AT&T Delivers Strong Second-Quarter Results as Investment-Led Strategy Gains Momentum

AT&T Delivers Strong Second-Quarter Results as Investment-Led Strategy Gains Momentum AT&T adds more than 1 million Advanced Connectivity customers, driven by year-over-year increases in net adds across fiber, fixed wireless, and postpaid phone subscribers

The Company reiterates all consolidated full-year 2026 and multi-year financial guidance and multi-year capital return plans, with accelerated pace of share repurchases in 2026

DALLAS, July 22, 2026 /PRNewswire/ -- AT&T Inc. (NYSE: T) reported strong second-quarter results, driven by consistent execution of the Company's investment-led strategy, demonstrating improved growth in consolidated service revenue and profitability. The Company continues to grow its base of high-value converged customers as it delivered a record quarter for combined fiber and fixed wireless net adds and its strongest consumer postpaid wireless account growth in more than three years.

"The accelerated growth we delivered this quarter shows our structural advantages to lead the next era of connectivity," said John Stankey, AT&T Chairman and CEO. "We are accelerating the pace of our planned share repurchases this year to approximately $10 billion, reflecting our confidence in our market position. With an industry-leading position in fiber – the best connectivity technology available – we believe our network performance and operating scale can't be matched."

Second-Quarter Consolidated Results 1

Second-Quarter Highlights

Outlook and Capital Allocation Plan

AT&T maintains its outlook for improved growth in adjusted EBITDA* and adjusted EPS* and higher free cash flow* through 2028, its plans to return $45 billion+ to shareholders during 2026-2028 through dividends and share repurchases, and an expectation that its net debt-to-adjusted EBITDA ratio* will return to a level consistent with its target in the 2.5x range within approximately three years following the closing of its transaction with EchoStar.

The Company's long-term outlook for 2026-2028 includes 4:

Note: AT&T's second-quarter 2026 earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, July 22, 2026. The webcast and related materials, including financial highlights, will be available at investors.att.com.

Consolidated Financial Results

Segment Results 6

Advanced Connectivity service revenues grew 5.1% year over year, driving growth in operating income of 20.3% and EBITDA* of 8.0%. Internet net adds were 646,000 — comprised of 367,000 fiber and 279,000 fixed wireless — and postpaid phone net adds were 432,000.

Advanced Connectivity

Dollars in millions

Second Quarter

Percent

Unaudited

2026

2025

Change

Operating Revenues

$ 28,615

$ 27,497

4.1

Service

23,478

22,334

5.1

Wireless Service

17,413

16,853

3.3

Advanced Home Internet

2,926

2,299

27.3

Business Fiber and Advanced Connectivity

1,946

1,769

10.0

Business Transitional and Other

1,042

1,249

(16.6)

Other Service

151

164

(7.9)

Equipment

5,137

5,163

(0.5)

Operating Expenses

21,270

21,391

(0.6)

Operating Income

7,345

6,106

20.3

Operating Income Margin

25.7

22.2

350

EBITDA*

$ 12,032

$ 11,141

8.0

EBITDA Margin*

42.0

40.5

150

Advanced Connectivity segment revenues grew 4.1% year over year, driven by service revenue growth of 5.1%. Wireless service revenue increased due to growth in retail wireless subscribers in underpenetrated categories and converged accounts, and pricing actions that were partially offset by promotional discounts on wireless subscriber additions. Advanced home internet revenue growth, which included an impact from the acquired mass markets fiber business that closed in the first quarter, reflects increases in fiber and AT&T Internet Air revenues. Business fiber and advanced connectivity revenues increased largely due to higher fiber and fixed wireless revenues. Business transitional and other revenues decreased partly due to lower demand for virtual private network and wholesale services.

Operating expenses were down 0.6% year over year, due to lower depreciation expense from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives. Also contributing to the decline were cost reductions from transformation initiatives, lower content licensing fees, and tower transaction gains. These decreases were partially offset by higher advertising expense, incremental customer costs related to the acquired mass markets fiber business, and higher bad debt expenses driven by subscriber growth.

