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 811-21197
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, 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 - 03/31/2008
Item 1 - Report to Stockholders
Annual Report
March 31, 2008
WCMA Government
Securities Fund
Table of Contents
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Page
- --------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Annual Report:
Disclosure of Expenses ................................................... 4
Current Seven-Day Yields ................................................. 4
Fund Financial Statements:
Statement of Assets and Liabilities .................................. 5
Statement of Operations .............................................. 5
Statements of Changes in Net Assets .................................. 6
Fund Financial Highlights ................................................ 7
Fund Notes to Financial Statements ....................................... 11
Fund Report of Independent Registered Public Accounting Firm ............. 14
Fund Important Tax Information (Unaudited) ............................... 14
Master LLC Portfolio Summary ............................................. 15
Master LLC Financial Statements:
Schedule of Investments .............................................. 16
Statement of Assets and Liabilities .................................. 17
Statement of Operations .............................................. 17
Statements of Changes in Net Assets .................................. 18
Master LLC Financial Highlights .......................................... 18
Master LLC Notes to Financial Statements ................................. 19
Master LLC Report of Independent Registered Public Accounting Firm ....... 21
Officers and Directors ................................................... 22
Additional Information ................................................... 25
2 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
A Letter to Shareholders
Dear Shareholder
Financial markets endured severe bouts of volatility during the reporting
period, particularly as the calendar turned to 2008. It was then that fears of
an economic recession swelled and credit market strains intensified, producing
calamity in the financial system and, ultimately, the demise of major Wall
Street firm Bear Stearns.
The Federal Reserve Board (the "Fed"), after cutting the target federal funds
rate 100 basis points (1%) between September 2007 and year-end, stepped up its
efforts to support the ailing financial sector in the first three months of
2008. The central bank cut interest rates 125 basis points in January alone, and
followed with another 75-basis-point cut on March 18, bringing the target rate
to 2.25%. In an unprecedented move, the Fed also extended its financing
operations directly to broker/dealers and assisted JPMorgan in its buyout of
ill-fated Bear Stearns.
Against this backdrop, investor anxiety has been acute and equity markets have
struggled. The S&P 500 Index of U.S. stocks was down in March, marking the fifth
consecutive month of negative returns. International markets outperformed the
U.S. for much of 2007, but that trend changed in more recent months as investors
grew increasingly reluctant to take on the risks of foreign investing.
In fixed income markets, an ongoing investor flight to quality continued to
drive Treasury yields lower and their prices higher. The yield on 10-year
Treasury issues, which touched 5.30% in June 2007 (its highest level in five
years), fell to 4.04% by year-end and to 3.45% by March 31. Investors largely
shunned bonds associated with the housing and credit markets, and the riskier
high yield sector landed in negative territory year-to-date. Meanwhile, the
municipal bond market has struggled with concerns around the creditworthiness of
monoline bond insurers and the failure of auctions for auction rate securities,
driving yields higher and prices lower across the curve. At period-end,
municipal bonds were trading at higher yields than their Treasury counterparts,
a very unusual occurrence by historical standards.
Overall, the major benchmark indexes posted mixed results for the current
reporting period, generally reflecting heightened investor risk aversion:
Total Returns as of March 31, 2008 6-month 12-month
==========================================================================================================
U.S. equities (S&P 500 Index) -12.46% - 5.08%
- ----------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) -14.02 -13.00
- ----------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) -10.50 - 2.70
- ----------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Index) + 5.23 + 7.67
- ----------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 0.75 + 1.90
- ----------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Capped Index) - 4.01 - 3.47
- ----------------------------------------------------------------------------------------------------------
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 today's volatile markets, we encourage you to review your
investment goals with your financial professional and to make portfolio changes,
as needed. For more up-to-date commentary on the economy and financial markets,
we invite you to visit www.blackrock.com/funds. As always, 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/ Rob Kapito
Rob Kapito
President, BlackRock Advisors, LLC
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 October 1, 2007 and held
through March 31, 2008) 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 hypothetical 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
October 1, 2007 March 31, 2008 During the Period* October 1, 2007 March 31, 2008 During the Period*
- ------------------------------------------------------------------------------------------------------------------------------------
Class 1 ......... $1,000 $1,010.20 $8.23 $1,000 $1,017.11 $8.26
Class 2 ......... $1,000 $1,013.40 $5.04 $1,000 $1,020.30 $5.05
Class 3 ......... $1,000 $1,015.00 $3.41 $1,000 $1,021.91 $3.42
Class 4 ......... $1,000 $1,015.00 $3.41 $1,000 $1,021.91 $3.42
- ------------------------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.62% for Class 1, 0.99% for Class 2, 0.67% for Class
3 and 0.67% for Class 4), multiplied by the average account value over the
period, multiplied by 185/366 (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 fund 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 366.
Current Seven-Day Yields
As of March 31, 2008
- --------------------------------------------------------------------------------
Class 1 ................................................................ 0.29%
Class 2 ................................................................ 0.95
Class 3 ................................................................ 1.28
Class 4 ................................................................ 1.28
- --------------------------------------------------------------------------------
4 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Statement of Assets and Liabilities
March 31, 2008 WCMA Government Securities Fund
================================================================================
Assets
- --------------------------------------------------------------------------------
Investment at value -- Master Government Securities LLC
(the "Master LLC") (cost -- $510,055,663) .................... $510,055,663
Prepaid expenses and other assets .............................. 26,791
------------
Total assets ................................................... 510,082,454
------------
================================================================================
Liabilities
- --------------------------------------------------------------------------------
Administration fees payable .................................... 110,782
Distribution fees payable ...................................... 53,937
Other affiliates payable ....................................... 2,513
Other accrued expenses payable ................................. 23,151
------------
Total liabilities .............................................. 190,383
------------
================================================================================
Net Assets
- --------------------------------------------------------------------------------
Net Assets ..................................................... $509,892,071
============
================================================================================
Net Assets Consist of
- --------------------------------------------------------------------------------
Class 1 shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized ........................ $ 1,054,281
Class 2 shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized ........................ 8,887,532
Class 3 shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized ........................ 15,482,253
Class 4 shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized ........................ 25,561,823
Paid-in capital in excess of par ............................... 458,873,007
Accumulated net realized gain allocated from
the Master LLC ............................................... 33,175
------------
Net Assets ..................................................... $509,892,071
============
================================================================================
Net Assets Value
- --------------------------------------------------------------------------------
Class 1 -- Based on net assets of $10,543,655 and 10,542,813
shares of beneficial interest outstanding .................... $ 1.00
============
Class 2 -- Based on net assets of $88,880,832 and 88,875,321
shares of beneficial interest outstanding .................... $ 1.00
============
Class 3 -- Based on net assets of $154,833,499 and
154,822,533 shares of beneficial interest outstanding ........ $ 1.00
============
Class 4 -- Based on net assets of $255,634,085 and
255,618,231 shares of beneficial interest outstanding ........ $ 1.00
============
Statement of Operations
Year Ended March 31, 2008 WCMA Government Securities Fund
================================================================================
Investment Income
- --------------------------------------------------------------------------------
Interest from affiliates ...................................... $ 111,190
Net investment income allocated from the Master LLC:
Interest .................................................... 20,667,201
Expenses .................................................... (1,155,930)
------------
Total income .................................................. 19,622,461
------------
