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Proc-Type: 2001,MIC-CLEAR
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UNITEDSTATES
Investment Company Act file number 811-06499
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE)
NOT FDIC INSURED
2 ANNUAL REPORT JULY 31, 2009 Dear Shareholder The market environment has clearly improved since the beginning of the year, but a great deal of uncertainty and risk remain. Through periods of market tur- Announcement to Shareholders Fund Summary as of July 31, 2009 BlackRock Muni New York Intermediate Duration Fund, Inc. 4 ANNUAL REPORT JULY 31, 2009 Fund Summary as of July 31, 2009 BlackRock MuniYield Arizona Fund, Inc. ANNUAL REPORT JULY 31, 2009 5 Fund Summary as of July 31, 2009 BlackRock MuniYield California Fund, Inc. 6 ANNUAL REPORT JULY 31, 2009 Fund Summary as of July 31, 2009 BlackRock MuniYield Investment Fund ANNUAL REPORT JULY 31, 2009 7 Fund Summary as of July 31, 2009 BlackRock MuniYield New Jersey Fund, Inc. 8 ANNUAL REPORT JULY 31, 2009
The Benefits and Risks of Leveraging
Funds with economic benefits in periods of declining short-term interest
Derivative Financial Instruments
instrument depends on the investment advisors ability to accurately pre-
ANNUAL REPORT JULY 31, 2009 9
Schedule of Investments July 31, 2009 BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock Muni New York
Intermediate Duration Fund, Inc. (MNE)
See Notes to Financial Statements.
Schedule of Investments (concluded) BlackRock Muni New York
Intermediate Duration Fund, Inc. (MNE)
See Notes to Financial Statements.
Schedule of Investments July 31, 2009 BlackRock MuniYield Arizona Fund, Inc. (MZA)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock MuniYield Arizona Fund,
Inc. (MZA)
See Notes to Financial Statements.
Schedule of Investments (concluded) BlackRock MuniYield Arizona Fund,
Inc. (MZA)
See Notes to Financial Statements.
Schedule of Investments July 31, 2009 BlackRock MuniYield California Fund, Inc. (MYC)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock MuniYield California
Fund, Inc. (MYC)
See Notes to Financial Statements.
Schedule of Investments (concluded) BlackRock MuniYield California
Fund, Inc. (MYC)
See Notes to Financial Statements.
Schedule of Investments July 31, 2009 BlackRock MuniYield Investment Fund (MYF)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock MuniYield Investment
Fund (MYF)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock MuniYield Investment
Fund (MYF)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock MuniYield Investment
Fund (MYF)
See Notes to Financial Statements.
Schedule of Investments (concluded) BlackRock MuniYield Investment
Fund (MYF)
See Notes to Financial Statements.
Schedule of Investments July 31, 2009 BlackRock MuniYield New Jersey Fund, Inc. (MYJ)
See Notes to Financial Statements.
Schedule of Investments (continued) BlackRock MuniYield New Jersey
Fund, Inc. (MYJ)
See Notes to Financial Statements.
Schedule of Investments (concluded) BlackRock MuniYield New Jersey
Fund, Inc. (MYJ)
See Notes to Financial Statements. Statements of Assets and Liabilities See Notes to Financial Statements.
See Notes to Financial Statements. Statements of Changes in Net Assets BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE) See Notes to Financial Statements. Statements of Changes in Net Assets BlackRock MuniYield California Fund, Inc. (MYC) See Notes to Financial Statements. Statements of Changes in Net Assets BlackRock MuniYield New Jersey Fund, Inc. (MYJ) See Notes to Financial Statements.
See Notes to Financial Statements. See Notes to Financial Statements. See Notes to Financial Statements. See Notes to Financial Statements. See Notes to Financial Statements. See Notes to Financial Statements.
Notes to Financial Statements
conditions only with the intention of actually acquiring them, but may enter
38 ANNUAL REPORT JULY 31, 2009
Financial transactions executed through TOBs generally will underperform
security transactions are determined on the identified cost basis. Dividend
The statutes of limitations on the Funds state and local tax returns may
ANNUAL REPORT JULY 31, 2009 39
Notes to Financial Statements (continued)
3. Investment Advisory Agreement and Other Transactions
40 ANNUAL REPORT JULY 31, 2009 ANNUAL REPORT JULY 31, 2009 41 6. Concentration, Market and Credit Risk: due from counterparties. The extent of the Funds exposure to credit and 42 ANNUAL REPORT JULY 31, 2009 Notes to Financial Statements (continued) 2 The maximum applicable rate on this series of Preferred Shares is the higher Since February 13, 2008, the Preferred Shares of each Fund failed to ANNUAL REPORT JULY 31, 2009 43 44 ANNUAL REPORT JULY 31, 2009
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of BlackRock MuniYield
appropriate in the circumstances, but not for the purpose of expressing an
ANNUAL REPORT JULY 31, 2009 45 46 ANNUAL REPORT JULY 31, 2009
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements
The Board of Directors (each, a Board and, collectively, the Boards,
peer funds, and applicable benchmarks, if any, as well as senior manage-
ANNUAL REPORT JULY 31, 2009 47
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)
affiliates from the relationship with the Funds; (d) economies of scale; and
meetings and preparing the materials for such Board meetings; (vii) provid-
48 ANNUAL REPORT JULY 31, 2009
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)
For MNE, MYC and MYF, the Board of each respective Fund and BlackRock
asset management firms, which concluded that larger asset bases do not,
ANNUAL REPORT JULY 31, 2009 49
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)
In connection with their consideration of the Agreements, the Boards also
were fair and reasonable and in the best interest of its respective Fund and
50 ANNUAL REPORT JULY 31, 2009
Automatic Dividend Reinvestment Plan
Benefits of the Plan The Plan provides an easy, convenient way
for
ANNUAL REPORT JULY 31, 2009 51
52 ANNUAL REPORT JULY 31, 2009
ANNUAL REPORT JULY 31, 2009 53
Effective July 31, 2009, Donald C. Burke, President of BlackRock Muni New York Intermediate Duration Fund, Inc., BlackRock
54 ANNUAL REPORT JULY 31, 2009
ANNUAL REPORT JULY 31, 2009 55
Additional Information
Householding
56 ANNUAL REPORT JULY 31, 2009
Additional Information (continued)
net investment income earned in that month. As a result, the dividends
Fund Certification
Funds filed with the SEC the certification of its chief executive officer and
Board Approvals
investing a substantial portion of its assets in Florida municipal bonds until
ANNUAL REPORT JULY 31, 2009 57 Additional Information (concluded) the tax regulations. Each Fund will send you a Form 1099-DIV each calen- BlackRock Privacy Principles BlackRock does not sell or disclose to non-affiliated third parties any non- 58 ANNUAL REPORT JULY 31, 2009
This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a
representa-
Item 2 Code of Ethics The registrant (or the Fund) has adopted a code of ethics, as of the end of the
Prof. Kester has a thorough understanding of generally accepted accounting principles, financial
1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
(f) Not Applicable
(h) The registrants audit committee has considered and determined that the provision of non-audit
Regulation S-X Rule 2-01(c)(7)(ii) $407,500, 0%
concluding that the vote cast is in its clients best interest notwithstanding the conflict. A copy of the
Item 8 Portfolio Managers of Closed-End Management Investment Companies as of July 31, 2009.
BlackRock and its affiliates (collectively, herein BlackRock) has built a professional working
paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such
Discretionary Incentive Compensation
Incentive Savings Plans BlackRock, Inc. has created a variety of incentive savings plans
in which
Portfolio Manager Dollar Range of Equity Securities
Item 9 Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
11(a) The registrants principal executive and principal financial officers or persons performing similar
Item 12 Exhibits attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company
By: /s/ Anne F. Ackerley
Date: September 22, 2009
By: /s/ Anne F. Ackerley
Date: September 22, 2009
By: /s/ Neal J. Andrews
Date: September 22, 2009 ,+G&/\`OHU#9:9':3>;Y\\[A/+0S,#L7.<#`'H.3D\4`4-1U:2+5K!+
M:5&M"%: EX-99.CERT I, Anne F. Ackerley, Chief Executive Officer (principal executive officer) of BlackRock MuniYield California Fund, Inc., 1. I have reviewed this report on Form N-CSR of BlackRock MuniYield California Fund, Inc.; material fact necessary to make the statements made, in light of the circumstances under which such statements were made, a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee a) all significant deficiencies and material weaknesses in the design or operation of internal control over Date: September 22, 2009 Anne F. Ackerley EX-99.CERT I, Neal J. Andrews, Chief Financial Officer (principal financial officer) of BlackRock MuniYield California 1. I have reviewed this report on Form N-CSR of BlackRock MuniYield California Fund, Inc.; omit to state a material fact necessary to make the statements made, in light of the circumstances under a) designed such disclosure controls and procedures, or caused such disclosure controls and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the a) all significant deficiencies and material weaknesses in the design or operation of internal b) any fraud, whether or not material, that involves management or other employees who /s/ Neal J. Andrews Exhibit 99.1350CERT Certification Pursuant to Rule 30a-2(b) under the 1940 Act and Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock MuniYield California Fund, Inc. (the Anne F. Ackerley Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock MuniYield California Fund, Inc. (the Neal J. Andrews This certification is being furnished pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Name of Fund: BlackRock MuniYield California Fund, Inc. (MYC)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock
MuniYield California Fund, Inc., 40 East 52nd Street, New York, NY 10022.
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 07/31/2009
Date of reporting period: 07/31/2009
Item 1 Report to Stockholders
Annual Report
JULY 31, 2009
BlackRock MuniYield Arizona Fund, Inc. (MZA)
BlackRock MuniYield California Fund, Inc. (MYC)
BlackRock MuniYield Investment Fund (MYF)
BlackRock MuniYield New Jersey Fund, Inc. (MYJ)
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents
Page
Dear Shareholder
3
Annual Report:
Fund Summaries
4
The Benefits and Risks of Leveraging
9
Derivative Financial Instruments
9
Financial Statements:
Schedules of Investments
10
Statements of Assets and Liabilities
27
Statements of Operations
28
Statements of Changes in Net Assets
29
Statement of Cash Flows
32
Financial Highlights
33
Notes to Financial Statements
38
Report of Independent Registered Public Accounting Firm
45
Important Tax Information
46
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements
47
Automatic Dividend Reinvestment Plan
51
Officers and Directors
52
Additional Information
56
The past 12 months reveal two distinct market backdrops one of extreme investor pessimism and decided weakness, and another of cautious optimism
and nascent signs of recovery. The first half of the period was characterized by the former, as the global financial crisis erupted into the worst recession
in decades. Daily headlines recounted universal macroeconomic deterioration, financial sector casualties, volatile swings in global equity markets, and
unprecedented government intervention that included widespread (and globally coordinated) monetary and quantitative easing by central banks and large-
scale fiscal stimuli. Sentiment improved noticeably in March 2009, however, on the back of new program announcements by the US Treasury Department
and Federal Reserve, as well as generally stronger-than-expected economic data in a few key areas, including retail sales, business and consumer confidence,
manufacturing and housing.
In this environment, US equities contended with extraordinary volatility, posting steep declines through mid-March 2009 before going on a three-month
rally that largely negated year-to-date losses. Late in the period, investor enthusiasm waned and a correction ensued for several weeks, mostly as a result
of profit taking and portfolio rebalancing, as opposed to a change in the economic outlook. Equities rallied once again as the period drew to a close, result-
ing in positive year-to-date returns for all major indexes. The experience in international markets was similar to that in the United States, though performance
was generally more extreme both on the decline and on the upturn. Notably, emerging markets, which lagged most developed regions through the downturn,
reassumed leadership in 2009 as these areas of the globe have generally seen a stronger acceleration in economic recovery.
In fixed income markets, while the flight to quality remained a prevalent theme, relatively attractive yields and distressed valuations, alongside a more
favorable macro environment, eventually captured investor attention, leading to a sharp recovery in non-Treasury assets. This has been particularly evident
in the high yield sector, which has firmly outpaced all other taxable asset classes since the start of 2009. At the same time, the municipal bond market
enjoyed a strong return after the exceptional market volatility of 2008, buoyed by a combination of attractive valuations, robust retail investor demand and
a slowdown in forced selling. Direct aid to state and local governments via the American Recovery and Reinvestment Act of 2009 has also lent support
to municipal bonds.
Total Returns as of July 31, 2009
6-month
12-month
US equities (S&P 500 Index)
21.18%
(19.96)%
Small cap US equities (Russell 2000 Index)
26.61
(20.72)
International equities (MSCI Europe, Australasia, Far East Index)
30.63
(22.60)
US Treasury securities (Merrill Lynch 10-Year US Treasury Index)
(3.91)
7.58
Taxable fixed income (Barclays Capital US Aggregate Bond Index)
4.47
7.85
Tax-exempt fixed income (Barclays Capital Municipal Bond Index)
4.38
5.11
High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)
30.11
5.30
Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.
bulence, as ever, BlackRocks full resources are dedicated to the management of our clients assets. For additional insight and timely food for thought, we
invite you to visit our award-winning Shareholder® magazine, now available exclusively online at www.blackrock.com/shareholdermagazine. We thank you
for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.
On June 16, 2009, BlackRock, Inc. announced that it received written notice from Barclays PLC (Barclays) in which Barclays Board of Directors had
accepted BlackRocks offer to acquire Barclays Global Investors (BGI). At a special meeting held on August 6, 2009, BlackRocks proposed purchase of
BGI was approved by an overwhelming majority of Barclays voting shareholders, an important step toward closing the transaction. The combination of
BlackRock and BGI will bring together market leaders in active and index strategies to create the preeminent asset management firm. The transaction is
scheduled to be completed in the fourth quarter of 2009, subject to important fund shareholder and regulatory approvals.
THIS PAGE NOT PART OF YOUR FUND REPORT 3
Investment Objective
BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE) (the Fund) seeks to provide shareholders with high current income exempt from fed-
eral income taxes and New York State and New York City personal income taxes by investing primarily in a portfolio of municipal obligations, the interest on
which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes and New York State and New York City personal income taxes. No
assurance can be given that the Funds investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 1.79% based on market price and 2.26% based on net asset value (NAV). For the same period,
the closed-end Lipper Intermediate Municipal Debt Funds category posted an average return of 6.93% based on market price and 2.06% on a NAV basis.
All returns reflect reinvestment of dividends. The Funds discount to NAV, which widened during the period, accounts for the difference between performance
based on price and performance based on NAV. During the period, the Funds distribution rate improved to roughly average for the peer group. Total return
reflected a combination of the Funds underperformance in the volatile fixed income markets through 2008, and its outperformance during the remarkable
recovery in risk assets and return of the municipal market to more normal demand metrics through the first half of 2009. During the period, we identified
sectors and credits that we were comfortable holding despite underperformance in the short term; these included some high yield credits, in addition to
Puerto Rico and housing bonds. Each of these segments ultimately benefited the Fund, as they outperformed during the markets recovery. We also actively
participated in the new-issue market. Where possible, we focused on both longer-dated maturities permitted by the Funds intermediate duration mandate,
as well as discount coupon bonds to benefit from the increased demand from the retail sector.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
Symbol on New York Stock Exchange (NYSE)
MNE
Initial Offering Date
August 1, 2003
Yield on Closing Market Price as of July 31, 2009 ($11.60)1
5.74%
Tax Equivalent Yield2
8.83%
Current Monthly Distribution per Common Share3
$0.0555
Current Annualized Distribution per Common Share3
$0.6660
Leverage as of July 31, 20094
36%
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 Represents Auction Market Preferred Shares (Preferred Shares) and tender option bond trusts (TOBs) as a percentage of total managed assets,
which is the total assets of the Fund (including any assets attributable to Preferred Shares and TOBs) minus the sum of accrued liabilities. For a
discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 9.
The table below summarizes the changes in the Funds market price and NAV per share:
7/31/09
7/31/08
Change
High
Low
Market Price
$11.60
$12.12
(4.29)%
$12.33
$ 7.50
Net Asset Value
$12.99
$13.51
(3.85)%
$13.88
$10.70
The following unaudited charts show the sector and credit quality allocations of the Funds long-term investments:
Sector Allocations
7/31/09
7/31/08
Health
18%
20%
County/City/Special District/
School District
17
20
Transportation
16
9
State
14
12
Housing
11
12
Education
8
9
Corporate
8
7
Utilities
7
9
Tobacco
1
2
Credit Quality Allocations5
7/31/09
7/31/08
AAA/Aaa
9%
6%
AA/Aa
31
43
A/A
31
21
BBB/Baa
19
15
BB/Ba
4
9
CCC/Caa
2
2
Not Rated6
4
4
5 Using the higher of Standard & Poors (S&P) or Moodys Investors
Service (Moodys) ratings.
6 The investment advisor has deemed certain of these non-rated
securities to be of investment grade quality. As of July 31, 2009
and 2008, the market value of these securities were $1,646,778
representing 2% and $1,927,760 representing 2%, respectively, of
the Funds long-term investments.
Investment Objective
BlackRock MuniYield Arizona Fund, Inc. (MZA) (the Fund) seeks to provide shareholders with as high a level of current income exempt from federal
and Arizona income taxes as is consistent with its investment policies and prudent investment management by investing primarily in a portfolio of long-term,
investment grade municipal obligations, the interest on which, in the opinion of bond counsel to the issuers, is exempt from federal and Arizona income taxes.
No assurance can be given that the Funds investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned (1.66)% based on market price and 3.27% based on NAV. For the same period, the closed-end
Lipper Other States Municipal Debt Funds category posted an average return of 4.52% based on market price and 3.12% on a NAV basis. All returns reflect
reinvestment of dividends. The Funds premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and
performance based on NAV. The benefit of above average yield is reflected in the total return of the portfolio. This is a product of the yield of the securities held
within the portfolio. During the first half of the period, performance was hindered by above-average exposure to the longer end of the yield curve, where yields
rose. Above-average exposure to lower-rated credits and other spread sectors, such as housing bonds, also hurt performance. The spread between high-grade
and lower-rated credits generally widened during the first half of the period, as credit markets adjusted to higher perceived risks and an overall weaker economy.
Fortunately, during the second half of the period, both of these factors reversed course and benefited the Fund. The yield curve flattened and credit spreads gen-
erally narrowed. Throughout the period, we worked to upgrade credit quality, when practical, in an often very volatile and illiquid market.Additionally, we favored
moving in the curve opportunistically. During the 12 months, Fund management maintained high cash allocations in an effort to reduce volatility and ensure that
ample cash was available to take advantage of opportunities in the new-issue market. The Funds cash balance lowered portfolio duration, which was beneficial;
however, it also held the yield down slightly as the money was invested in lower-yielding short-term investments, a negative factor.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
Symbol on NYSE Amex
MZA
Initial Offering Date
October 29, 1993
Yield on Closing Market Price as of July 31, 2009 ($12.85)1
6.26%
Tax Equivalent Yield2
9.63%
Current Monthly Distribution per Common Share3
$0.067
Current Annualized Distribution per Common Share3
$0.804
Leverage as of July 31, 20094
42%
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa-
ble to Preferred Shares and TOBs) minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see
The Benefits and Risks of Leveraging on page 9.
The table below summarizes the changes in the Funds market price and NAV per share:
7/31/09
7/31/08
Change
High
Low
Market Price
$12.85
$13.94
(7.82)%
$14.30
$7.28
Net Asset Value
$12.40
$12.81
(3.20)%
$13.12
$9.60
The following unaudited charts show the sector and credit quality allocations of the Funds long-term investments:
Sector Allocations
7/31/09
7/31/08
County/City/Special District/
School District
25%
22%
Utilities
19
17
State
17
9
Health
13
15
Education
12
23
Housing
8
10
Transportation
5
3
Corporate
1
1
Credit Quality Allocations5
7/31/09
7/31/08
AAA/Aaa
25%
11%
AA/Aa
22
36
A/A
29
27
BBB/Baa
19
20
BB/Ba
1
1
B/B
1
1
Not Rated6
3
4
5 Using the higher of S&Ps or Moodys ratings.
6 The investment advisor has deemed certain of these non-rated
securities to be of investment grade quality. As of July 31, 2009
and 2008, the market value of these securities were $1,515,561
representing 2% and $2,300,385 representing 2%, respectively, of
the Funds long-term investments.
Investment Objective
BlackRock MuniYield California Fund, Inc. (MYC) (the Fund) seeks to provide shareholders with as high a level of current income exempt from federal
and California income taxes as is consistent with its investment policies and prudent investment management by investing primarily in a portfolio of long-
term municipal obligations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal and California income taxes. No
assurance can be given that the Funds investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 1.37% based on market price and 4.64% based on NAV. For the same period, the closed-end
Lipper California Municipal Debt Funds category posted an average return of (3.92)% based on market price and (5.13)% on a NAV basis. All returns reflect
reinvestment of dividends. The Funds discount to NAV, which widened during the period, accounts for the difference between performance based on price and
performance based on NAV. The Funds duration positioning was neutral for most of the period. The majority of the Funds outperformance was derived from a
tightening in credit spreads. Along with extremely attractive borrowing costs, the portfolio accrual permitted an increase in dividends in June. Our strategy is to
pursue a balanced approach to returns, continue to bolster current yield and commit cash reserves when appropriate opportunities are uncovered. Credit fun-
damentals warrant monitoring in the current weak economic environment, especially in California, considering budgetary challenges. We are alert to improve
quality as opportunities arise.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
Symbol on NYSE
MYC
Initial Offering Date
February 28, 1992
Yield on Closing Market Price as of July 31, 2009 ($12.44)1
6.51%
Tax Equivalent Yield2
10.02%
Current Monthly Distribution per Common Share3
$0.0675
Current Annualized Distribution per Common Share3
$0.8100
Leverage as of July 31, 20094
39%
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa-
ble to Preferred Shares and TOBs) minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The
Benefits and Risks of Leveraging on page 9.
The table below summarizes the changes in the Funds market price and NAV per share:
7/31/09
7/31/08
Change
High
Low
Market Price
$12.44
$13.07
(4.82)%
$13.41
$ 7.07
Net Asset Value
$13.47
$13.71
(1.75)%
$14.06
$10.31
The following unaudited charts show the sector and credit quality allocations of the Funds long-term investments:
Sector Allocations
Credit Quality Allocations5
7/31/09
7/31/08
7/31/09
7/31/08
County/City/Special District/
AAA/Aaa
34%
43%
School District
35%
34%
AA/Aa
30
39
Utilities Electric & Gas (combined)
28
20
A/A
34
14
Education
13
15
BBB/Baa
1
4
Health
9
15
Not Rated
16
State
7
4
5 Using the higher of S&Ps or Moodys ratings.
Transportation
6
4
6 The investment advisor has deemed certain of these non-rated
Corporate
1
4
securities to be of investment grade quality. As of July 31, 2009, the
Housing
1
4
market value of these securities was $2,589,445 representing 1% of
the Funds long-term investments.
Investment Objective
BlackRock MuniYield Investment Fund (MYF) (the Fund) seeks to provide shareholders with as high a level of current income exempt from federal income
taxes as is consistent with its investment policies and prudent investment management by investing primarily in a portfolio of long-term municipal obligations,
the interest on which, in the opinion of bond counsel to the issuers, is exempt from federal income taxes. The Fund also seeks to provide shareholders with the
opportunity to own shares the value of which is exempt from Florida intangible personal property taxes. Effective September 16, 2008, BlackRock MuniYield
Florida Fund was renamed BlackRock MuniYield Investment Fund. No assurance can be given that the Funds investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 5.26% based on market price and 1.93% based on NAV. For the same period, the closed-end
Lipper General Municipal Debt Funds (Leveraged) category posted an average return of 2.20% based on market price and (2.40)% on a NAV basis. All returns
reflect reinvestment of dividends. The Funds discount to NAV, which narrowed during the period, accounts for the difference between performance based on
price and performance based on NAV. Sector allocation played an important role in determining how the Fund performed during the reporting period. The
Funds significant overweight in pre-refunded bonds in the one- to five-year maturity range aided comparative results, as the yield curve steepened.
Overweight exposure to the education and transportation sectors also enhanced the Funds performance.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
Symbol on NYSE
MYF
Initial Offering Date
February 28, 1992
Yield on Closing Market Price as of July 31, 2009 ($11.72)1
5.94%
Tax Equivalent Yield2
9.14%
Current Monthly Distribution per Common Share3
$0.058
Current Annualized Distribution per Common Share3
$0.696
Leverage as of July 31, 20094
39%
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa-
ble to Preferred Shares and TOBs) minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The
Benefits and Risks of Leveraging on page 9.
The table below summarizes the changes in the Funds market price and NAV per share:
7/31/09
7/31/08
Change
High
Low
Market Price
$11.72
$11.91
(1.60)%
$12.17
$ 6.74
Net Asset Value
$12.95
$13.59
(4.71)%
$13.87
$10.49
The following unaudited charts show the sector and credit quality allocations of the Funds long-term investments:
Sector Allocations
7/31/09
7/31/08
County/City/Special District/
School District
29%
30%
Utilities
19
10
Health
17
19
Transportation
16
24
State
9
4
Education
5
5
Housing
5
4
Corporate
4
Credit Quality Allocations5
7/31/09
7/31/08
AAA/Aaa
23%
34%
AA/Aa
39
34
A/A
34
16
BBB/Baa
8
Not Rated6
4
8
5 Using the higher of S&Ps or Moodys ratings.
6 The investment advisor has deemed certain of these non-rated securi-
ties to be of investment grade quality. As of July 31, 2009 and 2008,
the market value of these securities were $4,309,488 representing
2% and $13,599,832 representing 5%, respectively, of the Funds
long-term investments.
Investment Objective
BlackRock MuniYield New Jersey Fund, Inc. (MYJ) (the Fund) seeks to provide shareholders with as high a level of current income exempt from federal
and New Jersey income taxes as is consistent with its investment policies and prudent investment management by investing primarily in a portfolio of long-
term, investment grade municipal obligations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income tax and New
Jersey personal income taxes. No assurance can be given that the Funds investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 5.96% based on market price and 4.50% based on NAV. For the same period, the closed-end
Lipper New Jersey Municipal Debt Funds category posted an average return of 4.58% based on market price and 1.31% on a NAV basis. All returns reflect
reinvestment of dividends. The Funds discount to NAV, which narrowed during the period, accounts for the difference between performance based on price
and performance based on NAV. Sector allocation played an important role in determining how the Fund performed during the reporting period. Enhancing the
performance of the Fund were its overweight positions in education, tax-backed and utility bonds. As the economic downturn continued, these essential serv-
ice sectors significantly outperformed all spread products.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
Symbol on NYSE
MYJ
Initial Offering Date
May 1, 1992
Yield on Closing Market Price as of July 31, 2009 ($13.49)1
6.27%
Tax Equivalent Yield2
9.65%
Current Monthly Distribution per Common Share3
$0.0705
Current Annualized Distribution per Common Share3
$0.8460
Leverage as of July 31, 20094
35%
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa-
ble to Preferred Shares and TOBs) minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The
Benefits and Risks of Leveraging on page 9.
The table below summarizes the changes in the Funds market price and NAV per share:
7/31/09
7/31/08
Change
High
Low
Market Price
$13.49
$13.52
(0.22)%
$14.00
$ 8.15
Net Asset Value
$14.13
$14.36
(1.60)%
$14.68
$11.62
The following unaudited charts show the sector and credit quality allocations of the Funds long-term investments:
Sector Allocations
7/31/09
7/31/08
State
28%
24%
County/City/Special District/
School District
16
14
Health
13
18
Transportation
12
11
Education
11
14
Housing
10
7
Utilities
6
7
Corporate
3
3
Tobacco
1
2
Credit Quality Allocations5
7/31/09
7/31/08
AAA/Aaa
27%
29%
AA/Aa
27
38
A/A
31
19
BBB/Baa
11
11
Not Rated6
4
3
5 Using the higher of S&Ps or Moodys ratings.
6 The investment advisor has deemed certain of these non-rated
securities to be of investment grade quality. As of July 31, 2009 and
2008, the market value of these securities were $9,156,088 repre-
senting 3% and $11,259,091 representing 2%, respectively, of the
Funds long-term investments.
