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 811-02809
811-10095
Name of Fund: BlackRock Value Opportunities Fund, Inc.
Master Value Opportunities Trust
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 Value Opportunities Fund, Inc. and Master Value
Opportunities Trust, 800 Scudders Mill Road, Plainsboro, NJ 08536.
Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 03/31/07
Date of reporting period: 04/01/06 - 03/31/07
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES
FIXED INCOME LIQUIDITY REAL ESTATE
BlackRock Value Opportunities BLACKROCK
Fund, Inc.
ANNUAL REPORT | MARCH 31, 2007
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Value Opportunities Fund, Inc.
Important Tax Information
The following information is provided with respect to the ordinary income
distributions paid by BlackRock Value Opportunities Fund, Inc. during the fiscal
year ended March 31, 2007:
- ------------------------------------------------------------------------------------------------------------------------------------
Record Date July 13, 2006 December 4, 2006
Payable Date July 19, 2006 December 6, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Qualified Dividend Income for Individuals .............................................. 3.96%* 3.64%*
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends Qualifying for the Dividends Received Deduction for Corporations ............. 13.24%* 13.24%*
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Capital Gain Dividends for Non-U.S. Residents ............................... 100%** 100%**
- ------------------------------------------------------------------------------------------------------------------------------------
* 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.
Additionally, the Fund distributed long-term capital gains of $1.244490 per
share to shareholders of record on July 13, 2006 and $1.069473 per share to
shareholders of record on December 4, 2006.
2 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
A Letter to Shareholders
Dear Shareholder
For most financial markets, 2007 opened just as 2006 ended -- on a positive
trajectory. At the end of February and into March, however, global equity
markets registered their first significant decline since last summer. The market
jitters were triggered by a significant setback in the Chinese market and were
exacerbated by several concerns, notably a weakening economy, some disappointing
corporate earnings announcements, escalating geopolitical concerns in the Middle
East and increasing delinquencies in the subprime mortgage market. Despite the
recent spate of volatility, underlying stock market fundamentals appear quite
sound, supported by a generally favorable global economic backdrop, tame
inflation, relatively low interest rates and attractive valuations.
Not unlike the equity market, the bond market also has seen volatility recently
as observers have attempted to interpret mixed economic signals. A bond market
rally late last year reversed itself early in 2007 as economic data
strengthened. Prices improved (and yields fell) again in February as equities
struggled, but retrenched slightly in March. Notably, the Treasury curve
remained inverted for much of 2006 and into 2007. The 30-year Treasury yield
stood at 4.84% at the end of March 2007, while the one-month Treasury offered
the highest yield on the curve at 5.07%.
For its part, the Federal Reserve Board (the Fed) has left the target short-term
interest rate on hold at 5.25% since first pausing in its interest rate-hiking
campaign on August 8, 2006. Although the central bankers continue to express
concern about potential inflationary pressures, they also have made reference to
signs of economic weakness in their public statements. Most observers expect the
Fed to keep interest rates on hold for now.
Notwithstanding some recent volatility, most major market indexes managed to
post positive returns for the annual and semi-annual reporting periods ended
March 31, 2007:
Total Returns as of March 31, 2007 6-month 12-month
===========================================================================================================
U.S. equities (Standard & Poor's 500 Index) + 7.38% +11.83%
- -----------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) +11.02 + 5.91
- -----------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +14.85 +20.20
- -----------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) + 2.76 + 6.59
- -----------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 1.93 + 5.43
- -----------------------------------------------------------------------------------------------------------
High yield bonds (Credit Suisse High Yield Index) + 7.59 +11.82
- -----------------------------------------------------------------------------------------------------------
If recent market movements are any guide, 2007 could be a year of enhanced
market volatility. As you navigate the uncertainties of the financial markets,
we encourage you to review your investment goals with your financial
professional and to make portfolio changes, as needed. For more reflection on
the markets, please ask your financial professional for the latest issue of
"What's Ahead in 2007: First Quarter Update," or view it online at
www.blackrock.com/funds. We thank you for trusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the months
and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Fund President and Director/Trustee
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 3
A Discussion With Your Fund's Portfolio Manager
Small-cap equities posted respectable gains during the 12-month period,
but lagged larger-cap stocks amid an economic growth slowdown and associated
investor flight to quality.
How did the Fund perform during the fiscal year in light of the existing market
conditions?
BlackRock Value Opportunities Fund, Inc.'s Institutional, Investor A, Investor
B, Investor C and Class R Shares had total returns of +3.86%, +3.64%, +2.86%,
+2.80% and +3.39%, respectively, for the 12-month period ended March 31, 2007.
(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
and 7 of this report to shareholders.) Fund returns trailed the +5.91% return of
the benchmark Russell 2000 Index and the +7.97% average return of the Lipper
Small-Cap Value Funds category for the same period. (Funds in this Lipper
category seek long-term growth of capital by investing in small-capitalization
companies that are considered to be undervalued relative to a major unmanaged
stock index.)
The 12-month period was challenging for small-capitalization stocks, as
increased risk aversion and a slowing domestic economy led investors to favor
larger-cap issues. Despite volatile energy prices and signs of weakness in the
U.S. housing market, small-cap stocks posted respectable gains during the
12-month period. However, large-cap stocks, as measured by the Russell 1000
Index, advanced a much more robust 11.84%.
In May 2006, equity markets declined sharply on higher energy prices and the
sell-off gathered momentum when the Federal Reserve Board (the Fed) raised
interest rates by another .25% at their meeting on June 29, 2006. The Fed later
changed course at its August meeting, and opted to leave interest rates
unchanged at 5.25%. The Fed's decision to leave interest rates unchanged ignited
a broad equity market rally that was further supported by robust
merger-and-acquisition activity. In this environment, large-cap stocks
outperformed small-cap stocks, and value outperformed growth across the
capitalization spectrum. A sharp decline in the price of crude oil from
$78/barrel in the summer of 2006 to approximately $60/barrel in early 2007
further stoked the equity market rally.
Equity markets came under renewed pressure during the first quarter of 2007, as
investor concerns surrounding subprime mortgage and weakness in the U.S. housing
market weighed on investors' appetite for risk.
What factors most influenced Fund performance?
During the fiscal period, solid stock selection, particularly in the industrials
and information technology (IT) sectors, contributed favorably to performance
relative to the benchmark Russell 2000 Index. However, gains in industrials and
IT were offset by weakness primarily in the financial services, materials and
utilities sectors.
In industrials, aerospace & defense and transportation-related holdings added
the greatest value. Shares of aircraft component maker Triumph Group, Inc.
surged more than 25% during the period. The company reported quarterly earnings
ahead of expectations on increased demand from commercial and military aircraft
manufacturers. Swift Transportation Co. was another notable performer in the
sector. Shares spiked in early January following a raised bid to take the
provider of trucking transportation services private. In IT, favorable
comparisons were largely attributable to stock selection among electronic
equipment and IT services names. Notable individual contributors to Fund
performance included Anixter International, Inc., a provider of networking
products, and Convergys Corp., a provider of business process outsourcing
services. As these stocks approached our fair-value estimates, and we saw
limited opportunity for further price appreciation, we took advantage of market
strength and eliminated both positions.
Utilities and materials were among the strongest-performing sectors in the
benchmark Russell 2000 Index during the period, each gaining more than 20%. The
Fund's underweight in each of these areas hampered relative returns.
Disappointing stock selection in the financial services sector, however, proved
to be the most significant driver of underperformance during the 12-month
period. The Fund experienced weakness in the capital markets, insurance and real
estate subsectors. Conseco, Inc., a provider of life insurance and supplemental
medical insurance, detracted from investment performance as the company's
long-term care business failed to deliver improved results. Despite these
challenges, we believe the longer-term outlook is positive, and management is
taking appropriate steps to turn the company around. Asset management firm W.P.
Stewart & Co. Ltd. was another detractor within the financial services sector.
The company struggled with portfolio manager departures and a decline in assets
under management. We significantly
4 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
reduced the Trust's position in W.P. Stewart during the year based on our belief
that operating challenges are likely to continue for the foreseeable future.
What changes were made to the portfolio during the period?
Within the Russell 2000 Index, IT was one of the weakest sectors, gaining just
0.8% during the 12-month period. We took advantage of share price weakness and
increased the Trust's technology exposure, moving from a slightly underweight
position to a market neutral weighting. We added several semiconductor-related
names during the period, including Genesis Microchip, Inc., Cree, Inc. and Zoran
Corp. These stocks had sold off sharply last year as the broader semiconductor
industry worked through heightened inventory levels and slackening demand. We
believe the longer-term outlook for semiconductors remains compelling, and
identified specific situations where the stocks trade at a discount to their
historic valuations with attractive growth prospects.
We reduced exposure to consumer discretionary names, in many cases capitalizing
on recent strong performance. Notable sales during the fiscal year included auto
components manufacturer American Axle & Manufacturing Holdings, Inc. and
discount retailer Dollar Tree Stores, Inc., The Readers Digest Association, Inc.
and Ryan's Restaurant Group, Inc. also were eliminated on strength, as both
companies were acquired at significant premiums. Likewise, we reduced portfolio
exposure to the industrials sector, trimming our weighting in the economically
sensitive road & rail transportation service providers. We eliminated positions
in RailAmerica, Inc., which was acquired by Fortress Investment Group, and
Kansas City Southern on stock price strength. We also sold truckload carriers
J.B. Hunt Transportation Services, Inc. and Swift Transportation Co. Inc. on
concern that freight volumes would continue to slow.
How would you characterize the portfolio's position at the close of the period?
At March 31, 2007, the portfolio was most overweight relative to the Russell
2000 Index in energy (9% versus 5%) and financial services (24% versus 21%). The
portfolio's largest absolute exposure was in financial services, at about 24% of
net assets, followed by IT at nearly 19%.
As we enter the second calendar quarter, the market is at a delicate juncture.
The Fed raised interest rates consistently between June 2004 and June 2006, and
the U.S. economy is showing some signs of slowing. The Fed refrained from
raising interest rates at the August 8, 2006 meeting and is allowing the economy
time to respond to its 17 consecutive interest rate increases. At this point,
the critical question for investors centers on how abruptly the economy will
slow and whether the Fed will take action to reinvigorate growth later this
year.
