Audited Financial Statements · 2018-08-14 · Equity Index Fund O Schedule of investments December...

INVESTMENT FUNDS FOR EMPLOYEE BENEFIT TRUSTS

O Series

Audited Financial Statements

December 31, 2017

BLACKROCK®

O Series

Table of contents

Report of Independent Auditors 3

Financial statements

- Equity Index Fund O 5

- LifePath® Index 2020 Fund O 10









- LifePath® Index Retirement Fund O 55

Notes to financial statements 60

Regulatory statement 66

The Funds’ financial statements and summary schedules, as applicable, include:

Schedule of investmentsStatement of assets and liabilitiesStatement of operationsStatement of changes in net assetsFinancial highlightsSchedule of investments acquired, sold or redeemed (In summary)

BLACKROCK®2 December 31, 2017

Report of Independent Auditors

To the Board of Directors ofBlackRock Institutional Trust Company, N.A.

We have audited the accompanying financial statements of each of the funds listed in the table below (hereaftercollectively referred to as the “Funds”), which comprise the statements of assets and liabilities, including theschedules of investments, as of December 31, 2017, and the related statements of operations, of changes in netassets and the financial highlights for each of the periods listed in the table below. These financial statements andfinancial highlights are hereafter collectively referred to as “financial statements.”

Equity Index Fund O (1) LifePath® Index 2045 Fund O (1)

LifePath® Index 2020 Fund O (1) LifePath® Index 2050 Fund O (1)



LifePath® Index 2035 Fund O (1) LifePath® Index Retirement Fund O (1)

LifePath® Index 2040 Fund O (1)

(1) Statement of assets and liabilities, including the schedule of investments, as of December 31, 2017 and therelated statement of operations, of changes in net assets and the financial highlights for the year endedDecember 31, 2017.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordancewith accounting principles generally accepted in the United States of America; this includes the design,implementation and maintenance of internal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted ouraudits in accordance with auditing standards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on our judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, we consider internal control relevant to the Fund’s preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose

3 December 31, 2017

of expressing an opinion on the effectiveness of the Fund’s internal control. Accordingly, we express no suchopinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.

Opinions

In our opinion, for each of the Funds listed in the table above, the financial statements referred to above presentfairly, in all material respects, the financial position of each of the Funds as of December 31, 2017, and the resultsof each of their operations, changes in each of their net assets and each of the financial highlights for the periodslisted in the table above, in accordance with accounting principles generally accepted in the United States ofAmerica.

Other Matter

Our audits were conducted for the purpose of forming an opinion on each of the Funds’ financial statements takenas a whole. The schedule of investments acquired, sold or redeemed (in summary) of each of the Funds arepresented for purposes of additional analysis and are not a required part of the financial statements. Theinformation is the responsibility of management and was derived from and relates directly to the underlyingaccounting and other records used to prepare the financial statements. The information has been subjected to theauditing procedures applied in the audit of the financial statements and certain additional procedures, includingcomparing and reconciling such information directly to the underlying accounting and other records used toprepare the financial statements or to the financial statements themselves and other additional procedures, inaccordance with auditing standards generally accepted in the United States of America. In our opinion, theschedule of investments acquired, sold or redeemed (in summary) of each of the Funds is fairly stated, in allmaterial respects, in relation to the financial statements of each of the Funds taken as a whole.

San Francisco, California

March 16, 2018

4 December 31, 2017

Equity Index Fund O

Schedule of investments December 31, 2017

Security Units Cost Value

Collective fundsa — 100.02%

Equity Index Fund F 130,841 $6,650,669 $6,536,456

Short term investments — 0.01%

Short term investment fundsa — 0.01%

Short-Term Investment Fund 1,000 1,000 1,000

Total investments — 100.03% $6,651,669 $6,537,456

Other assets, less liabilities — (0.03)% (2,284)Net assets — 100.00% $6,535,172

a Managed by BlackRock Institutional Trust Company, N.A.

