Regulatory Filings • Aug 27, 2010
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Download Source FileN-Q 1 b82241a1nvq.htm FORM N-Q nvq PAGEBREAK
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
811-21614
Investment Company Act File Number
Eaton Vance Enhanced Equity Income Fund
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110 (Address of Principal Executive Offices)
Maureen A. Gemma Two International Place, Boston, Massachusetts 02110 (Name and Address of Agent for Services)
(617) 482-8260
(Registrants Telephone Number, Including Area Code)
September 30
Date of Fiscal Year End
June 30, 2010
Date of Reporting Period
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TOC /TOC link2 "Item 1. Schedule of Investments"
Item 1. Schedule of Investments
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Eaton Vance Enhanced Equity Income Fund as of June 30, 2010
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks 98.8% (1)
| Security | Value | |
|---|---|---|
| Aerospace & Defense 1.8% | ||
| General Dynamics Corp. | 87,890 | $ 5,146,838 |
| Lockheed Martin Corp. | 51,489 | 3,835,930 |
| $ 8,982,768 | ||
| Air Freight & Logistics 0.7% | ||
| FedEx Corp. | 49,044 | $ 3,438,475 |
| $ 3,438,475 | ||
| Beverages 2.7% | ||
| Coca-Cola Co. (The) | 102,852 | $ 5,154,942 |
| PepsiCo, Inc. | 129,030 | 7,864,379 |
| $ 13,019,321 | ||
| Biotechnology 1.4% | ||
| Amgen, | ||
| Inc. (2) | 94,121 | $ 4,950,765 |
| Celgene | ||
| Corp. (2) | 37,704 | 1,916,117 |
| $ 6,866,882 | ||
| Capital Markets 2.5% | ||
| Goldman Sachs Group, Inc. | 39,870 | $ 5,233,735 |
| Northern Trust Corp. | 92,239 | 4,307,561 |
| State Street Corp. | 72,658 | 2,457,294 |
| $ 11,998,590 | ||
| Commercial Banks 3.9% | ||
| KeyCorp | 308,415 | $ 2,371,711 |
| PNC Financial Services Group, Inc. | 73,748 | 4,166,762 |
| U.S. Bancorp | 147,462 | 3,295,776 |
| Wells Fargo & Co. | 352,605 | 9,026,688 |
| $ 18,860,937 | ||
| Commercial Services & Supplies 1.0% | ||
| Waste Management, Inc. | 148,857 | $ 4,657,736 |
| $ 4,657,736 | ||
| Communications Equipment 2.7% | ||
| Cisco Systems, | ||
| Inc. (2) | 479,090 | $ 10,209,408 |
| QUALCOMM, Inc. | 98,159 | 3,223,541 |
| $ 13,432,949 | ||
| Computers & Peripherals 7.0% | ||
| Apple, | ||
| Inc. (2) | 62,213 | $ 15,648,436 |
| Hewlett-Packard Co. | 173,570 | 7,512,109 |
| International Business Machines Corp. | 90,748 | 11,205,563 |
| $ 34,366,108 | ||
| Consumer Finance 0.7% | ||
| American Express Co. | 81,560 | $ 3,237,932 |
| $ 3,237,932 | ||
| Diversified Financial Services 4.8% | ||
| Bank of America Corp. | 684,141 | $ 9,831,106 |
| Citigroup, | ||
| Inc. (2) | 604,762 | 2,273,905 |
| JPMorgan Chase & Co. | 314,081 | 11,498,506 |
| $ 23,603,517 |
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| Security | Value | |
|---|---|---|
| Diversified Telecommunication | ||
| Services 1.9% | ||
| AT&T, Inc. | 280,752 | $ 6,791,391 |
| Verizon Communications, Inc. | 97,933 | 2,744,083 |
| $ 9,535,474 | ||
| Electric Utilities 1.1% | ||