R. Elise Baum, CFA
Vice President and Portfolio Manager
April 16, 2007
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 5
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:
o 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.
o 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).
o 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.
o 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.
o 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 the 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. The Fund may charge a 2% redemption fee for sales or exchange of shares
within 30 days of purchase or exchange. Performance data does not reflect this
potential fee. 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.
Recent Performance Results
6-Month 12-Month 10-Year
As of March 31, 2007 Total Return Total Return Total Return
================================================================================
Institutional Shares* + 8.25% +3.86% +279.60%
- --------------------------------------------------------------------------------
Investor A Shares* + 8.11 +3.64 +270.29
- --------------------------------------------------------------------------------
Investor B Shares* + 7.70 +2.86 +247.96
- --------------------------------------------------------------------------------
Investor C Shares* + 7.67 +2.80 +242.32
- --------------------------------------------------------------------------------
Class R Shares* + 8.03 +3.39 +260.50
- --------------------------------------------------------------------------------
Russell 2000(R) Index** +11.02 +5.91 +164.92
- --------------------------------------------------------------------------------
* 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.
** An unmanaged broad-based Index comprised of approximately 2,000
small-capitalization common stocks from various industrial sectors.
Russell 2000 is a registered trademark of the Frank Russell Company.
6 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Performance Data (concluded)
Value Opportunities
BlackRock Value Opportunities Fund, Inc.--Edgar
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional,
Investor A, Investor B, Investor C and Class R Shares compared to growth of an
investment in the Russell 2000 Index. Values are from March 1997 to March 2007.
Institutional Investor A Investor B Investor C Class R Russell 2000
Shares*+ Shares*+ Shares*+ Shares*+ Shares*+ Index++
3/97 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
3/98 $14,318 $13,530 $14,172 $14,174 $14,248 $14,201
9/99 $11,143 $10,503 $10,918 $10,916 $11,032 $11,893
3/00 $17,527 $16,487 $17,001 $16,990 $17,267 $16,328
3/01 $18,648 $17,495 $17,895 $17,888 $18,280 $13,825
3/02 $24,532 $22,948 $23,303 $23,296 $23,929 $15,759
3/03 $17,680 $16,502 $16,614 $16,612 $17,094 $11,510
3/04 $27,866 $25,941 $25,930 $25,915 $26,853 $18,856
3/05 $28,978 $26,919 $26,697 $26,680 $27,799 $19,877
3/06 $36,549 $33,853 $33,574 $33,301 $34,870 $25,014
3/07 $37,960 $35,085 $34,796 $34,232 $36,050 $26,492
Average Annual Total Return
Return
================================================================================
Institutional Shares
================================================================================
One Year Ended 3/31/07 + 3.86%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 + 9.12
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/07 +14.27
- --------------------------------------------------------------------------------
Return Without Return With
Sales Charge Sales Charge*
================================================================================
Investor A Shares
================================================================================
One Year Ended 3/31/07 + 3.64% - 1.80%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 + 8.86 + 7.69
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/07 +13.99 +13.37
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC++
================================================================================
Investor B Shares+
================================================================================
One Year Ended 3/31/07 + 2.86% - 1.01%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 + 8.02 + 7.74
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/07 +13.28 +13.28
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC++
================================================================================
Investor C Shares**
================================================================================
One Year Ended 3/31/07 + 2.80% + 1.94%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 + 8.00 + 8.00
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/07 +13.09 +13.09
- --------------------------------------------------------------------------------
Return
================================================================================
Class R Shares
================================================================================
One Year Ended 3/31/07 + 3.39%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 + 8.54
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/07 +13.68
- --------------------------------------------------------------------------------
* Assuming maximum sales charge of 5.25%.
** Maximum contingent deferred sales charge is 1% and is reduced to 0% after
one year.
+ Maximum contingent deferred sales charge is 4.50% and is reduced to 0%
after six years.
++ Assuming payment of applicable contingent deferred sales charge.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 7
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 October 1, 2006 and held through
March 31, 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 October 1, 2006 to
October 1, 2006 March 31, 2007 March 31, 2007
====================================================================================================================================
Actual
====================================================================================================================================
Institutional $1,000 $ 1,082.50 $ 5.09
- ------------------------------------------------------------------------------------------------------------------------------------
Investor A $1,000 $ 1,081.10 $ 6.38
- ------------------------------------------------------------------------------------------------------------------------------------
Investor B $1,000 $ 1,077.00 $ 10.30
- ------------------------------------------------------------------------------------------------------------------------------------
Investor C $1,000 $ 1,076.70 $ 10.36
- ------------------------------------------------------------------------------------------------------------------------------------
Class R $ 1,080.30 $ 7.68
====================================================================================================================================
Hypothetical (5% annual return before expenses)**
====================================================================================================================================
Institutional $1,000 $ 1,020.01 $ 4.94
- ------------------------------------------------------------------------------------------------------------------------------------
Investor A $1,000 $ 1,018.77 $ 6.19
- ------------------------------------------------------------------------------------------------------------------------------------
Investor B $1,000 $ 1,014.98 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Investor C $1,000 $ 1,014.93 $ 10.05
- ------------------------------------------------------------------------------------------------------------------------------------
Class R $1,000 $ 1,017.52 $ 7.44
- ------------------------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (.98% for Institutional, 1.23% for Investor A, 1.99%
for Investor B, 2.00% for Investor C and 1.48% 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 trust 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.
8 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Statement of Assets and Liabilities BlackRock Value Opportunities Fund, Inc.
As of March 31, 2007
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investment in Master Value Opportunities Trust (the "Trust"),
at value (identified cost -- $2,429,839,631) .................................... $ 2,685,467,884
Prepaid registration fees and other assets ........................................ 44,099
---------------
Total assets ...................................................................... 2,685,511,983
---------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payables:
Distributor ................................................................... $ 1,086,887
Administrative fees ........................................................... 550,702
Other affiliates .............................................................. 109,644 1,747,233
---------------
Accrued expenses .................................................................. 1,102,596
---------------
Total liabilities ................................................................. 2,849,829
---------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ........................................................................ $ 2,682,662,154
===============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Shares of Common Stock, $.10 par value, 100,000,000 shares authorized $ 3,108,540
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .. 3,011,730
Investor B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .. 2,611,390
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .. 2,582,735
Class R Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 240,514
Paid-in capital in excess of par .................................................. 2,320,810,839
Undistributed realized capital gains allocated from the Trust -- net .............. $ 94,668,153
Unrealized appreciation allocated from the Trust -- net ........................... 255,628,253
---------------
Total accumulated earnings -- net ................................................. 350,296,406
---------------
Net Assets ........................................................................ $ 2,682,662,154
===============
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional -- Based on net assets of $775,697,308 and 31,085,400 shares outstanding $ 24.95
===============
Investor A -- Based on net assets of $742,321,398 and 30,117,300 shares outstanding $ 24.65
===============
Investor B -- Based on net assets of $569,747,010 and 26,113,896 shares outstanding $ 21.82
===============
Investor C -- Based on net assets of $542,735,593 and 25,827,354 shares outstanding $ 21.01
===============
Class R -- Based on net assets of $52,160,845 and 2,405,143 shares outstanding .... $ 21.69
===============
See Notes to Financial Statements.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 9
Statement of Operations BlackRock Value Opportunities Fund, Inc.
For the Year Ended March 31, 2007
===================================================================================================================================
Investment Income Allocated from the Trust -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income allocated from the Trust:
Dividends ..................................................................... $ 26,762,992
Interest from affiliates ...................................................... 1,244,341
Securities lending -- net ..................................................... 1,133,249
Expenses ...................................................................... (14,137,912)
---------------
Total income ...................................................................... 15,002,670
---------------
==================================================================================================================================
Expenses
- ----------------------------------------------------------------------------------------------------------------------------------
Administration fees ............................................................... $ 7,004,801
Service and distribution fees -- Investor B ....................................... 6,484,675
Service and distribution fees -- Investor C ....................................... 5,532,314
Service fees -- Investor A ........................................................ 1,846,691
Transfer agent fees -- Institutional .............................................. 1,773,772
Transfer agent fees -- Investor A ................................................. 1,604,984
Transfer agent fees -- Investor B ................................................. 1,491,440
Transfer agent fees -- Investor C ................................................. 1,330,192
Service and distribution fees -- Class R .......................................... 231,494
Printing and shareholder reports .................................................. 141,503
Transfer agent fees -- Class R .................................................... 100,745
Registration fees ................................................................. 92,090
Professional fees ................................................................. 57,573
Directors' fees and expenses ...................................................... 30,585
Other ............................................................................. 20,553
---------------
Total expenses .................................................................... 27,743,412
---------------
Investment loss -- net ............................................................ (12,740,742)
---------------
==================================================================================================================================
Realized & Unrealized Gain (Loss) Allocated from the Trust -- Net
- ----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net ............................................................ 332,742,749
Foreign currency transactions -- net .......................................... (194) 332,742,555
---------------
Change in unrealized appreciation on investments -- net ........................... (239,256,964)
---------------
Total realized and unrealized gain -- net ......................................... 93,485,591
---------------
Net Increase in Net Assets Resulting from Operations .............................. $ 80,744,849
===============
See Notes to Financial Statements.
10 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Statements of Changes in Net Assets BlackRock Value Opportunities Fund, Inc.
