Regulatory Filings • Mar 25, 2014
Preview not available for this file type.
Download Source FileN-Q 1 d671616dnq.htm BLACKROCK ENHANCED CAPITAL & INCOME FUND, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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: John M. Perlowski, Chief Executive Officer, BlackRock Enhanced Capital and Income Fund, Inc., 55 East 52 nd Street, New York, NY 10055
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 10/31/2014
Date of reporting period: 01/31/2014
Item 1 Schedule of Investments
| Schedule of Investments January 31, 2014 (Unaudited) |
|---|
| (Percentages shown are based on Net Assets) |
| Common Stocks | Value | |
|---|---|---|
| Aerospace & Defense 0.3% | ||
| Triumph Group, Inc. | 31,300 | $ 2,141,546 |
| Air Freight & Logistics 0.0% | ||
| Royal Mail PLC (a) | 11,200 | 110,102 |
| Airlines 5.6% | ||
| Japan Airlines Co. Ltd. | 582,000 | 29,393,364 |
| United Continental Holdings, Inc. (a)(b) | 177,800 | 8,150,352 |
| 37,543,716 | ||
| Automobiles 4.4% | ||
| General Motors Co. (a)(b) | 691,700 | 24,956,536 |
| Renault SA | 48,400 | 4,204,488 |
| 29,161,024 | ||
| Beverages 0.7% | ||
| PepsiCo, Inc. (b) | 54,500 | 4,379,620 |
| Building Products 2.2% | ||
| Owens Corning (a)(b) | 392,300 | 14,966,245 |
| Capital Markets 0.4% | ||
| Legg Mason, Inc. (b) | 60,200 | 2,549,470 |
| Chemicals 4.3% | ||
| CF Industries Holdings, Inc. (b) | 126,300 | 29,157,618 |
| Commercial Banks 1.1% | ||
| U.S. Bancorp. | 177,600 | 7,056,048 |
| Communications Equipment 2.5% | ||
| QUALCOMM, Inc. (b) | 228,200 | 16,937,004 |
| Computers & Peripherals 2.9% | ||
| Apple Inc. (b) | 38,900 | 19,473,340 |
| Consumer Finance 1.7% | ||
| Discover Financial Services | 151,300 | 8,117,245 |
| Springleaf Holdings, Inc. (a) | 134,300 | 3,217,828 |
| 11,335,073 | ||
| Diversified Financial Services 6.0% | ||
| Atlas Mara Co-Nvest Ltd. (a) | 200,000 | 2,250,000 |
| Berkshire Hathaway, Inc., Class B (a)(b) | 87,600 | 9,776,160 |
| Citigroup, Inc. (b) | 221,930 | 10,526,140 |
| JPMorgan Chase & Co. (b) | 315,700 | 17,477,152 |
| 40,029,452 | ||
| Diversified Telecommunication Services 0.2% | ||
| AT&T Inc. (b) | 48,400 | 1,612,688 |
| Energy Equipment & Services 0.8% | ||
| Noble Corp. PLC (b) | 168,500 | 5,228,555 |
| Food & Staples Retailing 3.5% | ||
| Metro AG | 283,500 | 11,655,607 |
| Wal-Mart Stores, Inc. (b) | 154,900 | 11,567,932 |
| 23,223,539 | ||
| Food Products 0.3% | ||
| Unilever NV | 51,300 | 1,915,542 |
| Common Stocks | Shares | |
|---|---|---|
| Health Care Providers & Services 4.5% | ||
| Express Scripts Holding Co. (a)(b) | 79,000 | $ 5,900,510 |
| UnitedHealth Group, Inc. (b) | 337,800 | 24,416,184 |
| 30,316,694 | ||
| Household Durables 0.4% | ||
| Tempur Sealy International, Inc. (a) | 60,200 | 2,967,258 |
| Insurance 9.3% | ||
| The Allstate Corp. | 182,500 | 9,344,000 |
| American International Group, Inc. (b) | 756,800 | 36,296,128 |
| Fidelity National Financial, Inc., Class A (b) | 523,300 | 16,504,882 |
| 62,145,010 | ||
| Internet & Catalog Retail 2.2% | ||
| Expedia, Inc. (b) | 226,300 | 14,704,974 |
| Internet Software & Services 5.2% | ||
| eBay, Inc. (a)(b) | 221,400 | 11,778,480 |
| Google, Inc., Class A (a)(b) | 19,501 | 23,030,096 |
