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: Donald C. Burke, Chief Executive
Officer, BlackRock Enhanced Capital and Income Fund, Inc., 800 Scudders
Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011,
Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 12/31/2007
Date of reporting period: 07/01/2007 - 09/30/2007
Item 1 - Schedule of Investments
BlackRock Enhanced Capital and Income Fund, Inc.
Schedule of Investments as of September 30, 2007 (Unaudited) (in U.S. dollars)
Shares
Industry Held Preferred Stocks Value
Food Products - 0.7% 20 H.J. Heinz Finance Co., 6.226% (e) $ 2,027,500
Total Preferred Stocks (Cost - $2,164,267) - 0.7% 2,027,500
Common Stocks
Aerospace & Defense - 5.4% 52,400 Honeywell International, Inc. 3,116,228
31,900 Lockheed Martin Corp. 3,460,831
44,600 Northrop Grumman Corp. 3,478,800
76,700 Raytheon Co. 4,894,994
---------------
14,950,853
Airlines - 0.3% 43,600 Delta Air Lines, Inc. (d) 782,620
Automobiles - 1.0% 84,800 Honda Motor Co., Ltd. (a) 2,828,928
Capital Markets - 4.1% 125,425 The Bank of New York Mellon Corp. 5,536,260
94,600 Morgan Stanley 5,959,800
---------------
11,496,060
Chemicals - 1.5% 81,500 E.I. du Pont de Nemours & Co. 4,039,140
Commercial Banks - 1.1% 87,800 Wells Fargo & Co. 3,127,436
Communications Equipment - 1.0% 285,100 Alcatel SA (a) 2,902,318
Computers & Peripherals - 5.0% 59,300 Hewlett-Packard Co. 2,952,547
74,600 International Business Machines Corp. 8,787,880
393,200 Sun Microsystems, Inc. (d) 2,205,852
---------------
13,946,279
Diversified Financial 88,027 Bank of America Corp. 4,425,117
Services - 7.6% 191,190 Citigroup, Inc. 8,922,837
168,872 JPMorgan Chase & Co. 7,737,715
---------------
21,085,669
Diversified Telecommunication
Services - 5.2% 123,770 AT&T Inc. 5,236,709
449,300 Qwest Communications International Inc. (d) 4,115,588
114,200 Verizon Communications, Inc. 5,056,776
---------------
14,409,073
Electric Utilities - 2.8% 64,700 FPL Group, Inc. 3,938,936
107,300 The Southern Co. 3,892,844
---------------
7,831,780
Energy Equipment & Services - 3.4% 111,700 BJ Services Co. 2,965,635
36,900 GlobalSantaFe Corp. 2,805,138
99,500 Halliburton Co. 3,820,800
---------------
9,591,573
Food & Staples Retailing - 0.4% 26,000 Wal-Mart Stores, Inc. 1,134,900
Food Products - 5.6% 82,400 General Mills, Inc. 4,780,024
146,200 Kraft Foods, Inc. 5,045,362
182,000 Unilever NV (a) 5,614,700
---------------
15,440,086
Health Care Equipment & 54,100 Baxter International, Inc. 3,044,748
Supplies - 2.0% 63,325 Covidien Ltd. 2,627,987
---------------
5,672,735
Household Durables - 1.0% 61,700 Koninklijke Philips Electronics NV 2,772,798
Household Products - 1.6% 62,300 Kimberly-Clark Corp. 4,377,198
IT Services - 1.0% 432,500 Unisys Corp. (d) 2,863,150
Industrial Conglomerates - 3.4% 121,500 General Electric Co. 5,030,100
99,525 Tyco International Ltd. 4,412,939
---------------
9,443,039
Insurance - 7.5% 155,400 American International Group, Inc. 10,512,810
33,600 Hartford Financial Services Group, Inc. (f) 3,109,680
102,400 The Travelers Cos., Inc. 5,154,816
24,900 XL Capital Ltd. Class A 1,972,080
---------------
20,749,386
Machinery - 1.2% 21,500 Deere & Co. 3,191,030
Media - 4.3% 113,050 Comcast Corp. Special Class A (d) 2,708,678
355,400 Time Warner, Inc. 6,525,144
80,700 Walt Disney Co. 2,775,273
---------------
12,009,095
Metals & Mining - 1.7% 118,900 Alcoa, Inc. 4,651,368
Multi-Utilities - 1.5% 50,200 Consolidated Edison, Inc. 2,324,260
22,100 Dominion Resources, Inc. 1,863,030
---------------
4,187,290
Office Electronics - 1.8% 292,400 Xerox Corp. (d) 5,070,216
Oil, Gas & Consumable Fuels - 8.8% 73,400 Anadarko Petroleum Corp. 3,945,250
