|
|
|
Notes to Financial Statements (continued)
|
The deferred compensation
plan is not funded and obligations there under represent general unsecured
claims against the general assets of each Trust. Each Trust may, however, elect
to invest in common shares of other certain BlackRock Closed-End Funds selected
by the Independent Trustees in order to match their deferred compensation
obligations. Investments to cover each Trusts deferred compensation liability
are included in other assets in the Statements of Assets and Liabilities.
Dividends and distributions from the BlackRock Closed-End Funds investments
under the plan are included in income affiliated in the Statements of
Operations.
Bank Overdraft:
BLH recorded a bank overdraft, which resulted from estimates of
available cash.
Other:
Expenses directly related to a Trust are charged to that Trust. 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 PNC Financial Services
Group, Inc. (PNC), Bank of America Corporation (BAC) and Barclays Bank PLC
(Barclays) are the largest stockholders of BlackRock, Inc. (BlackRock). Due
to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC
and Barclays are not.
Each Trust entered into an
Investment Advisory Agreement with BlackRock Advisors, LLC (the Manager), the
Trusts 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 Trusts portfolio and provides the necessary
personnel, facilities, equipment and certain other services necessary to the operations
of each Trust. For such services, each Trust pays the Manager a monthly fee of
the Trusts average weekly net assets at the following annual rates:
|
|
|
|
|
|
|
|
|
|
BMT
|
|
|
0.35
|
%
|
BPK
|
|
|
0.40
|
%
|
BJZ
|
|
|
0.40
|
%
|
BLH
|
|
|
0.40
|
%
|
|
|
|
|
|
Average weekly net assets is
the average weekly value of each Trusts total assets minus the sum of its
accrued liabilities.
The Manager has voluntarily
agreed to waive its advisory fee by the amount of investment advisory fees each
Trust pays to the Manager indirectly through its investment in affiliated money
market funds, which are shown as fees waived by advisor in the Statements of
Operations.
The Manager has entered into
a separate sub-advisory agreement with BlackRock Financial Management, Inc.
(BFM), an affiliate of the Manager, with respect to the 2018 Trusts, under
which the Manager pays BFM for services it provides, a monthly fee that is a
percentage of the investment advisory fee paid by the 2018 Trusts to the
Manager.
The administration fee paid
to the Manager by BMT is computed weekly and payable monthly based on an annual
rate of 0.10% of the Trusts average weekly net assets.
For the year ended December
31, 2009, the 2018 Trusts reimbursed the Manager for certain accounting
services, which are included in accounting services in the Statements of
Operations.
|
|
|
|
|
|
|
|
|
|
|
Reimbursement
|
|
|
|
|
|
BPK
|
|
$
|
7,330
|
|
BJZ
|
|
$
|
2,925
|
|
BLH
|
|
$
|
1,792
|
|
|
|
|
|
|
Certain officers and/or
trustees of the Trusts are officers and/or directors of BlackRock or its affiliates.
The Trusts reimburse the Manager for compensation paid to the Trusts Chief
Compliance Officer.
3. Investments:
Purchases and sales of
investments, excluding short-term securities, for the year ended December 31,
2009 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
Sales
|
|
|
|
|
|
|
|
BMT
|
|
$
|
8,402,559
|
|
$
|
17,561,745
|
|
BPK
|
|
$
|
46,653,237
|
|
$
|
35,838,507
|
|
BJZ
|
|
$
|
8,632,471
|
|
$
|
6,356,040
|
|
BLH
|
|
$
|
13,720,004
|
|
$
|
11,321,620
|
|
|
|
|
|
|
|
|
|
4. 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 net asset values per share. The following permanent
differences as of December 31, 2009 attributable to the reclassification of
distributions and income recognized from pass-through entities were
reclassified to the following accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMT
|
|
BJZ
|
|
BLH
|
|
|
|
|
|
|
|
|
|
Undistributed net
investment income
|
|
$
|
(11
|
)
|
$
|
(9,764
|
)
|
$
|
(9,767
|
)
|
Accumulated net realized
loss
|
|
$
|
11
|
|
$
|
9,764
|
|
$
|
9,767
|
|
|
|
|
|
|
|
|
|
|
|
|
The tax character of
distributions paid during the fiscal years ended December 31, 2009 and 2008 was
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMT
|
|
BPK
|
|
BJZ
|
|
BLH
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2009
|
|
$
|
11,648,652
|
|
$
|
15,470,057
|
|
$
|
5,539,894
|
|
$
|
3,580,985
|
|
12/31/2008
|
|
$
|
11,803,205
|
|
$
|
18,864,773
|
|
$
|
6,547,786
|
|
$
|
4,004,952
|
|
Ordinary income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2008
|
|
$
|
5,484
|
|
$
|
181,324
|
|
$
|
51,067
|
|
$
|
43,283
|
|
Long-term capital gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2009
|
|
$
|
41,199
|
|
|
|
|
|
|
|
|
|
|
12/31/2008
|
|
$
|
339,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2009
|
|
$
|
11,689,851
|
|
$
|
15,470,057
|
|
$
|
5,539,894
|
|
$
|
3,580,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2008
|
|
$
|
12,148,129
|
|
$
|
19,046,097
|
|
$
|
6,598,853
|
|
$
|
4,048,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
29
|
|
|
|
Notes to Financial Statements (continued)
|
As of December 31, 2009, the
tax components of accumulated net earnings were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMT
|
|
BPK
|
|
BJZ
|
|
BLH
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed tax-exempt
income
|
|
$
|
10,275,901
|
|
$
|
16,367,734
|
|
$
|
5,786,169
|
|
$
|
3,908,848
|
|
Capital loss carryforwards
|
|
|
(2,615
|
)
|
|
(14,264,806
|
)
|
|
(4,077,582
|
)
|
|
(1,154,301
|
)
|
Net unrealized gains
(losses)*
|
|
|
14,260,913
|
|
|
26,275
|
|
|
(516,945
|
)
|
|
2,340,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
24,534,199
|
|
$
|
2,129,203
|
|
$
|
1,191,642
|
|
$
|
5,095,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The differences between
book-basis and tax-basis net unrealized gains (losses) were attributable
primarily to the tax deferral of losses on wash sales, amortization methods
from premiums and discounts on fixed income securities, the accrual of income
on securities in default, the timing and recognition of partnership income,
the treatment of residual interests in tender option bond trusts, the
deferral of compensation to trustees and other book-tax temporary
differences.