| 34,808,576 | ||
| IT Services 4.6% | ||
| Leidos Holdings, Inc. (b) | 383,500 | 17,387,890 |
| Science Applications International Corp. | 223,692 | 8,278,841 |
| Visa, Inc., Class A (b) | 22,700 | 4,890,261 |
| 30,556,992 | ||
| Leisure Equipment & Products 0.3% | ||
| Brunswick Corp. (b) | 52,700 | 2,184,942 |
| Media 3.4% | ||
| Comcast Corp., Special Class A (b) | 298,500 | 15,626,475 |
| News Corp. Class A (a) | 134,100 | 2,140,236 |
| Nexstar Broadcasting Group, Inc., Class A (b) | 38,400 | 1,845,120 |
| The Walt Disney Co. (b) | 45,600 | 3,311,016 |
| 22,922,847 | ||
| Metals & Mining 0.8% | ||
| Freeport-McMoRan Copper & Gold, Inc. (b) | 166,300 | 5,389,783 |
| Oil, Gas & Consumable Fuels 8.2% | ||
| HollyFrontier Corp. (b) | 283,360 | 13,119,568 |
| Linn Energy LLC (b) | 105,700 | 3,469,074 |
| Marathon Petroleum Corp. (b) | 68,000 | 5,919,400 |
| PBF Energy, Inc., Class A (b) | 389,000 | 10,086,770 |
| Suncor Energy, Inc. | 691,500 | 22,701,945 |
| 55,296,757 | ||
| Pharmaceuticals 8.4% | ||
| Eli Lilly & Co. (b) | 127,100 | 6,864,671 |
| Johnson & Johnson | 159,600 | 14,119,812 |
| Merck & Co., Inc. (b) | 198,800 | 10,530,436 |
| Novartis AG ADR (b) | 43,300 | 3,423,731 |
| Pfizer, Inc. (b) | 697,800 | 21,213,120 |
| 56,151,770 |
Portfolio Abbreviations
| To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the
following list: | American Depositary Receipt | KRW | Korean Won |
| --- | --- | --- | --- |
| EUR | Euro | USD | US Dollar |
| JPY | Japanese Yen | | |
JANUARY 31, 2014 1
| Schedule of Investments (continued) |
|---|
| (Percentages shown are based on Net Assets) |
| Common Stocks | Value | |
|---|---|---|
| Real Estate Investment Trusts (REITs) 1.1% | ||
| Annaly Capital Management, Inc. | 497,000 | $ 5,352,690 |
| Cole Real Estate Investment, Inc. | 143,100 | 2,167,965 |
| 7,520,655 | ||
| Semiconductors & Semiconductor Equipment 3.6% | ||
| Samsung Electronics Co. Ltd. | 26,800 | 23,911,804 |
| Software 1.5% | ||
| Activision Blizzard, Inc. | 295,800 | 5,067,054 |
| Oracle Corp. (b) | 141,500 | 5,221,350 |
| 10,288,404 | ||
| Wireless Telecommunication Services 5.0% | ||
| Vodafone Group PLC ADR (b) | 898,900 | 33,313,234 |
| Total Common Stocks 95.4% | 639,300,282 | |
| Warrants (c) | ||
| Diversified Financial Services 0.0% | ||
| Atlas Mara Co-Nvest Ltd., Expires 12/17/17 (a) | 200,000 | 114,000 |
| Total Long-Term Investments | ||
| (Cost $580,112,587) 95.4% | 639,414,282 |
| Short-Term Securities — BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (d)(e) | Value — $ 19,742,290 | |
|---|---|---|
| Total Short-Term Securities (Cost $19,742,290) 3.0% | 19,742,290 | |
| Total Investments Before Options | ||
| Written (Cost $599,854,877*) 98.4% | 659,156,572 | |
| Options Written | ||
| (Premiums Received $7,359,606) (0.8)% | (5,138,495 | ) |
| Total Investments Net of Options Written 97.6% | 654,018,077 | |
| Other Assets Less Liabilities 2.4% | 16,326,211 | |
| Net Assets 100.0% | $ 670,344,288 |
Notes to Schedule of Investments
| Tax cost | $ | |
|---|---|---|
| Gross unrealized appreciation | $ 70,024,611 | |
| Gross unrealized depreciation | (43,900,273 | ) |
| Net unrealized appreciation | $ 26,124,338 |
(a) Non-income producing security.
