Despite continued
global headwinds, risk assets (such as equities) have generated
strong performance as investors sought meaningful yields in
the ongoing low-interest-rate environment. About this time
one year ago, concerns about Europes debt crisis dominated
the markets as political instability in Greece and severe deficit
and liquidity problems in Spain raised the specter of a full-blown
euro collapse. Investors were also discouraged by gloomy economic
reports from various parts of the world, particularly in China.
As the outlook for the global economy worsened, however, investors
grew increasingly optimistic that the worlds largest
central banks would intervene to stimulate growth. This theme,
along with the European Central Banks (ECBs)
firm commitment to preserve the euro currency bloc, drove most
asset classes higher through the summer of 2012. In early September,
the ECB announced it would purchase unlimited amounts of short
term sovereign bonds to support the regions debt-laden
countries. Days later, the US Federal Reserve announced its
own much-anticipated stimulus package.
Although financial
markets world-wide were buoyed by these aggressive policy actions,
risk assets weakened in the fall of 2012. Global trade began
to slow as many European countries fell into recession and
growth continued to decelerate in China. In the United States,
stocks slid on lackluster corporate earnings and volatility
rose in advance of the US Presidential election. In the post-election
environment, investors grew increasingly concerned over the
fiscal cliff, the automatic tax increases and spending
cuts that had been scheduled to take effect at the beginning
of 2013. There was widespread fear that the fiscal cliff would
push the United States into recession unless politicians could
agree upon alternate measures to reduce the nations deficit.
Worries that bipartisan gridlock would preclude a timely budget
deal triggered high levels of volatility in financial markets
around the world in the months leading up to the last day of
the year. Ultimately, the worst of the fiscal cliff was averted
with a last-minute tax deal, although the postponement of decisions
relating to spending cuts and the debt ceiling left some lingering
uncertainty.
Investors shook
off the nerve-wracking finale to 2012 and the New Year began
with a powerful relief rally in risk assets. Money that had
been pulled to the sidelines amid year-end tax-rate uncertainty
poured back into the markets in January. Key indicators signaling
modest but broad-based improvements in the worlds major
economies underpinned the rally. Underlying this aura of comfort
was the absence of negative headlines out of Europe. Against
this backdrop, global equities surged through January while
rising US Treasury yields pressured high quality fixed income
assets (as prices move in the opposite direction as yields).
However, bond
markets regained strength in February when economic momentum
slowed and investors toned down their risk appetite. US stocks
continued to rise, but at a more moderate pace. Uncertainty
about how long the Federal Reserve would maintain its monetary
easing bias drove high levels of volatility later in the month,
but these fears abated as the budget sequester (automatic spending
cuts scheduled to take effect March 1) began to appear imminent
and was deemed likely to deter any near-term changes in the
central banks policy stance. Improving labor market data
and rising home prices pushed US stocks higher at the end of
the period, with major indices reaching new all-time highs.
Outside the United States, equity prices weakened in the final
two months of the period due to a resurgence of macro risk
out of Europe. Italys February presidential election
ended in a stalemate, further propagating the ongoing theme
of political instability in the eurozone. In March, a severe
banking crisis in Cyprus underscored the fragility of the broader
European banking system.
For the 6- and
12-month periods ended March 31, 2013, US and international
stocks and high yield bonds posted strong gains, while emerging
market equities lagged as the pace of global growth failed
to impress investors. US Treasury yields were highly volatile
over the past 12 months. While remaining relatively low from
a historical standpoint, yields began inching higher in the
later part of the period, pressuring Treasuries and investment-grade
bonds. Tax-exempt municipal bonds, however, benefited from
favorable supply-and-demand dynamics. Near-zero short term
interest rates continued to keep yields on money market securities
near their all-time lows.
Markets have
always been unpredictable, but that does not mean investors
can delay taking action. At BlackRock, we believe its
time for a different approach to investing. One that seeks
out more opportunities in more places across a broader array
of investments in a portfolio designed to move freely as the
markets move up and down. People everywhere are asking, So
what do I do with my money? Visit
www.blackrock.com
for answers.
Sincerely,
Rob Kapito
President, BlackRock Advisors, LLC
|
|
Statements of Assets and Liabilities
|
|
March 31, 2013
|
|
|
|
BIF
Government
Securities
Fund
|
|
BIF
Treasury
Fund
|
Assets
|
Investments at value Master Government Securities LLC and Master Treasury LLC (individually, Government LLC and Treasury
LLC or collectively, the Master LLCs), respectively
1
|
|
|
|
$
|
310,135,190
|
|
|
$
|
1,580,887,166
|
|
Withdrawals receivable from the Master LLCs
|
|
|
|
|
3,028,130
|
|
|
|
3,196,953
|
|
Capital shares sold receivable
|
|
|
|
|
418,105
|
|
|
|
|
|
Prepaid expenses
|
|
|
|
|
24,464
|
|
|
|
15,538
|
|
Total assets
|
|
|
|
|
313,605,889
|
|
|
|
1,584,099,657
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
Capital shares redeemed payable
|
|
|
|
|
3,446,235
|
|
|
|
3,196,953
|
|
Administration fees payable
|
|
|
|
|
10,680
|
|
|
|
46,201
|
|
Officers fees payable
|
|
|
|
|
109
|
|
|
|
427
|
|
Other accrued expenses payable
|
|
|
|
|
30,976
|
|
|
|
55,268
|
|
Total liabilities
|
|
|
|
|
3,488,000
|
|
|
|
3,298,849
|
|
Net Assets
|
|
|
|
$
|
310,117,889
|
|
|
$
|
1,580,800,808
|
|
|
|
|
|
|
|
|
|
|
Net Assets Consist of
|
Paid-in capital
2
|
|
|
|
$
|
310,108,131
|
|
|
$
|
1,580,778,546
|
|
Undistributed net investment income
|
|
|
|
|
95
|
|
|
|
165
|
|
Accumulated net realized gain allocated from the Master LLCs
|
|
|
|
|
9,663
|
|
|
|
22,097
|
|
Net Assets,
$1.00 net asset value per share
|
|
|
|
$
|
310,117,889
|
|
|
$
|
1,580,800,808
|
|
1
Investments at cost
|
|
|
|
$
|
310,135,190
|
|
|
$
|
1,580,887,166
|
|
2
Shares outstanding, unlimited number of shares authorized, $0.01 par value
|
|
|
|
|
310,108,133
|
|
|
|
1,580,778,548
|
|
See Notes to Financial Statements.