46,400 Chevron Corp. 4,342,112
24,200 Consol Energy, Inc. 1,127,720
128,700 Exxon Mobil Corp. 11,912,472
67,900 Peabody Energy Corp. 3,250,373
---------------
24,577,927
Pharmaceuticals - 8.0% 157,700 Bristol-Myers Squibb Co. 4,544,914
44,300 GlaxoSmithKline Plc (a) 2,356,760
65,700 Johnson & Johnson 4,316,490
208,000 Pfizer, Inc. 5,081,440
111,900 Schering-Plough Corp. 3,539,397
52,000 Wyeth 2,316,600
---------------
22,155,601
Semiconductors & Semiconductor 82,300 Applied Materials, Inc. 1,703,610
Equipment - 7.6% 181,200 Fairchild Semiconductor International, Inc. (d) 3,384,816
158,400 Intel Corp. 4,096,224
771,200 LSI Logic Corp. (d) 5,722,304
293,200 Micron Technology, Inc. (d) 3,254,520
299,700 Taiwan Semiconductor Manufacturing Co., Ltd. (a) 3,032,964
---------------
21,194,438
Thrifts & Mortgage Finance - 0.8% 36,000 Fannie Mae 2,189,160
Total Common Stocks (Cost - $229,969,777) - 96.6% 268,671,146
Face
Amount Short-Term Securities
Time Deposits - 0.0% $ 6,490 Brown Brothers Harriman & Co., 4.37% due 10/01/2007 6,490
Beneficial
Interest
$ 11,715,243 BlackRock Liquidity Series, LLC Cash Sweep
Series, 5.22% (b)(c) 11,715,243
Total Short-Term Securities (Cost - $11,721,733) - 4.2% 11,721,733
Total Investments Before Options Written
(Cost - $243,855,777) - 101.5% 282,420,379
Number of
Contracts Options Written
Call Options Written - (1.0%) 100 Chevron Corp., expiring January 2008 at USD 90 (76,500)
188 S&P 500 Index, expiring October 2007 at USD 145 (1,637,480)
738 S&P 500 Index, expiring October 2007 at USD 155 (981,540)
Total Options Written
(Premiums Received - $2,477,809) - (1.0%) (2,695,520)
Total Investments, Net of Options Written
(Cost - $241,377,968*) - 100.5% 279,724,859
Liabilities in Excess of Other Assets - (0.5%) (1,409,525)
---------------
Net Assets - 100.0% $ 278,315,334
===============
* The cost and unrealized appreciation (depreciation) of investments, net
of options written, as of September 30, 2007, as computed for federal
income tax purposes, were as follows:
Aggregate cost $ 242,110,679
===================
Gross unrealized appreciation $ 42,438,692
Gross unrealized depreciation (4,824,512)
-------------------
Net unrealized appreciation $ 37,614,180
===================
(a) Depositary receipts.
(b) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were
as follows:
Net Interest
Affiliate Activity Income
BlackRock Liquidity Series, LLC
Cash Sweep Series $ (295,163) $ 856,960
(c) Represents the current yield as of September 30, 2007.
(d) Non-income producing security.
(e) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(f) All or a portion of security held as collateral in connection with open
financial futures contracts.
o For Fund compliance purposes, the Fund's industry classifications refer
to any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease. Industries are shown as a percent of net assets.
o Financial futures contracts purchased as of September 30, 2007 were as
follows:
Number of Expiration Face Unrealized
Contracts Issue Date Value Appreciation
22 S&P 500 Index December 2007 $ 8,378,346 $ 81,204
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 and 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/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer of
BlackRock Enhanced Capital and Income Fund, Inc.
Date: November 20, 2007
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/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Enhanced Capital and Income Fund, Inc.
Date: November 20, 2007
By: /s/ Neal J. Andrews
-------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock Enhanced Capital and Income Fund, Inc.
Date: November 20, 2007