UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21197
811-21300
Name of Fund: WCMA Government Securities Fund
Master Government Securities LLC
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer
(principal executive officer), WCMA Government Securities Fund and Master
Government Securities LLC, 800 Scudders Mill Road, Plainsboro, NJ 08536.
Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (800) 221-7210
Date of fiscal year end: 03/31/2008
Date of reporting period: 04/01/2007 - 09/30/2007
Item 1 - Report to Stockholders
Semi-Annual Report (Unaudited)
September 30, 2007
WCMA Government
Securities Fund
WCMA Government Securities Fund
================================================================================
Table of Contents Page
- --------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Semi-Annual Report:
Disclosure of Expenses ................................................... 4
Current Seven-Day Yields ................................................. 4
Fund Financial Statements:
Statement of Assets and Liabilities ................................... 5
Statement of Operations ............................................... 6
Statements of Changes in Net Assets ................................... 7
Fund Financial Highlights ................................................ 8
Fund Notes to Financial Statements ....................................... 12
Fund Proxy Results ....................................................... 14
Master Portfolio Summary ................................................. 15
Master Financial Statements:
Schedule of Investments ............................................... 16
Statement of Assets and Liabilities ................................... 17
Statement of Operations ............................................... 18
Statements of Changes in Net Assets ................................... 19
Master Financial Highlights .............................................. 19
Master Notes to Financial Statements ..................................... 20
Master Proxy Results ..................................................... 21
Officers and Directors ................................................... 22
BlackRock Privacy Principles ............................................. 23
Availability of Quarterly Schedule of Investments ........................ 23
Electronic Delivery ...................................................... 23
2 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
A Letter to Shareholders
Dear Shareholder
The September reporting period took financial markets on a wild ride. While
subprime mortgage woes dominated headlines for much of 2007, troubles
intensified in the final months of the period, spawning a widespread "credit
crunch" that crept into other areas of the market. The U.S. Federal Reserve
Board (the "Fed") and other countries' central banks stepped in to inject
liquidity into the markets and bolster investor confidence. The Fed cut the
discount rate, the rate banks pay to borrow money directly from the Fed, from
6.25% to 5.25% in two moves in August and September. The central bankers also
cut the more widely followed federal funds target rate, which had remained
unchanged at 5.25% for over a year, to 4.75% in September. After a tumultuous
summer, the dust began to settle toward period-end amid speculation that the
worst of the credit crunch had passed.
Although heightened volatility and a weakening U.S. economy have been recurring
themes throughout the past year, equity markets have displayed surprising
resilience. Most recently, the credit turmoil dampened corporate merger-and-
acquisition activity, a key source of strength for equity markets. However,
market fundamentals have held firm, dividend payouts and share buybacks have
continued to grow, and valuations remain attractive. These tailwinds generally
have prevailed over the headwinds created by the slowing U.S. economy and
troubled housing market.
In fixed income markets, mixed economic signals and the credit market debacle
resulted in a flight to quality. At the height of the uncertainty, investors
shunned bonds associated with the housing and credit markets in favor of higher-
quality Treasury issues. The yield on 10-year Treasury issues, which touched
5.30% in June (its highest level in five years), fell to 4.59% by period-end,
while prices correspondingly rose.
Against this backdrop, financial markets posted generally positive results for
the six-month period, and relatively stronger returns for the full year ended
September 30, 2007:
Total Returns as of September 30, 2007 6-month 12-month
============================================================================================================
U.S. equities (S&P 500 Index) +8.44% +16.44%
- ------------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) +1.19 +12.34
- ------------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +8.72 +24.86
- ------------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +2.31 + 5.14
- ------------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +1.15 + 3.10
- ------------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) +0.56 + 7.62
- ------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future results. Index performance shown for
illustrative purposes only. You cannot invest directly in an index.
As you navigate market volatility, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as needed.
For more market insight, we invite you to view "What's Ahead in 2007: Third
Quarter Update" and "Are You Prepared for Volatility?" at
www.blackrock.com/funds. We thank you for entrusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the months
and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Vice Chairman, BlackRock, Inc.
3
THIS PAGE NOT PART OF YOUR FUND REPORT
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 expense example below (which is based
on a hypothetical investment of $1,000 invested on April 1, 2007 and held
through September 30, 2007) is intended to assist shareholders both in
calculating expenses based on an investment in the Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The table 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 table also 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.
Expense Example
Actual Hypothetical**
------------------------------------------------- --------------------------------------------------
Beginning Ending Beginning Ending
Account Value Account Value Expenses Paid Account Value Account Value Expenses Paid
April 1, 2007 Sept. 30, 2007 During the Period* April 1, 2007 Sept. 30, 2007 During the Period*
- -----------------------------------------------------------------------------------------------------------------------------
Class 1 ........... $1,000 $1,017.20 $8.15 $1,000 $1,016.82 $8.15
Class 2 ........... $1,000 $1,020.30 $5.14 $1,000 $1,019.81 $5.14
Class 3 ........... $1,000 $1,021.90 $3.53 $1,000 $1,021.41 $3.53
Class 4 ........... $1,000 $1,021.90 $3.53 $1,000 $1,021.41 $3.53
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.62% for Class 1, 1.02% for Class 2, .70% for Class
3 and .70% for Class 4), 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 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.
