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BlackRock Enhanced Large Cap Core Fund, Inc.

Regulatory Filings Sep 28, 2010

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N-Q 1 cii.htm CII cii.htm - Produced by Pellegrini and Associates, Inc. | 134 Spring Street New York NY 10012 | (212) 925-5151 $$/page=

UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C.20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21506 Name of Fund: BlackRock Enhanced Capital and Income Fund, Inc. (CII) Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809 Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock Enhanced Capital and Income Fund, Inc., 55 East 52 nd Street, New York, NY 10055. Registrant’s telephone number, including area code: (800) 882-0052, Option 4 Date of fiscal year end: 10/31/2010 Date of reporting period: 07/31/2010 Item 1 – Schedule of Investments

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Schedule of Investments July 31, 2010 (Unaudited)

BlackRock Enhanced Capital and Income Fund, Inc. (CII) (Percentages shown are based on Net Assets)

Common Stocks Shares Value
Aerospace & Defense — 5.4%
Honeywell International, Inc. 316,900 $ 13,582,334
Northrop Grumman Corp. 182,200 10,684,208
Raytheon Co. 200,200 9,263,254
33,529,796
Capital Markets — 3.6%
Invesco Ltd. 654,000 12,779,160
Morgan Stanley 352,913 9,525,122
22,304,282
Chemicals — 2.8%
E.I. du Pont de Nemours & Co. 417,900 16,995,993
Commercial Banks — 1.4%
Wells Fargo & Co. 305,800 8,479,834
Communications Equipment — 0.8%
Nokia Oyj - ADR 489,800 4,657,998
Diversified Financial Services — 5.1%
Bank of America Corp. 517,600 7,267,104
Citigroup, Inc. (a) 2,396,500 9,825,650
JPMorgan Chase & Co. (b) 361,439 14,558,763
31,651,517
Diversified Telecommunication Services — 8.1%
AT&T Inc. (b) 490,200 12,715,788
Frontier Communications Corp. 135,670 1,036,522
Qwest Communications
International, Inc. 3,544,101 20,059,612
Verizon Communications, Inc. 565,200 16,424,712
50,236,634
Electric Utilities — 2.6%
NextEra Energy, Inc. 121,744 6,367,211
The Southern Co. 272,200 9,616,826
15,984,037
Electrical Equipment — 2.2%
Emerson Electric Co. 268,300 13,291,582
Energy Equipment & Services — 3.4%
Ensco International Plc - ADR 211,600 8,846,996
Halliburton Co. 410,489 12,265,411
21,112,407
Food & Staples Retailing — 1.0%
Walgreen Co. 219,000 6,252,450
Food Products — 7.3%
General Mills, Inc. 327,442 11,198,517
Kraft Foods, Inc. (b) 637,100 18,609,691
Unilever NV - ADR 523,000 15,423,270
45,231,478
Household Products — 3.1%
Kimberly-Clark Corp. 297,900 19,101,348
IT Services — 2.1%
International Business Machines Corp. 100,253 12,872,485
Industrial Conglomerates — 1.0%
General Electric Co. 367,200 5,919,264
Common Stocks Shares Value
Insurance — 7.2%
ACE Ltd. 243,900 $ 12,946,212
MetLife, Inc. 302,325 12,715,789
The Travelers Cos., Inc. 372,830 18,809,273
44,471,274
Media — 4.8%
Comcast Corp., Special Class A 725,300 13,389,038
Time Warner, Inc. 512,500 16,123,250
29,512,288
Metals & Mining — 1.8%
Nucor Corp. 288,900 11,307,546
Multi-Utilities — 1.2%
Dominion Resources, Inc. 169,200 7,104,708
Oil, Gas & Consumable Fuels — 6.3%
Chevron Corp. (b) 239,900 18,282,779
Exxon Mobil Corp. (b) 244,500 14,591,760
Occidental Petroleum Corp. 77,200 6,016,196
38,890,735
Pharmaceuticals — 13.0%
Bristol-Myers Squibb Co. 777,100 19,365,332
Eli Lilly & Co. 456,300 16,244,280
Johnson & Johnson 148,200 8,608,938
Merck & Co., Inc. 506,600 17,457,436
Pfizer, Inc. 1,214,600 18,219,000
79,894,986
Semiconductors & Semiconductor
Equipment — 9.3%
Analog Devices, Inc. (b) 477,800 14,195,438
Intel Corp. 710,878 14,644,087
LSI Corp. (a) 2,628,100 10,591,243
Maxim Integrated Products, Inc. 1,006,000 17,635,180
57,065,948
Software — 1.8%
Microsoft Corp. 419,900 10,837,619
Specialty Retail — 3.5%
Home Depot, Inc. 391,300 11,155,963
Limited Brands, Inc. 418,100 10,720,084
21,876,047
Total Common Stocks 608,582,256
Total Long-Term Investments
(Cost – $674,538,857) – 98.8% 608,582,256
Short-Term Securities
BlackRock Liquidity Funds,
TempFund, Institutional Class
0.23% (c)(d) 11,693,096 11,693,096
Portfolio Abbreviation
ADR American Depositary Receipts

BLACKROCK ENHANCED CAPITAL AND INCOME FUND, INC.

