UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-03205 and 811-21300
Name of Fund: BIF Government Securities Fund and Master Government Securities LLC
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BIF Government Securities Fund and Master Government Securities LLC, 55 East 52nd Street, New York, NY 10055
Registrants’ telephone number, including area code: (800) 626-1960
Date of fiscal year end: 03/31/2015
Date of reporting period: 03/31/2015
Item 1 – Report to Stockholders
ANNUAL REPORT | ![]() |
Not FDIC Insured • May Lose Value • No Bank Guarantee |
Table of Contents
Page | |
The Markets in Review | 3 |
Annual Report: | |
Money Market Overview | 4 |
Fund Information | 5 |
Disclosure of Expenses | 5 |
Fund Financial Statements: | |
Statements of Assets and Liabilities | 6 |
Statements of Operations | 7 |
Statements of Changes in Net Assets | 8 |
Fund Financial Highlights | 9 |
Fund Notes to Financial Statements | 11 |
Fund Report of Independent Registered Public Accounting Firm | 13 |
Fund Important Tax Information | 13 |
Master LLC Portfolio Information | 14 |
Master LLC Financial Statements: | |
Schedules of Investments | 15 |
Statements of Assets and Liabilities | 18 |
Statements of Operations | 19 |
Statements of Changes in Net Assets | 19 |
Master LLC Financial Highlights | 20 |
Master LLC Notes to Financial Statements | 21 |
Master LLC Report of Independent Registered Public Accounting Firm | 24 |
Officers and Directors | 25 |
Additional Information | 28 |
2 | ANNUAL REPORT | MARCH 31, 2015 |
The Markets in Review |
Dear Shareholder,
![](https://capedge.com/proxy/N-CSR/0000891092-15-004811/robkapito_sig.jpg)
President, BlackRock Advisors, LLC
![](https://capedge.com/proxy/N-CSR/0000891092-15-004811/robkapito_photo.jpg)
Total Returns as of March 31, 2015
6-month | 12-month | |||||||||
U.S. large cap equities (S&P 500® Index) | 5.93 | % | 12.73 | % | ||||||
U.S. small cap equities (Russell 2000® Index) | 14.46 | 8.21 | ||||||||
International equities (MSCI Europe, Australasia, Far East Index) | 1.13 | (0.92 | ) | |||||||
Emerging market equities (MSCI Emerging Markets Index) | (2.37 | ) | 0.44 | |||||||
3-month Treasury bills (BofA Merrill Lynch 3-Month U.S. Treasury Bill Index) | 0.01 | 0.03 | ||||||||
U.S. Treasury securities (BofA Merrill Lynch 10-Year U.S. Treasury Index) | 6.25 | 9.88 | ||||||||
U.S. investment grade bonds (Barclays U.S. Aggregate Bond Index) | 3.43 | 5.72 | ||||||||
Tax-exempt municipal bonds (S&P Municipal Bond Index) | 2.29 | 6.60 | ||||||||
U.S. high yield bonds (Barclays U.S. Corporate High Yield 2% Issuer Capped Index) | 1.50 | 2.00 |
THIS PAGE NOT PART OF YOUR FUND REPORT | 3 |
Money Market Overview | |
For the 12-Month Period Ended March 31, 2015
4 | ANNUAL REPORT | MARCH 31, 2015 |
Fund Information as of March 31, 2015 | |
BIF Government Securities Fund
| 7-Day SEC Yield | | 7-Day Yield | |||||||
BIF Government Securities Fund | 0.00 | % | 0.00 | % |
BIF Treasury Fund
| 7-Day SEC Yield | | 7-Day Yield | |||||||
BIF Treasury Fund | 0.00 | % | 0.00 | % |
The 7-Day SEC Yields may differ from the 7-Day Yields shown above due to the fact that the 7-Day SEC Yields exclude distributed capital gains.
Expense Examples
Actual | Hypothetical2 | |||||||||||||||||||||||||||
| Beginning Account Value October 1, 2014 | | Ending Account Value March 31, 2015 | | Expenses Paid During the Period1 | | Beginning Account Value October 1, 2014 | | Ending Account Value March 31, 2015 | | Expenses Paid During the Period1 | | Annualized Expense Ratio | |||||||||||||||
BIF Government Securities Fund | $ | 1,000.00 | $ | 1,000.00 | $ | 0.35 | $ | 1,000.00 | $ | 1,024.58 | $ | 0.35 | 0.07 | % | ||||||||||||||
BIF Treasury Fund | $ | 1,000.00 | $ | 1,000.00 | $ | 0.20 | $ | 1,000.00 | $ | 1,024.73 | $ | 0.20 | 0.04 | % |
1 | For each Fund, expenses are equal to the annualized net expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period shown). Because the Funds invest significantly in their respective Master LLC, the expense examples reflect the net expenses of both the Funds and the Master LLCs in which they invest. |
2 | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
ANNUAL REPORT | MARCH 31, 2015 | 5 |
Statements of Assets and Liabilities |
March 31, 2015 | BIF Government Securities Fund | BIF Treasury Fund | |||||||||
Assets | |||||||||||
Investments at value — Master Government Securities LLC and Master Treasury LLC (each a “Master LLC” or collectively, the “Master LLCs”), respectively1 | $ | 190,590,061 | $ | 1,177,573,606 | |||||||
Prepaid expenses | 32,473 | 15,499 | |||||||||
Total assets | 190,622,534 | 1,177,589,105 | |||||||||
Liabilities | |||||||||||
Administration fees payable | — | 16,110 | |||||||||
Officer’s fees payable | 106 | 335 | |||||||||
Other accrued expenses payable | 9,023 | 17,425 | |||||||||
Total liabilities | 9,129 | 33,870 | |||||||||
Net Assets | $ | 190,613,405 | $ | 1,177,555,235 | |||||||
Net Assets Consist of | |||||||||||
Paid-in capital2 | $ | 190,610,780 | $ | 1,177,534,447 | |||||||
Undistributed net investment income | 104 | 165 | |||||||||
Accumulated net realized gain allocated from the Master LLC | 2,521 | 20,623 | |||||||||
Net Assets, $1.00 net asset value per share | $ | 190,613,405 | $ | 1,177,555,235 | |||||||
1 Investments at cost — from the applicable Master LLC | $ | 190,590,061 | $ | 1,177,573,606 | |||||||
2 Shares outstanding, unlimited number of shares authorized, $0.10 par value | 190,610,782 | 1,177,534,449 |
6 | ANNUAL REPORT | MARCH 31, 2015 |
Statements of Operations |
Year Ended March 31, 2015 | BIF Government Securities Fund | BIF Treasury Fund | |||||||||
Investment Income | |||||||||||
Net investment income allocated from the applicable Master LLC: | |||||||||||
Interest | $ | 198,030 | $ | 444,684 | |||||||
Expenses | (874,276 | ) | (2,105,090 | ) | |||||||
Fees waived | 749,660 | 1,905,051 | |||||||||
Total income | 73,414 | 244,645 | |||||||||
Fund Expenses | |||||||||||
Administration | 783,833 | 2,809,948 | |||||||||
Service and distribution | 390,330 | 1,401,122 | |||||||||
Registration | 68,602 | 29,640 | |||||||||
Professional | 35,057 | 38,650 | |||||||||
Transfer agent | 20,116 | 66,828 | |||||||||
Printing | 12,719 | 14,647 | |||||||||
Officer | 211 | 577 | |||||||||