================================================================================
Expenses
- --------------------------------------------------------------------------------
Administration ................................................ 1,201,641
Service and distribution -- Class 1 ........................... 116,470
Service and distribution -- Class 2 ........................... 557,019
Service and distribution -- Class 3 ........................... 609,444
Service and distribution -- Class 4 ........................... 823,764
Registration .................................................. 364,049
Printing ...................................................... 37,426
Professional .................................................. 36,984
Transfer agent -- Class 1 ..................................... 5,767
Transfer agent -- Class 2 ..................................... 7,520
Transfer agent -- Class 3 ..................................... 5,087
Transfer agent -- Class 4 ..................................... 5,692
Officer ....................................................... 223
Miscellaneous ................................................. 11,627
------------
Total expenses ................................................ 3,782,713
Waiver of expenses ............................................ (1,271,834)
------------
Total expenses after waiver ................................... 2,510,879
------------
Net investment income ......................................... 17,111,582
------------
================================================================================
Realized and Unrealized Gain Allocated from the Master LLC
- --------------------------------------------------------------------------------
Net realized gain on investments .............................. 31,548
Net change in unrealized appreciation/depreciation
on investments .............................................. 289,536
------------
Total net realized and unrealized gain ........................ 321,084
------------
Net Increase in Net Assets Resulting from Operations .......... $ 17,432,666
============
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 5
Statements of Changes in Net Assets WCMA Government Securities Fund
Year Ended March 31,
-------------------------------
Increase (Decrease) in Net Assets: 2008 2007
======================================================================================================================
Operations
- ----------------------------------------------------------------------------------------------------------------------
Net investment income ............................................................. $ 17,111,582 $ 19,423,516
Net realized gain ................................................................. 31,548 2,576
Net change in unrealized appreciation/depreciation ................................ 289,536 151,984
-------------------------------
Net increase in net assets resulting from operations .............................. 17,432,666 19,578,076
-------------------------------
======================================================================================================================
Dividends and Distributions to Shareholders from
- ----------------------------------------------------------------------------------------------------------------------
Net investment income:
Class 1 ....................................................................... (315,273) (511,697)
Class 2 ....................................................................... (2,758,865) (3,778,640)
Class 3 ....................................................................... (6,009,348) (7,008,543)
Class 4 ....................................................................... (8,028,096) (8,124,636)
Net realized gain:
Class 1 ....................................................................... -- (38)
Class 2 ....................................................................... -- (219)
Class 3 ....................................................................... -- (332)
Class 4 ....................................................................... -- (360)
-------------------------------
Decrease in net assets resulting from dividends and distributions to shareholders . (17,111,582) (19,424,465)
-------------------------------
======================================================================================================================
Beneficial Interest Transactions
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from beneficial interest transactions 48,665,561 (40,234,908)
-------------------------------
======================================================================================================================
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................... 48,986,645 (40,081,297)
Beginning of year ................................................................. 460,905,426 500,986,723
-------------------------------
End of year ....................................................................... $ 509,892,071 $ 460,905,426
===============================
See Notes to Financial Statements.
6 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Financial Highlights WCMA Government Securities Fund
Class 1
--------------------------------------------------------------------------
Year Ended March 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
=========================================================================================================================
Per Share Operating Performance
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------
Net investment income ..................... 0.0274 0.0351 0.0199 0.0027 0.0004
Net realized and unrealized gain (loss) ... 0.0013 0.0003 0.0001 (0.0012) (0.0002)
--------------------------------------------------------------------------
Net increase from investment operations ... 0.0287 0.0354 0.0200 0.0015 0.0002
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income ................. (0.0274) (0.0351) (0.0199) (0.0027) (0.0004)
Net realized gain ..................... -- -- 1 -- 1 -- 1 (0.0001)
--------------------------------------------------------------------------
Total dividends and distributions ......... (0.0274) (0.0351) (0.0199) (0.0027) (0.0005)
--------------------------------------------------------------------------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================
=========================================================================================================================
Total Investment Return
- -------------------------------------------------------------------------------------------------------------------------
Total investment return ................... 2.77% 3.55% 2.01% 0.27% 0.05%
==========================================================================
=========================================================================================================================
Ratios to Average Net Assets 2
- -------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver ............... 1.62% 1.59% 1.59% 1.41% 1.09%
==========================================================================
Total expenses ............................ 1.62% 1.59% 1.59% 1.60% 1.58%
==========================================================================
Net investment income and net realized gain 2.68% 3.51% 1.99% 0.24% 0.04%
==========================================================================
=========================================================================================================================
Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ............. $ 10,544 $ 11,122 $ 18,837 $ 16,718 $ 22,260
==========================================================================
1 Amount is less than $(0.0001) per share.
2 Includes the Fund's share of the Master LLC's allocated expenses and/or
net investment income and net realized gain.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 7
Financial Highlights (continued) WCMA Government Securities Fund
Class 2
--------------------------------------------------------------------------
Year Ended March 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
=========================================================================================================================
Per Share Operating Performance
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------
Net investment income ..................... 0.0336 0.0407 0.0259 0.0070 0.0015
Net realized and unrealized gain (loss) ... 0.0011 0.0004 0.0001 (0.0011) (0.0001)
--------------------------------------------------------------------------
Net increase from investment operations ... 0.0347 0.0411 0.0260 0.0059 0.0014
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income ................. (0.0336) (0.0407) (0.0259) (0.0070) (0.0015)
Net realized gain ..................... -- -- 1 -- 1 -- 1 (0.0001)
--------------------------------------------------------------------------
Total dividends and distributions ......... (0.0336) (0.0407) (0.0259) (0.0070) (0.0016)
--------------------------------------------------------------------------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================
=========================================================================================================================
Total Investment Return
- -------------------------------------------------------------------------------------------------------------------------
Total investment return ................... 3.41% 4.13% 2.63% 0.70% 0.16%
==========================================================================
=========================================================================================================================
Ratios to Average Net Assets 2
- -------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver ............... 1.00% 1.03% 0.99% 0.98% 0.97%
==========================================================================
Total expenses ............................ 1.26% 1.28% 1.27% 1.28% 1.26%
==========================================================================
Net investment income and net realized gain 3.32% 4.07% 2.58% 0.68% 0.15%
==========================================================================
=========================================================================================================================
Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ............. $ 88,881 $ 82,655 $ 115,872 $ 119,718 $ 137,566
==========================================================================
1 Amount is less than $(0.0001) per share.
2 Includes the Fund's share of the Master LLC's allocated expenses and/or
net investment income and net realized gain.