Operating income was $7.3 billion, up 20.3% year over year. EBITDA* was $12.0 billion, up $891 million year over year.

Legacy revenues continued to decline year over year in line with AT&T's goal to power down and stop providing service over the large majority of its domestic copper-based network by the end of 2029.

Legacy

Dollars in millions

Second Quarter

Percent

Unaudited

2026

2025

Change

Operating Revenues

$ 1,632

$ 2,202

(25.9)

Operating Expenses

1,109

1,243

(10.8)

Operating Income

523

959

(45.5)

Operating Income Margin

32.0

43.6

(1,160)

EBITDA*

$ 523

$ 959

(45.5)

EBITDA Margin*

32.0

43.6

(1,160)

Legacy segment revenues were down 25.9% year over year, primarily due to lower demand for services as the Company continues to decommission its copper-based network. Operating expenses, which represent direct operating costs, were $1.1 billion, down 10.8% year over year. Expense declines were primarily driven by lower personnel and other costs resulting from the decommissioning of the copper-based network, and lower fulfillment cost amortization, partially offset by vendor settlements. Operating income and EBITDA* were $523 million, down $436 million year over year.

Latin America

Dollars in millions

Second Quarter

Percent

Unaudited

2026

2025

Change

Operating Revenues

$ 1,224

$ 1,054

16.1

Service

780

662

17.8

Equipment

444

392

13.3

Operating Expenses

1,186

1,008

17.7

Operating Income

(17.4)

EBITDA*

227

201

12.9

Latin America segment revenues were up 16.1% year over year, primarily driven by favorable foreign exchange rates and postpaid wireless subscriber growth. Operating expenses were up 17.7% year over year due to unfavorable foreign exchange rates, higher bad debt expense, and higher depreciation expense. Operating income was $38 million, down $8 million year over year. EBITDA* was $227 million, up $26 million year over year.

* Further clarification and explanation of non-GAAP measures and reconciliations to the most comparable GAAP measures can be found in the "Non-GAAP Measures and Reconciliations to GAAP Measures" section of the release and at investors.att.com.

1 With the closing of the acquisition of substantially all of Lumen's Mass Markets fiber business on February 2, 2026, the fiber customer relationships were retained by AT&T and are included in the Company's year-to-date results, unless otherwise indicated. The recently acquired fiber network assets, including certain fiber network build capabilities, were placed in a wholly owned subsidiary, of which AT&T plans to sell a controlling interest to an equity partner that will co-invest in the ongoing business. As such, the subsidiary is classified as held-for-sale and reflected as discontinued operations.

2 Advanced home internet connections with AT&T wireless is defined as AT&T Fiber and AT&T Internet Air connections that are also primary wireless account holders that subscribe to consumer postpaid phone service. AT&T refers to these customers as converged customers. Convergence rate represents the ratio of converged customers to advanced home internet connections. This 2Q26 convergence metric is presented based on available information and is subject to revision.

3 Total consumer and business locations reached with fiber represents the sum of: (1) AT&T Owned and Operated locations, which reflect its customer locations passed by AT&T's fiber network and (2) AT&T Fiber Ventures locations, which represent locations served from the recently acquired mass markets fiber business, Gigapower, and other commercial open access providers.

4 The Company's long-term outlook for 2026-2028 is presented on a continuing operations basis and excludes discontinued operations.

5 The strategy to remove legacy fixed costs across a geography is tied to the decommissioning of infrastructure after all customers have been upgraded to newer services. Gaining approvals could delay this decommissioning beyond 2029.

6 Effective with the Company's first-quarter 2026 reporting, AT&T revised its operating segments to reflect the evolution of its business model to focus on delivering converged advanced connectivity services.

About AT&T

We help more than 100 million U.S. families, friends and neighbors, plus nearly 2.5 million businesses, connect to greater possibility. From the first phone call 150 years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE: T), please visit us at about.att.com. Investors can learn more at investors.att.com.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.

