# iShares Silver Trust: Form 10-Q for the period ended Sep 30, 2017

- Company: [iShares Silver Trust](/companies/slv.md) (CIK 1330568)
- Form: 10-Q
- Filed: 2017-11-07
- Accepted by EDGAR: Nov 7, 2017, 14:18 ET
- Period: 2017-09-30
- Accession: 0001437749-17-018514
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1330568/000143774917018514/slv20170930_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1330568/000143774917018514/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2017-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2017-07-01 to 2017-09-30 | −$7.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2017-01-01 to 2017-09-30 | −$21.5m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2017-07-01 to 2017-09-30 | $138.5m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2017-01-01 to 2017-09-30 | $216.5m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2017-07-01 to 2017-09-30 | $0.39 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2017-01-01 to 2017-09-30 | $0.61 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 9 months, 2017-01-01 to 2017-09-30 | $0 | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2017-09-30 | $0 | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Shares outstanding | at 2017-09-30 | 345,800,000 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 9,553 characters.

*This information should be read in conjunction with the financial statements and notes to financial statements included in Item 1 of Part I of this Form 10-Q. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “may,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. Except as required by applicable disclosure laws, neither the Sponsor, nor any other person assumes responsibility for the accuracy or completeness of any forward-looking statements. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor’s expectations or predictions.*

### Introduction

The iShares Silver Trust (the “Trust”) is a grantor trust formed under the laws of the State of New York. The Trust does not have any officers, directors, or employees, and is administered by The Bank of New York Mellon (the “Trustee”) acting as trustee pursuant to the Second Amended and Restated Depositary Trust Agreement (the “Trust Agreement”) between the Trustee and iShares Delaware Trust Sponsor LLC, the sponsor of the Trust (the “Sponsor”). The Trust issues units of beneficial interest (“Shares”) representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist primarily of silver bullion held by a custodian as an agent of the Trust responsible only to the Trustee.

The Trust is a passive investment vehicle and seeks to reflect generally the performance of the price of silver. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. The Trust does not engage in any activities designed to obtain a profit from, or ameliorate losses caused by, changes in the price of silver.

The Trust issues and redeems Shares only in exchange for silver, only in aggregations of 50,000 Shares (“a Basket”) or integral multiples thereof, and only in transactions with registered broker-dealers that have previously entered into an agreement with the Sponsor and the Trustee governing the terms and conditions of such issuance (such broker-dealers, the “Authorized Participants”). A list of the current Authorized Participants is available from the Sponsor or the Trustee.

Shares of the Trust trade on NYSE Arca, Inc. under the ticker symbol SLV.

### Valuation of Silver; Computation of Net Asset Value

On each business day, as soon as practicable after 4:00 p.m. (New York time), the Trustee evaluates the silver held by the Trust and determines the net asset value of the Trust and net asset value per Share (“NAV”). For all periods included in this report, the Trustee values the silver held by the Trust using the price per ounce of silver determined by the CME Group Inc. at approximately 12:00 p.m. (London time) and announced by Thomson Reuters shortly thereafter on each day that the London silver market is open for business (“LBMA Silver Price”). If there is no announced LBMA Silver Price on a business day, the Trustee is authorized to use the most recently announced LBMA Silver Price unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate as a basis for evaluation. Having valued the silver held by the Trust, the Trustee adds other assets of the Trust then subtracts all accrued fees, expenses and other liabilities of the Trust from the fair value of the silver and other assets held by the Trust. The result is the net asset value of the Trust. The Trustee computes NAV by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made. Effective October 2, 2017, the administrator for the LBMA Silver Price was changed from CME Group Inc. and Thomas Reuters to ICE Benchmark Administration Limited. The valuation methodology remains the same.

### Liquidity

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. In exchange for a fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s fee. The Trust’s only source of liquidity is its sales of silver.

### Critical Accounting Policies

The financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. Below, the Trust describes the valuation of silver bullion, a critical accounting policy that the Trust believes is important to understanding its results of operations and financial position. In addition, please refer to Note 2 to the financial statements included in this report for further discussion of the Trust’s accounting policies.

### Valuation of Silver Bullion

There are other indicators of the value of silver bullion that are available that could be different than that chosen by the Trust. The LBMA Silver Price is used by the Trust because it is commonly used by the U.S. silver market as an indicator of the value of silver and is permitted to be used under the Trust Agreement. The use of an indicator of the value of silver bullion other than the LBMA Silver Price could result in materially different fair value pricing of the silver held by the Trust, and as such, could result in different cost or market adjustments or in different redemption value adjustments of the outstanding redeemable capital Shares.

