UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03595
Name of Fund: BlackRock Healthcare Fund, Inc.
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock Healthcare Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ,
08543-9011
Registrant's telephone number, including area code: (800) 441-7762
Date of fiscal year end: 04/30/2008
Date of reporting period: 05/01/2007 - 10/31/2007
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
BlackRock Healthcare Fund, Inc.
SEMI-ANNUAL REPORT
OCTOBER 31, 2007 (UNAUDITED)
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
This report is transmitted to shareholders only. It is not authorized for
use as an offer of sale or a solicitation of an offer to buy shares of the
Fund unless accompanied or preceded by the Fund's current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. Statements and other information herein are as dated
and are subject to change.
BlackRock Healthcare Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
It's Fast, Convenient, & Timely!
To sign up today, go to www.blackrock.com/edelivery.
Table of Contents
Page
A Letter to Shareholders 3
Semi-Annual Report:
Fund Summary 4
About Fund Performance 6
Disclosure of Expenses 6
Portfolio Summary 7
Financial Statements:
Schedule of Investments 8
Statement of Assets and Liabilities 10
Statement of Operations 11
Statements of Changes in Net Assets 12
Financial Highlights 13
Notes to Financial Statements 18
Officers and Directors 24
Proxy Results 24
BlackRock Fund Information 25
Mutual Fund Family 27
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
A Letter to Shareholders
Dear Shareholder
The October reporting period was fairly tumultuous for financial markets, but
culminated in positive performance for most major benchmarks:
Total Returns as of October 31, 2007 6-month 12-month
U.S. equities (S&P 500 Index) +5.49% +14.56%
Small cap U.S. equities (Russell 2000 Index) +2.25% + 9.27%
International equities (MSCI Europe, Australasia, Far East Index) +8.19% +24.91%
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +2.68% + 5.38%
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +1.30% + 2.91%
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) -0.07% + 6.89%
Past performance is no guarantee of future results. Index performance shown
for illustrative purposes only. You cannot invest directly in an index.
Subprime mortgage woes dominated headlines for much of 2007, but intensified
in the summer and fall, spawning a widespread liquidity and credit crisis with
ramifications across global markets. The Federal Reserve Board (the "Fed") and
other countries' central banks stepped in to inject liquidity into the markets
and bolster investor confidence. The Fed cut the federal funds rate by 0.50%
in September and another 0.25% on the final day of the reporting period,
bringing its target rate to 4.50%. In taking action, the central bankers, who
had long deemed themselves inflation fighters, were seeking to stem the
fallout from the credit crunch and forestall a wider economic unraveling. By
period-end, the Fed had cited the risks between slower economic growth and
faster inflation as equally balanced.
Amid the volatility throughout the past year, equity markets have displayed
surprising resilience. Most recently, the credit turmoil dampened corporate
merger-and-acquisition (M&A) activity, a key source of strength for equity
markets. Still, market fundamentals have held firm, dividend payouts and share
buybacks have continued to grow, and valuations remain attractive. These
tailwinds generally have prevailed over the headwinds created by the slowing
U.S. economy, troubled housing market and, recently, a more difficult
corporate earnings backdrop. International markets fared even better than U.S.
equities, benefiting from robust M&A activity and generally stronger economies.
In fixed income markets, mixed economic signals and the credit woes resulted
in a flight to quality. At the height of the uncertainty, investors shunned
bonds associated with the housing and credit markets in favor of higher-
quality Treasury issues. The yield on 10-year Treasury issues, which touched
5.30% in June (its highest level in five years), fell to 4.48% by period-end,
while prices correspondingly rose. The tax-exempt bond market has been
challenged by a combination of record-setting supply year-to-date, economic
uncertainty and concerns around the credit worthiness of bond insurers. This
has brought municipal bond prices to relatively attractive levels and, as
such, demand generally has remained firm.
As you navigate market volatility, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as
needed. For more market insight and commentary from BlackRock investment
professionals, 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.
Sincerely,
/s/ Robert C. Doll, Jr.
- -----------------------
Robert C. Doll, Jr.
Vice Chairman, BlackRock, Inc.
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary
Portfolio Management Commentary
How did the Fund perform?
* The Fund outperformed its broad-market benchmark, the S&P 500 Index, and
the Russell 3000 Healthcare Index for the period.
