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| | Six Months Ended April 30, 2006 (unaudited) | | | | | | | | | | | | | | For the period
July 27, 20011
through
October 31, 20012 | |
| | | Year Ended October 31, | | |
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| | | 2005 | | 2004 | | 2003 | | 2002 | | |
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PER COMMON SHARE OPERATING PERFORMANCE: | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | $ | 15.44 | | $ | 15.28 | | $ | 14.76 | | $ | 14.47 | | $ | 14.09 | | $ | 14.33 | 3 |
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Investment operations: | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.57 | | | 1.14 | | | 1.14 | | | 1.14 | | | 1.09 | | | 0.15 | |
Net realized and unrealized gain (loss) | | | 0.13 | | | 0.09 | | | 0.36 | | | 0.13 | | | 0.29 | | | (0.08 | ) |
Dividends to preferred shareholders from net investment income | | | (0.12 | ) | | (0.17 | ) | | (0.08 | ) | | (0.09 | ) | | (0.13 | ) | | (0.01 | ) |
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Net increase from investment operations | | | 0.58 | | | 1.06 | | | 1.42 | | | 1.18 | | | 1.25 | | | 0.06 | |
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Dividends and distributions to common shareholders: | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.45 | ) | | (0.90 | ) | | (0.90 | ) | | (0.89 | ) | | (0.87 | ) | | (0.14 | ) |
In excess of net investment income | | | — | | | — | | | — | | | — | | | — | | | (0.02 | ) |
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Total dividends and distributions | | | (0.45 | ) | | (0.90 | ) | | (0.90 | ) | | (0.89 | ) | | (0.87 | ) | | (0.16 | ) |
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Capital charges with respect to issuance of: | | | | | | | | | | | | | | | | | | | |
Common shares | | | — | | | — | | | — | | | — | | | — | | | (0.03 | ) |
Preferred shares | | | — | | | — | | | — | | | — | | | — | | | (0.11 | ) |
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Total capital charges | | | — | | | — | | | — | | | — | | | — | | | (0.14 | ) |
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Net asset value, end of period | | $ | 15.57 | | $ | 15.44 | | $ | 15.28 | | $ | 14.76 | | $ | 14.47 | | $ | 14.09 | |
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Market price, end of period | | $ | 16.22 | | $ | 15.19 | | $ | 13.99 | | $ | 13.45 | | $ | 13.42 | | $ | 14.62 | |
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TOTAL INVESTMENT RETURN4 | | | 9.93 | % | | 15.38 | % | | 10.99 | % | | 6.95 | % | | (2.25 | )% | | (5.58 | )% |
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RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:5 | | | | | | | | | | | | | | | | | | | |
Expenses after fees waived and paid indirectly | | | 0.85 | %6 | | 0.86 | % | | 0.87 | % | | 0.88 | % | | 0.90 | % | | 0.73 | %6 |
Expenses after fees waived and before fees paid indirectly | | | 0.86 | %6 | | 0.87 | % | | 0.87 | % | | 0.89 | % | | 0.92 | % | | 0.74 | %6 |
Expenses before fees waived and paid indirectly | | | 1.25 | %6 | | 1.26 | % | | 1.27 | % | | 1.29 | % | | 1.33 | % | | 1.03 | %6 |
Net investment income after fees waived and paid indirectly and before preferred share dividends | | | 7.46 | %6 | | 7.35 | % | | 7.62 | % | | 7.73 | % | | 7.87 | % | | 3.93 | %6 |
Preferred share dividends | | | 1.60 | %6 | | 1.08 | % | | 0.56 | % | | 0.62 | % | | 0.93 | % | | 0.37 | %6 |
Net investment income available to common shareholders | | | 5.86 | %6 | | 6.27 | % | | 7.06 | % | | 7.11 | % | | 6.94 | % | | 3.56 | %6 |
SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | |
Average net assets of common shareholders (000) | | $ | 194,531 | | $ | 194,038 | | $ | 188,746 | | $ | 183,648 | | $ | 173,885 | | $ | 163,077 | |
Portfolio turnover | | | 16 | % | | 24 | % | | 13 | % | | 14 | % | | 57 | % | | 2 | % |
Net assets of common shareholders, end of period (000) | | $ | 195,462 | | $ | 193,457 | | $ | 191,274 | | $ | 184,874 | | $ | 181,200 | | $ | 175,110 | |
Preferred shares value outstanding, end of period (000) | | $ | 109,750 | | $ | 109,750 | | $ | 109,750 | | $ | 109,750 | | $ | 109,750 | | $ | 109,750 | |
Asset coverage per preferred share, end of period | | $ | 69,537 | | $ | 69,073 | | $ | 68,575 | | $ | 67,115 | | $ | 66,279 | | $ | 64,894 | |
The information in the above Financial Highlights represents the operating performance for a common share outstanding, total investment returns, ratios to average net assets and other supplemental data for each period indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s common shares.