Miscellaneous | 11,016 | 13,716 | |||||||||
Total expenses | 1,321,884 | 4,375,128 | |||||||||
Less administration fees waived | (782,482 | ) | (2,723,806 | ) | |||||||
Less service and distribution fees waived | (390,330 | ) | (1,401,122 | ) | |||||||
Less other expenses waived and/or reimbursed by the administrator | (75,772 | ) | (5,965 | ) | |||||||
Total expenses after fees waived and/or reimbursed | 73,300 | 244,235 | |||||||||
Net investment income | 114 | 410 | |||||||||
Realized Gain Allocation from the applicable Master LLC | |||||||||||
Net realized gain from investments | 10,394 | 39,027 | |||||||||
Net Increase in Net Assets Resulting from Operations | $ | 10,508 | $ | 39,437 |
ANNUAL REPORT | MARCH 31, 2015 | 7 |
Statements of Changes in Net Assets |
BIF Government Securities Fund | | BIF Treasury Fund | | ||||||||||||||||||||
Year Ended March 31, | | Year Ended March 31, | | ||||||||||||||||||||
Increase (Decrease) in Net Assets: | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Operations | |||||||||||||||||||||||
Net investment income | $ | 114 | $ | 138 | $ | 410 | $ | 467 | |||||||||||||||
Net realized gain | 10,394 | 11,271 | 39,027 | 89,072 | |||||||||||||||||||
Net increase in net assets resulting from operations | 10,508 | 11,409 | 39,437 | 89,539 | |||||||||||||||||||
Distributions to Shareholders From1 | |||||||||||||||||||||||
Net investment income | (114 | ) | (129 | ) | (410 | ) | (467 | ) | |||||||||||||||
Net realized gain | (10,534 | ) | (18,273 | ) | (43,855 | ) | (85,718 | ) | |||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (10,648 | ) | (18,402 | ) | (44,265 | ) | (86,185 | ) | |||||||||||||||
Capital Share Transactions | |||||||||||||||||||||||
Net proceeds from sale of shares | 1,207,974,931 | 1,623,103,742 | 2,261,047,523 | 3,058,576,700 | |||||||||||||||||||
Reinvestment of distributions | 10,597 | 18,339 | 44,061 | 85,969 | |||||||||||||||||||
Cost of shares redeemed | (1,397,451,859 | ) | (1,553,153,101 | ) | (2,231,803,519 | ) | (3,491,194,833 | ) | |||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (189,466,331 | ) | 69,968,980 | 29,288,065 | (432,532,164 | ) | |||||||||||||||||
Net Assets | |||||||||||||||||||||||
Total increase (decrease) in net assets | (189,466,471 | ) | 69,961,987 | 29,283,237 | (432,528,810 | ) | |||||||||||||||||
Beginning of year | 380,079,876 | 310,117,889 | 1,148,271,998 | 1,580,800,808 | |||||||||||||||||||
End of year | $ | 190,613,405 | $ | 380,079,876 | $ | 1,177,555,235 | $ | 1,148,271,998 | |||||||||||||||
Undistributed net investment income, end of year | $ | 104 | $ | 104 | $ | 165 | $ | 165 |
1 | Distributions for annual periods determined in accordance with federal income tax regulations. |
8 | ANNUAL REPORT | MARCH 31, 2015 |
Financial Highlights | BIF Government Securities Fund |
Year Ended March 31, | | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Net investment income | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | |||||||||||||
Net realized gain | 0.0000 | 1 | 0.0001 | 0.0000 | 1 | 0.0000 | 1 | 0.0001 | |||||||||||||||
Net increase from investment operations | 0.0000 | 0.0001 | 0.0000 | 0.0000 | 0.0001 | ||||||||||||||||||
Distributions from:2 | |||||||||||||||||||||||
Net investment income | (0.0000 | )3 | (0.0000 | )3 | (0.0000 | )3 | (0.0000 | )3 | (0.0000 | )3 | |||||||||||||
Net realized gain | (0.0000 | )3 | (0.0001 | ) | (0.0000 | )3 | (0.0000 | )3 | (0.0001 | ) | |||||||||||||
Total distributions | (0.0000 | ) | (0.0001 | ) | (0.0000 | ) | (0.0000 | ) | (0.0001 | ) | |||||||||||||
Net asset value, end of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total Return4 | |||||||||||||||||||||||
Based on net asset value | 0.00% | 0.01% | 0.00% | 0.00% | 0.01% | ||||||||||||||||||
Ratios to Average Net Assets5 | |||||||||||||||||||||||
Total expenses6 | 0.46% | 0.45% | 0.50% | 0.47% | 0.49% | ||||||||||||||||||
Total expenses after fees waived and/or reimbursed6 | 0.06% | 0.07% | 0.14% | 0.07% | 0.18% | ||||||||||||||||||
Net investment income6 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||
Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000) | $ | 190,613 | $ | 380,080 | $ | 310,118 | $ | 332,743 | $ | 208,517 |
1 | Amount is less than $0.00005 per share. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Amount is greater than $(0.00005) per share. |
4 | Where applicable, assumes the reinvestment of distributions. |
5 | Includes the Fund’s share of the Master LLC’s allocated expenses and/or net investment income. |
6 | Includes the Fund’s share of the Master LLC’s allocated fees waived of 0.24%, 0.23%, 0.20%, 0.24% and 0.22%, for the years ended March 31, 2015, March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011, respectively. |
ANNUAL REPORT | MARCH 31, 2015 | 9 |
Financial Highlights | BIF Treasury Fund |
Year Ended March 31, | | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Net investment income | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | |||||||||||||
Net realized gain | 0.0000 | 1 | 0.0001 | 0.0000 | 1 | 0.0000 | 1 | 0.0001 | |||||||||||||||
Net increase from investment operations | 0.0000 | 0.0001 | 0.0000 | 0.0000 | 0.0001 | ||||||||||||||||||
Distributions from:2 | |||||||||||||||||||||||
Net investment income | (0.0000 | )3 | (0.0000 | )3 | (0.0000 | )3 | (0.0000 | )3 | (0.0000 | )3 | |||||||||||||
Net realized gain | (0.0000 | )3 | (0.0001 | ) | (0.0000 | )3 | (0.0000 | )3 | (0.0001 | ) | |||||||||||||
Total distributions | (0.0000 | ) | (0.0001 | ) | (0.0000 | ) | (0.0000 | ) | (0.0001 | ) | |||||||||||||
Net asset value, end of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total Return4 | |||||||||||||||||||||||
Based on net asset value | 0.00% | 0.01% | 0.00% | 0.00% | 0.01% | ||||||||||||||||||
Ratios to Average Net Assets5 | |||||||||||||||||||||||
Total expenses6 | 0.41% | 0.42% | 0.45% | 0.40% | 0.49% | ||||||||||||||||||
Total expenses after fees waived and/or reimbursed6 | 0.04% | 0.06% | 0.10% | 0.05% | 0.16% | ||||||||||||||||||
Net investment income6 | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||
Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000) | $ | 1,177,555 | $ | 1,148,272 | $ | 1,580,801 | $ | 1,886,057 | $ | 1,625,719 |