(b) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(c) Warrants entitle the Trust to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date of the warrants, if any.
(d) Represents the current yield as of report date.
(e) Investments in issuers considered to be an affiliate of the Trust during the period ended January 31, 2014, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
| Affiliate — BlackRock Liquidity Funds, TempFund, Institutional Class | 20,482,532 | (740,242 | ) | 19,742,290 | Income — $ 2,781 |
|---|---|---|---|---|---|
For Trust compliance purposes, the Trusts industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.
Foreign currency exchange contracts as of January 31, 2014 were as follows:
| Currency Purchased — USD | 238,151 | JPY | 24,343,814 | Counterparty — Canadian Imperial Bank of Commerce | 2/03/14 | Unrealized Depreciation — $ (120 | ) |
|---|---|---|---|---|---|---|---|
2 JANUARY 31, 2014
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
Exchange-traded options written as of January 31, 2014 were as follows:
| Description — Apple Inc. | Call | USD | 555.00 | 2/07/14 | 106 | Market Value — $ (1,802 | ) |
|---|---|---|---|---|---|---|---|
| Citigroup, Inc. | Call | USD | 53.50 | 2/07/14 | 240 | (480 | ) |
| General Motors Co. | Call | USD | 40.00 | 2/07/14 | 1,810 | (15,385 | ) |
| Pfizer, Inc. | Call | USD | 31.50 | 2/14/14 | 361 | (2,888 | ) |
| Berkshire Hathaway, Inc., Class B | Call | USD | 116.25 | 2/22/14 | 264 | (6,314 | ) |
| Leidos Holdings, Inc. | Call | USD | 46.50 | 2/22/14 | 750 | (81,417 | ) |
| American International Group, Inc. | Call | USD | 52.50 | 2/24/14 | 1,000 | (25,000 | ) |
| Brunswick Corp. | Call | USD | 47.00 | 2/24/14 | 149 | (2,980 | ) |
| CF Industries Holdings, Inc. | Call | USD | 240.00 | 2/24/14 | 382 | (104,668 | ) |
| CF Industries Holdings, Inc. | Call | USD | 255.00 | 2/24/14 | 312 | (17,628 | ) |
| Citigroup, Inc. | Call | USD | 57.50 | 2/24/14 | 254 | (508 | ) |
| eBay, Inc. | Call | USD | 55.00 | 2/24/14 | 530 | (31,005 | ) |
| eBay, Inc. | Call | USD | 57.50 | 2/24/14 | 687 | (12,023 | ) |
| Expedia, Inc. | Call | USD | 75.00 | 2/24/14 | 375 | (41,250 | ) |
| Expedia, Inc. | Call | USD | 80.00 | 2/24/14 | 375 | (15,938 | ) |
| Express Scripts Holding Co. | Call | USD | 70.00 | 2/24/14 | 434 | (232,190 | ) |
| Fidelity National Financial, Inc., Class A | Call | USD | 32.00 | 2/24/14 | 515 | (33,475 | ) |
| Fidelity National Financial, Inc., Class A | Call | USD | 33.00 | 2/24/14 | 1,171 | (35,130 | ) |
| Freeport-McMoRan Copper & Gold, Inc. | Call | USD | 37.00 | 2/24/14 | 457 | (2,056 | ) |
| Freeport-McMoRan Copper & Gold, Inc. | Call | USD | 38.00 | 2/24/14 | 457 | (1,600 | ) |
| Google, Inc., Class A | Call | USD | 1,165.00 | 2/24/14 | 93 | (282,255 | ) |
| HollyFrontier Corp. | Call | USD | 50.00 | 2/24/14 | 750 | (16,875 | ) |
