SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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For the fiscal year ended: Commission file number:
December 31, 2005 001-32201
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PPLUS TRUST SERIES DCNA-1)
(Exact name of registrant as specified in its charter)
DELAWARE 13-3891329
(State or other (I. R. S. Employer
jurisdiction of Identification No.)
incorporation)
WORLD FINANCIAL CENTER, 10080
NEW YORK, NEW YORK (Zip Code)
(Address of principal
executive offices)
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Registrant's telephone number, including area code: (212) 449-1000
Securities registered pursuant to Section 12(b) of the Act:
PPLUS Trust Certificates Series DCNA-1 listed on The New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act:
Not Applicable.
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes [ ] No [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter.
Not Applicable.
Indicate the number of shares outstanding for each of the registrant's classes
of common stock, as of the latest practicable date.
Not Applicable.
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DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. BUSINESS
For information with respect to the underlying
securities held by PPLUS Trust Series DCNA-1, please
refer to DaimlerChrysler AG's (Commission file number
001-14561) periodic reports, including reports on
Form 20-F and Form 6-K, and other information on file
with the Securities and Exchange Commission (the
"SEC"). You can read and copy these reports and other
information at the public reference facilities
maintained by the SEC at Room 1580, 100 F Street,
N.E., Washington, D.C. 20549. You may obtain copies
of this material for a fee by writing to the SEC's
Public Reference Section of the SEC at 100 F Street,
N.E., Washington, D.C. 20549. You may obtain
information about the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
You can also access some of this information
electronically by means of the SEC's website on the
Internet at http://www.sec.gov, which contains
reports, proxy and information statements and other
information that the underlying securities guarantor
and the underlying securities issuer have filed
electronically with the SEC.
Although we have no reason to believe the information
concerning the underlying securities guarantee and
underlying securities or the underlying securities
guarantor and the underlying securities issuer
contained in the underlying securities guarantor's
Exchange Act reports is not reliable, neither the
depositor nor the trustee participated in the
preparation of such documents or made any due
diligence inquiry with respect to the information
provided therein. No investigation with respect to
the underlying securities guarantor and underlying
securities issuer (including, without limitation, no
investigation as to its financial condition or
creditworthiness) or of the underlying securities and
underlying securities guarantee has been made. You
should obtain and evaluate the same information
concerning the underlying securities issuer and the
underlying securities guarantor as you would obtain
and evaluate if your investment were directly in the
underlying securities or in other securities issued
by the underlying securities issuer or the underlying
securities guarantor. There can be no assurance that
events affecting the underlying securities and
underlying securities guarantee or the underlying
securities issuer and underlying securities guarantor
have not occurred or have not yet been publicly
disclosed which would affect the accuracy or
completeness of the publicly available documents
described above.
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ITEM 1A. RISK FACTORS
Your investment in trust certificates will involve
certain risks. You should carefully consider the
following discussion of risks, and the other
information included or incorporated by reference in
the applicable prospectus supplement and the
accompanying prospectus. You should also carefully
consider any risk factors and other information that
the underlying securities guarantor may file in their
Exchange Act reports as referenced in Item 1 above.
IF THE UNDERLYING SECURITIES ARE REDEEMED PRIOR TO
THEIR MATURITY DATE OR IF ANY CALL WARRANTS ARE
EXERCISED PRIOR TO THE STATED MATURITY DATE, YOU MAY
NOT BE ABLE TO REINVEST YOUR REDEMPTION OR CALL
PROCEEDS AT A YIELD COMPARABLE TO THE YIELD YOU WOULD
HAVE RECEIVED ON YOUR TRUST CERTIFICATES
The yield you will realize on your trust certificates
depends upon several factors, including:
o the purchase price of the trust certificates,
o when you acquire your trust certificates,
o whether the underlying securities issuer
exercises its option to redeem the underlying
securities, and
o whether the call warrant holders exercise their
optional rights to purchase outstanding trust
certificates.
The underlying securities issuer has the right to
redeem the underlying securities in whole, but not in
part, if it becomes obligated to pay additional
amounts. Because the underlying securities issuer has
the right to redeem the underlying securities early,
we cannot assure you that the trust will be able to
hold the underlying securities until their maturity
date.