See Notes to Financial Statements.
8 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Financial Highlights (continued) WCMA Government Securities Fund
Class 3
--------------------------------------------------------------------------
Year Ended March 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
=========================================================================================================================
Per Share Operating Performance
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------
Net investment income ..................... 0.0368 0.0439 0.0291 0.0102 0.0047
Net realized and unrealized gain (loss) ... 0.0010 0.0004 0.0001 (0.0010) (0.0001)
--------------------------------------------------------------------------
Net increase from investment operations ... 0.0378 0.0443 0.0292 0.0092 0.0046
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income ................. (0.0368) (0.0439) (0.0291) (0.0102) (0.0047)
Net realized gain ..................... -- -- 1 -- 1 -- 1 (0.0001)
--------------------------------------------------------------------------
Total dividends and distributions ......... (0.0368) (0.0439) (0.0291) (0.0102) (0.0048)
--------------------------------------------------------------------------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================
=========================================================================================================================
Total Investment Return
- -------------------------------------------------------------------------------------------------------------------------
Total investment return ................... 3.74% 4.47% 2.96% 1.03% 0.48%
==========================================================================
=========================================================================================================================
Ratios to Average Net Assets 2
- -------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver ............... 0.68% 0.71% 0.67% 0.66% 0.65%
==========================================================================
Total expenses ............................ 0.96% 0.98% 0.97% 0.98% 0.96%
==========================================================================
Net investment income and net realized gain 3.67% 4.41% 2.88% 1.01% 0.48%
==========================================================================
=========================================================================================================================
Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ............. $ 154,833 $ 158,327 $ 158,500 $ 193,195 $ 224,278
==========================================================================
1 Amount is less than $(0.0001) per share.
2 Includes the Fund's share of the Master LLC's allocated expenses and/or
net investment income and net realized gain.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 9
Financial Highlights (concluded) WCMA Government Securities Fund
Class 4
--------------------------------------------------------------------------
Year Ended March 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
=========================================================================================================================
Per Share Operating Performance
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------
Net investment income ..................... 0.0368 0.0439 0.0291 0.0102 0.0047
Net realized and unrealized gain (loss) ... 0.0003 0.0003 0.0002 (0.0012) -- 1
--------------------------------------------------------------------------
Net increase from investment operations ... 0.0371 0.0442 0.0293 0.0090 0.0047
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income ................. (0.0368) (0.0439) (0.0291) (0.0102) (0.0047)
Net realized gain ..................... -- -- 2 -- 2 -- 2 -- 2
--------------------------------------------------------------------------
Total dividends and distributions ......... (0.0368) (0.0439) (0.0291) (0.0102) (0.0047)
--------------------------------------------------------------------------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================
=========================================================================================================================
Total Investment Return
- -------------------------------------------------------------------------------------------------------------------------
Total investment return ................... 3.74% 4.47% 2.96% 1.03% 0.47%
==========================================================================
=========================================================================================================================
Ratios to Average Net Assets 3
- -------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver ............... 0.68% 0.71% 0.67% 0.66% 0.65%
==========================================================================
Total expenses ............................ 0.95% 0.98% 0.98% 0.97% 0.96%
==========================================================================
Net investment income and net realized gain 3.59% 4.41% 3.10% 0.91% 0.48%
==========================================================================
=========================================================================================================================
Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ............. $ 255,634 $ 208,801 $ 207,778 $ 81,344 $ 157,203
==========================================================================
1 Amount is less than $0.0001 per share.
2 Amount is less than $(0.0001) per share.
3 Includes the Fund's share of the Master LLC's allocated expenses and/or
net investment income and net realized gain.
See Notes to Financial Statements.
10 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Notes to Financial Statements 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 (the "1940 Act"), 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 accounting
principles generally accepted in the United States of America, which may require
the use of management accruals and estimates. Actual results may differ from
these estimates. The percentage of the Master LLC owned by the Fund at March 31,
2008 was 39.0%. 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.
The following is a summary of significant accounting policies followed by the
Fund:
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 of the Master LLC's Notes to Financial Statements, which are included
elsewhere in this report.
Investment Transactions and Net Investment Income: Investment transactions in
the Master LLC are accounted for on a trade date basis. The Fund records daily
its proportionate share of the Master LLC's income, expenses and realized gains
and losses. In addition, the Fund accrues its own income and expenses. Income
and realized gains and losses on investments are allocated daily to each class
based on its relative net assets.
Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and reinvested daily and paid monthly. Distributions of
realized gains, if any, are recorded on the ex-dividend dates.
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.
Effective September 28, 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. The administrator has
evaluated the application of FIN 48 to the Fund, and has determined that the
adoption of FIN 48 did not have a material impact on the Fund's financial
statements. The Fund files U.S. federal and various state and local tax returns.
No income tax returns are currently under examination. The statute of
limitations on the Fund's U.S. federal tax returns remains open for the years
ended March 31, 2005 through March 31, 2007. The statutes of limitations on the
Fund's state and local tax returns may remain open for an additional year
depending upon the jurisdiction.
Recent Accounting Pronouncements: 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. The impact on the Fund's financial
statement disclosures, if any, is currently being assessed.
In addition, in February 2007, Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. 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. The impact on the Fund's financial statement disclosures, if any,
is currently being assessed.
In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures
about Derivative Instruments and Hedging Activities -- an amendment of FASB
Statement No. 133" ("FAS 161") was issued and is effective for fiscal years
beginning after November 15, 2008. FAS 161 is intended to improve financial
reporting for derivative instruments by
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 11
Notes to Financial Statements (continued) WCMA Government Securities Fund
requiring enhanced disclosure that enables investors to understand how and why
an entity uses derivatives, how derivatives are accounted for, and how
derivative instruments affect an entity's results of operations and financial
position. The administrator is currently evaluating the implications of FAS 161
and the impact on the Fund's financial statement disclosures, if any, is
currently being assessed.
Other: Expenses directly related to the Fund or its classes are charged to that
Fund or class. Other operating expenses shared by several funds are pro-rated
among those funds on the basis of relative net assets or other appropriate
methods. Other expenses of the Fund are allocated daily to each class based on
its relative net assets.
2. Transactions with Affiliates:
The Fund entered into an Administration Agreement with BlackRock Advisors, LLC
(the "Administrator"), an indirect, wholly owned subsidiary of BlackRock, Inc.,
to provide administrative services (other than investment advice and related
portfolio activities). For such services, the Fund pays a monthly fee at an
annual rate of 0.25% of the Fund's average daily net assets. Merrill Lynch &
Co., Inc. ("Merrill Lynch") and The PNC Financial Services Group, Inc. ("PNC")
are principal owners of BlackRock, Inc.
The Fund has entered into a Distribution Agreement and a Distribution and
Shareholder Servicing Plan (the "Distribution Plan") with 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.).