1 | Amount is less than $0.00005 per share. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Amount is greater than $(0.00005) per share. |
4 | Where applicable, assumes the reinvestment of distributions. |
5 | Includes the Fund’s share of the Master LLC’s allocated expenses and/or net investment income. |
6 | Includes the Fund’s share of the Master LLC’s allocated fees waived of 0.17%, 0.14%, 0.11%, 0.15% and 0.08% for the years ended March 31, 2015, March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011, respectively. |
10 | ANNUAL REPORT | MARCH 31, 2015 |
Notes to Financial Statements | BIF Government Securities Fund and BIF Treasury Fund |
Fund Name | | Herein Referred To As | | Diversification Classification | ||||
BIF Government Securities Fund | BIF Government Securities | Diversified | ||||||
BIF Treasury Fund | BIF Treasury | Diversified |
ANNUAL REPORT | MARCH 31, 2015 | 11 |
Notes to Financial Statements (concluded) | BIF Government Securities Fund and BIF Treasury Fund |
| | BIF Government Securities | | BIF Treasury | ||||||||||
Ordinary income | 3/31/15 | $ | 10,648 | $ | 44,265 | |||||||||
3/31/14 | $ | 18,402 | $ | 86,185 | ||||||||||
| BIF Government Securities | | BIF Treasury | |||||||
Undistributed ordinary income | $ | 2,625 | $ | 20,788 | ||||||
12 | ANNUAL REPORT | MARCH 31, 2015 |
Report of Independent Registered Public Accounting Firm | BIF Government Securities Fund and BIF Treasury Fund |
Boston, Massachusetts
May 22, 2015
Important Tax Information (Unaudited)
| BIF Government Securities Fund | | BIF Treasury Fund | |||||||
Federal Obligation Interest1 | 0.71 | % | 0.92 | % | ||||||
Interest-Related Dividends and Qualified Short-Term Capital Gains for Non-U.S. Residents2 | 100.00 | % | 100.00 | % |
1 | The law varies in each state as to whether and what percentage of dividend income attributable to federal obligations is exempt from state income tax. We recommend that you consult your tax advisor to determine if any portion of the dividends you received is exempt from state income taxes. |
2 | Represents the portion of the taxable ordinary income dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations. |
ANNUAL REPORT | MARCH 31, 2015 | 13 |
Master LLC Portfolio Information as of March 31, 2015 | Master Government Securities LLC and Master Treasury LLC |
Portfolio Composition
Master Government Securities LLC | | Percent of Net Assets | ||||
U.S. Treasury Obligations | 62 | % | ||||
Repurchase Agreements | 40 | |||||
Liabilities in Excess of Other Assets | (2 | ) | ||||
Total | 100 | % |
Master Treasury LLC | | Percent of Net Assets | ||||
U.S. Treasury Obligations | 112 | % | ||||
Liabilities in Excess of Other Assets | (12 | ) | ||||
Total | 100 | % |
14 | ANNUAL REPORT | MARCH 31, 2015 |
Schedule of Investments March 31, 2015 | Master Government Securities LLC (Percentages shown are based on Net Assets) |
U.S. Treasury Obligations | | Par (000) | | Value | |||||||
U.S. Treasury Bills (a): | |||||||||||
0.02%, 4/23/15 | $ | 5,000 | $ | 4,999,932 | |||||||
0.06%, 5/07/15 | 15,000 | 14,999,137 | |||||||||
0.06%, 5/14/15 | 25,000 | 24,998,167 | |||||||||
0.07%, 5/21/15 | 10,000 | 9,999,037 | |||||||||
0.07%, 5/28/15 | 13,000 | 12,998,534 | |||||||||
0.13%, 7/02/15 | 5,000 | 4,998,320 | |||||||||
0.13%, 7/09/15 | 10,000 | 9,996,528 | |||||||||
0.09%, 7/16/15 | 5,000 | 4,998,707 | |||||||||
0.08%, 7/23/15 | 20,000 | 19,995,092 | |||||||||
0.09%, 8/13/15 | 10,000 | 9,996,625 | |||||||||
0.07%, 8/20/15 | 10,000 | 9,997,199 | |||||||||
0.07%, 8/27/15 | 8,000 | 7,997,848 | |||||||||
0.10%, 9/24/15 | 15,000 | 14,992,536 | |||||||||
0.14%, 10/01/15 | 12,840 | 12,831,237 | |||||||||
U.S. Treasury Notes: | |||||||||||
0.13%, 4/30/15 | 8,000 | 8,000,195 | |||||||||
0.25%, 5/15/15 | 8,000 | 8,001,635 | |||||||||
0.25%, 7/15/15 | 10,000 | 10,005,552 | |||||||||
1.75%, 7/31/15 | 10,000 | 10,056,073 | |||||||||
1.25%, 8/31/15 | 4,535 | 4,555,965 | |||||||||
0.08%, 1/31/16 (b) | 6,625 | 6,623,650 | |||||||||
0.10%, 4/30/16 (b) | 13,165 | 13,165,015 | |||||||||
0.11%, 7/31/16 (b) | 12,407 | 12,410,705 | |||||||||
0.09%, 10/31/16 (b) | 15,781 | 15,777,746 | |||||||||
0.12%, 1/31/17 (b) | 2,948 | 2,948,110 | |||||||||
Total U.S. Treasury Obligations (Cost — $255,343,545) — 61.6% | 255,343,545 | ||||||||||
Repurchase Agreements | |||||||||||
Bank of Montreal, 0.10%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $17,000,047, collateralized by various U.S. Treasury Obligations, 0.38% to 8.75%, due 6/15/15 to 01/31/21, original par and fair values of $16,870,458 and $17,340,096, respectively) | 17,000 | 17,000,000 | |||||||||
Total Value of Bank of Montreal (collateral value of $17,340,096) | 17,000,000 | ||||||||||
Barclays Capital, Inc., 0.10%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $15,000,042, collateralized by various U.S. Treasury Obligations, 0.00%, due 5/15/34 to 8/15/43, original par and fair values of $28,083,106 and $15,300,054, respectively) | 15,000 | 15,000,000 | |||||||||
Total Value of Barclays Capital, Inc. (collateral value of $15,300,054) | 15,000,000 | ||||||||||
BNP Paribas Securities Corp., 0.10%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $3,000,008, collateralized by various U.S. Treasury Obligations, 0.00%, due 8/15/19 to 2/15/44, original par and fair values of $6,423,200 and $3,060,040, respectively) | 3,000 | 3,000,000 |
Repurchase Agreements | | Par (000) | | Value | ||||||
BNP Paribas Securities Corp., 0.06%, 4/02/15 (Purchased on 3/27/15 to be repurchased at $15,000,150, collateralized by various U.S. Treasury Obligations, 0.00% to 0.50%, due 6/15/16 to 8/15/44, original par and fair values of $23,832,975 and $15,300,000, respectively) | $ | 15,000 | $ | 15,000,000 | ||||||
Total Value of BNP Paribas Securities Corp. (collateral value of $18,360,040) | 18,000,000 | |||||||||
HSBC Securities (USA), Inc., 0.10%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $16,000,044, collateralized by a U.S. Treasury Obligation, 4.75%, due 2/15/37, original par and fair value of $11,575,000 and $16,321,600, respectively) | 16,000 | 16,000,000 | ||||||||
Total Value of HSBC Securities (USA), Inc. (collateral value of $16,321,600) | 16,000,000 | |||||||||