6
|
ANNUAL REPORT
|
MARCH 31, 2013
|
Year Ended March 31,
2013
|
|
|
|
BIF
Government
Securities
Fund
|
|
BIF
Treasury
Fund
|
Investment Income
|
Net investment income allocated from the Master LLCs:
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
$
|
435,577
|
|
|
$
|
1,608,363
|
|
Expenses
|
|
|
|
|
(873,129
|
)
|
|
|
(2,811,049
|
)
|
Fees waived
|
|
|
|
|
626,980
|
|
|
|
1,754,744
|
|
Total income
|
|
|
|
|
189,428
|
|
|
|
552,058
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Expenses
|
Administration
|
|
|
|
|
799,754
|
|
|
|
3,990,924
|
|
Distribution
|
|
|
|
|
398,429
|
|
|
|
1,991,540
|
|
Transfer agent
|
|
|
|
|
25,027
|
|
|
|
103,364
|
|
Registration
|
|
|
|
|
75,139
|
|
|
|
27,106
|
|
Professional
|
|
|
|
|
39,299
|
|
|
|
36,319
|
|
Printing
|
|
|
|
|
548
|
|
|
|
10,000
|
|
Officer
|
|
|
|
|
219
|
|
|
|
854
|
|
Miscellaneous
|
|
|
|
|
5,818
|
|
|
|
6,396
|
|
Total expenses
|
|
|
|
|
1,344,233
|
|
|
|
6,166,503
|
|
Less fees waived by administrator
|
|
|
|
|
(756,488
|
)
|
|
|
(3,623,462
|
)
|
Less distribution fees waived
|
|
|
|
|
(398,429
|
)
|
|
|
(1,991,540
|
)
|
Total expenses after fees waived
|
|
|
|
|
189,316
|
|
|
|
551,501
|
|
Net investment income
|
|
|
|
|
112
|
|
|
|
557
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Gain Allocated from the Master LLCs
|
Net realized gain from investments
|
|
|
|
|
24,694
|
|
|
|
69,993
|
|
Net Increase in Net Assets Resulting from Operations
|
|
|
|
$
|
24,806
|
|
|
$
|
70,550
|
|
See Notes to Financial Statements.
ANNUAL REPORT
|
MARCH 31, 2013
|
7
|
|
|
Statements of Changes in Net Assets
|
|
|
|
|
|
BIF
Government
Securities
Fund
|
|
|
|
BIF
Treasury
Fund
|
|
|
|
|
|
Year Ended March 31,
|
|
|
|
Year Ended March 31,
|
|
Increase (Decrease) in Net
Assets:
|
|
|
|
2013
|
|
2012
|
|
|
|
2013
|
|
2012
|
Operations
|
Net
investment income
|
|
|
|
$
|
112
|
|
|
$
|
182
|
|
|
|
|
|
|
$
|
557
|
|
|
$
|
835
|
|
Net
realized gain
|
|
|
|
|
24,694
|
|
|
|
3,170
|
|
|
|
|
|
|
|
69,993
|
|
|
|
65,410
|
|
Net
increase in net assets resulting from
operations
|
|
|
|
|
24,806
|
|
|
|
3,352
|
|
|
|
|
|
|
|
70,550
|
|
|
|
66,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Shareholders
From
1
|
Net
investment income
|
|
|
|
|
(112
|
)
|
|
|
(87
|
)
|
|
|
|
|
|
|
(557
|
)
|
|
|
(670
|
)
|
Net
realized gain
|
|
|
|
|
(13,121
|
)
|
|
|
(6,596
|
)
|
|
|
|
|
|
|
(53,337
|
)
|
|
|
(95,753
|
)
|
Decrease in net assets resulting from
dividends and distributions to shareholders
|
|
|
|
|
(13,233
|
)
|
|
|
(6,683
|
)
|
|
|
|
|
|
|
(53,894
|
)
|
|
|
(96,423
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions
|
Net
proceeds from sale of shares
|
|
|
|
|
1,706,890,026
|
|
|
|
1,723,453,145
|
|
|
|
|
|
|
|
4,017,699,052
|
|
|
|
5,748,006,947
|
|
Reinvestment of dividends and distributions
|
|
|
|
|
13,181
|
|
|
|
6,650
|
|
|
|
|
|
|
|
53,668
|
|
|
|
96,046
|
|
Cost of shares redeemed
|
|
|
|
|
(1,729,540,003
|
)
|
|
|
(1,599,229,944
|
)
|
|
|
|
|
|
|
(4,323,025,302
|
)
|
|
|
(5,487,734,837
|
)
|
Net
increase (decrease) in net assets
derived from capital share transactions
|
|
|
|
|
(22,636,796
|
)
|
|
|
124,229,851
|
|
|
|
|
|
|
|
(305,272,582
|
)
|
|
|
260,368,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
Total increase (decrease) in net assets
|
|
|
|
|
(22,625,223
|
)
|
|
|
124,226,520
|
|
|
|
|
|
|
|
(305,255,926
|
)
|
|
|
260,337,978
|
|
Beginning of year
|
|
|
|
|
332,743,112
|
|
|
|
208,516,592
|
|
|
|
|
|
|
|
1,886,056,734
|
|
|
|
1,625,718,756
|
|
End
of year
|
|
|
|
$
|
310,117,889
|
|
|
$
|
332,743,112
|
|
|
|
|
|
|
$
|
1,580,800,808
|
|
|
$
|
1,886,056,734
|
|
Undistributed net investment income
|
|
|
|
$
|
95
|
|
|
$
|
95
|
|
|
|
|
|
|
$
|
165
|
|
|
$
|
165
|
|
1
|
|
Dividends and distributions are determined
in accordance with federal income tax regulations.
|
See Notes to Financial Statements.
8
|
ANNUAL REPORT
|
MARCH 31, 2013
|
|
|
Financial Highlights
|
BIF Government Securities
Fund
|
|
|
|
|
|
|
|
|
Year Ended March 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
Per Share Operating Performance
|
Net
asset value, beginning of year
|
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Net
investment income
|
|
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0070
|
|
Net
realized gain
|
|
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0001
|
|
|
|
0.0000
|
1
|
|
|
0.0001
|
|
Net
increase from investment operations
|
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0001
|
|
|
|
0.0000
|
|
|
|
0.0071
|
|
Dividends and distributions from:
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
(0.0000
|
)
3
|
|
|
(0.0000
|
)
3
|
|
|
(0.0000
|
)
3
|
|
|
(0.0002
|
)
|
|
|
(0.0070
|
)
|
Net realized gain
|
|
|
|
|
(0.0000
|
)
3
|
|
|
(0.0000
|
)
3
|
|
|
(0.0001
|
)
|
|
|
(0.0000
|
)
3
|
|
|
|
|
Total dividends and distributions
|
|
|
|
|
(0.0000
|
)
|
|
|
(0.0000
|
)
|
|
|
(0.0001
|
)
|
|
|
(0.0002
|
)
|
|
|
(0.0070
|
)
|
Net
asset value, end of year
|
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
4
|
Total investment return
|
|
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.01
|
%
|
|
|
0.03
|
%
|
|
|
0.70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets
5
|
Total expenses
|
|
|
|
|
0.50%
|
6
|
|
|
0.47%
|
6
|
|
|
0.49%
|
6
|
|
|
0.50
|
%
|
|
|
0.63
|
%
|
Total expenses after fees waived
|
|
|
|
|
0.14%
|
6
|
|
|
0.07%
|
6
|
|
|
0.18%
|
6
|
|
|
0.22
|
%
|
|
|
0.55
|
%
|
Net
investment income
|
|
|
|
|
0.00%
|
6
|
|
|
0.00%
|
6
|
|
|
0.00%
|
6
|
|
|
0.00
|
%
|
|
|
0.67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
Net
assets, end of year (000)
|
|
|
|
$
|
310,118
|
|
|
$
|
332,743
|
|
|
$
|
208,517
|
|
|
$
|
320,643
|
|
|
$
|
668,476
|
|
1
|
|
Amount is less than $0.00005 per share.
