assp_11k.htm
 
SECURITIES AND EXCHANGE COMMISSION
 
 
Washington, D.C. 20549
 
(Mark One)
 
FORM 11-K
 
x
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the fiscal year ended December 31, 2011
 
 
OR
 
¨
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:
   
   
 
AT&T 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
 

 
 
 

Financial Statements, Supplemental Schedule and Exhibit
 
 
Table of Contents
 
Page
 
 
 
 
Report of Independent Registered Public Accounting Firm
1
 
 
Financial Statements:
 
 
 
   Statements of Net Assets Available for Benefits as of December 31, 2011 and 2010
2
   Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2011
3
   Notes to Financial Statements
4
 
 
Supplemental Schedule:
 
 
 
   Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year) as of December 31, 2011
15
 
 
Exhibit:
 
 
 
   23 – Consent of Independent Registered Public Accounting Firm
24

 
 
 

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To Plan Administrator
of the AT&T Savings and Security Plan

We have audited the accompanying statements of net assets available for benefits of the AT&T Savings and Security Plan as of December 31, 2011 and 2010, and the related statement of changes in net assets available for benefits for the year ended December 31, 2011. 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 conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2011 and 2010, and the changes in its net assets available for benefits for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2011, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information is the responsibility of the Plan’s management. The information has been subjected to auditing procedures applied in our audits of the financial statements, and in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.


Dallas, Texas                                                                           /s/ Ernst & Young LLP
June 22, 2012


1

 
 
 

AT&T SAVINGS AND SECURITY PLAN
  
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
  
(Dollars in Thousands)
  
 
  
 
    
 
  
 
  
 
    
 
  
 
  
December 31,
 
  
2011
    
2010
ASSETS
  
 
    
 
  
Investments at fair value (See Notes 3 and 4)
   $ 5,141,448     $ 5,293,745  
 
                
Notes receivable from participants
     308,594       320,461  
Receivable for investments sold
     1,098       639  
Participant contributions receivable
     3,189       3,463  
Employer contributions receivable
     1,847       2,001  
Dividends and interest receivable
     4,601       1  
   Total Receivables
     319,329       326,565  
 
                
Total Assets
     5,460,777       5,620,310  
 
                
LIABILITIES
                
Administrative expenses payable
     3,146       3,165  
Securities purchased payable
     1,367       5,248  
Other payable
     1,781       -  
 
                
Total Liabilities
     6,294       8,413  
 
                
Net assets reflecting investments at fair value
     5,454,483       5,611,897  
 
                
Adjustment from fair value to contract value for fully benefit-responsive
   investment contracts
     (63,484 )     (44,151 )
 
                
Net Assets Available for Benefits
   $ 5,390,999     $ 5,567,746  
 
                
See Notes to Financial Statements.
                


2

 
 
 

AT&T SAVINGS AND SECURITY PLAN
  
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
  
FOR THE YEAR ENDED DECEMBER 31, 2011
  
(Dollars in Thousands)
  
 
  
 
  
 
  
 
  
Net Assets Available for Benefits, December 31, 2010
   $ 5,567,746  
 
        
Additions to Net Assets:
        
   Contributions:
        
      Participant contributions
     214,050  
      Employer contributions
     113,186  
      Rollover contributions
     4,687  
 
     331,923  
 
        
   Investment Income:
        
      Net appreciation in fair value of investments
     73,173  
      Dividends on AT&T common shares
     138,488  
      Interest
     24,499  
 
     236,160  
 
        
   Interest income on notes receivable from participants
     14,477  
 
        
      Total Additions
     582,560  
 
        
Deductions from Net Assets:
        
   Administrative expenses
     9,375  
   Distributions
     672,134  
 
        
      Total Deductions
     681,509  
 
        
Net decrease before transfers
     (98,949 )
 
        
Transfer to AT&T Retirement Savings Plan
     (77,798 )
 
        
Net Assets Available for Benefits, December 31, 2011
   $ 5,390,999  
 
        
See Notes to Financial Statements.
        


3

 
 
 
Notes to Financial Statements
(Dollars in Thousands)

NOTE 1. PLAN DESCRIPTION

The AT&T Savings and Security Plan (Plan) is a defined contribution plan originally established by SBC Communications Inc. (SBC) to provide a convenient way for eligible employees to save for retirement on a regular and long-term basis. In connection with the November 2005 merger of AT&T Corp., SBC changed its name to AT&T Inc. (AT&T or the Company). The majority of eligible employees are represented by the Communications Workers of America or the International Brotherhood of Electrical Workers who are employed by participating companies of AT&T. 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 Bank of New York Mellon Corporation (BNY Mellon) serves as the trustee for the Plan. Fidelity Investments Institutional Operations Company, Inc. (Fidelity) serves as record keeper for the Plan.

In 2011, the Plan was amended to make certain participants eligible to participate in the AT&T Retirement Savings Plan. As a result, participant account balances of $77,798 were transferred out of the Plan during 2011.

During 2011, participants could invest their contributions in one or more of seven funds in 1% increments:

· AT&T Shares Fund
· Global Equity Fund
· Bond Fund
· Mid and Small Cap Stock Fund
· Large Cap Stock Fund
· International Stock Fund
· Interest Income Fund
  

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. Company matching contributions are made solely in the form of shares of AT&T’s common stock held in an Employee Stock Ownership Plan (ESOP) which is a component of this Plan. Effective January 1, 2009, vested Company contributions made to the Plan that are invested in the ESOP can be immediately diversified into any of the fund options described above. Prior to January 1, 2009, participants could only diversify their vested Company match account beginning with the year following the year they attained age 55.

Dividends on shares in the AT&T Shares Fund and the ESOP can either be reinvested in the AT&T Shares Fund on a quarterly basis, or paid into a separate fund known as a Dividend Fund Account (DFA) for distribution at the end of the year. Interest earned on dividends held in the DFA purchases additional units of the AT&T Shares Fund in the participant’s account. During 2011, Plan participants elected to receive $33,637 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 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 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.

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 collective bargaining obligations. 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 Expenses The reasonable expenses of plan administration may be charged to the Plan in accordance with procedures adopted by the plan administrator (as defined by the Plan). Brokerage fees, transfer taxes and other expenses incident to the purchase of sale or securities by the Trustee shall be deemed to be part of the cost of such securities, or deducted in computing the proceeds, as the case may be. Taxes, if any, on any assets held or income received by the Trustee will be charged appropriately against the accounts of Plan participants as determined by the plan administrator. To the extent that expenses incident to the administration of the Plan are paid from the Plan, the plan administrator will determine which expenses are to be charged to and paid from participant’s individual accounts, which expenses are to be charged to and paid from the accounts of all participants (and how they are to be allocated among such accounts), and which expenses are to be charged to and paid from the accounts of one or more identified groups of participants (and how they are to be allocated among such accounts). All expenses of administering the Plan that are not charged to the Plan will be borne by the respective participating companies in the Plan as determined by the plan administrator.

