AT&T INC. - Annual Report 2020 | FinancialReports.eu

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11 -K

(Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the fiscal year ended December 31, 2019

☐TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from to

Commission File Number:1-8610

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

BELLSOUTH SAVINGS AND SECURITY PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

AT&T INC.

208 S. Akard, Dallas, Texas 75202

BellSouth Savings and Security Plan

Financial Statements, Supplemental Schedule and Exhibit

Table of Contents

Page Reports of Independent Registered Public Accounting Firm1 Financial Statements:
Statements of Net Assets Available for Benefits as of December 31, 2019 and 20182 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 20193 Notes to Financial Statements4 Supplemental Schedule:
Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year) as of December 31, 201916

Report of Independent Registered Public Accounting Firm

Plan Administrator and Plan Participants BellSouth Savings and Security Plan Dallas, Texas

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of BellSouth Savings and Security Plan (Plan) as of December 31, 2019 and 2018, the related statement of changes in net assets available for benefits for the year ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of BellSouth Savings and Security Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis of Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Report on Supplemental Information

The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 2019, has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under theEmployee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

/s/ BKD, LLP

We have served as the Plan’s auditor since 2018

San Antonio, Texas June 29, 2020

BellSouth Savings and Security Plan

Statements of Net Assets Available For Benefits

(Dollars in Thousands)| ASSETS | | |
| --- | --- | --- |
| Investment in AT&T Savings Group Investment Trust | $ 533,776 | $ 552,489 |
| Investments, at fair value | 1,920,451 | 1,575,169 |
| Total Investments (See Note 4) | 2,454,227 | 2,127,658 |
| Notes receivable from participants | 59,979 | 59,874 |
| Participant contributions receivable | 2,163 | 2,170 |
| Employer contributions receivable | 556 | 631 |
| Interest receivable | 469 | 396 |
| Total Receivables | 63,167 | 63,071 |
| Total Assets | 2,517,394 | 2,190,729 |

LIABILITIES
Administrative expenses payable	754	825
Due to broker for securities purchased	10,109	20,308
Total Liabilities	10,863	21,133

Net Assets Available for Benefits$2,506,531$2,169,596

See Notes to Financial Statements.

BellSouth Savings and Security Plan

Statement of Changes in Net Assets Available For Benefits

For the Year Ended December 31, 2019

(Dollars in Thousands)

Net Assets Available for Benefits, December 31, 2018$2,169,596

Changes in Net Assets:
Contributions:
Participant contributions64,095 Employer contributions17,548 Rollover contributions11,052

92,695 Investment Income:
Net income from investment in AT&T Savings Group Investment Trust15,393 Interest2,782 Dividends51,248 Net appreciation in fair value of investments396,850

466,273 Interest income on notes receivable from participants3,049 Distributions(223,813)
Administrative expenses(1,269)

Net Increase336,935

Net Assets Available for Benefits, December 31, 2019$2,506,531

See Notes to Financial Statements.

BellSouth Savings and Security Plan

Notes to Financial Statements

(Dollars in Thousands)

NOTE 1. PLAN DESCRIPTION

The BellSouth Savings and Security Plan (Plan) is a defined contribution plan originally established by BellSouth Corporation (BellSouth) to provide a convenient way for eligible nonmanagement employees of participating BellSouth companies to save on a regular and long-term basis. In December 2006, BellSouth was acquired by AT&T Inc. (AT&T or the Company). The following description of the Plan provides only general information. The Plan has detailed provisions covering participant eligibility, participant allotments from pay, participant withdrawals, participant loans, employer contributions and related vesting of contributions and Plan expenses. The Plan text and prospectus include complete descriptions of these and other Plan provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).

The Plan participates in the AT&T Savings Group Investment Trust (Group Trust) with respect to the AT&T Stable Value Fund and International Stock Fund. The Bank of New York Mellon Corporation (BNY Mellon) serves as trustee for both the Group Trust and the trust holding the Plan’s assets, known as the BellSouth Savings and Security Plan Trust. Fidelity Investments Institutional Operations Company, Inc. (Fidelity) serves as recordkeeper for the Plan. During 2019 and 2018, participants could invest their contributions in one or more of fourteen funds in 1% increments:

• AT&T Shares Fund• T. Rowe Price Mid-Cap Growth Fund • Bond Fund• Indexed Stock Fund • Fidelity Growth and Income Portfolio *• Russell 1000 Growth Index • Balanced Fund• LifePath Funds (based on retirement date)
• AT&T Stable Value Fund • Small and Mid-Sized U.S. Stock Index Fund ** • DFA U.S. Small Cap Value Portfolio• International Stock Index Fund • DFA U.S. Large Cap Value Portfolio II• AT&T International Stock Fund *

Investment fund option of the Group Trust ** Effective as of market close on June 29, 2018, the Fidelity Growth and Income Portfolio investment option ceased to exist as an investment option and the Small and Mid-Sized U.S. Stock Index Fund was introduced.

Participants contribute to the Plan through payroll allotments. Participants may also contribute amounts representing distributions from other qualified defined benefit and defined contribution plans (rollovers). The Company contributes to the Plan by matching the participants’ contributions based on the provisions of the Plan. All contributions are participant directed.

Dividends on shares in the AT&T Shares Fund can either be reinvested in the AT&T Shares Fund on a quarterly basis, or paid into a short-term interest bearing fund for distribution before the end of the year. Interest earned on dividends held in the short-term interest bearing fund are used to purchase additional units of the AT&T Shares Fund in the participant’s account. During 2019, Plan participants elected to receive $1,372 in dividend distributions. This amount is included in distributions on the Plan’s Statement of Changes in Net Assets Available for Benefits.

Each participant is entitled to exercise voting rights attributabl e to the AT&T shares allocated to their account and is notified by the Company prior to the time that such rights may be exercised. Subject to the fiduciary provisions of ERISA, the trustee will not vote any allocated shares for which instructions have not been given by a participant. The trustee votes any unallocated shares in the same proportion as it votes those shares that were allocated to the extent the proportionate vote is consistent with the trustee’s fiduciary obligations under ERISA. Participants have the same voting rights in the event of a tender or exchange offer.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

Although it has not expressed any intent to do so, AT&T has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA and collectively bargained agreements. In the event that the Plan is terminated, subject to the conditions set forth by ERISA, the account balances of all participants shall be 100% vested.

Administrative ExpensesEach participant in the Plan may be charged for investment manager fees and administrative expenses,

including, trustee and other expenses considered reasonable by the Plan administrator. Investment manager fees are charged through the applicable investment option. Administrative fees are divided on a pro rata basis among investment options of the participant. An additional fee is charged to individual participants for various services provided by the Plan’s recordkeeper and other service providers. Certain expenses are paid by the Plan, Group Trust, or Company.

NOTE 2. ACCOUNTING POLICIES

The accompanying financial statements were prepared in conformity with U.S. generally accepted accounting principles (GAAP), which require management to make estimates that affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. Distributions are recorded when paid.

Investment Valuation and Income RecognitionInvestments are stated at fair value except those investments that are fully benefit

responsive which are stated at contract value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for discussion of fair value measurements.
Investments in securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the year. If no sale was reported on that date, they are valued at the last reported bid price. Shares of registered investment companies (i.e. mutual funds) are valued based on quoted market prices, which represent the net asset value of shares held at year-end. Over-thecounter securities (OTC) and government obligations are valued at the bid price or the average of the bid and asked price on the last business day of the year from published sources where available and, if not available, from other sources considered reliable.
Depending on the types and contractual terms of OTC derivatives, fair value is measured using valuation techniques such as Black- Scholes option price models, simulation models, or a combination of various models.