Current Seven-Day Yields
As of September 30, 2007
- --------------------------------------------------------------------------------
Class 1 .............................................................. 2.90%
Class 2 .............................................................. 3.51
Class 3 .............................................................. 3.84
Class 4 .............................................................. 3.84
- --------------------------------------------------------------------------------
4 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Statement of Assets and Liabilities WCMA Government Securities Fund
As of September 30, 2007 (Unaudited)
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investment in Master Government Securities LLC (the "Master LLC"), at value
(identified cost -- $509,028,888) ............................................................ $ 509,028,888
Prepaid expenses and other assets .............................................................. 142,936
-------------
Total assets ................................................................................... 509,171,824
-------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payables:
Distributor ................................................................................. $ 138,125
Administrator ............................................................................... 98,160
Other affiliates ............................................................................ 3,460 239,745
-------------
Other liabilities .............................................................................. 19
-------------
Total liabilities .............................................................................. 239,764
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets ..................................................................................... $ 508,932,060
=============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Class 1 Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................................ $ 1,154,166
Class 2 Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................................ 8,010,073
Class 3 Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................................ 18,092,296
Class 4 Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................................ 23,634,923
Paid-in capital in excess of par ............................................................... 458,023,113
Undistributed realized capital gains on investments allocated from
the Master LLC -- net ........................................................................ 17,489
-------------
Net assets ..................................................................................... $ 508,932,060
=============
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Class 1 -- Based on net assets of $11,542,083 and 11,541,662 shares of
beneficial interest outstanding .............................................................. $ 1.00
=============
Class 2 -- Based on net assets of $80,103,673 and 80,100,730 shares of
beneficial interest outstanding .............................................................. $ 1.00
=============
Class 3 -- Based on net assets of $180,928,680 and 180,922,956 shares of
beneficial interest outstanding .............................................................. $ 1.00
=============
Class 4 -- Based on net assets of $236,357,624 and 236,349,225 shares of
beneficial interest outstanding .............................................................. $ 1.00
=============
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 5
Statement of Operations WCMA Government Securities Fund
For the Six Months Ended September 30, 2007 (Unaudited)
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest from affiliates ....................................................................... $ 68,289
Net investment income allocated from the Master LLC:
Interest .................................................................................... 11,689,966
Expenses .................................................................................... (580,602)
-------------
Total income ................................................................................... 11,177,653
-------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Administration fees ............................................................................ $ 581,287
Service and distribution fees -- Class 4 ....................................................... 389,118
Service and distribution fees -- Class 3 ....................................................... 301,796
Service and distribution fees -- Class 2 ....................................................... 273,861
Registration fees .............................................................................. 160,313
Service and distribution fees -- Class 1 ....................................................... 56,491
Printing and shareholder reports ............................................................... 17,732
Professional fees .............................................................................. 11,740
Transfer agent fees -- Class 2 ................................................................. 3,465
Transfer agent fees -- Class 1 ................................................................. 2,697
Transfer agent fees -- Class 4 ................................................................. 2,279
Transfer agent fees -- Class 3 ................................................................. 2,256
Other .......................................................................................... 4,241
-------------
Total expenses before waiver ................................................................... 1,807,276
Waiver of expenses ............................................................................. (576,625)
-------------
Total expenses after waiver .................................................................... 1,230,651
-------------
Investment income -- net ....................................................................... 9,947,002
-------------
===================================================================================================================================
Realized & Unrealized Gain Allocated from the Master LLC -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on investments -- net ............................................................ 15,862
Change in unrealized appreciation on investments -- net ........................................ 289,536
-------------
Total realized and unrealized gain -- net ...................................................... 305,398
-------------
Net Increase in Net Assets Resulting from Operations ........................................... $ 10,252,400
=============
See Notes to Financial Statements.
6 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Statements of Changes in Net Assets WCMA Government Securities Fund
For the Six
Months Ended For the
September 30, Year Ended
2007 March 31,
Increase (Decrease) in Net Assets: (Unaudited) 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................................... $ 9,947,002 $ 19,423,516
Realized gain -- net ........................................................................... 15,862 2,576
Change in unrealized appreciation -- net ....................................................... 289,536 151,984
-------------------------------
Net increase in net assets resulting from operations ........................................... 10,252,400 19,578,076
-------------------------------
===================================================================================================================================
Dividends & Distributions to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net:
Class 1 ..................................................................................... (195,322) (511,697)
Class 2 ..................................................................................... (1,647,063) (3,778,640)
Class 3 ..................................................................................... (3,532,138) (7,008,543)
Class 4 ..................................................................................... (4,572,479) (8,124,636)
Realized gain -- net:
Class 1 ..................................................................................... -- (38)
Class 2 ..................................................................................... -- (219)
Class 3 ..................................................................................... -- (332)
Class 4 ..................................................................................... -- (360)
-------------------------------
Net decrease in net assets resulting from dividends and distributions to shareholders .......... (9,947,002) (19,424,465)
-------------------------------
===================================================================================================================================
Beneficial Interest Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from beneficial interest transactions ............ 47,721,236 (40,234,908)
-------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................................ 48,026,634 (40,081,297)
Beginning of period ............................................................................ 460,905,426 500,986,723
-------------------------------
End of period .................................................................................. $ 508,932,060 $ 460,905,426
===============================
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 7
Financial Highlights WCMA Government Securities Fund
Class 1
-----------------------------------------------------------------------
For the Six For the Period
Months Ended For the Year Ended March 20,
September 30, March 31, 2003+ to
The following per share data and ratios have been derived 2007 --------------------------------------- March 31,
from information provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------
Investment income -- net ....................... .1712 .0351 .0199 .0027 .0004 .0003
Realized and unrealized gain (loss) -- net ..... .0012 .0003 .0001 (.0012) (.0002) .0002
-----------------------------------------------------------------------
Total from investment operations ............... .1724 .0354 .0200 .0015 .0002 .0005
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net .................... (.1712) (.0351) (.0199) (.0027) (.0004) (.0003)
Realized gain -- net ........................ -- --*** --*** --*** (.0001) --
-----------------------------------------------------------------------
Total dividends and distributions .............. (.1712) (.0351) (.0199) (.0027) (.0005) (.0003)
-----------------------------------------------------------------------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------
Total investment return ........................ 1.73%++ 3.55% 2.01% .27% .05% .05%
=======================================================================
===================================================================================================================================
Ratios to Average Net Assets**
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and reimbursement 1.62%* 1.59% 1.59% 1.41% 1.09% .02%
=======================================================================
Total expenses ................................. 1.62%* 1.59% 1.59% 1.60% 1.58% .02%
=======================================================================
Total investment income and realized gain -- net 3.44%* 3.51% 1.99% .24% .04% .03%
=======================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ....... $ 11,542 $ 11,122 $ 18,837 $ 16,718 $ 22,260 $ 25
=======================================================================
* Annualized.