See Notes to Financial Statements.
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NOTES TO FINANCIAL STATEMENTS (unaudited) |
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Note 1. Organization & Accounting Policies
BlackRock Investment Quality Municipal Trust Inc. (“Municipal Investment Quality”) was organized as a Maryland corporation on November 19, 1992. BlackRock California Investment Quality Municipal Trust Inc. (“California Investment Quality”), BlackRock New Jersey Investment Quality Municipal Trust Inc. (“New Jersey Investment Quality”) and BlackRock New York Investment Quality Municipal Trust Inc. (“New York Investment Quality”) were organized as Maryland corporations on April 12, 1993. BlackRock Florida Investment Quality Municipal Trust (“Florida Investment Quality”) was organized as a Massachusetts business trust on April 15, 1993. Municipal Investment Quality, California Investment Quality, Florida Investment Quality, New Jersey Investment Quality and New York Investment Quality are herein referred to as the Investment Quality Trusts. BlackRock Municipal Income Trust (“Municipal Income”), BlackRock California Municipal Income Trust (“California Income”), BlackRock Florida Municipal Income Trust (“Florida Income”), BlackRock New Jersey Municipal Income Trust (“New Jersey Income”) and BlackRock New York Municipal Income Trust (“New York Income”) (collectively the “Income Trusts”) were organized as Delaware statutory trusts on March 30, 2001. The Investment Quality Trusts and the Income Trusts are referred to herein collectively as the “Trusts.” Municipal Investment Quality and Municipal Income are registered as diversified, closed-end management investment companies under the Investment Company Act of 1940, as amended. California Investment Quality, California Income, Florida Investment Quality, Florida Income, New Jersey Investment Quality, New Jersey Income, New York Investment Quality and New York Income are registered as non-diversified, closed-end management investment companies under the Investment Company Act of 1940, as amended. The ability of issuers of debt securities held by each Trust to meet their obligations may be affected by economic developments in a state, a specific industry or region. |
Under the Trusts’ organizational documents, their officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trusts. In addition, in the normal course of business, the Trusts enter into contracts with their vendors and others that provide for general indemnifications. The Trusts’ maximum exposure under these arrangements are unknown as this would involve future claims that may be made against the Trusts. However, based on experience, the Trusts consider the risk of loss from such claims to be remote.
The following is a summary of significant accounting policies followed by the Trusts.
Investments Valuation: Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services selected under the supervision of each Trust’s Board of Trustees or Board of Directors, as the case may be (each, a “Board”). In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from bond dealers, market transactions in comparable investments and various relationships between investments. A futures contract is valued at the last sale price as of the close of the commodities exchange on which it trades. Short-term securities may be valued at amortized cost. Investments in open-end investment companies are valued at net asset value per share. Any investments or other assets for which such current market quotations are not readily available are valued at fair value (“Fair Value Assets”) as determined in good faith under procedures established by, and under the general supervision and responsibility of, each Trust’s Board. The investment advisor and/or sub-advisor will submit its recommendations regarding the valuation and/or valuation methodologies for Fair Value Assets to a valuation committee. The valuation committee may accept, modify or reject any recommendations. The pricing of all Fair Value Assets shall be subsequently reported to the Board.
When determining the price for a Fair Value Asset, the investment advisor and/or sub-advisor shall seek to determine the price that the Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant.
Investment Transactions and Investment Income: Investment transactions are recorded on trade date. The cost of investments sold and the related gain or loss is determined by use of the specific identification method, generally first-in, first-out, for both financial reporting and Federal income tax purposes. Each Trust also records interest income on an accrual basis and amortizes premium and/or accretes discount on securities purchased using the interest method.
Financial Futures Contracts: A futures contract is an agreement between two parties to buy and sell a financial instrument for a set price on a future date. Initial margin deposits are made upon entering into futures contracts and can be either cash or securities. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking-to-market” on a daily basis to reflect the market value of the contract at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, the Trust records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract.
Financial futures contracts, when used by the Trusts, help in maintaining a targeted duration. Futures contracts can be sold to effectively shorten an otherwise longer duration portfolio. In the same sense, futures contracts can be purchased to lengthen a portfolio that is shorter than its duration target. Thus, by buying or selling futures contracts, the Trusts may attempt to manage the duration of positions so that changes in interest rates do not change the duration of the portfolio unexpectedly.
Interest Rate Swaps: Interest rate swaps are agreements in which one party pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, a party may pay a fixed rate and receive a floating rate. Interest rate swaps are efficient as asset/liability management tools. In more complex swaps, the notional principal amount may decline (or amortize) over time.