Common/collective trust funds and 103-12 investment entities (i.e. an investment entity that holds the assets of two or more plans which are not members of a related group or employee benefit plan) are valued at quoted redemption values that represent the net asset values (NAV) of units held at year-end. Publicly traded partnerships are valued using trades on a national securities exchange based on the last reported sales price on the last business day of the year.

Investment contracts held by a defined contribution plan are required to be reported at contract value. Contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefitresponsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Group Trust invests in fully benefit-responsive guaranteed investment contracts (GICs)
and synthetic guaranteed investment contracts (Synthetic GICs). The underlying investments of the Synthetic GICs are owned by the Group Trust and are comprised of corporate bonds and notes, registered investment companies and government securities and are also valued as described above. The contract value of the fully benefit-responsive investment contracts represents contributions plus earnings, less participant withdrawals and administrative expenses.

Purchases and sales of securities are reflected as of the trade date. Dividend income is recognized on the ex-dividend date. Interest earned on investments is recognized on the accrual basis. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year. Transfers in and out of Level 1 (quoted market prices), Level 2 (other significant observable inputs) and Level 3 (significant unobservable inputs) are recognized on the period ending date.

Notes Receivable from ParticipantsNotes receivable from participants represent participant loans that are recorded at their unpaid

principal balance plus any accrued, but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2019 or 2018. If a participant ceases to make loan repayments and the Plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a distribution is recorded.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

Recent Accounting Standards

In February 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-06 “Employee Benefit Plan Master Trust Reporting” (ASU 2017-06). ASU 2017-06 requires plans to report interests in a master trust and changes in the value of that interest as separate line items on the plan’s financial statements. The plans must also disclose the master trust’s investments by general type as well as other assets and liabilities and disclose the dollar amount of the plan’s interest in each category disclosed. The new standard is effective for fiscal years beginning after December 15, 2018 with retrospective application. The Plan has adopted this standard retrospectively.

In July 2018, the FASB issued Accounting Standards Update No. 2018 -09 “Codification Improvements” (ASU-2018-09). ASU 2018- 09 requires a plan to evaluate its investments to determine whether a readily determinable fair value exists or if investments qualify for the net asset value per share practical expedient and can be excluded from the fair value hierarchy disclosure. The new standard is effective for fiscal years beginning after December 15, 2018. The Plan has adopted this standard retrospectively .

In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Fair Value Measurement (Topic 820) Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement” (ASU 2018-13). ASU 2018-13 eliminates and modifies certain disclosure requirements for fair value measurements of non-public entities. The eliminated disclosure requirements include (i) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (ii) the policy for timing of transfers between fair value hierarchy levels, (iii) the valuation processes for Level 3 fair value measurements and (iv) the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. The modified disclosure requirements include (i) In lieu of a rollforward for Level 3 fair value measurements disclosing the transfers into and out of Level 3 of the fair value hierarchy and purchases and issuances of Level 3 assets and liabilities and (ii) for entities that use the practical expedient measure of fair value the requirement disclosing the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. The new standard is effective for fiscal years beginning after December 15, 2019 with certain retrospective applications. Early adoption is permitted. Management is currently evaluating this updated guidance.

NOTE 3. FAIR VALUE MEASUREMENTS

Accounting Standards Codification 820,Fair Value Measurement, establishes a framework for measuring fair value. That framework

provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

Level 2 Inputs to the valuation methodology include:

• Quoted prices for similar assets and liabilities in active markets;

• Quoted prices for identical or similar assets or liabilities in inactive markets;

• Inputs other than quoted market prices that are observable for the asset or liability;

• Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The valuation methodologies described in Note 2 may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Plan management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the methodologies used at December 31, 2019 and 2018.

See Note 4 for fair value hierarchy for the Group Trust’s and Plan’s investments.

NOTE 4. INVESTMENTS

The Plan held investments in its own trust and in the Group Trust (through participation in the AT&T Stable Value Fund and AT&T International Stock Fund) as of December 31, 2019 and 2018.

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets, other than the Plan’s investment in the Group Trust, at fair value as of December 31, 2019:| | Plan Assets at Fair Value as of December 31, 2019 | | | |
| --- | --- | --- | --- | --- |
| | Level 1 | Level 2 | Level 3 | Total |
| Interest bearing investments | $ 895 | $ 2,107 | $ — | $ 3,002 |
| AT&T common stock | 392,583 | — | — | 392,583 |
| Mutual funds or exchange-traded funds | 635,427 | — | — | 635,427 |
| Corporate debt | — | 26,039 | — | 26,039 |
| Mortgage-backed securities | — | 40,044 | — | 40,044 |
| Government debt | — | 23,458 | — | 23,458 |
| Futures | 227 | — | — | 227 |

Total assets in fair value hierarchy$1,029,132$ 91,648$ —$ 1,120,780| Common/collective trusts measured at net asset value: | | | |
| --- | --- | --- | --- |
| U.S. index stock fund | 1 | | 423,222 |
| International index stock fund | | 2 | 57,933 |
| Blended equity & debt | 3 | | 290,385 |
| Bond index fund | 4 | | 28,131 |

Total assets at fair value$ 1,920,451

1This category includes common/collective trust funds with an objective of providing investment results that approximate the

overall performance of the common stocks included in the Standard and Poor’s Composite Stock Price Index of 500 stocks (the “S&P 500®”), the Russell 1000 Index and the Dow Jones U.S. Completion Total Stock Market Index. There are currently no redemption restrictions on these investments.
2This category includes a common/collective trust fund with an objective of providing investment results that approximate the overall performance of the common stocks included in the All Country World Index ex U.S. Index. Except for a short-term trading fee applicable to certain participant transactions, there are currently no redemption restrictions on this investment.
3This category includes common/collective trust funds also known as LifePath Portfolios which are well diversified portfolios that adjust the mix of the various underlying investments over time. The change in allocation of investments is designed to move from a more aggressive investment strategy to a more conservative strategy as the participants come closer to retirement. The year associated with the fund identification denotes the projected year of retirement of the participant selecting the fund. There are currently no redemption restrictions on these investments.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

4This category includesa common/collective trust fund with anobjective to approximate the overall performance of the Barclays
Capital Aggregate Bond Index. There are currently no redemption restrictions on these investments.

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets, other than the Plan’s investment in the Group Trust, at fair value as of December 31, 2018:| | Plan Assets at Fair Value as of December 31, 2018 | | | |
| --- | --- | --- | --- | --- |
| | Level 1 | Level 2 | Level 3 | Total |
| Interest bearing investments | $ 894 | $ 16,101 | $ — | $ 16,995 |
| AT&T common stock | 306,853 | — | — | 306,853 |
| Mutual funds or exchange-traded funds | 524,126 | — | — | 524,126 |
| Corporate debt | — | 26,914 | — | 26,914 |
| Mortgage-backed securities | — | 38,541 | — | 38,541 |
| Government debt | — | 8,765 | — | 8,765 |
| Futures | 62 | — | — | 62 |

Total assets in fair value hierarchy$ 831,935$ 90,321$ —$ 922,256| Common/collective trusts measured at net asset value: | | | |
| --- | --- | --- | --- |
| U.S. index stock fund | 1 | | 327,383 |
| International index stock fund | | 2 | 45,420 |
| Blended equity & debt | 3 | | 256,755 |
| Bond index fund | 4 | | 23,355 |

Total assets at fair value$ 1,575,169

1This category includes common/collective trust funds with an objective of providing investment results that approximate the

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

AT&T Savings Group Investment Trust Investments

AT&T established the Group Trust to manage assets of pooled investment options among various AT&T sponsored employee benefit trusts. Each participating trust’s interest in the investment fund options (i.e., separate accounts) of the Group Trust is based on account balances of the participants and their elected investment fund options. The Group Trust assets are allocated among the participating plans by assigning to each trust those transactions (primarily contributions, distributions, and expenses) that can be specifically identified and by allocating investment income and administrative expenses to the individual plans on a daily basis based on each participant’s account balance within each investment fund option.