For the Year Ended
March 31,
----------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment loss -- net ............................................................ $ (12,740,742) $ (11,942,974)
Realized gain -- net .............................................................. 332,742,555 562,837,108
Change in unrealized appreciation -- net .......................................... (239,256,964) 130,184,338
----------------------------------
Net increase in net assets resulting from operations .............................. 80,744,849 681,078,472
----------------------------------
===================================================================================================================================
Distributions to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain -- net:
Institutional ................................................................. (130,343,340) (151,044,604)
Investor A .................................................................... (117,666,198) (99,431,727)
Investor B .................................................................... (109,411,170) (116,197,410)
Investor C .................................................................... (97,179,966) (82,656,784)
Class R ....................................................................... (8,151,500) (4,363,485)
----------------------------------
Net decrease in net assets resulting from distributions to shareholders ........... (462,752,174) (453,694,010)
----------------------------------
===================================================================================================================================
Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from capital share transactions ..... 5,748,696 (170,503,936)
----------------------------------
===================================================================================================================================
Redemption Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Redemption fee .................................................................... 12,695 2,767
----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................... (376,245,934) 56,883,293
Beginning of year ................................................................. 3,058,908,088 3,002,024,795
----------------------------------
End of year ....................................................................... $ 2,682,662,154 $ 3,058,908,088
==================================
See Notes to Financial Statements.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 11
Financial Highlights BlackRock Value Opportunities Fund, Inc.
Institutional
------------------------------------------------------------------------
The following per share data and ratios For the Year Ended March 31,
have been derived from information provided ------------------------------------------------------------------------
in the financial statements. 2007 2006 2005 2004 2003
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ......... $ 28.46 $ 26.28 $ 27.22 $ 17.27 $ 24.58
------------------------------------------------------------------------
Investment income (loss) -- net** .......... .01 .03 (.04) (.02) (.05)
Realized and unrealized gain (loss) -- net . .76+ 6.39+ .97+ 9.97 (6.77)
------------------------------------------------------------------------
Total from investment operations ........... .77 6.42 .93 9.95 (6.82)
------------------------------------------------------------------------
Less distributions from realized gain -- net (4.28) (4.24) (1.87) -- (.49)
------------------------------------------------------------------------
Net asset value, end of year ............... $ 24.95 $ 28.46 $ 26.28 $ 27.22 $ 17.27
========================================================================
==================================================================================================================================
Total Investment Return***
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 3.86% 26.13% 3.99% 57.61% (27.93%)
========================================================================
==================================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ................................... .98% 1.02% 1.00% 1.02% 1.07%
========================================================================
Investment income (loss) -- net ............ .05% .11% (.15%) (.09%) (.24%)
========================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ..... $ 775,697 $ 916,562 $1,005,642 $1,072,299 $ 607,484
========================================================================
Portfolio turnover of the Trust ............ 72.47% 77.26% 74.31% 80.35% 68.27%
========================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment income (loss) -- net.
** Based on average shares outstanding.
*** Total investment returns exclude the effects of any sales charges.
+ Includes a redemption fee, which is less than $.01 per share.
See Notes to Financial Statements.
12 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Financial Highlights (continued) BlackRock Value Opportunities Fund, Inc.
Investor A
-----------------------------------------------------------------------
The following per share data and ratios For the Year Ended March 31,
have been derived from information provided -----------------------------------------------------------------------
in the financial statements. 2007 2006 2005 2004 2003
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ......... $ 28.15 $ 26.01 $ 26.96 $ 17.15 $ 24.45
-----------------------------------------------------------------------
Investment loss -- net** ................... (.05) (.04) (.10) (.08) (.09)
Realized and unrealized gain (loss) -- net . .75+ 6.31+ .97+ 9.89 (6.73)
-----------------------------------------------------------------------
Total from investment operations ........... .70 6.27 .87 9.81 (6.82)
-----------------------------------------------------------------------
Less distributions from realized gain -- net (4.20) (4.13) (1.82) -- (.48)
-----------------------------------------------------------------------
Net asset value, end of year ............... $ 24.65 $ 28.15 $ 26.01 $ 26.96 $ 17.15
=======================================================================
==================================================================================================================================
Total Investment Return++
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 3.64% 25.76% 3.77% 57.20% (28.09%)
=======================================================================
==================================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ................................... 1.23% 1.27% 1.25% 1.27% 1.33%
=======================================================================
Investment loss -- net ..................... (.20%) (.14%) (.39%) (.34%) (.48%)
=======================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ..... $ 742,321 $ 760,307 $ 643,904 $ 620,193 $ 347,736
=======================================================================
Portfolio turnover of the Trust ............ 72.47% 77.26% 74.31% 80.35% 68.27%
=======================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment loss -- net.
** Based on average shares outstanding.
+ Includes a redemption fee, which is less than $.01 per share.
++ Total investment returns exclude the effects of sales charges.
See Notes to Financial Statements.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 13
Financial Highlights (continued) BlackRock Value Opportunities Fund, Inc.
Investor B
------------------------------------------------------------------------
The following per share data and ratios For the Year Ended March 31,
have been derived from information provided ------------------------------------------------------------------------
in the financial statements. 2007 2006 2005 2004 2003
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ......... $ 25.36 $ 23.66 $ 24.69 $ 15.82 $ 22.74
------------------------------------------------------------------------
Investment loss -- net** ................... (.22) (.22) (.27) (.24) (.23)
Realized and unrealized gain (loss) -- net . .65+ 5.72+ .88+ 9.11 (6.25)
------------------------------------------------------------------------
Total from investment operations ........... .43 5.50 .61 8.87 (6.48)
------------------------------------------------------------------------
Less distributions from realized gain -- net (3.97) (3.80) (1.64) -- (.44)
------------------------------------------------------------------------
Net asset value, end of year ............... $ 21.82 $ 25.36 $ 23.66 $ 24.69 $ 15.82
========================================================================
==================================================================================================================================
Total Investment Return++
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 2.86% 24.82% 2.96% 56.07% (28.70%)
========================================================================
==================================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ................................... 2.00% 2.03% 2.02% 2.04% 2.10%
========================================================================
Investment loss -- net ..................... (.95%) (.91%) (1.17%) (1.11%) (1.26%)
========================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ..... $ 569,747 $ 762,340 $ 809,643 $ 951,562 $ 640,017
========================================================================
Portfolio turnover of the Trust ............ 72.47% 77.26% 74.31% 80.35% 68.27%
========================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment loss -- net.
** Based on average shares outstanding.
+ Includes a redemption fee, which is less than $.01 per share.
++ Total investment returns exclude the effects of sales charges.
See Notes to Financial Statements.
14 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Financial Highlights (continued) BlackRock Value Opportunities Fund, Inc.
Investor C
------------------------------------------------------------------------
The following per share data and ratios For the Year Ended March 31,
have been derived from information provided ------------------------------------------------------------------------
in the financial statements. 2007 2006 2005 2004 2003
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ......... $ 24.62 $ 23.10 $ 24.18 $ 15.50 $ 22.30
------------------------------------------------------------------------
Investment loss -- net** ................... (.21) (.22) (.27) (.23) (.23)
Realized and unrealized gain (loss) -- net . .61+ 5.57+ .86+ 8.91 (6.13)
------------------------------------------------------------------------
Total from investment operations ........... .40 5.35 .59 8.68 (6.36)
------------------------------------------------------------------------
Less distributions from realized gain -- net (4.01) (3.83) (1.67) -- (.44)
------------------------------------------------------------------------
Net asset value, end of year ............... $ 21.01 $ 24.62 $ 23.10 $ 24.18 $ 15.50
========================================================================
==================================================================================================================================
Total Investment Return++
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 2.80% 24.82% 2.95% 56.00% (28.69%)
========================================================================
==================================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ................................... 2.01% 2.05% 2.03% 2.05% 2.12%
========================================================================
Investment loss -- net ..................... (.97%) (.92%) (1.18%) (1.13%) (1.27%)
========================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ..... $ 542,736 $ 580,318 $ 524,132 $ 539,393 $ 334,720
========================================================================
Portfolio turnover of the Trust ............ 72.47% 77.26% 74.31% 80.35% 68.27%
========================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment loss -- net.
** Based on average shares outstanding.
+ Includes a redemption fee, which is less than $.01 per share.
++ Total investment returns exclude the effects of sales charges.
See Notes to Financial Statements.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 15
Financial Highlights (concluded) BlackRock Value Opportunities Fund, Inc.
Class R
----------------------------------------------------------------------
For the Period
For the Year Ended February 4,
The following per share data and ratios March 31, 2003++
have been derived from information provided ------------------------------------------------------- to March 31,
in the financial statements. 2007 2006 2005 2004 2003
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ....... $ 25.31 $ 23.80 $ 24.93 $ 15.87 $ 16.12
----------------------------------------------------------------------
Investment loss -- net** ................... (.10) (.09) (.15) (.12) --@@@
Realized and unrealized gain (loss) -- net . .64+ 5.73+ .88+ 9.18 (.25)
----------------------------------------------------------------------
Total from investment operations ........... .54 5.64 .73 9.06 (.25)
----------------------------------------------------------------------
Less distributions from realized gain -- net (4.16) (4.13) (1.86) -- --
----------------------------------------------------------------------
Net asset value, end of period ............. $ 21.69 $ 25.31 $ 23.80 $ 24.93 $ 15.87
======================================================================
=================================================================================================================================
Total Investment Return
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 3.39% 25.43% 3.53% 57.09% (1.55%)@
======================================================================
=================================================================================================================================
Ratios to Average Net Assets*
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ................................... 1.48% 1.51% 1.50% 1.52% 1.66%***
======================================================================
Investment loss -- net ..................... (.46%) (.39%) (.61%) (.59%) (.65%)***
======================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ... $ 52,161 $ 39,382 $ 18,703 $ 3,160 --@@
======================================================================
Portfolio turnover of the Trust ............ 72.47% 77.26% 74.31% 80.35% 68.27%
======================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment loss -- net.
** Based on average shares outstanding.
*** Annualized.
+ Includes a redemption fee, which is less than $.01 per share.
++ Commencement of operations.
@ Aggregate total investment return.
@@ Amount is less than $1,000.
@@@ Amount is less than $(.01) per share.
See Notes to Financial Statements.
16 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Notes to Financial Statements BlackRock Value Opportunities Fund, Inc.