|
As of December 31, 2009, the
Trusts had capital loss carryforwards available to offset future realized
capital gains through the indicated expiration dates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expires
December 31,
|
|
BMT
|
|
BPK
|
|
BJZ
|
|
BLH
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
$
|
933,303
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
$
|
230,344
|
|
2012
|
|
|
|
|
$
|
6,240,216
|
|
|
1,482,072
|
|
|
590,480
|
|
2013
|
|
|
|
|
|
|
|
|
530,943
|
|
|
|
|
2014
|
|
|
|
|
|
6,932,944
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
889,102
|
|
|
470,704
|
|
|
333,477
|
|
2017
|
|
$
|
2,615
|
|
|
202,544
|
|
|
660,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,615
|
|
$
|
14,264,806
|
|
$
|
4,077,582
|
|
$
|
1,154,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Concentration, Market and Credit Risk:
BJZ and BLH invest a
substantial amount of their assets in issuers located in a single state or
limited number of states. Please see the Schedules of Investments for
concentrations in specific states.
Many municipalities insure
repayment of their bonds, which may reduce the risk of loss due to credit risk.
The market value of these bonds may fluctuate for other reasons, including
market perception of the value of such insurance, and there is no guarantee
that the insurer will meet its obligation.
In the normal course of
business, the Trusts 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 (credit risk). The value of
securities held by the Trusts may decline in response to certain events,
including those directly involving the issuers whose securities are owned by
the Trusts; 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 credit risk, the
Trusts may be exposed to counterparty risk, or the risk that an entity with
which the Trusts have unsettled or open transactions may default. Financial
assets, which potentially expose the Trusts to credit and counterparty risks,
consist principally of investments and cash due from counterparties. The extent
of the Trusts exposure to credit and counterparty risks with respect to these
financial assets is generally approximated by their value recorded in the
Trusts Statements of Assets and Liabilities, less any collateral held by the
Trusts.
BMT invests a significant
portion of its assets in the county/city/special district/school district and
utilities sectors. BPK invests a significant portion of its assets in the
corporate and health sectors. BJZ invests a significant portion of its assets
in the county/city/special district/school district and state sectors. BLH
invests a significant portion of its assets in the county/city/special
district/school district and education sectors. Changes in economic conditions
affecting these sectors would have a greater impact on the Trusts and could
affect the value, income and/or liquidity of positions in such securities.
6. Capital Share Transactions
Common Shares
BMT is authorized to issue
200 million shares, including Preferred Shares, all of which were initially
classified as Common Shares, par value $0.01 per share. The 2018 Trusts are
authorized to issue an unlimited number of shares, including Preferred Shares,
par value $0.001 per share, all of which were initially classified as Common
Shares. Each Trusts Board is authorized, however, to reclassify any unissued
shares without approval of Common Shareholders.
During the years ended
December 31, 2009 and December 31, 2008 the shares issued and outstanding remained
constant.
Preferred Shares
The Preferred Shares are
redeemable at the option of each Trust, in whole or in part, on any dividend
payment date at their liquidation preference per share plus any accumulated and
unpaid dividends whether or not declared. The Preferred Shares are also subject
to mandatory redemption at their liquidation preference plus any accumulated
and unpaid dividends, whether or not declared, if certain requirements relating
to the composition of the assets and liabilities of a Trust, as set forth in
each Trusts Articles of Amendment/Statement of Preferences (the Governing
Instrument), are not satisfied.
From time to time in the
future, each Trust that has issued Preferred Shares may effect repurchases of
such shares at prices below their liquidation preferences as agreed upon by the
Trust and seller. Each Trust also may redeem such shares from time to time as
provided in the applicable Governing Instrument. Each Trust intends to effect
such redemptions and/or repurchases to the extent necessary to maintain
applicable asset coverage requirements or for such other reasons as the Board
may determine.
The holders of Preferred
Shares have voting rights equal to the holders of Common Shares (one vote per
share) and will vote together with the
|
|
|
|
30
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
|
|
|
Notes to Financial
Statements (concluded)
|
holders of Common Shares (one vote per share) as a single class.
However, the holders of Preferred Shares, voting as a separate class, are also
entitled to elect two Trustees for each Trust. In addition, the 1940 Act
requires that along with approval by shareholders that might otherwise be
required, the approval of the holders of a majority of any outstanding
Preferred Shares, voting separately as a class would be required to (a) adopt
any plan of reorganization that would adversely affect the Preferred Shares (b)
change the Trusts sub-classification as a closed-end investment company or
change its fundamental investment restrictions or (c) change its business so as
to cease to be an investment company.
