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 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 12/31/2018

Date of reporting period: 03/31/2018

Item 1 – Schedule of Investments

Schedule of Investments  (unaudited)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks — 100.0%

 

Airlines — 1.6%  

Delta Air Lines, Inc.

     210,765     $ 11,552,030  
   

 

 

  
Auto Components — 0.7%  

Allison Transmission Holdings, Inc.

     49,190       1,921,361  

Goodyear Tire & Rubber Co.

     117,432       3,121,343  
   

 

 

  
      5,042,704  
Banks — 12.7%  

Bank of America Corp.(a)(b)

     727,611       21,821,054  

Citigroup, Inc.

     146,123       9,863,302  

JPMorgan Chase & Co.(a)

     248,846       27,365,595  

Regions Financial Corp.

     330,035       6,132,050  

SunTrust Banks, Inc.

     211,115       14,364,265  

U.S. Bancorp

     270,232       13,646,716  
   

 

 

  
      93,192,982  
Biotechnology — 3.7%  

Biogen, Inc.(c)

     55,904       15,307,633  

Gilead Sciences, Inc.

     157,584       11,880,258  
   

 

 

  
      27,187,891  
Capital Markets — 1.2%  

E*Trade Financial Corp.(c)

     155,986       8,643,184  
   

 

 

  
Chemicals — 2.2%  

DowDuPont, Inc.

     250,010       15,928,137  
   

 

 

  
Communications Equipment — 2.9%  

Cisco Systems, Inc.

     488,674       20,959,228  
   

 

 

  
Consumer Finance — 1.6%  

Ally Financial, Inc.

     174,406       4,735,123  

SLM Corp.(c)

     636,757       7,138,046  
   

 

 

  
      11,873,169  
Containers & Packaging — 1.1%  

Packaging Corp. of America

     71,488       8,056,698  
   

 

 

  
Electric Utilities — 2.8%  

FirstEnergy Corp.

     338,399       11,508,950  

PG&E Corp.

     206,492       9,071,193  
   

 

 

  
      20,580,143  
Electronic Equipment, Instruments & Components — 2.5%  

CDW Corp.

     159,607       11,221,968  

Flex Ltd.(c)

     411,105       6,713,345  
   

 

 

  
      17,935,313  
Food & Staples Retailing — 3.4%  

CVS Health Corp.(b)

     126,275       7,855,568  
Security   Shares     Value  
Food & Staples Retailing (continued)  

Walmart Inc.

     191,513     $ 17,038,911  
   

 

 

  
      24,894,479  
Food Products — 1.1%  

J.M. Smucker Co.

     65,350       8,104,053  
   

 

 

  
Health Care Equipment & Supplies — 1.4%  

Baxter International, Inc.

     155,778       10,131,801  
   

 

 

  
Health Care Providers & Services — 7.1%  

Centene Corp.(c)

     81,787       8,740,577  

DaVita, Inc.(c)

     30,560       2,015,126  

Humana, Inc.

     58,609       15,755,858  

Laboratory Corp. of America Holdings(c)

     52,496       8,491,228  

UnitedHealth Group, Inc.

     79,875       17,093,250  
   

 

 

  
      52,096,039  
Hotels, Restaurants & Leisure — 1.2%  

Carnival Corp.

     137,002       8,984,591  
   

 

 

  
Household Durables — 2.6%  

D.R. Horton, Inc.

     286,922       12,578,660  

Lennar Corp., Class A

     55,458       3,268,695  

NVR, Inc.(c)

     1,111       3,110,800  
   

 

 

  
      18,958,155  
Household Products — 0.2%  

Energizer Holdings, Inc.

     29,203       1,739,915  
   

 

 

  
Industrial Conglomerates — 0.9%  

General Electric Co.

     491,261       6,622,198  
   

 

 

  
Insurance — 1.4%  

Assured Guaranty Ltd.

     95,526       3,458,041  

Hartford Financial Services Group, Inc.

     137,390       7,078,333  
   

 

 

  
      10,536,374  
Internet Software & Services — 4.5%  

Alphabet, Inc., Class A(c)

     32,047       33,237,226  
   

 

 

  
IT Services — 3.1%  

Amdocs Ltd.

     85,640       5,713,901  

Cognizant Technology Solutions Corp., Class A

     213,032       17,149,076  
   

 

 

  
      22,862,977  
Machinery — 1.5%  

Fortive Corp.

     107,288       8,316,966  
 

 

     1  

Schedule of Investments  (unaudited) (continued)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Security   Shares      Value  
Machinery (continued)  

WABCO Holdings, Inc.(c)

     18,036      $ 2,414,479  
    

 

 

  
       10,731,445  
Media — 2.4%  

Comcast Corp.,, Class A(b)

     507,620        17,345,375  
    

 

 

  
Metals & Mining — 1.0%  

Rio Tinto PLC — ADR

     141,026        7,267,070  
    

 

 

  
Multi-Utilities — 0.6%  

Public Service Enterprise Group, Inc.

