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 811-02739
811-10179
Name of Fund: BlackRock Basic Value Fund, Inc.
Master Basic Value LLC
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Basic Value Fund, Inc. and Master Basic Value LLC,
800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O.
Box 9011, Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 441-7762
Date of fiscal year end: 06/30/07
Date of reporting period: 07/01/06 - 06/30/07
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
BlackRock Basic Value
Fund, Inc.
ANNUAL REPORT JUNE 30, 2007
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
This report is transmitted to shareholders only. It is not authorized for
use as an offer of sale or a solicitation of an offer to buy shares of the
Fund unless accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and principal value
of shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Statements and other information herein
are as dated and are subject to change. Please see the Fund's prospectus
for a description of risks associated with global investments.
BlackRock Basic Value Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
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BlackRock Basic Value Fund, Inc.
Important Tax Information
The following information is provided with respect to the ordinary income
distributions paid by BlackRock Basic Value Fund, Inc. during the taxable year
ended June 30, 2007:
Record Date: September 13, 2006 December 4, 2006 June 12, 2007
Payable Date: September 19, 2006 December 6, 2006 June 14, 2007
Qualified Dividend Income for Individuals* 65.64% 90.70% 59.82%
Dividends Qualifying for the Dividends Received Deduction for
Corporations* 57.06% 82.96% 50.63%
Short-Term Capital Gain Dividends for Non-U.S. Residents** 70.65% 34.79% 58.33%
Additionally, the Fund distributed long-term capital gains of $2.525004 per share, $0.598582 per share and $1.559804
per share to shareholders of record on September 13, 2006, December 4, 2006 and June 12, 2007, respectively.
* The Fund hereby designates the percentage indicated above or the maximum amount allowable by law.
** Represents the portion of the taxable ordinary income dividends eligible for exemption from U.S. withholding tax
for nonresident aliens and foreign corporations.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
A Letter to Shareholders
Dear Shareholder
At the mid-point of 2007, investor sentiment appeared quite buoyant,
notwithstanding some undertones of caution. For equity markets, positive
momentum as the year began was interrupted by a notable but transitory
set-back at the end of February. Markets resumed their ascent through May,
but entered a trading range in June as investors began to question the
sustainability of the rally. For the most part, equities found support in
robust merger-and-acquisition activity, healthy global economies, tame
inflation, relatively low interest rates, still-positive earnings growth and
attractive valuations. These tailwinds prevailed over such headwinds as a
weakening U.S. economy, slowing housing market, credit-related lending
problems, escalating geopolitical concerns and high energy prices, leading
the Standard & Poor's (S&P) 500 Index to a new record high in May.
Meanwhile, turmoil in the subprime mortgage market and generally mixed
economic signals weighed on bonds. In June, bond prices dropped precipitously
as long-term yields rose to their highest levels in five years. The 10-year
Treasury yield, which began 2007 at 4.68%, reached nearly 5.30% in mid-June
before retracing to 5.03% by month's end. Notably, this year has brought some
re-steepening of the yield curve, which had been flat to inverted throughout
2006. Still, at the end of June, yields along the curve remained below the
federal funds rate of 5.25%, the level at which the Federal Reserve Board (the
Fed) has left it since first pausing in August 2006. While first-quarter gross
domestic product growth of 0.7% represented the slowest rate of expansion
since 2002, the Fed reiterated that inflation, not a slowing economy, remains
its primary concern. Many observers interpreted the Fed's reaction to mean
that the economy has hit its low and is bound for renewed strength, thereby
reducing the likelihood of an interest rate cut in the near future.
Against this backdrop, the major equity market indexes posted strong returns
for the annual and semi-annual periods ended June 30, 2007, while fixed income
assets were more mixed:
Total Returns as of June 30, 2007 6-month 12-month
U.S. equities (S&P 500 Index) + 6.96% +20.59%
Small cap U.S. equities (Russell 2000 Index) + 6.45 +16.43
International equities (MSCI Europe, Australasia, Far East Index) +10.74 +27.00
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) + 0.98 + 6.12
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 0.14 + 4.69
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) + 2.96 +11.22
We expect market volatility to linger throughout the second half of 2007. As
you navigate the uncertainties, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as
needed. For more market insight, we invite you to view "What's Ahead in 2007:
The Second-Quarter Update" and "Are You Prepared for Volatility?" at
www.blackrock.com/funds. We thank you for entrusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the
months and years ahead.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
Fund President and Director
THIS PAGE NOT PART OF YOUR FUND REPORT
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
A Discussion With Your Fund's Portfolio Managers
The Fund outperformed its benchmark and comparable Lipper category average for
the fiscal year, benefiting from successful stock selection and favorable
sector biases.
How did the Fund perform during the fiscal year in light of the existing
market conditions?
For the 12-month period ended June 30, 2007, BlackRock Basic Value Fund,
Inc.'s Institutional, Investor A, Investor B, Investor C and Class R Shares
had total returns of +25.11%, +24.81%, +23.82%, +23.83% and +24.46%,
respectively. (Fund results shown do not reflect sales charges and would be
lower if sales charges were included. Complete performance information can be
found on pages 6 - 8 of this report to shareholders.) This compared to a
return of +20.59% for the Standard & Poor's 500 (S&P 500) Index, +21.77% for
the S&P 500 Citigroup Value Index and an average return of +20.81% for the
Lipper Large-Cap Value Funds category for the same period. (Funds in this
Lipper category invest in companies considered to be undervalued relative to a
major unmanaged stock index.)
The U.S. equity market ended the 12-month period solidly in positive
territory, despite some bumps along the way. As the fiscal year began, the
market was recovering from a far-reaching correction that sent the average
U.S. stock 12% lower. In retrospect, the retrenchment was fairly normal and
long overdue, having been the first double-digit correction for U.S. equity
markets in nearly four years. In the summer, with the Federal Reserve Board
(the Fed) having finally ended its two-year streak of interest rate increases
and with oil prices on the decline after reaching an all-time high near $78
per barrel, stocks embarked on a one-way journey upward.
The market's ascent generally continued until the end of February 2007, when
concern over rising delinquencies in the subprime mortgage market sparked
fears that contagion from the already weak housing market could spill over to
the rest of the economy. This, and a 10% correction in the Chinese stock
market, prompted a global sell-off that led U.S. stocks to register their most
significant one-week decline in four years. The correction ultimately proved
short lived and surging corporate merger-and-acquisition (M&A) activity,
healthy global economies and moderate inflation pressures, among other
factors, led both the S&P 500 Index and the Dow Jones Industrial Average to
new record highs.
The biggest boon for the Fund during the 12 months came from the financials
sector, where our underweight position and good stock selection produced more
than 160 basis points (1.6%) in outperformance versus the S&P 500 Citigroup
Value Index. Given the flatness of the yield curve, we chose to avoid many of
the regional banks and lenders whose profits depend on the net interest margin
of the loans they issue. Instead, we focused on investment banks and
brokerages, which we felt were poised to benefit from the robust M&A activity
and healthy calendar of initial public offerings (IPOs). Within financials,
Morgan Stanley was our top performer, followed by Bank of America Corp. and
Sallie Mae, which appreciated significantly upon news that it would be taken
over by private equity interests. Our avoidance of Wachovia Corp. and
Washington Mutual, Inc., key players in the residential loan market, further
benefited performance. Our position in The Bank of New York Co., Inc. also
performed well after the company's merger with Mellon Corp.
As in financials, our underweight position and good stock selection in the
industrials sector also contributed significantly to performance. Based on our
expectation for a slowdown in the U.S. economy, we began to rotate away from
more economically sensitive stocks. Within industrials, this meant less
exposure to heavy construction and more emphasis on niche markets. Our
position in Deere & Co., for example, appreciated as the tractor business
benefited from the increased production of corn associated with efforts to
exploit ethanol as an energy source.
Also contributing to the Fund's outperformance was our positioning in consumer
discretionary, led by McDonald's Corp., which has refreshed its business and
continues to be a strong performer. For the most part, our strategy in
consumer discretionary entails limited exposure to retailers and greater
emphasis on cable and media stocks. Among the key contributors then were
Interpublic Group of Cos., Inc., Sony Corp., Royal Philips Electronics NV and
Comcast Corp.
The Fund's top two contributors for the year were healthcare names - Schering-
Plough Corp., a maker of prescription and over-the-counter drugs, and Baxter
International, Inc., manufacturer of medical equipment and supplies. We also
saw strong performance from select stocks in information technology (IT),
including International Business Machines Corp. and Unisys Corp.
Detracting modestly from the Fund's relative performance were underweight
positions in utilities and materials.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
What changes were made to the portfolio during the period?
We had been preparing the portfolio for a Goldilocks economy for some time - a
not-too-hot, not-too-cold scenario, characterized by relatively moderate
inflation and low interest rates. In our minds, it was clear that as the
economic cycle matures, the pace of growth inevitably would need to slow. We
see this as a natural progression of the business cycle.
The portfolio has evolved along with the economy. We have started to shy away
from consumer cyclicality, materials and, more generally, companies that are
heavily dependent on the economy for success. After five years of double-digit
earnings growth, we expect to see more companies missing their earnings
targets going forward. At this juncture, we believe it makes sense to favor
large-cap, multinational companies that can offer more consistency of earnings.
Many of our new purchases during the period occurred in the information
technology (IT) sector, where we initiated positions in Micron Technology,
Inc., Intel Corp., Taiwan Semiconductor Manufacturing Co., Ltd., Applied
Materials, Inc. and Alcatel SA. For the most part, we are not seeking
technology companies that are trying to create the next blockbuster product or
application, but are focused on what we believe to be well-run, shareholder-
friendly companies that are making smart moves with their capital allocations
and, in some cases, are offering dividends or buying back shares. In general,
we believe IT companies will benefit from a new cycle of capital spending on
technology. IT sales during the period included Motorola, which we sold on
weakness, and Nokia Oyj, which was liquidated after strong appreciation.
We maintained the Fund's overweight position in energy. Oil prices ended the
period at roughly $72 per barrel, up from the $50 range in January, yet many
energy stocks continue to trade at low multiples. We expect to maintain our
relatively heavy exposure to energy stocks as long as commodity prices remain
elevated. Within energy, we initiated positions in Peabody Energy Corp. and
Consol Energy, Inc.
In the health care sector, we established an overweight position for the first
time in more than 10 years. In part, this reflects attractive valuations but
also our view that, after years of poor performance and a limited product
pipeline, the worst has passed. During the 12-month period, we initiated
positions in pharmaceutical giants Bristol-Myers Squibb Co. and Wyeth, while
eliminating Eli Lilly & Co. from the portfolio. Looking ahead, we are more
cautious on the sector given the potential for industry-related legislation
coming out of Washington as the political season approaches.