1. Significant Accounting Policies:
On September 29, 2006, Merrill Lynch Value Opportunities Fund, Inc. was renamed
BlackRock Value Opportunities Fund, Inc. (the "Fund"). The Fund is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
investment company. The Fund seeks to achieve its investment objective by
investing all of its assets in Master Value Opportunities Trust (the "Trust"),
which has the same investment objective and strategies as the Fund. The value of
the Fund's investment in the Trust reflects the Fund's proportionate interest in
the net assets of the Trust. The performance of the Fund is directly affected by
the performance of the Trust. The financial statements of the Trust, 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 Trust
owned by the Fund at March 31, 2007 was 100%. 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. Class R Shares are sold
only to certain retirement plans. All classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that Investor A, Investor B, Investor C and Class R Shares bear certain expenses
related to the shareholder servicing of such shares, and Investor B, Investor C
and Class R 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 attributed 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 Trust at
fair value. Valuation of securities held by the Trust is discussed in Note 1(a)
of the Trust'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 Trust'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 Trust 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 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.
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"), which 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
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 17
Notes to Financial Statements (continued)
BlackRock Value Opportunities Fund, Inc.
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.
(h) Reclassification -- U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the current
year, $12,740,742 has been reclassified between undistributed net realized
capital gains and accumulated net investment loss as a result of permanent
differences attributable to net operating losses and foreign currency
transactions. This reclassification has no effect on net assets or net asset
values per share.
2. 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 31, 2006, shareholders of the Fund approved a new Investment Advisory
Agreement for the Trust with BlackRock Advisors, Inc. (the "Manager"), an
indirect, wholly owned subsidiary of BlackRock, Inc., which was reorganized into
a limited liability company and renamed BlackRock Advisors, LLC. The new
Investment Advisory Agreement between the Trust and the Manager became effective
on September 29, 2006. Prior to September 29, 2006, FAM was the Trust's manager.
The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect,
wholly owned subsidiary of Merrill Lynch, which is the limited partner.
The Fund has entered into an Administration Agreement with the Manager. The Fund
pays a monthly fee at an annual rate of .25% of the Fund's average daily net
assets for the performance of administrative services (other than investment
advice and related portfolio activities) necessary for the operation of the
Fund. Prior to September 29, 2006, FAM acted as the Fund's administrator and was
compensated at the same fee rate.
The Fund has also entered into separate Distribution Agreements and Distribution
Plans with FAM Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc.
("BDI") (collectively, the "Distributor"). FAMD is a wholly owned subsidiary of
Merrill Lynch Group, Inc. and BDI is an affiliate of BlackRock, Inc.
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 each Distributor
ongoing service 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 and an affiliate of each Distributor, 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 servicing to Investor A, Investor B, Investor C and Class
R shareholders. The ongoing distribution fee compensates each Distributor and
MLPF&S for providing shareholder servicing and distribution-related services to
Investor B, Investor C and Class R shareholders.
For the year ended March 31, 2007, FAMD, the Fund's Distributor until September
29, 2006, and BDI earned underwriting discounts and direct commissions and
MLPF&S and BDI earned dealer concessions on sales of the Fund's Institutional
and Investor A Shares as follows:
- --------------------------------------------------------------------------------
Institutional Investor A
- --------------------------------------------------------------------------------
FAMD ............................................... $ 36 $ 16,546
BDI ................................................ -- $ 431
MLPF&S ............................................. $ 36 $206,558
- --------------------------------------------------------------------------------
18 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Notes to Financial Statements (continued)
BlackRock Value Opportunities Fund, Inc.
For the year ended March 31, 2007, MLPF&S received contingent deferred sales
charges of $296,865 and $26,663 relating to transactions in Investor B and
Investor C Shares, respectively. In addition, BDI received contingent deferred
sales charges of $723 and $53 relating to transactions in Investor B and
Investor C Shares, respectively. Furthermore, MLPF&S received contingent
deferred sales charges of $2,683 relating to transactions subject to front-end
sales charge waivers in Investor A Shares.
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 transactions based upon instructions from shareholders with
respect to the subscription and redemption of Fund shares. During the period
September 29, 2006 to March 31, 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 .................................................... $7,098
Investor A ....................................................... $6,872
Investor B ....................................................... $6,989
Investor C ....................................................... $6,934
Class R .......................................................... $ 317
- --------------------------------------------------------------------------------
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 FAM, PSI, FDS, FAMD, Merrill Lynch and/or MLIM.
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 $5,748,696 and ($170,503,936) for the years ended March 31, 2007 and March
31, 2006, respectively.
Transactions in capital shares for each class were as follows:
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 5,420,671 $ 139,941,416
Shares issued to shareholders in
reinvestment of distributions ........ 5,118,562 123,752,990
-------------------------------
Total issued ........................... 10,539,233 263,694,406
Shares redeemed ........................ (11,660,898) (300,136,191)
-------------------------------
Net decrease ........................... (1,121,665) $ (36,441,785)
===============================
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 6,890,063 $ 186,278,745
Shares issued to shareholders in
reinvestment of distributions ........ 5,357,055 142,948,755
-------------------------------
Total issued ........................... 12,247,118 329,227,500
Shares redeemed ........................ (18,299,747) (496,011,156)
-------------------------------
Net decrease ........................... (6,052,629) $(166,783,656)
===============================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 7,108,673 $ 177,895,680
Automatic conversion of shares ......... 1,091,590 28,689,987
Shares issued to shareholders in
reinvestment of distributions ........ 4,669,118 111,679,759
-------------------------------
Total issued ........................... 12,869,381 318,265,426
Shares redeemed ........................ (9,759,027) (244,622,518)
-------------------------------
Net increase ........................... 3,110,354 $ 73,642,908
===============================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 4,970,290 $ 133,530,402
Automatic conversion of shares ......... 2,435,396 65,585,278
Shares issued to shareholders in
reinvestment of distributions ........ 3,576,373 94,401,097
-------------------------------
Total issued ........................... 10,982,059 293,516,777
Shares redeemed ........................ (8,733,796) (233,245,026)
-------------------------------
Net increase ........................... 2,248,263 $ 60,271,751
===============================
- -------------------------------------------------------------------------------
Investor B Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 3,804,054 $ 86,336,685
Shares issued to shareholders in
reinvestment of distributions ........ 4,913,819 104,478,521
-------------------------------
Total issued ........................... 8,717,873 190,815,206
-------------------------------
Automatic conversion of shares ......... (1,216,490) (28,689,987)
Shares redeemed ........................ (11,443,896) (257,695,350)
-------------------------------
Total redeemed ......................... (12,660,386) (286,385,337)
-------------------------------
Net decrease ........................... (3,942,513) $ (95,570,131)
===============================
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 19
Notes to Financial Statements (concluded)
BlackRock Value Opportunities Fund, Inc.
- -------------------------------------------------------------------------------
Investor B Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 4,630,190 $ 112,055,715
Shares issued to shareholders in
reinvestment of distributions ........ 4,593,369 109,836,852
-------------------------------
Total issued ........................... 9,223,559 221,892,567
-------------------------------
Automatic conversion of shares ......... (2,686,557) (65,585,278)
Shares redeemed ........................ (10,695,576) (258,951,920)
-------------------------------
Total redeemed ......................... (13,382,133) (324,537,198)
-------------------------------
Net decrease ........................... (4,158,574) $(102,644,631)
===============================
- -------------------------------------------------------------------------------
Investor C Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 4,649,675 $ 102,304,080
Shares issued to shareholders in
reinvestment of distributions ........ 4,416,676 90,726,478
-------------------------------
Total issued ........................... 9,066,351 193,030,558
Shares redeemed ........................ (6,812,030) (147,828,780)
-------------------------------
Net increase ........................... 2,254,321 $ 45,201,778
===============================
- -------------------------------------------------------------------------------
Investor C Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 4,186,981 $ 98,758,950
Shares issued to shareholders in
reinvestment of distributions ........ 3,271,117 75,944,387
-------------------------------
Total issued ........................... 7,458,098 174,703,337
Shares redeemed ........................ (6,574,936) (154,735,660)
-------------------------------
Net increase ........................... 883,162 $ 19,967,677
===============================
- -------------------------------------------------------------------------------
Class R Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 1,246,338 $ 28,217,567
Shares issued to shareholders in
reinvestment of distributions ........ 384,269 8,138,654
-------------------------------
Total issued ........................... 1,630,607 36,356,221
Shares redeemed ........................ (781,296) (17,440,295)
-------------------------------
Net increase ........................... 849,311 $ 18,915,926
===============================
- -------------------------------------------------------------------------------
Class R Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 957,085 $ 23,258,712
Shares issued to shareholders in
reinvestment of distributions ........ 182,392 4,341,509
-------------------------------
Total issued ........................... 1,139,477 27,600,221
Shares redeemed ........................ (369,623) (8,915,298)
-------------------------------
Net increase ........................... 769,854 $ 18,684,923
===============================
The Fund charges a 2% redemption fee on the proceeds (calculated at market
value) of a redemption (either by sale or exchange) of Fund shares made within
30 days of purchase or exchange. The redemption fee is paid to the Fund and is
intended to offset the trading costs, market impact and other costs associated
with short-term trading into and out of the Fund.
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended March 31,
2007 and March 31, 2006 was as follows:
- --------------------------------------------------------------------------------
3/31/2007 3/31/2006
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income .......................... $203,075,887 $159,973,153
Net long-term capital gains .............. 259,676,287 293,720,857
------------------------------
Total taxable distributions ................ $462,752,174 $453,694,010
==============================
As of March 31, 2007, the components of accumulated earnings on a tax basis were
as follows:
Undistributed ordinary income -- net ........................ $ 1,980,094
Undistributed long-term capital gains -- net ................ 116,041,138
------------
Total undistributed earnings -- net ......................... 118,021,232
Capital loss carryforward ................................... --
Unrealized gains -- net ..................................... 232,275,174*
------------
Total accumulated earnings -- net ........................... $350,296,406
============
* The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales.
20 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Report of Independent Registered Public Accounting Firm
BlackRock Value Opportunities Fund, Inc.