The Funds may utilize leverage to seek to enhance the yield and NAV of
their Common Shares. However, these objectives cannot be achieved in all
interest rate environments.
To leverage, the Funds issue Preferred Shares, which pay dividends at pre-
vailing short-term interest rates, and invest the proceeds in long-term
municipal bonds. In general, the concept of leveraging is based on the
premise that the cost of assets to be obtained from leverage will be based
on short-term interest rates, which normally will be lower than the income
earned by each Fund on its longer-term portfolio investments. To the extent
that the total assets of the Fund (including the assets obtained from lever-
age) are invested in higher-yielding portfolio investments, the Funds
Common Shareholders will benefit from the incremental yield.
To illustrate these concepts, assume a Funds Common Shares capitalization
is $100 million and it issues Preferred Shares for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are 3% and long-
term interest rates are 6%, the yield curve has a strongly positive slope. In
this case, the Fund pays dividends on the $50 million of Preferred Shares
based on the lower short-term interest rates. At the same time, the securi-
ties purchased by the Fund with assets received from the Preferred Shares
issuance earn the income based on long-term interest rates. In this case,
the dividends paid to Preferred Shareholders are significantly lower than
the income earned on the Funds long-term investments, and therefore the
Common Shareholders are the beneficiaries of the incremental net income.
Conversely, if prevailing short-term interest rates rise above long-term inter-
est rates of 6%, the yield curve has a negative slope. In this case, the Fund
pays dividends on the higher short-term interest rates whereas the Funds
total portfolio earns income based on lower long-term interest rates. If
short-term interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental net income pickup on the
Common Shares will be reduced or eliminated completely.
Furthermore, the value of the Funds portfolio investments generally varies
inversely with the direction of long-term interest rates, although other factors
can influence the value of portfolio investments. In contrast, the redemp-
tion value of the Funds Preferred Shares does not fluctuate in relation to
interest rates. As a result, changes in interest rates can influence the Funds
NAV positively or negatively in addition to the impact on Fund performance
from leverage from Preferred Shares discussed above.
The Funds may also, from time to time, leverage their assets through the
use of tender option bond (TOB) programs, as described in Note 1 of the
Notes to Financial Statements. TOB investments generally will provide the
rates, but expose the Funds to risks during periods of rising short-term
interest rates similar to those associated with Preferred Shares issued by
the Funds, as described above. Additionally, fluctuations in the market value
of municipal bonds deposited into the TOB trust may adversely affect the
Funds NAV per share.
The use of leverage may enhance opportunities for increased returns to the
Funds and Common Shareholders, but as described above, it also creates
risks as short- or long-term interest rates fluctuate. Leverage also will gen-
erally cause greater changes in the Funds NAV, market price and dividend
rate than a comparable portfolio without leverage. If the income derived
from securities purchased with assets received from leverage exceeds the
cost of leverage, the Funds net income will be greater than if leverage had
not been used. Conversely, if the income from the securities purchased is
not sufficient to cover the cost of leverage, the Funds net income will be
less than if leverage had not been used, and therefore the amount avail-
able for distribution to Common Shareholders will be reduced. The Funds
may be required to sell portfolio securities at inopportune times or at dis-
tressed values in order to comply with regulatory requirements applicable
to the use of leverage or as required by the terms of leverage instruments,
which may cause the Funds to incur losses. The use of leverage may limit
the Funds ability to invest in certain types of securities or use certain types
of hedging strategies, such as in the case of certain restrictions imposed
by ratings agencies that rate preferred shares issued by a Fund. The Funds
will incur expenses in connection with the use of leverage, all of which are
borne by the holders of the Common Shares and may reduce returns on
the Common Shares.
Under the Investment Company Act of 1940, each Fund is permitted to
issue Preferred Shares in an amount of up to 50% of its total managed
assets at the time of issuance. Under normal circumstances, each Fund
anticipates that the total economic leverage from Preferred Shares and
TOBs will not exceed 50% of its total managed assets at the time such
leverage is incurred. As of July 31, 2009, the Funds had economic leverage
from Preferred Shares and TOBs as a percentage of their total managed
assets as follows:
Percent of
Leverage
BlackRock Muni New York Intermediate Duration Fund, Inc
36%
BlackRock MuniYield Arizona Fund, Inc
42%
BlackRock MuniYield California Fund, Inc
39%
BlackRock MuniYield Investment Fund
39%
BlackRock MuniYield New Jersey Fund, Inc
35%
The Funds may invest in various derivative instruments, including financial
futures contracts, as specified in Note 2 of the Notes to Financial
Statements, which constitute forms of economic leverage. Such instruments
are used to obtain exposure to a market without owning or taking physical
custody of securities or to hedge market and/or interest rate risks. Such
derivative instruments involve risks, including the imperfect correlation
between the value of a derivative instrument and the underlying asset, pos-
sible default of the counterparty to the transaction and illiquidity of the
derivative instrument. The Funds ability to successfully use a derivative
dict pertinent market movements, which cannot be assured. The use of
derivative instruments may result in losses greater than if they had not
been used, may require a Fund to sell or purchase portfolio securities at
inopportune times or for distressed values, may limit the amount of appre-
ciation a Fund can realize on an investment or may cause a Fund to hold a
security that it might otherwise sell. The Funds investments in these instru-
ments are discussed in detail in the Notes to Financial Statements.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
New York 124.4%
Corporate 10.0%
New York City Industrial Development Agency, RB, AMT:
1990 American Airlines Inc. Project,
5.40%, 7/01/20
$ 1,500
$ 585,615
British Airways Plc Project, 7.63%, 12/01/32
1,000
770,760
Continental Airlines Inc., 8.38%, 11/01/16
1,000
701,510
Terminal One Group Association Project,
5.50%, 1/01/24
1,000
946,610
New York State Energy Research & Development
Authority, 5.00%, 8/01/32 (a)
1,000
997,200
New York State Energy Research & Development
Authority, RB, Series A:
Brooklyn Union Gas, Keyspan (FGIC), AMT,
4.70%, 2/01/24
500
457,765
Lilco Project (MBIA), 5.15%, 3/01/16
1,000
1,002,920
5,462,380
County/City/Special District/School District 22.0%
City of New York New York, GO:
Series J, 5.50%, 6/01/21
290
302,972
Series J, 5.50%, 6/01/21 (b)
1,710
1,980,471
Series J (MBIA), 5.25%, 5/15/18
1,500
1,600,680
Sub-Series B-1, 5.25%, 9/01/22
750
800,175
Sub-Series F-1 (Syncora), 5.00%, 9/01/22
1,000
1,030,610
Sub-Series I-1, 5.50%, 4/01/21
1,500
1,651,395
Sub-Series I-1, 5.13%, 4/01/25
750
779,805
New York City Industrial Development Agency, RB,
Queens Baseball Stadium, PILOT (AMBAC),
5.00%, 1/01/31
2,000
1,782,640
New York City Industrial Development Agency,
Refunding, RB, NY Stock Exchange Project, Series A,
4.25%, 5/01/24
500
471,135
New York City Transitional Finance Authority, RB:
Fiscal 2007, Series S-1 (MBIA), 5.00%, 7/15/24
1,000
1,015,460
Fiscal 2009, Series S-3, 5.00%, 1/15/23
575
591,531
12,006,874
Education 11.2%
Dutchess County Industrial Development Agency,
New York, Refunding, RB, Bard College Civic Facilities,
Series A-1, 5.00%, 8/01/22
750
756,892
New York City Industrial Development Agency, RB (ACA):
Lycee Francais De NY Project, Series A,
5.50%, 6/01/15
500
490,930
Polytechnic University Project, 4.70%, 11/01/22
1,000
843,210
New York City Trust for Cultural Resources, RB, Museum
of American Folk Art (ACA), 6.13%, 7/01/30
500
373,820
New York State Dormitory Authority, Non-State Supported
Debt, RB, 4.00%, 7/01/23
795
756,252
Par
Municipal Bonds
(000)
Value
New York (continued)
Education (concluded)
New York State Dormitory Authority, RB, Insured,
Mount Sinai School of Medicine, Series A (MBIA),
5.15%, 7/01/24
$ 250
$ 253,325
Saint Lawrence County Industrial Development Agency,
RB, Saint Lawrence University, Series A, Remarketed,
5.00%, 10/01/16
1,500
1,646,445
Schenectady Industrial Development Agency, Refunding,
RB, Union College Project, 5.00%, 7/01/26
1,000
1,023,430
6,144,304
Health 28.2%
Dutchess County Industrial Development Agency, RB,
Saint Francis Hospital, Series B, 7.25%, 3/01/19
385
365,519
Erie County Industrial Development Agency, RB,
Episcopal Church Home, Series A, 5.88%, 2/01/18
1,850
1,646,777
Genesee County Industrial Development Agency,
RB, United Memorial Medical Center Project,
4.75%, 12/01/14
390
360,446
New York City Industrial Development Agency, RB,
PSCH Inc. Project, 6.20%, 7/01/20
1,415
1,180,294
New York State Dormitory Authority, Non-State Supported
Debt, RB, 5.30%, 7/01/23
450
448,443
New York State Dormitory Authority, RB:
Lenox Hill Hospital Obligation Group,
5.75%, 7/01/17
1,305
1,175,453
Mount Sinai Health, Series A, 6.50%, 7/01/15 (b)
330
348,998
Mount Sinai Health, Series A, 6.63%, 7/01/18
340
349,479
NYU Hospitals Center, Series A, 5.00%, 7/01/16
1,130
1,068,573
NYU Hospitals Center, Series B, 5.25%, 7/01/24
480
441,706
North Shore-Long Island Jewish Group,
5.00%, 5/01/13
1,500
1,614,090
Winthrop S Nassau University, 5.50%, 7/01/11
1,735
1,763,905
Saratoga County Industrial Development Agency,
New York, RB, The Saratoga Hospital Project, Series B,
5.00%, 12/01/22
500
457,950
Saratoga County Industrial Development Agency,
New York, Refunding, RB, The Saratoga Hospital
Project, Series A (Radian):
4.38%, 12/01/13
365
363,431
4.50%, 12/01/14
380
375,337
4.50%, 12/01/15
395
384,785
Suffolk County Industrial Development Agency,
New York, Refunding, RB, Jeffersons Ferry Project,
4.63%, 11/01/16
800
731,616
Tompkins County Industrial Development Agency, RB,
Care Community, Kendal at Ithaca, Series A-2:
5.75%, 7/01/18
250
250,050
6.00%, 7/01/24
1,000
978,750
Portfolio Abbreviations
To simplify the listings of portfolio holdings in each Funds
ACA
American Capital Access Corp.
GNMA
Government National Mortgage Association
Schedule of Investments, the names and descriptions of
AGC
Assured Guaranty Corp.
GO
General Obligation Bonds
many of the securities have been abbreviated according
AMBAC
American Municipal Bond Assurance Corp.
HFA
Housing Finance Agency
to the following list:
AMT
Alternative Minimum Tax (subject to)
IDA
Industrial Development Authority
CAB
Capital Appreciation Bonds
MBIA
Municipal Bond Investors Assurance
CIFG
CDC IXIS Financial Guaranty
(National Public Finance Guaranty Corp.)
COP
Certificates of Participation
PILOT
Payment in Lieu of Taxes
FGIC
Financial Guaranty Insurance Co.
RB
Revenue Bonds
FNMA
Federal National Mortgage Association
S/F
Single-Family
FSA
Financial Security Assurance Inc.
TAN
Tax Anticipation Notes
VRDN
Variable Rate Demand Notes
10 ANNUAL REPORT JULY 31, 2009
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
New York (concluded)
Health (concluded)
Westchester County Industrial Development Agency, RB,
Special Needs Facilities Pooled Program, Series D-1,
6.80%, 7/01/19
$ 515
$ 439,537
Yonkers Industrial Development Agency, RB, Sacred Heart
Association Project, Series A, AMT, 4.80%, 10/01/26
750
693,668
15,438,807
Housing 13.6%
New York City Housing Development Corp., RB, The
Animal Medical Center, Series A, 5.50%, 12/01/33
1,615
1,580,956
New York State Mortgage Agency, RB, Homeowner
Mortgage, AMT:
Series 130, 4.75%, 10/01/30
2,500
2,261,225
Series 133, 4.95%, 10/01/21
1,000
997,220
Series 143, 4.85%, 10/01/27
500
455,955
New York State Urban Development Corp., RB,
Subordinate Lien, Corp. Purpose, Series A,
5.13%, 7/01/19
2,000
2,112,720
7,408,076
State 16.0%
New York Municipal Bond Bank Agency, RB, Series C,
5.25%, 12/01/18
2,000
2,161,260
New York State Dormitory Authority, RB:
Education, Series F, 5.00%, 3/15/30
1,290
1,307,583
Municipal Health Facilities, Lease, Sub-Series 2-4,
5.00%, 1/15/27
600
604,098
New York State Dormitory Authority, Refunding,
RB, Department of Health, Series A (CIFG),
5.00%, 7/01/25
1,500
1,519,080
New York State Thruway Authority, RB, Series A-1,
5.00%, 4/01/22
1,000
1,066,080
New York State Urban Development Corp., RB, State
Personal Income Tax, State Facilities, Series A-1
(MBIA), 5.00%, 3/15/24
485
501,868
New York State Urban Development Corp., Refunding, RB,
Service Contract, Series B, 5.00%, 1/01/21
1,500
1,593,015
8,752,984
Tobacco 1.9%
Tobacco Settlement Financing Corp., RB, Series B-1C,
5.50%, 6/01/22
1,000
1,032,970
Transportation 12.4%
Metropolitan Transportation Authority, RB:
Series A (MBIA), 5.00%, 11/15/24
2,000
2,026,660
Series B, 5.25%, 11/15/25
750
792,067
Series B (MBIA), 5.25%, 11/15/19
860
923,812
Metropolitan Transportation Authority, Refunding, RB,
Insured, Series A (MBIA), 5.00%, 11/15/25
3,000
3,020,550
6,763,089
Utilities 9.1%
Long Island Power Authority, RB:
General, Series D (MBIA), 5.00%, 9/01/25
4,000
4,037,840
Series A, 5.50%, 4/01/24
875
926,030
4,963,870
Total Municipal Bonds in New York
67,973,354
Par
Municipal Bonds
(000)
Value
Guam 4.3%
County/City/Special District/School District 0.6%
Territory of Guam, RB, Section 30, Series A,
5.38%, 12/01/24
$ 325
$ 320,934
State 0.3%
Territory of Guam, GO, Series A, 6.00%, 11/15/19
185
181,411
Transportation 1.7%
Guam International Airport Authority, RB, General Purpose,
Series C (MBIA), AMT, 5.25%, 10/01/22
1,000
956,410
Utilities 1.7%
Guam Government Waterworks Authority, RB, Water and
Wastewater System, 6.00%, 7/01/25
1,000
923,780
Total Municipal Bonds in Guam
2,382,535
Puerto Rico 17.9%
Education 0.8%
Puerto Rico Industrial Tourist Educational Medical
& Environmental Control Facilities Financing Authority,
RB, University Plaza Project, Series A (MBIA),
5.00%, 7/01/33
500
428,435
Housing 3.7%
Puerto Rico HFA, RB, Subordinate Revenue Funding,
Capital Fund Modernization, 5.13%, 12/01/27
2,000
2,002,200
State 3.9%
Commonwealth of Puerto Rico, GO, Public Improvement,
Series A, 5.25%, 7/01/30 (b)
615
736,038
Puerto Rico Municipal Finance Agency, GO, Series A,
5.25%, 8/01/25
1,000
898,830
Puerto Rico Public Buildings Authority, Refunding,
RB, Government Facilities, Series M-3 (MBIA),
6.00%, 7/01/28
500
494,400
2,129,268
Transportation 9.5%
Puerto Rico Highway & Transportation Authority, RB:
(FGIC), 5.75%, 7/01/21
2,000
1,952,760
Series Y (FSA), 6.25%, 7/01/21
3,000
3,258,390
5,211,150
Total Municipal Bonds in Puerto Rico
9,771,053
U.S. Virgin Islands 3.3%
Corporate 1.7%
United States Virgin Islands, RB, Senior Secured,
Hovensa Coker Project, AMT, 6.50%, 7/01/21
500
494,260
Virgin Islands Public Finance Authority, RB, Senior
Secured, Hovensa Refinery, AMT, 4.70%, 7/01/22
500
411,035
905,295
State 1.6%
Virgin Islands Public Finance Authority, RB, Senior Lien,
Matching Fund Loan Note, Series A, 5.25%, 10/01/24
1,000
899,200
Total Municipal Bonds in the U.S. Virgin Islands
1,804,495
Total Municipal Bonds 149.9%
81,931,437
ANNUAL REPORT JULY 31, 2009 11
(Percentages shown are based on Net Assets)
Municipal Bonds Transferred to
Par
Tender Option Bond Trusts (c)
(000)
Value
New York 3.4%
County/City/Special District/School District 3.4%
Erie County Industrial Development Agency, RB, City Of
Buffalo Project (FSA), 5.75%, 5/01/24
$ 1,831
$ 1,849,450
Total Municipal Bonds Transferred to
Tender Option Bond Trusts 3.4%
1,849,450
Total Long-Term Investments
(Cost $86,195,098) 153.3%
83,780,887
Short-Term Securities
Shares
CMA New York Municipal Money Fund, 0.04% (d)(e)
1,737,841
1,737,841
Total Short-Term Securities
(Cost $1,737,841) 3.2%
1,737,841
Total Investments (Cost $87,932,939*) 156.5%
85,518,728
Liabilities in Excess of Other Assets (0.6)%
(323,864)
Liability for Trust Certificates, Including Interest
Expense and Fees Payable (1.7)%
(919,337)
Preferred Shares, at Redemption Value (54.2)%
(29,633,926)
Net Assets Applicable to Common Shares 100.0%
$ 54,641,601
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2009, as computed for federal income tax purposes, were as follows:
Aggregate cost
$ 86,910,282
Gross unrealized appreciation
$ 1,202,849
Gross unrealized depreciation
(3,510,297)
Net unrealized depreciation
$ (2,307,448)
(a) When-issued security.
(b) US government securities, held in escrow, are used to pay interest on this security,
as well as to retire the bond in full at the date indicated, typically at a premium
to par.
(c) Securities represent bonds transferred to a tender option bond trust in exchange for
which the Fund acquired residual interest certificates. These securities serve as col-
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements
for details of municipal bonds transferred to tender option bond trusts.
(d) Investments in companies considered to be an affiliate of the Fund, for purposes of
Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
Net
Affiliate
Activity
Income
CMA New York Municipal Money Fund
$218,482
$19,036
(e) Represents the current yield as of report date.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157, Fair Value Measurements clarifies the definition of fair value, establishes
a framework for measuring fair values and requires additional disclosures about the
use of fair value measurements. Various inputs are used in determining the fair
value of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical securities
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
Funds own assumptions used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indica-
tion of the risk associated with investing in those securities. For information about
the Funds 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 inputs used as of July 31, 2009 in determining
the fair valuation of the Funds investments:
Valuation
Investments in
Inputs
Securities
Assets
Level 1 Short-Term Securities
$ 1,737,841
Level 2 Long-Term Investments1
83,780,887
Level 3
Total
$ 85,518,728
1 See above Schedule of Investments for values in each
sector.
12 ANNUAL REPORT JULY 31, 2009
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
Arizona 136.6%
Corporate 1.5%
Yavapai County IDA, Arizona, RB, Waste Management Inc.
Project, Series A, AMT, 4.90%, 3/01/28
$ 1,000
$ 846,930
County/City/Special District/School District 41.0%
City of Tucson Arizona, COP (AGC), 5.00%, 7/01/29
1,000
981,410
County of Pinal Arizona, COP:
5.00%, 12/01/26
1,250
1,175,312
5.00%, 12/01/29
1,250
1,156,687
Downtown Phoenix Hotel Corp., RB:
Senior, Series A (FGIC), 5.00%, 7/01/36
1,300
921,713
Sub-Series B (MBIA), 5.00%, 7/01/36
715
638,402
Gila County Unified School District No. 10-Payson,
Arizona, GO, School Improvement, Project of 2006,
Series A (AMBAC), 5.25%, 7/01/27 (a)
1,000
1,012,220
Gilbert Public Facilities Municipal Property Corp., Arizona,
RB, 5.50%, 7/01/27
2,000
2,083,700
Gladden Farms Community Facilities District, GO,
5.50%, 7/15/31
750
450,735
Greater Arizona Development Authority, RB, Santa Cruz
County Jail, Series 2, 5.25%, 8/01/31
1,000
998,710
Maricopa County Community College District, Arizona,
GO, Series C, 3.00%, 7/01/22
1,000
873,980
Maricopa County Elementary School District No. 3-
Tempe Elementary, Arizona, GO, Refunding (MBIA),
7.50%, 7/01/10
290
306,051
Maricopa County Unified School District, GO,
School Improvement:
No. 11 Peoria, Second Series (MBIA),
5.00%, 7/01/25
430
446,473
No. 89 Dysart, Project of 2006, Series C,
6.00%, 7/01/28
1,000
1,080,150
No. 090 Saddle Mountain, Series A, 5.00%, 7/01/14
50
51,626
Mohave County Unified School District No. 20 Kingman,
GO, School Improvement, Project 2006, Series C,
(AGC), 5.00%, 7/01/26
1,000
1,042,040
Phoenix Civic Improvement Corp., RB, Subordinate,
Civic Plaza Expansion Project, Series A (MBIA),
5.00%, 7/01/35
3,325
3,249,290
Queen Creek Improvement District No. 1, Special
Assessment, 5.00%, 1/01/32
2,000
1,622,140
Scottsdale Municipal Property Corp., Arizona, RB,
Water & Sewer Development Project, Series A,
5.00%, 7/01/24
1,500
1,627,920
Vistancia Community Facilities District, Arizona, GO:
6.75%, 7/15/22
1,275
1,281,018
5.75%, 7/15/24
750
683,978
Yuma County Library District, GO (Syncora),
5.00%, 7/01/26
1,465
1,471,593
23,155,148
Education 19.8%
Arizona State Board of Regents, RB, Series 2008-C:
6.00%, 7/01/25
970
1,105,286
6.00%, 7/01/26
350
396,161
6.00%, 7/01/27
425
477,356
6.00%, 7/01/28
300
332,973
Arizona Student Loan Acquisition Authority, Arizona,
Refunding, RB, Junior Sub-Series B-1, AMT,
6.15%, 5/01/29
3,285
3,098,576
Maricopa County IDA, Arizona, RB, Arizona Charter
Schools Project 1, Series A, 6.63%, 7/01/20
900
678,816
Par
Municipal Bonds
(000)
Value
Arizona (continued)
Education (concluded)
Pima County IDA, RB, American Charter Schools
Foundation, Series A, 5.63%, 7/01/38
$ 500
$ 335,640
Pima County IDA, RB, Arizona Charter Schools Project:
Series C, 6.70%, 7/01/21
725
596,001
Series C, 6.75%, 7/01/31
985
737,410
Series O, 5.00%, 7/01/26
1,000
632,010
Pima County IDA, RB, Charter Schools, II, Series A,
6.75%, 7/01/21
575
474,783
University of Arizona, COP, University Arizona Projects
(AMBAC):
Series A, 5.13%, 6/01/29
905
912,448
Series B, 5.00%, 6/01/28
1,400
1,409,114
11,186,574
Health 21.5%
Arizona Health Facilities Authority, Arizona, RB:
Banner Health, Series D, 6.00%, 1/01/30
1,500
1,528,125
Banner Health, Series D, 5.50%, 1/01/38
1,000
973,330
Catholic Healthcare West, Series A, 6.63%, 7/01/20
1,435
1,515,561
Maricopa County IDA, Arizona, RB, Catholic Healthcare
West, Series A, 5.50%, 7/01/26
1,850
1,790,578
Maricopa County IDA, Arizona, Refunding, RB, Samaritan
Health Services, Series A (MBIA), 7.00%, 12/01/16 (b)
1,000
1,234,370
Mesa IDA, RB, Discovery Health System, Series A
(MBIA), 5.63%, 1/01/15 (c)
1,000
1,030,980
Scottsdale IDA, Arizona, Refunding RB, Scottsdale
Healthcare, Series A, 5.25%, 9/01/30
900
829,899
Tucson IDA, RB, Christian Care Project, Series A
(Radian), 6.13%, 7/01/24 (c)
1,000
1,055,880
University Medical Center Corp., Arizona, RB,
6.50%, 7/01/39
500
502,865
Yavapai County IDA, Arizona, RB, Yavapai Regional
Medical Center, Series A, 6.00%, 8/01/33
1,800
1,672,848
12,134,436
Housing 13.0%
Maricopa County & Phoenix Industrial Development
Authorities, RB, S/F (GNMA), AMT:
Series A-1, 5.75%, 5/01/40
1,130
1,159,719
Series A-2, 5.80%, 7/01/40
845
867,714
Maricopa County IDA, Arizona, RB, Series 3-B (GNMA),
AMT, 5.25%, 8/01/38
1,576
1,574,956
Phoenix & Pima County IDA, RB (GNMA), AMT:
Series 1A, 5.65%, 7/01/39
719
734,340
Series 2007-1, 5.25%, 8/01/38
1,496
1,530,777
Phoenix IDA, Arizona, RB, Series 2007-2 (GNMA), AMT,
5.50%, 8/01/38
1,465
1,500,620
7,368,126
State 17.8%
Arizona School Facilities Board, COP:
5.13%, 9/01/21
1,000
1,047,890
5.75%, 9/01/22
2,000
2,167,100
Arizona State Transportation Board, RB, Series B,
5.00%, 7/01/30
4,000
4,166,320
Arizona Tourism & Sports Authority, RB, Baseball Training
Facilities Project, 5.00%, 7/01/16
1,000
974,870
Greater Arizona Development Authority, Arizona, RB,
Series B (MBIA), 5.00%, 8/01/30
1,700
1,676,081
10,032,261
ANNUAL REPORT JULY 31, 2009 13
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
Arizona (concluded)
Transportation 4.5%
Phoenix Civic Improvement Corp., RB, Senior Lien:
Series A, 5.00%, 7/01/33
$ 1,000
$ 976,770
Series B (MBIA), AMT, 5.75%, 7/01/17
1,000
1,024,020
Series B (MBIA), AMT, 5.25%, 7/01/32
600
537,456
2,538,246
Utilities 17.5%
Gilbert Water Resource Municipal Property Corp., RB,
Subordinate Lien (MBIA), 5.00%, 10/01/29
900
892,035
Phoenix Civic Improvement Corp., RB:
Junior Lien (MBIA), 5.50%, 7/01/20
2,500
2,672,875
Senior Lien, 5.50%, 7/01/22
2,000
2,212,000
Pinal County IDA, Arizona, RB, San Manuel Facilities
Project, AMT, 6.25%, 6/01/26
500
386,500
Salt River Project Agricultural Improvement & Power
District, RB:
Salt River Project, Series A, 5.00%, 1/01/35
1,500
1,504,830
Series A, 5.00%, 1/01/24
1,000
1,068,620
Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37
1,500
1,141,230
9,878,090
Total Municipal Bonds in Arizona
77,139,811
Guam 1.6%
Utilities 1.6%
Guam Government Waterworks Authority, RB, Water,
5.88%, 7/01/35
1,000
878,070
Puerto Rico 19.4%
State 10.2%
Commonwealth of Puerto Rico, GO:
Public Improvement, Series A, 5.125%, 7/01/31
75
65,000
Series A, 6.00%, 7/01/38
800
768,192
Puerto Rico Public Buildings Authority, RB,
Government Facilities:
Series N, 5.50%, 7/01/27
1,000
912,750
Series I, 5.25%, 7/01/33
1,815
1,531,787
Series M-3 (MBIA), 6.00%, 7/01/28
900
889,920
Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39
1,500
1,555,545
5,723,194
Transportation 2.9%
Puerto Rico Highway & Transportation Authority, RB,
Series AA (MBIA), 5.50%, 7/01/18
900
919,026
Puerto Rico Highway & Transportation Authority,
Refunding RB, Series CC, 5.50%, 7/01/31
790
719,761
1,638,787
Par
Municipal Bonds
(000)
Value
Puerto Rico (concluded)
Utilities 6.3%
Puerto Rico Aqueduct & Sewer Authority, RB, Senior Lien,
Series A (Radian), 6.00%, 7/01/44
$ 2,180
$ 2,102,828
Puerto Rico Electric Power Authority, RB:
Series TT, 5.00%, 7/01/37
550
471,939
Series WW, 5.38%, 7/01/24
1,000
990,350
3,565,117
Total Municipal Bonds in Puerto Rico
10,927,098
Total Municipal Bonds 157.6%
88,944,979
Municipal Bonds Transferred to
Tender Option Bond Trusts (d)
Arizona 5.3%
Utilities 5.3%
Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/34
3,000
3,013,860
Total Municipal Bonds Transferred to
Tender Option Bond Trusts 5.3%
3,013,860
Total Long-Term Investments
(Cost $95,550,958) 162.9%
91,958,839
Short-Term Securities
Shares
CMA Arizona Municipal Money Fund, 0.00% (e)(f)
4,187,171
4,187,171
Total Short-Term Securities
(Cost $4,187,171) 7.4%
4,187,171
Total Investments (Cost $99,738,129*) 170.3%
96,146,010
Other Assets Less Liabilities 1.1%
608,474
Liability for Trust Certificates, Including Interest
Expense and Fees Payable (2.7)%
(1,500,390)
Preferred Shares, at Redemption Value (68.7)%
(38,805,113)
Net Assets Applicable to Common Shares 100.0%
$ 56,448,981
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2009, as computed for federal income tax purposes, were as follows:
Aggregate cost
$ 98,267,814
Gross unrealized appreciation
$ 1,711,399
Gross unrealized depreciation
(5,333,203)
Net unrealized depreciation
$ (3,621,804)
(a) Represents a step-up bond that pays an initial coupon rate for the first period and
then a higher coupon rate for the following periods. Rate shown is as of report date.