* Over the past six months, U.S. stocks posted a positive total return, but
encountered significant volatility amid a credit and liquidity crisis
brought on by the housing market recession and subprime mortgage collapse.
The health care sector was largely insulated from these economic
developments and, as such, outperformed the broader market.
What factors influenced performance?
* The Fund benefited from good stock selection and favorable subsector
weightings. Medical devices and biotechnology led health care sector
performance, while pharmaceuticals lagged. Within the portfolio,
especially strong performance was achieved by Hologic, Inc., a leader in
digital mammography; Intuitive Surgical, Inc., the leader in robotic
surgery; and Celgene Corp., a pioneer in cancer treatment.
Describe recent portfolio activity.
* Our portfolio strategy was consistent throughout the six-month period. We
continued to emphasize biotechnology for the upside potential we believe
this subsector offers. This was balanced with exposure to pharmaceuticals
and HMOs, as these groups offer downside support. Within this more
defensive component of the portfolio, we shifted our emphasis from medical
devices to HMOs during the six-month period.
* Among the more important changes during the period were increases in
holdings of Merck & Co., Inc., a world-leading research-based
pharmaceutical company, and Hologic, as that company's digital mammography
device rapidly increased its market penetration and share. To fund these
additions, we reduced our position in MGI Pharma, Inc. based on concerns
that the company's new product pipeline may not be able to sustain the
excellent growth provided by its anti-emetic, Aloxi.
Describe the Fund's positioning at period-end.
* At period-end, the Fund's largest absolute weighting was in health care
equipment and supplies, followed by pharmaceuticals and biotechnology.
* From a market capitalization perspective, 60% of the portfolio was
invested in large cap stocks, 26% in mid cap stocks and 14% in small cap
stocks. This is in line with our positioning at the start of the period.
* U.S. companies accounted for 84% of the Fund's net assets at period-end,
which represents an increase from a historical perspective. This was
influenced by the weaker U.S. dollar and our expectation for a continuance
of this trend, as earnings from foreign subsidiaries provide a positive
impact on U.S. earnings growth.
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in Institutional
Shares*++ and Investor A Shares*++ compared to a similar investment in S&P
500 (R) Index++++. Values illustrated are as follows:
Institutional Shares*++
Date Value
October 1997 $10,000.00
October 1998 $11,608.00
October 1999 $12,989.00
October 2000 $20,611.00
October 2001 $19,382.00
October 2002 $16,347.00
October 2003 $18,538.00
October 2004 $18,995.00
October 2005 $23,369.00
October 2006 $24,043.00
October 2007 $30,262.00
Investor A Shares*++
Date Value
October 1997 $ 9,475.00
October 1998 $10,955.00
October 1999 $12,228.00
October 2000 $19,367.00
October 2001 $18,167.00
October 2002 $15,275.00
October 2003 $17,292.00
October 2004 $17,660.00
October 2005 $21,682.00
October 2006 $22,238.00
October 2007 $27,941.00
S&P 500 (R) Index++++
Date Value
October 1997 $10,000.00
October 1998 $12,199.00
October 1999 $15,331.00
October 2000 $16,264.00
October 2001 $12,214.00
October 2002 $10,369.00
October 2003 $12,526.00
October 2004 $13,706.00
October 2005 $14,901.00
October 2006 $17,336.00
October 2007 $19,860.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
++ The Fund invests worldwide primarily in equity securities of companies
that, in the opinion of management, derive or are expected to derive a
substantial portion of their sales from products or services in health
care.
++++ This unmanaged Index covers 500 industrial, utility, transportation and
financial companies of the U.S. markets (mostly NYSE issues) representing
about 75% of NYSE market capitalization and 30% of NYSE issues. S&P 500
is a trademark of the McGraw-Hill Companies.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Performance Summary for the Period Ended October 31, 2007
Average Annual Total Returns*
1 Year 5 Years 10 Years
6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
Total Returns charge charge charge charge charge charge
Institutional +12.16% +25.87% -- +13.11% -- +11.71% --
Investor A +11.91 +25.65 +19.05% +12.84 +11.63% +11.42 +10.82%
Investor B +11.54 +24.46 +19.96 +11.93 +11.67 +10.73 +10.73
Investor C +11.65 +24.62 +23.62 +11.99 +11.99 +10.55 +10.55
Class R +11.81 +25.27 -- +12.66 -- +11.21 --
S&P 500 Index + 5.49 +14.56 -- +13.88 -- + 7.10 --
Russell 3000 Healthcare Index** + 2.47 +11.24 -- + 9.92 -- + 8.15 --
* Assuming maximum sales charges. See "About Fund Performance" on page 6 for a detailed description of share classes,
including any related sales charges and fees.
