial statements.

In addition, there is certain network software that allows the equipment to provide the features and functions unique to the AT&T network, which we include in the cost of the equipment categories for financial reporting purposes.

of domestic wireless licenses have occurred routinely and at nominal cost.

We hedge a portion of the foreign currency exchange risk involved in certain foreign currency-denominated transactions, which we explain further in our discussion of our methods of managing our foreign currency risk (see Note 12).

While our intent is to settle the Mobility preferred interests in cash, the ability to settle this instrument in AT&T shares will result in additional dilutive impact, the magnitude of which is influenced by the fair value of the Mobility preferred interests and the average AT&T common stock price during the reporting period, which could vary from period-to-period.

The numerator includes an adjustment to add back to income from continuing operations the earned distributions on the Mobility preferred interests, included in net income attributable to noncontrolling interest, and the denominator includes the potential issuance of AT&T common stock to settle the Mobility preferred interests outstanding.

(See Notes 1 and 16)

| Balance as of December 31, 2019 | | | $ | (3,056) | | | | | $ | 48 | | | | | $ | (37) | | | | | $ | 8,515 | | | | | $ | 5,470 | |

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 December 31, [removed: 2022.][added: 2023.]

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 December 31, [removed: 2022.][added: 2023.]

AT&T management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Based on its assessment, AT&T management believes that, as of December 31, [removed: 2022,] [added: 2023,] the Company’s internal control over financial reporting is effective based on those criteria.

[removed: There] [added: a.There] is no information that was required to be disclosed in a report on Form 8-K during the fourth quarter of [removed: 2022] [added: 2023] but was not reported.

b.In the quarter ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement for the purchase or sale of our securities, within the meaning of Item 408 of Regulation S-K.

Information regarding executive officers required by Item 401 of Regulation S-K is furnished in a separate disclosure at the end of Part I of this report entitled “Information about our Executive Officers.” Information regarding directors required by Item 401 of Regulation S-K is incorporated herein by reference pursuant to General Instruction G(3) from the registrant’s [removed: 2023] [added: 2024] definitive proxy statement (Proxy Statement) under the heading “Management Proposal Item No. 1.

Information required by this Item is incorporated herein by reference pursuant to General Instruction G(3) from the registrant’s Proxy Statement under the headings “Director Compensation,” “CEO Pay Ratio,” [added: “Pay Versus Performance,”] and the pages beginning with the heading “Compensation Discussion and Analysis” and ending with, and including, the pages under the heading “Potential Payments upon Change in Control.”

The following table provides information as of December 31, [removed: 2022,] [added: 2023,] concerning shares of AT&T common stock authorized for issuance under AT&T’s existing equity compensation plans.

| Equity compensation plans approved by security holders | | | [removed: 76,927,549] [added: 65,711,036] (1) | | | $ | — | | [removed: 102,240,827] [added: 97,567,370] (2) | | |

(1)Includes the issuance of stock in connection with the following stockholder approved plans: (a) 0 stock options under the Stock Purchase and Deferral Plan (SPDP), (b) [removed: 945,111] [added: 108,480] phantom stock units under the Stock Savings Plan (SSP), [removed: 18,492,845] [added: 17,725,781] phantom stock units under the SPDP, [removed: 0] [added: 21,174] restricted stock [removed: units] under the 2011 Incentive Plan, [removed: 0] [added: 425,950] restricted stock [removed: units] under the 2016 Incentive Plan and [removed: 35,383,614] [added: 43,413,267] restricted stock [removed: units] under the 2018 Incentive Plan, (c) [removed: 0 target number of stock-settled performance shares under the 2011 Incentive Plan, 0 target number of stock-settled performance shares under the 2016 Incentive Plan, and 19,478,272] [added: 1,871,791] target number of stock-settled performance shares under the 2018 Incentive Plan.

At payout, the target number of performance shares may be reduced to zero or increased [removed: by] up to [removed: 150%.][added: 200%.]

