UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
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Investment Company Act file number 811-21722
Name of Fund: BlackRock Enhanced Equity Yield Fund, Inc. (EEF)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock
Enhanced Equity Yield Fund, Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing
address: P.O. Box 9011, Princeton, NJ, 08543-9011
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 12/31/2008
Date of reporting period: 01/01/2008 06/30/2008
Item 1 Report to Stockholders
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EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
Semi-Annual Report
JUNE 30, 2008 | (UNAUDITED)
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BlackRock Enhanced Equity Yield Fund, Inc. (EEF)
BlackRock Enhanced Equity Yield & Premium Fund, Inc. (ECV)
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NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
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Table of Contents
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Page
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A Letter to Shareholders
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3
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Semi-Annual Report:
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Fund Summaries
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4
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Financial Statements:
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Schedules of Investments
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6
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Statements of Assets and Liabilities
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16
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Statements of Operations
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17
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Statements of Changes in Net Assets
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18
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Financial Highlights
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20
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Notes to Financial Statements
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22
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Disclosure of Investment Advisory Agreement and Subadvisory Agreement
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25
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Officers and Directors
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29
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Additional Information
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29
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Dear Shareholder
Throughout the past year, investors were overwhelmed by lingering credit and financial market troubles, surging oil
prices and more recently, renewed inflation concerns. Healthy nonfinancial corporate profits and robust exporting
activity remained among the few bright spots, helping the economy to grow at a modest, but still positive, pace.
The Federal Reserve Board (the Fed) has been aggressive in its attempts to stoke economic growth and ease
financial market instability. In addition to slashing the target federal funds rate 325 basis points (3.25%) between
September 2007 and April 2008, the central bank introduced the new Term Securities Lending Facility, granted broker-
dealers access to the discount window and used its own balance sheet to help negotiate the sale of Bear Stearns.
As widely anticipated, the end of the period saw a pause in Fed action, as the central bank held the target rate steady
at 2.0% amid rising inflationary pressures.
As the Feds bold response to the financial crisis helped ease credit turmoil and investor anxiety, U.S. equity markets
sank sharply over the last six months, notwithstanding a brief rally in the spring. International markets were not immune
to the tumult, with most regions also registering declines.
Treasury securities also traded in a volatile fashion, but generally rallied (yields fell as prices correspondingly rose), with
investors continuing to seek safety as part of a broader flight to quality. The yield on 10-year Treasury issues, which fell
to 3.34% in March 2008, climbed up to the 4.20% range in mid-June as investors temporarily shifted out of Treasury
issues in favor of riskier assets (such as stocks and other high-quality fixed income sectors), then reversed course and
declined to 3.99% by period-end when credit fears re-emerged.
Tax-exempt issues eked out gains for the reporting period, but underperformed their taxable counterparts, as the group
continued to be pressured by problems among municipal bond insurers and the breakdown in the market for auction
rate securities.
The major benchmark indexes generated results that largely reflected heightened investor risk aversion:
Total Returns as of June 30, 2008
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6-month
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12-month
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U.S. equities (S&P 500 Index)
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(11.91)%
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(13.12)%
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Small cap U.S. equities (Russell 2000 Index)
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(9.37)%
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(16.19)%
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International equities (MSCI Europe, Australasia, Far East Index)
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(10.96)%
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(10.61)%
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Fixed income (Lehman Brothers U.S. Aggregate Index)
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1.13%
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7.12%
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Tax-exempt fixed income (Lehman Brothers Municipal Bond Index)
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0.02%
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3.23%
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High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Capped Index)
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(1.08)%
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(1.74)%
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Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly
in an index.
As you navigate todays volatile markets, we encourage you to review your investment goals with your financial profes-
sional and to make portfolio changes, as needed. For more up-to-date commentary on the economy and financial
markets, we invite you to visit www.blackrock.com/funds. As always, we thank you for entrusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the months and years ahead.
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THIS PAGE NOT PART OF YOUR FUND
REPORT
3
Fund Summary
as of June 30, 2008
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BlackRock Enhanced Equity Yield Fund, Inc.
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Investment Objective
BlackRock Enhanced Equity Yield Fund, Inc. (EEF) (the Fund)
primarily seeks to provide stockholders with current income and gains, with a secondary objective of providing capital appreciation. The Fund seeks to achieve its investment objective by investing primarily in a diversified portfolio of dividend-paying common stocks in an attempt to generate current income and by employing a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option premiums primarily on the S&P 500 Index.
Performance
For the six months ended June 30, 2008, the Fund returned (4.19)% based on market price and (8.84)% based on net asset value (NAV). For the same period, the benchmark S&P 500® Index posted an average return of (11.91)% . All returns reflect reinvestment of dividends. The Funds call-writing strategy offset some of the negative effects of a downturn in the equity markets. Specifically, management has discretion to increase or decrease the percentage of call-writing in the portfolio, and its decisions during this period of market volatility benefited performance. Management believes that these actions also have positioned the Fund to benefit from a market recovery.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. S&P 500 is a registered trademark of the McGraw-Hill Companies.
Fund Information
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Symbol on New York Stock Exchange
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EEF
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Initital Offering Date
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May 6, 2005
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Yield on Closing Market Price as of June 30, 2008
1
($14.50)
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13.79%
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Current Quarterly Distribution per share of Common Stock
2
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$0.50
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Current Annualized Distribution per share of Common Stock
2
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$2.00
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1
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
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2
The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized
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gain at fiscal year end.
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Past performance does not guarantee future results.
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The table below summarizes the Funds market price and net asset value per share:
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6/30/08
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12/31/07
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Change
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High
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Low
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Market Price
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$14.50
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$16.16
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(10.27)%
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$16.57
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$14.00
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Net Asset Value
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$15.00
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$17.57
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(14.63)%
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$17.57
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$14.98
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The following chart shows the portfolio composition of the Funds long-term investments:
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Portfolio Composition
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Sector
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6/30/08
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12/31/07
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Information Technology
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17%
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17%
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Energy
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16
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13
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Financials
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14
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17
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Health Care
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13
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13
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Industrials
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11
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11
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Consumer Staples
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10
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10
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Consumer Discretionary
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8
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8
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Materials
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4
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4
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Telecommunication Services
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4
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4
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Utilities
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3
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3
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For Fund compliance purposes, the Funds sector classifications refer to any one or more of the sector 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 sector sub-classifications for reporting ease.
Fund Summary
as of June 30, 2008
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BlackRock Enhanced Equity Yield & Premium Fund, Inc.
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Investment Objective
BlackRock Enhanced Equity Yield & Premium Fund, Inc. (ECV) (the Fund)
primarily seeks to provide stockholders with current income and gains, with a secondary objective of providing capital appreciation. The Fund seeks to achieve its investment objectives by investing primarily in a diversified portfolio of dividend-paying common stocks in an attempt to generate current income and by employing a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option premiums primarily on the S&P 500 Index as well as the NASDAQ 100 Index.
Performance
For the six months ended June 30, 2008, the Fund returned (6.14)% based on market price and (8.35)% based on net asset value (NAV). For the same period, the blended benchmark, comprised of 75% S&P 500 Index and 25% NASDAQ 100 Index, posted a return of (11.84)% . All returns reflect reinvestment of dividends. The Funds call-writing strategy offset some of the negative effects of a downturn in the equity markets. Specifically, management has discretion to increase or decrease the percentage of call-writing in the portfolio, and its decisions during this period of market volatility contributed to performance. Management believes that these actions also have positioned the Fund to benefit from a market recovery.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
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Symbol on New York Stock Exchange
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ECV
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Initital Offering Date
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June 30, 2005
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Yield on Closing Market Price as of June 30, 2008
1
($13.70)
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14.96%
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Current Semi-Annual Distribution per share of Common Stock
2
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$1.025
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Current Annualized Distribution per share of Common Stock
2
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$2.05
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1
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Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
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2
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The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain at fiscal year end.
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Past performance does not guarantee future results.
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The table below summarizes the Funds market price and net asset value per share:
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6/30/08
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12/31/07
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Change
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High
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Low
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Market Price
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$13.70
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$15.68
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(12.63)%
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$16.50
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$13.65
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Net Asset Value
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$14.76
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$17.30
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(14.68)%
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$17.30
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$14.76
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The following chart shows the portfolio composition of the Funds long-term investments:
Portfolio Composition
Sector
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6/30/08
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12/31/07
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Information Technology
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30%
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28%
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Health Care
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13
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13
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Energy
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12
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10
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Financials
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10
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14
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Industrials
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9
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9
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Consumer Discretionary
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9
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9
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Consumer Staples
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8
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8
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Materials
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4
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3
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Telecommunication Services
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3
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4
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Utilities
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2
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2
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For Fund compliance purposes, the Funds sector classifications refer to any one or more of the sector 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 sector sub-classifications for reporting ease.
Schedule of Investments
June 30, 2008 (Unaudited)
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BlackRock Enhanced Equity Yield Fund, Inc.
(Percentages shown are based on Net Assets)
Common Stocks
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Shares
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Value
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Aerospace & Defense 1.4%
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General Dynamics Corp.
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6,900
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$ 580,980
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Honeywell International, Inc.
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9,100
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457,548
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Lockheed Martin Corp.
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16,100
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1,588,426
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Northrop Grumman Corp.
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28,700
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1,920,030
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4,546,984
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Air Freight & Logistics 1.3%
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United Parcel Service, Inc. Class B
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64,800
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3,983,256
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Auto Components 0.1%
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Johnson Controls, Inc.
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16,200
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464,616
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Automobiles 0.3%
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General Motors Corp.
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88,100
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1,013,150
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Beverages 2.0%
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The Coca-Cola Co.
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89,100
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4,631,418
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PepsiCo, Inc.
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24,700
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1,570,673
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6,202,091
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Biotechnology 1.6%
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Amgen, Inc. (a)
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25,200
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1,188,432
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Biogen Idec, Inc. (a)
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11,200
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625,968
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Celgene Corp. (a)
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10,600
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677,022
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Genzyme Corp. (a)
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8,300
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597,766
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Gilead Sciences, Inc. (a)
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38,600
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2,043,870
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5,133,058
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Capital Markets 1.5%
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The Goldman Sachs Group, Inc.
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19,980
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3,494,502
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Lehman Brothers Holdings, Inc.
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26,400
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522,984
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Morgan Stanley
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18,000
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649,260
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4,666,746
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Chemicals 1.7%
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Air Products & Chemicals, Inc.
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6,100
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603,046
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The Dow Chemical Co.
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46,600
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1,626,806
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E.I. du Pont de Nemours & Co.
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45,900
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1,968,651
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PPG Industries, Inc.
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17,400
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998,238
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5,196,741
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Commercial Banks 3.5%
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Comerica, Inc.
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17,100
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438,273
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Regions Financial Corp.
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120,600
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1,315,746
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SunTrust Banks, Inc.
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41,900
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1,517,618
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U.S. Bancorp
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|
119,600
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3,335,644
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Wachovia Corp.
|
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143,700
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2,231,661
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Wells Fargo & Co.
|
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85,000
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2,018,750
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10,857,692
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Commercial Services & Supplies 0.2%
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Waste Management, Inc.
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19,100
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720,261
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Communications Equipment 3.3%
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|
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Ciena Corp. (a)
|
|
15,371
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|
356,146
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Cisco Systems, Inc. (a)
|
|
137,600
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|
3,200,576
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Corning, Inc.
|
|
50,300
|
|
1,159,415
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Motorola, Inc.
|
|
188,400
|
|
1,382,856
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QUALCOMM, Inc.
|
|
95,900
|
|
4,255,083
|
|
|
|
|
|
|
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|
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10,354,076
|
|
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Common Stocks
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Shares
|
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Value
|
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Computers & Peripherals 3.7%
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Apple, Inc. (a)
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26,200
|
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$ 4,386,928
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Dell, Inc. (a)
|
|
62,100
|
|
1,358,748
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EMC Corp. (a)
|
|
59,500
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|
874,055
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Hewlett-Packard Co.
|
|
41,900
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|
1,852,399
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International Business Machines Corp.
|
|
20,800
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|
2,465,424
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SanDisk Corp. (a)
|
|
32,400
|
|
605,880
|
|
|
|
|
|
|
|
|
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11,543,434
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|
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Consumer Finance 0.1%
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|
|
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Discover Financial Services, Inc.
|
|
22,900
|
|
301,593
|
|
|
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Diversified Financial Services 3.4%
|
|
|
|
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Bank of America Corp.
|
|
138,400
|
|
3,303,608
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CME Group, Inc.
|
|
3,812
|
|
1,460,720
|
Citigroup, Inc.
|
|
59,800
|
|
1,002,248
|
IntercontinentalExchange, Inc. (a)
|
|
11,500
|
|
1,311,000
|
JPMorgan Chase & Co.
|
|
104,900
|
|
3,599,119
|
|
|
|
|
|
|
|
|
|
10,676,695
|
|
|
|
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|
Diversified Telecommunication Services 3.4%
|
|
|
|
|
AT&T Inc.
|
|
163,790
|
|
5,518,085
|
Embarq Corp.
|
|
24,191
|
|
1,143,509
|
Verizon Communications, Inc.
|
|
79,290
|
|
2,806,866
|
Windstream Corp.
|
|
109,500
|
|
1,351,230
|
|
|
|
|
|
|
|
|
|
10,819,690
|
|
|
|
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|
Electric Utilities 0.4%
|
|
|
|
|
American Electric Power Co., Inc.
|
|
10,900
|
|
438,507
|
FirstEnergy Corp.
|
|
8,300
|
|
683,339
|
|
|
|
|
|
|
|
|
|
1,121,846
|
|
|
|
|
|
Electrical Equipment 1.1%
|
|
|
|
|
Emerson Electric Co.
|
|
49,400
|
|
2,442,830
|
Rockwell Automation, Inc.
|
|
23,400
|
|
1,023,282
|
|
|
|
|
|
|
|
|
|
3,466,112
|
|
|
|
|
|
Electronic Equipment & Instruments 0.3%
|
|
|
|
|
Tyco Electronics Ltd.
|
|
28,925
|
|
1,036,093
|
|
|
|
|
|
Energy Equipment & Services 3.4%
|
|
|
|
|
Baker Hughes, Inc.
|
|
9,300
|
|
812,262
|
National Oilwell Varco, Inc. (a)
|
|
36,600
|
|
3,247,152
|
Schlumberger Ltd.
|
|
12,797
|
|
1,374,782
|
Smith International, Inc.
|
|
34,500
|
|
2,868,330
|
Transocean, Inc.
|
|
16,330
|
|
2,488,529
|
|
|
|
|
|
|
|
|
|
10,791,055
|
|
|
|
|
|
Food & Staples Retailing 3.0%
|
|
|
|
|
SYSCO Corp.
|
|
100,500
|
|
2,764,755
|
Wal-Mart Stores, Inc.
|
|
99,100
|
|
5,569,420
|
Walgreen Co.
|
|
37,500
|
|
1,219,125
|
|
|
|
|
|
|
|
|
|
9,553,300
|
|
|
|
|
|
Food Products 1.0%
|
|
|
|
|
ConAgra Foods, Inc.
|
|
16,000
|
|
308,480
|
Kraft Foods, Inc.
|
|
47,321
|
|
1,346,282
|
Sara Lee Corp.
|
|
113,300
|
|
1,387,925
|
|
|
|
|
|
|
|
|
|
3,042,687
|
|
|
|
|
|
See Notes to Financial Statements.
|
Schedule of Investments (continued)
|
BlackRock Enhanced Equity Yield Fund, Inc.