| American Electric Power Co., Inc. | 162,217 | $ 5,239,609 |
| $ 5,239,609 | ||
| Electrical Equipment 1.0% | ||
| Emerson Electric Co. | 114,726 | $ 5,012,379 |
| $ 5,012,379 | ||
| Electronic Equipment, Instruments & | ||
| Components 1.2% | ||
| Corning, Inc. | 376,802 | $ 6,085,352 |
| $ 6,085,352 | ||
| Energy Equipment & Services 1.3% | ||
| Halliburton Co. | 70,371 | $ 1,727,608 |
| Schlumberger, Ltd. | 87,318 | 4,832,178 |
| $ 6,559,786 | ||
| Food & Staples Retailing 2.3% | ||
| CVS Caremark Corp. | 120,518 | $ 3,533,588 |
| Wal-Mart Stores, Inc. | 157,578 | 7,574,774 |
| $ 11,108,362 | ||
| Food Products 1.9% | ||
| Kellogg Co. | 100,464 | $ 5,053,339 |
| Nestle SA ADR | 87,745 | 4,232,819 |
| $ 9,286,158 | ||
| Health Care Equipment & | ||
| Supplies 3.1% | ||
| Covidien PLC | 67,855 | $ 2,726,414 |
| HeartWare International, | ||
| Inc. (2) | 55,534 | 3,891,199 |
| Thoratec | ||
| Corp. (2) | 68,312 | 2,918,972 |
| Varian Medical Systems, | ||
| Inc. (2) | 51,210 | 2,677,259 |
| Zimmer Holdings, | ||
| Inc. (2) | 54,875 | 2,965,994 |
| $ 15,179,838 | ||
| Health Care Providers & | ||
| Services 1.5% | ||
| AmerisourceBergen Corp. | 107,244 | $ 3,404,997 |
| Cardinal Health, Inc. | 73,526 | 2,471,209 |
| Fresenius Medical Care AG & Co. KGaA ADR | 30,548 | 1,640,122 |
| $ 7,516,328 | ||
| Hotels, Restaurants & Leisure 1.4% | ||
| Carnival Corp. | 96,329 | $ 2,912,989 |
| McDonalds Corp. | 59,071 | 3,891,007 |
| $ 6,803,996 | ||
| Household Products 4.1% | ||
| Colgate-Palmolive Co. | 131,123 | $ 10,327,248 |
| Procter & Gamble Co. | 164,231 | 9,850,575 |
| $ 20,177,823 | ||
| Industrial Conglomerates 2.5% | ||
| General Electric Co. | 857,959 | $ 12,371,769 |
| $ 12,371,769 | ||
| Insurance 3.4% | ||
| Aflac, Inc. | 61,446 | $ 2,621,901 |
| Berkshire Hathaway, Inc., | ||
| Class B (2) | 21,944 | 1,748,717 |
| Lincoln National Corp. | 108,387 | 2,632,720 |
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| Security | Value | |
|---|---|---|
| MetLife, Inc. | 111,605 | $ 4,214,205 |
| Prudential Financial, Inc. | 98,694 | 5,295,920 |
| $ 16,513,463 | ||
| Internet & Catalog Retail 1.0% | ||
| Amazon.com, | ||
| Inc. (2) | 44,610 | $ 4,874,089 |
| $ 4,874,089 | ||
| Internet Software & Services 1.6% | ||
| Google, Inc., | ||
| Class A (2) | 17,812 | $ 7,925,449 |
| $ 7,925,449 | ||
| IT Services 1.1% | ||
| MasterCard, Inc., Class A | 25,965 | $ 5,180,796 |
| $ 5,180,796 | ||
| Life Sciences Tools & Services 1.0% | ||
| Thermo Fisher Scientific, | ||
| Inc. (2) | 97,676 | $ 4,791,008 |
| $ 4,791,008 | ||
| Machinery 3.4% | ||
| Danaher Corp. | 146,378 | $ 5,433,551 |
| Deere & Co. | 84,560 | 4,708,301 |
| Illinois Tool Works, Inc. | 102,697 | 4,239,332 |
| PACCAR, Inc. | 61,656 | 2,458,225 |
| $ 16,839,409 | ||
| Media 0.7% | ||
| Walt Disney Co. (The) | 108,375 | $ 3,413,812 |
| $ 3,413,812 | ||
| Metals & Mining 2.5% | ||
| BHP Billiton, Ltd. ADR | 43,446 | $ 2,693,218 |
| Freeport-McMoRan Copper & Gold, Inc. | 20,064 | 1,186,384 |
