Annual Report (10-k)
March 27 2014 - 4:56PM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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For the fiscal year ended:
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Commission file number:
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December 31, 2013
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001-31941
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MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF INDEXPLUS TRUST SERIES 2003-1)
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or other
jurisdiction of
incorporation)
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13-3891329
(I. R. S. Employer
Identification No.)
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ONE BRYANT PARK, 4th FL
STRUCTURED CREDIT TRADING
NEW YORK, NEW YORK
(Address of principal
executive offices)
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10036
(Zip Code)
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Registrants telephone number, including area code: (646) 855-6745
Securities registered pursuant to Section 12(b) of the Act:
INDEXPLUS Trust Certificates Series 2003-1, listed on The New York Stock
Exchange.
Securities registered pursuant to Section 12(g) of the Act:
Not Applicable.
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes
o
No
þ
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes
o
No
þ
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).
Yes
o
No
o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act.
Large
accelerated filer
o
Accelerated filer
o
Non-accelerated filer
þ
Smaller reporting filer
o
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes
o
No
þ
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrants most recently completed second
fiscal quarter.
Not Applicable.
Indicate the number of shares outstanding for each of the registrants classes
of common stock, as of the latest practicable date.
Not Applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. BUSINESS
For information with respect to the underlying
securities held by INDEXPLUS Trust Series 2003-1, please refer to respective periodic reports, including annual reports
on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and other information of: The Boeing Company
(Commission file number 001-00442); Citigroup Inc. (Commission file number 001-09924); Credit Suisse Group AG (Commission
file number 001-33434) (condensed consolidated financial statements with respect to guarantor Credit Suisse Group AG and
issuer Credit Suisse (USA) of the underlying securities); Ford Motor Company (Commission file number 001-03950); General
Electric Capital Corporation (Commission file number 001-06461); Ally Financial Inc. (Commission file number
001-03754); The Goldman Sachs Group, Inc. (Commission file number 001-14965); Johnson & Johnson
(Commission file number 001-03215); Macys Retail Holdings Inc. (Commission file number 333-42940);
Macys, Inc. (Commission file number 001- 13536); Time Warner Inc. (Commission file number 001-15062);
Time Warner Companies, Inc. (Commission file number 001-08637); Turner Broadcasting System, Inc. (Commission file
number 001- 08911); United States Department of Treasury; Valero Energy Corporation (Commission file number
001-13175); Verizon Communications Inc. (Commission file number 001-08606); Verizon Global Funding Corp. (Commission
file number 333-73612); CBS Corporation (Commission file number 001-09553); CBS Operations Inc. (Commission file
number 333-62052-01) and Weyerhaeuser Company (Commission file number 001-04825) on file with the Securities and
Exchange Commission (the SEC”). You can read and copy these reports and other information at the public
reference facilities maintained by the SEC at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. You may
obtain copies of this material for a fee by writing to the SECs Public Reference Section of the SEC at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information about the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. You can also access some of this information electronically by means of the
SECs website on the Internet at http:// www.sec.gov, which contains reports, proxy and information
statements and other information that the respective underlying securities issuers have filed electronically with the
SEC. The underlying securities issuer Daimler Finance North America LLC (“Daimler Finance”) and the
guarantor, Daimler AG, no longer file periodic Exchange Act reports. Unless and until the underlying securities
comprise 10% of the assets held by the trust, the trust is not required to liquidate its holdings of the asset. If such
circumstances were to occur, such as an increase in concentration of Daimler Finance assets to at least 10% of total
trust assets, the asset would have to be liquidated.