4
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)

 
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  Investments are stated at fair 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 are valued based on quoted market prices, which represent the net asset value of shares held at year-end. Over-the-counter 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 are valued at quoted redemption values that represent the net asset values 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 fair value. However, 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 Plan. The Plan invests in fully benefit-responsive synthetic investment contracts (Synthetic GICs). The underlying investments of the Synthetic GICs are comprised of corporate bonds and notes, registered investment companies and government securities and are also valued as described above. The fair value of the wrap contracts for the Synthetic GICs is determined using a market approach discounting methodology that incorporates the difference between current market level rates for contract level wrap fees and the wrap fee being charged. The difference is calculated as a dollar value and discounted by the prevailing interpolated swap rate as of period end. 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.

Notes Receivable from Participants Notes 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, 2011 or 2010. 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

Improving Disclosures about Fair Value Measurements  In January 2010, the FASB issued Accounting Standards Update 2010-06, Improving Disclosures about Fair Value Measurements, (ASU 2010-06). ASU 2010-06 amended Accounting Standards Codification Topic 820, Fair Value Measurements, (ASC 820) to clarify certain existing fair value disclosures and require a number of additional disclosures. The requirement to present changes in Level 3 measurements on a gross basis is effective for reporting periods beginning after December 15, 2010. Since ASU 2010-06 only affects fair value measurement disclosures, adoption of ASU 2010-06 did not have an effect on the Plan’s net assets available for benefits or its changes in net assets available for benefits.


5

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)

 

Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRS  In May 2011, the FASB issued Accounting Standards Update 2011-04, Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs, (ASU 2011-04). ASU 2011-04 amended ASC 820, Fair Value Measurements, to converge the fair value measurement guidance in US generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs). Some of the amendments clarify the application of existing fair value measurement requirements, while other amendments change a particular principle in ASC 820. In addition, ASU 2011-04 requires additional fair value disclosures, although certain of these new disclosures will not be required for nonpublic entities. The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011. Plan management is currently evaluating the effect that the provisions of ASU 2011-04 will have on the Plan’s financial statements.

NOTE 3. FAIR VALUE MEASUREMENTS

ASC 820 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, 2011 and 2010.


6

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)



The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2011:
   
 
    
 
    
 
    
 
   
Plan Assets at Fair Value as of December 31, 2011
   
Level 1
    
Level 2
    
Level 3
    
Total
U.S. equity securities:
  
 
    
 
    
 
    
 
   AT&T common stock
   $ 2,376,998     $ -     $ -     $ 2,376,998
   Money market/mutual funds
     12,884       -       -       12,884
   Large cap stock fund1
     -       640,231       -       640,231
   Global equity fund2
     -       129,264       -       129,264
   Mid and small cap fund3
     -       364,360       -       364,360
International equity securities:
                              
   Global equity fund2
     -       39,040       -       39,040
   International stock fund4
     -       214,447       -       214,447
Fixed income securities:
                              
   Bond fund5
     -       380,028       -       380,028
Interest income fund:
                              
   Money Market/Mutual Funds
     50,438       -       -       50,438
   Synthetic GICs:
                              
      Money Market/Mutual Funds
     16,506       -       -       16,506
      U.S. government debt securities
     -       617,592       -       617,592
      Corporate debt securities:
                              
         Asset-backed securities
     -       66,070       -       66,070
         Commercial mortgage-backed securities
     -       86,476       -       86,476
         Collateralized mortgage obligations
     -       5,651       -       5,651
         Other corporate debt securities
     -       135,498       -       135,498
      Wrapper contract
     -       1,324       -       1,324
Short-term investments
     4,641       -       -       4,641
Total assets at fair value
   $ 2,461,467     $ 2,679,981     $ -     $ 5,141,448


7

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)



The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2010:
   
 
    
 
    
 
    
 
   
Plan Assets at Fair Value as of December 31, 2010
   
Level 1
    
Level 2
    
Level 3
    
Total
U.S. equity securities:
  
 
    
 
    
 
    
 
   AT&T common stock
   $ 2,454,679     $ -     $ -     $ 2,454,679
   Money market/mutual funds
     15,346       -       -       15,346
   Large cap stock fund1
     -       670,815       -       670,815
   Global equity fund2
     -       134,402       -       134,402
   Mid and small cap fund3
     -       395,258       -       395,258
International equity securities:
                              
   Global equity fund2
     -       46,540       -       46,540
   International stock fund4
     -       265,718       -       265,718
Fixed income securities:
                              
   Bond fund5
     -       355,626       -       355,626
Interest income fund:
                              
   Money Market/Mutual Funds
     37,798       -       -       37,798
   Synthetic GICs:
                              
      Money Market/Mutual Funds
     10,238       -       -       10,238
      U.S. government debt securities
     -       465,710       -       465,710
      Corporate debt securities:
                              
         Asset-backed securities
     -       1,626       -       1,626
         Commercial mortgage-backed securities
     -       184,891       -       184,891
         Collateralized mortgage obligations
     -       97,147       -       97,147
         Other corporate debt securities
     -       150,692       -       150,692
      Wrapper contract
     -       2,994       -       2,994
Short-term investments
     4,265       -       -       4,265
Total assets at fair value
   $ 2,522,326     $ 2,771,419     $ -     $ 5,293,745


8

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)



 1
This 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 S&P 500 Index. There are currently no redemption restrictions on this investment. The fair value of the investment in this category has been estimated using the net asset value per share.

 2
This fund is a balanced fund that consists of two common/collective trust funds with an objective of providing investment returns that approximate an asset allocation of 75% to the Dow Jones Wilshire 5000 Index and 25% to the Morgan Stanley Country Index – Europe, Australasia, Far East (MSCI EAFE) Index . There are currently no redemption restrictions on these investments. The fair value of the investments in this category has been estimated using the net asset value per share.

 3
This 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 Dow Jones Wilshire 4500 Index. There are currently no redemption restrictions on this investment. The fair value of the investment in this category has been estimated using the net asset value per share.

 4
This 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 MSCI EAFE Index. There are currently no redemption restrictions on this investment. The fair value of the investment in this category has been estimated using the net asset value per share.