(b) Security is collateralized by Municipal or US Treasury Obligations.
(c) US government securities, held in escrow, are used to pay interest on this security,
as well as to retire the bond in full at the date indicated, typically at a premium
to par.
14 ANNUAL REPORT JULY 31, 2009
(d) Securities represent bonds transferred to a tender option bond trust in exchange for
which the Fund acquired residual interest certificates. These securities serve as col-
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements
for details of municipal bonds transferred to tender option bond trusts.
(e) Investments in companies considered to be an affiliate of the Fund, for purposes of
Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
Net
Affiliate
Activity
Income
CMA Arizona Municipal Money Fund
$1,013,825
$16,706
(f) Represents the current yield as of report date.
Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
(FAS 157). FAS 157 clarifies the definition of fair value, establishes a framework for
measuring fair values and requires additional disclosures about the use of fair value
measurements. Various inputs are used in determining the fair value of investments,
which are as follows:
Level 1 price quotations in active markets/exchanges for identical securities
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
Funds own assumptions used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Funds 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 inputs used as of July 31, 2009 in determining
the fair valuation of the Funds investments:
Valuation
Investments in
Inputs
Securities
Assets
Level 1 Short-Term Securities
$ 4,187,171
Level 2 Long-Term Investments1
91,958,839
Level 3
Total
$ 96,146,010
1 See above Schedule of Investments for values in each
sector.
ANNUAL REPORT JULY 31, 2009 15
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
California 109.4%
Corporate 2.5%
California Pollution Control Financing Authority, Waste
Management Inc. Project, RB, AMT:
Series A-2, 5.40%, 4/01/25
$ 3,000
$ 2,752,890
Series C, 6.75%, 12/01/27
3,300
3,395,634
City of Chula Vista California, RB, San Diego Gas,
Series A, Remarketed, 5.88%, 2/15/34
975
988,357
7,136,881
County/City/Special District/School District 37.8%
Arcata Joint Powers Financing Authority, California, TAN,
Community Development Project Loan, Series A
(AMBAC), 6.00%, 8/01/23
2,520
2,481,142
Chino Basin Desalter Authority, Refunding RB, Series A
(AGC), 5.00%, 6/01/35
5,280
5,015,419
City of Long Beach California, RB, Series A (MBIA), AMT,
5.25%, 5/15/23
2,000
1,972,840
City of Los Angeles California, COP, Senior, Sonnenblick
Del Rio West Los Angeles (AMBAC), 6.20%, 11/01/31
2,000
2,031,580
Cucamonga County Water District, California, COP
(MBIA), 5.13%, 9/01/35
3,750
3,444,600
El Monte Union High School District, California, GO,
Election of 2002, Series C (FSA), 5.25%, 6/01/32
10,120
9,934,399
Fontana Unified School District, California, GO, Series A
(FSA), 5.25%, 8/01/28
7,000
7,101,290
Grant Joint Union High School District, California, GO,
Election of 2006, (FSA) 5.00%, 8/01/29
9,390
9,259,197
La Quinta Financing Authority, TAN, Series A (AMBAC),
5.13%, 9/01/34
5,020
4,281,006
Los Angeles County Metropolitan Transportation Authority,
RB, Proposition A First Tier Senior, Series A (AMBAC),
5.00%, 7/01/27
3,780
3,828,082
Los Angeles Unified School District, California, GO,
Series D, 5.00%, 7/01/27
2,375
2,372,102
Marin Community College District, GO, Election of 2004,
Series A (MBIA), 5.00%, 8/01/28
5,885
5,888,001
Modesto Irrigation District, COP, Series B, 5.50%, 7/01/35
3,300
3,250,533
Morgan Hill Unified School District, California, GO, CAB
(FGIC), 5.05%, 8/01/26 (a)(b)
7,570
3,396,735
Mount Diablo Unified School District, California, GO,
Election of 2002 (MBIA), 5.00%, 6/01/28
2,000
1,917,420
Murrieta Valley Unified School District Public Financing
Authority, Special Tax, Series A (AGC), 5.13%, 9/01/26
6,675
6,663,385
Orange County Sanitation District, COP (MBIA),
5.00%, 2/01/33
5,250
5,067,090
Pittsburg Redevelopment Agency, TAN, Refunding,
Subordinate, Los Medanos Community Project, Series A,
6.50%, 9/01/28
2,500
2,581,100
San Diego Regional Building Authority, California,
RB, County Operations Center & Annex, Series A,
5.38%, 2/01/36
3,200
3,201,184
San Francisco Bay Area Transit Financing Authority,
Refunding RB, Series A (MBIA), 5.00%, 7/01/34
5,430
5,293,816
San Jose Evergreen Community College District,
California, GO, CAB, Election of 2004, Series A
(MBIA), 5.12%, 9/01/23 (b)
10,005
4,374,686
Par
Municipal Bonds
(000)
Value
California (continued)
County/City/Special District/School District (concluded)
San Jose Unified School District, Santa Clara County
California, GO, Election of 2002, Series B (MBIA),
5.00%, 8/01/29
$ 1,855
$ 1,822,333
San Juan Unified School District, California, GO, Election
of 2002 (MBIA), 5.00%, 8/01/28
5,000
4,951,600
Santa Cruz County Redevelopment Agency, California,
TAN, Live Oak, Soquel Community Improvement,
Series A:
6.63%, 9/01/29
1,000
1,018,690
7.00%, 9/01/36
500
508,630
Vacaville Unified School District, California, GO, Election
of 2001 (MBIA), 5.00%, 8/01/30
4,745
4,618,688
Ventura Unified School District, California, GO, 1997
Election, Series H (FSA), 5.13%, 8/01/34
1,000
971,860
Westminster Redevelopment Agency, California, TAN,
Subordinate, Commercial Redevelopment Project No. 1
(AGC), 6.25%, 11/01/39
1,250
1,298,250
108,545,658
Education 9.1%
California Educational Facilities Authority, RB:
California Institute of Technology, 5.00%, 11/01/39
2,200
2,222,704
University of Southern California, Series A,
5.00%, 10/01/39
1,250
1,252,650
California Infrastructure & Economic Development
Bank, RB, J David Gladstone Institute Project,
5.50%, 10/01/22
4,990
5,076,477
California State University, RB, Systemwide, Series A,
5.50%, 11/01/39
2,725
2,725,763
Oak Grove School District, California, GO, Election
of 2008, Series A, 5.50%, 8/01/33
4,000
4,058,400
University of California, RB:
Limited Project, Series D (MBIA), 5.00%, 5/15/32
2,500
2,449,850
Series L, 5.00%, 5/15/36
8,500
8,327,280
26,113,124
Health 14.4%
ABAG Finance Authority for Nonprofit Corps, RB,
Redwood Senior Homes & Services, 6.00%, 11/15/22
1,730
1,652,115
California Health Facilities Financing Authority,
California, RB, Catholic Healthcare West, Series A,
6.00%, 7/01/39
10,000
9,675,900
California Statewide Communities Development Authority,
COP, John Muir, Mount Diablo Health System (MBIA),
5.13%, 8/15/22
5,250
5,250,735
California Statewide Communities Development
Authority, RB:
Catholic Healthcare West, Series D, 5.50%, 7/01/31
5,000
4,572,100
Daughters of Charity Health, Series A,
5.25%, 7/01/30
3,665
2,868,522
Health Facilities, Memorial Health Services, Series A,
6.00%, 10/01/23
3,270
3,339,651
Health Facilities, Memorial Health Services, Series A,
5.50%, 10/01/33
3,000
2,887,290
Kaiser Permanente, Series A, 5.00%, 4/01/31
3,500
3,164,840
Kaiser, Series C, Remarketed, 5.25%, 8/01/31
6,975
6,517,998
City of Torrance California, RB, Torrance Memorial
Medical Center, Series A, 6.00%, 6/01/22
1,310
1,338,899
41,268,050
16 ANNUAL REPORT JULY 31, 2009
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
California (continued)
Housing 1.3%
California Rural Home Mortgage Finance Authority,
California, RB:
Mortgage, Backed Securities Program, Series B
(GNMA), AMT, 6.15%, 6/01/20
$ 25
$ 25,470
Sub-Series FH-1, AMT, 5.50%, 8/01/47
415
226,992
Santa Clara County Housing Authority, California, RB,
John Burns Gardens Apartments Project, Series A, AMT,
6.00%, 8/01/41
3,500
3,537,765
3,790,227
State 8.9%
California State Public Works Board, RB:
Department Corrections, Series C, 5.50%, 6/01/23
5,000
4,969,950
Department Development Services, Porterville,
Series C, 6.25%, 4/01/34
1,100
1,116,610
Department Education, Riverside Campus Project,
Series B, 6.50%, 4/01/34
10,000
10,564,500
Regents University California, Series E,
5.00%, 4/01/34
3,540
3,379,992
State of California, GO:
5.50%, 4/01/30
5
5,016
Various Purpose, 6.50%, 4/01/33
5,000
5,405,600
25,441,668
Transportation 8.4%
City of San Jose California, RB, Series D (MBIA),
5.00%, 3/01/28
4,615
4,327,901
County of Orange California, RB, Series B,
5.75%, 7/01/34
3,000
3,048,810
Port of Oakland, RB (MBIA), AMT:
Series L, 5.38%, 11/01/27
11,615
10,575,458
Series K, 5.75%, 11/01/29
1,615
1,508,733
County of Sacremento California, RB, Senior, Series B,
5.75%, 7/01/39
900
873,099
San Francisco City & County Airports Commission,
Refunding RB, 2nd Series A-3, AMT, 6.75%, 5/01/19
3,475
3,642,148
23,976,149
Utilities 27.0%
Anaheim Public Financing Authority, California, RB,
Electric System Distribution Facilities, Series A (FSA),
5.00%, 10/01/31
9,000
8,892,450
California Infrastructure and Economic Development
Bank, RB, California, Independent System Operator,
Series A, 6.25%, 2/01/39
2,170
2,207,975
California State Department of Water Resources, RB,
Central Valley Project, Series AE, 5.00%, 12/01/28
6,000
6,220,740
California Statewide Communities Development
Authority, RB, Pooled Financing Program, Series C
(FSA), 5.25%, 10/01/28
2,380
2,409,107
Chino Basin Regional Financing Authority, California,
RB, Inland Empire Utility Agency, Series A (AMBAC),
5.00%, 11/01/33
2,015
1,943,508
City of Los Angeles California, Refunding RB,
Sub-Series A (MBIA), 5.00%, 6/01/27
4,500
4,494,420
Eastern Municipal Water District, California, COP,
Series H, 5.00%, 7/01/35
7,540
7,171,973
Los Angeles County Sanitation District Financing
Authority, California, RB, Capital Projects, District
No. 14 Sub-Series B (MBIA), 5.00%, 10/01/30
2,550
2,412,835
Los Angeles Department of Water & Power, RB, System,
Series A, 5.38%, 7/01/38
3,200
3,236,384
Par
Municipal Bonds
(000)
Value
California (concluded)
Utilities (concluded)
Metropolitan Water District of Southern California,
Refunding RB, Series B, 5.00%, 7/01/35
$ 2,625
$ 2,637,075
Metropolitan Water District of Southern California, RB:
Authorization, Series C, 5.00%, 7/01/35
4,085
4,103,791
Series A, 5.00%, 7/01/32
1,240
1,256,120
Series A (FSA), 5.00%, 7/01/30
1,000
1,019,440
Oxnard Financing Authority, RB, Redwood Trunk Sewer
& Headworks, Series A (MBIA), 5.25%, 6/01/34
3,000
2,864,070
Sacramento Municipal Utility District, RB, Cosumnes
Project (MBIA), 5.13%, 7/01/29
18,500
17,970,900
Sacramento Regional County Sanitation District, RB,
County Sanitation District 1 (MBIA), 5.00%, 8/01/35
5,375
5,178,221
San Diego Public Facilities Financing Authority, RB,
Senior, Series A, 5.38%, 5/15/34
1,900
1,907,866
Stockton Public Financing Authority, California, RB,
Water System Capital Improvement Projects, Series A
(MBIA), 5.00%, 10/01/31
1,600
1,452,432
77,379,307
Total Municipal Bonds in California
313,651,064
Puerto Rico 1.8%
County/City/Special District/School District 1.8%
Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.50%, 8/01/44
5,000
5,235,750
Total Municipal Bonds in Puerto Rico
5,235,750
Total Municipal Bonds 111.2%
318,886,814
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
California 45.8%
County/City/Special District/School District 14.8%
Contra Costa Community College District, California, GO,
Election 2002 (FSA), 5.00%, 8/01/30
10,210
10,053,481
Fremont Unified School District, Alameda County,
California, GO, Election 2002, Series B (FSA),
5.00%, 8/01/30
4,003
3,941,601
Los Angeles Community College District, California, GO,
Election 2003, Series E (FSA), 5.00%, 8/01/31
10,002
9,626,928
Peralta Community College District, California, GO,
Election 2000, Series D (FSA), 5.00%, 8/01/30
1,995
1,964,417
Sonoma County Junior College District, GO, Election
of 2002, Series B (FSA), 5.00%, 8/01/28
6,875
6,878,502
Santa Clara County Financing Authority, Refunding RB,
Lease Series L, 5.25%, 5/15/36
10,001
9,943,322
42,408,251
Education 11.2%
California State University, RB, Systemwide, Series A
(FSA), 5.00%, 11/01/39
4,840
4,635,994
San Diego Community College District, California, GO,
Election of 2002, 5.25%, 8/01/33
7,732
7,858,925
University of California, RB, Limited Project, Series B
(FSA), 5.00%, 5/15/33
8,490
8,315,785
University of California, RB, Series L, 5.00%, 5/15/40
11,597
11,207,183
32,017,887
ANNUAL REPORT JULY 31, 2009 17
(Percentages shown are based on Net Assets)
Municipal Bonds Transferred to
Par
Tender Option Bond Trusts (c)
(000)
Value
California (concluded)
Utilities 16.3%
California Educational Facilities Authority, RB, University
Southern California, Series A, 5.25%, 10/01/39
$ 13,845
$ 14,270,595
Eastern Municipal Water District, California, COP,
Series H, 5.00%, 7/01/33
4,748
4,555,797
Metropolitan Water District of Southern California, RB,
Series A, 5.00%, 7/01/37
20,000
20,038,000
San Diego County Water Authority, COP, Series A (FSA),
5.00%, 5/01/31
5,010
4,957,195
University of California, RB, Series O, 5.75%, 5/15/34
2,805
3,013,243
46,834,830
State 1.4%
Los Angeles Community College District, California, GO,
2008 Election, Series A, 6.00%, 8/01/33
3,828
4,119,611
Transportation 2.1%
San Francisco Bay Area Transit Financing Authority,
Refunding RB, Series A (MBIA), 5.00%, 7/01/30
6,000
5,976,600
Total Municipal Bonds Transferred to
Tender Option Bond Trusts 45.8%
131,357,179
Total Long-Term Investments
(Cost $464,058,450) 157.0%
450,243,993
Short-Term Securities
Shares
CMA California Municipal Money
Fund, 0.04% (d)(e)
7,607,697
7,607,697
Total Short-Term Securities
(Cost $7,607,697) 2.6%
7,607,697
Total Investments (Cost $471,666,147*) 159.6%
457,851,690
Other Assets Less Liabilities 3.3%
9,527,915
Liability for Trust Certificates, Including Interest
Expense and Fees Payable (26.0)%
(74,606,088)
Preferred Shares, at Redemption Value (36.9)%
(105,968,027)
Net Assets Applicable to Common Shares 100.0%
$286,805,490
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2009, as computed for federal income tax purposes, were as follows:
Aggregate cost
$397,366,785
Gross unrealized appreciation
$ 3,626,189
Gross unrealized depreciation
(17,517,294)
Net unrealized depreciation
$ (13,891,105)
(a) Security is collateralized by Municipal or US Treasury Obligations.
(b) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(c) Securities represent bonds transferred to a tender option bond trust in exchange for
which the Fund acquired residual interest certificates. These securities serve as col-
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements
for details of municipal bonds transferred to tender option bond trusts.
(d) Investments in companies considered to be an affiliate of the Fund, for purposes of
Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
Net
Affiliate
Activity
Income
CMA California Municipal Money Fund
$(6,805,560)
$91,856
(e) Represents the current yield as of report date.
Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
(FAS 157). FAS 157 clarifies the definition of fair value, establishes a framework for
measuring fair values and requires additional disclosures about the use of fair value
measurements. Various inputs are used in determining the fair value of investments,
which are as follows:
Level 1 price quotations in active markets/exchanges for identical securities
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
Funds own assumptions used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indica-
tion of the risk associated with investing in those securities. For information about
the Funds 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 inputs used as of July 31, 2009 in determining
the fair valuation of the Funds investments:
Valuation
Investments in
Inputs
Securities
Assets
Level 1 Short-Term Securities
$ 7,607,697
Level 2 Long-Term Investments1
450,243,993
Level 3
Total
$ 457,851,690
1 See above Schedule of Investments for values in each
sector.
18 ANNUAL REPORT JULY 31, 2009
(Percentages shown are based on Net Assets)
Municipal Bonds
(000)
Value
California 11.2%
County/City/Special District/School District 1.9%
San Diego Regional Building Authority, California, RB,
County Operations Center & Annex, Series A,
5.38%, 2/01/36
$ 3,310
$ 3,311,225
Health 0.4%
California Health Facilities Financing Authority,
California, RB, Catholic Healthcare West, Series A,
6.00%, 7/01/39
710
686,989
State 2.6%
California State Public Works Board, RB, Department
General Services, Buildings 8 & 9, Series A,
6.25%, 4/01/34
4,525
4,593,327
Transportation 1.5%
San Francisco City & County Airports Commission,
Refunding RB, 2nd Series A-3, AMT, 6.75%, 5/01/19
2,500
2,620,250
Utilities 4.8%
San Diego Public Facilities Financing Authority, RB,
Series B, 5.50%, 8/01/39
8,415
8,449,081
Total Municipal Bonds in California
19,660,872
District of Columbia 1.2%
Utilities 1.2%
District of Columbia Water & Sewer Authority, RB,
Series A, 5.25%, 10/01/29
2,000
2,067,480
Total Municipal Bonds in District of Columbia
2,067,480
Florida 45.6%
Corporate 2.0%
Hillsborough County IDA, RB, National Gypsum AMT:
Series A, 7.13%, 4/01/30
2,500
1,401,675
Series B, 7.13%, 4/01/30
3,750
2,102,512
3,504,187
County/City/Special District/School District 20.2%
City of Jacksonville Florida, Refunding & Improvement,
RB (MBIA), 5.25%, 10/01/32
2,315
2,311,736
City of Jacksonville Florida, RB, Series B (MBIA),
5.13%, 10/01/32
1,500
1,419,195
County of Hillsborough Florida, RB (AMBAC), 5.40%,
11/01/12 (a)
1,055
1,203,059
County of Lee Florida, RB (AMBAC), 5.25%, 10/01/23
1,125
1,132,493
County of Orange Florida, Refunding RB (AMBAC),
5.00%, 10/01/29
1,750
1,749,878
County of Osceola Florida, RB, Series A (MBIA),
5.50%, 10/01/27
1,760
1,779,184
County of Palm Beach Florida, RB (MBIA),
7.20%, 6/01/15
3,390
4,085,526
County of Sumter Florida, RB (AMBAC):
5.00%, 6/01/26
2,190
2,193,614
5.00%, 6/01/30
3,475
3,335,722
Jacksonville Economic Development Commission, RB,
Metropolitan Parking Solutions Project (ACA), AMT:
5.50%, 10/01/30
2,140
1,642,728
5.88%, 6/01/31
1,205
1,161,295
Santa Rosa County School Board, COP, Series 2
(MBIA), 5.25%, 2/01/26
1,180
1,202,750
Village Center Community Development District
Recreational Revenue, RB, Series A (MBIA):
5.38%, 11/01/34
1,995
1,685,615
5.13%, 11/01/36
1,000
805,740
Par
Municipal Bonds
(000)
Value
Florida (continued)
County/City/Special District/School District (concluded)
Village Center Community Development District Utility
Revenue, RB (MBIA), 5.13%, 10/01/28
$ 5,040
$ 4,654,591
Volusia County School Board, COP, Master Lease
Program (FSA), 5.50%, 8/01/24
5,000
5,050,000
35,413,126
Education 1.9%
Broward County Educational Facilities Authority, RB,
Educational Facilities, Nova Southeastern (AGC),
5.00%, 4/01/31
2,625
2,514,277
Volusia County IDA, RB, Student Housing, Stetson
University Project, Series A (CIFG), 5.00%, 6/01/35
1,000
805,300
3,319,577
Health 4.3%
Martin County Health Facilities Authority, RB, Martin
Memorial Medical Center, Series A (a):
5.75%, 11/15/12
1,350
1,560,695
5.88%, 11/15/12
3,535
4,100,918
South Lake County Hospital District, RB, South Lake
Hospital Inc:
5.80%, 10/01/34
1,000
911,440
6.38%, 10/01/34
1,150
1,057,747
7,630,800
Housing 1.8%
Broward County HFA, RB, Series E (FNMA), AMT,
5.90%, 10/01/39
960
968,429
Duval County HFA, RB (GNMA), AMT, 5.40%, 10/01/21
645
640,685
Florida Housing Finance Corp., RB, Homeowner Mortgage,
Series 4 (FSA), AMT, 6.25%, 7/01/22
360
371,765
Lee County HFA, RB, Multi-County Program, Series A-1
(GNMA), AMT, 7.13%, 3/01/28
30
30,461
Manatee County HFA, Refunding RB, Single Family,
Subordinate Series 1 (GNMA), AMT, 6.25%, 11/01/28
100
101,869
Miami-Dade County HFA, Florida, RB, Home Ownership
Mortgage, Series A-1 (GNMA), AMT, 6.30%, 10/01/20
365
371,939
Pinellas County HFA, RB, Multi-County Program,
Series A-1 (GNMA), AMT:
6.30%, 9/01/20
240
244,562
6.35%, 9/01/25
350
356,762
3,086,472
State 3.2%
Florida Municipal Loan Council, RB (MBIA):
Series A-1, 5.13%, 7/01/34
1,580
1,460,220
Series B, 5.38%, 11/01/30
4,250
4,193,985
5,654,205
Transportation 9.8%
County of Broward Florida, RB, Series I (AMBAC), AMT,
5.75%, 10/01/18
2,870
2,894,079
County of Miami-Dade Florida, RB, Miami International
Airport, Series A (FSA), AMT:
6.00%, 10/01/29
3,275
3,267,074
5.25%, 10/01/41
1,800
1,554,048
5.50%, 10/01/41
3,800
3,411,906
County of Miami-Dade Florida, RB, Series A (FSA), AMT,
5.00%, 10/01/33
3,740
3,197,962
Hillsborough County Aviation Authority, Florida, RB,
Series C (AGC), AMT, 5.75%, 10/01/26
1,000
1,014,130
Orlando & Orange County Expressway Authority, RB,
Series B (AMBAC), 5.00%, 7/01/30
1,950
1,917,630
17,256,829
ANNUAL REPORT JULY 31, 2009 19
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
Florida (concluded)
Utilities 2.4%
City of Miami Beach Florida, RB, Water And Sewer
Revenue (AMBAC), 5.75%, 9/01/25
$ 3,000
$ 3,068,640
City of Port Saint Lucie Florida, RB (MBIA),
5.25%, 9/01/25
1,215
1,220,855
4,289,495
Total Municipal Bonds in Florida
80,154,691
Georgia 6.0%
Transportation 1.9%
City of Atlanta Georgia, RB, General, Subordinate Lien,
Series C (FSA), 5.00%, 1/01/33
3,270
3,243,121
Utilities 4.1%
County of Fulton Georgia, RB (MBIA), 5.25%, 1/01/35
1,000
1,003,470
Municipal Electric Authority of Georgia, RB, General
Resolution Projects, Sub-Series D, 6.00%, 1/01/23
5,600
6,228,544
7,232,014
Total Municipal Bonds in Georgia
10,475,135
Illinois 3.0%
Health 3.0%
Illinois Finance Authority, RB:
Northwestern Memorial Hospital, Series A,
6.00%, 8/15/39
4,160
4,299,235
Rush University Medical Center Obligation Group,
Series A, 7.25%, 11/01/30
850
905,845
Total Municipal Bonds in Illinois
5,205,080
Indiana 2.7%
Utilities 2.7%
Indiana Municipal Power Agency, Indiana, RB, Indiana
Muni Power Agency Series B, 6.00%, 1/01/39
4,525
4,699,439
Total Municipal Bonds in Indiana
4,699,439
Kansas 1.8%
Health 1.8%
Kansas Development Finance Authority, RB, Adventist
Health, 5.50%, 11/15/29
3,250
3,262,382
Total Municipal Bonds in Kansas
3,262,382
Kentucky 3.6%
County/City/Special District/School District 1.9%
Louisville & Jefferson County Metropolitan Government
Parking Authority, RB, Series A, 5.75%, 12/01/34
3,200
3,364,672
Health 1.7%
Louisville, Jefferson County Metropolitan Government,
RB, Jewish Hospital Saint Marys Healthcare,
6.13%, 2/01/37
2,955
2,945,248
Total Municipal Bonds in Kentucky
6,309,920
Par
Municipal Bonds
(000)
Value
Maine 1.3%
Housing 1.3%
Maine State Housing Authority, Maine, RB, Series C, AMT,
5.45%, 11/15/23
$ 2,285
$ 2,285,983
Total Municipal Bonds in Maine
2,285,983
Massachusetts 2.6%
Education 0.9%
Massachusetts Health & Educational Facilities Authority,
RB, Tufts University, 5.38%, 8/15/38
1,500
1,564,860
Housing 1.1%
Massachusetts HFA, Massachusetts, RB, Housing,
Series F, AMT, 5.70%, 6/01/40
2,125
2,035,729
State 0.6%
Massachusetts State College Building Authority, RB,
Series A, 5.50%, 5/01/39
1,000
1,025,710
Total Municipal Bonds in Massachusetts
4,626,299
Michigan 2.0%
Health 1.3%
Royal Oak Hospital Finance Authority, Michigan, RB,
William Beaumont Hospital, 8.25%, 9/01/39
1,970
2,222,298
State 0.7%
Michigan State Building Authority, Refunding RB,
Facilities Program, Series I, 6.00%, 10/15/38
1,250
1,285,463
Total Municipal Bonds in Michigan
3,507,761
Nevada 1.7%
County/City/Special District/School District 1.7%
City of Las Vegas Nevada, GO, Limited Tax, Performing
Arts Center, 6.00%, 4/01/34
2,850
3,005,553