The weighted-average exercise price in the table does not include outstanding [added: restricted stock,] performance [removed: shares] [added: shares,] or phantom stock units.

To the extent applicable, the amount shown for approved plans in column (a), in addition to the above amounts, includes [removed: 2,648,162] [added: 2,144,593] phantom stock units (computed on a first-in-first-out basis) that were approved by the Board in 2000.

(2)Includes [removed: 19,493,387] [added: 12,326,447] shares that may be issued under the SPDP, [removed: 80,375,750] [added: 82,053,876] shares that may be issued under the 2018 Incentive Plan, and up to [removed: 2,371,691] [added: 3,187,047] shares that may be purchased through reinvestment of dividends on phantom shares held in the SSP.

As of December 31, [removed: 2022,] [added: 2023,] there were [removed: 2,861,614] [added: 2,199,257] shares of AT&T common stock subject to the converted options, having a weighted-average exercise price of [removed: $20.18.][added: $20.82.]

Also, does not include [removed: 346,157] [added: 345,032] outstanding phantom stock units that were issued by companies acquired by AT&T that are convertible into stock on a 1-to-1 basis, along with an estimated [removed: 135,365] [added: 138,149] shares that may be purchased with reinvested dividend equivalents paid on the outstanding phantom stock units.

| Total | | | 65,711,036 (3) | | | $ | — | | 97,567,370 (2) | | |

The weighted-average exercise price in the table does not include outstanding restricted stock, performance shares, or phantom stock units.

| Total | | | 76,927,549 (3) | | | $ | — | | 102,240,827 (2) | | |

| (1) Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) | | | | | | | | | | | | [removed: [40](#ie584a9deaa72439f8729a2dc6244438c_157)] [added: [40](#i0d12995231184538879373166b6a2300_160)] | | |

| Financial Statements covered by Report of Independent Registered Public Accounting Firm: | | | | | | | | | | | | [removed: [42](#ie584a9deaa72439f8729a2dc6244438c_160)] | | |

| Consolidated Statements of Income | | | | | | | | | | | | [removed: [43](#ie584a9deaa72439f8729a2dc6244438c_163)] [added: [43](#i0d12995231184538879373166b6a2300_166)] | | |

| Consolidated Statements of Comprehensive Income | | | | | | | | | | | | [removed: [44](#ie584a9deaa72439f8729a2dc6244438c_166)] [added: [44](#i0d12995231184538879373166b6a2300_169)] | | |

| Consolidated Balance Sheets | | | | | | | | | | | | [removed: [45](#ie584a9deaa72439f8729a2dc6244438c_172)] [added: [45](#i0d12995231184538879373166b6a2300_175)] | | |

| Consolidated Statements of Cash Flows | | | | | | | | | | | | [removed: [46](#ie584a9deaa72439f8729a2dc6244438c_178)] [added: [46](#i0d12995231184538879373166b6a2300_181)] | | |

| Consolidated Statements of Changes in Stockholders’ Equity | | | | | | | | | | | | [removed: [47](#ie584a9deaa72439f8729a2dc6244438c_184)] [added: [47](#i0d12995231184538879373166b6a2300_187)] | | |

| Notes to Consolidated Financial Statements | | | | | | | | | | | | [removed: [49](#ie584a9deaa72439f8729a2dc6244438c_190)] [added: [49](#i0d12995231184538879373166b6a2300_193)] | | |

| II - Valuation and Qualifying Accounts | | | | | | | | | | | | [removed: [105](#ie584a9deaa72439f8729a2dc6244438c_349)] [added: [102](#i0d12995231184538879373166b6a2300_376)] | | |

| 4-i | | | [Description of AT&T’s Securities Registered Under Section 12 of the Exchange [removed: Act](https://www.sec.gov/Archives/edgar/data/732717/000073271723000011/ex-4xiye2022.htm)] [added: Act](https://www.sec.gov/Archives/edgar/data/732717/000073271724000009/ex-4xiye2023.htm)] | | | | | | | | | | | |