 5
This category includes a common/collective trust fund with an objective of providing investment results that approximate the overall performance of the fixed income securities included in Barclays Capital Government/Credit Bond Index. There are currently no redemption restrictions on this investment. The fair value of the investment in this category has been estimated using the net asset value per share.


9

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)

NOTE 4. INVESTMENTS

Investments representing 5% or more of Plan net assets at December 31 were:

   
2011
  
2010
Employee Stock Ownership Plan*
  
 
  
 
AT&T common shares
   $ 1,133,758   $ 1,200,292
             
AT&T Shares Fund
            
AT&T common shares
     1,243,240     1,254,387
             
Large Cap Stock Fund
            
Barclays Global Investors Equity Index Fund F
     640,231     670,815
             
Bond Fund
            
Barclays Global Investors Intermediate Government/Credit Bond Index Fund F
     380,028     355,626
             
Mid and Small Cap Stock Fund
            
Barclays Global Investors EAFE Equity Extended Equity Market Fund F
     364,360     395,258

*    A portion of the ESOP represents nonparticipant-directed investments

During 2011, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated/(depreciated) in fair value as follows:

AT&T common stock
   $ 73,784  
Common/collective trust funds
     (611 )
Total
   $ 73,173  

Fully Benefit-Responsive Investment Contracts
The Interest Income Fund consists of fully benefit-responsive investment contracts with various financial institutions and insurance companies that promise to repay principal plus accrued income at contract maturity, subject to the creditworthiness of the issuer. Interest crediting rates are generally established when the contract is purchased and are periodically reset. The Interest Income Fund invests in Synthetic GICs, also referred to as wrapper contracts. The assets supporting the Synthetic GICs are owned by the Plan and generally consist of high quality fixed income securities. At December 31, 2011, the underlying assets had a fair value of $979,555 and a contract value of $916,071. At December 31, 2010, the underlying assets had a fair value of $951,096 and a contract value of $906,945. For the years ended December 31, 2011 and 2010, the average yield earned by the Plan on these contracts was 0.83% and 1.56%, and the average yield earned by the Plan, adjusted to reflect actual interest rate credited to participants, was 2.57% and 3.44%. No valuation reserves were recorded to adjust contract amounts as of December 31, 2011 or 2010.

A bank or insurance company issues a wrapper contract that provides preservation of principal, maintains a stable interest rate and provides daily liquidity at contract value for participant directed transactions, in accordance with the provisions of the Plan. Wrapper contracts amortize the realized and unrealized gains and losses on the underlying fixed income investments through adjustments to the future interest crediting rate. The issuer of the wrapper contract provides assurance that the adjustments to the interest crediting rate do not result in a future interest crediting rate that is less than zero, which would result in a loss of principal or accrued interest. The fair value of the wrapper contracts were $1,324 at December 31, 2011 and $2,994 at December 31, 2010.

Wrapper contracts’ interest crediting rates are typically reset on a monthly or quarterly basis and are based on the characteristics of the underlying fixed income securities. Other key factors that influence the interest crediting rates are market interest rates, the amount and timing of participant transactions into and out of the wrapper contract, investment returns on the underlying fixed income securities and the duration of those investments. All wrapper contracts provide for minimum interest crediting rate of zero percent. In the event that the interest crediting rate should fall to zero and the requirements of the wrapper contract are satisfied, the wrapper issuer will pay the Plan the shortfall needed to maintain the rate at zero, ensuring participants’ principal and accrued interest is protected.

10
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)



Changes in market interest rates can affect the yield to maturity and the market value of the underlying investment, and can have a material impact on the wrapper contract’s interest crediting rate. Additionally, participant withdrawals and transfers from the Interest Income Fund are paid at contract value but funded through the market value liquidation of the underlying
investments, which also impacts the interest crediting rate. The resulting gains and losses in the market value of the underlying investments relative to the wrapper contract value are represented on the Plan’s Statements of Net Assets Available for Benefits as the “Adjustment from fair value to contract value for fully benefit-responsive investment contracts,” and totaled $(63,484) at December 31, 2011, and $(44,151) at December 31, 2010. If this adjustment is positive, it indicates that the wrapper contract value is greater than the market value of the underlying investments and the embedded market value losses will be amortized in the future through a lower interest crediting rate. If the adjustment is negative, the embedded market gains would cause the future interest crediting rate to be higher.

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 Plan, a material adverse change to the provisions of the Plan, 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 Plan’s loss of its qualified status, un-cured material breaches of responsibilities or material and adverse changes to the provisions of the Plan. The Company does not believe any of the events are probable of occurring in the foreseeable future.

Investment Risk
Investments held by 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 benefit. Plan 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 Plan invests in securities with contractual cash flows, such as asset-backed securities, collateralized mortgage obligations and commercial mortgage backed securities, including securities backed by subprime mortgage loans. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate values, 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.


11

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)


NOTE 5. RELATED PARTY TRANSACTIONS

Plan assets are invested in AT&T stock directly. 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 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 transaction rules.

NOTE 6. TAX STATUS

The Plan has received a determination letter from the Internal Revenue Service (IRS) dated March 25, 2004, 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 and restated. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan, as amended and restated, is qualified and the related trust is tax exempt. In addition, the Plan has filed with the IRS for a new favorable determination letter on February 2, 2009, pursuant to, and as part of, the IRS determination letter filing program (Cycle C).

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, 2010, 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. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2008.


12

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)


NOTE 7. RECONCILATION 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:

 
  
2011
  
2010
 
  
 
    
 
  
Net Assets Available for Benefits per the financial statements
   $ 5,390,999     $ 5,567,746  
Adjustment from contract value to fair value for fully benefit-responsive
   investment contracts
     63,484       44,151  
Distributions payable to participants
     (848 )     (1,598 )
Net Assets Available for Benefits per the Form 5500
   $ 5,453,635     $ 5,610,299  

The following is a reconciliation of distributions to participants per the financial statements to the Form 5500 for the year ended December 31, 2011:

Distributions to participants per the financial statements
   $ 672,134  
Distributions payable to participants at December 31, 2010
     (1,598 )
Distributions payable to participants at December 31, 2011
     848  
Distributions to participants per the Form 5500
   $ 671,384  

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 total additions per the financial statements to total income per the Form 5500 for the year ended December 31, 2011:

Total additions per the financial statements
   $ 582,560  
Adjustment from contract value to fair value for fully benefit-responsive investment
   contracts at December 31, 2011
     63,484  
Adjustment from contract value to fair value for fully benefit-responsive investment
   contracts at December 31, 2010
     (44,151 )
Total income per the Form 5500
   $ 601,893  
 
        
Fully benefit-responsive contracts are recorded on the Form 5500 at fair value versus contract value on the
financial statements.
  