** The Russell 3000 Healthcare Index is an unmanaged index containing companies involved in medical services or healthcare
in the Russell 3000.
Past performance is not indicative of future results.
Expense Example
Actual Hypothetical**
Beginning Ending Expenses Beginning Ending Expenses
Account Value Account Value Paid During Account Value Account Value Paid During
May 1, 2007 October 31, 2007 the Period* May 1, 2007 October 31, 2007 the Period*
Institutional $1,000 $1,121.60 $ 6.84 $1,000 $1,018.75 $ 6.51
Investor A $1,000 $1,119.10 $ 8.07 $1,000 $1,017.59 $ 7.68
Investor B $1,000 $1,115.40 $12.69 $1,000 $1,013.20 $12.08
Investor C $1,000 $1,116.50 $12.54 $1,000 $1,013.35 $11.93
Class R $1,000 $1,118.10 $10.73 $1,000 $1,015.07 $10.21
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class (1.28% for
Institutional, 1.51% for Investor A, 2.38% for Investor B, 2.35% for Investor C and 2.01% for Class R),
multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half
year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in the most
recent fiscal half year divided by 365.
See "Disclosure of Expenses" on page 6 for further information on how expenses were calculated.
Fund Profile as of October 31, 2007
Percent of
Ten Largest Holdings Net Assets
Hologic, Inc. 7.1%
Bayer AG 4.9
SonoSite, Inc. 4.9
Medco Health Solutions, Inc. 4.9
Baxter International, Inc. 4.8
Bristol-Myers Squibb Co. 4.4
Abbott Laboratories 4.1
Thermo Fisher Scientific, Inc. 3.9
Celgene Corp. 3.6
Progenics Pharmaceuticals, Inc. 3.5
Percent of
Five Largest Industries Net Assets
Health Care Equipment & Supplies 24.5%
Pharmaceuticals 21.7
Biotechnology 17.2
Health Care Providers & Services 13.0
Life Science Tools & Services 6.9
For Fund compliance purposes, the Fund's industry classifications refer
to any one or more of the industry sub-classifications used by one or
more widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
About Fund Performance
* Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only
to eligible investors.
* Investor A Shares incur a maximum initial sales charge (front-end load) of
5.25% and a service fee of 0.25% per year (but no distribution fee).
* Investor B Shares are subject to a maximum contingent deferred sales
charge of 4.50% declining to 0% after six years. In addition, Investor B
Shares are subject to a distribution fee of 0.75% per year and a service
fee of 0.25% per year. These shares automatically convert to Investor A
Shares after approximately eight years. (There is no initial sales charge
for automatic share conversions.) All returns for periods greater than
eight years reflect this conversion.
* Investor C Shares are subject to a distribution fee of 0.75% per year and
a service fee of 0.25% per year. In addition, Investor C Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase.
* Class R Shares do not incur a maximum initial sales charge (front-end
load) or deferred sales charge. These shares are subject to a distribution
fee of 0.25% per year and a service fee of 0.25% per year. Class R Shares
are available only to certain retirement plans. Prior to inception, Class
R Share performance results are those of the Institutional Shares (which
have no distribution or service fees) restated to reflect Class R Share
fees.
Performance information reflects past performance and does not guarantee
future results. Current performance may be lower or higher than the
performance data quoted. Refer to www.blackrock.com/funds to obtain
performance data current to the most recent month-end. Performance results do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Performance data does not
reflect this potential fee. Figures shown in each of the performance tables on
pages 4 and 5 assume reinvestment of all dividends and capital gain
distributions, if any, at net asset value on the ex-dividend date. Investment
return and principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Dividends paid
to each class of shares will vary because of the different levels of service,
distribution and transfer agency fees applicable to each class, which are
deducted from the income available to be paid to shareholders.
