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 811-09637 and 811-09739
Name of Fund: BlackRock Large Cap Series Funds, Inc.
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
Master Large Cap Series LLC
Master Large Cap Core Portfolio
Master Large Cap Growth Portfolio
Master Large Cap Value Portfolio
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer,
BlackRock Large Cap Series Funds, Inc. and Master Large Cap Series LLC,
800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address: P.O. Box
9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (800) 441-7762
Date of fiscal year end: 10/31/2008
Date of reporting period: 11/01/2007 - 10/31/2008
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock BLACKROCK
Large Cap Series Funds, Inc.
ANNUAL REPORT | OCTOBER 31, 2008
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents
================================================================================
Page
- --------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Annual Report:
Fund Summaries ........................................................... 4
About Fund Performance ................................................... 10
Disclosure of Expenses ................................................... 10
Fund Financial Statements:
Statements of Assets and Liabilities ................................... 12
Statements of Operations ............................................... 14
Statements of Changes in Net Assets .................................... 15
Fund Financial Highlights ................................................ 18
Fund Notes to Financial Statements ....................................... 27
Fund Report of Independent Registered Public Accounting Firm ............. 34
Important Tax Information ................................................ 35
Master Portfolio Information ............................................. 36
Master Financial Statements:
Schedules of Investments ............................................... 38
Statements of Assets and Liabilities ................................... 45
Statements of Operations ............................................... 46
Statements of Changes in Net Assets .................................... 47
Master Financial Highlights .............................................. 48
Master Notes to Financial Statements ..................................... 49
Master Report of Independent Registered Public Accounting Firm ........... 52
Disclosure of Investment Advisory Agreement and Subadvisory Agreement .... 53
Officers and Directors ................................................... 57
Additional Information ................................................... 60
Mutual Fund Family ....................................................... 62
2 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
A Letter to Shareholders
Dear Shareholder
It has been a tumultuous period for investors, marked by almost daily headlines
of deepening turmoil in financial markets and a darkening economic outlook. The
news took an extraordinarily heavy tone late in the period as the credit crisis
boiled over and triggered unprecedented failures and consolidation in the
financial sector, stoking fears of a market and economic collapse and prompting
a series of new government programs designed to contain and combat the fallout.
The Federal Reserve Board (the "Fed") has taken decisive measures to restore
liquidity and stabilize the financial system. Key moves included slashing the
target federal funds rate 250 basis points (2.50%) between November 2007 and
April 2008 and providing massive cash injections and lending programs. In
October, as credit conditions further deteriorated, the central bank cut the key
interest rate by 50 basis points on two separate occasions -- on October 8 in
coordination with five other global central banks, and again during its
regularly scheduled meeting on October 29. This left the key short-term rate at
just 1.0%, its lowest level since 2004. While the U.S. economy appeared fairly
resilient through the second quarter of 2008, the third quarter saw a
contraction of 0.5%, and a more significant decline is expected for the fourth
quarter. Moreover, on December 1, the National Bureau of Economic Research
confirmed that the U.S. had entered a recession in December 2007.
Against this backdrop, U.S. equity markets experienced intense volatility, with
periods of downward pressure punctuated by sharp rebounds. Losses were
significant and broad-based, though small-cap stocks fared moderately better
than their larger counterparts. Non-U.S. markets decelerated at a considerably
faster pace than domestic equities -- a stark reversal of recent years' trends,
when international stocks generally outpaced U.S. stocks.
Treasury issues also traded in a volatile fashion, but rallied overall (yields
fell and prices correspondingly rose) and outperformed other fixed income assets
as investors continued their flight to higher quality and more liquid
securities. Tax-exempt issues generally underperformed, as problems among
municipal bond insurers and the collapse in the market for auction rate
securities afflicted the group throughout the course of the past year. At the
same time, the above mentioned economic headwinds and malfunctioning credit
markets plagued the high yield sector, with the third quarter of 2008 marking
one of the worst periods in history for the asset class.
Facing unprecedented volatility and macro pressures, the major benchmark indexes
generally recorded losses for the six- and 12-month reporting periods:
Total Returns as of October 31, 2008 6-month 12-month
============================================================================================================
U.S. equities (S&P 500 Index) (29.28)% (36.10)%
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Small cap U.S. equities (Russell 2000 Index) (24.39) (34.16)
- ------------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) (41.21) (46.62)
- ------------------------------------------------------------------------------------------------------------
Fixed income (Barclays Capital U.S. Aggregate Index*) (3.63) 0.30
- ------------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Barclays Capital Municipal Bond Index*) (4.70) (3.30)
- ------------------------------------------------------------------------------------------------------------
High yield bonds (Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Index*) (24.86) (25.41)
- ------------------------------------------------------------------------------------------------------------
* Formerly a Lehman Brothers Index.
Past performance is no guarantee of future results. Index performance
shown is for illustrative purposes only. You cannot invest directly in an
index.
Through periods of market turbulence, as ever, BlackRock's full resources are
dedicated to the management of our clients' assets. For our most current views
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 investments, 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
THIS PAGE NOT PART OF YOUR FUND REPORT 3
Fund Summary BlackRock Large Cap Core Fund
Portfolio Management Commentary
How did the Fund perform?
o The Fund underperformed the benchmark Russell 1000 Index, through its
investment in Master Large Cap Core Portfolio (the "Portfolio") for the
12-month period.
What factors influenced performance?
o Broadly speaking, the Portfolio's underperformance for the period resulted
from stock selection.
o The Portfolio's underperformance in consumer staples was almost entirely
due to its underweight position, but stock selection in the sector was
negative as well. We believe the underweight positioning is justified by
the high valuations in that sector. Fund performance was also hurt by a
combination of disappointing stock selection and an overweight in the
information technology (IT) sector, especially among office electronics
and semiconductors names. Finally, disappointing results from stock
selection within health care, materials, energy and industrials offset the
positive effects of allocation decisions among those sectors.
o The consumer discretionary sector was a significant contributor to
performance, as we focused on finding high-quality companies, companies
with global revenue streams, turn-around companies, and companies that
will benefit as consumers "trade down" (e.g., discounters such as Ross
Stores Inc.). The Portfolio's underweight in financials stocks (most
notably in mortgage finance and capital markets companies) also helped
performance.
o The most significant individual contributors to Portfolio performance
included AutoZone, Inc., Chubb Corp. and Express Scripts, Inc., as well as
underweights in American International Group, Inc. and Citigroup, Inc. The
biggest individual detractors from performance included Seagate
Technology, Valero Energy Corp. and JPMorgan Chase & Co., as well as
underweights in Wal-Mart Stores, Inc. and Wells Fargo.
Describe recent portfolio activity.
o During the period, we increased the Portfolio's exposure to the energy,
IT, health care, industrials and consumer staples sectors. The Portfolio's
largest purchases included Occidental Petroleum, Cummins Inc., Johnson &
Johnson, Apache Corp. and Hess Corp.
o We reduced the Portfolio's exposure to the materials and financials
sectors. The Portfolio's largest sales included MetLife Corp., Cisco
Systems Corp., International Business Machines Corp., American
International Group and Medco Health Solutions, Inc.
Describe Portfolio positioning at period-end.
o On October 31, 2008, the Portfolio was overweight versus the benchmark in
IT, health care, energy and consumer discretionary, and underweight in
financials, consumer staples, utilities and telecommunication services.
o We believe the U.S. economy is facing a deeper-than-normal recession that
will put a significant drag on corporate earnings. Going forward, we still
believe in the importance of high-quality U.S. multinationals, as many
still have good earnings growth, quality balance sheets and good
valuations. In this uncertain environment, quality is key. While the
time-tested importance of fundamentals appears to have been absent from
valuations recently, fundamentals do matter. When the market returns to a
more "normal" state, we believe that owning high-quality companies will
stand us in good stead.
The views expressed reflect the opinions of BlackRock as of the date of this
report and are subject to change based on changes in market, economic or other
conditions. These views are not intended to be a forecast of future events and
are no guarantee of future results.
4 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
BlackRock Large Cap Core Fund
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional
and Investor A Shares compared to growth of an investment in the Russell 1000
Index. Values are from December 22, 1999 to October 2008:
Institutional Investor A Russell 1000
Shares(1,2) Shares(1,2) Index(3)
12/22/99(4) $10,000 $ 9,475 $10,000
Oct-00 $11,770 $11,124 $10,250
Oct-01 $ 9,104 $ 8,587 $ 7,581
Oct-02 $ 8,314 $ 7,819 $ 6,474
Oct-03 $10,335 $ 9,696 $ 7,919
Oct-04 $11,285 $10,568 $ 8,658
Oct-05 $13,310 $12,429 $ 9,564
Oct-06 $15,561 $14,494 $11,097
Oct-07 $17,668 $16,411 $12,765
Oct-08 $10,734 $ 9,948 $ 8,068
1 Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
2 The Fund invests all of its assets in Master Large Cap Core Portfolio of
Master Large Cap Series LLC. The Portfolio invests primarily in a
diversified portfolio of equity securities of large cap companies located
in the United States that the Advisor believes blends growth and value.
3 This unmanaged broad-based Index measures the performance of the 1,000
largest companies in the Russell 3000(R) Index, which represents
approximately 92% of the total market capitalization of the Russell 3000
Index.
4 Commencement of operations.
Performance Summary for the Period Ended October 31, 2008
Average Annual Total Returns 5
-----------------------------------------------------------------------------
1 Year 5 Years Since Inception 6
---------------------- --------------------- ---------------------
6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
Total Returns charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional .................... (27.81)% (39.25)% -- 0.76% -- 0.80% --
Service .......................... (27.92) (39.39) -- 0.51 -- 0.55 --
Investor A ....................... (27.92) (39.38) (42.56)% 0.51 (0.56)% 0.55 (0.06)%
Investor B ....................... (28.26) (39.90) (42.52) (0.29) (0.61) (0.17) (0.17)
Investor C ....................... (28.23) (39.93) (40.51) (0.29) (0.29) (0.24) (0.24)
Class R .......................... (28.17) (39.71) -- 0.20 -- 0.31 --
Russell 1000 Index ............... (30.13) (36.80) -- 0.37 -- (2.39) --
- -----------------------------------------------------------------------------------------------------------------------------------
5 Assuming maximum sales charges, if any. See "About Fund Performance" on
page 10 for a detailed description of share classes, including any related
sales charges and fees.
6 The Fund commenced operations on December 22, 1999.
Past performance is not indicative of future results.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 5
Fund Summary BlackRock Large Cap Growth Fund
Portfolio Management Commentary
How did the Fund perform?
o The Fund underperformed the benchmark Russell 1000 Growth Index, through
its investment in Master Large Cap Growth Portfolio (the "Portfolio"), for
the 12-month period.
What factors influenced performance?
o Broadly speaking, the Portfolio's underperformance for the period resulted
from stock selection.
o The Portfolio's underperformance in consumer staples was largely due to
its underweight position, which we believe is justified given the high
valuations in that sector. Fund performance was also hurt by a combination
of disappointing stock selection and an overweight in the information
technology (IT) sector, especially among semiconductors, software,
computer peripherals and communications equipment names. Finally,
disappointing results from stock selection within health care offset the
positive effects of allocation decisions in the sector.
o The consumer discretionary sector was a significant contributor to
performance, as we focused on finding high-quality companies, companies
with global revenue streams, turn-around companies, and companies that
will benefit as consumers "trade down" (e.g., discounters such as Ross
Stores Inc.). The Portfolio's underweight in financials stocks (most
notably in mortgage finance and capital markets companies) also helped
performance.
o The most significant individual contributors to Portfolio performance
included AutoZone Inc., Express Scripts, Inc., The Mosaic Co. and
PartnerRe Ltd., as well as an underweight in NII Holdings. The biggest
individual detractors from performance included Seagate Technology,
Cummins, Inc., Microsoft Corp. and Apollo Group, Inc., as well as an
underweight in The Procter & Gamble Co.
Describe recent portfolio activity.
o During the period, we increased the Portfolio's exposure to the IT, health
care, industrials, energy and consumer staples sectors. The Portfolio's
largest purchases included Cummins, Inc., Occidental Petroleum Corp.,
Intel Corp., Hess Corp. and Texas Instruments, Inc.
o We reduced the Portfolio's exposure to the materials and financials
sectors. The Portfolio's largest sales included Cisco Systems Inc.,
International Business Machines Corp., Oracle Corp., Mosaic Co. and Medco
Health Solutions, Inc.
Describe Portfolio positioning at period-end.
o On October 31, 2008, the Portfolio was overweight versus the benchmark in
IT, consumer discretionary, health care and industrials, and underweight
in consumer staples, financials, materials and utilities. The Portfolio
was neutral in energy and telecommunication services.
o We believe the U.S. economy is facing a deeper-than-normal recession that
will put a significant drag on corporate earnings. Going forward, we still
believe in the importance of high-quality U.S. multinationals, as many
still have good earnings growth, quality balance sheets and good
valuations. In this uncertain environment, quality is key. While the
time-tested importance of fundamentals appears to have been absent from
valuations recently, fundamentals do matter. When the market returns to a
more "normal" state, we believe that owning high-quality companies will
stand us in good stead.
The views expressed reflect the opinions of BlackRock as of the date of this
report and are subject to change based on changes in market, economic or other
conditions. These views are not intended to be a forecast of future events and
are no guarantee of future results.
6 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
BlackRock Large Cap Growth Fund
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional
and Investor A Shares compared to growth of an investment in the Russell 1000
Growth Index. Values are from December 22, 1999 to October 2008:
Institutional Investor A Russell 1000
Shares(1,2) Shares(1,2) Growth Index(3)
12/22/99(4) $10,000 $ 9,475 $10,000
Oct-00 $11,350 $10,726 $ 9,610
Oct-01 $ 7,504 $ 7,081 $ 5,771
Oct-02 $ 6,443 $ 6,057 $ 4,639
Oct-03 $ 7,974 $ 7,479 $ 5,651
Oct-04 $ 8,364 $ 7,830 $ 5,842
Oct-05 $ 9,365 $ 8,740 $ 6,357
Oct-06 $10,636 $ 9,896 $ 7,046
Oct-07 $12,451 $11,559 $ 8,401
Oct-08 $ 7,668 $ 7,084 $ 5,296
1 Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
2 The Fund invests all of its assets in Master Large Cap Growth Portfolio of
Master Large Cap Series LLC. The Portfolio invests primarily in a
diversified portfolio of equity securities of large cap companies located
in the United States that the Advisor believes have good prospects for
earnings growth.
3 This unmanaged broad-based Index is a subset of the Russell 1000 Index
consisting of those Russell 1000 securities with a greater-than-average
growth orientation.
4 Commencement of operations.
Performance Summary for the Period Ended October 31, 2008
Average Annual Total Returns 5
--------------------------------------------------------------------------
1 Year 5 Years Since Inception 6
--------------------- -------------------- --------------------
6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
Total Returns charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional ...................... (26.71)% (38.41)% -- (0.78)% -- (2.95)% --
Service ............................ (26.81) (38.59) -- (1.03) -- (3.20) --
Investor A ......................... (26.92) (38.72) (41.93)% (1.08) (2.14)% (3.23) (3.82)%
Investor B ......................... (27.17) (39.15) (41.81) (1.84) (2.22) (3.90) (3.90)
Investor C ......................... (27.17) (39.10) (39.69) (1.81) (1.81) (3.97) (3.97)
Class R ............................ (27.06) (38.88) -- (1.35) -- (3.42) --
Russell 1000 Growth Index .......... (30.51) (36.95) -- (1.29) -- (6.92) --
- -----------------------------------------------------------------------------------------------------------------------------------
5 Assuming maximum sales charges, if any. See "About Fund Performance" on
page 10 for a detailed description of share classes, including any related
sales charges and fees.
6 The Fund commenced operations on December 22, 1999.
Past performance is not indicative of future results.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 7
Fund Summary BlackRock Large Cap Value Fund
Portfolio Management Commentary
How did the Fund perform?
o The Fund underperformed the benchmark Russell 1000 Value Index, through
its investment in Master Large Cap Value Portfolio (the "Portfolio"), for
the 12-month period.
What factors influenced performance?
o Broadly speaking, the Portfolio's underperformance for the period resulted
from asset allocation decisions.
o The Portfolio's overweight in information technology (IT) detracted from
performance, particularly within the software, office electronics and
computers & peripherals sub-sectors. The Fund's underperformance in
consumer staples was almost entirely due to its underweight position,
which we believe is justified given the high valuations in that sector.
Disappointing stock selection in energy, health care and materials hurt
Fund performance as well. Despite the downward pressure on energy stocks,
we believe the long-term supply and demand imbalance is favorable.
Concerns regarding slowing global growth put pressure on materials stocks,
especially during the third quarter.
o The consumer discretionary sector was a significant contributor to
performance, as we focused on finding high-quality companies, turn-around
companies, companies that will benefit as consumers "trade down" (e.g.,
discounters such as TJX Cos., Inc. and Ross Stores, Inc.), and companies
with global revenue streams such as Nike, Inc. and The Walt Disney Co. The
Portfolio's underweights in financials (most notably in mortgage finance
and capital markets companies) and telecommunication services also helped
performance.
o The most significant individual contributors to Portfolio performance
included Citigroup, Inc., Amgen Corp., Chubb Corp. and The Travelers Cos.,
Inc., as well as an underweight in American International Group, Inc. The
biggest individual detractors from performance included JPMorgan Chase &
Co., Reliance Steel & Aluminum and Seagate Technology, as well as
underweights in Wells Fargo and The Procter & Gamble Co.
Describe recent portfolio activity.
o During the period, we increased the Portfolio's exposure to the health
care, consumer discretionary, IT, energy and industrials sectors. The
Portfolio's largest purchases included Pfizer, Inc., Apache Corp., Capital
One Financial Corp., Devon Energy Corp. and The AllState Corp.
o We reduced the Portfolio's exposure to the materials, utilities and
consumer staples sectors. The Portfolio's largest sales included American
International Group Inc., Goldman Sachs Group Inc., Exxon Mobil Corp.,
Deere & Co. and Occidental Petroleum.
Describe Portfolio positioning at period-end.
o On October 31, 2008, the Portfolio was overweight versus the benchmark in
IT, health care, industrials and energy, and underweight in financials,
consumer staples, utilities, telecommunication services and consumer
discretionary. The Portfolio was neutral in materials.
o We believe the U.S. economy is facing a deeper-than-normal recession that
will put a significant drag on corporate earnings. Going forward, we still
believe in the importance of high-quality U.S. multinationals, as many
still have good earnings growth, quality balance sheets and good
valuations. In this uncertain environment, quality is key. While the
time-tested importance of fundamentals appears to have been absent from
valuations recently, fundamentals do matter. When the market returns to a
more "normal" state, we believe that owning high-quality companies will
stand us in good stead.
The views expressed reflect the opinions of BlackRock as of the date of this
report and are subject to change based on changes in market, economic or other
conditions. These views are not intended to be a forecast of future events and
are no guarantee of future results.
8 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
BlackRock Large Cap Value Fund
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional
and Investor A Shares compared to growth of an investment in the Russell 1000
Value Index. Values are from December 22, 1999 to October 2008:
Institutional Investor A Russell 1000
Shares(1,2) Shares(1,2) Value Index(3)
12/22/99(4) $10,000 $ 9,475 $10,000
Oct-00 $11,640 $11,000 $10,809
Oct-01 $10,684 $10,073 $ 9,527
Oct-02 $10,224 $ 9,617 $ 8,573
Oct-03 $12,907 $12,112 $10,533
Oct-04 $14,730 $13,781 $12,161
Oct-05 $17,895 $16,702 $13,604
Oct-06 $21,128 $19,671 $16,523
Oct-07 $23,736 $22,039 $18,313
Oct-08 $14,952 $13,847 $11,574
1 Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
2 The Fund invests all of its assets in Master Large Cap Value Portfolio of
the Master Large Cap Series LLC. The Portfolio invests primarily in a
diversified portfolio of equity securities of large cap companies located
in the United States that the Advisor believes are undervalued.
3 This unmanaged broad-based Index is a subset of the Russell 1000 Index
consisting of those Russell 1000 securities with lower price/book ratios
and lower forecasted growth values.
4 Commencement of operations.
Performance Summary for the Period Ended October 31, 2008
Average Annual Total Returns 5
------------------------------------------------------------------------
1 Year 5 Years Since Inception 6
--------------------- -------------------- --------------------
6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
Total Returns charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional ........................ (28.75)% (37.01)% -- 2.98% -- 4.64% --
Service .............................. (28.76) (37.10) -- 2.73 -- 4.39 --
Investor A ........................... (28.86) (37.17) (40.47)% 2.71 1.61% 4.38 3.74%
Investor B ........................... (29.08) (37.62) (40.25) 1.93 1.59 3.66 3.66
Investor C ........................... (29.08) (37.66) (38.24) 1.92 1.92 3.58 3.58
Class R .............................. (28.91) (37.35) -- 2.43 -- 4.17 --
Russell 1000 Value Index ............. (29.91) (36.80) -- 1.90 -- 1.66 --
- -----------------------------------------------------------------------------------------------------------------------------------
5 Assuming maximum sales charges, if any. See "About Fund Performance" on
page 10 for a detailed description of share classes, including any related
sales charges and fees.
6 The Fund commenced operations on December 22, 1999.
Past performance is not indicative of future results.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 9
About Fund Performance BlackRock Large Cap Series Funds, Inc.
o Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only
to eligible investors.
o Service Shares are not subject to any sales charge. Service Shares are
subject to a service fee of 0.25% per year (but no distribution fee) and
are available only to eligible investors. For BlackRock Large Cap Growth
Fund and BlackRock Large Cap Value Fund, prior to October 2, 2006, Service
Share performance results are those of Institutional Shares (which have no
distribution or service fees) restated to reflect the Service Share fees.
For BlackRock Large Cap Core Fund, prior to September 24, 2007, Service
Share performance results are those of Institutional Shares (which have no
distribution or service fees) restated to reflect the Service Share fees.
o Investor A Shares incur a maximum initial sales charge (front-end load) of
5.25% and a service fee of 0.25% per year (but no distribution fee).
o Investor B Shares are subject to a maximum contingent deferred sales
charge of 4.50% declining to 0% after six years. In addition, Investor B
Shares are subject to a distribution fee of 0.75% per year and a service
fee of 0.25% per year. These shares automatically convert to Investor A
Shares after approximately eight years. (There is no initial sales charge
for automatic share conversions.) All returns for periods greater than
eight years reflect this conversion.
o Investor C Shares are subject to a distribution fee of 0.75% per year and
a service fee of 0.25% per year. In addition, Investor C Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase.
o Class R Shares do not incur a maximum initial sales charge (front-end
load) or deferred sales charge. These shares are subject to a distribution
fee of 0.25% per year and a service fee of 0.25% per year. Class R Shares
are available only to certain retirement plans. Prior to inception, Class
R Share performance results are those of Institutional Shares (which have
no distribution or service fees) restated to reflect Class R Share fees.
Performance information reflects past performance and does not guarantee
future results. Current performance may be lower or higher than the
performance data quoted. Refer to www.blackrock.com/funds to obtain
performance data current to the most recent month-end. Performance results
do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Performance data does not
reflect this potential fee. Figures shown in each of the performance
tables on pages 4 - 9 assume reinvestment of all dividends and capital
gain distributions, if any, at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.