** Includes the Fund's share of the Master LLC's allocated expenses and/or
investment income and realized gain.
*** Amount is less than $(.0001) per share.
+ Effective date of the Fund's registration.
++ Aggregate total investment return.
See Notes to Financial Statements.
8 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Financial Highlights (continued) WCMA Government Securities Fund
Class 2
-----------------------------------------------------------------------
For the Six For the Period
Months Ended For the Year Ended March 20,
September 30, March 31, 2003+ to
The following per share data and ratios have been derived 2007 --------------------------------------- March 31,
from information provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------
Investment income -- net ....................... .0201 .0407 .0259 .0070 .0015 .0003
Realized and unrealized gain (loss) -- net ..... .0010 .0004 .0001 (.0011) (.0001) .0002
-----------------------------------------------------------------------
Total from investment operations ............... .0211 .0411 .0260 .0059 .0014 .0005
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net .................... (.0201) (.0407) (.0259) (.0070) (.0015) (.0003)
Realized gain -- net ........................ -- --*** --*** --*** (.0001) --
-----------------------------------------------------------------------
Total dividends and distributions .............. (.0201) (.0407) (.0259) (.0070) (.0016) (.0003)
-----------------------------------------------------------------------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=======================================================================
Total investment return ........................ 2.04%++ 4.13% 2.63% .70% .16% .05%
=======================================================================
===================================================================================================================================
Ratios to Average Net Assets**
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and reimbursement 1.02%* 1.03% .99% .98% .97% .02%
=======================================================================
Total expenses ................................. 1.26%* 1.28% 1.27% 1.28% 1.26% .02%
=======================================================================
Total investment income and realized gain -- net 4.04%* 4.07% 2.58% .68% .15% .03%
=======================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ....... $ 80,104 $ 82,655 $115,872 $119,718 $137,566 $ 25
=======================================================================
* Annualized.
** Includes the Fund's share of the Master LLC's allocated expenses and/or
investment income and realized gain.
*** Amount is less than $(.0001) per share.
+ Effective date of the Fund's registration.
++ Aggregate total investment return.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 9
Financial Highlights (continued) WCMA Government Securities Fund
Class 3
-----------------------------------------------------------------------
For the Six For the Period
Months Ended For the Year Ended March 20,
September 30, March 31, 2003+ to
The following per share data and ratios have been derived 2007 --------------------------------------- March 31,
from information provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------
Investment income -- net ....................... .0217 .0439 .0291 .0102 .0047 .0003
Realized and unrealized gain (loss) -- net ..... .0009 .0004 .0001 (.0010) (.0001) .0002
-----------------------------------------------------------------------
Total from investment operations ............... .0226 .0443 .0292 .0092 .0046 .0005
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net .................... (.0217) (.0439) (.0291) (.0102) (.0047) (.0003)
Realized gain -- net ........................ -- --*** --*** --*** (.0001) --
-----------------------------------------------------------------------
Total dividends and distributions .............. (.0217) (.0439) (.0291) (.0102) (.0048) (.0003)
-----------------------------------------------------------------------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=======================================================================
Total investment return ........................ 2.20%++ 4.47% 2.96% 1.03% .48% .05%
=======================================================================
===================================================================================================================================
Ratios to Average Net Assets**
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and reimbursement .70%* .71% .67% .66% .65% .02%
=======================================================================
Total expenses ................................. .96%* .98% .97% .98% .96% .02%
=======================================================================
Total investment income and realized gain -- net 4.36%* 4.41% 2.88% 1.01% .48% .03%
=======================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ....... $180,929 $158,327 $158,500 $193,195 $224,278 $ 25
=======================================================================
* Annualized.
** Includes the Fund's share of the Master LLC's allocated expenses and/or
investment income and realized gain.
*** Amount is less than $(.0001) per share.
+ Effective date of the Fund's registration.
++ Aggregate total investment return.
See Notes to Financial Statements.
10 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Financial Highlights (concluded) WCMA Government Securities Fund
Class 4
-----------------------------------------------------------------------
For the Six For the Period
Months Ended For the Year Ended March 20,
September 30, March 31, 2003+ to
The following per share data and ratios have been derived 2007 --------------------------------------- March 31,
from information provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------
Investment income -- net ....................... .0217 .0439 .0291 .0102 .0047 .0003
Realized and unrealized gain (loss) -- net ..... .0002 .0003 .0002 (.0012) --++ .0002
-----------------------------------------------------------------------
Total from investment operations ............... .0219 .0442 .0293 .0090 .0047 .0005
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net .................... (.0217) (.0439) (.0291) (.0102) (.0047) (.0003)
Realized gain -- net ........................ -- --*** --*** --*** --*** --
-----------------------------------------------------------------------
Total dividends and distributions .............. (.0217) (.0439) (.0291) (.0102) (.0047) (.0003)
-----------------------------------------------------------------------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=======================================================================
Total investment return ........................ 2.20%+++ 4.47% 2.96% 1.03% .47% .05%
=======================================================================
===================================================================================================================================
Ratios to Average Net Assets**
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and reimbursement .70%* .71% .67% .66% .65% .02%
=======================================================================
Total expenses ................................. .95%* .98% .98% .97% .96% .02%
=======================================================================
Total investment income and realized gain -- net 4.34%* 4.41% 3.10% .91% .48% .03%
=======================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ....... $236,358 $208,801 $207,778 $ 81,344 $157,203 $ 25
=======================================================================
* Annualized.