|
2
|
|
Dividends and distributions are determined
in accordance with federal income tax regulations.
|
3
|
|
Amount is greater than $(0.00005) per share.
|
4
|
|
Where applicable, total investment returns
include the reinvestment of dividends and distributions.
|
5
|
|
Includes the Funds share of the Master
LLCs allocated expenses and/or net investment income.
|
6
|
|
Includes the Funds share of the Master
LLCs allocated fees waived of 0.20%, 0.24% and 0.22%, for the years ended March 31, 2013, March 31, 2012 and March
31, 2011, respectively.
|
See Notes to Financial Statements.
ANNUAL REPORT
|
MARCH 31, 2013
|
9
|
|
|
Financial Highlights
|
BIF Treasury
Fund
|
|
|
|
|
|
|
|
|
Year Ended March 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
Per Share Operating Performance
|
Net
asset value, beginning of year
|
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Net
investment income
|
|
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0002
|
|
|
|
0.0064
|
|
Net
realized gain
|
|
|
|
|
0.0000
|
1
|
|
|
0.0000
|
1
|
|
|
0.0001
|
|
|
|
0.0001
|
|
|
|
0.0001
|
|
Net
increase from investment operations
|
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0001
|
|
|
|
0.0003
|
|
|
|
0.0065
|
|
Dividends and distributions from:
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
(0.0000
|
)
3
|
|
|
(0.0000
|
)
3
|
|
|
(0.0000
|
)
3
|
|
|
(0.0004
|
)
|
|
|
(0.0064
|
)
|
Net realized gain
|
|
|
|
|
(0.0000
|
)
3
|
|
|
(0.0000
|
)
3
|
|
|
(0.0001
|
)
|
|
|
(0.0000
|
)
3
|
|
|
|
|
Total dividends and distributions
|
|
|
|
|
(0.0000
|
)
|
|
|
(0.0000
|
)
|
|
|
(0.0001
|
)
|
|
|
(0.0004
|
)
|
|
|
(0.0064
|
)
|
Net
asset value, end of year
|
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
4
|
Total investment return
|
|
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.01
|
%
|
|
|
0.04
|
%
|
|
|
0.64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets
5
|
Total expenses
|
|
|
|
|
0.45%
|
6
|
|
|
0.40%
|
6
|
|
|
0.49%
|
6
|
|
|
0.53
|
%
|
|
|
0.57
|
%
|
Total expenses after fees waived
|
|
|
|
|
0.10%
|
6
|
|
|
0.05%
|
6
|
|
|
0.16%
|
6
|
|
|
0.20
|
%
|
|
|
0.50
|
%
|
Net
investment income
|
|
|
|
|
0.00%
|
6
|
|
|
0.00%
|
6
|
|
|
0.00%
|
6
|
|
|
0.02
|
%
|
|
|
0.46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
Net
assets, end of year (000)
|
|
|
|
$
|
1,580,801
|
|
|
$
|
1,886,057
|
|
|
$
|
1,625,719
|
|
|
$
|
1,677,334
|
|
|
$
|
4,235,341
|
|
1
|
|
Amount is less than $0.00005 per share.
|
2
|
|
Dividends and distributions are determined
in accordance with federal income tax regulations.
|
3
|
|
Amount is greater than $(0.00005) per share.
|
4
|
|
Where applicable, total investment returns
include the reinvestment of dividends and distributions.
|
5
|
|
Includes the Funds share of the Master
LLCs allocated expenses and/or net investment income.
|
6
|
|
Includes the Funds share of the Master
LLCs allocated fees waived of 0.11%, 0.15% and 0.08%, for the years ended March 31, 2013, March 31, 2012 and March
31, 2011, respectively.
|
See Notes to Financial Statements.
10
|
ANNUAL REPORT
|
MARCH 31, 2013
|
|
|
Notes to Financial Statements
|
BIF Government Securities
Fund and BIF Treasury Fund
|
1. Organization and Significant Accounting
Policies:
BIF Government Securities Fund and BIF Treasury Fund (collectively
the Funds or individually a Fund) are registered under the Investment Company Act of 1940, as amended (the 1940
Act), as diversified, open-end management investment companies. Each Fund is organized as a Massachusetts business trust. BIF Government
Securities Fund and BIF Treasury Fund seek to achieve their investment objectives by investing all of their assets in Master Government Securities LLC
and Master Treasury LLC, respectively, (collectively the Master LLCs or individually a Master LLC), an affiliate of the Funds,
which have the same investment objectives and strategies as the Funds. Each Master LLC is organized as a Delaware limited liability company. The value
of each Funds investment in the respective Master LLC reflects each Funds proportionate interest in the net assets of the respective Master
LLC. The performance of each Fund is directly affected by the performance of the respective Master LLC. The percentage of each Master LLC owned by the
corresponding Fund at March 31, 2013 was 61.8% for BIF Government Securities Fund and 63.5% for BIF Treasury Fund. The financial statements of the
Master LLCs, 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 (US GAAP), which may require management to make estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates. The Boards of Trustees of the Funds and the Boards of Directors of the Master LLCs are referred to
throughout this report as the Board of Directors or the Board and the members are referred to as
Directors.
The following is a summary of significant accounting policies
followed by the Funds:
Valuation:
US GAAP defines fair value as the price the
Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The
Funds record their investment in the respective Master LLC at fair value based on each Funds proportionate interest in the net assets of the
respective Master LLC. Valuation of securities held by the Master LLCs is discussed in Note 1 of the Master LLCs Notes to Financial Statements,
which are included elsewhere in this report. Each Fund seeks to maintain its net asset value per share at $1.00, although there is no assurance that it
will be able to do so on a continuing basis.
Investment Transactions and Investment Income:
For
financial reporting purposes, contributions to and withdrawals from the Master LLCs are accounted for on a trade date basis. Each Fund records daily
its proportionate share of the respective Master LLCs income, expenses and realized gains and losses. In addition, the Funds accrue their own
expenses.
Dividends and Distributions:
Dividends from net investment
income are declared and reinvested daily. Distributions of capital gains are recorded on the ex-dividend dates. The character and timing of dividends
and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP.
Income Taxes:
It is each Funds policy to comply with
the requirements of the Internal Revenue Code of 1986, as amended, 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.
Each Fund files US federal and various state and local tax
returns. No income tax returns are currently under examination. The statute of limitations on each Funds US federal tax returns remains open for
each of the four years ended March 31, 2013. The statutes of limitations on each Funds state and local tax returns may remain open for an
additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax
liability.