Dividends paid to each class of shares will vary because of the different
levels of service, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid to
shareholders.
Disclosure of Expenses BlackRock Large Cap Series Funds, Inc.
Shareholders of these Funds 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 examples on page 11
(which are based on a hypothetical investment of $1,000 invested on May 1, 2008
and held through Octo-ber 31, 2008) are intended to assist shareholders both in
calculating expenses based on an investment in each Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The tables provide 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 corresponding to their Fund and share class
under the heading entitled "Expenses Paid During the Period."
The tables also provide information about hypothetical account values and
hypothetical expenses based on the Funds' 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 these Funds 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 tables 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 examples are
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.
10 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Disclosure of Expenses (concluded) BlackRock Large Cap Series Funds, Inc.
BlackRock Large Cap Core Fund
Actual Hypothetical 2
------------------------------------------------------- ----------------------------------------------------
Beginning Ending Beginning Ending
Account Value Account Value Expenses Paid Account Value Account Value Expenses Paid
May 1, 2008 October 31, 2008 During the Period 1 May 1, 2008 October 31, 2008 During the Period 1
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional ..... $ 1,000 $ 721.90 $ 3.72 $ 1,000 $1,020.78 $ 4.37
Service ........... $ 1,000 $ 720.80 $ 4.33 $ 1,000 $1,020.07 $ 5.08
Investor A ........ $ 1,000 $ 720.80 $ 4.80 $ 1,000 $1,019.52 $ 5.63
Investor B ........ $ 1,000 $ 717.40 $ 8.81 $ 1,000 $1,015.80 $ 10.34
Investor C ........ $ 1,000 $ 717.70 $ 8.64 $ 1,000 $1,015.05 $ 10.13
Class R ........... $ 1,000 $ 718.30 $ 6.82 $ 1,000 $1,017.16 $ 8.01
- ------------------------------------------------------------------------------------------------------------------------------------
1 For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (0.86% for Institutional, 1.00% for Service, 1.11% for
Investor A, 1.85% for Investor B, 2.00% for Investor C and 1.58% for Class
R), multiplied by the average account value over the period, multiplied by
184/366 (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 portfolio in which it invests.
2 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.
See "Disclosure of Expenses" on page 10 for further information on how
expenses were calculated.
BlackRock Large Cap Growth Fund
Actual Hypothetical 4
------------------------------------------------------- ----------------------------------------------------
Beginning Ending Beginning Ending
Account Value Account Value Expenses Paid Account Value Account Value Expenses Paid
May 1, 2008 October 31, 2008 During the Period 3 May 1, 2008 October 31, 2008 During the Period 3
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional ..... $ 1,000 $ 732.90 $ 4.14 $ 1,000 $1,020.32 $ 4.82
Service ........... $ 1,000 $ 731.90 $ 5.05 $ 1,000 $1,019.27 $ 5.89
Investor A ........ $ 1,000 $ 730.80 $ 6.05 $ 1,000 $1,018.11 $ 7.05
Investor B ........ $ 1,000 $ 728.30 $ 9.04 $ 1,000 $1,014.64 $ 10.53
Investor C ........ $ 1,000 $ 728.30 $ 9.17 $ 1,000 $1,014.49 $ 10.68
Class R ........... $ 1,000 $ 729.40 $ 7.35 $ 1,000 $1,016.60 $ 8.57
- ------------------------------------------------------------------------------------------------------------------------------------
3 For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (0.95% for Institutional, 1.16% for Service, 1.39% for
Investor A, 2.08% for Investor B, 2.11% for Investor C and 1.69% for Class
R), multiplied by the average account value over the period, multiplied by
184/366 (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 portfolio in which it invests.
4 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.
See "Disclosure of Expenses" on page 10 for further information on how
expenses were calculated.
BlackRock Large Cap Value Fund
Actual Hypothetical 6
------------------------------------------------------- ----------------------------------------------------
Beginning Ending Beginning Ending
Account Value Account Value Expenses Paid Account Value Account Value Expenses Paid
May 1, 2008 October 31, 2008 During the Period 5 May 1, 2008 October 31, 2008 During the Period 5
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional ..... $ 1,000 $ 712.50 $ 4.22 $ 1,000 $1,020.17 $ 4.98
Service ........... $ 1,000 $ 712.40 $ 4.91 $ 1,000 $1,019.37 $ 5.79
Investor A ........ $ 1,000 $ 711.40 $ 5.46 $ 1,000 $1,018.72 $ 6.44
Investor B ........ $ 1,000 $ 709.20 $ 8.64 $ 1,000 $1,015.00 $ 10.18
Investor C ........ $ 1,000 $ 709.20 $ 8.76 $ 1,000 $1,014.84 $ 10.33
Class R ........... $ 1,000 $ 710.90 $ 6.79 $ 1,000 $1,017.16 $ 8.01
- ------------------------------------------------------------------------------------------------------------------------------------
5 For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (0.98% for Institutional, 1.14% for Service, 1.27% for
Investor A, 2.01% for Investor B, 2.04% for Investor C and 1.58% for Class
R), multiplied by the average account value over the period, multiplied by
184/366 (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 portfolio in which it invests.
6 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.
See "Disclosure of Expenses" on page 10 for further information on how
expenses were calculated.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 11
Statements of Assets and Liabilities BlackRock Large Cap Series Funds, Inc.
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
October 31, 2008 Core Fund Growth Fund Value Fund
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments at value -- Master Large Cap Core Portfolio, Master
Large Cap Growth Portfolio and Master Large Cap Value Portfolio
(the "Portfolios"), respectively 1 .................................. $ 2,718,630,206 $ 547,040,740 $ 2,896,990,959
Withdrawals receivable from the Portfolios ............................. 7,731,804 2,462,759 9,252,648
Capital shares sold receivable ......................................... 1,773,405 788,435 7,936,508
Prepaid expenses ....................................................... 14,156 20,700 73,829
-------------------------------------------------------
Total assets ........................................................... 2,728,149,571 550,312,634 2,914,253,944
-------------------------------------------------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Capital shares redeemed payable ........................................ 9,505,209 3,251,194 17,189,156
Other affiliates payable ............................................... 1,133,907 251,255 860,568
Service and distribution fees payable .................................. 1,032,283 221,661 834,245
Administration fees payable ............................................ 441,070 116,686 622,078
Officer's and Directors' fees payable .................................. 443 92 501
Other accrued expenses payable ......................................... 308,964 90,892 769,532
-------------------------------------------------------
Total liabilities ...................................................... 12,421,876 3,931,780 20,276,080
-------------------------------------------------------
Net Assets ............................................................. $ 2,715,727,695 $ 546,380,854 $ 2,893,977,864
=======================================================
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Shares, $0.10 par value 2 ................................ $ 8,125,611 $ 1,600,821 $ 7,058,046
Service Shares, $0.10 par value 3 ...................................... 4,410 138,262 201,582
Investor A Shares, $0.10 par value 4 ................................... 12,127,099 2,479,024 10,762,403
Investor B Shares, $0.10 par value 5 ................................... 2,280,748 586,537 958,296
Investor C Shares, $0.10 par value 6 ................................... 9,066,942 2,120,271 4,041,180
Class R Shares, $0.10 par value 7 ...................................... 1,197,117 786,484 1,217,678
Paid-in capital in excess of par ....................................... 3,758,369,545 743,549,902 4,043,242,325
Undistributed net investment income .................................... 10,727,229 1,851,419 18,586,985
Accumulated net realized loss allocated from the Portfolios ............ (542,778,853) (94,227,507) (562,456,149)
Net unrealized appreciation/depreciation allocated from the Portfolios . (543,392,153) (112,504,359) (629,634,482)
-------------------------------------------------------
Net Assets ............................................................. $ 2,715,727,695 $ 546,380,854 $ 2,893,977,864
=======================================================
See Notes to Financial Statements.
12 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Statements of Assets and Liabilities (concluded)
BlackRock Large Cap Series Funds, Inc.
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
October 31, 2008 Core Fund Growth Fund Value Fund
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional:
Net assets .......................................................... $ 700,113,140 $ 118,872,685 $ 867,750,496
=======================================================
Shares outstanding .................................................. 81,256,109 16,008,209 70,580,461
=======================================================
Net asset value ..................................................... $ 8.62 $ 7.43 $ 12.29
=======================================================
Service:
Net assets .......................................................... $ 372,357 $ 10,218,101 $ 24,717,105
=======================================================
Shares outstanding .................................................. 44,099 1,382,623 2,015,822
=======================================================
Net asset value ..................................................... $ 8.44 $ 7.39 $ 12.26
=======================================================
Investor A:
Net assets .......................................................... $ 1,023,004,719 $ 179,527,772 $ 1,295,099,735
=======================================================
Shares outstanding .................................................. 121,270,992 24,790,244 107,624,033
=======================================================
Net asset value ..................................................... $ 8.44 $ 7.24 $ 12.03
=======================================================
Investor B:
Net assets .......................................................... $ 180,730,481 $ 39,608,430 $ 108,659,554
=======================================================
Shares outstanding .................................................. 22,807,484 5,865,372 9,582,964
=======================================================
Net asset value ..................................................... $ 7.92 $ 6.75 $ 11.34
=======================================================
Investor C:
Net assets .......................................................... $ 714,368,473 $ 143,081,044 $ 456,180,290
=======================================================
Shares outstanding .................................................. 90,669,416 21,202,708 40,411,803
=======================================================
Net asset value ..................................................... $ 7.88 $ 6.75 $ 11.29
=======================================================
Class R:
Net assets .......................................................... $ 97,138,525 $ 55,072,822 $ 141,570,684
=======================================================
Shares outstanding .................................................. 11,971,165 7,864,836 12,176,778
=======================================================
Net asset value ..................................................... $ 8.11 $ 7.00 $ 11.63
=======================================================
1 Cost ......................................................... $ 3,262,022,359 $ 659,545,099 $ 3,526,625,441
=======================================================
2 Authorized shares -- Institutional ........................... 400,000,000 100,000,000 400,000,000
=======================================================
3 Authorized shares -- Service ................................. 50,000,000 50,000,000 50,000,000
=======================================================
4 Authorized shares -- Investor A .............................. 300,000,000 100,000,000 400,000,000
=======================================================
5 Authorized shares -- Investor B .............................. 200,000,000 200,000,000 200,000,000
=======================================================
6 Authorized shares -- Investor C .............................. 400,000,000 100,000,000 400,000,000
=======================================================
7 Authorized shares -- Class R ................................. 200,000,000 200,000,000 200,000,000
=======================================================
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 13
Statements of Operations BlackRock Large Cap Series Funds, Inc.
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
Year Ended October 31, 2008 Core Fund Growth Fund Value Fund
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income allocated from the Portfolios:
Dividends ........................................................... $ 57,346,171 $ 9,196,136 $ 75,253,256
Securities lending -- affiliated .................................... 2,373,840 458,871 1,875,859
Income -- affiliated ................................................ 44,540 32,804 173,113
Expenses ............................................................ (20,728,984) (4,825,116) (22,843,379)
-------------------------------------------------------
Total income ........................................................... 39,035,567 4,862,695 54,458,849
-------------------------------------------------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Administration ......................................................... 10,427,489 2,155,331 11,075,617
Service -- Service ..................................................... 1,282 30,944 79,010
Service -- Investor A .................................................. 3,686,896 672,316 5,271,971
Service and distribution -- Investor B ................................. 3,378,802 732,584 1,962,156
Service and distribution -- Investor C ................................. 11,153,487 2,213,621 7,284,598
Service and distribution -- Class R .................................... 689,576 400,302 952,048
Transfer agent --Institutional ......................................... 1,085,380 261,159 1,761,099
Transfer agent -- Service .............................................. 257 7,281 28,374
Transfer agent -- Investor A ........................................... 3,288,437 635,873 4,195,387
Transfer agent -- Investor B ........................................... 969,940 173,399 438,357
Transfer agent -- Investor C ........................................... 2,456,321 518,599 1,713,019
Transfer agent -- Class R .............................................. 399,048 249,318 524,764
Printing ............................................................... 227,880 62,588 414,164
Registration ........................................................... 137,162 103,443 212,382
Custodian .............................................................. 52,286 -- --
Professional ........................................................... 35,648 27,836 56,714
Officer and Directors .................................................. 1,006 810 1,816
Miscellaneous .......................................................... 28,905 16,009 --
-------------------------------------------------------
Total expenses ......................................................... 38,019,802 8,261,413 35,971,476
Less fees reimbursed by administrator .................................. (2,313,453) -- --
-------------------------------------------------------
Total expenses after reimbursement ..................................... 35,706,349 8,261,413 35,971,476
-------------------------------------------------------
Net investment income (loss) ........................................... 3,329,218 (3,398,718) 18,487,373
-------------------------------------------------------
===================================================================================================================================
Realized and Unrealized Loss Allocated from the Portfolios
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investments ..................................... (481,977,259) (85,860,084) (553,041,090)
Net change in unrealized appreciation/depreciation on investments ...... (1,471,037,839) (299,013,413) (1,337,240,997)
-------------------------------------------------------
Total realized and unrealized loss ..................................... (1,953,015,098) (384,873,497) (1,890,282,087)
-------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations ................... $(1,949,685,880) $ (388,272,215) $(1,871,794,714)
=======================================================
See Notes to Financial Statements.
14 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Statements of Changes in Net Assets BlackRock Large Cap Core Fund
Year Ended
October 31,
-----------------------------------
Increase (Decrease) in Net Assets: 2008 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ............................................................... $ 3,329,218 $ (12,041,138)
Net realized gain (loss) ................................................................... (481,977,259) 511,455,783
Net change in unrealized appreciation/depreciation ......................................... (1,471,037,839) 18,511,672
-----------------------------------
Net increase (decrease) in net assets resulting from operations ............................ (1,949,685,880) 517,926,317
-----------------------------------
===================================================================================================================================
Distributions to Shareholders From
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain:
Institutional ........................................................................... (40,584,994) (99,449,229)
Service ................................................................................. (16,889) --
Investor A .............................................................................. (49,275,359) (122,443,778)
Investor B .............................................................................. (13,092,429) (34,481,267)
Investor C .............................................................................. (39,331,368) (130,020,216)
Class R ................................................................................. (4,479,952) (13,745,990)
-----------------------------------
Decrease in net assets resulting from distributions to shareholders ........................ (146,780,991) (400,140,480)
-----------------------------------
===================================================================================================================================
Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from capital share transactions .............. (669,363,421) 1,660,734,627
-----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................................................... (2,765,830,292) 1,778,520,464
Beginning of year .......................................................................... 5,481,557,987 3,703,037,523
-----------------------------------
End of year ................................................................................ $ 2,715,727,695 $ 5,481,557,987
===================================
End of year undistributed net investment income ............................................ $ 10,727,229 --
===================================
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 15
Statements of Changes In Net Assets BlackRock Large Cap Growth Fund
Year Ended
October 31,
-----------------------------------
Increase (Decrease) in Net Assets: 2008 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss ........................................................................ $ (3,398,718) $ (6,483,394)
Net realized gain (loss) ................................................................... (85,860,084) 69,191,141
Net change in unrealized appreciation/depreciation ......................................... (299,013,413) 83,548,531
-----------------------------------
Net increase (decrease) in net assets resulting from operations ............................ (388,272,215) 146,256,278
-----------------------------------
===================================================================================================================================
Distributions to Shareholders From
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain:
Institutional ........................................................................... (9,290,931) (785,321)
Service ................................................................................. (304,931) (17,414)
Investor A .............................................................................. (8,735,614) (858,312)
Investor B .............................................................................. (2,868,466) (412,496)
Investor C .............................................................................. (7,764,443) (747,786)
Class R ................................................................................. (2,625,201) (211,333)
-----------------------------------
Decrease in net assets resulting from distributions to shareholders ........................ (31,589,586) (3,032,662)
-----------------------------------
===================================================================================================================================
Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from capital share transactions .............. (221,684,908) 260,169,210
-----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................................................... (641,546,709) 403,392,826
Beginning of year .......................................................................... 1,187,927,563 784,534,737
-----------------------------------
End of year ................................................................................ $ 546,380,854 $ 1,187,927,563
===================================
End of year undistributed net investment income ............................................ $ 1,851,419 --
===================================
See Notes to Financial Statements.
16 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Statements of Changes in Net Assets BlackRock Large Cap Value Fund
Year Ended
October 31,
-----------------------------------
Increase (Decrease) in Net Assets: 2008 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income ...................................................................... $ 18,487,373 $ 7,160,464
Net realized gain (loss) ................................................................... (553,041,090) 335,108,036
Net change in unrealized appreciation/depreciation ......................................... (1,337,240,997) 141,991,944
-----------------------------------
Net increase (decrease) in net assets resulting from operations ............................ (1,871,794,714) 484,260,444
-----------------------------------
===================================================================================================================================
Dividends and Distributions to Shareholders From
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income:
Institutional ........................................................................... (3,377,730) (1,176,425)
Service ................................................................................. (25,415) (12,439)
Investor A .............................................................................. (1,057,129) (1,464,394)
Class R ................................................................................. -- (46,948)
Net realized gain:
Institutional ........................................................................... (83,333,124) (16,065,705)
Service ................................................................................. (2,208,784) (386,770)
Investor A .............................................................................. (158,770,597) (27,046,018)
Investor B .............................................................................. (16,369,131) (5,082,815)
Investor C .............................................................................. (58,542,094) (12,945,329)
Class R ................................................................................. (14,032,340) (2,059,378)
-----------------------------------
Decrease in net assets resulting from dividends and distributions to shareholders .......... (337,716,344) (66,286,221)
-----------------------------------
===================================================================================================================================
Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from capital share transactions .............. (204,217,215) 1,039,235,808
-----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................................................... (2,413,728,273) 1,457,210,031
Beginning of year .......................................................................... 5,307,706,137 3,850,496,106
-----------------------------------
End of year ................................................................................ $ 2,893,977,864 $ 5,307,706,137
===================================
End of year undistributed net investment income ............................................ $ 18,586,985 $ 4,460,258
===================================
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 17
Financial Highlights BlackRock Large Cap Core Fund
Institutional Service
-------------------------------------------------------------- -------------------------
Period
Year September 24,
Year Ended October 31, Ended 2007 1 to
-------------------------------------------------------------- October 31, October 31,
2008 2007 2006 2005 2004 2008 2007
====================================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period .. $ 14.60 $ 14.20 $ 13.20 $ 11.28 $ 10.33 $ 14.33 $ 14.02
-------------------------------------------------------------- ------------------------
Net investment income (loss) 2 ........ 0.07 0.04 0.03 0.04 0.02 0.04 (0.01)
Net realized and unrealized gain (loss) (5.66) 1.83 2.10 1.97 0.93 (5.55) 0.32
-------------------------------------------------------------- ------------------------
Net increase (decrease) from investment
operations ......................... (5.59) 1.87 2.13 2.01 0.95 (5.51) 0.31
-------------------------------------------------------------- ------------------------
Distributions from net realized gain .. (0.39) (1.47) (1.13) (0.09) -- (0.38) --
-------------------------------------------------------------- ------------------------
Net asset value, end of period ........ $ 8.62 $ 14.60 $ 14.20 $ 13.20 $ 11.28 $ 8.44 $ 14.33
============================================================== ========================
====================================================================================================================================
Total Investment Return 3
- ------------------------------------------------------------------------------------------------------------------------------------
Based on net asset value .............. (39.25)% 13.55% 16.91% 17.94% 9.20% (39.39)% 2.21% 7
============================================================== ========================
====================================================================================================================================
Ratios to Average Net Assets 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses after reimbursement .... 0.86% 0.87% 0.89% 0.91% 0.93% 1.06% 1.14% 5
============================================================== ========================
Total expenses ........................ 0.86% 0.87% 0.89% 0.91% 0.93% 1.06% 1.14% 5
============================================================== ========================
Net investment income (loss) .......... 0.58% 0.24% 0.19% 0.31% 0.17% 0.37% (0.52)% 5
============================================================== ========================
====================================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) ....... $700,113 $1,532,235 $922,301 $601,378 $415,647 $ 372 $ 640
============================================================== ========================
Portfolio turnover of the Fund ........ -- 0% 6 0% 6 -- -- -- --
============================================================== ========================
Portfolio turnover of the Portfolios .. 109% 96% 88% 94% 135% 109% 96%
============================================================== ========================
1 Commencement of operations.
2 Based on average shares outstanding.
3 Total investment returns exclude the effects of any sales charges.
4 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
5 Annualized.
6 BlackRock Large Cap Core Fund (the "Fund").
7 Aggregate total investment return.
See Notes to Financial Statements.