To the Shareholders and Board of Directors of BlackRock Value Opportunities
Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
BlackRock Value Opportunities Fund, Inc. (formerly Merrill Lynch Value
Opportunities Fund, Inc.) as of March 31, 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 referred to
above present fairly, in all material respects, the financial position of
BlackRock Value Opportunities Fund, Inc. as of March 31, 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
May 21, 2007
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 21
Portfolio Information Master Value Opportunities Trust
As of March 31, 2007
Percent of
Ten Largest Equity Holdings Net Assets
- --------------------------------------------------------------------------------
Crescent Real Estate EQT Co. ......................................... 2.6%
Dresser-Rand Group, Inc. ............................................. 2.5
Timken Co. ........................................................... 2.4
EDO Corp. ............................................................ 2.3
Denbury Resources, Inc. .............................................. 2.2
First Midwest Bancorp, Inc. .......................................... 2.2
Conseco, Inc. ........................................................ 2.1
Valassis Communications, Inc. ........................................ 2.0
Webster Financial Corp. .............................................. 2.0
Foot Locker, Inc. .................................................... 1.9
- --------------------------------------------------------------------------------
Percent of
Five Largest Industries Net Assets
- --------------------------------------------------------------------------------
Real Estate Investment Trusts (REITs) ................................ 6.5%
Commercial Banks ..................................................... 6.5
Software ............................................................. 5.2
Communications Equipment ............................................. 4.6
Insurance ............................................................ 4.5
- --------------------------------------------------------------------------------
Percent of
Sector Weightings Total Investments
- --------------------------------------------------------------------------------
Financials .......................................................... 17.9%
Information Technology .............................................. 15.1
Industrials ......................................................... 11.4
Consumer Discretionary .............................................. 9.6
Health Care ......................................................... 7.1
Energy .............................................................. 7.0
Materials & Processing .............................................. 2.9
Consumer Staples .................................................... 2.5
Utilities ........................................................... 1.1
Telecommunication Services .......................................... 0.1
Other* .............................................................. 25.3
- --------------------------------------------------------------------------------
* Includes portfolio holdings in short-term investments, warrants and
certain exchange-traded funds.
For Trust compliance purposes, the Trust's industry and sector
classifications refer to any one or more of the industry and sector
sub-classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Trust management. This
definition may not apply for the purposes of this report, which may
combine industry and sector sub-classifications for reporting ease.
22 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Schedule of Investments as of March 31, 2007 Master Value Opportunities Trust
Shares
Held Common Stocks Value
================================================================================
Aerospace & Defense -- 4.4%
493,400 Curtiss-Wright Corp. (d) $ 19,015,636
2,324,100 EDO Corp. (a)(d) 60,891,420
336,100 Spirit Aerosystems Holdings, Inc. Class A (e) 10,704,785
519,400 Triumph Group, Inc. (a) 28,743,596
------------
119,355,437
================================================================================
Biotechnology -- 2.3%
2,861,200 Angiotech Pharmaceuticals, Inc. (d)(e) 15,679,376
356,100 Applera Corp. -- Celera Genomics Group (e) 5,056,620
1,081,600 Human Genome Sciences, Inc. (d)(e) 11,486,592
744,219 Maxygen, Inc. (a)(e) 8,298,042
621,600 NPS Pharmaceuticals, Inc. (e) 2,107,224
1,798,458 Neurogen Corp. (e) 11,689,977
1,416,140 Vical, Inc. (a)(e) 6,825,795
------------
61,143,626
================================================================================
Capital Markets -- 1.6%
182,900 HFF, Inc. Class A (e) 2,743,500
47,700 KBW, Inc. (e) 1,658,052
707,700 Knight Capital Group, Inc. Class A (e) 11,209,968
333,700 WP Stewart & Co. Ltd. (d) 3,360,359
1,047,100 Waddell & Reed Financial, Inc. Class A (d) 24,418,372
------------
43,390,251
================================================================================
Chemicals -- 0.4%
402,400 Valspar Corp. 11,198,792
================================================================================
Commercial Banks -- 6.5%
144,300 Banner Corp. 5,995,665
907,800 The Colonial BancGroup, Inc. (d) 22,468,050
204,200 Cullen/Frost Bankers, Inc. 10,685,786
381,400 First Merchants Corp. 9,046,808
1,632,100 First Midwest Bancorp, Inc. (d) 59,979,675
662,000 Greater Bay Bancorp 17,801,180
198,650 MetroCorp Bancshares, Inc. 4,211,380
190,300 Mid-State Bancshares 6,982,107
896,345 Old National Bancorp (d) 16,295,552
308,650 Sterling Financial Corp. 9,626,794
513,100 Texas Capital Bancshares, Inc. (e) 10,518,550
------------
173,611,547
================================================================================
Commercial Services & Supplies -- 3.4%
249,500 Administaff, Inc. 8,782,400
3,304,100 Allied Waste Industries, Inc. (d)(e) 41,598,619
882,325 Casella Waste Systems, Inc. (d)(e) 8,611,492
173,300 Heidrick & Struggles International, Inc. (e) 8,396,385
1,269,300 Tetra Tech, Inc. (d)(e) 24,192,858
------------
91,581,754
================================================================================
Communications Equipment -- 4.6%
320,400 ADC Telecommunications, Inc. (e) 5,363,496
4,472,600 Andrew Corp. (d)(e) 47,364,834
214,400 Black Box Corp. 7,834,176
4,397,883 Extreme Networks, Inc. (e) 18,603,045
3,760,000 Tellabs, Inc. (e) 37,224,000
3,593,900 Westell Technologies, Inc. Class A (a)(e) 7,798,763
------------
124,188,314
================================================================================
Computers & Peripherals -- 0.8%
938,000 Neoware Systems, Inc. (d)(e) 9,445,660
751,000 Rackable Systems, Inc. (d)(e) 12,744,470
------------
22,190,130
================================================================================
Construction & Engineering -- 0.8%
693,400 Chicago Bridge & Iron Co. NV 21,322,050
================================================================================
Containers & Packaging -- 1.8%
4,207,300 Smurfit-Stone Container Corp. (d)(e) 47,374,198
================================================================================
Diversified Consumer Services -- 1.9%
1,849,600 Corinthian Colleges, Inc. (d)(e) 25,432,000
1,145,400 Universal Technical Institute, Inc. (e) 26,435,832
------------
51,867,832
================================================================================
Diversified Telecommunication Services -- 0.1%
37,500 Aruba Networks, Inc. (e) 550,125
69,500 BigBand Networks, Inc. (e) 1,251,695
------------
1,801,820
================================================================================
Electrical Equipment -- 0.4%
360,700 Global Power Equipment Group, Inc. (d)(e) 609,583
184,100 Hubbell, Inc. Class B 8,880,984
------------
9,490,567
================================================================================
Electronic Equipment & Instruments -- 1.9%
1,406,800 Ingram Micro, Inc. Class A (e) 27,165,308
662,600 Tech Data Corp. (e) 23,727,706
------------
50,893,014
================================================================================
Energy Equipment & Services -- 4.3%
2,163,100 Dresser-Rand Group, Inc. (d)(e) 65,888,026
1,729,300 Key Energy Services, Inc. (e) 28,274,055
679,500 Rowan Cos., Inc. (d) 22,063,365
------------
116,225,446
================================================================================
Food & Staples Retailing -- 1.5%
398,500 BJ's Wholesale Club, Inc. (d)(e) 13,481,255
1,081,500 Casey's General Stores, Inc. (d) 27,048,315
------------
40,529,570
================================================================================
Food Products -- 1.6%
162,100 The J.M. Smucker Co. 8,643,172
1,162,700 Smithfield Foods, Inc. (d)(e) 34,822,865
------------
43,466,037
================================================================================
Health Care Equipment & Supplies -- 2.6%
1,252,900 DexCom, Inc. (d)(e) 9,847,794
4,005,372 OraSure Technologies, Inc. (a)(e) 29,439,484
1,397,784 Wright Medical Group, Inc. (e) 31,156,605
------------
70,443,883
================================================================================
Health Care Providers & Services -- 0.7%
1,566,000 Hooper Holmes, Inc. (e) 7,000,020
331,100 LifePoint Hospitals, Inc. (e) 12,654,642
------------
19,654,662
================================================================================
Health Care Technology -- 0.9%
1,322,706 Emdeon Corp. (d)(e) 20,012,542
723,463 Merge Technologies, Inc. (d)(e) 3,508,796
------------
23,521,338
================================================================================
Hotels, Restaurants & Leisure -- 1.6%
215,700 Ambassadors Group, Inc. 7,169,868
309,700 Ambassadors International, Inc. (d) 14,289,558
175,000 Isle of Capri Casinos, Inc. (e) 4,483,500
580,100 O'Charleys, Inc. (e) 11,190,129
170,800 Red Robin Gourmet Burgers, Inc. (e) 6,630,456
------------
43,763,511
================================================================================
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 23
Schedule of Investments (continued) Master Value Opportunities Trust
Shares
Held Common Stocks Value
================================================================================
Household Durables -- 0.8%
1,380,600 Furniture Brands International, Inc. (d) $ 21,785,868
================================================================================
IT Services -- 2.3%
3,277,800 The BISYS Group, Inc. (e) 37,563,588
1,748,100 BearingPoint, Inc. (d)(e) 13,390,446
1,383,400 Sapient Corp. (d)(e) 9,490,124
------------
60,444,158
================================================================================
Insurance -- 4.5%
71,200 American National Insurance Co. 9,108,616
