SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11 -K
(Mark One)
☒
OF 1934
For the fiscal year ended December 31, 2019
OR
☐
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:
AT&T PUERTO RICO RETIREMENT SAVINGS 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
AT&T Puerto Rico Retirement Savings Plan
Financial Statements, Supplemental Schedules and Exhibit
Table of Contents
Page
Reports of Independent Registered Public Accounting Firm
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31, 2019 and 2018
Statements of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2019
Notes to Financial Statements
Supplemental Schedules:
Schedule H, Part IV, Line 4(a) – Schedule of Delinquent Participant Contributions for the Year Ended December 31,
2019
Schedule H, Part IV, Line 4(i) – Schedule of Assets (Held at End of Year) as of December 31, 2019
1
Report of Independent Registered Public Accounting Firm
Plan Administrator and Plan Participants
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Dallas, Texas
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of AT&T Retirement Savings Plan and AT&T
Puerto Rico Retirement Savings Plan (Plans) as of December 31, 2019 and 2018, the related statements 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 AT&T Retirement Savings Plan and AT&T Puerto Rico Retirement Savings 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 Plans’ 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 Plans 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 Plans are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part
of our audits 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 Plans 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 schedules of delinquent participant contributions for the year ended December 31,
2019, and assets (held at end of year) as of December 31, 2019, have been subjected to audit procedures performed in conjunction
with the audit of the Plans’ financial statements. The supp lemental schedules are the responsibility of the Plans’ management. Our
audit procedures included determining whether the supplemental schedules reconcile 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 schedules. In forming our opinion on the supplemental schedules, we evaluated whether the
supplemental schedules, including their form and content, are presented in conformity with the Department of Labor’s Rules and
Regulations for Reporting and Disclosure under the
Employee 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 Plans’ auditor since 2018
San Antonio, Texas
June 29, 2020
2
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Statements of Net Assets Available For Benefits
(Dollars in Thousands)
December 31, 2019
December 31, 2018
AT&T
Retirement
Savings Plan
AT&T
Puerto Rico
Retirement
Savings Plan
AT&T
Retirement
Savings Plan
AT&T
Puerto Rico
Retirement
Savings Plan
Assets
Investment in AT&T Savings Plan Master Trust, (Note 4)
$48,415,529
$ 127,881
$36,217,189
$ 101,101
Notes receivable from participants
Employer contribution receivable
Participant contribution receivable
Total Receivables
Net Assets Available for Benefits
$49,280,973
$ 137,356
$37,044,727
$ 109,258
See Notes to Financial Statements.
3
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Statements of Changes in Net Assets Available For Benefits
For the Year Ended December 31, 2019
(Dollars in Thousands)
AT&T
Retirement
Savings Plan
AT&T
Puerto Rico
Retirement
Savings Plan
Net Assets Available for Benefits, December 31, 2018
$37,044,727
$ 109,258
Changes in Net Assets:
Contributions:
Participant contributions
1,200,165
Employer contributions
589,761
Rollover contributions
288,862
Investment Income
Net income from investment in AT&T Savings Plan Master Trust
8,367,999
Interest income on notes receivable from participants
40,188
Administrative Expenses
(23,664)
Distributions
(4,088,284)
Net increase before plan transfers
6,375,027
Net asset transfer from AlienVault 401(k) Plan (Note 1)
6,634
Net asset transfer from Otter Media Holdings, LLC 401(k) Plan (Note 1)
174
Net asset transfer from Warner Media, LLC Savings Plan (Note 1)
5,854,411
Net increase after plan transfers
Net Assets Available for Benefits, December 31, 2019
$49,280,973
$ 137,356
See Notes to Financial Statements.
4
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements
(Dollars in Thousands)
NOTE 1. PLAN DESCRIPTIONS
The following descriptions provide only general information. Detailed provisions covering participant eligibility, participant
allotments from pay, participant withdrawals, participant loans, employer contributions and related vesting of contributions and plan
expenses are provided in the plan texts and prospectuses. The AT&T Retirement Savings Plan and AT&T Puerto Rico Retirement
Savings Plan (collectively referred to as the Plans) are defined contribution plans and are subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).
The AT&T Retirement Savings Plan (ARSP) was originally established by BellSouth Corporation (BellSouth) to provide a convenient
way for eligible non-management and bargained for 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 ARSP became sponsored by
AT&T Inc. effective December 31, 2008.