     80,381        4,038,341  
    

 

 

  
Oil, Gas & Consumable Fuels — 6.0%  

BP PLC — ADR

     207,078        8,394,942  

Chevron Corp.

     135,256        15,424,594  

Marathon Oil Corp.

     119,549        1,928,326  

Suncor Energy, Inc.

     404,193        13,960,826  

TOTAL SA — ADR

     78,754        4,543,318  
    

 

 

  
       44,252,006  
Pharmaceuticals — 4.2%  

Novo Nordisk A/S — ADR

     176,905        8,712,571  

Pfizer, Inc.

     621,275        22,049,050  
    

 

 

  
       30,761,621  
Professional Services — 0.8%  

Robert Half International, Inc.

     96,981        5,614,230  
    

 

 

  
Road & Rail — 1.9%  

Norfolk Southern Corp.

     104,869        14,239,113  
    

 

 

  
Software — 8.4%  

Dell Technologies, Inc., Class V(c)

     124,103        9,085,581  
Security   Shares     Value  
Software (continued)  

Microsoft Corp.(b)

     395,647     $ 36,110,702  

Oracle Corp.

     360,671       16,500,698  
   

 

 

  
      61,696,981  
Specialty Retail — 5.3%  

Home Depot, Inc.

     65,564       11,686,127  

Lowe’s Cos., Inc.(b)

     182,964       16,055,091  

Urban Outfitters, Inc.(c)

     296,473       10,957,642  
   

 

 

  
      38,698,860  
Technology Hardware, Storage & Peripherals — 5.5%  

Apple, Inc.(a)

     240,746       40,392,364  
   

 

 

  
Tobacco — 2.5%  

Altria Group, Inc.(b)

     288,708       17,992,283  
   

 

 

  

Total Long-Term Investments — 100.0%
(Cost — $580,819,235)

 

     732,148,976  
   

 

 

  
Short-Term Securities — 0.6%  

BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.58%(d)(e)

     4,100,115       4,100,115  
   

 

 

  

Total Short-Term Securities — 0.6%
(Cost — $4,100,115)

 

     4,100,115  
   

 

 

  

Total Investments Before Options Written — 100.6%
(Cost — $584,919,350)

 

     736,249,091  
   

 

 

  

Options Written — (0.6)%
(Premiums Received — $7,555,428)

 

     (4,204,474 ) 
   

 

 

  

Total Investments, Net of Options Written — 100.0%
(Cost — $577,363,922)

 

     732,044,617  

Other Assets Less Liabilities — 0.0%

 

     224,225  
   

 

 

  

Net Assets — 100.0%

 

   $ 732,268,842  
   

 

 

  
 
(a)  All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.
(b)  All or a portion of security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.
(c)  Non-income producing security.
(d)  Annualized 7-day yield as of period end.
(e)  During the period ended March 31, 2018, 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
Held at
12/31/17		      Net
Activity		      Shares
Held at
03/31/18		      Value at
03/31/18		      Income     

Net

Realized
Gain (a)

      Change in
Unrealized
Appreciation
(Depreciation)		  

BlackRock Liquidity Funds, T-Fund, Institutional Class

      3,142,974        957,141        4,100,115      $ 4,100,115      $ 11,713      $ —      $ —  
           

 

 

     

 

 

     

 

 

     

 

 

  

 

  (a)  Includes net capital gain distributions, if applicable.  

 

2   

Schedule of Investments  (unaudited) (continued)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

 

For Trust compliance purposes, the Trust’s industry classifications refer to 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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Portfolio Abbreviations

ADR — American Depositary Receipts

USD — U.S. Dollar

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Written

 

Description    Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                           

Novo Nordisk A/S — ADR

      124          04/03/18        USD     51.85        USD     611        $ (71 ) 

Cisco Systems, Inc.

      453          04/05/18        USD     42.70        USD     1,943          (21,826 ) 

Oracle Corp.

      230          04/05/18        USD     52.75        USD     1,052          —  

Alphabet, Inc., Class A

      18          04/06/18        USD     1,150.00        USD     1,867          (360 ) 

Apple, Inc.

      121          04/06/18        USD     177.50        USD     2,030          (1,936 ) 

BP PLC — ADR

      218          04/06/18        USD     40.00        USD     884          (17,331 ) 

Bank of America Corp.

      254          04/06/18        USD     33.50        USD     762          (254 ) 

Baxter International, Inc.

      29          04/06/18        USD     67.50        USD     189          (928 ) 

Baxter International, Inc.

      57          04/06/18        USD     68.50        USD     371          (912 ) 

CVS Health Corp.

      283          04/06/18        USD     70.00        USD     1,761          (3,113 ) 

Carnival Corp.

      308          04/06/18        USD     68.50        USD     2,020          (3,080 ) 

Chevron Corp.

      166          04/06/18        USD     114.00        USD     1,893          (23,157 ) 

Chevron Corp.