18 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Financial Highlights (continued) BlackRock Large Cap Core Fund
Investor A
---------------------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 14.33 $ 13.97 $ 13.01 $ 11.15 $ 10.23
---------------------------------------------------------------------------
Net investment income (loss) 1 ..... 0.04 0.00 2 (0.01) 0.01 (0.01)
Net realized and unrealized
gain (loss) ...................... (5.54) 1.79 2.08 1.94 0.93
---------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (5.50) 1.79 2.07 1.95 0.92
---------------------------------------------------------------------------
Distributions from net realized gain (0.39) (1.43) (1.11) (0.09) --
---------------------------------------------------------------------------
Net asset value, end of year ....... $ 8.44 $ 14.33 $ 13.97 $ 13.01 $ 11.15
===========================================================================
==================================================================================================================
Total Investment Return 3
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (39.38)% 13.23% 16.61% 17.61% 8.99%
===========================================================================
==================================================================================================================
Ratios to Average Net Assets 4
- ------------------------------------------------------------------------------------------------------------------
Total expenses after reimbursement . 1.11% 1.14% 1.14% 1.16% 1.18%
===========================================================================
Total expenses ..................... 1.23% 1.16% 1.14% 1.16% 1.18%
===========================================================================
Net investment income (loss) ....... 0.32% (0.03)% (0.06)% (0.05)% (0.09)%
===========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 1,023,005 $ 1,846,007 $ 1,028,585 $ 629,682 $ 392,896
===========================================================================
Portfolio turnover of the Fund ..... -- 0% 5 0% 5 -- --
===========================================================================
Portfolio turnover of the Portfolios 109% 96% 88% 94% 135%
===========================================================================
Investor B
---------------------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 13.57 $ 13.30 $ 12.43 $ 10.74 $ 9.93
---------------------------------------------------------------------------
Net investment income (loss) 1 ..... (0.05) (0.10) (0.11) (0.08) (0.09)
Net realized and unrealized
gain (loss) ...................... (5.23) 1.69 1.99 1.86 0.90
---------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (5.28) 1.59 1.88 1.78 0.81
---------------------------------------------------------------------------
Distributions from net realized gain (0.37) (1.32) (1.01) (0.09) --
---------------------------------------------------------------------------
Net asset value, end of year ....... $ 7.92 $ 13.57 $ 13.30 $ 12.43 $ 10.74
===========================================================================
==================================================================================================================
Total Investment Return 3
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (39.90)% 12.30% 15.72% 16.69% 8.16%
===========================================================================
==================================================================================================================
Ratios to Average Net Assets 4
- ------------------------------------------------------------------------------------------------------------------
Total expenses after reimbursement . 1.88% 1.93% 1.91% 1.93% 1.95%
===========================================================================
Total expenses ..................... 2.04% 1.94% 1.91% 1.93% 1.95%
===========================================================================
Net investment income (loss) ....... (0.45)% (0.78)% (0.83)% (0.66)% (0.86)%
===========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 180,730 $ 494,478 $ 467,145 $ 446,242 $ 412,162
===========================================================================
Portfolio turnover of the Fund ..... -- 0% 5 0% 5 -- --
===========================================================================
Portfolio turnover of the Portfolios 109% 96% 88% 94% 135%
===========================================================================
1 Based on average shares outstanding.
2 Amount is less than $0.01 per share.
3 Total investment returns exclude the effects of sales charge.
4 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
5 BlackRock Large Cap Core Fund (the "Fund").
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 19
Financial Highlights (continued) BlackRock Large Cap Core Fund
Investor C
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 13.51 $ 13.26 $ 12.43 $ 10.73 $ 9.93
--------------------------------------------------------------------------
Net investment loss 1 .............. (0.06) (0.11) (0.11) (0.09) (0.09)
Net realized and unrealized
gain (loss) ...................... (5.20) 1.71 1.97 1.88 0.89
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (5.26) 1.60 1.86 1.79 0.80
--------------------------------------------------------------------------
Distributions from net realized gain (0.37) (1.35) (1.03) (0.09) --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 7.88 $ 13.51 $ 13.26 $ 12.43 $ 10.73
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (39.93)% 12.40% 15.64% 16.80% 8.06%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses after reimbursement . 1.97% 1.93% 1.91% 1.94% 1.96%
==========================================================================
Total expenses ..................... 1.97% 1.93% 1.91% 1.94% 1.96%
==========================================================================
Net investment loss ................ (0.54)% (0.79)% (0.84)% (0.73)% (0.86)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 714,368 $1,447,336 $1,176,244 $ 737,063 $ 430,689
==========================================================================
Portfolio turnover of the Fund ..... -- 0% 4 0% 4 -- --
==========================================================================
Portfolio turnover of the Portfolios 109% 96% 88% 94% 135%
==========================================================================
Class R
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 13.85 $ 13.56 $ 12.68 $ 10.89 $ 10.02
--------------------------------------------------------------------------
Net investment loss 1 .............. (0.01) (0.05) (0.04) (0.03) (0.03)
Net realized and unrealized
gain (loss) ...................... (5.35) 1.75 2.02 1.91 0.90
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (5.36) 1.70 1.98 1.88 0.87
--------------------------------------------------------------------------
Distributions from net realized gain (0.38) (1.41) (1.10) (0.09) --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 8.11 $ 13.85 $ 13.56 $ 12.68 $ 10.89
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (39.71)% 12.90% 16.29% 17.39% 8.68%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses after reimbursement . 1.54% 1.45% 1.39% 1.42% 1.43%
==========================================================================
Total expenses ..................... 1.54% 1.45% 1.39% 1.42% 1.43%
==========================================================================
Net investment loss ................ (0.12)% (0.33)% (0.32)% (0.28)% (0.32)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 97,139 $ 160,861 $ 108,762 $ 46,379 $ 15,160
==========================================================================
Portfolio turnover of the Fund ..... -- 0% 4 0% 4 -- --
==========================================================================
Portfolio turnover of the Portfolios 109% 96% 88% 94% 135%
==========================================================================
1 Based on average shares outstanding.
2 Total investment returns exclude the effects of sales charge.
3 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
4 BlackRock Large Cap Core Fund (the "Fund").
See Notes to Financial Statements.
20 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Financial Highlights (continued) BlackRock Large Cap Growth Fund
Institutional Service
------------------------------------------------------ ---------------------------------
Period
Year Ended October 2,
Year Ended October 31, October 31, 2006 1 to
------------------------------------------------------ -------------------- October 31,
2008 2007 2006 2005 2004 2008 2007 2006
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period .. $ 12.40 $ 10.63 $ 9.36 $ 8.36 $ 7.97 $ 12.37 $ 10.62 $ 10.18
------------------------------------------------------ ---------------------------------
Net investment income (loss) 2 ........ 0.02 (0.02) (0.02) (0.02) (0.04) (0.01) (0.05) (0.01)
Net realized and unrealized gain (loss) (4.67) 1.83 1.29 1.02 0.43 (4.65) 1.84 0.45
------------------------------------------------------ ---------------------------------
Net increase (decrease) from investment
operations .......................... (4.65) 1.81 1.27 1.00 0.39 (4.66) 1.79 0.44
------------------------------------------------------ ---------------------------------
Distributions from net realized gain .. (0.32) (0.04) -- -- -- (0.32) (0.04) --
------------------------------------------------------ ---------------------------------
Net asset value, end of period ........ $ 7.43 $ 12.40 $ 10.63 $ 9.36 $ 8.36 $ 7.39 $ 12.37 $ 10.62
====================================================== =================================
===================================================================================================================================
Total Investment Return 3
- -----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value .............. (38.41)% 17.07% 13.57% 11.96% 4.89% (38.59) 16.89% 4.32% 6
====================================================== =================================
===================================================================================================================================
Ratios to Average Net Assets 4
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses ........................ 0.96% 0.95% 1.04% 1.08% 1.13% 1.14% 1.20% 1.36% 5
====================================================== =================================
Net investment income (loss) .......... 0.21% (0.16)% (0.22)% (0.20)% (0.45)% (0.07)% (0.42)% (1.14)% 5
====================================================== =================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) ....... $118,873 $368,001 $215,697 $128,667 $ 79,869 $ 10,218 $ 11,134 $ 5,014
====================================================== =================================
Portfolio turnover of the Portfolios .. 144% 87% 117% 132% 165% 144% 87% 117%
====================================================== =================================
1 Commencement of operations.
2 Based on average shares outstanding.
3 Total investment returns exclude the effects of any sales charges.
4 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
5 Annualized.
6 Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 21
Financial Highlights (continued) BlackRock Large Cap Growth Fund
Investor A
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 12.15 $ 10.44 $ 9.22 $ 8.26 $ 7.89
--------------------------------------------------------------------------
Net investment loss 1 .............. (0.02) (0.05) (0.06) (0.04) (0.06)
Net realized and unrealized
gain (loss) ...................... (4.57) 1.80 1.28 1.00 0.43
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (4.59) 1.75 1.22 0.96 0.37
--------------------------------------------------------------------------
Distributions from net realized gain (0.32) (0.04) -- -- --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 7.24 $ 12.15 $ 10.44 $ 9.22 $ 8.26
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (38.72)% 16.80% 13.23% 11.62% 4.69%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 1.31% 1.27% 1.29% 1.33% 1.38%
==========================================================================
Net investment loss ................ (0.21)% (0.46)% (0.48)% (0.46)% (0.69)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 179,528 $ 327,501 $ 218,017 $ 112,887 $ 64,539
==========================================================================
Portfolio turnover of the Portfolios 144% 87% 117% 132% 165%
==========================================================================
Investor B
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 11.43 $ 9.91 $ 8.82 $ 7.96 $ 7.66
--------------------------------------------------------------------------
Net investment loss 1 .............. (0.09) (0.13) (0.12) (0.10) (0.12)
Net realized and unrealized
gain (loss) ...................... (4.27) 1.69 1.21 0.96 0.42
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (4.36) 1.56 1.09 0.86 0.30
--------------------------------------------------------------------------
Distributions from net realized gain (0.32) (0.04) -- -- --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 6.75 $ 11.43 $ 9.91 $ 8.82 $ 7.96
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (39.15)% 15.78% 12.36% 10.80% 3.92%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 2.05% 2.08% 2.07% 2.11% 2.16%
==========================================================================
Net investment loss ................ (0.93)% (1.26)% (1.25)% (1.15)% (1.48)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 39,608 $ 105,513 $ 107,113 $ 95,593 $ 93,382
==========================================================================
Portfolio turnover of the Portfolios 144% 87% 117% 132% 165%
==========================================================================
1 Based on average shares outstanding.
2 Total investment returns exclude the effects of sales charge.
3 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
See Notes to Financial Statements.
22 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Financial Highlights (continued) BlackRock Large Cap Growth Fund
Investor C
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 11.42 $ 9.90 $ 8.81 $ 7.95 $ 7.65
--------------------------------------------------------------------------
Net investment loss 1 .............. (0.09) (0.13) (0.12) (0.10) (0.12)
Net realized and unrealized
gain (loss) ...................... (4.26) 1.69 1.21 0.96 0.42
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (4.35) 1.56 1.09 0.86 0.30
--------------------------------------------------------------------------
Distributions from net realized gain (0.32) (0.04) -- -- --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 6.75 $ 11.42 $ 9.90 $ 8.81 $ 7.95
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (39.10)% 15.79% 12.37% 10.82% 3.92%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 2.05% 2.04% 2.06% 2.11% 2.16%
==========================================================================
Net investment loss ................ (0.95)% (1.24)% (1.25)% (1.19)% (1.48)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 143,081 $ 280,142 $ 185,337 $ 125,150 $ 94,969
==========================================================================
Portfolio turnover of the Portfolios 144% 87% 117% 132% 165%
==========================================================================
Class R
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 11.79 $ 10.17 $ 9.00 $ 8.08 $ 7.74
--------------------------------------------------------------------------
Net investment loss 1 .............. (0.05) (0.09) (0.07) (0.07) (0.06)
Net realized and unrealized
gain (loss) ...................... (4.42) 1.75 1.24 0.99 0.40
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (4.47) 1.66 1.17 0.92 0.34
--------------------------------------------------------------------------
Distributions from net realized gain (0.32) (0.04) -- -- --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 7.00 $ 11.79 $ 10.17 $ 9.00 $ 8.08
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (38.88)% 16.36% 13.00% 11.39% 4.39%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 1.64% 1.58% 1.54% 1.58% 1.61%
==========================================================================
Net investment loss ................ (0.53)% (0.79)% (0.73)% (0.75)% (0.95)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... 55,073 95,637 53,356 26,566 $ 11,304
==========================================================================
Portfolio turnover of the Portfolios 144% 87% 117% 132% 165%
==========================================================================
1 Based on average shares outstanding.
2 Total investment returns exclude the effects of sales charge.
3 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 23
Financial Highlights (continued) BlackRock Large Cap Value Fund
Institutional Service
------------------------------------------------------ ---------------------------------
Period
Year Ended October 2,
Year Ended October 31, October 31, 2006 1 to
------------------------------------------------------ -------------------- October 31,
2008 2007 2006 2005 2004 2008 2007 2006
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period .. $ 20.95 $ 18.96 $ 17.12 $ 14.71 $ 12.89 $ 20.89 $ 18.95 $ 18.62
------------------------------------------------------ ---------------------------------
Net investment income (loss) 2 ........ 0.14 0.12 0.06 0.06 0.07 0.10 0.06 (0.01)
Net realized and unrealized gain (loss) (7.42) 2.19 2.93 3.01 1.75 (7.38) 2.19 0.65
------------------------------------------------------ ---------------------------------
Net increase (decrease) from investment
operations .......................... (7.28) 2.31 2.99 3.07 1.82 (7.28) 2.25 0.64
------------------------------------------------------ ---------------------------------
Dividends and distributions from:
Net investment income ............. (0.05) (0.02) -- -- -- (0.02) (0.01) --
Net realized gain ................. (1.33) (0.30) (1.15) (0.66) -- (1.33) (0.30) (0.31)
------------------------------------------------------ ---------------------------------
Total dividends and distributions ..... (1.38) (0.32) (1.15) (0.66) -- (1.35) (0.31) (0.31)
------------------------------------------------------ ---------------------------------
Net asset value, end of period ........ $ 12.29 $ 20.95 $ 18.96 $ 17.12 $ 14.71 $ 12.26 $ 20.89 $ 18.95
====================================================== =================================
===================================================================================================================================
Total Investment Return 3
- -----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value .............. (37.01)% 12.35% 18.06% 21.49% 14.12% (37.10)% 12.01% 3.49% 4
====================================================== =================================
===================================================================================================================================
Ratios to Average Net Assets 5
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses ........................ 0.93% 0.88% 0.94% 0.98% 1.01% 1.12% 1.18% 1.35% 6
====================================================== =================================
Net investment income (loss) .......... 0.81% 0.59% 0.32% 0.35% 0.49% 0.62% 0.29% (1.14)% 6
====================================================== =================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) ....... $867,750 $1,327,046 $990,081 $446,172 $194,625 $ 24,717 $ 33,790 $ 24,828
====================================================== =================================
Portfolio turnover of the Portfolios .. 108% 72% 71% 95% 128% 108% 72% 71%
====================================================== =================================
1 Commencement of operations.
2 Based on average shares outstanding.
3 Total investment returns exclude the effects of any sales charges.
4 Aggregate total investment return.
5 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income.
6 Annualized.
See Notes to Financial Statements.
24 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Financial Highlights (continued) BlackRock Large Cap Value Fund
Investor A
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 20.54 $ 18.64 $ 16.86 $ 14.53 $ 12.77
--------------------------------------------------------------------------
Net investment income (loss) 1 ..... 0.09 0.06 0.01 0.02 0.03
Net realized and unrealized
gain (loss) ...................... (7.26) 2.16 2.89 2.97 1.73
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (7.17) 2.22 2.90 2.99 1.76
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income .......... (0.01) (0.02) -- -- --
Net realized gain .............. (1.33) (0.30) (1.12) (0.66) --
--------------------------------------------------------------------------
Total dividends and distributions .. (1.34) (0.32) (1.12) (0.66) --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 12.03 $ 20.54 $ 18.64 $ 16.86 $ 14.53
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (37.17)% 12.04% 17.78% 21.20% 13.78%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 1.22% 1.17% 1.19% 1.23% 1.26%
==========================================================================
Net investment income (loss) ....... 0.52% 0.28% 0.05% 0.10% 0.21%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $1,295,100 $2,499,604 $1,652,442 $ 371,216 $ 161,867
==========================================================================
Portfolio turnover of the Portfolios 108% 72% 71% 95% 128%
==========================================================================
Investor B
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 19.41 $ 17.76 $ 16.12 $ 14.02 $ 12.41
--------------------------------------------------------------------------
Net investment income (loss) 1 ..... (0.04) (0.09) (0.11) (0.09) (0.07)
Net realized and unrealized
gain (loss) ...................... (6.85) 2.04 2.74 2.85 1.68
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (6.89) 1.95 2.63 2.76 1.61
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income .......... -- -- -- -- --
Net realized gain .............. (1.18) (0.30) (0.99) (0.66) --
--------------------------------------------------------------------------
Total dividends and distributions .. (1.18) (0.30) (0.99) (0.66) --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 11.34 $ 19.41 $ 17.76 $ 16.12 $ 14.02
==========================================================================
==================================================================================================================
Total Investment Return 2
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (37.62)% 11.11% 16.81% 20.29% 12.97%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 3
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 1.99% 1.98% 1.96% 2.00% 2.02%
==========================================================================
Net investment income (loss) ....... (0.24)% (0.47)% (0.67)% (0.60)% (0.53)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 108,660 $ 277,113 $ 309,795 $ 261,345 $ 222,055
==========================================================================
Portfolio turnover of the Portfolios 108% 72% 71% 95% 128%
==========================================================================
1 Based on average shares outstanding.
2 Total investment returns exclude the effects of sales charge.
3 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 25
Financial Highlights (concluded) BlackRock Large Cap Value Fund
Investor C
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 19.37 $ 17.72 $ 16.11 $ 14.01 $ 12.41
--------------------------------------------------------------------------
Net investment income (loss) 1 ..... (0.04) (0.09) (0.12) (0.10) (0.07)
Net realized and unrealized
gain (loss) ...................... (6.83) 2.04 2.76 2.86 1.67
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (6.87) 1.95 2.64 2.76 1.60
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income .......... -- -- -- -- --
Net realized gain .............. (1.21) (0.30) (1.03) (0.66) --
--------------------------------------------------------------------------
Total dividends and distributions .. (1.21) (0.30) (1.03) (0.66) --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 11.29 19.37 $ 17.72 $ 16.11 $ 14.01
==========================================================================
==================================================================================================================
Total Investment Return 3
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (37.66)% 11.14% 16.89% 20.31% 12.89%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 4
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 2.00% 1.97% 1.96% 2.00% 2.03%
==========================================================================
Net investment income (loss) ....... (0.26)% (0.50)% (0.69)% (0.65)% (0.54)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 456,180 $ 959,039 $ 754,266 $ 409,937 $ 219,806
==========================================================================
Portfolio turnover of the Portfolios 108% 72% 71% 95% 128%
==========================================================================
Class R
--------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year . $ 19.92 $ 18.13 $ 16.46 $ 14.23 $ 12.54
--------------------------------------------------------------------------
Net investment income (loss) 1 ..... 0.03 (0.01) (0.03) (0.03) (0.00) 2
Net realized and unrealized
gain (loss) ...................... (7.02) 2.11 2.80 2.92 1.69
--------------------------------------------------------------------------
Net increase (decrease) from
investment operations ............ (6.99) 2.10 2.77 2.89 1.69
--------------------------------------------------------------------------
Dividends and distributions from:
Net investment income .......... -- (0.01) -- -- --
Net realized gain .............. (1.30) (0.30) (1.10) (0.66) --
--------------------------------------------------------------------------
Total dividends and distributions .. (1.30) (0.31) (1.10) (0.66) --
--------------------------------------------------------------------------
Net asset value, end of year ....... $ 11.63 $ 19.92 $ 18.13 $ 16.46 $ 14.23
==========================================================================
==================================================================================================================
Total Investment Return 3
- ------------------------------------------------------------------------------------------------------------------
Based on net asset value ........... (37.75)% 11.71% 17.41% 20.93% 13.48%
==========================================================================
==================================================================================================================
Ratios to Average Net Assets 4
- ------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 1.55% 1.50% 1.45% 1.48% 1.53%
==========================================================================
Net investment income (loss) ....... 0.19% (0.06)% (0.19)% (0.19)% (0.03)%
==========================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...... $ 141,571 $ 211,115 $ 119,085 $ 45,894 $ 11,362
==========================================================================
Portfolio turnover of the Portfolios 108% 72% 71% 95% 128%
==========================================================================
1 Based on average shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns exclude the effects of sales charge.
4 Includes the Fund's share of the Portfolio's allocated expenses and/or net
investment income (loss).
See Notes to Financial Statements.
26 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Notes to Financial Statements BlackRock Large Cap Series Funds, Inc.
1. Organization and Significant Accounting Policies:
BlackRock Large Cap Core Fund, BlackRock Large Cap Growth Fund and BlackRock
Large Cap Value Fund (the "Funds" or, individually, as the "Fund"), three of the
series constituting BlackRock Large Cap Series Funds, Inc., are registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as diversified,
open-end management investment companies. Each Fund seeks to achieve its
investment objective by investing all, or a portion of, their assets in Master
Large Cap Core Portfolio, Master Large Cap Growth Portfolio and Master Large Cap
Value Portfolio (the "Portfolios" or individually as the "Portfolio"),
respectively, constituting Master Large Cap Series LLC (the "Master LLC"), each
of which has the same investment objective and strategies as the corresponding
Funds. The Funds are organized as Maryland corporations. The value of a Fund's
investment in the related Portfolio reflects each Fund's proportionate interest
in the net assets of the respective Portfolio. The performance of each Fund is
directly affected by the performance of the related Portfolio. The financial
statements of the Portfolios, including the Schedules of Investments, are
included elsewhere in this report and should be read in conjunction with the
Funds' financial statements. The Funds' 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 percentages of Master Large Cap
Core Portfolio, Master Large Cap Growth Portfolio and Master Large Cap Value
Portfolio owned by BlackRock Large Cap Core Fund, BlackRock Large Cap Growth
Fund and BlackRock Large Cap Value Fund, were 95.6%, 82.1% and 94.6%,
respectively. The Funds offer multiple classes of shares. Institutional and
Service Shares are sold only to certain eligible investors. Investor A Shares
are generally sold with a front-end sales charge. Investor B and Investor C
Shares may be subject to a contingent deferred sales charge. Class R Shares are
sold only to certain retirement plans. All classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that Investor A, Investor B, Investor C and Class R Shares
bear certain expenses related to the shareholder servicing of such shares, and
Investor B, Investor C and Class R Shares also bear certain expenses related to
the distribution of such shares. Each class has exclusive voting rights with
respect to matters relating to its shareholder servicing and distribution
expenditures (except that Investor B shareholders may vote on material changes
to the Investor A distribution plan).
The following is a summary of significant accounting policies followed by the
Funds:
Valuation of Investments: Each Fund records its investment in the corresponding
Portfolio at fair value. Valuation of securities held by the Portfolios is
discussed in Note 1 of the Portfolios' Notes to Financial Statements, which are
included elsewhere in this report.
Investment Transactions and Net Investment Income: Investment transactions in
the Portfolios are accounted for on a trade date basis. Each Fund records daily
its proportionate share of the Portfolio's income, expenses and realized and
unrealized gains and losses. In addition, each Fund accrues its own expenses.
Income and realized and unrealized gains and losses are allocated daily to each
class based on its relative net assets.
Dividends and Distributions to Shareholders: Dividends and distributions paid by
each Fund are recorded on the ex-dividend dates.
Income Taxes: It is each 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 April 30, 2008, each 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 each Fund, and has determined that the
adoption of FIN 48 does not have a material impact on the Funds' financial
statements. Each 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 Funds' tax returns remains open for the years ended October
31, 2005 through October 31, 2007. The statutes of limitations on each 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 Funds' 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. 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. In September 2008, FASB Staff
Position No. 133-1 and FASB Interpretation No. 45-4 (the "FSP"), "Disclosures
about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement
No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date
of FASB Statement No. 161," was issued and is effective for fiscal years and
interim periods ending after November 15, 2008. The FSP amends FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 27
Notes to Financial Statements (continued) BlackRock Large Cap Series Funds, Inc.
to require disclosures by sellers of credit derivatives, including credit
derivatives embedded in hybrid instruments. The FSP also clarifies the effective
date of FAS 161, whereby disclosures required by FAS 161 are effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. The impact on the Funds' financial statement disclosures, if
any, is currently being assessed.
Other: Expenses directly related to a 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 each Fund are allocated daily to each class based on
its relative net assets.
2. Transactions with Affiliates:
Each Fund has 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, each Fund pays a monthly fee
at an annual rate of 0.25% of each 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.
With respect to the BlackRock Large Cap Core Fund, the Administrator
contractually agreed to waive and/or reimburse fees and/or expenses in order to
limit expenses (excluding interest expense and certain other fund expenses) as a
percentage of average daily net assets allocated to certain classes of the Fund
as follows: 1.11% (for Investor A Shares), and 1.91% (for Investor B Shares),
which is shown as fees reimbursed by administrator on the Statements of
Operations. The waiver agreement provides that the waiver will continue until
October 31, 2008 and thereafter unless terminated by the Administrator. The
Administrator has agreed to continue the waiver.
Effective October 1, 2008, each Fund has entered into separate Distribution
Agreements and Distribution Plans with BlackRock Investments, Inc. ("BII"),
which replaced FAM Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc.
and its affiliates ("BDI") (collectively, the "Distributor") as the sole
distributor of the Funds. FAMD is a wholly owned subsidiary of Merrill Lynch
Group, Inc., and BII and BDI are affiliates of BlackRock, Inc. The service and
distribution fees did not change as a result of this transaction.
