Regulatory Filings • May 22, 2015
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Download Source FileN-Q 1 d901625dnq.htm BLACKROCK ENHANCED CAPITAL & INCOME FUND, INC. 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: 12/31/2015
Date of reporting period: 03/31/2015
Item 1 Schedule of Investments
| Schedule of Investments March 31, 2015 (Unaudited) |
|---|
| (Percentages shown are based on Net Assets) |
| Common Stocks | Value | |
|---|---|---|
| Aerospace & Defense 1.2% | ||
| Honeywell International, Inc. (a) | 10,200 | $ 1,063,962 |
| Raytheon Co. (a) | 66,761 | 7,293,639 |
| 8,357,601 | ||
| Air Freight & Logistics 1.1% | ||
| FedEx Corp. (a) | 47,751 | 7,900,403 |
| Airlines 1.7% | ||
| Southwest Airlines Co. | 110,045 | 4,874,994 |
| United Continental Holdings, Inc. (a)(b) | 110,455 | 7,428,099 |
| 12,303,093 | ||
| Auto Components 0.5% | ||
| Lear Corp. (a) | 34,800 | 3,856,536 |
| Banks 11.7% | ||
| Bank of America Corp. (a) | 1,110,488 | 17,090,410 |
| Citigroup, Inc. (a)(c) | 299,387 | 15,424,418 |
| JPMorgan Chase & Co. (a) | 329,165 | 19,940,816 |
| SunTrust Banks, Inc. (a) | 225,820 | 9,278,944 |
| U.S. Bancorp. (a) | 397,915 | 17,376,948 |
| Wells Fargo & Co. (a) | 62,026 | 3,374,214 |
| 82,485,750 | ||
| Beverages 2.7% | ||
| Dr Pepper Snapple Group, Inc. (a) | 145,155 | 11,391,764 |
| Molson Coors Brewing Co., Class B | 101,670 | 7,569,331 |
| 18,961,095 | ||
| Biotechnology 1.9% | ||
| Amgen, Inc. (a) | 82,780 | 13,232,383 |
| Capital Markets 1.2% | ||
| Atlas Mara Co-Nvest Ltd. (b) | 75,047 | 525,329 |
| The Goldman Sachs Group, Inc. (a) | 40,323 | 7,579,514 |
| 8,104,843 | ||
| Chemicals 0.3% | ||
| The Dow Chemical Co. (a) | 48,902 | 2,346,318 |
| Communications Equipment 3.2% | ||
| Brocade Communications Systems, Inc. (a) | 497,701 | 5,905,222 |
| Cisco Systems, Inc. (a) | 416,222 | 11,456,511 |
| QUALCOMM, Inc. (a) | 70,500 | 4,888,470 |
| 22,250,203 | ||
| Consumer Finance 2.4% | ||
| Discover Financial Services (a)(c) | 203,323 | 11,457,251 |
| SLM Corp. | 619,946 | 5,753,099 |
| 17,210,350 | ||
| Containers & Packaging 0.7% | ||
| Packaging Corp. of America | 64,543 | 5,046,617 |
| Electronic Equipment, Instruments & Components 0.5% | ||
| Zebra Technologies Corp., Class A (a)(b) | 39,321 | 3,567,005 |
| Energy Equipment & Services 2.3% | ||
| Atwood Oceanics, Inc. (a) | 73,135 | 2,055,825 |
| Common Stocks | Value | |
|---|---|---|
| Energy Equipment & Services (concluded) | ||
| Halliburton Co. (a) | 30,167 | $ 1,323,728 |
| Schlumberger Ltd. (a) | 130,999 | 10,930,557 |
| Weatherford International PLC (a)(b) | 175,445 | 2,157,974 |
| 16,468,084 | ||
| Food & Staples Retailing 4.1% | ||
| CVS Health Corp. (a)(c) | 219,787 | 22,684,216 |
| The Kroger Co. (a) | 10,144 | 777,639 |
| Wal-Mart Stores, Inc. (a) | 64,434 | 5,299,697 |
| 28,761,552 | ||
| Food Products 0.4% | ||
| Pilgrims Pride Corp. (a)(d) | 46,778 | 1,056,715 |
| Tyson Foods, Inc., Class A (a) | 50,226 | 1,923,656 |
| 2,980,371 | ||
| Health Care Equipment & Supplies 0.1% | ||
| Medtronic PLC (a) | 9,440 | 736,226 |
| Health Care Providers & Services 14.4% | ||
| Aetna, Inc. (a)(c) | 147,208 | 15,682,068 |
| Centene Corp. (a)(b) | 176,400 | 12,469,716 |
| Cigna Corp. (a) | 141,300 | 18,289,872 |
| Express Scripts Holding Co. (a)(b) | 78,700 | 6,828,799 |
| Humana, Inc. (a) | 5,318 | 946,710 |
| Laboratory Corp. of America Holdings (a)(b) | 66,089 | 8,333,162 |
| McKesson Corp. (a) | 42,111 | 9,525,508 |
| UnitedHealth Group, Inc. (a) | 172,920 | 20,454,707 |
| Universal Health Services, Inc., Class B (a) | 73,090 | 8,603,424 |
| 101,133,966 | ||
| Hotels, Restaurants & Leisure 1.7% | ||
| Carnival Corp. (a) | 170,068 | 8,136,053 |
| Las Vegas Sands Corp. (a) | 63,060 | 3,470,822 |
| 11,606,875 | ||
| Industrial Conglomerates 2.5% | ||
| 3M Co. (a) | 105,549 | 17,410,308 |
| Insurance 4.7% | ||