** Includes the Fund's share of the Master LLC's allocated expenses and/or
investment income and realized gain.
*** Amount is less than $(.0001) per share.
+ Effective date of the Fund's registration.
++ Amount is less than $.0001 per share.
+++ Aggregate total investment return.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 11
Notes to Financial Statements (Unaudited) WCMA Government Securities Fund
1. Significant Accounting Policies:
WCMA Government Securities Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a no load, diversified, open-end management
investment company. The Fund seeks to achieve its investment objective by
investing all of its assets in Master Government Securities LLC (the "Master
LLC"), which has the same investment objective and strategies as the Fund.
Effective June 15, 2007, the Master LLC was converted from a Delaware statutory
trust to a Delaware limited liability company. The value of the Fund's
investment in the Master LLC reflects the Fund's proportionate interest in the
net assets of the Master LLC. The performance of the Fund is directly affected
by the performance of the Master LLC. The financial statements of the Master
LLC, including the Schedule of Investments, are included elsewhere in this
report and should be read in conjunction with the Fund's financial statements.
The Fund's financial statements are prepared in conformity with U.S. generally
accepted accounting principles, which may require the use of management accruals
and estimates. Actual results may differ from these estimates. These unaudited
financial statements reflect all adjustments which are, in the opinion of
management, necessary to present a fair statement of results for the interim
period. All such adjustments are of a normal, recurring nature. The percentage
of the Master LLC owned by the Fund at September 30, 2007 was 46.3%. The Fund is
divided into four classes, designated Class 1, Class 2, Class 3 and Class 4.
Each Class 1, Class 2, Class 3 and Class 4 share represents interests in the
same assets of the Fund and has identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that each class bears
certain expenses related to service and the distribution of such shares and the
additional incremental transfer agency costs resulting from the conversion of
shares and has exclusive voting with respect to matters relating to such
shareholder services and distribution expenditures. Income, expenses (other than
expenses attributed to a specific class) and realized and unrealized gains and
losses on investments 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 investments in the Master
LLC at fair value. Valuation of securities held by the Master LLC is discussed
in Note 1(a) of the Master LLC's Notes to Financial Statements, which are
included elsewhere in this report.
(b) Investment income and expenses -- The Fund records daily its proportionate
share of the Master LLC's income, expenses and realized and unrealized gains and
losses. In addition, the Fund accrues its own income and 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 its 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 to shareholders -- The Fund declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
backup withholding tax withheld) in additional Fund shares at net asset value.
Dividends are declared from the total of net investment income. Distributions of
net realized gain, if any, on investments are paid at least annually.
(f) Investment transactions -- Investment transactions in the Master LLC are
accounted for on a trade date basis.
(g) Recent accounting pronouncements -- Effective September 30, 2007, the Fund
implemented Financial Accounting Standards Board ("FASB") Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109" ("FIN 48"). 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 investment companies, before being measured and recognized in
the financial statements. Management has evaluated the application of FIN 48 to
the Fund, and has determined that the adoption of FIN 48 does not have a
material impact on the Fund's financial statements. The Fund files U.S. and
various state tax returns. No income tax returns are currently under
examination. The statute of limitations on the Fund's tax returns remains open
for the years ended March 31, 2004 through March 31, 2007.
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 Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Fund's financial statements,
if any, has not been determined.
12 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Notes to Financial Statements (continued) WCMA Government Securities Fund
2. Transactions with Affiliates:
The Fund has entered into an Administration Agreement with BlackRock Advisors,
LLC (the "Administrator"), an indirect, wholly owned subsidiary of BlackRock,
Inc. 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. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial
Services Group, Inc. ("PNC") are principal owners of BlackRock, Inc.
Pursuant to the Distribution and Shareholder Servicing Plans in compliance with
Rule 12b-1 under the Investment Company Act of 1940, the Fund may pay Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned subsidiary
of Merrill Lynch and/or affiliates of PNC or Merrill Lynch (including BlackRock,
Inc.), service fees and distribution fees. The fees are accrued daily and paid
monthly at annual rates based upon the average daily net assets of the shares of
the Fund as follows:
- -------------------------------------------------------------------------------
Service Distribution
Fee Fee
- -------------------------------------------------------------------------------
Class 1 ..................................... .25% .75%
Class 2 ..................................... .25% .425%
Class 3 ..................................... .25% .125%
Class 4 ..................................... .25% .125%
- -------------------------------------------------------------------------------
The ongoing service fee compensates MLPF&S for providing shareholder services to
respective shareholders. The ongoing distribution fee compensates MLPF&S for
providing shareholder and distribution related services to respective
shareholders. The Fund has entered into a contractual arrangement with the
Administrator and MLPF&S to waive and/or reimburse a portion of the Fund's fees
and expenses to ensure that the net expenses for the Fund's Class 2 Shares is
..32% higher than that of CMA Government Fund, and Class 3 and Class 4 Shares is
equal to that of CMA Government Fund. The fee/expense waiver or reimbursement
includes service and distribution fees. This arrangement has a one-year term and
is renewable. For the six months ended September 30, 2007, MLPF&S earned fees of
$1,021,266 of which $576,625 was waived.
Financial Data Services, Inc. ("FDS"), a wholly owned subsidiary of Merrill
Lynch, is the Fund's transfer agent. Interest is earned by the Fund from FDS
based on the difference, if any, between estimated and actual daily beneficial
share activity, which results in uninvested net proceeds from sales of Fund
shares.