The Trusts had
the following series of Preferred Shares outstanding, effective yields and
reset frequency at December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Preferred
Shares
|
|
Effective
Yield
|
|
Reset
Frequency
Days
|
|
|
|
|
|
|
|
|
|
|
|
BPK
|
|
W7
|
|
|
2,677
|
|
|
0.43%
|
|
|
7
|
|
|
|
R7
|
|
|
2,677
|
|
|
0.41%
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BJZ
|
|
M7
|
|
|
2,221
|
|
|
0.50%
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLH
|
|
T7
|
|
|
1,256
|
|
|
0.46%
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on
seven-day Preferred Shares are cumulative at a rate which is reset every seven
days based on the results of an auction. If the Preferred Shares fail to clear
the auction on an auction date, the affected Trust is required to pay the
maximum applicable rate on the Preferred Shares to holders of such shares for
successive dividend periods until such time as the shares are successfully
auctioned. The maximum applicable rate on all series of Preferred Shares is the
higher of 110% of AA commercial paper rate or 110% of 90% of the Kenney S&P
30-day High Grade Index rate divided by 1.00 minus the marginal tax rate. The
low, high and average dividend rates on the Preferred Shares for each Trust for
the year ended December 31, 2009 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Low
|
|
High
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
|
BPK
|
|
W7
|
|
|
0.37%
|
|
|
1.28%
|
|
|
0.58%
|
|
|
|
R7
|
|
|
0.35%
|
|
|
1.28%
|
|
|
0.58%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BJZ
|
|
M7
|
|
|
0.35%
|
|
|
1.72%
|
|
|
0.59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLH
|
|
T7
|
|
|
0.38%
|
|
|
1.43%
|
|
|
0.57%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Since February
13, 2008, the Preferred Shares of each Trust failed to clear any of their
auctions. As a result, the Preferred Shares dividend rates were reset to the
maximum applicable rate, which ranged from 0.35% to 1.72% for the year ended
December 31, 2009. A failed auction is not an event of default for the Trusts
but it has a negative impact on the liquidity of Preferred Shares. A failed
auction occurs when there are more sellers of a funds auction rate preferred
shares than buyers. A successful auction for each Trusts Preferred Shares may
not occur for some time, if ever, and even if liquidity does resume, Preferred
Shareholders may not have the ability to sell the Preferred Shares at their liquidation
preference.
The Trusts may
not declare dividends or make other distributions on Common Shares or purchase
any such shares if, at the time of the declaration, distribution or purchase,
asset coverage with respect to the outstanding Preferred Shares is less than
200%.
The Trusts pay
commissions of 0.25% on the aggregate principal amount of all shares that
successfully clear their auctions and 0.15% on the aggregate principal amount
of all shares that fail to clear their auctions. Certain broker-dealers have
individually agreed to reduce commissions for failed auctions.
Preferred
Shares issued and outstanding for the year ended December 31, 2009 for all
Trusts and the year ended December 31, 2008 for BJZ and BLH, remained constant.
During the
year ended December 31, 2008, BMT and BPK announced the following redemptions
of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid
dividends through the redemption date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Redemption
Date
|
|
Shares
Redeemed
|
|
Aggregate
Principal
|
|
|
|
|
|
|
|
|
|
|
|
BMT
|
|
|
M7
|
|
6/24/08
|
|
|
600
|
|
|
$
|
15,000,000
|
|
|
|
|
M7
|
|
11/18/08
|
|
|
2,000
|
|
|
$
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BPK
|
|
|
W7
|
|
6/26/08
|
|
|
75
|
|
|
$
|
1,875,000
|
|
|
|
|
R7
|
|
6/27/08
|
|
|
75
|
|
|
$
|
1,875,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMT had
sufficient short-term securities to satisfy the redemptions. BPK financed the
Preferred Shares redemptions with cash received from TOBs.
7. Subsequent Events:
Managements
evaluation of the impact of all subsequent events on the Trusts financial
statements was completed through February 25, 2010, the date the financial
statements were issued and the following items were noted:
Each Trust
paid a net investment income dividend on February 1, 2010 to Common
Shareholders of record on January 15, 2010 as follows:
|
|
|
|
|
|
|
|
|
|
|
Common
Dividend
Per Share
|
|
|
|
|
|
BMT
|
|
$
|
0.030417
|
|
BPK
|
|
$
|
0.078000
|
|
BJZ
|
|
$
|
0.072000
|
|
BLH
|
|
$
|
0.082000
|
|
|
|
|
|
The dividends
declared on Preferred Shares for the period January 1, 2010 to January 31, 2010
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Dividends
Declared
|
|
|
|
|
|
|
|
BPK
|
|
W7
|
|
$
|
15,716
|
|
|
|
R7
|
|
$
|
15,547
|
|
|
|
|
|
|
|
|
|
BJZ
|
|
M7
|
|
$
|
13,547
|
|
|
|
|
|
|
|
|
|
BLH
|
|
T7
|
|
$
|
7,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
31
|
|
|
|
Report of Independent
Registered Public Accounting Firm
|
To the Directors/Trustees and Shareholders
of:
BlackRock Insured Municipal Term Trust Inc.
BlackRock Municipal 2018 Term Trust
BlackRock California Municipal 2018 Term Trust
BlackRock New York Municipal 2018 Term Trust
(collectively, the Trusts)
We have
audited the accompanying statements of assets and liabilities of the Trusts,
including the schedules of investments, as of December 31, 2009, 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 Trusts 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
Trusts are not required to have, nor were we engaged to perform audits 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 Trusts 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 December 31, 2009, 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 the Trusts
as of December 31, 2009, 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
February 25, 2010
|
|
I
mportant Tax Information (Unaudited)
|
|
All of the net
investment income distributions paid by BMT, BPK, BJZ and BLH during the
taxable year ended December 31, 2009 qualify as tax-exempt interest dividends
for Federal income tax purposes.
