AT&T Inc.

Data and privacy · Data protection and privacy laws

Enactment of new privacy laws and regulations could, among other things, adversely affect our ability to collect data and offer targeted advertisements or result in additional costs of compliance or litigation. Increased public focus on a variety of issues related to our operations, such as privacy issues, government requests or orders for customer data, state rate regulation of broadband and concerns about global climate change, have led to proposals or new legislation.

Legal and litigation · Litigation and legal proceedings

We currently are, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings that arise in or outside the ordinary course of our business based on alleged acts of misconduct by employees, contractors or other third parties. These actions seek, among other things, compensation for alleged personal injury (including claims for loss of life), workers' compensation, employment discrimination, sexual harassment, workplace misconduct, wage and hour claims and other employment-related damages.

Industry regulation · Safety and environmental regulations

Increased public focus on a variety of issues related to our operations, such as privacy issues, government requests or orders for customer data, state rate regulation of broadband and concerns about global climate change, have led to proposals or new legislation at state, federal and foreign government levels to change or increase regulation on our operations.

Industry regulation · Regulatory compliance and changes

Changes to federal, state and foreign government regulations and decisions in regulatory proceedings, as well as private litigation, could further increase our operating costs and/or alter customer perceptions of our operations, which could materially adversely affect us. Our subsidiaries providing wired services are subject to significant federal and state regulation, while many of our competitors are not.

Supply chain and procurement · Supplier operation and dependance

We depend on various suppliers to provide equipment to operate our business and satisfy customer demand, and interruption or delay in supply can adversely impact our operating results. We depend on suppliers to provide us, directly or through other suppliers, with items such as network equipment, customer premises equipment and wireless-related equipment such as mobile hotspots, handsets, wirelessly enabled computers, wireless data cards and other connected devices for our customers.

Core operations · Facility damage and equipment failure

Such events could cause significant damage to the infrastructure upon which our business operations rely, resulting in degradation or disruption of service to our customers, as well as significant recovery time and expenditures to resume operations. Our system redundancy and other measures we take to protect our infrastructure and operations from the impacts of such events may be ineffective or inadequate to sustain our operations through all such events.

Project and contract management · Project execution and delivery risks

We have spent, and plan to continue spending, significant capital and other resources on the ongoing development and deployment of our 5G and fiber networks. This deployment and other network service enhancements and product launches may not occur as scheduled or at the cost expected due to many factors, including unexpected inflation, delays in determining equipment and wireless handset operating standards, supplier delays, software issues, increases in network and handset component costs, regulatory permitting delays for tower sites or enhancements, or labor-related delays.

Supply chain and procurement · Raw material availability and cost volatility

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

Natural and catastrophic events · Climate change and environmental impact

Extreme weather events and other potential effects of climate change may impose risk of damage to our infrastructure, our ability to provide services, and may cause changes in federal, state and foreign government regulation. The potential physical effects of extreme weather events and other potential effects of climate change, such as increased frequency and severity of storms, floods, fires, freezing conditions, sea-level rise and other climate-related events, could damage our networks and cause disruptions in our services.

Social and demographic · Public perception and reputation

Incidents or public assertions leading to damage to our 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. We believe that our brand image, awareness and reputation strengthen our relationship with consumers and contribute significantly to the success of our business.

Social and demographic · Social and political movements

Increased public focus on a variety of issues related to our operations, such as privacy issues, government requests or orders for customer data, state rate regulation of broadband and concerns about global climate change, have led to proposals or new legislation at state, federal and foreign government levels to change or increase regulation on our operations.

Strategic execution · Strategic transformation and turnaround risks

We may not realize or sustain the expected benefits from acquisitions, joint ventures or our business transformation initiatives, including dispositions, which could have a material adverse effect on our business, operations, financial condition, results of operations and competitive position. We have been and will be undertaking certain transformation initiatives and investments, which are designed to reduce costs, enable legacy rationalization, streamline and modernize distribution and customer service.

Strategic execution · Merger acquisition and divestiture risks

If we do not successfully manage and timely execute these initiatives and investments, which may include acquisitions, joint ventures, particularly those aimed at enhancing our fiber serviceable locations, and other strategic transactions, or if they are inadequate or ineffective, we may fail to meet our financial goals and achieve anticipated benefits.

Technology infrastructure · Disaster recovery and business continuity

Our system redundancy and other measures we take to protect our infrastructure and operations from the impacts of such events may be ineffective or inadequate to sustain our operations through all such events. Any of these occurrences could result in lost revenues from business interruption, damage to our reputation and reduced profits.

Cybersecurity and data protection · Data privacy and protection regulations

Cyberattacks have caused, and may in the future cause, equipment or network failures, copying or 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. For example, in July 2024, we disclosed a cybersecurity incident on Item 1.05 of Form 8-K relating to the copying of mobile customer call data.

Digital transformation and innovation · Digital transformation and modernization

We are using and intend to further use AI-driven efficiencies in our network design and operations, software development, sales, marketing, customer support services and general and administrative costs. The models used in those products or operations, 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.

Digital transformation and innovation · Technology implementation and upgrades

We have spent, and continue to spend, significant capital to shift our wired network to software-based technology and are expanding 5G wireless technology to address these demands. We have entered and continue to enter into a significant number of software licensing agreements and continue to work with software developers to provide network functions in lieu of installing switches or other physical network equipment.

Digital transformation and innovation · Technology obsolescence and evolution

Continuing growth in and the converging nature of wireless and broadband services will require us to deploy significant amounts of capital and require ongoing access to spectrum in order to provide attractive services to customers. Wireless and broadband services are undergoing rapid and significant technological changes and a dramatic increase in usage.

Capital structure and performance · Credit rating and cost of capital

Additionally, downgrades of our credit rating by the major credit rating agencies could increase our cost of borrowing and also impact the collateral we would be required to post under certain agreements we have entered into with our derivative counterparties, which could negatively impact our liquidity. While we believe such decisions were prudent and necessary to take advantage of both growth opportunities and respond to industry developments, we did experience credit rating downgrades from historical levels.

International and currency · International operations and emerging markets

Our international operations increase our exposure to political instability, to changes in the international economy and to regulation on our business, and these risks could offset our expected growth opportunities. We have international operations, particularly in Mexico, and other countries worldwide where we need to comply with a wide variety of complex local laws, regulations and treaties.