      53          04/06/18        USD     117.00        USD     604          (1,590 ) 

Cisco Systems, Inc.

      321          04/06/18        USD     46.50        USD     1,377          (1,926 ) 

Citigroup, Inc.

      212          04/06/18        USD     79.40        USD     1,431          (5 ) 

Citigroup, Inc.

      51          04/06/18        USD     75.50        USD     344          (561 ) 

Comcast Corp., Class A

      70          04/06/18        USD     41.00        USD     239          (3,640 ) 

Comcast Corp., Class A

      114          04/06/18        USD     38.50        USD     390          (1,140 ) 

D.R. Horton, Inc.

      456          04/06/18        USD     45.50        USD     1,999          (8,436 ) 

Delta Air Lines, Inc.

      383          04/06/18        USD     56.00        USD     2,099          (15,512 ) 

DowDuPont, Inc.

      128          04/06/18        USD     74.50        USD     815          (1,152 ) 

E*Trade Financial Corp.

      132          04/06/18        USD     52.00        USD     731          (47,190 ) 

Goodyear Tire & Rubber Co.

      752          04/06/18        USD     29.00        USD     1,999          (3,760 ) 

Hartford Financial Services Group, Inc.

      126          04/06/18        USD     55.50        USD     649          (1,134 ) 

Home Depot, Inc.

      498          04/06/18        USD     190.00        USD     8,876          (2,739 ) 

Humana, Inc.

      74          04/06/18        USD     277.50        USD     1,989          (3,330 ) 

JPMorgan Chase & Co.

      100          04/06/18        USD     115.00        USD     1,100          (1,500 ) 

JPMorgan Chase & Co.

      31          04/06/18        USD     116.00        USD     341          (341 ) 

JPMorgan Chase & Co.

      47          04/06/18        USD     117.00        USD     517          (423 ) 

Lowe’s Cos., Inc.

      281          04/06/18        USD     91.00        USD     2,466          (5,339 ) 

Marathon Oil Corp.

      121          04/06/18        USD     16.50        USD     195          (2,117 ) 

Microsoft Corp.

      99          04/06/18        USD     95.00        USD     904          (2,871 ) 

Pfizer, Inc.

      56          04/06/18        USD     36.50        USD     199          (448 ) 

Pfizer, Inc.

      55          04/06/18        USD     37.00        USD     195          (220 ) 

Suncor Energy, Inc.

      216          04/06/18        USD     35.50        USD     746          (2,052 ) 

U.S. Bancorp

      55          04/06/18        USD     54.50        USD     278          (440 ) 

Urban Outfitters, Inc.

      300          04/06/18        USD     38.00        USD     1,109          (12,750 ) 

FirstEnergy Corp.

      308          04/09/18        USD     32.15        USD     1,048          (60,393 ) 

Regions Financial Corp.

      362          04/12/18        USD     19.32        USD     673          (7,503 ) 

 

     3  

Schedule of Investments  (unaudited) (continued)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                           

SunTrust Banks, Inc.

      389          04/12/18        USD     72.51        USD     2,647        $ (6,781 ) 

Alphabet, Inc., Class A

      21          04/13/18        USD     1,155.00        USD     2,178          (3,780 ) 

Apple, Inc.

      91          04/13/18        USD     180.00        USD     1,527          (2,821 ) 

Bank of America Corp.

      488          04/13/18        USD     31.90        USD     1,464          (5,627 ) 

Bank of America Corp.

      508          04/13/18        USD     32.50        USD     1,523          (2,286 ) 

Baxter International, Inc.

      29          04/13/18        USD     68.00        USD     189          (493 ) 

Baxter International, Inc.

      45          04/13/18        USD     69.00        USD     293          (810 ) 

Biogen, Inc.

      33          04/13/18        USD     290.00        USD     904          (5,115 ) 

Chevron Corp.

      53          04/13/18        USD     117.00        USD     604          (3,736 ) 

Chevron Corp.

      52          04/13/18        USD     118.00        USD     593          (2,418 ) 

Citigroup, Inc.

      86          04/13/18        USD     76.50        USD     581          (473 ) 

Comcast Corp., Class A

      620          04/13/18        USD     40.20        USD     2,119          (373 ) 

D.R. Horton, Inc.

      553          04/13/18        USD     43.50        USD     2,424          (70,508 ) 

Delta Air Lines, Inc.

      318          04/13/18        USD     56.00        USD     1,743          (29,733 ) 

Flex Ltd.

      746          04/13/18        USD     18.00        USD     1,218          (2,984 ) 

Humana, Inc.

      44          04/13/18        USD     275.00        USD     1,183          (10,230 ) 

JPMorgan Chase & Co.

      198          04/13/18        USD     115.00        USD     2,177          (14,157 ) 

JPMorgan Chase & Co.

      47          04/13/18        USD     117.00        USD     517          (2,162 ) 

Marathon Oil Corp.