The Plan’s interest in each of the investment fund options within the Group Trust is disclosed below as of December 31, 2019.

AT&T Total

Return BondAT&T U.S. FundStock FundAT&T International Stock FundAT&T Stable Value FundGroup Trust| | | | | BellSouth | | BellSouth | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | AT&T Master | AT&T Master | AT&T Master | Savings and | AT&T Master | Savings and | |
| | Trust | Trust | Trust | Security Plan | Trust | Security Plan | Total |
| Interest bearing cash | $ 1,060 | $ - | $ 2 | $ - | $ - | $ - | $ 1,062 |
| Foreign cash | 7,378 | - | 77 | 1 | - | - | 7,456 |
| Mortgage-backed securities | 379,956 | - | - | - | - | - | 379,956 |
| Corporate debt | 847,135 | - | - | - | - | - | 847,135 |
| Government securities | 195,789 | - | - | - | - | - | 195,789 |
| Common/collective trust funds | 1,090,769 | 2,485,301 | 447,390 | 6,544 | - | - | 4,030,004 |
| Equities - common stock | - | 398,270 | 199,296 | 2,915 | - | - | 600,481 |
| Equities - preferred stock | 2,427 | - | 3,742 | 55 | - | - | 6,224 |
| Futures | (1,714) | - | - | - | - | - | (1,714) |
| Registered investment companies | 269,023 | 64,059 | 4,581 | 67 | 74,332 | 6,163 | 418,225 |
| Group Trust investments at fair value | 2,791,823 | 2,947,630 | 655,088 | 9,582 | 74,332 | 6,163 | 6,484,618 |
| receivable from the Time Warner Defined | | | | | | | |
| Contribution Plans Master Trust | 220,271 | - | 315,016 | - | 478,443 | - | 1,013,730 |
| Unsettled trades/other | (203,119) | (196) | 1,326 | 19 | (1,717) | 323 | (203,364) |
| Fully benefit-responsive investments contracts | | | | | | | |
| valued at contract value | - | - | - | - | 6,243,864 | 517,689 | 6,761,553 |
| Group Trust net assets | $ 2,808,975 | $ 2,947,434 | $ 971,430 | $ 9,601 | $ 6,794,922 | $ 524,175 | $ 14,056,537 |

BellSouth Savings and Security Plan does not hold any investments in AT&T Total Return Bond Fund or AT&T U.S. Stock Fund.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

The Plan’s interest in each of the investment fund options within the Group Trust is disclosed below as of December 31, 2018.

AT&T Total

Return BondAT&T U.S.AT&T International Stock

FundStock FundFundAT&T Stable Value FundGroup Trust| | | | | BellSouth | | BellSouth | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | AT&T | AT&T | AT&T | Savings and | AT&T | Savings and | |
| | Master Trust | Master Trust | Master Trust | Security Plan | Master Trust | Security Plan | Total |
| Interest bearing cash | $ 8,064 | $ 500 | $ 3 | $ - | $ - | $ - | $ 8,567 |
| Foreign cash | 3,892 | - | 16 | - | - | - | 3,908 |
| Mortgage-backed securities | 267,127 | - | - | - | - | - | 267,127 |
| Corporate debt | 712,633 | - | - | - | - | - | 712,633 |
| Government securities | 315,654 | - | - | - | - | - | 315,654 |
| Common/collective trust funds | 756,427 | 2,161,448 | 155,359 | 2,163 | - | - | 3,075,397 |
| 103-12 investment entities | - | - | 233,699 | 3,253 | - | - | 236,952 |
| Equities - common stock | - | 324,930 | 191,236 | 2,662 | - | - | 518,828 |
| Equities - preferred stock | - | - | 4,466 | 62 | - | - | 4,528 |
| Futures | (245) | - | - | - | - | - | (245) |
| Registered investment companies | 291,899 | 6,090 | 3,487 | 49 | 171,316 | 14,400 | 487,241 |
| Group Trust investments at fair value | 2,355,451 | 2,492,968 | 588,266 | 8,189 | 171,316 | 14,400 | 5,630,590 |
| Unsettled trades/other | (395,768) | (263) | 790 | 11 | (1,140) | 369 | (396,001) |
| Fully benefit-responsive investments | | | | | | | |
| contracts valued at contract value | - | - | - | - | 6,299,631 | 529,520 | 6,829,151 |
| Group Trust net assets | $ 1,959,683 | $ 2,492,705 | $ 589,056 | $ 8,200 | $ 6,469,807 | $ 544,289 | $ 12,063,740 |

BellSouth Savings and Security Plan does not hold any investments in AT&T Total Return Bond Fund or AT&T U.S. Stock Fund.

Net Appreciation in Fair Value of Group Trust Investments and

Total Investment Income for the Year Ended December 31, 2019

Group

Trust Net appreciation in fair value of Group Trust Investments$ 913,769
Investment Income:| Interest | 226,978 |
| --- | --- |
| Dividends | 22,461 |
| Less: investment management expenses | (9,179) |

Net investment income of Group Trust Investments$ 1,154,029

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

The following tables sets forth by level, within the fair value hierarchy, the Group Trust’s assets at fair value as of December 31, 2019 and 2018:| | | Group Trust Assets at Fair Value | | |
| --- | --- | --- | --- | --- |
| | | December 31, 2019 | | |
| | Level 1 | Level 2 | Level 3 | Total |
| Corporate debt | $ — | $ 841,471 | $ 5,664 | $ 847,135 |
| Mortgage-backed securities | — | 376,318 | 3,638 | 379,956 |
| Interest bearing cash | — | 1,062 | — | 1,062 |
| Foreign cash | 7,456 | — | — | 7,456 |
| Equities - common stock | 598,435 | — | 2,046 | 600,481 |
| Equities - preferred stock | 3,797 | 2,427 | — | 6,224 |
| Futures | (1,713) | (1) | — | (1,714) |
| Registered investment companies | 418,225 | — | — | 418,225 |
| Government securities | — | 195,789 | — | 195,789 |

Total assets in fair value hierarchy$1,026,200$ 1,417,066$ 11,348$ 2,454,614| Investments measured at net asset value | | | | |
| --- | --- | --- | --- | --- |
| U.S. common/collective trusts | | 1 | | 3,525,120 |
| International common/collective trusts | | 2 | | 187,908 |
| 103-12 investments | 3 | | | 266,026 |
| Non-publicly traded registered investments companies | | | 4 | 50,950 |