For the most part, changes to the portfolio were largely stock-specific rather
than thematic. As such, other notable additions included Qwest Communications
International Inc. and Sprint Nextel Corp. in the telecommunications sector,
Wal-Mart Stores, Inc. in consumer staples, Honda Motor Co., Ltd. in consumer
discretionary and Sallie Mae (bought and sold) and Fannie Mae in financials.
Conversely, we eliminated consumer discretionary names Gannett Co., Inc., The
Gap, Inc. and Interpublic Group of Cos., Inc., consumer staples names Altria
Group, Inc. and The Kroger Co., and financials stocks Marsh & McLennan Cos.,
Inc. and The Allstate Corp. In utilities we sold Public Service Enterprise
Group, Inc. and in materials we eliminated International Paper Co. Generally
speaking, sales were made as stocks reached our price targets, based on a
change in our original assessment or to make room for more compelling
opportunities. Finally, we reduced exposure to defense contractor Raytheon
Co., as we are somewhat concerned about defense spending as political
jockeying intensifies.
How would you characterize the Fund's position at the close of the period?
At year-end, the portfolio was overweight versus the S&P 500 Citigroup Value
Index in energy, information technology, health care and consumer staples. It
had underweights in financials, utilities, telecommunication services,
consumer discretionary, industrials and materials.
We intend to maintain the approach that contributed to the Fund's
outperformance during the past year. This involves a focus on large-cap,
multinational companies with the ability to deliver shareholder value amid a
slower economic backdrop. We had argued that the U.S. equity market would be
up in the high single digits to low double digits this year and that, if
wrong, the error would be to the upside (that is, the market would be higher
than we thought). At this juncture, that view stands. In our opinion, the
market has fared well despite some substantial bumps in the road. More
potholes are expected, particularly given such formidable unknowns as global
terrorism, geopolitical concerns and the scope of the subprime collapse.
Despite these worries, a great deal of cash remains on company balance sheets,
which can be deployed via continued M&A, leveraged buyout and private equity
activity. Importantly, stocks look quite attractive compared to bonds and
relative to expectations for growth, underpinning our cautiously optimistic
outlook.
Kevin M. Rendino
Co-Portfolio Manager
Robert J. Martorelli
Co-Portfolio Manager
July 13, 2007
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Performance Data
About Fund Performance
Effective October 2, 2006, the Fund's Class A, Class B, Class C and Class I
Shares were redesignated Investor A, Investor B, Investor C and Institutional
Shares, respectively. Class R Shares did not change their designation. As
previously communicated to shareholders, new sales charge schedules came into
effect at the same time for certain of these classes.
The Fund has multiple classes of shares:
* Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only to
eligible investors.
* Investor A Shares incur a maximum initial sales charge (front-end load) of
5.25% and a service fee of 0.25% per year (but no distribution fee).
* Investor B Shares are subject to a maximum contingent deferred sales charge
of 4.50% declining to 0% after six years. In addition, Investor B Shares are
subject to a distribution fee of 0.75% per year and a service fee of 0.25% per
year. These shares automatically convert to Investor A Shares after
approximately eight years. (There is no initial sales charge for automatic
share conversions.) All returns for periods greater than eight years reflect
this conversion.
* Investor C Shares are subject to a distribution fee of 0.75% per year and a
service fee of 0.25% per year. In addition, Investor C Shares are subject to a
1% contingent deferred sales charge if redeemed within one year of purchase.
* Class R Shares do not incur a maximum initial sales charge (front-end load)
or deferred sales charge. These shares are subject to a distribution fee of
0.25% per year and a service fee of 0.25% per year. Class R Shares are
available only to certain retirement plans. Prior to inception, Class R Share
performance results are those of Institutional Shares (which have no
distribution or service fees) restated for Class R Share fees.
Performance information reflects past performance and does not guarantee
future results. Current performance may be lower or higher than the
performance data quoted. Refer to www.blackrock.com to obtain performance data
current to the most recent month-end. Performance results do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. Figures shown in each of the following tables
assume reinvestment of all dividends and capital gain distributions, if any,
at net asset value on the ex-dividend date. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class of shares
will vary because of the different levels of service, distribution and
transfer agency fees applicable to each class, which are deducted from the
income available to be paid to shareholders.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Performance Data (continued)
Recent Performance Results
6-Month 12-Month 10-Year
As of June 30, 2007 Total Return Total Return Total Return
Institutional Shares* +7.98% +25.11% +134.92%
Investor A Shares* +7.83 +24.81 +129.06
Investor B Shares* +7.39 +23.82 +115.39
Investor C Shares* +7.40 +23.83 +111.92
Class R Shares* +7.68 +24.46 +124.28
S&P 500r Index** +6.96 +20.59 + 99.07
S&P 500 Citigroup Value Index*** +7.37 +21.77 +125.36
* Investment results shown do not reflect sales charges; results shown would be lower if a sales
charge was included. Cumulative total investment returns are based on changes in net asset values
for the periods shown, and assume reinvestment of all dividends and capital gains distributions
at net asset value on the ex-dividend date.
** This unmanaged Index covers 500 industrial, utility, transportation and financial companies of the
U.S. markets (mostly NYSE issues), representing about 75% of NYSE market capitalization and 30% of
NYSE issues.
*** This unmanaged Index is designed to provide a comprehensive measure of large-cap U.S. equity "value"
performance. It is an unmanaged float adjusted market capitalization weighted index comprised of stocks
representing approximately half the market capitalization of the S&P 500 Index that have been identified
as being on the value end of the growth-value spectrum.
S&P 500 is a registered trademark of the McGraw-Hill Companies.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Performance Data (concluded)
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in Institutional
Shares*++, Investor A Shares*++, Investor B Shares*++, Investor C Shares*++
and Class R Shares*++ compared to a similar investment in S&P 500 Index++++
and S&P 500 Citigroup Value Index++++++. Values illustrated are as follows:
Institutional Shares*++
Date Value
June 1997 $10,000.00
June 1998 $12,323.00
June 1999 $14,114.00
June 2000 $13,270.00
June 2001 $14,478.00
June 2002 $12,976.00
June 2003 $12,880.00
June 2004 $16,130.00
June 2005 $16,739.00
June 2006 $18,777.00
June 2007 $23,492.00
Investor A Shares*++
Date Value
June 1997 $ 9,475.00
June 1998 $11,644.00
June 1999 $13,304.00
June 2000 $12,480.00
June 2001 $13,580.00
June 2002 $12,137.00
June 2003 $12,023.00
June 2004 $15,017.00
June 2005 $15,542.00
June 2006 $17,390.00
June 2007 $21,704.00
Investor B Shares*++
Date Value
June 1997 $10,000.00
June 1998 $12,197.00
June 1999 $13,831.00
June 2000 $12,871.00
June 2001 $13,904.00
June 2002 $12,329.00
June 2003 $12,117.00
June 2004 $15,019.00
June 2005 $15,428.00
June 2006 $17,258.00
June 2007 $21,539.00
Investor C Shares*++
Date Value
June 1997 $10,000.00
June 1998 $12,198.00
June 1999 $13,829.00
June 2000 $12,868.00
June 2001 $13,897.00
June 2002 $12,327.00
June 2003 $12,112.00
June 2004 $15,010.00
June 2005 $15,416.00
June 2006 $17,114.00
June 2007 $21,192.00
Class R Shares*++
Date Value
June 1997 $10,000.00
June 1998 $12,262.00
June 1999 $13,974.00
June 2000 $13,072.00
June 2001 $14,191.00
June 2002 $12,655.00
June 2003 $12,551.00
June 2004 $15,636.00
June 2005 $16,149.00
June 2006 $18,021.00
June 2007 $22,428.00
S&P 500 Index++++
Date Value
June 1997 $10,000.00
June 1998 $13,016.00
June 1999 $15,978.00
June 2000 $17,137.00
June 2001 $14,595.00
June 2002 $11,970.00
June 2003 $12,000.00
June 2004 $14,293.00
June 2005 $15,197.00
June 2006 $16,508.00
June 2007 $19,907.00
S&P 500 Citigroup Value Index++++++
Date Value
June 1997 $10,000.00
June 1998 $12,627.00
June 1999 $14,563.00
June 2000 $13,378.00
June 2001 $13,395.00
June 2002 $12,193.00
June 2003 $11,813.00
June 2004 $14,482.00
June 2005 $16,108.00
June 2006 $18,508.00
June 2007 $22,536.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
++ The Fund invests all of its assets in Master Basic Value LLC. Master
Basic Value LLC invests in securities, primarily equities, that
management of the Fund believes are undervalued and therefore represent
basic investment value.
++++ This unmanaged Index covers 500 industrial, utility, transportation and
financial companies of the U.S. markets (mostly NYSE issues)
representing about 75% of NYSE market capitalization and 30% of NYSE
issues.
++++++ This unmanaged Index is designed to provide a comprehensive measure of
large-cap U.S. equity "value" performance. It is an unmanaged float
adjusted market capitalization weighted index comprised of stocks
representing approximately half the market capitalization of the S&P
500 Index that have been indentified as being on the value end of the
growth-value spectrum.
Past performance is not indicative of future results.
Average Annual Total Return
Return
Institutional Shares
One Year Ended 6/30/07 +25.11%
Five Years Ended 6/30/07 +12.60
Ten Years Ended 6/30/07 + 8.92
Return Without Return With
Sales Charge Sales Charge*
Investor A Shares
One Year Ended 6/30/07 +24.81% +18.25%
Five Years Ended 6/30/07 +12.33 +11.12
Ten Years Ended 6/30/07 + 8.64 + 8.06
Return Return
Without CDSC With CDSC++++++
Investor B Shares++
One Year Ended 6/30/07 +23.82% +19.32%
Five Years Ended 6/30/07 +11.46 +11.20
Ten Years Ended 6/30/07 + 7.97 + 7.97
Return Return
Without CDSC With CDSC++++++
Investor C Shares++++
One Year Ended 6/30/07 +23.83% +22.83%
Five Years Ended 6/30/07 +11.45 +11.45
Ten Years Ended 6/30/07 + 7.80 + 7.80
Return
Class R Shares
One Year Ended 6/30/07 +24.46%
Five Years Ended 6/30/07 +12.13
Ten Years Ended 6/30/07 + 8.41
* Assuming maximum sales charge of 5.25%.
++ Maximum contingent deferred sales charge is 4.50% and is
reduced to 0% after six years.
++++ Maximum contingent deferred sales charge is 1% and is reduced
to 0% after one year.
