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: |
December 31, 2010
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001-32018 |
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PPLUS TRUST SERIES TWC-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
3RD FLOOR STRUCTURED CREDIT TRADING
NEW YORK, NEW YORK
(Address of principal
executive offices)
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10036
(Zip Code) |
Registrants telephone number, including area code: (212) 449-1000
Securities registered pursuant to Section 12(b) of the Act:
PPLUS Trust Certificates Series TWC-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 PPLUS Trust Series TWC-1, please
refer to Time Warner Inc.s (Commission file number
001-15062) 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 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, NE,
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, NE,
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
underlying securities guarantors and the underlying
securities issuer have filed electronically with the
SEC.
Although we have no reason to believe the information
concerning the underlying guarantees and underlying
securities or the underlying securities guarantors
and the underlying securities issuer contained in the
underlying securities guarantors Exchange Act
reports is 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 underlying
securities guarantors and underlying securities
issuer (including, without limitation, no
investigation as to their respective financial
condition or creditworthiness) or of the underlying
securities has been made. You should obtain and
evaluate the same information concerning the
underlying securities issuer and the underlying
securities guarantors as you would obtain and
evaluate if your investment were directly in the
underlying securities, underlying guarantees or in
other securities issued by the underlying securities
issuer or the underlying securities guarantors. There
can be no assurance that events affecting the
underlying securities and underlying guarantees or
the underlying securities issuer and underlying
securities guarantors have not occurred or have not
yet been publicly disclosed which would affect the
accuracy or completeness of the publicly available
documents described above.
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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 guarantors and underlying
securities issuer may file in their Exchange Act
reports as referenced in Item 1 above.
IF THE UNDERLYING SECURITIES ARE REDEEMED PRIOR TO
THEIR MATURITY DATE OR IF ANY CALL WARRANTS ARE
EXERCISED PRIOR TO THE STATED MATURITY DATE, YOU MAY
NOT BE ABLE TO REINVEST YOUR REDEMPTION OR CALL
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 the underlying securities issuer
exercises its option to redeem the underlying
securities, and |
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whether the call warrant holders exercise their
optional rights to purchase outstanding trust
certificates. |
The underlying securities issuer has the right to
redeem the underlying securities in whole or in part
at its option. Because the underlying securities
issuer has the right to redeem the underlying
securities early, we cannot assure you that the trust
will be able to hold the underlying securities until
their maturity date.
Although the call warrant holders are not obligated
to exercise the call warrants, the yield you will
realize on your trust certificates depends on whether
the call warrant holders exercise their call warrants
to purchase the trust certificates.
Prevailing interest rates at the time of an early
redemption or a call exercise may be lower than the
yield on your trust certificates. Therefore, you may
be unable to realize a comparable yield upon
reinvesting the funds you receive from an early
redemption or exercise of any call warrants. In
addition, if the prevailing market value of the trust
certificates exceeds the redemption price or call
exercise price paid to you upon a redemption of the
underlying securities or the exercise of a call, you
will not be able to realize such excess.
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YOU MAY NOT BE PAID IF THE ASSETS OF THE TRUST ARE
INSUFFICIENT
Currently, the trust has no significant assets other
than the underlying securities and the underlying
guarantees. If the underlying securities and the
underlying guarantees are insufficient to make
payments or distributions on the trust certificates,
no other assets will be available for payment of the
deficiency.
The underlying securities issuer is organized as a
holding company that owns subsidiary companies.