Non-GAAP Measures and Reconciliations to GAAP Measures

Schedules and reconciliations of non-GAAP financial measures cited in this document to the most comparable financial measures under generally accepted accounting principles (GAAP) can be found at investors.att.com and in our Form 8-K dated July 22, 2026. Adjusted diluted EPS, adjusted operating income, EBITDA, EBITDA margin, adjusted EBITDA, free cash flow, and net debt are non-GAAP financial measures frequently used by investors and credit rating agencies. The information below refers only to AT&T's continuing operations and does not include discussion of balances or activity related to discontinued operations.

Adjusted EPS is calculated by excluding from operating revenues, operating expenses, other income (expenses) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Non-operational items arising from asset acquisitions and dispositions include the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate; in these cases, we use the actual tax expense or combined marginal rate of approximately 25%.

For 2Q26, adjusted EPS of $0.65 is diluted EPS from continuing operations of $0.66 adjusted to remove $0.05 benefit from tax items and adjusted for a $0.03 asset abandonment charge, and $0.01 for benefit-related, transaction, legal and other items. For 2Q25, adjusted EPS of $0.54 is diluted EPS of $0.62 minus $0.05 equity in net income of DIRECTV and minus $0.03 benefit-related, transaction, legal and other items. Transaction, legal and other costs include certain legal reserves and settlements that cover extended historical periods, novel theories of liability, and/or are unpredictable in both magnitude and timing, and therefore are distinct and separate from normal, recurring legal matters. Such costs are presented net of expected insurance recoveries.

The Company expects adjustments to 2026 reported diluted EPS from continuing operations to include acquisition-related amortization of approximately $0.3 billion (based on preliminary information), a non-cash mark-to-market benefit plan gain/loss and other items. The Company expects the mark-to-market adjustment, which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a significant item. AT&T's projected adjusted EPS depends on future levels of revenues and expenses, most of which are not reasonably estimable at this time. Accordingly, the Company cannot provide a reconciliation between this projected non-GAAP metric and the most comparable GAAP metric without unreasonable effort.

Adjusted operating income is operating income adjusted for revenues and costs the Company considers non-operational in nature, including items arising from asset acquisitions or dispositions. For 2Q26, adjusted operating income of $7.5 billion is calculated as operating income of $7.0 billion, plus adjustments of $418 million. For 2Q25, adjusted operating income of $6.5 billion is calculated as operating income of $6.5 billion minus adjustments of $12 million. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated July 22, 2026, and include transaction, legal, and other costs as discussed above.

EBITDA is income from continuing operations plus income tax, interest, and depreciation and amortization expenses minus equity in net income (loss) of affiliates and other income (expense) – net. Adjusted EBITDA is calculated by excluding from EBITDA certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, significant abandonments and impairments, benefit-related gains and losses, employee separation, and other material gains and losses. Adjustments include transaction, legal, and other costs as discussed above.

For 2Q26, adjusted EBITDA of $12.3 billion is calculated as income from continuing operations of $5.0 billion, plus income tax expense of $0.8 billion, plus interest expense of $1.9 billion, plus equity in net income (loss) of affiliates of $(29) million, minus other income (expense) – net of $0.7 billion, plus depreciation and amortization of $5.0 billion, plus adjustments of $334 million. For 2Q25, adjusted EBITDA of $11.7 billion is calculated as income from continuing operations of $4.9 billion, plus income tax expense of $1.2 billion, plus interest expense of $1.7 billion, minus equity in net income of affiliates of $0.5 billion, minus other income (expense) – net of $0.8 billion, plus depreciation and amortization of $5.3 billion, minus adjustments of $21 million. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated July 22, 2026.

At the segment level, EBITDA is operating income before depreciation and amortization. EBITDA margin is EBITDA divided by total revenues. For 2Q26, Advanced Connectivity EBITDA of $12.0 billion is operating income of $7.3 billion plus depreciation and amortization of $4.7 billion. For 2Q25, Advanced Connectivity EBITDA of $11.1 billion is operating income of $6.1 billion plus depreciation and amortization of $5.0 billion.

Adjusted EBITDA, Advanced Connectivity EBITDA, and Legacy EBITDA estimates depend on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide reconciliations between these projected non-GAAP metrics and the most comparable GAAP metrics without unreasonable effort.