J.P. Morgan Securities LLC, 0.11%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $15,000,046, collateralized by a U.S. Treasury Obligation, 1.63%, due 7/31/19, original par and fair value of $15,065,000 and $15,301,497, respectively) | 15,000 | 15,000,000 | ||||||||
Total Value of J.P. Morgan Securities LLC (collateral value of 15,301,497) | 15,000,000 | |||||||||
Merrill Lynch, Pierce, Fenner & Smith, Inc., 0.12%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $15,000,050, collateralized by a U.S. Treasury Obligation, 0.63%, due 10/15/16, original par and fair value of $15,225,500 and $15,300,081, respectively) | 15,000 | 15,000,000 | ||||||||
Total Value of Merrill Lynch, Pierce, Fenner & Smith, Inc. (collateral value of $15,300,081) | 15,000,000 | |||||||||
Morgan Stanley & Co. LLC, 0.10%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $11,663,032, collateralized by a U.S. Treasury Obligation, 0.63%, due 8/15/16, original par and fair value of $11,859,500 and $11,896,308, respectively) | 11,663 | 11,663,000 | ||||||||
Total Value of Morgan Stanley & Co. LLC (collateral value of $11,896,308) | 11,663,000 | |||||||||
RBC Capital Markets LLC, 0.10%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $15,000,042, collateralized by various U.S. Treasury Obligations, 1.63% to 3.63%, due 8/31/19 to 8/15/43, original par and fair values of $14,222,200 and $15,300,013, respectively) | 15,000 | 15,000,000 | ||||||||
Total Value of RBC Capital Markets LLC (collateral value of $15,300,013) | 15,000,000 | |||||||||
SG Americas Securities LLC, 0.14%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $16,000,062, collateralized by various U.S. Treasury Obligations, 0.13% to 3.88%, due 12/31/15 to 4/15/29, original par and fair values of $14,578,400 and $16,320,037, respectively) | 16,000 | 16,000,000 |
ANNUAL REPORT | MARCH 31, 2015 | 15 |
Schedule of Investments (concluded) | Master Government Securities LLC (Percentages shown are based on Net Assets) |
Repurchase Agreements | | Par (000) | | Value | ||||||
Total Value of SG Americas Securities LLC (collateral value of $16,320,037) | $ | 16,000,000 | ||||||||
TD Securities (USA) LLC, 0.11%, 4/01/15 (Purchased on 3/31/15 to be repurchased at $14,000,043, collateralized by various U.S. Treasury Obligations, 0.00% to 1.75%, due 3/31/22 to 2/15/44, original par and fair values of $25,064,300 and $14,280,059, respectively) | $ | 14,000 | 14,000,000 | |||||||
Total Value of TD Securities (collateral value of $14,280,059) | 14,000,000 |
Repurchase Agreements | | Par (000) | | Value | ||||||
Wells Fargo Securities LLC, 0.12%, 4/01/15 (Purchased on 3/13/15 to be repurchased at 15,000,950, collateralized by a U.S. Treasury Obligation, 2.38%, due 8/15/24, original par and fair value of $14,721,600 and $15,300,052, respectively) (b) | $ | 15,000 | $ | 15,000,000 | ||||||
Total Value of Wells Fargo Securities LLC (collateral value of $15,300,052) | 15,000,000 | |||||||||
Total Repurchase Agreements (Cost — $167,663,000) — 40.5% | 167,663,000 | |||||||||
Total Investments (Cost — $423,006,545*) — 102.1% | 423,006,545 | |||||||||
Liabilities in Excess of Other Assets — (2.1)% | (8,550,154 | ) | ||||||||
Net Assets — 100.0% | $ | 414,456,391 |
Notes to Schedule of Investments
* | Cost for federal income tax purposes. | |||||
(a) | Rates shown are discount rates or a range of discount rates paid at the time of purchase. | |||||
(b) | Variable rate security. Rate shown is as of report date. | |||||
• | Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows: |
• | Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master LLC has the ability to access | |||
• | Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) | |||
• | Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including Master LLC ‘s own assumptions used in determining the fair value of investments) |
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Master LLC’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Master LLC’s policy regarding valuation of investments, refer to Note 2 of the Notes to Financial Statements. | ||||
As of March 31, 2015, the following table summarizes the Master LLC’s investments categorized in the disclosure hierarchy: |
| | Level 1 | | Level 2 | | Level 3 | | Total | ||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Total investments 1 | — | $ | 423,006,545 | — | $ | 423,006,545 |
The Master LLC may hold assets in which the fair value approximates the carrying amount for financial statement purposes. As of March 31, 2015, cash of $124,148 is categorized as Level 1 within the disclosure hierarchy. | ||||
During the year ended March 31, 2015, there were no transfers between levels. |
16 | ANNUAL REPORT | MARCH 31, 2015 |
Schedule of Investments March 31, 2015 | Master Treasury LLC (Percentages shown are based on Net Assets) |
U.S. Treasury Obligations | | Par (000) | | Value | ||||||
U.S. Treasury Bills (a): | ||||||||||
0.01% - 0.04%, 4/02/15 | $ | 246,097 | $ | 246,096,888 | ||||||
0.01% - 0.03%, 4/09/15 | 594,163 | 594,160,528 | ||||||||
0.03%, 4/16/15 | 88,000 | 87,998,826 | ||||||||
0.01% - 0.02%, 4/23/15 | 93,000 | 92,999,006 | ||||||||
0.05%, 4/30/15 | 178,000 | 177,993,077 | ||||||||
0.02%, 5/07/15 | 19,515 | 19,514,644 | ||||||||
0.02%, 5/28/15 | 136,000 | 135,995,617 | ||||||||
0.03%, 6/18/15 | 50,000 | 49,996,434 | ||||||||
0.03% - 0.13%, 7/02/15 | 85,000 | 84,990,007 | ||||||||
0.09%, 7/16/15 | 16,000 | 15,995,839 | ||||||||
0.08%, 7/23/15 | 67,730 | 67,713,699 | ||||||||
0.08%, 7/30/15 | 14,714 | 14,710,291 | ||||||||
0.07% - 0.08%, 8/06/15 | 29,096 | 29,088,498 | ||||||||
0.09%, 8/13/15 | 55,000 | 54,981,437 | ||||||||
0.07%, 8/20/15 | 50,000 | 49,985,997 | ||||||||
0.07% - 0.09%, 8/27/15 | 48,275 | 48,259,828 | ||||||||
0.08% - 0.11%, 9/03/15 | 60,685 | 60,663,346 | ||||||||
0.11%, 9/17/15 | 12,000 | 11,994,050 | ||||||||
U.S. Treasury Obligations | | Par (000) | | Value | ||||||
U.S. Treasury Bills (a) (concluded): | ||||||||||
0.10% - 0.12%, 9/24/15 | $ | 30,775 | $ | 30,758,134 | ||||||
0.14%, 10/01/15 | 14,100 | 14,090,377 | ||||||||
U.S. Treasury Notes: | ||||||||||
4.13%, 5/15/15 | 40,000 | 40,202,814 | ||||||||
0.25%, 7/15/15 | 30,000 | 30,016,656 | ||||||||
0.25%, 8/15/15 | 27,190 | 27,206,285 | ||||||||
0.25%, 10/31/15 | 20,000 | 20,007,553 | ||||||||
0.08%, 1/31/16 (b) | 18,736 | 18,732,374 | ||||||||