Additionally,
BMT distributed long-term capital gains of $0.001592 per share to shareholders
of record on July 1, 2009.
|
|
|
|
|
|
32
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
|
|
|
A
utomatic
Dividend Reinvestment Plans
|
Pursuant to
each Trusts Dividend Reinvestment Plan (the Plan), Common Shareholders are
automatically enrolled to have all distributions of dividends and capital gains
reinvested by Computershare Trust Company, N.A. (the Plan Agent) in the
respective Trusts shares pursuant to the Plan. Shareholders who elect not to
participate in the Plan will receive all distributions in cash paid by check
and mailed directly to the shareholders of record (or if the shares are held in
street or other nominee name, then to the nominee) by the Plan Agent, which
serves as agent for the shareholders in administering the Plan.
After the
Trusts declare a dividend or determine to make a capital gain distribution, the
Plan Agent will acquire shares for the participants account by the purchase of
outstanding shares on the open market, on the Trusts primary exchange or
elsewhere (open market purchases). These Trusts will not issue any new shares
under the Plan.
Participation
in the Plan is completely voluntary and may be terminated or resumed at any
time without penalty by notice if received and processed by the Plan Agent
prior to the dividend record date; otherwise such termination or resumption
will be effective with respect to any subsequently declared dividend or other
distribution.
The Plan
Agents fees for the handling of the reinvestment of dividends and
distributions will be paid by each Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agents open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.
Each Trust
reserves the right to amend or terminate the Plan. There is no direct service
charge to participants in the Plan; however, each Trust reserves the right to
amend the Plan to include a service charge payable by the participants.
Participants that request a sale of shares through the Plan Agent are subject
to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All
correspondence concerning the Plan should be directed to the Plan Agent at P.O.
Box 43078, Providence, RI 02940-3078 or by calling (800) 699-1BFM. All
overnight correspondence should be directed to the Plan Agent at 250 Royall
Street, Canton, MA 02021.
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
33
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address
and Year of Birth
|
|
Position(s)
Held with
Trusts
|
|
Length
of Time
Served as
Trustee
2
|
|
Principal Occupation(s) During Past
Five Years
|
|
Number of BlackRock-
Advised Registered
Investment Companies
(RICs) Consisting of
Investment Portfolios
(Portfolios) Overseen
|
|
Public
Directorships
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interested
Trustees
1
|
|
Richard E. Cavanagh
55 East 52nd
Street
New York, NY 10055
1946
|
|
Chairman of the Board and Trustee
|
|
Since 1994
|
|
Trustee, Aircraft Finance Trust from 1999 to 2009;
Director, The Guardian Life Insurance Company of America since 1998; Trustee,
Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005
to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof
since 1996; Adjunct Lecturer, Harvard University since 2007; President and
Chief Executive Officer of The Conference Board, Inc. (global business
research organization) from 1995 to 2007.
|
|
102 RICs consisting of 100 Portfolios
|
|
Arch Chemical (chemical and allied products)
|
|
|
|
|
|
|
|
|
|
|
|
Karen P. Robards
55 East 52nd
Street
New York, NY 10055
1950
|
|
Vice Chair of the Board, Chair of the Audit Committee
and Trustee
|
|
Since 2007
|
|
Partner of Robards & Company, LLC, (financial
advisory firm) since 1987; Co-founder and Director of the Cooke Center for
Learning and Development, (a not-for-profit organization) since 1987;
Director of Enable Medical Corp. from 1996 to 2005; Investment Banker at
Morgan Stanley from 1976 to 1987.
|
|
102 RICs consisting of 100 Portfolios
|
|
AtriCure, Inc. (medical devices); Care Investment
Trust, Inc. (health care real estate investment trust)
|
|
|
|
|
|
|
|
|
|
|
|
G. Nicholas
Beckwith, III
55 East 52nd
Street
New York, NY 10055
1945
|
|
Trustee
|
|
Since 2007
|
|
Chairman and Chief Executive Officer, Arch Street
Management, LLC (Beckwith Family Foundation) and various Beckwith property
companies since 2005; Chairman of the Board of Directors, University of
Pittsburgh Medical Center since 2002; Director, Shady Side Hospital
Foundation since 1977; Director, Beckwith Institute for Innovation In Patient
Care since 1991; Member, Advisory Council on Biology and Medicine, Brown
University since 2002; Trustee, Claude Worthington Benedum Foundation
(charitable foundation) since 1989; Trustee, Chatham University since 1981;
Trustee, University of Pittsburgh since 2002; Emeritus Trustee, Shady Side
Academy since 1977; Chairman and Manager, Penn West Industrial Trucks LLC
(sales, rental and servicing of material handling equipment) from 2005 to
2007; Chairman, President and Chief Executive Officer, Beckwith Machinery
Company (sales, rental and servicing of construction and equipment) from 1985
to 2005; Director, National Retail Properties (REIT) from 2006 to 2008.
|
|
102 RICs consisting of 100 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Kent Dixon
55 East 52nd
Street
New York, NY 10055
1937
|
|
Trustee and Member of the Audit Committee
|
|
Since 1993
|
|
Consultant/Investor since 1988.
|
|
102 RICs consisting of 100 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Frank J. Fabozzi
55 East 52nd
Street
New York, NY 10055
1948
|
|
Trustee and Member of the Audit Committee
|
|
Since 1993
|
|
Consultant/Editor of The Journal of Portfolio
Management since 2006; Professor in the Practice of Finance and Becton
Fellow, Yale University, School of Management, since 2006; Adjunct Professor
of Finance and Becton Fellow, Yale University from 1994 to 2006.
|
|
102 RICs consisting of 100 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen F. Feldstein
55 East 52nd
Street
New York, NY 10055
1941
|
|
Trustee
|
|
Since 2005
|
|
President of Economics Studies, Inc. (private
economic consulting firm) since 1987; Chair, Board of Trustees, McLean
Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of
the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of
the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine
Arts, Boston since 1992; Member of the Visiting Committee to the Harvard
University Art Museum since 2003; Director, Catholic Charities of Boston
since 2009.