Although the call warrant holders are not obligated
to exercise the call warrants, the yield you will
realize on your trust certificates depends on whether
the call warrant holders exercise their call warrants
to purchase the Class A trust certificates.
Prevailing interest rates at the time of an early
redemption or a call exercise may be lower than the
yield on your trust certificates. Therefore, you may
be unable to realize a comparable yield upon
reinvesting the funds you receive from an early
redemption or exercise of any call warrants. In
addition, if the prevailing market value of the trust
certificates exceeds the redemption price or call
exercise price paid to you upon a redemption of the
underlying securities or the exercise of a call, you
will not be able to realize such excess.
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YOU MAY NOT BE PAID IF THE ASSETS OF THE TRUST ARE
INSUFFICIENT
Currently, the trust has no significant assets other
than the underlying securities and the underlying
guarantee. If the underlying securities and the
underlying guarantee are insufficient to make
payments or distributions on the trust certificates,
no other assets will be available for payment of the
deficiency. The underlying securities issuer is
organized as a holding company that owns subsidiary
companies. According to the underlying securities
prospectus, the underlying securities issuer derives
its operating income and cash flow primarily from its
subsidiaries and investments, which poses two
principal risks:
o the underlying securities issuer's right to
participate as an equity holder in any
distribution of assets of any of its subsidiaries
upon the subsidiary's liquidation or otherwise,
and thus the ability of its security holders,
including the trust, to benefit from the
distribution, will be subject to prior claims of
the subsidiary's creditors, except to the extent
that any claims the underlying securities issuer
may have as a creditor of the subsidiary are
recognized, and
o the underlying securities issuer's ability to
service its indebtedness and other obligations is
dependent primarily upon the earnings and cash
flow of its subsidiaries and the distribution or
other payment to it of such earnings and cash
flow.
YOU MAY NOT RECOVER THE WHOLE OF THE PRESENT VALUE OR
STATED AMOUNT (IF APPLICABLE) OF YOUR TRUST
CERTIFICATES IF THE TRUST DISPOSES OF THE UNDERLYING
SECURITIES ON A DEFAULT BY THE UNDERLYING SECURITIES
ISSUER OR IN THE EVENT THE UNDERLYING SECURITIES
GUARANTOR CEASES FILING EXCHANGE ACT REPORTS
If the underlying securities issuer defaults on its
obligations under the underlying securities or the
underlying securities guarantor ceases to file
Exchange Act reports or ceases to be in compliance
with Rule 3-10 of Regulation S-X under the Securities
Act, then the trust will either distribute the
underlying securities to the trust certificateholders
or dispose of them and distribute the proceeds to the
trust certificateholders. Your recovery in either of
those events may be limited by two factors:
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o if a default occurs, the market value of the
underlying securities may be adversely affected
and the proceeds of their disposition may be
lower than the aggregate present value or stated
amount (if applicable) of the trust certificates;
and
o in either event, any distribution of funds or
underlying securities by the trust to the trust
certificateholders will be done in accordance
with the allocation ratio as described in the
applicable prospectus supplement relating to the
trust certificates. The funds or aggregate
principal amount of underlying securities you
receive on that distribution may be less than the
present value or stated amount (if applicable) of
your trust certificates.
THE TRUSTEE WILL NOT MANAGE THE UNDERLYING SECURITIES
Except as described below, the trust will not dispose
of any underlying securities, even if an event occurs
that adversely affects the value of the underlying
securities or that adversely affects the underlying
securities issuer or the underlying securities
guarantor. As provided in the applicable trust
agreement, the trust will dispose of the underlying
securities only if:
o there is a payment default on any underlying
securities,
o there is another type of default that accelerates
the maturity of the underlying securities, or
o the underlying securities guarantor ceases to
file Exchange Act reports or ceases to be in
compliance with Rule 3-10 of Regulation S-X under
the Securities Act.
Under the first circumstance listed above, the
trustee must sell the underlying securities on behalf
of the trust, even if adverse market conditions
exist. The trustee has no discretion to do otherwise.