Total Municipal Bonds in Nevada
3,005,553
New Jersey 1.6%
Transportation 1.6%
New Jersey Transportation Trust Fund Authority,
New Jersey, RB, Transportation System, Series A,
5.88%, 12/15/38
2,670
2,828,598
Total Municipal Bonds in New Jersey
2,828,598
New York 7.5%
County/City/Special District/School District 1.4%
New York City Transitional Finance Authority, RB, Fiscal
2009, Series S-3, 5.25%, 1/15/39
2,500
2,496,200
State 3.3%
New York State Dormitory Authority, RB, Education,
Series B, 5.25%, 3/15/38
5,700
5,798,724
Transportation 1.8%
Triborough Bridge & Tunnel Authority, New York, RB,
Series A-2, 5.38%, 11/15/38
3,030
3,131,566
20 ANNUAL REPORT JULY 31, 2009
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
New York (concluded)
Utilities 1.0%
Long Island Power Authority, RB, Series A,
5.50%, 4/01/24
$ 1,600
$ 1,693,312
Total Municipal Bonds in New York
13,119,802
Pennsylvania 3.7%
Transportation 3.1%
Pennsylvania Turnpike Commission, RB, Sub-Series B,
5.25%, 6/01/39
5,650
5,458,070
Utilities 0.6%
Pennsylvania Economic Development Financing Authority,
RB, Pennsylvania, American Water Co. Project,
6.20%, 4/01/39
1,075
1,118,473
Total Municipal Bonds in Pennsylvania
6,576,543
Puerto Rico 4.1%
Housing 1.7%
Puerto Rico HFA, RB, Subordinate, Capital Fund
Modernization, 5.13%, 12/01/27
3,000
3,003,300
State 2.4%
Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 5.75%, 8/01/37
4,200
4,153,884
Total Municipal Bonds in Puerto Rico
7,157,184
Texas 4.2%
County/City/Special District/School District 1.1%
Conroe ISD, Texas, GO, School Building, Series A,
5.75%, 2/15/35
1,800
1,889,028
Health 0.5%
Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B, 7.25%, 12/01/35
800
864,056
Transportation 1.7%
Houston Texas Airport Systems Revenue, ARB, Refunding,
Senior Lien, Series A, 5.50%, 7/01/39 (b)
1,170
1,147,220
North Texas Tollway Authority, Refunding RB, System,
First Tier, Series K-1 (AGC), 5.75%, 1/01/38
1,750
1,824,830
2,972,050
Utilities 0.9%
Lower Colorado River Authority, Refunding RB,
5.75%, 5/15/28
1,620
1,672,067
Total Municipal Bonds in Texas
7,397,201
Virginia 1.1%
State 1.1%
Virginia Public School Authority, Virginia, RB, School
Financing, 6.50%, 12/01/35
1,700
1,900,293
Total Municipal Bonds in Virginia
1,900,293
Total Municipal Bonds 104.9%
184,240,216
Municipal Bonds Transferred to
Par
Tender Option Bond Trusts (c)
(000)
Value
California 9.5%
County/City/Special District/School District 5.2%
Los Angeles Community College District, California, GO,
2008 Election, Series A, 6.00%, 8/01/33
$ 7,697
$ 8,282,247
Los Angeles Unified School District, California, GO,
Series I, 5.00%, 1/01/34
790
760,857
9,043,104
Utilities 4.3%
California Educational Facilities Authority, RB, University
Southern California, Series A, 5.25%, 10/01/39
4,200
4,329,108
University of California, RB, Series O, 5.75%, 5/15/34
3,000
3,222,720
7,551,828
Municipal Bonds Transferred to
Tender Option Bond Trusts in California
16,594,932
District of Columbia 3.8%
County/City/Special District/School District 1.7%
District of Columbia, RB, Series A, 5.50%, 12/01/30
2,805
3,015,375
Utilities 2.1%
District of Columbia Water & Sewer Authority, RB,
Series A, 5.50%, 10/01/39
3,507
3,648,104
Municipal Bonds Transferred to Tender Option
Bond Trusts in District of Columbia
6,663,479
Florida 19.0%
County/City/Special District/School District 4.1%
City of Jacksonville, Florida, RB, Better Jacksonville
(MBIA), 5.00%, 10/01/27
2,700
2,730,159
Polk County School Board, COP, Master Lease, Series A
(FSA), 5.50%, 1/01/25
4,380
4,474,039
7,204,198
Health 9.6%
Miami-Dade County, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds (Miami Childrens
Hospital), Series A (AMBAC), 5.63%, 8/15/17
6,600
7,267,986
South Broward Hospital District, Florida, RB, Hospital
(MBIA), 5.63%, 5/01/12
8,500
9,559,440
16,827,426
Housing 2.1%
Lee County HFA, RB, Multi-County Program, Series A-2
(GNMA), AMT, 6.00%, 9/01/40
2,400
2,580,048
Manatee County HFA, RB, Series A (GNMA), AMT,
5.90%, 9/01/40
1,141
1,148,100
3,728,148
Transportation 2.0%
Hillsborough County Aviation Authority, Florida, RB,
Series A (AGC), AMT, 5.50%, 10/01/38
3,869
3,505,218
Utilities 1.2%
Jacksonville Electric Authority, RB, Issue Three,
Series Two, River Power Park, 5.00%, 10/01/37
2,100
2,014,152
Municipal Bonds Transferred to
Tender Option Bond Trusts in Florida
33,279,142
ANNUAL REPORT JULY 31, 2009 21
(Percentages shown are based on Net Assets)
Municipal Bonds Transferred to
Par
Tender Option Bond Trusts (c)
(000)
Value
Illinois 4.4%
Education 3.4%
Illinois Finance Authority, RB, University of Chicago,
Series B, 6.25%, 7/01/38
$ 5,300
$ 5,843,833
Transportation 1.0%
Illinois State Toll Highway Authority, RB, Series B,
5.50%, 1/01/33
1,750
1,829,916
Municipal Bonds Transferred to
Tender Option Bond Trusts in Illinois
7,673,749
Nevada 6.4%
County/City/Special District/School District 6.4%
Clark County Water Reclamation District, GO:
Limited Tax, 6.00%, 7/01/38
5,000
5,330,000
Series B, 5.50%, 7/01/29
5,668
5,987,374
Municipal Bonds Transferred to
Tender Option Bond Trusts in Nevada
11,317,374
New Hampshire 1.3%
Education 1.3%
New Hampshire Health & Education Facilities Authority,
RB, Dartmouth College, 5.25%, 6/01/39
2,159
2,249,727
Municipal Bonds Transferred to
Tender Option Bond Trusts in New Hampshire
2,249,727
New York 1.5%
Utilities 1.5%
New York City Municipal Water Finance Authority, RB,
Series FF-2, 5.50%, 6/15/40
2,504
2,631,684
Municipal Bonds Transferred to
Tender Option Bond Trusts in New York
2,631,684
South Carolina 1.9%
Utilities 1.9%
South Carolina State Public Service Authority, RB,
Santee Cooper Series A, 5.50%, 1/01/38
3,240
3,407,573
Municipal Bonds Transferred to
Tender Option Bond Trusts in South Carolina
3,407,573
Texas 5.4%
Health 3.1%
Harris County Cultural Education Facilities Finance
Corp., RB, Texas Childrens Hospital Project,
5.50%, 10/01/39
5,400
5,391,630
Utilities 2.3%
City of San Antonio, Texas, Refunding RB, Series A,
5.25%, 2/01/31
3,989
4,103,327
Municipal Bonds Transferred to
Tender Option Bond Trusts in Texas
9,494,957
Municipal Bonds Transferred to
Par
Tender Option Bond Trusts (c)
(000)
Value
Virginia 1.0%
Health 1.0%
Fairfax County IDA, Virginia, RB, Health Care, Inova
Health System, Series A, 5.50%, 5/15/35
$ 1,749
$ 1,779,087
Municipal Bonds Transferred to
Tender Option Bond Trusts in Virginia
1,779,087
Total Municipal Bonds Transferred to
Tender Option Bond Trusts 54.2%
95,091,704
Total Long-Term Investments
(Cost $277,685,993) 159.1%
279,331,920
Short-Term Securities
Pennsylvania 1.1%
City of Philadelphia Pennsylvania, GO, Multi-Mode, VRDN,
Refunding, Series B (FSA), 2.50%, 8/07/09 (d)
2,000
2,000,000
Shares
Money Market Funds 0.8%
FFI Institutional Tax-Exempt Fund, 0.42% (e)(f)
1,400,051
1,400,051
Total Short-Term Securities
(Cost $3,400,051) 1.9%
3,400,051
Total Investments (Cost $281,086,044*) 161.0%
282,731,971
Other Assets Less Liabilities 1.9%
3,229,959
Liability for Trust Certificates, Including Interest
Expense and Fees Payable (29.0)%
(50,872,385)
Preferred Shares, at Redemption Value (33.9)%
(59,479,742)
Net Assets Applicable to Common Shares 100.0%
$175,609,803
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2009, as computed for federal income tax purposes, were as follows:
Aggregate cost
$230,813,758
Gross unrealized appreciation
$ 8,907,018
Gross unrealized depreciation
(7,786,385)
Net unrealized appreciation
$ 1,120,633
(a) US government securities, held in escrow, are used to pay interest on this security,
as well as to retire the bond in full at the date indicated, typically at a premium
to par.
(b) When-issued security.
(c) Securities represent bonds transferred to a tender option bond trust in exchange for
which the Fund acquired residual interest certificates. These securities serve as col-
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements
for details of municipal bonds transferred to tender option bond trusts.
(d) Security may have a maturity of more than one year at time of issuance, but has
variable rate and demand features that qualify it as a short-term security. The rate
shown is as of report date and maturity shown is the date the principal owed can
be recovered through demand.
(e) Investments in companies considered to be an affiliate of the Fund, for purposes of
Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
Net
Affiliate
Activity
Income
CMA Florida Municipal Money Fund
$(7,485,416)
$31,934
FFI Institutional Tax-Exempt Fund
$(1,400,051)
$13,750
(f) Represents the current yield as of report date.
22 ANNUAL REPORT JULY 31, 2009
Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
(FAS 157). FAS 157 clarifies the definition of fair value, establishes a framework for
measuring fair values and requires additional disclosures about the use of fair value
measurements. Various inputs are used in determining the fair value of investments,
which are as follows:
Level 1 price quotations in active markets/exchanges for identical securities
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
Funds own assumptions used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indica-
tion of the risk associated with investing in those securities. For information about
the Funds 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 inputs used as of July 31, 2009 in determining
the fair valuation of the Funds investments:
Valuation
Investments in
Inputs
Securities
Assets
Level 1 Short-Term Securities
$ 1,400,051
Level 2
Long-Term Investments1
279,331,920
Short-Term Securities
2,000,000
Total Level 2
281,331,920
Level 3
Total
$ 282,731,971
1 See above Schedule of Investments for values in
each sector.
ANNUAL REPORT JULY 31, 2009 23
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
New Jersey 137.4%
Corporate 1.6%
Gloucester County Improvement Authority, Refunding RB,
Waste Management Inc. Project:
Series A, 6.85%, 12/01/29
$ 2,000
$ 2,019,600
Series B, AMT, 7.00%, 12/01/29
1,180
1,190,950
3,210,550
County/City/Special District/School District 24.1%
Burlington County Bridge Commission, RB, Governmental
Leasing Program, 5.25%, 8/15/12 (a)
1,000
1,129,460
City of Perth Amboy New Jersey, GO, CAB (FSA) (b):
5.39%, 7/01/33
1,575
1,311,298
5.38%, 7/01/34
1,925
1,591,186
County of Hudson New Jersey, COP, Refunding (MBIA),
6.25%, 12/01/16
1,500
1,669,440
Essex County Improvement Authority, Refunding RB,
County Guaranteed, Project Consolidation (MBIA),
5.50%, 10/01/29
5,085
5,432,102
Hudson County Improvement Authority, RB, County,
Guaranteed, Harrison Parking Facilities Project,
Series C (AGC), 5.38%, 1/01/44
4,800
4,918,080
Hudson County Improvement Authority, Refunding
RB, Hudson County Lease Project (MBIA),
5.38%, 10/01/24
4,500
4,530,240
Jackson Township School District, New Jersey, GO
(FGIC), 5.00%, 4/15/12 (a)
6,840
7,585,901
Middlesex County Improvement Authority, RB, Senior,
Heldrich Center Hotel, Series A, 5.00%, 1/01/20
655
386,692
Middlesex County Improvement Authority, Refunding
RB, County Guaranteed, Golf Course Projects,
5.25%, 6/01/22
1,455
1,568,592
Monmouth County Improvement Authority, RB,
Governmental Loan (AMBAC):
5.00%, 12/01/11 (a)
2,085
2,289,205
5.00%, 12/01/15
1,215
1,258,473
5.00%, 12/01/16
1,280
1,315,648
Morristown Parking Authority, RB, Guaranteed (MBIA),
4.50%, 8/01/37
585
548,712
Newark Housing Authority, Refunding RB, Additional,
Newark Redevelopment Project (MBIA),
4.38%, 1/01/37
3,225
2,761,310
Salem County Improvement Authority, RB, Finlaw State
Office Building (FSA):
5.38%, 8/15/28
500
528,190
5.25%, 8/15/38
500
511,835
South Jersey Port Corp., Refunding RB:
4.75%, 1/01/18
4,280
4,436,776
4.85%, 1/01/19
2,485
2,567,800
5.00%, 1/01/20
2,000
2,065,800
48,406,740
Education 15.5%
New Jersey Educational Facilities Authority, RB:
Georgian Court College Project, Series C,
6.50%, 7/01/13 (a)
2,000
2,391,620
Montclair State University, Series J, 5.25%, 7/01/38
1,140
1,110,178
Montclair State University, Series L (MBIA),
5.00%, 7/01/14 (a)
5,305
6,092,209
Rider University, (Radian), 5.00%, 7/01/17
1,000
988,390
Rider University, Series A (Radian), 5.50%, 7/01/23
1,255
1,252,515
Rider University, Series A (Radian), 5.25%, 7/01/34
1,450
1,250,030
Rider University, Series C (Radian), 5.00%, 7/01/37
1,750
1,466,727
Par
Municipal Bonds
(000)
Value
New Jersey (continued)
Education (concluded)
New Jersey Educational Facilities Authority, Refunding RB:
College of New Jersey, Series D (FSA),
5.00%, 7/01/35
$ 6,115
$ 6,229,289
Georgian Court University, Series D, 5.25%, 7/01/37
1,000
875,780
Ramapo College, Series I (AMBAC), 4.25%, 7/01/31
750
644,422
Ramapo College, Series I (AMBAC), 4.25%, 7/01/36
810
665,763
Rowan University, Series B (AGC), 5.00%, 7/01/24
1,800
1,940,832
University Medical & Dentistry, Series B,
7.13%, 12/01/23
1,300
1,377,571
University Medical & Dentistry, Series B,
7.50%, 12/01/32
1,625
1,717,316
New Jersey State Higher Education Assistance Authority,
RB, Series A (AMBAC), AMT, 5.30%, 6/01/17
3,170
3,182,553
31,185,195
Health 19.9%
New Jersey EDA, RB, CAB, Saint Barnabas, Series A
(MBIA), 6.25%, 7/01/24 (c)
3,850
1,270,885
New Jersey EDA, RB, Masonic Charity Foundation NJ:
5.25%, 6/01/24
1,425
1,435,559
5.25%, 6/01/32
685
644,188
New Jersey EDA, Refunding RB First Mortgage,
Winchester, Series A:
5.75%, 11/01/24
2,500
2,297,350
5.80%, 11/01/31
2,000
1,765,820
New Jersey Health Care Facilities Financing Authority, RB,
CAB, Saint Barnabas Health, Series B (c):
5.90%, 7/01/30
2,000
330,160
5.69%, 7/01/36
500
45,925
5.18%, 7/01/37
13,250
1,110,747
New Jersey Health Care Facilities Financing Authority, RB:
Atlantic City Medical Center, 5.75%, 7/01/12 (a)
1,060
1,192,288
Atlantic City Medical Center, 6.25%, 7/01/12 (a)
500
569,525
Atlantic City Medical Center, 6.25%, 7/01/17
520
547,789
Atlantic City Medical Center, 5.75%, 7/01/25
520
526,079
Capital Health System Obligation Group, Series A,
5.75%, 7/01/13 (a)
1,650
1,899,430
Childrens Specialized Hospital, Series A,
5.50%, 7/01/36
1,540
1,239,700
Health System, Catholic Health East, Series A,
5.38%, 11/15/12 (a)
1,100
1,247,070
Hospital Asset Transformation Program, Series A,
5.25%, 10/01/38
1,000
1,002,090
Hunterdon Medical Center, Series A,
5.13%, 7/01/35
1,950
1,713,075
Meridian Health, Series I (AGC), 5.00%, 7/01/38
1,000
986,410
Meridian Health System Obligation Group (FSA),
5.25%, 7/01/19
1,500
1,506,720
Meridian Health System Obligation Group (FSA),
5.38%, 7/01/24
2,250
2,255,175
Meridian Health System Obligation Group (FSA),
5.25%, 7/01/29
2,195
2,131,564
Pascack Valley Hospital Association,
6.63%, 7/01/36 (d)(e)
1,845
47,232
Robert Wood University (AMBAC), 5.70%, 7/01/20
4,000
4,030,280
Saint Barnabas Health Care System, Series A,
5.00%, 7/01/29
4,155
3,235,706
Somerset Medical Center, 5.50%, 7/01/33
1,875
1,025,119
South Jersey Hospital, 5.00%, 7/01/36
385
338,061
South Jersey Hospital, 5.00%, 7/01/46
1,650
1,394,217
Southern Ocean County Hospital (Radian),
5.13%, 7/01/31
2,000
1,642,620
Virtua Health (AGC), 5.50%, 7/01/38
2,500
2,496,275
39,927,059
24 ANNUAL REPORT JULY 31, 2009
(Percentages shown are based on Net Assets)
Par
Municipal Bonds
(000)
Value
New Jersey (continued)
Housing 15.0%
New Jersey State Housing & Mortgage Finance
Agency, RB:
Capital Fund Program, Series A (FSA),
4.70%, 11/01/25
$ 6,950
$ 6,871,743
Home Buyer, Series CC (MBIA), AMT,
5.80%, 10/01/20
4,515
4,670,181
Home Buyer, Series U (MBIA), AMT,
5.60%, 10/01/12
2,515
2,521,187
S/F Housing, Series T, AMT, 4.65%, 10/01/32
4,945
4,304,969
S/F Housing, Series U, AMT, 4.95%, 10/01/32
700
647,276
S/F Housing, Series X, AMT, 4.85%, 4/01/16
3,605
3,710,014
Series A (FGIC), AMT, 4.90%, 11/01/35
1,365
1,215,928
Series AA, 6.50%, 10/01/38
2,160
2,297,700
Newark Housing Authority, RB, South Ward Police
Facility (AGC):
5.75%, 12/01/30
1,115
1,125,280
6.75%, 12/01/38
2,670
2,851,961
30,216,239
State 36.5%
Garden State Preservation Trust, RB (FSA):
2005 Series A, 5.80%, 11/01/22
4,300
4,876,071
CAB, Series B, 5.12%, 11/01/23 (c)
6,860
3,535,575
CAB, Series B, 5.25%, 11/01/28 (c)
4,540
1,693,148
New Jersey EDA, RB, Cigarette Tax (Radian):
5.75%, 6/15/29
1,895
1,576,450
5.50%, 6/15/31
370
295,027
5.75%, 6/15/34
755
608,417
New Jersey EDA, RB, Department of Human Services,
Pooled, 5.00%, 7/01/12
220
240,702
New Jersey EDA, RB, Motor Vehicle Surcharge Revenue,
Series A (MBIA), 5.25%, 7/01/33
14,000
13,609,260
New Jersey EDA, Refunding, RB, School Facilities
Construction, Series AA, 5.50%, 12/15/29
3,300
3,482,391
New Jersey EDA, RB, School Facilities Construction:
Series L (FSA), 5.00%, 3/01/30
5,800
5,907,126
Series O, 5.25%, 3/01/23
2,400
2,498,712
Series P, 5.00%, 9/01/15
3,000
3,347,190
Series P, 5.25%, 9/01/16
3,115
3,465,375
Series Z (AGC), 5.50%, 12/15/34
3,665
3,843,339
Series Z (AGC), 6.00%, 12/15/34
3,600
3,923,604
New Jersey State Transit Corp., COP, Subordinate,
Federal Transit Administration Grants, Series B,
5.75%, 9/15/14
3,620
3,864,857
New Jersey Transportation Trust Fund Authority,
New Jersey, RB, Transportation System:
CAB, Series C (AMBAC), 6.05%, 12/15/35 (c)
4,140
713,405
Series A, 5.50%, 12/15/21
3,525
3,843,484
Series A, 6.00%, 12/15/38
2,900
3,099,027
Series A (AGC), 5.63%, 12/15/28
1,250
1,330,913
Series B (MBIA), 5.50%, 12/15/21
5,865
6,394,903
State of New Jersey, COP, Equipment Lease Purchase,
Series A, 5.25%, 6/15/28
1,100
1,104,136
73,253,112
Tobacco 1.6%
Tobacco Settlement Financing Corp., New Jersey, RB:
7.00%, 6/01/13 (a)
500
606,640
CAB, Series 1-B, 5.65%, 6/01/41 (c)
5,100
221,493
Series 1-A, 4.50%, 6/01/23
2,720
2,324,594
3,152,727
Par
Municipal Bonds
(000)
Value
New Jersey (concluded)
Transportation 15.0%
Delaware River Port Authority Pennsylvania & New Jersey,
RB (FSA), 6.00%, 1/01/19
$ 7,860
$ 7,925,081
New Jersey State Turnpike Authority, RB:
Growth & Income Securities, Series B (AMBAC),
6.05%, 1/01/35 (b)
4,870
3,495,199
Series E, 5.25%, 1/01/40
5,475
5,486,826
New Jersey Transportation Trust Fund Authority,
New Jersey, RB, Transportation System, Series A:
5.88%, 12/15/38
3,050
3,231,170
(AGC), 5.50%, 12/15/38
1,000
1,046,130
Port Authority of New York & New Jersey, RB,
Consolidated:
Ninety, Third Series, 6.13%, 6/01/94
5,000
5,446,550
One Hundred Fifty, Second Series, AMT,
5.75%, 11/01/30
3,300
3,410,286
30,041,242
Utilities 8.2%
New Jersey EDA, RB:
NJ American Water Co. Inc. Project, Series A (FGIC),
AMT, 6.88%, 11/01/34
6,670
6,671,134
Series A, New Jersey, American Water (AMBAC), AMT,
5.25%, 11/01/32
1,000
860,670
United Water NJ Inc., Series B, Remarketed
(AMBAC), 4.50%, 11/01/25
4,500
4,595,310
Rahway Valley Sewerage Authority, RB, CAB, Series A
(MBIA), 4.87%, 9/01/31 (c)
6,000
1,643,040
Union County Utilities Authority, RB, Senior Lease, Ogden
Martin, Series A (AMBAC), AMT:
5.38%, 6/01/17
1,585
1,576,283
5.38%, 6/01/18
1,175
1,146,624
16,493,061
Total Municipal Bonds in New Jersey
275,885,925
Puerto Rico 6.6%
Education 1.0%
Puerto Rico Industrial Tourist Educational Medical
& Environmental Control Facilities Financing Authority,
RB, University Plaza Project, Series A (MBIA),
5.00%, 7/01/33
2,445
2,095,047
Housing 1.0%
Puerto Rico HFA, RB, Subordinate, Capital Fund
Modernization, 5.13%, 12/01/27
2,025
2,027,228
State 3.0%
Puerto Rico Sales Tax Financing Corp. RB, First
Sub-Series A, 5.75%, 8/01/37
6,000
5,934,120
Transportation 1.6%
Puerto Rico Highway & Transportation Authority,
Refunding, RB, Series CC (AGC), 5.50%, 7/01/31
3,000
3,136,830
Total Municipal Bonds in Puerto Rico
13,193,225
U.S. Virgin Islands 2.6%
Corporate 2.6%
United States Virgin Islands, RB, Senior Secured,
Hovensa Coker Project, AMT, 6.50%, 7/01/21
3,500
3,459,820
Virgin Islands Public Finance Authority, RB, Senior
Secured, Hovensa Refinery, AMT, 5.88%, 7/01/22
1,900
1,775,113
Total Municipal Bonds in the U.S. Virgin Islands
5,234,933
Total Municipal Bonds 146.6%
294,314,083
ANNUAL REPORT JULY 31, 2009 25
(Percentages shown are based on Net Assets)
Municipal Bonds Transferred to
Par
Tender Option Bond Trusts (f)
(000)
Value
State 3.2%
Garden State Preservation Trust, RB, 2005 Series A
(FSA), 5.75%, 11/01/28
$ 5,460
$ 6,465,186
Transportation 1.9%
Port Authority of New York & New Jersey, Refunding,
RB, Consolidated One Hundred Fifty Second, AMT,
5.25%, 11/01/35
3,764
3,684,598
Total Municipal Bonds Transferred to
Tender Option Bond Trusts 5.1%
10,149,784
Total Long-Term Investments
(Cost $308,757,672) 151.7%
304,463,867
Short-Term Securities
Shares
CMA New Jersey Municipal Money Fund,
0.07% (g)(h)
3,181,516
3,181,516
Total Short-Term Securities
(Cost $3,181,516) 1.6%
3,181,516
Total Investments (Cost $311,939,188*) 153.3%
307,645,383
Other Assets Less Liabilities 0.9%
1,925,911
Liability for Trust Certificates, Including Interest
Expense and Fees Payable (3.3)%
(6,620,872)
Preferred Shares, at Redemption Value (50.9)%
(102,210,594)
Net Assets Applicable to Common Shares 100.0%
$200,739,828
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2009, as computed for federal income tax purposes, were as follows:
Aggregate cost
$305,093,140
Gross unrealized appreciation
$ 10,755,374
Gross unrealized depreciation
(14,806,832)
Net unrealized depreciation
$ (4,051,458)
(a) US government securities, held in escrow, are used to pay interest on this security,
as well as to retire the bond in full at the date indicated, typically at a premium
to par.
(b) Represents a step-up bond that pays an initial coupon rate for the first period and
then a higher coupon rate for the following periods. Rate shown is as of report date.
(c) Represents a zero-coupon bond. Rate shown reflects current yield as of report date.
(d) Issuer filed for bankruptcy and/or is in default of interest payments.
(e) Non-income producing security.
(f) Securities represent bonds transferred to a tender option bond trust in exchange for
which the Fund acquired residual interest certificates. These securities serve as col-
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements
for details of municipal bonds transferred to tender option bond trusts.
(g) Investments in companies considered to be an affiliate of the Fund, for purposes of
Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
Net
Affiliate
Activity
Income
CMA New Jersey Municipal Money Fund
$(1,257,255)
$45,578
(h) Represents the current yield as of report date.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157, Fair Value Measurements clarifies the definition of fair value, establishes a
framework for measuring fair values and requires additional disclosures about the
use of fair value measurements. Various inputs are used in determining the fair value
of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical securities
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
Funds own assumptions used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indica-
tion of the risk associated with investing in those securities. For information about
the Funds 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 inputs used as of July 31, 2009 in determining
the fair valuation of the Funds investments:
Valuation
Investments in
Inputs
Securities
Assets
Level 1 Short-Term Securities
$ 3,181,516
Level 2 Long-Term Investments1
304,463,867
Level 3
Total
$ 307,645,383
1 See above Schedule of Investments for values in each
sector.