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and exchange
fees; and (b) operating expenses including advisory fees, distribution fees
including 12b-1 fees, and other Fund expenses. The expense example on page 5
(which is based on a hypothetical investment of $1,000 invested on May 1, 2007
and held through October 31, 2007) is intended to assist shareholders both in
calculating expenses based on an investment in the Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The table provides information about actual account values and actual
expenses. In order to estimate the expenses a shareholder paid during the
period covered by this report, shareholders can divide their account value by
$1,000 and then multiply the result by the number corresponding to their share
class under the heading entitled "Expenses Paid During the Period."
The table also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses. In order to assist shareholders
in comparing the ongoing expenses of investing in this Fund and other funds,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders'
ongoing costs only and do not reflect any transactional expenses, such as
sales charges, redemption fees or exchange fees. Therefore, the hypothetical
table is useful in comparing ongoing expenses only, and will not help
shareholders determine the relative total expenses of owning different funds.
If these transactional expenses were included, shareholder expenses would have
been higher.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Portfolio Summary
As of October 31, 2007
Percent of
Long-Term
Sector Representation Investments
Health Care 91.1%
Materials 4.9
Consumer Staples 2.7
Information Technology 1.3
For Fund compliance purposes, the Fund's 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.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Schedule of Investments as of October 31, 2007 (Unaudited) (in U.S. dollars)
Common Stocks Shares Value
Biotechnology--17.2%
Amgen, Inc. (a) 12,100 $ 703,131
Arena Pharmaceuticals, Inc. (a) 71,600 688,076
Ark Therapeutics Group Plc (a) 400,000 965,412
Celgene Corp. (a) 261,000 17,226,000
Cytori Therapeutics, Inc. (a) 200,000 1,188,000
Genentech, Inc. (a) 77,500 5,745,075
Genzyme Corp. (a) 32,000 2,431,040
Gilead Sciences, Inc. (a) 249,800 11,538,262
ImClone Systems, Inc. (a) 10,100 435,815
Isis Pharmaceuticals, Inc. (a) 129,700 2,285,314
Lexicon Genetics, Inc. (a) 514,300 1,856,623
Novacea, Inc. (a) 120,000 926,400
Omrix Biopharmaceuticals, Inc. (a)(f) 125,369 4,367,856
Onyx Pharmaceuticals, Inc. (a) 110,000 5,138,100
Pharmion Corp. (a) 112,000 5,389,440
Progenics Pharmaceuticals, Inc. (a) 706,700 16,367,172
Regeneron Pharmaceuticals, Inc. (a) 24,000 528,000
Sangamo Biosciences, Inc. (a) 137,809 2,616,993
Seattle Genetics, Inc. (a)(f) 102,000 1,225,020
Speedel Holding AG (a) 2,500 327,823
Vertex Pharmaceuticals, Inc. (a) 45,000 1,455,300
Vical, Inc. (a) 120,000 618,000
-------------
84,022,852
Chemicals--4.8%
Bayer AG 280,000 23,374,972
Food & Staples Retailing--2.6%
CVS/Caremark Corp. 300,000 12,531,000
Health Care Equipment & Supplies--24.5%
Alsius Corp. (a) 250,000 937,500
AngioDynamics, Inc. (a) 50,000 1,000,000
Baxter International, Inc. 379,400 22,767,794
Gen-Probe, Inc. (a) 49,500 3,465,990
Hansen Medical, Inc. (a)(f) 221,600 8,613,592
Hologic, Inc. (a)(f) 491,900 33,414,767
Masimo Corp. (a) 111,000 3,798,420