Pursuant to the Distribution Plans adopted by the Funds in accordance with Rule
12b-1 under the 1940 Act, the Funds pay the Distributor ongoing service and
distribution fees. The fees are accrued daily and paid monthly at annual rates
based upon the average daily net assets of the shares as follows:
- --------------------------------------------------------------------------------
Service Distribution
Fee Fee
- --------------------------------------------------------------------------------
Service ............................................... 0.25% --
Investor A ............................................ 0.25% --
Investor B ............................................ 0.25% 0.75%
Investor C ............................................ 0.25% 0.75%
Class R ............................................... 0.25% 0.25%
- --------------------------------------------------------------------------------
Pursuant to sub-agreements with the Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, and the Distributor provide share-holder servicing
and distribution services to the Funds. The ongoing service and/or distribution
fee compensates the Distributor and each broker-dealer for providing shareholder
servicing and/or distribution-related services to Service, Investor A, Investor
B, Investor C and Class R shareholders.
For the year ended October 31, 2008, the affiliates earned underwriting
discounts and direct commissions and its affiliates earned dealer concessions on
sales of the Funds' Investor A Shares, which totaled as follows:
- --------------------------------------------------------------------------------
Investor A
- --------------------------------------------------------------------------------
BlackRock Large Cap Core Fund ..................................... $752,473
BlackRock Large Cap Growth Fund ................................... $155,983
BlackRock Large Cap Value Fund .................................... $141,521
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, affiliates received contingent deferred
sales charges relating to transactions in Investor B and Investor C Shares as
follows:
- --------------------------------------------------------------------------------
Investor B Investor C
- --------------------------------------------------------------------------------
BlackRock Large Cap Core Fund ........................ $329,391 $190,259
BlackRock Large Cap Growth Fund ...................... $ 56,512 $ 38,508
BlackRock Large Cap Value Fund ....................... $184,857 $130,128
- --------------------------------------------------------------------------------
These amounts include payments to Hilliard Lyons, which was considered an
affiliate for a portion of the year.
Furthermore, affiliates received contingent deferred sales charges relating to
transactions subject to front-end sales charge waivers on Investor A Shares as
follows:
- --------------------------------------------------------------------------------
Investor A
- --------------------------------------------------------------------------------
BlackRock Large Cap Core Fund ..................................... $18,802
BlackRock Large Cap Growth Fund ................................... $ 5,237
BlackRock Large Cap Value Fund .................................... $13,142
- --------------------------------------------------------------------------------
PNC Global Investment Servicing (U.S.) Inc., formerly PFPC Inc., an indirect,
wholly owned subsidiary of PNC and an affiliate of the Administrator, serves as
transfer agent. Each class of the Funds bears the costs of transfer agent fees
associated with such respective classes. Transfer agency
28 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Notes to Financial Statements (continued) BlackRock Large Cap Series Funds, Inc.
fees borne by each class of the Funds are comprised of those fees charged for
all shareholder communications including mailing of shareholder reports,
dividend and distribution notices, and proxy materials for shareholders
meetings, as well as per account and per transaction fees related to servicing
and maintenance of shareholder accounts, including the issuing, redeeming and
transferring of shares of each class of the Fund, 12b-1 fee calculation, check
writing, anti-money laundering services, and customer identification services.
Pursuant to written agreements, certain affiliates provide the Funds with
sub-accounting, recordkeeping, sub-transfer agency and other administrative
services with respect to sub-accounts they service. For these services, these
affiliates receive an annual fee per shareholder account which will vary
depending on share class. For the year ended October 31, 2008, the Funds paid
the following fees in return for these services, which are a component of the
transfer agent fees in the accompanying Statements of Operations:
- --------------------------------------------------------------------------------
BlackRock Large Cap Core Fund .................................... $5,145,560
BlackRock Large Cap Growth Fund .................................. $1,469,001
BlackRock Large Cap Value Fund ................................... $4,148,051
- --------------------------------------------------------------------------------
The Funds may earn income on positive cash balances in demand deposit accounts
that are maintained by the transfer agent on behalf of the Funds. For the year
ended October 31, 2008, the Funds earned the following, which are included in
income from affiliates in the Statements of Operations:
- --------------------------------------------------------------------------------
BlackRock Large Cap Core Fund ....................................... $33,940
BlackRock Large Cap Growth Fund ..................................... $ 4,033
BlackRock Large Cap Value Fund ...................................... $52,386
- --------------------------------------------------------------------------------
The Administrator maintains a call center, which is responsible for providing
certain shareholder services to each Fund, such as responding to shareholder
inquiries and processing transactions based upon instructions from shareholders
with respect to the subscription and redemption of Fund shares. For the year
ended October 31, 2008, the following amounts have been accrued by each Fund to
reimburse the Administrator for costs incurred running the call center, which
are a component of the transfer agent fees in the accompanying Statements of
Operations.
- --------------------------------------------------------------------------------
BlackRock Large Cap Core Fund Call Center Fees
- --------------------------------------------------------------------------------
Institutional .................................................. $ 32,327
Service ........................................................ $ 8
Investor A ..................................................... $174,929
Investor B ..................................................... $ 60,129
Investor C ..................................................... $ 24,958
Class R ........................................................ $ 1,977
- --------------------------------------------------------------------------------
BlackRock Large Cap Growth Fund
- --------------------------------------------------------------------------------
Institutional .................................................. $ 2,020
Service ........................................................ $ 174
Investor A ..................................................... $ 8,957
Investor B ..................................................... $ 3,501
Investor C ..................................................... $ 5,145
Class R ........................................................ $ 1,105
- --------------------------------------------------------------------------------
BlackRock Large Cap Value Fund
- --------------------------------------------------------------------------------
Institutional .................................................. $ 22,135
Service ........................................................ $ 932
Investor A ..................................................... $151,196
Investor B ..................................................... $ 13,906
Investor C ..................................................... $ 20,338
Class R ........................................................ $ 2,909
- --------------------------------------------------------------------------------
Certain officers and/or directors of the Funds are officers and/or directors of
BlackRock, Inc. or its affiliates. The Funds reimburse the Administrator for
compensation paid to the Funds' Chief Compliance Officer.
3. Income Tax Information:
Reclassifications: Accounting principles generally accepted in the United States
of America require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting. These
reclassifications have no effect on net assets or on net asset values per share.
The following permanent differences as of October 31, 2008 attributable to the
expiration of capital loss carryforwards, classification of distributions,
classification of settlement proceeds and net operating losses were reclassified
to the following accounts:
- -------------------------------------------------------------------------------
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
Core Fund Growth Fund Value Fund
- -------------------------------------------------------------------------------
Decrease paid-in capital ...... $(20,925,458) $(13,119,199) $ (4,668)
Increase undistributed net
investment income ........... 7,398,011 5,250,137 99,628
Increase (decrease) accumulated
net realized loss ........... 13,527,447 7,869,062 (94,960)
- -------------------------------------------------------------------------------
The tax character of distributions paid during the fiscal years ended October
31, 2008 and October 31, 2007 was as follows:
- --------------------------------------------------------------------------------
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
Core Fund Growth Fund Value Fund
- --------------------------------------------------------------------------------
Ordinary income
10/31/08 ..................... $ 15,910,659 -- $ 70,385,990
10/31/07 ..................... $ 30,000,325 -- $ 2,700,206
Long-term capital gain
10/31/08 ..................... $130,870,332 $ 31,589,586 $267,330,354
10/31/07 ..................... $370,140,155 $ 3,032,662 $ 63,586,015
--------------------------------------------
Total
10/31/08 ..................... $146,780,991 $ 31,589,586 $337,716,344
============================================
10/31/07 ..................... $400,140,480 $ 3,032,662 $ 66,286,221
============================================
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 29
Notes to Financial Statements (continued) BlackRock Large Cap Series Funds, Inc.
As of October 31, 2008, the tax components of accumulated losses were as
follows:
- -------------------------------------------------------------------------------
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
Core Fund Growth Fund Value Fund
- -------------------------------------------------------------------------------
Undistributed ordinary
income ............. -- -- $ 9,252,325
Capital loss
carryforward ....... $ (470,188,173) $ (77,066,661) (464,452,445)
Net unrealized losses* (605,255,604) (127,813,786) (718,303,526)
-----------------------------------------------------
Total accumulated
net losses ......... $(1,075,443,777) $ (204,880,447) $(1,173,503,646)
=====================================================
* The difference between book-basis and tax-basis net unrealized losses is
attributable primarily to the tax deferral of losses on wash sales and the
timing of income recognition on partnership interests.
As of October 31, 2008, the Funds had capital loss carryforwards available to
offset future realized capital gains through the indicated expirations dates:
- --------------------------------------------------------------------------------
BlackRock BlackRock BlackRock
Large Cap Large Cap Large Cap
Expires October 31, Core Fund Growth Fund Value Fund
- --------------------------------------------------------------------------------
2009 ................. $ 17,134,577 $ 5,667,758 --
2010 ................. 26,458,063 43,580 --
2011 ................. 2,999,774 -- --
2016 ................. 423,595,759 71,355,323 $464,452,445
--------------------------------------------
Total ................ $470,188,173 $ 77,066,661 $464,452,445
============================================
4. Capital Share Transactions:
Transactions in shares for each class were as follows:
Year Ended Year Ended
October 31, 2008 October 31, 2007
------------------------------- -------------------------------
BlackRock Large Cap Core Fund Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 18,307,143 $ 213,274,693 16,602,584 $ 246,470,220
Shares issued resulting from reorganization .................. -- -- 32,717,868 467,180,857
Shares issued to shareholders in reinvestment of distributions 2,274,133 30,541,847 5,760,400 82,316,928
------------------------------- -------------------------------
Total issued ................................................. 20,581,276 243,816,540 55,080,852 795,968,005
Shares redeemed .............................................. (44,290,807) (536,280,456) (15,085,098) (222,976,522)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (23,709,531) $ (292,463,916) 39,995,754 $ 572,991,483
=============================== ===============================
Period September 24, 2007+
to October 31, 2007
-------------------------------
Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
Service
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 1,706 $ 20,740 72 $ 999
Shares issued to shareholders in reinvestment of distributions 207 2,724 45,010 631,258
------------------------------- -------------------------------
Total issued ................................................. 1,913 23,464 45,082 632,257
Shares redeemed .............................................. (2,490) (29,767) (406) (5,829)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (577) $ (6,303) 44,676 $ 626,428
=============================== ===============================
+ Commencement of operations.
Year Ended
October 31, 2007
-------------------------------
Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
Investor A
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold and automatic conversion of shares ............... 25,121,752 $ 287,778,279 28,436,081 $ 411,923,052
Shares issued resulting from reorganization .................. -- -- 35,734,228 501,049,717
Shares issued to shareholders in reinvestment of distributions 3,501,677 46,152,207 7,931,899 111,313,482
------------------------------- -------------------------------
Total issued ................................................. 28,623,429 333,930,486 72,102,208 1,024,286,251
Shares redeemed .............................................. (36,162,977) (410,373,242) (16,932,248) (246,911,315)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (7,539,548) $ (76,442,756) 55,169,960 $ 777,374,936
=============================== ===============================
30 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Notes to Financial Statements (continued) BlackRock Large Cap Series Funds, Inc.
Year Ended Year Ended
October 31, 2008 October 31, 2007
------------------------------- -------------------------------
BlackRock Large Cap Core Fund (concluded) Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
Investor B
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 1,944,126 $ 21,374,807 3,250,818 $ 44,949,747
Shares issued resulting from reorganization .................. -- -- 11,051,520 146,904,698
Shares issued to shareholders in reinvestment of distributions 965,784 12,033,720 2,318,297 30,856,830
------------------------------- -------------------------------
Total issued ................................................. 2,909,910 33,408,527 16,620,635 222,711,275
Shares redeemed and automatic conversion of shares ........... (16,534,915) (175,371,510) (15,319,048) (210,781,327)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (13,625,005) $ (141,962,983) 1,301,587 $ 11,929,948
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Investor C
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 18,173,395 $ 198,511,648 25,010,048 $ 343,608,226
Shares issued resulting from reorganization .................. -- -- 1,351,067 17,877,463
Shares issued to shareholders in reinvestment of distributions 2,978,085 36,928,497 9,176,419 121,646,342
------------------------------- -------------------------------
Total issued ................................................. 21,151,480 235,440,145 35,537,534 483,132,031
Shares redeemed .............................................. (37,605,977) (400,427,690) (17,089,724) (235,184,620)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (16,454,497) $ (164,987,545) 18,447,810 $ 247,947,411
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Class R
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 5,011,848 $ 56,841,792 5,791,814 $ 81,305,003
Shares issued to shareholders in reinvestment of distributions 351,544 4,475,160 1,010,724 13,725,638
------------------------------- -------------------------------
Total issued ................................................. 5,363,392 61,316,952 6,802,538 95,030,641
Shares redeemed .............................................. (5,004,446) (54,816,870) (3,210,183) (45,166,220)
------------------------------- -------------------------------
Net increase ................................................. 358,946 $ 6,500,082 3,592,355 $ 49,864,421
=============================== ===============================
BlackRock Large Cap Growth Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 7,511,633 $ 73,321,006 17,006,393 $ 196,644,985
Share issued to shareholders in reinvestment of distributions 712,440 8,123,721 62,922 683,337
------------------------------- -------------------------------
Total issued ................................................. 8,224,073 81,444,727 17,069,315 197,328,322
Shares redeemed .............................................. (21,883,831) (232,545,666) (7,700,131) (87,838,517)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (13,659,758) $ (151,100,939) 9,369,184 $ 109,489,805
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Service
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 800,038 $ 8,201,394 614,628 $ 7,183,206
Shares issued to shareholders in reinvestment of distributions 25,764 292,397 1,438 15,600
------------------------------- -------------------------------
Total issued ................................................. 825,802 8,493,791 616,066 7,198,806
Shares redeemed .............................................. (343,432) (3,339,036) (187,853) (2,111,501)
------------------------------- -------------------------------
Net increase ................................................. 482,370 $ 5,154,755 428,213 $ 5,087,305
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Investor A
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold and automatic conversion of shares ............... 11,239,300 $ 111,809,291 13,520,166 $ 152,824,259
Shares issued to shareholders in reinvestment of distributions 738,365 8,229,629 74,874 798,915
------------------------------- -------------------------------
Total issued ................................................. 11,977,665 120,038,920 13,595,040 153,623,174
Shares redeemed .............................................. (14,146,657) (138,339,235) (7,519,049) (84,391,960)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (2,168,992) $ (18,300,315) 6,075,991 $ 69,231,214
=============================== ===============================
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 31
Notes to Financial Statements (continued) BlackRock Large Cap Series Funds, Inc.
Year Ended Year Ended
October 31, 2008 October 31, 2007
------------------------------- -------------------------------
BlackRock Large Cap Growth Fund (concluded) Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
Investor B
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 1,001,693 $ 9,563,976 2,624,001 $ 27,808,640
Shares issued to shareholders in reinvestment of distributions 249,325 2,610,264 37,261 376,698
------------------------------- -------------------------------
Total issued ................................................. 1,251,018 12,174,240 2,661,262 28,185,338
Shares redeemed and automatic conversion of shares ........... (4,616,366) (41,341,832) (4,244,218) (45,329,772)
------------------------------- -------------------------------
Net decrease ................................................. (3,365,348) $ (29,167,592) (1,582,956) $ (17,144,434)
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Investor C
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 5,629,306 $ 52,751,745 11,083,851 $ 118,787,413
Shares issued to shareholders in reinvestment of distributions 698,980 7,309,379 69,949 706,480
------------------------------- -------------------------------
Total issued ................................................. 6,328,286 60,061,124 11,153,800 119,493,893
Shares redeemed .............................................. (9,646,626) (87,478,848) (5,360,747) (57,345,607)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (3,318,340) $ (27,417,724) 5,793,053 $ 62,148,286
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Class R
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 3,819,354 $ 36,987,224 5,000,714 $ 54,802,359
Shares issued to shareholders in reinvestment of distributions 242,342 2,618,770 20,340 211,332
------------------------------- -------------------------------
Total issued ................................................. 4,061,696 39,605,994 5,021,054 55,013,691
Shares redeemed .............................................. (4,306,198) (40,459,087) (2,159,077) (23,656,657)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (244,502) $ (853,093) 2,861,977 $ 31,357,034
=============================== ===============================
BlackRock Large Cap Value Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 36,894,137 $ 614,681,902 30,936,573 $ 616,244,281
Shares issued to shareholders in reinvestment of dividends
and distributions .......................................... 4,133,919 77,302,827 788,152 15,077,111
------------------------------- -------------------------------
Total issued ................................................. 41,028,056 691,984,729 31,724,725 631,321,392
Shares redeemed .............................................. (33,791,812) (566,502,267) (20,606,763) (412,032,591)
------------------------------- -------------------------------
Net increase ................................................. 7,236,244 $ 125,482,462 11,117,962 $ 219,288,801
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Service
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 706,019 $ 11,959,010 595,347 $ 12,076,181
Shares issued to shareholders in reinvestment of dividends
and distributions .......................................... 112,372 2,099,110 19,088 364,951
------------------------------- -------------------------------
Total issued ................................................. 818,391 14,058,120 614,435 12,441,132
Shares redeemed .............................................. (420,028) (6,793,559) (307,139) (6,097,755)
------------------------------- -------------------------------
Net increase ................................................. 398,363 $ 7,264,561 307,296 $ 6,343,377
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Investor A
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold and automatic conversion of shares ............... 48,856,474 $ 810,946,846 53,168,066 $ 1,066,141,467
Shares issued to shareholders in reinvestment of dividends
and distributions .......................................... 8,148,668 149,528,060 1,405,085 26,430,387
------------------------------- -------------------------------
Total issued ................................................. 57,005,142 960,474,906 54,573,151 1,092,571,854
Shares redeemed .............................................. (71,052,529) (1,126,150,477) (21,540,848) (424,585,851)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (14,047,387) $ (165,675,571) 33,032,303 $ 667,986,003
=============================== ===============================
32 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Notes to Financial Statements (concluded) BlackRock Large Cap Series Funds, Inc.
Year Ended Year Ended
October 31, 2008 October 31, 2007
------------------------------- -------------------------------
BlackRock Large Cap Value Fund (concluded) Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
Investor B
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 1,092,265 $ 17,474,705 2,551,487 $ 47,649,721
Shares issued to shareholders in reinvestment of distributions 854,376 14,866,308 260,480 4,661,325
------------------------------- -------------------------------
Total issued ................................................. 1,946,641 32,341,013 2,811,967 52,311,046
Shares redeemed and automatic conversion of shares ........... (6,636,951) (100,755,559) (5,980,285) (112,293,764)
------------------------------- -------------------------------
Net decrease ................................................. (4,690,310) $ (68,414,546) (3,168,318) $ (59,982,718)
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Investor C
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 8,488,185 $ 132,881,032 17,217,899 $ 322,045,398
Shares issued to shareholders in reinvestment of distributions 3,171,063 54,954,834 683,298 12,203,021
------------------------------- -------------------------------
Total issued ................................................. 11,659,248 187,835,866 17,901,197 334,248,419
Shares redeemed .............................................. (20,768,438) (319,453,157) (10,956,566) (205,519,795)
------------------------------- -------------------------------
Net increase (decrease) ...................................... (9,109,190) $ (131,617,291) 6,944,631 $ 128,728,624
=============================== ===============================
- -----------------------------------------------------------------------------------------------------------------------------------
Class R
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................. 5,771,456 $ 92,978,324 6,549,560 $ 125,647,577
Shares issued to shareholders in reinvestment of dividends
and distributions .......................................... 788,255 14,015,179 115,104 2,105,311
------------------------------- -------------------------------
Total issued ................................................. 6,559,711 106,993,503 6,664,664 127,752,888
Shares redeemed .............................................. (4,981,736) (78,250,333) (2,632,867) (50,881,167)
------------------------------- -------------------------------
Net increase ................................................. 1,577,975 $ 28,743,170 4,031,797 $ 76,871,721
=============================== ===============================
5. Acquisition of BlackRock Investment Trust of
BlackRock FundsSM:
On September 24, 2007, BlackRock Large Cap Core Fund ("Large Cap Core") acquired
substantially all of the assets and assumed substantially all of the liabilities
of BlackRock Investment Trust of BlackRock Funds ("Investment Trust"), pursuant
to a plan of reorganization. The acquisition was accomplished by a tax-free
exchange of 72,936,885 shares of beneficial interest of Investment Trust for
80,889,693 shares of common stock of Large Cap Core. Investment Trust's net
assets on that date of $1,133,643,993, including $18,270,415 of net realized
capital losses and $286,539,853 of net unrealized appreciation were combined
with those of Large Cap Core. The aggregate net assets immediately after the
acquisition amounted to $5,393,201,700.
6. Subsequent Events:
On September 15, 2008, Bank of America Corporation announced that it has agreed
to acquire Merrill Lynch, one of the principal owners of BlackRock, Inc. The
purchase has been approved by the shareholders and directors of both companies
and certain regulators. Subject to other regulatory approvals, the transaction
is expected to close on or about December 31, 2008.
BlackRock Large Cap Core Fund
On November 14, 2008 (the "Reorganization Date"), BlackRock Large Cap Core Fund
acquired all of the assets and certain stated liabilities of PNC Growth & Income
Fund (the "PNC Fund"), a series of PNC Funds, Inc. The reorganization was
pursuant to an Agreement and plan of Reorganization, which was approved by the
shareholders of the PNC Fund on October 31, 2008. Under the Agreement and Plan
of Reorganization, 316,179 Investor A Shares, 67,564 Investor C Shares and
9,403,899 Institutional Shares of the PNC Fund were exchanged for 329,616
Investor A Shares, 68,866 Investor A Shares and 9,664,610 Institutional Shares,
respectively, of BlackRock Large Cap Core Fund. The conversion ratio for
Investor A Shares, Investor C Shares and Institutional Shares were 1.04249758,
1.01927550 and 1.02772376, respectively. The assets of the PNC Fund, which
consisted of securities and related receivables less liabilities were converted
on a tax free basis. On the Reorganization Date, the net assets of BlackRock
Large Cap Core Fund were valued at $2,529,461,660 (including net assets of
$78,592,131 for the PNC Fund, which included $59,817,678 of net unrealized
depreciation).
BlackRock Large Cap Value Fund paid ordinary income dividends in the amount of
$0.167139 per Institutional Share, $0.140663 per Service Share, $0.089097 per
Investor A Share and $0.060142 per Class R Share on December 18, 2008 to
shareholders of record on December 16, 2008.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 33
Report of Independent Registered Public Accounting Firm
BlackRock Large Cap Series Funds, Inc.