26 ANNUAL REPORT JULY 31, 2009
BlackRock
Muni New York
BlackRock
BlackRock
BlackRock
Intermediate
MuniYield
MuniYield
BlackRock
MuniYield
Duration
Arizona
California
MuniYield
New Jersey
Fund, Inc.
Fund, Inc.
Fund, Inc.
Investment Fund
Fund, Inc.
July 31, 2009
(MNE)
(MZA)
(MYC)
(MYF)
(MYJ)
Assets
Investments at value unaffiliated1
$ 83,780,887
$ 91,958,839
$ 450,243,993
$ 281,331,920
$ 304,463,867
Investments at value affiliated2
1,737,841
4,187,171
7,607,697
1,400,051
3,181,516
Cash
9,526
34,317
86,521
202,857
48,718
Interest receivable
943,074
755,828
6,711,278
3,971,317
2,992,838
Investments sold receivable
173,930
4,937,904
1,144,275
48,211
Prepaid expenses
13,323
20,276
39,833
27,338
28,541
Total assets
86,484,651
97,130,361
469,627,226
288,077,758
310,763,691
Liabilities
Investments purchased payable
1,000,000
530,326
1,141,429
Income dividends payable Common Shares
233,457
304,941
1,437,430
786,365
1,001,329
Investment advisory fees payable
34,290
42,042
206,562
127,560
137,716
Interest expense and fees payable
3,443
390
230,078
74,805
17,171
Other affiliates payable
555
640
2,765
1,782
2,087
Officers and Directors fees payable
87
89
461
389
444
Other accrued expenses payable
21,398
28,165
70,077
58,303
50,821
Total accrued liabilities
1,293,230
376,267
2,477,699
2,190,633
1,209,568
Other Liabilities
Trust certificates3
915,894
1,500,000
74,376,010
50,797,580
6,603,701
Total Liabilities
2,209,124
1,876,267
76,853,709
52,988,213
7,813,269
Preferred Shares at Redemption Value
$25,000 per share liquidation preference, plus unpaid dividends4,5
29,633,926
38,805,113
105,968,027
59,479,742
102,210,594
Net Assets Applicable to Common Shareholders
$ 54,641,601
$ 56,448,981
$ 286,805,490
$ 175,609,803
$ 200,739,828
Net Assets Applicable to Common Shareholders Consist of
Paid-in capital6,7
$ 59,630,112
$ 60,445,940
$ 301,598,405
$ 188,893,413
$ 204,494,347
Undistributed net investment income
499,055
618,220
3,354,000
1,887,727
3,064,620
Accumulated net realized loss
(3,073,355)
(1,023,060)
(4,332,458)
(16,817,264)
(2,525,334)
Net unrealized appreciation/depreciation
(2,414,211)
(3,592,119)
(13,814,457)
1,645,927
(4,293,805)
Net Assets Applicable to Common Shareholders
$ 54,641,601
$ 56,448,981
$ 286,805,490
$ 175,609,803
$ 200,739,828
Net asset value per Common Share
$ 12.99
$ 12.40
$ 13.47
$ 12.95
$ 14.13
1 Investments at cost unaffiliated
$ 86,195,098
$ 95,550,958
$ 464,058,450
$ 279,685,993
$ 308,757,672
2 Investments at cost affiliated
$ 1,737,841
$ 4,187,171
$ 7,607,697
$ 1,400,051
$ 3,181,516
3 Represents short-term floating rate certificates issued by tender option
bond trusts.
4 Preferred Shares outstanding:
Par value $0.05 per share
2,379
3,349
Par value $0.10 per share
1,185
1,552
4,238
739
5 Preferred Shares authorized
1,240
1,612
7,000
1 million
4,760
6 Common Shares outstanding, $0.10 par value
4,206,439
4,551,352
21,295,255
13,558,024
14,203,242
7 Common Shares authorized
200 million
200 million
200 million
unlimited
200 million
ANNUAL REPORT JULY 31, 2009 27
Statements of Operations
BlackRock
Muni New York
BlackRock
BlackRock
BlackRock
Intermediate
MuniYield
MuniYield
BlackRock
MuniYield
Duration
Arizona
California
MuniYield
New Jersey
Fund, Inc.
Fund, Inc.
Fund, Inc.
Investment Fund
Fund, Inc.
Year Ended July 31, 2009
(MNE)
(MZA)
(MYC)
(MYF)
(MYJ)
Investment Income
Interest
$ 4,261,253
$ 5,067,757
$ 23,390,797
$ 15,176,230
$ 16,004,357
Income affiliated
19,036
16,706
91,856
45,684
45,578
Total income
4,280,289
5,084,463
23,482,653
15,221,914
16,049,935
Expenses
Investment advisory
459,757
473,849
2,332,558
1,408,638
1,532,026
Commissions for Preferred Shares
57,153
77,044
239,025
170,922
197,678
Professional
47,511
58,264
99,335
84,545
69,408
Transfer agent
21,967
33,770
52,042
44,334
42,075
Accounting services
19,023
32,528
139,441
74,464
72,832
Printing
9,801
9,806
41,709
26,913
29,295
Registration
9,018
1,802
9,166
9,583
9,166
Custodian
7,013
8,112
22,052
18,007
19,280
Officer and Directors
6,965
7,081
36,225
22,714
25,570
Miscellaneous
40,139
42,556
53,815
60,078
43,773
Total expenses excluding interest expense and fees
678,347
744,812
3,025,368
1,920,198
2,041,103
Interest expense and fees1
21,102
29,974
1,068,779
371,937
175,400
Total expenses
699,449
774,786
4,094,147
2,292,135
2,216,503
Less fees waived by advisor
(97,600)
(20,372)
(49,215)
(33,111)
(20,530)
Total expenses after fees waived
601,849
754,414
4,044,932
2,259,024
2,195,973
Net investment income
3,678,440
4,330,049
19,437,721
12,962,890
13,853,962
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments
(2,160,349)
(502,704)
(3,850,618)
(12,407,592)
(1,310,444)
Financial futures contracts
117,870
(2,160,349)
(502,704)
(3,732,748)
(12,407,592)
(1,310,444)
Net change in unrealized appreciation/depreciation on investments
(174,373)
(1,630,717)
(3,452,968)
2,135,373
(3,427,395)
Total realized and unrealized loss
(2,334,722)
(2,133,421)
(7,185,716)
(10,272,219)
(4,737,839)
Dividends to Preferred Shareholders From
Net investment income
(835,785)
(856,443)
(2,734,089)
(1,840,008)
(2,158,107)
Net Increase in Net Assets Applicable to Common Shareholders Resulting
from Operations
$ 507,933
$ 1,340,185
$ 9,517,916
$ 850,663
$ 6,958,016
1 Related to tender option bond
trusts.
28 ANNUAL REPORT JULY 31, 2009
Period
Year Ended
June 1, 2008
Year Ended
July 31,
to July 31,
May 31,
Increase (Decrease) in Net Assets:
2009
2008
2008
Operations
Net investment income
$ 3,678,440
$ 574,639
$ 3,842,387
Net realized loss
(2,160,349)
(172,515)
(616,570)
Net change in unrealized appreciation/depreciation
(174,373)
(2,049,285)
(3,001,803)
Dividends to Preferred Shareholders from net investment income
(835,785)
(177,526)
(1,149,537)
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
507,933
(1,824,687)
(925,523)
Dividends to Common Shareholders From
Net investment income
(2,696,327)
(445,883)
(2,675,295)
Net Assets Applicable to Common Shareholders
Total decrease in net assets applicable to Common Shareholders
(2,188,394)
(2,270,570)
(3,600,818)
Beginning of period
56,829,995
59,100,565
62,701,383
End of period
$ 54,641,601
$ 56,829,995
$ 59,100,565
Undistributed net investment income
$ 499,055
$ 362,967
$ 411,737
BlackRock MuniYield Arizona Fund, Inc. (MZA)
Period
Year Ended
November 1, 2007
Year Ended
July 31,
to July 31,
October 31,
Increase (Decrease) in Net Assets:
2009
2008
2007
Operations
Net investment income
$ 4,330,049
$ 3,275,909
$ 4,276,021
Net realized gain (loss)
(502,704)
(374,900)
813,164
Net change in unrealized appreciation/depreciation
(1,630,717)
(4,126,989)
(2,857,872)
Dividends and distributions to Preferred Shareholders from:
Net investment income
(856,443)
(885,773)
(1,310,529)
Net realized gain
(228,921)
(102,456)
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
1,340,185
(2,340,674)
818,328
Dividends and Distributions to Common Shareholders From
Net investment income
(3,202,649)
(2,327,146)
(3,117,045)
Net realized gain
(533,902)
(285,146)
Decrease in net assets resulting from dividends and distributions to Common Shareholders
(3,202,649)
(2,861,048)
(3,402,191)
Capital Share Transactions
Reinvestment of common dividends
93,565
191,164
201,509
Net Assets Applicable to Common Shareholders
Total decrease in net assets applicable to Common Shareholders
(1,768,899)
(5,010,558)
(2,382,354)
Beginning of period
58,217,880
63,228,438
65,610,792
End of period
$ 56,448,981
$ 58,217,880
$ 63,228,438
Undistributed net investment income
$ 618,220
$ 374,545
$ 311,568
ANNUAL REPORT JULY 31, 2009 29
Period
Year Ended
November 1, 2007
Year Ended
July 31,
to July 31,
October 31,
Increase (Decrease) in Net Assets:
2009
2008
2007
Operations
Net investment income
$ 19,437,721
$ 14,610,706
$ 19,905,518
Net realized gain (loss)
(3,732,748)
952,926
347,077
Net change in unrealized appreciation/depreciation
(3,452,968)
(19,656,431)
(10,806,382)
Dividends to Preferred Shareholders from net investment income
(2,734,089)
(4,297,338)
(6,115,916)
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
9,517,916
(8,390,137)
3,330,297
Dividends to Common Shareholders From
Net investment income
(14,714,808)
(10,541,151)
(14,097,459)
Net Assets Applicable to Common Shareholders
Total decrease in net assets applicable to Common Shareholders
(5,196,892)
(18,931,288)
(10,767,162)
Beginning of period
292,002,382
310,933,670
321,700,832
End of period
$ 286,805,490
$ 292,002,382
$ 310,933,670
Undistributed net investment income
$ 3,354,000
$ 1,425,723
$ 1,349,213
BlackRock MuniYield Investment Fund (MYF)
Period
Year Ended
November 1, 2007
Year Ended
July 31,
to July 31,
October 31,
Increase (Decrease) in Net Assets:
2009
2008
2007
Operations
Net investment income
$ 12,962,890
$ 9,905,043
$ 13,472,485
Net realized gain (loss)
(12,407,592)
(2,127,402)
365,993
Net change in unrealized appreciation/depreciation
2,135,373
(10,593,132)
(8,146,519)
Dividends to Preferred Shareholders from net investment income
(1,840,008)
(2,806,091)
(4,025,743)
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
850,663
(5,621,582)
1,666,216
Dividends to Common Shareholders From
Net investment income
(9,555,926)
(7,077,289)
(9,517,733)
Net Assets Applicable to Common Shareholders
Total decrease in net assets applicable to Common Shareholders
(8,705,263)
(12,698,871)
(7,851,517)
Beginning of period
184,315,066
197,013,937
204,865,454
End of period
$ 175,609,803
$ 184,315,066
$ 197,013,937
Undistributed net investment income
$ 1,887,727
$ 1,003,169
$ 975,376
30 ANNUAL REPORT JULY 31, 2009
Period
Year Ended
December 1, 2007
Year Ended
July 31,
to July 31,
November 30,
Increase (Decrease) in Net Assets:
2009
2008
2007
Operations
Net investment income
$ 13,853,962
$ 8,848,451
$ 14,402,279
Net realized gain (loss)
(1,310,444)
(292,267)
1,589,868
Net change in unrealized appreciation/depreciation
(3,427,395)
(10,807,922)
(12,322,831)
Dividends to Preferred Shareholders from net investment income
(2,158,107)
(2,640,535)
(4,053,487)
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
6,958,016
(4,892,273)
(384,171)
Dividends to Common Shareholders From
Net investment income
(10,240,537)
(6,670,582)
(9,885,456)
Net Assets Applicable to Common Shareholders
Total decrease in net assets applicable to Common Shareholders
(3,282,521)
(11,562,855)
(10,269,627)
Beginning of period
204,022,349
215,585,204
225,854,831
End of period
$ 200,739,828
$ 204,022,349
$ 215,585,204
Undistributed net investment income
$ 3,064,620
$ 1,613,847
$ 1,964,587
ANNUAL REPORT JULY 31, 2009 31
Statement of Cash Flows
BlackRock MuniYield California Fund, Inc. (MYC)
Year Ended July 31, 2009
Cash Provided by Operating Activities
Net increase in net assets resulting from operations, excluding dividends to Preferred Shareholders
$ 12,252,005
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Decrease in interest receivable
801,825
Increase in prepaid expenses
(22,033)
Decrease in investment advisory fees payable
(1,137)
Decrease in other affiliates payable
(1,657)
Decrease in other accrued expenses payable
(80,867)
Decrease in Officers and Directors fees payable
(428)
Decrease in interest expense and fees payable
(108,285)
Net realized and unrealized loss on investments
7,303,586
Amortization of premium and discount on investments
807,724
Proceeds from sales of long-term investments
177,879,841
Purchases of long-term investments
(168,348,786)
Net proceeds from sales of short-term securities
16,805,560
Net cash provided by operating activities
47,287,348
Cash Used for Financing Activities
Payments on redemption of Preferred Shares
(20,550,000)
Cash receipts from trust certificates
20,533,405
Cash payments for trust certificates
(29,993,456)
Cash dividends paid to Common Shareholders
(14,448,617)
Cash dividends paid to Preferred Shareholders
(2,797,964)
Cash used for financing activities
(47,256,632)
Cash
Net increase in cash
30,716
Cash at beginning of year
55,805
Cash at end of year
$ 86,521
Cash Flow Information
Cash paid during the year for interest
$ 1,177,064
A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the period, based on the average
borrowing outstanding in relation to average
total assets.
32 ANNUAL REPORT JULY 31, 2009
Financial Highlights
BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE)
Period
June 1,
Year Ended
2008
July 31,
to July 31,
Year Ended May 31,
2009
2008
2008
2007
2006
2005
Per Share Operating Performance
Net asset value, beginning of period
$ 13.51
$ 14.05
$ 14.91
$ 14.66
$ 15.05
$ 14.45
Net investment income1
0.87
0.14
0.91
0.90
0.87
0.85
Net realized and unrealized gain (loss)
(0.55)
(0.53)
(0.86)
0.24
(0.37)
0.58
Dividends to Preferred Shareholders from net investment income
(0.20)
(0.04)
(0.27)
(0.25)
(0.20)
(0.11)
Net increase (decrease) from investment operations
0.12
(0.43)
(0.22)
0.89
0.30
1.32
Dividends to Common Shareholders from net investment income
(0.64)
(0.11)
(0.64)
(0.64)
(0.69)
(0.72)
Net asset value, end of period
$ 12.99
$ 13.51
$ 14.05
$ 14.91
$ 14.66
$ 15.05
Market price, end of period
$ 11.60
$ 12.12
$ 12.81
$ 13.93
$ 13.03
$ 13.44
Total Investment Return2
Based on net asset value
2.26%
(3.01)%3
(1.10)%
6.57%
2.52%
9.99%
Based on market price
1.79%
(4.56)%3
(3.48)%
12.02%
2.03%
10.97%
Ratios to Average Net Assets Applicable to Common Shares
Total expenses4
1.33%
1.39%5
1.28%
1.31%
1.33%
1.38%
Total expenses after fees waived and paid indirectly4
1.15%
1.15%5
1.04%
1.08%
1.10%
1.15%
Total expenses after fees waived and fees paid indirectly and
excluding interest expense and fees4,6
1.11%
1.11%5
1.04%
1.08%
1.10%
1.15%
Net investment income4
7.01%
6.36%5
6.31%
6.01%
5.89%
5.75%
Dividends to Preferred Shareholders
1.59%
1.84%5
1.89%
1.66%
1.32%
0.77%
Net investment income to Common Shareholders
5.42%
4.52%5
4.42%
4.35%
4.57%
4.98%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)
$ 54,642
$ 56,830
$ 59,101
$ 62,701
$ 61,672
$ 63,290
Preferred Shares outstanding at $25,000 liquidation preference, end
of period (000)
$ 29,625
$ 29,625
$ 31,000
$ 31,000
$ 31,000
$ 31,000
Portfolio turnover
32%
2%
21%
29%
49%
17%
Asset coverage, end of period per $1,000
$ 2,8447
$ 2,9187
$ 2,9067
$ 3,0237
$ 2,989
$ 3,042
1 Based on average shares outstanding.
2 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
3 Aggregate total investment return.
4 Do not reflect the effect of dividends to Preferred Shareholders.
5 Annualized. Certain non-recurring expenses have been included in the ratio but not annualized. If these expenses were annualized, the ratio of the total expenses, total expenses after
fees waived and paid indirectly, total expenses after fees waived and fees paid indirectly and excluding interest expense and fees, net investment income and net investment income to
Common Shareholders would have been 1.79%, 1.55%, 1.50%, 5.96% and 4.12%, respectively.
6 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.
7 Asset coverage per Preferred Share at $25,000 liquidation preference for the periods ended July 2009, July 2008, May 2008 and May 2007 are $71,119, $72,970, $72,676 and
$75,573, respectively.
ANNUAL REPORT JULY 31, 2009 33
Financial Highlights
BlackRock MuniYield Arizona Fund, Inc. (MZA)
Period
November 1,
Year Ended
2007
July 31,
to July 31,
Year Ended October 31,
2009
2008
2007
2006
2005
2004
Per Share Operating Performance
Net asset value, beginning of period
$ 12.81
$ 13.96
$ 14.53
$ 14.39
$ 15.04
$ 14.64
Net investment income1
0.95
0.72
0.95
0.98
0.97
0.98
Net realized and unrealized gain (loss)
(0.47)
(1.00)
(0.46)
0.36
(0.49)
0.40
Dividends and distributions to Preferred Shareholders from:
Net investment income
(0.19)
(0.19)
(0.29)
(0.26)
(0.14)
(0.06)
Net realized gain
(0.05)
(0.02)
(0.02)
(0.00)2
Net increase (decrease) from investment operations
0.29
(0.52)
0.18
1.06
0.34
1.32
Dividends and distributions to Common Shareholders from:
Net investment income
(0.70)
(0.51)
(0.69)
(0.80)
(0.92)
(0.92)
Net realized gain
(0.12)
(0.06)
(0.12)
(0.02)
Total dividends and distributions to Common Shareholders
(0.70)
(0.63)
(0.75)
(0.92)
(0.94)
(0.92)
Capital changes with respect to issuance of Preferred Shares
0.003
(0.05)
Net asset value, end of period
$ 12.40
$ 12.81
$ 13.96
$ 14.53
$ 14.39
$ 15.04
Market price, end of period
$ 12.85
$ 13.94
$ 13.66
$ 14.79
$ 16.03
$ 15.10
Total Investment Return4
Based on net asset value
3.27%
(3.79)%5
1.29%
7.47%
1.91%
9.40%
Based on market price
(1.66)%
6.99%5
(2.63)%
(1.80)%
13.07%
13.80%
Ratios to Average Net Assets Applicable to Common Shares
Total expenses6
1.46%
1.61%7
1.76%
1.71%
1.52%
1.40%
Total expenses after fees waived and paid indirectly6
1.42%
1.59%7
1.75%
1.70%
1.51%
1.39%
Total expenses after fees waived and fees paid indirectly and
excluding interest expense and fees6,8
1.36%
1.40%7
1.37%
1.33%
1.20%
1.19%
Net investment income6
8.16%
7.19%7
6.65%
6.90%
6.54%
6.65%
Dividends to Preferred Shareholders
1.61%
1.94%7
2.04%
1.83%
0.91%
0.42%
Net investment income to Common Shareholders
6.55%
5.25%7
4.61%
5.07%
5.63%
6.23%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)
$ 56,449
$ 58,218
$ 63,228
$ 65,611
$ 64,630
$ 67,217
Preferred Shares outstanding at $25,000 liquidation preference, end
of period (000)
$ 38,800
$ 40,300
$ 40,300
$ 40,300
$ 40,300
$ 30,300
Portfolio turnover
39%
13%
31%
31%
28%
21%
Asset coverage per Preferred Share at $25,000 liquidation preference, end
of period
$ 61,375
$ 61,1229
$ 64,2329
$ 65,7089
$ 65,0989
$ 80,4649
1 Based on average shares outstanding.
2 Amount is less than $(0.01) per share.
3 Amount is less than $0.01 per share.
4 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
5 Aggregate total investment return.
6 Do not reflect the effect of dividends to Preferred Shareholders.
7 Annualized.
8 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.
9 Amounts have been recalculated to conform with current year presentation.
34 ANNUAL REPORT JULY 31, 2009
Financial Highlights
BlackRock MuniYield California Fund, Inc. (MYC)
Period
November 1,
Year Ended
2007
July 31,
to July 31,
Year Ended October 31,
2009
2008
2007
2006
2005
2004
Per Share Operating Performance
Net asset value, beginning of period
$ 13.71
$ 14.60
$ 15.11
$ 14.73
$ 15.27
$ 15.17
Net investment income1
0.91
0.69
0.93
0.96
0.93
1.02
Net realized and unrealized gain (loss)
(0.33)
(0.88)
(0.49)
0.37
(0.46)
0.12
Dividends to Preferred Shareholders from net investment income
(0.13)
(0.20)
(0.29)
(0.25)
(0.13)
(0.07)
Net increase (decrease) from investment operations
0.45
(0.39)
0.15
1.08
0.34
1.07
Dividends to Common Shareholders from net investment income
(0.69)
(0.50)
(0.66)
(0.70)
(0.86)
(0.97)
Capital changes with respect to issuance of Preferred Shares
0.002
(0.02)
Net asset value, end of period
$ 13.47
$ 13.71
$ 14.60
$ 15.11
$ 14.73
$ 15.27
Market price, end of period
$ 12.44
$ 13.07
$ 13.25
$ 14.00
$ 13.37
$ 14.43
Total Investment Return3
Based on net asset value
4.64%
(2.55)%4
1.36%
8.03%
2.59%
7.74%
Based on market price
1.37%
2.37%4
(0.72)%
10.28%
(1.46)%
9.16%
Ratios to Average Net Assets Applicable to Common Shares
Total expenses5
1.49%
1.49%6
1.77%
1.52%
1.13%
1.12%
Total expenses after fees waived5
1.47%
1.45%6
1.75%
1.51%
1.13%
1.12%
Total expenses after fees waived and excluding interest expense and fees5,7
1.08%
1.06%6
1.06%
1.06%
0.98%
0.96%
Net investment income5
7.07%
6.24%6
6.29%
6.51%
6.16%
6.79%
Dividends to Preferred Shareholders
0.99%
1.83%6
1.93%
1.70%
0.84%
0.44%
Net investment income to Common Shareholders
6.08%
4.41%6
4.36%
4.81%
5.32%
6.35%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)
$ 286,805
$ 292,002
$ 310,934
$ 321,701
$ 313,708
$ 325,204
Preferred Shares outstanding at $25,000 liquidation preference, end
of period (000)
$ 105,950
$ 126,500
$ 175,000
$ 175,000
$ 175,000
$ 140,000
Portfolio turnover
38%
30%
41%
39%
53%
29%
Asset coverage per Preferred Share at $25,000 liquidation preference, end
of period
$ 92,679
$ 82,7248
$ 69,4528
$ 70,9858
$ 69,8188
$ 83,0728
1 Based on average shares outstanding.
2 Amount is less than $0.01 per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
4 Aggregate total investment return.
5 Do not reflect the effect of dividends to Preferred Shareholders.
6 Annualized.
7 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.
8 Amounts have been recalculated to conform with current year presentation.
ANNUAL REPORT JULY 31, 2009 35
Financial Highlights
BlackRock MuniYield Investment Fund (MYF)
Period
November 1,
Year Ended
2007
July 31,
to July 31,
Year Ended October 31,
2009
2008
2007
2006
2005
2004
Per Share Operating Performance
Net asset value, beginning of period
$ 13.59
$ 14.53
$ 15.11
$ 14.91
$ 15.27
$ 14.97
Net investment income1
0.96
0.73
0.99
0.99
0.98
1.00
Net realized and unrealized gain (loss)
(0.77)
(0.94)
(0.57)
0.28
(0.26)
0.29
Dividends to Preferred Shareholders from net investment income
(0.13)
(0.21)
(0.30)
(0.26)
(0.14)
(0.07)
Net increase (decrease) from investment operations
0.06
(0.42)
0.12
1.01
0.58
1.22
Dividends to Common Shareholders from net investment income
(0.70)
(0.52)
(0.70)
(0.81)
(0.92)
(0.92)
Capital charges with respect to issuance of Preferred Shares
(0.00)2
(0.02)
Net asset value, end of period
$ 12.95
$ 13.59
$ 14.53
$ 15.11
$ 14.91
$ 15.27
Market price, end of period
$ 11.72
$ 11.91
$ 12.86
$ 14.35
$ 14.93
$ 14.28
Total Investment Return3
Based on net asset value
1.93%
(2.52)%4
1.21%
7.24%
3.98%
8.99%
Based on market price
5.26%
(3.48)%4
(5.68)%
1.71%
11.34%
10.57%
Ratios to Average Net Assets Applicable to Common Shares
Total expenses5
1.35%
1.42%6
1.47%
1.44%
1.25%
1.19%
Total expenses after fees waived5
1.34%
1.40%6
1.46%
1.42%
1.25%
1.18%
Total expenses after fees waived and excluding interest expense and fees5,7
1.12%
1.10%6
1.10%
1.09%
1.05%
1.03%
Net investment income5
7.66%
6.77%6
6.72%
6.63%
6.46%
6.67%
Dividends to Preferred Shareholders
1.09%
1.92%6
2.01%
1.75%
0.95%
0.48%
Net investment income to Common Shareholders
6.57%
4.85%6
4.71%
4.88%
5.51%
6.19%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)
$ 175,610
$ 184,315
$ 197,014
$ 204,865
$ 202,042
$ 206,895
Preferred Shares outstanding at $25,000 liquidation preference, end
of period (000)
$ 59,475
$ 90,825
$ 110,000
$ 110,000
$ 110,000
$ 95,000
Portfolio turnover
63%
22%
25%
46%
42%
33%
Asset coverage per Preferred Share at $25,000 liquidation preference, end
of period
$ 98,819
$ 75,7428
$ 69,7908
$ 71,5748
$ 70,9208
$ 79,4468
1 Based on average shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
4 Aggregate total investment return.
5 Do not reflect the effect of dividends to Preferred Shareholders.
6 Annualized.
7 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option
bond trusts.