Total assets at fair value$ 6,484,618

1The objective of the common/collective trust funds held in the AT&T U.S. Stock Fund is to deliver diversified exposure to the

large-capitalization U.S. equity market as represented by the Russell 3000 Index. The objective of the common/collective trust funds held in the AT&T Total Return Bond Fund is to deliver diversified exposure to the fixed income market as represented by the Bloomberg Barclays Aggregate Index. There are currently no redemption restrictions on these investments.
2The objective of the common/collective trust funds held in the AT&T International Stock Fund is to provide diversified exposure to international markets as represented by the All Country World Index ex U.S., MSCI Emerging Markets Net Dividend Index, MSCI Australia Index and MSCI Canada Index. There are currently no redemption restrictions on these investments.
3The objective of these equity commingled funds is to provide diversified exposure to international markets as represented by the All Country World Index ex U.S. that invest in both developed and emerging countries. These funds have redemption restrictions limited to daily and monthly settlement.
4These are non-publicly traded registered investment companies, consisting of a short-term floating rate portfolio plus publiclytraded high-yield and asset-backed fixed income securities. The fair value of the investments in this group have been estimated using the net asset values reported by the fund manager. These funds are utilized on a discretionary basis as part of a broad fixed income mandate. These are open-ended funds, with no final termination dates. There are currently no redemption restrictions on this investment.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)| | | Group Trust Assets at Fair Value | | |
| --- | --- | --- | --- | --- |
| | | December 31, 2018 | | |
| | Level 1 | Level 2 | Level 3 | Total |
| Corporate debt | $ — | $ 712,633 | $ — | $ 712,633 |
| Mortgage-backed securities | — | 267,127 | — | 267,127 |
| Interest bearing cash | — | 8,567 | — | 8,567 |
| Foreign cash | 3,908 | — | — | 3,908 |
| Equities - common stock | 518,828 | — | — | 518,828 |
| Equities - preferred stock | 4,528 | — | — | 4,528 |
| Futures | (245) | — | — | (245) |
| Registered investment companies | 487,241 | — | — | 487,241 |
| Government securities | — | 315,654 | — | 315,654 |

Total assets in fair value hierarchy$ 1,014,260$ 1,303,981$ —$ 2,318,241| Investments measured at net asset value | | | | |
| --- | --- | --- | --- | --- |
| U.S. common/collective trusts | | 1 | | 2,868,746 |
| International common/collective trusts | | 2 | | 157,522 |
| 103-12 investments | 3 | | | 236,952 |
| Non-publicly traded registered investments companies | | | 4 | 49,129 |

Total assets at fair value$ 5,630,590

1The objective of the common/collective trust funds held in the AT&T U.S. Stock Fund is to deliver diversified exposure to the

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

Derivative Financial Instruments

In the normal course of operations, Group Trust assets and liabilities held in the AT&T Stable Value Fund (Stable Value Fund) may include derivative financial instruments (futures and foreign currency forward contracts). These instruments involve, in varying degrees, elements of credit and market volatility risks in excess of more traditional investment holdings such as equity and debt instruments. The intent is to use derivative financial instruments as an economic hedge to manage market volatility and foreign currency exchange rate risk associated with the Stable Value Fund’s investment assets. The gains (losses) are located on the Statement of Changes in Net Assets Available for Benefits as Net Income from Investment in AT&T Savings Group Investment Trust to the extent of the Plan’s ownership in the Group Trust. The Group Trust’s fiduciaries do not anticipate any material adverse effect on the Group Trust’s financial position resulting from its involvement in these instruments.

In addition to the derivative financial instruments held by the Group Trust, the Plan also holds derivative financial instruments as Plan investments in its own trust. The income is located on the Statements of Changes in Net Assets Available for Benefits a component of net appreciation in fair value of investments.

At December 31, 2019 and 2018, the fair value of derivative financial instruments held by the Group Trust and the Plan was not material.

Futures Contracts

The primary risk managed by the Group Trust using futures contracts is the price risk associated with investments. On behalf of the Group Trust, investment managers enter into various futures contracts to economically hedge investments. These contracts, which are considered derivatives under Accounting Standards Codification Topic 815,Derivatives and Hedgingare agreements between two

parties to buy or sell a security or financial interest at a set price on a future date and are standardized and exchange -traded. Upon entering into such a contract on behalf of the Group Trust, the investment manager is requ ired to pledge to the broker an amount of cash or securities equal to the minimum “initial margin” requirements of the exchange on which the contract is traded. Pursuant to the contract, the investment manager agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded on a daily basis by the trustee as a realized gain or loss equal to the difference in the value of the contract between daily closing prices. Upon entering into such contracts, the Group Trust bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Group Trust may not achieve the anticipated benefits of the futures contracts and may realize a loss. With futures, there is minimal counterparty credit risk to the Group Trust since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. The investments in the Group Trust are subject to equity price risk and interest rate risk, in the normal course of pursuing its investment objectives. The U.S. interest rate futures held in the portfolio as of December 31, 2019 and 2018 were used primarily to hedge and manage the duration risk of the portfolio.

The futures held in the Plan as of December 31, 2019 and 2018, were used primarily to maintain the target allocations of the portfolio.

Foreign Currency Contracts

The primary risks managed by the Group Trust using foreign currency forward contracts is the foreign currency exchange rate risk associated with the Group Trust’s investments denominated in foreign currencies. On behalf of the Group Trust, investment managers enter into forward foreign currency contracts, which are agreements to exchange foreign currencies at a specified future date at a specified rate, the terms of which are not standardized on an exchange. These contracts are intended to minimize the effect of currency fluctuations on the performance of investments denominated in foreign currencies. Although in some cases, forward foreign currency contracts are used to express a view on the direction of a particular currency, risk arises both from the possible inability of the counterparties to meet the terms of the contracts (credit risk) and from movement in foreign currency exchange rates (market risk).
Foreign currency forward contracts are entered into with major banks to minimize credit risk, and accordingly, no credit reserve has been established against these amounts. The contracts are recorded at fair value on the date the contract is entered into, which is typically zero.

Fully Benefit-Responsive Investment Contracts

The Stable Value Fund consists of fully benefit-responsive investment contracts with various financial institutions and insurance companies which can be accounted for by the Plans at contract value. Generally contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

The investments held by the Stable Value Fund as of December 31, 2019 include Synthetic GICs which are fully benefit-responsive investment contracts. Synthetic GICs are constructed by combining a stable value insurance wrapper contract and a fixed income portfolio. The assets supporting the Synthetic GICs are owned by the Group Trust and generally consist of high quality fixed income securities.

Traditional Guaranteed Investment Contracts (“Traditional GICs” also known as “General Account GICs”) are issued by insurance companies and typically pay a guaranteed fixed or floating rate of interest over the life of the contract with a repayment of principal at maturity. A Synthetic GIC is similar to a Traditional GIC but has unbundled the insurance and investment components of the Traditional GIC.

Wrapper contracts are typically issued by a bank or insurance company, and seek to provide preservation of principal by permitting daily liquidity at contract value for participant directed transactions, in accordance with the provisions of the Plans. Wrapper contracts amortize the realized and unrealized gains and losses on the underlying fixed income investments through adjustments to the future interest crediting rate of the contract. Wrapper contracts typically contain contractual provisions that prevent the interest crediting rate from falling below zero.

In certain circumstances, the amount withdrawn from the wrapper contract could be payable at fair value rather than at contract value.
These events include termination of the Plans, a material adverse change to the provisions of the Plans, if AT&T elects to withdraw from a wrapper contract in order to switch to a different investment provider or, in the event of a spin-off or sale of a division, if the terms of the successor plan do not meet the contract issuers’ underwriting criteria for issuance of a clone wrapper contract. Events that would permit a wrapper contract issuer to terminate a wrapper contract upon short notice include the Plans’ loss of qualified status, un-cured material breaches of responsibilities or material and adverse changes to the provisions of the Plans. The Company does not believe any of the events are probable of occurring in the foreseeable future.