| The Allstate Corp. | 112,630 | 8,015,877 |
| American International Group, Inc. (a) | 289,695 | 15,872,389 |
| The Travelers Cos., Inc. (a) | 81,748 | 8,839,411 |
| 32,727,677 | ||
| Internet & Catalog Retail 0.5% | ||
| The Priceline Group, Inc. (a)(b) | 2,784 | 3,240,994 |
| Internet Software & Services 3.9% | ||
| Facebook, Inc., Class A (a)(b) | 118,811 | 9,768,046 |
| Google, Inc., Class A (a)(b) | 15,622 | 8,665,523 |
| Google, Inc., Class C (a)(b) | 15,996 | 8,765,808 |
| 27,199,377 | ||
| IT Services 3.1% | ||
| Alliance Data Systems Corp. (a)(b) | 4,628 | 1,371,045 |
| Amdocs Ltd. | 91,591 | 4,982,550 |
| Portfolio Abbreviations — ADR | American Depositary Receipt | JPY | Japanese Yen |
|---|---|---|---|
| EUR | Euro | KRW | Korean Won |
MARCH 31, 2015 1
| Schedule of Investments (continued) |
|---|
| (Percentages shown are based on Net Assets) |
| Common Stocks | Value | |
|---|---|---|
| IT Services (concluded) | ||
| Cognizant Technology Solutions Corp., Class A (a)(b) | 54,534 | $ 3,402,376 |
| DST Systems, Inc. (a) | 13,536 | 1,498,571 |
| MasterCard, Inc., Class A (a) | 40,453 | 3,494,735 |
| ServiceSource International, Inc. (b) | 918,920 | 2,848,652 |
| Total System Services, Inc. | 103,151 | 3,935,211 |
| 21,533,140 | ||
| Machinery 0.7% | ||
| Parker-Hannifin Corp. (a) | 43,525 | 5,169,899 |
| Media 3.1% | ||
| Comcast Corp., Class A (a) | 335,805 | 18,962,908 |
| Omnicom Group, Inc. (a) | 38,563 | 3,007,143 |
| 21,970,051 | ||
| Multiline Retail 0.7% | ||
| Macys, Inc. | 76,358 | 4,956,398 |
| Multi-Utilities 0.4% | ||
| Public Service Enterprise Group, Inc. | 60,411 | 2,532,429 |
| Oil, Gas & Consumable Fuels 4.3% | ||
| BP PLC ADR (a)(c) | 200,430 | 7,838,817 |
| Exxon Mobil Corp. (a) | 26,826 | 2,280,210 |
| Hess Corp. (a) | 68,409 | 4,642,919 |
| Marathon Petroleum Corp. (a) | 32,522 | 3,329,928 |
| PBF Energy, Inc., Class A | 52,486 | 1,780,325 |
| Suncor Energy, Inc. (a) | 299,745 | 8,767,541 |
| Tesoro Corp. (a) | 21,244 | 1,939,365 |
| 30,579,105 | ||
| Paper & Forest Products 0.7% | ||
| Domtar Corp. | 98,685 | 4,561,221 |
| Pharmaceuticals 4.4% | ||
| Astrazeneca PLC ADR (a) | 103,068 | 7,052,943 |
| Johnson & Johnson (a) | 23,783 | 2,392,570 |
| Merck & Co., Inc. | 4,075 | 234,231 |
| Pfizer, Inc. (a) | 21,481 | 747,324 |
| Shire PLC ADR | 28,175 | 6,741,996 |
| Teva Pharmaceutical Industries Ltd. ADR (a) | 226,610 | 14,117,803 |
| 31,286,867 | ||
| Road & Rail 0.9% | ||
| Norfolk Southern Corp. (a) | 43,328 | 4,459,318 |
| Union Pacific Corp. (a) | 17,952 | 1,944,381 |
| 6,403,699 | ||
| Semiconductors & Semiconductor Equipment 4.1% | ||
| Intel Corp. (a) | 433,755 | 13,563,519 |
| Micron Technology, Inc. (a)(b) | 457,900 | 12,422,827 |
| NVIDIA Corp. (a) | 141,500 | 2,960,887 |
| 28,947,233 | ||
| Software 2.1% | ||
| Microsoft Corp. (a) | 223,005 | 9,066,268 |
| Oracle Corp. (a) | 136,525 | 5,891,054 |
| 14,957,322 |
| Common Stocks | Shares | Value | |
|---|---|---|---|
| Specialty Retail 5.0% | |||
| The Home Depot, Inc. (a) | 97,749 | $ 11,105,264 | |
| Lowes Cos., Inc. (a) | 248,449 | 18,482,121 | |
| Ross Stores, Inc. | 55,295 | 5,825,881 | |
| 35,413,266 | |||
| Technology Hardware, Storage & Peripherals 5.4% | |||
| Apple, Inc. (a) | 80,127 | 9,970,203 | |
| EMC Corp. (a) | 359,272 | 9,182,992 | |
| Hewlett-Packard Co. (a) | 222,589 | 6,935,873 | |
| Western Digital Corp. (a) | 132,710 | 12,077,937 | |
| 38,167,005 | |||
| Textiles, Apparel & Luxury Goods 0.6% | |||
| Deckers Outdoor Corp. (a)(b) | 23,274 | 1,695,976 | |
| Fossil Group, Inc. (a)(b) | 31,095 | 2,563,783 | |
| 4,259,759 | |||
| Investment Companies | |||
| Utilities Select Sector SPDR Fund | 24,000 | 1,066,320 | |
| Total Investment Companies 0.2% | 1,066,320 | ||
| Warrants (e) | |||
| Capital Markets 0.0% | |||
| Atlas Mara Co-Nvest Ltd., Expires 12/17/17 | 180,000 | 90,000 | |
| Total Long-Term | |||