The accompanying notes are an integral part of these financial statements.


Equity Index Fund O

Statement of assets and liabilities December 31, 2017

Value

Assets

Investment in collective funds, at fair value (cost $6,650,669) $ 6,536,456Short term investments, at fair value (cost $1,000) 1,000

Total investments 6,537,456

Receivable from investment advisor 883

6,538,339

Liabilities

Shareholder servicing fees payable 3,167

3,167

Net assets $ 6,535,172

Units outstanding 304,957

Unit value $ 21.43



Equity Index Fund O

Statement of operations Year ended December 31, 2017

Net investment income

Collective fund income $ 178,256Distributions from short term investment funds 13Securities lending indirect income 1,574

Total investment income 179,843

Expenses

Management fees 1,398Administration fees 5,861Shareholder servicing fees 8,909Audit fees 3,774

Total expenses 19,942Less operating expenses borne by BTC (8,994)

Net expenses 10,948

Net investment income 168,895

Net realized and unrealized gain (loss)

Net realized gain (loss) on:Investments 1,847,716

Net realized gain 1,847,716

Net change in unrealized appreciation/depreciation on:Investments (223,227)

Net change in unrealized appreciation/depreciation (223,227)

Net realized and unrealized gain 1,624,489

Net increase in net assets resulting from operations $ 1,793,384

Statement of changes in net assets Year ended December 31, 2017

Decrease in net assets:

Operations

Net investment income $ 168,895Net realized gain 1,847,716Net change in unrealized appreciation/depreciation (223,227)

Net increase in net assets resulting from operations 1,793,384

Unitholder transactions

Contributions (164,293 units) 3,026,209Redemptions (591,795 units) (11,177,760)

Net decrease in net assets from unitholder transactions (8,151,551)

Net decrease in net assets (6,358,167)Net assets, beginning of year 12,893,339

Net assets, end of year $ 6,535,172



Equity Index Fund O

Financial highlights Year ended December 31, 2017

Per unit operating performance (per unit outstanding throughout the year)

Unit value, beginning of year $ 17.60Income from investment operations:

Net investment income (based on average units outstanding throughout the year) $ 0.36Net realized and unrealized gain on investment transactions 3.47

Total income from investment operations 3.83

Unit value, end of year $ 21.43

Total return 21.76%

Ratios to average net assets:

Expensesa 0.22%Net expensesa 0.12%Net investment income 1.88%

a The expenses incurred by underlying funds in which the fund invests are not included in this ratio. The collective fund income allocated to the fund fromunderlying funds is net of those expenses.



Equity Index Fund O

Schedule of investments acquired, sold or redeemed (In summary)For the year ended December 31, 2017

Sales and redemptions

Types of investmentsCost of investments

acquired ProceedsRealized

gain (loss)

Collective funds $ 2,372,605 $ 10,538,183 $ (1,004,348)

Collective funds-fund of fund gain (loss) — — 2,852,064



LifePath® Index 2020 Fund O




LifePath® Index 2020 Fund F 75,789,469 $1,415,807,530 $1,516,585,169




Total investments — 100.04% $1,415,808,530 $1,516,586,169

Other assets, less liabilities — (0.04)% (580,996)Net assets — 100.00% $1,516,005,173






Value

Assets

Investment in collective funds, at fair value (cost $1,415,807,530) $ 1,516,585,169Short term investments, at fair value (cost $1,000) 1,000

Total investments 1,516,586,169

Receivable for unitholder contributions 2,034,284

1,518,620,453

Liabilities

Payable for investments purchased 1,475,264Payable for unitholder redemptions 559,020Management fees payable 580,551Administration fees payable 445

2,615,280

Net assets $ 1,516,005,173

Units outstanding 99,513,618

Unit value $ 15.23






Collective fund income $ 38,095,204Distributions from short term investment funds 49Securities lending indirect income 1,020,988