| Leidos Holdings, Inc. | Call | USD | 50.00 | 2/24/14 | 600 | (9,000 | ) |
| Linn Energy LLC | Call | USD | 33.00 | 2/24/14 | 246 | (13,530 | ) |
| Merck & Co., Inc. | Call | USD | 50.00 | 2/24/14 | 407 | (131,258 | ) |
| Nexstar Broadcasting Group, Inc., Class A | Call | USD | 50.00 | 2/24/14 | 211 | (20,045 | ) |
| Noble Corp. PLC | Call | USD | 38.00 | 2/24/14 | 463 | (2,084 | ) |
| Novartis AG ADR | Call | USD | 80.00 | 2/24/14 | 118 | (10,620 | ) |
| Oracle Corp. | Call | USD | 38.00 | 2/24/14 | 179 | (4,475 | ) |
| Owens Corning | Call | USD | 40.00 | 2/24/14 | 1,164 | (75,660 | ) |
| PBF Energy, Inc., Class A | Call | USD | 35.00 | 2/24/14 | 1,500 | (37,500 | ) |
| PepsiCo, Inc. | Call | USD | 82.50 | 2/24/14 | 299 | (16,894 | ) |
| Pfizer, Inc. | Call | USD | 32.00 | 2/24/14 | 723 | (5,061 | ) |
| QUALCOMM, Inc. | Call | USD | 75.00 | 2/24/14 | 626 | (50,706 | ) |
| United Continental Holdings, Inc. | Call | USD | 49.00 | 2/24/14 | 460 | (26,910 | ) |
| UnitedHealth Group, Inc. | Call | USD | 75.00 | 2/24/14 | 328 | (16,892 | ) |
| Visa, Inc., Class A | Call | USD | 240.00 | 2/24/14 | 32 | (688 | ) |
| Vodafone Group PLC ADR | Call | USD | 40.00 | 2/24/14 | 1,626 | (13,821 | ) |
| Wal-Mart Stores, Inc. | Call | USD | 77.50 | 2/24/14 | 426 | (11,715 | ) |
| Wal-Mart Stores, Inc. | Call | USD | 82.50 | 2/24/14 | 425 | (1,275 | ) |
| American International Group, Inc. | Call | USD | 50.00 | 2/28/14 | 1,331 | (107,811 | ) |
| AT&T Inc. | Call | USD | 34.00 | 2/28/14 | 484 | (14,520 | ) |
| Oracle Corp. | Call | USD | 38.00 | 2/28/14 | 600 | (20,400 | ) |
| UnitedHealth Group, Inc. | Call | USD | 73.50 | 2/28/14 | 899 | (112,375 | ) |
| American International Group, Inc. | Call | USD | 50.00 | 3/24/14 | 1,331 | (149,072 | ) |
| American International Group, Inc. | Call | USD | 52.50 | 3/24/14 | 500 | (25,750 | ) |
| Berkshire Hathaway, Inc., Class B | Call | USD | 120.00 | 3/24/14 | 218 | (8,502 | ) |
| Eli Lilly & Co. | Call | USD | 55.00 | 3/24/14 | 344 | (28,896 | ) |
| Fidelity National Financial, Inc., Class A | Call | USD | 33.00 | 3/24/14 | 254 | (15,875 | ) |
| HollyFrontier Corp. | Call | USD | 50.00 | 3/24/14 | 750 | (60,000 | ) |
| JPMorgan Chase & Co. | Call | USD | 60.00 | 3/24/14 | 212 | (7,632 | ) |
| Legg Mason, Inc. | Call | USD | 45.00 | 3/24/14 | 331 | (18,205 | ) |
JANUARY 31, 2014 3
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
Exchange-traded options written as of January 31, 2014 were as follows: (concluded)
| Description — Linn Energy LLC | Call | USD | 33.00 | 3/24/14 | 335 | Market Value — $ (29,312 | ) |
|---|---|---|---|---|---|---|---|
| Merck & Co., Inc. | Call | USD | 52.50 | 3/24/14 | 502 | (80,822 | ) |
| Noble Corp. PLC | Call | USD | 38.00 | 3/24/14 | 463 | (4,398 | ) |
| Novartis AG ADR | Call | USD | 80.00 | 3/24/14 | 120 | (13,200 | ) |