| Investments (Cost $683,507,650) 99.4% | 699,781,341 | ||
| Short-Term Securities | |||
| BlackRock Liquidity Funds, TempFund, Institutional Class, 0.06% (f)(g) | 5,833,475 | 5,833,475 | |
| Beneficial Interest (000) | |||
| BlackRock Liquidity Series, LLC Money Market Series, 0.22% (f)(g)(h) | $ 211 | 211,200 | |
| Total Short-Term | |||
| Securities (Cost $6,044,675) 0.9% | 6,044,675 | ||
| Total Investments Before Options | |||
| Written (Cost $689,552,325*) 100.3% | 705,826,016 | ||
| Options Written | |||
| (Premiums Received $6,332,521) (0.7)% | (4,814,155 | ) | |
| Total Investments Net of Options Written 99.6% | 701,011,861 | ||
| Other Assets Less Liabilities 0.4% | 3,026,582 | ||
| Net Assets 100.0% | $ 704,038,443 |
2 MARCH 31, 2015
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
Notes to Schedule of Investments
| Tax cost | $ | |
|---|---|---|
| Gross unrealized appreciation | $ 34,375,134 | |
| Gross unrealized depreciation | (39,847,327 | ) |
| Net unrealized depreciation | $ (5,472,193 | ) |
(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) All or a portion of security has been pledged as collateral in connection with outstanding OTC derivatives.
(d) Security, or a portion of security, is on loan.
(e) 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.
(f) Represents the current yield as of report date.
(g) During the period ended March 31, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
| Affiliate | Shares/ Beneficial Interest Held
at December 31, 2014 | Net Activity | | Shares/ Beneficial Interest Held at March 31, 2015 | Income |
| --- | --- | --- | --- | --- | --- |
| BlackRock Liquidity Funds, TempFund, Institutional Class | 1,879,452 | 3,954,023 | | 5,833,475 | $ 1,624 |
| BlackRock Liquidity Series, LLC Money Market Series | $ 673,750 | $ (462,550 | ) | $ 211,200 | $ 6,397 |
(h) Security was purchased with the cash collateral from loaned securities. The Trust may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series, LLC Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
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.
As of March 31, 2015, forward foreign currency exchange contracts outstanding were as follows:
| Currency Purchased — EUR | 3,805,000 | Currency Sold — USD | 4,257,928 | Counterparty — BNP Paribas S.A. | 4/22/15 | Unrealized Appreciation/ Depreciation — $ (165,360 | ) |
|---|---|---|---|---|---|---|---|
| EUR | 14,567,104 | USD | 16,312,130 | State Street Bank and Trust Co. | 4/22/15 | (644,095 | ) |
| JPY | 848,852,000 | USD | 7,067,371 | BNP Paribas S.A. | 4/22/15 | 12,720 | |
| JPY | 384,253,022 | USD | 3,183,860 | BNP Paribas S.A. | 4/22/15 | 21,111 | |
| JPY | 2,088,462,000 | USD | 17,392,197 | Citigroup Global Markets, Inc. | 4/22/15 | 27,211 | |
| JPY | 561,351,000 | USD | 4,692,432 | Citigroup Global Markets, Inc. | 4/22/15 | (10,326 | ) |
| JPY | 496,836,000 | USD | 4,154,217 | Standard Chartered Bank | 4/22/15 | (10,215 | ) |
| KRW | 11,602,279,280 | USD | 10,525,519 | Standard Chartered Bank | 4/22/15 | (75,775 | ) |
| KRW | 10,500,000,000 | USD | 9,550,664 | Standard Chartered Bank | 4/22/15 | (93,702 | ) |
| USD | 701,738 | EUR | 637,757 | Citigroup Global Markets, Inc. | 4/22/15 | 15,781 | |
| USD | 16,743,065 | EUR | 14,498,371 | HSBC Securities (USA), Inc. | 4/22/15 | 1,148,958 | |
| USD | 3,666,173 | EUR | 3,235,976 | The Bank of New York Mellon | 4/22/15 | 185,633 | |
| USD | 37,316,805 | JPY | 4,379,754,022 | HSBC Securities (USA), Inc. | 4/22/15 | 786,228 | |
| USD | 16,374,574 | KRW | 17,716,470,263 | Standard Chartered Bank | 4/22/15 | 418,005 | |
| USD | 4,030,273 | KRW | 4,385,809,017 | UBS Securities LLC | 4/22/15 | 80,137 | |
| Total | $ 1,696,311 |
As of March 31, 2015, exchange-traded options written were as follows:
| Description — Apple, Inc. | Call | USD | 135.00 | 4/02/15 | 133 | Market Value — $ (133 | ) |
|---|---|---|---|---|---|---|---|