Total investment income 39,116,241

Expenses

Management fees 1,118,361Administration fees 5,742Audit fees 3,765

Total expenses 1,127,868

Net investment income 37,988,373




Net change in unrealized appreciation/depreciation on:Investments 116,576,530

Net change in unrealized appreciation/depreciation 116,576,530




Increase in net assets:

Operations

Net investment income $ 37,988,373Net realized gain 22,760,861Net change in unrealized appreciation/depreciation 116,576,530



Contributions (51,879,442 units) 728,735,203Redemptions (51,121,502 units) (735,960,127)


Net increase in net assets 170,100,840Net assets, beginning of year 1,345,904,333

Net assets, end of year $ 1,516,005,173










Total return 11.74%


Expensesa 0.07%Net investment income 2.37%









gain (loss)

Collective funds $ 381,517,994 $ 389,479,482 $ 5,963,751






Value

Assets




1,254,481,635

Liabilities


2,268,253

Net assets $ 1,252,213,382


Unit value $ 16.06






Collective fund income $ 31,560,887Distributions from short term investment funds 35Securities lending indirect income 726,643


Expenses

Management fees 905,311Administration fees 5,741Audit fees 3,765

Total expenses 914,817











Operations





Net increase in net assets from unitholder transactions 126,422,825

Net increase in net assets 293,457,085Net assets, beginning of year 958,756,297











Total return 13.90%











gain (loss)







Value

Assets




2,490,714,346

Liabilities


4,584,882

Net assets $ 2,486,129,464


Unit value $ 16.82






Collective fund income $ 58,471,209Distributions from short term investment funds 69Securities lending indirect income 1,176,882


Expenses


Total expenses 1,664,374Less operating expenses borne by BTC (15)

Net expenses 1,664,359











Operations

















Total return 15.84%











gain (loss)









LifePath® Index 2035 Fund F 52,446,677 $966,801,569 $1,065,606,339



Short-Term Investment Fund 999 999 999

Total investments — 100.04% $966,802,568 $1,065,607,338







Value

Assets

Investment in collective funds, at fair value (cost $966,801,569) $ 1,065,606,339Short term investments, at fair value (cost $999) 999



1,067,878,504

Liabilities


2,661,152

Net assets $ 1,065,217,352


Unit value $ 17.56








Expenses



Net expenses 721,023











Operations

















Total return 17.69%











gain (loss)












Short-Term Investment Fund 999 999 999








Value

Assets

Investment in collective funds, at fair value (cost $2,348,726,325) $ 2,595,395,521Short term investments, at fair value (cost $999) 999



2,601,100,293

Liabilities

Payable for investments purchased 4,207,554Payable for unitholder redemptions 1,496,220Management fees payable 875,371Administration fees payable 443

6,579,588

Net assets $ 2,594,520,705


Unit value $ 18.22






Collective fund income (includes underlying fund-related operating expenses, $362 of which was borne by BTC) $ 59,138,747Distributions from short term investment funds 73Securities lending indirect income 885,925


Expenses


Total expenses 1,632,901Less operating expenses borne by BTC (9,522)

Net expenses 1,623,379











Operations

















Total return 19.40%











gain (loss)









LifePath® Index 2045 Fund F 33,810,131 $632,497,820 $702,493,385











Value

Assets




705,091,544

Liabilities


2,848,279

Net assets $ 702,243,265


Unit value $ 18.77








Expenses














Operations

















Total return 20.40%











gain (loss)







Value

Assets




1,698,461,698

Liabilities


9,901,024

Net assets $ 1,688,560,674


Unit value $ 19.16








Expenses


Total expenses 1,001,971Less operating expenses borne by BTC (9,522)












Operations

















Total return 20.81%









Cost of investments RealizedTypes of investments acquired Proceeds gain (loss)







Value

Assets




332,755,648

Liabilities


2,921,338

Net assets $ 329,834,310


Unit value $ 19.82








Expenses














Operations

















Total return 20.85%











gain (loss)