Other:
Expenses directly related to a Fund are charged to
that Fund. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate
methods.
The Funds may earn interest on positive cash balances in demand
deposit accounts that are maintained by the transfer agent on behalf of the Funds. This amount, if any, is shown as income in the Statements of
Operations.
2. Administration Agreement and Other Transactions with
Affiliates:
The PNC Financial Services Group, Inc. (PNC) is the
largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (BlackRock).
Each Fund entered into an Administration Agreement with BlackRock
Advisors, LLC (the Administrator), an indirect, wholly owned subsidiary of BlackRock, to provide administrative services (other than
investment advice and related portfolio activities). For such services, each Fund pays the Administrator a monthly fee at an annual rate of 0.25% of
the average daily value of each Funds respective net assets. The Funds do not pay an investment advisory fee or investment management
fee.
ANNUAL REPORT
|
MARCH 31, 2013
|
11
|
|
|
Notes to Financial Statements (concluded)
|
BIF Government Securities
Fund and BIF Treasury Fund
|
Each Fund entered into a Distribution Agreement and Distribution
and Shareholder Servicing Plan with BlackRock Investments, LLC (BRIL), an affiliate of the Administrator. Pursuant to the Distribution and
Shareholder Servicing Plan in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are
accrued daily and paid monthly at the annual rate of 0.125% based upon each Funds respective average daily net assets.
The Administrator and BRIL voluntarily agreed to waive their
respective administration and service and distribution fees and/or reimburse operating expenses to enable the Funds to maintain minimum levels of daily
net investment income. These amounts are reported in the Statements of Operations as fees waived by administrator and distribution fees waived. The
Administrator and BRIL may discontinue the waiver or reimbursement at any time.
Certain officers and/or directors of the Funds are officers and/or
directors of BlackRock or its affiliates. The Funds reimburse the Administrator for a portion of the compensation paid to the Funds Chief
Compliance Officer, which are included in officer in the Statements of Operations.
3. Income Tax Information:
The tax character of distributions paid during the fiscal years
ended March 31, 2013 and March 31, 2012 was as follows:
|
|
|
|
|
|
BIF Government
Securities
Fund
|
|
BIF
Treasury Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
|
|
|
3/31/13
|
|
|
$
|
13,233
|
|
|
$
|
53,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/12
|
|
|
$
|
6,683
|
|
|
$
|
96,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2013, the tax components of accumulated net
earnings were as follows:
|
|
|
|
BIF Government
Securities
Fund
|
|
BIF
Treasury Fund
|
Undistributed ordinary income
|
|
|
|
$
|
9,758
|
|
|
$
|
22,368
|
|
Net
unrealized losses
1
|
|
|
|
|
|
|
|
|
(106
|
)
|
Total
|
|
|
|
$
|
9,758
|
|
|
$
|
22,262
|
|
1
|
|
The difference between book-basis and tax-basis unrealized losses
is attributable to the tax deferral of losses on wash sales.
|
4. Capital Share Transactions:
The number of shares sold, reinvested and redeemed corresponds to
the net proceeds from the sale of shares, reinvestment of dividends and distributions and cost of shares redeemed, respectively, since shares are sold
and redeemed at $1.00 per share.
5. Subsequent Events:
Management has evaluated the impact of all subsequent events on
each Fund through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or
additional disclosure in the financial statements.
12
|
ANNUAL REPORT
|
MARCH 31, 2013
|
|
|
Report of Independent Registered Public Accounting Firm
|
BIF Government Securities
Fund
and BIF Treasury Fund
|
To the Shareholders and Boards of Trustees of BIF Government
Securities Fund and BIF Treasury Fund:
We have audited the accompanying statements of assets and
liabilities of BIF Government Securities Fund and BIF Treasury Fund (the Funds) as of March 31, 2013, 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
Funds 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 audits to obtain reasonable assurance
about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we
engaged to perform, an audit of their 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 Funds 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 positions of BIF Government Securities Fund and BIF Treasury Fund as of March
31, 2013, 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
Boston, Massachusetts
May 24,
2013
|
|
Important Tax Information (Unaudited)
|
The following information is provided with respect to the ordinary
income distributions paid by the Funds during the fiscal year ended March 31, 2013.
|
|
|
|
BIF
Government
Securities
Fund
|
|
BIF
Treasury
Fund
|
Federal Obligation Interest
1
|
|
|
|
|
0.44
|
%
|
|
|
1.04
|
%
|
Interest-Related Dividends and Qualified Short-Term Capital Gains for Non-US
Residents
2
|
|
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
1
|
|
The law varies in each state as to whether
and what percentage of dividend income attributable to federal obligations is exempt from state income tax. We recommend
that you consult your tax advisor to determine if any portion of the dividends you received is exempt from state income taxes.
|
2
|
|
Represents the portion of the taxable ordinary
income dividends eligible for exemption from US withholding tax for nonresident aliens and foreign corporations.
|
ANNUAL REPORT
|
MARCH 31, 2013
|
13
|
|
|
Master LLC Portfolio Information
as of March 31, 2013
|
Master Government
Securities LLC
and Master Treasury LLC
|
Portfolio
Composition
Master Government Securities
LLC
|
|
|
|
Percent of
Net Assets
|
US
Treasury Obligations
|
|
|
|
|
64
|
%
|
Repurchase Agreements
|
|
|
|
|
36
|
|
Total
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Master Treasury LLC
|
|
|
|
Percent of
Net Assets
|
US
Treasury Obligations
|
|
|
|
|
100
|
%
|
Total
|
|
|
|
|
100
|
%
|
14
|
ANNUAL REPORT
|
MARCH 31, 2013
|
|
|
Schedule of Investments
March 31, 2013
|
Master
Government Securities LLC
(Percentages shown are based on Net Assets)
|
US Treasury Obligations
|
|
|
|
Par (000)
|
|
Value
|
US
Treasury Bills (a):
|
|
|
|
|
|
|
|
|
|
|
0.09%, 4/04/13
|
|
|
|
$
|
25,000
|
|
|
$
|
24,999,753
|
|
0.11%, 4/15/13
|
|
|
|
|
22,000
|
|
|
|
21,998,992
|
|
0.15%, 4/18/13
|
|
|
|
|
8,000
|
|
|
|
7,999,700
|
|
0.15%, 4/25/13
|
|
|
|
|
10,000
|
|
|
|
9,998,976
|
|
0.16%, 5/02/13
|
|
|
|
|
15,000
|
|
|
|
14,997,867
|
|
0.15%, 5/09/13
|
|
|
|
|
20,000
|
|
|
|
19,996,750
|
|
0.15%, 5/16/13
|
|
|
|
|
5,000
|
|
|
|
4,999,042
|
|
0.12%, 5/23/13
|
|
|
|
|
15,000
|
|
|
|
14,997,295
|
|
0.09% - 0.19%, 5/30/13
|
|
|
|
|
25,000
|
|
|
|
24,995,417
|
|
0.14%, 6/06/13
|
|
|
|
|
10,000
