AT&T INC.

In this section, we are including the required disclosure for pay versus performance as defined by the Securities and Exchange Commission (SEC) for our principal executive officer(s) (PEO(s)) and

Non-PEO

NEOs and Company performance for the fiscal years listed below.

Note 1.

John Stankey succeeded Randall Stephenson as CEO on July 1, 2020. The remaining NEOs for each year are presented as follows:

Note 2.

Compensation Actually Paid (CAP) is the Summary Compensation Table (SCT) total value for the period shown with adjustments for equity awards and pension. CAP reflects equity awards based on the

valuation for cash settled portions of awards under Accounting Standards Codification Topic 718:

Compensation – Stock Compensation

for each period in the above table. Pension values for CAP reflect the pension service cost as used in the financial statements for each period shown in the above table.

Note 3.

Previously reported CAP for 2020, 2021, and 2022 have been recalculated based on recent guidance from the SEC clarifying that equity awards should be treated as vested in the CAP calculation when the holder achieves retirement eligible status if the awards allow for accelerated vesting when retirement eligibility is satisfied with no other conditions.

Note 4.

The company must calculate TSR with a base investment of $100 in a manner consistent with the SEC stock performance graph disclosure requirements over the cumulative period covered in the disclosure (i.e., for 2020 the table represents the TSR over 2020, the TSR for 2021 represents the cumulative TSR over 2020 and 2021, etc.). The peer group used for comparison is the S&P 500 Communication Services Index (CSI).

Note 5.

Standalone AT&T results reflect the historical operating results of the company presented as continuing operations and exclude U.S. Video and other dispositions included in Corporate and Other that did not meet the criteria for discontinued operations. Standalone AT&T results are presented to provide 2020 and 2021 full-year results that are comparable to 2022 and 2023 continuing operations financial data. Standalone AT&T Adjusted Operating Income differs from Adjusted Operating Income presented in our quarterly earnings material, and is calculated by adjusting AT&T’s Operating Income (Loss) from Continuing Operations for the following items: (1) transaction, impairment and depreciation and amortization costs associated with merger, acquisition and disposition activity for transactions when enterprise value exceeds $2.0 billion; (2) costs related to changes in accounting principles, changes in tax laws, natural disasters, impairments and abandonments of goodwill, other intangibles and fixed assets and, gains and losses related to asset dispositions and

activity, in each case, in

excess of $500 million for 2022 and 2021, and

in-excess

of $300 million for 2023; additionally, for 2023, the actuarial and

gains and losses related to the assets and liabilities of pension and other post-retirement benefit plans and rabbi trusts and benefit plan funding that varies from budget; and (3) severance

OTHER INFORMATION

charges in excess of $200 million for 2022, and in excess of $300 million for 2023. Standalone AT&T Adjusted Operating Income also removes the results from U.S. Video operations and other dispositions that did not meet the criteria for discontinued operations, which impacts 2021 and 2020.

Compensation Actually Paid (CAP) calculations are as follows:

Note 1.

The following table shows each of the amounts added or deducted to arrive at the Additions to SCT Total for both Equity Awards and Pension Costs:

Note 2.

Based on updated SEC guidance, Total Equity Award adjustment calculations for 2023 assume vesting upon retirement eligibility date for Restricted Stock Units (RSUs). Dividend equivalents for vested RSUs are not included in equity adjustments for CAP. Prior year Total Equity Award adjustments for 2020, 2021, and 2022 for John Stankey and 2020 adjustments for Randall Stephenson have been recalculated for ease of year-over-year comparison.

Note 3.

The Supplemental Employee Retirement Plan (SERP) was amended in 2020 to freeze Mr. Stankey’s benefit accruals effective 12/31/2019 and convert it to a cash balance account earning annual interest at 3.7% (as disclosed in prior years’ CD&As). This amendment resulted in a

one-time

Prior Service Cost to account for the change in pension liability. For 2020, the total Pension Cost shown above includes the annual Service Cost (for annual benefit accrual) and this additional Prior Service Cost.

Mr. Stankey’s 2021, 2022, and 2023 Pension Costs do not include any Prior Service Cost since there were no applicable plan amendments. In 2021, his qualified management pension increased more than the SERP benefit; it is used as an offset to the gross SERP formula, resulting in a net negative Service Cost for all pension benefits. In 2022, the management pension increased by approximately the same amount that the SERP benefit decreased, resulting in a small positive net Service Cost.

Mr. Stephenson’s 2020 Pension Cost does not include any Prior Service Cost since his SERP benefit was frozen effective 12/31/2012 and the amendment was accounted for in 2013. His management pension increased somewhat more than the amount the SERP benefit decreased during 2020, resulting in a modest positive net Service Cost.

Note 1.

The following table shows each of the

Non-CEO

NEOs’ average amounts added or deducted to arrive at the Additions to SCT Total for both

Equity Awards and Pension Costs:

Note 2

. Based on updated SEC guidance, Total Equity Award adjustment calculations for 2023 assume vesting upon retirement eligibility date for RSUs. Dividend equivalents for vested RSUs are not included in equity adjustments for CAP. Prior year Total Equity Award adjustments for 2020, 2021, and 2022 for all NEO’s have been recalculated where applicable for ease of year-over-year comparison.

In addition to the tabular disclosure, the following is an unranked list of the most important performance measures that link CAP to Company performance.

OTHER INFORMATION

Pay versus Performance CAP Comparisons

Each of the following graphs shows the relationship between CAP and the required performance measures in the tabular disclosure: (i) AT&T TSR and Peer Group TSR (Value of Initial Fixed $100 Investment), (ii) Net Income, and (iii) Standalone Adjusted AT&T Operating Income (Company Selected Measure). AT&T’s compensation program is designed to drive long-term sustained performance aligned with stockholder interests and does so through the use of short-term and long-term incentive awards (as described in our CD&A). In 2023, 90% of the CEO and other NEOs’ target compensation opportunity was delivered via

at-risk

pay.

ANNEX A

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).

Free Cash Flow

Free cash flow is defined as cash from operations and cash distributions from DIRECTV classified as investing activities minus capital expenditures and cash paid for vendor financing (classified as financing activities). We believe this metric provides 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 from our continued economic interest in the U.S. video operations as part of our DIRECTV equity method investment, 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.

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.