++++++ Assuming payment of applicable contingent deferred sales
charge.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and exchange
fees; and (b) operating expenses including advisory fees, distribution fees
including 12b-1 fees and other Fund expenses. The following example (which is
based on a hypothetical investment of $1,000 invested on January 1, 2007 and
held through June 30, 2007) is intended to assist shareholders both in
calculating expenses based on an investment in the Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during
the period covered by this report, shareholders can divide their account value
by $1,000 and then multiply the result by the number in the first line under
the heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders'
ongoing costs only and do not reflect any transactional expenses, such as
sales charges, redemption fees or exchange fees. Therefore, the second table
is useful in comparing ongoing expenses only, and will not help shareholders
determine the relative total expenses of owning different funds. If these
transactional expenses were included, shareholder expenses would have been
higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007 to
January 1, 2007 June 30, 2007 June 30, 2007
Actual
Institutional $1,000 $1,079.80 $2.75
Investor A $1,000 $1,078.30 $4.20
Investor B $1,000 $1,073.90 $8.43
Investor C $1,000 $1,074.00 $8.27
Class R $1,000 $1,076.80 $5.85
Hypothetical (5% annual return before expenses)**
Institutional $1,000 $1,022.26 $2.67
Investor A $1,000 $1,020.86 $4.08
Investor B $1,000 $1,016.77 $8.20
Investor C $1,000 $1,016.92 $8.05
Class R $1,000 $1,019.27 $5.69
* For each class of the Fund, expenses are equal to the expense ratio for the class
(.53% for Institutional, .81% for Investor A, 1.63% for Investor B, 1.60% for Investor C
and 1.13% for Class R), multiplied by the average account value over the period, multiplied
by 182/365 (to reflect the one-half year period shown). Because the Fund is a feeder fund,
the expense table example reflects the expenses of both the feeder fund and the Master LLC
in which it invests.
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days
in the most recent fiscal half year divided by 365.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Statement of Assets and Liabilities BlackRock Basic Value Fund, Inc.
As of June 30, 2007
Assets
Investment in Master Basic Value LLC (the "Master LLC"), at value
(identified cost--$5,330,435,956) $ 8,510,193,277
Prepaid expenses 26,431
---------------
Total assets 8,510,219,708
---------------
Liabilities
Payables:
Distributor $ 1,911,694
Other affiliates 1,622,104
Dividends and distributions payable to shareholders 147 3,533,945
---------------
Accrued expenses 233,304
---------------
Total liabilities 3,767,249
---------------
Net Assets
Net assets $ 8,506,452,459
===============
Net Assets Consist of
Institutional Shares of Common Stock, $.10 par value, 400,000,000 shares authorized $ 11,989,535
Investor A Shares of Common Stock, $.10 par value, 200,000,000 shares authorized 8,169,551
Investor B Shares of Common Stock, $.10 par value, 400,000,000 shares authorized 2,203,466
Investor C Shares of Common Stock, $.10 par value, 200,000,000 shares authorized 2,836,778
Class R Shares of Common Stock, $.10 par value, 400,000,000 shares authorized 118,914
Paid-in capital in excess of par 5,347,522,248
Undistributed investment income--net $ 3,047,663
Accumulated realized capital loss allocated from the Master LLC--net (49,193,017)
Unrealized appreciation allocated from the Master LLC--net 3,179,757,321
---------------
Total undistributed earnings--net 3,133,611,967
---------------
Net Assets $ 8,506,452,459
===============
Net Asset Value
Institutional--Based on net assets of $4,071,437,076 and 119,895,351 shares outstanding $ 33.96
===============
Investor A--Based on net assets of $2,759,566,826 and 81,695,507 shares outstanding $ 33.78
===============
Investor B--Based on net assets of $729,333,533 and 22,034,660 shares outstanding $ 33.10
===============
Investor C--Based on net assets of $906,972,119 and 28,367,782 shares outstanding $ 31.97
===============
Class R--Based on net assets of $39,142,905 and 1,189,139 shares outstanding $ 32.92
===============
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Statement of Operations BlackRock Basic Value Fund, Inc.
For the Year Ended June 30, 2007
Investment Income
Net investment income allocated from the Master LLC:
Dividends $ 169,546,476
Interest from affiliates 5,741,553
Securities lending--net 1,029,278
Expenses (34,627,436)
---------------
Total income 141,689,871
---------------
Expenses
Service and distribution fees--Investor C $ 8,417,744
Service and distribution fees--Investor B 8,015,378
Service fees--Investor A 6,392,221
Transfer agent fees--Institutional 4,220,004
Transfer agent fees--Investor A 3,079,795
Transfer agent fees--Investor B 1,186,678
Transfer agent fees--Investor C 1,136,185
Printing and shareholder reports 282,495
Service and distribution fees--Class R 158,273
Registration fees 135,827
Professional fees 77,593
Transfer agent fees--Class R 49,062
Directors' fees and expenses 30,262
Other 39,726
---------------
Total expenses 33,221,243
---------------
Investment income--net 108,468,628
---------------
Realized & Unrealized Gain Allocated from the Master LLC--Net
Realized gain on investments and options written--net 679,387,077
Change in unrealized appreciation on investments and options written--net 999,166,510
---------------
Total realized and unrealized gain--net 1,678,553,587
---------------
Net Increase in Net Assets Resulting from Operations $ 1,787,022,215
===============
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Statements of Changes in Net Assets BlackRock Basic Value Fund, Inc.
For the Year Ended
June 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 108,468,628 $ 97,016,762
Realized gain--net 679,387,077 749,812,072
Change in unrealized appreciation/depreciation--net 999,166,510 52,424,461
--------------- ---------------
Net increase in net assets resulting from operations 1,787,022,215 899,253,295
--------------- ---------------
Dividends & Distributions to Shareholders
Investment income--net:
Institutional (90,891,682) (57,968,619)
Investor A (50,933,522) (28,120,646)
Investor B (6,050,839) (4,412,874)
Investor C (8,445,877) (4,018,853)
Class R (541,265) (278,358)
Realized gain--net:
Institutional (626,220,024) (190,415,930)
Investor A (414,731,739) (109,263,240)
Investor B (133,673,033) (57,000,078)
Investor C (143,384,675) (37,857,410)
Class R (5,296,869) (1,272,507)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to shareholders (1,480,169,525) (490,608,515)
--------------- ---------------
Capital Share Transactions
Net increase (decrease) in net assets derived from capital share transactions 626,685,603 (1,052,404,332)
--------------- ---------------
Net Assets
Total increase (decrease) in net assets 933,538,293 (643,759,552)
Beginning of year 7,572,914,166 8,216,673,718
--------------- ---------------
End of year* $ 8,506,452,459 $ 7,572,914,166
=============== ===============
* Undistributed investment income--net $ 3,047,663 $ 51,442,220
=============== ===============
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Financial Highlights BlackRock Basic Value Fund, Inc.
The following
per share data
and ratios
have been
derived from
information Institutional Investor A
provided in
the financial For the Year Ended June 30, For the Year Ended June 30,
statements. 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value,
beginning
of year $ 32.87 $ 31.19 $ 31.89 $ 25.83 $ 27.14 $ 32.69 $ 31.03 $ 31.74 $ 25.72 $ 27.01
------------------------------------------------------- -------------------------------------------------------
Investment
income--net** .55 .48 .46 .40 .35 .46 .40 .38 .33 .29
Realized and
unrealized
gain (loss)--
net 6.98 3.18 .64 6.06 (.65) 6.95 3.16 .63 6.02 (.63)
------------------------------------------------------- -------------------------------------------------------
Total from
investment
operations 7.53 3.66 1.10 6.46 (.30) 7.41 3.56 1.01 6.35 (.34)
------------------------------------------------------- -------------------------------------------------------
Less dividends
and
distributions:
Investment
income--net (.80) (.47) (.43) (.40) (.34) (.68) (.39) (.35) (.33) (.28)
Realized
gain--net (5.64) (1.51) (1.37) -- (.67) (5.64) (1.51) (1.37) -- (.67)
------------------------------------------------------- -------------------------------------------------------
Total dividends
and
distributions (6.44) (1.98) (1.80) (.40) (1.01) (6.32) (1.90) (1.72) (.33) (.95)
------------------------------------------------------- -------------------------------------------------------
Net asset value,
end of year $ 33.96 $ 32.87 $ 31.19 $ 31.89 $ 25.83 $ 33.78 $ 32.69 $ 31.03 $ 31.74 $ 25.72
======================================================= =======================================================
Total Investment Return*
Based on net
asset value
per share 25.11% 12.18%++++ 3.77% 25.23% (.74%) 24.81% 11.89%++++ 3.49% 24.90% (.94%)
======================================================== =======================================================
Ratios to Average Net Assets++
Expenses .54% .57% .57% .56% .60% .80% .82% .82% .81% .85%
======================================================= =======================================================
Investment
income--net 1.63% 1.52% 1.49% 1.36% 1.48% 1.37% 1.28% 1.24% 1.11% 1.23%
======================================================= =======================================================
Supplemental Data
Net assets, end
of year (in
thousands) $4,071,437 $3,655,602 $3,992,702 $4,220,353 $3,564,283 $2,759,567 $2,266,626 $2,242,881 $2,223,869 $1,679,935
======================================================= =======================================================
Portfolio
turnover of
the Master LLC 31% 42% 45% 33% 32% 31% 42% 45% 33% 32%
======================================================= =======================================================
* Total investment returns exclude the effects of any sales charges.
** Based on average shares outstanding.
++ Includes the Fund's share of the Master LLC's allocated expenses and/or investment income--net.
++++ For the year ended June 30, 2006, +.10% of the Fund's Institutional Shares' and +.10% of the Fund's
Investor A Shares' total returns consist of a portion of payments by Fund Asset Management, L.P. to
the Master LLC for compensation as a result of a securities class action entitlement recovery and as
a result of a corporate action. Excluding these items, the total returns would have been +12.08% for
Institutional Shares and +11.79 for Investor A Shares.
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Basic Value Fund, Inc.
The following
per share data
and ratios
have been
derived from
information Investor B Investor C
provided in
the financial For the Year Ended June 30, For the Year Ended June 30,
statements. 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value,
beginning
of year $ 32.00 $ 30.39 $ 31.08 $ 25.19 $ 26.44 $ 31.15 $ 29.66 $ 30.42 $ 24.68 $ 25.96
------------------------------------------------------- -------------------------------------------------------
Investment
income--net** .19 .15 .14 .10 .11 .19 .15 .14 .09 .10
Realized and
unrealized
gain (loss)--
net 6.80 3.09 .62 5.92 (.63) 6.60 3.01 .61 5.79 (.62)
------------------------------------------------------- -------------------------------------------------------
Total from
investment
operations 6.99 3.24 .76 6.02 (.52) 6.79 3.16 .75 5.88 (.52)
------------------------------------------------------- -------------------------------------------------------
Less dividends
and
distributions:
Investment
income--net (.25) (.12) (.08) (.13) (.06) (.33) (.16) (.14) (.14) (.09)
Realized
gain--net (5.64) (1.51) (1.37) -- (.67) (5.64) (1.51) (1.37) -- (.67)
------------------------------------------------------- -------------------------------------------------------
Total dividends
and
distributions (5.89) (1.63) (1.45) (.13) (.73) (5.97) (1.67) (1.51) (.14) (.76)
------------------------------------------------------- -------------------------------------------------------
Net asset
value, end
of year $ 33.10 $ 32.00 $ 30.39 $ 31.08 $ 25.19 $ 31.97 $ 31.15 $ 29.66 $ 30.42 $ 24.68
======================================================= =======================================================
Total Investment Return*
Based on net
asset value
per share 23.82% 11.01%++++ 2.72% 23.95% (1.72%) 23.83% 11.02%++++ 2.70% 23.93% (1.75%)
======================================================= =======================================================
Ratios to Average Net Assets++
Expenses 1.59% 1.59% 1.59% 1.58% 1.63% 1.58% 1.59% 1.59% 1.59% 1.64%
======================================================= =======================================================
Investment
income--net .59% .50% .47% .35% .45% .59% .50% .46% .33% .45%
======================================================= =======================================================
Supplemental Data
Net assets, end
of year (in
thousands) $ 729,334 $ 860,121 $1,212,392 $1,594,286 $1,626,835 $ 906,972 $ 763,451 $ 743,882 $ 679,667 $ 502,623
======================================================= =======================================================
Portfolio
turnover of
the Master LLC 31% 42% 45% 33% 32% 31% 42% 45% 33% 32%
======================================================= ========================================================
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
++ Includes the Fund's share of the Master LLC's allocated expenses and/or investment income--net.