Free cash flow for 2Q26 of $4.7 billion is cash from operating activities from continuing operations of $10.8 billion, minus capital expenditures of $5.7 billion and cash paid for vendor financing of $0.4 billion. For 2Q25, free cash flow of $4.4 billion is cash from operating activities of $9.8 billion, less cash distributions from DIRECTV classified as operating activities of $0.5 billion, less cash taxes paid on DIRECTV of $0.3 billion, minus capital expenditures of $4.9 billion and cash paid for vendor financing of $0.2 billion. Due to high variability and difficulty in predicting items that impact cash from operating activities, capital expenditures and vendor financing payments, the Company is not able to provide a reconciliation between projected free cash flow and the most comparable GAAP metric without unreasonable effort.

Capital investment provides a comprehensive view of cash used to invest in our networks, product developments, and support systems. In connection with capital improvements, we have favorable payment terms of 120 days or more with certain vendors, referred to as vendor financing, which are excluded from capital expenditures and reported as financing activities. Capital investment includes capital expenditures and cash paid for vendor financing ($0.4 billion in 2Q26, $0.2 billion in 2Q25). Due to high variability and difficulty in predicting items that impact capital expenditures and vendor financing payments, the Company is not able to provide a reconciliation between projected capital investment and the most comparable GAAP metric without unreasonable effort.

Net debt of $126.4 billion at June 30, 2026, is calculated as total debt of $144.0 billion less cash and cash equivalents of $17.6 billion and time deposits (i.e., deposits at financial institutions that are greater than 90 days) of $0. Net debt-to-adjusted EBITDA is calculated by dividing net debt by the sum of the most recent four quarters of adjusted EBITDA. Net debt and adjusted EBITDA estimates depend on future levels of revenues, expenses and other metrics which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between projected net debt-to-adjusted EBITDA and the most comparable GAAP metrics and related ratios without unreasonable effort.

Discussion and Reconciliation of Non-GAAP Measures

We believe the following measures are relevant and useful information to investors as they are part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors. These measures should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with U.S. generally accepted accounting principles (GAAP).

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

Free Cash Flow

Free cash flow is defined as cash from operations minus cash flows related to our DIRECTV equity investment that was sold in July 2025, minus capital expenditures and cash paid for vendor financing (classified as financing activities). Free cash flow after dividends is defined as cash from operations minus cash flows related to our DIRECTV equity investment, capital expenditures, cash paid for vendor financing and dividends on common and preferred shares. Free cash flow dividend payout ratio is defined as the percentage of dividends paid on common and preferred shares to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including capital expenditures and vendor financing, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Free Cash Flow and Free Cash Flow Dividend Payout Ratio

Dollars in millions

Second Quarter

Six-Month Period

2026

2025

2026

2025

Net Cash Provided by Operating Activities from Continuing Operations

$ 10,801

$ 9,763

$ 18,396

$ 18,812

Less: Distributions from DIRECTV classified as operating activities

—

(503)

—

(1,926)

Less: Cash taxes paid on DIRECTV

—

251

—

251

Less: Capital expenditures

(5,700)

(4,897)

(10,577)

(9,174)

Less: Payment of vendor financing

(431)

(220)

(643)

(423)

Free Cash Flow

4,670

4,394

7,176

7,540

Less: Dividends paid

(1,976)

(2,044)

(3,973)

(4,135)

Free Cash Flow after Dividends

$ 2,694

$ 2,350

$ 3,203

$ 3,405

Free Cash Flow Dividend Payout Ratio

42.3 %

46.5 %

55.4 %

54.8 %

Cash Paid for Capital Investment

In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.

Cash Paid for Capital Investment

Dollars in millions

Second Quarter

Six-Month Period

2026

2025

2026

2025

Capital expenditures

$ (5,700)

$ (4,897)

$ (10,577)

$ (9,174)

Payment of vendor financing

(431)

(220)

(643)

(423)

Cash paid for Capital Investment

$ (6,131)

$ (5,117)

$ (11,220)

$ (9,597)

EBITDA

Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP.