|
|
102 RICs consisting of 100 Portfolios
|
|
The McClatchy Company (publishing); BellSouth (telecommunications); Knight Ridder (publishing)
|
|
|
|
|
|
|
|
|
|
|
|
James T. Flynn
55 East 52nd
Street
New York, NY 10055
1939
|
|
Trustee and Member of the Audit Committee
|
|
Since 2007
|
|
Chief Financial Officer of JPMorgan & Co., Inc.
from 1990 to 1995.
|
|
102 RICs consisting of 100 Portfolios
|
|
None
|
|
|
|
|
|
|
34
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
|
|
|
Officers and Trustees (continued)
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address
and Year of Birth
|
|
Position(s)
Held with
Trusts
|
|
Length
of Time
Served as
Trustee
2
|
|
Principal Occupation(s) During Past
Five Years
|
|
Number of BlackRock-
Advised Registered
Investment Companies
(RICs) Consisting of
Investment Portfolios
(Portfolios) Overseen
|
|
Public
Directorships
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interested
Trustees
1
(concluded)
|
|
Jerrold B. Harris
55 East 52nd
Street
New York, NY 10055
1942
|
|
Trustee
|
|
Since 2007
|
|
Trustee, Ursinus College since 2000; Director,
Troemner LLC (scientific equipment) since 2000
|
|
102 RICs consisting of 100 Portfolios
|
|
BlackRock Kelso Capital Corp.
|
|
|
|
|
|
|
|
|
|
|
|
R. Glenn Hubbard
55 East 52nd
Street
New York, NY 10055
1958
|
|
Trustee
|
|
Since 2004
|
|
Dean, Columbia Business School since 2004; Columbia
faculty member since 1988; Co-Director of Columbia Business Schools
Entrepreneurship Program from 1997 to 2004; Visiting Professor at the John F.
Kennedy School of Government at Harvard University and the Harvard Business
School since 1985 and at the University of Chicago since 1994; Formerly
Chairman of the U.S. Council of Economic Advisers under the President of the
United States from 2001 to 2003.
|
|
102 RICs consisting of 100 Portfolios
|
|
ADP (data and information services); KKR Financial
Corporation (finance); Metropolitan Life Insurance Company (insurance).
|
|
|
|
|
|
|
|
|
|
|
|
W. Carl Kester
55 East 52nd
Street
New York, NY 10055
1951
|
|
Trustee and Member of the Audit Committee
|
|
Since 2007
|
|
George Fisher Baker Jr. Professor of Business
Administration, Harvard Business School; Deputy Dean for Academic Affairs
since 2006; Unit Head, Finance, Harvard Business School, from 2005 to 2006;
Senior Associate Dean and Chairman of the MBA Program of Harvard Business
School, from 1999 to 2005; Member of the faculty of Harvard Business School
since 1981; Independent Consultant since 1978.
|
|
102 RICs consisting of 100 Portfolios
|
|
None
|
|
|
|
|
|
|
1
|
Trustees serve until their
resignation, removal or death, or until December 31 of the year in which they
turn 72.
|
|
|
2
|
Date shown is the earliest
date a person has served as a Trustee for the Trusts covered in this annual
report. 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 trustees as joining the Trusts board in 2007, each trustee first
became a member of the board of other legacy MLIM or legacy BlackRock Funds
as follows: G. Nicholas Beckwith, III since 1999; Richard E. Cavanagh since
1994; Kent Dixon since 1988; Frank J. Fabozzi since 1988; Kathleen F.
Feldstein since 2005; James T. Flynn since 1996; Jerrold B. Harris since 1999;
R. Glenn Hubbard since 2004; W. Carl Kester since 1998; and Karen P. Robards
since 1998.
|
|
|
|
|
|
|
|
|
|
|
|
|
Interested Trustees
3
|
|
Richard S. Davis
55 East 52nd
Street
New York, NY 10055
1945
|
|
Trustee
|
|
Since 2007
|
|
Managing Director, BlackRock, Inc. since 2005; Chief
Executive Officer, State Street Research & Management Company from 2000
to 2005; Chairman of the Board of Trustees, State Street Research Mutual
Funds from 2000 to 2005; Chairman, SSR Realty from 2000 to 2004.
|
|
173 RICs consisting of 304 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Henry Gabbay
55 East 52nd
Street
New York, NY 10055
1947
|
|
Trustee
|
|
Since 2007
|
|
Consultant, BlackRock, Inc. from 2007 to 2008;
Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative
Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock
Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007;
Treasurer of certain closed-end funds in the BlackRock fund complex from 1989
to 2006.
|
|
173 RICs consisting of 304 Portfolios
|
|
None
|
|
|
|
|
|
|
3
|
Mr. Davis is an interested
person, as defined in the Investment Company Act of 1940, of the Trusts
based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is
an interested person of the Trusts based on his former positions with
BlackRock, Inc. and its affiliates as well as his ownership of BlackRock,
Inc. and PNC securities. Trustees serve until their resignation, removal or
death, or until December 31 of the year in which they turn 72.