|
|
|
|
9,997,394
|
|
0.09%, 6/13/13
|
|
|
|
|
21,600
|
|
|
|
21,596,226
|
|
0.09% - 0.10%, 6/20/13
|
|
|
|
|
30,000
|
|
|
|
29,993,643
|
|
0.08% - 0.13%, 6/27/13
|
|
|
|
|
27,000
|
|
|
|
26,993,437
|
|
0.13%, 7/05/13
|
|
|
|
|
10,000
|
|
|
|
9,996,533
|
|
0.12%, 8/15/13
|
|
|
|
|
10,000
|
|
|
|
9,995,433
|
|
0.11% - 0.13%, 9/05/13
|
|
|
|
|
17,000
|
|
|
|
16,990,476
|
|
0.11%, 9/19/13
|
|
|
|
|
5,000
|
|
|
|
4,997,372
|
|
0.11%, 9/26/13
|
|
|
|
|
20,000
|
|
|
|
19,989,061
|
|
US
Treasury Notes:
|
|
|
|
|
|
|
|
|
|
|
0.50%, 5/31/13
|
|
|
|
|
5,000
|
|
|
|
5,002,281
|
|
0.38%, 7/31/13
|
|
|
|
|
5,000
|
|
|
|
5,004,575
|
|
0.25%, 11/30/13
|
|
|
|
|
6,000
|
|
|
|
6,003,959
|
|
0.25%, 1/31/14
|
|
|
|
|
5,000
|
|
|
|
5,003,311
|
|
0.25%, 2/28/14
|
|
|
|
|
6,000
|
|
|
|
6,003,848
|
|
Total US Treasury Obligations 64.3%
|
|
|
|
|
|
|
|
|
322,551,341
|
|
|
Repurchase Agreements
|
Barclays Capital, Inc., 0.17%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $11,750,222, collateralized by a US Treasury Note, 0.25% due
9/15/15, par and fair values of $12,000,900 and $11,985,087, respectively)
|
|
|
|
|
11,750
|
|
|
|
11,750,000
|
|
Citigroup Global Markets, Inc., 0.15%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $15,000,250, collateralized by a US Treasury Note,
0.63% due 11/30/17, par and fair values of $15,309,800 and $15,300,095, respectively)
|
|
|
|
|
15,000
|
|
|
|
15,000,000
|
|
Credit Suisse Securities (USA) LLC, 0.18%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $16,000,320, collateralized by a US Treasury Bond,
3.13% due 2/15/42, par and fair values of $16,180,000 and $16,323,224, respectively)
|
|
|
|
|
16,000
|
|
|
|
16,000,000
|
|
Deutsche Bank Securities, Inc., 0.15%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $12,888,215, collateralized by a US Treasury Note,
0.75% due 10/31/17, par and fair values of $13,059,800 and $13,145,816, respectively)
|
|
|
|
|
12,888
|
|
|
|
12,888,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Agreements
|
|
|
|
Par (000)
|
|
Value
|
Goldman Sachs & Co., 0.11%, 4/02/13 (Purchased on 3/26/13 to be repurchased at $15,500,332, collateralized by a US Treasury Inflation Indexed
Note, 1.88% due 7/15/13, par and fair values of $12,317,600 and $15,810,093, respectively)
|
|
|
|
$
|
15,500
|
|
|
$
|
15,500,000
|
|
HSBC Securities (USA), Inc., 0.17%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $15,000,283, collateralized by a US Treasury Inflation
Indexed Note, 0.13% due 4/15/17, par and fair values of $13,990,000 and $15,305,350, respectively)
|
|
|
|
|
15,000
|
|
|
|
15,000,000
|
|
JPMorgan Securities, Inc., 0.17%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $15,000,283, collateralized by a US Treasury Note, 0.38% due
1/15/16, par and fair values of $15,275,000 and $15,303,042, respectively)
|
|
|
|
|
15,000
|
|
|
|
15,000,000
|
|
Merrill Lynch, Pierce, Fenner & Smith, Inc., 0.14%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $20,000,311, collateralized by a US
Treasury Note, 1.75% due 3/31/14, par and fair values of $19,917,400 and $20,403,121, respectively)
|
|
|
|
|
20,000
|
|
|
|
20,000,000
|
|
Mizuho Securities USA LLC, 0.18%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $20,000,400, collateralized by various US Treasury
Securities STRIPS, 0.00% - 3.63% due 5/15/132/15/14, par and fair values of $20,413,485 and $20,400,000, respectively)
|
|
|
|
|
20,000
|
|
|
|
20,000,000
|
|
Morgan Stanley & Co., Inc., 0.17%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $15,000,283, collateralized by a US Treasury Note,
2.50% due 3/31/15, par and fair values of $14,471,000 and $15,300,101, respectively)
|
|
|
|
|
15,000
|
|
|
|
15,000,000
|
|
RBS Securities, Inc., 0.17%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $10,000,189, collateralized by a US Treasury Note, 0.13% due
8/31/13, par and fair values of $10,200,000 and $10,200,970, respectively)
|
|
|
|
|
10,000
|
|
|
|
10,000,000
|
|
UBS Securities LLC, 0.15%, 4/01/13 (Purchased on 3/28/13 to be repurchased at $15,000,250, collateralized
by a US Treasury Note, 1.88% due 4/30/14, par and fair values of $14,910,800 and $15,300,028, respectively)
|
|
|
|
|
15,000
|
|
|
|
15,000,000
|
|
Total Repurchase Agreements 36.1%
|
|
|
|
|
|
|
|
|
181,138,000
|
|
Total Investments (Cost $503,689,341*) 100.4%
|
|
503,689,341
|
|
Liabilities in Excess of Other Assets (0.4)%
|
|
(2,190,415
|
)
|
Net Assets 100.0%
|
$
|
501,498,926
|
|
Portfolio
Abbreviation
STRIPS
Separately Traded Registered Interest and Principal of Securities
See Notes to
Financial Statements.
ANNUAL REPORT
|
MARCH 31, 2013
|
15
|
|
|
Schedule of Investments
(concluded)
|
Master
Government Securities LLC
|
Notes to Schedule
of Investments
*
|
|
|
|
Cost
for federal income tax purposes.
|
(a)
|
|
|
|
Rates shown are discount rates or a range of discount rates paid at the time of purchase.
|
|
|
|
|
Fair
Value Measurements Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized
into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
|
|
|
|
|
Level 1 unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Master LLC has the ability to
access
|
|
|
|
|
Level 2 other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active,
quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for
the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or
other market-corroborated inputs)
|
|
|
|
|
Level 3 unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available
(including the Master LLCs own assumptions used in determining the fair value of investments)
|
|
|
|
|
The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for
instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases,
for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the
lowest level input that is significant to the fair value measurement in its entirety.
|
|
|
|
|
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the
Master LLCs policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of
the reporting period. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not
necessarily an indication of the risks associated with investing in those securities. For information about the Master LLCs policy regarding
valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.
|
The
following table summarizes the Master LLCs investments categorized in the disclosure hierarchy as of March 31, 2013:
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury Obligations
|
|
|
|
|
|
|
|
$
|
322,551,341
|
|
|
|
|
|
|
$
|
322,551,341
|
|
Repurchase Agreements
|
|
|
|
|
|
|
|
|
181,138,000
|
|
|
|
|
|
|
|
181,138,000
|
|
Total
|
|
|
|
|
|
|
|
$
|
503,689,341
|
|
|
|
|
|
|
$
|
503,689,341
|
|
Certain of the Master LLCs assets are held at carrying amount, which approximates fair value for financial statement purposes. As of March 31, 2013, cash of $616 is categorized as Level 1 within the disclosure hierarchy.