The AT&T Puerto Rico Retirement Savings Plan (ARSP-PR) was originally established by CCPR Inc. to provide a convenient way
for eligible employees of its Puerto Rico subsidiary, CCPR Services Inc., and certain affiliates, to save on a regular and long-term
basis. The ARSP-PR became sponsored by AT&T effective December 31, 2008.
Effective at the close of business on April 30, 2019, the AlienVault 401(k) Plan was merged into the ARSP. As a result, $6,634 net
assets including $114 in participant loans were transferred to the ARSP on April 30, 2019.
Effective at the close of business on October 31, 2019, the Otter Media Holdings, LLC 401(k) Plan was merged into the ARSP. As a
result, $174 net assets were transferred to the ARSP on October 31, 2019.
Effective at the close of business on December 31, 2019, the Warner Media, LLC Savings Plan was merged into the ARSP. The
merger included $5,854,411 of net assets including $61,326 in participant loans.
The Plans participate in the AT&T Savings Plan Master Trust (AT&T Master Trust) for certain participant investment fund options as
described below. The AT&T Master Trust invests in the AT&T Savings Group Investment Trust (Group Trust) for the remaining
participant investment fund options. The Bank of New York Mellon Corporation (BNY Mellon) serves as trustee for both the AT&T
Master Trust and Group Trust. With respect to the ARSP-PR, BNY Mellon serves as a U.S. custodian pursuant to a custodian
agreement and Oriental Financial Group serves as trustee of the associated trust known as the AT&T Puerto Rico Retirement Savings
Plan Trust. Fidelity Investments Institutional Operations Company, Inc. (Fidelity) serves as recordkeeper for the Plans.
During 2019 and 2018, participants could invest their contributions in one or more of eleven funds in 1% increments:
• AT&T Total Return Bond Fund*
• Small and Mid-Sized U.S. Stock Index Fund**
• AT&T U.S. Stock Fund*
• International Stock Index Fund**
• AT&T International Stock Fund*
• Large Cap U.S. Stock Index Fund**
• AT&T Stable Value Fund*
• AT&T Shares Fund**
• AT&T Age-Based Asset Allocation Funds
(based on retirement date)**
• Fidelity BrokerageLink
®
**
• Total U.S. Stock Market Index Fund**
* Investment fund option of the Group Trust.
** Investment fund option of the AT&T Master Trust.
5
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
Participants contribute to the Plans through payroll allotments. The Company contributes to the Plans by matching the participants’
contributions based on the provisions of the respective plan. For the ARSP, some matching contributions are made in the form of cash
and are participant directed immediately upon allocation. The majority of Company matching contributions for the ARSP and all
Company matching contributions for the ARSP-PR are made solely in the form of shares of AT&T’s common stock. Matching
contributions made in stock into the ARSP are held in an Employee Stock Ownership Plan (ESOP), which is part of the AT&T Shares
Fund, within the AT&T Master Trust. Matching contributions made in stock into the ARSP-PR are held in a separate stock bonus
portion of the ARSP-PR. Company contributions made to the Plans can be immediately diversified into any of the fund options above.
Dividends on AT&T shares held in the ARSP 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 (or pass-through) 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, participants in the ARSP elected to receive $36,147 in dividend distributions, which are included in distributions on the
statements of changes in net assets available for benefits. Dividends on AT&T shares held in the ARSP are reinvested in the AT&T
Shares Fund on a quarterly basis. Dividends on AT&T shares held in the ARSP-PR are not eligible for pass-through and are reinvested
in the AT&T Shares Fund on a quarterly basis.
Each participant is entitled to exercise voting rights attributable 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 the 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 obligation under ERISA. Participants have the same voting rights in the event of a tender or exchange offer.
Although it has not expressed any intent to do so, AT&T has the right under the Plans to discontinue its contributions at any time and
to terminate the Plans subject to the provisions of ERISA. In the event that the Plans are terminated, subject to the conditions set forth
by ERISA, the account balances of all participants shall be 100% vested.