JULY 31, 2010

1

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Schedule of Investments (continued)

BlackRock Enhanced Capital and Income Fund, Inc. (CII) (Percentages shown are based on Net Assets)

Short-Term Securities Shares Value
Total Short-Term Securities
(Cost – $11,693,096) – 1.9% $ 11,693,096
Total Investments Before Outstanding
Options Written (Cost – $686,231,953*) – 100.7% 620,275,352
Options Written Contracts
Exchange-Traded Call Options Written — (1.0)%
Analog Devices, Inc.:
Strike Price $30, expires
8/20/10 1,575 (126,000)
Strike Price $32.50, expires
8/20/10 100 (1,250)
Bank of America Corp.:
Strike Price $14, expires
8/20/10 1,020 (42,840)
Strike Price $14, expires
9/17/10 910 (63,700)
Strike Price $15, expires
9/17/10 910 (26,390)
Bristol-Myers Squibb Co.,
Strike Price $26,
expires 8/20/10 2,915 (29,150)
Citigroup, Inc.:
Strike Price $4, expires 8/20/10 1,100 (18,150)
Strike Price $4.20, expires
9/17/10 2,500 (30,523)
Comcast Corp., Special Class A,
Strike Price $18, expires 8/20/10 2,540 (196,850)
Dominion Resources, Inc., Strike
Price $40, expires 8/20/10 570 (121,125)
E.I. du Pont de Nemours & Co.:
Strike Price $37, expires
8/20/10 1,570 (584,825)
Strike Price $38, expires
8/20/10 1,570 (438,815)
Eli Lilly & Co., Strike Price $35,
expires 8/20/10 2,500 (206,250)
Emerson Electric Co., Strike Price
$47, expires 8/20/10 940 (277,300)
Ensco International Plc, Strike Price
$42, expires 8/20/10 1,165 (157,275)
Frontier Communications Corp.,
Strike Price $7.50, expires
8/20/10 200 (5,500)
General Electric Co., Strike Price
$16, expires 8/20/10 2,750 (129,250)
Halliburton Co., Strike Price $29,
expires 8/20/10 425 (66,938)
Home Depot, Inc.:
Strike Price $28, expires
8/20/10 970 (132,890)
Strike Price $33, expires
8/20/10 1,000 (3,000)
Strike Price $29, expires
9/17/10 970 (81,480)
Honeywell International, Inc., Strike
Price $41, expires 8/20/10 610 (137,555)
Intel Corp., Strike Price $22,
expires 8/20/10 1,500 (12,750)
Options Written Contracts Value
Exchange-Traded Call Options Written (continued)
International Business Machines
Corp., Strike Price $130,
expires 9/17/10 270 $ (62,370)
Invesco Ltd., Strike Price $20,
expires 9/17/10 250 (20,625)
Johnson & Johnson, Strike Price
$60, expires 8/20/10 1,100 (19,800)
Kimberly-Clark Corp.:
Strike Price $62.50, expires
8/20/10 1,500 (292,500)
Strike Price $65, expires
8/20/10 140 (5,950)
Kraft Foods, Inc., Strike Price $29,
expires 8/20/10 4,190 (280,730)
Limited Brands, Inc.:
Strike Price $25, expires
8/20/10 1,270 (171,450)
Strike Price $26, expires
8/20/10 1,030 (82,400)
Maxim Integrated Products, Inc.:
Strike Price $17.50, expires
8/20/10 2,000 (100,000)
Strike Price $19, expires
9/17/10 1,155 (17,325)
Merck & Co., Inc.:
Strike Price $36, expires
8/20/10 2,650 (47,700)
Strike Price $37, expires
8/20/10 125 (812)
Microsoft Corp., Strike Price $27,
expires 8/20/10 600 (7,200)
Morgan Stanley:
Strike Price $26, expires
8/20/10 625 (84,688)
Strike Price $26, expires
9/17/10 625 (118,125)
Nokia Oyj:
Strike Price $9, expires 8/20/10 1,465 (94,493)
Strike Price $10, expires
8/20/10 250 (3,250)
Northrop Grumman Corp.,
Strike Price $60, expires 8/20/10 1,360 (88,400)
Nucor Corp., Strike Price $40,
expires 8/20/10 1,000 (66,500)
Pfizer, Inc., Strike Price $15,
expires 8/20/10 4,550 (163,800)
Raytheon Co., Strike Price $49,
expires 8/20/10 1,500 (14,250)
The Southern Co., Strike Price $36,
expires 9/17/10 1,149 (51,705)
Time Warner, Inc.:
Strike Price $30, expires
8/20/10 2,700 (513,000)
Strike Price $33, expires
9/17/10 100 (6,000)
Unilever NV, Strike Price $30,
expires 8/20/10 250 (11,250)
Verizon Communications, Inc., Strike
Price $27, expires 8/20/10 3,110 (656,210)
Walgreen Co., Strike Price $30,
expires 8/20/10 750 (11,250)
Wells Fargo & Co., Strike Price $28,
expires 8/20/10 1,500 (96,000)