Value

Assets




189,088,742

Liabilities


3,363,676

Net assets $ 185,725,066


Unit value $ 12.90








Expenses



Net expenses 77,786











Operations

















Total return 20.79%











gain (loss)

Collective funds $ 119,733,950 $ 9,149,160 $ 638,846




LifePath® Index Retirement Fund O




LifePath® Index Retirement Fund F 50,925,843 $947,722,098 $994,968,753











Value

Assets



Receivable for unitholder contributions 888,827

995,858,580

Liabilities

Payable for investments purchased 704,749Payable for unitholder redemptions 184,078Management fees payable 381,116Administration fees payable 444

1,270,387

Net assets $ 994,588,193


Unit value $ 14.17








Expenses


Total expenses 747,967











Operations

















Total return 10.19%









Cost of investments RealizedTypes of investments acquired Proceeds gain (loss)





Notes to financial statements

Each of the collective investment funds included in this report (individually, a “Fund”, and collectively, the “Funds”)is a trust maintained by BlackRock Institutional Trust Company, N.A. (“BTC”), which serves as trustee of theFunds. Each Fund is an entity that is legally separate from BTC, other collective investment funds, and theinvesting unitholders. The Funds are established under a plan document, as amended from time to time, which isnot within the scope of the audit, and sets forth the terms under which BTC manages and administers the Funds’assets.

Each Fund invests in one or more other collective investment funds (each, an “underlying fund”, and collectively,the “underlying funds”) to seek to meet its investment objectives. The plan document and the financial statementsof the underlying funds, both made available by BTC, provide information about the investment strategy andredemption terms of the underlying funds and should be read in conjunction with each Fund’s financialstatements. Investments in the underlying funds are presented in each Fund’s schedule of investments.

1. Significant accounting policies

The following significant accounting policies are consistently followed by each Fund in the preparation of itsfinancial statements in conformity with accounting principles generally accepted in the United States of America(“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management tomake certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP andfollows the accounting and reporting guidance applicable to investment companies.

A. Valuation – Valuation of each Fund’s units occurs, at a minimum, each day the Fund is open for contributionsand redemptions and, for financial reporting purposes, as of the report date should the reporting period end on aday that the Fund is not open (each, a “valuation date”). Unit values are determined by dividing each Fund’s netassets by the number of units outstanding on the valuation date. Each Fund’s investments are valued at fair valueeach valuation date.

U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in anorderly transaction between market participants at the valuation date. The BlackRock Global ValuationMethodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investmentsfor the Funds. The investments of each Fund are valued pursuant to the policies and procedures developed bythe Global Valuation Committee and approved by BTC (“BlackRock’s global valuation policy”).

Units of collective investment funds, including short term investment funds, are valued based on the unit valuedetermined for each fund on the valuation date.

In the event that application of these methods of valuation results in a price for an investment which is deemednot to be representative of the fair value of such investment or if a price is not available, the investment will bevalued by the Global Valuation Committee, in accordance with BlackRock’s global valuation policy. The fairvaluation approaches that may be utilized by the Global Valuation Committee to determine fair value includemarket approach, income approach and cost approach. The valuation techniques used under these approachestake into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) theprincipal market for the investment; (iii) the customary participants in the principal market for the investment;(iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices forsimilar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves,volatilities, prepayment speeds, loss severities, credit risks and default rates.