13

 
 
 
Notes to Financial Statements (Continued)
(Dollars in Thousands)


NOTE 8. NONPARTICIPANT DIRECTED INVESTMENTS

Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments as of December 31 was as follows:

 
2011
  
2010
Assets
 
    
 
AT&T common shares
 $ 1,133,758     $ 1,200,292
Temporary cash investments
   3,916       5,655
Receivable for investments sold
   1,098       639
   Total Assets
   1,138,772       1,206,586
             
Liabilities
            
Securities purchased payable
   -       2,215
Administrative expenses payable
   630       300
   Total Liabilities
   630       2,515
             
Net Assets Available for Benefits1
 $ 1,138,142     $ 1,204,071
             
  2011
             
Net Assets Available for Benefits, December 31, 20101
 $ 1,204,071        
             
   Employer contributions2
   113,548        
   Net appreciation in fair value of investments
   33,654        
   Administrative expenses
   (1,810 )      
   Distributions
   (99,947 )      
   Transfers to other funds
   (92,756 )      
    (47,311 )      
             
Transfers to other plans
   (18,618 )      
             
Net Assets Available for Benefits, December 31, 20111
 $ 1,138,142        
             
 
 1
A portion of these amounts include participant and nonparticipant-directed investments.

 2
Employer contributions include forfeitures allocated from the AT&T Shares Fund.

 
NOTE  9. SUBSEQUENT EVENTS
 
In June 2012, as a result of the sale of AT&T’s Advertising Solutions and Interactive businesses, approximately $63,931 of participant accounts and balances were transferred from the Plan to a successor plan sponsored by the acquirer.


14

 
 
 

AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value

 
Employee Stock Ownership Plan
 
  
 
  
 
*  
AT&T COMMON SHARES
37,491,998 SHARES
   $ 989,117   $ 1,133,758
*  
DREYFUS GOVERNMENT CASH
   MANAGEMENT FUND
REGISTERED INVESTMENT
   COMPANY:  3,915,638 UNITS
     3,916     3,915
   
TOTAL EMPLOYEE STOCK OWNERSHIP PLAN
     993,033     1,137,673
   
 
 
            
AT&T Shares Fund
 
            
*  
AT&T COMMON SHARES
41,112,433 SHARES
           1,243,240
*  
DREYFUS GOVERNMENT CASH
   MANAGEMENT FUND
REGISTERED INVESTMENT
   COMPANY: 4,965 UNITS
           5
*  
DREYFUS GOVERNMENT CASH
   MANAGEMENT FUND
REGISTERED INVESTMENT
   COMPANY: 8,964,001 UNITS
           8,964
   
TOTAL SHARES FUND
 
     **     1,252,209
   
 
 
            
Bond Fund
 
            
*  
BARCLAYS GLOBAL INVESTORS
   INTERMEDIATE
   GOVERNMENT/CREDIT BOND
   INDEX FUND F
COMMON/COLLECTIVE TRUST
   FUND: 15,323,727 UNITS
     **     380,028
   
 
 
            
Large Cap Stock Fund
 
            
*  
BARCLAYS GLOBAL INVESTORS
   EQUITY INDEX FUND F
COMMON/COLLECTIVE TRUST
   FUND: 31,018,938 UNITS
     **     640,231
   
 
 
            
Interest Income Fund
 
            
   
STATE STREET BANK & TRUST CO
   WRAPPER
SYNTHETIC GIC #99039, IR ***
           233
   
JP MORGAN CHASE BANK WRAPPER
SYNTHETIC GIC #ASBCSS-01,
   IR ***
           544
   
INTL BK RECON & DEVELOPMENT
.800% 07/13/2012 DD 07/15/10
           2,507
   
DREYFUS GOVT CASH MGMT FUND
VAR RT 12/31/2075 DD 06/03/97
           174
   
ASIAN DEVELOPMENT BANK
2.750% 05/21/2014 DD 05/21/09
           2,521
   
ASIAN DEVELOPMENT BANK
2.625% 02/09/2015 DD 02/09/10
           2,847
   
BARCLAYS BK PLC UK GOVT 144A
2.700% 03/05/2012 DD 03/05/09
           4,201
   
BEAR STEARNS COML 04-PWR4 A3
VAR RT  06/11/2041 DD 06/01/04
           2,814
   
BEAR STEARNS COML 04-TOP16 A-6
4.750% 02/13/2046 DD 11/01/04
           5,346
   
BRFKREDIT
2.050% 04/15/2013 DD 04/15/10
           2,261
   
CDP FINANCIAL
3.000% 11/25/2014 DD 11/25/09
           1,930
   
CAPITAL AUTO REC 07 4 CL A-4A
5.300% 05/15/2014 DD 11/15/07
           1,619
   
CARMAX
1.56% 07/15/2014 DD 02/19/10
           1,134
   
CHRYSLER FINANCIAL AUTO
2.82% 01/15/2016 DD 07/14/09
           977
   
CITIGROUP FUNDING INC
2.250% 12/10/2012 DD 08/06/09
           6,111
   
COMMONWEALTH BANK AUST
2.500% 12/10/2012 DD 06/10/09
           1,708
   
CIE DE FINANCEMENT FOUNCIER
2.125% 04/22/2013 DD 04/22/10
           1,583
   
CIE FIN FONCIER CVD144A
2.25% 03/07/2014 DD 3/08/11
           4,620

  15
 
 
AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value

 
 