To the Shareholders and Board of Directors of BlackRock Large Cap Series Funds,
Inc.:
We have audited the accompanying statements of assets and liabilities of
BlackRock Large Cap Core Fund, BlackRock Large Cap Growth Fund and BlackRock
Large Cap Value Fund, three of the series constituting BlackRock Large Cap
Series Funds, Inc. (the "Fund"), as of October 31, 2008, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock Large Cap Core Fund, BlackRock Large Cap Growth Fund and BlackRock
Large Cap Value Fund of BlackRock Large Cap Series Funds, Inc. as of October 31,
2008, the results of their operations for the year then ended, the changes in
their 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
December 30, 2008
34 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Important Tax Information
BlackRock Large Cap Core Fund and BlackRock Large Cap Value Fund
The following information is provided with respect to the ordinary income
distributions paid by BlackRock Large Cap Core Fund and BlackRock Large Cap
Value Fund of BlackRock Large Cap Series Funds, Inc. during the taxable year
ended October 31, 2008:
BlackRock Large BlackRock Large
Cap Core Fund Cap Value Fund
==========================================================================================================================
Record Date December 13, 2007 December 13, 2007
Payable Date December 17, 2007 December 17, 2007
==========================================================================================================================
Qualified Dividend Income for Individuals* 80.05% 91.41%
- --------------------------------------------------------------------------------------------------------------------------
Dividends Qualifying for the Dividends Received Deduction for Corporations* 79.42% 91.06%
- --------------------------------------------------------------------------------------------------------------------------
Short-Term Capital Gain Dividends for Non-U.S. Residents** 100% 93.66%
- --------------------------------------------------------------------------------------------------------------------------
* Each Fund hereby designates the percentage indicated above or the maximum
amount allowable by law.
** Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
Additionally, BlackRock Large Cap Core Fund and BlackRock Large Cap Value Fund
distributed long-term capital gains of $0.339376 and $1.038525, respectively,
per share to shareholders of record on December 13, 2007.
BlackRock Large Cap Growth Fund
During the taxable year ended October 31, 2008, BlackRock Large Cap Growth Fund
of BlackRock Large Cap Series Funds, Inc. distributed long-term capital gains of
$0.314815 and $0.002362 per share to shareholders of record on December 13, 2007
and July 16, 2008, respectively.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 35
Portfolio Information as of October 31, 2008 Master Large Cap Series LLC
Sector Representation
Percent of
Master Large Cap Core Portfolio Long-Term Investments
- --------------------------------------------------------------------------------
Information Technology ............................................... 23%
Energy ............................................................... 19
Health Care .......................................................... 18
Consumer Discretionary ............................................... 15
Industrials .......................................................... 12
Consumer Staples ..................................................... 6
Financials ........................................................... 5
Materials ............................................................ 1
Telecommunication Services ........................................... 1
- --------------------------------------------------------------------------------
Percent of
Master Large Cap Growth Portfolio Long-Term Investments
- --------------------------------------------------------------------------------
Information Technology ............................................... 33%
Health Care .......................................................... 19
Industrials .......................................................... 14
Consumer Discretionary ............................................... 14
Energy ............................................................... 9
Consumer Staples ..................................................... 8
Materials ............................................................ 2
Financials ........................................................... 1
- --------------------------------------------------------------------------------
Percent of
Master Large Cap Value Portfolio Long-Term Investments
- --------------------------------------------------------------------------------
Energy ............................................................... 21%
Health Care .......................................................... 20
Financials ........................................................... 16
Industrials .......................................................... 13
Information Technology ............................................... 13
Consumer Discretionary ............................................... 10
Consumer Staples ..................................................... 3
Materials ............................................................ 2
Telecommunication Services ........................................... 2
- --------------------------------------------------------------------------------
For Portfolio compliance purposes, sector and industry classifications
refer to any one or more of the sector and industry sub-classifications
used by one or more widely recognized market indexes or ratings group
indexes, and/or as defined by Portfolio management. This definition may
not apply for purposes of this report, which may combine sector and
industry sub-classifications for reporting ease.
Five Largest Industries
Percent of
Master Large Cap Core Portfolio Net Assets
- --------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels .......................................... 16%
Pharmaceuticals ...................................................... 7
Specialty Retail ..................................................... 7
Health Care Providers & Services ..................................... 7
Semiconductors & Semiconductor Equipment ............................. 6
- --------------------------------------------------------------------------------
Percent of
Master Large Cap Growth Portfolio Net Assets
- --------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment ............................. 11%
Health Care Providers & Services ..................................... 10
Software ............................................................. 8
Computers & Peripherals .............................................. 8
Oil, Gas & Consumable Fuels .......................................... 6
- --------------------------------------------------------------------------------
Percent of
Master Large Cap Value Portfolio Net Assets
- --------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels .......................................... 19%
Insurance ............................................................ 13
Pharmaceuticals ...................................................... 9
Health Care Providers & Services ..................................... 8
Aerospace & Defense .................................................. 5
- --------------------------------------------------------------------------------
36 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Portfolio Information (concluded) Master Large Cap Series LLC
Ten Largest Equity Holdings
Percent of
Master Large Cap Core Portfolio Net Assets
- --------------------------------------------------------------------------------
Exxon Mobil Corp. .................................................... 5%
Johnson & Johnson .................................................... 3
Chevron Corp. ........................................................ 3
Pfizer, Inc. ......................................................... 2
Hewlett-Packard Co. .................................................. 2
ConocoPhillips ....................................................... 2
Amgen, Inc. .......................................................... 2
Occidental Petroleum Corp. ........................................... 2
Walt Disney Co. ...................................................... 2
Apache Corp. ......................................................... 1
- --------------------------------------------------------------------------------
Percent of
Master Large Cap Growth Portfolio Net Assets
- --------------------------------------------------------------------------------
Hewlett-Packard Co. .................................................. 3%
Intel Corp. .......................................................... 3
Exxon Mobil Corp. .................................................... 2
Wal-Mart Stores, Inc. ................................................ 2
Occidental Petroleum Corp. ........................................... 2
Microsoft Corp. ...................................................... 2
Accenture Ltd. Class A ............................................... 1
Lockheed Martin Corp. ................................................ 1
Express Scripts, Inc. ................................................ 1
Hess Corp. ........................................................... 1
- --------------------------------------------------------------------------------
Percent of
Master Large Cap Value Portfolio Net Assets
- --------------------------------------------------------------------------------
Exxon Mobil Corp. .................................................... 8%
Chevron Corp. ........................................................ 4
Pfizer, Inc. ......................................................... 3
ConocoPhillips ....................................................... 3
Amgen, Inc. .......................................................... 2
General Electric Co. ................................................. 2
Walt Disney Co. ...................................................... 2
Apache Corp. ......................................................... 2
Johnson & Johnson .................................................... 2
Marathon Oil Corp. ................................................... 2
- --------------------------------------------------------------------------------
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 37
Schedule of Investments October 31, 2008 Master Large Cap Core Portfolio
(Percentages shown are based on Net Assets)
Common Stocks Shares Value
===============================================================================
Consumer Discretionary -- 14.6%
Hotels, Restaurants & Leisure -- 1.0%
Panera Bread Co. Class A (a)(b) 630,000 $ 28,425,600
- -------------------------------------------------------------------------------
Household Durables -- 0.2%
NVR, Inc. (a) 10,000 4,902,100
- -------------------------------------------------------------------------------
Leisure Equipment & Products -- 1.0%
Hasbro, Inc. 970,000 28,197,900
- -------------------------------------------------------------------------------
Media -- 2.5%
Omnicom Group Inc. 960,000 28,358,400
Walt Disney Co. 1,650,000 42,735,000
--------------
71,093,400
- -------------------------------------------------------------------------------
Multiline Retail -- 3.2%
Big Lots, Inc. (a) 1,350,000 32,980,500
Dollar Tree, Inc. (a) 770,000 29,275,400
Family Dollar Stores, Inc. 1,070,000 28,793,700
--------------
91,049,600
- -------------------------------------------------------------------------------
Specialty Retail -- 6.7%
Advance Auto Parts, Inc. 1,060,000 33,072,000
AutoZone, Inc. (a) 250,000 31,822,500
Foot Locker, Inc. 720,000 10,526,400
The Gap, Inc. 2,060,000 26,656,400
RadioShack Corp. 2,340,000 29,624,400
Ross Stores, Inc. 940,000 30,728,600
TJX Cos., Inc. 1,130,000 30,238,800
--------------
192,669,100
- -------------------------------------------------------------------------------
Total Consumer Discretionary 416,337,700
===============================================================================
Consumer Staples -- 6.4%
Beverages -- 0.2%
The Coca-Cola Co. 110,000 4,846,600
- -------------------------------------------------------------------------------
Food & Staples Retailing -- 3.4%
BJ's Wholesale Club, Inc. (a) 870,000 30,624,000
The Kroger Co. 1,170,000 32,128,200
SYSCO Corp. 570,000 14,934,000
Wal-Mart Stores, Inc. 360,000 20,091,600
--------------
97,777,800
- -------------------------------------------------------------------------------
Household Products -- 1.5%
Church & Dwight Co., Inc. 200,000 11,818,000
The Procter & Gamble Co. 480,000 30,979,200
--------------
42,797,200
- -------------------------------------------------------------------------------
Personal Products -- 1.3%
The Estee Lauder Cos., Inc. Class A 340,000 12,253,600
Herbalife Ltd. 940,000 22,964,200
--------------
35,217,800
- -------------------------------------------------------------------------------
Total Consumer Staples 180,639,400
===============================================================================
Energy -- 18.8%
Energy Equipment & Services -- 2.4%
Baker Hughes, Inc. 400,000 13,980,000
ENSCO International, Inc. 740,000 28,127,400
Tidewater, Inc. 570,000 24,857,700
--------------
66,965,100
- -------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 16.4%
Apache Corp. 450,000 37,048,500
Chevron Corp. 990,000 73,854,000
ConocoPhillips 1,010,000 52,540,200
Exxon Mobil Corp. 1,940,000 143,792,800
Hess Corp. 570,000 34,319,700
Marathon Oil Corp. 1,220,000 35,502,000
Murphy Oil Corp. 550,000 27,852,000
Occidental Petroleum Corp. 780,000 43,321,200
Valero Energy Corp. 900,000 18,522,000
--------------
466,752,400
- -------------------------------------------------------------------------------
Total Energy 533,717,500
===============================================================================
Financials -- 4.7%
Commercial Banks -- 0.2%
Wells Fargo & Co. 190,000 6,469,500
- -------------------------------------------------------------------------------
Consumer Finance -- 1.2%
Capital One Financial Corp. 850,000 33,252,000
- -------------------------------------------------------------------------------
Diversified Financial Services -- 0.7%
Bank of America Corp. 250,000 6,042,500
JPMorgan Chase & Co. 340,000 14,025,000
--------------
20,067,500
- -------------------------------------------------------------------------------
Insurance -- 2.6%
The Allstate Corp. 930,000 24,542,700
Chubb Corp. 70,000 3,627,400
The Travelers Cos., Inc. 330,000 14,041,500
UnumProvident Corp. 2,010,000 31,657,500
--------------
73,869,100
- -------------------------------------------------------------------------------
Total Financials 133,658,100
===============================================================================
Health Care -- 18.7%
Biotechnology -- 1.7%
Amgen, Inc. (a) 800,000 47,912,000
- -------------------------------------------------------------------------------
Health Care Equipment & Supplies -- 2.4%
C.R. Bard, Inc. 340,000 30,005,000
Edwards Lifesciences Corp. (a) 520,000 27,476,800
Varian Medical Systems, Inc. (a) 250,000 11,377,500
--------------
68,859,300
- -------------------------------------------------------------------------------
Health Care Providers & Services -- 6.7%
AmerisourceBergen Corp. 700,000 21,889,000
Cigna Corp. 290,000 4,727,000
Express Scripts, Inc. (a) 550,000 33,335,500
Lincare Holdings, Inc. (a) 1,010,000 26,613,500
McKesson Corp. 760,000 27,960,400
Omnicare, Inc. 260,000 7,168,200
Quest Diagnostics, Inc. 690,000 32,292,000
WellPoint, Inc. (a) 910,000 35,371,700
--------------
189,357,300
- -------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.6%
Invitrogen Corp. (a) 630,000 18,137,700
- -------------------------------------------------------------------------------
Pharmaceuticals -- 7.3%
Eli Lilly & Co. 1,070,000 36,187,400
Forest Laboratories, Inc. (a) 1,300,000 30,199,000
Johnson & Johnson 1,260,000 77,288,400
Pfizer, Inc. 3,630,000 64,287,300
--------------
207,962,100
- -------------------------------------------------------------------------------
Total Health Care 532,228,400
===============================================================================
See Notes to Financial Statements.
38 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Schedule of Investments (continued) Master Large Cap Core Portfolio
(Percentages shown are based on Net Assets)
Common Stocks Shares Value
===============================================================================
Industrials -- 11.9%
Aerospace & Defense -- 4.9%
General Dynamics Corp. 590,000 $ 35,588,800
L-3 Communications Holdings, Inc. 400,000 32,468,000
Lockheed Martin Corp. 400,000 34,020,000
Raytheon Co. 710,000 36,288,100
--------------
138,364,900
- -------------------------------------------------------------------------------
Commercial Services & Supplies -- 1.1%
Waste Management, Inc. 1,030,000 32,166,900
- -------------------------------------------------------------------------------
Electrical Equipment -- 0.8%
Cooper Industries Ltd. Class A 760,000 23,522,000
- -------------------------------------------------------------------------------
Industrial Conglomerates -- 1.1%
General Electric Co. 1,590,000 31,020,900
- -------------------------------------------------------------------------------
Machinery -- 2.5%
AGCO Corp. (a) 670,000 21,118,400
Cummins, Inc. 1,020,000 26,367,000
Dover Corp. 750,000 23,827,500
--------------
71,312,900
- -------------------------------------------------------------------------------
Road & Rail -- 1.0%
CSX Corp. 130,000 5,943,600
Ryder System, Inc. 560,000 22,187,200
--------------
28,130,800
- -------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.5%
MSC Industrial Direct Co. Class A 430,000 15,419,800
- -------------------------------------------------------------------------------
Total Industrials 339,938,200
===============================================================================
Information Technology -- 23.0%
Communications Equipment -- 0.2%
Cisco Systems, Inc. (a) 260,000 4,620,200
- -------------------------------------------------------------------------------
Computers & Peripherals --5.9%
Hewlett-Packard Co. 1,540,000 58,951,200
International Business Machines Corp. 110,000 10,226,700
Lexmark International, Inc. Class A (a) 860,000 22,213,800
NetApp, Inc. (a) 1,170,000 15,830,100
QLogic Corp. (a) 1,820,000 21,876,400
Seagate Technology 2,330,000 15,774,100
Western Digital Corp. (a) 1,480,000 24,420,000
--------------
169,292,300
- -------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.9%
Agilent Technologies, Inc. (a) 1,170,000 25,962,300
- -------------------------------------------------------------------------------
IT Services -- 3.1%
Accenture Ltd. Class A 1,090,000 36,024,500
Affiliated Computer Services, Inc. Class A (a) 150,000 6,150,000
Computer Sciences Corp. (a) 792,900 23,913,864
Global Payments, Inc. 270,000 10,937,700
Hewitt Associates, Inc. Class A (a) 360,000 10,040,400
--------------
87,066,464
- -------------------------------------------------------------------------------
Office Electronics -- 0.9%
Xerox Corp. 3,150,000 25,263,000
- -------------------------------------------------------------------------------
Semiconductors & Semiconductor
Equipment -- 6.1%
Altera Corp. 1,710,000 29,668,500
Analog Devices, Inc. 1,320,000 28,195,200
Broadcom Corp. Class A (a) 1,690,000 28,865,200
Integrated Device Technology, Inc. (a) 1,340,000 8,522,400
Intersil Corp. Class A 330,000 4,517,700
LSI Corp. (a) 4,360,000 16,786,000
Novellus Systems, Inc. (a) 1,760,000 27,808,000
Xilinx, Inc. 1,590,000 29,287,800
--------------
173,650,800
- -------------------------------------------------------------------------------
Software -- 5.9%
Adobe Systems, Inc. (a) 750,000 19,980,000
BMC Software, Inc. (a) 1,110,000 28,660,200
CA, Inc. 1,820,000 32,396,000
Compuware Corp. (a) 1,620,000 10,335,600
Microsoft Corp. 1,240,000 27,689,200
Symantec Corp. (a) 2,540,000 31,953,200
Synopsys, Inc. (a) 930,000 17,000,400
--------------
168,014,600
- -------------------------------------------------------------------------------
Total Information Technology 653,869,664
===============================================================================
Materials -- 1.3%
Containers & Packaging -- 0.8%
Crown Holdings, Inc. (a) 1,130,000 22,803,400
- -------------------------------------------------------------------------------
Metals & Mining -- 0.5%
Reliance Steel & Aluminum Co. 520,000 13,020,800
- -------------------------------------------------------------------------------
Total Materials 35,824,200
===============================================================================
Telecommunication Services -- 0.7%
Diversified Telecommunication Services -- 0.7%
AT&T Inc. 780,000 20,880,600
- -------------------------------------------------------------------------------
Total Telecommunication Services 20,880,600
===============================================================================
Total Long-Term Investments
(Cost -- $3,421,449,360) -- 100.1% 2,847,093,764
===============================================================================
===============================================================================
Beneficial
Interest
Short-Term Securities (000)
===============================================================================
BlackRock Liquidity Series, LLC
Money Market Series, 1.57% (c)(d)(e) $11,588 11,588,400
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $11,588,400) -- 0.4% 11,588,400
===============================================================================
Total Investments (Cost -- $3,433,037,760*) -- 100.5% 2,858,682,164
Liabilities in Excess of Other Assets -- (0.5)% (15,167,389)
--------------
Net Assets -- 100.0% $2,843,514,775
==============
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 39
Schedule of Investments (concluded) Master Large Cap Core Portfolio
* The cost and unrealized appreciation (depreciation) of investments as of
October 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ....................................... $ 3,497,291,826
===============
Gross unrealized appreciation ........................ $ 163,213,998
Gross unrealized depreciation ........................ (801,823,660)
---------------
Net unrealized depreciation .......................... $ (638,609,662)
===============
(a) Non-income producing security.
(b) Security, or a portion of security, is on loan.
(c) Security was purchased with the cash proceeds from securities loans.
(d) Represents the current yield as of the report date.
(e) Investments in companies considered to be an affiliate of the Portfolio,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
--------------------------------------------------------------------------
Net
Affiliate Activity Income
--------------------------------------------------------------------------
BlackRock Liquidity Series, LLC
Cash Sweep Series -- $ 11,231
BlackRock Liquidity Series, LLC
Money Market Series $(870,851,900) $2,505,518
--------------------------------------------------------------------------
o For Portfolio compliance purposes, the Portfolio's sector and industry
classifications refer to any one or more of the sector and industry
sub-classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Portfolio management. This
definition may not apply for purposes of this report, which may combine
sector and industry sub-classifications for reporting ease. These sector
and industry classifications are unaudited.
See Notes to Financial Statements.