| Goldcorp, Inc. | 163,585 | 7,173,202 |
| United States Steel Corp. | 35,280 | 1,360,044 |
| $ 12,412,848 | ||
| Multi-Utilities 1.3% | ||
| PG&E Corp. | 83,297 | $ 3,423,507 |
| Public Service Enterprise Group, Inc. | 91,570 | 2,868,888 |
| $ 6,292,395 | ||
| Multiline Retail 1.0% | ||
| Target Corp. | 98,969 | $ 4,866,306 |
| $ 4,866,306 | ||
| Office Electronics 0.4% | ||
| Xerox Corp. | 273,218 | $ 2,196,673 |
| $ 2,196,673 | ||
| Oil, Gas & Consumable Fuels 9.4% | ||
| Apache Corp. | 67,534 | $ 5,685,688 |
| Chevron Corp. | 143,484 | 9,736,824 |
| ConocoPhillips | 71,649 | 3,517,249 |
| Exxon Mobil Corp. | 148,595 | 8,480,317 |
| Hess Corp. | 131,106 | 6,599,876 |
| Occidental Petroleum Corp. | 86,233 | 6,652,876 |
| Peabody Energy Corp. | 76,472 | 2,992,349 |
| Southwestern Energy | ||
| Co. (2) | 60,937 | 2,354,606 |
| $ 46,019,785 | ||
| Pharmaceuticals 6.3% | ||
| Abbott Laboratories | 98,225 | $ 4,594,966 |
| Bristol-Myers Squibb Co. | 163,695 | 4,082,553 |
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| Security | Value | |
|---|---|---|
| Johnson & Johnson | 201,616 | $ 11,907,441 |
| Merck & Co., Inc. | 55,170 | 1,929,295 |
| Pfizer, Inc. | 576,044 | 8,214,387 |
| $ 30,728,642 | ||
| Real Estate Investment Trusts | ||
| (REITs) 0.2% | ||
| AvalonBay Communities, Inc. | 5,597 | $ 522,592 |
| Boston Properties, Inc. | 6,279 | 447,944 |
| $ 970,536 | ||
| Road & Rail 0.9% | ||
| CSX Corp. | 86,531 | $ 4,294,534 |
| $ 4,294,534 | ||
| Semiconductors & Semiconductor | ||
| Equipment 0.9% | ||
| Intel Corp. | 222,773 | $ 4,332,935 |
| $ 4,332,935 | ||
| Software 3.6% | ||
| Microsoft Corp. | 446,116 | $ 10,265,129 |
| Oracle Corp. | 331,155 | 7,106,586 |
| $ 17,371,715 | ||
| Specialty Retail 4.5% | ||
| Best Buy Co., Inc. | 127,203 | $ 4,307,094 |
| Gap, Inc. (The) | 116,429 | 2,265,708 |
| Home Depot, Inc. | 214,893 | 6,032,046 |
| Staples, Inc. | 216,538 | 4,125,049 |
| TJX Companies, Inc. (The) | 125,283 | 5,255,622 |
| $ 21,985,519 | ||
| Textiles, Apparel & Luxury | ||
| Goods 1.3% | ||
| NIKE, Inc., Class B | 95,523 | $ 6,452,579 |
| $ 6,452,579 | ||
| Tobacco 1.1% | ||
| Philip Morris International, Inc. | 116,936 | $ 5,360,346 |
| $ 5,360,346 | ||
| Wireless Telecommunication Services 0.7% | ||
| American Tower Corp., | ||
| Class A (2) | 76,823 | $ 3,418,623 |
| $ 3,418,623 | ||
| Total Common Stocks (identified cost $482,188,523) | $ 483,583,551 |
Short-Term Investments 1.9%
| Description | Interest — (000s omitted) | Value |
|---|---|---|
| Eaton Vance Cash Reserves Fund, LLC, | ||
| 0.25% (3) | $ 9,363 | $ 9,363,334 |
| Total Short-Term Investments (identified cost $9,363,334) | $ 9,363,334 | |
| Total Investments 100.7% (identified cost $491,551,857) | $ 492,946,885 |
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Covered Call Options Written (0.8)%
| Security | Number of — Contracts | Strike — Price | Expiration — Date | Value | |
|---|---|---|---|---|---|
| Abbott Laboratories | 590 | $ 49.00 | 8/21/10 | $ (36,285 | ) |