++++ For the year ended June 30, 2006, +.10% of the Fund's Investor B Shares' and +.10% of the Fund's
Investor C Shares' total returns consist of a portion of payments by Fund Asset Management, L.P. to
the Master LLC for compensation as a result of a securities class action entitlement recovery and as
a result of a corporate action. Excluding these items, the total returns would have been +10.91% for
Investor B Shares and +10.92 for Investor C Shares.
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Financial Highlights (concluded) BlackRock Basic Value Fund, Inc.
Class R
For the Period
For the Year Ended January 3, 2003++
The following per share data and ratios have been derived June 30, to June 30,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 31.98 $ 30.41 $ 31.17 $ 25.36 $ 23.65
------------ ------------ ------------ ------------ ------------
Investment income--net** .35 .32 .30 .25 .21
Realized and unrealized gain--net 6.79 3.08 .63 5.93 1.50
------------ ------------ ------------ ------------ ------------
Total from investment operations 7.14 3.40 .93 6.18 1.71
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.56) (.32) (.32) (.37) --
Realized gain--net (5.64) (1.51) (1.37) -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (6.20) (1.83) (1.69) (.37) --
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 32.92 $ 31.98 $ 30.41 $ 31.17 $ 25.36
============ ============ ============ ============ ============
Total Investment Return
Based on net asset value per share 24.46% 11.59%++++++ 3.28% 24.58% 7.23%+++
============ ============ ============ ============ ============
Ratios to Average Net Assets++++
Expenses 1.09% 1.07% 1.07% 1.07% 1.10%*
============ ============ ============ ============ ============
Investment income--net 1.08% 1.02% .98% .80% 1.09%*
============ ============ ============ ============ ============
Supplemental Data
Net assets, end of period (in thousands) $ 39,143 $ 27,114 $ 24,817 $ 13,821 $ 1
============ ============ ============ ============ ============
Portfolio turnover of the Master LLC 31% 42% 45% 33% 32%
============ ============ ============ ============ ============
* Annualized.
** Based on average shares outstanding.
++ Commencement of operations.
++++ Includes the Fund's share of the Master LLC's allocated expenses and/or investment income--net.
++++++ For the year ended June 30, 2006, +.10% of the Fund's Class R Shares' total return consists of a
portion of payments by Fund Asset Management, L.P. to the Master LLC for compensation as a result
of a securities class action entitlement recovery and a result of a corporate action. Excluding
these items, the total return would have been +11.49% for Class R Shares.
+++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements BlackRock Basic Value Fund, Inc.
1. Significant Accounting Policies:
On September 29, 2006, Merrill Lynch Basic Value Fund, Inc. was renamed
BlackRock Basic Value Fund, Inc. (the "Fund"). The Fund is registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund seeks to achieve its investment
objective by investing all of its assets in Master Basic Value LLC (the
"Master LLC"), which has the same investment objective and strategies as the
Fund. Effective June 15, 2007, the Master LLC was converted from a Delaware
statutory trust to a Delaware limited liability company. The value of the
Fund's investment in the Master LLC reflects the Fund's proportionate interest
in the net assets of the Master LLC. The performance of the Fund is directly
affected by the performance of the Master LLC. The financial statements of the
Master LLC, including the Schedule of Investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements. The Fund's financial statements are prepared in conformity with
U.S. generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The percentage of the Master LLC owned by the Fund at June 30, 2007
was 99.9%. The Fund offers multiple classes of shares. Effective October 2,
2006, Class I, Class A, Class B and Class C Shares were redesignated
Institutional, Investor A, Investor B and Investor C Shares, respectively.
Class R Shares did not change their designation. Institutional Shares are sold
only to certain eligible investors. Investor A Shares are sold with a front-
end sales charge. Shares of Investor B and Investor C may be subject to a
contingent deferred sales charge. All classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions,
except that Investor A, Investor B and Investor C Shares bear certain expenses
related to the shareholder servicing of such shares, and Investor B and
Investor C Shares also bear certain expenses related to the distribution of
such shares. Each class has exclusive voting rights with respect to matters
relating to its shareholder servicing and distribution expenditures (except
that Investor B shareholders may vote on certain changes to the Investor A
distribution plan). Income, expenses (other than expenses attributable to a
specific class) and realized and unrealized gains and losses are allocated
daily to each class based on its relative net assets. The following is a
summary of significant accounting policies followed by the Fund.
(a) Valuation of investments--The Fund records its investment in the Master
LLC at fair value. Valuation of securities held by the Master LLC is discussed
in Note 1(a) of the Master LLC's Notes to Financial Statements, which are
included elsewhere in this report.
(b) Investment income and expenses--The Fund records daily its proportionate
share of the Master LLC's income, expenses and realized and unrealized gains
and losses. In addition, the Fund accrues its own expenses.
(c) Income taxes--It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders. Therefore,
no federal income tax provision is required.
(d) Prepaid registration fees--Prepaid registration fees are charged to
expense as the related shares are issued.
(e) Dividends and distributions--Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(f) Investment transactions--Investment transactions in the Master LLC are
accounted for on a trade date basis.
(g) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet
in connection with accounting for uncertainties in income tax positions taken
or expected to be taken by an entity, including mutual funds, before being
measured and recognized in the financial statements. Adoption of FIN 48 is
required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on each of the Fund's financial statements, if any, is
currently being assessed.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Fund's financial statements, if any, has not been
determined.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued) BlackRock Basic Value Fund, Inc.
In addition, in February 2007, Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of FAS 157. FAS 159 permits entities to choose
to measure many financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is
evaluating the implications of FAS 159 and its impact on the Fund's financial
statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. ("PNC"),
has approximately a 34% economic and voting interest. The new company operates
under the BlackRock name and is governed by a board of directors with a
majority of independent members.
On August 15, 2006, shareholders of the Fund approved a new Investment
Advisory Agreement for the Master LLC with BlackRock Advisors, Inc. BlackRock
Advisors, Inc. was reorganized into a limited liability company and renamed
BlackRock Advisors, LLC (the "Manager"), an indirect, wholly owned subsidiary
of BlackRock, Inc. The new Investment Advisory Agreement between the Master
LLC and the Manager became effective on September 29, 2006. Prior to September
29, 2006, FAM was the Master LLC's manager. The general partner of FAM is an
indirect, wholly owned subsidiary of Merrill Lynch, which is the limited
partner.
The Fund has also entered into separate Distribution Agreements and
Distribution Plans with FAM Distributors, Inc. ("FAMD") and BlackRock
Distributors, Inc. and its affiliates ("BDI") (collectively, the
"Distributor"). FAMD is a wholly owned subsidiary of Merrill Lynch Group, Inc.
and BDI is an affiliate of BlackRock, Inc.
The Fund has entered into an Administration Agreement with BlackRock Advisors,
LLC. Currently, the Fund pays BlackRock Advisors, LLC no fees pursuant to this
agreement.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor
ongoing service fees and distribution fees. The fees are accrued daily and
paid monthly at annual rates based upon the average daily net assets of the
shares as follows:
Service Distribution
Fee Fee
Investor A .25% --
Investor B .25% .75%
Investor C .25% .75%
Class R .25% .25%
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, also provide shareholder servicing and
distribution services to the Fund. The ongoing service fee compensates the
Distributor and each broker-dealer (including MLPF&S) for providing
shareholder services to Investor A, Investor B, and Investor C shareholders.
The ongoing distribution fee compensates the Distributor and the broker-
dealers for providing shareholder servicing and distribution-related services
to Investor B, Investor C and Class R shareholders.
For the year ended June 30, 2007, FAMD, the Fund's sole Distributor until
September 29, 2006, and BDI earned underwriting discounts and direct
commissions and MLPF&S earned dealer concessions on sales of the Fund's
Investor A and Institutional Shares as follows:
FAMD MLPF&S BDI
Institutional -- $ 3,679 --
Investor A $76,198 $947,226 $ 813
For the year ended June 30, 2007, MLPF&S received contingent deferred sales
charges of $417,798 and $64,982 relating to transactions in Investor B and
Investor C Shares, respectively. In addition, BDI received contingent deferred
sales charges of $1,486 and $1,126 relating to trans-actions in Investor B and
Investor C Shares, respectively. Furthermore, MLPF&S received contingent
deferred sales charges of $5,791, relating to transactions subject to front-
end sales charge waivers in Investor A Shares.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued) BlackRock Basic Value Fund, Inc.
The Manager maintains a call center, which is responsible for providing
certain shareholder services to the Fund, such as responding to shareholder
inquiries and processing trans-actions based upon instructions from
shareholders with respect to the subscription and redemption of Fund shares.
During the period September 29, 2006 to June 30, 2007, the following amounts
have been accrued by the Fund to reimburse the Manager for costs incurred
running the call center, which are a component of the transfer agent fees in
the accompanying Statements of Operations.
Call Center
Fees
Institutional $36,634
Investor A $42,795
Investor B $17,696
Investor C $ 9,044
Class R --
Effective September 29, 2006, PFPC Inc., an indirect, wholly owned subsidiary
of PNC and an affiliate of the Manager, became the Fund's transfer agent.
Prior to September 29, 2006, the Fund's transfer agent was Financial Data
Services, Inc. ("FDS"), a wholly owned subsidiary of Merrill Lynch.
Prior to September 29, 2006, certain officers and/or directors of the Fund
were officers and/or directors of MLIM, FAM, PSI, FAMD, FDS, Merrill Lynch,
and/or Merrill Lynch Investment Managers, LLC.