SonoSite, Inc. (a)(f) 659,500 23,207,805
Stryker Corp. (f) 113,000 8,023,000
Thoratec Corp. (a) 100,000 1,997,000
Trans1, Inc (a) 78,800 1,970,000
Volcano Corp. (a) 403,900 6,902,651
William Demant Holding (a) 35,575 3,277,129
-------------
119,375,648
Health Care Providers & Services--13.0%
Aetna, Inc. 120,000 6,740,400
Athenahealth, Inc. (a) 5,400 206,442
Cardinal Health, Inc. 21,000 1,428,630
Express Scripts, Inc. (a) 179,600 11,332,760
Genoptix, Inc. (a) 100,900 2,492,230
Health Net, Inc. (a) 100,000 5,361,000
Medco Health Solutions, Inc. (a) 245,400 23,160,852
UnitedHealth Group, Inc. 100,000 4,915,000
WellPoint, Inc. (a) 100,000 7,923,000
-------------
63,560,314
Common Stocks Shares Value
Health Care Technology--5.2%
Cerner Corp. (a)(f) 264,200 $ 15,735,752
HLTH Corp. (a)(f) 689,500 9,728,845
-------------
25,464,597
Internet Software & Services--1.2%
WebMD Health Corp. Class A (a)(f) 133,161 6,121,411
Life Sciences Tools & Services--6.9%
Covance, Inc. (a)(f) 129,500 10,683,750
Exelixis, Inc. (a)(f) 281,500 3,096,500
Thermo Fisher Scientific, Inc. (a) 314,600 18,501,626
WuXi PharmaTech Cayman, Inc. (a)(b) 39,400 1,516,506
-------------
33,798,382
Pharmaceuticals--21.7%
Abbott Laboratories 357,500 19,526,650
Bristol-Myers Squibb Co. 690,000 20,693,100
Eurand NV (a) 120,000 1,650,000
Forest Laboratories, Inc. (a) 62,000 2,422,340
Intercell AG (a) 100,000 4,161,638
MGI Pharma, Inc. (a)(f) 44,400 1,446,552
Merck & Co., Inc. 200,000 11,652,000
Pozen, Inc. (a)(f) 60,000 561,600
Roche Holding AG 30,000 5,124,095
Schering-Plough Corp. 250,000 7,630,000
Shire Pharmaceuticals Plc (b) 72,000 5,410,800
Shire Plc 370,000 9,267,835
Sun Pharmaceuticals Industries Ltd. 440,000 11,889,180
United Laboratories Ltd. (a) 5,572,100 4,277,797
-------------
105,713,587
Total Common Stocks (Cost--$357,271,980)--97.1% 473,962,763
Beneficial
Short-Term Securities Interest
BlackRock Liquidity Series, LLC
Cash Sweep Series,
4.96% (c)(d) $ 4,549,087 4,549,087
BlackRock Liquidity Series, LLC
Money Market Series,
5.04% (c)(d)(e) 97,664,700 97,664,700
Total Short-Term Securities
(Cost--$102,213,787)--21.0% 102,213,787
Total Investments (Cost--$459,485,767*)--118.1% 576,176,550
Liabilities in Excess of Other Assets--(18.1%) (88,358,030)
-------------
Net Assets--100.0% $ 487,818,520
=============
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Schedule of Investments (concluded)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 461,925,111
================
Gross unrealized appreciation $ 117,529,017
Gross unrealized depreciation (3,277,578)
----------------
Net unrealized appreciation $ 114,251,439
================
(a) Non-income producing security.
(b) Depositary receipts.
(c) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Interest
Affiliate Activity Income
BlackRock Liquidity Series, LLC
Cash Sweep Series $ (5,540,792) $297,431
BlackRock Liquidity Series, LLC
Money Market Series $(69,807,700) $209,822
(d) Represents the current yield as of October 31, 2007.
(e) Security was purchased with the cash proceeds from securities loans.
(f) Security, or a portion of security, is on loan.
o For Fund compliance purposes, the Fund's industry classifications refer
to any one or more of the industry sub-classifications used by one or
more widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine such industry sub-classifications for
reporting ease. Industries are shown as a percent of net assets.