      121          04/13/18        USD     16.51        USD     195          (4,091 ) 

Microsoft Corp.

      400          04/13/18        USD     93.50        USD     3,651          (45,000 ) 

Norfolk Southern Corp.

      227          04/13/18        USD     144.00        USD     3,082          (10,215 ) 

Oracle Corp.

      271          04/13/18        USD     50.00        USD     1,240          (1,084 ) 

Pfizer, Inc.

      119          04/13/18        USD     36.50        USD     422          (2,082 ) 

Pfizer, Inc.

      237          04/13/18        USD     37.00        USD     841          (1,896 ) 

Pfizer, Inc.

      116          04/13/18        USD     37.50        USD     412          (580 ) 

Suncor Energy, Inc.

      270          04/13/18        USD     32.50        USD     933          (59,670 ) 

U.S. Bancorp

      429          04/13/18        USD     53.00        USD     2,166          (6,864 ) 

UnitedHealth Group, Inc.

      57          04/13/18        USD     230.00        USD     1,220          (3,448 ) 

Urban Outfitters, Inc.

      165          04/13/18        USD     36.50        USD     610          (25,163 ) 

Urban Outfitters, Inc.

      165          04/13/18        USD     37.00        USD     610          (20,213 ) 

SunTrust Banks, Inc.

      389          04/19/18        USD     73.00        USD     2,647          (10,965 ) 

Alphabet, Inc., Class A

      18          04/20/18        USD     1,150.00        USD     1,867          (3,915 ) 

Alphabet, Inc., Class A

      21          04/20/18        USD     1,200.00        USD     2,178          (1,575 ) 

Altria Group, Inc.

      543          04/20/18        USD     67.50        USD     3,384          (4,615 ) 

Altria Group, Inc.

      80          04/20/18        USD     65.00        USD     499          (2,600 ) 

Amdocs Ltd.

      263          04/20/18        USD     67.50        USD     1,755          (25,643 ) 

Apple, Inc.

      204          04/20/18        USD     180.00        USD     3,423          (14,382 ) 

Apple, Inc.

      74          04/20/18        USD     175.00        USD     1,242          (12,210 ) 

Assured Guaranty Ltd.

      167          04/20/18        USD     37.00        USD     605          (10,437 ) 

Assured Guaranty Ltd.

      200          04/20/18        USD     36.00        USD     724          (22,800 ) 

BP PLC — ADR

      145          04/20/18        USD     43.00        USD     588          (1,377 ) 

Bank of America Corp.

      103          04/20/18        USD     32.00        USD     309          (2,008 ) 

Bank of America Corp.

      254          04/20/18        USD     34.00        USD     762          (635 ) 

Baxter International, Inc.

      168          04/20/18        USD     70.00        USD     1,093          (1,512 ) 

Biogen, Inc.

      28          04/20/18        USD     295.00        USD     767          (4,200 ) 

CDW Corp.

      219          04/20/18        USD     75.75        USD     1,540          (8,063 ) 

CVS Health Corp.

      283          04/20/18        USD     70.00        USD     1,761          (2,405 ) 

Carnival Corp.

      309          04/20/18        USD     70.00        USD     2,026          (4,635 ) 

Centene Corp.

      228          04/20/18        USD     110.00        USD     2,437          (40,470 ) 

 

 

4   

Schedule of Investments  (unaudited) (continued)

March 31, 2018

    BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                           

Chevron Corp.

      208          04/20/18        USD     120.00        USD     2,372        $ (7,488 ) 

Cisco Systems, Inc.

      610          04/20/18        USD     42.00        USD     2,616          (80,215 ) 

Citigroup, Inc.

      127          04/20/18        USD     80.00        USD     857          (508 ) 

Cognizant Technology Solutions Corp., Class A

      100          04/20/18        USD     82.50        USD     805          (10,250 ) 

Comcast Corp., Class A

      76          04/20/18        USD     37.50        USD     260          (646 ) 

DaVita, Inc.

      84          04/20/18        USD     77.50        USD     554          (840 ) 

Dell Technologies, Inc., Class V

      388          04/20/18        USD     75.00        USD     2,841          (95,060 ) 

Dell Technologies, Inc., Class V

      46          04/20/18        USD     80.00        USD     337          (5,175 ) 

Delta Air Lines, Inc.

      317          04/20/18        USD     57.50        USD     1,737          (21,715 ) 

DowDuPont, Inc.

      531          04/20/18        USD     70.00        USD     3,383          (6,372 ) 

E*Trade Financial Corp.

      223          04/20/18        USD     56.75        USD     1,236          (30,414 ) 

Energizer Holdings, Inc.

      185          04/20/18        USD     55.00        USD     1,102          (99,900 ) 

FirstEnergy Corp.

      301          04/20/18        USD     34.00        USD     1,024          (23,328 ) 

Flex Ltd.

      568          04/20/18        USD     18.00        USD     928          (1,988 ) 

Flex Ltd.

