Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Common-Size Income Statement
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
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Solvency Ratios (Summary)
AT&T Inc., solvency ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The solvency position, as indicated by the presented metrics, exhibits a complex pattern over the five-year period. Generally, leverage ratios initially increased before demonstrating signs of stabilization and, in some cases, modest improvement. Coverage ratios experienced more volatility, with a notable dip in 2022 followed by a recovery.
- Debt Ratios
- Debt to equity, both with and without the inclusion of operating lease liabilities, increased from 2021 to 2022. Subsequently, these ratios decreased through 2024, although they remained above the 2021 levels. A slight increase is observed in 2025. The inclusion of operating lease liabilities consistently results in higher debt ratio values, highlighting the impact of these obligations. Debt to capital ratios followed a similar trend, increasing in 2022 and then decreasing through 2024, with a minor increase in 2025. Debt to assets ratios remained relatively stable, fluctuating between 0.31 and 0.39, with a slight increase in 2025.
- Leverage Ratio
- Financial leverage increased significantly from 2021 to 2022, then decreased in subsequent years, stabilizing around 3.80 in 2024 and 2025. This suggests an initial increase in the use of debt financing followed by a period of more controlled leverage.
- Coverage Ratios
- Interest coverage experienced substantial volatility. A significant decrease occurred in 2022, followed by a recovery in 2023 and 2024, and a further increase in 2025, returning to levels comparable to those observed in 2021. Fixed charge coverage mirrored this pattern, with a sharp decline in 2022 and subsequent improvement, though remaining below the 2021 level until 2025, when it returned to a similar value. The 2022 declines in both coverage ratios indicate a reduced ability to meet fixed financial obligations during that year.
Overall, the period demonstrates an initial increase in debt burden followed by a period of stabilization and modest improvement in leverage metrics. The significant fluctuations in coverage ratios warrant further investigation to understand the underlying drivers of the 2022 decline and the subsequent recovery.
Debt Ratios
Coverage Ratios
Debt to Equity
AT&T Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Debt to Equity, Sector | ||||||
| Telecommunication Services | ||||||
| Debt to Equity, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity attributable to AT&T
= ÷ =
2 Click competitor name to see calculations.
The debt to equity ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased, then stabilized, and finally showed a slight increase. A review of the underlying components, total debt and stockholders’ equity, provides further insight into these movements.
- Debt to Equity Ratio - Overall Trend
- The debt to equity ratio began at 1.07 in 2021. It increased to 1.39 in 2022, before decreasing to 1.33 in 2023. A further decrease was observed in 2024, with the ratio falling to 1.18. In the most recent year presented, 2025, the ratio increased slightly to 1.23.
- Total Debt
- Total debt decreased significantly from $177,354 million in 2021 to $135,890 million in 2022. It then experienced a modest increase to $137,331 million in 2023, followed by a decrease to $123,532 million in 2024. The latest reported value for 2025 shows an increase to $136,100 million.
- Stockholders’ Equity
- Stockholders’ equity attributable to the company decreased substantially from $166,332 million in 2021 to $97,500 million in 2022. Subsequent years showed increases, reaching $103,297 million in 2023, $104,372 million in 2024, and $110,533 million in 2025.
The initial increase in the debt to equity ratio in 2022 was primarily driven by a larger decrease in stockholders’ equity than in total debt. The subsequent decline in the ratio through 2024 reflects a combination of decreasing debt and increasing equity. The slight increase in the ratio in 2025 is attributable to a larger increase in total debt compared to the increase in stockholders’ equity.
While the ratio has fluctuated, it remained above 1.0 for the entire period, indicating that debt financing exceeds equity financing. The trend suggests a period of deleveraging followed by a modest return to increased debt levels.
Debt to Equity (including Operating Lease Liability)
AT&T Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Accounts payable and accrued liabilities) | ||||||
| Noncurrent operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Telecommunication Services | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity attributable to AT&T
= ÷ =
2 Click competitor name to see calculations.
The debt to equity ratio, including operating lease liability, exhibited fluctuations over the five-year period. Total debt decreased significantly between 2021 and 2022, then remained relatively stable through 2024 before increasing slightly in 2025. Simultaneously, stockholders’ equity attributable to AT&T experienced a substantial decline from 2021 to 2022, followed by a period of recovery and moderate growth through 2025.