During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, a Trust will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract, if any.
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The Trusts are exposed to credit loss in the event of non-performance by the other party to the swap. However, the Trusts closely monitor swaps and do not anticipate non-performance by any counterparty.
Segregation: In cases in which the Investment Company Act of 1940 (the “1940 Act”), as amended, and the interpretive positions of the Securities and Exchange Commission (the “Commission”) require that each Trust segregate assets in connection with certain investments (e.g., when-issued securities, swap agreements or futures contracts), each Trust will, consistent with certain interpretive letters issued by the Commission, designate on its books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated.
Federal Income Taxes: It is each Trust’s intention to continue to be treated as a regulated investment company under the Internal Revenue Code and to distribute sufficient amounts of their net income and net realized capital gains, if any, to shareholders. Therefore, no federal income tax provisions have been recorded.
Dividends and Distributions: Each Trust declares and pays dividends and distributions to common shareholders monthly from net investment income, net realized short-term capital gains and, if necessary, other sources. Net long-term capital gains, if any, in excess of loss carryforwards may be distributed in accordance with the 1940 Act. Dividends and distributions are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. Dividends and distributions to preferred shareholders are accrued and determined as described in Note 5.
Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences may be material.
Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trust’s Board, non-interested Trustees/Directors (“Trustees”) are required to defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other BlackRock closed-end trusts selected by the Trustees. These amounts are shown on the Statements of Assets and Liabilities as “Investments in affiliates”. This has the same economic effect for the Trustees as if the Trustees had invested the deferred amounts in such Trusts.
The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Trust. Each Trust may, however, elect to invest in common shares of those Trusts selected by the Trustees in order to match its deferred compensation obligations.
Other: Expenses that are directly related to one of the Trusts are charged directly to that Trust. Other operating expenses are generally prorated to the Trusts on the basis of relative net assets of all of the BlackRock Closed-End Trusts.
Note 2. Agreements
Each Trust has an Investment Management Agreement with BlackRock Advisors, Inc. (the “Advisor”), a wholly owned subsidiary of BlackRock, Inc. BlackRock Financial Management, Inc. (“BFM”), a wholly owned subsidiary of BlackRock, Inc., serves as sub-advisor to Municipal Income Trust, California Municipal Income Trust, Florida Municipal Income Trust, New Jersey Municipal Income Trust and New York Municipal Income Trust. BlackRock, Inc. is an indirect majority owned subsidiary of The PNC Financial Services Group, Inc. The Investment Management Agreement for each Income Trust covers both investment advisory and administration services. Each Investment Quality Trust has an Administration Agreement with the Advisor.
Each Trust’s investment advisory fee paid to the Advisor is computed weekly and payable monthly based on an annual rate, 0.35% for the Investment Quality Trusts and 0.60% for the Income Trusts, of the Trust’s average weekly managed assets. “Managed assets” means the total assets of a Trust (including any assets attributable to any preferred shares that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage). The Advisor has voluntarily agreed to waive a portion of the investment advisory fee or other expenses on the Income Trusts as a percentage of managed assets as follows: 0.25% for the first five years of each of the Trust’s operations, 0.20% in year six, 0.15% in year seven, 0.10% in year eight and 0.05% in year nine.
The Advisor pays BFM fees for its sub-advisory services.
The administration fee paid to the Advisor is computed weekly and payable monthly based on an annual rate of 0.15% for the Municipal Investment Quality Trust and 0.10% for the California Investment Quality, Florida Investment Quality, New Jersey Investment Quality and New York Investment Quality of the Trusts’ average weekly managed assets.
Pursuant to the agreements, the Advisor provides continuous supervision of the investment portfolio and pays the compensation of officers of each Trust who are affiliated persons of the Advisor, as well as occupancy and certain clerical and accounting costs of each Trust. Each Trust bears all other costs and expenses, which include reimbursements to the Advisor for cost of employees that provide pricing, secondary market support, and compliance services to each Trust. For the six months ended April 30, 2006, the Trusts reimbursed the Advisor the following amounts, which are included in miscellaneous expenses in the Statements of Operations:
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Trust | | Amount | | Trust | | Amount |
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Municipal Investment Quality | | $ | 8,236 | | Florida Income | | $ | 3,180 |
Municipal Income | | | 17,376 | | New Jersey Investment Quality | | | 480 |
California Investment Quality | | | 480 | | New Jersey Income | | | 3,479 |
California Income | | | 6,853 | | New York Investment Quality | | | 657 |
Florida Investment Quality | | | 572 | | New York Income | | | 5,944 |
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Pursuant to the terms of each Trust’s custody agreement, each Trust received earnings credits from its custodian for positive cash balances maintained, which are used to offset custody fees. These credits are shown on the Statement of Operations as “fees paid indirectly”.