3,200,500 Conseco, Inc. (d)(e) 55,368,650
537,700 HCC Insurance Holdings, Inc. 16,561,160
398,900 Harleysville Group, Inc. 12,960,261
427,700 IPC Holdings, Ltd. 12,339,145
696,971 Presidential Life Corp. (d) 13,744,268
------------
120,082,100
================================================================================
Internet Software & Services -- 2.0%
3,538,500 CNET Networks, Inc. (d)(e) 30,820,335
3,176,700 webMethods, Inc. (a)(e) 22,840,473
------------
53,660,808
================================================================================
Leisure Equipment & Products -- 0.5%
389,600 Brunswick Corp. (d) 12,408,760
================================================================================
Life Sciences Tools & Services -- 0.6%
235,500 Affymetrix, Inc. (d)(e) 7,081,485
623,900 Exelixis, Inc. (d)(e) 6,201,566
126,000 Illumina, Inc. (e) 3,691,800
------------
16,974,851
================================================================================
Machinery -- 3.2%
2,132,700 Timken Co. 64,642,137
1,339,200 Wabash National Corp. (d) 20,650,464
------------
85,292,601
================================================================================
Media -- 3.4%
979,000 Harte-Hanks, Inc. (d) 27,010,610
1,026,100 Playboy Enterprises, Inc. Class B (e) 10,558,569
56,200 Scholastic Corp. (e) 1,747,820
3,074,600 Valassis Communications, Inc. (a)(d)(e) 52,852,374
------------
92,169,373
================================================================================
Metals & Mining -- 1.4%
310,500 Reliance Steel & Aluminum Co. 15,028,200
505,100 Steel Dynamics, Inc. (d) 21,820,320
------------
36,848,520
================================================================================
Multi-Utilities -- 1.3%
633,800 OGE Energy Corp. (d) 24,591,440
444,600 Puget Energy, Inc. (d) 11,417,328
------------
36,008,768
================================================================================
Oil, Gas & Consumable Fuels -- 4.4%
399,900 Cabot Oil & Gas Corp. Class A (d) 26,921,268
2,022,100 Denbury Resources, Inc. (e) 60,238,359
204,100 Forest Oil Corp. (d)(e) 6,810,817
560,191 Plains Exploration & Production Co. (e) 25,287,022
------------
119,257,466
================================================================================
Paper & Forest Products -- 0.1%
68,100 Neenah Paper, Inc. (d) 2,706,294
================================================================================
Pharmaceuticals -- 1.9%
1,643,900 Medicis Pharmaceutical Corp. Class A (d) 50,664,998
================================================================================
Real Estate Investment Trusts (REITs) -- 6.5%
110,900 Alexandria Real Estate Equities, Inc. 11,131,033
466,200 Brandywine Realty Trust (d) 15,575,742
3,497,500 Crescent Real Estate EQT Co. 70,159,850
728,100 FelCor Lodging Trust, Inc. (d) 18,908,757
834,200 Friedman Billings Ramsey Group, Inc. Class A (d) 4,604,784
291,200 Healthcare Realty Trust, Inc. 10,861,760
1,300,300 Lexington Corporate Properties Trust (d) 27,475,339
51,400 Newcastle Investment Corp. 1,425,322
366,600 Omega Healthcare Investors, Inc. 6,287,190
183,600 Rayonier, Inc. 7,894,800
------------
174,324,577
================================================================================
Road & Rail -- 1.0%
675,348 Marten Transport Ltd. (e) 10,724,526
379,700 U.S. Xpress Enterprises, Inc. Class A (a)(e) 6,553,622
547,221 Vitran Corp., Inc. (e) 10,752,893
------------
28,031,041
================================================================================
Semiconductors & Semiconductor Equipment -- 2.2%
811,700 Cree, Inc. (d)(e) 13,360,582
1,448,200 Genesis Microchip, Inc. (e) 13,453,778
1,194,800 Mattson Technology, Inc. (d)(e) 10,872,680
1,297,200 Zoran Corp. (e) 22,078,344
------------
59,765,384
================================================================================
Software -- 5.2%
3,876,147 Agile Software Corp. (a)(e) 26,939,222
1,595,711 Bottomline Technologies, Inc. (a)(e) 17,393,250
137,800 Glu Mobile, Inc. (e) 1,378,000
490,900 Informatica Corp. (d)(e) 6,592,787
3,028,400 InterVoice, Inc. (a)(d)(e) 20,108,576
5,476,699 Novell, Inc. (e) 39,541,767
739,800 TIBCO Software, Inc. (e) 6,303,096
2,161,600 Wind River Systems, Inc. (e) 21,486,304
------------
139,743,002
================================================================================
Specialty Retail -- 3.3%
2,157,500 Foot Locker, Inc. 50,809,125
1,143,900 RadioShack Corp. (d) 30,919,617
271,200 Talbots, Inc. 6,405,744
------------
88,134,486
================================================================================
Textiles, Apparel & Luxury Goods -- 0.6%
542,000 Jones Apparel Group, Inc. 16,655,660
================================================================================
Thrifts & Mortgage Finance -- 3.5%
267,600 Anchor Bancorp Wisconsin, Inc. (d) 7,586,460
549,600 Dime Community Bancshares, Inc. (d) 7,271,208
91,000 FirstFed Financial Corp. (d)(e) 5,171,530
622,600 Franklin Bank Corp. (d)(e) 11,125,861
191,100 The PMI Group, Inc. 8,641,541
1,106,600 Webster Financial Corp. 53,127,866
------------
92,924,466
================================================================================
Trading Companies & Distributors -- 1.2%
1,169,000 United Rentals, Inc. (d)(e) 32,147,500
- --------------------------------------------------------------------------------
Total Common Stocks
(Cost -- $2,287,715,138) -- 94.0% 2,527,044,460
================================================================================
================================================================================
Exchange-Traded Funds
================================================================================
60,500 iShares Dow Jones US Real Estate Index Fund (d) 5,157,625
527,100 iShares Russell 2000 Index Fund (d) 41,883,366
24 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Schedule of Investments (concluded) Master Value Opportunities Trust
Shares
Held Exchange-Traded Funds Value
================================================================================
128,500 iShares Russell Microcap Index Fund (d) $ 7,557,085
417,100 iShares S&P SmallCap 600/BARRA
Value Index Fund (d) 31,995,741
290,600 PowerShares Zacks Micro Cap Portfolio 5,288,920
53,700 StreetTRACKS(R) Gold Trust (e) 3,531,312
- --------------------------------------------------------------------------------
Total Exchange-Traded Funds
(Cost -- $80,550,484) -- 3.6% 95,414,049
================================================================================
================================================================================
Warrants (f)
================================================================================
Capital Markets -- 0.9%
453,000 UBS AG (expires 4/30/2007) (h) 24,321,570
- --------------------------------------------------------------------------------
Total Warrants
(Cost -- $22,886,204) -- 0.9% 24,321,570
Beneficial
Interest Short-Term Securities Value
===============================================================================
$ 26,153,679 BlackRock Liquidity Series, LLC Cash Sweep
Series, 5.26% (b)(g) $ 26,153,679
708,582,550 BlackRock Liquidity Series, LLC Money Market
Series, 5.33% (b)(c)(g) 708,582,550
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $734,736,229) -- 27.4% 734,736,229
===============================================================================
Total Investments
(Cost -- $3,125,888,055*) -- 125.9% 3,381,516,308
Liabilities in Excess of
Other Assets -- (25.9%) (696,048,424)
--------------
Net Assets -- 100.0% $2,685,467,884
==============
* The cost and unrealized appreciation (depreciation) of investments as of
March 31, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost ........................................... $ 3,149,241,134
===============
Gross unrealized appreciation ............................ $ 359,067,959
Gross unrealized depreciation ............................ (126,792,785)
===============
Net unrealized appreciation .............................. $ 232,275,174
===============
(a) Investments in companies (whereby the Trust held 5% or more of the
companies outstanding securities) that are considered to be an affiliate,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
- -------------------------------------------------------------------------------------------------------------------------
Purchase Sales Realized Dividend
Affiliate Cost Cost Gain (Loss) Income
- -------------------------------------------------------------------------------------------------------------------------
1-800-FLOWERS.COM, Inc. Class A* $ 6,854,782 $20,286,131 $(1,842,441) +
Agile Software Corp. $ 7,196,159 $ 3,958,089 $ (308,122) +
Bottomline Technologies, Inc. $13,660,535 $ 8,057,168 $ 434,486 +
Cornell Cos., Inc.* $ 217,544 $15,599,395 $ 5,841,974 +
EDO Corp. $52,638,242 $ 197,804 $ (50,156) $ 44,649
InterVoice, Inc. $11,198,224 -- -- +
Maxygen, Inc.* -- $17,990,383 $(2,211,960) +
NetIQ Corp.* -- $27,029,179 $ 1,984,830+
OraSure Technologies, Inc. $16,160,976 $10,471,109 $(2,688,163) +
SupportSoft, Inc.* $ 3,069,921 $14,412,186 $ 3,159,805+
Triumph Group, Inc.* $ 2,665,761 $47,920,519 $22,996,560 $127,144
U.S. Xpress Enterprises, Inc. Class A* $ 2,954,215 $14,720,163 $ 6,328,042 +
Valassis Communications, Inc. $47,852,236 $ 9,796,209 $(4,062,373) +
Vical, Inc.* $ 1,010,084 $ 2,718,363 $(1,084,646) +
Westell Technologies, Inc. Class A $ 5,945,882 $ 1,437,724 $ (614,274) +
webMethods, Inc. $23,683,144 $15,713,354 $ 6,937,509 +
- -------------------------------------------------------------------------------------------------------------------------
* No longer an affiliated company as of March 31, 2007.
+ Non-income producing security.
(b) Investments in companies considered to be an affiliate of the Trust, 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 $ (1,385,844) $ 1,244,341
BlackRock Liquidity Series, LLC
Money Market Series $277,719,423 $ 1,133,249
- --------------------------------------------------------------------------------
(c) Security was purchased with the cash proceeds from securities loans.
(d) Security, or a portion of security, is on loan.
(e) Non-income producing security.
(f) Warrants entitle the Trust to purchase a predetermined number of shares of
common stock and are non-income producing. The purchase price and number
of shares are subject to adjustment under certain conditions until the
expiration date.
(g) Represents the current yield as of March 31, 2007.
(h) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
o For Trust compliance purposes, the Trust'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 Trust management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease. These industries are shown as a percent of net assets. These
industry classifications are unaudited.