0.10%, 4/30/16 (b) | 37,044 | 37,044,040 | ||||||||
0.11%, 7/31/16 (b) | 38,478 | 38,489,938 | ||||||||
0.09%, 10/31/16 (b) | 63,861 | 63,843,277 | ||||||||
0.12%, 1/31/17 (b) | 35,348 | 35,349,311 | ||||||||
Total Investments (Cost — $2,198,878,771*) — 112.3% | 2,198,878,771 | |||||||||
Liabilities in Excess of Other Assets — (12.3)% | (240,331,646 | ) | ||||||||
Net Assets — 100.0% | $ | 1,958,547,125 | ||||||||
Notes to Schedule of Investments
* | Cost for federal income tax purposes. | |||||
(a) | Rates shown are discount rates or a range of discount rates paid at the time of purchase. | |||||
(b) | Variable rate security. Rate shown is as of report date. | |||||
• | Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows: |
• | Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Master LLC has the ability to access | |||
• | Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) | |||
• | Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Master LLC’s own assumptions used in determining the fair value of investments) |
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Master LLC’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Master LLC’s policy regarding valuation of investments, refer to Note 2 of the Notes to Financial Statements. | ||||
As of March 31, 2015, the following table summarizes the Master LLC’s investments categorized in the disclosure hierarchy: |
| | Level 1 | | Level 2 | | Level 3 | | Total | ||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
U.S. Treasury Obligations | — | $ | 2,198,878,771 | — | $ | 2,198,878,771 |
The Master LLC may hold assets in which the fair value approximates the carrying amount for financial statement purposes. As of March 31, 2015, cash of $12,072,335 is categorized as Level 1 within the disclosure hierarchy. | ||||
During the year ended March 31, 2015, there were no transfers between levels. |
ANNUAL REPORT | MARCH 31, 2015 | 17 |
Statements of Assets and Liabilities |
March 31, 2015 | Master Government Securities LLC | Master Treasury LLC | |||||||||
Assets | |||||||||||
Investments at value — unaffiliated1 | $ | 255,343,545 | $ | 2,198,878,771 | |||||||
Repurchase agreements, at value — unaffiliated2 | 167,663,000 | — | |||||||||
Cash | 124,148 | 12,072,335 | |||||||||
Investments sold receivable | 2,844,132 | 14,120,515 | |||||||||
Contributions receivable from investors | 1,348,446 | — | |||||||||
Interest receivable | 57,075 | 691,053 | |||||||||
Receivable from Manager | 438 | — | |||||||||
Prepaid expenses | 2,151 | 6,984 | |||||||||
Total assets | 427,382,935 | 2,225,769,658 | |||||||||
Liabilities | |||||||||||
Investments purchased payable | 12,831,237 | 267,076,819 | |||||||||
Directors’ fees payable | 4,148 | 13,496 | |||||||||
Other affiliates payable | 3,168 | 10,035 | |||||||||
Other accrued expenses payable | 87,991 | 122,183 | |||||||||
Total liabilities | 12,926,544 | 267,222,533 | |||||||||
Net Assets | $ | 414,456,391 | $ | 1,958,547,125 | |||||||
Net Assets Consist of | |||||||||||
Investors’ capital | $ | 414,456,391 | $ | 1,958,547,125 | |||||||
1 Investments at cost — unaffiliated | $ | 255,343,545 | $ | 2,198,878,771 | |||||||
2 Repurchase agreements at cost — unaffiliated | $ | 167,663,000 | — |
18 | ANNUAL REPORT | MARCH 31, 2015 |
Statements of Operations |
Year Ended March 31, 2015 | Master Government Securities LLC | Master Treasury LLC | |||||||||
Investment Income | |||||||||||
Interest | $ | 352,403 | $ | 767,315 | |||||||
Expenses | |||||||||||
Investment advisory | 1,321,588 | 3,309,705 | |||||||||
Custodian | 66,814 | 52,815 | |||||||||
Professional | 62,321 | 57,655 | |||||||||
Accounting services | 59,118 | 137,250 | |||||||||
Directors | 17,938 | 55,651 | |||||||||
Printing | 9,747 | 12,485 | |||||||||
Miscellaneous | 11,871 | 20,621 | |||||||||
Total expenses | 1,549,397 | 3,646,182 | |||||||||
Less fees waived by the Manager | (1,321,508 | ) | (3,301,413 | ) | |||||||
Less expenses reimbursed by the Manager | (2,117 | ) | — | ||||||||
Less fees paid indirectly | (225 | ) | (121 | ) | |||||||
Total expenses after fees waived and/or reimbursed and paid indirectly | 225,547 | 344,648 | |||||||||
Net investment income | 126,856 | 422,667 | |||||||||
Realized Gain | |||||||||||
Net realized gain from investments | 17,400 | 67,075 | |||||||||
Net Increase in Net Assets Resulting from Operations | $ | 144,256 | $ | 489,742 |
Master Government Securities LLC | Master Treasury LLC | | |||||||||||||||||||||
Year Ended March 31, | Year Ended March 31, | | |||||||||||||||||||||
Increase (Decrease) in Net Assets: | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Operations | |||||||||||||||||||||||
Net investment income | $ | 126,856 | $ | 175,864 | $ | 422,667 | $ | 522,103 | |||||||||||||||
Net realized gain | 17,400 | 17,538 | 67,075 | 141,266 | |||||||||||||||||||
Net increase in net assets resulting from operations | 144,256 | 193,402 | 489,742 | 663,369 | |||||||||||||||||||
Capital Transactions | |||||||||||||||||||||||
Proceeds from contributions | 3,021,057,792 | 3,661,948,379 | 7,988,911,024 | 9,499,699,101 | |||||||||||||||||||
Value of withdrawals | (3,246,909,425 | ) | (3,523,476,939 | ) | (7,905,358,754 | ) | (10,114,167,781 | ) | |||||||||||||||
Net increase (decrease) in net assets derived from capital transactions | (225,851,633 | ) | 138,471,440 | 83,552,270 | (614,468,680 | ) | |||||||||||||||||
Net Assets | |||||||||||||||||||||||
Total increase (decrease) in net assets | (225,707,377 | ) | 138,664,842 | 84,042,012 | (613,805,311 | ) | |||||||||||||||||
Beginning of year | 640,163,768 | 501,498,926 | 1,874,505,113 | 2,488,310,424 | |||||||||||||||||||
End of year | $ | 414,456,391 | $ | 640,163,768 | $ | 1,958,547,125 | $ | 1,874,505,113 | |||||||||||||||
ANNUAL REPORT | MARCH 31, 2015 | 19 |
Financial Highlights | Master Government Securities LLC |
Year Ended March 31, | | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||
Total Return | |||||||||||||||||||||||
Total return | 0.02% | 0.04% | 0.06% | 0.04% | 0.13% | ||||||||||||||||||
Ratios to Average Net Assets | |||||||||||||||||||||||
Total expenses | 0.28% | 0.27% | 0.27% | 0.27% | 0.27% | ||||||||||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly | 0.04% | 0.04% | 0.08% | 0.03% | 0.06% | ||||||||||||||||||