RABOBANK NEDERLAND
2.125% 10/13/2015 DD 10/13/10
     2,352
 
COUNCIL OF EUROPE
2.750% 02/10/2015 DD 02/10/10
     1,512
 
COUNCIL OF EUROPE BD
1.5% 01/15/2015 DD 05/11/11
     3,173
 
CREDIT SUISSE FIRST BOSTON
VAR RT 02/15/2038 DD 03/01/05
     1,507
 
DANSKE BANK A/S
2.500% 05/10/2012 DD 06/30/09
     2,013
 
DISCOVER CARD EXE 08-4 CL A
5.650% 12/15/2015 DD 06/18/08
     8,882
 
DNB NOR BOLIGKRE CVD 144A
2.9% 03/29/2016 DD 03/29/11
     2,338
 
EUROPEAN BK RECON AND DEV
2.750% 04/20/2015 DD 04/20/10
     1,260
 
FNMA BD
1.25% 09/28/2016 DD 08/19/11
     7,229
 
FNMA NOTE
2.5% 05/15/2014 DD 05/15/09
     2,400
 
FNMA NOTE
3.000% 09/16/2014 DD 08/14/09
     7,035
 
FNMA NOTE
2.625% 11/20/2014 DD 10/26/09
     1,904
 
FNMA NOTE
1.625% 10/26/2015 DD 09/27/10
     6,149
 
FHLMC   POOL #78-8657
VAR RT  09/01/2031 DD 09/01/01
     28
 
FEDERAL HOME LN BK CONS BD
5.500% 08/13/2014 DD 06/22/07
     3,776
 
FEDERAL HOME LN BK CONS BD
3.625% 05/29/2013 DD 04/18/08
     13,075
 
FEDERAL HOME LN BKS CONS BD
5.250% 06/18/2014 DD 05/27/04
     6,288
 
FEDERAL FARM CR BK CONS BD
1.500% 11/16/2015 DD 11/15/10
     3,880
 
FEDERAL NATL MTG ASSN DEBS
4.625% 10/15/2014 DD 09/17/04
     10,000
 
FEDERAL HOME LN MTG CORP REF
4.125% 09/27/2013 DD 08/20/08
     13,090
 
FEDERAL HOME LN MTG CORP
1.625% 04/15/2013 DD 03/04/10
     1,968
 
FEDERAL HOME LN MTG CORP
1.75% 06/10/2015 DD 09/10/10
     5,159
 
FEDERAL HOME LN MTG CORP
2.5% 05/27/2016 DD 08/08/11
     15,886
 
FNMA    POOL #0254914
4.500% 09/01/2013 DD 08/01/03
     553
 
FNMA GTD REMIC P/T 2002-W2 AF6
STEP 05/25/2032 DD 03/01/02
     654
 
FNMA GTD REMIC P/T 2002-T11 B
5.341% 04/25/2012 DD 07/01/02
     8,077
 
FNMA GTD REMIC P/T 02-W11 AF 6
VAR RT  11/25/2032 DD 09/01/02
     698
 
FNMA GTD REMIC 2003-T1 A
3.807% 11/25/2012 DD 02/01/03
     968
 
FNMA GTD REMIC P/T 03-T3
VAR RT  05/25/2033 DD 02/01/03
     1,008
 
FNMA GTD REMIC P/T 03-W10 2A
VAR RT 06/25/2043 DD 06/01/03
     744
 
FNMA GTD REMIC P/T 04-T4 AI9
5.450% 08/25/2034 DD 07/01/04
     2,646
 
FHLMC MULTICLASS MTG 2736 BD
5.000% 04/15/2032 DD 01/01/04
     2,847
 
FHLMC MULTICLASS MTG 2785 AJ
5.000% 04/15/2034 DD 04/01/04
     1,785
 
FHLMC MULTICLASS CTFS 2866 NA
4.500% 10/15/2034 DD 10/01/04
     2,544
 
FHLMC MULTICLASS CTFS 2882 NA
5.000% 11/15/2034 DD 11/01/04
     3,058
 
FHLMC MULTICLASS MTG
4.500% 09/15/2018 DD 02/01/05
     2,054
 
FHLMC MULTICLASS MTG 2930 KC
4.500% 06/15/2019 DD 02/01/05
     1,157
 
FHLMC MULTICLASS MTG 2934 CI
5.000% 01/15/2034 DD 02/01/05
     4,711
 
FHLMC MULTICLASS MTG 3660 BH
4.500% 07/15/2037 DD 04/01/10
     2,890
 
FHLMC MULTICLASS MTG 3202 LN
4.500% 03/15/2035 DD 08/01/06
     2,916
 
FHLMC MULTICLASS MTG 3601 PA
5.000% 09/15/2038 DD 11/01/09
     2,924
 
FNMA GTD REMIC P/T 10-22 PC
5.000% 03/25/2037 DD 02/01/10
     3,436
 
FNMA GTD REMIC P/T 10-48 UA
5.000% 12/25/2034 DD 04/01/10
     1,368
 
FNMA    POOL #0686026
VAR RT  04/01/2033 DD 04/01/03
     543
 
FNMA    POOL #0756359
VAR RT  12/01/2033 DD 12/01/03
     716

16 
 
 
AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value

 
 