Pursuant to the Distribution Plan adopted by the Fund in accordance with Rule
12b-1 under the 1940 Act, the Fund pays MLPF&S 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 .......................................... 0.25% 0.750%
Class 2 .......................................... 0.25% 0.425%
Class 3 .......................................... 0.25% 0.125%
Class 4 .......................................... 0.25% 0.125%
- --------------------------------------------------------------------------------
The ongoing service fee compensates MLPF&S for providing shareholder services to
shareholders. The ongoing distribution fee compensates MLPF&S for providing
distribution related services to 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 0.32% higher than that of CMA
Government Securities Fund, and Class 3 and Class 4 Shares is equal to that of
CMA Government Securities Fund. The fee/expense waiver or reimbursement includes
service and distribution fees. This arrangement has a one-year term and is
renewable. For the year ended March 31, 2008, MLPF&S earned fees of $2,106,697,
of which $1,271,834 was waived.
Financial Data Services, Inc. ("FDS"), a wholly owned subsidiary of Merrill
Lynch and an affiliate of the Administrator, serves as 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 directors of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Shares of Beneficial Interest:
Transactions in shares of beneficial interests for each class were as follows:
- --------------------------------------------------------------------------------
Class 1 Shares for the Year
Ended March 31, 2008 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 121,626,056 $ 121,626,056
Shares issued to shareholders in
reinvestment of dividends ............ 315,273 315,273
-----------------------------------
Total issued ........................... 121,941,329 121,941,329
Shares redeemed ........................ (122,533,816) (122,533,816)
-----------------------------------
Net decrease ........................... (592,487) $ (592,487)
===================================
- --------------------------------------------------------------------------------
Class 1 Shares for the Year
Ended March 31, 2007 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 185,188,568 $ 185,188,568
Shares issued to shareholders in
reinvestment of dividends
and distributions .................... 511,728 511,728
-----------------------------------
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 Year
Ended March 31, 2008 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 527,715,700 $ 527,715,700
Shares issued to shareholders in
reinvestment of dividends ............ 2,758,865 2,758,865
-----------------------------------
Total issued ........................... 530,474,565 530,474,565
Shares redeemed ........................ (524,336,137) (524,336,137)
-----------------------------------
Net increase ........................... 6,138,428 $ 6,138,428
===================================
- --------------------------------------------------------------------------------
Class 2 Shares for the Year
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)
===================================
12 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Notes to Financial Statements (concluded) WCMA Government Securities Fund
- --------------------------------------------------------------------------------
Class 3 Shares for the Year
Ended March 31, 2008 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,037,700,677 $ 1,037,700,677
Shares issued to shareholders in
reinvestment of dividends ............ 6,009,348 6,009,348
-----------------------------------
Total issued ........................... 1,043,710,025 1,043,710,025
Shares redeemed ........................ (1,047,361,189) (1,047,361,189)
-----------------------------------
Net decrease ........................... (3,651,164) $ (3,651,164)
===================================
- --------------------------------------------------------------------------------
Class 3 Shares for the Year
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 Year
Ended March 31, 2008 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,722,710,820 $ 1,722,710,820
Shares issued to shareholders in
reinvestment of dividends ............ 8,028,096 8,028,096
-----------------------------------
Total issued ........................... 1,730,738,916 1,730,738,916
Shares redeemed ........................ (1,683,968,132) (1,683,968,132)
-----------------------------------
Net increase ........................... 46,770,784 $ 46,770,784
===================================
- --------------------------------------------------------------------------------
Class 4 Shares for the Year
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
===================================
4. Income Tax Information:
The tax character of distributions paid during the fiscal years ended
March 31, 2008 and March 31, 2007 were as follows:
- --------------------------------------------------------------------------------
3/31/2008 3/31/2007
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income ................................ $17,111,582 $19,424,465
---------------------------
Total taxable distributions ...................... $17,111,582 $19,424,465
===========================
As of March 31, 2008, the components of accumulated earnings on a tax basis were
as follows:
- --------------------------------------------------------------------------------
Undistributed net ordinary income ................................ $ 35,035
Undistributed net long-term capital gains ........................ --
--------
Total undistributed net earnings ................................. 35,035
Net unrealized losses ............................................ (1,860)*
--------
Total accumulated net earnings ................................... $ 33,175
========
* The difference between book-basis and tax-basis net unrealized losses is
attributable primarily to the tax deferral of losses on wash sales.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 13
Report of Independent Registered Public Accounting Firm
WCMA Government Securities Fund
To the Shareholders and Board of Directors of
WCMA Government Securities Fund:
We have audited the accompanying statement of assets and liabilities of WCMA
Government Securities Fund (the "Fund") as of March 31, 2008, 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 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 WCMA
Government Securities Fund as of March 31, 2008, 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 the 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 27, 2008
Important Tax Information (Unaudited)
The following information is provided with respect to the ordinary income
distributions paid by WCMA Government Securities Fund for the fiscal year ended
March 31, 2008:
- --------------------------------------------------------------------------------
Federal Obligation Interest
- --------------------------------------------------------------------------------
Months Paid: April 2007 - March 2008 ............................... 20.90%*
- --------------------------------------------------------------------------------
Interest-Related Dividends for Non-U.S. Residents
- --------------------------------------------------------------------------------
Months Paid: April 2007 - December 2007 ............................ 99.46%**
January 2008 - March 2008 ............................. 97.67%**
- --------------------------------------------------------------------------------
* The law varies in each state as to whether and what percentage of dividend
income attributable to federal obligations is exempt from state income
tax. We recommend that you consult your tax advisor to determine if any
portion of the dividends you received is exempt from state income taxes.
** Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
14 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Portfolio Summary Master Government Securities LLC
Portfolio Composition as a Percent of Net Assets
3/31/08 3/31/07
- --------------------------------------------------------------------------------
Repurchase Agreements ................................ 71% 78%
U.S. Government Obligations .......................... 33 22
Liabilities in Excess of Other Assets ................ (4%) --
-----------------------
Total ................................................ 100% 100%
=======================
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 15
Schedule of Investments March 31, 2008
Master Government Securities LLC (Percentages shown are based on Net Assets)
Interest Maturity Par
Issue Rate Date (000) Value
=====================================================================================
U.S. Government Obligations* -- 33.2%
=====================================================================================
U.S. Treasury Bills 1.25-
3.20 % 4/03/2008 $79,597 $ 79,582,921
3.197 4/10/2008 25,000 24,977,799
0.35-
2.40 4/15/2008 60,662 60,624,255
0.35-
2.252 4/17/2008 74,549 74,499,858
2.263 4/24/2008 9,191 9,177,134
2.04-
2.168 5/01/2008 51,526 51,432,839
0.810-
2.20 5/08/2008 60,170 60,074,538
0.98 6/19/2008 25,000 24,945,556
1.30 7/03/2008 50,000 49,835,694
- -------------------------------------------------------------------------------------
Total U.S. Government Obligations
(Cost -- $435,150,594)........................................... 435,150,594
- -------------------------------------------------------------------------------------
Issue
=====================================================================================
Repurchase Agreements** -- 70.4%
=====================================================================================
Banc of America Securities LLC, purchased on
3/26/2008 to yield 1.50% to 4/02/2008, repurchase
price $68,519,979, collateralized by GNMA,
5% - 6.50% due 11/15/2019 to 3/20/2038 ................ 68,500 68,500,000
- -------------------------------------------------------------------------------------
Barclays Capital Inc., purchased on 3/31/2008 to
yield 1.45% to 4/01/2008, repurchase price
$66,802,691, collateralized by U.S. Treasury Inflation
Bond, 3% - 3.50% due 1/15/2011 to 7/15/2012 ........... 66,800 66,800,000
- -------------------------------------------------------------------------------------
Citigroup Global Markets Inc., purchased on
3/26/2008 to yield 2% to 4/02/2008, repurchase
price $68,526,639, collateralized by GNMA, 6%
due 3/20/2038 ......................................... 68,500 68,500,000
- -------------------------------------------------------------------------------------
Credit Suisse Securities (USA) LLC, purchased on
1/02/2008 to yield 4.10% to 4/01/2008, repurchase
price $55,159,650, collateralized by GNMA, 5% - 7%
due 7/20/2032 to 2/20/2038 ............................ 54,600 54,600,000
- -------------------------------------------------------------------------------------
Deutsche Bank Securities Inc., purchased on
3/26/2008 to yield 1.85% to 4/02/2008, repurchase
price $68,524,641, collateralized by GNMA,
4.50% - 7% due 1/15/2033 to 3/15/2038 ................. 68,500 68,500,000
- -------------------------------------------------------------------------------------
Goldman Sachs & Co., Inc., purchased on 1/16/2008
to yield 3.70% to 4/16/2008, repurchase price
$56,120,014, collateralized by GNMA, 4.50% - 7.50%
due 7/20/2025 to 2/20/2037 ............................ 55,600 55,600,000
- -------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc., purchased on
3/26/2008 to yield 2.10% to 4/02/2008, repurchase
price $68,527,971, collateralized by GNMA,
4.50% - 12% due 8/15/2008 to 3/20/2038 ................ 68,500 68,500,000
- -------------------------------------------------------------------------------------
HSBC Securities (USA) Inc., purchased on 3/31/2008
to yield 1.45% to 4/01/2008, repurchase price
$66,802,691, collateralized by U.S. Treasury Bond,
4.375% due 2/15/2038 .................................. 66,800 66,800,000
- -------------------------------------------------------------------------------------
J.P. Morgan Securities Inc., purchased on 3/25/2008
to yield 1.75% to 4/01/2008, repurchase price
$68,023,139, collateralized by GNMA,
4.50% - 11.50% due 9/15/2008 to 3/20/2038 ............. 68,000 68,000,000
- -------------------------------------------------------------------------------------
Lehman Brothers Inc., purchased on 3/31/2008 to
yield 1.80% to 4/01/2008, repurchase price
$66,803,340, collateralized by GNMA, 4% - 9%
due 3/15/2013 to 3/15/2038 ............................ 66,800 66,800,000
- -------------------------------------------------------------------------------------
Merrill Lynch Government Securities Inc., purchased on
3/26/2008 to yield 1.55% to 4/02/2008, repurchase
price $68,520,645, collateralized by GNMA,
5.50% - 6% due 6/15/2034 to 9/15/2036 (a) ............. 68,500 68,500,000
- -------------------------------------------------------------------------------------
Mizuho Securities USA Inc., purchased on 3/31/2008
to yield 1.40% to 4/01/2008, repurchase price
$66,802,598, collateralized by U.S. Treasury Bill, due
6/12/2008 to 8/21/2008 ................................ 66,800 66,800,000
- -------------------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated, purchased on
3/31/2008 to yield 1.35% to 4/01/2008, repurchase
price $66,802,505, collateralized by U.S. Treasury
STRIPS+, due 2/15/2025 to 5/15/2025 ................... 66,800 66,800,000
- -------------------------------------------------------------------------------------
UBS Securities LLC, purchased on 3/17/2008 to yield
1.65% to 6/16/2008, repurchase price $66,275,275,
collateralized by GNMA, 3.50% - 13%
due 6/15/2008 to 9/15/2041 ............................ 66,000 66,000,000
- -------------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost -- $920,700,000) .......................................... 920,700,000
- -------------------------------------------------------------------------------------
Total Investments (Cost -- $1,355,850,594***) -- 103.6% ......... 1,355,850,594
Liabilities in Excess of Other Assets -- (3.6%) ................. (47,728,427)
---------------
Net Assets -- 100.0% ............................................ $ 1,308,122,167
===============
* U.S. Treasury Bills are traded on a discount basis; the interest rates
shown are the range of discount rates paid at the time of purchase by the
Master LLC.
** Repurchase Agreements are fully collateralized by U.S. Government
Obligations.
*** Cost for federal income tax purposes.
+ 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 (000) Income
--------------------------------------------------------------------------
Merrill Lynch Government Securities Inc. $19,600 $2,314,618
--------------------------------------------------------------------------
See Notes to Financial Statements.