According to the underlying securities prospectus,
the underlying securities issuer derives its
operating income and cash flow primarily from its
subsidiaries and investments, which poses two
principal risks:
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the underlying securities issuers right to
participate as an equity holder in any
distribution of assets of any of its
subsidiaries upon the subsidiarys liquidation
or otherwise, and thus the ability of its
security holders, including the trust, to
benefit from the distribution, will be subject
to prior claims of the subsidiarys creditors,
except to the extent that any claims the
underlying securities issuer may have as a
creditor of the subsidiary are recognized, and |
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the underlying securities issuers ability to
service its indebtedness and other obligations
is dependent primarily upon the earnings and
cash flow of its subsidiaries and the
distribution or other payment to it of such
earnings and cash flow. |
YOU MAY NOT RECOVER THE WHOLE OF THE PRESENT VALUE OR
STATED AMOUNT (IF APPLICABLE) OF YOUR TRUST
CERTIFICATES IF THE TRUST DISPOSES OF THE UNDERLYING
SECURITIES ON A DEFAULT BY THE UNDERLYING SECURITIES
ISSUER OR IN THE EVENT THE UNDERLYING PARENT
GUARANTOR CEASES FILING EXCHANGE ACT REPORTS
If the underlying securities issuer defaults on its
obligations under the underlying securities or the
underlying parent guarantor ceases to file Exchange
Act reports or ceases to be in compliance with Rule
3-10 of Regulation S-X under the Securities Act, then
the trust will either distribute the underlying
securities to the trust certificateholders or dispose
of them and distribute the proceeds to the trust
certificateholders. Your recovery in either of those
events may be limited by two factors:
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if a default occurs, the market value of the
underlying securities may be adversely affected
and the proceeds of their disposition may be
lower than the present value, or aggregate
stated amount (if applicable) of the trust
certificates; and |
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in either event, any distribution of funds or
underlying securities by the trust to the trust
certificateholders will be done in accordance
with the allocation ratio as described in the
applicable prospectus supplement relating to the
trust certificates. The funds or aggregate
principal amount of underlying securities you
receive on that distribution may be less than
the present value, or aggregate stated amount
(if applicable) of your trust certificates. |
THE TRUSTEE WILL NOT MANAGE THE UNDERLYING
SECURITIES
Except as described below, the trust will not dispose
of any underlying securities, even if an event occurs
that adversely affects the value of the underlying
securities or that adversely affects the underlying
securities issuer or the underlying securities
guarantors. As provided in the applicable trust
agreement, the trust will dispose of the underlying
securities only if:
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there is a payment default on any underlying
securities, |
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there is another type of default that
accelerates the maturity of the underlying
securities, or |
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the underlying parent guarantor ceases to file
Exchange Act reports or ceases to be in
compliance with Rule 3-10 of Regulation S-X
under the Securities Act. |
Under the first circumstance listed above, the
trustee must sell the underlying securities on behalf
of the trust, even if adverse market conditions
exist. The trustee has no discretion to do otherwise.
If adverse market conditions do exist at the time of
the trustees sale of the underlying securities, you
may incur greater losses than if the trust continued
to hold the underlying securities.
THE TRUST CERTIFICATES ARE SUBJECT TO THE
CREDITWORTHINESS OF THE UNDERLYING SECURITIES
ISSUER
The trust certificates represent interests in
obligations of the underlying securities issuer. In
particular, the trust certificates will be subject to
all the risks associated with directly investing in
the underlying securities issuers unsecured
unsubordinated debt obligations. Neither the
underlying indenture nor the underlying securities
place a limitation on the amount of indebtedness that
may be incurred by the underlying securities issuer.
THE TRUST CERTIFICATES ARE SUBJECT TO THE
CREDITWORTHINESS OF THE UNDERLYING SECURITIES
GUARANTORS
The trust certificates represent interests in
obligations of the underlying securities guarantors.
In particular, the trust certificates will be subject
to all the risks associated with directly investing
in the underlying securities guarantors unsecured
debt obligations. The maximum aggregate amount of the
underlying guarantees by the underlying securities
guarantors shall not exceed the maximum amount that
can be guaranteed by each, respectively, without
rendering such guarantee voidable under applicable
law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of
creditors generally.
THE PAYMENTS OWED TO THE TRUST CERTIFICATEHOLDERS ARE
UNSECURED OBLIGATIONS
In a liquidation, holders of the underlying
securities, including the trust, will be paid only
after holders of secured obligations of the
underlying securities issuer and the underlying
securities guarantors. According to the underlying
securities prospectus, the underlying securities are
unsecured and rank equally with all other unsecured
and unsubordinated indebtedness of the underlying
securities issuer.
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THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moodys and/or S&P assigned
ratings to the trust certificates equivalent to the
ratings of the underlying securities as of the date
of the applicable prospectus supplement.
Any rating issued with respect to the trust
certificates is not a recommendation to purchase,
sell or hold a security. Ratings do not comment on
the market price of the trust certificates or their
suitability for a particular investor. We cannot
assure you that these 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 the underlying securities)
merit. A revision or withdrawal of a rating may
adversely affect the market price of the trust
certificates.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. (REMOVED AND RESERVED)
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
The Trust Certificates issued by PPLUS Trust Series
TWC-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.
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ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Not Applicable.
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.
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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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Security Ownership Of Certain Beneficial Owners:
None. |
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Security Ownership Of Management: Not
Applicable. |
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Changes In Control: None. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.
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 28, 2011, 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 year
ended December 31, 2010. |
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99.1. | |
Trustees Annual Compliance Certificate
dated March 4, 2011. |
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99.2. |
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Report of PricewaterhouseCoopers LLP,
Independent Registered Public Accounting
Firm, dated March 21, 2011, Registrants
Assertion on Compliance with PPLUS Minimum
Servicing Standards dated March 21, 2011
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
March 2, 2011, The Bank of New York Mellons
Assertion on Compliance with PPLUS Minimum
Servicing Standards dated March 2,
2011 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 28, 2011 |
By: |
/s/ John Marciano |
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Name: |
John Marciano |
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Title: |
Vice President |
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