- Debt to Equity Ratio Trend
- The debt to equity ratio increased from 1.22 in 2021 to 1.62 in 2022, indicating a greater reliance on debt financing relative to equity. This ratio then decreased to 1.38 in 2024, suggesting an improvement in the company’s financial leverage. However, a slight increase to 1.44 was observed in 2025. The overall trend suggests a period of increased leverage followed by a partial correction, with a minor reversion towards higher leverage in the most recent year.
- Total Debt
- Total debt, inclusive of operating lease liabilities, decreased substantially from US$202,321 million in 2021 to US$158,096 million in 2022. It remained relatively consistent at approximately US$158 million to US$160 million from 2022 through 2025, with a slight increase to US$158,624 million in 2025. This indicates that, after an initial reduction, the company maintained a consistent debt level.
- Stockholders’ Equity
- Stockholders’ equity attributable to AT&T decreased significantly from US$166,332 million in 2021 to US$97,500 million in 2022. From 2022 to 2025, equity showed a recovery, increasing to US$110,533 million. This growth, while positive, did not fully offset the initial decline, and the equity position in 2025 remained below the level observed in 2021.
The interplay between decreasing debt and increasing equity from 2022 to 2024 contributed to the improvement in the debt to equity ratio during that period. The slight increase in debt and continued moderate growth in equity in 2025 resulted in a marginal increase in the ratio.
Debt to Capital
AT&T Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Debt to Capital, Sector | ||||||
| Telecommunication Services | ||||||
| Debt to Capital, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The debt to capital ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased before stabilizing and showing a slight decline. Total debt decreased significantly between 2021 and 2022, then experienced modest increases in subsequent years. Total capital followed a similar pattern of initial decrease and subsequent stabilization with a final increase.
- Debt to Capital Ratio - Overall Trend
- The debt to capital ratio began at 0.52 in 2021, increased to 0.58 in 2022, and then decreased to 0.54 in 2024. It rose slightly to 0.55 in 2025. This indicates an initial increase in financial leverage, followed by a period of relative stability and a minor increase in the most recent year.
- Total Debt
- Total debt decreased substantially from US$177,354 million in 2021 to US$135,890 million in 2022. It then increased to US$137,331 million in 2023, decreased again to US$123,532 million in 2024, and finally increased to US$136,100 million in 2025. This suggests active debt management with periods of reduction and subsequent re-borrowing or new debt issuance.
- Total Capital
- Total capital decreased from US$343,686 million in 2021 to US$233,390 million in 2022, mirroring the decrease in total debt. It then showed a modest increase to US$240,628 million in 2023, decreased to US$227,904 million in 2024, and increased to US$246,633 million in 2025. The fluctuations in total capital likely reflect changes in equity and other capital components alongside debt levels.
The observed trends suggest a dynamic capital structure. While the debt to capital ratio remained relatively stable between 0.54 and 0.58 over the latter part of the period, the underlying components – debt and capital – experienced notable changes, indicating ongoing adjustments to the company’s financing mix.
Debt to Capital (including Operating Lease Liability)
AT&T Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Accounts payable and accrued liabilities) | ||||||
| Noncurrent operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Total capital (including operating lease liability) | ||||||
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Telecommunication Services | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
The Debt to Capital ratio, inclusive of operating lease liabilities, exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased before stabilizing and showing a slight decline. Total debt and total capital both decreased between 2021 and 2024, then total debt increased slightly in 2025 while total capital also increased.
- Debt to Capital Ratio Trend
- The Debt to Capital ratio began at 0.55 in 2021. It increased to 0.62 in 2022, representing the largest single-year increase in the observed period. The ratio then decreased slightly to 0.61 in 2023 and continued to decline to 0.58 in 2024. In 2025, the ratio rose marginally to 0.59.
- Total Debt (including operating lease liability)
- Total debt decreased significantly from US$202,321 million in 2021 to US$158,096 million in 2022. It remained relatively stable at US$158,423 million in 2023, then decreased further to US$144,456 million in 2024. A slight increase to US$158,624 million was observed in 2025.
- Total Capital (including operating lease liability)
- Total capital followed a similar trend to total debt, decreasing from US$368,653 million in 2021 to US$255,596 million in 2022. It experienced a modest increase to US$261,720 million in 2023, followed by a decrease to US$248,828 million in 2024. Total capital increased to US$269,157 million in 2025.
The observed fluctuations suggest a period of deleveraging followed by a stabilization and slight re-increase in both debt and capital. The Debt to Capital ratio, while volatile, remained within a relatively narrow range between 0.55 and 0.62 throughout the period, indicating a generally consistent capital structure.