Certain officers and/or trustees of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial interest
transactions was $47,721,236 and $(40,234,908) for the six months ended
September 30, 2007 and for the year ended March 31, 2007, respectively.
Transactions in shares of beneficial interests for each class were as follows:
- --------------------------------------------------------------------------------
Class 1 Shares for the Six Months Dollar
Ended September 30, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 44,114,308 $ 44,114,308
Shares issued to shareholders in
reinvestment of dividends ............. 195,324 195,324
------------------------------
Total issued ............................. 44,309,632 44,309,632
Shares redeemed .......................... (43,903,270) (43,903,270)
------------------------------
Net increase ............................. 406,362 $ 406,362
==============================
- --------------------------------------------------------------------------------
Class 1 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 185,188,568 $ 185,188,568
Shares issued to shareholders in
reinvestment of dividends
and distributions ..................... 511,729 511,729
------------------------------
Total issued ............................. 185,700,296 185,700,296
Shares redeemed .......................... (193,419,437) (193,419,437)
------------------------------
Net decrease ............................. (7,719,141) $ (7,719,141)
==============================
- --------------------------------------------------------------------------------
Class 2 Shares for the Six Months Dollar
Ended September 30, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 280,985,836 $ 280,985,836
Shares issued to shareholders in
reinvestment of dividends ............. 1,647,064 1,647,064
------------------------------
Total issued ............................. 282,632,900 282,632,900
Shares redeemed .......................... (285,269,063) (285,269,063)
------------------------------
Net decrease ............................. (2,636,163) $ (2,636,163)
==============================
- --------------------------------------------------------------------------------
Class 2 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 551,349,244 $ 551,349,244
Shares issued to shareholders in
reinvestment of dividends
and distributions ..................... 3,778,866 3,778,866
------------------------------
Total issued ............................. 555,128,110 555,128,110
Shares redeemed .......................... (588,378,499) (588,378,499)
------------------------------
Net decrease ............................. (33,250,389) $ (33,250,389)
==============================
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 13
Notes to Financial Statements (concluded) WCMA Government Securities Fund
- --------------------------------------------------------------------------------
Class 3 Shares for the Six Months Dollar
Ended September 30, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 508,453,758 $ 508,453,758
Shares issued to shareholders in
reinvestment of dividends ........... 3,532,138 3,532,138
---------------------------------
Total issued ........................... 511,985,896 511,985,896
Shares redeemed ........................ (489,536,637) (489,536,637)
---------------------------------
Net increase ........................... 22,449,259 $ 22,449,259
=================================
- --------------------------------------------------------------------------------
Class 3 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,183,649,416 $ 1,183,649,416
Shares issued to shareholders in
reinvestment of dividends
and distributions ................... 7,008,875 7,008,875
---------------------------------
Total issued ........................... 1,190,658,291 1,190,658,291
Shares redeemed ........................ (1,190,888,128) (1,190,888,128)
---------------------------------
Net decrease ........................... (229,837) $ (229,837)
=================================
- --------------------------------------------------------------------------------
Class 4 Shares for the Six Months Dollar
Ended September 30, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 762,446,124 $ 762,446,124
Shares issued to shareholders in
reinvestment of dividends ........... 4,572,478 4,572,478
---------------------------------
Total issued ........................... 767,018,602 767,018,602
Shares redeemed ........................ (739,516,824) (739,516,824)
---------------------------------
Net increase ........................... 27,501,778 $ 27,501,778
=================================
- --------------------------------------------------------------------------------
Class 4 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,149,612,238 $ 1,149,612,238
Shares issued to shareholders in
reinvestment of dividends
and distributions ................... 8,124,996 8,124,996
---------------------------------
Total issued ........................... 1,157,737,234 1,157,737,234
Shares redeemed ........................ (1,156,772,775) (1,156,772,775)
---------------------------------
Net increase ........................... 964,459 $ 964,459
=================================
Proxy Results
During the six-month period ended September 30, 2007, the shareholders of WCMA
Government Securities Fund voted on the following proposal, which was approved
at a special shareholders' meeting on August 23, 2007. This proposal was part of
the reorganization of the Fund's Board of Directors to take effect on or about
November 1, 2007. A description of the proposal and number of shares voted for
each Director are as follows:
- ----------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ----------------------------------------------------------------------------------------------
To elect the Fund's David O. Beim, Richard S. Davis,
Board of Directors: Ronald W. Forbes, Henry Gabbay, Dr.
Matina Horner, Rodney D. Johnson,
Herbert I. London, Cynthia A.