Administrative and Operating Expenses; Investment Manager Fees
Except to the extent paid by the Company, all expenses incident to
the administration and operation of the Plans are charged to participants, either directly to their accounts or through the investment
funds offered under the Group Trust or AT&T Master Trust, in accordance with administrative procedures established by the Plan
administrator. Investment manager fees are charged through the investment funds. Expenses charged directly to participant accounts
(e.g., recordkeeping, communications fees) are reflected as a periodic fee on the participant account statements. In addition, expenses
and fees with respect to certain transactions and services (e.g., plan loan initiation fees) are charged directly to participants who incur
them rather than to the Plans as a whole.
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 Recognition
responsive investments 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.
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.
6
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
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 benefit-
responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted
transactions under the terms of the Plans. The Group Trust invests in fully benefit-responsive 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. 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 income (loss) 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 Participants
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.
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 determ ine 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.
7
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
NOTE 3. FAIR VALUE MEASUREMENTS
ASC 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.
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 AT&T Master Trust’s investments.
NOTE 4. INVESTMENTS
The Plans held investments in the AT&T Master Trust (for certain investment fund options as disclosed in Note 1), and the AT&T
Master Trust held an investment in the Group Trust as of December 31, 2019 and 2018.
AT&T Savings Plan Master Trust Investments
AT&T established the AT &T Master Trust to manage assets of pooled investment options among various AT&T sponsored employee
benefit plans.
Each participating plan’s interest in the investment fund options (i.e., separate accounts) of the AT&T Master Trust is based on
account balances of the participants and their elected investment fund options. The AT&T Master Trust assets are allocated among the
participating plans by assigning to each plan those transactions (primarily contributions, benefit payments, and expenses) that can be
specifically identified, and by allocating investment income and administrative expenses related to the AT&T Master Trust on a daily
basis based on each participant’s account balance within each investment fund option.
8
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
The participating plans and ownership percentages of the AT&T Master Trust are listed below:
December 31,
2019
2018
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Total
The Plans’ percentage interest in each of the investment fund options within the AT&T Master Trust is disclosed below:
December 31, 2019
December 31, 2018
AT&T
Retirement
Savings
Plan
AT&T
Puerto Rico
Retirement
Savings
Plan
AT&T
Retirement
Savings
Plan
AT&T
Puerto Rico
Retirement
Savings
Plan
Total U.S. Stock Market Index Fund
99.820%
0.180%
Large Cap U.S. Stock Index Fund
99.670%
0.330%
Small and Mid-Sized U.S. Stock Index Fund
99.640%
0.360%
International Stock Index Fund
99.360%
0.640%
AT&T Shares Fund
99.720%
0.280%
AT&T Age-Based Asset Allocation Funds:
AT&T Age-Based Allocation 2000 Fund
99.810%
0.190%
AT&T Age-Based Allocation 2005 Fund
99.900%
0.100%
AT&T Age-Based Allocation 2010 Fund
99.840%
0.160%
AT&T Age-Based Allocation 2015 Fund
99.910%
0.090%
AT&T Age-Based Allocation 2020 Fund
99.800%
0.200%
AT&T Age-Based Allocation 2025 Fund
99.870%
0.130%
AT&T Age-Based Allocation 2030 Fund
99.630%
0.370%
AT&T Age-Based Allocation 2035 Fund
99.580%
0.420%
AT&T Age-Based Allocation 2040 Fund
99.400%
0.600%
AT&T Age-Based Allocation 2045 Fund
99.320%
0.680%
AT&T Age-Based Allocation 2050 Fund
99.560%
0.440%
AT&T Age-Based Allocation 2055 Fund
99.830%
0.170%
AT&T Age-Based Allocation 2060 Fund
99.700%
0.300%
Fidelity BrokerageLink
®
99.990%
0.010%
*December 31, 2019 investment fund options allocations above for the ARSP do not include the net assets transferred from the
Warner Media, LLC Savings Plan. This plan transfer is reflected as a receivable in the AT&T Master Trust financial position and not
allocated to the fund options as of December 31, 2019.