These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T's ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing cash generation potential with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which management is responsible and upon which we evaluate performance.

There are material limitations to using these non-GAAP financial measures. EBITDA and EBITDA margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. For market comparability, management analyzes performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA and EBITDA margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

EBITDA and Adjusted EBITDA

Dollars in millions

Second Quarter

Six-Month Period

2026

2025

2026

2025

Income from Continuing Operations

$ 5,038

$ 4,861

$ 9,257

$ 9,553

Additions:

Income Tax Expense

784

1,237

1,963

2,536

Interest Expense

1,883

1,655

3,696

3,313

Equity in Net (Income) Loss of Affiliates

(485)

(1,925)

Other (Income) Expense - Net

(696)

(767)

(1,290)

(1,222)

Depreciation and amortization

4,966

5,251

9,932

10,441

EBITDA

12,004

11,752

23,628

22,696

Transaction, legal and other costs

149

295

128

Benefit-related (gain) loss

(101)

(70)

(76)

(64)

Asset impairments and abandonments and restructuring

286

—

286

504

Adjusted EBITDA 1

$ 12,338

$ 11,731

$ 24,133

$ 23,264

1 See "Adjusting Items" section for additional discussion and reconciliation of adjusted items.

Segment EBITDA and EBITDA Margin

Dollars in millions

Second Quarter

Six-Month Period

2026

2025

2026

2025

Advanced Connectivity Segment

Operating Income

$ 7,345

$ 6,106

$ 14,198

$ 12,078

Add: Depreciation and amortization

4,687

5,035

9,392

10,008

EBITDA

$ 12,032

$ 11,141

$ 23,590

$ 22,086

Total Operating Revenues

$ 28,615

$ 27,497

$ 57,086

$ 54,689

Operating Income Margin

25.7

22.2

24.9

22.1

EBITDA Margin

42.0

40.5

41.3

40.4

Legacy Segment

Operating Income

$ 523

$ 959

$ 1,135

$ 1,978

Add: Depreciation and amortization

—

EBITDA

$ 523

$ 959

$ 1,135

$ 1,978

Total Operating Revenues

$ 1,632

$ 2,202

$ 3,400

$ 4,570

Operating Income Margin

32.0

43.6

33.4

43.3

EBITDA Margin

32.0

43.6

33.4

43.3

Latin America Segment

Operating Income

$ 38

$ 46

$ 58

$ 89

Add: Depreciation and amortization

189

155

389

305

EBITDA

$ 227

$ 201

$ 447

$ 394

Total Operating Revenues

$ 1,224

$ 1,054

$ 2,397

$ 2,025

Operating Income Margin

3.1

4.4

2.4

4.4

EBITDA Margin

18.5

19.1

18.6

19.5

Adjusting Items

Adjusting items include revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions, including the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and that those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.

The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate, in these cases we use the actual tax expense or combined marginal rate of approximately 25%.

Adjusting Items

Dollars in millions

Second Quarter

Six-Month Period

2026

2025

2026

2025

Operating Expenses

Transaction, legal and other costs 1

$ 149

$ 49

$ 295

$ 128

Benefit-related (gain) loss

(101)

(70)

(76)

(64)

Asset impairments and abandonments and restructuring

286

—

286

504

Adjustments to Operations and Support Expenses

334

(21)

505

568

Amortization of intangible assets

141

Adjustments to Operating Expenses

418

(12)

646

586

Other

Equity in net income of DIRECTV

—

(503)

—

(1,926)

Benefit-related (gain) loss, impairments of investments and other

(89)

(189)

(61)

(125)

Adjustments to Income from Continuing Operations Before

Income Taxes

329

(704)

585

(1,465)

Tax impact of adjustments

(168)

140

(333)

Tax-related items

365

—

365

—

Adjustments to Income From Continuing Operations

$ (117)

$ (536)

$ 80

$ (1,132)

Preferred stock redemption gain

—

(90)

Adjustments to Income From Continuing Operations

Attributable to Common Stock

$ (117)

$ (536)

$ 80

$ (1,222)

1 Includes certain legal reserves and settlements that cover extended historical periods, novel theories of liability and/or are unpredictable in

both magnitude and timing, and therefore are distinct and separate from normal, recurring legal matters. Such costs are presented net of

expected insurance recoveries and are primarily associated with legacy legal matters and cybersecurity events.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses, other income (expense) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. AT&T's calculation of Adjusted items, as presented, may differ from similarly titled measures reported by other companies.