Montgomery, Joseph P. Platt, Jr.,
Robert C. Robb, Jr., Toby
Rosenblatt, Kenneth L. Urish,
Frederick W. Winter 446,963,321 29,104
- ----------------------------------------------------------------------------------------------
14 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Portfolio Summary Master Government Securities LLC
Portfolio Composition as a Percent of Net Assets
As of
------------------
9/30/07 3/31/07
- ------------------------------------------------------------------------------
Repurchase Agreements ................ 73.9% 78.4%
U.S. Government Obligations .......... 25.6 21.4
Other Assets Less Liabilities ........ 0.5 0.2
------------------
Total ................................ 100.0% 100.0%
==================
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 15
Schedule of Investments as of September 30, 2007 (Unaudited)
Master Government Securities LLC (in Thousands)
Face Interest Maturity
Issue Amount Rate Date Value
================================================================================
U.S.Government=Obligations* -- 25.6%
================================================================================
U.S. Treasury Bills $112,720 2.55-
4.784% 10/04/2007 $ 112,653
87,080 3.897-
4.82 10/11/2007 86,949
8,891 3.42 11/23/2007 8,844
26,239 3.9-
4.01 12/06/2007 26,043
8,263 3.635 12/27/2007 8,188
9,000 4.00 1/17/2008 8,889
- --------------------------------------------------------------------------------
U.S. Treasury Notes 30,000 4.25 11/30/2007 30,015
- --------------------------------------------------------------------------------
Total U.S. Government Obligations
(Cost -- $281,581) ............................................. 281,581
- --------------------------------------------------------------------------------
Face
Amount Issue
================================================================================
Repurchase Agreements*** -- 73.9%
================================================================================
$53,000 Banc of America Securities LLC, purchased on 9/26/2007
to yield 4.60% to 10/03/2007, repurchase price $53,047,
collateralized by GNMA, 6.50% due 9/20/2037 ................ 53,000
- --------------------------------------------------------------------------------
55,300 Barclays Capital Inc., purchased on 9/28/2007 to yield
3.95% to 10/01/2007, repurchase price $55,318,
collateralized by U.S. Treasury Inflation Bond, 2.38%
due 1/15/2025 .............................................. 55,300
- --------------------------------------------------------------------------------
55,300 Bear, Stearns Co., Inc., purchased on 9/28/2007 to yield
3.95% to 10/01/2007, repurchase price $55,318,
collateralized by Treasury Inflation Protected Security,
3.625% due 4/15/2028 ....................................... 55,300
- --------------------------------------------------------------------------------
53,000 Citigroup Global Markets Inc., purchased on 9/26/2007 to
yield 4.74% to 10/03/2007, repurchase price $53,049,
collateralized by GNMA, 5.50% due 5/15/2037 ................ 53,000
- --------------------------------------------------------------------------------
57,000 Credit Suisse Securities (USA) LLC, purchased on 9/25/2007
to yield 4.71% to 10/02/2007, repurchase price $57,052,
collateralized by GNMA, 5.50% to 7.50% due 4/20/2030
to 9/20/2037 ............................................... 57,000
- --------------------------------------------------------------------------------
53,000 Deutsche Bank Securities Inc., purchased on 9/26/2007 to
yield 4.70% to 10/03/2007, repurchase price $53,048,
collateralized by GNMA, 4% to 8.50% due 6/15/2009
to 08/15/2049 .............................................. 53,000
- --------------------------------------------------------------------------------
52,500 Goldman, Sachs & Co. , purchased on 9/13/2007 to yield
4.80% to 10/15/2007, repurchase price $52,724,
collateralized by GNMA, 5% to 6.50% due 9/15/2031
to 10/15/2036 .............................................. 52,500
- --------------------------------------------------------------------------------
53,000 Greenwich Capital Markets, Inc., purchased on 9/26/2007
to yield 4.70% to 10/03/2007, repurchase price $53,048,
collateralized by GNMA, 4.50% to 10.50%
due 8/15/2008 to 2/15/2048 ................................. 53,000
- --------------------------------------------------------------------------------
55,275 HSBC Securities (USA) Inc., purchased on 9/28/2007 to
yield 4.90% to 10/01/2007, repurchase price $55,298,
collateralized by GNMA, 5% to 7% due 09/15/2036
to 09/15/2037 .............................................. 55,275
- --------------------------------------------------------------------------------
57,000 J.P. Morgan Securities Inc., purchased on 9/25/2007 to yield
4.60% to 10/02/2007, repurchase price $57,051,
collateralized by GNMA, 5% to 6% due 05/15/2035
to 10/15/2036 .............................................. 57,000
- --------------------------------------------------------------------------------
57,000 Lehman Brothers Inc., purchased on 9/25/2007 to yield
4.50% to 10/02/2007, repurchase price $57,050,
collateralized by GNMA, 4.50% to 11%
due 2/20/2009 to 9/15/2037 ................................. 57,000
- --------------------------------------------------------------------------------
53,000 Merrill Lynch Government Securities Inc., purchased on
9/26/2007 to yield 4.25% to 10/03/2007, repurchase price
$53,044, collateralized by GNMA, 5% to 9.50% due
8/15/2009 to 7/15/2037 (a) ................................. 53,000
- --------------------------------------------------------------------------------
53,000 Mizuho Securities USA Inc., purchased on 9/26/2007 to
yield 4.15% to 10/03/2007, repurchase price $53,043,
collateralized by U.S. Treasury Note, 4.50% to 4.88%
due 5/31/2008 to 8/31/2011 ................................. 53,000
- --------------------------------------------------------------------------------
53,000 Morgan Stanley & Co. Incorporated, purchased on
9/26/2007 to yield 4.25% to 10/03/2007, repurchase price
$53,044, collateralized by GNMA, 5.50% to 11.50%
due 2/15/2009 to 10/15/2035 ................................ 53,000
- --------------------------------------------------------------------------------
53,000 UBS Securities LLC, purchased on 9/26/2007 to yield
4.55% to 10/03/2007, repurchase price $53,047,
collateralized by GNMA, 4.50% to 12%
due 6/15/2009 to 7/15/2037 ................................. 53,000
- --------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost -- $813,375) .................................................. 813,375
- --------------------------------------------------------------------------------
Total Investments (Cost -- $1,094,956**) -- 99.5% ................... 1,094,956
Other Assets Less Liabilities -- 0.5% ............................... 5,487
----------
Net Assets -- 100.0% ................................................ $1,100,443
==========
* U.S. Treasury Bills are traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the Fund.
U.S. Treasury Notes bear interest at the rates shown, payable at fixed
dates until maturity.
** Cost for federal income tax purposes.
*** Repurchase Agreements are fully collateralized by U.S. Government
Obligations.
+ Separately Traded Registered Interest and Principal of Securities
(STRIPS).