2 BLACKROCK ENHANCED CAPITAL AND INCOME FUND, INC.

JULY 31, 2010

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Schedule of Investments (continued)

BlackRock Enhanced Capital and Income Fund, Inc. (CII) (Percentages shown are based on Net Assets)

Options Written Contracts Value
Total Exchange-Traded Call Options Written $ (5,977,587)
Over-the-Counter Call Options Written — (0.5)%
ACE Ltd.:
Strike Price $51.65, expires
8/20/10, Broker UBS AG 170 (33,886)
Strike Price $53.73, expires
9/17/10, Broker Credit Suisse
International 685 (68,793)
AT&T Inc.:
Strike Price $24.75, expires
8/20/10, Broker Deutsche
Bank AG 980 (116,620)
Strike Price $26, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 650 (16,140)
Strike Price $25.20, expires
9/17/10, Broker Goldman
Sachs Bank USA 540 (51,063)
Strike Price $26.25, expires
9/17/10, Broker Goldman
Sachs Bank USA 530 (22,355)
Bristol-Myers Squibb Co., Strike Price
$26, expires 9/17/10, Broker
Goldman Sachs Bank USA 1,360 (43,267)
Chevron Corp., Strike Price $73.50,
expires 8/20/10, Broker Morgan
Stanley Capital Services, Inc. 1,800 (538,655)
Citigroup, Inc.:
Strike Price $4.07, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 4,580 (51,255)
Strike Price $4.10, expires
8/20/10, Broker UBS AG 2,500 (28,143)
Strike Price $4.25, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 2,500 (2,925)
Dominion Resources, Inc., Strike
Price $41.60, expires 8/20/10,
Broker UBS AG 555 (46,112)
Exxon Mobil Corp.:
Strike Price $63, expires
8/20/10, Broker Credit Suisse
International 1,830 (6,709)
Frontier Communications Corp.,
Strike Price $7.52, expires
9/17/10, Broker Credit Suisse
International 545 (9,458)
General Mills, Inc., Strike Price
$36.48, expires 9/17/10, Broker
JPMorgan Chase Bank NA 2,460 (33,318)
Halliburton Co., Strike Price $29.86,
expires 8/20/10, Broker UBS AG 1,830 (224,689)
Honeywell International, Inc., Strike
Price $43.11, expires 8/20/10,
Broker UBS AG 1,135 (29,008)
Intel Corp., Strike Price $21.54,
expires 9/17/10, Broker Morgan
Stanley Capital Services, Inc. 2,400 (71,040)
International Business Machines
Corp., Strike Price $125, expires
8/20/10, Broker Citibank NA 280 (101,454)
Options Written Contracts Value
Over-the-Counter Call Options Written (continued)
Invesco Ltd., Strike Price $19.12,
expires 8/20/10, Broker
JPMorgan Chase Bank NA 2,040 $ (178,814)
JPMorgan Chase & Co., Strike Price
$40, expires 8/20/10,
Broker UBS AG 1,270 (98,279)
Kraft Foods, Inc., Strike Price
$29.66, expires 8/20/10,
Broker UBS AG 590 (14,129)
LSI Corp.:
Strike Price $4.99, expires
8/20/10, Broker Credit Suisse
International 4,800 (13,819)
Strike Price $5.26, expires
8/20/10, Broker UBS AG 2,500 (28)
Maxim Integrated Products, Inc.:
Strike Price $18.12, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 1,350 (20,654)
Strike Price $18.54, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 1,030 (22,518)
MetLife, Inc., Strike Price $40.87,
expires 8/20/10, Broker
JPMorgan Chase Bank NA 1,060 (221,918)
Microsoft Corp.:
Strike Price $24.77, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 450 (50,100)
Strike Price $26, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 2,100 (79,926)
NextEra Energy, Inc., Strike Price
$52.13, expires 9/17/10,
Broker UBS AG 860 (87,095)
Occidental Petroleum Corp., Strike
Price $82, expires 8/20/10,
Broker Jeffries & Co., Inc. 425 (19,370)
Pfizer, Inc., Strike Price $15.11,
expires 8/20/10, Broker Morgan
Stanley Capital Services, Inc. 4,550 (180,703)
Qwest Communications International Inc.:
Strike Price $5.33, expires
8/20/10, Broker Credit Suisse
International 6,080 (245,900)
Strike Price $5.36, expires
8/20/10, Broker UBS AG 6,000 (182,502)
Strike Price $5.41, expires
8/20/10, Broker Credit Suisse
International 1,230 (31,853)
Strike Price $5.40, expires
9/17/10, Broker Deutsche
Bank AG 6,180 (177,539)
The Southern Co., Strike Price
$35.34, expires 8/20/10, Broker
JPMorgan Chase Bank NA 877 (34,819)
The Travelers Cos., Inc.:
Strike Price $51.25, expires
8/20/10, Broker Goldman
Sachs Bank USA 960 (45,704)
Strike Price $50, expires
8/20/10, Broker Morgan
Stanley Capital Services, Inc. 345 (22,904)

