We actively manage the timing of our supplier payments for operating items to optimize the use of our cash and seek to make payments on 90-day or greater terms, while providing suppliers with access to bank facilities that permit earlier payment at their cost. Our supplier financing program does not result in changes to our normal, contracted payment cycles or cash from operations.

At the supplier’s election, they can receive payment of AT&T obligations prior to the scheduled due dates, at a discounted price from the third-party financial institution. The discounted price paid to participating suppliers is based on a variable rate that is indexed to the overnight borrowing rate. We agree to pay the financial institution the stated amount generally within 90 days of receipt of the invoice. We do not have pledged assets or other guarantees under our supplier financing program.

Our outstanding payment obligations are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets and are reported as operating or investing (when capitalizable) activities in our statements of cash flows when paid.

The following table presents the change in the supplier financing obligation for the years ended December 31:


	2025		2024
Confirmed obligations outstanding at the beginning of year	$	2,498	$	2,844
Invoices received	17,939		15,510
Invoices paid	(17,347)		(15,856)
Confirmed obligations outstanding at the end of year	$	3,090	$	2,498

We also have arrangements with suppliers of handset inventory that allow us to extend the stated payment terms by generally 90 days at an additional cost to us (variable rate extension fee). Direct supplier financing outstanding is included in “Accounts payable and accrued liabilities” on our consolidated balance sheets and is reported as operating activities in our statements of cash flows when paid.

The following table presents the change in the direct supplier financing obligation for the years ended December 31:


	2025		2024
Obligations outstanding at the beginning of year	$	6,272	$	5,442
Invoices extended	19,850		15,831
Invoices paid	(19,221)		(15,001)
Obligations outstanding at the end of year	$	6,901	$	6,272

We enter into multi-year software licensing arrangements, which, consistent with industry standards, are paid over the license terms of two to five years. Additionally, in connection with capital improvements and the acquisition of other productive assets, we negotiate favorable payment terms of 120 days or more (referred to as vendor financing), which are reported as financing activities in our statements of cash flows when paid.

The following table presents the change in the vendor financing obligation for the years ended December 31:


	2025		2024
Obligations outstanding at the beginning of year	$	1,424	$	2,516
Commitments	1,594		700
Payments	(1,181)		(1,792)
Obligations outstanding at the end of year1,2	$	1,837	$	1,424
1Total vendor financing payables at December 31, 2025 and 2024 were $1,892 and $1,448, respectively, of which $956 and $749 are included in “Accounts payable and accrued liabilities.”
2Includes software licensing arrangements of approximately $1,200 and $850 at December 31, 2025 and 2024, respectively.