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments and U.S. government securities, for the six months ended April 30, 2006, were as follows:
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Trust | | Purchases | | Sales | | Trust | | Purchases | | Sales |
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Municipal Investment Quality | | $ | 170,471,071 | | $ | 168,265,590 | | Florida Income | | $ | 14,405,471 | | $ | 11,235,567 |
Municipal Income | | | 461,600,770 | | | 402,825,581 | | New Jersey Investment Quality | | | 1,122,245 | | | 2,436,766 |
California Investment Quality | | | 5,400,831 | | | 2,373,596 | | New Jersey Income | | | 1,455,902 | | | 1,635,818 |
California Income | | | 41,243,014 | | | 36,593,062 | | New York Investment Quality | | | 5,495,186 | | | 6,015,085 |
Florida Investment Quality | | | 3,178,466 | | | 4,018,578 | | New York Income | | | 47,900,372 | | | 49,753,187 |
There were no purchases or sales of U.S. government securities.
Details of open interest rate swaps at April 30, 2006 were as follows:
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Trust | | Notional
Amount | | Fixed
Rate(a) | | Floating Rate | | Termination
Date | | Unrealized
Appreciation
(Depreciation) | |
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Investment Quality | | $ | 8,500,000 | | 4.180 | % | | 1-week BMA Municipal Swap Index | | 09/14/06 | | $ | 212,865 | |
Municipal Trust | | | 6,300,000 | | 4.258 | | | 1-week BMA Municipal Swap Index | | 03/20/07 | | | 240,150 | |
| | | 8,500,000 | | 4.263 | | | 1-week BMA Municipal Swap Index | | 12/27/06 | | | 242,456 | |
| | | 7,250,000 | | 4.266 | | | 1-week BMA Municipal Swap Index | | 11/03/06 | | | 108,444 | |
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Municipal Income Trust | | | 32,100,000 | | 4.180 | % | | 1-week BMA Municipal Swap Index | | 09/14/06 | | | 803,878 | |
| | | 24,000,000 | | 4.258 | | | 1-week BMA Municipal Swap Index | | 03/20/07 | | | 914,856 | |
| | | 32,000,000 | | 4.263 | | | 1-week BMA Municipal Swap Index | | 12/27/06 | | | 912,776 | |
| | | 28,000,000 | | 4.266 | | | 1-week BMA Municipal Swap Index | | 11/03/06 | | | 418,815 | |
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California Municipal | | | 12,000,000 | | 4.180 | % | | 1-week BMA Municipal Swap Index | | 09/14/06 | | | 300,515 | |
Income Trust | | | 9,000,000 | | 4.258 | | | 1-week BMA Municipal Swap Index | | 03/20/07 | | | 343,071 | |
| | | 12,000,000 | | 4.263 | | | 1-week BMA Municipal Swap Index | | 12/27/06 | | | 342,291 | |
| | | 10,500,000 | | 4.266 | | | 1-week BMA Municipal Swap Index | | 11/03/06 | | | 157,056 | |
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Florida Municipal Income | | | 4,500,000 | | 4.180 | % | | 1-week BMA Municipal Swap Index | | 09/14/06 | | | 112,693 | |
Trust | | | 3,300,000 | | 4.258 | | | 1-week BMA Municipal Swap Index | | 03/20/07 | | | 125,793 | |
| | | 4,500,000 | | 4.263 | | | 1-week BMA Municipal Swap Index | | 12/27/06 | | | 128,359 | |
| | | 4,000,000 | | 4.266 | | | 1-week BMA Municipal Swap Index | | 11/03/06 | | | 59,831 | |
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New Jersey Municipal | | | 5,500,000 | | 4.180 | % | | 1-week BMA Municipal Swap Index | | 09/14/06 | | | 137,736 | |
Income Trust | | | 4,100,000 | | 4.258 | | | 1-week BMA Municipal Swap Index | | 03/20/07 | | | 156,288 | |
| | | 5,500,000 | | 4.263 | | | 1-week BMA Municipal Swap Index | | 12/27/06 | | | 156,883 | |
| | | 4,750,000 | | 4.266 | | | 1-week BMA Municipal Swap Index | | 11/03/06 | | | 71,049 | |
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New York Municipal | | | 7,800,000 | | 4.180 | % | | 1-week BMA Municipal Swap Index | | 09/14/06 | | | 195,335 | |
Income Trust | | | 5,800,000 | | 4.258 | | | 1-week BMA Municipal Swap Index | | 03/20/07 | | | 221,090 | |
| | | 7,750,000 | | 4.263 | | | 1-week BMA Municipal Swap Index | | 12/27/06 | | | 221,063 | |
| | | 6,750,000 | | 4.266 | | | 1-week BMA Municipal Swap Index | | 11/03/06 | | | 100,964 | |
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| | | | | | | | | | | | | 738,452 | |