| Citigroup, Inc. | Call | USD | 53.00 | 4/02/15 | 808 | (1,212 | ) |
MARCH 31, 2015 3
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
As of March 31, 2015, exchange-traded options written were as follows: (continued)
| Description — Google, Inc., Class A | Call | USD | 565.00 | 4/02/15 | 19 | Market Value — $ (855 | ) |
|---|---|---|---|---|---|---|---|
| Johnson & Johnson | Call | USD | 104.00 | 4/02/15 | 118 | (118 | ) |
| Micron Technology, Inc. | Call | USD | 31.50 | 4/02/15 | 800 | (2,000 | ) |
| Pfizer, Inc. | Call | USD | 35.00 | 4/02/15 | 133 | (1,264 | ) |
| Tesoro Corp. | Call | USD | 94.50 | 4/02/15 | 55 | (1,265 | ) |
| U.S. Bancorp. | Call | USD | 45.50 | 4/02/15 | 1,000 | (6,000 | ) |
| Weatherford International PLC | Call | USD | 13.50 | 4/02/15 | 440 | (440 | ) |
| Wells Fargo & Co. | Call | USD | 56.00 | 4/02/15 | 310 | (1,550 | ) |
| Western Digital Corp. | Call | USD | 111.00 | 4/02/15 | 245 | (735 | ) |
| American International Group, Inc. | Call | USD | 56.50 | 4/06/15 | 975 | (5,850 | ) |
| JPMorgan Chase & Co. | Call | USD | 60.50 | 4/06/15 | 150 | (3,450 | ) |
| Teva Pharmaceutical Industries Ltd. ADR | Call | USD | 57.50 | 4/06/15 | 575 | (273,125 | ) |
| 3M Co. | Call | USD | 167.50 | 4/10/15 | 65 | (4,225 | ) |
| Aetna, Inc. | Call | USD | 100.00 | 4/10/15 | 32 | (23,520 | ) |
| Amgen, Inc. | Call | USD | 162.50 | 4/10/15 | 414 | (64,998 | ) |
| Apple, Inc. | Call | USD | 127.00 | 4/10/15 | 130 | (11,570 | ) |
| Astrazeneca PLC ADR | Call | USD | 67.00 | 4/10/15 | 515 | (96,563 | ) |
| Bank of America Corp. | Call | USD | 16.00 | 4/10/15 | 2,780 | (8,340 | ) |
| BP PLC ADR | Call | USD | 42.00 | 4/10/15 | 1,003 | (2,508 | ) |
| Brocade Communications Systems, Inc. | Call | USD | 12.75 | 4/10/15 | 1,395 | (2,415 | ) |
| Cisco Systems, Inc. | Call | USD | 31.00 | 4/10/15 | 1,042 | (2,084 | ) |
| Cognizant Technology Solutions Corp., Class A | Call | USD | 63.00 | 4/10/15 | 90 | (5,175 | ) |
| CVS Health Corp. | Call | USD | 103.00 | 4/10/15 | 1,100 | (132,000 | ) |
| Deckers Outdoor Corp. | Call | USD | 75.00 | 4/10/15 | 115 | (5,462 | ) |
| Discover Financial Services | Call | USD | 59.50 | 4/10/15 | 113 | (1,695 | ) |
| Discover Financial Services | Call | USD | 60.50 | 4/10/15 | 112 | (1,680 | ) |
| Discover Financial Services | Call | USD | 61.50 | 4/10/15 | 219 | (3,285 | ) |
| The Dow Chemical Co. | Call | USD | 50.00 | 4/10/15 | 280 | (2,100 | ) |
| DST Systems, Inc. | Call | USD | 107.51 | 4/10/15 | 66 | (22,625 | ) |
| EMC Corp. | Call | USD | 29.00 | 4/10/15 | 899 | (4,495 | ) |
| Facebook, Inc., Class A | Call | USD | 81.50 | 4/10/15 | 326 | (51,508 | ) |
| FedEx Corp. | Call | USD | 177.50 | 4/10/15 | 238 | (2,142 | ) |
| Fossil Group, Inc. | Call | USD | 87.00 | 4/10/15 | 155 | (2,325 | ) |
| Google, Inc., Class A | Call | USD | 585.00 | 4/10/15 | 10 | (275 | ) |
| Google, Inc., Class C | Call | USD | 562.50 | 4/10/15 | 29 | (5,220 | ) |
| Halliburton Co. | Call | USD | 43.50 | 4/10/15 | 180 | (17,100 | ) |
| Hewlett-Packard Co. | Call | USD | 35.00 | 4/10/15 | 420 | (420 | ) |
| Intel Corp. | Call | USD | 35.00 | 4/10/15 | 724 | (2,896 | ) |
| Medtronic PLC | Call | USD | 79.00 | 4/10/15 | 42 | (1,869 | ) |
| Micron Technology, Inc. | Call | USD | 29.50 | 4/10/15 | 160 | (4,400 | ) |
| Micron Technology, Inc. | Call | USD | 31.50 | 4/10/15 | 800 | (4,800 | ) |
| Microsoft Corp. | Call | USD | 45.00 | 4/10/15 | 370 | (740 | ) |
| NVIDIA Corp. | Call | USD | 23.50 | 4/10/15 | 120 | (540 | ) |
| QUALCOMM, Inc. | Call | USD | 72.50 | 4/10/15 | 73 | (548 | ) |
| Tesoro Corp. | Call | USD | 96.00 | 4/10/15 | 55 | (2,942 | ) |
| U.S. Bancorp. | Call | USD | 45.00 | 4/10/15 | 188 | (940 | ) |
| U.S. Bancorp. | Call | USD | 45.50 | 4/10/15 | 250 | (1,750 | ) |
| Union Pacific Corp. | Call | USD | 121.00 | 4/10/15 | 89 | (1,157 | ) |