See Notes to Financial Statements.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 25
Statement of Assets and Liabilities Master Value Opportunities Trust
As of March 31, 2007
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value
(including securities loaned of $687,014,502)
(identified cost -- $2,098,738,980) ............................................. $ 2,358,095,462
Investments in affiliated securities, at value (identified cost -- $1,027,149,075) 1,023,420,846
Receivables:
Securities sold ............................................................... $ 29,332,970
Contributions ................................................................. 12,503,684
Dividends ..................................................................... 1,758,268
Securities lending ............................................................ 74,680 43,669,602
---------------
Prepaid expenses and other assets ................................................. 47,315
---------------
Total assets ...................................................................... 3,425,233,225
---------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Collateral on securities loaned, at value ......................................... 708,582,550
Bank overdraft .................................................................... 2,039,807
Payables:
Securities purchased .......................................................... 18,875,805
Withdrawals ................................................................... 8,920,861
Investment adviser ............................................................ 1,043,460
Other affiliates .............................................................. 26,364 28,866,490
---------------
Accrued expenses .................................................................. 276,494
---------------
Total liabilities ................................................................. 739,765,341
---------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ........................................................................ $ 2,685,467,884
===============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Investors' capital ................................................................ $ 2,429,839,631
Unrealized appreciation -- net .................................................... 255,628,253
---------------
Net Assets ........................................................................ $ 2,685,467,884
===============
See Notes to Financial Statements.
26 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Statement of Operations Master Value Opportunities Trust
For the Year Ended March 31, 2007
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends (including $171,793 from affiliates and
net of $18,144 foreign withholding tax) ......................................... $ 26,762,992
Interest from affiliates .......................................................... 1,244,341
Securities lending -- net ......................................................... 1,133,249
---------------
Total income ...................................................................... 29,140,582
---------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees .......................................................... $ 13,244,881
Accounting services ............................................................... 516,792
Custodian fees .................................................................... 181,347
Professional fees ................................................................. 72,434
Trustees' fees and expenses ....................................................... 45,890
Printing and shareholder reports .................................................. 8,189
Pricing fees ...................................................................... 1,388
Other ............................................................................. 66,991
---------------
Total expenses .................................................................... 14,137,912
---------------
Investment income -- net .......................................................... 15,002,670
---------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments (including $34,821,071 from affiliates) -- net .................... 332,742,749
Foreign currency transactions -- net .......................................... (194) 332,742,555
---------------
Change in unrealized appreciation on investments -- net ........................... (239,256,964)
---------------
Total realized and unrealized gain -- net ......................................... 93,485,591
---------------
Net Increase in Net Assets Resulting from Operations .............................. $ 108,488,261
===============
See Notes to Financial Statements.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 27
Statements of Changes in Net Assets Master Value Opportunities Trust
For the Year Ended
March 31,
---------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net .......................................................... $ 15,002,670 $ 18,479,530
Realized gain -- net .............................................................. 332,742,555 562,837,108
Change in unrealized appreciation -- net .......................................... (239,256,964) 130,184,338
---------------------------------
Net increase in net assets resulting from operations .............................. 108,488,261 711,500,976
---------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions ....................................................... 720,879,806 553,882,524
Fair value of withdrawals ......................................................... (1,205,762,583) (1,209,469,692)
---------------------------------
Net decrease in net assets derived from capital transactions ...................... (484,882,777) (655,587,168)
---------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................... (376,394,516) 55,913,808
Beginning of year ................................................................. 3,061,862,400 3,005,948,592
---------------------------------
End of year ....................................................................... $ 2,685,467,884 $ 3,061,862,400
=================================
See Notes to Financial Statements.
Financial Highlights Master Value Opportunities Trust
The following per share data and ratios For the Year Ended March 31,
have been derived from information provided ----------------------------------------------------------------------------
in the financial statements. 2007 2006 2005 2004 2003
=================================================================================================================================
Total Investment Return
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment return .............. 4.34% 26.66% 4.48% 58.26% (27.31%)+
============================================================================
=================================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ............................. .50% .51% .50% .51% .51%
============================================================================
Investment income -- net ............. .53% .62% .35% .42% .32%
============================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 2,685,468 $ 3,061,862 $ 3,005,949 $ 3,189,311 $ 1,932,417
============================================================================
Portfolio turnover ................... 72.47% 77.26% 74.31% 80.35% 68.27%
============================================================================
+ Fund Asset Management, L.P. fully reimbursed the Trust for a loss on a
transaction not meeting the Trust's investment guidelines, which had no
impact on total return.
See Notes to Financial Statements.
28 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Notes to Financial Statements Master Value Opportunities Trust
1. Significant Accounting Policies:
Master Value Opportunities Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, and is organized as a Delaware
statutory trust. The Declaration of Trust permits the Trustees to issue
nontransferable interests in the Trust, subject to certain limitations. The
Trust'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 Trust.
(a) Valuation of investments -- Equity securities that are held by the Trust
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 Trustees of the Trust.
Long positions in securities 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 Trustees of the Trust. Short positions traded in the
OTC market are valued at the last available asked price. Trust 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 or purchased are valued at the last sale price in the case of
exchange-traded options. Options traded in the OTC market are valued at the last
asked price (options written) or the last bid price (options purchased). Swap
agreements are valued daily based upon quoted fair valuations received daily by
the Trust 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 Trust
employs certain pricing services to provide certain securities prices for the
Trust. 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 Trustees of the Trust, including valuations furnished
by the pricing services retained by the Trust, which may use a matrix system for
valuations. The procedures of a pricing service and its valuations are reviewed
by the officers of the Trust under the general supervision of the Trust's Board
of Trustees. Such valuations and procedures will be reviewed periodically by the
Board of Trustees of the Trust.
Generally, trading in foreign securities, as well as U.S. Government securities,
money market instruments and certain fixed income securities 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 Trust are determined as of such times. Foreign currency
exchange rates will generally be 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 Trust'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 Trust's Board of Trustees
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 Trust's Board of Trustees.
(b) Derivative financial instruments -- The Trust may engage in various
portfolio investment strategies both to increase the return of the Trust and to
hedge, and protect its exposure to interest rate movements and movements in the
securities market. 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.
o Financial futures contracts -- The Trust may purchase or sell financial
futures contracts and options on such financial futures contracts.
Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield.
Upon entering into a contract, the Trust deposits, and maintains as
collateral, such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Trust agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 29
Notes to Financial Statements (continued) Master Value Opportunities Trust
variation margin and are recorded by the Trust as unrealized gains or
losses. When the contract is closed, the Trust records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value at the time it was closed.
o Options -- The Trust may write put and covered call options and purchase
and write call and put options. When the Trust writes an option, an amount
equal to the premium received by the Trust 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 Trust
enters into a closing transaction), the Trust realizes a gain or loss on
the option to the extent of the premiums received or paid (or a gain or
loss to the extent that the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
o Forward foreign exchange contracts -- The Trust may enter into forward
foreign exchange contracts as a hedge against either specific transactions
or portfolio positions. The contract is marked-to-market daily and the
change in market value is recorded by the Trust as an unrealized gain or
loss. When the contract is closed, the Trust records a realized gain or
loss equal to the difference between the value at the time it was opened
and the value at the time it was closed.
o Foreign currency options and futures -- The Trust may purchase or sell
listed or OTC foreign currency options, foreign currency futures and
related options on foreign currency futures as a short or long hedge
against possible variations in foreign exchange rates. Such transactions
may be effected with respect to hedges on non-U.S. dollar-denominated
securities owned by the Trust, sold by the Trust but not yet delivered, or
committed or anticipated to be purchased by the Trust.
(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
from investments include the effects of foreign exchange rates on investments.
The Trust 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 Trust is considered as a "pass-through" entity for
federal income tax purposes. As such, each investor in the Trust is treated as
owner of its proportionate share of the net assets, income, expenses and
realized and unrealized gains and losses of the Trust. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates. Therefore, no federal income tax provision is
required. It is intended that the Trust's assets will be managed so an investor
in the Trust 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 transactions 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 Trust 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 Trust and any additional required collateral is delivered to the Trust on
the next business day. Where the Trust receives securities as collateral for the
loaned securities, it collects a fee from the borrower. The Trust typically
receives the income on the loaned securities but does not receive the income on
the collateral. Where the Trust 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 Trust 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 Trust could experience delays
and costs in gaining access to the collateral. The Trust also could suffer a
30 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Notes to Financial Statements (continued) Master Value Opportunities Trust
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 Trust recorded a bank overdraft reflecting an
overnight overdraft, which resulted from a failed trade that settled the next
day.
(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 the Trust'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 Trust'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"), which 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 Trust'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. 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 31, 2006, the shareholders of the investor of the Trust approved a new
Investment Advisory Agreement for the Trust with BlackRock Advisors, Inc., which
was reorganized into a limited liability company and renamed BlackRock Advisors,
LLC. The new Investment Advisory Agreement between the Trust and the Manager
became effective on September 29, 2006. Prior to September 29, 2006, FAM was the
Trust's manager. The general partner of FAM is Princeton Services, Inc. ("PSI"),
an indirect, wholly owned subsidiary of Merrill Lynch, which is the limited
partner.
The Manager is responsible for the management of the Trust's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Trust. For such services, the Trust
pays a monthly fee based upon the average daily value of the Trust's net assets
at the following annual rates: .50% of the Trust's average daily net assets not
exceeding $1 billion; .475% of average daily net assets in excess of $1 billion
but not exceeding $1.5 billion; and $.45% of average daily net assets in excess
of $1.5 billion. 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 BIM for services it provides a monthly fee
at an annual rate that is a percentage of the management fee paid by the Trust
to the Manager.
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 31
Notes to Financial Statements (concluded) Master Value Opportunities Trust
The Trust 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 March 31, 2007, the Trust lent securities with a
value of $87,576,876 to MLPF&S or its affiliates. Pursuant to that order, the
Trust 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 Trust, invest cash collateral received by the Trust 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 March 31, 2007, BIM received $489,197 in
securities lending agent fees.
In addition, MLPF&S received $688,803 in commissions on the execution of
portfolio security transactions for the Trust for the year ended March 31, 2007.
For the year ended March 31, 2007, the Trust reimbursed FAM and the Manager
$32,060 and $26,364, respectively, for certain accounting services.
Prior to September 29, 2006, certain officers and/or trustees of the Series were
officers and/or directors of MLIM, FAM, PSI, Merrill Lynch, and/or MLIM, LLC.
Commencing September 29, 2006, certain officers and/or trustees of the Trust 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 March 31, 2007 were $2,024,122,783 and $2,484,117,773, respectively.