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(a) | Trust pays fixed interest rate and receives floating rate. |
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Note 4. Income Tax Information
The tax character of distributions paid during the year ended October 31, 2005, were as follows:
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| | Year ended October 31, 2005 | |
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Distributions Paid From: | | Tax-exempt Income | | Long-term
Capital Gains | | Total Distributions | |
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Municipal Investment Quality | | $ | 19,171,844 | | | $ | — | | | $ | 19,171,844 | | |
Municipal Income | | | 50,626,000 | | | | — | | | | 50,626,000 | | |
California Investment Quality | | | 981,792 | | | | — | | | | 981,792 | | |
California Income | | | 16,041,371 | | | | — | | | | 16,041,371 | | |
Florida Investment Quality | | | 1,131,803 | | | | 138,032 | | | | 1,269,835 | | |
Florida Income | | | 7,162,799 | | | | — | | | | 7,162,799 | | |
New Jersey Investment Quality | | | 972,856 | | | | — | | | | 972,856 | | |
New Jersey Income | | | 8,139,994 | | | | — | | | | 8,139,994 | | |
New York Investment Quality | | | 1,329,762 | | | | — | | | | 1,329,762 | | |
New York Income | | | 13,412,688 | | | | — | | | | 13,412,688 | | |
For Federal income tax purposes, the following Trusts had capital loss carryforwards at October 31, 2005, the Trust’s most recent tax year-end except for New York Income which had its most recent tax year-end at July 31, 2005. These amounts may be used to offset future realized capital gains, if any:
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Trust | | Capital Loss
Carryforward
Amount | | Expires |
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Municipal Investment Quality | | $ | 159,146 | | 2012 |
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Municipal Income | | $ | 11,431,206 | | 2011 |
| | | 15,767,388 | | 2012 |
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| | $ | 27,198,594 | | |
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California Investment Quality | | $ | 9,026 | | 2012 |
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California Income | | $ | 389,453 | | 2010 |
| | | 124,338 | | 2011 |
| | | 4,943,577 | | 2012 |
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| | $ | 5,457,368 | | |
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Trust | | Capital Loss
Carryforward
Amount | | Expires |
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Florida Income | | $ | 1,060,497 | | 2012 |
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New Jersey Income | | $ | 988,460 | | 2012 |
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New York Income | | $ | 662,558 | | 2011 |
| | | 485,438 | | 2012 |
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| | $ | 1,147,996 | | |
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Note 5. Capital
There are 200 million of $0.01 par value common shares authorized for each of the Investment Quality Trusts. There are an unlimited number of $0.001 par value common shares authorized for the Income Trusts. Each Trust may classify or reclassify any unissued common shares into one or more series of preferred shares.
During the six months ended April 30, 2006 and the year ended October 31, 2005, the following Trusts issued additional shares under its dividend reinvestment plan:
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Trust | | April 30, 2006 | | October 31, 2005 |
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Municipal Income | | 90,118 | | | 72,096 | |
California Income | | 16,439 | | | — | |
Flordia Income | | 5,688 | | | 2,650 | |
New Jersey Income | | 21,442 | | | 3,854 | |
New York Income | | 23,507 | | | 4,806 | |
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As of April 30, 2006, each Trust had the following series of preferred shares outstanding as listed in the table below. The preferred shares have a liquidation value of $25,000 per share plus any accumulated unpaid dividends.