9
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
The financial position of the AT&T Master Trust was as follows:
December 31, 2019
AT&T Master Trust
AT&T Retirement
Savings Plan Interest
AT&T Puerto Rico Retirement
Savings Plan Interest
AT&T common stock
Mutual funds
Common/collective trust funds
21,384,074
21,308,331
75,743
Fidelity BrokerageLink
Investment in Group Trust
13,522,761
AT&T Master Trust investments
Receivable from the Time Warner
Defined Contribution Plans Master
Trust
Net other assets and liabilities
(432)
Net assets available for benefits
December 31, 2018
AT&T Master Trust
AT&T Retirement
Savings Plan Interest
AT&T Puerto Rico Retirement
Savings Plan Interest
AT&T common stock
Mutual funds
Common/collective trust funds
Fidelity BrokerageLink
Investment in Group Trust
AT&T Master Trust investments
Net other assets and liabilities
Net assets available for benefits
Net Appreciation in Fair Value of AT&T Master Trust Investments and
Total Investment Income for the Year Ended December 31, 2019
2019
Net appreciation in fair value of AT&T Master Trust Investments
$ 6,790,842
Investment income:
Dividends
Interest
Gain from investment in Group Trust
Net investment income of Master Trust Investments
$ 8,392,781
10
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
The following tables set forth by level, within the fair value hierarchy, the AT&T Master Trust’s assets at fair value, excluding its
investment in the Group Trust:
AT&T Master Trust Assets at Fair Value as of
December 31, 2019*
Level 1
Level 2
Level 3
Total
AT&T common stock
$ 6,396,097
$ —
$ —
$ 6,396,097
Mutual funds
Self-directed brokerage accounts
Total assets in fair value hierarchy
$8,846,763
$ 8,527
$
—
$ 8,855,290
Common/collective trusts measured at net asset value
Asset allocation funds
1
Total U.S. stock market index fund
2
Large cap U.S. stock index fund
3
Small and mid-sized U.S. stock index fund
4
International stock index fund
5
Total assets at fair value
$30,239,364
1
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 through the
projected retirement date and for a number of years thereafter. 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.
2
overall performance of the common stocks included in the Dow Jones Total U.S. Stock Market Index. There are currently no
redemption restrictions on this investment.
3
overall performance of the common stocks included in the Standard and Poor’s Composite Stock Price Index of 500 stocks (the
S&P 500
®
). There are currently no redemption restrictions on this investment.
4
overall performance of the common stocks included in the Dow Jones U.S. Completion Total Stock Market Index. There are
currently no redemption restrictions on this investment.
5
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.
*December 31, 2019 fair value hierarchy table above does not include the assets transferred from the Warner Media, LLC Savings
Plan. This plan transfer is reflected as a receivable in the AT&T Master Trust financial position and not allocated to the three levels as
of December 31, 2019.
11
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
AT&T Master Trust Assets at Fair Value as of
December 31, 2018
Level 1
Level 2
Level 3
Total
AT&T common stock
$4,885,378
$ —
$ —
$ 4,885,378
Mutual funds
Self-directed brokerage accounts
1,998,969
Total assets in fair value hierarchy
$6,965,793
$ 8,366
$ —
$ 6,974,159
Common/collective trusts measured at net asset value
Asset allocation funds
1
Total U.S. stock market index fund
2
Large cap U.S. stock index fund
3
Small and mid-sized U.S. stock index fund
4
International stock index fund
5
Total assets at fair value
$ 24,825,030
1
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 through the
projected retirement date and for a number of years thereafter. 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.
2
overall performance of the common stocks included in the Dow Jones Total U.S. Stock Market Index. There are currently no
redemption restrictions on this investment.
3
overall performance of the common stocks included in the Standard and Poor’s Composite Stock Price Index of 500 stocks (the
S&P 500
®
). There are currently no redemption restrictions on this investment.
4
overall performance of the common stocks included in the Dow Jones U.S. Completion Total Stock Market Index. There are
currently no redemption restrictions on this investment.
5
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.
12
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings 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 AT&T Master Trust’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 Bond
Fund*
AT&T U.S.
Stock Fund*
AT&T International Stock Fund
AT&T Stable Value Fund
Group Trust
AT&T Master
Trust
AT&T Master
Trust
AT&T Master
Trust
BellSouth
Savings and
Security Plan
AT&T Master
Trust
BellSouth
Savings and
Security Plan
Total
Interest bearing cash
Foreign cash
Mortgage-backed securities
Corporate debt
Government securities
Common/collective trust funds
Equities - common stock
Equities - preferred stock
Futures
Registered investment companies
Group Trust investments at fair value
receivable from the Time Warner Defined
Contribution Plans Master Trust
Unsettled trades/other
Fully benefit-responsive investments contracts
valued at contract value
Group Trust net assets
* BellSouth Savings and Security Plan does not hold any investments in AT&T Total Return Bond Fund or AT&T U.S. Stock Fund.