Commencing September 29, 2006, certain officers and/or directors of the Fund
are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share transactions
was $626,685,603 and $(1,052,404,332) for the years ended June 30, 2007 and
June 30, 2006, respectively.
Transactions in capital shares for each class were as follows:
Institutional Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 16,047,597 $ 541,111,421
Shares issued resulting from
reorganization 151 5,194
Shares issued to shareholders in
reinvestment of dividends and
distributions 20,428,376 661,886,244
--------------- ---------------
Total issued 36,476,124 1,203,002,859
Shares redeemed (27,805,558) (937,947,530)
--------------- ---------------
Net increase 8,670,566 $ 265,055,329
=============== ===============
Institutional Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 12,162,295 $ 388,148,242
Shares issued to shareholders in
reinvestment of dividends and
distributions 7,232,379 224,517,087
--------------- ---------------
Total issued 19,394,674 612,665,329
Shares redeemed (36,187,671) (1,148,235,609)
--------------- ---------------
Net decrease (16,792,997) $ (535,570,280)
=============== ===============
Investor A Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 15,453,058 $ 518,831,919
Shares issued resulting from
reorganization 87,134 2,989,624
Automatic conversion of shares 1,143,664 37,938,790
Shares issued to shareholders in
reinvestment of dividends and
distributions 12,972,490 418,852,722
--------------- ---------------
Total issued 29,656,346 978,613,055
Shares redeemed (17,292,443) (581,223,002)
--------------- ---------------
Net increase 12,363,903 $ 397,390,053
=============== ===============
Investor A Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 5,904,314 $ 186,825,298
Automatic conversion of shares 6,772,815 214,204,975
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,956,309 122,304,905
--------------- ---------------
Total issued 16,633,438 523,335,178
Shares redeemed (19,576,052) (618,742,750)
--------------- ---------------
Net decrease (2,942,614) $ (95,407,572)
=============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 2,344,134 $ 76,770,164
Shares issued resulting from
reorganization 21,095 709,459
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,048,929 127,380,237
--------------- ---------------
Total issued 6,414,158 204,859,860
--------------- ---------------
Automatic conversion of shares (1,169,339) (37,938,790)
Shares redeemed (10,086,752) (331,075,957)
--------------- ---------------
Total redeemed (11,256,091) (369,014,747)
=============== ===============
Net decrease (4,841,933) $ (164,154,887)
=============== ===============
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements (concluded) BlackRock Basic Value Fund, Inc.
Investor B Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 2,714,708 $ 84,109,870
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,817,155 55,133,538
--------------- ---------------
Total issued 4,531,863 139,243,408
--------------- ---------------
Automatic conversion of shares (6,907,670) (214,204,975)
Shares redeemed (10,645,064) (329,435,474)
--------------- ---------------
Total redeemed (17,552,734) (543,640,449)
=============== ===============
Net decrease (13,020,871) $ (404,397,041)
=============== ===============
Investor C Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 3,931,440 $ 125,237,099
Shares issued resulting from
reorganization 18,478 600,268
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,533,999 138,718,355
--------------- ---------------
Total issued 8,483,917 264,555,722
Shares redeemed (4,622,643) (147,290,507)
--------------- ---------------
Net increase 3,861,274 $ 117,265,215
=============== ===============
Investor C Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 4,570,295 $ 138,125,124
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,267,545 37,460,641
--------------- ---------------
Total issued 5,837,840 175,585,765
Shares redeemed (6,410,804) (193,530,696)
--------------- ---------------
Net decrease (572,964) $ (17,944,931)
=============== ===============
Class R Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 587,695 $ 19,481,369
Shares issued to shareholders in
reinvestment of dividends and
distributions 126,981 3,920,229
--------------- ---------------
Total issued 714,676 23,401,598
Shares redeemed (373,348) (12,271,705)
--------------- ---------------
Net increase 341,328 $ 11,129,893
=============== ===============
Class R Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 327,779 $ 10,136,303
Shares issued to shareholders in
reinvestment of dividends and
distributions 51,206 1,550,612
--------------- ---------------
Total issued 378,985 11,686,915
Shares redeemed (347,382) (10,771,423)
--------------- ---------------
Net increase 31,603 $ 915,492
=============== ===============
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended
June 30, 2007 and June 30, 2006 was as follows:
6/30/2007 6/30/2006
Distributions paid from:
Ordinary income $ 380,286,483 $ 111,213,802
Net long-term capital gains 1,099,883,042 379,394,713
--------------- ---------------
Total taxable distributions $ 1,480,169,525 $ 490,608,515
=============== ===============
As of June 30, 2007, the components of accumulated earnings on a tax
basis were as follows:
Undistributed ordinary income--net $ 24,737,903
Undistributed long-term capital gains--net 28,052,959
----------------
Total undistributed earnings--net 52,790,862
Capital loss carryforward (186,861)*
Unrealized gains--net 3,081,007,966**
----------------
Total accumulated earnings--net $ 3,133,611,967
================
* On June 30, 2007, the Fund had a net capital loss carryforward of
$186,861, all of which expires in 2010. This amount will be available
to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales and the tax deferral of losses on straddles.
5. Acquisition of BlackRock Basic Value Fund II, Inc.:
On June 18, 2007, the Fund acquired substantially all of the assets and
assumed substantially all of the liabilities of BlackRock Basic Value Fund II,
Inc. ("Basic Value II"), pursuant to a plan of reorganization. The acquisition
was accomplished by a tax-free exchange of 270,206 shares of common stock of
Basic Value II for 126,858 shares of common stock of the Fund. Basic Value
II's net assets on that date of $4,304,545, including $359,909 of net
accumulated realized capital losses and $2,965,508 of net unrealized
appreciation were combined with those of the Fund. The aggregate net assets
immediately after the acquisition amounted to $8,778,939,281.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Report of Independent Registered Public Accounting Firm
BlackRock Basic Value Fund, Inc.
To the Shareholders and Board of Directors
of BlackRock Basic Value Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
BlackRock Basic Value Fund, Inc. (formerly Merrill Lynch Basic Value Fund,
Inc.) as of June 30, 2007, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Fund is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Fund's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of BlackRock Basic
Value Fund, Inc. as of June 30, 2007, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in
the period then ended, and its financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
August 16, 2007
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Portfolio Information Master Basic Value LLC
As of June 30, 2007
Percent of
Ten Largest Common Stock Holdings Net Assets
Exxon Mobil Corp. 5.0%
JPMorgan Chase & Co. 3.6
American International Group, Inc. 3.3
Citigroup, Inc. 3.0
International Business Machines Corp. 2.8
Tyco International Ltd. 2.7
Morgan Stanley 2.5
Time Warner, Inc. 2.3
The Bank of New York Co., Inc. 2.3
Unilever NV 2.2
Percent of
Long-Term
Investment Criteria Investments
Above-Average Yield 36.1%
Below-Average Price/Earnings Ratio 31.9
Low Price-to-Book Value 24.3
Special Situations 4.4
Price to Cash Flow 3.3
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Schedule of Investments as of June 30, 2007 Master Basic Value LLC
Percent of
Industry Shares Held Common Stocks Value Net Assets
Above-Average Yield
Diversified Telecommunication 3,888,597 AT&T Inc. (e) $ 161,376,775 1.9%
Services
Communications Equipment 5,766,500 Alcatel SA (b)(e) 80,731,000 0.9
Metals & Mining 3,524,400 Alcoa, Inc. 142,843,932 1.7
Capital Markets 4,648,500 The Bank of New York Co., Inc. 192,633,840 2.3
Pharmaceuticals 3,794,800 Bristol-Myers Squibb Co. 119,763,888 1.4
Oil, Gas & Consumable Fuels 1,622,600 Chevron Corp. 136,687,824 1.6
Multi-Utilities 775,900 Dominion Resources, Inc. (e) 66,967,929 0.8
Chemicals 2,923,400 E.I. du Pont de Nemours & Co. (e) 148,625,656 1.7
Oil, Gas & Consumable Fuels 5,078,100 Exxon Mobil Corp. 425,951,028 5.0
Industrial Conglomerates 4,596,800 General Electric Co. 175,965,504 2.1
Food Products 2,880,200 General Mills, Inc. 168,261,284 2.0
Pharmaceuticals 2,739,800 GlaxoSmithKline Plc (b)(e) 143,483,326 1.7
Aerospace & Defense 1,992,900 Honeywell International, Inc. (e) 112,160,412 1.3
Diversified Financial Services 6,271,892 JPMorgan Chase & Co. 303,873,167 3.6
Pharmaceuticals 1,573,600 Johnson & Johnson 96,965,232 1.1
Pharmaceuticals 6,741,700 Pfizer, Inc. (e) 172,385,269 2.0
Electric Utilities 2,151,200 The Southern Co. (e) 73,764,648 0.9
Semiconductors & Semiconductor 7,369,356 Taiwan Semiconductor Manufacturing Co.,
Equipment Ltd. (b) 82,020,934 1.0
Diversified Telecommunication 3,985,800 Verizon Communications, Inc. 164,095,386 1.9
Services
Pharmaceuticals 1,227,700 Wyeth 70,396,318 0.8
---------------- ------
3,038,953,352 35.7
Below-Average Price/
Earnings Ratio
Insurance 3,983,000 American International Group, Inc. 278,929,490 3.3
Diversified Financial Services 3,156,000 Bank of America Corp. 154,296,840 1.8
Health Care Equipment & Supplies 1,843,100 Baxter International, Inc. 103,840,254 1.2
Diversified Financial Services 5,042,900 Citigroup, Inc. 258,650,341 3.0
Beverages 5,364,300 Coca-Cola Enterprises, Inc. (e) 128,743,200 1.5
Oil, Gas & Consumable Fuels 930,600 Consol Energy, Inc. 42,909,966 0.5
Thrifts & Mortgage Finance 932,500 Fannie Mae 60,920,225 0.7
Computers & Peripherals 2,084,600 Hewlett-Packard Co. (e) 93,014,852 1.1
Semiconductors & Semiconductor 5,796,300 Intel Corp. 137,720,088 1.6
Equipment
Household Durables 1,995,000 Koninklijke Philips Electronics NV 84,428,400 1.0
Food Products 1,132,100 Kraft Foods, Inc. (e) 39,906,525 0.5
Hotels, Restaurants & Leisure 1,688,900 McDonald's Corp. 85,728,564 1.0
Capital Markets 2,536,800 Morgan Stanley 212,786,784 2.5
Aerospace & Defense 1,860,400 Northrop Grumman Corp. 144,869,348 1.7
Pharmaceuticals 5,060,200 Schering-Plough Corp. (e) 154,032,488 1.8