The Global Valuation Committee employs various methods for calibrating valuation approaches for investmentswhere an active market does not exist, including regular due diligence of the Funds’ pricing vendors, a regularreview of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealizedgains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements inmarket values, and reviews of market related activity.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based onindependent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”).These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels forfinancial reporting purposes as follows:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset orliability either directly or indirectly, including quoted prices for similar assets or liabilities inmarkets that are active, quoted prices for identical or similar assets or liabilities in markets thatare not active, inputs other than quoted prices that are observable for the assets or liabilities(such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepaymentspeeds, loss severities, credit risks and default rates) or other market–corroborated inputs; and

Level 3 Unobservable inputs for the asset or liability based on the best information available in thecircumstances, to the extent observable inputs are not available, including the Global ValuationCommittee’s assumptions used in determining the fair value of investments.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets orliabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized inLevel 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In suchcases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level inputthat is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers in or out of an assigned level within the fair valuehierarchy. Transfers between different levels of the fair value hierarchy are deemed to have occurred as of thebeginning of the reporting period. The categorization of values determined for financial instruments are based onthe pricing transparency of the financial instruments and are not necessarily an indication of the risks associatedwith investing in those securities.

As of December 31, 2017, the value of each of the Funds’ investments was classified as Level 2. The breakdownof each Fund’s investments into major categories is disclosed in its respective schedule of investments.

B. Security transactions and income recognition – Security transactions are accounted for on trade date. Interestincome and interest expense are accounted for on an accrual basis. Distributions from short term investment funds arerecognized on the ex-dividend date. Realized gains and losses are determined on a first-in, first-out (FIFO) cost basisas a specific identification cost relief method. Realized gains and losses reported by a fund may include a componentattributable to the fund’s pro-rata share of net realized gain or loss recognized by underlying funds.

Collective fund income represents the investing fund’s pro-rata share of net investment income (loss) fromunderlying funds. Collective fund income, as earned, is reinvested as of each valuation date. The components ofcollective fund income include interest income, dividend income, distributions from short term investment fundsreceived from underlying funds, withholding taxes, and expenses, as applicable. The investing fund’s pro-ratashare of the securities lending income from underlying funds is disclosed separately from collective fund incomeand is shown net of interest rebates and securities lending agent fees.



C. Distribution of income – Net investment income and net realized gains are not distributed.

D. Contributions and redemptions of units – The value of units upon contribution to or redemption from a Fund isbased on the Fund’s unit value determined on that day. A unitholder’s ability to contribute to or redeem from eachFund occurs on a daily basis on a day BTC is open for business.

Unitholders may, at BTC’s discretion, contribute securities or other assets in lieu of cash (“in-kind contributions”) orredeem securities and/or units of underlying funds (“in-kind redemptions”) and will be charged any expenses and fees, asagreed, of the transfer. In-kind contributions and in-kind redemptions are priced in accordance with BlackRock’s globalvaluation policy and any expenses and fees, as agreed, of the transfer may be deducted from the contribution orredemption amount. For purposes of U.S. GAAP, these in-kind redemption transactions are treated as a sale of securitiesand the resulting gains and losses are recognized based on the market value of the securities on the date of the transfer.

E. Unitholders’ net assets – Each Fund’s unitholders have an undivided interest in the Fund’s net assets.Unitholders’ interests are represented by accounting entries in each Fund’s records as “units” and are notcertificated. Each Fund may issue an unlimited number of units, and units have no preferences as to conversion,transfer, dividend or redemption.

F. Income taxes – Each Fund complies with the requirements of the Federal and California tax authorities for exemptionfrom income taxes and, accordingly, no tax provision is required. BTC has analyzed tax laws and regulations and theirapplication to the Funds as of December 31, 2017, inclusive of the open tax return years, and does not believe there areany uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

G. Expenses – Expenses are accounted for on an accrual basis. Expenses directly related to a Fund are chargedto that Fund. Other operating expenses shared by several funds, including other funds managed by BTC, arepro-rated among those funds on the basis of relative net assets or other appropriate methods.

2. Related party transactions

BTC is the trustee of the Funds and provides investment management and fiduciary services for the Funds. BTCis a subsidiary of BlackRock, Inc.