| United Continental Holdings, Inc. | Call | USD | 69.50 | 4/10/15 | 138 | (10,902 | ) |
| United Continental Holdings, Inc. | Call | USD | 70.50 | 4/10/15 | 137 | (7,398 | ) |
| Western Digital Corp. | Call | USD | 103.00 | 4/10/15 | 315 | (2,992 | ) |
| 3M Co. | Call | USD | 173.25 | 4/17/15 | 460 | (6,776 | ) |
| Aetna, Inc. | Call | USD | 105.00 | 4/17/15 | 60 | (16,110 | ) |
| Alliance Data Systems Corp. | Call | USD | 290.00 | 4/17/15 | 23 | (25,875 | ) |
| Apple, Inc. | Call | USD | 127.00 | 4/17/15 | 40 | (6,060 | ) |
| Atwood Oceanics, Inc. | Call | USD | 30.00 | 4/17/15 | 285 | (13,538 | ) |
| Bank of America Corp. | Call | USD | 16.00 | 4/17/15 | 2,780 | (23,630 | ) |
| Brocade Communications Systems, Inc. | Call | USD | 13.00 | 4/17/15 | 1,395 | (7,673 | ) |
| Carnival Corp. | Call | USD | 45.00 | 4/17/15 | 375 | (113,438 | ) |
| Carnival Corp. | Call | USD | 46.00 | 4/17/15 | 333 | (71,595 | ) |
| Centene Corp. | Call | USD | 62.50 | 4/17/15 | 614 | (503,480 | ) |
| Centene Corp. | Call | USD | 65.00 | 4/17/15 | 285 | (163,875 | ) |
4 MARCH 31, 2015
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
| As of March 31, 2015, exchange-traded options written were as follows: (continued) — Description | Put/ Call | Strike Price | Expiration Date | Contracts | Market Value | ||
|---|---|---|---|---|---|---|---|
| Cigna Corp. | Call | USD | 125.00 | 4/17/15 | 710 | $ (415,350 | ) |
| Citigroup, Inc. | Call | USD | 52.50 | 4/17/15 | 158 | (9,796 | ) |
| Citigroup, Inc. | Call | USD | 55.00 | 4/17/15 | 220 | (2,200 | ) |
| Cognizant Technology Solutions Corp., Class A | Call | USD | 62.50 | 4/17/15 | 200 | (20,500 | ) |
| Comcast Corp., Class A | Call | USD | 60.00 | 4/17/15 | 840 | (9,240 | ) |
| Discover Financial Services | Call | USD | 60.00 | 4/17/15 | 169 | (2,535 | ) |
| Discover Financial Services | Call | USD | 60.75 | 4/17/15 | 360 | (2,082 | ) |
| Dr Pepper Snapple Group, Inc. | Call | USD | 80.00 | 4/17/15 | 726 | (41,745 | ) |
| Facebook, Inc., Class A | Call | USD | 82.50 | 4/17/15 | 268 | (40,870 | ) |
| The Goldman Sachs Group, Inc. | Call | USD | 195.00 | 4/17/15 | 100 | (8,750 | ) |
| Google, Inc., Class A | Call | USD | 570.00 | 4/17/15 | 49 | (31,360 | ) |
| Google, Inc., Class C | Call | USD | 545.00 | 4/17/15 | 41 | (58,835 | ) |
| Google, Inc., Class C | Call | USD | 560.00 | 4/17/15 | 10 | (7,400 | ) |
| Halliburton Co. | Call | USD | 44.00 | 4/17/15 | 120 | (10,740 | ) |
| Hess Corp. | Call | USD | 75.00 | 4/17/15 | 200 | (1,300 | ) |
| Hewlett-Packard Co. | Call | USD | 35.00 | 4/17/15 | 420 | (840 | ) |
| The Home Depot, Inc. | Call | USD | 120.00 | 4/17/15 | 230 | (4,140 | ) |
| Humana, Inc. | Call | USD | 170.00 | 4/17/15 | 40 | (41,600 | ) |
| Intel Corp. | Call | USD | 33.00 | 4/17/15 | 543 | (17,919 | ) |
| JPMorgan Chase & Co. | Call | USD | 62.50 | 4/17/15 | 640 | (17,600 | ) |
| The Kroger Co. | Call | USD | 77.50 | 4/17/15 | 51 | (4,335 | ) |
| Laboratory Corp. of America Holdings | Call | USD | 125.00 | 4/17/15 | 340 | (93,500 | ) |
| Las Vegas Sands Corp. | Call | USD | 57.50 | 4/17/15 | 160 | (9,040 | ) |
| Lear Corp. | Call | USD | 115.00 | 4/17/15 | 50 | (2,875 | ) |
| Lowes Cos., Inc. | Call | USD | 75.00 | 4/17/15 | 1,350 | (134,325 | ) |
| Marathon Petroleum Corp. | Call | USD | 110.00 | 4/17/15 | 200 | (8,000 | ) |
| MasterCard, Inc., Class A | Call | USD | 90.00 | 4/17/15 | 152 | (4,484 | ) |
| McKesson Corp. | Call | USD | 230.00 | 4/17/15 | 105 | (19,688 | ) |
| Microsoft Corp. | Call | USD | 45.00 | 4/17/15 | 375 | (563 | ) |
| Norfolk Southern Corp. | Call | USD | 110.00 | 4/17/15 | 170 | (1,274 | ) |
| NVIDIA Corp. | Call | USD | 24.00 | 4/17/15 | 135 | (675 | ) |
| Omnicom Group, Inc. | Call | USD | 80.00 | 4/17/15 | 200 | (8,500 | ) |
| Oracle Corp. | Call | USD | 44.00 | 4/17/15 | 265 | (6,492 | ) |
| Parker-Hannifin Corp. | Call | USD | 125.00 | 4/17/15 | 110 | (2,750 | ) |