There were no transfers between levels during the year ended March 31, 2013.
See Notes to
Financial Statements.
16
|
ANNUAL REPORT
|
MARCH 31, 2013
|
|
|
Schedule of Investments
March 31, 2013
|
Master
Treasury LLC
(Percentages shown are based on Net Assets)
|
US Treasury
Obligations
|
|
|
|
Par (000)
|
|
Value
|
US
Treasury Bills (a):
|
|
|
|
|
|
|
|
|
|
|
0.09% - 0.14%, 4/04/13
|
|
|
|
$
|
458,900
|
|
|
$
|
458,895,349
|
|
0.10% - 0.15%, 4/11/13
|
|
|
|
|
222,000
|
|
|
|
221,992,873
|
|
0.06% - 0.15%, 4/18/13
|
|
|
|
|
343,807
|
|
|
|
343,792,076
|
|
0.08% - 0.15%, 4/25/13
|
|
|
|
|
194,000
|
|
|
|
193,987,378
|
|
0.08% - 0.15%, 5/09/13
|
|
|
|
|
142,885
|
|
|
|
142,864,508
|
|
0.08% - 0.15%, 5/16/13
|
|
|
|
|
112,000
|
|
|
|
111,986,270
|
|
0.12% - 0.14%, 5/23/13
|
|
|
|
|
65,000
|
|
|
|
64,987,523
|
|
0.08% - 0.15%, 5/30/13
|
|
|
|
|
106,000
|
|
|
|
105,983,283
|
|
0.11% - 0.14%, 6/06/13
|
|
|
|
|
175,000
|
|
|
|
174,959,986
|
|
0.10%, 6/13/13
|
|
|
|
|
100,000
|
|
|
|
99,980,472
|
|
0.09% - 0.10%, 6/20/13
|
|
|
|
|
89,000
|
|
|
|
88,981,764
|
|
0.08% - 0.13%, 6/27/13
|
|
|
|
|
162,750
|
|
|
|
162,710,421
|
|
0.13%, 7/05/13
|
|
|
|
|
25,000
|
|
|
|
24,991,333
|
|
0.12%, 7/11/13
|
|
|
|
|
30,000
|
|
|
|
29,990,225
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury
Obligations
|
|
|
|
Par (000)
|
|
Value
|
US
Treasury Bills (a) (concluded):
|
|
|
|
|
|
|
|
|
|
|
0.12%, 8/15/13
|
|
|
|
$
|
50,000
|
|
|
$
|
49,977,167
|
|
0.14%, 8/22/13
|
|
|
|
|
38,000
|
|
|
|
37,979,480
|
|
0.11%, 9/05/13
|
|
|
|
|
20,000
|
|
|
|
19,990,344
|
|
0.12%, 9/12/13
|
|
|
|
|
50,000
|
|
|
|
49,973,646
|
|
0.11%, 9/19/13
|
|
|
|
|
20,000
|
|
|
|
19,989,489
|
|
0.11%, 9/26/13
|
|
|
|
|
25,000
|
|
|
|
24,986,326
|
|
US
Treasury Notes:
|
|
|
|
|
|
|
|
|
|
|
0.38%, 7/31/13
|
|
|
|
|
20,000
|
|
|
|
20,018,300
|
|
0.25%, 1/31/14
|
|
|
|
|
16,000
|
|
|
|
16,010,594
|
|
0.25%, 2/28/14
|
|
|
|
|
24,000
|
|
|
|
24,015,392
|
|
Total Investments (Cost $2,489,044,199*) 100.0%
|
|
2,489,044,199
|
|
Liabilities in Excess of Other Assets 0.0%
|
|
(733,775
|
)
|
Net Assets 100.0%
|
$
|
2,488,310,424
|
|
Notes to Schedule
of Investments
*
|
|
|
|
Cost
for federal income tax purposes.
|
(a)
|
|
|
|
Rates shown are discount rates or a range of discount rates paid at the time of purchase.
|
|
|
|
|
Fair
Value Measurements Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized
into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
|
|
|
|
|
Level 1 unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Master LLC has the ability to
access
|
|
|
|
|
Level 2 other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active,
quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for
the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or
other market-corroborated inputs)
|
|
|
|
|
Level 3 unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available
(including the Master LLCs own assumptions used in determining the fair value of investments)
|
|
|
|
|
The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for
instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases,
for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the
lowest level input that is significant to the fair value measurement in its entirety.
|
|
|
|
|
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the
Master LLCs policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of
the reporting period. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not
necessarily an indication of the risks associated with investing in those securities. For information about the Master LLCs policy regarding
valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.
|
The following table summarizes the Master LLCs investments categorized
in the disclosure hierarchy as of March 31, 2013:
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury Obligations
|
|
|
|
|
|
|
|
$
|
2,489,044,199
|
|
|
|
|
|
|
$
|
2,489,044,199
|
|
Certain of the Master LLCs assets are held at carrying amount, which approximates fair value for financial statement purposes. As of March
31, 2013, cash of $29,933 is categorized as Level 1 within the disclosure hierarchy.
|
There were no transfers between levels during the year ended March 31, 2013.
|
See Notes to
Financial Statements.
ANNUAL REPORT
|
MARCH 31, 2013
|
17
|
|
|
Statements of Assets and Liabilities
|
|
March 31, 2013
|
|
|
|
Master
Government
Securities
LLC
|
|
Master
Treasury
LLC
|
Assets
|
Investments at value unaffiliated
1
|
|
|
|
$
|
322,551,341
|
|
|
$
|
2,489,044,199
|
|
Repurchase agreements, at value unaffiliated
2
|
|
|
|
|
181,138,000
|
|
|
|
|
|
Cash
|
|
|
|
|
616
|
|
|
|
29,933
|
|
Contributions receivable from investors
|
|
|
|
|
903,239
|
|
|
|
2,613,248
|
|
Interest receivable
|
|
|
|
|
22,145
|
|
|
|
23,797
|
|
Prepaid expenses
|
|
|
|
|
6,663
|
|
|
|
14,914
|
|
Total assets
|
|
|
|
|
504,622,004
|
|
|
|
2,491,726,091
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
Withdrawals payable to investors
|
|
|
|
|
3,028,130
|
|
|
|
3,196,953
|
|
Investment advisory fees payable
|
|
|
|
|
7,256
|
|
|
|
96,291
|
|
Directors fees payable
|
|
|
|
|
113
|
|
|
|
15,157
|
|
Other affiliates payable
|
|
|
|
|
3,691
|
|
|
|
15,843
|
|
Other accrued expenses payable
|
|
|
|
|
83,888
|
|
|
|
91,423
|
|
Total liabilities
|
|
|
|
|
3,123,078
|
|
|
|
3,415,667
|
|
Net Assets
|
|
|
|
$
|
501,498,926
|
|
|
$
|
2,488,310,424
|
|
|
|
|
|
|
|
|
|
|
Net
Assets Consist
of
|
Investors capital
|
|
|
|
$
|
501,498,926
|
|
|
$
|
2,488,310,424
|
|
1
Investments at cost unaffiliated
|
|
|
|
$
|
322,551,341
|
|
|
$
|
2,489,044,199
|
|
2
Repurchase agreements at cost unaffiliated
|
|
|
|
$
|
181,138,000
|
|
|
|
|
|
See
Notes to Financial Statements.