Net investment income | 0.02% | 0.03% | 0.06% | 0.04% | 0.13% | ||||||||||||||||||
Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000) | $ | 414,456 | $ | 640,164 | $ | 501,499 | $ | 743,147 | $ | 496,689 |
Master Treasury LLC |
Year Ended March 31, | | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||
Total Return | |||||||||||||||||||||||
Total return | 0.02% | 0.03% | 0.03% | 0.03% | 0.08% | ||||||||||||||||||
Ratios to Average Net Assets | |||||||||||||||||||||||
Total expenses | 0.19% | 0.18% | 0.18% | 0.17% | 0.18% | ||||||||||||||||||
Total expenses after fees waived and paid indirectly | 0.02% | 0.04% | 0.07% | 0.02% | 0.09% | ||||||||||||||||||
Net investment income | 0.02% | 0.03% | 0.03% | 0.03% | 0.06% | ||||||||||||||||||
Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000) | $ | 1,958,547 | $ | 1,874,505 | $ | 2,488,310 | $ | 3,146,576 | $ | 2,626,224 |
20 | ANNUAL REPORT | MARCH 31, 2015 |
Notes to Financial Statements | Master Government Securities LLC and Master Treasury LLC |
ANNUAL REPORT | MARCH 31, 2015 | 21 |
Notes to Financial Statements (continued) | Master Government Securities LLC and Master Treasury LLC |
Average Daily Net Assets | | Investment Advisory Fee | ||||
First $500 Million | 0.250 | % | ||||
$500 Million — $1 Billion | 0.175 | % | ||||
Greater than $1 Billion | 0.125 | % |
| | Reimbursement To Manager | ||||
Master Government Securities LLC | $ | 6,996 | ||||
Master Treasury LLC | $ | 18,547 |
22 | ANNUAL REPORT | MARCH 31, 2015 |
Notes to Financial Statements (concluded) | Master Government Securities LLC and Master Treasury LLC |
counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Master LLCs’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Master LLCs.
ANNUAL REPORT | MARCH 31, 2015 | 23 |
Report of Independent Registered Public Accounting Firm | Master Government Securities LLC and Master Treasury LLC |
Boston, Massachusetts
May 22, 2015
24 | ANNUAL REPORT | MARCH 31, 2015 |
Officers and Directors |
Name, Address1 and Year of Birth | Position(s) Held with Funds/ Master LLCs | Length of Time Served as a Director3 | Principal Occupation(s) During Past Five Years | Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen | Public Directorships | ||||||||
Independent Directors2 | |||||||||||||
Rodney D. Johnson 1941 | Chair of the Board and Director | Since 2007 | President, Fairmount Capital Advisors, Inc. from 1987 to 2013; Member of the Archdiocesan Investment Committee of the Archdiocese of Philadelphia from 2004 to 2012; Director, The Committee of Seventy (civic) from 2006 to 2012; Director, Fox Chase Cancer Center from 2004 to 2011. | 33 RICs consisting of 156 Portfolios | None | ||||||||
David O. Beim 1940 | Director | Since 2007 | Professor of Professional Practice at the Columbia University Graduate School of Business since 1991; Trustee, Phillips Exeter Academy from 2002 to 2012; Chairman, Wave Hill, Inc. (public garden and cultural center) from 1990 to 2006. | 33 RICs consisting of 156 Portfolios | None | ||||||||
Collette Chilton 1958 | Director | Since 2015 | Chief Investment Officer, Williams College since 2006; Chief Investment Officer, Lucent Asset Management Corporation from 1998 to 2006. | 33 RICs consisting of 156 Portfolios | None | ||||||||
Frank J. Fabozzi 1948 | Director | Since 2014 | Editor of and Consultant for The Journal of Portfolio Management since 2006; Professor of Finance, EDHEC Business School since 2011; Visiting Professor, Princeton University from 2013 to 2014; Professor in the Practice of Finance and Becton Fellow, Yale University School of Management from 2006 to 2011. | 109 RICs consisting of 232 Portfolios | None | ||||||||
Dr. Matina S. Horner 1939 | Director | Since 2007 | Executive Vice President, Teachers Insurance and Annuity Association and College Retirement Equities Fund from 1989 to 2003. | 33 RICs consisting of 156 Portfolios | NSTAR (electric and gas utility) | ||||||||
Herbert I. London 1939 | Director | Since 2007 | Professor Emeritus, New York University since 2005; President, London Center for Policy Research since 2012; John M. Olin Professor of Humanities, New York University from 1993 to 2005 and Professor thereof from 1980 to 2005; President Emeritus, Hudson Institute (policy research organization) from 2011 to 2012, President thereof from 1997 to 2011 and Trustee from 1980 to 2012; Chairman of the Board of Trustees for Grantham University since 2006; Director, InnoCentive, Inc. (global internet service) since 2005; Director, Cerego, LLC (educational software) since 2005; Director, Cybersettle (online adjudication) since 2009; Director, AIMS Worldwide, Inc. (marketing) from 2007 to 2012. | 33 RICs consisting of 156 Portfolios | None | ||||||||
Ian A. MacKinnon 1948 | Director | Since 2012 | Director, Kennett Capital, Inc. (investments) since 2006; Director, Free Library of Philadelphia from 1998 to 2008. | 33 RICs consisting of 156 Portfolios | None | ||||||||
Cynthia A. Montgomery 1952 | Director | Since 2007 | Professor, Harvard Business School since 1989; Director, McLean Hospital from 2005 to 2012; Director, Harvard Business School Publishing from 2005 to 2010. | 33 RICs consisting of 156 Portfolios | Newell Rubbermaid, Inc. (manufacturing) | ||||||||
Joseph P. Platt 1947 | Director | Since 2007 | Director, Jones and Brown (Canadian insurance broker) since 1998; General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Director, The West Penn Allegheny Health System (a not-for-profit health system) from 2008 to 2013; Partner, Amarna Corporation, LLC (private investment company) from 2002 to 2008. | 33 RICs consisting of 156 Portfolios | Greenlight Capital Re, Ltd. (reinsurance company) | ||||||||
Robert C. Robb, Jr. 1945 | Director | Since 2007 | Partner, Lewis, Eckert, Robb and Company (management and financial consulting firm) since 1981. | 33 RICs consisting of 156 Portfolios | None |
ANNUAL REPORT | MARCH 31, 2015 | 25 |
Officers and Directors (continued) |
Name, Address1 and Year of Birth | Position(s) Held with Funds/ Master LLCs | Length of Time Served as a Director3 | Principal Occupation(s) During Past Five Years | Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen | Public Directorships | ||||||||||||||||||