(Percentages shown are based on Net Assets)
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Health Care Equipment & Supplies 1.5%
|
|
|
|
|
Baxter International, Inc.
|
|
13,300
|
|
$ 850,402
|
Becton Dickinson & Co.
|
|
17,800
|
|
1,447,140
|
Boston Scientific Corp. (a)
|
|
42,546
|
|
522,890
|
Covidien Ltd.
|
|
28,925
|
|
1,385,218
|
Zimmer Holdings, Inc. (a)
|
|
9,200
|
|
626,060
|
|
|
|
|
|
|
|
|
|
4,831,710
|
|
|
|
|
|
Health Care Providers & Services 1.6%
|
|
|
|
|
Aetna, Inc.
|
|
15,700
|
|
636,321
|
Express Scripts, Inc. (a)
|
|
17,600
|
|
1,103,872
|
Medco Health Solutions, Inc. (a)
|
|
24,300
|
|
1,146,960
|
UnitedHealth Group, Inc.
|
|
39,200
|
|
1,029,000
|
WellPoint, Inc. (a)
|
|
21,500
|
|
1,024,690
|
|
|
|
|
|
|
|
|
|
4,940,843
|
|
|
|
|
|
Hotels, Restaurants & Leisure 1.9%
|
|
|
|
|
Carnival Corp.
|
|
34,300
|
|
1,130,528
|
McDonalds Corp.
|
|
75,700
|
|
4,255,854
|
Starwood Hotels & Resorts Worldwide, Inc.
|
|
12,200
|
|
488,854
|
|
|
|
|
|
|
|
|
|
5,875,236
|
|
|
|
|
|
Household Durables 1.0%
|
|
|
|
|
Fortune Brands, Inc.
|
|
21,900
|
|
1,366,779
|
Lennar Corp. Class A
|
|
22,200
|
|
273,948
|
Whirlpool Corp.
|
|
24,600
|
|
1,518,558
|
|
|
|
|
|
|
|
|
|
3,159,285
|
|
|
|
|
|
Household Products 1.7%
|
|
|
|
|
The Procter & Gamble Co.
|
|
85,642
|
|
5,207,890
|
|
|
|
|
|
IT Services 0.6%
|
|
|
|
|
Automatic Data Processing, Inc.
|
|
38,900
|
|
1,629,910
|
Cognizant Technology Solutions Corp. (a)
|
|
12,400
|
|
403,124
|
|
|
|
|
|
|
|
|
|
2,033,034
|
|
|
|
|
|
Industrial Conglomerates 4.5%
|
|
|
|
|
3M Co.
|
|
51,500
|
|
3,583,885
|
General Electric Co.
|
|
338,200
|
|
9,026,558
|
Textron, Inc.
|
|
14,300
|
|
685,399
|
Tyco International Ltd.
|
|
21,025
|
|
841,841
|
|
|
|
|
|
|
|
|
|
14,137,683
|
|
|
|
|
|
Insurance 2.9%
|
|
|
|
|
The Allstate Corp.
|
|
18,100
|
|
825,179
|
American International Group, Inc.
|
|
28,300
|
|
748,818
|
Hartford Financial Services Group, Inc.
|
|
15,500
|
|
1,000,835
|
Lincoln National Corp.
|
|
35,000
|
|
1,586,200
|
Marsh & McLennan Cos., Inc.
|
|
72,900
|
|
1,935,495
|
The Travelers Cos., Inc.
|
|
68,900
|
|
2,990,260
|
|
|
|
|
|
|
|
|
|
9,086,787
|
|
|
|
|
|
Internet & Catalog Retail 0.5%
|
|
|
|
|
Amazon.com, Inc. (a)
|
|
20,200
|
|
1,481,266
|
|
|
|
|
|
Internet Software & Services 1.7%
|
|
|
|
|
eBay, Inc. (a)
|
|
76,100
|
|
2,079,813
|
Google, Inc. Class A (a)
|
|
5,720
|
|
3,011,122
|
Yahoo! Inc. (a)
|
|
10,000
|
|
206,600
|
|
|
|
|
|
|
|
|
|
5,297,535
|
|
|
|
|
|
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Leisure Equipment & Products 0.9%
|
|
|
|
|
Eastman Kodak Co.
|
|
61,800
|
|
$ 891,774
|
Mattel, Inc.
|
|
111,700
|
|
1,912,304
|
|
|
|
|
|
|
|
|
|
2,804,078
|
|
|
|
|
|
Life Sciences Tools & Services 0.2%
|
|
|
|
|
Thermo Fisher Scientific, Inc. (a)
|
|
11,600
|
|
646,468
|
|
|
|
|
|
Machinery 1.7%
|
|
|
|
|
Caterpillar, Inc.
|
|
36,200
|
|
2,672,284
|
Cummins, Inc.
|
|
21,600
|
|
1,415,232
|
Deere & Co.
|
|
16,200
|
|
1,168,506
|
|
|
|
|
|
|
|
|
|
5,256,022
|
|
|
|
|
|
Media 0.7%
|
|
|
|
|
CBS Corp. Class B
|
|
76,850
|
|
1,497,807
|
The DIRECTV Group, Inc.(a)
|
|
32,000
|
|
829,120
|
|
|
|
|
|
|
|
|
|
2,326,927
|
|
|
|
|
|
Metals & Mining 1.6%
|
|
|
|
|
Alcoa, Inc.
|
|
29,600
|
|
1,054,352
|
Allegheny Technologies, Inc.
|
|
18,300
|
|
1,084,824
|
Freeport-McMoRan Copper & Gold, Inc. Class B
|
|
23,900
|
|
2,800,841
|
|
|
|
|
|
|
|
|
|
4,940,017
|
|
|
|
|
|
Multi-Utilities 2.6%
|
|
|
|
|
Ameren Corp.
|
|
11,600
|
|
489,868
|
Consolidated Edison, Inc.
|
|
31,300
|
|
1,223,517
|
Dominion Resources, Inc.
|
|
15,800
|
|
750,342
|
Public Service Enterprise Group, Inc.
|
|
64,200
|
|
2,948,706
|
Xcel Energy, Inc.
|
|
134,000
|
|
2,689,380
|
|
|
|
|
|
|
|
|
|
8,101,813
|
|
|
|
|
|
Multiline Retail 0.1%
|
|
|
|
|
Target Corp.
|
|
9,400
|
|
437,006
|
|
|
|
|
|
Oil, Gas & Consumable Fuels 11.9%
|
|
|
|
|
Anadarko Petroleum Corp.
|
|
29,300
|
|
2,192,812
|
Apache Corp.
|
|
9,400
|
|
1,306,600
|
Chevron Corp.
|
|
68,906
|
|
6,830,652
|
ConocoPhillips (b)
|
|
45,800
|
|
4,323,062
|
Devon Energy Corp.
|
|
8,700
|
|
1,045,392
|
EOG Resources, Inc.
|
|
10,200
|
|
1,338,240
|
Exxon Mobil Corp.
|
|
128,100
|
|
11,289,453
|
Hess Corp.
|
|
22,000
|
|
2,776,180
|
Spectra Energy Corp.
|
|
110,000
|
|
3,161,400
|
Valero Energy Corp.
|
|
15,100
|
|
621,818
|
XTO Energy, Inc.
|
|
37,700
|
|
2,582,827
|
|
|
|
|
|
|
|
|
|
37,468,436
|
|
|
|
|
|
Paper & Forest Products 0.6%
|
|
|
|
|
International Paper Co.
|
|
50,700
|
|
1,181,310
|
Weyerhaeuser Co.
|
|
15,300
|
|
782,442
|
|
|
|
|
|
|
|
|
|
1,963,752
|
|
|
|
|
|
See Notes to Financial Statements.
|
Schedule of Investments (continued)
|
BlackRock Enhanced Equity Yield Fund, Inc.
(Percentages shown are based on Net Assets)
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Pharmaceuticals 7.4%
|
|
|
|
|
Abbott Laboratories
|
|
22,400
|
|
$ 1,186,528
|
Bristol-Myers Squibb Co.
|
|
115,800
|
|
2,377,374
|
Eli Lilly & Co.
|
|
49,300
|
|
2,275,688
|
Johnson & Johnson
|
|
101,500
|
|
6,530,510
|
Merck & Co., Inc.
|
|
99,400
|
|
3,746,386
|
Pfizer, Inc.
|
|
290,500
|
|
5,075,035
|
Schering-Plough Corp.
|
|
63,000
|
|
1,240,470
|
Wyeth
|
|
15,900
|
|
762,564
|
|
|
|
|
|
|
|
|
|
23,194,555
|
|
|
|
|
|
Real Estate Investment Trusts (REITs) 1.3%
|
|
|
|
|
Plum Creek Timber Co., Inc.
|
|
57,100
|
|
2,438,741
|
Vornado Realty Trust
|
|
17,800
|
|
1,566,400
|
|
|
|
|
|
|
|
|
|
4,005,141
|
|
|
|
|
|
Semiconductors & Semiconductor Equipment 3.2%
|
|
|
Applied Materials, Inc.
|
|
37,700
|
|
719,693
|
Intel Corp.
|
|
131,600
|
|
2,826,768
|
Linear Technology Corp.
|
|
37,100
|
|
1,208,347
|
Microchip Technology, Inc.
|
|
52,500
|
|
1,603,350
|
National Semiconductor Corp.
|
|
55,700
|
|
1,144,078
|
Nvidia Corp. (a)
|
|
90,250
|
|
1,689,480
|
Texas Instruments, Inc.
|
|
32,200
|
|
906,752
|
|
|
|
|
|
|
|
|
|
10,098,468
|
|
|
|
|
|
Software 3.6%
|
|
|
|
|
Autodesk, Inc. (a)
|
|
54,500
|
|
1,842,645
|
Electronic Arts, Inc. (a)
|
|
18,500
|
|
821,955
|
Microsoft Corp.
|
|
230,200
|
|
6,332,802
|
Oracle Corp. (a)
|
|
108,200
|
|
2,272,200
|
|
|
|
|
|
|
|
|
|
11,269,602
|
|
|
|
|
|
Specialty Retail 1.4%
|
|
|
|
|
Home Depot, Inc.
|
|
62,500
|
|
1,463,750
|
Staples, Inc.
|
|
123,100
|
|
2,923,625
|
|
|
|
|
|
|
|
|
|
4,387,375
|
|
|
|
|
|
Textiles, Apparel & Luxury Goods 0.8%
|
|
|
|
|
VF Corp.
|
|
35,500
|
|
2,526,890
|
|
|
|
|
|
Thrifts & Mortgage Finance 0.5%
|
|
|
|
|
Fannie Mae
|
|
27,600
|
|
538,476
|
Freddie Mac
|
|
19,500
|
|
319,800
|
Washington Mutual, Inc. (c)
|
|
177,300
|
|
874,089
|
|
|
|
|
|
|
|
|
|
1,732,365
|
|
|
|
|
|
Tobacco 1.8%
|
|
|
|
|
Philip Morris International, Inc.
|
|
16,600
|
|
819,874
|
Reynolds American, Inc.
|
|
40,500
|
|
1,890,135
|
UST, Inc.
|
|
51,800
|
|
2,828,798
|
|
|
|
|
|
|
|
|
|
5,538,807
|
|
|
|
|
|
Wireless Telecommunication Services 0.2%
|
|
|
|
|
Sprint Nextel Corp.
|
|
80,100
|
|
760,951
|
|
|
|
|
|
Total Common Stocks
|
|
|
|
|
(Cost $334,548,928) 95.1%
|
|
|
|
299,001,118
|
|
|
|
|
|
Beneficial Interest
|
|
|
Short-Term Securities
|
|
|
|
(000)
|
|
Value
|
|
|
|
|
|
|
|
|
BlackRock Liquidity Series, LLC
|
|
|
|
|
|
|
Money Market Series, 2.70% (d)(e)(f)
|
|
$ 24,740
|
|
$ 24,740,410
|
|
|
|
|
|
Total Short-Term Securities
|
|
|
|
|
|
|
(Cost $24,740,410) 7.9%
|
|
|
|
|
|
24,740,410
|
|
|
|
|
|
|
|
|
|
|
|
Options Purchased
|
|
Contracts
|
|
|
|
|
|
|
|
Call Options Purchased
|
|
|
|
|
|
|
3M Co., expiring July 2008 at $85
|
|
|
|
60
|
|
300
|
AT&T Inc., expiring July 2008 at $37.50
|
|
|
|
440
|
|
3,300
|
Abbott Laboratories, expiring August 2008 at $52.50
|
|
20
|
|
4,000
|
Aetna, Inc., expiring July 2008 at $50
|
|
|
|
30
|
|
225
|
Amazon.com, Inc., expiring July 2008 at $80
|
|
|
|
40
|
|
2,920
|
Amgen, Inc., expiring July 2008 at $45
|
|
|
|
50
|
|
12,525
|
Anadarko Petroleum Corp., expiring August 2008
|
|
|
|
|
|
|
at $60
|
|
|
|
60
|
|
94,200
|
Apple, Inc., expiring July 2008 at $150
|
|
|
|
70
|
|
132,125
|
Autodesk, Inc., expiring July 2008 at $40
|
|
|
|
80
|
|
600
|
Bank of America Corp., expiring August 2008 at $45
|
|
|
|
120
|
|
240
|
Carnival Corp., expiring July 2008 at $40
|
|
|
|
80
|
|
400
|
Caterpillar, Inc., expiring August 2008 at $85
|
|
|
|
120
|
|
5,520
|
Cisco Systems, Inc., expiring August 2008 at $26
|
|
|
|
130
|
|
3,510
|
The Coca-Cola Co., expiring August 2008 at $62.50
|
|
|
|
80
|
|
600
|
ConocoPhillips, expiring August 2008 at $85
|
|
|
|
70
|
|
73,150
|
Corning, Inc., expiring August 2008 at $25
|
|
|
|
60
|
|
3,450
|
Cummins, Inc., expiring August 2008 at $75
|
|
|
|
80
|
|
16,200
|
Dell, Inc., expiring July 2008 at $24
|
|
|
|
110
|
|
1,155
|
eBay, Inc., expiring July 2008 at $30
|
|
|
|
150
|
|
4,275
|
E.I. du Pont de Nemours & Co., expiring July 2008
|
|
|
|
|
|
|
at $47.50
|
|
|
|
30
|
|
225
|
E.I. du Pont de Nemours & Co., expiring July 2008
|
|
|
|
|
|
|
at $50
|
|
|
|
60
|
|
300
|
EMC Corp., expiring July 2008 at $18
|
|
|
|
70
|
|
105
|
Eli Lilly & Co., expiring July 2008 at $55
|
|
|
|
80
|
|
400
|
Express Scripts, Inc., expiring August 2008 at $65
|
|
|
|
30
|
|
7,500
|
Exxon Mobil Corp., expiring August 2008 at $95
|
|
|
|
80
|
|
7,560
|
Freeport-McMoRan Copper & Gold, Inc. Class B,
|
|
|
|
|
|
|
expiring August 2008 at $95
|
|
|
|
40
|
|
97,900
|
Gilead Sciences, Inc., expiring August 2008 at $55
|
|
|
|
50
|
|
7,375
|
The Goldman Sachs Group, Inc., expiring July 2008
|
|
|
|
|
|
|
at $175
|
|
|
|
50
|
|
30,875
|
Hess Corp., expiring August 2008 at $95
|
|
|
|
40
|
|
130,600
|
Hewlett-Packard Co., expiring August 2008 at $45
|
|
|
|
90
|
|
12,375
|
See Notes to Financial Statements.
|
Schedule of Investments (continued)
|
BlackRock Enhanced Equity Yield Fund, Inc.