For its services as trustee and investment manager of the Funds, BTC charges investment management fees, accrueddaily, based on the net assets of the Funds. The Funds listed below have investment management fees as follows:

Fund name

Annual management

fee

Equity Index Fund O 0.015%

LifePath® Index 2020 Fund O 0.070%









LifePath® Index Retirement Fund O 0.070%



The Funds may incur, directly or indirectly through their investment in underlying funds, operating expenses foradministration (including custody, fund accounting and related services including Form 5500 reporting), audit(including System and Organization Controls 1 Report review and other services), and other third-party expenses,including fees paid for proxy voting services, certain legal expenses, and shareholder servicing fees (paid at thedirection of the investing plan for services provided to the investing plans). BTC has, without recourse, agreed tobear all operating expenses in excess of a certain percent of the Funds’ respective net assets (“net operatingexpense ratio cap”). A Fund’s investment management fees and shareholder servicing fees are not included inthe operating expenses to which the net operating expense ratio cap applies. The effects of these expensearrangements, if any, have been reflected in the statement of operations as operating expenses borne by BTC.Net operating expense ratio caps in effect for the year ended December 31, 2017, were as follows:

Fund name

Net operating

expense ratio cap

Equity Index Fund O 0.01%










LifePath® Index Retirement Fund O 0.01%

3. Securities lending

A fund may earn securities lending income indirectly by its investment in underlying funds that lend securities. Thestatement of operations provides information on securities lending income earned indirectly by a fund. Securitieslending income earned by an underlying fund consists of borrower fees and/or earnings from the investment ofcash collateral posted by borrowers. A portion of the return from investment of cash collateral may be paid to theborrowers of the securities as a negotiated rebate of interest earned on the cash collateral. The remainingsecurities lending income is allocated between the underlying funds and BTC, the securities lending agent. BTCbears all operational costs with respect to securities lending transactions. Securities lending by underlying fundsinvolves exposure to certain risks, including cash collateral reinvestment risk.

4. Commitments and contingencies

In the normal course of business, each Fund enters into contracts that contain a variety of representations whichprovide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as thiswould involve future claims that may be made against the Funds that have not yet occurred. However, based onexperience, each Fund expects the risk of loss to be remote.

5. Principal risks

In the normal course of business, each Fund’s investment activities expose it to various types of risk associatedwith the financial instruments and markets in which it invests. The significant types of financial risks each Fund isexposed to include, but are not limited to, market risk and credit risk.



Market risk

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price,currency and interest rate movements. It represents the potential loss a fund may suffer through holding marketpositions in the face of market movements. Each Fund is exposed to market risk by its investment in underlyingfunds. The financial statements of the underlying funds should be read in conjunction with these financialstatements. The fair value of securities held by a fund may decline due to general market conditions, economictrends or events that are not specifically related to the issuers of the securities including local, regional or globalpolitical, social or economic instability or to factors that affect a particular industry or group of industries. Theextent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’sschedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that aprice change of a particular investment will have a material impact on the net assets of a fund. The investmentconcentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Credit risk

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction,including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling tomake timely interest and/or principal payments or to otherwise honor its obligations. BTC’s evaluation of thecreditworthiness of their counterparties may not prove sufficient and the absence of a regulated market tofacilitate settlement may increase the potential for losses by a fund. Financial assets, which potentially expose afund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due fromcounterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financialassets is approximated by its value recorded in the statement of assets and liabilities.

6. Ownership concentration

The following table shows the number of unitholders with interests in excess of 10% of the net assets of therespective fund as of December 31, 2017. Investment activities of such unitholders could have a material impacton the operations of such fund. Such unitholders may be other collective investment funds with diversifiedunitholders.

Fund name

Number of fund unitholders with

interests in excess of 10% Aggregated%

Equity Index Fund O 1 100.00%

LifePath® Index 2020 Fund O 5 90.89%









LifePath® Index Retirement Fund O 5 90.74%



7. Subsequent event

BTC has evaluated the impact of subsequent events on the Funds through March 16, 2018, the date the financialstatements were available to be issued, and has determined that there were no subsequent events requiringadjustment or disclosure in the financial statements.