Debt to Assets
AT&T Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Debt to Assets, Sector | ||||||
| Telecommunication Services | ||||||
| Debt to Assets, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The Debt-to-Assets ratio exhibits a relatively stable pattern over the five-year period. Initial values indicate a decrease in the ratio followed by a period of stabilization and a slight increase towards the end of the observed timeframe.
- Overall Trend
- The ratio begins at 0.32 in 2021, increases to 0.34 in both 2022 and 2023, then decreases to 0.31 in 2024, and concludes at 0.32 in 2025. This suggests a moderate fluctuation around the 0.32-0.34 range.
- Initial Decrease (2021-2022)
- A rise in the ratio from 0.32 to 0.34 is observed between 2021 and 2022. This indicates a relative increase in debt compared to assets during this period. This change could be attributed to an increase in debt, a decrease in assets, or a combination of both.
- Stabilization and Fluctuation (2022-2025)
- From 2022 to 2023, the ratio remains constant at 0.34. A subsequent decrease to 0.31 is noted in 2024, followed by a return to 0.32 in 2025. These fluctuations suggest potential shifts in the company’s capital structure or asset base, though the changes are relatively small.
- Magnitude of the Ratio
- Throughout the period, the Debt-to-Assets ratio remains below 0.35. This suggests that, relative to its assets, the company maintains a moderate level of debt. A ratio consistently below 0.5 is generally considered indicative of reasonable solvency.
In summary, the Debt-to-Assets ratio demonstrates a pattern of moderate fluctuation with no significant or sustained upward or downward trend over the five-year period. The ratio remains within a relatively narrow range, indicating a generally stable financial position with respect to debt and asset levels.
Debt to Assets (including Operating Lease Liability)
AT&T Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Accounts payable and accrued liabilities) | ||||||
| Noncurrent operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Telecommunication Services | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The Debt to Assets ratio, including operating lease liability, exhibits a relatively stable pattern over the five-year period. While fluctuations are present, the ratio remains within a narrow range, indicating a consistent, though not dramatically changing, level of financial leverage.
- Overall Trend
- The ratio begins at 0.37 in 2021, increases to 0.39 in both 2022 and 2023, then decreases slightly to 0.37 in 2024, and concludes at 0.38 in 2025. This suggests a modest increase in leverage followed by a partial reversal, ultimately settling near the initial level.
- Total Debt
- Total debt, inclusive of operating lease liabilities, decreased significantly from US$202,321 million in 2021 to US$158,096 million in 2022. It remained relatively consistent at US$158,423 million in 2023, then decreased again to US$144,456 million in 2024 before increasing to US$158,624 million in 2025. This indicates periods of debt reduction followed by stabilization and a final increase.
- Total Assets
- Total assets experienced a substantial decline from US$551,622 million in 2021 to US$402,853 million in 2022. Assets remained relatively stable between 2022 and 2024, fluctuating between US$402,853 million and US$394,795 million. A moderate increase to US$420,198 million is observed in 2025.
- Ratio Dynamics
- The initial increase in the Debt to Assets ratio from 2021 to 2022 is attributable to a larger percentage decrease in total assets compared to the decrease in total debt. The subsequent stabilization and slight decrease in the ratio from 2023 to 2024 are linked to a further reduction in total debt, while assets remained relatively constant. The final increase in 2025 is due to a larger increase in total debt compared to total assets.
In summary, the company maintains a consistent level of financial leverage as measured by the Debt to Assets ratio. Fluctuations in the ratio are primarily driven by changes in both total debt and total assets, with the relative magnitude of these changes dictating the overall trend.
Financial Leverage
AT&T Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Financial Leverage, Sector | ||||||
| Telecommunication Services | ||||||
| Financial Leverage, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity attributable to AT&T
= ÷ =
2 Click competitor name to see calculations.
An examination of the financial information reveals trends in the company’s financial leverage over a five-year period. Total assets decreased significantly from 2021 to 2022, then exhibited relative stability with slight increases in subsequent years. Stockholders’ equity attributable to AT&T also experienced a substantial decline between 2021 and 2022, followed by a period of modest growth.
- Financial Leverage
- The financial leverage ratio increased from 3.32 in 2021 to 4.13 in 2022, indicating a greater reliance on debt financing relative to equity. This represents the largest single-year increase in the observed period. Following 2022, the ratio decreased to 3.94 in 2023 and continued to decline, reaching 3.78 in 2024. The ratio remained relatively stable at 3.80 in 2025. While the ratio decreased from its peak in 2022, it remains elevated compared to the 2021 level. This suggests that, despite recent improvements, the company continues to employ a considerable amount of financial leverage.