2
Although we have no reason to believe the information
concerning the respective underlying securities or the
respective underlying securities issuers contained in the
underlying securities issuers Exchange Act reports are not
reliable, neither the depositor nor the trustee participated in
the preparation of such documents or made any due diligence
inquiry with respect to the information provided therein. No
investigation with respect to the respective underlying
securities issuers (including, without limitation, no
investigation as to their respective financial condition or
creditworthiness) or of the respective underlying securities
has been made. You should obtain and evaluate the same
information concerning the respective underlying securities
issuers as you would obtain and evaluate if your investment
were directly in the respective underlying securities or in
other securities issued by the respective underlying securities
issuers. There can be no assurance that events affecting the
respective underlying securities or the respective underlying
securities issuers have not occurred or have not yet been
publicly disclosed which would affect the accuracy or
completeness of the publicly available documents described
above.
ITEM 1A. RISK FACTORS
Your investment in the trust certificates will involve certain
risks. You should carefully consider the following discussion
of risks, and the other information included or incorporated by
reference in the applicable prospectus supplement and the
accompanying prospectus. You should also carefully consider any
risk factors and other information that the underlying
securities issuer may file in its Exchange Act reports as
referenced in Item 1 above.
IF THE TRUST CERTIFICATES OR ANY OF THE UNDERLYING SECURITIES
ARE REDEEMED PRIOR TO THEIR MATURITY DATE, YOU MAY NOT BE ABLE
TO REINVEST YOUR REDEMPTION PROCEEDS AT A YIELD COMPARABLE TO
THE YIELD YOU WOULD HAVE RECEIVED ON YOUR TRUST CERTIFICATES.
The yield you will realize on your trust certificates depends
upon several factors, including:
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the purchase price of the trust certificates,
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when you acquire your trust certificates,
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whether an underlying securities issuer exercises an option
to redeem underlying securities, and
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whether the trust redeems the trust certificates prior to
the final scheduled distribution date.
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The description of the underlying securities in the applicable
prospectus supplement indicates which of the underlying
securities can be redeemed prior to maturity at the option of
the associated underlying securities issuer. Because the
indicated underlying securities issuers have the right to
redeem the indicated underlying securities early, we cannot
assure you that the trust will be able to hold those underlying
securities until their maturity date.
3
YOU MAY NOT BE PAID IF THE ASSETS OF THE TRUST ARE INSUFFICIENT
Distributions on the trust certificates will be made only from
available assets of the trust. The trust will have no
significant assets other than the portfolio of underlying
securities. The trust certificates are not obligations of and
do not represent any interests in the underwriter, the
depositor, the trustee, the market agent, the calculation agent
or any of their affiliates. Neither we nor the underwriter, the
trustee, the market agent, the calculation agent or any other
person or entity will be obligated to make any payments on the
trust certificates from its own assets, and trust certificates
holders will have no recourse against any of them or their
respective assets. If the payments received from the underlying
securities are insufficient to make distributions on the trust
certificates, you may not receive all or part of the full
amount due on your trust certificates.
NEITHER WE NOR THE TRUSTEE, THE UNDERWRITER, THE MARKET AGENT,
THE CALCULATION AGENT NOR ANY OF THEIR AFFILIATES WILL MANAGE
THE UNDERLYING SECURITIES
Except as described below, the trust will not dispose of any of
the underlying securities, even if an event occurs that
adversely affects any underlying securities issuer and/or the
value of any or all of the underlying securities. Under the
applicable trust agreement, the trust will dispose of an
underlying security only if:
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there is a credit event on an underlying security or an
underlying securities issuer,
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there is a non-payment-related default that accelerates the
maturity of an underlying security, or
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in the case of an underlying securities issuer that is
obliged to file Exchange Act reports, the relevant
underlying securities issuer ceases to file Exchange Act
reports and the related underlying securities comprise 10%
or more of the assets of the trust.
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Under the above circumstances, the trustee must retain a market
agent who will sell the defaulted underlying security on or
after the 30th day after receipt of notice of the default in
accordance with the sale procedures described in the applicable
prospectus supplement and distribute the net proceeds from such
sale to the holders of the trust certificates pro rata even if
adverse market conditions exist. Neither the trustee nor the
market agent has discretion to do otherwise. If adverse market
conditions exist at the time of the sale of the underlying
securities, you may incur greater losses than if the trust
continued to hold the underlying securities and sold them at a
later date.