(Percentages shown are based on Net Assets)
|
Options Purchased
|
|
Contracts
|
|
Value
|
|
|
|
|
|
|
Call Options Purchased (concluded)
|
|
|
|
|
Intel Corp., expiring July 2008 at $20
|
|
340
|
|
$ 63,580
|
JPMorgan Chase & Co., expiring August 2008
|
|
|
|
|
at $42.50
|
|
230
|
|
7,360
|
Johnson Controls, Inc., expiring July 2008 at $35
|
|
40
|
|
300
|
Lehman Brothers Holdings, Inc., expiring July 2008
|
|
|
|
|
at $60
|
|
50
|
|
50
|
Marathon Oil Corp., expiring July 2008 at $55
|
|
10
|
|
600
|
Medco Health Solutions, Inc., expiring July 2008
|
|
|
|
|
at $45
|
|
50
|
|
13,750
|
Merck & Co., Inc., expiring July 2008 at $47.50
|
|
170
|
|
850
|
National Oilwell Varco, Inc., expiring August 2008
|
|
|
|
|
at $60
|
|
60
|
|
176,400
|
Oracle Corp., expiring August 2008 at $24
|
|
190
|
|
2,375
|
QUALCOMM, Inc., expiring July 2008 at $42.50
|
|
140
|
|
37,100
|
Reynolds American, Inc., expiring August 2008
|
|
|
|
|
at $60
|
|
50
|
|
375
|
Rockwell Automation, Inc., expiring July 2008
|
|
|
|
|
at $60
|
|
60
|
|
300
|
Schlumberger Ltd., expiring August 2008 at $90
|
|
20
|
|
37,000
|
Smith International, Inc., expiring July 2008
|
|
|
|
|
at $62.50
|
|
80
|
|
166,000
|
Staples, Inc., expiring August 2008 at $25
|
|
100
|
|
7,500
|
Texas Instruments, Inc., expiring July 2008 at $30
|
|
65
|
|
1,203
|
UST, Inc., expiring July 2008 at $55
|
|
100
|
|
10,500
|
United Parcel Service, Inc. Class B, expiring July 2008
|
|
|
at $75
|
|
70
|
|
350
|
VF Corp., expiring August 2008 at $80
|
|
60
|
|
4,350
|
Verizon Communications, Inc., expiring July 2008
|
|
|
|
|
at $40
|
|
160
|
|
1,120
|
Wal-Mart Stores, Inc., expiring July 2008 at $57.50
|
|
170
|
|
12,495
|
Waste Management, Inc., expiring July 2008
|
|
|
|
|
at $35
|
|
10
|
|
2,850
|
Wells Fargo & Co., expiring July 2008 at $27.50
|
|
120
|
|
2,400
|
Wells Fargo & Co., expiring July 2008 at $35
|
|
50
|
|
250
|
XTO Energy, Inc., expiring August 2008 at $70
|
|
70
|
|
25,200
|
|
|
|
|
|
Total Options Purchased
|
|
|
|
|
(Cost $1,428,639) 0.4%
|
|
|
|
1,228,168
|
|
|
|
|
|
Total Investments Before Options Written
|
|
|
|
|
(Cost $360,717,977*) 103.4%
|
|
|
|
324,969,696
|
|
|
|
|
|
|
|
|
|
Options Written
|
|
|
|
|
|
|
|
|
|
Call Options Written
|
|
|
|
|
Abbott Laboratories, expiring August 2008
|
|
|
|
|
at $55
|
|
40
|
|
(3,800)
|
Amgen, Inc., expiring July 2008 at $47.50
|
|
100
|
|
(8,600)
|
Options Written
|
|
Contracts
|
|
Value
|
|
|
|
|
|
|
Call Options Written (concluded)
|
|
|
|
|
Anadarko Petroleum Corp., expiring August 2008
|
|
|
|
|
at $65
|
|
120
|
|
$ (133,800)
|
Apple, Inc., expiring July 2008 at $170
|
|
140
|
|
(72,450)
|
ConocoPhillips, expiring August 2008 at $90
|
|
140
|
|
(93,800)
|
Cummins, Inc., expiring August 2008 at $80
|
|
160
|
|
(17,600)
|
Express Scripts, Inc., expiring August 2008
|
|
|
|
|
at $75
|
|
60
|
|
(2,400)
|
Exxon Mobil Corp., expiring August 2008
|
|
|
|
|
at $100
|
|
160
|
|
(4,560)
|
Freeport-McMoRan Copper & Gold, Inc. Class B,
|
|
|
|
|
expiring August 2008 at $110
|
|
80
|
|
(110,200)
|
Gilead Sciences, Inc., expiring August 2008
|
|
|
|
|
at $60
|
|
100
|
|
(3,000)
|
The Goldman Sachs Group, Inc., expiring July 2008
|
|
|
|
|
at $195
|
|
100
|
|
(5,250)
|
Hess Corp., expiring August 2008 at $110
|
|
80
|
|
(159,600)
|
Hewlett-Packard Co., expiring August 2008
|
|
|
|
|
at $50
|
|
180
|
|
(4,050)
|
Intel Corp., expiring July 2008 at $22.50
|
|
680
|
|
(31,620)
|
JPMorgan Chase & Co., expiring August 2008
|
|
|
|
|
at $45
|
|
460
|
|
(6,210)
|
Medco Health Solutions, Inc., expiring July 2008
|
|
|
|
|
at $50
|
|
100
|
|
(3,750)
|
National Oilwell Varco, Inc., expiring August 2008
|
|
|
|
|
at $70
|
|
120
|
|
(240,000)
|
QUALCOMM, Inc., expiring July 2008 at $47.50
|
|
280
|
|
(11,620)
|
S&P 500 Listed Option, expiring August 2008
|
|
|
|
|
at $1,370
|
|
790
|
|
(576,700)
|
S&P 500 Listed Option, expiring August 2008
|
|
|
|
|
at $1,380
|
|
450
|
|
(247,500)
|
Schlumberger Ltd., expiring August 2008 at $10
|
|
40
|
|
(42,000)
|
Smith International, Inc., expiring July 2008
|
|
|
|
|
at $70
|
|
160
|
|
(213,600)
|
Staples, Inc., expiring August 2008 at $27.50
|
|
200
|
|
(3,500)
|
UST, Inc., expiring July 2008 at $60
|
|
200
|
|
(4,500)
|
VF Corp., expiring August 2008 at $85
|
|
70
|
|
(1,750)
|
Wal-Mart Stores, Inc., expiring July 2008 at $60
|
|
340
|
|
(6,290)
|
Waste Management, Inc., expiring July 2008
|
|
|
|
|
at $37.50
|
|
20
|
|
(1,900)
|
XTO Energy, Inc., expiring August 2008 at $75
|
|
140
|
|
(26,950)
|
|
|
|
|
|
Total Options Written
|
|
|
|
|
(Premiums Received $3,488,930) (0.7%)
|
|
|
|
(2,037,000)
|
|
|
|
|
|
Total Investments, Net of Options Written 102.7%
|
|
|
|
322,932,696
|
Liabilities in Excess of Other Assets (2.7%)
|
|
|
|
(8,544,836)
|
|
|
|
|
|
Net Assets 100.0%
|
|
|
|
$ 314,387,860
|
|
|
|
|
|
|
* The cost and unrealized appreciation (depreciation) of investments as of June 30,
2008, as computed for federal income tax purposes, were as follows:
|
Aggregate cost
|
|
$ 360,718,208
|
|
|
|
Gross unrealized appreciation
|
|
$ 23,528,323
|
Gross unrealized depreciation
|
|
(59,276,835)
|
|
|
|
Net unrealized depreciation
|
|
$ (35,748,512)
|
|
|
|
See Notes to Financial Statements.
|
Schedule of Investments (concluded)
|
BlackRock Enhanced Equity Yield Fund, Inc.
|
(a) Non-income producing security.
(b) All, or a portion of security, pledged as collateral in connection with open
financial futures contracts.
(c) Security, or a portion of security, is on loan.
(d) 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
|
|
|
|
|
Activity
|
|
Interest
|
Affiliate
|
|
(000)
|
|
Income
|
|
|
|
|
|
|
BlackRock Liquidity Series, LLC
|
|
|
|
|
Money Market Series
|
|
$(9,980)
|
|
$467,155
|
|
|
|
|
|
(e) Represents the current yield as of report date.
(f) A portion of security was purchased with the cash proceeds from
securities loans.
Financial futures contracts purchased as of June 30,2008 were as follows:
|
|
|
|
Expiration
|
|
Face
|
|
Unrealized
|
Contracts
|
|
Issue
|
|
Date
|
|
Value
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
272
|
|
S&P 500 Index September 2008
|
|
$18,134,881
|
|
$ (711,921)
|
|
|
|
|
|
|
|
For Fund compliance purposes,the Funds 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.
Effective January 1,2008,the Fund adopted Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (FAS 157). FAS 157 clarifies the definition of fair value, estab-
lishes a framework for measuring fair values and requires additional disclosures
about the use of fair value measurements. Various inputs are used in determining
the fair value of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical
securities
Level 2 other observable inputs (including,but not limited to: quoted prices
for 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
circumstance, to the extent observable inputs are not available (including the
Fund's own assumption used 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. For
information about the Fund's policy regarding valuation of investments and
other significant accounting policies, please refer to Note 1 of the Notes to
Financial Statements.
The following table summarizes the inputs used as of June 30, 2008 in deter-
mining the fair valuation of the Fund's investments:
|
|
|
|
Other
|
Valuation
|
|
Investments in
|
|
Financial
|
Inputs
|
|
Securities
|
|
Instruments*
|
|
|
|
|
|
Level 1
|
|
$299,001,118
|
|
$(1,520,753)
|
Level 2
|
|
24,740,410
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
Total
|
|
$323,741,528
|
|
$(1,520,753)
|
|
|
|
|
|
|
* Other financial instruments are options and futures.
|
|
See Notes to Financial Statements.
|
10 SEMI-ANNUAL REPORT JUNE 30, 2008
|
Schedule of Investments
June 30, 2008 (Unaudited)
|
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
(Percentages shown are based on Net Assets)
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Aerospace & Defense 1.2%
|
|
|
|
|
L-3 Communications Holdings, Inc.
|
|
3,700
|
|
$ 336,219
|
Northrop Grumman Corp.
|
|
19,300
|
|
1,291,170
|
Precision Castparts Corp.
|
|
2,500
|
|
240,925
|
United Technologies Corp.
|
|
21,500
|
|
1,326,550
|
|
|
|
|
|
|
|
|
|
3,194,864
|
|
|
|
|
|
Air Freight & Logistics 1.1%
|
|
|
|
|
United Parcel Service, Inc. Class B
|
|
46,200
|
|
2,839,914
|
|
|
|
|
|
Auto Components 0.1%
|
|
|
|
|
Johnson Controls, Inc.
|
|
9,600
|
|
275,328
|
|
|
|
|
|
Automobiles 0.2%
|
|
|
|
|
General Motors Corp.
|
|
42,500
|
|
488,750
|
|
|
|
|
|
Beverages 1.3%
|
|
|
|
|
The Coca-Cola Co.
|
|
43,100
|
|
2,240,338
|
PepsiCo, Inc.
|
|
20,200
|
|
1,284,518
|
|
|
|
|
|
|
|
|
|
3,524,856
|
|
|
|
|
|
Biotechnology 3.2%
|
|
|
|
|
Amgen, Inc. (a)
|
|
37,900
|
|
1,787,364
|
Celgene Corp. (a)
|
|
28,000
|
|
1,788,360
|
Genzyme Corp. (a)
|
|
30,700
|
|
2,211,014
|
Gilead Sciences, Inc. (a)
|
|
48,800
|
|
2,583,960
|
|
|
|
|
|
|
|
|
|
8,370,698
|
|
|
|
|
|
Building Products 0.1%
|
|
|
|
|
Masco Corp.
|
|
15,400
|
|
242,242
|
|
|
|
|
|
Capital Markets 1.6%
|
|
|
|
|
The Charles Schwab Corp.
|
|
15,400
|
|
316,316
|
Franklin Resources, Inc.
|
|
2,600
|
|
238,290
|
The Goldman Sachs Group, Inc.
|
|
11,890
|
|
2,079,561
|
Legg Mason, Inc.
|
|
21,400
|
|
932,398
|
Morgan Stanley
|
|
13,100
|
|
472,517
|
|
|
|
|
|
|
|
|
|
4,039,082
|
|
|
|
|
|
Chemicals 1.3%
|
|
|
|
|
The Dow Chemical Co.
|
|
40,500
|
|
1,413,855
|
E.I. du Pont de Nemours & Co.
|
|
24,700
|
|
1,059,383
|
Eastman Chemical Co.
|
|
11,600
|
|
798,776
|
|
|
|
|
|
|
|
|
|
3,272,014
|
|
|
|
|
|
Commercial Banks 2.6%
|
|
|
|
|
BB&T Corp.
|
|
21,800
|
|
496,386
|
Comerica, Inc.
|
|
7,400
|
|
189,662
|
SunTrust Banks, Inc.
|
|
14,500
|
|
525,190
|
U.S. Bancorp
|
|
91,900
|
|
2,563,091
|
Wachovia Corp.
|
|
106,800
|
|
1,658,604
|
Wells Fargo & Co.
|
|
53,200
|
|
1,263,500
|
|
|
|
|
|
|
|
|
|
6,696,433
|
|
|
|
|
|
Commercial Services & Supplies 1.6%
|
|
|
|
|
Pitney Bowes, Inc.
|
|
26,800
|
|
913,880
|
R.R. Donnelley & Sons Co.
|
|
67,200
|
|
1,995,168
|
Waste Management, Inc.
|
|
35,600
|
|
1,342,476
|
|
|
|
|
|
|
|
|
|
4,251,524
|
|
|
|
|
|
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Communications Equipment 5.3%
|
|
|
|
|
Ciena Corp. (a)
|
|
27,271
|
|
$ 631,869
|
Cisco Systems, Inc. (a)
|
|
173,100
|
|
4,026,306
|
Corning, Inc.
|
|
45,600
|
|
1,051,080
|
Motorola, Inc.
|
|
63,400
|
|
465,356
|
QUALCOMM, Inc.
|
|
109,200
|
|
4,845,204
|
Research In Motion Ltd. (a)
|
|
24,349
|
|
2,846,398
|
|
|
|
|
|
|
|
|
|
13,866,213
|
|
|
|
|
|
Computers & Peripherals 6.1%
|
|
|
|
|
Apple, Inc. (a)
|
|
74,700
|
|
12,507,768
|
EMC Corp. (a)
|
|
33,900
|
|
497,991
|
Hewlett-Packard Co.
|
|
40,200
|
|
1,777,242
|
International Business Machines Corp.
|
|
9,100
|
|
1,078,623
|
|
|
|
|
|
|
|
|
|
15,861,624
|
|
|
|
|
|
Construction & Engineering 0.7%
|
|
|
|
|
Fluor Corp.
|
|
9,100
|
|
1,693,328
|
|
|
|
|
|
Consumer Finance 0.1%
|
|
|
|
|
Discover Financial Services, Inc.
|
|
21,000
|
|
276,570
|
|
|
|
|
|
Distributors 0.3%
|
|
|
|
|
Genuine Parts Co.
|
|
20,400
|
|
809,472
|
|
|
|
|
|
Diversified Consumer Services 0.2%
|
|
|
|
|
Apollo Group, Inc. Class A (a)
|
|
14,400
|
|
637,344
|
|
|
|
|
|
Diversified Financial Services 2.3%
|
|
|
|
|
Bank of America Corp.
|
|
110,301
|
|
2,632,885
|
CME Group, Inc.
|
|
840
|
|
321,880
|
Citigroup, Inc.
|
|
17,100
|
|
286,596
|
IntercontinentalExchange, Inc. (a)
|
|
3,400
|
|
387,600
|
JPMorgan Chase & Co.
|
|
65,300
|
|
2,240,443
|
|
|
|
|
|
|
|
|
|
5,869,404
|
|
|
|
|
|
Diversified Telecommunication Services 2.8%
|
|
|
|
|
AT&T Inc.
|
|
98,332
|
|
3,312,805
|
Embarq Corp.
|
|
6,519
|
|
308,153
|
Verizon Communications, Inc.
|
|
70,432
|
|
2,493,293
|
Windstream Corp.
|
|
97,761
|
|
1,206,371
|
|
|
|
|
|
|
|
|
|
7,320,622
|
|
|
|
|
|
Electric Utilities 1.0%
|
|
|
|
|
Progress Energy, Inc.