BLACKROCK ENHANCED CAPITAL AND INCOME FUND, INC.

JULY 31, 2010

3

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Schedule of Investments (concluded)

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

(Percentages shown are based on Net Assets)

Options Written Contracts Value
Over-the-Counter Call Options Written (concluded)
Unilever NV:
Strike Price $29, expires
8/20/10, Broker JPMorgan
Chase Bank NA 1,050 $ (97,182)
Strike Price $31.19, expires
9/17/10, Broker Dominion
Resources 530 (7,963)
Total Over-the-Counter Call Options Written (3,328,609)
Total Options Written
(Premiums Received – $8,531,562) – (1.5)% (9,306,196)
Total Investments, Net of Outstanding
Options Written– 99.2% 610,969,156
Other Assets Less Liabilities – 0.8% 5,226,159
Net Assets – 100.0% $ 616,195,315

____________________________________ * The cost and unrealized appreciation (depreciation) of investments as of July 31, 2010, as computed for federal income tax purposes, were as

follows:
Aggregate cost $ 711,748,456
Gross unrealized appreciation $ 2,059,999
Gross unrealized depreciation (93,533,103)
Net unrealized depreciation $ (91,473,104)

(a) Non-income producing security. (b) All or a portion of security has been pledged as collateral in connection with open options written. (c) Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment - Company Act of 1940, as amended, are as follows:

Shares — Held at Shares — Held at
October 31, Net July 31,
Affiliate 2009 Activity 2010 Income
BlackRock Liquidity
Funds,TempFund,
Institutional Class 24,567,455 (12,874,359) 11,693,096 $19,145
(d) Represents the current yield as of report date.

• For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub- classifications for reporting ease.

•Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivatives, which are as follows: •Level 1 — price quotations in active markets/exchanges for identical assets and liabilities •Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the

assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

•Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its annual report. The following table summarizes the inputs used as of July 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:

Valuation Inputs Level 1 Level 2 Level 3 Total
Assets:
Investments in Securities:
Long-Term Investments:
Common Stock $608,582,256 — — $ 608,582,256
Short-Term
Securities 11,693,096 — 11,693,096
Total $620,275,352 — — $ 620,275,352

1 See above Schedule of Investments for values in each industry.

Derivative Financial Instruments 2 — Valuation Inputs Level 1 Level 3
Liabilities:
Equity contracts $ (5,977,587) $(3,328,609) -— $ (9,306,196)

2 Other financial instruments are options, which are shown at value.

4 BLACKROCK ENHANCED CAPITAL AND INCOME FUND, INC.

JULY 31, 2010

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Item 2 – Controls and Procedures

2(a) – The registrant's principal executive and principal financial officers or persons performing similar functions have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended. 2(b) – There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3 – Exhibits Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BlackRock Enhanced Capital and Income Fund, Inc.

By: /s/ Anne F. Ackerley Anne F. Ackerley Chief Executive Officer of BlackRock Enhanced Capital and Income Fund, Inc.

Date: September 27, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Anne F. Ackerley Anne F. Ackerley Chief Executive Officer (principal executive officer) of BlackRock Enhanced Capital and Income Fund, Inc.

Date: September 27, 2010

By: /s/ Neal J. Andrews Neal J. Andrews Chief Financial Officer (principal financial officer) of BlackRock Enhanced Capital and Income Fund, Inc.

Date: September 27, 2010

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