13
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
The AT&T Master Trust’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 Bond
Fund*
AT&T U.S.
Stock Fund*
AT&T International Stock
Fund
AT&T Stable Value Fund
Group Trust
AT&T
Master Trust
AT&T
Master Trust
AT&T
Master Trust
BellSouth
Savings and
Security Plan
AT&T
Master Trust
BellSouth
Savings and
Security Plan
Total
Interest bearing cash
Foreign cash
Mortgage-backed securities
Corporate debt
Government securities
Common/collective trust funds
103-12 investment entities
Equities - common stock
Equities - preferred stock
Futures
Registered investment companies
Group Trust investments at fair value
Unsettled trades/other
Fully benefit-responsive investments
contracts valued at contract value
Group Trust net assets
* 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
Net investment income of Group Trust Investments
$ 1,154,029
14
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings 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
$ 847,13
5
Mortgage-backed securities
Interest bearing cash
Foreign cash
Equities - common stock
Equities - preferred stock
Futures
Registered investment companies
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
International common/collective trusts
2
103-12 investments
3
Non-publicly traded registered investments companies
4
Total assets at fair value
$ 6,484,618
1
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.
2
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.
3
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.
4
traded 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.
*December 31, 2019 fair value hierarchy table above does not include the assets transferred from the Warner Media, LLC Savings
Plan. This plan transfer is reflected as a receivable in the AT&T Master Trust financial position and not allocated to the three levels as
of December 31, 2019.
15
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings 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
Interest bearing cash
Foreign cash
Equities - common stock
Equities - preferred stock
Futures
Registered investment companies
Government securities
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
International common/collective trusts
2
103-12 investments
3
Non-publicly traded registered investments companies
4
Total assets at fair value
$ 5,630,590
1
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.
2
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.
3
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.
4
traded 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.
16
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings 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 Loss from Investment in AT&T Savings Plan Master Trust to the extent of the
Plans’ ownership in the AT&T Master 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.
At December 31, 2019 and 2018, the fair value of derivative financial instruments held by the AT&T Master Trust 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
AT&T Master Trust, investment managers for the Group Trust enter into various futures contracts to economically hedge investments
in domestic securities. These contracts, which are considered derivatives under ASC Topic 815,
Derivatives and Hedging
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 required 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.
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 AT&T Master Trust, investment
managers for the Group Trust 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. The fair value of the foreign
currency contracts are disclosed in unsettled trades and other of the Group Trust and are included in the Statement of Net Assets
Available for Benefits to the extent of the Plans’ ownership in the AT&T Master Trust.
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.
17
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings 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, ARSP held approximately $20,300 and $18,400, respectively, and ARSP-PR held approximately
$124 and $101, 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 AT&T Master Trust 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 funds holding AT&T stock 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.
18
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
NOTE 5. PARTIES -IN-INTEREST TRANSACTIONS
The Plan may, at the discretion of the Plan’s participants or via the Company match, invest through the Master Trust in the Company’s
common stock through the AT&T Shares Fund. The Master Trust held 163,66 6,768 and 171,176,516 shares of the Company’s
common stock as of December 31, 2019 and 2018, respectively. Dividends earned by the Master Trust on the Company’s common
stock were $343,331 for the year ended December 31, 2019.
The assets of the Plans are invested in AT&T stock either through the Group Trust or AT&T Master Trust. Because the Company is
the plan sponsor of the Plans, transactions involving the Company’s stock qualify as party-in-interest transactions. In addition, certain
investments held by the Plans, Group Trust, and AT&T Master Trust are managed by BNY Mellon and Fidelity as trustee or custodian
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.
NOTE 6. TAX STATUS
The ARSP has received a determination letter from the IRS dated August 12, 2015, stating that the ARSP is qualified under
Section 401(a) of the IRC and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the IRS the
Plan was amended. Once qualified, the ARSP is required to operate in conformity with the IRC to maintain its qualification. The Plan
administrator believes the ARSP is being operated in compliance with the applicable requirements of the IRC and, therefore, believes
that the Plan, as amended, is qualified and the related trust is tax exempt.