Regulatory statement (unaudited)

BlackRock Institutional Trust Company, N.A.

Participation requirements. Participation in each Fund is available to accounts which meet the followingconditions:

� The account is (i) a retirement, pension profit sharing, stock bonus, or other employee benefit trust or custo-dial account that is exempt from Federal income taxation under Section 501(a) of the Internal RevenueCode of 1986, as amended from time to time (IRC) by reason of constituting part of a plan qualifying underSection 401(a) of the IRC, (ii) any eligible governmental plan trust or custodial account under Section 457(b)of the IRC that is exempt from Federal income taxation under Section 457(g) of the IRC, (iii) any gov-ernmental plan described in Section 401(a)(24) of the IRC that is not subject to Federal income taxation andis not funded by an annuity contract described in Section 403(b) of the IRC, (iv) a trust created under anemployees’ pension or profit sharing plan which is a Puerto Rican plan described in Section 1022(i)(1) ofERISA, (v) any common, collective, or commingled trust fund that consists solely of the assets of trusts andplans described herein and is exempt from Federal income taxation by reason of qualifying as a “group trust”under Revenue Ruling 81-100, (vi) a separate account maintained by an insurance company, the assets ofwhich are insulated from the claims of the insurance company’s general creditors, that consists solely ofassets of plans or trusts described herein, or (vii) any retirement income account described inSection 403(b)(9) of the IRC to the extent that the interest or participation therein is issued to a church, aconvention or association of churches, or an organization described in Section 414(e)(3)(A) of the IRCestablishing or maintaining the retirement income account or any trust established by any such entity inconnection with such retirement income account, that is not subject to Federal income taxation, or (viii) anyother plan, trust or custodial account, or other organization or entity the assets of which are permitted byRevenue Ruling 81-100 to be commingled in trust for investment purposes with the assets of other plans ortrusts as described herein with the resulting commingled trust being exempt from Federal income taxationunder Section 501(a) of the IRC by reason of qualifying as a “group trust”; provided, however, that theorganizational documents, maintenance, actions and activities of such plan or trust satisfy any applicableconditions of Revenue Ruling 81-100 and any other applicable legal requirements identified by BTC.

� The plan, trust or custodial account, or other organization or entity adopts documents establishing BTC’s col-lective funds.

� BlackRock Institutional Trust Company, N.A. has been appointed to hold assets of the account in any ca-pacity, including, but not limited to, as trustee, investment manager, managing agent, custodian or agent.

For additional details regarding participation requirements, see the Funds’ plan document.

Filing of annual report with Department of Labor. A plan administrator receiving this Annual Report may beeligible for a simplified reporting procedure described in Department of Labor Regulations §2520.103-3 for a planyear ending on or after the end of a Fund’s fiscal year. The fiscal year end for each Fund is December 31. Tosuch eligible plan administrators, BlackRock Institutional Trust Company, N.A. certifies that the statements ofassets and liabilities included in the Annual Report were filed with the Department of Labor on or before the dateupon which the annual report of such plans is required to be filed by the plan administrators in accordance withDepartment of Labor Regulation §2520.103-9. The “Employer Identification Number” of each Fund is as follows:

Fund name ID number

Equity Index Fund O 36-4723218

LifePath® Index 2020 Fund O 45-2849498



Regulatory statement (unaudited)

Fund name ID number








LifePath® Index Retirement Fund O 45-2859118

Regulatory requirement. Collective funds are authorized under the Office of the Comptroller of the Currency’sRegulation 9.18(a)(2) and are subject to other pertinent provisions of Regulation 9 as promulgated by the Office ofthe Comptroller of the Currency. In compliance with this Regulation, the trustee will provide detail of investmenttransactions upon request and without charge.


Audited Financial Statements · 2018-08-14 · Equity Index Fund O Schedule of investments December...

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Transcript of Audited Financial Statements · 2018-08-14 · Equity Index Fund O Schedule of investments December...