Insurance 2,880,676 The Travelers Cos., Inc. 154,116,166 1.8
Food Products 5,917,300 Unilever NV (b) 183,554,646 2.2
IT Services 12,752,475 Unisys Corp. (a) 116,557,622 1.4
Food & Staples Retailing 656,500 Wal-Mart Stores, Inc. 31,584,215 0.4
Insurance 1,043,200 XL Capital Ltd. Class A (e) 87,931,328 1.1
Office Electronics 7,007,300 Xerox Corp. (a)(e) 129,494,904 1.5
---------------- ------
2,684,016,246 31.6
Low Price-to-Book Value
Oil, Gas & Consumable Fuels 1,803,900 Anadarko Petroleum Corp. 93,784,761 1.1
Media 4,949,050 Comcast Corp. Special Class A (a) 138,375,438 1.6
Machinery 780,000 Deere & Co. (e) 94,177,200 1.1
Semiconductors & Semiconductor 5,598,600 Fairchild Semiconductor International,
Equipment Inc. (a)(e) 108,164,952 1.3
Energy Equipment & Services 2,404,721 GlobalSantaFe Corp. (e) 173,741,092 2.0
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Schedule of Investments (continued) Master Basic Value LLC
Percent of
Industry Shares Held Common Stocks Value Net Assets
Low Price-to-Book Value (concluded)
Energy Equipment & Services 2,446,200 Halliburton Co. (e) $ 84,393,900 1.0%
Insurance 725,900 Hartford Financial Services Group, Inc. 71,508,409 0.8
Household Products 2,174,400 Kimberly-Clark Corp. 145,445,616 1.7
Semiconductors & Semiconductor 14,324,515 LSI Logic Corp. (a)(e) 107,577,108 1.3
Equipment
Semiconductors & Semiconductor 6,484,800 Micron Technology, Inc. (a)(e) 81,254,544 1.0
Equipment
Aerospace & Defense 3,063,394 Raytheon Co. 165,086,303 1.9
Computers & Peripherals 15,989,000 Sun Microsystems, Inc. (a)(e) 84,102,140 1.0
Media 9,367,600 Time Warner, Inc. (e) 197,094,304 2.3
Industrial Conglomerates 6,886,500 Tyco International Ltd. (a)(e) 232,694,835 2.7
Media 3,362,900 Walt Disney Co. (e) 114,809,406 1.4
Commercial Banks 4,563,200 Wells Fargo & Co. 160,487,744 1.9
---------------- ------
2,052,697,752 24.1
Price-to-Cash Flow
Automobiles 515,535 Honda Motor Co., Ltd. (b) 18,708,765 0.2
Oil, Gas & Consumable Fuels 2,047,000 Peabody Energy Corp. (e) 99,033,860 1.2
Diversified Telecommunication 7,396,000 Qwest Communications International
Services Inc. (a)(e) 71,741,200 0.9
Wireless Telecommunication Services 4,193,000 Sprint Nextel Corp. (e) 86,837,030 1.0
---------------- ------
276,320,855 3.3
Special Situations
Semiconductors & Semiconductor 2,337,300 Applied Materials, Inc. (e) 46,442,151 0.5
Equipment
Energy Equipment & Services 2,976,500 BJ Services Co. (e) 84,651,660 1.0
Media 258,257 Citadel Broadcasting Corp. (e) 1,665,758 0.0
Computers & Peripherals 2,246,300 International Business Machines Corp. 236,423,075 2.8
---------------- ------
369,182,644 4.3
Total Common Stocks
(Cost--$5,242,761,789) 8,421,170,849 99.0
Beneficial Interest Short-Term Securities
$ 168,881,214 BlackRock Liquidity Series, LLC
Cash Sweep Series, 5.33% (c)(d) 168,881,214 2.0
1,165,981,423 BlackRock Liquidity Series, LLC
Money Market Series, 5.33% (c)(d)(f) 1,165,981,423 13.7
Total Short-Term Securities
(Cost--$1,334,862,637) 1,334,862,637 15.7
Total Investments
(Cost--$6,577,624,426) 9,756,033,486 114.7
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Schedule of Investments (concluded) Master Basic Value LLC
Number of Percent of
Contracts Options Written Value Net Assets
Call Options Written 4,000 Chevron Corp., expiring January 2008
at USD 90 $ (1,520,000) 0.0%
15,064 Comcast Corp. Special Class A, expiring
July 2007 at USD 28.333 (903,840) 0.0
6,000 International Business Machines Corp.,
expiring July 2007 at USD 100 (3,480,000) (0.1)
Total Options Written
(Premiums Received--$7,253,677) (5,903,840) (0.1)
Total Investments, Net of Options Written (Cost--$6,570,370,749*) 9,750,129,646 114.6
Liabilities in Excess of Other Assets (1,239,866,717) (14.6)
---------------- ------
Net Assets $ 8,510,262,929 100.0%
================ ======
* The cost and unrealized appreciation (depreciation) of investments,
net of options written, as of June 30, 2007, as computed for federal
income tax purposes, were as follows:
Aggregate cost $ 6,588,915,025
=================
Gross unrealized appreciation $ 3,164,926,191
Gross unrealized depreciation (3,711,570)
-----------------
Net unrealized appreciation $ 3,161,214,621
=================
(a) Non-income producing security.
(b) Depositary receipts.
(c) Investments in companies considered to be an affiliate of the Master LLC,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Interest
Affiliate Activity Income
BlackRock Liquidity Series, LLC
Cash Sweep Series I $168,881,214 $5,744,649
BlackRock Liquidity Series, LLC
Money Market Series $183,418,823 $1,029,798
(d) Represents the current yield as of June 30, 2007.
(e) Security, or a portion of security, is on loan.
(f) Security was purchased with the cash proceeds from securities loans.
o For Master LLC's compliance purposes, the Master LLC's industry
classifications refer to any one or more of the industry sub-
classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Master LLC management.
This definition may not apply for purposes of this report, which may
combine industry sub-classifications for reporting ease. These industry
classifications and investment criteria are unaudited.
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Statement of Assets and Liabilities Master Basic Value LLC
As of June 30, 2007
Assets
Investments in unaffiliated securities, at value (including securities loaned
of $1,125,392,375) (identified cost--$5,242,761,789) $ 8,421,170,849
Investments in affiliated securities, at value (identified cost--$1,334,862,637) 1,334,862,637
Receivables:
Securities sold $ 142,128,038
Dividends 9,817,282
Contributions 9,126,683
Securities lending 81,941 161,153,944
---------------
Prepaid expenses and other assets 20,037
---------------
Total assets 9,917,207,467
---------------
Liabilities
Collateral on securities loaned, at value 1,165,981,423
Options written, at value (premiums received--$7,253,677) 5,903,840
Bank overdraft 91,481,345
Payables:
Withdrawals 121,698,926
Securities purchased 18,319,371
Investment adviser 2,797,112
Other affiliates 37,356 142,852,765
---------------
Accrued expenses and other liabilities 725,165
---------------
Total liabilities 1,406,944,538
---------------
Net Assets
Net assets $ 8,510,262,929
===============
Net Assets Consist of
Investors' capital $ 5,330,504,032
Unrealized appreciation--net 3,179,758,897
---------------
Net Assets $ 8,510,262,929
===============
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Statement of Operations Master Basic Value LLC
For the Year Ended June 30, 2007
Investment Income
Dividends (net of $2,350,175 foreign withholding tax) $ 169,639,564
Interest from affiliates 5,744,649
Securities lending--net 1,029,798
---------------
Total income 176,414,011
---------------
Expenses
Investment advisory fees $ 32,865,881
Accounting services 1,064,335
Custodian fees 300,368
Professional fees 214,542
Directors' fees and expenses 46,514
Printing and shareholder reports 5,117
Pricing fees 1,344
Other 147,888
---------------
Total expenses 34,645,989
---------------
Investment income--net 141,768,022
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 684,874,263
Options written--net (4,813,622) 680,060,641
---------------
Change in unrealized appreciation/depreciation on:
Investments--net 999,147,422
Options written--net 353,843 999,501,265
--------------- ---------------
Total realized and unrealized gain--net 1,679,561,906
---------------
Net Increase in Net Assets Resulting from Operations $ 1,821,329,928
===============
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Statements of Changes in Net Assets Master Basic Value LLC
For the Year Ended
June 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 141,768,022 $ 132,432,086
Realized gain--net 680,060,641 750,790,613
Change in unrealized appreciation/depreciation--net 999,501,265 52,228,027
--------------- ---------------
Net increase in net assets resulting from operations 1,821,329,928 935,450,726
--------------- ---------------
Capital Transactions
Proceeds from contributions 1,281,525,079 807,530,243
Fair value of withdrawals (2,173,906,741) (2,390,594,118)
--------------- ---------------
Net decrease in net assets derived from capital transactions (892,381,662) (1,583,063,875)
--------------- ---------------
Net Assets
Total increase (decrease) in net assets 928,948,266 (647,613,149)
Beginning of year 7,581,314,663 8,228,927,812
--------------- ---------------
End of year $ 8,510,262,929 $ 7,581,314,663
=============== ===============
See Notes to Financial Statements.
Financial Highlights Master Basic Value LLC
The following per share data and ratios have been derived For the Year Ended June 30,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Total Investment Return
Total investment return 25.25% 12.32%* 3.91% 25.38% (.09%)
=========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses .43% .43% .43% .43% .43%
=========== =========== =========== =========== ===========
Investment income--net 1.74% 1.66% 1.63% 1.50% 1.66%
=========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of year (in thousands) $ 8,510,263 $ 7,581,315 $ 8,228,928 $ 8,747,240 $ 7,388,495
=========== =========== =========== =========== ===========
Portfolio turnover 31% 42% 45% 33% 32%
=========== =========== =========== =========== ===========
* For the year ended June 30, 2006, +.10% of the Master LLC's total return consists of payments by
Fund Asset Management, L.P. for compensation as a result of a securities class action entitlement
recovery and as a result of a corporate action. Excluding these items, the total return would have
been +12.22%.
See Notes to Financial Statements.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements Master Basic Value LLC
1. Significant Accounting Policies:
Master Basic Value LLC (the "Master LLC") is registered under the Investment
Company Act of 1940, as amended, and is organized as a Delaware limited
liability company. Prior to June 15, 2007, the Master LLC was organized as a
Delaware statutory trust (the "Trust"). The Limited Liability Company
Agreement (the "LLC Agreement") permits the Directors (and prior to June 15,
2007, the Declaration of Trust permited the Trustees) to issue nontransferable
interests in the Master LLC/Trust, subject to certain limitations. Throughout
this report the Trust and the Master LLC are referred to as the Master LLC and
the Board of Trustees is referred to as the Board of Directors. The Master
LLC's financial statements are prepared in conformity with U.S. generally
accepted accounting principles, which may require the use of management
accruals and estimates. Actual results may differ from these estimates. The
following is a summary of significant accounting policies followed by the
Master LLC.