8 Amounts have been recalculated to conform with current year presentation.
36 ANNUAL REPORT JULY 31, 2009
Financial Highlights
BlackRock MuniYield New Jersey Fund, Inc. (MYJ)
Period
December 1,
Year Ended
2007
July 31,
to July 31,
Year Ended November 30,
2009
2008
2007
2006
2005
2004
Per Share Operating Performance
Net asset value, beginning of period
$ 14.36
$ 15.18
$ 15.90
$ 15.37
$ 15.25
$ 15.39
Net investment income1
0.98
0.62
1.01
1.00
1.01
1.06
Net realized and unrealized gain (loss)
(0.34)
(0.79)
(0.74)
0.54
0.18
(0.14)
Dividends to Preferred Shareholders from net investment income
(0.15)
(0.18)
(0.29)
(0.25)
(0.16)
(0.08)
Net increase (decrease) from investment operations
0.49
(0.35)
(0.02)
1.29
1.03
0.84
Dividends to Common Shareholders from net investment income
(0.72)
(0.47)
(0.70)
(0.76)
(0.91)
(0.96)
Capital charges with respect to issuance of Preferred Shares
(0.00)2
(0.02)
Net asset value, end of period
$ 14.13
$ 14.36
$ 15.18
$ 15.90
$ 15.37
$ 15.25
Market price, end of period
$ 13.49
$ 13.52
$ 13.66
$ 15.47
$ 14.38
$ 14.73
Total Investment Return3
Based on net asset value
4.50%
(2.17)%4
0.11%
8.83%
7.08%
5.84%
Based on market price
5.96%
2.35%4
(7.41)%
13.17%
3.72%
9.72%
Ratios to Average Net Assets Applicable to Common Shares
Total expenses5
1.15%
1.22%6
1.28%
1.44%
1.39%
1.25%
Total expenses after fees waived5
1.14%
1.20%6
1.27%
1.44%
1.39%
1.24%
Total expenses after fees waived and excluding interest expense and fees5,7
1.05%
1.13%6
1.10%
1.09%
1.09%
1.02%
Net investment income5
7.21%
6.27%6
6.56%
6.50%
6.47%
6.94%
Dividends to Preferred Shareholders
1.12%
1.85%6
1.85%
1.65%
1.05%
0.50%
Net investment income to Common Shareholders
6.09%
4.42%6
4.71%
4.85%
5.42%
6.44%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)
$ 200,740
$ 204,022
$ 215,585
$ 225,855
$ 218,250
$ 216,618
Preferred Shares outstanding at $25,000 liquidation preference, end
of period (000)
$ 102,200
$ 104,725
$ 119,000
$ 119,000
$ 119,000
$ 119,000
Portfolio turnover
21%
11%
18%
9%
32%
14%
Asset coverage per Preferred Share at $25,000 liquidation preference, end
of period
$ 74,107
$ 73,7098
$ 70,3058
$ 72,4528
$ 70,8588
$ 70,5148
1 Based on average shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
4 Aggregate total investment return.
5 Do not reflect effect of dividends to Preferred Shareholders.
6 Annualized.
7 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option
bond trusts.
8 Amounts have been recalculated to conform with current year presentation.
ANNUAL REPORT JULY 31, 2009 37
1. Organization and Significant Accounting Policies:
BlackRock Muni New York Intermediate Duration Fund, Inc. (Muni New
York), BlackRock MuniYield Arizona Fund, Inc. (MuniYield Arizona),
BlackRock MuniYield California Fund, Inc. (MuniYield California),
BlackRock MuniYield Investment Fund (formerly BlackRock MuniYield
Florida Fund) (MuniYield Investment) and BlackRock MuniYield New
Jersey Fund, Inc. (MuniYield New Jersey) (collectively, the Funds or
individually as the Fund), are registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as non-diversified, closed-end
management investment companies. Muni New York, MuniYield Arizona,
MuniYield California, and MuniYield New Jersey are organized as Maryland
corporations. MuniYield Investment is organized as a Massachusetts busi-
ness trust. The Funds financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require the use of management accruals and estimates. Actual
results may differ from these estimates. The Funds determine, and make
available for publication, the net asset values of their Common Shares on a
daily basis.
The following is a summary of significant accounting policies followed by
the Funds:
Valuation of Investments: Municipal investments (including
commitments
to purchase such investments on a when-issued basis) are valued on the
basis of prices provided by dealers or pricing services selected under the
supervision of each Funds Board of Directors/Trustees (the Board). In
determining the value of a particular investment, pricing services may use
certain information with respect to transactions in such investments, quota-
tions from dealers, pricing matrixes, market transactions in comparable
investments and information with respect to various relationships between
investments. Financial futures contracts traded on exchanges are valued at
their last sale price. Short-term securities with maturities less than 60 days
may be valued at amortized cost, which approximates fair value. Invest-
ments in open-end investment companies are valued at net asset value
each business day.
In the event that application of these methods of valuation results in a
price for an investment which is deemed not to be representative of the
market value of such investment, the investment will be valued by a
method approved by each Funds Board as reflecting fair value (Fair Value
Assets). When determining the price for Fair Value Assets, the investment
advisor and/or the sub-advisor seeks to determine the price that each
Fund might reasonably expect to receive from the current sale of that asset
in an arms length transaction. Fair value determinations shall be based
upon all available factors that the investment advisor and/or sub-advisor
deems relevant. The pricing of all Fair Value Assets is subsequently reported
to the Board or a committee thereof.
Forward Commitments and When-Issued Delayed Delivery Securities: The
Funds may purchase securities on a when-issued basis and may purchase
or sell securities on a forward commitment basis. Settlement of such trans-
actions normally occurs within a month or more after the purchase or sale
commitment is made. The Funds may purchase securities under such
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement,
the Funds may be required to pay more at settlement than the security
is worth. In addition, the purchaser is not entitled to any of the interest
earned prior to settlement. When purchasing a security on a delayed-
delivery basis the Funds assume the rights and risks of ownership of the
security, including the risk of price and yield fluctuations. In the event of
default by the counterparty, the Funds maximum amount of loss is the
unrealized gain of the commitment.
Municipal Bonds Transferred to Tender Option Bond Trusts: The
Funds
leverage their assets through the use of tender option bond trusts (TOBs).
A TOB is established by a third party sponsor forming a special purpose
entity, into which one or more funds, or an agent on behalf of the funds,
transfers municipal bonds. Other funds managed by the investment advisor
may also contribute municipal bonds to a TOB into which a Fund has con-
tributed bonds. A TOB typically issues two classes of beneficial interests:
short-term floating rate certificates, which are sold to third party investors,
and residual certificates (TOB Residuals), which are generally issued to
the participating funds that made the transfer. The TOB Residuals held by a
Fund include the right of the Fund (1) to cause the holders of a propor-
tional share of the floating rate certificates to tender their certificates at
par, and (2) to transfer, within seven days, a corresponding share of the
municipal bonds from the TOB to the Fund. The TOB may also be termi-
nated without the consent of the Fund upon the occurrence of certain
events as defined in the TOB agreements. Such termination events may
include the bankruptcy or default of the municipal bond, a substantial
downgrade in credit quality of the municipal bond, the inability of the TOB
to obtain quarterly or annual renewal of the liquidity support agreement, a
substantial decline in market value of the municipal bond or the inability to
remarket the short-term floating rate certificates to third party investors.
The cash received by the TOB from the sale of the short-term floating rate
certificates, less transaction expenses, is paid to the Fund, which typically
invests the cash in additional municipal bonds. Each Funds transfer of the
municipal bonds to a TOB is accounted for as a secured borrowing, there-
fore the municipal bonds deposited into a TOB are presented in the Funds
Schedules of Investments and the proceeds from the issuance of the short-
term floating rate certificates are shown as trust certificates in the
Statements of Assets and Liabilities.
Interest income from the underlying securities is recorded by the Funds
on an accrual basis. Interest expense incurred on the secured borrowing
and other expenses related to remarketing, administration and trustee
services to a TOB are reported as expenses of the Funds. The floating
rate certificates have interest rates that generally reset weekly and their
holders have the option to tender certificates to the TOB for redemption
at par at each reset date. At July 31, 2009, the aggregate value of the
underlying municipal bonds transferred to TOBs, the related liability for
trust certificates and the range of interest rates on the liability for the
trust certificates were as follows:
Notes to Financial Statements (continued)
Underlying
Municipal
Bonds
Liability for
Range of
Transferred
Trust
Interest
to TOBs
Certificates
Rates
Muni New York
$ 1,849,450
$ 915,894
1.49%
MuniYield Arizona
$ 3,013,860
$ 1,500,000
0.27%
0.24%
MuniYield California
$131,357,179
$74,376,010
1.59%
0.22%
MuniYield Investment
$ 95,091,704
$50,797,580
2.24%
0.41%
MuniYield New Jersey
$ 10,149,784
$ 6,603,701
1.56%
For the year ended July 31, 2009, the Funds average trust certificates out-
standing and the daily weighted average interest rate were as follows:
Average Trust
Daily Weighted
Certificates
Average
Outstanding
Interest Rate
Muni New York
$ 1,292,013
1.62%
MuniYield Arizona
$ 1,253,379
2.38%
MuniYield California
$ 65,362,281
1.63%
MuniYield Investment
$ 23,631,071
1.57%
MuniYield New Jersey
$ 9,097,710
1.92%
the market for fixed rate municipal bonds when short-term interest rates
rise, but tend to outperform the market for fixed rate bonds when interest
rates decline or remain relatively stable. Should short-term interest rates
rise, the Funds investments in TOBs may adversely affect the Funds invest-
ment income and distributions to shareholders. Also, fluctuations in the
market value of municipal bonds deposited into the TOB may adversely
affect the Funds net asset value per share.
Zero-Coupon Bonds: Each Fund may invest in zero-coupon bonds,
which
are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experience
greater volatility in market value than similar maturity debt obligations
which provide for regular interest payments.
Segregation and Collateralization: In cases in which the 1940 Act
and
the interpretive positions of the Securities and Exchange Commission
(SEC) require that each Fund either receive collateral or segregate
assets in connection with certain investments (e.g., financial futures con-
tracts) each Fund will, consistent with SEC rules and/or certain interpretive
letters issued by the SEC, segregate collateral or designate on its books
and records cash or other liquid securities having a market value at least
equal to the amount that would otherwise be required to be physically seg-
regated. Furthermore, based on requirements and agreements with certain
exchanges and third party broker-dealers, each party has requirements to
deliver/deposit securities as collateral for certain investments (e.g., finan-
cial futures contracts). As part of these agreements, when the value of these
investments achieves a previously agreed upon value (minimum transfer
amount), each party may be required to deliver additional collateral.
Investment Transactions and Investment Income: For financial
reporting
purposes, investment transactions are recorded on the dates the trans-
actions are entered into (the trade dates). Realized gains and losses on
income is recorded on the ex-dividend dates. Interest income is recognized
on the accrual method. Each Fund amortizes all premiums and discounts
on debt securities.
Dividends and Distributions: Dividends from net investment income
are
declared and paid monthly. Distributions of capital gains are recorded on
the ex-dividend dates. Dividends and distributions to Preferred Shareholders
are accrued and determined as described in Note 7.
Income Taxes: It is each Funds policy to comply with the
requirements of
the Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Each Fund files US federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limita-
tions on the Funds US federal tax returns remains open for the four peri-
ods ended as follows:
Year Ended
Period
Year Ended
Year Ended
Muni New York
July 31, 2009
June 1, 2008 to
May 31, 2008
May 31, 2007
July 31, 2008
MuniYield Arizona
July 31, 2009
November 1,
October 31,
October 31,
2008 to
2007
2006
July 31, 2008
MuniYield California
July 31, 2009
November 1,
October 31,
October 31,
2008 to
2007
2006
July 31, 2008
MuniYield Investment
July 31, 2009
November 1,
October 31,
October 31,
2008 to
2007
2006
July 31, 2008
MuniYield New Jersey
July 31, 2009
December 1,
November 30,
November 30,
2008 to
2007
2006
July 31, 2008
remain open for an additional year depending upon the jurisdiction.
Recent Accounting Pronouncement: In June 2009, Statement of
Financial
Accounting Standards No. 166, Accounting for Transfers of Financial Assets
an amendment of FASB Statement No. 140 (FAS 166), was issued.
FAS 166 is intended to improve the relevance, representational faithfulness
and comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows;
and a transferors continuing involvement, if any, in transferred financial
assets. FAS 166 is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2009. Earlier application
is prohibited. The recognition and measurement provisions of FAS 166 must
be applied to transfers occurring on or after the effective date. Additionally,
the disclosure provisions of FAS 166 should be applied to transfers that
occurred both before and after the effective date of FAS 166. The impact of
FAS 166 on the Funds financial statement disclosures, if any, is currently
being assessed.
Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan: Under the deferred compensation plan approved by
each
Funds Board, non-interested Directors (Independent Directors) may defer
a portion of their annual complex-wide compensation. Deferred amounts
earn an approximate return as though equivalent dollar amounts had been
invested in common shares of other certain BlackRock Closed-End Funds
selected by the Independent Directors. This has approximately the same
economic effect for the Independent Directors as if the Independent
Directors had invested the deferred amounts directly in other certain
BlackRock Closed-End Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of each
Fund. Each Fund may, however, elect to invest in common shares of other
certain BlackRock Closed-End Funds selected by the Independent Directors
in order to match their deferred compensation obligations.
Other: Expenses directly related to a Fund are charged to that Fund.
Other
operating expenses shared by several funds are prorated among those
funds on the basis of relative net assets or other appropriate methods.
2. Derivative Financial Instruments:
The Funds may engage in various portfolio investment strategies both to
increase the return of the Funds and to economically hedge, or protect,
their exposure to interest rate movements and movements in the securities
markets. Losses may arise if the value of the contract decreases due to an
unfavorable change in the price of the underlying security or if the counter-
party does not perform under the contract. To the extent amounts due to
the Funds from their counterparties are not fully collateralized contractually
or otherwise, the Funds bear the risk of loss from counterparty non-per-
formance. See Note 1 Segregation and Collateralization for information
with respect to collateral practices.
The Funds are subject to interest rate risk in the normal course of pursuing
their investment objectives by investing in various derivative financial instru-
ments, as described below.
Financial Futures Contracts: The Funds may purchase or sell
financial
futures contracts and options on financial futures contracts to gain expo-
sure to, or economically hedge against, changes in interest rates (interest
rate risk). Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield. Pursuant
to the contract, the Funds agree to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as margin variation and are recognized by
the Funds as unrealized gains or losses. When the contract is closed, the
Funds record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time
it was closed. The use of financial futures transactions involves the risk of
an imperfect correlation in the movements in the price of futures contracts,
interest rates and the underlying assets. Financial futures transactions
involve minimal counterparty risk since financial futures contracts are
guaranteed against default by the exchange on which they trade.
Counterparty risk is also minimized by the daily margin variation.
Derivatives Not Accounted for as Hedging Instruments under Financial
Accounting Standards Board Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities:
MuniYield California
The Effect of Derivative Instruments on the Statement of Operations
Year Ended July 31, 2009*
Net Realized Gain From Derivatives Recognized in Income
Financial
Futures
Contracts
Interest rate contracts
$ 117,870
* As of July 31, 2009, there were no financial futures contracts outstanding. During
the year ended July 31, 2009, the Fund had limited activity in these transactions.
with Affiliates:
The PNC Financial Services Group, Inc. (PNC) and Bank of America
Corporation (BAC) are the largest stockholders of BlackRock, Inc.
(BlackRock). BAC became a stockholder of BlackRock following its
acquisition of Merrill Lynch & Co. (Merrill Lynch) on January 1, 2009.
Prior to that date, both PNC and Merrill Lynch were considered affiliates
of the Funds under the 1940 Act. Subsequent to the acquisition, PNC
remains an affiliate, but due to the restructuring of Merrill Lynchs owner-
ship interest of BlackRock, BAC is not deemed to be an affiliate under
the 1940 Act.
Each Fund entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the Manager), the Funds 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 Funds portfolio
and provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of each Fund. For such services,
Muni New York pays the Manager a monthly fee at an annual rate of
0.55%, and MuniYield Arizona, MuniYield California, MuniYield Investment
and MuniYield New Jersey pay 0.50% of each Funds average daily net
assets. Average daily net assets is the average daily value of each Funds
total assets minus the sum of its accrued liabilities.
The Manager has contractually agreed to waive a portion of its fee during
the first seven years of Muni New Yorks operations ending July 2010
as follows:
Fee Waiver
(As a Percentage
of Average Daily
Net Assets)
Year 6 through July 31, 2009
0.10%
Year 7 through July 31, 2010
0.05%
The Manager has not agreed to waive any portion of its fee beyond
July 31, 2010.
Notes to Financial Statements (continued)
Such waivers are included in fees waived by advisor on the Statements
of Operations:
Fees Waived
by Manager
Muni New York
$ 83,359
The Manager has agreed to waive its advisory fees by the amount of invest-
ment advisory fees each Fund pays to the Manager indirectly through its
investment in affiliated money market funds, which are included in fees
waived by advisor in the Statements of Operations. For the year ended July
31, 2009, the amounts waived were as follows:
Amount
Muni New York
$ 14,241
MuniYield Arizona
$ 20,372
MuniYield California
$ 49,215
MuniYield Investment
$ 33,111
MuniYield New Jersey
$ 20,530
The Manager has entered into separate sub-advisory agreements with
BlackRock Investment Management, LLC (BIM), an affiliate of the
Manager, with respect to each Fund, under which the Manager pays BIM
for services it provides, a monthly fee that is a percentage of the invest-
ment advisory fee paid by each Fund to the Manager.
For the year ended July 31, 2009, the Funds reimbursed the Manager for
certain accounting services in the following amounts, which are included in
accounting services in the Statements of Operations:
Amount
Muni New York
$ 1,657
MuniYield Arizona
$ 1,883
MuniYield California
$ 8,525
MuniYield Investment
$ 5,356
MuniYield New Jersey
$ 6,066
Certain officers and/or directors of the Funds are officers and/or directors
of BlackRock or its affiliates. The Funds reimburse the Manager for com-
pensation paid to the Funds Chief Compliance Officer.
4. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended July 31, 2009 were as follows:
Purchases
Sales
Muni New York
$ 25,784,627
$ 25,005,749
MuniYield Arizona
$ 35,169,070
$ 40,066,728
MuniYield California
$168,879,112
$182,666,168
MuniYield Investment
$171,012,287
$179,675,387
MuniYield New Jersey
$ 63,376,074
$ 73,947,752
5. 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 July 31, 2009 attributable to amortization methods on fixed income securities, the tax classification of distributions
received from a regulated investment company, the reclassification of distributions, the book to tax difference on the sale of residual interests in tender
option bond trusts and the expiration of capital loss carryforwards were reclassified to the following accounts:
Muni
MuniYield
MuniYield
MuniYield
MuniYield
New York
Arizona
California
Investment
New Jersey
Paid-in capital
(60,084)
(921,907)
(136,101)
Undistributed net investment income
(10,240)
(27,282)
(60,547)
(682,398)
(4,545)
Accumulated net realized loss
10,240
87,366
60,547
1,604,305
140,646
The tax character of distributions paid during the fiscal years ended October 31, 2007, November 30, 2007, May 31, 2008, the fiscal period ended
July 31, 2008 and the fiscal year ended July 31, 2009 were as follows:
Muni
MuniYield
MuniYield
MuniYield
MuniYield
New York
Arizona
California
Investment
New Jersey
Tax-exempt income
7/31/2009
$ 3,532,112
$ 4,059,092
$17,252,007
$11,207,252
$12,398,644
6/01/2008 7/31/2008
623,409
12/01/2007 7/31/2008
9,199,157
11/01/2007 7/31/2008
3,212,919
14,838,489
9,883,380
5/31/2008
3,824,832
11/30/2007
13,938,943
10/31/2007
4,427,574
20,213,375
13,543,476
Ordinary income
7/31/2009
$ 196,890
$ 188,682
12/01/2007 7/31/2008
$ 111,960
Long-term capital gains
11/01/2007 7/31/2008
$ 762,823
10/31/2007
387,602
Notes to Financial Statements (continued)
Muni
MuniYield
MuniYield
MuniYield
MuniYield
New York
Arizona
California
Investment
New Jersey
Total
7/31/2009
$ 3,532,112
$ 4,059,092
$17,448,897
$11,395,934
$12,398,644
6/01/2008 7/31/2008
623,409
12/01/2007 7/31/2008
9,311,117
11/01/2007 7/31/2008
3,975,742
14,838,489
9,883,380
5/31/2008
3,824,832
11/30/2007
13,938,943
10/31/2007
4,815,176
20,213,375
13,543,476
As of July 31, 2009, the tax components of accumulated net losses were as follows:
Muni
MuniYield
MuniYield
MuniYield
MuniYield
New York
Arizona
California
Investment
New Jersey
Undistributed tax-exempt income
$ 367,744
$ 695,355
$ 3,334,652
$ 1,734,273
$ 2,497,123
Capital loss carryforwards
(1,399,933)
(318,483)
(740,661)
(3,367,961)
(765,466)
Net unrealized losses*
(3,956,322)
(4,373,831)
(17,386,906)
(11,649,922)
(5,486,176)
Total accumulated net losses
$ (4,988,511)
$(3,996,959)
$(14,792,915)
$(13,283,610)
$(3,754,519)
* The differences between book-basis and tax-basis net unrealized losses is attributable primarily to the tax deferral of losses on wash sales, the tax deferral of losses on straddles,
the difference between book and tax for premiums and discounts on fixed income securities, the deferral of post-October capital losses for tax purposes, and the tax treatment of
residual interests in tender option bond trusts.
As of July 31, 2009, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:
Muni
MuniYield
MuniYield
MuniYield
MuniYield
New York
Arizona
California
Investment
New Jersey
Expires July 31,
2011
$ 178,107
2012
$ 134,161
$ 1,266,217
$ 239,556
2015
25,350
2016
739,187
$ 318,483
393,490
2,101,744
104,422
2017
501,235
169,064
421,488
Total
$ 1,399,933
$ 318,483
$ 740,661
$ 3,367,961
$ 765,466
Each Fund invests a substantial amount of its 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 reduces
the risk of loss due to issuer default. 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 Funds 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 Funds may decline in response to
certain events, including those directly involving the issuers whose securi-
ties are owned by the Funds; conditions affecting the general economy;
overall market changes; local, regional or global political, social or eco-
nomic instability; and currency and interest rate and price fluctuations.
Similar to credit risk, the Funds may be exposed to counterparty risk, or the
risk that an entity with which the Funds have unsettled or open transac-
tions may default. Financial assets, which potentially expose the Funds to
credit and counterparty risks, consist principally of investments and cash
counterparty risks with respect to these financial assets is approximated by
their value recorded in the Funds Statements of Assets and Liabilities.
7. Capital Share Transactions:
Each Fund is authorized to issue 200 million shares (MuniYield Investment
is authorized to issue an unlimited amount of shares par value $0.10 per
share) including Preferred Shares, all of which were initially classified as
Common Shares. Each Board is authorized, however, to reclassify any
unissued shares of Common Shares without approval of Common
Shareholders.
Common Shares
Shares issued and outstanding for MuniYield Arizona for the year ended
July 31, 2009, the period November 1, 2007 to July 31, 2008 and the
year ended October 31, 2007 increased by 7,393, 14,368 and 13,972,
respectively, as a result of dividend reinvestment.
Shares issued and outstanding remained constant for Muni New York for the
year ended July 31, 2009, the period ended July 31, 2008 and the year
ended May 31, 2008, for MuniYield California for the year ended July 31,
2009, the period ended July 31, 2008 and the year ended October 31,
2007, for MuniYield Investment for the period ended January 31, 2009,
the period ended July 31, 2008 and the year ended October 31, 2007 and
for MuniYield New Jersey for the year ended July 31, 2009, the period
ended July 31, 2008 and the year ended November 30, 2007.
Preferred Shares
The Preferred Shares are redeemable at the option of each Fund, in whole
or in part, on any dividend payment date at its liquidation preference per
share plus any accumulated or unpaid dividends whether or not declared.
The Preferred Shares are also subject to mandatory redemption at their
liquidation preference plus any accumulated or unpaid dividends, whether
or not declared, if certain requirements relating to the composition of
the assets and liabilities of the Funds, as set forth in each Funds Articles
Supplementary or Certificate of Designation as applicable, (Governing
Instrument), are not satisfied.
From time to time in the future, the Funds may affect repurchases of
Preferred Shares at prices below their liquidation preferences as agreed
upon by the Funds and seller. The Funds also may redeem such shares
from time to time as provided in the applicable Governing Instrument. The
Funds intend to affect 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 hold-
ers of Common Shares (one vote per share) as a single class. However,
holders of Preferred Shares, voting as a separate class, are also entitled to
elect two directors for each Fund. 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 Funds 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 Funds had the following series of Preferred Shares outstanding, effec-
tive yields and reset frequency as of July 31, 2009:
Reset
Preferred
Effective Frequency
Series
Shares
Yield
Days
Muni New York
F7
1,185
1.57%2
7
MuniYield Arizona
A
499
0.58%1
7
B
668
0.52%1
7
C
385
1.57%2
7
MuniYield California
A
1,453
0.38%1
28
B
1,453
0.58%1
7
C
484
0.58%1
28
D
848
1.57%2
7
MuniYield Investment
A
1,189
0.58%1
7
B
865
0.58%1
7
C
325
1.63%2
7
MuniYield New Jersey
A
2,061
0.58%1
7
B
1,288
0.58%1
7
C
739
1.57%2
7
1 The maximum applicable rate on this series of Preferred Shares is the higher
of 110% of the AA commercial paper rate or 110% of 90% of the Kenny S&P
30-day High Grade Index rate divided by 1.00 minus the marginal tax rate.
of 110% plus or times (i) the Telerate/BAA LIBOR or (ii) 90% of the Kenny S&P
30-day High Grade Index rate divided by 1.00 minus the marginal tax rate.
Dividends on 7- or 28-day Preferred Shares are cumulative at a rate, which
is reset every 7 or 28 days, respectively, based on the results of an auc-
tion. If the Preferred Shares fail to clear the auction on an auction date, the
Fund 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 the Preferred Shares is footnoted as applicable on the above chart.
The low, high and average dividend rates on the Preferred Shares for each
Fund for the year ended July 31, 2009 were as follows:
Series
Low
High
Average
Muni New York
F7
1.42%
11.76%
2.98%
MuniYield Arizona
A
0.38%
12.57%
1.91%
B
0.43%
10.21%
1.90%
C
1.42%
11.76%
2.82%
MuniYield California
A
0.38%
8.65%
1.92%
B
0.38%
12.57%
1.85%
C
0.43%
12.57%
2.06%
D
1.49%
10.38%
2.79%
MuniYield Investment
A
0.38%
12.57%
1.91%
B
0.35%
12.26%
1.88%
C
1.46%
11.42%
2.80%
MuniYield New Jersey
A
0.38%
12.57%
1.85%
B
0.40%
11.35%
1.84%
C
1.49%
10.38%
2.79%
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
12.57% for the year ended July 31, 2009. A failed auction is not an event
of default for the Funds, 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. It is impossible to predict
how long this imbalance will last. A successful auction for each Funds
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 Funds 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%.
Prior to December 22, 2008, the Funds paid commissions to certain
broker-dealers at the end of each auction at an annual rate of 0.25%, cal-
culated on the aggregated principal amount. As of December 22, 2008,
commissions paid to broker-dealers on Preferred Shares that experienced
a failed auction were reduced to 0.15% on the aggregate principal
amount. The Funds will pay commissions of 0.25% on the aggregate princi-
pal amount of all shares that successfully clear their auctions. Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of
Merrill Lynch, earned commissions for the period August 1, 2008 to
Notes to Financial Statements (concluded)
December 31, 2008 (after which time Merrill Lynch was no longer consid-
ered an affiliate) as follows:
Commissions
Muni New York
$ 62,802
MuniYield Arizona
$ 59,616
MuniYield California
$116,901
MuniYield Investment
$139,630
MuniYield New Jersey
$139,715
During the year ended July 31, 2009, certain Funds announced redemp-
tions of Preferred Shares at a price of $25,000 per share plus any accrued
and unpaid dividends through the redemption date:
Redemption
Shares
Aggregate
Series
Date
Redeemed
Principal
MuniYield Arizona
A
7/09/09
19
$ 475,000
B
7/14/09
26
$ 650,000
C
7/06/09
15
$ 375,000
MuniYield California
A
7/09/09
282
$ 7,050,000
B
7/02/09
282
$ 7,050,000
C
7/30/09
94
$ 2,350,000
D
7/07/09
164
$ 4,100,000
MuniYield Investment
A
7/02/09
627
$15,675,000
B
7/06/09
456
$11,400,000
C
7/08/09
171
$ 4,275,000
MuniYield New Jersey
A
7/09/09
51
$ 1,275,000
B
7/08/09
32
$ 800,000
C
7/07/09
18
$ 450,000
During the period ended July 31, 2008, the following Funds announced
redemptions of Preferred Shares at a price of $25,000 per share plus any
accrued and unpaid dividends through the redemption date:
Redemption
Shares
Aggregate
Series
Date
Redeemed
Principal
Muni New York
F7
6/23/08
55
$ 1,375,000
MuniYield California
A
7/10/08
665
$16,625,000
B
6/19/08
665
$16,625,000
C
7/03/08
222
$ 5,550,000
D
6/24/08
388
$ 9,700,000
MuniYield Investment
A
6/19/08
384
$ 9,600,000
B
6/27/08
279
$ 6,975,000
C
6/25/08
104
$ 2,600,000
MuniYield New Jersey
A
6/26/08
288
$ 7,200,000
B
6/25/08
180
$ 4,500,000
C
6/24/08
103
$ 2,575,000
The Funds financed the Preferred Share redemptions with cash received
from TOB transactions.