| 10-h | | | 2005 Supplemental Employee Retirement Plan [(Exhibit 10-g to Form 10-K for the period ending December 31, [removed: 2021](https://www.sec.gov/Archives/edgar/data/732717/000073271722000015/ex-10xgye2021.htm)[)](https://www.sec.gov/Archives/edgar/data/732717/000073271722000015/ex-10xgye2021.htm)] [added: 2021)](https://www.sec.gov/Archives/edgar/data/732717/000073271722000015/ex-10xgye2021.htm)] | | | | | | | | | | | |

| [removed: 10-k] [added: 10-l] | | | [removed: Stock Purchase and] [added: Cash] Deferral Plan as amended July 28, 2022 ([Exhibit [removed: 10.](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1033q22.htm)[3](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1033q22.htm) [to] [added: 10.2 to] Form 10-Q for the period ending September 30, [removed: 202](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1033q22.htm)[2](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1033q22.htm))] [added: 2022](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1023q22.htm))] | | | | | | | | | | | |

| [removed: 10-l] [added: 10-o] | | | [removed: Cash Deferral] [added: AT&T Inc. Health] Plan [removed: as amended July 28, 2022] ([Exhibit [removed: 10.](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1023q22.htm)[2](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1023q22.htm)] [added: 10.](https://www.sec.gov/Archives/edgar/data/732717/000073271723000047/exhibit1022q23.htm)[2](https://www.sec.gov/Archives/edgar/data/732717/000073271723000047/exhibit1022q23.htm)] [to Form 10-Q for the period [removed: ending September 30, 202](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1023q22.htm)[2](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1023q22.htm))] [added: ending](https://www.sec.gov/Archives/edgar/data/732717/000073271723000047/exhibit1022q23.htm) [June](https://www.sec.gov/Archives/edgar/data/732717/000073271723000047/exhibit1022q23.htm) [30, 202](https://www.sec.gov/Archives/edgar/data/732717/000073271723000047/exhibit1022q23.htm)[3](https://www.sec.gov/Archives/edgar/data/732717/000073271723000047/exhibit1022q23.htm))] | | | | | | | | | | | |

| [removed: 10-o] [added: 10-r] | | | [removed: AT&T Inc. Health] [added: Administrative] Plan [removed: ([Exhibit] [added: [(](https://www.sec.gov/Archives/edgar/data/732717/000073271723000057/exhibit1013q23.htm)[Exhibit] 10.1 to Form 10-Q for the period ending September 30, [removed: 202](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1013q22.htm)[2](https://www.sec.gov/Archives/edgar/data/732717/000073271722000102/exhibit1013q22.htm))] [added: 2023](https://www.sec.gov/Archives/edgar/data/732717/000073271723000057/exhibit1013q23.htm))] | | | | | | | | | | | |

| 10-q | | | AT&T Inc. Equity Retention and Hedging Policy as amended March 24, 2022 ([Exhibit 10.2 to [removed: Form](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm) [10-Q](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm) [](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm)[f](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm)[or] [added: Form 10-Q for] the period [removed: end](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm)[ing](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm) [March] [added: ending March] 31, [removed: 2](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm)[022](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm))] [added: 2022](https://www.sec.gov/Archives/edgar/data/732717/000073271711000107/retention.htm))] | | | | | | | | | | | |

| [removed: 10-r] [added: 10-s] | | | [removed: Administrative] [added: AT&T Inc. Non-Employee Director Stock and Deferral] Plan [removed: [(](https://www.sec.gov/Archives/edgar/data/732717/000156276220000064/exh10q.htm)[Exhibit 10-q] [added: ([Exhibit 10-s] to Form 10-K for the period ending December 31, [removed: 2019](https://www.sec.gov/Archives/edgar/data/732717/000156276220000064/exh10q.htm))] [added: 2022](https://www.sec.gov/Archives/edgar/data/732717/000073271723000011/ex-10xsye2022.htm))] | | | | | | | | | | | |