### Results of Operations

#### The Quarter Ended September 30, 2017

The Trust’s net asset value fell from $5,590,930,271 at June 30, 2017 to $5,506,779,094 at September 30, 2017, a 1.51% decrease. The decrease in the Trust’s net asset value resulted primarily from a decrease in the number of outstanding Shares, which fell from 358,950,000 Shares at June 30, 2017 to 345,800,000 Shares at September 30, 2017, a consequence of 12,050,000 Shares (241 Baskets) being created and 25,200,000 Shares (504 Baskets) being redeemed during the quarter. The decrease in the Trust’s net asset value was partially offset by an increase in the LBMA Silver Price, which rose 2.37% from $16.47 at June 30, 2017 to $16.86 at September 30, 2017.

The 2.18% increase in the Trust’s NAV from $15.58 at June 30, 2017 to $15.92 at September 30, 2017 is directly related to the 2.37% increase in the price of silver.

The Trust’s NAV increased slightly less than the price of silver on a percentage basis due to the Sponsor’s fees, which were $7,129,498 for the quarter, or 0.13% of the Trust’s average weighted assets of $5,656,125,449 during the quarter. The NAV of $17.21 on September 8, 2017 was the highest during the quarter, compared with a low during the quarter of $14.39 on July 10, 2017.

Net increase in net assets resulting from operations for the quarter ended September 30, 2017 was $138,466,960, resulting primarily from an unrealized gain on investment in silver bullion of $178,415,473, offset by a net investment loss of $7,129,498, a net realized loss of $596,586 from silver bullion sold to pay expenses and a net realized loss of $32,222,429 on silver bullion distributed for the redemption of Shares. Other than the Sponsor’s fees of $7,129,498, the Trust had no expenses during the quarter.

#### The Nine Months Ended September 30, 2017

The Trust’s net asset value fell from $5,541,130,643 at December 31, 2016 to $5,506,779,094 at September 30, 2017, a 0.62% decrease. The decrease in the Trust’s net asset value resulted primarily from a decrease in the number of outstanding Shares, which fell from 359,900,000 Shares at December 31, 2016 to 345,800,000 Shares at September 30, 2017, a consequence of 41,100,000 Shares (822 Baskets) being created and 55,200,000 Shares (1,104 Baskets) being redeemed during the period. The decrease in the Trust’s net asset value was partially offset by an increase in the LBMA Silver Price, which rose 3.82% from $16.24 at December 31, 2016 to $16.86 at September 30, 2017.

The 3.38% increase in the Trust’s NAV from $15.40 at December 31, 2016 to $15.92 at September 30, 2017 is directly related to the 3.82% increase in the price of silver.

The Trust’s NAV increased slightly less than the price of silver on a percentage basis due to the Sponsor’s fees, which were $21,523,569 for the period, or 0.37% of the Trust’s average weighted assets of $5,755,216,065 during the period. The NAV of $17.57 on April 13, 2017 was the highest during the period, compared with a low during the period of $14.39 on July 10, 2017.

Net increase in net assets resulting from operations for the nine months ended September 30, 2017 was $216,479,005, resulting primarily from an unrealized gain on investment in silver bullion of $298,932,277, offset by a net investment loss of $21,523,569, a net realized loss of $1,537,774 from silver bullion sold to pay expenses and a net realized loss of $59,391,929 on silver bullion distributed for the redemption of Shares. Other than the Sponsor’s fees of $21,523,569, the Trust had no expenses during the period.

## Controls and procedures

As filed, 1,570 characters.

The duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, with the participation of the Trustee, have evaluated the effectiveness of the Trust’s disclosure controls and procedures, and have concluded that the disclosure controls and procedures of the Trust were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, as appropriate to allow timely decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.

There were no changes in the Trust’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.

## Risk factors

As filed, 248 characters.

There have been no material changes to the Risk Factors last reported under Part I, Item 1A of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission on February 24, 2017.

Filed Nov 7, 2017.
Source: SEC EDGAR, the filing index for accession 0001437749-17-018514. Last ingested by Listed: Oct 24, 2026, 15:09 ET. No prices; not investment advice.