4
THE VALUE OF THE TRUST CERTIFICATES DEPENDS UPON THE
CREDITWORTHINESS OF THE UNDERLYING SECURITIES ISSUERS AND THE
MARKET PRICES OF THE UNDERLYING SECURITIES.
The trust certificates represent interests in obligations of
the underlying securities issuers and will be subject to all
the risks associated with directly investing in each underlying
securities issuers debt obligations. The underlying indenture
and the terms and conditions governing each underlying security
may not limit the amount of indebtedness that may be incurred
by the relevant underlying securities issuer. In addition, an
investment in the trust certificates represents an investment
in the underlying securities and most of the underlying
securities are not listed on any securities exchange. The
underlying securities are generally purchased and sold through
dealers who make a market in such securities for their own
accounts, and there may be significant disparities in the
prices quoted for any of the underlying securities by
securities dealers at any point in time. Therefore, the market
for any of the underlying securities is less liquid than the
market for securities which are traded through a securities
exchange and the aggregate market value of a comparable amount
of the underlying securities may be higher than the market
price of the trust certificates. You should consider the nature
of each underlying security and the credit risk of each
underlying securities issuer before making an investment
decision regarding the trust certificates.
THE TRUST CERTIFICATEHOLDERS MAY SUFFER A LOSS UPON THE
OCCURRENCE OF A REMOVAL EVENT
Should a removal event, as described in the applicable
prospectus supplement, occur with respect to an underlying
security, the trustee on behalf of the trust will instruct the
market agent to sell such underlying security and distribute
the net proceeds of the sale of such underlying security to the
trust certificateholders. In such case, the certificate
principal balance of the trust certificates will be reduced by
the principal amount of the underlying security subject to such
removal event. If the amount distributable to the trust
certificateholders from the proceeds of the sale of the
underlying securities subject to the removal event is less than
the principal amount of such underlying securities plus any
accrued and unpaid interest thereof the trust
certificateholders will suffer a loss. Additionally, if less
than all of such underlying securities are sold and the
applicable underlying securities issuer defaults on payments
due on such unsold underlying securities, the trust
certificateholders will suffer a loss. The trust
certificateholders will also bear the risk of reinvestment
resulting from the reduction in the certificate principal
balance of the trust certificates.
5
THE PASS-THROUGH RATE MAY BE REDUCED UPON PAYMENT OF PRINCIPAL
ON OR THE OCCURRENCE OF A REMOVAL EVENT WITH RESPECT TO
UNDERLYING SECURITIES
Because the pass-through rate on the trust certificates will be
determined in part by the weighted average interest rate of the
underlying securities, payments of principal on an underlying
security or the occurrence of a removal event may cause the
pass-through rate to decrease depending upon the interest rate
of such underlying security.
AS UNDERLYING SECURITIES ARE REMOVED FROM THE TRUST AT THEIR
MATURITY, REDEMPTION OR SALE, THE POOL OF UNDERLYING SECURITIES
WILL BECOME LESS DIVERSIFIED AND YOUR EXPOSURE TO ECONOMIC
FACTORS THAT DISPROPORTIONATELY AFFECT ONE OR MORE OF THE
REMAINING UNDERLYING SECURITIES WILL INCREASE.
As underlying securities mature, underlying securities are
redeemed or sold, or removal events occur, the pool of
underlying securities held by the trust will become less
diversified. These events could increase your risk of loss
resulting from the decline in one or more of the economic
factors disproportionately affecting any of the remaining
underlying securities.
PRINCIPAL AND INTEREST PAYMENTS ON THE UNDERLYING SECURITIES
ARE UNSECURED OBLIGATIONS OF THE UNDERLYING SECURITIES ISSUERS
Distributions on the trust certificates depend primarily on
principal and interest payments on the underlying securities.