Interest Bearing Cash

At December 31, 2019 and 2018, the Plan held approximately $764 and $945, respectively, of unallocated interest bearing cash related to contributions, uncashed checks and fees pending allocation to participant accounts or clearance through the plan funds.

Investment Risk

Investments held by the Group Trust and the Plan are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of investments could occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits. Participants’ accounts that are invested in the Company stock fund option are exposed to market risk in the event of a significant decline in the value of AT&T stock.

Additionally, the Group Trust invests in securities with contractual cash flows, such as asset backed securities, collateralized mortgage obligations and commercial mortgage-backed securities. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate value, delinquencies or defaults, or both, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates.

NOTE 5. PARTIES -IN-INTEREST TRANSACTIONS

The Plan may, at the discretion of the Plan’s participants or via the Company match, invest in the Company’s common stock. The Plan held 10,045,635 and 10,751,695 shares of the Company’s common stock as of December 31, 2019 and 2018, respectively. Dividends earned by the Plan on the Company’s common stock were $20,050 for the year ended December 31, 2019.

Plan assets are invested in AT&T stock either directly or through the Group Trust. Because the Company is the plan sponsor, transactions involving the Company’s stock qualify as party-in-interest transactions. In addition, certain investments held by the Plan and Group Trust are managed by BNY Mellon and Fidelity as trustee and record keeper, respectively, as defined by various agreements. Therefore, these transactions and fees paid to these entities qualify as parties-in-interest transactions. All of these transactions are exempt from the prohibited transactions rules.

BellSouth Savings and Security Plan

Notes to Financial Statements (Continued)

(Dollars in Thousands)

NOTE 6. TAX STATUS

The Plan has received a determination letter from the Internal Revenue Service (IRS) dated June 4, 2015, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is exempt from taxation.
Subsequent to this determination by the IRS, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan administrator has indicated that it will take the necessary steps, if any, to bring the Plan’s operations into compliance with the Code.

Accounting principles generally accepted in the United States require Plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2019, there were no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions;
however, there are currently no audits for any tax periods in progress.

NOTE 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31:| | 2019 | 2018 |
| --- | --- | --- |
| Net Assets Available for Benefits per the financial statements | $ 2,506,531 | $ 2,169,596 |
| Distributions payable to participants | (299) | (368) |

Net Assets Available for Benefits per the Form 5500$ 2,506,232$ 2,169,228

Distributions payable to participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date. The following is a reconciliation of distributions to participants per the financial statements to the Form 5500 for the year ended December 31, 2019:| Distributions to participants per the financial statements | $ 223,813 |
| --- | --- |
| Distributions payable to participants at December 31, 2018 | (368) |
| Distributions payable to participants at December 31, 2019 | 299 |

Distributions to participants per the Form 5500$ 223,744

NOTE 8. SUBSEQUENT EVENTS

In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The COVID-19 pandemic has led to extreme volatility in financial markets and has affected, and may continue to affect, the market price of AT&T ’s common stock and other Plan assets. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets. The extent to which COVID-19 impacts the financial markets will depend on future developments that are highly uncertain and cannot be predicted.

The Coronavirus Aid Relief, and Economic Security Act (CARES Act) was passed by the U.S. Senate on March 26, 2020. Section 2202 of the CARES Act permits eligible Plan participants to request penalty-free distributions of up to $100,000 for qualifying coronavirus-related reasons. These reasons include adverse financial consequences due to being quarantined, furloughed, laid off, having work hours reduced or being unable to work due to a lack of childcare due to COVID-19. Plan Management is in the process of reviewing the CARES Act and any resulting changes to the Plan.

BELLSOUTH SAVINGS AND SECURITY PLAN

EIN 58-1533433, PLAN NO. 004

SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)

December 31, 2019

(Dollars in Thousands)

Identity of IssueDescription of InvestmentCurrent Value| * NORTHERN TRUST S&P 500 INDEX STOCK | COMMON/COLLECTIVE TRUST FUND: | |
| --- | --- | --- |
| FUND | 15,348 UNITS | $ 176,658 |
| * BLACKROCK RUSSELL 1000 INDEX FUND | COMMON/COLLECTIVE TRUST FUND: | |
| | 5,670,836 UNITS | 189,555 |
| EXTENDED EQUITY MARKET FUND F | COMMON/COLLECTIVE TRUST FUND: | |
| | 142,131 UNITS | 10,795 |

Total Indexed Stock Fund377,008

Balanced Fund * DREYFUS GOVERNMENT CASHREGISTERED INVESTMENT COMPANY:
MANAGEMENT FUND10,719,828 UNITS10,720 * NORTHERN TRUST QM AGGREGATECOMMON/COLLECTIVE TRUST FUND:
BOND INDEX FUND48,137 UNITS| * NORTHERN TRUST S&P 500 INDEX STOCK | COMMON/COLLECTIVE TRUST FUND: 4,015 | |
| --- | --- | --- |
| FUND | UNITS | 46,214 |
| FUTURES CONTRACT | S&P 500 EMINI INDEX FUT (CME) EXP MAR | |
| | 20 | 239 |
| FUTURES CONTRACT | US 10YR TREAS NTS FUTURE (CBT) EXP | |
| | MAR 20 | 596 |
| US TREASURY BILL | 0.000% 01/30/2020 DD 01/31/19 | 287 |

Total Balanced Fund86,187

Registered Investment Companies T ROWE PR INST M/C GRWREGISTERED INVESTMENT COMPANY:
5,460,578 UNITS333,696 DFA US SM CAP VAL PORTREGISTERED INVESTMENT COMPANY:
3,635,299 UNITS125,200 DFA US LRG CAP VAL II-INSTREGISTERED INVESTMENT COMPANY:
9,176,749 UNITS160,318

Total Registered Investment Companies619,214

LifePath Funds * LIFEPATH INDEX 2050 FUND FCOMMON/COLLECTIVE TRUST FUND:
500,882 UNITS9,962 * LIFEPATH INDEX 2040 FUND FCOMMON/COLLECTIVE TRUST FUND:
2,631,804 UNITS68,018

BELLSOUTH SAVINGS AND SECURITY PLAN

EIN 58-1533433, PLAN NO. 004 SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (Continued)

December 31, 2019

(Dollars in Thousands)

Identity of IssueDescription of InvestmentCurrent Value| * LIFEPATH INDEX 2030 FUND F | COMMON/COLLECTIVE TRUST FUND: | |
| --- | --- | --- |
| | 4,726,828 UNITS | 115,044 |
| * LIFEPATH INDEX RETIREMENT FD F | COMMON/COLLECTIVE TRUST FUND: | |
| | 4,458,104 UNITS | 97,361 |

Total LifePath Funds290,385| AT&T Shares Fund | | |
| --- | --- | --- |
| * AT&T INC | 10,045,635 SHARES | 392,583 |
| * DREYFUS GOVT CAS MGMT INST 289 | REGISTERED INVESTMENT COMPANY: | |
| | 3,777,329 UNITS | 3,777 |