18
|
ANNUAL REPORT
|
MARCH 31, 2013
|
Year Ended March 31,
2013
|
|
|
|
Master
Government
Securities
LLC
|
|
Master
Treasury
LLC
|
Investment
Income
|
Interest
|
|
|
|
$
|
871,705
|
|
|
$
|
2,688,407
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
Investment advisory
|
|
|
|
|
1,488,911
|
|
|
|
4,214,899
|
|
Accounting services
|
|
|
|
|
67,124
|
|
|
|
193,371
|
|
Professional
|
|
|
|
|
92,281
|
|
|
|
104,213
|
|
Custodian
|
|
|
|
|
55,391
|
|
|
|
69,576
|
|
Directors
|
|
|
|
|
20,179
|
|
|
|
93,032
|
|
Printing
|
|
|
|
|
7,038
|
|
|
|
5,884
|
|
Miscellaneous
|
|
|
|
|
6,095
|
|
|
|
22,282
|
|
Total expenses
|
|
|
|
|
1,737,019
|
|
|
|
4,703,257
|
|
Less fees waived by Manager
|
|
|
|
|
(1,243,823
|
)
|
|
|
(2,941,732
|
)
|
Total expenses after fees waived
|
|
|
|
|
493,196
|
|
|
|
1,761,525
|
|
Net investment income
|
|
|
|
|
378,509
|
|
|
|
926,882
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
Gain
|
Net realized gain from investments
|
|
|
|
|
46,689
|
|
|
|
116,489
|
|
Net Increase in Net Assets Resulting from Operations
|
|
|
|
$
|
425,198
|
|
|
$
|
1,043,371
|
|
Statements of Changes in Net Assets
|
|
|
|
Master Government Securities LLC
|
|
|
|
Master Treasury LLC
|
|
|
|
|
|
Year Ended March 31,
|
|
|
|
Year Ended March 31,
|
|
Increase (Decrease) in Net
Assets:
|
|
|
|
2013
|
|
2012
|
|
|
|
2013
|
|
2012
|
Operations
|
Net
investment income
|
|
|
|
$
|
378,509
|
|
|
$
|
219,088
|
|
|
|
|
|
|
$
|
926,882
|
|
|
$
|
948,805
|
|
Net
realized gain
|
|
|
|
|
46,689
|
|
|
|
7,419
|
|
|
|
|
|
|
|
116,489
|
|
|
|
110,794
|
|
Net
increase in net assets resulting from operations
|
|
|
|
|
425,198
|
|
|
|
226,507
|
|
|
|
|
|
|
|
1,043,371
|
|
|
|
1,059,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Transactions
|
Proceeds from contributions
|
|
|
|
|
4,413,995,582
|
|
|
|
5,471,740,795
|
|
|
|
|
|
|
|
10,935,669,633
|
|
|
|
15,223,561,834
|
|
Value of withdrawals
|
|
|
|
|
(4,656,068,634
|
)
|
|
|
(5,225,509,991
|
)
|
|
|
|
|
|
|
(11,594,978,915
|
)
|
|
|
(14,704,269,540
|
)
|
Net
increase (decrease) in net assets derived from capital transactions
|
|
|
|
|
(242,073,052
|
)
|
|
|
246,230,804
|
|
|
|
|
|
|
|
(659,309,282
|
)
|
|
|
519,292,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets
|
Total increase (decrease) in net assets
|
|
|
|
|
(241,647,854
|
)
|
|
|
246,457,311
|
|
|
|
|
|
|
|
(658,265,911
|
)
|
|
|
520,351,893
|
|
Beginning of year
|
|
|
|
|
743,146,780
|
|
|
|
496,689,469
|
|
|
|
|
|
|
|
3,146,576,335
|
|
|
|
2,626,224,442
|
|
End
of year
|
|
|
|
$
|
501,498,926
|
|
|
$
|
743,146,780
|
|
|
|
|
|
|
$
|
2,488,310,424
|
|
|
$
|
3,146,576,335
|
|
See Notes to
Financial Statements.
ANNUAL REPORT
|
MARCH 31, 2013
|
19
|
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Financial Highlights
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Master
Government Securities LLC
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Year Ended March 31,
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2013
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2012
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2011
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2010
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2009
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Total
Investment Return
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Total investment return
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0.06
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%
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0.04
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%
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0.13
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%
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|
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0.18
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%
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|
|
1.05
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%
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|
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Ratios
to Average Net
Assets
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Total expenses
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0.27
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%
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|
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0.27
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%
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|
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0.27
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%
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|
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0.26
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%
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0.23
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%
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Total expenses after fees waived and paid indirectly
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0.08
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%
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0.03
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%
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0.06
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%
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0.07
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%
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0.20
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%
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Net
investment income
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|
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0.06
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%
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0.04
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%
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0.13
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%
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0.14
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%
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1.03
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%
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Supplemental
Data
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Net
assets, end of year (000)
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$
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501,499
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$
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743,147
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$
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496,689
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$
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680,465
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$
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1,170,448
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Master Treasury LLC
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Year Ended March 31,
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2013
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2012
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2011
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2010
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2009
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Total
Investment Return
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Total investment return
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|
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0.03
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%
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0.03
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%
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0.08
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%
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|
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0.10
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%
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0.98
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%
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Ratios
to Average Net
Assets
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Total expenses
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|
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0.18
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%
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0.17
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%
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0.18
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%
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0.17
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%
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0.16
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%
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Total expenses after fees waived and paid indirectly
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0.07
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%
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0.02
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%
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0.09
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%
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0.14
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%
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0.16
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%
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Net
investment income
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0.03
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%
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0.03
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%
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0.06
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%
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0.08
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%
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0.81
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%
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Supplemental
Data
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Net
assets, end of year (000)
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$
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2,488,310
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$
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3,146,576
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$
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2,626,224
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$
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2,856,229
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$
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5,718,164
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See
Notes to Financial Statements.