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
35
|
|
|
|
Officers and Trustees (concluded)
|
|
|
|
|
|
|
|
Name, Address
and Year of Birth
|
|
Position(s)
Held with
Trusts
|
|
Length
of Time
Served
|
|
Principal Occupation(s) During Past
Five Years
|
|
|
|
|
|
|
|
Trusts
Officers
1
|
|
|
|
|
|
|
|
Anne F. Ackerley
55 East 52nd
Street
New York, NY 10055
1962
|
|
President and Chief Executive Officer
|
|
Since 2009
|
|
Managing Director of BlackRock, Inc. since 2000; Vice
President of the BlackRock-advised Funds from 2007 to 2009; Chief Operating
Officer of BlackRocks Global Client Group (GCG) since 2009; Chief Operating
Officer of BlackRocks U.S. Retail Group from 2006 to 2009; Head of
BlackRocks Mutual Fund Group from 2000 to 2006.
|
|
|
|
|
|
|
|
Brendan Kyne
55 East 52nd
Street
New York, NY 10055
1977
|
|
Vice President
|
|
Since 2009
|
|
Managing Director of BlackRock, Inc. since 2010;
Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development
and Management for BlackRocks U.S. Retail Group since 2009, Co-head thereof
from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.
|
|
|
|
|
|
|
|
Neal J. Andrews
55 East 52nd
Street
New York, NY 10055
1966
|
|
Chief Financial Officer
|
|
Since 2007
|
|
Managing Director of BlackRock, Inc. since 2006;
Senior Vice President and Line of Business Head of Fund Accounting and
Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to
2006.
|
|
|
|
|
|
|
|
Jay M. Fife
55 East 52nd
Street
New York, NY 10055
1970
|
|
Treasurer
|
|
Since 2007
|
|
Managing Director of BlackRock, Inc. since 2007 and
Director in 2006; Assistant Treasurer of the Merrill Lynch Investment
Managers, L.P. (MLIM) and Fund Asset Management, L.P. advised funds from
2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.
|
|
|
|
|
|
|
|
Brian P. Kindelan
55 East 52nd
Street
New York, NY 10055
1959
|
|
Chief Compliance Officer
|
|
Since 2007
|
|
Chief Compliance Officer of the BlackRock-advised
Funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc.
since 2005.
|
|
|
|
|
|
|
|
Howard B. Surloff
55 East 52nd
Street
New York, NY 10055
1965
|
|
Secretary
|
|
Since 2007
|
|
Managing Director and General Counsel of U.S. Funds
at BlackRock, Inc. since 2006; General Counsel (U.S.) of Goldman Sachs Asset
Management, L.P. from 1993 to 2006.
|
|
|
|
|
1
|
Officers of the Trusts
serve at the pleasure of the Board.
|
|
|
|
Investment Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809
Sub-Advisor
2
BlackRock Financial
Management, Inc.
New York, NY 10055
2
For the 2018 Trusts.
Custodian
State Street Bank and
Trust Company
Boston, MA 02111
Transfer Agent
Common Shares
Computershare Trust Company,
N.A.
Canton, MA 02021
Transfer Agent
2
Preferred Shares
BNY Mellon Shareowner
Services
Jersey City, NJ 07310
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public Accounting Firm
Deloitte & Touche
LLP
Princeton, NJ 08540
Legal Counsel
Skadden, Arps, Slate,
Meagher & Flom
LLP
New York, NY 10036
Address of the Trusts
100 Bellevue Parkway
Wilmington, DE 19809
|
|
|
|
Effective January 1, 2010,
Kent Dixon, a Trustee of the Trusts, retired.
The Trusts Board wishes Mr. Dixon well in his retirement.
|
|
|
|
|
|
|
|
|
36
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
|
|
|
Additional
Information
|
|
|
Proxy
Results
|
|
The Annual Meeting of
Shareholders was held on August 26, 2009 for shareholders of record on June 29,
2009 to elect trustee nominees of each Trust. The Board is organized into three
classes, one class of which is elected annually. Each Trustee serves a
three-year term concurrent with the class into which he or she is elected.
Approved the Class II
Trustees as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
S. Davis
|
|
Frank
J. Fabozzi
|
|
James
T. Flynn
|
|
Karen
P. Robards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMT
|
|
|
19,296,200
|
|
|
4,302,604
|
|
|
19,296,719
|
|
|
4,302,085
|
|
|
19,290,225
|
|
|
4,308,579
|
|
|
19,288,342
|
|
|
4,310,462
|
|
BPK
|
|
|
15,193,418
|
|
|
176,044
|
|
|
3,196
|
1
|
|
26
|
1
|
|
15,193,418
|
|
|
176,044
|
|
|
15,151,275
|
|
|
218,187
|
|
BJZ
|
|
|
5,933,027
|
|
|
58,460
|
|
|
1,377
|
1
|
|
33
|
1
|
|
5,933,027
|
|
|
58,460
|
|
|
5,930,327
|
|
|
61,160
|
|
BLH
|
|
|
3,345,934
|
|
|
123,391
|
|
|
812
|
1
|
|
13
|
1
|
|
3,345,934
|
|
|
123,391
|
|
|
3,344,934
|
|
|
124,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Voted on by holders of
Preferred Shares only.
|
The Trusts are listed for
trading on the New York Stock Exchange (NYSE) and have filed with the NYSE
their annual chief executive officer certification regarding compliance with
the NYSEs listing standards. Each Trust filed with the Securities and Exchange
Commission (SEC) the certification of its chief executive officer and chief
financial officer required by section 302 of the Sarbanes-Oxley Act.
The Trusts dividend policy
is to distribute all or a portion of their net investment income to their
shareholders on a monthly basis. In order to provide shareholders with a more
stable level of dividend distributions, the Trusts may at times pay out less
than the entire amount of net investment income earned in any particular month
and may at times in any particular month pay out such accumulated but
undistributed income in addition to net investment income earned in that
month. As a result, the dividends paid by the Trusts for any particular month
may be more or less than the amount of net investment income earned by the
Trusts during such month. The Trusts current accumulated but undistributed net
investment income, if any, is disclosed in the Statements of Assets and
Liabilities, which comprises part of the financial information included in this
report.