|
|
36,200
|
|
1,514,246
|
The Southern Co.
|
|
30,500
|
|
1,065,060
|
|
|
|
|
|
|
|
|
|
2,579,306
|
|
|
|
|
|
Electrical Equipment 0.3%
|
|
|
|
|
Emerson Electric Co.
|
|
16,200
|
|
801,090
|
|
|
|
|
|
Electronic Equipment & Instruments 0.1%
|
|
|
|
|
Tyco Electronics Ltd.
|
|
7,875
|
|
282,082
|
|
|
|
|
|
Energy Equipment & Services 2.9%
|
|
|
|
|
Baker Hughes, Inc.
|
|
5,900
|
|
515,306
|
National Oilwell Varco, Inc. (a)
|
|
28,200
|
|
2,501,904
|
Schlumberger Ltd.
|
|
2,903
|
|
311,869
|
Smith International, Inc.
|
|
27,282
|
|
2,268,225
|
Transocean, Inc.
|
|
9,654
|
|
1,471,173
|
Weatherford International Ltd. (a)
|
|
10,800
|
|
535,572
|
|
|
|
|
|
|
|
|
|
7,604,049
|
|
|
|
|
|
See Notes to Financial Statements.
|
Schedule of Investments (continued)
|
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
(Percentages shown are based on Net Assets)
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Food & Staples Retailing 2.5%
|
|
|
|
|
CVS Caremark Corp.
|
|
23,900
|
|
$ 945,723
|
SYSCO Corp.
|
|
76,800
|
|
2,112,768
|
Wal-Mart Stores, Inc.
|
|
52,200
|
|
2,933,640
|
Walgreen Co.
|
|
16,100
|
|
523,411
|
|
|
|
|
|
|
|
|
|
6,515,542
|
|
|
|
|
|
Food Products 0.8%
|
|
|
|
|
Kraft Foods, Inc.
|
|
46,127
|
|
1,312,313
|
Sara Lee Corp.
|
|
72,100
|
|
883,225
|
|
|
|
|
|
|
|
|
|
2,195,538
|
|
|
|
|
|
Health Care Equipment & Supplies 0.4%
|
|
|
|
|
Boston Scientific Corp. (a)
|
|
35,886
|
|
441,039
|
Covidien Ltd.
|
|
7,875
|
|
377,134
|
Stryker Corp.
|
|
5,500
|
|
345,840
|
|
|
|
|
|
|
|
|
|
1,164,013
|
|
|
|
|
|
Health Care Providers & Services 1.9%
|
|
|
|
|
Aetna, Inc.
|
|
8,200
|
|
332,346
|
Cigna Corp.
|
|
10,100
|
|
357,439
|
Express Scripts, Inc. (a)
|
|
16,400
|
|
1,028,608
|
Humana, Inc. (a)
|
|
24,700
|
|
982,319
|
Medco Health Solutions, Inc. (a)
|
|
10,300
|
|
486,160
|
UnitedHealth Group, Inc.
|
|
46,300
|
|
1,215,375
|
WellPoint, Inc. (a)
|
|
11,300
|
|
538,558
|
|
|
|
|
|
|
|
|
|
4,940,805
|
|
|
|
|
|
Hotels, Restaurants & Leisure 1.7%
|
|
|
|
|
Carnival Corp.
|
|
7,000
|
|
230,720
|
McDonalds Corp.
|
|
43,500
|
|
2,445,570
|
Starbucks Corp. (a)
|
|
45,600
|
|
717,744
|
Wynn Resorts Ltd.
|
|
13,400
|
|
1,090,090
|
|
|
|
|
|
|
|
|
|
4,484,124
|
|
|
|
|
|
Household Durables 1.5%
|
|
|
|
|
Fortune Brands, Inc.
|
|
23,200
|
|
1,447,912
|
Lennar Corp. Class A
|
|
32,000
|
|
394,880
|
Newell Rubbermaid, Inc.
|
|
46,200
|
|
775,698
|
Whirlpool Corp.
|
|
19,900
|
|
1,228,427
|
|
|
|
|
|
|
|
|
|
3,846,917
|
|
|
|
|
|
Household Products 1.3%
|
|
|
|
|
Colgate-Palmolive Co.
|
|
5,100
|
|
352,410
|
Kimberly-Clark Corp.
|
|
4,800
|
|
286,944
|
The Procter & Gamble Co.
|
|
43,600
|
|
2,651,316
|
|
|
|
|
|
|
|
|
|
3,290,670
|
|
|
|
|
|
IT Services 1.4%
|
|
|
|
|
Automatic Data Processing, Inc.
|
|
30,900
|
|
1,294,710
|
Paychex, Inc.
|
|
77,500
|
|
2,424,200
|
|
|
|
|
|
|
|
|
|
3,718,910
|
|
|
|
|
|
Industrial Conglomerates 2.7%
|
|
|
|
|
3M Co.
|
|
24,300
|
|
1,691,037
|
General Electric Co.
|
|
191,850
|
|
5,120,477
|
Textron, Inc.
|
|
5,800
|
|
277,994
|
|
|
|
|
|
|
|
|
|
7,089,508
|
|
|
|
|
|
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Insurance 1.3%
|
|
|
|
|
American International Group, Inc.
|
|
7,400
|
|
$ 195,804
|
Hartford Financial Services Group, Inc.
|
|
3,900
|
|
251,823
|
Lincoln National Corp.
|
|
20,100
|
|
910,932
|
Marsh & McLennan Cos., Inc.
|
|
10,500
|
|
278,775
|
Prudential Financial, Inc.
|
|
7,400
|
|
442,076
|
The Travelers Cos., Inc.
|
|
31,100
|
|
1,349,740
|
|
|
|
|
|
|
|
|
|
3,429,150
|
|
|
|
|
|
Internet & Catalog Retail 0.3%
|
|
|
|
|
Amazon.com, Inc. (a)
|
|
12,100
|
|
887,293
|
|
|
|
|
|
Internet Software & Services 4.4%
|
|
|
|
|
Akamai Technologies, Inc. (a)
|
|
32,800
|
|
1,141,112
|
Baidu.com, Inc. (a)(b)
|
|
1,854
|
|
580,228
|
eBay, Inc. (a)
|
|
97,807
|
|
2,673,065
|
Google, Inc. Class A (a)(c)
|
|
13,060
|
|
6,875,045
|
Yahoo! Inc. (a)
|
|
12,600
|
|
260,316
|
|
|
|
|
|
|
|
|
|
11,529,766
|
|
|
|
|
|
Life Sciences Tools & Services 0.5%
|
|
|
|
|
Thermo Fisher Scientific, Inc. (a)
|
|
24,400
|
|
1,359,812
|
|
|
|
|
|
Machinery 1.1%
|
|
|
|
|
Caterpillar, Inc.
|
|
16,900
|
|
1,247,558
|
Cummins, Inc.
|
|
18,500
|
|
1,212,120
|
Danaher Corp.
|
|
4,000
|
|
309,200
|
|
|
|
|
|
|
|
|
|
2,768,878
|
|
|
|
|
|
Media 1.2%
|
|
|
|
|
CBS Corp. Class B
|
|
19,400
|
|
378,106
|
Comcast Corp. Class A
|
|
105,950
|
|
2,009,872
|
The DIRECTV Group, Inc.(a)
|
|
26,600
|
|
689,206
|
|
|
|
|
|
|
|
|
|
3,077,184
|
|
|
|
|
|
Metals & Mining 1.1%
|
|
|
|
|
Allegheny Technologies, Inc.
|
|
6,000
|
|
355,680
|
Freeport-McMoRan Copper & Gold, Inc. Class B
|
|
17,200
|
|
2,015,668
|
Nucor Corp.
|
|
5,600
|
|
418,152
|
|
|
|
|
|
|
|
|
|
2,789,500
|
|
|
|
|
|
Multi-Utilities 0.8%
|
|
|
|
|
Xcel Energy, Inc.
|
|
105,200
|
|
2,111,364
|
|
|
|
|
|
Oil, Gas & Consumable Fuels 8.3%
|
|
|
|
|
Anadarko Petroleum Corp.
|
|
8,600
|
|
643,624
|
Apache Corp.
|
|
6,100
|
|
847,900
|
Chesapeake Energy Corp.
|
|
21,500
|
|
1,418,140
|
Chevron Corp.
|
|
46,500
|
|
4,609,545
|
ConocoPhillips
|
|
27,521
|
|
2,597,707
|
Devon Energy Corp.
|
|
4,500
|
|
540,720
|
Exxon Mobil Corp. (c)
|
|
72,000
|
|
6,345,360
|
Spectra Energy Corp.
|
|
23,000
|
|
661,020
|
Valero Energy Corp.
|
|
10,100
|
|
415,918
|
Williams Cos., Inc.
|
|
38,600
|
|
1,555,966
|
XTO Energy, Inc.
|
|
31,600
|
|
2,164,916
|
|
|
|
|
|
|
|
|
|
21,800,816
|
|
|
|
|
|
Paper & Forest Products 0.9%
|
|
|
|
|
International Paper Co.
|
|
36,600
|
|
852,780
|
MeadWestvaco Corp.
|
|
24,600
|
|
586,464
|
Weyerhaeuser Co.
|
|
17,900
|
|
915,406
|
|
|
|
|
|
|
|
|
|
2,354,650
|
|
|
|
|
|
See Notes to Financial Statements.
|
Schedule of Investments (continued)
|
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
(Percentages shown are based on Net Assets)
Common Stocks
|
|
Shares
|
|
Value
|
|
|
|
|
|
|
Pharmaceuticals 6.2%
|
|
|
|
|
Abbott Laboratories
|
|
23,700
|
|
$ 1,255,389
|
Bristol-Myers Squibb Co.
|
|
87,800
|
|
1,802,534
|
Eli Lilly & Co.
|
|
16,800
|
|
775,488
|
Johnson & Johnson
|
|
56,100
|
|
3,609,474
|
Merck & Co., Inc.
|
|
34,500
|
|
1,300,305
|
Pfizer, Inc.
|
|
182,900
|
|
3,195,263
|
Schering-Plough Corp.
|
|
41,600
|
|
819,104
|
Teva Pharmaceutical Industries Ltd. (b)
|
|
29,097
|
|
1,332,643
|
Wyeth
|
|
46,100
|
|
2,210,956
|
|
|
|
|
|
|
|
|
|
16,301,156
|
|
|
|
|
|
Real Estate Investment Trusts (REITs) 0.9%
|
|
|
|
|
Developers Diversified Realty Corp.
|
|
7,400
|
|
256,854
|
Plum Creek Timber Co., Inc.
|
|
21,700
|
|
926,807
|
Simon Property Group, Inc.
|
|
3,600
|
|
323,604
|
Vornado Realty Trust
|
|
9,400
|
|
827,200
|
|
|
|
|
|
|
|
|
|
2,334,465
|
|
|
|
|
|
Semiconductors & Semiconductor Equipment 4.9%
|
|
|
Advanced Micro Devices, Inc. (a)
|
|
128,900
|
|
751,487
|
Analog Devices, Inc.
|
|
38,200
|
|
1,213,614
|
Intel Corp.
|
|
185,040
|
|
3,974,659
|
Nvidia Corp. (a)
|
|
92,400
|
|
1,729,728
|
Texas Instruments, Inc.
|
|
91,200
|
|
2,568,192
|
Xilinx, Inc.
|
|
98,200
|
|
2,479,550
|
|
|
|
|
|
|
|
|
|
12,717,230
|
|
|
|
|
|
Software 5.7%
|
|
|
|
|
Adobe Systems, Inc. (a)
|
|
31,800
|
|
1,252,602
|
Autodesk, Inc. (a)
|
|
49,800
|
|
1,683,738
|
Electronic Arts, Inc. (a)
|
|
20,998
|
|
932,941
|
Intuit, Inc. (a)
|
|
27,400
|
|
755,418
|
Microsoft Corp.
|
|
264,700
|
|
7,281,897
|
Oracle Corp. (a)
|
|
145,862
|
|
3,063,102
|
|
|
|
|
|
|
|
|
|
14,969,698
|
|
|
|
|
|
Specialty Retail 1.6%
|
|
|
|
|
Home Depot, Inc.
|
|
69,100
|
|
1,618,322
|
Staples, Inc.
|
|
107,000
|
|
2,541,250
|
|
|
|
|
|
|
|
|
|
4,159,572
|
|
|
|
|
|
Textiles, Apparel & Luxury Goods 1.0%
|
|
|
|
|
Coach, Inc. (a)
|
|
19,900
|
|
574,712
|
VF Corp.
|
|
28,000
|
|
1,993,040
|
|
|
|
|
|
|
|
|
|
2,567,752
|
|
|
|
|
|
Thrifts & Mortgage Finance 0.7%
|
|
|
|
|
Fannie Mae
|
|
58,200
|
|
1,135,482
|
Washington Mutual, Inc.
|
|
137,400
|
|
677,382
|
|
|
|
|
|
|
|
|
|
1,812,864
|
|
|
|
|
|
Tobacco 1.4%
|
|
|
|
|
Reynolds American, Inc.
|
|
30,200
|
|
1,409,434
|
UST, Inc.
|
|
40,800
|
|
2,228,088
|
|
|
|
|
|
|
|
|
|
3,637,522
|
|
|
|
|
|
Total Common Stocks
|
|
|
|
|
(Cost $264,846,349) 92.9%
|
|
|
|
242,651,508
|
|
|
|
|
|
Beneficial Interest
|
|
|
Short-Term Securities
|
|
(000)
|
|
Value
|
|
|
|
|
|
|
BlackRock Liquidity Series, LLC
|
|
|
|
|
Money Market Series, 2.70% (d)(e)
|
|
$ 21,608
|
|
$ 21,607,948
|
|
|
|
|
|
Total Short-Term Securities
|
|
|
|
|
(Cost $21,607,948) 8.3%
|
|
|
|
21,607,948
|
|
|
|
|
|
|
|
|
|
Options Purchased
|
|
Contracts
|
|
|
|
|
|
|
|
Call Options Purchased
|
|
|
|
|
3M Co., expiring July 2008 at $85
|
|
30
|
|
150
|
AT&T Inc., expiring July 2008 at $37.50
|
|
310
|
|
2,325
|
Abbott Laboratories, expiring August 2008
|
|
|
|
|
at $52.50
|
|
10
|
|
2,000
|
Adobe Systems, Inc., expiring July 2008
|
|
|
|
|
at $37.50
|
|
50
|
|
12,000
|
Aetna, Inc., expiring July 2008 at $50
|
|
20
|
|
150
|
Amazon.com, Inc., expiring July 2008 at $80
|
|
30
|
|
2,190
|
Amgen, Inc., expiring July 2008 at $45
|
|
80
|
|
20,040
|
Anadarko Petroleum Corp., expiring August 2008
|
|
|
|
|
at $60
|
|
20
|
|
31,400
|
Apple, Inc., expiring July 2008 at $150
|
|
160
|
|
302,000
|
Autodesk, Inc., expiring July 2008 at $40
|
|
110
|
|
825
|
Bank of America Corp., expiring August 2008
|
|
|
|
|
at $45
|
|
100
|
|
200
|
Carnival Corp., expiring July 2008 at $40
|
|
10
|
|
50
|
Caterpillar, Inc., expiring August 2008 at $85
|
|
50
|
|
2,300
|
Cigna Corp., expiring July 2008 at $50
|
|
20
|
|
100
|
Cisco Systems, Inc., expiring August 2008
|
|
|
|
|
at $26
|
|
160
|
|
4,320
|
The Coca-Cola Co., expiring August 2008
|
|
|
|
|
at $62.50
|
|
30
|
|
225
|
ConocoPhillips, expiring August 2008 at $85
|
|
40
|
|
41,800
|
Corning, Inc., expiring August 2008 at $25
|
|
60
|
|
3,450
|
Cummins, Inc., expiring August 2008 at $75
|
|
80
|
|
16,200
|
E.I. du Pont de Nemours & Co., expiring July 2008
|
|
|
|
|
at $47.50
|
|
21
|
|
158
|
E.I. du Pont de Nemours & Co., expiring July 2008
|
|
|
|
|
at $50
|
|
40
|
|
200
|
EMC Corp., expiring July 2008 at $18
|
|
40
|
|
60
|
eBay, Inc., expiring July 2008 at $30
|
|
200
|
|
5,700
|
Eli Lilly & Co., expiring July 2008 at $55
|
|
20
|
|
100
|
Express Scripts, Inc., expiring August 2008
|
|
|
|
|
at $65
|
|
30
|
|
7,500
|
Exxon Mobil Corp., expiring August 2008
|
|
|
|
|
at $95
|
|
40
|
|
3,780
|
Fluor Corp., expiring July 2008 at $135
|
|
20
|
|
102,400
|
Freeport-McMoRan Copper & Gold, Inc. Class B,
|
|
|
|
|
expiring August 2008 at $95
|
|
40
|
|
97,900
|
Gilead Sciences, Inc., expiring August 2008
|
|
|
|
|
at $55
|
|
110
|
|
16,225
|
The Goldman Sachs Group, Inc., expiring July 2008
|
|
|
|
|
at $175
|
|
30
|
|
18,525
|
Hewlett-Packard Co., expiring August 2008
|
|
|
|
|
at $45
|
|
20
|
|
2,750
|
Intel Corp., expiring July 2008 at $20
|
|
335
|
|
62,645
|
See Notes to Financial Statements.