Adjusted Operating Income, Adjusted Operating Income Margin,

Adjusted EBITDA and Adjusted EBITDA Margin

Dollars in millions

Second Quarter

Six-Month Period

2026

2025

2026

2025

Operating Income

$ 7,038

$ 6,501

$ 13,696

$ 12,255

Adjustments to Operating Expenses

418

(12)

646

586

Adjusted Operating Income

$ 7,456

$ 6,489

$ 14,342

$ 12,841

EBITDA

$ 12,004

$ 11,752

$ 23,628

$ 22,696

Adjustments to Operations and Support Expenses

334

(21)

505

568

Adjusted EBITDA

$ 12,338

$ 11,731

$ 24,133

$ 23,264

Total Operating Revenues

$ 31,558

$ 30,847

$ 63,064

$ 61,473

Operating Income Margin

22.3 %

21.1 %

21.7 %

19.9 %

Adjusted Operating Income Margin

23.6 %

21.0 %

22.7 %

20.9 %

Adjusted EBITDA Margin

39.1 %

38.0 %

38.3 %

37.8 %

Adjusted Diluted EPS

Second Quarter

Six-Month Period

2026

2025

2026

2025

Diluted Earnings Per Share (EPS) From Continuing

Operations

$ 0.66

$ 0.62

$ 1.21

$ 1.22

Equity in net income of DIRECTV

—

(0.05)

—

(0.21)

Restructuring and impairments

0.03

—

0.03

0.05

Benefit-related, transaction, legal and other items

0.01

(0.03)

0.03

(0.01)

Tax-related items

(0.05)

—

(0.05)

—

Adjusted EPS

$ 0.65

$ 0.54

$ 1.22

$ 1.05

Year-over-year growth - Adjusted

20.4 %

16.2 %

Weighted Average Common Shares Outstanding with

Dilution (000,000)

6,946

7,219

6,987

7,221

Net Debt to Adjusted EBITDA

Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. Our Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Adjusted EBITDA. Net Debt is calculated by subtracting cash and cash equivalents and deposits at financial institutions that are greater than 90 days (e.g., certificates of deposit and time deposits), from the sum of debt maturing within one year and long-term debt.

Net Debt to Adjusted EBITDA - 2026

Dollars in millions

Three Months Ended

Sept. 30,

Dec. 31,

March 31,

June 30,

Four

Quarters

2025 1

2026 1

2026

Adjusted EBITDA

$ 11,861

$ 11,236

$ 11,795

$ 12,338

$ 47,230

End-of-period current debt

9,323

End-of-period long-term debt

134,631

Total End-of-Period Debt

143,954

Less: Cash and Cash Equivalents

17,570

Net Debt Balance

126,384

Annualized Net Debt to Adjusted EBITDA Ratio

2.68

1 As reported in AT&T's Form 8-K filed April 22, 2026.

Net Debt to Adjusted EBITDA - 2025

Dollars in millions

Three Months Ended

Sept. 30,

Dec. 31,

March 31,

June 30,

Four

Quarters

2024 1

2025 1

Adjusted EBITDA

$ 11,586

$ 10,791

$ 11,533

$ 11,731

$ 45,641

End-of-period current debt

9,254

End-of-period long-term debt

123,057

Total End-of-Period Debt

132,311

Less: Cash and Cash Equivalents

10,499

Less: Time Deposits

1,500

Net Debt Balance

120,312

Annualized Net Debt to Adjusted EBITDA Ratio

2.64

1 As reported in AT&T's Form 8-K filed April 22, 2026.

SOURCE AT&T