| Pilgrims Pride Corp. | Call | USD | 28.00 | 4/17/15 | 150 | (1,500 | ) |
| Pilgrims Pride Corp. | Call | USD | 29.00 | 4/17/15 | 83 | (830 | ) |
| Raytheon Co. | Call | USD | 110.00 | 4/17/15 | 170 | (23,460 | ) |
| Suncor Energy, Inc. | Call | USD | 32.00 | 4/17/15 | 275 | (1,512 | ) |
| SunTrust Banks, Inc. | Call | USD | 42.00 | 4/17/15 | 1,135 | (32,348 | ) |
| The Travelers Cos., Inc. | Call | USD | 110.00 | 4/17/15 | 430 | (21,500 | ) |
| Tyson Foods, Inc., Class A | Call | USD | 43.00 | 4/17/15 | 125 | (1,250 | ) |
| United Continental Holdings, Inc. | Call | USD | 72.50 | 4/17/15 | 350 | (18,200 | ) |
| Universal Health Services, Inc., Class B | Call | USD | 120.00 | 4/17/15 | 366 | (49,410 | ) |
| Utilities Select Sector SPDR Fund | Call | USD | 45.00 | 4/17/15 | 120 | (4,740 | ) |
| Western Digital Corp. | Call | USD | 105.00 | 4/17/15 | 101 | (1,262 | ) |
| Zebra Technologies Corp., Class A | Call | USD | 95.00 | 4/17/15 | 196 | (9,310 | ) |
| Aetna, Inc. | Call | USD | 110.00 | 4/24/15 | 322 | (29,945 | ) |
| American International Group, Inc. | Call | USD | 56.00 | 4/24/15 | 150 | (6,300 | ) |
| Exxon Mobil Corp. | Call | USD | 87.00 | 4/24/15 | 68 | (4,148 | ) |
| Intel Corp. | Call | USD | 32.00 | 4/24/15 | 200 | (14,800 | ) |
| Schlumberger Ltd. | Call | USD | 86.00 | 4/24/15 | 152 | (14,440 | ) |
| Schlumberger Ltd. | Call | USD | 87.00 | 4/24/15 | 175 | (11,638 | ) |
| Suncor Energy, Inc. | Call | USD | 30.50 | 4/24/15 | 250 | (9,875 | ) |
| Teva Pharmaceutical Industries Ltd. ADR | Call | USD | 62.00 | 4/24/15 | 279 | (50,220 | ) |
| Wal-Mart Stores, Inc. | Call | USD | 85.00 | 4/24/15 | 49 | (2,328 | ) |
| 3M Co. | Call | USD | 162.50 | 5/01/15 | 33 | (16,995 | ) |
| Aetna, Inc. | Call | USD | 111.00 | 5/01/15 | 322 | (42,182 | ) |
| American International Group, Inc. | Call | USD | 56.00 | 5/01/15 | 325 | (18,362 | ) |
| Apple, Inc. | Call | USD | 133.00 | 5/01/15 | 98 | (16,366 | ) |
| Cisco Systems, Inc. | Call | USD | 27.50 | 5/01/15 | 250 | (15,875 | ) |
| Citigroup, Inc. | Call | USD | 54.00 | 5/01/15 | 311 | (12,906 | ) |
MARCH 31, 2015 5
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
As of March 31, 2015, exchange-traded options written were as follows: (concluded)
| Description — Express Scripts Holding Co. | Call | USD | 86.50 | 5/01/15 | 148 | Market Value — $ (47,212 | ) |
|---|---|---|---|---|---|---|---|
| JPMorgan Chase & Co. | Call | USD | 62.50 | 5/01/15 | 198 | (9,801 | ) |
| MasterCard, Inc., Class A | Call | USD | 90.00 | 5/01/15 | 50 | (4,975 | ) |
| Oracle Corp. | Call | USD | 43.50 | 5/01/15 | 145 | (9,715 | ) |
| Schlumberger Ltd. | Call | USD | 86.50 | 5/01/15 | 175 | (17,850 | ) |
| Teva Pharmaceutical Industries Ltd. ADR | Call | USD | 62.00 | 5/01/15 | 279 | (58,311 | ) |
| Weatherford International PLC | Call | USD | 13.00 | 5/01/15 | 440 | (15,620 | ) |
| The Goldman Sachs Group, Inc. | Call | USD | 195.00 | 5/07/15 | 100 | (20,894 | ) |
| Cisco Systems, Inc. | Call | USD | 27.50 | 5/08/15 | 250 | (17,375 | ) |
| JPMorgan Chase & Co. | Call | USD | 60.00 | 5/08/15 | 460 | (79,350 | ) |
| Microsoft Corp. | Call | USD | 43.50 | 5/08/15 | 371 | (10,388 | ) |
| Oracle Corp. | Call | USD | 43.50 | 5/08/15 | 145 | (11,310 | ) |
| Wal-Mart Stores, Inc. | Call | USD | 84.50 | 5/08/15 | 225 | (17,775 | ) |
| Honeywell International, Inc. | Call | USD | 104.00 | 5/11/15 | 50 | (14,412 | ) |
| Carnival Corp. | Call | USD | 48.00 | 5/15/15 | 150 | (21,000 | ) |
| Comcast Corp., Class A | Call | USD | 60.00 | 5/15/15 | 840 | (54,600 | ) |
| Express Scripts Holding Co. | Call | USD | 85.00 | 5/15/15 | 98 | (41,650 | ) |
| Express Scripts Holding Co. | Call | USD | 87.50 | 5/15/15 | 148 | (42,254 | ) |
| Exxon Mobil Corp. | Call | USD | 87.50 | 5/15/15 | 68 | (6,324 | ) |
| The Home Depot, Inc. | Call | USD | 120.00 | 5/15/15 | 258 | (22,962 | ) |