Total AT&T Shares Fund396,360| Bond Fund | | |
| --- | --- | --- |
| ABBVIE INC | 4.500% 05/14/2035 DD 05/14/15 | 226 |
| ABBVIE INC | 4.700% 05/14/2045 DD 05/14/15 | 112 |
| AMERICAN MUNI PWR-OHIO INC OH | 6.449% 02/15/2044 DD 12/09/09 | 1,392 |
| AMERICAN WATER CAPITAL CORP | 3.400% 03/01/2025 DD 08/14/14 | 315 |
| AMGEN INC | 3.125% 05/01/2025 DD 05/01/15 | 939 |
| ANHEUSER-BUSCH INBEV WORLDWIDE | 4.150% 01/23/2025 DD 01/23/19 | 327 |
| ARROW ELECTRONICS INC | 3.250% 09/08/2024 DD 09/08/17 | 308 |
| ASHTEAD CAPITAL INC 144A | 4.000% 05/01/2028 DD 11/04/19 | 404 |
| ASSET BACKED SECURITIES HE4 M1 | VAR RT 08/15/2033 DD 08/06/03 | 86 |
| AVIATION CAPITAL GROUP LL 144A | 4.125% 08/01/2025 DD 08/01/18 | 105 |
| AVIATION CAPITAL GROUP LL 144A | VAR RT 06/01/2021 DD 12/03/18 | 100 |
| BAMLL COMMERCIAL MO RLJ A 144A | VAR RT 04/15/2036 DD 05/30/19 | 200 |
| BANC OF AMERICA FUNDING 2 D A1 | VAR RT 05/25/2035 DD 06/01/05 | 21 |
| BANK 2019-BNK20 BN20 ASB | 2.933% 09/15/2061 DD 09/01/19 | 411 |
| BANK OF AMERICA CORP | VAR RT 03/05/2024 DD 03/05/18 | 100 |
| BANK OF AMERICA CORP | VAR RT 03/05/2024 DD 03/05/18 | 623 |
| BANK OF AMERICA CORP | VAR RT 07/23/2024 DD 07/23/18 | 316 |
| BAT CAPITAL CORP | 3.222% 08/15/2024 DD 08/15/18 | 102 |
| BAYER US FINANCE II LLC 144A | 4.375% 12/15/2028 DD 06/25/18 | 218 |
| BEAR STEARNS ARM TRUST 11 1A2 | VAR RT 02/25/2033 DD 12/01/02 | 2 |
| BEAR STEARNS ARM TRUST 12 13A1 | VAR RT 02/25/2036 DD 12/01/05 | 8 |
| BMW US CAPITAL LLC 144A | VAR RT 08/13/2021 DD 08/14/18 | 100 |
| BOSTON SCIENTIFIC CORP | 3.850% 05/15/2025 DD 05/12/15 | 164 |
| BROADCOM CORP / BROADCOM CAYMA | 3.000% 01/15/2022 DD 01/15/18 | 101 |
| BROADCOM CORP / BROADCOM CAYMA | 3.625% 01/15/2024 DD 01/15/18 | 415 |
| CD 2018-CD7 MORTGAGE T CD7 ASB | 4.213% 08/15/2051 DD 08/01/18 | 328 |
| CENTENE CORP 144A | 4.750% 01/15/2025 DD 07/15/19 | 208 |
| CHARTER COMMUNICATIONS OPERATI | VAR RT 02/01/2024 DD 07/03/18 | 206 |

BELLSOUTH SAVINGS AND SECURITY PLAN

EIN 58-1533433, PLAN NO. 004 SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (Continued)

December 31, 2019

(Dollars in Thousands)

Identity of IssueDescription of InvestmentCurrent Value| CHASE ISSUANCE TRUST A1 A | VAR RT 01/15/2022 DD 02/06/17 | 200 |
| --- | --- | --- |
| CHICAGO IL TRANSIT AUTH SALES | 6.899% 12/01/2040 DD 08/06/08 | 135 |
| CITIBANK NA | VAR RT 07/23/2021 DD 07/23/18 | 402 |
| CITIGROUP COMMERCIAL GC35 AAB | 3.608% 11/10/2048 DD 12/01/15 | 938 |
| CITIGROUP INC | VAR RT 04/23/2029 DD 04/23/18 | 438 |
| COMMIT TO PUR FNMA SF MTG | 3.000% 02/01/2050 DD 02/01/20 | 4,256 |
| COMMIT TO PUR FNMA SF MTG | 3.500% 03/01/2050 DD 03/01/20 | 1,644 |
| COMMIT TO PUR FNMA SF MTG | 5.000% 01/01/2050 DD 01/01/20 | 1,069 |
| COMMIT TO PUR GNMA II JUMBOS | 3.000% 02/20/2050 DD 02/01/20 | 821 |
| COMMIT TO PUR GNMA II JUMBOS | 3.500% 02/20/2050 DD 02/01/20 | 980 |
| COMMIT TO PUR GNMA II JUMBOS | 4.000% 01/20/2050 DD 01/01/20 | 1,242 |
| COMMIT TO PUR GNMA II JUMBOS | 4.000% 02/20/2050 DD 02/01/20 | 414 |
| CONSOLIDATED EDISON CO OF NEW | VAR RT 06/25/2021 DD 06/26/18 | 100 |
| CONTINENTAL AIRLINES 2012-1 CL | 4.150% 10/11/2025 DD 03/22/12 | 143 |
| CSAIL 2015-C4 COMMERCIAL C4 A4 | 3.808% 11/15/2048 DD 11/01/15 | 213 |
| CVS HEALTH CORP | 5.050% 03/25/2048 DD 03/09/18 | 178 |
| DAIMLER FINANCE NORTH AME 144A | 3.400% 02/22/2022 DD 02/22/19 | 205 |
| DAIMLER FINANCE NORTH AME 144A | VAR RT 02/15/2022 DD 08/15/19 | 202 |
| DELL INTERNATIONAL LLC / 144A | 4.900% 10/01/2026 DD 03/20/19 | 110 |
| DELL INTERNATIONAL LLC / 144A | 6.020% 06/15/2026 DD 06/01/16 | 460 |
| DIGITAL REALTY TRUST LP | 4.450% 07/15/2028 DD 06/21/18 | 221 |
| DISCOVER FINANCIAL SERVICES | 4.500% 01/30/2026 DD 01/31/19 | 219 |
| * DREYFUS GOVT CAS MGMT INST 289 | VAR RT 12/31/2075 DD 06/03/97 | 952 |
| DUKE ENERGY CAROLINAS LLC | 3.750% 06/01/2045 DD 03/12/15 | 971 |
| ENTERGY ARKANSAS LLC | 3.500% 04/01/2026 DD 01/08/16 | 316 |
| FEDERAL HOME LN BK CONS DISC | 02/05/2020 | 997 |
| FEDERAL HOME LN BK CONS DISC N | 02/03/2020 | 897 |
| FEDERAL HOME LN BKS CONS DISC | 01/08/2020 | 200 |
| FHLMC POOL #SD-8036 | 3.000% 12/01/2049 DD 12/01/19 | 3,248 |
| FHLMC MULTICLASS MTG 3626 ME | 5.000% 01/15/2040 DD 01/01/10 | 22 |
| FHLMC MULTICLASS MTG K156 A1 | 3.700% 05/25/2030 DD 08/01/18 | 208 |
| FLORIDA POWER & LIGHT CO | 4.125% 02/01/2042 DD 12/13/11 | 573 |
| FNMA POOL #0AL2617 | 6.000% 10/01/2040 DD 11/01/12 | 141 |
| FNMA POOL #0AM0359 | 2.310% 08/01/2022 DD 08/01/12 | 100 |
| FNMA POOL #0AS1338 | 5.000% 12/01/2043 DD 11/01/13 | 383 |
| FNMA POOL #0AS2741 | 5.000% 06/01/2044 DD 05/01/14 | 257 |
| FNMA POOL #0BM2007 | 4.000% 09/01/2048 DD 08/01/18 | 227 |
| FNMA POOL #0MA3443 | 4.000% 07/01/2048 DD 07/01/18 | 2,920 |
| FNMA POOL #0MA3495 | 4.000% 09/01/2048 DD 09/01/18 | 8,685 |
| FNMA POOL #0MA3692 | 3.500% 07/01/2049 DD 06/01/19 | 2,668 |
| FNMA POOL #0MA3871 | 3.000% 11/01/2049 DD 11/01/19 | 1,014 |
| FNMA GTD REMIC P/T 03-25 KP | 5.000% 04/25/2033 DD 03/01/03 | 77 |
| FNMA GTD REMIC P/T 03-W1 1A1 | VAR RT 12/25/2042 DD 01/01/03 | 26 |