| Aflac, Inc. | 400 | 45.00 | 8/21/10 | (70,400 | ) |
| Amazon.com, Inc. | 275 | 140.00 | 7/17/10 | (1,787 | ) |
| American Electric Power Co., Inc. | 970 | 31.00 | 8/21/10 | (186,725 | ) |
| American Express Co. | 410 | 46.00 | 7/17/10 | (2,460 | ) |
| American Tower Corp., Class A | 390 | 42.50 | 7/17/10 | (94,575 | ) |
| AmerisourceBergen Corp. | 655 | 30.00 | 8/21/10 | (167,025 | ) |
| Amgen, Inc. | 470 | 62.50 | 7/17/10 | (940 | ) |
| Amgen, Inc. | 285 | 57.50 | 8/21/10 | (22,230 | ) |
| Apache Corp. | 340 | 110.00 | 7/17/10 | (1,700 | ) |
| Apple, Inc. | 320 | 240.00 | 7/17/10 | (508,000 | ) |
| Apple, Inc. | 180 | 280.00 | 8/21/10 | (123,300 | ) |
| AT&T, Inc. | 976 | 26.00 | 7/17/10 | (2,440 | ) |
| Bank of America Corp. | 5,475 | 17.00 | 8/21/10 | (90,338 | ) |
| Berkshire Hathaway, Inc., Class B | 145 | 80.00 | 9/18/10 | (60,175 | ) |
| Best Buy Co., Inc. | 830 | 40.00 | 9/18/10 | (41,500 | ) |
| BHP Billiton, Ltd. ADR | 260 | 67.50 | 8/21/10 | (48,880 | ) |
| Bristol-Myers Squibb Co. | 1,065 | 25.00 | 9/18/10 | (136,320 | ) |
| Cardinal Health, Inc. | 480 | 35.00 | 9/18/10 | (60,000 | ) |
| Carnival Corp. | 485 | 39.00 | 7/17/10 | (1,940 | ) |
| Celgene Corp. | 190 | 60.00 | 7/17/10 | (1,140 | ) |
| Chevron Corp. | 935 | 75.00 | 9/18/10 | (94,435 | ) |
| Cisco Systems, Inc. | 2,875 | 24.00 | 7/17/10 | (15,813 | ) |
| Cisco Systems, Inc. | 960 | 25.00 | 8/21/10 | (10,560 | ) |
| Coca-Cola Co. (The) | 620 | 55.00 | 8/21/10 | (10,850 | ) |
| Colgate-Palmolive Co. | 790 | 85.00 | 8/21/10 | (23,700 | ) |
| Corning, Inc. | 2,265 | 17.00 | 8/21/10 | (147,225 | ) |
| Corning, Inc. | 750 | 19.00 | 8/21/10 | (12,000 | ) |
| Covidien PLC | 410 | 45.00 | 7/17/10 | (3,075 | ) |
| CSX Corp. | 520 | 55.00 | 8/21/10 | (50,180 | ) |
| CVS Caremark Corp. | 725 | 36.00 | 8/21/10 | (4,712 | ) |
| Danaher Corp. | 955 | 40.00 | 9/18/10 | (19,100 | ) |
| Deere & Co. | 550 | 62.50 | 9/18/10 | (92,950 | ) |
| Emerson Electric Co. | 750 | 50.00 | 9/18/10 | (43,125 | ) |
| Exxon Mobil Corp. | 640 | 62.50 | 7/17/10 | (8,960 | ) |
| Exxon Mobil Corp. | 210 | 65.00 | 8/21/10 | (5,670 | ) |
| FedEx Corp. | 245 | 90.00 | 7/17/10 | (367 | ) |
| Freeport-McMoRan Copper & Gold, Inc. | 120 | 75.00 | 8/21/10 | (7,380 | ) |
| Fresenius Medical Care AG & Co. KGaA ADR | 155 | 55.00 | 7/17/10 | (9,300 | ) |
| Gap, Inc. (The) | 760 | 22.00 | 9/18/10 | (34,200 | ) |
| General Dynamics Corp. | 530 | 75.00 | 8/21/10 | (2,650 | ) |
| General Electric Co. | 5,150 | 17.00 | 7/17/10 | (12,875 | ) |
| General Electric Co. | 1,720 | 17.00 | 9/18/10 | (36,120 | ) |
| Goldman Sachs Group, Inc. | 398 | 150.00 | 7/17/10 | (10,348 | ) |
| Google, Inc., Class A | 120 | 510.00 | 9/18/10 | (81,000 | ) |
| Halliburton Co. | 355 | 33.00 | 7/17/10 | (355 | ) |
| Hess Corp. | 1,050 | 60.00 | 8/21/10 | (46,200 | ) |
| Hewlett-Packard Co. | 340 | 48.00 | 8/21/10 | (21,590 | ) |
| Hewlett-Packard Co. | 1,050 | 49.00 | 8/21/10 | (47,775 | ) |
| Home Depot, Inc. | 430 | 32.00 | 8/21/10 | (10,965 | ) |