(a) Valuation of investments--Equity securities that are held by the Master
LLC that are traded on stock exchanges or the NASDAQ Global Market are valued
at the last sale price or official close price on the exchange, as of the
close of business on the day the securities are being valued or, lacking any
sales, at the last available bid price for long positions and at the last
available asked price for short positions. In cases where equity securities
are traded on more than one exchange, the securities are valued on the
exchange designated as the primary market by or under the authority of the
Board of Directors of the Master LLC. Long positions traded in the over-the-
counter ("OTC") market, NASDAQ Capital Market or Bulletin Board are valued at
the last available bid price or yield equivalent obtained from one or more
dealers or pricing services approved by the Board of Directors of the Master
LLC. Short positions traded in the OTC market are valued at the last available
asked price. Portfolio securities that are traded both in the OTC market and
on a stock exchange are valued according to the broadest and most
representative market.
Options written are valued at the last sale price in the case of exchange-
traded options or, in the case of options traded in the OTC market, the last
asked price. Options purchased are valued at their last sale price in the case
of exchange-traded options or, in the case of options traded in the OTC
market, the last bid price. Swap agreements are valued based upon quoted fair
valuations received daily by the Master LLC from a pricing service or
counterparty. Financial futures contracts and options thereon, which are
traded on exchanges, are valued at their last sale price as of the close of
such exchanges. Valuation of short-term investment vehicles is generally based
on the net asset value of the underlying investment vehicle or amortized cost.
Repurchase agreements are valued at cost plus accrued interest. The Master LLC
employs pricing services to provide certain securities prices for the Master
LLC. Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Board of Directors of the Master LLC, including valuations
furnished by the pricing services retained by the Master LLC, which may use a
matrix system for valuations. The procedures of a pricing service and its
valuations are reviewed by the officers of the Master LLC under the general
supervision of the Master LLC's Board of Directors. Such valuations and
procedures will be reviewed periodically by the Board of Directors of the
Master LLC.
Generally, trading in foreign securities, as well as U.S. government
securities and money market instruments, is substantially completed each day
at various times prior to the close of business on the New York Stock Exchange
("NYSE"). The values of such securities used in computing the net assets of
the Master LLC are determined as of such times. Foreign currency exchange
rates are generally determined as of the close of business on the NYSE.
Occasionally, events affecting the values of such securities and such exchange
rates may occur between the times at which they are determined and the close
of business on the NYSE that may not be reflected in the computation of the
Master LLC's net assets. If events (for example, a company announcement,
market volatility or a natural disaster) occur during such periods that are
expected to materially affect the value of such securities, those securities
will be valued at their fair value as determined in good faith by the Master
LLC's Board of Directors or by BlackRock Advisors, LLC (the "Manager"), an
indirect, wholly owned subsidiary of BlackRock, Inc., using a pricing service
and/or procedures approved by the Master LLC's Board of Directors.
(b) Derivative financial instruments--The Master LLC may engage in various
portfolio investment strategies both to increase the return of the Master LLC
and to hedge, or protect its exposure to interest rate movements and movements
in the securities markets. Losses may arise due to changes in the value of the
contract due to an unfavorable change in the price of the underlying security
or index, or if the counterparty does not perform under the contract. The
counterparty for certain instruments may pledge cash or securities as
collateral.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued) Master Basic Value LLC
* Options--The Master LLC may purchase and write covered call and put options.
When the Master LLC writes an option, an amount equal to the premium received
by the Master LLC is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked-to-market to reflect the
current market value of the option written. When a security is purchased or
sold through an exercise of an option, the related premium paid (or received)
is added to (or deducted from) the basis of the security acquired or deducted
from (or added to) the proceeds of the security sold. When an option expires
(or the Master LLC enters into a closing transaction), the Master LLC realizes
a gain or loss on the option to the extent of the premiums received or paid
(or gain or loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
(c) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized.
Assets and liabilities denominated in foreign currencies are valued at the
exchange rate at the end of the period. Foreign currency transactions are the
result of settling (realized) or valuing (unrealized) assets or liabilities
expressed in foreign currencies into U.S. dollars. Realized and unrealized
gains or losses on investments include the effects of foreign exchange rates
on investments. The Master LLC invests in foreign securities, which may
involve a number of risk factors and special considerations not present with
investments in securities of U.S. corporations.
(d) Income taxes--The Master LLC is classified as a partnership for federal
income tax purposes. As such, each investor in the Master LLC is treated as
owner of its proportionate share of the net assets, income, expenses and
realized and unrealized gains and losses of the Master LLC. Therefore, no
federal income tax provision is required. Under the applicable foreign tax
law, a withholding tax may be imposed on interest, dividends and capital gains
at various rates. It is intended that the Master LLC's assets will be managed
so an investor in the Master LLC can satisfy the requirements of Subchapter M
of the Internal Revenue Code.
(e) Security transactions and investment income--Security transactions are
recorded on the dates the trans-actions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis.
(f) Securities lending--The Master LLC may lend securities to financial
institutions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities.
The market value of the loaned securities is determined at the close of
business of the Master LLC and any additional required collateral is delivered
to the Master LLC on the next business day. Where the Master LLC receives
securities as collateral for the loaned securities, it collects a fee from the
borrower. The Master LLC typically receives the income on the loaned
securities but does not receive the income on the collateral. Where the Master
LLC receives cash collateral, it may invest such collateral and retain the
amount earned on such investment, net of any amount rebated to the borrower.
Loans of securities are terminable at any time and the borrower, after notice,
is required to return borrowed securities within five business days. The
Master LLC may pay reasonable finder's, lending agent, administrative and
custodial fees in connection with its loans. In the event that the borrower
defaults on its obligation to return borrowed securities because of insolvency
or for any other reason, the Master LLC could experience delays and costs in
gaining access to the collateral. The Master LLC also could suffer a loss
where the value of the collateral falls below the market value of the borrowed
securities, in the event of borrower default or in the event of losses on
investments made with cash collateral.
(g) Bank overdraft--The Fund recorded a bank overdraft which resulted from a
failed trade.
(h) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." FIN 48 prescribes the minimum recognition threshold a tax position must
meet in connection with accounting for uncertainties in income tax positions
taken or expected to be taken by an entity, including mutual funds, before
being measured and recognized in the financial statements. Adoption of FIN 48
is required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on each of the Master LLC's financial statements, if any,
is currently being assessed.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued) Master Basic Value LLC
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Master LLC's financial statements, if any, has not
been determined.
In addition, in February 2007, FASB issued Statement of Financial Accounting
Standards No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), was issued and is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provisions of FAS 157. FAS 159
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at
fair value. FAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. At this
time, management is evaluating the implications of FAS 159 and its impact on
the Master LLC's financial statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. ("PNC"),
has approximately a 34% economic and voting interest. The new company operates
under the BlackRock name and is governed by a board of directors with a
majority of independent members.
On August 15, 2006, shareholders of the investors of the Master LLC approved a
new Investment Advisory Agreement with BlackRock Advisors, Inc., which was
reorganized into a limited liability company and renamed BlackRock Advisors,
LLC (the "Manager"), an indirect, wholly owned subsidiary of BlackRock, Inc.
The new Investment Advisory Agreement between the Master LLC and the Manager
became effective on September 29, 2006. Prior to September 29, 2006, FAM was
the manager. The general partner of FAM is an indirect, wholly owned
subsidiary of Merrill Lynch, which is the limited partner.
The Manager is responsible for the management of the Master LLC's investments
and provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Master LLC. For such services, the
Master LLC pays a monthly fee based upon the average daily value of the Master
LLC's net assets at the following annual rates: .60% of the Master LLC's
average daily net assets not exceeding $100 million; .50% of average daily net
assets in excess of $100 million but not exceeding $200 million; and .40% of
average daily net assets in excess of $200 million.
In addition, the Manager has entered into a Sub-Advisory Agreement with
BlackRock Investment Management, LLC ("BIM") an affiliate of the Manager,
under which the Manager pays the sub-adviser for services it provides a fee
that is a percentage of the management fee paid by the Master LLC to the
Manager.
The Master LLC has received an exemptive order from the Securities and
Exchange Commission permitting it to lend portfolio securities to Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, or its affiliates. As of June 30, 2007, the
Master LLC lent securities with a value of $311,564,813 to MLPF&S or its
affiliates. Pursuant to that order, the Master LLC has retained BIM as the
securities lending agent for a fee based on a share of the returns on
investment of cash collateral. Prior to September 29, 2006, BIM was organized
as Merrill Lynch Investment Managers, LLC ("MLIM, LLC"), an affiliate of FAM,
and MLIM, LLC was the securities lending agent. BIM may, on behalf of the
Master LLC, invest cash collateral received by the Master LLC for such loans,
among other things, in a private investment company managed by the Manager or
in registered money market funds advised by the Manager or its affiliates. For
the year ended June 30, 2007, BIM received $426,691 in securities lending
agent fees.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Notes to Financial Statements (concluded) Master Basic Value LLC
In addition, MLPF&S received $1,289,478 in commissions on the execution
of portfolio security transactions for the Master LLC for the year ended
June 30, 2007.
For the year ended June 30, 2007, the Master LLC reimbursed FAM and the
Manager $44,197 and $117,164 respectively, for certain accounting services.
Prior to September 29, 2006, certain officers and/or Directors of the Master
LLC were officers and/or directors of MLIM, PSI, FAM, Merrill Lynch and/or
MLIM, LLC.
Commencing September 29, 2006, certain officers and/or Directors of the Master
LLC are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended June 30, 2007 were $2,514,128,161 and $3,276,992,814, respectively.