      189          04/20/18        USD     19.00        USD     309          (189 ) 

Fortive Corp.

      240          04/20/18        USD     78.10        USD     1,860          (37,144 ) 

General Electric Co.

      199          04/20/18        USD     15.00        USD     268          (2,786 ) 

Gilead Sciences, Inc.

      165          04/20/18        USD     82.50        USD     1,244          (3,795 ) 

Hartford Financial Services Group, Inc.

      183          04/20/18        USD     55.00        USD     943          (3,751 ) 

J.M. Smucker Co.

      264          04/20/18        USD     135.00        USD     3,274          (4,620 ) 

JPMorgan Chase & Co.

      298          04/20/18        USD     115.00        USD     3,277          (27,863 ) 

Laboratory Corp. of America Holdings

      120          04/20/18        USD     176.90        USD     1,941          (1,583 ) 

Lennar Corp., Class A

      151          04/20/18        USD     62.50        USD     890          (12,835 ) 

Lowe’s Cos., Inc.

      281          04/20/18        USD     92.50        USD     2,466          (15,315 ) 

Marathon Oil Corp.

      249          04/20/18        USD     16.00        USD     402          (16,808 ) 

Microsoft Corp.

      492          04/20/18        USD     92.50        USD     4,490          (94,956 ) 

Novo Nordisk A/S — ADR

      567          04/20/18        USD     54.00        USD     2,792          (4,706 ) 

Oracle Corp.

      518          04/20/18        USD     50.00        USD     2,370          (3,108 ) 

PG&E Corp.

      120          04/20/18        USD     42.50        USD     527          (25,800 ) 

Packaging Corp. of America

      116          04/20/18        USD     125.00        USD     1,307          (1,740 ) 

Pfizer, Inc.

      224          04/20/18        USD     37.00        USD     795          (3,248 ) 

Pfizer, Inc.

      116          04/20/18        USD     38.00        USD     412          (580 ) 

Public Service Enterprise Group, Inc.

      113          04/20/18        USD     50.00        USD     568          (12,713 ) 

Regions Financial Corp.

      341          04/20/18        USD     19.40        USD     634          (10,026 ) 

Regions Financial Corp.

      409          04/20/18        USD     20.00        USD     760          (8,384 ) 

Rio Tinto PLC — ADR

      295          04/20/18        USD     57.50        USD     1,520          (2,212 ) 

Rio Tinto PLC — ADR

      67          04/20/18        USD     65.00        USD     345          (335 ) 

Robert Half International, Inc.

      259          04/20/18        USD     60.00        USD     1,499          (22,663 ) 

SLM Corp.

      2,002          04/20/18        USD     12.00        USD     2,244          (22,022 ) 

Suncor Energy, Inc.

      81          04/20/18        USD     36.00        USD     280          (1,782 ) 

TOTAL SA — ADR

      139          04/20/18        USD     58.70        USD     802          (7,344 ) 

U.S. Bancorp

      371          04/20/18        USD     55.00        USD     1,874          (2,968 ) 

UnitedHealth Group, Inc.

      70          04/20/18        USD     230.00        USD     1,498          (12,985 ) 

WABCO Holdings, Inc.

      99          04/20/18        USD     145.00        USD     1,325          (6,187 ) 

Walmart Inc.

      306          04/20/18        USD     91.50        USD     2,722          (21,267 ) 

FirstEnergy Corp.

      302          04/25/18        USD     34.01        USD     1,027          (25,817 ) 

Alphabet, Inc., Class A

      7          04/27/18        USD     1,180.00        USD     726          (2,660 ) 

Alphabet, Inc., Class A

      7          04/27/18        USD     1,100.00        USD     726          (12,355 ) 

Altria Group, Inc.

      521          04/27/18        USD     65.50        USD     3,247          (25,008 ) 

 

 

     5  

Schedule of Investments  (unaudited) (continued)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                           

Apple, Inc.

      151          04/27/18        USD     182.50        USD     2,533        $ (10,268 ) 

BP PLC — ADR

      65          04/27/18        USD     41.00        USD     264          (4,582 ) 

Bank of America Corp.

      805          04/27/18        USD     32.00        USD     2,414          (20,125 ) 

Baxter International, Inc.

      121          04/27/18        USD     68.00        USD     787          (6,776 ) 

Biogen, Inc.

      114          04/27/18        USD     300.00        USD     3,122          (27,075 ) 

Chevron Corp.

      77          04/27/18        USD     121.00        USD     878          (4,312 ) 

Citigroup, Inc.

      56          04/27/18        USD     75.50        USD     378          (2,464 ) 

Citigroup, Inc.

      22          04/27/18        USD     75.00        USD     149          (979 ) 

Cognizant Technology Solutions Corp., Class A

      479          04/27/18        USD     86.00        USD     3,856          (19,160 ) 

Comcast Corp., Class A

      103          04/27/18        USD     36.50        USD     352          (3,399 ) 

Delta Air Lines, Inc.