| Owens Corning | Call | USD | 42.00 | 3/24/14 | 990 | (56,925 | ) |
| PBF Energy, Inc., Class A | Call | USD | 30.00 | 3/24/14 | 200 | (6,500 | ) |
| Pfizer, Inc. | Call | USD | 32.00 | 3/24/14 | 361 | (7,220 | ) |
| UnitedHealth Group, Inc. | Call | USD | 75.00 | 3/24/14 | 1,140 | (128,820 | ) |
| Visa, Inc., Class A | Call | USD | 240.00 | 3/24/14 | 113 | (12,938 | ) |
| The Walt Disney Co. | Call | USD | 75.00 | 3/24/14 | 250 | (36,125 | ) |
| Total | $ (2,356,299 | ) |
Over-the-counter options written as of January 31, 2014 were as follows:
| Description — Marathon Petroleum Corp. | Counterparty — Credit Suisse International | Call | USD | 91.48 | 2/03/14 | 37,400 | Market Value — $ (1,507 | ) |
|---|---|---|---|---|---|---|---|---|
| Eli Lilly & Co. | UBS AG | Call | USD | 50.13 | 2/04/14 | 35,500 | (137,762 | ) |
| General Motors Co. | Citibank N.A. | Call | USD | 41.91 | 2/04/14 | 18,000 | | |
| Pfizer, Inc. | Morgan Stanley & Co. International PLC | Call | USD | 30.48 | 2/04/14 | 50,400 | (5,900 | ) |
| Springleaf Holdings, Inc. | Deutsche Bank AG | Call | USD | 24.84 | 2/04/14 | 25,000 | (1,867 | ) |
| U.S. Bancorp. | Morgan Stanley & Co. International PLC | Call | USD | 39.74 | 2/04/14 | 97,600 | (23,642 | ) |
| United Continental Holdings, Inc. | Morgan Stanley & Co. International PLC | Call | USD | 37.94 | 2/07/14 | 52,000 | (410,860 | ) |
| Expedia, Inc. | Deutsche Bank AG | Call | USD | 68.94 | 2/10/14 | 23,500 | (32,849 | ) |
| Expedia, Inc. | Goldman Sachs International | Call | USD | 63.00 | 2/10/14 | 59,900 | (248,833 | ) |
| Fidelity National Financial, Inc., Class A | UBS AG | Call | USD | 29.35 | 2/10/14 | 65,500 | (143,951 | ) |
| Suncor Energy, Inc. | Bank of Montreal | Call | USD | 35.26 | 2/10/14 | 202,500 | (4,117 | ) |
| Triumph Group, Inc. | Credit Suisse International | Call | USD | 79.40 | 2/10/14 | 17,200 | | |
| Vodafone Group PLC ADR | UBS AG | Call | USD | 39.10 | 2/11/14 | 162,600 | (7,080 | ) |
| Cole Real Estate Investment, Inc. | Citibank N.A. | Call | USD | 14.04 | 2/12/14 | 40,000 | (44,280 | ) |
| Cole Real Estate Investment, Inc. | Morgan Stanley & Co. International PLC | Call | USD | 14.00 | 2/12/14 | 18,700 | (21,505 | ) |
| Samsung Electronics Co. Ltd. | Bank of America N.A. | Call | KRW | 1,079,325.00 | 2/12/14 | 5,100 | (644 | ) |
| Renault SA | Credit Suisse International | Call | EUR | 66.83 | 2/14/14 | 26,600 | (48,085 | ) |
| Suncor Energy, Inc. | Deutsche Bank AG | Call | USD | 34.66 | 2/19/14 | 177,800 | (24,908 | ) |
| Unilever NV | Citibank N.A. | Call | USD | 40.04 | 2/19/14 | 51,300 | (4,008 | ) |
| Metro AG | Deutsche Bank AG | Call | EUR | 35.55 | 2/20/14 | 56,800 | (9,500 | ) |
| Samsung Electronics Co. Ltd. | Bank of America N.A. | Call | KRW | 1,079,325.00 | 2/26/14 | 5,100 | (7,721 | ) |