|
Schedule of Investments (continued)
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
(Percentages shown are based on Net Assets)
Options Purchased
|
|
Contracts
|
|
Value
|
|
|
|
|
|
|
Call Options Purchased (concluded)
|
|
|
|
|
Intuit, Inc., expiring July 2008 at $27.50
|
|
60
|
|
$ 5,250
|
JPMorgan Chase & Co., expiring August 2008
|
|
|
|
|
at $42.50
|
|
140
|
|
4,480
|
Johnson Controls, Inc., expiring July 2008 at $35
|
|
20
|
|
150
|
Medco Health Solutions, Inc., expiring July 2008
|
|
|
|
|
at $45
|
|
30
|
|
8,250
|
Merck & Co., Inc., expiring July 2008 at $47.50
|
|
80
|
|
400
|
National Oilwell Varco, Inc., expiring August 2008
|
|
|
|
|
at $60
|
|
50
|
|
147,000
|
Oracle Corp., expiring August 2008 at $24
|
|
250
|
|
3,125
|
QUALCOMM, Inc., expiring July 2008 at $42.50
|
|
160
|
|
42,400
|
Reynolds American, Inc., expiring August 2008
|
|
|
|
|
at $60
|
|
30
|
|
225
|
Smith International, Inc., expiring July 2008
|
|
|
|
|
at $62.50
|
|
70
|
|
145,250
|
Staples, Inc., expiring August 2008 at $25
|
|
80
|
|
6,000
|
UST, Inc., expiring July 2008 at $55
|
|
80
|
|
8,400
|
United Parcel Service, Inc. Class B, expiring
|
|
|
|
|
July 2008 at $75
|
|
40
|
|
200
|
VF Corp., expiring August 2008 at $80
|
|
50
|
|
3,625
|
Verizon Communications, Inc., expiring July 2008
|
|
|
|
|
at $40
|
|
160
|
|
1,120
|
Wal-Mart Stores, Inc., expiring July 2008 at $57.50
|
|
90
|
|
6,615
|
Waste Management, Inc., expiring July 2008 at $35
|
|
20
|
|
5,700
|
Wells Fargo & Co., expiring July 2008 at $27.50
|
|
80
|
|
1,600
|
Wells Fargo & Co., expiring July 2008 at $35
|
|
50
|
|
250
|
XTO Energy, Inc., expiring August 2008 at $70
|
|
60
|
|
21,600
|
Xilinx, Inc., expiring July 2008 at $27.50
|
|
250
|
|
8,125
|
|
|
|
|
|
Total Options Purchased
|
|
|
|
|
(Cost $1,237,100) 0.5%
|
|
|
|
1,179,433
|
|
|
|
|
|
Total Investments Before Options Written
|
|
|
|
|
(Cost $287,691,397*) 101.7%
|
|
|
|
265,438,889
|
|
|
|
|
|
|
|
|
|
Options Written
|
|
|
|
|
|
|
|
|
|
Call Options Written
|
|
|
|
|
Abbott Laboratories, expiring August 2008
|
|
|
|
|
at $55
|
|
20
|
|
(1,900)
|
Amgen, Inc., expiring July 2008 at $47.50
|
|
160
|
|
(13,760)
|
Anadarko Petroleum Corp., expiring August 2008
|
|
|
|
|
at $65
|
|
40
|
|
(44,600)
|
Apple, Inc., expiring July 2008 at $170
|
|
320
|
|
(165,600)
|
ConocoPhillips, expiring August 2008 at $90
|
|
80
|
|
(53,600)
|
Cummins, Inc., expiring August 2008 at $80
|
|
160
|
|
(17,600)
|
Express Scripts, Inc., expiring August 2008 at $75
|
|
60
|
|
(2,400)
|
Exxon Mobil Corp., expiring August 2008 at $100
|
|
80
|
|
(2,280)
|
Fluor Corp., expiring July 2008 at $155
|
|
40
|
|
(125,600)
|
Options Written
|
|
Contracts
|
|
Value
|
|
|
|
|
|
|
Call Options Written (concluded)
|
|
|
|
|
Freeport-McMoRan Copper & Gold, Inc. Class B,
|
|
|
|
|
expiring August 2008 at $110
|
|
80
|
|
$ (110,200)
|
Gilead Sciences, Inc., expiring August 2008 at $60
|
|
220
|
|
(6,600)
|
The Goldman Sachs Group, Inc., expiring July 2008
|
|
|
|
|
at $195
|
|
60
|
|
(3,150)
|
Hewlett-Packard Co., expiring August 2008 at $50
|
|
40
|
|
(900)
|
Intel Corp., expiring July 2008 at $22.50
|
|
670
|
|
(31,155)
|
JPMorgan Chase & Co., expiring August 2008
|
|
|
|
|
at $45
|
|
280
|
|
(3,780)
|
Medco Health Solutions, Inc., expiring July 2008
|
|
|
|
|
at $50
|
|
60
|
|
(2,250)
|
National Oilwell Varco, Inc., expiring August 2008
|
|
|
|
|
at $70
|
|
100
|
|
(200,000)
|
QUALCOMM, Inc., expiring July 2008 at $47.50
|
|
320
|
|
(13,280)
|
S&P 500 Listed Option, expiring August 2008
|
|
|
|
|
at $1,370
|
|
650
|
|
(474,500)
|
S&P 500 Listed Option, expiring August 2008
|
|
|
|
|
at $1,380
|
|
365
|
|
(200,750)
|
Smith International, Inc., expiring July 2008 at $70
|
|
140
|
|
(186,900)
|
Staples, Inc., expiring August 2008 at $27.50
|
|
160
|
|
(2,800)
|
UST, Inc., expiring July 2008 at $60
|
|
160
|
|
(3,600)
|
VF Corp., expiring August 2008 at $85
|
|
60
|
|
(1,500)
|
Wal-Mart Stores, Inc., expiring July 2008 at $60
|
|
180
|
|
(3,330)
|
Waste Management, Inc., expiring July 2008
|
|
|
|
|
at $37.50
|
|
40
|
|
(3,800)
|
XTO Energy, Inc., expiring August 2008 at $75
|
|
120
|
|
(23,100)
|
|
|
|
|
|
Total Options Written
|
|
|
|
|
(Premiums Received $2,939,939) (0.7%)
|
|
|
|
(1,698,935)
|
|
|
|
|
|
Total Investments, Net of Options Written 101.0%
|
|
|
|
263,739,954
|
Liabilities in Excess of Other Assets (1.0%)
|
|
|
|
(2,565,603)
|
|
|
|
|
|
Net Assets 100.0%
|
|
|
|
$261,174,351
|
|
|
|
|
|
* The cost and unrealized appreciation (depreciation) of investments as of June 30,
2008, as computed for federal income tax purposes, were as follows:
|
Aggregate cost
|
|
$287,701,679
|
|
|
|
Gross unrealized appreciation
|
|
$ 18,013,396
|
Gross unrealized depreciation
|
|
(40,276,186)
|
|
|
|
Net unrealized depreciation
|
|
$ (22,262,790)
|
|
|
|
|
(a) Non-income producing security.
(b) Depositary receipts.
(c) All, or a portion of security, pledged as collateral in connection with open
financial futures contracts.
(d) 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
|
|
|
|
|
Activity
|
|
Interest
|
Affiliate
|
|
(000)
|
|
Income
|
|
|
|
|
|
|
BlackRock Liquidity Series, LLC
|
|
|
|
|
Money Market Series
|
|
$(12,274)
|
|
$512,869
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
Schedule of Investments (concluded)
|
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
|
(e) Represents the current yield as of report date.
Financial futures contracts purchased on June 30,2008 were as follows:
|
|
|
|
Expiration
|
|
Face
|
|
Unrealized
|
Contracts
|
|
Issue
|
|
Date
|
|
Value
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
238
|
|
S&P 500 Index September 2008
|
|
$15,618,655
|
|
$ (373,565)
|
|
|
|
|
|
|
|
For Fund compliance purposes,the Funds 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.
Effective January 1,2008,the Fund adopted Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (FAS 157). FAS 157 clarifies the definition of fair value, estab-
lishes a framework for measuring fair values and requires additional disclosures
about the use of fair value measurements. Various inputs are used in determining
the fair value of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical
securities
Level 2 other observable inputs (including,but not limited to: quoted prices
for 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
circumstance, to the extent observable inputs are not available (including the
Fund's own assumption used 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. For
information about the Fund's policy regarding valuation of investments and
other significant accounting policies, please refer to Note 1 of the Notes to
Financial Statements.
The following table summarizes the inputs used as of June 30, 2008 in deter-
mining the fair valuation of the Fund's investments:
|
|
|
|
Other
|
Valuation
|
|
Investments in
|
|
Financial
|
Inputs
|
|
Securities
|
|
Instruments*
|
|
|
|
|
|
Level 1
|
|
$242,651,508
|
|
$(893,067)
|
Level 2
|
|
21,607,948
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
Total
|
|
$264,259,456
|
|
$(893,067)
|
|
|
|
|
|
|
* Other financial instruments are options and futures.
|
|
See Notes to Financial Statements.
|
Statements of Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
BlackRock
|
|
|
BlackRock
|
|
Enhanced
|
|
|
Enhanced
|
|
Equity Yield
|
|
|
Equity Yield
|
|
& Premium
|
June 30, 2008 (Unaudited)
|
|
Fund, Inc.
|
|
Fund, Inc.
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Investments at value unaffiliated
1,2
|
|
$ 300,229,286
|
|
$ 243,830,941
|
Investments at value affiliated
3
|
|
24,740,410
|
|
21,607,948
|
Dividends receivable
|
|
540,540
|
|
319,809
|
Securities lending income receivable
|
|
630
|
|
|
Margin variation receivable
|
|
9,311
|
|
9,055
|
Repurchase fees receivable
|
|
117,927
|
|
|
Prepaid expenses
|
|
18,380
|
|
15,476
|
|
|
|
|
|
Total assets
|
|
325,656,484
|
|
265,783,229
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Collateral at value securities loaned
|
|
850,000
|
|
|
Options written at value
4
|
|
2,037,000
|
|
1,698,935
|
Bank overdraft
|
|
24,341
|
|
37,888
|
Capital shares redeemed payable
|
|
5,896,338
|
|
|
Dividends payable
|
|
2,079,725
|
|
2,555,296
|
Investment advisory fees payable
|
|
277,745
|
|
230,145
|
Officers and Directors fees payable
|
|
491
|
|
400
|
Other affiliates payable
|
|
2,821
|
|
2,459
|
Other accrued expenses payable
|
|
100,163
|
|
83,755
|
|
|
|
|
|
Total liabilities
|
|
11,268,624
|
|
4,608,878
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
$ 314,387,860
|
|
$ 261,174,351
|
|
|
|
|
|
|
|
Net Assets Consist of
|
|
|
|
|
|
|
|
|
|
|
Par value $0.10 per share, 200,000,000 shares authorized
5
|
|
$ 2,095,443
|
|
$ 1,769,705
|
Paid-in capital in excess of par
|
|
355,535,584
|
|
296,334,101
|
Distributions in excess of net investment income
|
|
(18,940,208)
|
|
(16,488,546)
|
Accumulated net realized gain
|
|
10,705,313
|
|
944,160
|
Net unrealized appreciation/depreciation
|
|
(35,008,272)
|
|
(21,385,069)
|
|
|
|
|
|
Net assets
|
|
$ 314,387,860
|
|
$ 261,174,351
|
|
|
|
|
|
Net asset value
|
|
$ 15.00
|
|
$ 14.76
|
|
|
|
|
|
1
Cost unaffiliated
|
|
$ 335,977,567
|
|
$ 266,083,449
|
|
|
|
|
|
2
Securities loaned
|
|
$ 838,100
|
|
|
|
|
|
|
|
3
Cost affiliated
|
|
$ 24,740,410
|
|
$ 21,607,948
|
|
|
|
|
|
4
Premiums received
|
|
$ 3,488,930
|
|
$ 2,939,939
|
|
|
|
|
|
5
Shares of Common Stock outstanding
|
|
20,954,427
|
|
17,697,047
|
|
|
|
|
|
See Notes to Financial Statements.
|
Statements of Operations
|
|
|
|
|
|
|
|
|
|
BlackRock
|
|
|
BlackRock
|
|
Enhanced
|
|
|
Enhanced
|
|
Equity Yield
|
|
|
Equity Yield
|
|
& Premium
|
Six Months Ended June 30, 2008 (Unaudited)
|
|
Fund, Inc.
|
|
Fund, Inc.