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Statement of Assets and Liabilities
As of October 31, 2007 (Unaudited)
Assets
Investments in unaffiliated securities, at value (including securities
loaned of $95,652,867) (identified cost--$357,271,980) $ 473,962,763
Investments in affiliated securities, at value (identified cost--$102,213,787) 102,213,787
Cash 35,763
Foreign cash (cost--$25,291) 25,828
Receivables:
Securities sold $ 17,764,546
Capital shares sold 1,068,073
Dividends 625,811
Securities lending 42,610 19,501,040
---------------
Prepaid expenses and other assets 34,678
---------------
Total assets 595,773,859
---------------
Liabilities
Collateral on securities loaned, at value $ 97,664,700
Deferred foreign capital gains tax 17,016
Payables:
Securities purchased 8,217,637
Capital shares redeemed 1,179,121
Investment adviser 405,065
Distributor 123,730
Other affiliates 144,382 10,069,935
---------------
Accrued expenses and other liabilities 203,688
---------------
Total liabilities 107,955,339
---------------
Net Assets
Net assets $ 487,818,520
===============
Net Assets Consist of
Accumulated investment loss--net $ (2,254,495)
Undistributed realized capital gains--net 32,408,634
Unrealized appreciation--net 116,694,116
---------------
Total accumulated earnings--net 146,848,255
Institutional Shares of Common Stock, $.10 par value, 200,000,000 shares authorized 2,147,793
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 2,757,905
Investor B Shares of Common Stock, $.10 par value, 250,000,000 shares authorized 1,400,912
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 1,745,320
Class R Shares of Common Stock, $.10 par value, 250,000,000 shares authorized 194,637
Paid-in capital in excess of par 332,723,698
---------------
Net Assets $ 487,818,520
===============
Net Asset Value
Institutional--Based on net assets of $157,922,524 and 21,477,930 shares outstanding $ 7.35
===============
Investor A--Based on net assets of $182,075,542 and 27,579,053 shares outstanding $ 6.60
===============
Investor B--Based on net assets of $62,050,044 and 14,009,122 shares outstanding $ 4.43
===============
Investor C--Based on net assets of $76,938,741 and 17,453,199 shares outstanding $ 4.41
===============
Class R--Based on net assets of $8,831,669 and 1,946,371 shares outstanding $ 4.54
===============
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Statement of Operations
For the Six Months Ended October 31, 2007 (Unaudited)
Investment Income
Dividends (net of $35,328 foreign withholding tax) $ 1,098,903
Interest from affiliates 297,431
Securities lending--net 209,822
---------------
Total income 1,606,156
---------------
Expenses
Investment advisory fees $ 2,264,603
Service and distribution fees--Investor C 351,640
Service and distribution fees--Investor B 313,324
Service fees--Investor A 207,003
Transfer agent fees--Institutional 119,670
Transfer agent fees--Investor A 112,080
Accounting services 87,343
Transfer agent fees--Investor B 80,743
Transfer agent fees--Investor C 79,377
Custodian fees 42,899
Professional fees 38,128
Printing and shareholder reports 37,597
Registration fees 35,754
Directors' fees and expenses 19,724
Service and distribution fees--Class R 17,861
Transfer agent fees--Class R 13,887
Pricing fees 2,428
Other 16,720
---------------
Total expenses 3,840,781
---------------
Investment loss--net (2,234,625)
---------------
Realized and Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net (including $16,293 foreign capital gain tax) 34,899,227
Foreign currency transactions--net (71,073)
---------------
Total realized gain--net 34,828,154
---------------
Change in unrealized appreciation/depreciation on:
Investments--net (including $46,633 foreign capital gain credit) 19,261,000
Foreign currency transactions--net 11,230
---------------
Total change in unrealized appreciation/depreciation--net 19,272,230
Total realized and unrealized gain--net 54,100,384
---------------
Net Increase in Net Assets Resulting from Operations $ 51,865,759
===============
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Statements of Changes in Net Assets
For the For the
Six Months Ended Year Ended
October 31, 2007 April 30,
Increase (Decrease) in Net Assets: (Unaudited) 2007
Operations
Investment loss--net $ (2,234,625) $ (5,028,576)
Realized gain--net 34,828,154 47,928,471
Change in unrealized appreciation/depreciation--net 19,272,230 (1,892,152)
--------------- ---------------
Net increase in net assets resulting from operations 51,865,759 41,007,743
--------------- ---------------
Distributions to Shareholders
Realized gain--net:
Institutional (10,905,864) (18,041,102)
Investor A (12,989,379) (21,510,564)
Investor B (6,557,008) (16,162,029)
Investor C (7,448,812) (13,564,480)
Class R (739,572) (871,195)
--------------- ---------------
Net decrease in net assets resulting from distributions to shareholders (38,640,635) (70,149,370)