Independent Directors2 (concluded) | |||||||||||||||||||||||
Toby Rosenblatt 1938 | Director | Since 2007 | President, Founders Investments Ltd. (private investments) since 1999; Director, Forward Management, LLC since 2007; Director, College Futures Foundation (philanthropic foundation) since 2009; Director, The James Irvine Foundation (philanthropic foundation) from 1998 to 2008. | 33 RICs consisting of 156 Portfolios | None | ||||||||||||||||||
Mark Stalnecker 1951 | Director | Since 2015 | Chief Investment Officer, University of Delaware from 1999 to 2013; Trustee, Winterthur Museum and Country Estate since 2001; Member of the Investment Committee, Delaware Public Employees’ Retirement System since 2002; Member of the Investment Committee, Christiana Care Health System since 2009; Member of the Investment Committee, Delaware Community Foundation from 2013 to 2014. | 33 RICs consisting of 156 Portfolios | None | ||||||||||||||||||
Kenneth L. Urish 1951 | Director | Since 2007 | Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Immediate-past Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since 2001; Principal, UP Strategic Wealth Investment Advisors, LLC since 2013; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007. | 33 RICs consisting of 156 Portfolios | None | ||||||||||||||||||
Frederick W. Winter 1945 | Director | Since 2007 | Director, Alkon Corporation (pneumatics) since 1992; Professor and Dean Emeritus of the Joseph M. Katz School of Business, University of Pittsburgh from 2005 to 2013 and Dean thereof from 1997 to 2005; Director, Tippman Sports (recreation) from 2005 to 2013; Director, Indotronix International (IT services) from 2004 to 2008. | 33 RICs consisting of 156 Portfolios | None | ||||||||||||||||||
1 | The address of each Director is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. | ||||||||||||||||||||||
2 | Independent Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 75. The Board has determined to extend the terms of Independent Directors on a case-by-case basis, as appropriate. | ||||||||||||||||||||||
3 | Date shown is the earliest date a person has served for the Funds/Master LLCs. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Independent Directors as joining the Funds’/Master LLCs’ board in 2007, those Independent Directors first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: David O. Beim, 1998; Dr. Matina S. Horner, 2004; Rodney D. Johnson, 1995; Herbert I. London, 1987; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Robert C. Robb, Jr., 1998; Toby Rosenblatt, 2005; Kenneth L. Urish, 1999; and Frederick W. Winter, 1999. Frank J. Fabozzi first became a member of the board of other funds advised by BlackRock Advisors, LLC or its affiliates in 1988. | ||||||||||||||||||||||
Interested Director4 | |||||||||||||||||||||||
Barbara G. Novick 1960 | Director | Since 2015 | Vice Chairman of BlackRock, Inc. since 2006; Chair of BlackRock’s Government Relations Steering Committee since 2009; head of the Global Client Group of BlackRock, Inc. from 1988 to 2008. | 109 RICs consisting of 232 Portfolios | None | ||||||||||||||||||
4 | Ms. Novick is an “interested person,” as defined in the 1940 Act, of the Funds/Master LLCs based on her position with BlackRock, Inc. and its affiliates. |
26 | ANNUAL REPORT | MARCH 31, 2015 |
Officers and Directors (concluded) |
Name, Address1 and Year of Birth | Position(s) Held with Funds/Master LLCs | Length of Time Served as an Officer | Principal Occupation(s) During Past Five Years | |||||
Officers2 | ||||||||
John M. Perlowski 1964 | President and Chief Executive Officer | Since 2010 | Managing Director of BlackRock, Inc. since 2009; Head of Global Fund Services since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009. | |||||
Richard Hoerner, CFA 1958 | Vice President | Since 2009 | Managing Director of BlackRock, Inc. since 2000; Head of the Global Cash Group since 2013; Co-head of the Global Cash and Securities Lending Group from 2010 to 2013; Member of the Cash Management Group Executive Committee since 2005. | |||||
Jennifer McGovern 1977 | Vice President | Since 2014 | Director of BlackRock, Inc. since 2011; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group since 2013; Vice President of BlackRock, Inc. from 2008 to 2010. | |||||
Neal Andrews 1966 | Chief Financial Officer | Since 2007 | Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006. | |||||
Jay Fife 1970 | Treasurer | Since 2007 | Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006. | |||||
Charles Park 1967 | Chief Compliance Officer | Since 2014 | Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012. | |||||
Fernanda Piedra 1969 | Anti-Money Laundering Compliance Officer | Since 2015 | Director of BlackRock, Inc. since 2014; Anti-Money Laundering Compliance Officer and Regional Head of Financial Crime for the Americas at BlackRock, Inc. since 2014; Head of Regulatory Changes and Remediation for the Asset Wealth Management Division of Deutsche Bank from 2010 to 2014; Vice President of Goldman Sachs (Anti-Money Laundering/Suspicious Activities Group) from 2004 to 2010. | |||||
Benjamin Archibald 1975 | Secretary | Since 2012 | Managing Director of BlackRock, Inc. since 2014; Director of BlackRock, Inc. from 2010 to 2013; Assistant Secretary of the BlackRock-advised funds from 2010 to 2012; General Counsel and Chief Operating Officer of Uhuru Capital Management from 2009 to 2010; Executive Director and Counsel of Goldman Sachs Asset Management from 2005 to 2009. | |||||
1 The address of each Officer is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. | ||||||||
2 Officers of the Funds/Master LLCs serve at the pleasure of the Board. | ||||||||
Further information about the Officers and Directors is available in the Funds’/Master LLCs’ Statement of Additional Information, which can be obtained without charge by calling (800) 221-7210. | ||||||||
Effective December 31, 2014, Paul L. Audet and Henry Gabbay resigned as Directors of the Funds/Master LLCs and Ronald W. Forbes resigned as a Director of the Funds/Master LLCs and Co-Chair of the Board. Effective January 1, 2015, Collette Chilton, Barbara G. Novick and Mark Stalnecker were appointed to serve as Directors of the Funds/Master LLCs. Effective March 1, 2015, Charles Park resigned as Anti-Money Laundering Compliance Officer of the Funds/Master LLCs and Fernanda Piedra became Anti-Money Laundering Compliance Officer of the Funds/Master LLCs. |