Some of these payments are unsecured obligations of the
underlying securities issuers. In any proceedings involving the
insolvency, liquidation or winding up of an underlying
securities issuer, holders of unsecured securities of that
underlying issuer will be paid only after the holders of that
underlying securities issuers secured obligations are paid in
full. As a result, you may not recover the principal amount of
your trust certificates attributable to such underlying
security.
THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moodys and/or Fitch Ratings assigned
ratings to the trust certificates on the original issue date in
one of the four highest categories assigned to long-term debt.
Any rating issued with respect to the trust certificates is not
a recommendation to purchase, sell or hold a security. Ratings
do not reflect upon the market price of the trust certificates
or their suitability for a particular investor. We cannot
assure you that initial ratings will remain for any given
period of time or that a ratings agency would not revise or
withdraw entirely the ratings if, in its judgment,
circumstances (including, without limitation, the rating of any
of the underlying securities) merit. A revision or withdrawal
of a rating may adversely affect the market price of the trust
certificates.
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POTENTIAL CONFLICTS OF INTERESTS MAY ARISE BETWEEN US, THE
UNDERWRITER AND THE TRUST
We, Merrill Lynch, or one of its affiliates will acquire the
underlying securities comprising the trusts portfolio.
Potential conflicts of interests may arise as Merrill Lynch and
its affiliates may engage in investment banking or may provide
other services for some or all of the underlying securities
issuers. In addition, Merrill Lynch and its affiliates may also
own, make purchases or sales, including sales to the trust,
establish long or short positions or engage in hedging
activities in some or all of the underlying securities for
their own accounts. All such activities may result in conflicts
of interests among Merrill Lynch, its affiliates and the trust
certificateholders.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Trust Certificates issued by INDEXPLUS Trust Series 2003-1
are represented by one or more physical certificates registered
in the name of Cede & Co., the nominee of the Depository Trust
Company. The Trust Certificates are listed on the New York
Stock Exchange.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Not Applicable.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not Applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Registrant has procedures so as to provide reasonable assurance that its future
Exchange Act filings will be filed within the applicable time periods.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Not Applicable.
ITEM 11. EXECUTIVE COMPENSATION
Not Applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
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(a)
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Securities Authorized For Issuance Under Equity
Compensation Plans: None.
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(b)
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Security Ownership Of Certain Beneficial Owners: None.
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(c)
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Security Ownership Of Management: Not Applicable.
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(d)
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Changes In Control: None.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Not Applicable.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements: Not Applicable.
(a)(2) Financial Statement Schedules: Not Applicable.
(a)(3) List of Exhibits
The following exhibits are filed as part of, and incorporated
by reference into, this Annual Report on Form 10-K:
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31.1.
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Certification of the Vice President of Registrant dated
March 24, 2014, pursuant to Rules 13a-14 and 15d-14
under the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, with respect to the
Registrants Annual Report on Form 10-K for the
fiscal year ended December 31, 2013.
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99.1.
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Trustees Annual Compliance Certificate dated
February 20, 2014.
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99.2.
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Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated March 21, 2014,
Registrants Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 21, 2014 and PPLUS Minimum
Servicing Standards.
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99.3.
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Report of KPMG LLP, Independent
Registered Public Accounting Firm, dated
January 28, 2014, The Bank of New York Mellons Assertion
on Compliance with PPLUS Minimum Servicing
Standards dated January 28, 2014 and PPLUS Minimum
Servicing Standards.
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(b) Exhibits
The Registrant hereby files as part of this Annual Report
on Form 10-K the exhibits listed in Item 15(a)(3) set forth
above.
(c) Financial Statement Schedules
Not Applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
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MERRILL LYNCH DEPOSITOR, INC.
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Date: March 27, 2014
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By:
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/s/ John Marciano
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Name:
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John Marciano
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Title:
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Vice President
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