Shares issued and outstanding during the years ended July 31, 2009 and
May 31, 2008 for Muni New York, October 31, 2007 for MuniYield Arizona,
MuniYield California and MuniYield Investment and November 30, 2007
for MuniYield New Jersey remained constant.
8. Subsequent Events:
Each Fund paid a net investment income dividend on September 1, 2009 to Common Shareholders of record on August 14, 2009 as follows:
Distribution
Per Share
Muni New York
$0.0555
MuniYield Arizona
$0.0670
MuniYield California
$0.0675
MuniYield Investment
$0.0580
MuniYield New Jersey
$0.0705
The dividends declared on Preferred Shares for the period August 1, 2009 to August 31, 2009 were as follows:
Muni
MuniYield
MuniYield
MuniYield
MuniYield
New York
Arizona
California
Investment
New Jersey
Series A
$ 5,273
$14,158
$12,565
$23,207
Series B
$ 7,019
$15,355
$ 8,781
$21,780
Series C
$12,033
$ 5,463
$10,235
$13,727
Series D
$26,630
Series F7
$37,036
Managements evaluation of the impact of all subsequent events on the Funds financial statements was completed through September 28, 2009, the date
the financial statements were issued.
Investment Fund and to the Shareholders and Board of Directors of
BlackRock Muni New York Intermediate Duration Fund, Inc., BlackRock
MuniYield Arizona Fund, Inc., BlackRock MuniYield California Fund, Inc.,
and BlackRock MuniYield New Jersey Fund, Inc. (collectively, the Funds):
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of BlackRock Muni New York
Intermediate Duration Fund, Inc. as of July 31, 2009, and the related
statement of operations for the year then ended, the statements of
changes in net assets for the year then ended, the period June 1, 2008 to
July 31, 2008 and for the year ended May 31, 2008, and the financial
highlights for the year then ended, the period June 1, 2008 to July 31,
2008 and for each of the two years in the period ended May 31, 2008.
We have also audited the accompanying statements of assets and liabili-
ties, including the schedules of investments, of BlackRock MuniYield
Arizona Fund, Inc. and BlackRock MuniYield Investment Fund (formerly
BlackRock MuniYield Florida Fund) as of July 31, 2009, and the related
statements of operations for the year then ended, the statements of
changes in net assets for the year then ended, the period November 1,
2007 to July 31, 2008 and for the year ended October 31, 2007, and the
financial highlights for each of the respective periods presented. We have
also audited the accompanying statement of assets and liabilities, includ-
ing the schedule of investments, of BlackRock MuniYield California Fund,
Inc. as of July 31, 2009, and the related statements of operations and
cash flows for the year then ended, the statements of changes in net
assets for the year then ended, the period November 1, 2007 to July 31,
2008 and for the year ended October 31, 2007, and the financial high-
lights for each of the respective periods presented. We have also audited
the accompanying statement of assets and liabilities, including the sched-
ule of investments, of BlackRock MuniYield New Jersey Fund, Inc. as of
July 31, 2009, and the related statement of operations for the year then
ended, the statements of changes in net assets for the year then ended,
the period December 1, 2007 to July 31, 2008 and for the year ended
November 30, 2007, and the financial highlights for each of the respec-
tive periods presented. 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. The financial highlights for each of the two years in
the period ended May 31, 2006 for BlackRock Muni New York
Intermediate Duration Fund, Inc. were audited by other auditors whose
report, dated July 14, 2006, expressed an unqualified opinion on those
financial highlights.
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 assur-
ance 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 finan-
cial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
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 disclo-
sures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluat-
ing the overall financial statement presentation. Our procedures included
confirmation of securities owned as of July 31, 2009, by correspondence
with the custodian and brokers; where replies were not received from bro-
kers, 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
BlackRock Muni New York Intermediate Duration Fund, Inc. as of July 31,
2009, the results of its operations for the year then ended, the changes
in its net assets for the year then ended, the period June 1, 2008 to
July 31, 2008 and for the year ended May 31, 2008, and the financial
highlights for the year then ended, the period June 1, 2008 to July 31,
2008 and for each of the two years in the period ended May 31, 2008,
in conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements
and financial highlights referred to above present fairly, in all material
respects, the financial position of BlackRock MuniYield Arizona Fund, Inc.
and of BlackRock MuniYield Investment Fund as of July 31, 2009, the
results of their operations for the year then ended, the changes in their
net assets for the year then ended, the period November 1, 2007 to
July 31, 2008 and for the year ended October 31, 2007, and the financial
highlights for each of the respective periods presented, in conformity with
accounting principles generally accepted in the United States of America.
Additionally, in our opinion, the financial statements and financial high-
lights referred to above present fairly, in all material respects, the financial
position of BlackRock MuniYield California Fund, Inc. as of July 31, 2009,
the results of its operations and its cash flows for the year then ended,
the changes in its net assets for the year then ended, the period
November 1, 2007 to July 31, 2008 and for the year ended October 31,
2007, and the financial highlights for each of the respective periods
presented, in conformity with accounting principles generally accepted in
the United States of America. Additionally, in our opinion, the financial
statements and financial highlights referred to above present fairly, in all
material respects, the financial position of BlackRock MuniYield New
Jersey Fund, Inc. as of July 31, 2009, the results of its operations for the
year then ended, the changes in its net assets for the year then ended,
the period December 1, 2007 to July 31, 2008 and for the year ended
November 30, 2007, and the financial highlights for each of the respec-
tive periods presented, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
September 28, 2009
Important Tax Information
All of the net investment income distributions paid by BlackRock Muni New York Intermediate Duration Fund, Inc., BlackRock MuniYield Arizona Fund, Inc.,
and BlackRock MuniYield New Jersey Fund, Inc. during the taxable years ended July 31, 2009 qualify as tax-exempt interest dividends for federal income
tax purposes.
The following table summarizes the taxable per share distributions paid by BlackRock MuniYield California Fund, Inc. and BlackRock MuniYield Investment
Fund during the taxable year ended July 31, 2009:
BlackRock MuniYield
BlackRock MuniYield
California Fund, Inc.
Investment Fund
Payable Date
Ordinary Income
Payable Date
Ordinary Income
Common Shareholders
12/31/2008
$ 0.005990
12/31/2008
$ 0.008817
Preferred Shareholders:
Series A
12/26/2008
$13.95
12/11/2008
$12.68
12/18/2008
$ 3.27
Series B
12/18/2008
$ 9.53
12/12/2008
$ 9.98
12/26/2008
$ 3.54
12/19/2008
$ 5.70
Series C
12/18/2008
$13.30
12/10/2008
$16.95
12/17/2008
$ 0.77
Series D
12/9/2008
$14.59
All of the other net investment income distributions paid by the Funds qualify as tax-exempt interest dividends for federal income tax purposes.
the members of which are referred to as Board Members) of each of
BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE),
BlackRock MuniYield Arizona Fund, Inc. (MZA), BlackRock MuniYield
California Fund, Inc. (MYC), BlackRock MuniYield Investment Fund
(MYF) and BlackRock MuniYield New Jersey Fund, Inc. (MYJ and,
together with MNE, MZA, MYC and MYF, each a Fund and, collectively,
the Funds) met on April 14, 2009 and May 28 29, 2009 to consider
the approval of its respective Funds investment advisory agreement (each,
an Advisory Agreement) with BlackRock Advisors, LLC (the Manager),
the Funds investment advisor. Each Board also considered the approval of
the sub-advisory agreement (each, a Sub-Advisory Agreement) between
its respective Fund, the Manager and BlackRock Investment Management,
LLC (the Sub-Advisor). The Manager and the Sub-Advisor are referred to
herein as BlackRock. The Advisory Agreements and the Sub-Advisory
Agreements are referred to herein as the Agreements. Unless otherwise
indicated, references to actions taken by the Board or the Boards shall
mean each Board acting independently with respect to its respective Fund.
Activities and Composition of the Boards
Each Board consists of twelve individuals, ten of whom are not interested
persons as defined in the Investment Company Act of 1940, as amended
(the 1940 Act) (the Independent Board Members). The Board Members
of each Fund are responsible for the oversight of the operations of such
Fund and perform the various duties imposed on the directors of invest-
ment companies by the 1940 Act. The Independent Board Members have
retained independent legal counsel to assist them in connection with their
duties. The Chairman of each Board is an Independent Board Member.
Each Board has established five standing committees: an Audit Committee,
a Governance and Nominating Committee, a Compliance Committee, a
Performance Oversight Committee and an Executive Committee, each of
which is composed of Independent Board Members (except for the
Executive Committee, which has one interested Board Member) and is
chaired by an Independent Board Member. In addition, each Board has
established an Ad Hoc Committee on Auction Market Preferred Shares.
The Agreements
Pursuant to the 1940 Act, each Board is required to consider the continua-
tion of the Agreements on an annual basis. In connection with this process,
each Board assessed, among other things, the nature, scope and quality of
the services provided to its respective Fund by the personnel of BlackRock
and its affiliates, including investment management, administrative serv-
ices, shareholder services, oversight of fund accounting and custody,
marketing services and assistance in meeting legal and regulatory
requirements.
Throughout the year, the Boards, acting directly and through their commit-
tees, considers at each of their meetings factors that are relevant to their
annual consideration of the renewal of the Agreements, including the
services and support provided by BlackRock to the Funds and their share-
holders. Among the matters the Boards considered were: (a) investment
performance for one-, three- and five-year periods, as applicable, against
ment and portfolio managers analysis of the reasons for any underperfor-
mance against its peers; (b) fees, including advisory and other amounts
paid to BlackRock and its affiliates by the Funds for services such as call
center and fund accounting; (c) the Funds operating expenses; (d) the
resources devoted to, and compliance reports relating to, the Funds invest-
ment objectives, policies and restrictions; (e) the Funds compliance with
their Code of Ethics and compliance policies and procedures; (f) the
nature, cost and character of non-investment management services pro-
vided by BlackRock and its affiliates; (g) BlackRocks and other service
providers internal controls; (h) BlackRocks implementation of the proxy
voting policies approved by the Boards; (i) execution quality of portfolio
transactions; (j) BlackRocks implementation of the Funds valuation and
liquidity procedures; and (k) periodic updates on BlackRocks business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April 14, 2009 meeting, each
Board
requested and received materials specifically relating to the Agreements.
Each Board is engaged in an ongoing process with BlackRock to continu-
ously review the nature and scope of the information provided to better
assist their deliberations. The materials provided in connection with the
April meeting included (a) information independently compiled and
prepared by Lipper, Inc. (Lipper) on Fund fees and expenses, and the
investment performance of each Fund as compared with a peer group of
funds as determined by Lipper and a customized peer group selected by
BlackRock, as applicable (collectively, Peers); (b) information on the
profitability of the Agreements to BlackRock and a discussion of fall-out
benefits to BlackRock and its affiliates and significant shareholders;
(c) a general analysis provided by BlackRock concerning investment
advisory fees charged to other clients, such as institutional and open-end
funds, under similar investment mandates, as well as the performance of
such other clients; (d) the impact of economies of scale; (e) a summary
of aggregate amounts paid by each Fund to BlackRock; and (f) an internal
comparison of management fees classified by Lipper, if applicable.
At an in-person meeting held on April 14, 2009, each Board reviewed
materials relating to its consideration of the Agreements. As a result of the
discussions that occurred during the April 14, 2009 meeting, the Boards
presented BlackRock with questions and requests for additional informa-
tion and BlackRock responded to these requests with additional written
information in advance of the May 28 29, 2009 Board meeting.
At an in-person meeting held on May 28 29, 2009, each Funds Board,
including the Independent Board Members, unanimously approved the
continuation of the Advisory Agreement between the Manager and such
Fund and the Sub-Advisory Agreement between such Fund, the Manager
and the Sub-Advisor, each for a one-year term ending June 30, 2010. The
Boards considered all factors they believed relevant with respect to the
Funds, including, among other factors: (a) the nature, extent and quality of
the services provided by BlackRock; (b) the investment performance of the
Funds and BlackRock portfolio management; (c) the advisory fee and the
cost of the services and profits to be realized by BlackRock and certain
(e) other factors.
Each Board also considered other matters it deemed important to the
approval process, such as services related to the valuation and pricing of
its respective Funds portfolio holdings, direct and indirect benefits to
BlackRock and its affiliates from their relationship with such Fund and
advice from independent legal counsel with respect to the review process
and materials submitted for the Boards review. The Boards noted the will-
ingness of BlackRock personnel to engage in open, candid discussions
with the Boards. The Boards did not identify any particular information as
controlling, and each Board Member may have attributed different weights
to the various items considered.
A. Nature, Extent and Quality of the Services: Each Board, including
its
Independent Board Members, reviewed the nature, extent and quality of
services provided by BlackRock, including the investment advisory services
and the resulting performance of its respective Fund. Throughout the year,
each Board compared its respective Funds performance to the perform-
ance of a comparable group of closed-end funds, and the performance of
at least one relevant benchmark, if any. The Boards met with BlackRocks
senior management personnel responsible for investment operations,
including the senior investment officers. Each Board also reviewed the
materials provided by its respective Funds portfolio management team dis-
cussing such Funds performance and such Funds investment objective,
strategies and outlook.
Each Board considered, among other factors, the number, education and
experience of BlackRocks investment personnel generally and its respec-
tive Funds portfolio management team, investments by portfolio managers
in the funds they manage, BlackRocks portfolio trading capabilities,
BlackRocks use of technology, BlackRocks commitment to compliance
and BlackRocks approach to training and retaining portfolio managers
and other research, advisory and management personnel. Each Board
also reviewed a general description of BlackRocks compensation structure
with respect to its respective Funds portfolio management team and
BlackRocks ability to attract and retain high-quality talent.
In addition to advisory services, each Board considered the quality of the
administrative and non-investment advisory services provided to its respec-
tive Fund. BlackRock and its affiliates provide the Funds with certain
administrative and other services (in addition to any such services pro-
vided to the Funds by third parties) and officers and other personnel as
are necessary for the operations of the Funds. In addition to investment
advisory services, BlackRock and its affiliates provide the Funds with
other services, including (i) preparing disclosure documents, such as the
prospectus and the statement of additional information in connection
with the initial public offering and periodic shareholder reports; (ii) prepar-
ing communications with analysts to support secondary market trading of
the Funds; (iii) assisting with daily accounting and pricing; (iv) preparing
periodic filings with regulators and stock exchanges; (v) overseeing and
coordinating the activities of other service providers; (vi) organizing Board
ing legal and compliance support; and (viii) performing other administra-
tive functions necessary for the operation of the Funds, such as tax
reporting, fulfilling regulatory filing requirements, and call center services.
The Boards reviewed the structure and duties of BlackRocks fund adminis-
tration, accounting, legal and compliance departments and considered
BlackRocks policies and procedures for assuring compliance with applica-
ble laws and regulations.
B. The Investment Performance of the Funds and BlackRock: Each
Board,
including its Independent Board Members, also reviewed and considered
the performance history of its respective Fund. In preparation for the April 14,
2009 meeting, the Boards were provided with reports, independently pre-
pared by Lipper, which included a comprehensive analysis of each Funds
performance. The Boards also reviewed a narrative and statistical analysis
of the Lipper data that was prepared by BlackRock, which analyzed various
factors that affect Lippers rankings. In connection with its review, each
Board received and reviewed information regarding the investment per-
formance of its respective Fund as compared to a representative group
of similar funds as determined by Lipper and to all funds in such Funds
applicable Lipper category and customized peer group selected by
BlackRock, as applicable. Each Board was provided with a description of
the methodology used by Lipper to select peer funds. Each Board regularly
reviews the performance of its respective Fund throughout the year.
The Board of MNE noted that MNE performed below the median of its
customized Lipper peer group composite in the three- and five-year periods
reported and MNE performed above the median of its customized Lipper
peer group composite in the one-year period reported. The Board and
BlackRock reviewed the reasons for MNEs underperformance during these
periods compared with its Peers. The Board was informed that, among
other things, overweight positions in health care and housing credits along
with some poor performance in AMT and Puerto Rico credits negatively
impacted MNEs performance.
The Board of MYC noted that MYC performed below the median of its cus-
tomized Lipper peer group composite in the three- and five-year periods
reported and MYC performed above the median of its customized Lipper
peer group composite in the one-year period reported. The Board and
BlackRock reviewed the reasons for MYCs underperformance during these
periods compared with its Peers. The Board was informed that, among
other things, MYC did not have the ability to invest in non-investment grade
securities and, as credit spreads tightened in past years, this negatively
impacted MYCs performance.
The Board of MYF noted that MYF performed below the median of its
customized Lipper peer group composite in the one-, three- and five-year
periods reported. The Board and BlackRock reviewed the reasons for MYFs
underperformance during these periods compared with its Peers. The Board
was informed that, among other things, overweight positions in the hospital
and housing sectors and poor performance of some insured and AMT
bonds held by MYF negatively impacted MYFs performance.
discussed BlackRocks commitment to providing the resources necessary to
assist the portfolio managers and to improve each such Funds performance.
The Board of MZA noted that in general MZA performed better than its
Peers in that MZAs performance was at or above the median of its cus-
tomized Lipper peer group composite in each of the one-, three- and five-
year periods reported.
The Board of MYJ noted that in general MYJ performed better than its Peers
in that MYJs performance was at or above the median of its Lipper per-
formance universe composite in each of the one-, three- and five-year
periods reported.
C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds: Each Board, including its Independent
Board
Members, reviewed its respective Funds contractual advisory fee rates
compared with the other funds in its respective Lipper category. Each
Board also compared its respective Funds total expenses, as well as
actual management fees, to those of other comparable funds. Each Board
considered the services provided and the fees charged by BlackRock to
other types of clients with similar investment mandates, including sepa-
rately managed institutional accounts.
The Boards received and reviewed statements relating to BlackRocks
financial condition and profitability with respect to the services it provided
the Funds. The Boards were also provided with a profitability analysis that
detailed the revenues earned and the expenses incurred by BlackRock
for services provided to the Funds. The Boards reviewed BlackRocks prof-
itability with respect to the Funds and other funds the Boards currently
oversee for the year ended December 31, 2008 compared to available
aggregate profitability data provided for the year ended December 31,
2007. The Boards reviewed BlackRocks profitability with respect to other
fund complexes managed by the Manager and/or its affiliates. The Boards
reviewed BlackRocks assumptions and methodology of allocating expenses
in the profitability analysis, noting the inherent limitations in allocating
costs among various advisory products. The Boards recognized that prof-
itability may be affected by numerous factors including, among other
things, fee waivers by the Manager, the types of funds managed, expense
allocations and business mix, and therefore comparability of profitability
is somewhat limited.
The Boards noted that, in general, individual fund or product line profitabil-
ity of other advisors is not publicly available. Nevertheless, to the extent
such information is available, the Boards considered BlackRocks overall
operating margin compared to the operating margin for leading investment
management firms whose operations include advising closed-end funds,
among other product types. The comparison indicated that operating mar-
gins for BlackRock with respect to its registered funds are consistent with
margins earned by similarly situated publicly traded competitors. In addi-
tion, the Boards considered, among other things, certain third-party data
comparing BlackRocks operating margin with that of other publicly-traded
in themselves, translate to higher profit margins.
In addition, the Boards considered the cost of the services provided to
the Funds by BlackRock, and BlackRocks and its affiliates profits relating
to the management and distribution of the Funds and the other funds
advised by BlackRock and its affiliates. As part of their analysis, the Boards
reviewed BlackRocks methodology in allocating its costs to the manage-
ment of the Funds. The Boards also considered whether BlackRock has the
financial resources necessary to attract and retain high quality investment
management personnel to perform its obligations under the Agreements
and to continue to provide the high quality of services that is expected by
the Boards.
Each Board noted that its respective Fund paid contractual management
fees, which do not take into account any expense reimbursement or fee
waivers, lower than or equal to the median contractual management fees
paid by such Funds Peers.
D. Economies of Scale: Each Board, including its Independent
Board
Members, considered the extent to which economies of scale might be
realized as the assets of its respective Fund increase and whether there
should be changes in the advisory fee rate or structure in order to enable
such Fund to participate in these economies of scale, for example through
the use of breakpoints in the advisory fee based upon the assets of such
Fund. The Boards considered that the funds in the BlackRock fund complex
share some common resources and, as a result, an increase in the overall
size of the complex could permit each fund to incur lower expenses than
it would otherwise as a stand-alone entity. The Boards also considered
BlackRocks overall operations and its efforts to expand the scale of, and
improve the quality of, its operations.
The Boards noted that most closed-end fund complexes do not have fund
level breakpoints because closed-end funds generally do not experience
substantial growth after the initial public offering and each fund is man-
aged independently consistent with its own investment objectives. The
Boards noted that only one closed-end fund in the Fund Complex has
breakpoints in its fee structure. Information provided by Lipper also
revealed that only one closed-end fund complex used a complex-level
breakpoint structure.
E. Other Factors: The Boards also took into account other ancillary
or
fall-out benefits that BlackRock or its affiliates and significant sharehold-
ers may derive from their relationship with the Funds, both tangible and
intangible, such as BlackRocks ability to leverage its investment profes-
sionals who manage other portfolios, an increase in BlackRocks profile in
the investment advisory community, and the engagement of BlackRocks
affiliates as service providers to the Funds, including for administrative
and distribution services. The Boards also noted that BlackRock may use
third-party research obtained by soft dollars generated by certain mutual
fund transactions to assist itself in managing all or a number of its other
client accounts.
received information regarding BlackRocks brokerage and soft dollar prac-
tices. The Boards received reports from BlackRock, which included informa-
tion on brokerage commissions and trade execution practices throughout
the year.
Conclusion
Each Board, including its Independent Board Members, unanimously
approved the continuation of the Advisory Agreement between its respec-
tive Fund and the Manager for a one-year term ending June 30, 2010
and the Sub-Advisory Agreement between such Fund, the Manager and
Sub-Advisor for a one-year term ending June 30, 2010. Based upon its
evaluation of all these factors in their totality, each Board, including its
Independent Board Members, was satisfied that the terms of the Agreements
its shareholders. In arriving at a decision to approve the Agreements, each
Board did not identify any single factor or group of factors as all-important
or controlling, but considered all factors together, and different Board
Members may have attributed different weights to the various factors con-
sidered. The Independent Board Members were also assisted by the advice
of independent legal counsel in making this determination. The contractual
fee arrangements for each Fund reflects the results of several years of
review by such Funds Board Members and predecessor Board Members,
and discussions between such Board Members (and predecessor Board
Members) and BlackRock. Certain aspects of the arrangements may be
the subject of more attention in some years than in others, and the Board
Members conclusions may be based in part on their consideration of these
arrangements in prior years.
How the Plan Works The Funds offer a Dividend Reinvestment
Plan
(The Plan) under which income and capital gains dividends paid by a
Fund are automatically reinvested in additional Common Shares of the
Fund. The Plan is administered on behalf of the shareholders by The BNY
Mellon Shareowner Services for BlackRock MuniYield Arizona Fund, Inc.,
BlackRock MuniYield California Fund, Inc., BlackRock MuniYield Investment
Fund and BlackRock MuniYield New Jersey Fund, Inc., and Computershare
Trust Company, N.A. for BlackRock Muni New York Intermediate Duration
Fund, Inc. (individually, the Plan Agent or together, the Plan Agents).
Under the Plan, whenever a Fund declares a dividend, participants in the
Plan will receive the equivalent in shares of Common Shares of the Fund.
The Plan Agents will acquire the shares for the participants account either
(i) through receipt of additional unissued but authorized shares of the
Funds (newly issued shares) or (ii) by purchase of outstanding Common
Shares on the open market on the New York Stock Exchange or NYSE
Amex, as applicable or elsewhere. If, on the dividend payment date, the
Funds net asset value per share is equal to or less than the market price
per share plus estimated brokerage commissions (a condition often
referred to as a market premium), the Plan Agents will invest the dividend
amount in newly issued shares. If the Funds net asset value per share is
greater than the market price per share (a condition often referred to as a
market discount), the Plan Agents will invest the dividend amount by pur-
chasing on the open market additional shares. If the Plan Agents are
unable to invest the full dividend amount in open market purchases, or if
the market discount shifts to a market premium during the purchase
period, the Plan Agents will invest any uninvested portion in newly issued
shares. The shares acquired are credited to each shareholders account.
The amount credited is determined by dividing the dollar amount of the
dividend by either (i) when the shares are newly issued, the net asset
value per share on the date the shares are issued or (ii) when shares
are purchased in the open market, the average purchase price per share.
Participation in the Plan Participation in the Plan is
automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
Common Shares of the Funds unless the shareholder specifically elects not
to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish
to participate in the Plan must advise their Plan Agent in writing (at the
address set forth below) that they elect not to participate in the Plan.
Participation in the Plan is completely voluntary and may be terminated
or resumed at any time without penalty by writing to the Plan Agent.
shareholders to make additional, regular investments in the Funds. The
Plan promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the mar-
ket price plus commissions of a Funds shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less
than they could otherwise purchase them and with a cash value greater
than the value of any cash distribution they would have received. However,
there may not be enough shares available in the market to make distribu-
tions in shares at prices below the net asset value. Also, since the Funds
do not redeem shares, the price on resale may be more or less than the
net asset value.
Plan Fees There are no enrollment fees or brokerage fees for
participat-
ing in the Plan. The Plan Agents service fees for handling the reinvestment
of distributions are paid for by the Funds. However, brokerage commissions
may be incurred when the Funds purchase shares on the open market and
shareholders will pay a pro rata share of any such commissions.
Tax Implications The automatic reinvestment of dividends and
distribu-
tions will not relieve participants of any federal, state or local income tax
that may be payable (or required to be withheld) on such dividends.
Therefore, income and capital gains may still be realized even though
shareholders do not receive cash. If, when the Funds shares are trading at
a market premium, the Funds issue shares pursuant to the Plan that have
a greater fair market value than the amount of cash reinvested, it is possi-
ble that all or a portion of the discount from the market value (which may
not exceed 5% of the fair market value of the Funds shares) could be
viewed as a taxable distribution. If the discount is viewed as a taxable
distribution, it is also possible that the taxable character of this discount
would be allocable to all the shareholders, including shareholders who do
not participate in the Plan. Thus, shareholders who do not participate in the
Plan might be required to report as ordinary income a portion of their dis-
tributions equal to their allocable share of the discount.
Contact Information All correspondence concerning the Plan,
including
any questions about the Plan, should be directed to the Plan Agent at the
following addresses: Shareholders of BlackRock MuniYield Arizona Fund,
Inc., BlackRock MuniYield California Fund, Inc., BlackRock MuniYield
Investment Fund and BlackRock MuniYield New Jersey Fund, Inc. should
contact The BNY Mellon Shareowner Services, P.O. Box 358035, Pittsburgh,
PA 15252-8035, Telephone: (866) 216-0242 and shareholders of
BlackRock Muni New York Intermediate Duration Fund, Inc. should
contact Computershare Trust Company, N.A., P.O. Box 43078, Providence,
RI 02940-3078, Telephone: (800) 699-IBFM or overnight correspondence
should be directed to the Plan Agent at 250 Royall Street, Canton,
MA 02021.