| Science Applications International Corp. | Morgan Stanley & Co. International PLC | Call | USD | 38.59 | 2/26/14 | 50,000 | (35,103 | ) |
| Springleaf Holdings, Inc. | Bank of America N.A. | Call | USD | 25.78 | 2/26/14 | 48,800 | (13,695 | ) |
| The Allstate Corp. | Morgan Stanley & Co. International PLC | Call | USD | 53.79 | 2/28/14 | 50,600 | (20,438 | ) |
| News Corp. Class A | Deutsche Bank AG | Call | USD | 17.54 | 2/28/14 | 73,700 | (7,509 | ) |
| Pfizer, Inc. | Credit Suisse International | Call | USD | 31.29 | 2/28/14 | 188,700 | (37,610 | ) |
| Comcast Corp., Special Class A | Citibank N.A. | Call | USD | 52.94 | 3/05/14 | 68,500 | (74,024 | ) |
| Samsung Electronics Co. Ltd. | Bank of America N.A. | Call | KRW | 952,577.50 | 3/05/14 | 4,500 | (140,038 | ) |
| JPMorgan Chase & Co. | Citibank N.A. | Call | USD | 56.98 | 3/07/14 | 152,700 | (129,795 | ) |
| Activision Blizzard, Inc. | Deutsche Bank AG | Call | USD | 17.46 | 3/10/14 | 163,700 | (89,200 | ) |
| Discover Financial Services | Deutsche Bank AG | Call | USD | 55.17 | 3/10/14 | 83,200 | (74,474 | ) |
| Leidos Holdings, Inc. | Deutsche Bank AG | Call | USD | 45.65 | 3/10/14 | 75,000 | (111,251 | ) |
| Comcast Corp., Special Class A | Morgan Stanley & Co. International PLC | Call | USD | 50.69 | 3/13/14 | 68,700 | (178,317 | ) |
| Metro AG | Morgan Stanley & Co. International PLC | Call | EUR | 35.92 | 3/18/14 | 99,100 | (25,988 | ) |
| Japan Airlines Co. Ltd. | Goldman Sachs International | Call | JPY | 5,085.03 | 3/26/14 | 160,100 | (288,019 | ) |
4 JANUARY 31, 2014
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
Over-the-counter options written as of January 31, 2014 were as follows: (concluded)
| Description — Johnson & Johnson | Counterparty — Morgan Stanley & Co. International PLC | Call | USD | 91.83 | 3/27/14 | 47,900 | Market Value — $ (28,404 | ) |
|---|---|---|---|---|---|---|---|---|
| The Allstate Corp. | Morgan Stanley & Co. International PLC | Call | USD | 52.32 | 3/28/14 | 49,700 | (51,415 | ) |
| Vodafone Group PLC ADR | Deutsche Bank AG | Call | USD | 37.79 | 4/02/14 | 169,100 | (166,208 | ) |
| Japan Airlines Co. Ltd. | UBS AG | Call | JPY | 5,111.51 | 12/12/14 | 160,000 | (131,689 | ) |
| Total | $ (2,782,196 | ) |
Fair Value Measurements Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:
Level 1 unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Trust has the ability to access
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 Trusts own assumptions used in determining the fair value of investments and derivative financial instruments)
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trusts policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trusts policy regarding valuation of investments and derivative financial instruments, please refer to the Trusts most recent financial statements as contained in its annual report.