If adverse market conditions do exist at the time of
the trustee's sale of the underlying securities, you
may incur greater losses than if the trust continued
to hold the underlying securities.
THE TRUST CERTIFICATES ARE SUBJECT TO THE
CREDITWORTHINESS OF THE UNDERLYING SECURITIES
ISSUER AND THE UNDERLYING SECURITIES GUARANTOR
The trust certificates represent interests in
obligations of the underlying securities issuer and
the underlying securities guarantor. In particular,
the trust certificates will be subject to all the
risks associated with directly investing in the
underlying securities guarantor's unsecured debt
obligations. None of the underlying indenture, the
underlying securities or the guarantee places a
limitation on the amount of indebtedness that may be
incurred by the underlying securities issuer or
underlying securities guarantor.
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THE PAYMENTS OWED TO THE TRUST CERTIFICATEHOLDERS ARE
UNSECURED OBLIGATIONS
In a liquidation, holders of the underlying
securities, including the trust, will be paid only
after holders of secured obligations of the
underlying securities issuer. According to the
underlying securities prospectus, the underlying
securities are unsecured and rank equally with all
other unsecured and unsubordinated indebtedness of
the underlying securities issuer.
THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moody's and S&P assigned
ratings to the trust certificates equivalent to the
ratings of the underlying securities, as of the date
of the applicable prospectus.
Any rating issued with respect to the trust
certificates is not a recommendation to purchase,
sell or hold a security. Ratings do not comment on
the market price of the trust certificates or their
suitability for a particular investor. We cannot
assure you that initial ratings will remain for any
given period of time or that a ratings agency would
not revise or withdraw entirely the ratings if, in
its judgment, circumstances (including, without
limitation, the rating of the underlying securities)
merit. A revision or withdrawal of a rating may
adversely affect the market price of the trust
certificates.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
The Trust Certificates issued by PPLUS Trust Series
DCNA-1 are represented by one or more physical
certificates registered in the name of Cede & Co.,
the nominee of the Depository Trust Company. The
Trust Certificates are listed on the New York Stock
Exchange.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Not Applicable.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not Applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Registrant has procedures so as to provide
reasonable assurance that its future Exchange Act
filings will be filed within the applicable time
periods.
ITEM 9B. OTHER INFORMATION
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not Applicable.
ITEM 11. EXECUTIVE COMPENSATION
Not Applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
(a) Securities Authorized For Issuance Under Equity
Compensation Plans: None.
(b) Security Ownership Of Certain Beneficial Owners:
None.
(c) Security Ownership Of Management: Not Applicable.
(d) Changes In Control: None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Not Applicable.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements: Not Applicable.
(a)(2) Financial Statement Schedules: Not Applicable.
(a)(3) List of Exhibits
The following exhibits are filed as part of, and
incorporated by reference into, this Annual Report on
Form 10-K:
31.1 Certification of President of
Registrant dated March 27, 2006,
pursuant to Rules 13a-14 and 15d-14
under the Securities Exchange Act of
1934, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of
2002, with respect to the
Registrant's Annual Report on Form
10-K for the year ended December 31,
2005.
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99.1 Trustee's Annual Compliance
Certificate dated February 21, 2006.
99.2. Report of Deloitte & Touche LLP,
Independent Registered Public
Accounting Firm, dated March 24,
2006, Registrant's Assertion on
Compliance with PPLUS Minimum
Servicing Standards dated March 24,
2006 and PPLUS Minimum Servicing
Standards.
99.3. Report of Ernst & Young LLP,
Independent Registered Public
Accounting Firm, dated February 21,
2006, The Bank of New York's
Assertion on Compliance with PPLUS
Minimum Servicing Standards dated
February 21, 2006 and PPLUS Minimum
Servicing Standards.
(b) Exhibits
The Registrant hereby files as part of this
Annual Report on Form 10-K the exhibits
listed in Item 15(a)(3) set forth above.
(c) Financial Statement Schedules
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, hereunto duly authorized.
MERRILL LYNCH DEPOSITOR, INC.
Date: March 27, 2006 By: /s/ Stephan Kuppenheimer
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Name: Stephan Kuppenheimer
Title: President
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