| JPMorgan Chase & Co. | Call | USD | 62.50 | 5/15/15 | 198 | (14,256 | ) |
| Las Vegas Sands Corp. | Call | USD | 60.00 | 5/15/15 | 160 | (11,600 | ) |
| Lear Corp. | Call | USD | 114.25 | 5/15/15 | 120 | (26,897 | ) |
| McKesson Corp. | Call | USD | 230.00 | 5/15/15 | 105 | (51,975 | ) |
| NVIDIA Corp. | Call | USD | 24.00 | 5/15/15 | 300 | (5,700 | ) |
| Oracle Corp. | Call | USD | 44.00 | 5/15/15 | 128 | (7,936 | ) |
| Parker-Hannifin Corp. | Call | USD | 125.00 | 5/15/15 | 110 | (16,775 | ) |
| The Priceline Group, Inc. | Call | USD | 1,210.00 | 5/15/15 | 14 | (38,780 | ) |
| Raytheon Co. | Call | USD | 110.00 | 5/15/15 | 170 | (44,965 | ) |
| Schlumberger Ltd. | Call | USD | 87.50 | 5/15/15 | 152 | (16,720 | ) |
| UnitedHealth Group, Inc. | Call | USD | 125.00 | 5/15/15 | 864 | (125,280 | ) |
| Wal-Mart Stores, Inc. | Call | USD | 85.00 | 5/15/15 | 48 | (3,551 | ) |
| Total | $ (4,128,869 | ) |
As of March 31, 2015, over-the-counter options written were as follows:
| Description — Amdocs Ltd. | Counterparty — Deutsche Bank AG | Call | USD | 52.65 | 4/10/15 | 45,800 | Market Value — $ (96,438 | ) |
|---|---|---|---|---|---|---|---|---|
| Total System Services, Inc. | Morgan Stanley & Co. International PLC | Call | USD | 39.02 | 4/10/15 | 51,600 | (18,118 | ) |
| Domtar Corp. | Morgan Stanley & Co. International PLC | Call | USD | 46.41 | 4/15/15 | 25,000 | (26,861 | ) |
| Public Service Enterprise Group, Inc. | Deutsche Bank AG | Call | USD | 41.87 | 4/15/15 | 30,000 | (25,682 | ) |
| Ross Stores, Inc. | Deutsche Bank AG | Call | USD | 107.25 | 4/15/15 | 30,000 | (26,204 | ) |
| SLM Corp. | UBS AG | Call | USD | 9.65 | 4/15/15 | 156,000 | (7,764 | ) |
| Domtar Corp. | Morgan Stanley & Co. International PLC | Call | USD | 46.87 | 4/22/15 | 25,000 | (28,295 | ) |
| Macys, Inc. | Goldman Sachs International | Call | USD | 64.93 | 4/22/15 | 19,000 | (21,958 | ) |
| Packaging Corp. of America | Deutsche Bank AG | Call | USD | 83.18 | 4/27/15 | 16,000 | (7,929 | ) |
| SLM Corp. | UBS AG | Call | USD | 9.74 | 4/29/15 | 156,000 | (12,767 | ) |
| Southwest Airlines Co. | Morgan Stanley & Co. International PLC | Call | USD | 45.11 | 4/29/15 | 27,000 | (26,831 | ) |
| Molson Coors Brewing Co., Class B | Citibank N.A. | Call | USD | 77.04 | 4/30/15 | 25,000 | (45,760 | ) |
| PBF Energy, Inc., Class A | Morgan Stanley & Co. International PLC | Call | USD | 32.80 | 5/01/15 | 26,200 | (51,227 | ) |
| Tyson Foods, Inc., Class A | Morgan Stanley & Co. International PLC | Call | USD | 40.60 | 5/06/15 | 12,600 | (6,222 | ) |
| The Allstate Corp. | Morgan Stanley & Co. International PLC | Call | USD | 71.26 | 5/07/15 | 56,400 | (75,885 | ) |
| Norfolk Southern Corp. | Deutsche Bank AG | Call | USD | 111.25 | 5/08/15 | 17,000 | (3,517 | ) |
| Macys, Inc. | Goldman Sachs International | Call | USD | 64.93 | 5/12/15 | 19,000 | (37,413 | ) |
| Shire PLC ADR | Citibank N.A. | Call | USD | 255.19 | 5/12/15 | 14,000 | (50,496 | ) |
| Molson Coors Brewing Co., Class B | Citibank N.A. | Call | USD | 77.04 | 5/14/15 | 25,000 | (61,305 | ) |
| Southwest Airlines Co. | Morgan Stanley & Co. International PLC | Call | USD | 45.11 | 5/19/15 | 27,000 | (37,726 | ) |
| Packaging Corp. of America | Deutsche Bank AG | Call | USD | 83.18 | 5/21/15 | 16,000 | (16,888 | ) |
| Total | $ (685,286 | ) |
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. The hierarchy gives the highest priority to unadjusted quoted prices in
6 MARCH 31, 2015
Schedule of Investments (continued) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:
Level 1 unadjusted quoted prices 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)
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. For information about the Trusts policy regarding valuation of investments and derivative financial instruments, refer to the Trusts most recent financial statements as contained in its annual report.