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
|
|
|
|
|
|
Dividends
1
|
|
$ 3,848,429
|
|
$ 2,748,416
|
Interest from affiliates
|
|
446,003
|
|
512,869
|
Securities lending
|
|
21,152
|
|
|
|
|
|
|
|
Total income
|
|
4,315,584
|
|
3,261,285
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Investment advisory
|
|
1,736,670
|
|
1,422,561
|
Professional
|
|
43,064
|
|
43,400
|
Accounting services
|
|
41,054
|
|
51,712
|
Officer and Directors
|
|
18,537
|
|
14,156
|
Custodian
|
|
16,240
|
|
9,732
|
Printing
|
|
13,528
|
|
12,272
|
Repurchase offer
|
|
9,698
|
|
32,097
|
Transfer agent
|
|
8,576
|
|
9,999
|
Registration
|
|
5,362
|
|
5,145
|
Miscellaneous
|
|
15,022
|
|
9,284
|
|
|
|
|
|
Total expenses
|
|
1,907,751
|
|
1,610,358
|
|
|
|
|
|
Net investment income
|
|
2,407,833
|
|
1,650,927
|
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) from:
|
|
|
|
|
Investments
|
|
(12,337,875)
|
|
(6,458,637)
|
Futures
|
|
(1,669,251)
|
|
(3,493,343)
|
Options written
|
|
26,194,513
|
|
13,286,854
|
|
|
|
|
|
|
|
12,187,387
|
|
3,334,874
|
|
|
|
|
|
Net change in unrealized appreciation/depreciation on:
|
|
|
|
|
Investments
|
|
(47,473,179)
|
|
(31,618,842)
|
Futures
|
|
(593,596)
|
|
(208,772)
|
Options written
|
|
(148,238)
|
|
(15,381)
|
|
|
|
|
|
|
|
(48,215,013)
|
|
(31,842,995)
|
|
|
|
|
|
Total realized and unrealized loss
|
|
(36,027,626)
|
|
(28,508,121)
|
|
|
|
|
|
Net Decrease in Net Assets Resulting from Operations
|
|
$ (33,619,793)
|
|
$ (26,857,194)
|
|
|
|
|
|
1
Foreign withholding tax
|
|
$ 7,856
|
|
$ 1,884
|
|
|
|
|
|
See Notes to Financial Statements.
|
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Enhanced
|
|
BlackRock Enhanced Equtiy
|
|
|
Equity Yield Fund, Inc.
|
|
Yield & Premium Fund, Inc.
|
|
|
|
|
|
|
|
Six Months Ended
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
|
|
June 30, 2008
|
|
December 31,
|
|
June 30, 2008
|
|
December 31,
|
Increase (Decrease) in Net Assets:
|
|
(Unaudited)
|
|
2007
|
|
(Unaudited)
|
|
2007
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$ 2,407,833
|
|
$ 6,057,971
|
|
$ 1,650,927
|
|
$ 3,654,996
|
Net realized gain
|
|
12,187,387
|
|
9,701,370
|
|
3,334,874
|
|
16,061,914
|
Net change in unrealized appreciation/depreciation
|
|
(48,215,013)
|
|
2,890,965
|
|
(31,842,995)
|
|
1,483,822
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
(33,619,793)
|
|
18,650,306
|
|
(26,857,194)
|
|
21,200,732
|
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Shareholders From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(21,348,041)
2
|
|
(6,028,827)
|
|
(18,139,473)
2
|
|
(3,654,996)
|
Net realized gain
|
|
|
|
(10,245,934)
|
|
|
|
(17,184,920)
|
Tax return of capital
|
|
|
|
(26,237,858)
|
|
|
|
(15,306,196)
|
|
|
|
|
|
|
|
|
|
Decrease in net assets resulting from dividends and distributions to shareholders
|
|
(21,348,041)
|
|
(42,512,619)
|
|
(18,139,473)
|
|
(36,146,112)
|
|
|
|
|
|
|
|
|
|
|
Common Stock Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment of dividends and distributions
|
|
|
|
5,093,318
|
|
|
|
2,993,123
|
Net redemption of Common Stock resulting from a repurchase offer
1
|
|
(5,778,411)
|
|
(277,233)
|
|
|
|
(606,573)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from Common Stock transactions
|
|
(5,778,411)
|
|
4,816,085
|
|
|
|
2,386,550
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total decrease in net assets
|
|
(60,746,245)
|
|
(19,046,228)
|
|
(44,996,667)
|
|
(12,558,830)
|
Beginning of period
|
|
375,134,105
|
|
394,180,333
|
|
306,171,018
|
|
318,729,848
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$ 314,387,860
|
|
$ 375,134,105
|
|
$ 261,174,351
|
|
$ 306,171,018
|
|
|
|
|
|
|
|
|
|
End of period distributions in excess of net investment income
|
|
$ (18,940,208)
|
|
|
|
$ (16,488,546)
|
|
|
|
|
|
|
|
|
|
|
|
1
Repurchase offer fees
|
|
$ 117,927
|
|
$ 5,575
|
|
|
|
$ 16,944
|
|
|
|
|
|
|
|
|
|
2
A portion of the dividends from net investment income may be deemed a tax return of capital or net realized gain at fiscal year end.
|
|
See Notes to Financial Statements.
|
Financial Highlights
|
|
|
|
BlackRock Enhanced Equity Yield Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
Period
|
|
|
Six Months Ended
|
|
December 31,
|
|
May 6, 2005
1
|
|
|
June 30, 2008
|
|
|
|
|
|
|
|
to December 31,
|
|
|
(Unaudited)
|
|
2007
|
|
|
|
2006
|
|
2005
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$ 17.57
|
|
$ 18.68
|
|
$ 18.49
|
|
$ 19.10
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
0.11
|
|
0.29
|
|
|
|
0.27
|
|
0.23
|
Net realized and unrealized gain (loss)
|
|
(1.68)
3
|
|
0.60
3
|
|
|
|
2.09
3
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
(1.57)
|
|
0.89
|
|
|
|
2.36
|
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions from:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(1.00)
4
|
|
(0.28)
|
|
|
|
(0.38)
|
|
(0.13)
|
Net realized gain
|
|
|
|
(0.48)
|
|
|
|
(0.96)
|
|
(0.87)
|
Tax return of capital
|
|
|
|
(1.24)
|
|
|
|
(0.83)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
(1.00)
|
|
(2.00)
|
|
|
|
(2.17)
|
|
(1.00)
|
|
|
|
|
|
|
|
|
|
|
|
Offering costs resulting from the issuance of Common Stock
|
|
|
|
|
|
|
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$ 15.00
|
|
$ 17.57
|
|
$ 18.68
|
|
$ 18.49
|
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
$ 14.50
|
|
$ 16.16
|
|
$ 19.86
|
|
$ 17.23
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
(8.84)%
6
|
|
4.96%
|
|
|
|
13.38%
|
|
2.16%
6
|
|
|
|
|
|
|
|
|
|
|
|
Based on market price
|
|
(4.19)%
6
|
|
(9.20)%
|
|
|
|
29.35%
|
|
(9.08)%
6
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
1.10%
7
|
|
1.09%
|
|
|
|
1.12%
|
|
1.07%
7
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
1.38%
7
|
|
1.53%
|
|
|
|
1.44%
|
|
1.86%
7
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000)
|
|
$ 314,388
|
|
$ 375,134
|
|
$ 394,180
|
|
$ 387,244
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
18%
|
|
46%
|
|
|
|
49%
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Commencement of operations.
2
Based on average shares outstanding.
3
Includes repurchase offer fees, which are less than $0.01 per share.
4
A portion of the dividends from net investment income may be deemed a tax return of capital or net realized gain
at fiscal year end.
5
Total investment returns based on market value, which can be significantly greater or less than the net asset value,
may result in substantially different returns. Total investment returns exclude the effects of sales charges.
6
Aggregate total investment return.
7
Annualized.
|
See Notes to Financial Statements.
|
Financial Highlights
|
|
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
Period
|
|
|
Six Months Ended
|
|
December 31,
|
|
June 30, 2005
1
|
|
|
June 30, 2008
|
|
|
|
|
|
|
|
to December 31,
|
|
|
(Unaudited)
|
|
2007
|
|
|
|
2006
|
|
2005
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$ 17.30
|
|
$ 18.14
|
|
$ 18.28
|
|
$ 19.10
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
0.09
|
|
0.21
|
|
|
|
0.27
|
|
0.19
|
Net realized and unrealized gain (loss)
|
|
(1.60)
3
|
|
1.00
3
|
|
|
|
1.64
3
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
(1.51)
|
|
1.21
|
|
|
|
1.91
|
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions from:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(1.03)
4
|
|
(0.21)
|
|
|
|
(0.28)
|
|
(0.19)
|
Net realized gain
|
|
|
|
(0.97)
|
|
|
|
(0.56)
|
|
(0.68)
|
Tax return of capital
|
|
|
|
(0.87)
|
|
|
|
(1.21)
|
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
(1.03)
|
|
(2.05)
|
|
|
|
(2.05)
|
|
(1.03)
|
|
|
|
|
|
|
|
|
|
|
|
Offering costs resulting from the issuance of Common Stock
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$ 14.76
|
|
$ 17.30
|
|
$ 18.14
|
|
$ 18.28
|
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
$ 13.70
|
|
$ 15.68
|
|
$ 19.52
|
|
$ 16.82
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
(8.35)%
6
|
|
7.41%
|
|
|
|
10.92%
|
|
1.40%
6
|
|
|
|
|
|
|
|
|
|
|
|
Based on market price
|
|
(6.14)%
6
|
|
(9.53)%
|
|
|
|
29.72%
|
|
(10.89)%
6
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
1.13%
7
|
|
1.10%
|
|
|
|
1.11%
|
|
1.08%
7
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
1.16%
7
|
|
1.12%
|
|
|
|
1.49%
|
|
1.94%
7
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000)
|
|
$ 261,174
|
|
$ 306,171
|
|
$ 318,730
|
|
$ 321,498
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
26%
|
|
59%
|
|
|
|
68%
|
|
34%
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Commencement of operations.
2
Based on average shares outstanding.
3
Includes repurchase offer fees, which are less than $0.01 per share.
4
A portion of the dividends from net investment income may be deemed a tax return of capital or net realized gain
at fiscal year end.
5
Total investment returns based on market value, which can be significantly greater or less than the net asset value,
may result in substantially different returns. Total investment returns exclude the effects of sales charges.
6
Aggregate total investment return.
7
Annualized.
|
See Notes to Financial Statements.
|
Notes to Financial Statements
(Unaudited)
1. Significant Accounting Policies:
BlackRock Enhanced Equity Yield Fund, Inc. and BlackRock Enhanced
Equity Yield & Premium Fund, Inc. (the Funds or individually as the
Fund) are registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as diversified, closed-end management
investment companies. The Funds financial statements are prepared in
conformity with accounting principles generally accepted in the United
States of America, which may require the use of management accruals
and estimates. Actual results may differ from these estimates. The Funds
determine and make available for publication the net asset value of their
Common Stock on a daily basis.
The following is a summary of significant accounting policies followed by
the Funds:
Valuation of Investments:
Equity investments traded on a recognized
securities exchange or the NASDAQ Global Market System are valued at
the last reported sale price that day or the NASDAQ official closing price,
if applicable. For equity investments traded on more than one exchange,
the last reported sale price on the exchange where the stock is primarily
traded is used. Equity investments traded on a recognized exchange for
which there were no sales on that day are valued at the last available
bid price. If no bid price is available, the prior days price will be used,
unless it is determined that such prior days price no longer reflects the
fair value of the security. Financial futures contracts traded on exchanges
are valued at their last sale price. Investments in open-end investment
companies are valued at net asset value each business day. Short term
securities are valued at amortized cost.
Exchange-traded options are valued at the mean between the last bid
and ask prices at the close of the options market in which the options
trade. An exchange-traded option for which there is no mean price is val-
ued at the last bid (long positions) or ask (short positions) price. If no
bid or ask price is available, the prior days price will be used, unless it
is determined that such prior days price no longer reflects the fair value
of the option. Over-the-counter (OTC) options are valued by an inde-
pendent pricing service using a mathematical model which incorporates
a number of market data factors.
In the event that application of these methods of valuation results in a
price for an investment which is deemed not to be representative of the
market value of such investment, the investment will be valued by a
method approved by the respective Funds Board of Directors (the
Board) as reflecting fair value (Fair Value Assets). When determining
the price for Fair Value Assets, the investment advisor and/or sub-advisor
seeks to determine the price that the Funds might reasonably expect to
receive from the current sale of that asset in an arms-length trans-
|
action. Fair value determinations shall be based upon all available fac-
tors that the investment advisor and/or sub-advisor deems relevant. The
pricing of all Fair Value Assets is subsequently reported to the Board or a
committee thereof.
Derivative Financial Instruments:
The Funds may engage in various
portfolio investment strategies to increase the return of the Funds and
to hedge, or protect, its exposure to interest rate movements and move-
ments in the securities markets. Losses may arise if the value of the con-
tract decreases due to an unfavorable change in the price of the under-
lying security or if the counterparty does not perform under the contract.
Financial futures contracts The Funds may purchase or sell finan-
cial or index futures contracts and options on such futures contracts.
Futures contracts are contracts for delayed delivery of securities at a
specific future date and at a specific price or yield. Upon entering
into a contract, the Funds deposit and maintain as collateral such
initial margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Funds agree to receive from, or
pay to, the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as varia-
tion margin and are recognized by the Funds as unrealized gains or
losses. When the contract is closed, the Funds record a realized gain
or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
Options The Funds may purchase and write call and put options.
When the Funds write an option, an amount equal to the premium
received by the Funds is reflected as an asset and an equivalent lia-
bility. The amount of the liability is subsequently marked-to-market to
reflect the current market value of the option written. When a security
is purchased or sold through an exercise of an option, the related
premium paid (or received) is added to (or deducted from) the basis
of the security acquired or deducted from (or added to) the proceeds
of the security sold. When an option expires (or the Funds enter into
a closing transaction), the Funds realize a gain or loss on the option
to the extent of the premiums received or paid (or gain or loss to the
extent the cost of the closing transaction exceeds the premium
received or paid).
A call option gives the purchaser of the option the right (but not the
obligation) to buy, and obligates the seller to sell (when the option is
exercised), the underlying position at the exercise price at any time
or at a specified time during the option period. A put option gives the
holder the right to sell and obligates the writer to buy the underlying
position at the exercise price at any time or at a specified time dur-
ing the option period.
|
Notes to Financial Statements (continued)
Segregation:
In cases in which the 1940 Act and the interpretive posi-
tions of the Securities and Exchange Commission (SEC) require that
the Funds segregate assets in connection with certain investments (e.g.,
futures) or certain borrowings, the Funds will, consistent with certain
interpretive letters issued by the SEC, designate on its books and
records cash or other liquid debt securities having a market value at
least equal to the amount that would otherwise be required to be physi-
cally segregated.
Investment Transactions and Investment Income:
Investment transac-
tions are recorded on the dates the transactions are entered into (the
trade dates). Realized gains and losses on security transactions are
determined on the identified cost basis. Dividend income is recorded
on the ex-dividend dates. Dividends from foreign securities where the
ex-dividend date may have passed are subsequently recorded when the
Funds have determined the ex-dividend date. Interest income is recog-
nized on the accrual basis.
Securities Lending:
The Funds may lend securities to financial institu-
tions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an
amount equal to at least 100% of the current market value of the
loaned securities. The market value of the loaned securities is deter-
mined at the close of business of the Funds and any additional required
collateral is delivered to the Funds on the next business day. The Funds
typically receive the income on the loaned securities but do not receive
the income on the collateral. Where the Funds receive cash collateral,
they may invest such collateral and retain the amount earned on such
investment, net of any amount rebated to the borrower. A Fund may
receive a flat fee for its loans. Loans of securities are terminable at any
time and the borrower, after notice, is required to return borrowed securi-
ties within the standard time period for settlement of securities transac-
tions. The Funds may pay reasonable lending agent, administrative and
custodial fees in connection with their loans. In the event that the bor-
rower defaults on its obligation to return borrowed securities because of
insolvency or for any other reason, the Funds could experience delays
and costs in gaining access to the collateral. The Funds also could suffer
a loss where the value of the collateral falls below the market value of
the borrowed securities, in the event of borrower default or in the event
of losses on investments made with cash collateral.
Dividends and Distributions:
Enhanced Equity Yield, Inc. declares and
pays dividends quarterly from net investment income. Enhanced Equity
Yield & Premium Fund, Inc. declares and pays dividends semi-annually
from net investment income. Distributions of capital gains are recorded
on the ex-dividend dates. If the total dividends and distributions made in
any tax year exceeds net investment income and accumulated realized
capital gains, a portion of the total distribution may be treated as a tax
return of capital.
|
Income Taxes:
It is the Funds policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment compa-
nies and to distribute substantially all of its taxable income to its share-
holders. Therefore, no federal income tax provision is required. Under the
applicable foreign tax laws, a withholding tax may be imposed on inter-
est, dividends and capital gains at various rates.
The Funds file U.S. federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limita-
tions on the Funds U.S. federal tax returns remain open for the years
ended December 31, 2004 through December 31, 2006. The statutes of
limitations on the Funds state and local tax returns may remain open for
an additional year depending upon the jurisdiction.
Recent Accounting Pronouncement:
In March 2008, Statement of
Financial Accounting Standards No. 161, Disclosures about Derivative
Instruments and Hedging Activities an amendment of FASB Statement
No. 133 (FAS 161) was issued and is effective for fiscal years
beginning after November 15, 2008. FAS 161 is intended to improve
financial reporting for derivative instruments by requiring enhanced dis-
closure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative instru-
ments affect an entitys results of operations and financial position. The
impact on the Funds financial statement disclosures, if any, is currently
being assessed.
Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan:
Under the deferred compensation plan: approved by
each Funds Board, non-interested Directors (Independent Directors)
may defer a portion of their annual complex-wide compensation.
Deferred amounts earn an approximate return as though equivalent
dollar amounts have been invested in common shares of other certain
BlackRock Closed-End Funds selected by the Independent Directors.
This has approximately the same economic effect for the Independent
Directors as if the Independent Directors had invested the deferred
amounts directly in other certain BlackRock Closed-End Funds.
The deferred compensation plan is not funded and obligations thereun-
der represent general unsecured claims against the general assets of
the Funds. The Funds may, however, elect to invest in common stock of
other certain BlackRock Closed-End Funds selected by the Independent
Directors in order to match its deferred compensation obligations.
|
Notes to Financial Statements (continued)
Bank Overdraft:
Enhanced Equity Yield Fund, Inc. recorded a bank
overdraft due to a timing difference of securities settlement. Enhanced
Equity Yield & Premium Funds, Inc. recorded a bank overdraft, which
resulted from estimates of available cash.
Other:
Expenses directly related to each of the Funds are charged to
that Fund. Other operating expenses shared by several funds are pro-
rated among those funds on the basis of relative net assets or other
appropriate methods.
2. Investment Advisory Agreement and Other Transactions
with Affiliates:
Each Fund has entered into an Investment Advisory Agreement with
BlackRock Advisors, LLC (the Advisor), an indirect, wholly owned sub-
sidiary of BlackRock, Inc., to provide investment advisory and adminis-
tration services. Merrill Lynch & Co., Inc. (Merrill Lynch) and The PNC
Financial Services Group Inc. (PNC) are the principal owners of
BlackRock, Inc.
The Advisor is responsible for the management of each Funds portfolio
and provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of each Fund. For such
services, each Fund pays the Advisor a monthly fee at an annual rate
equal to 1.0% of the aggregate average daily value of each Funds net
assets plus the proceeds of any outstanding borrowings used for leverage.
The Advisor has entered into separate sub-advisory agreements with
BlackRock Investment Management, LLC (BIM), an affiliate of the
Advisor, with respect to each Fund, under which the Advisor pays BIM
for services it provides, a monthly fee that is a percentage of the invest-
ment advisory fee paid by each Fund to the Advisor.
For the six months ended June 30, 2008, BlackRock Enhanced Equity
Yield Fund, Inc. and BlackRock Enhanced Equity Yield & Premium Fund,
Inc. reimbursed the Advisor $2,835 and $2,825, respectively for certain
accounting services, which are included in accounting services in the
Statements of Operations.
Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), a wholly
owned subsidiary of Merrill Lynch, received $17,022 and $17,887 in
commissions on the execution of portfolio security transactions for
BlackRock Enhanced Equity Yield, Inc. and BlackRock Enhanced Equity
Yield & Premium Fund, Inc., respectively, for the six months ended
June 30, 2008.
BlackRock Enhanced Equity Yield Fund has received an exemptive order
from the SEC permitting them to lend portfolio securities to MLPF&S.
Pursuant to that order, BlackRock Enhanced Equity Yield Fund has
|
retained BIM as the securities lending agent for a fee based on a share
of the returns on investment of cash collateral. BIM may, on behalf of the
Fund, invest cash collateral received by the Fund for such loans, among
other things, in a private investment company managed by the Advisor or
in registered money market funds advised by the Advisor or its affiliates.
For the six months ended June 30, 2008, BIM received $5,115 in secu-
rities lending agent fees from BlackRock Enhaned Equity Yield Fund, Inc.
Certain officers and/or directors of the Funds are officers and/or direc-
tors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for
the six months ended June 30, 2008 were as follows:
|
|
|
Total
|
|
Total
|
|
|
Purchases
|
|
Sales
|
|
|
|
|
|
BlackRock Enhanced Equity Yield
|
|
|
|
|
Fund, Inc
|
|
$57,489,112
|
|
$63,348,631
|
BlackRock Enhanced Equity Yield &
|
|
|
|
|
Premium Fund, Inc
|
|
$69,438,696
|
|
$67,326,096
|
|
|
|
|
|
BlackRock Enhanced Equity Yield Fund, Inc.
Transactions in call options written for the six months ended June 30,
2008 were as follows:
|
|
|
|
|
Premiums
|
Call Options Written
|
|
Contracts
|
|
Received
|
|
|
|
|
|
Outstanding call options written,
|
|
|
|
|
beginning of year
|
|
1,730
|
|
$ 5,561,868
|
Options written
|
|
33,680
|
|
37,905,128
|
Options closed
|
|
(25,215)
|
|
(29,420,926)
|
Options expired
|
|
(4,305)
|
|
(10,446,080)
|
Options exercised
|
|
(380)
|
|
(111,060)
|
|
|
|
|
|
Outstanding call options written,
|
|
|
|
|
end of year
|
|
5,510
|
|
$ 3,488,930
|
|
|
|
|
|
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
Transactions in call options written for the six months ended June 30,
2008, were as follows:
|
|
|
|
|
Premiums
|
Call Options Written
|
|
Contracts
|
|
Received
|
|
|
|
|
|
Outstanding call options written,
|
|
|
|
|
beginning of year
|
|
1,390
|
|
$ 4,560,235
|
Options written
|
|
29,081
|
|
31,033,139
|
Options closed
|
|
(20,846)
|
|
(23,936,142)
|
Options expired
|
|
(4,540)
|
|
(8,550,554)
|
Options exercised
|
|
(420)
|
|
(166,739)
|
|
|
|
|
|
Outstanding call options written,
|
|
|
|
|
end of year
|
|
4,665
|
|
$ 2,939,939
|
|
|
|
|
|
Notes to Financial Statements (concluded)
4. Capital Share Transactions:
Each Fund is authorized to issue 200,000,000 shares of capital stock,
par value $0.10 per share, all of which were initially classified as
Common Stock. Each Funds Board is authorized, however, to classify
and reclassify any unissued shares of capital stock without approval of
the holders of Common Stock.
Common Stock
Each Fund will make offers to repurchase its shares at annual (approxi-
mately 12-month) intervals. The shares tendered in the repurchase offer
will be subject to a repurchase fee retained by the Fund to compensate
the Fund for expenses directly related to the repurchase offer.
BlackRock Enhanced Equity Yield Fund, Inc.
Shares issued and outstanding during the six months ended June 30,
2008 decreased by 393,614 as a result of a repurchase offer. Shares
issued and outstanding for the year ended December 31, 2007
increased by 266,355 from dividend and distribution reinvestments and
decreased by 15,067 as a result of a repurchase offer.
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
Shares issued and outstanding during the six months ended June 30,
2008 remained constant. Shares issued and outstanding during the year
ended December 31, 2007 increased by 163,331 from dividend and
distribution reinvestments and decreased by 33,736 as a result of a
repurchase offer.
5. Plan of Reorganization:
On March 14, 2008, the Board approved a plan of reorganization for the
Funds, subject to shareholder approval and certain other conditions,
whereby BlackRock Enhanced Capital and Income Fund, Inc. will acquire
substantially all of the assets and assume substantially all of the liabili-
ties of each Fund in exchange for newly issued shares of BlackRock
Enhanced Capital and Income Fund, Inc.
6. Subsequent Event:
BlackRock Enhanced Equity Yield & Premium Fund, Inc. announced
on August 8, 2008 an offer to repurchase up to 5% of its outstanding
Common Stock from shareholders to commence August 15, 2008 and
is scheduled to expire on September 12, 2008.
|
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
|
The Board of Directors (collectively, the Board, the members of which
are referred to as Directors) of BlackRock Enhanced Equity Yield Fund,
Inc. (EEF) and BlackRock Enhanced Equity Yield & Premium Fund,
Inc. (ECV and, together with EEF, the Funds) met in April and May
2008 to consider approving the continuation of each Funds investment
advisory agreement (each, an Advisory Agreement) with BlackRock
Advisors, LLC (the Advisor), each Funds investment adviser. The Board
also considered the approval of each Funds subadvisory agreement
(each, a Subadvisory Agreement and, together with the Advisory
Agreement, the Agreements) between the Advisor and BlackRock
Investment Management, LLC (the Subadvisor). The Advisor and the
Subadvisor are collectively referred to herein as the Advisors and,
together with BlackRock, Inc., BlackRock.
Activities and Composition of the Board
The Board of Directors of each Fund consists of thirteen individuals,
eleven of whom are not interested persons of the Funds as defined in
the Investment Company Act of 1940 (the 1940 Act) (the Independent
Directors). The Directors are responsible for the oversight of the opera-
tions of the Funds and perform the various duties imposed on the
directors of investment companies by the 1940 Act. The Independent
Directors have retained independent legal counsel to assist them in con-
nection with their duties. The Chairman of the Board is an Independent
Director. The Board has established four standing committees: an Audit
Committee, a Governance and Nominating Committee, a Compliance
Committee and a Performance Oversight Committee.
Advisory Agreement and Subadvisory Agreement
Upon the consummation of the combination of BlackRock, Inc.s invest-
ment management business with Merrill Lynch & Co., Inc.s investment
management business, including Merrill Lynch Investment Managers,
L. P., and certain affiliates, each Fund entered into an Advisory Agree-
ment and a Subadvisory Agreement, each with an initial two-year term.
Consistent with the 1940 Act, after the Advisory Agreements and
Subadvisory Agreements respective initial two-year term, the Board is
required to consider the continuation of each Funds Advisory Agreement
and Subadvisory Agreement on an annual basis. In connection with this
process, the Board assessed, among other things, the nature, scope
and quality of the services provided to each Fund by the personnel of
BlackRock and its affiliates, including investment advisory services,
administrative services, secondary market support services, oversight
of fund accounting and custody, and assistance in meeting legal and
regulatory requirements. The Board also received and assessed informa-
tion regarding the services provided to each Fund by certain unaffiliated
service providers.
Throughout the year, the Board also considered a range of information
in connection with its oversight of the services provided by BlackRock
and its affiliates. Among the matters the Board considered were:
|
(a) investment performance for one-, three- and five-year periods, as
applicable, against peer funds, as well as senior management and port-
folio managers analysis of the reasons for underperformance, if applica-
ble; (b) fees, including advisory, administration and other fees paid to
BlackRock and its affiliates by each Fund, as applicable; (c) Fund oper-
ating expenses paid to third parties; (d) the resources devoted to and
compliance reports relating to each Funds investment objective, policies
and restrictions; (e) each Funds compliance with its Code of Ethics and
compliance policies and procedures; (f) the nature, cost and character
of non-investment management services provided by BlackRock and its
affiliates; (g) BlackRocks and other service providers internal controls;
(h) BlackRocks implementation of the proxy voting guidelines approved
by the Board; (i) the use of brokerage commissions and spread and
execution quality; (j) valuation and liquidity procedures; and (k)
reviews of BlackRocks business, including BlackRocks response to
the increasing scale of its business.
Board Considerations in Approving the Advisory
Agreement and Subadvisory Agreement
To assist the Board in its evaluation of the Agreements, the Directors
received information from BlackRock in advance of the April 22, 2008
meeting which detailed, among other things, the organization, business
lines and capabilities of the Advisors, including: (a) the responsibilities
of various departments and key personnel and biographical information
relating to key personnel; (b) financial statements for BlackRock; (c) the
advisory and/or administrative fees paid by each Fund to the Advisors,
including comparisons, compiled by Lipper Inc. (Lipper), an independent
third party, with the management fees, which include advisory and
administration fees, of funds with similar investment objectives (Peers);
(d) the profitability of BlackRock and certain industry profitability ana-
lyses for advisers to registered investment companies; (e) the expenses
of BlackRock in providing various services; (f) non-investment advisory
reimbursements, if applicable, and fallout benefits to BlackRock;
(g) economies of scale, if any, generated through the Advisors manage-
ment of all of the BlackRock closed-end funds (the Fund Complex);
(h) the expenses of each Fund, including comparisons of respective
Funds expense ratios (both before and after any fee waivers) with the
expense ratios of its Peers; (i) an internal comparison of management
fees classified by Lipper, if applicable; and (j) each Funds performance
for the past one-, three- and five-year periods, as applicable, as well as
each Funds performance compared to its Peers.
The Board also considered other matters it deemed important to
the approval process, where applicable, such as payments made to
BlackRock or its affiliates relating to the distribution of Fund shares,
services related to the valuation and pricing of Fund portfolio holdings,
allocation of Fund brokerage fees (including the related benefits to
BlackRock of soft dollars) and direct and indirect benefits to BlackRock
and its affiliates from their relationship with the Funds.
|
Disclosure of Investment Advisory Agreement and Subadvisory Agreement (continued)
|
In addition to the foregoing materials, independent legal counsel to the
Independent Directors provided a legal memorandum outlining, among
other things, the duties of the Board under the 1940 Act, as well as the
general principles of relevant law in reviewing and approving advisory
contracts, the requirements of the 1940 Act in such matters, an advis-
ers fiduciary duty with respect to advisory agreements and compensa-
tion, and the standards used by courts in determining whether invest-
ment company boards of directors have fulfilled their duties and the
factors to be considered by boards in voting on advisory agreements.
The Independent Directors reviewed this information and discussed it
with independent legal counsel prior to the meeting on April 22, 2008.
At the Board meeting on April 22, 2008, BlackRock made a presenta-
tion to and responded to questions from the Board. Following the meet-
ing on April 22, 2008, the Board presented BlackRock with questions
and requests for additional information. BlackRock responded to these
requests with additional written materials provided to the Directors prior
to the meetings on May 29 and 30, 2008. At the Board meetings on
May 29 and 30, 2008, BlackRock responded to further questions from
the Board. In connection with BlackRocks presentations, the Board
considered each Agreement and, in consultation with independent legal
counsel, reviewed the factors set out in judicial decisions and SEC state-
ments relating to the renewal of the Agreements.
Matters Considered by the Board
In connection with its deliberations with respect to the Agreements,
the Board considered all factors it believed relevant with respect to each
Fund, including the following: the nature, extent and quality of the services
provided by the Advisors; the investment performance of each Fund; the
costs of the services to be provided and profits to be realized by the
Advisors and their affiliates from their relationship with the Funds; the
extent to which economies of scale would be realized as the Fund
Complex grows; and whether BlackRock realizes other benefits from its
relationship with the Funds.
A. Nature, Extent and Quality of the Services:
In evaluating the nature,
extent and quality of the Advisors services, the Board reviewed informa-
tion concerning the types of services that the Advisors provide and are
expected to provide to each Fund, narrative and statistical information
concerning each Funds performance record and how such performance
compares to each Funds Peers, information describing BlackRocks
organization and its various departments, the experience and responsi-
bilities of key personnel and available resources. The Board noted the
willingness of the personnel of BlackRock to engage in open, candid
discussions with the Board. The Board further considered the quality
of the Advisors investment process in making portfolio management
decisions.
|
In addition to advisory services, the Directors considered the quality of
the administrative and non-investment advisory services provided to the
Funds. The Advisors and their affiliates provided each Fund with such
administrative and other services, as applicable (in addition to any
such services provided by others for the Funds), and officers and other
personnel as are necessary for the operations of the respective Fund.
In addition to investment management services, the Advisors and their
affiliates provided each Fund with services such as: preparing share-
holder reports and communications, including annual and semi-annual
financial statements and the Funds websites; communications with
analysts to support secondary market trading; assisting with daily
accounting and pricing; preparing periodic filings with regulators and
stock exchanges; overseeing and coordinating the activities of other
service providers; administering and organizing Board meetings and
preparing the Board materials for such meetings; providing legal and
compliance support (such as helping to prepare proxy statements
and responding to regulatory inquiries); and performing other Fund
administrative tasks necessary for the operation of the respective Fund
(such as tax reporting and fulfilling regulatory filing requirements). The
Board considered the Advisors policies and procedures for assuring
compliance with applicable laws and regulations.