16 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Statement of Assets and Liabilities
March 31, 2008 Master Government Securities LLC
================================================================================
Assets
- --------------------------------------------------------------------------------
Investments at value -- unaffiliated (cost -- $1,287,350,594) $ 1,287,350,594
Investments at value -- affiliated (cost -- $68,500,000) .... 68,500,000
Cash ........................................................ 355
Contributions receivable .................................... 1,257,792
Interest receivable (including $14,747 from affiliates) ..... 1,129,823
Prepaid expenses ............................................ 23,159
---------------
Total assets ................................................ 1,358,261,723
---------------
================================================================================
Liabilities
- --------------------------------------------------------------------------------
Investments purchased payable ............................... 49,835,694
Investment advisory fees payable ............................ 212,879
Other affiliates payable .................................... 10,083
Other accrued expenses payable .............................. 80,900
---------------
Total liabilities ........................................... 50,139,556
---------------
================================================================================
Net Assets
- --------------------------------------------------------------------------------
Net Assets .................................................. $ 1,308,122,167
===============
================================================================================
Net Assets Consist of
- --------------------------------------------------------------------------------
Investors' capital .......................................... $ 1,308,122,167
===============
Statement of Operations
Year Ended March 31, 2008 Master Government Securities LLC
================================================================================
Investment Income
- --------------------------------------------------------------------------------
Interest (includes $2,314,618 from affiliates) .............. $ 45,070,275
================================================================================
Expenses
- --------------------------------------------------------------------------------
Investment advisory ......................................... 2,194,232
Accounting services ......................................... 184,349
Custodian ................................................... 59,202
Professional ................................................ 51,220
Directors ................................................... 30,271
Printing .................................................... 576
Miscellaneous ............................................... 27,556
---------------
Total expenses .............................................. 2,547,406
---------------
Net investment income ....................................... 42,522,869
---------------
================================================================================
Realized and Unrealized Gain (Loss)
- --------------------------------------------------------------------------------
Net realized gain on investments ............................ 71,881
Net change in unrealized appreciation/depreciation
on investments ............................................ (27,831)
---------------
Total realized and unrealized gain .......................... 44,050
---------------
Net Increase in Net Assets Resulting from Operations ........ $ 42,566,919
===============
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 17
Statements of Changes in Net Assets Master Government Securities LLC
Year Ended March 31,
-----------------------------------
Increase (Decrease) in Net Assets: 2008 2007
==============================================================================================================
Operations
- --------------------------------------------------------------------------------------------------------------
Net investment income ................................................. $ 42,522,869 $ 45,035,528
Net realized gain ..................................................... 71,881 4,743
Net change in unrealized appreciation/depreciation .................... (27,831) 319,061
-----------------------------------
Net increase in net assets resulting from operations .................. 42,566,919 45,359,332
-----------------------------------
==============================================================================================================
Capital Transactions
- --------------------------------------------------------------------------------------------------------------
Proceeds from contributions ........................................... 6,967,978,832 5,153,023,736
Fair value of withdrawals ............................................. (6,666,836,245) (5,202,779,172)
-----------------------------------
Net increase (decrease) in net assets derived from capital transactions 301,142,587 (49,755,436)
-----------------------------------
==============================================================================================================
Net Assets
- --------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ............................... 343,709,506 (4,396,104)
Beginning of year ..................................................... 964,412,661 968,808,765
-----------------------------------
End of year ........................................................... $ 1,308,122,167 $ 964,412,661
===================================
Financial Highlights Master Government Securities LLC
Year Ended March 31,
----------------------------------------------------------------------
2008 2007 2006 2005 2004
=====================================================================================================================
Total Investment Return
- ---------------------------------------------------------------------------------------------------------------------
Total investment return ................... 4.16% 4.90% 3.37% 1.44% 0.94%
======================================================================
=====================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------
Total expenses ............................ 0.24% 0.26% 0.26% 0.25% 0.22%
======================================================================
Net investment income and net realized gain 3.99% 4.84% 3.31% 1.39% 0.94%
======================================================================
=====================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ............. $1,308,122 $ 964,413 $ 968,809 $ 936,566 $1,194,238
======================================================================
See Notes to Financial Statements.
18 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Notes to Financial Statements 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 (the "1940 Act"), 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 permitted the Directors (and prior to June 15, 2007, the
Declaration of Trust permitted 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 accounting principles generally
accepted in the United States of America, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates.
The following is a summary of significant accounting policies followed by the
Master LLC:
Valuation of Investments: The Master LLC securities are valued under the
amortized cost method which approximates current market value in accordance with
Rule 2a-7 of the 1940 Act. Under this method, securities are valued at cost when
purchased and thereafter, a constant proportionate amortization of any discount
or premium is recorded until the maturity of the security. Regular review and
monitoring of the valuation is performed in an attempt to avoid dilution or
other unfair results to investors.
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
Master LLC's custodian. If the counterparty defaults and the fair value of the
collateral declines, liquidation of the collateral by the Master LLC may be
delayed or limited.
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 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.
Effective September 28, 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. BlackRock Advisors, LLC
(the "Advisor"), an indirect, wholly owned subsidiary of BlackRock, Inc., has
evaluated the application of FIN 48 to the Master LLC, and has determined that
the adoption of FIN 48 did not have a material impact on the Master LLC's
financial statements. The Master LLC files U.S. federal and various state and
local tax returns. No income tax returns are currently under examination. The
statutes of limitations on the Master LLC's U.S. federal tax returns remains
open for the years ended March 31, 2005 through March 31, 2007. The statutes of
limitations on the Master LLC's state and local tax returns may remain open for
an additional year depending upon the jurisdiction.
Investment Transactions and Investment Income: Investment 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 is recognized on the accrual basis. The
Master LLC amortizes all premiums and discounts on debt securities.
Recent Accounting Pronouncements: 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. The impact on the Master LLC's
financial statement disclosures, if any, is currently being assessed.
In addition, in February 2007, Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. 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. The impact on the Master LLC's financial statement disclosures, if
any, is currently being assessed.
In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures
about Derivative Instruments and Hedging Activities -- an amendment of FASB
Statement No. 133" ("FAS 161") was issued and is effective for fiscal years
beginning after November 15, 2008. FAS 161 is intended to improve financial
reporting for derivative instruments by requiring enhanced disclosure that
enables investors to understand how and why an entity uses derivatives, how
derivatives are accounted for, and how derivative instruments affect an entity's
results of operations and financial position. Management is currently evaluating
the implications of
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 19
Notes to Financial Statements (concluded) Master Government Securities LLC
FAS 161 and the impact on the Master LLC's financial statement disclosures, if
any, is currently being assessed.
Other: Expenses directly related to the Master LLC are charged to the Master
LLC. Other operating expenses shared by several funds are pro-rated among those
funds on the basis of relative net assets or other appropriate methods.
2. Investment Advisory Agreement and Other Transactions with Affiliates:
The Master LLC entered into an Investment Advisory Agreement with the Advisor to
provide investment advisory and administration services. Merrill Lynch & Co.,
Inc. ("Merrill Lynch") and The PNC Financial Services Group, Inc. are principal
owners of BlackRock, Inc.
The Advisor is responsible for the management of the Master LLC's portfolio and
provides the necessary personnel, facilities and equipment to provide such
services to the Master LLC. The Advisor also performs certain administrative
services necessary for the operation 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: 0.25% of the Master LLC's
average daily net assets not exceeding $500 million; 0.175% of the average daily
net assets in excess of $500 million, but not exceeding $1 billion; and 0.125%
of the average daily net assets in excess of $1 billion.
In addition, the Advisor has entered into a separate sub-advisory agreement with
BlackRock Institutional Management Corporation ("BIMC"), an affiliate of the
Advisor, under which the Advisor pays BIMC for services it provides, a monthly
fee that is a percentage of the investment advisory fee paid by the Master LLC
to the Advisor. For the year ended March 31, 2008, the Master LLC reimbursed the
Advisor $19,232 for certain accounting services, which is included in accounting
services expenses in the Statement of Operations.
Certain officers and/or directors of the Master LLC are officers and/or
directors of BlackRock, Inc. or its affiliates.
20 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Report of Independent Registered Public Accounting Firm
Master Government Securities LLC
To the Investors and Board of Directors of
Master Government Securities LLC:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Master Government Securities LLC (the "Master
LLC") (formerly Master Government Securities Trust) as of March 31, 2008, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Master LLC's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The
Master LLC is not required to have, nor were we engaged to perform, an audit of
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Master LLC's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2008, 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
Government Securities LLC as of March 31, 2008, 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 the 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 27, 2008
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 21
Officers and Directors
Number of
Position(s) Length of BlackRock-
Held with Time Served Advised Funds
Name, Address Fund/ as a Principal Occupation(s) and Portfolios Public
and Year of Birth Master LLC Director** During Past Five Years Overseen Directorships
====================================================================================================================================
Non-Interested Directors*
- ------------------------------------------------------------------------------------------------------------------------------------
David O. Beim Director Since 2007 Professor of Finance and Economics at the 35 Funds None
40 East 52nd Street Columbia University Graduate School of 81 Portfolios
New York, NY 10022 Business since 1991; Trustee, Phillips
1940 Exeter Academy since 2002; Formerly
Chairman, Wave Hill, Inc. (public garden
and cultural center) from 1990 to 2006.