The concurrent decrease in total assets and stockholders’ equity between 2021 and 2022 likely contributed to the increase in financial leverage during that period. The subsequent stabilization of assets and growth in equity appear to have mitigated further increases in leverage, and even led to modest reductions. However, the overall trend suggests a continued reliance on debt financing, albeit at a slightly reduced level compared to 2022.
Interest Coverage
AT&T Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Less: Loss from discontinued operations, net of tax | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Interest Coverage, Sector | ||||||
| Telecommunication Services | ||||||
| Interest Coverage, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
The period under review demonstrates significant fluctuation in the interest coverage ratio. Initial values indicate a healthy ability to meet interest obligations, followed by a substantial decline, and subsequent recovery towards original levels.
- Earnings Before Interest and Tax (EBIT)
- EBIT experienced a dramatic decrease from US$33,831 million in 2021 to US$3,014 million in 2022. A recovery was then observed, with EBIT reaching US$26,552 million in 2023, US$23,457 million in 2024, and further increasing to US$33,811 million in 2025. This pattern directly influences the interest coverage ratio.
- Interest Expense
- Interest expense remained relatively stable throughout the period, fluctuating between US$6,108 million and US$6,884 million. The consistency in interest expense highlights that changes in the interest coverage ratio are primarily driven by variations in EBIT, rather than changes in financing costs.
- Interest Coverage Ratio
- The interest coverage ratio began at 4.91 in 2021, indicating a strong capacity to cover interest payments with earnings. A sharp decline occurred in 2022, with the ratio falling to 0.49, suggesting a limited ability to meet interest obligations. The ratio improved to 3.96 in 2023 and 3.47 in 2024, demonstrating a recovery in earnings relative to interest expense. By 2025, the ratio had returned to 4.97, reaching a level comparable to that of 2021. This suggests a restoration of the capacity to comfortably cover interest payments.
The substantial drop in the interest coverage ratio in 2022 warrants further investigation to understand the underlying causes of the significant EBIT decline. However, the subsequent recovery and return to prior levels by 2025 indicate a successful turnaround in profitability relative to interest obligations.
Fixed Charge Coverage
AT&T Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| U.S. federal statutory tax rate | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Less: Loss from discontinued operations, net of tax | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Operating lease cost | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest expense | ||||||
| Operating lease cost | ||||||
| Preferred stock dividends and redemption gain | ||||||
| Preferred stock dividends and redemption gain, tax adjustment1 | ||||||
| Preferred stock dividends and redemption gain, after tax adjustment | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage2 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Telecommunication Services | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Preferred stock dividends and redemption gain, tax adjustment = (Preferred stock dividends and redemption gain × U.S. federal statutory tax rate) ÷ (1 − U.S. federal statutory tax rate)
= ( × ) ÷ (1 − ) =
2 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
3 Click competitor name to see calculations.
The period under review demonstrates fluctuating performance in fixed charge coverage. Earnings before fixed charges and tax exhibited considerable volatility, impacting the overall coverage ratio. Fixed charges remained relatively stable throughout the analyzed timeframe.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax began at US$39,624 million in 2021, experienced a substantial decline to US$8,451 million in 2022, then recovered to US$32,129 million in 2023. A further decrease to US$29,233 million was noted in 2024, followed by an increase to US$39,738 million in 2025, returning to levels comparable to those observed in 2021.
- Fixed Charges
- Fixed charges were US$12,939 million in 2021, decreasing to US$11,802 million in 2022. They subsequently rose to US$12,544 million in 2023 and US$12,791 million in 2024, concluding at US$12,812 million in 2025. The changes in fixed charges were comparatively modest relative to the fluctuations in earnings.
- Fixed Charge Coverage
- The fixed charge coverage ratio began at 3.06 in 2021, indicating a strong ability to meet fixed obligations. A significant decrease was observed in 2022, with the ratio falling to 0.72, suggesting a limited capacity to cover fixed charges. The ratio improved to 2.56 in 2023 and 2.29 in 2024, demonstrating a recovery in coverage. By 2025, the ratio had risen to 3.10, exceeding the initial level from 2021 and indicating a strengthened ability to cover fixed charges.
The substantial decline in earnings before fixed charges and tax in 2022 directly resulted in the lowest fixed charge coverage ratio during the period. The subsequent recovery in earnings over the following years contributed to the improvement in the coverage ratio, culminating in a value in 2025 that surpassed the initial value. The relative stability of fixed charges suggests that changes in the coverage ratio are primarily driven by fluctuations in earnings.