BELLSOUTH SAVINGS AND SECURITY PLAN

EIN 58-1533433, PLAN NO. 004 SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (Continued)

December 31, 2019

(Dollars in Thousands)

Identity of IssueDescription of InvestmentCurrent Value| FNMA GTD REMIC P/T 19-25 FA | VAR RT 06/25/2049 DD 05/25/19 | 555 |
| --- | --- | --- |
| FORD MOTOR CREDIT CO LLC | 3.664% 09/08/2024 DD 09/08/14 | 201 |
| FORD MOTOR CREDIT CO LLC | VAR RT 04/05/2021 DD 03/05/18 | 199 |
| GENERAL ELECTRIC CO | 4.125% 10/09/2042 DD 10/09/12 | 41 |
| GENERAL MOTORS FINANCIAL CO IN | 3.150% 06/30/2022 DD 06/30/17 | 408 |
| GNMA POOL #0705997 | 5.000% 01/15/2039 DD 01/01/09 | 59 |
| GNMA POOL #0782523 | 5.000% 11/15/2035 DD 12/01/08 | 53 |
| GNMA POOL #0AE7708 | 4.000% 08/15/2043 DD 08/01/13 | 13 |
| GNMA POOL #0AL0766 | 3.500% 01/15/2045 DD 01/01/15 | 247 |
| GNMA POOL #0AL5269 | 3.500% 02/15/2045 DD 02/01/15 | 432 |
| GNMA POOL #0AN4392 | 4.000% 06/15/2045 DD 06/01/15 | 848 |
| GNMA GTD REMIC P/T 12-H08 FC | VAR RT 04/20/2062 DD 04/20/12 | 165 |
| GNMA GTD REMIC P/T 15-H08 FB | VAR RT 03/20/2065 DD 03/20/15 | 522 |
| GNMA GTD REMIC P/T 16-H11 F | VAR RT 05/20/2066 DD 05/20/16 | 249 |
| GNMA GTD REMIC P/T 16-H23 FD | VAR RT 10/20/2066 DD 10/20/16 | 23 |
| GNMA GTD REMIC P/T 17-H14 FE | VAR RT 06/20/2067 DD 06/20/17 | 548 |
| GOLDMAN SACHS GROUP INC/THE | 3.850% 07/08/2024 DD 07/08/14 | 846 |
| GS MORTGAGE SECURITIE GC26 AAB | 3.365% 11/10/2047 DD 12/01/14 | 909 |
| GS MORTGAGE SECURITIES GC28 A5 | 3.396% 02/10/2048 DD 02/01/15 | 209 |
| GSCG TRUST 2019-60 600C A 144A | 2.936% 09/06/2034 DD 08/01/19 | 201 |
| GSR MORTGAGE LOAN TRUS AR6 1A1 | VAR RT 09/25/2035 DD 09/01/05 | 39 |
| HOST HOTELS & RESORTS LP | 4.000% 06/15/2025 DD 05/15/15 | 643 |
| INTERNATIONAL FINANCE CORP | 2.125% 04/07/2026 DD 04/07/16 | 709 |
| INTERNATIONAL LEASE FINANCE CO | 8.625% 01/15/2022 DD 12/22/11 | 113 |
| JOHN DEERE CAPITAL CORP | VAR RT 09/10/2021 DD 09/10/18 | 300 |
| JPMBB COMMERCIAL MORTG C31 ASB | 3.540% 08/15/2048 DD 08/01/15 | 933 |
| JPMBB COMMERCIAL MORTG C32 ASB | 3.358% 11/15/2048 DD 10/01/15 | 929 |
| JPMBB COMMERCIAL MORTG C33 ASB | 3.562% 12/15/2048 DD 11/01/15 | 520 |
| JPMDB COMMERCIAL MORTGA C2 ASB | 2.954% 06/15/2049 DD 05/01/16 | 409 |
| JPMORGAN CHASE & CO | VAR RT 03/09/2021 DD 03/09/17 | 100 |
| JPMORGAN CHASE & CO | VAR RT 07/23/2024 DD 07/23/18 | 605 |
| KRAFT HEINZ FOODS CO | 3.950% 07/15/2025 DD 07/15/16 | 424 |
| MERCEDES-BENZ AUTO LEASE A A2 | 3.010% 02/16/2021 DD 01/30/19 | 412 |
| MERRILL LYNCH MORTGAGE IN E A1 | VAR RT 11/25/2029 DD 09/23/04 | 37 |
| MIDAMERICAN ENERGY CO | 4.400% 10/15/2044 DD 04/03/14 | 472 |
| MILL CITY MORTGAGE GS2 A1 144A | VAR RT 08/25/2059 DD 10/01/19 | 195 |
| MORGAN STANLEY | VAR RT 07/22/2025 DD 07/23/19 | 101 |
| MORGAN STANLEY | 3.875% 04/29/2024 DD 04/28/14 | 106 |
| MORGAN STANLEY | 3.700% 10/23/2024 DD 10/23/14 | 1,062 |
| MORGAN STANLEY CAPITAL H3 ASB | 4.120% 07/15/2051 DD 07/01/18 | 217 |
| MORGAN STANLEY CAPITAL UBS8 A3 | 3.540% 12/15/2048 DD 12/01/15 | 210 |
| MORGAN STANLEY MORTGA 11AR 1A1 | VAR RT 01/25/2035 DD 12/29/04 | 21 |
| NAVIENT STUDENT LOA EA A1 144A | 3.430% 12/15/2059 DD 11/15/18 | 111 |

BELLSOUTH SAVINGS AND SECURITY PLAN

EIN 58-1533433, PLAN NO. 004 SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (Continued)

December 31, 2019

(Dollars in Thousands)