FORDO 2009-B  A3
2.790% 08/15/2013 DD 06/09/09
     482
 
FORDO 2011-A A3
.97% 01/15/2015 DD 01/28/11
     3,876
 
ALLY FINANCIAL INC
   (GMAC FDIC GTC)
1.750% 10/30/2012 DD 10/30/09
     1,418
 
GE CAPITAL CORP
5.250% 10/19/2012 DD 10/19/07
     4,140
 
GREENWICH CAP COML 05-GG3 A3
VAR RT  08/10/2042 DD 02/01/05
     7,178
 
GREENWICH CAP COML 05-GG11 A2
VAR RT 07/10/2013 DD 10/01/07
     8,721
 
HOWARD HUGHES MEDICAL IN
3.450% 09/01/2014 DD 08/18/09
     768
 
ING BK N V NTHE ST CR GTEE
2.625% 02/09/2012 DD 02/09/09
     1,202
 
INTER-AMERICAN DEVEL BK
1.625% 07/15/2013 DD 05/19/10
     2,533
 
INTL BK RECON & DEVELOP
2.375% 05/26/2015 DD 05/26/10
     2,637
 
J P MORGAN 08 C2 CL A-2
5.855% 02/12/2051 DD 05/01/08
     6,284
 
LB UBS COML MTG TR 04-C7 A-6
4.786% 10/15/2029 DD 10/11/04
     4,687
 
MARRIOTT VACATION 04-1 A 144A
4.620% 05/20/2026 DD 05/31/04
     217
 
MERCEDES-BENZ AUTO RECEIV 1 A3
1.420% 08/15/2014 DD 04/21/10
     1,204
 
MERCEDES-BENZ AUTO RECEIV 1 A4
1.220% 12/15/2017 DD 07/20/11
     1,386
 
MICROSOFT CORP
1.625% 09/25/2015 DD 09/27/10
     761
 
MICROSOFT CORP SR UNSEC
2.500% 02/08/2015 DD 02/08/11
     2,251
 
MORGAN STANLEY CAP HQ7 AR
VAR RT 11/14/2042 DD 11/01/05
     2,474
 
NCUA GUARANTEED NOTES
1.600% 10/29/2020 DD 11/10/10
     454
 
NORDIC INVESTMENT BANK
2.625% 10/06/2014 DD 10/05/09
     1,364
 
RABOBANK NEDERLAND
4.200% 05/13/2014 DD 05/13/09
     5,029
 
ROYAL BK OF CANADA
3.125% 04/14/2015 DD 04/14/10
     1,312
 
ROYAL BK SCOTLND GRP PLC
1.500% 03/30/2012 DD 11/30/09
     3,406
 
SIERRA REC FDG CO 06-1A CL A1
5.840% 05/20/2018 DD 07/11/06
     854
 
STRUCTURED ASSET 04-3AC A-1
VAR RT  03/25/2034 DD 02/01/04
     1,477
 
US CENTRAL FEDERAL CRED
1.900% 10/19/2012 DD 10/19/09
     3,382
 
U S TREASURY NOTE
4.250% 08/15/2014 DD 08/15/04
     1,102
 
U S TREASURY NOTE
2.250% 03/31/2016 DD 03/31/11
     4,800
 
U S TREASURY NOTE
2.625% 07/31/2014 DD 07/31/09
     15,732
 
U S TREASURY NOTE
3.125% 10/341/2016 DD 10/31/09
     15,524
 
U S TREASURY NOTE
2.625% 12/31/2014  DD 12/31/09
     4,160
 
U S TREASURY NOTE
2.375% 02/28/2015 DD 02/28/10
     10,610
 
U S TREASURY NOTE
2.500% 03/31/2015 DD 03/31/10
     8,530
 
U S TREASURY NOTE
2.500% 04/30/2015 DD 04/30/10
     5,336
 
U S TREASURY NOTE
1.750% 07/31/2015 DD 07/31/10
     5,219
 
U S TREASURY NOTE
1.250% 08/31/2015 DD 08/31/10
     9,239
 
U S TREASURY NOTE
1.250% 10/31/2015 DD 10/31/10
     16,923
 
U S TREASURY NOTE
1.375% 11/30/2015 DD 11/30/10
     4,740
 
U S TREASURY NOTE
2.1250% 02/29/2016 DD 02/28/11
     5,305
 
U S TREASURY NOTE
2.000% 04/30/2016 DD 04/30/11
     7,392
 
U S TREASURY NOTE
1.500% 07/31/2016 DD 07/31/11
     20,677
 
U S TREASURY NOTE
.5000% 08/15/2014 DD 08/15/11
     4,721
 
U S TREASURY NOTE
1.000% 08/31/206 DD 08/31/11
     16,175
 
U S TREASURY NOTE
1.000% 10/31/2016 DD 10/31/11
     12,621

17 
 
 
AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value

 
 
U S TREASURY NOTE
.875% 11/30/2016 DD 11/30/11
     3,009
 
U S TREASURY NOTE
.875% 12/31/2016 DD 12/31/11
     4,708
 
WEST CORP FED CRED UNION
1.750% 11/02/2012 DD 11/02/09
     1,924
 
WESTPAC BANKING CORP
2.900% 09/10/2014 DD 09/10/09
     3,866
 
WOART 2010-A A4
2.21% 5/15/2015 DD 01/28/10
     2,839
 
YALE UNIVERSITY YALUNI
2.900% 10/15/2014 DD 11/10/09
     2,260
 
 
 
     469,240
 
 
 
      
 
BANK OF AMERICA WRAPPER
Synthetic GIC #99-086, IR ***
     492
 
MONUMENTAL LIFE
   INSURANCECOMPANY WRAPPER
Synthetic GIC #MDA00871TR,
   IR ***
     55
 
INTL BK RECON & DEVELOP
.800% 07/13/2012 DD 07/15/10
     2,307
 
DREYFUS GOVT CASH MGMT FUND
VAR RT  12/31/2075 DD 06/03/97
     16,332
 
ASIAN DEVELOPMENT BANK
2.750% 05/21/2014 DD 05/21/09
     1,996
 
ASIAN DEVELOPMENT BANK
2.625% 02/09/2015 DD 02/09/10
     2,320
 
BA CR CARD TR 2007-8 NT CL A
5.590% 11/17/2014 DD 06/22/07
     4,397
 
BANK OF AMERICA CORP
3.125% 06/15/2012 DD 12/04/08
     3,101
 
BEAR STEARNS COML 04-PWR4 A3
VAR RT  06/11/2041 DD 06/01/04
     2,274
 
BEAR STEARNS COML 04-TOP16 A-6
4.750% 02/13/2046 DD 11/01/04
     4,276
 
BEAR STERNS COML PW16 A4
VAR RT 06/11/2040 DD 06/01/07
     4,680
 
BRKREDIT AS
2.050% 04/15/2013 DD 04/15/10
     1,813
 
CARMX 2010
1.560% 07/15/2014 DD 02/19/10
     901
 
CDP FINANCIAL
3.000% 11/25/2014 DD 11/25/09
     1,621
 
CD 07-CD4 COML MTG TR MTG A2B
5.205% 12/11/2049 DD 03/01/07
     7,869
 
CAPITAL ONE MULTI ASSET A3
5.050% 02/15/2016 DD 04/16/08
     7,896
 
CITIBANK CR CARD 05-A2 A2
4.850% 03/10/2017 DD 03/09/05
     6,709
 
CGCMT 2007-C6 A4
VAR RT  12/10/2049 DD 07/01/07
     3,528
 
CHASE INSURANCE
5.120% 10/15/2014 DD 10/15/07
     4,844
 
CITIGROUP FUNDING INC
2.250% 12/10/2012 DD 08/06/09
     4,074
 
GREENWICH CAPITAL COMM
   GG9 A4
5.444% 03/10/2039 DD 03/01/07
     4,330
 
GREENWICH CAPITAL COMM
   GG11 A2
VAR RT 12/10/2049 DD 10/01/07
     8,054
 
COMMONWEALTH BANK AUST
2.500% 12/10/2012 DD 06/10/09
     1,388
 
CIE DE FINANCEMENT FONCIER
2.125% 04/22/2013 DD 04/22/10
     1,385
 
RABOBANK NEDERLAND
2.125% 10/13/2015 DD 10/13/10
     2,156
 
COUNCIL OF EUROPE
2.750% 02/10/2015 DD 02/10/10
     1,247
 
COUNCIL OF EUROPE
1.500% 01/15/2015 DD 05/11/11
     2,902
 
DAIMLERCHHRYSLER 07 CL A-4A
5.280% 03/08/2013 DD 11/21/07
     1,129
 
DANSKE BANK A/S
2.500% 05/10/2012 DD 06/30/09
     1,610
 
EUUROPEAN BK RECON & DEV
2.750% 04/20/2015 DD 04/20/10
     945
 
FHLMC   POOL #1B-1438
VAR RT  01/01/2034 DD 01/01/04
     352
 
FHLMC   POOL #G1-2099
4.500% 06/01/2013 DD 05/01/06
     544
 
FEDERAL HOME LN BK CONS BD
5.250% 06/18/2014 DD 05/27/04
     4,675
 
FEDERAL FARM CREDIT BK CONS
1.375% 06/25/2013 DD 05/25/10
     6,403

18 
 
 

AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value

 
 
FHLMC   POOL #1B-0118
VAR RT  08/01/2031 DD 08/01/01
     41
 
FEDERAL NATL MTG ASSN DEBS
4.625% 10/15/2014 DD 09/17/04
     6,889
 
FEDERAL NATL MTG ASSN DEBS
4.875% 12/15/2016 DD 11/17/06
     1,531
 
FEDERAL HOME LN MTG CORP REF
4.875% 06/13/2018 DD 06/13/08
     7,230
 
FEDERAL HOME LN MTG CORP REF
2.125% 03/23/2012 DD 02/19/09
     954
 
FEDERAL HOME LN MTG CORP REF
3.750% 03/27/2019 DD 03/27/09
     9,817
 
FEDERAL HOME LN MTG CORP REF
2.000% 08/25/2016 DD 07/08/11
     4,575
 
FNMA GTD REMIC P/T 2002-W2 AF6
STEP 05/25/2032 DD 03/01/02
     654
 
FNMA GTD REMIC P/T 02-W11 AF 6
VAR RT  11/25/2032 DD 09/01/02
     1,396
 
FHLMC MULTICLASS MTG
VAR RT  12/25/2032 DD 10/01/02
     443
 
FHLMC MULTICLASS MTG
3.614% 09/27/2012 DD 09/01/02
     381
 
FNMA GTD REMIC P/T 04-W1 2A2
7.000% 12/25/2033 DD 01/01/04
     1,604
 
FNMA GTD REMIC P/T 05-19 PA
5.500% 07/25/2034 DD 02/01/05
     3,288
 
FNMA GTD REMIC 2010-22 PC
5.000% 03/25/2037 DD 02/01/10
     2,778
 
FHLMC MULTICLASS MTG 2736 BD
5.000% 04/15/2032 DD 01/01/04
     2,320
 
FHLMC MULTICLASS CTFS 2791 OB
4.500% 05/15/2033 DD 05/01/04
     4,184
 
FHLMC MULTICLASS CTFS 2931 AM
4.500% 07/15/2019 DD 02/01/05
     1,695
 
FHLMC MULTICLASS CTFS 2941 AJ
4.500% 03/15/2035 DD 03/01/05
     3,506
 
FEDERAL NATL MTG ASSN MTN
2.500% 05/15/2014 DD 05/15/09
     1,461
 
FEDERAL NATL MTG ASSN MTN
1.125% 06/27/2014 DD 05/16/11
     6,280
 
FHLMC MULTICLASS MTG 2934 CI
5.000% 01/15/2034 DD 02/01/05
     4,283
 
FHLMC MULTICLASS MTG 3626 MA
5.000% 02/15/2030 DD 01/01/10
     2,181
 
FHLMC MULTICLASS MTG 3660 BH
4.5000% 07/15/2037 DD 04/01/10
     2,737
 
FHLMC MULTICLASS MTG 3601 PA
5.000% 09/15/2038 DD 11/01/09
     2,720
 
FNMA    POOL #0728766
VAR RT  07/01/2033 DD 07/01/03
     298
 
FORDO 2009-B A3
2.790% 08/15/2013 DD 06/09/09
     397
 
FORDO 2011-A A3
.970% 01/15/2015 DD 01/28/11
     3,560
 
ALLY FINANCIAL
1.750% 10/30/2012 DD 10/30/09
     1,114
 
GNMA GTD REMIC P/T 04-17 MA
5.000% 02/16/2032 DD 03/01/04
     1,473
 
HUNDAI AUTO RCVB TRUST C A4
1.300% 02/15/2018 DD 10/02/11
     3,756
 
HOWARD HUGHES MEDICAL IN
3.450% 09/01/2014 DD 08/18/09
     640
 
ING BK N V NTHE ST CR GTEE
2.625% 02/09/2012 DD 02/09/09
     952
 
INTER-AMERICAN DEVEL BK
1.625% 07/15/2013 DD 05/19/10
     2,127
 
INTL BK RECON & DEVELOP
2.375% 05/26/2015 DD 05/26/10
     2,215
 
INTL BK RECON & DEVELOP
.500% 11/26/2013 DD 10/26/11
     1,199
 
J P MORGAN CHASE 07-LDPX CL A3
5.420% 01/15/2049 DD 03/01/07
     8,648
 
JOHNSON & JOHNSON NT
5.150% 07/15/2018 DD 06/23/08
     9,659
 
KING INTERNATIONAL LEASING
2.754% 10/15/2022 DD 11/17/10
     1,596
 
LB UBS COML MTG 06-C7 CL A2
5.300% 11/15/2038 DD 11/11/06
     3,806
 
MERCEDES-BENZ AUTO RECEIV 1 A3
1.420% 08/15/2014 DD 04/21/10
     992
 
MERCEDES-BENZ AUTO RECEIV 1 A4
1.220% 12/15/2017 DD 07/20/11
     1,306
 
MICROSOFT
1.625% 09/25/2015 DD 09/27/10
     720
 
MICROSOFT SR UNSEC
2.500% 02/08/2016 DD 02/08/11
     2,007
 
NCUA GUARANTEED NOTES C1 APT
2.650% 10/29/2020 DD 11/10/10
     1,509
 
NORDIC INVESTMENT BANK
2.625% 10/06/2014 DD 10/05/09
     1,154

19 
 
 

AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value

 
 
  
RABOBANK NEDERLAND
4.200% 05/13/2014 DD 05/13/09
 
 
 
 
 3,982
 
  
ROYAL BANK OF CANADA
3.125% 04/14/2015 DD 04/14/10
 
 
 
 
 1,102
 
  
ROYAL BK SCOTLAND GRP PLC 144A
2.625% 05/11/2012 DD 05/12/09
 
 
 
 
 1,912
 
  
SLM STUDENT LN 2005-8 CL A-4
VAR RT  01/25/2028 DD 09/20/05
 
 
 