      146          04/27/18        USD     55.00        USD     800          (22,818 ) 

DowDuPont, Inc.

      138          04/27/18        USD     66.50        USD     879          (10,902 ) 

E*Trade Financial Corp.

      382          04/27/18        USD     54.00        USD     2,117          (117,274 ) 

General Electric Co.

      493          04/27/18        USD     15.50        USD     665          (5,916 ) 

Gilead Sciences, Inc.

      217          04/27/18        USD     84.00        USD     1,636          (11,392 ) 

Goodyear Tire & Rubber Co.

      286          04/27/18        USD     29.00        USD     760          (5,720 ) 

Hartford Financial Services Group, Inc.

      304          04/27/18        USD     55.00        USD     1,566          (10,488 ) 

Humana, Inc.

      88          04/27/18        USD     275.00        USD     2,366          (33,660 ) 

Lowe’s Cos., Inc.

      199          04/27/18        USD     89.00        USD     1,746          (36,815 ) 

Microsoft Corp.

      56          04/27/18        USD     94.00        USD     511          (9,900 ) 

Microsoft Corp.

      29          04/27/18        USD     95.00        USD     265          (5,651 ) 

Norfolk Southern Corp.

      140          04/27/18        USD     143.00        USD     1,901          (24,500 ) 

PG&E Corp.

      284          04/27/18        USD     46.50        USD     1,248          (16,330 ) 

PG&E Corp.

      33          04/27/18        USD     44.00        USD     145          (4,785 ) 

Pfizer, Inc.

      350          04/27/18        USD     37.00        USD     1,242          (7,700 ) 

Pfizer, Inc.

      116          04/27/18        USD     38.00        USD     412          (986 ) 

Suncor Energy, Inc.

      42          04/27/18        USD     35.00        USD     145          (2,730 ) 

U.S. Bancorp

      28          04/27/18        USD     54.50        USD     141          (490 ) 

UnitedHealth Group, Inc.

      155          04/27/18        USD     232.50        USD     3,317          (27,280 ) 

Urban Outfitters, Inc.

      370          04/27/18        USD     37.50        USD     1,368          (51,800 ) 

Walmart Inc.

      76          04/27/18        USD     91.50        USD     676          (6,992 ) 

Bank of America Corp.

      161          04/30/18        USD     31.50        USD     483          (6,549 ) 

Fortive Corp.

      350          04/30/18        USD     78.50        USD     2,713          (50,750 ) 

Pfizer, Inc.

      4          04/30/18        USD     35.75        USD     14          (232 ) 

Novo Nordisk A/S — ADR

      229          05/01/18        USD     51.51        USD     1,128          (19,146 ) 

Alphabet, Inc., Class A

      4          05/04/18        USD     1,100.00        USD     415          (7,620 ) 

Altria Group, Inc.

      177          05/04/18        USD     64.00        USD     1,103          (18,851 ) 

Apple, Inc.

      305          05/04/18        USD     172.50        USD     5,117          (140,300 ) 

BP PLC — ADR

      116          05/04/18        USD     42.00        USD     470          (6,264 ) 

Bank of America Corp.

      343          05/04/18        USD     31.50        USD     1,029          (15,435 ) 

Bank of America Corp.

      171          05/04/18        USD     32.00        USD     513          (5,386 ) 

CVS Health Corp.

      128          05/04/18        USD     64.00        USD     796          (18,240 ) 

Carnival Corp.

      140          05/04/18        USD     68.00        USD     918          (11,900 ) 

Chevron Corp.

      56          05/04/18        USD     119.00        USD     639          (7,140 ) 

Cisco Systems, Inc.

      334          05/04/18        USD     44.00        USD     1,433          (20,374 ) 

Citigroup, Inc.

      89          05/04/18        USD     74.00        USD     601          (5,651 ) 

Cognizant Technology Solutions Corp., Class A

      166          05/04/18        USD     82.00        USD     1,336          (36,520 ) 

Comcast Corp., Class A

      59          05/04/18        USD     35.50        USD     202          (3,923 ) 

DowDuPont, Inc.

      105          05/04/18        USD     67.00        USD     669          (9,607 ) 

E*Trade Financial Corp.

      128          05/04/18        USD     56.00        USD     709          (26,814 ) 

 

 

6   

Schedule of Investments  (unaudited) (continued)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                           

Flex Ltd.

      380          05/04/18        USD     17.00        USD     621        $ (16,340 ) 

General Electric Co.

      95          05/04/18        USD     14.50        USD     128          (2,660 ) 

Gilead Sciences, Inc.

      167          05/04/18        USD     77.50        USD     1,259          (33,734 ) 

Hartford Financial Services Group, Inc.

      142          05/04/18        USD     53.00        USD     732          (16,117 ) 

JPMorgan Chase & Co.

      150          05/04/18        USD     114.00        USD     1,650          (26,475 ) 

Marathon Oil Corp.