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Trust | | | Series | | Shares | | Trust | | | Series | | Shares | |
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Municipal Investment Quality | | T7 | | | 3,262 | | California Income | | T7 | | | 2,639 | |
| | T28 | | | 2,600 | | | | R7 | | | 2,639 | |
Municipal Income | | M7 | | | 3,001 | | Florida Investment Quality | | R7 | | | 340 | |
| | T7 | | | 3,001 | | Florida Income | | T7 | | | 2,302 | |
| | W7 | | | 3,001 | | New Jersey Investment Quality | | T7 | | | 300 | |
| | R7 | | | 3,001 | | New Jersey Income | | R7 | | | 2,552 | |
| | F7 | | | 3,001 | | New York Investment Quality | | F7 | | | 392 | |
California Investment Quality | | W7 | | | 300 | | New York Income | | W7 | | | 2,195 | |
| | | | | | | | | F7 | | | 2,195 | |
Dividends on seven-day preferred shares are cumulative at a rate which is reset every seven days based on the results of an auction. Dividends on 28-day preferred shares are cumulative at a rate which resets every 28 days based on the results of an auction. The dividend ranges on the preferred shares for each of the Trusts for the six months ended April 30, 2006, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
Trust | | | Series | | Low | | High | | Average | | Trust | | | Series | | Low | | High | | Average | |
| | |
| |
| |
| |
| |
| | |
| |
| |
| |
| |
Municipal Investment Quality | | T7 | | | 2.12 | % | 3.60 | % | 2.89 | % | | California Income | | T7 | | | 2.12 | % | 3.80 | % | 2.79 | % | |
| | T28 | | | 2.78 | | 3.36 | | 3.08 | | | | | R7 | | | 2.00 | | 3.50 | | 2.81 | | |
Municipal Income | | M7 | | | 2.70 | | 3.70 | | 3.05 | | | Florida Investment Quality | | R7 | | | 2.59 | | 4.10 | | 3.14 | | |
| | T7 | | | 2.50 | | 3.60 | | 3.00 | | | Florida Income | | T7 | | | 2.20 | | 3.60 | | 2.87 | | |
| | W7 | | | 2.30 | | 3.50 | | 2.98 | | | New Jersey Investment Quality | | T7 | | | 2.20 | | 3.95 | | 2.86 | | |
| | R7 | | | 2.45 | | 3.80 | | 2.97 | | | New Jersey Income | | R7 | | | 2.00 | | 3.71 | | 2.86 | | |
| | F7 | | | 2.40 | | 3.64 | | 2.97 | | | New York Investment Quality | | F7 | | | 2.50 | | 3.60 | | 2.82 | | |
California Investment Quality | | W7 | | | 2.00 | | 3.60 | | 2.60 | | | New York Income | | W7 | | | 2.40 | | 3.70 | | 2.86 | | |
| | | | | | | | | | | | | | F7 | | | 2.20 | | 3.55 | | 2.84 | | |
A Trust may not declare dividends or make other distributions on common shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding preferred shares would be less than 200%.
The preferred shares are redeemable at the option of each Trust, in whole or in part, on any dividend payment date at $25,000 per share plus any accumulated unpaid dividends whether or not declared. The preferred shares are also subject to mandatory redemption at $25,000 per share plus any accumulated or unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Trust, as set forth in each Trust’s Declaration of Trust, are not satisfied.
The holders of preferred shares have voting rights equal to the holders of common shares (one vote per share) and will vote together with holders of common shares as a single class. However, holders of preferred shares, voting as a separate class, are also entitled to elect two Trustees for each Trust. In addition, the 1940 Act, as amended, requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding preferred shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the preferred shares, (b) change a Trust’s subclassification as a closed-end investment company or change its fundamental investment restrictions and (c) change its business so as to cease to be an investment company.
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Note 6. Dividends
Subsequent to April 30, 2006, the Board of each Trust declared dividends from undistributed earnings per common share payable June 1, 2006, to shareholders of record on May 15, 2006. The per share common dividends declared were as follows: |
| | | | | | | |
Trust | | | Common Dividend
Per Share | | Trust | | | Common Dividend
Per Share | |
| | |
| |
| | |
| |
Municipal Investment Quality | | $0.088250 | | Florida Income | | $0.075375 | |
Municipal Income | | 0.082625 | | New Jersey Investment Quality | | 0.070125 | |
California Investment Quality | | 0.070600 | | New Jersey Income | | 0.079625 | |
California Income | | 0.076074 | | New York Investment Quality | | 0.073125 | |
Florida Investment Quality | | 0.070781 | | New York Income | | 0.075339 | |
59
The dividends declared on preferred shares for the period May 1, 2006 to May 31, 2006, for each of the Trusts were as follows:
| | | | | | | | | | | | | | | |
Trust | | | Series | | Dividends
Declared | | Trust | | | Series | | Dividends
Declared | |
| | |
| |
| |
| | |
| |
| |
Municipal Investment Quality | | T7 | | | $271,203 | | | California Income | | T7 | | | $216,847 | | |
| | T28 | | | 167,544 | | | | | R7 | | | 162,694 | | |
Municipal Income | | M7 | | | 251,484 | | | Florida Investment Quality | | R7 | | | 23,800 | | |
| | T7 | | | 251,364 | | | Florida Income | | T7 | | | 190,398 | | |
| | W7 | | | 199,567 | | | New Jersey Investment Quality | | T7 | | | 20,784 | | |
| | R7 | | | 202,147 | | | New Jersey Income | | R7 | | | 168,840 | | |
| | F7 | | | 258,536 | | | New York Investment Quality | | F7 | | | 33,708 | | |
California Investment Quality | | W7 | | | 19,509 | | | New York Income | | W7 | | | 138,790 | | |
| | | | | | | | | F7 | | | 187,453 | | | |
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Note 7. Concentration Risk
The Trusts concentrate their investments in securities issued by state agencies, other governmental entities and U.S. Territories. The Trusts are more susceptible to adverse financial, social, environmental, economic, regulatory and political factors that may affect these states, which could seriously affect the ability of these states and their municipal subdivisions to meet continuing obligations for principle and interest payments, than if the Trusts were not concentrated in securities issued by state agencies, other governmental entities and U.S. Territories. |
Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that market value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified in the Portfolios of Investments.