4. Short-Term Borrowings:
The Trust, along with certain other funds managed by the Manager and its
affiliates, is a party to a $500,000,000 credit agreement with a group of
lenders. The Trust may borrow under the credit agreement to fund shareholder
redemptions and for other lawful purposes other than for leverage. The Trust may
borrow up to the maximum amount allowable under the Trust's current prospectus
and statement of additional information, subject to various other legal,
regulatory or contractual limits. On November 22, 2006, the credit agreement was
renewed for one year under substantially the same terms. The Trust pays a
commitment fee of .06% per annum based on the Trust'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
Trust did not borrow under the credit agreement during the year ended March 31,
2007.
32 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Report of Independent Registered Public Accounting Firm
Master Value Opportunities Trust
To the Investor and Board of Trustees of Master Value Opportunities Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Master Value Opportunities Trust as of March 31,
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 Trust'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 from material misstatement. The
Trust 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 Trust'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 March 31, 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
Value Opportunities Trust as of March 31, 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
May 21, 2007
BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 33
Officers and Directors/Trustees
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director/ Director/
Name Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Interested Director/Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to Vice Chairman and Director of BlackRock, Inc., 122 Funds None
Doll, Jr.* Princeton, NJ and present Global Chief Investment Officer for Equities, 168 Portfolios
08543-9011 Director/ Chairman of the BlackRock Retail Operating
Age: 52 Trustee Committee, and member of the BlackRock 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/Trustees serve until their resignation, removal or death, or until December 31 of the year in which they
turn 72. As Fund/Trust President, Mr. Doll serves at the pleasure of the Board of Directors/Trustees.
34 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
Officers and Directors/Trustees (continued)
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director/ Director/
Name Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Independent Directors/Trustees*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald W. P.O. Box 9095 Director/ 2002 to Managing General Partner of The Burton Partnership, 21 Funds Knology, Inc.
Burton Princeton, NJ Trustee present Limited Partnership (an investment partnership) 38 Portfolios (telecommuni-
08543-9095 since 1979; Managing General Partner of The South cations);
Age: 63 Atlantic Venture Funds since 1983; Member of Symbion, Inc.
the Investment Advisory Council of the Florida (healthcare)
State Board of Administration since 2001. and Capital
Southwest
(financial)
- ------------------------------------------------------------------------------------------------------------------------------------
John P.O. Box 9095 Director/ 2005 to President and Chief Executive Officer of Allmerica 21 Funds Cabot
Francis Princeton, NJ Trustee present Financial Corporation (financial services holding 38 Portfolios Corporation
O'Brien 08543-9095 company) from 1995 to 2002 and Director from 1995 (chemicals),
Age: 63 to 2003; President of Allmerica Investment LKQ Corpora-
Management Co., Inc. (investment adviser) from 1989 tion (auto
to 2002, Director from 1989 to 2002 and Chairman of parts
the Board from 1989 to 1990; President, Chief manufacturing)
Executive Officer and Director of First Allmerica and TJX Com-
Financial Life Insurance Company from 1989 to 2002 panies, Inc.
and Director of various other Allmerica Financial (retailer)
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.
- ------------------------------------------------------------------------------------------------------------------------------------
David H. P.O. Box 9095 Director/ 2003 to Consultant with Putnam Investments from 1993 to 21 Funds None
Walsh Princeton, NJ Trustee present 2003, and employed in various capacities therewith 38 Portfolios
08543-9095 from 1973 to 1992; Director, Massachusetts Audubon
Age: 65 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. P.O. Box 9095 Director/ 1998 to Managing Director of FGW Associates since 1997; 21 Funds Watson
Weiss** Princeton, NJ Trustee present Vice President, Planning, Investment and Devel- 38 Portfolios Pharma-
08543-9095 opment of Warner Lambert Co. from 1979 to 1997; ceuticals
Age: 65 Director of the Michael J. Fox Foundation for Inc.
Parkinson's Research since 2000; Director of BTG (pharma-
International Plc (a global technology commercial- ceutical
ization company) since 2001. company)
------------------------------------------------------------------------------------------------------------------------
* Directors/Trustees 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 VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 35
Officers and Directors/Trustees (concluded)
Position(s) Length of
Held with Time
Name Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch
Burke Princeton, NJ President present Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM") in 2006;
08543-9011 and and First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from
Age: 46 Treasurer 1999 to 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
present
- ------------------------------------------------------------------------------------------------------------------------------------
Robin P.O. Box 9011 Vice 2002 to Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from
Elise Princeton, NJ President present 2000 to 2006; First Vice President of MLIM from 1999 to 2000; Director of MLIM from
Baum 08543-9011 1997 to 1999; Vice President of MLIM from 1995 to 1997.
Age: 46
- ------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Fund 2004 to Managing Director of BlackRock, Inc. and Fund Chief Compliance Officer since 2006;
Hiller Princeton, NJ Chief present Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President and
08543-9011 Compliance Chief Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief
Age: 55 Officer Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at
Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance Officer
at Prudential Financial from 1995 to 2000; Senior Counsel in the Securities and
Exchange Commission's Division of Enforcement in Washington, D.C. from 1990 to
1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director of BlackRock, Inc. since 2006; Director (Legal Advisory) of MLIM from 2002
Pellegrino Princeton, NJ present to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM
08543-9011 from 1997 to 1999; Secretary of MLIM, FAM, FAM Distributors, Inc. ("FAMD") and
Age: 47 Princeton Services from 2004 to 2006.
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors/Trustees.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Directors/Trustees 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
- --------------------------------------------------------------------------------
Effective April 13, 2007, Jeffrey Hiller resigned his position as Chief
Compliance Officer of the Fund/Trust. Also effective April 13, 2007, Karen Clark
was appointed Chief Compliance Officer of the Fund/Trust. Ms. Clark has been a
Managing Director of BlackRock, Inc. since 2007. She was a Director thereof from
2005 to 2007. Prior to that, Ms. Clark was a principal and senior compliance
officer at State Street Global Advisors from 2001 to 2005. Ms. Clark was a
principal consultant with PricewaterhouseCoopers, LLP from 1998 to 2001. From
1993 to 1998, Ms. Clark was Branch Chief, Division of Investment Management and
Office of Compliance Inspections and Examinations, with the U.S. Securities and
Exchange Commission.
- --------------------------------------------------------------------------------
36 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 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 nonpublic 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 nonpublic 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 nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated 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 nonpublic
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 nonpublic
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 VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 37
BlackRock Funds (concluded)
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund has delegated proxy voting responsibilities to BlackRock and its
affiliates, subject to the general oversight of the Fund's Board of
Directors/Trustees. 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 voting securities were voted
(if any) by the Fund's previous manager 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 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
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 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.
38 BLACKROCK VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007
A World-Class Mutual Fund Family
BlackRock now offers an expanded lineup of open-end mutual funds. Our range
includes more than 85 funds crossing all investment styles and managed by
experts in equity, fixed income and tax-exempt investing.
Equity Portfolios
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 Global Technology 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 Lifecycle Prepared Portfolios+
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 Prepared Portfolios+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 U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Portfolios
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 Portfolios
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
Money Market Portfolios
BlackRock Money Market Portfolio
BlackRock Municipal Money Market Portfolio
BlackRock NC Municipal MM Portfolio
BlackRock NJ Municipal MM Portfolio
BlackRock OH Municipal MM Portfolio
BlackRock PA Municipal MM Portfolio
BlackRock Summit Cash Reserves Fund*
BlackRock U.S. Treasury MM Portfolio
BlackRock VA Municipal MM Portfolio
* 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 VALUE OPPORTUNITIES FUND, INC. MARCH 31, 2007 39
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 returns 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.
BlackRock Value Opportunities Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
BLACKROCK
#10253-3/07
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) Laurie Simon Hodrick (resigned as of May 1, 2006), (3) John
F. O'Brien, (4) David H. Walsh and (5) Fred G. Weiss.
The registrant's board of directors has determined that Laurie Simon
Hodrick qualifies as a financial expert pursuant to Item 3(c)(4) of
Form N-CSR.
Ms. Hodrick has a thorough understanding of generally accepted
accounting principals, financial statements, and internal controls and
procedures for financial reporting. Ms. Hodrick earned a Ph.D. in
economics and has taught courses in finance for over 15 years. Her
M.B.A.-level course centers around the evaluation and analysis of
firms' corporate financial statements. She has also taught in financial
analysts' training programs. Ms. Hodrick has also worked with several
prominent corporations in connection with the analysis of financial
forecasts and projections and analysis of the financial statements of
those companies, serving on the Financial Advisory Council of one of
these major corporations. She has also served as the Treasurer and
Finance Chair of a 501(c)(3) organization. Ms. Hodrick has published a
number of articles in leading economic and financial journals and is
the associate editor of two leading finance journals.
Item 4 - Principal Accountant Fees and Services
BlackRock Value Opportunities Fund, Inc.
(a) Audit Fees - Fiscal Year Ending March 31, 2007 - $6,800
Fiscal Year Ending March 31, 2006 - $6,600
(b) Audit-Related Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2007 - $6,100
Fiscal Year Ending March 31, 2006 - $6,000
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
Master Value Opportunities Trust
(a) Audit Fees - Fiscal Year Ending March 31, 2007 - $41,100
Fiscal Year Ending March 31, 2006 - $41,100
(b) Audit-Related Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
(d) All Other Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 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) Fiscal Year Ended March 31, 2007 - $3,016,200
Fiscal Year Ended March 31, 2006 - $3,754,550
(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) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - Not Applicable
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 sets 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 certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
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 Value Opportunities Fund, Inc. and Master Value Opportunities Trust
By: /s/ Robert C. Doll, Jr.
--------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Value Opportunities Fund, Inc. and Master Value Opportunities
Trust
Date: May 21, 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 Value Opportunities Fund, Inc. and Master Value Opportunities
Trust
Date: May 21, 2007
By: /s/ Donald C. Burke
--------------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock Value Opportunities Fund, Inc. and Master Value Opportunities
Trust
Date: May 21, 2007