The following tables summarize the Trusts investments and derivative financial instruments categorized in the disclosure hierarchy as of January 31, 2014:
| Level 1 | Level 2 | Total | ||
|---|---|---|---|---|
| Assets: | ||||
| Investments: | ||||
| Long-Term Investments: | ||||
| Common Stocks: | ||||
| Aerospace & Defense | $ 2,141,546 | | | $ 2,141,546 |
| Air Freight & Logistics | 110,102 | | | 110,102 |
| Airlines | 37,543,716 | | | 37,543,716 |
| Automobiles | 24,956,536 | $ 4,204,488 | | 29,161,024 |
| Beverages | 4,379,620 | | | 4,379,620 |
| Building Products | 14,966,245 | | | 14,966,245 |
| Capital Markets | 2,549,470 | | | 2,549,470 |
| Chemicals | 29,157,618 | | | 29,157,618 |
| Commercial Banks | 7,056,048 | | | 7,056,048 |
| Communications Equipment | 16,937,004 | | | 16,937,004 |
| Computers & Peripherals | 19,473,340 | | | 19,473,340 |
| Consumer Finance | 11,335,073 | | | 11,335,073 |
| Diversified Financial Services | 40,029,452 | | | 40,029,452 |
| Diversified Telecommunication Services | 1,612,688 | | | 1,612,688 |
| Energy Equipment & Services | 5,228,555 | | | 5,228,555 |
| Food & Staples Retailing | 11,567,932 | 11,655,607 | | 23,223,539 |
| Food Products | 1,915,542 | | | 1,915,542 |
| Health Care Providers & Services | 30,316,694 | | | 30,316,694 |
| Household Durables | 2,967,258 | | | 2,967,258 |
| Insurance | 62,145,010 | | | 62,145,010 |
JANUARY 31, 2014 5
Schedule of Investments (concluded) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
| Level 1 | Level 2 | Total | |||||
|---|---|---|---|---|---|---|---|
| Assets: (concluded) | |||||||
| Investments: (concluded) | |||||||
| Long-Term Investments: (concluded) | |||||||
| Common Stocks: (concluded) | |||||||
| Internet & Catalog Retail | $ 14,704,974 | | | $ 14,704,974 | |||
| Internet Software & Services | 34,808,576 | | | 34,808,576 | |||
| IT Services | 30,556,992 | | | 30,556,992 | |||
| Leisure Equipment & Products | 2,184,942 | | | 2,184,942 | |||
| Media | 22,922,847 | | | 22,922,847 | |||
| Metals & Mining | 5,389,783 | | | 5,389,783 | |||
| Oil, Gas & Consumable Fuels | 55,296,757 | | | 55,296,757 | |||
| Pharmaceuticals | 56,151,770 | | | 56,151,770 | |||
| Real Estate Investment Trusts (REITs) | 7,520,655 | | | 7,520,655 | |||
| Semiconductors & Semiconductor Equipment | 23,911,804 | | | 23,911,804 | |||
| Software | 10,288,404 | | | 10,288,404 | |||
| Wireless Telecommunication Services | 33,313,234 | | | 33,313,234 | |||
| Warrants | 114,000 | | | 114,000 | |||
| Short-Term Securities | 19,742,290 | | | 19,742,290 | |||
| Total | $ 643,296,477 | $ 15,860,095 | | $ 659,156,572 | |||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Derivative Financial Instruments 1 | |||||||
| Liabilities: | |||||||
| Equity contracts | $ (2,268,567 | ) | $ (2,869,928 | ) | | $ (5,138,495 | ) |
| Foreign currency exchange contracts | (120 | ) | | | (120 | ) | |
| Total | $ (2,268,687 | ) | $ (2,869,928 | ) | | $ (5,138,615 | ) |
| 1 Derivative | |||||||
| financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are value at the unrealized appreciation/depreciation on the instrument and options written are shown at value. | |||||||
| The carrying amount for certain of the Trusts assets and/or liabilities approximates fair value for financial reporting purposes. As of January 31, 2014, | |||||||
| such assets and/or liabilities are categorized within the disclosure hierarchy as follows: | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets: | |||||||
| Foreign currency at value | $ 4,824 | | | $ 4,824 | |||
| Cash pledged as collateral for options written | 200,000 | | | 200,000 | |||
| Liabilities: | |||||||
| Bank overdraft | | $ (59,261 | ) | | (59,261 | ) | |
| Total | $ 204,824 | $ (59,261 | ) | | $ 145,563 |
There were no transfers between Levels during the period ended January 31, 2014.
6 JANUARY 31, 2014
| Item 2 | Controls and Procedures |
|---|---|
| 2(a) | The registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants 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 registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrants |
| last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrants 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/ John M. Perlowski |
| John M. Perlowski | |
| Chief Executive Officer (principal executive officer) of | |
| BlackRock Enhanced Capital and Income Fund, Inc. | |
| Date: March 25, 2014 |
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: |
|---|
| John M. Perlowski |
| Chief Executive Officer (principal executive officer) of |
| BlackRock Enhanced Capital and Income Fund, Inc. |
| Date: March 25, 2014 |
| By: |
|---|
| Neal J. Andrews |
| Chief Financial Officer (principal financial officer) of |
| BlackRock Enhanced Capital and Income Fund, Inc. |
| Date: March 25, 2014 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.