40 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Schedule of Investments October 31, 2008 Master Large Cap Growth Portfolio
(Percentages shown are based on Net Assets)
Common Stocks Shares Value
===============================================================================
Consumer Discretionary -- 13.9%
Hotels, Restaurants & Leisure -- 1.1%
Panera Bread Co. Class A (a)(b) 159,000 $ 7,174,080
- -------------------------------------------------------------------------------
Household Durables -- 0.6%
NVR, Inc. (a) 9,000 4,411,890
- -------------------------------------------------------------------------------
Leisure Equipment & Products -- 1.0%
Hasbro, Inc. 223,000 6,482,610
- -------------------------------------------------------------------------------
Media -- 1.9%
Omnicom Group Inc. 234,000 6,912,360
Walt Disney Co. 233,000 6,034,700
--------------
12,947,060
- -------------------------------------------------------------------------------
Multiline Retail -- 3.3%
Big Lots, Inc. (a) 324,000 7,915,320
Dollar Tree, Inc. (a) 191,000 7,261,820
Family Dollar Stores, Inc. 245,000 6,592,950
--------------
21,770,090
- -------------------------------------------------------------------------------
Specialty Retail -- 5.8%
Advance Auto Parts, Inc. 263,000 8,205,600
AnnTaylor Stores Corp. (a) 552,000 6,938,640
AutoZone, Inc. (a) 64,000 8,146,560
Ross Stores, Inc. 230,000 7,518,700
TJX Cos., Inc. 302,000 8,081,520
--------------
38,891,020
- -------------------------------------------------------------------------------
Textiles, Apparel & Luxury Goods -- 0.2%
Polo Ralph Lauren Corp. 24,000 1,132,080
- -------------------------------------------------------------------------------
Total Consumer Discretionary 92,808,830
===============================================================================
Consumer Staples -- 7.8%
Food & Staples Retailing -- 4.6%
The Kroger Co. 268,000 7,359,280
SYSCO Corp. 345,000 9,039,000
Wal-Mart Stores, Inc. 260,000 14,510,600
--------------
30,908,880
- -------------------------------------------------------------------------------
Household Products -- 1.1%
Church & Dwight Co., Inc. 118,000 6,972,620
- -------------------------------------------------------------------------------
Personal Products -- 2.1%
The Estee Lauder Cos., Inc. Class A 195,000 7,027,800
Herbalife Ltd. 295,000 7,206,850
--------------
14,234,650
- -------------------------------------------------------------------------------
Total Consumer Staples 52,116,150
===============================================================================
Energy -- 9.5%
Energy Equipment & Services -- 3.6%
Baker Hughes, Inc. 238,000 8,318,100
Dresser-Rand Group, Inc. (a) 81,000 1,814,400
ENSCO International, Inc. 190,000 7,221,900
Tidewater, Inc. 154,000 6,715,940
--------------
24,070,340
- -------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 5.9%
Exxon Mobil Corp. 221,000 16,380,520
Hess Corp. 154,000 9,272,340
Occidental Petroleum Corp. 239,000 13,274,060
--------------
38,926,920
- -------------------------------------------------------------------------------
Total Energy 62,997,260
===============================================================================
Financials -- 0.9%
Insurance -- 0.9%
PartnerRe Ltd. 91,000 6,159,790
- -------------------------------------------------------------------------------
Total Financials 6,159,790
===============================================================================
Health Care -- 18.9%
Biotechnology -- 0.5%
Cephalon, Inc. (a) 49,000 3,514,280
- -------------------------------------------------------------------------------
Health Care Equipment & Supplies -- 2.4%
C.R. Bard, Inc. 18,000 1,588,500
Edwards Lifesciences Corp. (a) 126,000 6,657,840
Varian Medical Systems, Inc. (a) 169,000 7,691,190
--------------
15,937,530
- -------------------------------------------------------------------------------
Health Care Providers & Services -- 9.9%
AmerisourceBergen Corp. 196,000 6,128,920
Cigna Corp. 428,000 6,976,400
Community Health Systems, Inc. (a) 128,000 2,624,000
Express Scripts, Inc. (a) 154,000 9,333,940
Lincare Holdings, Inc. (a)(b) 261,000 6,877,350
McKesson Corp. 178,000 6,548,620
Omnicare, Inc. 240,000 6,616,800
Quest Diagnostics, Inc. 162,000 7,581,600
Universal Health Services, Inc. Class B 136,000 5,717,440
WellPoint, Inc. (a) 184,000 7,152,080
--------------
65,557,150
- -------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.9%
Invitrogen Corp. (a) 212,000 6,103,480
- -------------------------------------------------------------------------------
Pharmaceuticals -- 5.2%
Eli Lilly & Co. 191,000 6,459,620
Endo Pharmaceuticals Holdings, Inc. (a) 150,000 2,775,000
Forest Laboratories, Inc. (a) 284,000 6,597,320
Johnson & Johnson 135,000 8,280,900
Pfizer, Inc. 177,600 3,145,296
Watson Pharmaceuticals, Inc. (a) 285,000 7,458,450
--------------
34,716,586
- -------------------------------------------------------------------------------
Total Health Care 125,829,026
===============================================================================
Industrials -- 14.3%
Aerospace & Defense -- 4.8%
General Dynamics Corp. 105,000 6,333,600
L-3 Communications Holdings, Inc. 98,000 7,954,660
Lockheed Martin Corp. 115,000 9,780,750
Raytheon Co. 156,000 7,973,160
--------------
32,042,170
- -------------------------------------------------------------------------------
Commercial Services & Supplies -- 1.1%
Waste Management, Inc. 240,000 7,495,200
- -------------------------------------------------------------------------------
Electrical Equipment -- 2.2%
Cooper Industries Ltd. Class A 247,000 7,644,650
Hubbell, Inc. Class B 189,000 6,779,430
--------------
14,424,080
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 41
Schedule of Investments (concluded) Master Large Cap Growth Portfolio
(Percentages shown are based on Net Assets)
Common Stocks Shares Value
===============================================================================
Industrials (concluded)
Machinery -- 2.7%
Cummins, Inc. 251,000 $ 6,488,350
Dover Corp. 252,000 8,006,040
Lincoln Electric Holdings, Inc. 40,000 1,726,000
Timken Co. 93,000 1,476,840
--------------
17,697,230
- -------------------------------------------------------------------------------
Professional Services -- 0.2%
Manpower, Inc. 42,000 1,307,460
- -------------------------------------------------------------------------------
Road & Rail -- 2.3%
CSX Corp. 196,000 8,961,120
Ryder System, Inc. 166,000 6,576,920
--------------
15,538,040
- -------------------------------------------------------------------------------
Trading Companies & Distributors -- 1.0%
MSC Industrial Direct Co. Class A 192,000 6,885,120
- -------------------------------------------------------------------------------
Total Industrials 95,389,300
===============================================================================
Information Technology -- 33.5%
Communications Equipment -- 0.3%
Cisco Systems, Inc. (a) 125,000 2,221,250
- -------------------------------------------------------------------------------
Computers & Peripherals -- 7.8%
Hewlett-Packard Co. 532,000 20,364,960
International Business Machines Corp. 49,000 4,555,530
Lexmark International, Inc. Class A (a) 241,000 6,225,030
NetApp, Inc. (a) 535,000 7,238,550
QLogic Corp. (a) 488,000 5,865,760
Seagate Technology 525,000 3,554,250
Western Digital Corp. (a) 254,000 4,191,000
--------------
51,995,080
- -------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 2.2%
Agilent Technologies, Inc. (a) 359,000 7,966,210
Jabil Circuit, Inc. 116,000 975,560
Tech Data Corp. (a) 269,000 5,770,050
--------------
14,711,820
- -------------------------------------------------------------------------------
IT Services -- 4.4%
Accenture Ltd. Class A 301,000 9,948,050
Affiliated Computer Services, Inc. Class A (a) 171,000 7,011,000
Global Payments, Inc. 166,000 6,724,660
Unisys Corp. (a) 3,587,000 5,452,240
--------------
29,135,950
- -------------------------------------------------------------------------------
Semiconductors & Semiconductor
Equipment -- 10.7%
Altera Corp. 409,000 7,096,150
Analog Devices, Inc. 330,000 7,048,800
Broadcom Corp. Class A (a) 443,000 7,566,440
Integrated Device Technology, Inc. (a) 1,112,000 7,072,320
Intel Corp. 1,093,000 17,488,000
LSI Corp. (a) 1,799,000 6,926,150
National Semiconductor Corp. 199,000 2,620,830
Novellus Systems, Inc. (a) 81,000 1,279,800
Silicon Laboratories, Inc. (a) 265,000 6,879,400
Xilinx, Inc. 390,000 7,183,800
--------------
71,161,690
- -------------------------------------------------------------------------------
Software -- 8.1%
Adobe Systems, Inc. (a) 326,000 8,684,640
BMC Software, Inc. (a) 275,000 7,100,500
CA, Inc. 404,000 7,191,200
Compuware Corp. (a) 1,061,000 6,769,180
Microsoft Corp. 533,000 11,901,890
Symantec Corp. (a) 445,000 5,598,100
Synopsys, Inc. (a) 347,000 6,343,160
--------------
53,588,670
- -------------------------------------------------------------------------------
Total Information Technology 222,814,460
===============================================================================
Materials -- 1.5%
Chemicals -- 0.5%
FMC Corp. 78,000 3,396,120
- -------------------------------------------------------------------------------
Containers & Packaging -- 1.0%
Crown Holdings, Inc. (a) 328,000 6,619,040
- -------------------------------------------------------------------------------
Total Materials 10,015,160
===============================================================================
Total Long-Term Investments
(Cost -- $809,115,328) -- 100.3% 668,129,976
===============================================================================
===============================================================================
Beneficial
Interest
Short-Term Securities (000)
===============================================================================
BlackRock Liquidity Series, LLC
Money Market Series, 1.57% (c)(d)(e) $4,794 4,794,000
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $4,794,000) -- 0.7% 4,794,000
===============================================================================
Total Investments (Cost -- $813,909,328*) -- 101.0% 672,923,976
Liabilities in Excess of Other Assets -- (1.0)% (6,961,274)
--------------
Net Assets -- 100.0% $ 665,962,702
==============
* The cost and unrealized appreciation (depreciation) of investments as of
October 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ......................................... $ 832,153,063
=============
Gross unrealized appreciation .......................... $ 14,897,338
Gross unrealized depreciation .......................... (174,126,425)
-------------
Net unrealized depreciation ............................ $(159,229,087)
=============
(a) Non-income producing security.
(b) Security, or a portion of security, is on loan.
(c) Investments in companies considered to be an affiliate of the Portfolio,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
--------------------------------------------------------------------------
Net
Affiliate Activity Income
--------------------------------------------------------------------------
BlackRock Liquidity Series, LLC
Cash Sweep Series $ (1,956,307) $ 32,332
BlackRock Liquidity Series, LLC
Money Market Series $(191,113,400) $532,649
--------------------------------------------------------------------------
(d) Represents the current yield as of report date.
(e) Security was purchased with the cash proceeds from securities loans.
o For Portfolio compliance purposes, the Portfolio's sector and industry
classifications refer to any one or more of the sector and industry
sub-classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Portfolio management. This
definition may not apply for purposes of this report, which may combine
sector and industry sub-classifications for reporting ease. These sector
and industry classifications are unaudited.
See Notes to Financial Statements.
42 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Schedule of Investments October 31, 2008 Master Large Cap Value Portfolio
(Percentages shown are based on Net Assets)
Common Stocks Shares Value
===============================================================================
Consumer Discretionary -- 10.2%
Auto Components -- 0.1%
TRW Automotive Holdings Corp. (a) 670,000 $ 4,234,400
- -------------------------------------------------------------------------------
Household Durables -- 2.1%
Jarden Corp. (a)(b) 1,390,000 24,742,000
NVR, Inc. (a) 60,000 29,412,600
Toll Brothers, Inc. (a) 370,000 8,554,400
--------------
62,709,000
- -------------------------------------------------------------------------------
Leisure Equipment & Products -- 1.0%
Hasbro, Inc. 1,040,000 30,232,800
- -------------------------------------------------------------------------------
Media -- 1.9%
Walt Disney Co. 2,210,000 57,239,000
- -------------------------------------------------------------------------------
Multiline Retail -- 1.0%
Family Dollar Stores, Inc. 1,160,000 31,215,600
- -------------------------------------------------------------------------------
Specialty Retail -- 3.3%
AnnTaylor Stores Corp. (a) 480,000 6,033,600
Foot Locker, Inc. 2,280,000 33,333,600
The Gap, Inc. (b) 2,310,000 29,891,400
RadioShack Corp. 2,570,000 32,536,200
--------------
101,794,800
- -------------------------------------------------------------------------------
Textiles, Apparel & Luxury Goods -- 0.8%
Jones Apparel Group, Inc. 2,210,000 24,553,100
- -------------------------------------------------------------------------------
Total Consumer Discretionary 311,978,700
===============================================================================
Consumer Staples -- 3.2%
Food & Staples Retailing -- 2.2%
BJ's Wholesale Club, Inc. (a)(b) 940,000 33,088,000
The Kroger Co. 1,290,000 35,423,400
--------------
68,511,400
- -------------------------------------------------------------------------------
Food Products -- 0.3%
H.J. Heinz Co. 190,000 8,325,800
- -------------------------------------------------------------------------------
Household Products -- 0.7%
The Procter & Gamble Co. 310,000 20,007,400
- -------------------------------------------------------------------------------
Total Consumer Staples 96,844,600
===============================================================================
Energy -- 21.4%
Energy Equipment & Services -- 2.1%
ENSCO International, Inc. 800,000 30,408,000
Tidewater, Inc. 740,000 32,271,400
--------------
62,679,400
- -------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 19.3%
Apache Corp. 620,000 51,044,600
Chevron Corp. 1,750,000 130,550,000
ConocoPhillips 1,580,000 82,191,600
Exxon Mobil Corp. 3,140,000 232,736,800
Hess Corp. 350,000 21,073,500
Marathon Oil Corp. 1,600,000 46,560,000
Occidental Petroleum Corp. 510,000 28,325,400
--------------
592,481,900
- -------------------------------------------------------------------------------
Total Energy 655,161,300
===============================================================================
Financials -- 15.7%
Commercial Banks -- 0.4%
Wells Fargo & Co. 300,000 10,215,000
- -------------------------------------------------------------------------------
Consumer Finance -- 1.3%
Capital One Financial Corp. 1,040,000 40,684,800
- -------------------------------------------------------------------------------
Diversified Financial Services -- 1.2%
Bank of America Corp. 440,000 10,634,800
JPMorgan Chase & Co. 640,000 26,400,000
--------------
37,034,800
- -------------------------------------------------------------------------------
Insurance -- 12.8%
The Allstate Corp. 1,350,000 35,626,500
American Financial Group, Inc. 860,000 19,547,800
CNA Financial Corp. 610,000 9,491,600
Chubb Corp. 810,000 41,974,200
Everest Re Group Ltd. 170,000 12,699,000
HCC Insurance Holdings, Inc. 1,110,000 24,486,600
The Hanover Insurance Group, Inc. 220,000 8,635,000
Marsh & McLennan Cos., Inc. 1,370,000 40,168,400
PartnerRe Ltd. 500,000 33,845,000
Prudential Financial, Inc. 1,130,000 33,900,000
RenaissanceRe Holdings Ltd. 700,000 32,130,000
Transatlantic Holdings, Inc. 90,000 3,856,500
The Travelers Cos., Inc. 1,060,000 45,103,000
UnumProvident Corp. 2,280,000 35,910,000
W.R. Berkley Corp. 560,000 14,711,200
--------------
392,084,800
- -------------------------------------------------------------------------------
Total Financials 480,019,400
===============================================================================
Health Care -- 20.3%
Biotechnology -- 2.4%
Amgen, Inc. (a) 1,220,000 73,065,800
- -------------------------------------------------------------------------------
Health Care Providers & Services -- 8.0%
AmerisourceBergen Corp. 970,000 30,331,900
LifePoint Hospitals, Inc. (a) 1,180,000 28,284,600
Lincare Holdings, Inc. (a) 940,000 24,769,000
McKesson Corp. 720,000 26,488,800
Omnicare, Inc. 1,240,000 34,186,800
Quest Diagnostics, Inc. 720,000 33,696,000
Universal Health Services, Inc. Class B 720,000 30,268,800
WellPoint, Inc. (a) 1,000,000 38,870,000
--------------
246,895,900
- -------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.9%
Invitrogen Corp. (a) 940,000 27,062,600
- -------------------------------------------------------------------------------
Pharmaceuticals -- 9.0%
Eli Lilly & Co. 1,220,000 41,260,400
Forest Laboratories, Inc. (a) 1,500,000 34,845,000
Johnson & Johnson 790,000 48,458,600
King Pharmaceuticals, Inc. (a) 2,360,000 20,744,400
Pfizer, Inc. 5,960,000 105,551,600
Watson Pharmaceuticals, Inc. (a) 950,000 24,861,500
--------------
275,721,500
- -------------------------------------------------------------------------------
Total Health Care 622,745,800
===============================================================================
Industrials -- 13.0%
Aerospace & Defense -- 5.0%
General Dynamics Corp. 760,000 45,843,200
L-3 Communications Holdings, Inc. 410,000 33,279,700
Northrop Grumman Corp. 700,000 32,823,000
Raytheon Co. 800,000 40,888,000
--------------
152,833,900
- -------------------------------------------------------------------------------
Commercial Services & Supplies -- 1.8%
R.R. Donnelley & Sons Co. 1,210,000 20,049,700
Waste Management, Inc. 1,150,000 35,914,500
--------------
55,964,200
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 43
Schedule of Investments (concluded) Master Large Cap Value Portfolio
(Percentages shown are based on Net Assets)
Common Stocks Shares Value
===============================================================================
Industrials (concluded)
Electrical Equipment -- 0.5%
Cooper Industries Ltd. Class A 350,000 $ 10,832,500
Hubbell, Inc. Class B 110,000 3,945,700
--------------
14,778,200
- -------------------------------------------------------------------------------
Industrial Conglomerates -- 2.2%
General Electric Co. 3,430,000 66,919,300
- -------------------------------------------------------------------------------
Machinery -- 2.4%
AGCO Corp. (a) 310,000 9,771,200
Dover Corp. 970,000 30,816,900
Flowserve Corp. 150,000 8,538,000
Gardner Denver, Inc. (a) 670,000 17,165,400
Pentair, Inc. 210,000 5,804,400
Timken Co. 20,000 317,600
--------------
72,413,500
- -------------------------------------------------------------------------------
Professional Services -- 0.1%
Manpower, Inc. 140,000 4,358,200
- -------------------------------------------------------------------------------
Road & Rail -- 1.0%
Ryder System, Inc. 780,000 30,903,600
- -------------------------------------------------------------------------------
Total Industrials 398,170,900
===============================================================================
Information Technology -- 12.8%
Computers & Peripherals -- 3.8%
Hewlett-Packard Co. 720,000 27,561,600
Lexmark International, Inc. Class A (a) 760,000 19,630,800
QLogic Corp. (a) 2,600,000 31,252,000
Seagate Technology 2,480,000 16,789,600
Western Digital Corp. (a) 1,240,000 20,460,000
--------------
115,694,000
- -------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.7%
Ingram Micro, Inc. Class A (a) 340,000 4,532,200
Tech Data Corp. (a) 780,000 16,731,000
--------------
21,263,200
- -------------------------------------------------------------------------------
IT Services -- 1.5%
Affiliated Computer Services, Inc. Class A (a) 290,000 11,890,000
Computer Sciences Corp. (a) 1,120,000 33,779,200
--------------
45,669,200
- -------------------------------------------------------------------------------
Office Electronics -- 1.1%
Xerox Corp. 4,090,000 32,801,800
- -------------------------------------------------------------------------------
Semiconductors & Semiconductor
Equipment -- 1.3%
Integrated Device Technology, Inc. (a) 1,710,000 10,875,600
LSI Corp. (a) 7,590,000 29,221,500
--------------
40,097,100
- -------------------------------------------------------------------------------
Software -- 4.4%
BMC Software, Inc. (a) 1,050,000 27,111,000
CA, Inc. 2,030,000 36,134,000
Compuware Corp. (a) 3,490,000 22,266,200
Symantec Corp. (a) 2,550,000 32,079,000
Synopsys, Inc. (a) 1,050,000 19,194,000
--------------
136,784,200
- -------------------------------------------------------------------------------
Total Information Technology 392,309,500
===============================================================================
Materials -- 2.2%
Chemicals -- 1.3%
Eastman Chemical Co. 390,000 15,752,100
FMC Corp. 550,000 23,947,000
--------------
39,699,100
- -------------------------------------------------------------------------------
Metals & Mining -- 0.9%
Reliance Steel & Aluminum Co. 1,170,000 29,296,800
- -------------------------------------------------------------------------------
Total Materials 68,995,900
===============================================================================
Telecommunication Services -- 1.4%
Diversified Telecommunication Services -- 1.4%
AT&T Inc. 1,660,000 44,438,200
- -------------------------------------------------------------------------------
Total Telecommunication Services 44,438,200
===============================================================================
Total Long-Term Investments
(Cost -- $3,720,905,854) -- 100.2% 3,070,664,300
===============================================================================
===============================================================================
Beneficial
Interest
Short-Term Securities (000)
===============================================================================
BlackRock Liquidity Series, LLC
Cash Sweep Series, 4.60% (c)(d) $ 3,952 3,951,863
BlackRock Liquidity Series, LLC
Money Market Series, 1.57% (c)(d)(e) 32,481 32,480,900
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $36,432,763) -- 1.2% 36,432,763
===============================================================================
Total Investments
(Cost -- $3,757,338,617*) -- 101.4% 3,107,097,063
Liabilities in Excess of Other Assets -- (1.4)% (43,981,436)
--------------
Net Assets -- 100.0% $3,063,115,627
==============
* The cost and unrealized appreciation (depreciation) of investments as of
October 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ....................................... $ 3,850,065,828
===============
Gross unrealized appreciation ........................ $ 150,978,368
Gross unrealized depreciation ........................ (893,947,133)
---------------
Net unrealized depreciation .......................... $ (742,968,765)
===============
(a) Non-income producing security.
(b) Security, or a portion of security, is on loan.
(c) Represents the current yield as of report date.
(d) Investments in companies considered to be an affiliate of the Portfolio,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
--------------------------------------------------------------------------
Net
Affiliate Activity Income
--------------------------------------------------------------------------
BlackRock Liquidity Series, LLC
Cash Sweep Series $ 3,941,248 $ 125,056
BlackRock Liquidity Series, LLC
Money Market Series $(538,611,350) $1,943,004
--------------------------------------------------------------------------
(e) Security was purchased with the cash proceeds from securities loans.
o For Portfolio compliance purposes, the Portfolio's sector and industry
classifications refer to any one or more of the sector and industry
sub-classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Portfolio management. This
definition may not apply for purposes of this report, which may combine
sector and industry sub-classifications for reporting ease. These sector
and industry classifications are unaudited.
See Notes to Financial Statements.
44 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Statements of Assets and Liabilities Master Large Cap Series LLC
Master Large Master Large Master Large
Cap Core Cap Growth Cap Value
October 31, 2008 Portfolio Portfolio Portfolio
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments at value -- unaffiliated 1,2 ............................... $ 2,847,093,764 $ 668,129,976 $ 3,070,664,300
Investments at value -- affiliated 3 ................................... 11,588,400 4,794,000 36,432,763
Investments sold receivable ............................................ 45,760,045 24,991,595 45,306,613
Investments sold receivable -- affiliated .............................. -- 272,500 3,137,500
Dividends receivable ................................................... 2,433,100 352,370 2,670,700
Securities lending income receivable -- affiliated ..................... 223,735 43,876 247,224
Interest receivable .................................................... 1,883 900 --
Prepaid expenses ....................................................... 99,276 21,965 95,510
Other assets ........................................................... 2,011 181 99,035
-------------------------------------------------------
Total assets ........................................................... 2,907,202,214 698,607,363 3,158,653,645
-------------------------------------------------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Collateral at value -- securities loaned ............................... 11,588,400 4,794,000 32,480,900
Bank overdraft ......................................................... 6,233,552 1,604,700 --
Investments purchased payable .......................................... 34,529,698 23,456,373 52,135,328
Withdrawals payable from investor ...................................... 6,504,044 2,356,817 9,313,348
Investments purchased payable -- affiliates ............................ 3,410,000 -- 69,085
Investment advisory fees payable ....................................... 1,137,920 283,690 1,291,546
Other affiliates payable ............................................... 23,952 5,552 26,340
Officer's and Directors' fees payable .................................. 471 111 520
Other accrued expenses payable ......................................... 259,402 143,418 220,951
-------------------------------------------------------
Total liabilities ...................................................... 63,687,439 32,644,661 95,538,018
-------------------------------------------------------
Net Assets ............................................................. $ 2,843,514,775 $ 665,962,702 $ 3,063,115,627
=======================================================
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Investors' capital ..................................................... $ 3,417,870,371 $ 806,948,054 $ 3,713,357,181
Net unrealized appreciation/depreciation ............................... (574,355,596) (140,985,352) (650,241,554)
-------------------------------------------------------
Net Assets ............................................................. $ 2,843,514,775 $ 665,962,702 $ 3,063,115,627
=======================================================
1 Cost -- unaffiliated ......................................... $ 3,421,449,360 $ 809,115,328 $ 3,720,905,854
=======================================================
2 Securities loaned at value ................................... $ 12,019,968 $ 4,811,950 $ 32,763,582
=======================================================
3 Cost -- affiliated ........................................... $ 11,588,400 $ 4,794,000 $ 36,432,763
=======================================================
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 45
Statements of Operations Master Large Cap Series LLC
Master Large Master Large Master Large
Cap Core Cap Growth Cap Value
Year Ended October 31, 2008 Portfolio Portfolio Portfolio
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends .............................................................. $ 60,423,512 $ 10,476,436 $ 77,751,307
Securities lending -- affiliated ....................................... 2,505,518 532,649 1,943,004
Income -- affiliated ................................................... 47,261 37,127 179,408
-------------------------------------------------------
Total income ........................................................... 62,976,291 11,046,212 79,873,719
-------------------------------------------------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory .................................................... 20,282,735 4,995,410 22,131,879
Accounting services .................................................... 704,837 342,759 703,315
Custodian .............................................................. 615,937 143,303 541,106
Professional ........................................................... 92,678 56,961 87,896
Officer and Directors .................................................. 69,965 28,916 71,242
Printing ............................................................... 6,931 1,744 7,378
Miscellaneous .......................................................... 84,660 22,075 80,669
-------------------------------------------------------
Total expenses ......................................................... 21,857,743 5,591,168 23,623,485
-------------------------------------------------------
Net investment income .................................................. 41,118,548 5,455,044 56,250,234
-------------------------------------------------------
===================================================================================================================================
Realized and Unrealized Loss
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investments ..................................... (521,502,159) (114,597,872) (586,455,313)
Net change in unrealized appreciation/depreciation on investments ...... (1,536,726,590) (333,142,941) (1,366,434,994)
-------------------------------------------------------
Total realized and unrealized loss ..................................... (2,058,228,749) (447,740,813) (1,952,890,307)
-------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations ................... $(2,017,110,201) $ (442,285,769) $(1,896,640,073)
=======================================================
See Notes to Financial Statements.