Officers and Directors
Number of
Length of
BlackRock-
Position(s)
Time
Advised Funds
Name, Address
Held with
Served as
and Portfolios
Public
and Year of Birth
Funds
a Director2
Principal Occupation(s) During Past Five Years
Overseen
Directorships
Non-Interested Directors1
Richard E. Cavanagh
Chairman
Since
Trustee, Aircraft Finance Trust since 1999; Director, The Guardian Life Insurance
104 Funds
Arch Chemical
40 East 52nd Street
of the Board
2007
Company of America since 1998; Trustee, Educational Testing Service from 1997
101 Portfolios
(chemical and allied
New York, NY 10022
and Director
to 2009 and Chairman from 2005 to 2009; Senior Advisor, The Fremont Group
products)
1946
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.
Karen P. Robards
Vice Chair of
Since
Partner of Robards & Company, LLC (financial advisory firm) since 1987;
104 Funds
AtriCure, Inc.
40 East 52nd Street
the Board,
2007
Co-founder and Director of the Cooke Center for Learning and Development,
101 Portfolios
(medical devices);
New York, NY 10022
Chair of
(a not-for-profit organization) since 1987; Director of Enable Medical Corp.
Care Investment
1950
the Audit
from 1996 to 2005.
Trust, Inc. (health
Committee
care real estate
and Director
investment trust)
G. Nicholas Beckwith, III
Director
Since
Chairman and Chief Executive Officer, Arch Street Management, LLC (Beckwith
104 Funds
None
40 East 52nd Street
2007
Family Foundation) and various Beckwith property companies since 2005;
101 Portfolios
New York, NY 10022
Chairman of the Board of Directors, University of Pittsburgh Medical Center
1945
since 2002; Board of Directors, Shady Side Hospital Foundation since 1977;
Board of Directors, 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; Board of Trustees, Chatham University since 1981; Board of Trustees,
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; Member of the Board of Directors,
National Retail Properties (REIT) from 2006 to 2007.
Kent Dixon
Director and
Since
Consultant/Investor since 1988.
104 Funds
None
40 East 52nd Street
Member of
2007
101 Portfolios
New York, NY 10022
the Audit
1937
Committee
Frank J. Fabozzi
Director and
Since
Consultant/Editor of The Journal of Portfolio Management since 2006; Professor
104 Funds
None
40 East 52nd Street
Member of
2007
in the Practice of Finance and Becton Fellow, Yale University, School of Manage-
101 Portfolios
New York, NY 10022
the Audit
ment, since 2006; Adjunct Professor of Finance and Becton Fellow, Yale University
1948
Committee
from 1994 to 2006.
Kathleen F. Feldstein
Director
Since
President of Economics Studies, Inc. (private economic consulting firm) since
104 Funds
The McClatchy
40 East 52nd Street
2007
1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee
101 Portfolios
Company
New York, NY 10022
Emeritus thereof since 2008; Member of the Board of Partners Community
(publishing)
1941
Healthcare, Inc. since 2005; 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.
James T. Flynn
Director and
Since
Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to 1995.
104 Funds
None
40 East 52nd Street
Member of
2007
101 Portfolios
New York, NY 10022
the Audit
1939
Committee
Jerrold B. Harris
Director
Since
Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment)
104 Funds
BlackRock Kelso
40 East 52nd Street
2007
since 2000.
101 Portfolios
Capital Corp.
New York, NY 10022
1942
Officers and Directors (continued)
Number of
Length of
BlackRock-
Position(s)
Time
Advised Funds
Name, Address
Held with
Served as
and Portfolios
Public
and Year of Birth
Funds
a Director2
Principal Occupation(s) During Past Five Years
Overseen
Directorships
Non-Interested Directors1
(concluded)
R. Glenn Hubbard
Director
Since
Dean, Columbia Business School since 2004; Columbia faculty member since
104 Funds
ADP (data and
40 East 52nd Street
2007
1988; Co-Director, Columbia Business Schools Entrepreneurship Program
101 Portfolios
information services),
New York, NY 10022
from 1997 to 2004; Visiting Professor, John F. Kennedy School of Government
KKR Financial
1958
at Harvard University and the Harvard Business School since 1985 and at the
Corporation (finance),
University of Chicago since 1994; Chairman, U.S. Council of Economic Advisers
Metropolitan Life
under the President of the United States from 2001 to 2003.
Insurance Company
(insurance)
W. Carl Kester
Director
Since
George Fisher Baker Jr. Professor of Business Administration, Harvard Business
104 Funds
None
40 East 52nd Street
2007
School; Deputy Dean for Academic Affairs, since 2006; Unit Head, Finance,
101 Portfolios
New York, NY 10022
Harvard Business School, from 2005 to 2006; Senior Associate Dean and
1951
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.
1 Directors serve until their resignation, removal or
death, or until December 31 of the year in which they turn 72.
2 Following the combination of Merrill Lynch Investment
Managers, L.P. (MLIM) and BlackRock, Inc. (BlackRock) in September 2006, the various legacy
MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart
shows
directors as joining the Funds board in 2007, each director first became a member of the board of directors of other legacy MLIM or legacy
BlackRock
Funds as follows: G. Nicholas Beckwith, III, 1999; Richard E. Cavanagh, 1994; Kent Dixon, 1988; Frank J. Fabozzi, 1988; Kathleen F. Feldstein,
2005;
James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.
Interested Directors3
Richard S. Davis
President4
Since
Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street
173 Funds
None
40 East 52nd Street
and Director
2007
Research & Management Company from 2000 to 2005; Chairman of the Board
283 Portfolios
New York, NY 10022
of Trustees, State Street Research Mutual Funds from 2000 to 2005; Chairman,
1945
SSR Realty from 2000 to 2004.
Henry Gabbay
Director
Since
Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock,
173 Funds
None
40 East 52nd Street
2007
Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC
283 Portfolios
New York, NY 10022
from 1998 to 2007; President of BlackRock Funds and BlackRock Bond
1947
Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end
funds in the BlackRock fund complex from 1989 to 2006.
3 Mr. Davis is an interested person, as defined
in the Investment Company Act of 1940, of the Funds based on his position with BlackRock, Inc. and its
affiliates. Mr. Gabbay is an interested person of the Funds based on his former positions with BlackRock, Inc. and its affiliates as well
as his ownership
of BlackRock, Inc. and PNC Securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn
72.
4 Fund President for BlackRock MuniYield Investment Fund.
Officers and Directors (continued)
Position(s)
Name, Address
Held with
Length of
and Year of Birth
Funds
Time Served
Principal Occupation(s) During Past 5 Years
Fund Officers1
Donald C. Burke
President2
Since
Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (MLIM)
40 East 52nd Street
and Chief
2007
and Fund Asset Management L.P. (FAM) in 2006, First Vice President thereof from 1997 to 2005. Treasurer thereof
New York, NY 10022
Executive
from 1999 to 2006 and Vice President thereof from 1990 to 1997.
1960
Officer
Anne F. Ackerley
Vice
Since
Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised funds from 2007 to 2009;
40 East 52nd Street
President
2007
Chief Operating Officer of BlackRocks Account Management Group (AMG) since 2009; Chief Operating Officer of
New York, NY 10022
BlackRocks U.S. Retail Group from 2006 to 2009; Head of BlackRocks Mutual Fund Group from 2000 to 2006.
1962
Neal J. Andrews
Chief
Since
Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund
40 East 52nd Street
Financial
2007
Accounting and Administration at PNC Global Investment Servicing from 1992 to 2006.
New York, NY 10022
Officer
1966
Jay M. Fife
Treasurer
Since
Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the Merrill Lynch
40 East 52nd Street
2007
Investment Managers, L.P. (MLIM) and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of
New York, NY 10022
MLIM Fund Services Group from 2001 to 2006.
1970
Brian P. Kindelan
Chief
Since
Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel
40 East 52nd Street
Compliance
2007
of BlackRock, Inc. since 2005; Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004.
New York, NY 10022
Officer
1959
Howard B. Surloff
Secretary
Since
Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; General
40 East 52nd Street
2007
Counsel (U.S.) of Goldman Sachs Asset Management, L.P. from 1993 to 2006.
New York, NY 10022
1965
1 Officers of the Funds serve at the pleasure of the Board
of Directors.
2 Fund President for all Funds except BlackRock MuniYield
Investment Fund.
Further information about the Funds Officers and Directors is available in the Funds Statement of Additional Information, which can be
obtained
without charge by calling (800) 441-7762
MuniYield Arizona Fund, Inc., BlackRock MuniYield California Fund, Inc. and BlackRock MuniYield New Jersey Fund, Inc. and
Chief Executive Officer of the Funds retired. The Funds Boards of Directors wish Mr. Burke well in his retirement.
Effective August 1, 2009, Anne F. Ackerley became President of BlackRock Muni New York Intermediate Duration Fund, Inc.,
BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield California Fund, Inc. and BlackRock MuniYield New Jersey Fund,
Inc. and Chief Executive Officer of the Funds, and Brendan Kyne became Vice President of the Funds.
Officers and Directors (concluded)
Custodians
Transfer Agent
Auction Agent
Independent
Investment Advisor
Address of the Funds
State Street Bank
Common Shares
Preferred Shares
Registered Public
BlackRock Advisors, LLC
100 Bellevue Parkway
and Trust Company1
Computershare
BNY Mellon
Accounting Firm
Wilmington, DE 19809
Wilmington, DE 19809
Boston, MA 02101
Trust Company, N.A.1
Shareowner Services
Deloitte & Touche LLP
Providence, RI 02940
Jersey City, NJ 07310
Princeton, NJ 08540
The Bank of
BNY Mellon
Accounting Agent
Legal Counsel
Sub-Advisor
New York Mellon2
Shareowner Services2
State Street Bank
Skadden, Arps, Slate,
BlackRock Investment
New York, NY 10286
Jersey City, NJ 07310
and Trust Company
Meagher & Flom LLP
Management, LLC
Princeton, NJ 08540
New York, NY 10036
Plainsboro, NJ 08536
1 For BlackRock Muni New York Intermediate Duration Fund,
Inc.
2 For BlackRock MuniYield Arizona Fund, Inc., BlackRock
MuniYield California Fund, Inc., BlackRock MuniYield Investment Fund, Inc., and BlackRock MuniYield New Jersey Fund, Inc.,
General Information
The Funds do not make available copies of their Statements of Additional
Information because the Funds shares are not continuously offered, which
means that the Statement of Additional Information of each Fund has not
been updated after completion of the respective Funds offerings and the
information contained in each Funds Statement of Additional Information
may have become outdated.
Other than the revisions discussed in the Board Approvals on page 57,
there were no material changes in the Funds investment objectives or poli-
cies or to the Funds charters or by-laws that were not approved by their
shareholders or in the principal risk factors associated with investment in
the Funds. There have been no changes in the persons who are primarily
responsible for the day-to-day management for the Funds portfolios.
Quarterly performance, semi-annual and annual reports and other informa-
tion regarding the Funds 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 regard-
ing the Funds 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 Funds web-
sites or shareholders can sign up for e-mail notifications of quarterly state-
ments, annual and semi-annual reports by enrolling in the Funds 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.
The Funds 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 other-
wise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please contact the Funds
at (800) 441-7762.
Availability of Quarterly Schedule of Investments
Each Fund files its complete schedule of portfolio holdings witht the SEC
for the first and third quarters of each fiscal year on Form N-Q. The Funds
Forms N-Q are available on the 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 Funds 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 Funds use to
determine how to vote proxies relating to portfolio securities is available
(1) without charge, upon request, by calling toll-free (800) 441-7762;
(2) at www.blackrock.com; and (3) on the Securities and Exchange
Commissions website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Funds voted proxies relating to securities
held in the Funds portfolios during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
www.blackrock.com or by calling (800) 441-7762 and (2) on the
Securities and Exchange Commissions website at http://www.sec.gov.
Dividend Policy
The Funds dividend policy is to distribute all or a portion of their net
investment income to its shareholders on a monthly basis. In order to pro-
vide shareholders with a more stable level of dividend distributions, the
Funds 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
paid by the Funds for any particular month may be more or less than the
amount of net investment income earned by the Funds during such month.
The Funds current accumulated but undistributed net investment income, if
any, is disclosed in the Statements of Assets and Liabilities, which com-
prises part of the financial information included in this report.
Certain Funds 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. The
chief financial officer required by section 302 of the Sarbanes-Oxley Act.
On September 12, 2008, the Board of Directors of BlackRock MuniYield
Florida Fund voted unanimously to change a non-fundamental invest-
ment policy of the Fund, and to rename the Fund BlackRock MuniYield
Investment Fund. The Funds previous non-fundamental investment policy
required the Fund, under normal market conditions, to invest at least 80%
of its assets in Florida municipal bonds and 100% in municipal bonds
rated investment grade at time of investment. Due to the repeal of the
Florida Intangible Personal Property Tax as of January 2007, the Board
has approved an amended policy allowing the Fund flexibility to invest in
municipal obligations regardless of geographic location. The Funds new
investment policy is, under normal market conditions, to invest 100% of its
assets in municipal bonds rated investment grade at time of investment.
The approved changes will not alter the Funds investment objective.
Under current market conditions, the Manager anticipates that it will gradu-
ally reposition the Funds portfolio over time and that during such period
the Fund may continue to hold a substantial portion of its assets in Florida
municipal bonds. At this time, it is uncertain how long the repositioning
may take, and the Fund will continue to be subject to risks associated with
the repositioning is complete.
The Manager and the Board believe the amended policy will allow the
Manager to better manage the Funds portfolio in the best interests of Fund
shareholders and to better meet the Funds investment objective.
Effective September 13, 2008, following approval by the Funds Board
and the applicable ratings agencies, the Board amended the terms of
the Funds Articles Supplementary in order to allow the Funds to enter
into TOB transactions, the proceeds of which were used to redeem a
portion of the Funds Preferred Shares. Accordingly, the definition of
Inverse Floaters was amended to incorporate the Funds permissible
ratio of floating rate instruments into inverse floating rate instruments.
Additionally, conforming changes and certain formula modifications con-
cerning inverse floaters were made to the definitions of Moodys Discount
Factor and S&P Discount Factor, as applicable, to integrate the Funds
investments in TOBs into applicable calculations.
Section 19 Notices
The amounts and sources of distributions reported are only estimates and
are not being provided for tax reporting purposes. The actual amounts and
sources for tax reporting purposes will depend upon each Funds invest-
ment experience during the year and may be subject to changes based on
dar year that will tell you how to report these distributions for federal
income tax purposes.
Total Fiscal Year-to-Date
Percentage of Fiscal Year-to-Date
Cumulative Distributions by Character
Cumulative Distributions by Character
Net
Net Realized
Total Per
Net
Net Realized
Total Per
Investment
Capital
Return of
Common
Investment
Capital
Return of
Common
Income
Gains
Capital
Share
Income
Gains
Capital
Share
MuniYield California
$0.690990
$0.690990
100%
0%
0%
100%
MuniYield Investment
$0.704817
$0.704817
100%
0%
0%
100%
BlackRock is committed to maintaining the privacy of its current and for-
mer fund investors and individual clients (collectively, Clients) and to
safeguarding their non-public personal information. The following informa-
tion 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 applica-
tions, 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.
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 pro-
cedures relating to the proper storage and disposal of such information.
tion of future performance. The Funds have leveraged 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 affect the yield to Common Shareholders. Statements and other information
herein are as dated and are subject to change.
period covered by this report, applicable to the registrants 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 registrants 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
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)
The registrants 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.
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. Kesters 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 registrants 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 Fees1
(c) Tax Fees2
(d) All Other Fees3
Current
Previous
Current
Previous
Current
Previous
Current
Previous
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Entity Name
End
End
End
End
End
End
End
End
BlackRock
MuniYield
$33,400
$32,500
$3,500
$3,500
$6,100
$6,100
$1,028
$1,049
California Fund, Inc.
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.
The registrants 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 registrants 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 SECs 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.
(g) Affiliates Aggregate Non-Audit Fees:
Current Fiscal Year
Previous Fiscal Year
Entity Name
End
End
BlackRock MuniYield
California Fund, Inc.
$418,128
$415,649
services that were rendered to the registrants investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by
the registrants 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 accountants independence.
Item 5 Audit Committee of Listed Registrants The following individuals are members of the registrants
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
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)
Item 6 Investments
(a) The registrants 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
Funds investment adviser (Investment Adviser) pursuant to the Investment Advisers 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 Funds 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 Advisers 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
Advisers 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 Advisers Portfolio
Management Group and/or the Investment Advisers Legal and Compliance Department and
Funds 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 SECs website
at http://www.sec.gov.
(a)(1) The registrant (or Fund) is managed by a team of investment professionals comprised of
Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock and Walter OConnor,
Managing Director at BlackRock. Each is a member of BlackRocks municipal tax-exempt
management group. Each is jointly responsible for the day-to-day management of the
registrants portfolio, which includes setting the registrants overall investment strategy,
overseeing the management of the registrant and/or selection of its investments. Messrs.
Jaeckel and OConnor have been members of the registrants portfolio management team
since 2006 and 1992, respectively.
Portfolio Manager
Biography
Theodore R. Jaeckel, Jr.
Managing Director at BlackRock, Inc. since 2006; Managing Director of
MLIM from 2005 to 2006; Director of MLIM from 1997 to 2005.
Walter OConnor
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 July 31, 2009:
(ii) Number of Other Accounts Managed
(iii) Number of Other Accounts and
and Assets by Account Type
Assets for Which Advisory Fee is
Performance-Based
Other
Other Pooled
Other
Other Pooled
(i) Name of
Registered
Investment
Other
Registered
Investment
Other
Portfolio Manager
Investment
Vehicles
Accounts
Investment
Vehicles
Accounts
Companies
Companies
Walter OConnor
76
0
0
0
0
0
$17.6 Billion
$0
$0
$0
$0
$0
Theodore R. Jaeckel,
76
0
0
0
0
0
$17.6 Billion
$0
$0
$0
$0
$0
(iv) Potential Material Conflicts of Interest
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
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 BlackRocks (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 July 31, 2009:
Portfolio Manager Compensation Overview
BlackRocks 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.
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 is a function of several components: the performance of
BlackRock, Inc., the performance of the portfolio managers group within BlackRock, the
investment performance, including risk-adjusted returns, of the firms assets under management or
supervision by that portfolio manager relative to predetermined benchmarks, and the individuals
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.
BlackRocks 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.
BlackRocks 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 BlackRocks 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. 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.
OConnor and Jaeckel 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 firms investment products. Each participant in the deferred compensation program is
permitted to allocate his deferred amounts among the various investment options. Messrs.
OConnor and Jaeckel 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:
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 July 31, 2009.
Beneficially Owned
Walter OConnor None
Theodore R. Jaeckel, Jr. None
Purchasers Not Applicable due to no such purchases during the period covered by this report.
Item 10 Submission of Matters to a Vote of Security Holders The registrants 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 registrants Secretary. There have been no material changes to these
procedures.
Item 11 Controls and Procedures
functions have concluded that the registrants 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.
11(b) There were no changes in the registrants 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
registrants internal control over financial reporting.
12(a)(1) Code of Ethics See Item 2
12(a)(2) Certifications Attached hereto
12(a)(3) Not Applicable
12(b) Certifications Attached hereto
Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BlackRock MuniYield California Fund, Inc.
Anne F. Ackerley
Chief Executive Officer of
BlackRock MuniYield California Fund, Inc.
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.
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock MuniYield California Fund, Inc.
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniYield California Fund, Inc.
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CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
certify that:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report fairly
present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented
in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90
days prior to the filing date of this report, based on such evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial reporting that
occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over financial reporting; and
of the registrant's board of directors (or persons performing the equivalent functions):
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
/s/ Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock MuniYield California Fund, Inc.
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Fund, Inc., certify that:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report fairly present in all material respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of a date within 90 days prior to the filing date of this report, based on such
evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered by this report that
has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
audit committee of the registrant's board of directors (or persons performing the equivalent functions):
control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize, and report financial information; and
have a significant role in the registrant's internal control over financial reporting.
Date: September 22, 2009
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniYield California Fund, Inc.
Section 906 of the Sarbanes Oxley Act
Registrant), hereby certifies, to the best of her knowledge, that the Registrants Report on Form N-CSR for the
period ended July 31, 2009, (the Report) fully complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
Date: September 22, 2009
/s/ Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock MuniYield California Fund, Inc.
Registrant), hereby certifies, to the best of his knowledge, that the Registrants Report on Form N-CSR for the
period ended July 31, 2009, (the Report) fully complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
Date: September 22, 2009
/s/ Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniYield California Fund, Inc.
amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and
Exchange Commission.
Proxy Voting Policies
For The BlackRock-Advised Funds
May 30, 2008
Table of Contents | ||
Page | ||
Introduction | 1 | |
Proxy Voting Policies | 2 | |
Boards of Directors | 2 | |
Auditors | 2 | |
Compensation and Benefits | 2 | |
Capital Structure | 3 | |
Corporate Charter and By-Laws | 3 | |
Corporate Meetings | 3 | |
Investment Companies | 3 | |
Environmental and Social Issues | 3 | |
Reports to the Board | 4 |
Introduction The Trustees/Directors (Directors) of the BlackRock-Advised Funds (the Funds) have the responsibility for voting proxies relating to portfolio securities of the Funds, and have determined that it is in the best interests of the Funds and their shareholders to delegate that responsibility to BlackRock Advisors, LLC and its affiliated U.S. registered investment advisers (BlackRock), the investment adviser to the Funds, as part of BlackRocks authority to manage, acquire and dispose of account assets. The Directors hereby direct BlackRock to vote such proxies in accordance with this Policy, and any proxy voting guidelines that the Adviser determines are appropriate and in the best interests of the Funds shareholders and which are consistent with the principles outlined in this Policy. The Directors have authorized BlackRock to utilize an unaffiliated third-party as its agent to vote portfolio proxies in accordance with this Policy and to maintain records of such portfolio proxy voting. When BlackRock votes proxies for an advisory client that has delegated to BlackRock proxy voting authority, BlackRock acts as the clients agent. Under the Investment Advisers Act of 1940 (the Advisers Act), an investment adviser is a fiduciary that owes each of its clients a duty of care and loyalty with respect to all services the adviser undertakes on the clients behalf, including proxy voting. BlackRock is therefore subject to a fiduciary duty to vote proxies in a manner BlackRock believes is consistent with the clients best interests.1 When voting proxies for the Funds, BlackRocks primary objective is to make voting decisions solely in the best interests of the Funds shareholders. In fulfilling its obligations to shareholders, BlackRock will seek to act in a manner that it believes is most likely to enhance the economic value of the underlying securities held in client accounts.2 It is imperative that BlackRock considers the interests of Fund shareholders, and not the interests of BlackRock, when voting proxies and that real (or perceived) material conflicts that may arise between BlackRocks interest and those of BlackRocks clients are properly addressed and resolved. Advisers Act Rule 206(4)-6 was adopted by the SEC in 2003 and requires, among other things, that an investment adviser that exercises voting authority over clients proxy voting adopt policies and procedures reasonably designed to ensure that the adviser votes proxies in the best interests of clients, discloses to its clients information about those 1 Letter from Harvey L. Pitt, Chairman, SEC, to John P.M. Higgins, President, Ram Trust Services (February 12, 2002) (Section 206 of the Investment Advisers Act imposes a fiduciary responsibility to vote proxies fairly and in the best interests of clients); SEC Release No. IA-2106 (February 3, 2003). 2 Other considerations, such as social, labor, environmental or other policies, may be of interest to particular clients. While BlackRock is cognizant of the importance of such considerations, when voting proxies it will generally take such matters into account only to the extent that they have a direct bearing on the economic value of the underlying securities. To the extent that a BlackRock client, such as the Funds, desires to pursue a particular social, labor, environmental or other agenda through the proxy votes made for its securities held through BlackRock as investment adviser, BlackRock encourages the client to consider retaining direct proxy voting authority or to appoint independently a special proxy voting fiduciary other than BlackRock. - 1 - |
policies and procedures and also discloses to clients how they may obtain information on how the adviser has voted their proxies. BlackRock has adopted separate but substantially similar guidelines and procedures that are consistent with the principles of this Policy. BlackRocks Equity Investment Policy Oversight Committee, or a sub-committee thereof (the Committee), addresses proxy voting issues on behalf of BlackRock and its clients, including the Funds. The Committee is comprised of senior members of BlackRocks Portfolio Management and Administration Groups and is advised by BlackRocks Legal and Compliance Department. Proxy Voting Policies A. Boards of Directors These proposals concern those issues submitted to shareholders relating to the composition of the board of directors of companies other than investment companies. As a general matter, the Funds believe that a companys board of directors (rather than shareholders) is most likely to have access to important, nonpublic information regarding a companys business and prospects, and is therefore best-positioned to set corporate policy and oversee management. The Funds therefore believe that the foundation of good corporate governance is the election of qualified, independent corporate directors who are likely to diligently represent the interests of shareholders and oversee management of the corporation in a manner that will seek to maximize shareholder value over time. In individual cases, consideration may be given to a director nominees history of representing shareholder interests as a director of other companies, or other factors to the extent deemed relevant by the Committee. B. Auditors These proposals concern those issues submitted to shareholders related to the selection of auditors. As a general matter, the Funds believe that corporate auditors have a responsibility to represent the interests of shareholders and provide an independent view on the propriety of financial reporting decisions of corporate management. While the Funds anticipate that the Committee will generally defer to a corporations choice of auditor, in individual cases, consideration may be given to an auditors history of representing shareholder interests as auditor of other companies, to the extent deemed relevant. C. Compensation and Benefits These proposals concern those issues submitted to shareholders related to management compensation and employee benefits. As a general matter, the Funds favor disclosure of a companys compensation and benefit policies and oppose excessive compensation, but believe that compensation matters are normally best determined by a - 2 - |
corporations board of directors, rather than shareholders. Proposals to micro-manage a companys compensation practices or to set arbitrary restrictions on compensation or benefits should therefore generally not be supported by the Committee. D. Capital Structure These proposals relate to various requests, principally from management, for approval of amendments that would alter the capital structure of a company, such as an increase in authorized shares. As a general matter, the Funds expect that the Committee will support requests that it believes enhance the rights of common shareholders and oppose requests that appear to be unreasonably dilutive. E. Corporate Charter and By-Laws These proposals relate to various requests for approval of amendments to a corporations charter or by-laws, principally for the purpose of adopting or redeeming poison pills. As a general matter, the Funds expect that the Committee will oppose poison pill provisions unless, after consultation with the portfolio managers, it is determined that supporting the poison pill is in the best interest of shareholders. F. Corporate Meetings These are routine proposals relating to various requests regarding the formalities of corporate meetings. As a general matter, the Funds expect that the Committee will support company management except where the proposals are substantially duplicative or serve no legitimate business purpose. G. Investment Companies These proposals relate to proxy issues that are associated solely with holdings of shares of investment companies, including, but not limited to, investment companies for which BlackRock provides investment advisory, administrative and/or other services. As with other types of companies, the Funds believe that an investment companys board of directors (rather than its shareholders) is best-positioned to set fund policy and oversee management. However, the Funds oppose granting boards of directors authority over certain matters, such as changes to a funds investment objective, that the Investment Company Act of 1940 envisions will be approved directly by shareholders. H. Environmental and Social Issues These are shareholder proposals to limit corporate conduct in some manner that relates to the shareholders environmental or social concerns. The Funds generally believe that annual shareholder meetings are inappropriate forums for the discussion of larger social issues, and oppose shareholder resolutions micro-managing corporate conduct or requesting release of information that would not help a shareholder evaluate - 3 - |
an investment in the corporation as an economic matter. While the Funds are generally supportive of proposals to require corporate disclosure of matters that seem relevant and material to the economic interests of shareholders, the Funds generally are not supportive of proposals to require disclosure of corporate matters for other purposes. Reports to the Board BlackRock will report to the Directors on proxy votes it has made on behalf of the Funds at least annually. - 4 - |