20
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ANNUAL REPORT
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MARCH 31, 2013
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Notes to Financial Statements
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Master Government
Securities LLC and Master Treasury LLC
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1. Organization and Significant Accounting
Policies:
Master Government Securities LLC and Master Treasury LLC
(collectively the Master LLCs or individually a Master LLC) are registered under the Investment Company Act of 1940, as amended
(the 1940 Act), and are organized as Delaware limited liability companies. Each Master LLCs Limited Liability Company Agreement
permits the Board of Directors of the Master LLC (the Board) to issue non-transferable interests in the Master LLC, subject to certain
limitations. The Master LLCs financial statements are prepared in conformity with accounting principles generally accepted in the United States
of America (US GAAP), which may require management to make estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and the reported amounts of increases and decreases in the net assets from operations during the reporting
period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies
followed by the Master LLCs:
Valuation:
US GAAP defines fair value as the price the
Master LLCs would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement
date. The Master LLCs investments are valued under the amortized cost method, which approximates current market value in accordance with Rule
2a-7 under the 1940 Act. Under this method, investments are valued at cost when purchased and thereafter, a constant proportionate accretion of
discounts and amortization of premiums are recorded until the maturity of the security.
Repurchase Agreements:
The Master LLCs may invest in
repurchase agreements. In a repurchase agreement, the Master LLCs purchase a security from a counterparty who agrees to repurchase the same security at
a mutually agreed upon date and price. On a daily basis, the counterparty is required to maintain collateral subject to the agreement and in value no
less than the agreed repurchase amount. The agreements are conditioned upon the collateral being deposited under the Federal Reserve book entry system
or held in a segregated account by the Master LLCs custodian or designated sub-custodians under tri-party repurchase agreements. In the event the
counterparty defaults and the fair value of the collateral declines, the Master LLCs could experience losses, delays and costs in liquidating the
collateral.
Investment Transactions and Investment Income:
For
financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and
losses on investment transactions are determined on the identified cost basis. Interest income, including amortization and accretion of premiums and
discounts on debt securities, is recognized on the accrual basis.
Income Taxes:
The Master LLCs are classified as
partnerships for federal income tax purposes. As such, each investor in each Master LLC is treated as the owner of its proportionate share of net
assets, income, expenses and realized gains and losses of that Master LLC. Therefore, no federal income tax provision is required. It is intended that
each Master LLCs assets will be managed so an investor in a Master LLC can satisfy the requirements of Subchapter M of the Internal Revenue Code
of 1986, as amended.
Each Master LLC files US federal and various state and local tax
returns. No income tax returns are currently under examination. The statute of limitations on each Master LLCs US federal tax returns remains
open for each of the four years ended March 31, 2013. The statutes of limitations on each Master LLCs state and local tax returns may remain open
for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a
tax liability.
Recent Accounting Standards:
In December 2011, the
Financial Accounting Standards Board (the FASB) issued guidance that will expand current disclosure requirements on the offsetting of
certain assets and liabilities. The new disclosures will be required for investments and derivative financial instruments subject to master netting or
similar agreements, which are eligible for offset in the Statements of Assets and Liabilities and will require an entity to disclose both gross and net
information about such investments and transactions in the financial statements. In January 2013, the FASB issued guidance that clarifies which
investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting will be
limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending
transactions. The guidance is effective for financial statements with fiscal years beginning on or after January 1, 2013, and interim periods within
those fiscal years. Management is evaluating the impact of this guidance on the Master LLCs financial statement disclosures.
Other:
Expenses directly related to a Master LLC are
charged to that Master LLC. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or
other appropriate methods.
The Master LLCs have an arrangement with the custodian whereby
fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of
Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional
custody charges.
ANNUAL REPORT
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MARCH 31, 2013
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21
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Notes to Financial Statements (concluded)
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Master Government
Securities LLC and Master Treasury LLC
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2. Investment Advisory Agreement and Other Transactions with
Affiliates:
The PNC Financial Services Group, Inc. (PNC) is the
largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (BlackRock).
The Master LLCs entered into an Investment Advisory Agreement with
BlackRock Advisors, LLC (the Manager), the Master LLCs investment advisor, an indirect, wholly owned subsidiary of BlackRock, to
provide investment advisory and administration services. The Manager is responsible for the management of each Master LLCs portfolio and provides
the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Master LLC. For such services, each
Master LLC pays the Manager a monthly fee based on a percentage of each Master LLCs average daily net assets at the following annual
rates:
Average Daily Net
Assets
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Investment
Advisory Fee
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First $500 Million
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0.250
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%
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$500 Million $1 Billion
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0.175
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%
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Greater than $1 Billion
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0.125
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%
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The Manager voluntarily agreed to waive a portion of the
investment advisory fees and/or reimburse operating expenses of each Master LLC to enable the feeder funds that invest in the Master LLCs to maintain
minimum levels of net investment income. These amounts are reported in the Statements of Operations as fees waived by Manager.
For the year ended March 31, 2013, the Master LLCs reimbursed the
Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as
follows:
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Reimbursement
to
Manager
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Master Government Securities LLC
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$
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7,935
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Master Treasury LLC
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$
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32,130
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Certain officers and/or directors of the Master LLCs are officers
and/or directors of BlackRock or its affiliates.
3. Market and Credit Risk:
In the normal course of business, the Master LLCs invest in
securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet
all its obligations (issuer credit risk). The value of securities held by the Master LLCs may decline in response to certain events, including those
directly involving the issuers whose securities are owned by the Master LLCs; conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the
Master LLCs may be exposed to counterparty credit risk, or the risk that an entity with which the Master LLCs have unsettled or open transactions may
fail to or be unable to perform on its commitments. The Master LLCs manage counterparty credit risk by entering into transactions only with
counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those
counterparties. Financial assets, which potentially expose the Master LLCs to market, issuer and counterparty credit risks, consist principally of
financial instruments and receivables due from counterparties. The extent of the Master LLCs exposure to market, issuer and counterparty credit
risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any
collateral held by the Master LLCs.
4. Subsequent Events:
Management has evaluated the impact of all subsequent events on
each Master LLC through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or
additional disclosure in the financial statements.
22
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ANNUAL REPORT
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MARCH 31, 2013
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Report of Independent Registered Public Accounting Firm
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Master Government
Securities LLC
and Master Treasury LLC
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To the Investors and Boards of Directors of Master Government
Securities LLC and Master Treasury LLC:
We have audited the accompanying statements of assets and
liabilities of Master Government Securities LLC and Master Treasury LLC (the Master LLCs), including the schedules of investments, as of
March 31, 2013, 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 Master LLCs 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 audits to obtain reasonable assurance
about whether the financial statements and financial highlights are free of material misstatement. The Master LLCs are not required to have, nor were
we engaged to perform, an audit of their 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 LLCs internal control over financial reporting. Accordingly, we express no such
opinion.
An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March
31, 2013, by correspondence with the custodian and brokers. 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 positions of Master Government Securities LLC and Master Treasury LLC as of
March 31, 2013, 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
Boston, Massachusetts
May 24,
2013
ANNUAL REPORT
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MARCH 31, 2013
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23
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