| Home Depot, Inc. | 1,290 | 35.00 | 8/21/10 | (5,160 | ) |
| Illinois Tool Works, Inc. | 670 | 47.50 | 9/18/10 | (36,850 | ) |
| Intel Corp. | 1,115 | 24.00 | 7/17/10 | (1,672 | ) |
| Intel Corp. | 670 | 22.00 | 8/21/10 | (14,070 | ) |
| International Business Machines Corp. | 545 | 135.00 | 7/17/10 | (6,268 | ) |
| Johnson & Johnson | 1,010 | 65.00 | 7/17/10 | (2,525 | ) |
| Johnson & Johnson | 605 | 60.00 | 8/21/10 | (85,305 | ) |
| JPMorgan Chase & Co. | 1,885 | 43.00 | 7/17/10 | (4,712 | ) |
| Kellogg Co. | 655 | 55.00 | 9/18/10 | (22,925 | ) |
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| Security | Number of — Contracts | Strike — Price | Expiration — Date | Value | |
|---|---|---|---|---|---|
| KeyCorp | 2,005 | $ 9.00 | 9/18/10 | $ (50,125 | ) |
| Lincoln National Corp. | 650 | 28.00 | 7/17/10 | (6,500 | ) |
| Lockheed Martin Corp. | 335 | 80.00 | 9/18/10 | (46,900 | ) |
| MasterCard, Inc., Class A | 155 | 230.00 | 7/17/10 | (3,875 | ) |
| McDonalds Corp. | 385 | 70.00 | 9/18/10 | (35,420 | ) |
| Merck & Co., Inc. | 335 | 36.00 | 7/17/10 | (11,893 | ) |
| MetLife, Inc. | 725 | 43.00 | 9/18/10 | (80,475 | ) |
| Microsoft Corp. | 2,680 | 27.00 | 7/17/10 | (6,700 | ) |
| NIKE, Inc., Class B | 480 | 75.00 | 7/17/10 | (4,800 | ) |
| Northern Trust Corp. | 555 | 55.00 | 7/17/10 | (1,387 | ) |
| Occidental Petroleum Corp. | 520 | 85.00 | 8/21/10 | (79,300 | ) |
| Oracle Corp. | 2,155 | 24.00 | 9/18/10 | (73,270 | ) |
| PACCAR, Inc. | 310 | 45.00 | 8/21/10 | (26,350 | ) |
| Peabody Energy Corp. | 395 | 48.00 | 9/18/10 | (35,155 | ) |
| PepsiCo, Inc. | 645 | 67.50 | 7/17/10 | (1,935 | ) |
| Pfizer, Inc. | 3,745 | 16.00 | 9/18/10 | (80,518 | ) |
| PG&E Corp. | 545 | 45.00 | 9/18/10 | (20,438 | ) |
| Philip Morris International, Inc. | 760 | 47.00 | 9/18/10 | (133,380 | ) |
| PNC Financial Services Group, Inc. | 445 | 67.50 | 8/21/10 | (16,020 | ) |
| Procter & Gamble Co. | 825 | 65.00 | 7/17/10 | (2,062 | ) |
| Procter & Gamble Co. | 490 | 62.50 | 8/21/10 | (31,115 | ) |
| Prudential Financial, Inc. | 645 | 65.00 | 9/18/10 | (59,663 | ) |
| Public Service Enterprise Group, Inc. | 595 | 30.00 | 9/18/10 | (139,825 | ) |
| QUALCOMM, Inc. | 590 | 38.00 | 7/17/10 | (2,655 | ) |
| Schlumberger, Ltd. | 525 | 65.00 | 8/21/10 | (38,063 | ) |
| Southwestern Energy Co. | 235 | 47.00 | 9/18/10 | (16,450 | ) |
| Staples, Inc. | 1,410 | 23.00 | 9/18/10 | (21,150 | ) |
| State Street Corp. | 440 | 43.00 | 8/21/10 | (3,300 | ) |
| Target Corp. | 495 | 57.50 | 7/17/10 | (1,485 | ) |
| Thermo Fisher Scientific, Inc. | 630 | 55.00 | 9/18/10 | (53,550 | ) |
| TJX Companies, Inc. (The) | 635 | 45.00 | 7/17/10 | (12,700 | ) |
| U.S. Bancorp | 960 | 24.00 | 9/18/10 | (85,920 | ) |
| United States Steel Corp. | 180 | 65.00 | 7/17/10 | (90 | ) |
| Varian Medical Systems, Inc. | 190 | 60.00 | 8/21/10 | (7,125 | ) |
| Verizon Communications, Inc. | 590 | 28.00 | 7/17/10 | (25,960 | ) |
| Wal-Mart Stores, Inc. | 945 | 52.50 | 7/17/10 | (2,362 | ) |