Transactions in call options written for the year ended June 30, 2007
were as follows:
Number of Premiums
Call Options Written Contracts Received
Outstanding call options written,
beginning of year 20,000 $ 2,439,994
Options written 159,408 28,251,825
Options closed (107,454) (14,339,916)
Options exercised (46,890) (9,098,226)
--------------- ---------------
Outstanding call options written,
end of year 25,064 $ 7,253,677
=============== ===============
4. Short-Term Borrowings:
The Master LLC, along with certain other funds managed by the Manager and its
affiliates, is party to a $500,000,000 credit agreement with a group of
lenders, which expires November 2007. The Master LLC may borrow under the
credit agreement to fund shareholder redemptions and for other lawful purposes
other than for leverage. The Master LLC may borrow up to the maximum amount
allowable under the Master LLC's current prospectus and statement of
additional information, subject to various other legal, regulatory or
contractual limits. The Master LLC pays a commitment fee of .06% per annum
based on the Master LLC's pro rata share of the unused portion of the credit
agreement. Amounts borrowed under the credit agreement bear interest at a rate
equal to, at each fund's election, the federal funds rate plus .35% or a base
rate as defined in the credit agreement. The Master LLC did not borrow under
the credit agreement during the year ended June 30, 2007.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Report of Independent Registered Public Accounting Firm Master Basic Value LLC
To the Investors and Board of Directors
of Master Basic Value LLC:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Master Basic Value LLC (the "Master
LLC"), formerly Master Basic Value Trust, as of June 30, 2007, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Master LLC's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. The Master LLC is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Master LLC's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2007, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed
other auditing procedures. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above, present fairly, in all material respects, the financial position of
Master Basic Value LLC as of June 30, 2007, the results of its operations for
the year then ended, the changes in its net assets for each of the two years
in the period then ended, and its financial highlights for each of the five
years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
August 16, 2007
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Officers and Directors
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
Interested Director
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, Inc., 121 Funds None
P.O. Box 9011 President present Global Chief Investment Officer for Equities, 161 Portfolios
Princeton, and Chairman of the BlackRock Retail Operating
NJ 08543-9011 Director Committee, and member of the BlackRock
Age: 52 Executive Committee since 2006; President
of the funds advised by Merrill Lynch Investment
Managers, L.P. ("MLIM") and its affiliates
("MLIM/FAM-advised funds") from 2005 to
2006 and Chief Investment Officer thereof
from 2001 to 2006; President of MLIM and
Fund Asset Management, L.P. ("FAM") from
2001 to 2006; Co-Head (Americas Region)
thereof from 2000 to 2001 and Senior Vice
President from 1999 to 2001; President and
Director of Princeton Services, Inc. ("Princeton
Services") and President of Princeton
Administrators, L.P. ("Princeton Administrators")
from 2001 to 2006; Chief Investment Officer
of OppenheimerFunds, Inc. in 1999 and Executive
Vice President thereof from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock Advisors, LLC and its affiliates act as
investment adviser. Mr. Doll is an "interested person," as defined in the
Investment Company Act, of the Fund based on his positions with BlackRock, Inc.
and its affiliates. Directors serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72. As Fund President, Mr. Doll
serves at the pleasure of the Board of Directors.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Officers and Directors (continued)
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
Independent Directors*
Donald W. Burton Director 2002 to Managing General Partner of The Burton 21 Funds Knology, Inc.
P.O. Box 9095 present Partnership, Limited Partnership (an investment 32 Portfolios (telecommuni-
Princeton, partnership) since 1979; Managing General cations),
NJ 08543-9095 Partner of The South Atlantic Venture Funds Symbion, Inc.
Age: 63 since 1983; Member of the Investment (healthcare)
Advisory Council of the Florida State Board and Capital
of Administration since 2001. Southwest
(financial)
John Francis O'Brien Director 2005 to President and Chief Executive Officer of 21 Funds Cabot
P.O. Box 9095 present Allmerica Financial Corporation (financial 32 Portfolios Corporation
Princeton, services holding company) from 1995 to 2002 (chemicals),
NJ 08543-9095 and Director from 1995 to 2003; President of LKQ Corporation
Age: 64 Allmerica Investment Management Co., Inc. (auto parts
(investment adviser) from 1989 to 2002, manufacturing)
Director from 1989 to 2002 and Chairman of and TJX
the Board from 1989 to 1990; President, Chief Companies, Inc.
Executive Officer and Director of First (retailer)
Allmerica Financial Life Insurance Company
from 1989 to 2002 and Director of various other
Allmerica Financial companies until 2002; Director
from 1989 to 2006, Member of the Governance
Nominating Committee from 2004 to 2006,
Member of the Compensation Committee from
1989 to 2006 and Member of the Audit Committee
from 1990 to 2004 of ABIOMED; Director, Member
of the Governance and Nomination Committee
and Member of the Audit Committee of Cabot
Corporation since 1990; Director and Member of
the Audit Committee and Compensation Committee
of LKQ Corporation since 2003; Lead Director of
TJX Companies, Inc. since 1996; Trustee of the
Woods Hole Oceanographic Institute since 2003.
Director, Ameresco, Inc. since 2006. Director,
Boston Lyric Opera since 2002.
David H. Walsh Director 2003 to Director, Ruckleshaus Institute and Haub School 21 Funds None
P.O. Box 9095 present of Natural Resources at the University of 32 Portfolios
Princeton, Wyoming since 2006; Consultant with Putnam
NJ 08543-9095 Investments from 1993 to 2003, and employed in
Age: 65 various capacities therewith from 1973 to 1992;
Director, Massachusetts Audubon Society from
1990 to 1997; Director, The National Audubon
Society from 1998 to 2005; Director, The
American Museum of Fly Fishing since 1997.
Fred G. Weiss** Director 1998 to Managing Director of FGW Associates since 21 Funds Watson
P.O. Box 9095 present 1997; Vice President, Planning, Investment and 32 Portfolios Pharmaceuticals,
Princeton, Development of Warner Lambert Co. from 1979 Inc.
NJ 08543-9095 to 1997; Director of the Michael J. Fox Foundation (pharmaceutical
Age: 65 for Parkinson's Research since 2000; Director of company)
BTG International Plc (a global technology
commercialization company) since 2001.
* Directors serve until their resignation, removal or death, or until December 31
of the year in which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Officers and Directors (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill
P.O. Box 9011 President present Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM")
Princeton, and and in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer
NJ 08543-9011 Treasurer 1999 to thereof from 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
Age: 47 present
Karen Clark Fund Chief 2007 to Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance present BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to 2007;
Princeton, Officer Principal and Senior Compliance Officer, State Street Global Advisors, from 2001 to
NJ 08543-9011 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998 to 2001; and
Age: 42 Branch Chief, Division of Investment Management and Office of Compliance
Inspections and Examinations, U.S. Securities and Exchange Commission, from
1993 to 1998.
Alice A. Pellegrino Secretary 2004 to Director of BlackRock, Inc. since 2006; Director (Legal Advisory) of MLIM from
P.O. Box 9011 present 2002 to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with
Princeton, MLIM from 1997 to 1999; Secretary of MLIM, FAM, FAM Distributors, Inc. and
NJ 08543-9011 Princeton Services from 2004 to 2006.
Age: 47
* Officers of the Fund serve at the pleasure of the Board of Directors.
Further information about the Fund's Officers and Directors is available in
the Fund's Statement of Additional Information, which can be obtained without
charge by calling 1-800-441-7762.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
BlackRock Funds
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, "Clients") and to
safeguarding their non-public personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any non-
public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client
accounts. These non-affiliated third parties are required to protect the
confidentiality and security of this information and to use it only for its
intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that
may be of interest to you. In addition, BlackRock restricts access to non-
public personal information about its Clients to those BlackRock employees
with a legitimate business need for the information. BlackRock maintains
physical, electronic and procedural safeguards that are designed to protect
the non-public personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site or shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at
http://www.blackrock.com/edelivery
2) Select eDelivery under the More Information section
3) Log into your account
The Fund will mail only one copy of shareholder documents, including
prospectuses, annual and semi-annual reports and proxy statements, to
shareholders with multiple accounts at the same address. This practice is
commonly called "householding" and it 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 Fund at
(800) 441-7762.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund/Master LLC has delegated proxy voting responsibilities to BlackRock
and its affiliates, subject to the general oversight of the Fund's/Master
LLC's Board of Directors. A description of the policies and procedures that
BlackRock and its affiliates use to determine how to vote proxies relating to
portfolio securities is available without charge, upon request, on our Web
site at www.blackrock.com, by calling (800) 441-7762, or on the Web site of
the Securities and Exchange Commission (the "Commission") at
http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Fund's/Master LLC's voting
securities were voted (if any) by BlackRock during the most recent 12-month
period ended June 30 is available, upon request and without charge, on our Web
site at www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Fund/Master LLC files its complete schedule of portfolio holdings for the
first and third quarters of its fiscal year with the Commission on Form N-Q.
The Fund's/Master LLC's Forms N-Q are available on the Commission's Web site
at http://www.sec.gov and 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. The
Fund's/Master LLC's Forms N-Q may also be obtained upon request, without
charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us
on the Web at www.blackrock.com.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have
$50 or more automatically deducted from their checking or savings account and
invested in any of the BlackRock portfolios.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock portfolios, as
long as their account is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover,
Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
A World-Class Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all
investment styles and managed by experts in equity, fixed income and
tax-exempt investing.
Equity Funds
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio++
BlackRock Balanced Capital Fund++
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund++
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio*
BlackRock Global Science & Technology
Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Investment Trust
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock Technology Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
BlackRock Bond Fund
BlackRock Commodity Strategies Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government
Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Total Return Portfolio
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* See the prospectus for information on specific limitations on
investments in the fund.
++ Mixed asset fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should
consider the investment objectives, risks, charges and expenses of the funds
under consideration carefully before investing. Each fund's prospectus
contains this and other information and is available at www.blackrock.com or
by calling 800-882-0052 or from your financial advisor. The prospectus should
be read carefully before investing.
BLACKROCK BASIC VALUE FUND, INC. JUNE 30, 2007
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee and
(ii) each audit committee financial expert is independent: (1)
Donald W. Burton, (2) John F. O'Brien, (3) David H. Walsh and (4)
Fred G. Weiss.
Item 4 - Principal Accountant Fees and Services
BlackRock Basic Value Fund, Inc.
(a) Audit Fees - Fiscal Year Ended June 30, 2007 - $6,600
Fiscal Year Ended June 30, 2006 - $6,600
(b) Audit-Related Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
(c) Tax Fees - Fiscal Year Ended June 30, 2007 - $6,100
Fiscal Year Ended June 30, 2006 - $6,000
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
Master Basic Value LLC
(a) Audit Fees - Fiscal Year Ended June 30, 2007 - $43,500
Fiscal Year Ended June 30, 2006 - $43,500
(b) Audit-Related Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
(c) Tax Fees - Fiscal Year Ended June 30, 2007 - $9,200
Fiscal Year Ended June 30, 2006 - $9,200
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
(e)(1) The registrant's audit committee (the "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
by the Committee. The Committee also must approve other non-audit
services provided to the registrant and those non-audit services
provided to the registrant's affiliated 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"). However, such services will only be
deemed pre-approved provided that any individual project does not
exceed $5,000 attributable to the registrant or $50,000 for all of
the registrants the Committee oversees. Any proposed services
exceeding the pre-approved cost levels will require specific pre-
approval by the 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.
(e)(2) 0%
(f) Not Applicable
(g) BlackRock Basic Value Fund, Inc.
Fiscal Year Ended June 30, 2007 - $2,967,000
Fiscal Year Ended June 30, 2006 - $2,815,800
Master Basic Value LLC
Fiscal Year Ended June 30, 2007 - $2,970,100
Fiscal Year Ended June 30, 2006 - $2,819,000
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant 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.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,735,000, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
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
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 - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's 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
15d-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) 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 registrant's
internal control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
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.
BlackRock Basic Value Fund, Inc. and Master Basic Value LLC
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Basic Value Fund, Inc. and Master Basic Value LLC
Date: August 20, 2007
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 the registrant and in the capacities and on
the dates indicated.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Basic Value Fund, Inc. and Master Basic Value LLC
Date: August 20, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock Basic Value Fund, Inc. and Master Basic Value LLC
Date: August 20, 2007