      83          05/04/18        USD     17.50        USD     134          (2,863 ) 

Microsoft Corp.

      112          05/04/18        USD     94.00        USD     1,022          (27,720 ) 

Oracle Corp.

      219          05/04/18        USD     48.00        USD     1,002          (9,417 ) 

Pfizer, Inc.

      24          05/04/18        USD     36.50        USD     85          (1,212 ) 

Pfizer, Inc.

      26          05/04/18        USD     36.00        USD     92          (1,833 ) 

Pfizer, Inc.

      2          05/04/18        USD     35.50        USD     7          (192 ) 

Suncor Energy, Inc.

      29          05/04/18        USD     35.00        USD     100          (2,450 ) 

Suncor Energy, Inc.

      32          05/04/18        USD     35.50        USD     111          (2,016 ) 

U.S. Bancorp

      160          05/04/18        USD     52.50        USD     808          (10,800 ) 

Urban Outfitters, Inc.

      330          05/04/18        USD     38.00        USD     1,220          (41,250 ) 

Wal-Mart Stores, Inc.Walmart Inc.

      153          05/04/18        USD     91.00        USD     1,361          (20,120 ) 

FirstEnergy Corp.

      242          05/08/18        USD     35.01        USD     823          (12,097 ) 

TOTAL SA — ADR

      150          05/08/18        USD     58.60        USD     865          (14,339 ) 

Apple, Inc.

      158          05/11/18        USD     172.50        USD     2,651          (95,465 ) 

Bank of America Corp.

      183          05/11/18        USD     31.00        USD     549          (9,699 ) 

Suncor Energy, Inc.

      8          05/11/18        USD     36.00        USD     28          (400 ) 

Robert Half International, Inc.

      276          05/17/18        USD     59.25        USD     1,598          (56,797 ) 

Allison Transmission Holdings, Inc.

      292          05/18/18        USD     40.00        USD     1,141          (36,500 ) 

Alphabet, Inc., Class A

      3          05/18/18        USD     1,100.00        USD     311          (7,170 ) 

Amdocs Ltd.

      210          05/18/18        USD     67.50        USD     1,401          (37,800 ) 

Apple, Inc.

      220          05/18/18        USD     180.00        USD     3,691          (59,840 ) 

BP PLC — ADR

      130          05/18/18        USD     42.00        USD     527          (8,125 ) 

Bank of America Corp.

      183          05/18/18        USD     31.00        USD     549          (14,274 ) 

Baxter International, Inc.

      96          05/18/18        USD     66.25        USD     624          (15,072 ) 

Biogen, Inc.

      20          05/18/18        USD     290.00        USD     548          (13,300 ) 

Chevron Corp.

      78          05/18/18        USD     120.00        USD     890          (10,998 ) 

Citigroup, Inc.

      23          05/18/18        USD     75.00        USD     155          (1,598 ) 

Citigroup, Inc.

      137          05/18/18        USD     72.50        USD     925          (18,084 ) 

Comcast Corp., Class A

      164          05/18/18        USD     35.00        USD     560          (17,220 ) 

DowDuPont, Inc.

      192          05/18/18        USD     67.50        USD     1,223          (20,064 ) 

FirstEnergy Corp.

      302          05/18/18        USD     36.00        USD     1,027          (15,704 ) 

Flex Ltd.

      380          05/18/18        USD     17.00        USD     621          (19,000 ) 

General Electric Co.

      99          05/18/18        USD     15.00        USD     133          (2,475 ) 

Gilead Sciences, Inc.

      317          05/18/18        USD     80.00        USD     2,390          (50,562 ) 

Laboratory Corp. of America Holdings

      170          05/18/18        USD     178.85        USD     2,750          (13,186 ) 

Lennar Corp., Class A

      155          05/18/18        USD     62.50        USD     914          (22,088 ) 

Lowe’s Cos., Inc.

      245          05/18/18        USD     90.00        USD     2,150          (53,655 ) 

Marathon Oil Corp.

      83          05/18/18        USD     16.00        USD     134          (8,839 ) 

Oracle Corp.

      301          05/18/18        USD     48.00        USD     1,377          (18,512 ) 

Pfizer, Inc.

      49          05/18/18        USD     37.00        USD     174          (1,911 ) 

Public Service Enterprise Group, Inc.

      165          05/18/18        USD     50.00        USD     829          (28,463 ) 

SLM Corp.

      863          05/18/18        USD     11.00        USD     967          (61,705 ) 

SunTrust Banks, Inc.

      383          05/18/18        USD     68.75        USD     2,606          (90,820 ) 

Suncor Energy, Inc.

      7          05/18/18        USD     36.00        USD     24          (441 ) 

 

     7  

Schedule of Investments  (unaudited) (continued)

March 31, 2018

   

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                           

TOTAL SA — ADR

      69          05/18/18        USD     57.50        USD     398        $ (11,212 ) 

U.S. Bancorp

      111          05/18/18        USD     52.50        USD     561          (9,990 ) 

UnitedHealth Group, Inc.