(a) Investments in companies considered to be an affiliate of the Master LLC,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
- --------------------------------------------------------------------------------
Net Interest
Affiliate Activity Income
- --------------------------------------------------------------------------------
Merrill Lynch Government Securities Inc. $4,100 $1,252
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
16 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Statement of Assets and Liabilities Master Government Securities LLC
As of September 30, 2007 (Unaudited)
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in repurchase agreements, at value (including $53,000,000 in affiliates)
(identified cost -- $813,375,000) .......................................................... $ 813,375,000
Investments in unaffiliated securities, at value (identified cost -- $281,580,699) ......... 281,580,699
Cash ....................................................................................... 25,385
Receivables:
Contributions .............................................................................. $ 4,981,047
Interest (including $12,514 from affiliates) ............................................... 694,530 5,675,577
-------------
Prepaid expenses ........................................................................... 9,020
-------------
Total assets ............................................................................... 1,100,665,681
====================================================================================================================================
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser payable ................................................................. 170,922
Accrued expenses ........................................................................... 51,318
--------------
Total liabilities .......................................................................... 222,240
--------------
====================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets ................................................................................. $1,100,443,441
==============
====================================================================================================================================
Net Assets Consist of
- ------------------------------------------------------------------------------------------------------------------------------------
Investors' capital ......................................................................... $1,100,443,441
--------------
Net assets ................................................................................. $1,100,443,441
==============
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 17
Statement of Operations Master Government Securities LLC
For the Six Months Ended September 30, 2007 (Unaudited)
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest (includes $1,251,720 from affiliates) ............................................. $ 24,334,183
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ................................................................... $ 1,029,466
Accounting services ........................................................................ 89,052
Custodian fees ............................................................................. 30,707
Professional fees .......................................................................... 26,244
Directors' fees and expenses ............................................................... 17,504
Pricing fees ............................................................................... 1,786
Printing and shareholder reports ........................................................... 141
Other ...................................................................................... 13,668
-------------
Total expenses ............................................................................. 1,208,568
-------------
Investment income -- net ................................................................... 23,125,615
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on investments -- net ........................................................ 33,663
Change in unrealized appreciation on investments -- net .................................... (27,831)
-------------
Total realized and unrealized gain -- net .................................................. 5,832
-------------
Net Increase in Net Assets Resulting from Operations ....................................... $ 23,131,447
=============
See Notes to Financial Statements.
18 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Statements of Changes in Net Assets Master Government Securities LLC
For the Six
Months Ended For the
September 30, Year Ended
2007 March 31,
Increase (Decrease) in Net Assets: (Unaudited) 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ............................................................. $ 23,125,615 $ 45,035,528
Realized gain -- net ................................................................. 33,663 4,743
Change in unrealized appreciation -- net ............................................. (27,831) 319,061
--------------------------------------
Net increase in net assets resulting from operations ................................. 23,131,447 45,359,332
--------------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions .......................................................... 2,916,556,724 5,153,023,736
Fair value of withdrawals ............................................................ (2,803,657,391) (5,202,779,172)
--------------------------------------
Net increase (decrease) in net assets derived from capital transactions .............. 112,899,333 (49,755,436)
--------------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .............................................. 136,030,780 (4,396,104)
Beginning of period .................................................................. 964,412,661 968,808,765
--------------------------------------
End of period ........................................................................ $ 1,100,443,441 $ 964,412,661
======================================
Financial Highlights Master Government Securities LLC
For the Six For the Period
Months Ended For the Year Ended February 13,
September 30, March 31, 2003+ to
The following ratios have been derived from 2007 --------------------------------------------------- March 31,
information provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
==================================================================================================================================
Total Investment Return
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment return .................. 2.42++ 4.90% 3.37% 1.44% .94% .75%*
================================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. .25%* .26% .26% .25% .22% .26%*
================================================================================
Investment income and realized gain -- net 4.77%* 4.84% 3.31% 1.39% .94% 1.08%*
================================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $1,100,443 $ 964,413 $ 968,809 $ 936,566 $1,194,238 $1,585,194
================================================================================
* Annualized.
+ Commencement of operations.
++ Aggregate total investment return.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 19
Notes to Financial Statements (Unaudited) Master Government Securities LLC
1. Significant Accounting Policies:
Master Government Securities LLC (the "Master LLC") is registered under the
Investment Company Act of 1940, as amended, and is organized as a Delaware
limited liability company. Prior to June 15, 2007, the Master LLC was organized
as a Delaware statutory trust (the "Trust"). The Limited Liability Company
Agreement permits the Directors (and prior to June 15, 2007, the Declaration of
Trust permits the Trustees) to issue non- transferable interests in the Master
LLC/Trust, subject to certain limitations. Throughout this report, the Trust and
the Master LLC are referred to as the Master LLC and the Board of Trustees is
referred to as the Board of Directors. The Master LLC's financial statements are
prepared in conformity with U.S. generally accepted accounting principles, which
may require the use of management accruals and estimates. Actual results may
differ from these estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to present a
fair statement of the results for the interim period. The following is a summary
of significant accounting policies followed by the Master LLC.
(a) Valuation of investments -- Portfolio securities may be valued at amortized
cost, which approximates market value. Other investments and assets for which
market value quotations are not available are valued at fair value as determined
in good faith by or under the direction of the Board of Directors.
(b) Repurchase agreements -- The Master LLC may invest in U.S. government and
agency securities pursuant to repurchase agreements. Under such agreements, the
counterparty agrees to repurchase the security at a mutually agreed upon time
and price. The counterparty will be required on a daily basis to maintain the
value of the securities subject to the agreement at no less than the repurchase
price. The agreements are conditioned upon the collateral being deposited under
the Federal Reserve book entry system or held in a segregated account by the
Fund's custodian. If the counterparty defaults and the fair value of the
collateral declines, liquidation of the collateral by the Fund may be delayed or
limited.