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
37
|
|
|
|
Additional
Information (continued)
|
|
|
General
Information
|
|
The Trusts do not make
available copies of their Statements of Additional Information because the
Trusts shares are not continuously offered, which means that the Statement of
Additional Information of each Trust has not been updated after completion of
the respective Trusts offerings and the information contained in each Trusts
Statement of Additional Information may have become outdated.
During the period, there were
no material changes in the Trusts investment objectives or policies or to the
Trusts charters or by-laws that were not approved by the shareholders or in
the principal risk factors associated with investment in the Trusts. There have
been no changes in the persons who are primarily responsible for the day-to-day
management of the Trusts portfolio.
Quarterly performance,
semi-annual and annual reports and other information regarding the Trusts may
be found on BlackRocks website, which can be accessed at
http://www.blackrock.com. This reference to BlackRocks website is intended to
allow investors public access to information regarding the Trusts and does not,
and is not intended to, incorporate BlackRocks website into this report.
Electronic Delivery
Electronic copies of most
financial reports are available on the Trusts websites or shareholders can
sign up for e-mail notifications of quarterly statements, annual and
semi-annual reports by enrolling in the Trusts electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors,
Banks or Brokerages:
Please contact your financial
advisor to enroll. Please note that not all investment advisors, banks or
brokerages may offer this service.
Householding
The Trusts will mail only one
copy of shareholder documents, including annual and semi-annual reports and
proxy statements, to shareholders with multiple accounts at the same address.
This practice is commonly called householding and it is intended to reduce
expenses and eliminate duplicate mailings of shareholder documents. Mailings of
your shareholder documents may be householded indefinitely unless you instruct
us otherwise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please contact the Trusts at
(800) 441-7762.
Availability of Quarterly Schedule of Investments
Each Trust files its complete
schedule of portfolio holdings with the SEC for the first and third quarters of
each fiscal year on Form N-Q. The Trusts Forms N-Q are available on the SECs
website at http://www.sec.gov and may also be reviewed and copied at the SECs
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling (202) 551-8090. Each Trusts
Forms N-Q may also be obtained upon request and without charge by calling (800)
441-7762.
Availability of Proxy Voting Policies and Procedures
A description of the policies
and procedures that the Trusts use to determine how to vote proxies relating to
portfolio securities is available (1) without charge, upon request, by calling
(800) 441-7762; (2) at www.blackrock.com; and (3) on the SECs website at
http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the
Trusts voted proxies relating to securities held in the Trusts 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 SECs website at http://www.sec.gov.
|
|
|
|
|
|
38
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
|
|
|
Additional
Information (concluded)
|
|
|
Section
19(a) Notices
|
|
These reported amounts and
sources of distributions are estimates and are not being provided for tax
reporting purposes. The actual amounts and sources for tax reporting purposes
will depend upon each Trusts investment experience during the year and may be
subject to changes based on the tax regulations. Each Trust will provide a Form
1099-DIV each calendar year that will explain the character of these dividends
and distributions for federal income tax purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Total
Cumulative Distributions
for the Fiscal Year
|
|
%
Breakdown of the Total Cumulative
Distributions for the Fiscal Year
|
|
|
|
|
|
|
|
|
|
Net
Investment
Income
|
|
Net
Realized
Capital
Gains
|
|
Return
of
Capital
|
|
Total
Per
Common
Share
|
|
Net
Investment
Income
|
|
Net
Realized
Capital
Gains
|
|
Return
of
Capital
|
|
Total
Per
Common
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMT
|
|
$
|
0.4484
|
|
$
|
0.0016
|
|
|
|
$
|
0.4500
|
|
100
|
%
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2009
|
39
|
This report is transmitted to
shareholders only. It is not a Prospectus. Past performance results shown in
this report should not be considered a representation of future performance.
BPK, BJZ and BLH leverage their Common Shares, which creates risks for Common
Shareholders, including the likelihood of greater volatility of net asset value
and market price of the Common Shares and the risk that fluctuations in the
short-term dividend rates of the Preferred Shares, currently set at the maximum
reset rate as a result of failed auctions, may reduce the Common Shares yield.
Statements and other information herein are as dated and are subject to change.
|
|
|
|
|
|
|
#CEF-BK4-1209
|
Item 2 –
|
Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. During the period covered by this report, there have been no
amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.
|
|
|
Item 3 –
|
Audit Committee Financial Expert – The registrant’s board of directors or trustees, as applicable (the “board of directors”) has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:
|
|
Kent Dixon (retired effective December 31, 2009)
|
|
Frank J. Fabozzi
|
|
James T. Flynn
|
|
W. Carl Kester
|
|
Karen P. Robards
|
|
|
|
The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.
|
|
|
|
Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of
complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.
|
|
|
|
Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and
assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.
|
|
|
|
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
|
Entity Name
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
The BlackRock Insured Municipal Term Trust Inc.
|
$27,500
|
$26,800
|
$0
|
$3,500
|
$6,100
|
$6,100
|
$1,028
|
$1,049
|
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:
|
Entity Name
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
The BlackRock Insured Municipal Term Trust Inc.
|
$414,628
|
$415,649
|
|
(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) – $407,500, 0%
|
|
|
Item 5 –
|
Audit Committee of Listed Registrants – The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):
|
|
|
|
Kent Dixon (retired effective December 31, 2009)
|
|
Frank J. Fabozzi
|
|
James T. Flynn
|
|
W. Carl Kester
|
|
Karen P. Robards
|
|
|
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 – The board of directors has delegated the voting of proxies for the Fund securities to the Fund’s investment adviser (“Investment Adviser”) pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser
will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the
“Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment
Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding
the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at
http://www.sec.gov
.
|
|
|
Item 8 –
|
Portfolio Managers of Closed-End Management Investment Companies – as of December 31, 2009.