As of March 31, 2015, the following tables summarize the Trusts investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| Assets: | ||||
| Investments: | ||||
| Long-Term Investments: | ||||
| Common Stocks: | ||||
| Aerospace & Defense | $ 8,357,601 | | | $ 8,357,601 |
| Air Freight & Logistics | 7,900,403 | | | 7,900,403 |
| Airlines | 12,303,093 | | | 12,303,093 |
| Auto Components | 3,856,536 | | | 3,856,536 |
| Banks | 82,485,750 | | | 82,485,750 |
| Beverages | 18,961,095 | | | 18,961,095 |
| Biotechnology | 13,232,383 | | | 13,232,383 |
| Capital Markets | 8,104,843 | | | 8,104,843 |
| Chemicals | 2,346,318 | | | 2,346,318 |
| Communications Equipment | 22,250,203 | | | 22,250,203 |
| Consumer Finance | 17,210,350 | | | 17,210,350 |
| Containers & Packaging | 5,046,617 | | | 5,046,617 |
| Electronic Equipment, Instruments & Components | 3,567,005 | | | 3,567,005 |
| Energy Equipment & Services | 16,468,084 | | | 16,468,084 |
| Food & Staples Retailing | 28,761,552 | | | 28,761,552 |
| Food Products | 2,980,371 | | | 2,980,371 |
| Health Care Equipment & Supplies | 736,226 | | | 736,226 |
| Health Care Providers & Services | 101,133,966 | | | 101,133,966 |
| Hotels, Restaurants & Leisure | 11,606,875 | | | 11,606,875 |
| Industrial Conglomerates | 17,410,308 | | | 17,410,308 |
| Insurance | 32,727,677 | | | 32,727,677 |
| Internet & Catalog Retail | 3,240,994 | | | 3,240,994 |
| Internet Software & Services | 27,199,377 | | | 27,199,377 |
| IT Services | 21,533,140 | | | 21,533,140 |
| Machinery | 5,169,899 | | | 5,169,899 |
| Media | 21,970,051 | | | 21,970,051 |
| Multiline Retail | 4,956,398 | | | 4,956,398 |
| Multi-Utilities | 2,532,429 | | | 2,532,429 |
| Oil, Gas & Consumable Fuels | 30,579,105 | | | 30,579,105 |
| Paper & Forest Products | 4,561,221 | | | 4,561,221 |
| Pharmaceuticals | 31,286,867 | | | 31,286,867 |
| Road & Rail | 6,403,699 | | | 6,403,699 |
| Semiconductors & Semiconductor Equipment | 28,947,233 | | | 28,947,233 |
| Software | 14,957,322 | | | 14,957,322 |
| Specialty Retail | 35,413,266 | | | 35,413,266 |
| Technology Hardware, Storage & Peripherals | 38,167,005 | | | 38,167,005 |
| Textiles, Apparel & Luxury Goods | 4,259,759 | | | 4,259,759 |
| Investment Companies | 1,066,320 | | | 1,066,320 |
| Warrants | | $ 90,000 | | 90,000 |
| Short-Term Securities | 5,833,475 | 211,200 | | 6,044,675 |
| Total | $ 705,524,816 | $ 301,200 | | $ 705,826,016 |
MARCH 31, 2015 7
Schedule of Investments (concluded) BlackRock Enhanced Capital and Income Fund, Inc. (CII)
| Derivative Financial Instruments 1 | |||||||
| Assets: | |||||||
| Forward foreign currency exchange contracts | | $ 2,695,784 | | $ 2,695,784 | |||
| Liabilities: | |||||||
| Equity contracts | $ (4,032,769 | ) | (781,386 | ) | | (4,814,155 | ) |
| Forward foreign currency exchange contracts | | (999,473 | ) | | (999,473 | ) | |
| Total | $ (4,032,769 | ) | $ 914,925 | | $ (3,117,844 | ) | |
| 1 Derivative | |||||||
| financial instruments are forward foreign currency exchange contracts and options written. Forward foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options written are shown at | |||||||
| value. | |||||||
| The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of March 31, 2015, such | |||||||
| assets and/or liabilities are categorized within the disclosure hierarchy as follows: | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets: | |||||||
| Cash pledged as collateral for OTC derivatives | $ 100,000 | | | $ 100,000 | |||
| Liabilities: | |||||||
| Bank overdraft | | $ (196 | ) | | (196 | ) | |
| Bank overdraft on foreign currency at value | | (14,031 | ) | | (14,031 | ) | |
| Collateral on securities loaned at value | | (211,200 | ) | | (211,200 | ) | |
| Total | $ 100,000 | $ (225,427 | ) | | $ (125,427 | ) |
During the period ended March 31, 2015, there were no transfers between levels.
8 MARCH 31, 2015
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: |
|---|
| John M. Perlowski |
| Chief Executive Officer (principal executive officer) of |
| BlackRock Enhanced Capital and Income Fund, Inc. |
| Date: May 22, 2015 |
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/ John M. Perlowski |
|---|---|
| John M. Perlowski | |
| Chief Executive Officer (principal executive officer) of | |
| BlackRock Enhanced Capital and Income Fund, Inc. | |
| Date: May 22, 2015 | |
| By: | /s/ Neal J. Andrews |
| Neal J. Andrews | |
| Chief Financial Officer (principal financial officer) of | |
| BlackRock Enhanced Capital and Income Fund, Inc. | |
| Date: May 22, 2015 |
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