(c) Income taxes -- The Master LLC is classified as a partnership for federal
income tax purposes. As such, each investor in the Master LLC is treated as
owner of its proportionate share of the net assets, income, expenses and
realized and unrealized gains and losses of the Master LLC. Therefore, no
federal income tax provision is required. It is intended that the Master LLC's
assets will be managed so an investor in the Master LLC can satisfy the
requirements of Subchapter M of the Internal Revenue Code.
(d) 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. Interest income (including amortization of premium and
discount) is recognized on the accrual basis.
(e) Recent accounting pronouncements -- Effective September 30, 2007, the Master
LLC implemented Financial Accounting Standards Board ("FASB") Interpretation No.
48, "Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109" ("FIN 48"). 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 investment companies, before being measured and recognized in
the financial statements. Management has evaluated the application of FIN 48 to
the Master LLC, and has determined that the adoption of FIN 48 does not have a
material impact on the Master LLC's financial statements. The Master LLC files
U.S. and various state tax returns. No income tax returns are currently under
examination. The statute of limitations on the Master LLC's tax returns remains
open for the years ended March 31, 2004 through March 31, 2007.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS 157
and its impact on the Master LLC's financial statements, if any, has not been
determined.
In addition, in February 2007, FASB Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Master LLC's financial
statements, if any, has not been determined.
20 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
Notes to Financial Statements (concluded) Master Government Securities LLC
2. Investment Advisory Agreement and Transactions with Affiliates:
The Master LLC has entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the "Manager"), an indirect, wholly owned subsidiary of
BlackRock, Inc. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC
Financial Services Group, Inc. are principal owners of BlackRock, Inc.
The Manager is responsible for the management of the Master LLC's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Master LLC. For such services, the
Master LLC pays a monthly fee based upon the average daily value of the Master
LLC's net assets at the following annual rates: .25% of the Master LLC's average
daily net assets not exceeding $500 million; .175% of the average daily net
assets in excess of $500 million, but not exceeding $1 billion; and .125% of the
average daily net assets in excess of $1 billion. In addition, the Manager has
entered into a Sub-Advisory Agreement with BlackRock Institutional Management
Corporation, an affiliate of the Manager, under which the Manager pays the
Sub-Adviser for services it provides a monthly fee at an annual rate that is a
percentage of the management fee paid to the Manager.
The Master LLC has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated, a wholly owned subsidiary of Merrill Lynch, or its
affiliates. Pursuant to that order, the Master LLC has retained BlackRock
Investment Management, LLC ("BIM"), an affiliate of the Manager, as the
securities lending agent for a fee based on a share of the returns on investment
of cash collateral. BIM may, on behalf of the Master LLC, invest cash collateral
received by the Master LLC for such loans, among other things, in a private
investment company managed by the Manager or in registered money market funds
advised by the Manager or its affiliates.
For the six months ended September 30, 2007, the Master LLC reimbursed the
Manager $8,795 for certain accounting services.
Certain officers and/or directors of the Master LLC are officers and/or
directors of BlackRock, Inc. or its affiliates.
Proxy Results
During the six-month period ended September 30, 2007, the shareholders of Master
Government Securities LLC voted on the following proposal, which was approved at
a special shareholders' meeting on September 7, 2007. This proposal was a part
of the reorganization of the Master LLC's Board of Directors to take effect on
or about November 1, 2007. A description of the proposal and number of shares
voted are as follows:
- ------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ------------------------------------------------------------------------------------------------------------------
To elect the Master LLC's Board of Directors: David O. Beim 876,453,033 1,408,964
Richard S. Davis 876,968,825 893,172
Ronald W. Forbes 876,968,825 893,172
Henry Gabbay 876,453,037 1,408,960
Dr. Matina Horner 876,453,037 1,408,960
Rodney D. Johnson 876,968,825 893,172
Herbert I. London 876,968,825 893,172
Cynthia A. Montgomery 876,968,821 893,176
Joseph P. Platt, Jr. 876,968,825 893,172
Robert C. Robb, Jr. 876,968,821 893,176
Toby Rosenblatt 876,453,033 1,408,964
Kenneth L. Urish 876,968,825 893,172
Frederick W. Winter 876,453,037 1,408,960
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 21
Officers and Directors as of September 30, 2007
Robert C. Doll, Jr., Fund President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Jean Margo Reid, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Donald C. Burke, Vice President and Treasurer
Karen Clark, Chief Compliance Officer
Howard Surloff, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-221-7210*
* For inquiries regarding your WCMA account, call 800-262-4636.
22 WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their non-public personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated third parties are required to protect the confidentiality
and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to non-public
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. 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.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
WCMA GOVERNMENT SECURITIES FUND SEPTEMBER 30, 2007 23
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. An investment in the
Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although the Fund seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing in
the Fund. Performance data quoted represents past performance and does not
guarantee future results. Total return information assumes reinvestment of all
distributions. Current performance may be higher or lower than the performance
data quoted. For current month-end performance information, call 1-800-882-0052.
The Fund's current 7-day yield more closely reflects the current earnings of the
Fund than the total returns quoted. Statements and other information herein are
as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web site
at http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio during the most recent 12-month period
ended June 30 is available (1) at www.blackrock.com and (2) on the Securities
and Exchange Commission's Web site at http://www.sec.gov.
WCMA Government Securities Fund
P.O. Box 9011
Princeton, NJ 08543-9011
#WCMAGS -- 9/07
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this
semi-annual report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
15d-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
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.
WCMA Government Securities Fund and Master Government Securities LLC
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer of
WCMA Government Securities Fund and Master Government Securities LLC
Date: November 20, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
WCMA Government Securities Fund and Master Government Securities LLC
Date: November 20, 2007
By: /s/ Neal J. Andrews
-------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
WCMA Government Securities Fund and Master Government Securities LLC
Date: November 20, 2007