Investment Advisor and Administrator BlackRock Advisors, LLC Wilmington, DE 19809 | Custodian and Accounting Agent State Street Bank and Trust Company Boston, MA 02110 | Transfer Agent Financial Data Services, Inc. Jacksonville, FL 32246 Distributor BlackRock Investments, LLC New York, NY 10022 | Independent Registered Public Accounting Firm Deloitte & Touche LLP Boston, MA 02116 Legal Counsel Sidley Austin LLP New York, NY 10019 | Address of the Funds 100 Bellevue Parkway Wilmington, DE 19809 |
ANNUAL REPORT | MARCH 31, 2015 | 27 |
Additional Information |
General Information
BlackRock Privacy Principles
28 | ANNUAL REPORT | MARCH 31, 2015 |
Additional Information (concluded) |
BlackRock Privacy Principles (concluded)
ANNUAL REPORT | MARCH 31, 2015 | 29 |
![](https://capedge.com/proxy/N-CSR/0000891092-15-004811/blackrock_1-5in.jpg)
Item 2 – | Code of Ethics – Each registrant (or “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to update certain information and to make other non-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com. |
Item 3 – | Audit Committee Financial Expert – Each registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial expert serving on its audit committee and (ii) each audit committee financial expert is independent: |
Kenneth L. Urish | |
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. | |
Item 4 – | Principal Accountant Fees and Services |
The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Funds: |
(a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees3 | |||||
Entity Name | Current Fiscal Year End | Previous Fiscal Year End | Current Fiscal Year End | Previous Fiscal Year End | Current Fiscal Year End | Previous Fiscal Year End | Current Fiscal Year End | Previous Fiscal Year End |
BIF Government Securities Fund | $7,363 | $7,363 | $0 | $0 | $9,792 | $9,600 | $0 | $0 |
Master Government Securities LLC | $26,363 | $26,363 | $0 | $0 | $13,260 | $13,000 | $0 | $0 |
The following table presents fees billed by D&T that were required to be approved by each registrant’s audit committee (each a “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”): |
Current Fiscal Year End | Previous Fiscal Year End | |
(b) Audit-Related Fees1 | $0 | $0 |
(c) Tax Fees2 | $0 | $0 |
(d) All Other Fees3 | $2,391,000 | $2,555,000 |
1 The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.
2 The nature of the services includes tax compliance, tax advice and tax planning.
3 Aggregate fees borne by BlackRock in connection with the review of compliance procedures and attestation thereto performed by D&T with respect to all of the registered closed-end funds and some of the registered open-end funds advised by BlackRock.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
Each Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval |
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by the registrant’s Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Fund Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrants which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels. |
Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the registrant’s Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels. (e)(2) None of the services described in each of Items 4(b) through (d) were approved by either Committee pursuant to the de minimus exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) Not Applicable (g) The aggregate non-audit fees paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Fund Service Providers were: |
Entity Name | Current Fiscal Year End | Previous Fiscal Year End |
BIF Government Securities Fund | $9,792 | $9,600 |
Master Government Securities LLC | $13,260 | $13,000 |
Additionally, SSAE 16 Review (Formerly, SAS No. 70) fees for the current and previous fiscal years of $2,391,000 and $2,555,000, respectively, were billed by D&T to the Investment Adviser. |
(h) Each Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser and the Fund Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
Item 5 – | Audit Committee of Listed Registrants – Not Applicable | |
Item 6 – | Investments | |
(a) The registrants’ Schedules of Investments are included as part of the Report to Stockholders filed under Item 1 of this Form. | ||
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. | ||
Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable |
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Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – Not Applicable |
Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable |
Item 10 – | Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures. |
Item 11 – | Controls and Procedures |
(a) – | The registrants’ principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants’ disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15(d)-15(b) under the Securities Exchange Act of 1934, as amended. | |
(b) – | There were no changes in the registrants’ internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrants’ internal control over financial reporting. |
Item 12 – | Exhibits attached hereto |
(a)(1) – Code of Ethics – See Item 2 | |
(a)(2) – Certifications – Attached hereto | |
(a)(3) – Not Applicable | |
(b) – Certifications – Attached hereto |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BIF Government Securities Fund and Master Government Securities LLC
By: | /s/ John M. Perlowski John M. Perlowski Chief Executive Officer (principal executive officer) of BIF Government Securities Fund and Master Government Securities LLC |
Date: June 2, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of each registrant and in the capacities and on the dates indicated.
By: | /s/ John M. Perlowski John M. Perlowski Chief Executive Officer (principal executive officer) of BIF Government Securities Fund and Master Government Securities LLC |
Date: June 2, 2015
By: | /s/ Neal J. Andrews Neal J. Andrews Chief Financial Officer (principal financial officer) of BIF Government Securities Fund and Master Government Securities LLC |
Date: June 2, 2015
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