The ARSP-PR has received a determination letter from the Commonwealth of Puerto Rico’s Department of Treasury (Treasury) dated
May 29, 2018 stating that the ARSP-PR is qualified under Section 1081.01 of the Internal Revenue Code for a New Puerto Rico (the
Puerto Rico Code), and therefore, the related trust is exempt from taxation. Once qualified, the ARSP-PR is required to operate in
conformity with the Puerto Rico Code to maintain its qualification. The Plan administrator believes the ARSP-PR is being operated in
compliance with the applicable requirements of the Puerto Rico Code and, therefore, believes that the ARSP-PR, as amended, is
qualified and the related trust is tax exempt.
Accounting principles generally accepted in the United States require Plan management to evaluate uncertain tax positions taken by
the Plans. 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 or Treasury. The Plans’ administrator has analyzed the tax positions
taken by the Plans, and has concluded that as of December 31, 2019, there were no uncertain positions taken or expected to be taken.
The Plans have recognized no interest or penalties related to uncertain tax positions. The Plans are 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:
AT&T
Retirement
Savings Plan
AT&T
Puerto Rico
Retirement
Savings Plan
Net Assets Available for Benefits per the financial statements
$49,280,973
$ 137,356
Distributions payable to participants
Net Assets Available for Benefits per the Form 5500
$49,269,015
$ 137,325
19
AT&T Retirement Savings Plan
AT&T Puerto Rico Retirement Savings Plan
Notes to Financial Statements (Continued)
(Dollars in Thousands)
The following is a reconciliation of Net Assets Available for Benefits per the financial statements to the Form 5500 as of
December 31, 2018:
AT&T
Retirement
Savings Plan
AT&T
Puerto Rico
Retirement
Savings Plan
Net Assets Available for Benefits per the financial statements
$37,044,727
$ 109,258
Distributions payable to participants
Net Assets Available for Benefits per the Form 5500
$37,035,655
$ 109,228
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
ARSP financial statements to the Form 5500 for the year ended December 31, 2019:
AT&T
Retirement
Savings Plan
AT&T
Puerto Rico
Retirement
Savings Plan
Distributions to participants per the financial statements
$ 4,088,284
$ 8,428
Distributions payable to participants at December 31, 2018
Distributions payable to participants at December 31, 2019
Distributions to participants per the Form 5500
$ 4,091,170
$ 8,429
NOTE 8. SUBSEQUENT EVENTS
Effective at the close of business on April 30, 2020, the Xandr Inc. 401(k) Plan was merged into the ARSP. As a result, approximately
$78,000 net assets were transferred to the ARSP on April 30, 2020.
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 Man agement is in the process
of reviewing the CARES Act and any resulting changes to the Plan.
20
SCHEDULE H, LINE 4(a)—SCHEDULE OF DELIQUENT PARTICIPANT CONTRIBUTIONS
December 31, 2019
(Dollars in Thousands)
AT&T RETIREMENT SAVINGS PLAN
EIN 43-1301883, PLAN NO. 009
Participant Contributions
Transferred Late to the Plan
Total That Constitute Nonexempt Prohibited
Transactions
$9
Check Here if Late Participant
Loan Repayments are included:
Contributions
Not Corrected
Contributions
Corrected
Outside
VCFP
Contributions
Pending
Correction
in VCFP
Total Fully
Corrected Under
VCFP and PTE
2002-51
$ —
$ 8
$ 1
21
SCHEDULE H, LINE 4(i)—SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2019
(Dollars in Thousands)
AT&T RETIREMENT SAVINGS PLAN
EIN 43-1301883, PLAN NO. 009
Identity of Issue
Description of Investment
Current
Value
Loan Fund
* Notes Receivable from Participants
3.25% - 10.50%
$ 854, 483
TOTAL
$ 854, 483
* Party-in-Interest.
AT&T PUERTO RICO RETIREMENT SAVINGS PLAN
EIN 43-1301883, PLAN NO. 011
Identity of Issue
Description of Investment
Current
Value
Loan Fund
* Notes Receivable from Participants
3.50% - 9.25%
$ 9,472
TOTAL
$ 9,472
* 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) has duly caused this annual report to be signed by the undersigned thereunto duly authorized.
AT&T Puerto Rico Retirement Savings 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