46 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Statements of Changes in Net Assets Master Large Cap Series LLC
(As Restated for 2007. See Note 6)
Master Large Cap Core Portfolio Master Large Cap Growth Portfolio
--------------------------------- ---------------------------------
Year Ended Year Ended
October 31, October 31,
--------------------------------- ---------------------------------
Increase (Decrease) in Net Assets: 2008 2007 2008 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income ...................................... $ 41,118,548 $ 27,760,104 $ 5,455,044 $ 2,458,062
Net realized gain (loss) ................................... (521,502,159) 527,140,752 (114,597,872) 69,759,009
Net change in unrealized appreciation/depreciation ......... (1,536,726,590) 22,249,344 (333,142,941) 89,197,066
--------------------------------- ---------------------------------
Net increase (decrease) in net assets resulting from
operations ............................................... (2,017,110,201) 577,150,200 (442,285,769) 161,414,137
--------------------------------- ---------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions ................................ 986,366,566 1,415,268,883 469,632,427 596,750,862
Fair value of withdrawals .................................. (1,775,472,579) (219,326,884) (595,379,184) (309,546,572)
--------------------------------- ---------------------------------
Net increase (decrease) in net assets derived
from capital transactions ................................ (789,106,013) 1,195,941,999 (125,746,757) 287,204,290
--------------------------------- ---------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................... (2,806,216,214) 1,773,092,199 (568,032,526) 448,618,427
Beginning of year .......................................... 5,649,730,989 3,876,638,790 1,233,995,228 785,376,801
--------------------------------- ---------------------------------
End of year ................................................ $ 2,843,514,775 $ 5,649,730,989 $ 665,962,702 $ 1,233,995,228
================================= =================================
Statements of Changes in Net Assets Master Large Cap Series LLC
Master Large Cap Value Portfolio
-----------------------------------
Year Ended
October 31,
-----------------------------------
Increase (Decrease) in Net Assets: 2008 2007
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income ...................................................................... $ 56,250,234 $ 45,367,286
Net realized gain (loss) ................................................................... (586,455,313) 338,339,351
Net change in unrealized appreciation/depreciation ......................................... (1,366,434,994) 147,211,110
-----------------------------------
Net increase (decrease) in net assets resulting from operations ............................ (1,896,640,073) 530,917,747
-----------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions ................................................................ 1,889,127,025 2,162,748,781
Fair value of withdrawals .................................................................. (2,321,525,876) (1,229,437,681)
-----------------------------------
Net increase (decrease) in net assets derived from capital transactions .................... (432,398,851) 933,311,100
-----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................................................... (2,329,038,924) 1,464,228,847
Beginning of year .......................................................................... 5,392,154,551 3,927,925,704
-----------------------------------
End of year ................................................................................ $ 3,063,115,627 $ 5,392,154,551
===================================
See Notes to Financial Statements.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 47
Financial Highlights Master Large Cap Series LLC
Master Large Cap Core Portfolio
--------------------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------------------
2008 2007 2006 2005 2004
==============================================================================================================================
Total Investment Return
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return ............ (38.84)% 13.94% 17.32% 18.35% 9.61%
======================================================================================
==============================================================================================================================
Ratios to Average Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 0.50% 0.49% 0.49% 0.51% 0.52%
======================================================================================
Net investment income .............. 0.93% 0.63% 0.58% 0.72% 0.57%
======================================================================================
==============================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000) ....................... $ 2,843,515 $ 5,649,731 $ 3,876,639 $ 2,666,699 $ 1,831,300
======================================================================================
Portfolio turnover ................. 109% 96% 88% 94% 136%
======================================================================================
Master Large Cap Growth Portfolio
--------------------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------------------
2008 2007 2006 2005 2004
==============================================================================================================================
Total Investment Return
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return ............ (37.96)% 17.47% 14.05% 12.47% 5.42%
======================================================================================
==============================================================================================================================
Ratios to Average Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses ..................... 0.56% 0.56% 0.56% 0.57% 0.59%
======================================================================================
Net investment income .............. 0.54% 0.25% 0.26% 0.33% 0.09%
======================================================================================
==============================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000) ....................... $ 665,963 $ 1,233,995 $ 785,377 $ 489,398 $ 344,400
======================================================================================
Portfolio turnover ................. 144% 87% 117% 132% 165%
======================================================================================
Financial Highlights Master Large Cap Series LLC
Master Large Cap Value Portfolio
----------------------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------------------
2008 2007 2006 2005 2004
===================================================================================================================================
Total Investment Return
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment return ........................... (36.54)% 12.72% 18.48% 21.93% 14.57%
============================================================================
===================================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses .................................... 0.51% 0.51% 0.53% 0.55% 0.56%
============================================================================
Net investment income ............................. 1.22% 0.95% 0.73% 0.80% 0.93%
============================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ..................... $ 3,063,116 $ 5,392,155 $ 3,927,926 $ 1,535,988 $ 810,489
============================================================================
Portfolio turnover ................................ 108% 72% 71% 95% 128%
============================================================================
See Notes to Financial Statements.
48 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Notes to Financial Statements Master Large Cap Series LLC
1. Organization and Significant Accounting Policies:
Master Large Cap Core Portfolio, Master Large Cap Growth Portfolio and Master
Large Cap Value Portfolio (the "Portfolios" or individually, a "Portfolio")
constitute the Master Large Cap Series LLC (the "Master 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. The Limited
Liability Company Agreement permits the Board of Directors (the "Board") to
issue non-transferable interests in the Master LLC, subject to certain
limitations. The Portfolios' 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
Portfolios:
Valuation of Investments: Equity investments traded on a recognized securities
exchange or the NASDAQ Global Market System are valued at the last reported sale
price that day or the NASDAQ official closing price, if applicable. For equity
investments traded on more than one exchange, the last reported sale price on
the exchange where the stock is primarily traded is used. Equity investments
traded on a recognized exchange for which there were no sales on that day are
valued at the last available bid price. If no bid price is available, the prior
day's price will be used, unless it is determined that such prior day's price no
longer reflects the fair value of the security. Short-term securities are valued
at amortized cost. The Portfolios value their investments in the BlackRock
Liquidity Series, LLC Money Market Series and BlackRock Liquidity Series, LLC
Cash Sweep Series at fair value, which is ordinarily based upon their pro-rata
ownership in the net assets of the underlying fund.
In the event that application of these methods of valuation results in a price
for an investment which is deemed not to be representative of the market value
of such investment, the investment will be valued by a method approved by the
Board as reflecting fair value ("Fair Value Assets"). When determining the price
for Fair Value Assets, the investment advisor and/or sub-advisor seeks to
determine the price that a Portfolio might reasonably expect to receive from the
current sale of that asset in an arm's-length transaction. Fair value
determinations shall be based upon all available factors that the investment
advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets
is subsequently reported to the Board or a committee thereof.
Investment Transactions and Investment Income: Investment trans-actions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis.
Securities Lending: A Portfolio may lend securities to financial institutions
that provide cash or securities issued or guaranteed by the U.S. government as
collateral, which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. The market value of
the loaned securities is determined at the close of business of the Portfolio
and any additional required collateral is delivered to the Portfolio on the next
business day. A Portfolio typically receives the income on the loaned securities
but does not receive the income on the collateral. Where a Portfolio receives
cash collateral, it may invest such collateral and retain the amount earned on
such investment, net of any amount rebated to the borrower. A Portfolio may
receive a flat fee for its loans. Loans of securities are terminable at any time
and the borrower, after notice, is required to return borrowed securities within
the standard time period for settlement of securities transactions. A Portfolio
may pay reasonable lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any other
reason, a Portfolio could experience delays and costs in gaining access to the
collateral. A Portfolio also could suffer a loss where the value of the invested
collateral falls below the market value of the borrowed securities, either in
the event of borrower default or in the event of losses on investments made with
cash collateral. For the year ended October 31, 2008, the Funds received only
cash collateral for any securities loaned.
Income Taxes: Each Portfolio is classified as a "pass-through entity" for
federal income tax purposes. As such, each investor in a Portfolio is treated as
owner of its proportionate share of the net assets, income, expenses and
realized and unrealized gains and losses of the Portfolio. Therefore, no federal
income tax provisions are required.
It is intended that each Portfolio's assets will be managed so an investor in
the Portfolio can satisfy the requirements of Subchapter M of the Internal
Revenue Code.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 49
Notes to Financial Statements (continued) Master Large Cap Series LLC
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 Portfolios'
financial statement disclosures 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. 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. In September 2008, FASB Staff
Position No. 133-1 and FASB Interpretation No. 45-4 (the "FSP"), "Disclosures
about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement
No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date
of FASB Statement No. 161," was issued and is effective for fiscal years and
interim periods ending after November 15, 2008. The FSP amends FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," to
require disclosures by sellers of credit derivatives, including credit
derivatives embedded in hybrid instruments. The FSP also clarifies the effective
date of FAS 161, whereby disclosures required by FAS 161 are effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. The impact on the Portfolios' financial statement
disclosures, if any, is currently being assessed.
Bank Overdraft: The Master Large Cap Core Portfolio and the Master Large Cap
Growth Portfolio each recorded a bank overdraft, which resulted from estimates
of available cash.
Other: Expenses directly related to one of the Portfolios are charged to that
Portfolio. 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, on behalf of each Portfolio, entered into an Investment Advisory
Agreement with BlackRock Advisors, LLC (the "Advisor"), an indirect, wholly
owned subsidiary of BlackRock, Inc., to provide investment advisory and
administration services. Merrill Lynch & Co. Inc. ("Merrill Lynch") and The PNC
Financial Services Group, Inc. ("PNC") are principal owners of BlackRock, Inc.
The Advisor is responsible for the management of each Portfolio's investments
and provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Portfolio. For such services the
Master Large Cap Core Portfolio pays the Advisor a monthly fee at an annual rate
of 0.50% of the average daily net assets not exceeding $1 billion, 0.45% of
average daily net assets in excess of $1 billion but not exceeding $5 billion
and 0.40% of average daily net assets in excess of $5 billion; the Master Large
Cap Growth Portfolio pays the Advisor a monthly fee at an annual rate of 0.50%
of the average daily net assets not exceeding $5 billion and 0.45% of average
daily net assets in excess of $5 billion; and the Master Large Cap Value
Portfolio pays the Advisor a monthly fee at an annual rate of 0.50% of the
average daily net assets not exceeding $3 billion and 0.45% of average daily net
assets in excess of $3 billion.
The Advisor has entered into a separate sub-advisory agreement with BlackRock
Investment Management, LLC ("BIM"), an affiliate of the Advisor, with respect to
each Portfolio under which the Advisor pays BIM for services it provides, a
monthly fee that is a percentage of the investment advisory fee paid by a
Portfolio to the Advisor.
For the year ended October 31, 2008, each Portfolio reimbursed the Advisor for
certain accounting services, which are included in accounting services in the
Statements of Operations. The reimbursements were as follows:
- --------------------------------------------------------------------------------
Accounting
Services
- --------------------------------------------------------------------------------
Master Large Cap Core Portfolio .................................... $79,621
Master Large Cap Growth Portfolio .................................. $18,111
Master Large Cap Value Portfolio ................................... $83,040
- --------------------------------------------------------------------------------
The Master LLC has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), a wholly owned subsidiary of Merrill
Lynch, or its affiliates. As of October 31, 2008, Master Large Cap Core
Portfolio, Master Large Cap Growth Portfolio, and Master Large Cap Value
Portfolio lent securities with values of $4,015,680, $2,256,000, and $0,
respectively, to MLPF&S or its affiliates. Pursuant to that order, each
Portfolio has retained BIM as the securities lending agent for a fee based on a
share of the returns on investment of cash collateral. BIM may, on behalf of a
Portfolio, invest cash collateral received by the Portfolio for such loans,
among other things, in a private investment company managed by the Advisor or in
registered money market funds advised by the Advisor or its affiliates. For the
year ended October 31, 2008, BIM received $608,113, $130,236, and $431,465 in
securities lending agent fees for Master Large Cap Core Portfolio, Master Large
Cap Growth Portfolio, and Master Large Cap Value Portfolio, respectively.
50 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Notes to Financial Statements (concluded) Master Large Cap Series LLC
The Portfolios may earn income on positive cash balances in demand deposit
accounts. For the year ended October 31, 2008, the Portfolios earned the
following amounts, which are included in income -- affiliated in the Statements
of Operations:
- --------------------------------------------------------------------------------
Master Large Cap Core Portfolio ..................................... $36,030
Master Large Cap Growth Portfolio ................................... $ 4,795
Master Large Cap Value Portfolio .................................... $54,352
- --------------------------------------------------------------------------------
Certain officers and/or directors of the Master LLC are officers and/or
directors of BlackRock, Inc. or its affiliates. Each Portfolio reimburses the
Advisor for compensation paid to the Master LLC's Chief Compliance Officer.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 2008 were as follows:
- --------------------------------------------------------------------------------
Purchases Sales
- --------------------------------------------------------------------------------
Master Large Cap Core Portfolio ............ $4,835,571,071 $5,584,713,693
Master Large Cap Growth Portfolio .......... $1,447,849,210 $1,567,940,810
Master Large Cap Value Portfolio ........... $4,993,576,246 $5,371,430,945
- --------------------------------------------------------------------------------
4. Short-Term Borrowings:
The Master LLC, on behalf of the Portfolios, along with certain other funds
managed by the Advisor and its affiliates, is party to a $500,000,000 credit
agreement with a group of lenders, which expired in November 2008 and was
subsequently renewed until November 2009. A Portfolio may borrow under the
credit agreement to fund shareholder redemptions and for other lawful purposes
other than for leverage. A Portfolio may borrow up to the maximum amount
allowable under the Portfolio's current Prospectus and Statement of Additional
Information, subject to various other legal, regulatory or contractual limits.
Each Portfolio pays a commitment fee of 0.06% per annum based on the Portfolio's
pro rata share of the unused portion of the credit agreement, which is included
in miscellaneous in the Statements of Operations. Amounts borrowed under the
credit agreement bear interest at a rate equal to, at each fund's election, the
federal funds rate plus 0.35% or a base rate as defined in the credit agreement.
The Portfolios did not borrow under the credit agreement during the year ended
October 31, 2008.
5. Acquisition:
Master Large Cap Core Portfolio
On September 24, 2007, an investor of Master Large Cap Core Portfolio ("Master
Large Cap Core") acquired all of the net assets of BlackRock Investment Trust
Portfolio of BlackRock Funds, pursuant to a plan of reorganization. As a result
of the reorganization, which included $286,539,853 of net unrealized
appreciation, Master Large Cap Core received an in-kind contribution of
portfolio securities.
6. Restatement:
Master Large Cap Core Portfolio
During the current year's financial reporting process, Master Large Cap Core
determined that the net unrealized appreciation recognized as a result of the
September 24, 2007 reorganization described in Note 5 should have been reported
in the financial statements as proceeds received from contributions rather than
as part of the net change in unrealized appreciation for the year ended October
31, 2007. Accordingly, Master Large Cap Core has restated its Statement of
Changes in Net Assets for the year ended October 31, 2007 to appropriately
reduce the net change in unrealized appreciation/depreciation and increase the
proceeds from contributions by a corresponding amount.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets Previously
For the Year Ended October 31, 2007 Reported Restated
- --------------------------------------------------------------------------------
Net change in unrealized
appreciation/depreciation ................ $ 308,789,197 $ 22,249,344
Net increase in net assets
resulting from operations ................ $ 863,690,053 $ 577,150,200
Proceeds from contributions ................ $1,128,729,030 $1,415,268,883
Net increase (decrease) in net assets
derived from capital transactions ........ $ 909,402,146 $1,195,941,999
- --------------------------------------------------------------------------------
7. Subsequent Events:
On September 15, 2008, Bank of America Corporation announced that it has agreed
to acquire Merrill Lynch, one of the principal owners of BlackRock, Inc. The
purchase has been approved by the shareholders and directors of both companies
and certain regulators. Subject to other regulatory approvals, the transaction
is expected to close on or about December 31, 2008.
Master Large Cap Core Portfolio
On November 14, 2008 (the "Reorganization Date"), an investor of Master Large
Cap Core acquired all of the assets and certain stated liabilities of PNC Growth
& Income Fund (the "PNC Fund"), a series of PNC Funds, Inc. The reorganization
was pursuant to an Agreement and Plan of Reorganization, which was approved by
the shareholders of the PNC Fund on October 31, 2008. As a result of the
reorganization, which included $59,817,678 of net unrealized depreciation,
Master Large Cap Core received an in-kind contribution of portfolio securities.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 51
Report of Independent Registered Public Accounting Firm
Master Large Cap Series LLC
To the Investors and Board of Directors of Master Large Cap Series LLC:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments of Master Large Cap Series LLC (the "Master LLC"),
comprising Master Large Cap Core Portfolio, Master Large Cap Growth Portfolio
and Master Large Cap Value Portfolio, as of October 31, 2008, the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Master LLC's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The
Master LLC is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Master LLC's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of October 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
Large Cap Core Portfolio, Master Large Cap Growth Portfolio and Master Large Cap
Value Portfolio of Master Large Cap Series LLC, as of October 31, 2008, the
results of their operations for the year then ended, the changes in their 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.
As discussed in Note 6, the Statement of Changes in Net Assets of Master Large
Cap Core Portfolio for the year ended October 31, 2007, has been restated.
Deloitte & Touche LLP
Princeton, New Jersey
December 30, 2008
52 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
BlackRock Large Cap Core Fund (the "Large Cap Core Fund"), BlackRock Large Cap
Growth Fund (the "Large Cap Growth Fund") and BlackRock Large Cap Value Fund
(the "Large Cap Value Fund") (each a "Fund"), each a series of BlackRock Large
Cap Series Funds, Inc. (the "Series Fund"), currently invest all of their
investable assets in, respectively, Master Large Cap Core Portfolio, Master
Large Cap Growth Portfolio and Master Large Cap Value Portfolio, each a
portfolio (each a "Master Portfolio") of Master Large Cap Series LLC (the
"Master LLC"). Accordingly, the Funds do not require investment advisory
services, since all investments are made at the Master Portfolio level.
The Board of Directors of the Master LLC met in person in April and June 2008 to
consider the approval of the Master LLC's investment advisory agreement with
BlackRock Advisors, LLC (the "Advisor") on behalf of each Master Portfolio (the
"Advisory Agreement"). The Board of the Master LLC also considered the approval
of the subadvisory agreement between the Advisor and BlackRock Investment
Management, LLC (the "Subadvisor") with respect to each Master Portfolio (the
"Subadvisory Agreement"). The Advisor and the Subadvisor are referred to herein
as "BlackRock." The Advisory Agreement and the Subadvisory Agreement are
referred to herein as the "Agreements." Since each Fund invests all of its
investable assets in the corresponding Master Portfolio, the Board of Directors
of the Series Fund also considered the approval of the Agreements. For ease and
clarity of presentation, the Board of Directors of the Master LLC and the Board
of Directors of the Series Fund, which are comprised of the same thirteen
individuals, are herein referred to collectively as the "Boards," the members of
which are referred to as "Directors."
Activities and Composition of the Boards
The Boards each consist of thirteen individuals, eleven of whom are not
"interested persons" of either the Series Fund or the Master LLC as defined in
the Investment Company Act of 1940, as amended (the "1940 Act") (the
"Independent Directors"). The Boards are responsible for the oversight of the
operations of the Series Fund and the Master LLC, as pertinent, and perform the
various duties imposed on the directors of investment companies by the 1940 Act.
The Independent Directors have retained independent legal counsel to assist them
in connection with their duties. The Co-Chairs of each Board are both
Independent Directors. The Boards established four standing committees: an Audit
Committee, a Governance and Nominating Committee, a Compliance Committee and a
Performance Oversight Committee, each of which is composed of, and chaired by,
Independent Directors.
The Agreements
Upon the consummation of the combination of BlackRock's investment management
business with Merrill Lynch & Co., Inc.'s investment management business,
including Merrill Lynch Investment Managers, L.P. and certain affiliates (the
"Transaction"), the Master LLC on behalf of each Master Portfolio entered into
an Advisory Agreement with the Advisor with an initial two-year term and the
Advisor entered into a Subadvisory Agreement with the Subadvisor with respect to
each Master Portfolio with an initial two-year term. Consistent with the 1940
Act, prior to the expiration of each Agreement's initial two-year term, the
Boards are required to consider the continuation of the Agreements on an annual
basis. In connection with this process, the Boards assessed, among other things,
the nature, scope and quality of the services provided to each Fund and/or
Master Portfolio by the personnel of BlackRock and its affiliates, including
investment management, administrative services, shareholder services, oversight
of fund accounting and custody, marketing services and assistance in meeting
legal and regulatory requirements. The Boards also received and assessed
information regarding the services provided to each Fund and/or Master Portfolio
by certain unaffiliated service providers.
Throughout the year, the Boards, acting directly and through their committees,
consider at each of their meetings factors that are relevant to their annual
consideration of the renewal of the Agreements, including the services and
support provided to each Fund and/or Master Portfolio and their shareholders.
Among the matters the Boards considered, as pertinent, were: (a) investment
performance for one, three and five years, as applicable, against peer funds, as
well as senior management's and portfolio managers' analysis of the reasons for
underperformance, if applicable; (b) fees, including advisory, administration,
if applicable, and other fees paid to BlackRock and its affiliates by each Fund
and/or Master Portfolio, such as transfer agency fees and fees for marketing and
distribution; (c) Fund and/or Master Portfolio operating expenses; (d) the
resources devoted to and compliance reports relating to the investment
objective, policies and restrictions of each Fund and Master Portfolio; (e) the
compliance of each Fund and Master Portfolio with its Code of Ethics and
compliance policies and procedures; (f) the nature, cost and character of
non-investment management services provided by BlackRock and its affiliates; (g)
BlackRock's and other service providers' internal controls; (h) BlackRock's
implementation of the proxy voting guidelines approved by the Boards; (i) the
use of brokerage commissions and spread and execution quality; (j) valuation and
liquidity procedures; and (k) periodic overview of BlackRock's business,
including BlackRock's response to the increasing scale of its business.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 53
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(continued)
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April 16, 2008 meeting at which approval of
the Agreements was to be considered, the Boards requested and received materials
specifically relating to the Agreements. The Boards are engaged in an ongoing
process with BlackRock to continuously review the nature and scope of the
information provided to better assist their deliberations. These materials
included (a) information independently compiled and prepared by Lipper, Inc.
("Lipper") on each Fund's fees and expenses and the investment performance of
each Fund as compared with a peer group of funds as determined by Lipper
("Peers"); (b) information on the profitability of the Agreements to BlackRock
and certain affiliates, including their other relationships with the Funds
and/or Master Portfolios, and a discussion of fall-out benefits; (c) a general
analysis provided by BlackRock concerning investment advisory fees charged to
other clients, such as institutional and closed-end funds, under similar
investment mandates, as well as the performance of such other clients; (d) a
report on economies of scale; (e) sales and redemption data regarding each
Fund's shares; and (f) an internal comparison of management fees classified by
Lipper, if applicable. At the April 16, 2008 meeting, the Boards requested and
subsequently received from BlackRock (i) comprehensive analysis of total
expenses on a fund-by-fund basis; (ii) further analysis of investment
performance; (iii) further data regarding the profitability, size and fee levels
of each Fund and Master Portfolio; and (iv) additional information on sales and
redemptions.
The Boards also considered other matters they deemed important to the approval
process, such as payments made to BlackRock or its affiliates relating to the
distribution of the Fund's shares, services related to the valuation and pricing
of portfolio holdings of the Master Portfolios, allocation of Master Portfolio
brokerage fees (including the benefits of "soft dollars"), and direct and
indirect benefits to BlackRock and its affiliates from their relationship with
the Funds and the Master Portfolios. The Boards did not identify any particular
information as controlling, and each Director may have attributed different
weights to the various items considered.