Identity of IssueDescription of InvestmentCurrent Value| NELNET STUDENT LOAN 2A A 144A | VAR RT 06/27/2067 DD 04/30/19 | 389 |
| --- | --- | --- |
| NEW JERSEY ST TRANSPRTN TRUST | 2.631% 06/15/2024 DD 12/18/19 | 201 |
| NEW RESIDENTIAL M RPL3 A1 144A | VAR RT 07/25/2059 DD 09/01/19 | 98 |
| NEW YORK CITY NY TRANSITIONAL | 5.750% 02/01/2035 DD 03/03/10 | 582 |
| NEW YORK CITY NY TRANSITIONAL | 5.767% 08/01/2036 DD 10/22/09 | 870 |
| NEW YORK LIFE GLOBAL FUND 144A | VAR RT 01/28/2021 DD 02/01/19 | 501 |
| NEW YORK ST DORM AUTH ST PERSO | 5.289% 03/15/2033 DD 10/14/10 | 486 |
| NEW YORK ST URBAN DEV CORP SAL | 2.150% 03/15/2025 DD 10/30/19 | 299 |
| PENNSYLVANIA ST HGR EDU ASSIST | VAR RT 10/25/2036 DD 11/17/06 | 186 |
| PHILIP MORRIS INTERNATIONAL IN | 3.250% 11/10/2024 DD 11/10/14 | 945 |
| PLAINS ALL AMERICAN PIPELINE L | 4.650% 10/15/2025 DD 08/24/15 | 429 |
| PRIME MORTGAGE TRUST 2 CL1 1A2 | VAR RT 02/25/2034 DD 01/25/04 | 7 |
| PRINCETON UNIVERSITY | 5.700% 03/01/2039 DD 01/21/09 | 416 |
| PUBLIC PWR GENERATION AGY NE R | 7.242% 01/01/2041 DD 07/16/09 | 127 |
| REYNOLDS AMERICAN INC | 4.000% 06/12/2022 DD 06/12/15 | 208 |
| SABINE PASS LIQUEFACTION LLC | VAR RT 02/01/2021 DD 02/01/14 | 103 |
| SANTANDER HOLDINGS USA INC | 3.400% 01/18/2023 DD 12/18/17 | 410 |
| SBA GTD PARTN CTFS 2003-20C 1 | 4.500% 03/01/2023 DD 03/12/03 | 322 |
| SBA GTD PARTN CTFS 2005-20B 1 | 4.625% 02/01/2025 DD 02/16/05 | 226 |
| SBA GTD PARTN CTFS 2008-20D 1 | 5.370% 04/01/2028 DD 04/16/08 | 223 |
| SBA GTD PARTN CTFS 2008-20E 1 | 5.490% 05/01/2028 DD 05/14/08 | 205 |
| SBA GTD PARTN CTFS 2008-20F 1 | 5.680% 06/01/2028 DD 06/11/08 | 78 |
| SBA GTD PARTN CTFS 2009-20A 1 | 5.720% 01/01/2029 DD 01/14/09 | 30 |
| SG COMMERCIAL MORTGAGE S C5 A4 | 3.055% 10/10/2048 DD 07/01/16 | 206 |
| SLH PROXY LONG EXPOSURE | SLHOPNTA4 | 13 |
| SLM STUDENT LOAN TRUST 2 9 A7A | VAR RT 01/25/2041 DD 01/25/18 | 358 |
| SLM STUDENT LOAN TRUST 20 4 A3 | VAR RT 01/25/2027 DD 05/19/05 | 149 |
| SLM STUDENT LOAN TRUST 200 9 A | VAR RT 04/25/2023 DD 08/28/08 | 90 |
| SMB PRIVATE EDUCATIO C A1 144A | VAR RT 09/15/2025 DD 09/19/18 | 53 |
| SOFI CONSUMER LOAN P 3 A1 144A | 3.200% 08/25/2027 DD 08/07/18 | 43 |
| SOUTH DAKOTA ST EDUCTNL ENHANC | 3.539% 06/01/2022 DD 03/14/13 | 1,496 |
| SOUTHERN CALIFORNIA GAS CO | 4.450% 03/15/2044 DD 03/13/14 | 225 |
| SPIRIT REALTY LP | 3.200% 01/15/2027 DD 09/16/19 | 200 |
| STRUCTURED ADJUSTABLE R 12 7A1 | VAR RT 09/25/2034 DD 08/01/04 | 60 |
| STRUCTURED ASSET INVESTME 8 M1 | VAR RT 09/25/2034 DD 08/25/04 | 47 |
| STRUCTURED ASSET MORTG AR4 2A1 | VAR RT 12/19/2034 DD 07/30/04 | 29 |
| SYNCHRONY FINANCIAL | 3.950% 12/01/2027 DD 12/01/17 | 210 |
| THORNBURG MORTGAGE SECUR 1 I1A | VAR RT 03/25/2044 DD 03/31/04 | 333 |
| U S TREASURY BOND | 2.750% 08/15/2047 DD 08/15/17 | 591 |
| U S TREASURY BOND | 3.000% 02/15/2048 DD 02/15/18 | 400 |
| U S TREASURY BOND | 3.125% 05/15/2048 DD 05/15/18 | 173 |
| U S TREASURY BOND | 3.000% 08/15/2048 DD 08/15/18 | 294 |
| U S TREASURY BOND | 3.000% 02/15/2049 DD 02/15/19 | 679 |

BELLSOUTH SAVINGS AND SECURITY PLAN

EIN 58-1533433, PLAN NO. 004 SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (Continued)

December 31, 2019

(Dollars in Thousands)

Identity of IssueDescription of InvestmentCurrent Value| U S TREASURY BOND | 2.875% 05/15/2049 DD 05/15/19 | 1,895 |
| --- | --- | --- |
| U S TREASURY BOND | 2.250% 08/15/2049 DD 08/15/19 | 632 |
| U S TREASURY NOTE | 2.625% 02/15/2029 DD 02/15/19 | 2,651 |
| U S TREASURY NOTE | 2.375% 05/15/2029 DD 05/15/19 | 936 |
| U S TREASURY NOTE | 1.625% 08/15/2029 DD 08/15/19 | 1,755 |
| U S TREASURY NOTE | 1.250% 08/31/2024 DD 08/31/19 | 1,766 |
| U S TREASURY NOTE | 1.750% 11/15/2029 DD 11/15/19 | 789 |
| UBS COMMERCIAL MORTGAG C11 ASB | 4.119% 06/15/2051 DD 07/01/18 | 216 |
| UBS COMMERCIAL MORTGAG C13 ASB | 4.241% 10/15/2051 DD 10/01/18 | 220 |
| US TREAS-CPI INFLAT | 1.375% 02/15/2044 DD 02/15/14 | 260 |
| US TREAS-CPI INFLAT | 1.000% 02/15/2046 DD 02/15/16 | 597 |
| US TREAS-CPI INFLAT | 1.000% 02/15/2048 DD 02/15/18 | 808 |
| VERIZON COMMUNICATIONS INC | 4.016% 12/03/2029 DD 06/03/19 | 1,172 |
| VISA INC | 3.150% 12/14/2025 DD 12/14/15 | 423 |
| WALGREEN CO | 3.100% 09/15/2022 DD 09/13/12 | 306 |
| WELLS FARGO & CO | 3.000% 02/19/2025 DD 02/19/15 | 310 |
| WELLS FARGO BANK NA | VAR RT 03/25/2020 DD 09/25/18 | 250 |
| WELLS FARGO COMMERCIA NXS4 ASB | 3.522% 12/15/2048 DD 12/01/15 | 935 |
| WELLS FARGO COMMERCIAL C45 ASB | 4.147% 06/15/2051 DD 07/01/18 | 327 |
| WELLTOWER INC | 4.250% 04/15/2028 DD 04/10/18 | 439 |
| WP CAREY INC | 4.250% 10/01/2026 DD 09/12/16 | 218 |

Total Bond Fund92,600

International Stock
INTL STOCK INDEXBGI MSCI ACWI EX-US INDEX SUPERFUND57,933

Interest Bearing Cash
* DREYFUS GOVT CAS MGMT INST 289VAR RT 12/31/2075 DD 06/03/97764

*** Notes Receivable from Participants4.25% - 10.50%59,979**

Total$ 1,980,430

Party-in-Interest

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized.

BellSouth Savings and Security Plan

By: AT&T Services, Inc., Plan Administrator for the Foregoing Plan

By/s/ Debra L. Dial Debra L. Dial Senior Vice President and Controller

Date: June 29, 2020

EXHIBIT INDEX

Exhibit identified below, Exhibits 23 is filed herein as exhibit hereto.

Exhibit Number 23Consent of Independent Registered Public Accounting Firm

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AT&T INC. Annual Report 2020

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AT&T INC. — Annual Report 2020

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