60
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DIVIDEND REINVESTMENT PLANS |
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Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by Computershare Trust Company, N.A. (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who elect not to participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent.
After an Investment Quality Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participant’s account, by the purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open market purchases”). The Investment Quality Trusts will not issue any new shares under the Plan, which serves as agent for the shareholders in administering the Plan.
After an Income Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by open market purchases. If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open market purchases.
Participants in the Plan may withdraw from the Plan upon written notice to the Plan Agent and will receive certificates for whole Trust shares and a cash payment for any fraction of a Trust share.
The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any Federal income tax that may be payable on such dividends or distributions.
Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan, however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants who request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at 250 Royall Street, Canton, MA 02021, or (800) 699-1BFM.
61
On February 15, 2006, BlackRock, Inc. (“BlackRock”) and Merrill Lynch & Co., Inc. (“Merrill Lynch”) announced that they had entered into an agreement pursuant to which Merrill Lynch would contribute its investment management business, Merrill Lynch Investment Managers, to BlackRock, one of the largest publicly traded investment management firms in the United States, to form a new asset management company that will be one of the world’s preeminent, diversified global money management organizations with approximately $1 trillion in assets under management. Based in New York, BlackRock currently manages assets for institutional and individual investors worldwide through a variety of equity, fixed income, cash management and alternative investment products. The new company will operate under the BlackRock name and be governed by a board of directors with a majority of independent members. The new company will offer a full range of equity, fixed income, cash management and alternative investment products with strong representation in both retail and institutional channels, in the U.S. and in non-U.S. markets. It will have over 4,500 employees in 18 countries and a major presence in most key markets, including the United States, the United Kingdom, Asia, Australia, the Middle East and Europe. Merrill Lynch will own no more than 49.8% of the total issued and outstanding capital stock of the new company and it will own no more than 45% of the new company’s common stock, and The PNC Financial Services Group, Inc. (“PNC”), which currently holds a majority interest in BlackRock, will retain approximately 34% of the new company’s common stock. Each of Merrill Lynch and PNC has agreed that it will vote all of its shares on all matters in accordance with the recommendation of BlackRock’s board. Completion of the transaction is subject to various regulatory approvals, client consents, approval by BlackRock shareholders and customary conditions. The transaction has been approved by the boards of directors of Merrill Lynch, BlackRock and PNC and is expected to close at the end of the third quarter of 2006.
The Trusts listed for trading on the New York Stock Exchange (NYSE) has filed with the NYSE its chief executive officer certification regarding compliance with the NYSE’s listing standards and each Trust listed for trading on the American Stock Exchange (AMEX) has filed with the AMEX its corporate governance certification regarding compliance with the AMEX’s listing standards. All of the Trusts have filed with the Securities and Exchange Commission the certification of it chief officer and chief financial officer required but section 302 of the Sarbanes-Oxley Act.
The Trusts do not make available copies of their respective Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the statement of Additional Information of each Trust has not been updated after completion of such Trust’s offering and the information contained in each Trust’s Statement of Additional Information may have become outdated.
During the period, there were no material changes in the Trusts’ investment objectives or policies or to their charter or by-laws that have not been approved by the shareholders or in the principle risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolio.
Quarterly performance and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com/indiv/products/closedendfunds/funds.html. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended, to incorporate BlackRock’s website into this report.
Certain officers of the Trusts listed on the inside back cover of this Report to Shareholders are also officers of the Advisor or Sub-Advisor. They serve in the following capacities for the Advisor or Sub-Advisor: Robert S. Kapito - Director and Vice Chairman of the Advisor and the Sub-Advisor, Kevin M. Klingert - Director of the Advisor and Managing Director of the Advisor and the Sub-Advisor, Henry Gabbay, Anne Ackerley and Bartholomew Battista - Managing Directors of the Advisor and Sub-Advisor, James Kong and Vincent Tritto - Managing Directors of the Sub-Advisor, and Brian P. Kindelan - Managing Director of the Advisor.