      157          05/18/18        USD     226.25        USD     3,360          (93,487 ) 

Urban Outfitters, Inc.

      300          05/18/18        USD     39.00        USD     1,109          (52,500 ) 

Walmart Inc.

      77          05/18/18        USD     92.50        USD     685          (12,128 ) 
                          

 

 

  
                           $ (3,776,864 ) 
                          

 

 

  

OTC Options Written

 

Description    Counterparty      Number of
Contracts		        Expiration
Date		        Exercise
Price		        Notional
Amount (000)		        Value  

Call

                                   

Regions Financial Corp.

    Citibank N.A.        70,300          04/03/18          USD       19.98          USD          1,306        $ (1,066 ) 

Ally Financial, Inc.

    Citibank N.A.        21,700          04/05/18          USD       29.12          USD          589          (125 ) 

Rio Tinto PLC — ADR

    Barclays Bank PLC        30,200          04/09/18          USD       54.00          USD          1,556          (7,207 ) 

CDW Corp.

    Citibank N.A.        65,800          04/10/18          USD       72.90          USD          4,626          (28,911 ) 

Centene Corp.

    Citibank N.A.        22,100          04/11/18          USD       103.48          USD          2,362          (108,015 ) 

Novo Nordisk A/S — ADR

    Citibank N.A.        5,200          04/11/18          USD       51.92          USD          256          (392 ) 

Public Service Enterprise Group, Inc.

    Bank of America N.A.        16,400          04/13/18          USD       50.62          USD          824          (10,635 ) 

Ally Financial, Inc.

    Citibank N.A.        21,700          04/19/18          USD       29.26          USD          589          (1,681 ) 

Ally Financial, Inc.

    UBS AG        22,000          04/19/18          USD       29.66          USD          597          (983 ) 

FirstEnergy Corp.

    Citibank N.A.        40,600          04/30/18          USD       32.01          USD          1,381          (96,487 ) 

Pfizer, Inc.

    Citibank N.A.        15,900          05/04/18          USD       37.49          USD          564          (3,398 ) 

Rio Tinto PLC — ADR

    Citibank N.A.        5,600          05/07/18          USD       53.75          USD          289          (5,923 ) 

SLM Corp.

    Citibank N.A.        63,700          05/07/18          USD       11.30          USD          714          (30,586 ) 

Suncor Energy, Inc.

    Citibank N.A.        68,100          05/08/18          USD       33.84          USD          2,352          (89,603 ) 

Packaging Corp. of America

    Bank of America N.A.        13,500          05/14/18          USD       121.93          USD          1,521          (14,596 ) 

DaVita, Inc.

    Bank of America N.A.        8,400          05/21/18          USD       70.56          USD          554          (12,200 ) 

Rio Tinto PLC — ADR

    Citibank N.A.        5,600          05/21/18          USD       53.75          USD          289          (7,564 ) 

TOTAL SA — ADR

    UBS AG        7,500          05/25/18          USD       58.91          USD          433          (8,238 ) 
                                  

 

 

  
                                   $ (427,610 ) 
    

 

 

  

 

 

8   

Schedule of Investments  (unaudited) (continued)

March 31, 2018

    BlackRock Enhanced Capital and Income Fund (CII)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes 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 Trust’s own assumptions used in determining the fair value of investments)

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. Investments classified within Level 3 have significant unobservable inputs used by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information..

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value 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 and is not necessarily an indication of the risks associated with investing in these securities. For information about the Trust’s policy regarding valuation of investments, refer to the Trust’s most recent financial statements as contained in its annual report..

As of March 31, 2018, the following tables summarize the Trust’s investments categorized in the disclosure hierarchy:

 

        Level 1        Level 2        Level 3        Total  

Assets:

                   

Investments:

                   

Long-Term Investments:

                    

Common Stocks(a)

      $ 732,148,976        $ —        $ —        $ 732,148,976  

Short-Term Securities

        4,100,115          —          —          4,100,115  
    

 

 

       

 

 

       

 

 

       

 

 

  
     $ 736,249,091        $ —        $ —        $ 736,249,091  
    

 

 

       

 

 

       

 

 

       

 

 

  

Derivative Financial Instruments(b)

                   

Liabilities:

                   

Equity contracts

     $ (3,161,657 )       $ (1,042,817 )       $ —        $ (4,204,474 ) 
    

 

 

       

 

 

       

 

 

       

 

 

  

 

  (a)  See above Schedule of Investments for values in each industry.  
  (b)  Derivative financial instruments are options written, which are shown at value.  

During the period ended March 31, 2018, there were no transfers between levels.

 

 

     9  

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/ John M. Perlowski                        
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Enhanced Capital and Income Fund, Inc.
Date: May 21, 2018

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 21, 2018
By:   /s/ Neal J. Andrews                            
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Enhanced Capital and Income Fund, Inc.
Date: May 21, 2018