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald W. Forbes Director and Since 2002 Professor Emeritus of Finance, School of 35 Funds None
40 East 52nd Street Co-Chair Business, State University of New York at 81 Portfolios
New York, NY 10022 of the Board Albany since 2000.
1940 of Directors
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Matina Horner Director Since 2007 Formerly Executive Vice President of 35 Funds NSTAR (electric
40 East 52nd Street Teachers Insurance and Annuity Association 81 Portfolios and gas utility)
New York, NY 10022 and College Retirement Equities Fund from
1939 1989 to 2003.
- ------------------------------------------------------------------------------------------------------------------------------------
Rodney D. Johnson Director and Since 2007 President, Fairmount Capital Advisors, Inc. 35 Funds None
40 East 52nd Street Co-Chair since 1987; Director, Fox Chase Cancer 81 Portfolios
New York, NY 10022 of the Board Center since 2002; Member of the
1941 of Directors Archdiocesan Investment Committee of the
Archdiocese of Philadelphia since 2003;
Director, the Committee of Seventy (civic)
since 2006.
- ------------------------------------------------------------------------------------------------------------------------------------
Herbert I. London Director and Since 2007 Professor Emeritus, New York University 35 Funds AIMS Worldwide, Inc.
40 East 52nd Street Member of since 2005; John M. Olin Professor of 81 Portfolios (marketing)
New York, NY 10022 the Audit Humanities, New York University from 1993
1939 Committee to 2005 and Professor thereof from 1980 to
2005; President, Hudson Institute (policy
research organization) since 1997 and
Trustee thereof since 1980; Chairman of the
Board of Trustees for Grantham University
since 2006; Director of InnoCentive, Inc.
(strategic solutions company) since 2005;
Director of Cerego, LLC (software
development and design) since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. Montgomery Director Since 2002 Professor, Harvard Business School since 35 Funds Newell Rubbermaid,
40 East 52nd Street 1989; Director, Harvard Business School 81 Portfolios Inc. (manufacturing)
New York, NY 10022 Publishing since 2005; Director, McLean
1952 Hospital since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph P. Platt, Jr. Director Since 2007 Director, The West Penn Allegheny Health 35 Funds Greenlight Capital
40 East 52nd Street System (a not-for-profit health system) 81 Portfolios Re, Ltd. (reinsurance
New York, NY 10022 since 2008; Partner, Amarna Corporation, company)
1947 LLC (private investment company) since
2002; Director, WQED Multimedia (PBS and
Multimedia, a not-for-profit company)
since 2002; Director, Jones and Brown
(Canadian insurance broker) since 1998;
General Partner, Thorn Partner, LP (private
investment) since 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert C. Robb, Jr. Director Since 2007 Partner, Lewis, Eckert, Robb and Company 35 Funds None
40 East 52nd Street (management and financial consulting firm) 81 Portfolios
New York, NY 10022 since 1981.
1945
- ------------------------------------------------------------------------------------------------------------------------------------
22 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Officers and Directors (continued)
Number of
Position(s) Length of BlackRock-
Held with Time Served Advised Funds
Name, Address Fund/ as a Principal Occupation(s) and Portfolios Public
and Year of Birth Master LLC Director** During Past Five Years Overseen Directorships
====================================================================================================================================
Non-Interested Directors* (concluded)
- ------------------------------------------------------------------------------------------------------------------------------------
Toby Rosenblatt Director Since 2007 President, Founders Investments Ltd. 35 Funds A.P. Pharma, Inc.
40 East 52nd Street (private investments) since 1999; Director 81 Portfolios (speciality
New York, NY 10022 of Forward Management, LLC since 2007; pharmaceuticals)
1938 Director, The James Irvine Foundation
(philanthropic foundation) since 1997;
Formerly Trustee, State Street Research
Mutual Funds from 1990 to 2005; Formerly,
Trustee, Metropolitan Series Funds, Inc.
from 2001 to 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth L. Urish Director and Since 2007 Managing Partner, Urish Popeck & Co., LLC 35 Funds None
40 East 52nd Street Chair of (certified public accountants and 81 Portfolios
New York, NY 10022 the Audit consultants) since 1976; Member of External
1951 Committee Advisory Board, The Pennsylvania State
University Accounting Department since
2001; Trustee, The Holy Family Foundation
since 2001; Committee Member/Professional
Ethics Committee of the Pennsylvania
Institute of Certified Public Accountants
since 2007; President and Trustee,
Pittsburgh Catholic Publishing Associates
since 2003; Formerly Director, Inter-Tel
from 2006 to 2007.
- ------------------------------------------------------------------------------------------------------------------------------------
Frederick W. Winter Director and Since 2007 Professor and Dean Emeritus of the Joseph 35 Funds None
40 East 52nd Street Member of M. Katz School of Business, University of 81 Portfolios
New York, NY 10022 the Audit Pittsburgh since 2005 and Dean thereof from
1945 Committee 1997 to 2005. Director, Alkon Corporation
(pneumatics) since 1992; Director,
Indotronix International (IT services)
since 2004; Director, Tippman Sports
(recreation) since 2005.
-------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72.
** Following the combination of Merrill Lynch Investment Managers, L.P. ("MLIM") and BlackRock, Inc.
("BlackRock") in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were
realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows
certain directors as joining the Fund's/Master LLC's board in 2007, those directors first became a
member of the board of directors of other legacy MLIM or legacy BlackRock Funds as follows: David O.
Beim since 1998; Ronald W. Forbes since 1977; Matina Horner since 2004; Rodney D. Johnson since 1995;
Herbert I. London since 1987; Cynthia A. Montgomery since 1994; Joseph P. Platt since 1999; Robert C.
Robb, Jr. since 1999; Toby Rosenblatt since 2005; Kenneth L. Urish since 1999 and Frederick W. Winter
since 1999.