| Walt Disney Co. (The) | 544 | 36.00 | 7/17/10 | (1,904 | ) |
| Waste Management, Inc. | 845 | 35.00 | 7/17/10 | (2,535 | ) |
| Wells Fargo & Co. | 1,765 | 34.00 | 7/17/10 | (3,530 | ) |
| Wells Fargo & Co. | 1,060 | 29.00 | 8/21/10 | (47,700 | ) |
| Xerox Corp. | 1,640 | 9.00 | 7/17/10 | (6,560 | ) |
| Zimmer Holdings, Inc. | 275 | 55.00 | 7/17/10 | (22,000 | ) |
| Total Covered Call Options Written (premiums received $12,209,117) | $ (4,003,272 | ) | |||
| Other Assets, Less Liabilities 0.1% | $ 515,626 | ||||
| Net Assets 100.0% | $ 489,459,239 |
| The percentage shown for each investment category in the
Portfolio of Investments is based on net assets. — ADR | American Depositary Receipt |
| --- | --- |
| (1) | A portion of each applicable common stock for which a written
call option is outstanding at June 30, 2010 has been
pledged as collateral for such written option. |
| (2) | Non-income producing security. |
| (3) | Affiliated investment company available to Eaton Vance
portfolios and funds which invests in high quality, U.S. dollar
denominated money market instruments. The rate shown is the
annualized seven-day yield as of June 30, 2010. Net income allocated from the
investment in Eaton Vance Cash Reserves Fund, LLC and Cash
Management Portfolio, an affiliated investment company, for the
fiscal year to date ended June 30, 2010 was $8,462 and $0,
respectively. |
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The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2010, as determined on a federal income tax basis, were as follows:
| Aggregate cost | $ | |
|---|---|---|
| Gross unrealized appreciation | $ 45,161,975 | |
| Gross unrealized depreciation | (45,574,944 | ) |
| Net unrealized depreciation | $ (412,969 | ) |
Written call options activity for the fiscal year to date ended June 30, 2010 was as follows:
| Contracts | Received | |||
|---|---|---|---|---|
| Outstanding, beginning of period | 82,872 | $ | 16,233,693 | |
| Options written | 280,274 | 48,919,460 | ||
| Options terminated in closing purchase transactions | (185,617 | ) | (36,722,806 | ) |
| Options exercised | (6,737 | ) | (1,055,075 | ) |
| Options expired | (86,444 | ) | (15,166,155 | ) |
| Outstanding, end of period | 84,348 | $ | 12,209,117 |
At June 30, 2010, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
The Fund is subject to equity price risk in the normal course of pursuing its investment objective. The Fund generally intends to write covered call options on individual stocks above the current value of the stock to generate premium income. In writing call options on individual stocks, the Fund in effect, sells potential appreciation in the value of the applicable stock above the exercise price in exchange for the option premium received. The Fund retains the risk of loss, minus the premium received, should the price of the underlying stock decline. The Fund is not subject to counterparty credit risk with respect to its written options as the Fund, not the counterparty, is obligated to perform under such derivatives.