62
Set forth below is a summary of notices sent by each Trust, if any, pursuant to Section 19 of the Investment Company Act of 1940. Section 19 requires each Trust to accompany dividend payments with a notice if any part of that payment is from a source other than accumulated net investment income, not including profits or losses from the sale of securities or other properties. These notices are not for tax reporting purposes and were provided only for informational purposes in order to comply with the requirements of Section 19. In January 2007, after the completion of each Trust’s tax year, shareholders will receive a Form 1099-DIV which will reflect the amount of income, capital gain and return of capital paid by the Trust taxable in calendar year 2006 and reportable on your 2006 federal and other income tax returns.
| | | | | | | | | | |
| | Total
distributions | | Net Investment
Income | | Distributions
from proceeds
from the sale
of securities | | Distributions
from return
of capital | |
| |
| |
| |
| |
| |
BlackRock Florida Investment Quality Municipal Trust (RFA) | | | | | | | | | |
| | | | | | | | | |
Dec-05 | | | $0.12966 | | $— | | $0.12966 | | $— | |
| | | | | | | | | |
BlackRock New Jersey Investment Quality Municipal Trust (RNJ) | | | | | | | | | |
| | | | | | | | | |
Dec-05 | | | $0.06353 | | — | | $0.06353 | | — | |
| | | | | | | | | |
BlackRock New York Investment Quality Municipal Trust (RNY) | | | | | | | | | |
| | | | | | | | | |
Dec-05 | | | $0.04274 | | — | | $0.04274 | | — | |
63
BlackRock Closed-End Funds
| | | |
Trustees
Ralph L. Schlosstein, Chairman
Andrew F. Brimmer, Lead Trustee
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
Kathleen F. Feldstein
R. Glenn Hubbard
Robert S. Kapito Officers
Robert S. Kapito, President
Henry Gabbay, Treasurer
Bartholomew Battista, Chief Compliance Officer
Anne Ackerley, Vice President
Kevin M. Klingert, Vice President
James Kong, Assistant Treasurer
Vincent B. Tritto, Secretary
Brian P. Kindelan, Assistant Secretary Investment Advisor
BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM Sub-Advisor1
BlackRock Financial Management, Inc.
40 East 52nd Street
New York, NY 10022 Accounting Agent and Custodian
State Street Bank and Trust Company
2 Avenue De Lafayette
Boston, MA 02111
1 For the Income Trusts.
2 For the Investment Quality Trusts. | | | Transfer Agent
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
(800) 699-1BFM Auction Agent1
Bank of New York
101 Barclay Street, 7 West
New York, NY 10286 Auction Agent2
Deutsche Bank Trust Company Americas
60 Wall Street, 8th Floor
New York, NY 10286 Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116 Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036 Legal Counsel – Independent Trustees
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022 This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares.Statements and other information contained in this report are as dated and are subject to change. BlackRock Closed-End Funds
c/o BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM |
The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Trusts at (800)699-1BFM.
The Trusts have delegated to the Advisor the voting of proxies relating to their voting securities pursuant to the Advisor’s proxy voting policies and procedures. You may obtain a copy of these proxy voting policies and procedures, without charge, by calling (800) 699-1BFM. These policies and procedures are also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov.
Information on how proxies relating to the Trusts’ voting securities were voted (if any) by the Advisor during the most recent 12-month period ended June 30th is available without charge, upon request, by calling (800) 699-1BFM or on the website of the Commission at http://www.sec.gov.
The Trusts file their complete schedule of portfolio holdings for the first and third quarters of their respective fiscal years with the Commission on Form N-Q. Each Trust’s Form N-Q will be available on the Commission’s website at http://www.sec.gov. Each Trust’s Form N-Q, may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Form N-Q, may also be obtained upon request without charge by calling (800) 699-1BFM.
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This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change. | 
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CEF-SEMI-2 | | |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
The Registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers.
No such purchases were made during the period covered by this report.
Item 10. Submission of Matters to a Vote of Security Holders.
No matters were voted on by shareholders during the period covered by this report.
Item 11. Controls and Procedures. (a) The Registrant's principal executive officer and principal financial officer have evaluated the Registrant's disclosure controls and procedures within 90 days of this filing and have concluded, as of that date, that the Registrant’s disclosure controls and procedures were reasonably designed to ensure that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported within the required time periods and that information required to be disclosed by the Registrant in this Form N-CSR was accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a -3(d))) that occurred during the Registrant’s last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Not applicable.
(a) (2) Separate certifications of the Principal Executive and Financial Officers pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002 furnished as EX-99.CERT.
(b) Certification of Principal Executive and Financial Officers pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002 furnished as EX-99.906 CERT.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BlackRock Florida Municipal Income Trust
By: /s/ Henry Gabbay
Name: Henry Gabbay
Title: Treasurer
Date: July 6, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ Robert S. Kapito
Name: Robert S. Kapito
Title: Principal Executive Officer
Date: July 6, 2006
By: /s/ Henry Gabbay
Name: Henry Gabbay
Title: Principal Financial Officer
Date: July 6, 2006
3