B. The Investment Performance of the Funds and BlackRock:
As previ-
ously noted, the Board received performance information regarding each
Fund and its Peers. Among other things, the Board received materials
reflecting each Funds historic performance and each Funds perform-
ance compared to its Peers. More specifically, each Funds one-, three-
and five-year total returns (as applicable) were evaluated relative to its
Peers (including the Peers median performance).
The Board reviewed a narrative and statistical analysis of the Lipper
data that was prepared by BlackRock, which analyzed various factors
that affect Lipper rankings.
The Board noted that EEF and ECV performed below the median of
each Funds respective Peers for the one-year and since inception
periods reported. The Board then discussed with representatives of
BlackRock the reasons for each Funds underperformance during these
periods compared with its Peers. The Board noted that each Funds
underperformance was as a result of each Funds bias towards higher
yielding equities, creating a significant allocation of each Funds portfolio
to financial companies. The Board noted that the Advisor has tried to
address the underperformance of each Fund with its proposal to merge
the Funds with BlackRock Enhanced Capital and Income Fund, Inc.
The Board concluded that BlackRock was committed to providing the
resources necessary to assist the portfolio managers and to improve
each Funds performance. Based on its review, the Board generally was
satisfied with BlackRocks efforts to improve each Funds performance
going forward.
|
Disclosure of Investment Advisory Agreement and Subadvisory Agreement (continued)
|
After considering this information, the Boards concluded that the per-
formance of each Fund, in light of and after considering the other facts
and circumstances applicable to each Fund, supports a conclusion that
each Funds Agreements should be renewed.
C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds:
In evaluating the management fees and
expenses that each Fund is expected to bear, the Board considered
each Funds current management fee structure and each Funds expense
ratios in absolute terms as well as relative to the fees and expense
ratios of its applicable Peers. The Board, among other things, reviewed
comparisons of each Funds gross management fees before and after
any applicable reimbursements and fee waivers and total expense ratios
before and after any applicable waivers with those of applicable Peers.
The Board also reviewed a narrative analysis of the Peer rankings pre-
pared by Lipper and summarized by BlackRock at the request of the
Board. This summary placed the Peer rankings into context by analyzing
various factors that affect these comparisons.
The Board noted that each Fund paid contractual management fees
lower than or equal to the median contractual fees paid by each Funds
respective Peers. This comparison was made without giving effect to any
expense reimbursements or fee waivers.
The Board also compared the management fees charged and services
provided by the Advisors to closed-end funds in general versus other
types of clients (such as open-end investment companies and separately
managed institutional accounts) in similar investment categories. The
Board noted certain differences in services provided and costs incurred
by the Advisor with respect to closed-end funds compared to these
other types of clients and the reasons for such differences.
In connection with the Boards consideration of the fees and expense
information, the Board reviewed the considerable investment manage-
ment experience of the Advisors and considered the high level of invest-
ment management, administrative and other services provided by the
Advisors. In light of these factors and the other facts and circumstances
applicable to each Fund, the Board concluded that the fees paid and
level of expenses incurred by each Fund under its Agreements support a
conclusion that each Funds Agreements should be renewed.
D. Profitability of BlackRock:
The Board also considered BlackRocks
profitability in conjunction with its review of fees. The Board reviewed
BlackRocks profitability with respect to the Fund Complex and other
fund complexes managed by the Advisors. In reviewing profitability, the
Board recognized that one of the most difficult issues in determining
profitability is establishing a method of allocating expenses. The Board
also reviewed BlackRocks assumptions and methodology of allocating
|
expenses, noting the inherent limitations in allocating costs among
various advisory products. The Board also recognized that individual
fund or product line profitability of other advisors is generally not
publicly available.
The Board recognized that profitability may be affected by numerous
factors including, among other things, the types of funds managed,
expense allocations and business mix, and therefore comparability of
profitability is somewhat limited. Nevertheless, to the extent available,
the Board considered BlackRocks operating margin compared to the
operating margin estimated by BlackRock for a leading investment man-
agement firm whose operations consist primarily of advising closed-end
funds. The comparison indicated that BlackRocks operating margin was
approximately the same as the operating margin of such firm.
In evaluating the reasonableness of the Advisors compensation, the
Board also considered any other revenues paid to the Advisors, including
partial reimbursements paid to the Advisors for certain non-investment
advisory services, if applicable. The Board noted that these payments
were less than the Advisors costs for providing these services. The Board
also considered indirect benefits (such as soft dollar arrangements) that
the Advisors and their affiliates are expected to receive, which are attrib-
utable to their management of the Fund.
The Board concluded that BlackRocks profitability, in light of all the
other facts and circumstances applicable to each Fund, supports a
conclusion that each Funds Agreements should be renewed.
E. Economies of Scale:
In reviewing each Funds fees and expenses,
the Board examined the potential benefits of economies of scale, and
whether any economies of scale should be reflected in the Funds fee
structure, for example through the use of breakpoints for the Fund or the
Fund Complex. In this regard, the Board reviewed information provided
by BlackRock, noting that most closed-end fund complexes do not have
fund-level breakpoints because closed-end funds generally do not expe-
rience substantial growth after their initial public offering and each fund
is managed independently consistent with its own investment objectives.
The Board noted that only three closed-end funds in the Fund Complex
have breakpoints in their fee structures. Information provided by Lipper
also revealed that only one closed-end fund complex used a complex-
level breakpoint structure. The Board found, based on its review of
comparable funds, that each Funds management fee is appropriate
in light of the scale of the Fund.
F. Other Factors:
In evaluating fees, the Board also considered indirect
benefits or profits the Advisors or their affiliates may receive as a result
of their relationships with the Funds (fall-out benefits). The Directors,
including the Independent Directors, considered the intangible benefits
that accrue to the Advisors and their affiliates by virtue of their relation-
ships with the Funds, including potential benefits accruing to the
Advisors and their affiliates as a result of participating in offerings of the
|
Disclosure of Investment Advisory Agreement and Subadvisory Agreement (concluded)
|
Funds shares, potentially stronger relationships with members of the
broker-dealer community, increased name recognition of the Advisors
and their affiliates, enhanced sales of other investment funds and prod-
ucts sponsored by the Advisors and their affiliates and increased assets
under management which may increase the benefits realized by the
Advisors from soft dollar arrangements with broker-dealers. The Board
also considered the unquantifiable nature of these potential benefits.
Conclusion with Respect to the Agreements
In reviewing the Agreements, the Directors did not identify any single
factor discussed above as all-important or controlling and different
Directors may have attributed different weights to the various factors
considered. The Directors, including the Independent Directors, unani-
mously determined that each of the factors described above, in light
of all the other factors and all of the facts and circumstances applicable
to each respective Fund, was acceptable for each Fund and supported
the Directors conclusion that the terms of each Agreement were fair
and reasonable, that each Funds fees are reasonable in light of the
services provided to the respective Fund and that each Agreement
should be approved.
|
Officers and Directors
Richard E. Cavanagh, Chairman of the Board and Director
Karen . Robards, Vice Chair of the Board, Chair of the Audit
Committee and Director
G. Nicholas Beckwith, III, Director
Richard S. Davis, Director
Kent Dixon, Director
Frank J. Fabozzi, Director
Kathleen F. Feldstein, Director
James T. Flynn, Director
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director
Robert S. Salomon, Jr., Director
Donald C. Burke, Fund President and Chief Executive Officer
Anne F. Ackerley, Vice President
Neal J. Andrews, Chief Financial Officer
Jay M. Fife, Treasurer
Brian . Kindelan, Chief Compliance Officer of the Fund
Howard Surloff, Secretary
|
Custodian
State Street Bank and Trust Company
Boston, MA 02101
Transfer Agent
The Bank of New York Mellon
New York, NY 10286
Accounting Agent
State Street Bank and Trust Company
Princeton, NJ 08540
Independent Registered Public Accounting Firm
Deloitte & Touche
LLP
Princeton, NJ 08540
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
LLP
New York, NY 10036
|
Additional Information
Fundamental Periodic Repurchase Policy
The Board of each Fund approved a fundamental policy whereby each Fund has adopted an interval fund structure pursuant to Rule 23c-3 under the
1940 Act. As an interval fund, each Fund will make annual repurchase offers at net asset value (less repurchase fee not to exceed 2%) to all Fund
shareholders. The percentage of outstanding shares that the Funds can repurchase in each offer will be established by the respective Funds Board of
Directors shortly before the commencement of each offer, and will be between 5% and 25% of the respective Funds then outstanding shares.
Each Fund has adopted the following fundamental policy regarding periodic repurchases:
(a) The Fund will make repurchase offers at periodic intervals pursuant to Rule 23c-3 under the 1940 Act.
(b) The periodic interval between repurchase request deadlines will be approximately 12 months.
(c) The repurchase request deadline for each repurchase offer will be 14 days prior to the last Friday in June for BlackRock Enhanced Equity Yield
Fund, Inc. and 14 days prior to the last Friday in September for BlackRock Enhanced Equity Yield & Premium Fund, Inc., provided that in the event
that such day is not a business day, the repurchase request deadline will be the subsequent business day.
(d) The maximum number of days between a repurchase request deadline and the next repurchase pricing date will be 14 days; provided that if
the 14
th
day
after a repurchase request deadline is not a business day, the repurchase pricing date shall be the next business day.
Each Funds Board may place such conditions and limitations on a repurchase offer as may be permitted under Rule 23c-3. Repurchase offers may be
suspended or postponed under certain circumstances, as provided in Rule 23c-3.
|
SEMI-ANNUAL REPORT JUNE 30, 2008 29
Additional Information (concluded)
Availability of Quarterly Schedule of Investments
The Funds file their complete schedules of portfolio holdings with
the SEC for the first and third quarters of each fiscal year on Form
N-Q. The Funds Forms N-Q are available on the SECs website at
http://www.sec.gov. The Funds Forms N-Q may also be reviewed
|
and copied at the SECs Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be
obtained by calling (800) SEC-0330. The Funds Forms N-Q may also be
obtained upon request and without charge by calling (800) 441-7762.
|
Electronic Delivery
Electronic copies of most financial reports are available on each Funds
website, or shareholders can sign up for e-mail notifications of quarterly
statements, annual and semi-annual reports by enrolling in the respec-
tive Funds electronic delivery program.
|
Shareholders Who Hold Accounts with Investment Advisors, Banks or
Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.
|
General Information
The Funds will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called householding and it is intended to reduce expenses and elimi-
nate duplicate mailings of shareholder documents. Mailings of your
shareholder documents may be householded indefinitely unless you
instruct us otherwise. If you do not want the mailing of these documents
to be combined with those for other members of your household, please
contact the Funds at (800) 441-7762.
|
Quarterly performance, semi-annual and annual reports and other
information regarding the Funds may be found on BlackRocks website,
which can be accessed at http://www.blackrock.com. This reference
to BlackRocks website is intended to allow investors public access to
information regarding the Funds and does not, and is not intended to,
incorporate BlackRocks website into this report.
|
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and
former fund investors and individual clients (collectively, Clients) and
to safeguarding their non-public personal information. The following infor-
mation is provided to help you understand what personal information
BlackRock collects, how we protect that information and why in certain
cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with
those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and
about you from different sources, including the following: (i) information
we receive from you or, if applicable, your financial intermediary, on appli-
cations, forms or other documents; (ii) information about your trans-
actions with us, our affiliates, or others; (iii) information we receive from
a consumer reporting agency; and (iv) from visits to our websites.
|
BlackRock does not sell or disclose to non-affiliated third parties any non-
public personal information about its Clients, except as permitted by law
or as is necessary to respond to regulatory requests or to service Client
accounts. These non-affiliated third parties are required to protect the
confidentiality and security of this information and to use it only for its
intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services
that may be of interest to you. In addition, BlackRock restricts access
to nonpublic personal information about its Clients to those BlackRock
employees with a legitimate business need for the information. BlackRock
maintains physical, electronic and procedural safeguards that are designed
to protect the non-public personal information of its Clients, including pro-
cedures relating to the proper storage and disposal of such information.
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The Board of each Fund has delegated the voting of proxies for Fund
securities to the Advisor pursuant to the Advisors proxy voting guidelines.
Under these guidelines, the Advisor will vote proxies related to Fund secu-
rities in the best interests of the Fund and its stockholders. From time to
time, a vote may present a conflict between the interests of the Funds
stockholders, on the one hand, and those of the Advisor, or any affiliated
person of the Fund or the Advisor, on the other. In such event, provided
that the Advisors Equity Investment Policy Oversight Committee, or a sub-
committee thereof (the Committee) is aware of the real or potential con-
flict or material non-routine matter and if the Committee does not reason-
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ably believe it is able to follow its general voting guidelines (or if the par-
ticular proxy matter is not addressed in the guidelines) and vote impartial-
ly, the Committee may retain an independent fiduciary to advise the
Committee on how to vote or to cast votes on behalf of the Advisors
clients. If the Advisor determines not to retain an independent fiduciary, or
does not desire to follow the advice of such indpendenent fiduciary, the
Committee shall determine how to vote the proxy after consulting with the
Advisors Portfolio Management Group and/or the Advisors Legal and
Compliance Department and concluding that the vote cast is in its clients
best interest notwithstanding the conflict.
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This report is transmitted to shareholders only. This is not a
prospectus. Past performance results shown in this report
should not be considered a representation of future performance.
Statements and other information herein are as dated and are
subject to change.
A description of the policies and procedures that the Funds
use to determine how to vote proxies relating to portfolio
securities is available (1) without charge, upon request, by calling
toll-free (800) 441-7762; (2) at www.blackrock.com; and
(3) on the Securities and Exchange Commissions website at
http://www.sec.gov. Information about how the Funds voted
proxies relating to securities held in the Funds portfolios during
the most recent 12-month period ended June 30 is available
upon request and without charge (1) at www.blackrock.com or by
calling (800) 441-7762 and (2) on the Securities and Exchange
Commissions website at http://www.sec.gov.
BlackRock Enhanced Equity Yield Fund, Inc.
BlackRock Enhanced Equity Yield & Premium Fund, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
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Item 2 Code of Ethics Not Applicable to this semi-annual report
Item 3 Audit Committee Financial Expert Not Applicable to this semi-annual report
Item 4 Principal Accountant Fees and Services Not Applicable to this semi-annual report
Item 5 Audit Committee of Listed Registrants Not Applicable to this semi-annual report
Item 6 Investments
(a) The registrants Schedule of Investments is included as part of the Report to
Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since
the previous Form N-CSR filing.
Item 7 Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies Not Applicable to this semi-annual report
Item 8 Portfolio Managers of Closed-End Management Investment Companies Not Applicable to
this semi-annual report
Item 9 Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers Not Applicable
Item 10 Submission of Matters to a Vote of Security Holders The registrants Nominating and
Governance Committee will consider nominees to the board of directors recommended by
shareholders when a vacancy becomes available. Shareholders who wish to recommend a
nominee should send nominations which include biographical information and set forth the
qualifications of the proposed nominee to the registrants Secretary. There have been no
material changes to these procedures.
Item 11 Controls and Procedures
11(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.
11(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 second fiscal quarter
of the period covered by this report that have materially affected, or are reasonably likely to
materially affect, the registrants internal control over financial reporting.
Item 12 Exhibits attached hereto
12(a)(1) Code of Ethics Not Applicable to this semi-annual report
12(a)(2) Certifications Attached hereto
12(a)(3) Not Applicable
12(b) Certifications Attached hereto
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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 Equity Yield Fund, Inc.
By:
Donald C. Burke
Donald C. Burke
Chief Executive Officer of
BlackRock Enhanced Equity Yield Fund, Inc.
Date: August 22, 2008
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:
Donald C. Burke
Donald C. Burke
Chief Executive Officer (principal executive officer) of
BlackRock Enhanced Equity Yield Fund, Inc.
Date: August 22, 2008
By:
Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Enhanced Equity Yield Fund, Inc.
Date: August 22, 2008
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