At an in-person meeting held on April 16, 2008, the Boards discussed and
considered the proposed renewal of the Agreements. As a result of the
discussions, the Boards requested and BlackRock provided additional information,
as detailed above, in advance of the June 3 - 4, 2008 Board meeting. At the
in-person meeting held on June 3 - 4, 2008, the Boards, including the
Independent Directors, unanimously approved the continuation of (a) the Advisory
Agreement between the Advisor and the Master LLC on behalf of each Master
Portfolio for a one-year term ending June 30, 2009 and (b) the Subadvisory
Agreement between the Advisor and the Subadvisor with respect to each Master
Portfolio for a one-year term ending June 30, 2009. The Boards considered all
factors they believed relevant with respect to each Fund and/or Master
Portfolio, as applicable, including, among other factors: (a) the nature, extent
and quality of the services provided by BlackRock; (b) the investment
performance of the Fund, the Master Portfolio and BlackRock portfolio
management; (c) the advisory fee and the cost of the services and profits to be
realized by BlackRock and certain affiliates from the relationships with the
Fund and the Master Portfolio; and (d) economies of scale.
A. Nature, Extent and Quality of the Services: The Boards, including the
Independent Directors, reviewed the nature, extent and quality of services
provided by BlackRock, including the investment advisory services and the
resulting performance of each Fund and Master Portfolio. The Boards compared
each Fund's performance to the performance of a comparable group of mutual funds
as classified by Lipper and the performance of at least one relevant index or
combination of indices. The Boards met with BlackRock's senior management
personnel responsible for investment operations, including the senior investment
officers. The Boards also reviewed the materials provided by each Master
Portfolio's portfolio management team discussing Master Portfolio performance
and the Master Portfolio's investment objective, strategies and outlook.
The Boards considered, among other factors, the number, education and experience
of BlackRock's investment personnel generally, and of each Master Portfolio's
portfolio management team; BlackRock's portfolio trading capabilities;
BlackRock's use of technology; BlackRock's commitment to compliance; and
BlackRock's approach to training and retaining portfolio managers and other
research, advisory and management personnel. The Boards also reviewed
BlackRock's compensation structure with respect to the portfolio management
teams of the Master Portfolios and BlackRock's ability to attract and retain
high-quality talent.
In addition to advisory services, the Boards considered the quality of the
administrative and non-investment advisory services provided to the Funds and
the Master Portfolios. BlackRock and its affiliates provide the Funds and the
Master Portfolios with certain administrative, transfer agency, shareholder and
other services (in addition to any such services provided to the Funds and the
Master Portfolios by third parties) and officers and other personnel as are
necessary for the operations of the Funds and the Master Portfolios. In addition
to investment advisory services, BlackRock and its affiliates provide the Funds
and the Master Portfolios with other services, including (a) preparing
disclosure documents, such as the prospectus, the statement of additional
information and shareholder reports; (b) assisting with daily accounting and
pricing; (c) overseeing and coordinating the activities of other service
providers; (d) organizing Board meetings and preparing the materials for such
Board meetings; (e) providing legal and compliance support; and (f) performing
other administrative functions necessary for the operation of the Funds and the
Master Portfolios, such as tax reporting and fulfilling regulatory filing
requirements. The Boards reviewed the structure and duties of BlackRock's fund
administration, accounting, legal and compliance departments.
54 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(continued)
B. The Investment Performance of the Funds, the Master Portfolios and BlackRock:
The Boards, including the Independent Directors, also reviewed and considered
the performance history of each Fund. In preparation for the April 16, 2008
meeting, the Boards were provided with reports, independently prepared by
Lipper, which included a comprehensive analysis of each Fund's performance. The
Boards also reviewed a narrative and statistical analysis of the Lipper data
that was prepared by BlackRock, which analyzed various factors that affect
Lipper's rankings. In connection with its review, the Boards received and
reviewed information regarding the investment performance of each Fund (and
related performance of the corresponding Master Portfolio) as compared to a
representative group of similar funds as determined by Lipper and to all funds
in the Fund's applicable Lipper category. The Boards were provided with a
description of the methodology used by Lipper to select peer funds. The Boards
regularly review the performance of each Fund and Master Portfolio throughout
the year. The Boards attach more importance to performance over relatively long
periods of time, typically three to five years.
The Boards noted that both the Large Cap Core Fund and the Large Cap Value Fund
had investment performance during at least two of the one-, three- and five-year
periods that was at least equal to or above the median of the respective Fund's
Peers. The Boards noted that the Large Cap Growth Fund (a) underperformed its
benchmark, the Russell 1000 Growth Index, and the median of its Peers for the
one-year period due in large part to BlackRock's stock selection and (b)
performed above its benchmark index during the three- and five-year periods, but
below the median of the Fund's Peers. The Boards have had continuing discussions
with BlackRock regarding the investment approach and performance of the Large
Cap Growth Fund. BlackRock advised the Boards that it intends to continue its
disciplined valuation approach, believing that buying better-than-market growth
opportunities for better-than-market valuation is in the long-term interest of
investors.
C. Consideration of the Advisory Fees and the Cost of the Services and Profits
to be Realized by BlackRock and its Affiliates from the Relationship with the
Funds and the Master Portfolios: The Boards, including the Independent
Directors, reviewed each Master Portfolio's contractual advisory fee rates
compared with the other funds in the corresponding Fund's Lipper category. They
also compared each Fund's total expenses to those of other comparable funds. The
Boards considered the services provided and the fees charged by BlackRock to
other types of clients with similar investment mandates, including separately
managed institutional accounts.
The Boards received and reviewed statements relating to BlackRock's financial
condition and profitability with respect to the services it provided to the
Funds and the Master Portfolios. The Boards were also provided with a
profitability analysis that detailed the revenues earned and the expenses
incurred by BlackRock and certain affiliates that provide services to the Funds
and the Master Portfolios. The Boards reviewed BlackRock's profitability with
respect to each Fund/Master Portfolio and each fund the Boards currently oversee
for the year ended December 31, 2007 compared to aggregate profitability data
provided for the year ended December 31, 2005.
In addition, the Boards considered the cost of the services provided to the
Funds and the Master Portfolios by BlackRock, and BlackRock's and its
affiliates' profits relating to the management and distribution of the Funds and
the Master Portfolios and the other funds advised by BlackRock and its
affiliates. As part of their analysis, the Boards reviewed BlackRock's
methodology in allocating its costs to the management of each Fund and Master
Portfolio and concluded that there was a reasonable basis for the allocation.
The Boards also considered whether BlackRock has the financial resources
necessary to attract and retain high-quality investment management personnel to
perform its obligations under the Agreements and to continue to provide the high
quality of services that are expected by the Boards.
The Boards noted that each Master Portfolio paid contractual advisory fees,
prior to any expense reimbursements, lower than or equal to the median of the
corresponding Fund's Peers. The Boards noted that BlackRock has contractually
agreed to waive and/or reimburse fees and/or expenses with respect to the Large
Cap Core Fund in order to limit the Large Cap Core Fund's expenses. The Boards
also took into account that each Master Portfolio has an advisory fee
arrangement that includes breakpoints that adjust the fee rate downward as the
size of the Master Portfolio increases, thereby allowing shareholders the
potential to participate in economies of scale.
D. Economies of Scale: The Boards, including the Independent Directors,
considered the extent to which economies of scale might be realized as the
assets of the Funds and the Master Portfolios increase and whether there should
be changes in the advisory fee rate or structure in order to enable the Funds
and the Master Portfolios to participate in these economies of scale. The
Boards, including the Independent Directors, considered whether the shareholders
would benefit from economies of
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 55
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(concluded)
scale and whether there was potential for future realization of economies with
respect to the Funds and the Master Portfolios. The Boards considered that the
funds in the BlackRock fund complex share common resources and, as a result, an
increase in the overall size of the complex could permit each fund to incur
lower expenses than it would otherwise as a stand-alone entity. The Boards also
considered the anticipated efficiencies in the processes of BlackRock's overall
operations as it continues to add personnel and commit capital to expand the
scale of operations. The Boards found, based on their review of comparable
funds, that the management fee of each Fund/Master Portfolio is appropriate in
light of the scale of the Fund/Master Portfolio.
E. Other Factors: The Boards also took into account other ancillary or
"fall-out" benefits that BlackRock may derive from its relationship with the
Funds and the Master Portfolios, both tangible and intangible, such as
BlackRock's ability to leverage its investment professionals who manage other
portfolios, an increase in BlackRock's profile in the investment advisory
community, and the engagement of BlackRock's affiliates as service providers to
the Funds and the Master Portfolios, including for administrative, transfer
agency and distribution services. The Boards also noted that BlackRock may use
third-party research, obtained by soft dollars generated by transactions in the
Master Portfolios, to assist itself in managing all or a number of its other
client accounts.
In connection with their consideration of the Agreements, the Boards also
received information regarding BlackRock's brokerage and soft dollar practices.
The Boards received reports from BlackRock which included information on
brokerage commissions and trade execution practices throughout the year.
Conclusion
The Boards approved the continuation of (a) the Advisory Agreement between the
Advisor and the Master LLC on behalf of each Master Portfolio for a one-year
term ending June 30, 2009 and (b) the Subadvisory Agreement between the Advisor
and the Subadvisor with respect to each Master Portfolio for a one-year term
ending June 30, 2009. Based upon their evaluation of all these factors in their
totality, the Boards, including the Independent Directors, were satisfied that
the terms of the Agreements were fair and reasonable and in the best interest of
each Fund and Master Portfolio and the shareholders of each Fund. In arriving at
a decision to approve the Agreements, the Boards did not identify any single
factor or group of factors as all-important or controlling, but considered all
factors together. The Independent Directors were also assisted by the advice of
independent legal counsel in making this determination. The contractual fee
arrangements for the Funds and the Master Portfolios reflect the results of
several years of review by the Directors and predecessor Directors, and
discussions between the Directors (and predecessor Directors) and BlackRock (and
predecessor advisors). Certain aspects of the arrangements may be the subject of
more attention in some years than in others, and the Directors' conclusions may
be based in part on their consideration of these arrangements in prior years.
56 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Officers and Directors
Number of
Position(s) BlackRock-
Held with Length of Time Advised Funds
Name, Address Fund/ Served as a Principal Occupation(s) and Portfolios
and Year of Birth Master LLC Director 2 During Past Five Years Overseen Public Directorships
====================================================================================================================================
Non-Interested Directors 1
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald W. Forbes Co-Chair of Since 2007 Professor Emeritus of Finance, 34 Funds None
40 East 52nd Street the Board of School of Business, State 81 Portfolios
New York, NY 10022 Directors and University of New York at Albany
1940 Director since 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
Rodney D. Johnson Co-Chair of Since 2007 President, Fairmount Capital 34 Funds None
40 East 52nd Street the Board of Advisors, Inc. since 1987; 81 Portfolios
New York, NY 10022 Directors and Director, Fox Chase Cancer
1941 Director Center since 2002; Member of the
Archdiocesan Investment
Committee of the Archdiocese of
Philadelphia since 2003;
Director, The Committee of
Seventy (civic) since 2006.
- ------------------------------------------------------------------------------------------------------------------------------------
David O. Beim Director Since 2007 Professor of Finance and 34 Funds None
40 East 52nd Street Economics at the Columbia 81 Portfolios
New York, NY 10022 University Graduate School of
1940 Business since 1991; Trustee,
Phillips Exeter Academy since
2002; Formerly Chairman, Wave
Hill Inc. (public garden and
cultural center) from 1990 to
2006.
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Matina Horner Director Since 2007 Formerly Executive Vice 34 Funds NSTAR (electric and
40 East 52nd Street President of Teachers Insurance 81 Portfolios gas utility)
New York, NY 10022 and Annuity Association and
1939 College Retirement Equities Fund
from 1989 to 2003.
- ------------------------------------------------------------------------------------------------------------------------------------
Herbert I. London Director and Since 1999 Professor Emeritus, New York 34 Funds AIMS Worldwide, Inc.
40 East 52nd Street Member of University since 2005; John M. 81 Portfolios (marketing)
New York, NY 10022 the Audit Olin Professor of Humanities,
1939 Committee New York University from 1993 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,
InnoCentive, Inc. (strategic
solutions company) since 2005;
Director of Cerego, LLC
(software development and
design) since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. Montgomery Director Since 2007 Professor, Harvard Business 34 Funds Newell Rubbermaid,
40 East 52nd Street School since 1989; Director, 81 Portfolios Inc. (manufacturing)
New York, NY 10022 Harvard Business School
1952 Publishing since 2005; Director,
McLean Hospital since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph P. Platt, Jr. Director Since 2007 Director, The West Penn 34 Funds Greenlight Capital
40 East 52nd Street Allegheny Health System (a 81 Portfolios Re, Ltd (reinsurance
New York, NY 10022 not-for-profit health system) company)
1947 since 2008; Partner, Amarna
Corporation, 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 34 Funds None
40 East 52nd Street Company (management and 81 Portfolios
New York, NY 10022 financial consulting firm) since
1945 1981.
- ------------------------------------------------------------------------------------------------------------------------------------
Toby Rosenblatt Director Since 2007 President, Founders Investments 34 Funds A.P. Pharma, Inc.
40 East 52nd Street Ltd. (private investments) since 81 Portfolios (specialty
New York, NY 10022 1999; Director of Forward pharmaceuticals)
1938 Management, LLC since 2007;
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.
- ------------------------------------------------------------------------------------------------------------------------------------
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 57
Officers and Directors (continued)
Number of
Position(s) BlackRock-
Held with Length of Time Advised Funds
Name, Address Fund/ Served as a Principal Occupation(s) and Portfolios
and Year of Birth Master LLC Director 2 During Past Five Years Overseen Public Directorships
====================================================================================================================================
Non-Interested Directors 1
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth L. Urish Chair of Since 2007 Managing Partner, Urish Popeck & 34 Funds None
40 East 52nd Street the Audit Co., LLC (certified public 81 Portfolios
New York, NY 10022 Committee accountants and consultants)
1951 and Director since 1976; Member of External
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 34 Funds None
40 East 52nd Street Member of the Joseph M. Katz School of 81 Portfolios
New York, NY 10022 the Audit Business, University of
1945 Committee Pittsburgh since 2005 and Dean
thereof from 1997 to 2005;
Director, Alkon Corporation
(pneumatics) since 1992;
Director, Indotronix
International (IT services)
since 2004; Director, Tippman
Sports (recreation) since 2005.
------------------------------------------------------------------------------------------------------------
1 Directors serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72.
2 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 board in 2007, each director 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 3
- ------------------------------------------------------------------------------------------------------------------------------------
Richard S. Davis Director Since 2007 Managing Director, BlackRock, 184 Funds None
40 East 52nd Street Inc. since 2005; Formerly Chief 295 Portfolios
New York, NY 10022 Executive Officer, State Street
1945 Research & Management Company
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. 184 Funds None
40 East 52nd Street since 2007; Formerly Managing 295 Portfolios
New York, NY 10022 Director, BlackRock, Inc. from
1947 1989 to 2007; Formerly Chief
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.
------------------------------------------------------------------------------------------------------------
3 Mr. Davis is an "interested person," as defined in the Investment Company Act of 1940, of the
Fund/Master LLC based on this position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an
"interested person" of the Fund/Master LLC due to his consulting arrangement with BlackRock, Inc. as
well as his ownership of BlackRock, Inc. and PNC securities. Directors serve until their resignation,
removal or death, or until December 31 of the year in which they turn 72.
58 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
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 Officers 1
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Fund Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Managing
40 East 52nd Street President and Director of Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund
New York, NY 10022 Chief Executive Asset Management, L.P. ("FAM") in 2006; First Vice President thereof
1960 Officer from 1997 to 2005; Treasurer thereof from 1999 to 2006 and Vice
President thereof from 1990 to 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Anne F. Ackerley Vice Since 2007 Managing Director of BlackRock, Inc. since 2000; Chief Operating Officer
40 East 52nd Street President of BlackRock's U.S. Retail Group since 2006; Head of BlackRock's Mutual
New York, NY 10022 Fund Group from 2000 to 2006; Merrill Lynch & Co., Inc. from 1984 to
1962 1986 and from 1988 to 2000, most recently as First Vice President and
Operating Officer of the Mergers and Acquisitions Group.
- ------------------------------------------------------------------------------------------------------------------------------------
Neal J. Andrews Chief Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Senior Vice
40 East 52nd Street Financial President and Line of Business Head of Fund Accounting and
New York, NY 10022 Officer Administration at PNC Global Investment Servicing (U.S.) Inc. (formerly
1966 PFPC Inc.) from 1992 to 2006.
- ------------------------------------------------------------------------------------------------------------------------------------
Jay M. Fife Treasurer Since 2007 Managing Director of BlackRock, Inc. since 2007 and Director in 2006;
40 East 52nd Street Formerly Assistant Treasurer of the MLIM/FAM-advised Funds from 2005 to
New York, NY 10022 2006; Director of MLIM Fund Services Group from 2001 to 2006.
1970
- ------------------------------------------------------------------------------------------------------------------------------------
Brian P. Kindelan Chief Since 2007 Chief Compliance Officer of the BlackRock-advised Funds since 2007;
40 East 52nd Street Compliance Anti-Money Laundering Officer of the BlackRock-advised Funds since 2007;
New York, NY 10022 Officer Managing Director and Senior Counsel of BlackRock, Inc. since 2005;
1959 Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to
2004 and Vice President and Senior Counsel thereof from 1998 to 2000;
Formerly Senior Counsel of The PNC Bank Corp. from 1995 to 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Howard B. Surloff Secretary Since 2007 Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds
40 East 52nd Street at BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of
New York, NY 10022 Goldman Sachs Asset Management, L.P. from 1993 to 2006.
1965
------------------------------------------------------------------------------------------------------------
1 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
Brown Brothers Harriman & Co.
Boston, MA 02109
Transfer Agent
PNC Global Investment
Servicing (U.S.) Inc.
Wilmington, DE 19809
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
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 59
Additional Information
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.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Funds' website or shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Funds' electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisors, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock website at http://www.blackrock.com/edelivery
2) Click on the applicable link and follow the steps to sign up
3) Log into your account
Householding
The Funds will mail only one copy of shareholder documents, including
prospectuses, annual and semi-annual reports and proxy statements, to
shareholders with multiple accounts at the same address. This practice is
commonly called "householding" and it is intended to reduce expenses and
eliminate duplicate mailings of shareholder documents. Mailings of your
shareholder documents may be householded indefinitely unless you instruct us
otherwise. If you do not want the mailing of these documents to be combined with
those for other members of your household, please contact the Funds at (800)
441-7762.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Funds use 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 (the
"SEC") website at http://www.sec.gov.
60 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
Additional Information (concluded)
Availability of Additional Information (concluded)
Availability of Proxy Voting Record
Information about how the Funds vote proxies relating to securities held in the
Funds' portfolios during the most recent 12-month period ended June 30 is
available upon request and without charge (1) at www.blackrock.com or by calling
(800) 441-7762 and (2) on the SEC's website at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Funds file their complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Funds' 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, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling (800) SEC-0330. The Funds' Forms N-Q may also be obtained upon request
and without charge by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 from 8:00 AM to 6:00 PM EST to get information about
your account balances, recent transactions and share prices. You can also reach
us on the Web at www.blackrock.com/funds.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock funds, as long as
their account is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover,
Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008 61
A World-Class Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all
investment styles and managed by experts in equity, fixed income and tax-exempt
investing.
Equity Funds
BlackRock All-Cap Global Resources Portfolio
BlackRock Asset Allocation Portfolio+
BlackRock Aurora Portfolio
BlackRock Balanced Capital Fund+
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Growth Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund+
BlackRock Global Dynamic Equity Fund
BlackRock Global Emerging Markets Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio
BlackRock Global SmallCap Fund
BlackRock Health Sciences Opportunities Portfolio*
BlackRock Healthcare Fund
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Diversification Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio
BlackRock International Value Fund
BlackRock Large Cap Core Fund
BlackRock Large Cap Core Plus Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Science & Technology Opportunities Portfolio
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
BlackRock Emerging Market Debt Portfolio
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Income Portfolio+
BlackRock Income Builder Portfolio+
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Long Duration Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Strategic Income Portfolio
BlackRock Total Return Fund
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* See the prospectus for information on specific limitations on investments
in the fund.
+ Mixed asset fund.
BlackRock mutual funds are currently distributed by BlackRock Investments, Inc.
You should consider the investment objectives, risks, charges and expenses of
the funds under consideration carefully before investing. Each fund's prospectus
contains this and other information and is available at www.blackrock.com or by
calling (800) 882-0052 or from your financial advisor. The prospectus should be
read carefully before investing.
62 BLACKROCK LARGE CAP SERIES FUNDS, INC. OCTOBER 31, 2008
These reports are not authorized for use as an offer of sale or a solicitation
of an offer to buy shares of the Funds unless accompanied or preceded by the
Funds' current prospectus. Past performance results shown in these reports
should not be considered a representation of future performance. Investment
returns and principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Statements and
other information herein are as dated and are subject to change.
BlackRock Large Cap Series Funds, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
BLACKROCK
#CAPSERIES-10/08
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 expert serving on its audit committee and (ii) each audit
committee financial expert is independent:
Kenneth L. Urish
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
- -----------------------------------------------------------------------------------------------------------------------------------
BlackRock Large
Cap Core Fund $6,800 $19,900 $0 $0 $6,100 $6,100 $1,049 $1,042
- -----------------------------------------------------------------------------------------------------------------------------------
BlackRock Large
Cap Growth Fund $6,800 $12,700 $0 $0 $6,100 $6,100 $1,049 $1,042
- -----------------------------------------------------------------------------------------------------------------------------------
BlackRock Large
Cap Value Fund $6,800 $12,700 $0 $0 $6,100 $6,100 $1,049 $1,042
- -----------------------------------------------------------------------------------------------------------------------------------
Master Large Cap
Core Portfolio $34,300 $44,200 $0 $0 $9,200 $9,200 $0 $0
- -----------------------------------------------------------------------------------------------------------------------------------
Master Large Cap
Growth Portfolio $31,300 $37,900 $0 $0 $9,200 $9,200 $0 $0
- -----------------------------------------------------------------------------------------------------------------------------------
Master Large Cap
Value Portfolio $31,300 $37,900 $0 $0 $9,200 $9,200 $0 $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
--------------------------------------------------------------------
BlackRock Large Cap Core Fund $294,649 $291,642
--------------------------------------------------------------------
BlackRock Large Cap Growth Fund $294,649 $291,642
--------------------------------------------------------------------
BlackRock Large Cap Value Fund $294,649 $291,642
--------------------------------------------------------------------
Master Large Cap Core Portfolio $296,700 $293,700
--------------------------------------------------------------------
Master Large Cap Growth Portfolio $296,700 $293,700
--------------------------------------------------------------------
Master Large Cap Value Portfolio $296,700 $293,700
--------------------------------------------------------------------
(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 of directors 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.
BlackRock Large Cap Series Funds, Inc. and Master Large Cap Series LLC
By: /s/ Donald C. Burke
-------------------
Donald C. Burke
Chief Executive Officer of
BlackRock Large Cap Series Funds, Inc. and Master Large Cap Series LLC
Date: December 19, 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
BlackRock Large Cap Series Funds, Inc. and Master Large Cap Series LLC
Date: December 19, 2008
By: /s/ Donald C. Burke
-------------------
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Large Cap Series Funds, Inc. and Master Large Cap Series LLC
Date: December 19, 2008