====================================================================================================================================
Interested Directors*
- ------------------------------------------------------------------------------------------------------------------------------------
Richard S. Davis Director Since 2007 Managing Director, BlackRock, Inc. since 185 Funds None
40 East 52nd Street 2005; Formerly Chief Executive Officer, 292 Portfolios
New York, NY 10022 State Street Research & Management Company
1945 from 2000 to 2005; Formerly Chairman of the
Board of Trustees, State Street Research
Mutual Funds from 2000 to 2005; Formerly
Chairman, SSR Realty from 2000 to 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Henry Gabbay Director Since 2007 Consultant, BlackRock, Inc. since 2007; 184 Funds None
40 East 52nd Street Formerly Managing Director, BlackRock, Inc. 291 Portfolios
New York, NY 10022 from 1989 to 2007; Formerly Chief
1947 Administrative Officer, BlackRock Advisors,
LLC from 1998 to 2007; Formerly President
of BlackRock Funds and BlackRock Bond
Allocation Target Shares from 2005 to 2007
and Treasurer of certain closed-end funds
in the BlackRock fund complex from 1989 to
2006.
-------------------------------------------------------------------------------------------------------------
* Messrs. Davis and Gabbay are both "interested persons," as defined in the Investment Company Act of
1940, of the Fund/Master LLC based on their positions with BlackRock, Inc. and its affiliates.
Directors serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72.
- ------------------------------------------------------------------------------------------------------------------------------------
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 23
Officers and Directors (concluded)
Position(s)
Held with
Name, Address Fund/ Length of
and Year of Birth Master LLC Time Served Principal Occupation(s) During Past Five Years
====================================================================================================================================
Fund/Master LLC's Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Fund Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of
40 East 52nd Street President Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P.
New York, NY 10022 and Chief ("FAM") in 2006; First Vice President thereof from 1997 to 2005; Treasurer thereof
1960 Executive from 1999 to 2006 and Vice President thereof from 1990 to 1997.
Officer
- ------------------------------------------------------------------------------------------------------------------------------------
Anne F. Ackerley Vice Since 2007 Managing Director of BlackRock, Inc. since 2000 and First Vice President and Chief
40 East 52nd Street President Operating Officer of Mergers and Acquisitions Group from 1997 to 2000; First Vice
New York, NY 10022 President and Chief Operating Officer of Public Finance Group thereof from 1995 to
1962 1997; First Vice President of Emerging Markets Fixed Income Research of Merrill
Lynch & Co., Inc. from 1994 to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Neal J. Andrews Chief Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Senior Vice President
40 East 52nd Street Financial and Line of Business Head of Fund Accounting and Administration at PFPC Inc. from
New York, NY 10022 Officer 1992 to 2006.
1966
- ------------------------------------------------------------------------------------------------------------------------------------
Jay M. Fife Treasurer Since 2007 Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly
40 East 52nd Street Assistant Treasurer of the MLIM/FAM advised funds from 2005 to 2006; Director of
New York, NY 10022 MLIM Fund Services Group from 2001 to 2006.
1970
- ------------------------------------------------------------------------------------------------------------------------------------
Brian P. Kindelan Chief Since 2007 Chief Compliance Officer of the Funds since 2007; Anti-Money Laundering Officer of
40 East 52nd Street Compliance the Funds since 2007; Managing Director and Senior Counsel thereof since 2005;
New York, NY 10022 Officer of Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004 and Vice
1959 the Funds President and Senior Counsel thereof from 1998 to 2000; Senior Counsel of The PNC
Bank Corp. from 1995 to 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Howard Surloff Secretary Since 2007 Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at
40 East 52nd Street BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman Sachs Asset
New York, NY 10022 Management, L.P. from 1993 to 2006.
1965
-------------------------------------------------------------------------------------------------------------
* Officers of the Fund/Master LLC serve at the pleasure of the Board of Directors.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's/Master LLC's Officers and Directors is available in the Fund's/Master
LLC's Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and
Trust Company
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
Jacksonville, FL 32246
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540
Legal Counsel
Sidley Austin LLP
New York, NY 10019
24 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
Additional 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 website at
http://www.sec.gov and 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 (800) SEC-0330. The Fund's Forms N-Q
may also be obtained upon request and without charge by calling (800) 441-7762.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's website 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.
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.
General Information
The Fund will mail only one copy of shareholder documents, including 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.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008 25
Additional Information (concluded)
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 websites.
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.
26 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2008
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. Total return information assumes reinvestment of all distributions.
Past performance results shown in this report should not be considered a
representation of future performance. For current month-end performance
information, call (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 (800) 441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's website
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 or by calling (800) 441-7762
and (2) on the Securities and Exchange Commission's website at
http://www.sec.gov.
WCMA Government Securities Fund
100 Bellevue Parkway
Wilmington, DE 19809
#WCMAGS -- 3/08
Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code
of ethics, as of the end of the period covered by this report,
applicable to the registrant's principal executive officer,
principal financial officer and principal accounting officer, or
persons performing similar functions. During the period covered by
this report, there have been no amendments to or waivers granted
under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "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:
Ronald W. Forbes (not reappointed to audit committee, effective
November 1, 2007)
Kenneth L. Urish (term began, effective November 1, 2007)
Richard R. West (term ended, effective November 1, 2007)
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Audit Fees (b) Audit-Related Fees(1) (c) Tax Fees(2) (d) All Other Fees(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Current Previous Current Previous Current Previous Current Previous
Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal
Entity Name End Year End End Year End End Year End End Year End
- ----------------------------------------------------------------------------------------------------------------------------------
Master Government
Securities LLC $24,300 $28,500 $0 $0 $9,200 $9,200 $0 $0
- ----------------------------------------------------------------------------------------------------------------------------------
WCMA Government
Securities Fund $6,800 $6,600 $0 $0 $6,100 $6,100 $749 $0
- ----------------------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services reasonably
related to the performance of the audit of financial statements not included in
Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax
planning.
3 The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
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"). The term of any general pre-approval is 12 months
from the date of the pre-approval, unless the Committee provides for
a different period. Tax or other non-audit services provided to the
registrant which have a direct impact on the operation or financial
reporting of the registrant will only be deemed pre-approved
provided that any individual project does not exceed $10,000
attributable to the registrant or $50,000 for all of the registrants
the Committee oversees. For this purpose, multiple projects will be
aggregated to determine if they exceed the previously mentioned cost
levels.
Any proposed services exceeding the pre-approved cost levels
will require specific pre-approval by the Committee, as will any
other services not subject to general pre-approval (e.g.,
unanticipated but permissible services). The Committee is informed
of each service approved subject to general pre-approval at the next
regularly scheduled in-person board meeting. At this meeting, an
analysis of such services is presented to the Committee for
ratification. The Committee may delegate to one or more of its
members the authority to approve the provision of and fees for any
specific engagement of permitted non-audit services, including
services exceeding pre-approved cost levels.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
--------------------------------------------------------------------
Current Fiscal Previous Fiscal
Entity Name Year End Year End
--------------------------------------------------------------------
Master Government Securities LLC $287,500 $3,023,700
--------------------------------------------------------------------
WCMA Government Securities Fund $288,549 $3,020,600
--------------------------------------------------------------------
(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 (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by 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) - $287,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Investments
(a) The registrant's Schedule of Investments is included as part of
the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual
period covered since the previous Form N-CSR filing.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
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 and Governance 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 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 - 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.
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: May 22, 2008
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: May 22, 2008
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: May 22, 2008