At June 30, 2010, the aggregate fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is equity price risk was $4,003,272.
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| | Level 1 quoted prices in active markets for
identical investments |
| --- | --- |
| | Level 2 other significant observable inputs
(including quoted prices for similar investments, interest
rates, prepayment speeds, credit risk, etc.) |
| | Level 3 significant unobservable inputs
(including a funds own assumptions in determining the fair
value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2010, the inputs used in valuing the Funds investments, which are carried at value, were as follows:
| Quoted Prices in — Active Markets for | Significant Other | Significant | ||||
|---|---|---|---|---|---|---|
| Identical Assets | Observable Inputs | Unobservable Inputs | ||||
| Asset Description | (Level 1) | (Level 2) | (Level 3) | Total | ||
| Common Stocks | $ 483,583,551 | $ | $ | $ 483,583,551 | ||
| Short-Term Investments | | 9,363,334 | | 9,363,334 | ||
| Total Investments | $ 483,583,551 | $ 9,363,334 | $ | $ 492,946,885 | ||
| Liability Description | ||||||
| Covered Call Options Written | $ (4,003,272 | ) | $ | $ | $ (4,003,272 | ) |
| Total | $ (4,003,272 | ) | $ | $ | $ (4,003,272 | ) |
The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments.
The Fund held no investments or other financial instruments as of September 30, 2009 whose fair value was determined using Level 3 inputs.
For information on the Funds policy regarding the valuation of investments and other significant accounting policies, please refer to the Funds most recent financial statements included in its semiannual or annual report to shareholders.
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link2 "Item 2. Controls and Procedures"
Item 2. Controls and Procedures
(a) It is the conclusion of the registrants principal executive officer and principal financial officer that the effectiveness of the registrants current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commissions rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrants principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrants internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrants internal control over financial reporting.
Folio /Folio
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link1 "Signatures"
Signatures
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.
Eaton Vance Enhanced Equity Income Fund
| By: | /s/ Duncan W. Richardson Duncan W. Richardson |
|---|---|
| President | |
| Date: | August 25, 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/ Duncan W. Richardson |
|---|---|
| Duncan W. Richardson | |
| President | |
| Date: | August 25, 2010 |
| By: | /s/ Barbara E. Campbell |
| Barbara E. Campbell | |
| Treasurer | |
| Date: | August 25, 2010 |
Folio /Folio
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