|
|
|
|
(a)(1)
|
The registrant is managed by a team of investment professionals comprised of F. Howard Downs, Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the
day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. Downs, Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2007, 2006 and 2006, respectively.
|
Portfolio Manager
|
Biography
|
F. Howard Downs
|
Director of BlackRock, Inc. since 2004; Vice President of BlackRock, Inc. from 1999 to 2004.
|
Theodore R. Jaeckel, Jr.
|
Managing Director at BlackRock, Inc. since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director of MLIM from 1997 to 2005.
|
Walter O’Connor
|
Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.
|
|
(a)(2)
|
As of December 31, 2009:
|
|
|
|
|
(ii) Number of Other Accounts Managed
and Assets by Account Type
|
(iii) Number
of
Other
Accounts
and
Assets
for Which Advisory Fee is
Performance-Based
|
(i) Name of
Portfolio Manager
|
Other
Registered
Investment
Companies
|
Other Pooled
Investment
Vehicles
|
Other
Accounts
|
Other
Registered
Investment
Companies
|
Other Pooled
Investment
Vehicles
|
Other
Accounts
|
Walter O’Connor
|
76
|
0
|
0
|
0
|
0
|
0
|
|
$19.04 Billion
|
$0
|
$0
|
$0
|
$0
|
$0
|
Theodore R. Jaeckel, Jr.
|
76
|
0
|
0
|
0
|
0
|
0
|
|
$19.04 Billion
|
$0
|
$0
|
$0
|
$0
|
$0
|
F. Howard Downs
|
9
|
3
|
35
|
0
|
0
|
0
|
|
$1.61 Billion
|
$119.6 Million
|
$990.4 Million
|
$0
|
$0
|
$0
|
|
|
|
|
(iv)
|
Potential Material Conflicts of Interest
|
|
|
|
|
BlackRock and its affiliates (collectively, herein “BlackRock”) has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of
portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund,
|
|
|
|
and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates
and significant shareholders and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock
may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Each
portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. In this connection, it should be noted that a portfolio manager may currently manage certain accounts that are subject to performance fees. In addition, a portfolio manager may assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive
fees may be voluntarily or involuntarily deferred. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees.
|
|
|
|
As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential
treatment. To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time. This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base.
|
|
(a)(3)
|
As of December 31, 2009:
|
|
|
|
|
Portfolio Manager Compensation Overview
|
|
|
|
BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based
discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock such as its Long-Term Retention and Incentive Plan and Restricted Stock Program.
|
|
|
|
Base compensation.
Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other
capacities.
|
|
|
|
Discretionary Incentive Compensation
|
|
|
|
Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s
seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock. In most cases, including for the portfolio managers of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks against which the
performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to the portfolio managers, such benchmarks for the Fund include a combination of market-based indices (e.g., Barclays Capital Municipal Bond Index), certain customized indices and certain fund industry peer groups.
|
|
|
|
BlackRock’s Chief Investment Officers make a subjective determination with respect to the portfolio managers’ compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above. Performance is measured on both a pre-tax and after-tax basis over various time periods including 1, 3, 5 and 10-year
periods, as applicable.
|
|
|
|
Distribution of Discretionary Incentive Compensation
|
|
|
|
Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total
compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods.
|
|
|
|
Long-Term Retention and Incentive Plan (“LTIP”) —
The LTIP is a long-term incentive plan that seeks to reward certain key employees. Prior to 2006, the plan provided for the grant of awards that were expressed as an amount of cash that, if properly vested and subject to the attainment of
certain performance goals, will be settled in cash and/or in BlackRock, Inc. common stock. Beginning in 2006, awards are granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the attainment of certain performance goals, will be settled in BlackRock, Inc. common stock. Messrs. O’Connor, Jaeckel and Downs have each received awards under the LTIP.
|
|
|
|
Deferred Compensation Program —
A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his
deferred amounts among the various investment options. Messrs. O’Connor, Jaeckel and Downs have each participated in the deferred compensation program.
|
|
|
|
Other compensation benefits.
In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:
|
|
|
|
Incentive Savings Plans —
BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50%
of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation. The RSP offers a range of investment options, including registered investment companies managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio. The ESPP
allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans.
|
|
|
|
|
(a)(4)
|
Beneficial Ownership of Securities
– December 31, 2009
.
|
Portfolio Manager
|
Dollar Range of Equity Securities Beneficially Owned
|
Walter O’Connor
|
None
|
Theodore R. Jaeckel, Jr.
|
None
|
F. Howard Downs
|
None
|
Item 9 –
|
Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.
|
|
|
Item 10 –
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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 that 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.
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Item 11 –
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Controls and Procedures
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11(a) –
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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 13(a)-15(b) under the Securities Exchange Act of 1934, as amended.
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11(b) –
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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.
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Item 12 –
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Exhibits attached hereto
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12(a)(1) –
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Code of Ethics – See Item 2
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12(a)(2) –
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Certifications – Attached hereto
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12(a)(3) –
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Not Applicable
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12(b) –
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Certifications – Attached hereto
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12(c) –
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Not Applicable to this registrant
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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.
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The BlackRock Insured Municipal Term Trust Inc.
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By:
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/s/ Anne F. Ackerley
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Anne F. Ackerley
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Chief Executive Officer of
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The BlackRock Insured Municipal Term Trust Inc.
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Date: February 23, 2010
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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.
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By:
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/s/ Anne F. Ackerley
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Anne F. Ackerley
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Chief Executive Officer (principal executive officer) of
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The BlackRock Insured Municipal Term Trust Inc.
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Date: February 23, 2010
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By:
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/s/ Neal J. Andrews
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Neal J. Andrews
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Chief Financial Officer (principal financial officer) of
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The BlackRock Insured Municipal Term Trust Inc.
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Date: February 23, 2010
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