 
 5,047
 
  
SAN CLEMENTE LEASING
3.030% 11/22/2022 DD 12/08/10
 
 
 
 
 1,557
 
  
US CENTRAL FEDERAL CRED
1.900% 10/19/2012 DD 10/19/09
 
 
 
 
 2,712
 
  
TENNESSEE VALLEY AUTH
3.875% 02/15/2021 DD 02/08/11
 
 
 
 
 3,041
 
  
U S TREASURY NOTE
1.875% 02/28/2014 DD 02/28/09
 
 
 
 
 672
 
  
U S TREASURY NOTE
2.625% 4/30/2016 DD 04/30/09
 
 
 
 
 17,311
 
  
U S TREASURY NOTE
2.625% 02/29/2016 DD 02/28/09
 
 
 
 
 25,943
 
  
U S TREASURY NOTE
2.625% 07/31/2014 DD 07/31/09
 
 
 
 
 7,411
 
  
U S TREASURY NOTE
3.625% 08/15/2019 DD 08/15/09
 
 
 
 
 10,655
 
  
U S TREASURY NOTE
2.375% 10/31/2014 DD 10/31/09
 
 
 
 
 1,690
 
  
U S TREASURY NOTE
3.375% 11/15/2019 DD 11/15/09
 
 
 
 
 13,679
 
  
U S TREASURY NOTE
3.625% 02/15/2020 DD 02/15/10
 
 
 
 
 4,639
 
  
U S TREASURY NOTE
2.625% 08/15/2020 DD 08/15/10
 
 
 
 
 14,560
 
  
U S TREASURY NOTE
1.875% 08/31/2017 DD 08/31/10
 
 
 
 
 6,280
 
  
U S TREASURY NOTE
2.750% 02/28/2018 DD 02/28/11
 
 
 
 
 4,934
 
  
U S TREASURY NOTE
3.125% 05/15/2021 DD 05/15/11
 
 
 
 
 12,840
 
  
U S TREASURY NOTE
2.125% 08/15/2021 DD 08/15/11
 
 
 
 
 21,641
 
  
U S TREASURY NOTE
1.000% 08/31/2016 DD 08/31/11
 
 
 
 
 7,077
 
  
U S TREASURY NOTE
1.750% 10-31/2018 DD 10/31/11
 
 
 
 
 6,175
 
  
U S TREASURY NOTE
.375% 11/15/2014 DD 11/15/11
 
 
 
 
 2,001
 
  
U S TREASURY NOTE
1.250% 10/31/2015 DD 10/31/10
 
 
 
 
 21,538
 
  
U S TREASURY NOTE
1.375% 11/30/2015 DD 11/30/10
 
 
 
 
 10,305
 
  
VENDEE MORTGAGE
7.750% 05/15/2022 DD 06/01/92
 
 
 
 
 1,141
 
  
WORLD ONMI AUTO
2.210% 05/15/2015 DD 01/28/10
 
 
 
 
 2,738
 
  
WEST CORP FED CRED UNION
1.750% 11/02/2012 DD 11/02/09
 
 
 
 
 1,620
 
  
WESTPAC BANKING CORP
2.900% 09/10/2014 DD 09/10/09
 
 
 
 
 3,135
 
  
YALE UNIVERSITY YALUNI
2.900% 10/15/2014 DD 11/10/09
 
 
 
 
 1,858
 
  
 
 
 
 
 
 
 459,877
 
  
 
 
 
 
 
 
 
  *  
DREYFUS GOVERNMENT CASH
   MANAGEMENT FUND
REGISTERED INVESTMENT
   COMPANY: 50,437,834 UNITS
 
 
 
 
 50,438
     
 
 
 
 
 
 
 
     
TOTAL INTEREST INCOME FUND
 
 
**
 
 979,555
     
 
 
 
 
 
 
 
Global Equity Fund
 
 
 
 
 
 
  *  
BARCLAYS GLOBAL INVESTORS
   U.S. EQUITY MARKET FUND F
COMMON/COLLECTIVE TRUST
   FUND: 3,330,690 UNITS
 
 
 
 
 129,264
  *  
BARCLAYS GLOBAL INVESTORS
   EAFE EQUITY INDEX FUND F
COMMON/COLLECTIVE TRUST
   FUND: 1,593,479 UNITS
 
 
 
 
 39,040
     
TOTAL GLOBAL EQUITY FUND
 
 
**
 
 168,304
     
 
 
 
 
 
 
 
     
 
 
 
 
 
 
 
     
 
 
 
 
 
 
 
     
 
 
 
 
 
 
 
     
 
 
 
 
 
 
 

20 
 
 

AT&T SAVINGS AND SECURITY PLAN
 
EIN 43-1301883, PLAN NO. 004
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2011
(Dollars in Thousands)
 
 
 
 
 
 
 
 
 
 
 
Identity of Issue
 
Description of Investment
 
Cost
 
Current Value
 
Mid and Small Cap Stock Fund
  
 
    
 
    
 
*  
BARCLAYS GLOBAL INVESTOR
   EAFE EQUITY EXTENDED
   EQUITY MARKET FUND F
  
COMMON/COLLECTIVE TRUST
 FUND: 13,115,893 UNITS
       **       364,360
   
 
  
 
                
International Stock Fund
  
 
                
*  
BARCLAYS GLOBAL INVESTOR
   EAFE EQUITY INTERNATIONAL
   STOCK FUND F
  
COMMON/COLLECTIVE TRUST
 FUND: 8,752,941 Units
       **       214,447
   
 
  
 
                
Interest Bearing Cash
  
 
                
*  
DREYFUS GOVERNMENT CASH
   MANAGEMENT FUND
  
REGISTERED INVESTMENT
 COMPANY: 4,641,196 UNITS
       **       4,640
   
 
  
 
                
Loan Fund
  
 
                
*  
LOANS TO PLAN PARTICIPANTS
   4.24% - 10.50%       **       308,594
   
 
                    
   
TOTAL
                 $ 5,450,042
   
 
                    
*  
Party-in-interest
                
**  
Participant-directed investment, cost not required
                
***  
Wrapper agreement, no stated maturity
                
 
 
 
 
 
 
 
 
 
 


21 
 
 

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 Savings and Security Plan





By
/s/ Paul W. Stephens
 
Paul W. Stephens
 
Senior Vice President and Controller




Date: June 22, 2012
 
 
 
 
 
 
 
 

22 
 
 

EXHIBIT INDEX

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

Exhibit
Number                 

23  
Consent of Independent Registered Public Accounting Firm
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23