--------------- ---------------
Capital Share Transactions
Net increase (decrease) in net assets derived from capital share transactions 22,472,072 (46,379,248)
--------------- ---------------
Net Assets
Total increase (decrease) in net assets 35,697,196 (75,520,875)
Beginning of period 452,121,324 527,642,199
--------------- ---------------
End of period* $ 487,818,520 $ 452,121,324
=============== ===============
* Accumulated investment loss--net $ (2,254,495) $ (19,870)
=============== ===============
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Financial Highlights
Institutional
For the
The following per share data and ratios Six Months Ended
have been derived from information October 31, 2007 For the Year Ended April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 7.08 $ 7.29 $ 6.55 $ 6.87 $ 5.59 $ 6.66
----------- ----------- ----------- ----------- ----------- -----------
Investment loss--net** (.02) (.04) (.05) (.06) (.05) (.04)
Realized and unrealized gain (loss)--net .82 .67 1.27 .11 1.33 (1.03)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .80 .63 1.22 .05 1.28 (1.07)
----------- ----------- ----------- ----------- ----------- -----------
Less distributions from realized gain--net (.53) (.84) (.48) (.37) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 7.35 $ 7.08 $ 7.29 $ 6.55 $ 6.87 $ 5.59
=========== =========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 12.16%+++++ 10.62% 18.70%++ .99% 22.90% (16.07%)
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses 1.28%+++ 1.33% 1.30% 1.33% 1.29% 1.33%
=========== =========== =========== =========== =========== ===========
Investment loss--net (.57%)+++ (.64%) (.75%) (.88%) (.75%) (.79%)
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 157,923 $ 147,755 $ 159,116 $ 146,922 $ 275,570 $ 244,217
=========== =========== =========== =========== =========== ===========
Portfolio turnover 79% 152% 120% 127% 141% 128%
=========== =========== =========== =========== =========== ===========
* Total investment returns exclude the effect of any sales charges.
** Based on average shares outstanding.
++ In 2006, there was no impact to the Fund's total investment return as a result of a payment by
Merrill Lynch Investment Managers, L.P. (an affiliate).
+++ Annualized.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Financial Highlights (continued)
Investor A
For the
The following per share data and ratios Six Months Ended
have been derived from information October 31, 2007 For the Year Ended April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 6.41 $ 6.69 $ 6.04 $ 6.38 $ 5.21 $ 6.23
----------- ----------- ----------- ----------- ----------- -----------
Investment loss--net** (.02) (.05) (.07) (.07) (.06) (.05)
Realized and unrealized gain (loss)--net .73 .61 1.19 .10 1.23 (.97)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .71 .56 1.12 .03 1.17 (1.02)
----------- ----------- ----------- ----------- ----------- -----------
Less distributions from realized gain--net (.52) (.84) (.47) (.37) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 6.60 $ 6.41 $ 6.69 $ 6.04 $ 6.38 $ 5.21
=========== =========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 11.91%+++++ 10.43% 18.61%++ .74% 22.46% (16.37%)
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses 1.51%+++ 1.57% 1.55% 1.58% 1.55% 1.58%
=========== =========== =========== =========== =========== ===========
Investment loss--net (.80%)+++ (.89%) (99%) (1.13%) (1.00%) (1.04%)
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 182,076 $ 160,652 $ 172,585 $ 142,774 $ 160,443 $ 119,375
=========== =========== =========== =========== =========== ===========
Portfolio turnover 79% 152% 120% 127% 141% 128%
=========== =========== =========== =========== =========== ===========
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
++ In 2006, there was no impact to the Fund's total investment return as a result of a payment by
Merrill Lynch Investment Managers, L.P. (an affiliate).
+++ Annualized.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Financial Highlights (continued)
Investor B
For the
The following per share data and ratios Six Months Ended
have been derived from information October 31, 2007 For the Year Ended April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 4.44 $ 4.93 $ 4.57 $ 4.96 $ 4.08 $ 4.91
----------- ----------- ----------- ----------- ----------- -----------
Investment loss--net** (.04) (.07) (.09) (.09) (.08) (.08)
Realized and unrealized gain (loss)--net .50 .41 .89 .07 .96 (.75)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .46 .34 .80 (.02) .88 (.83)
----------- ----------- ----------- ----------- ----------- -----------
Less distributions from realized gain--net (.47) (.83) (.44) (.37) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 4.43 $ 4.44 $ 4.93 $ 4.57 $ 4.96 $ 4.08
=========== =========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 11.54%+++++ 9.41% 17.64%++ (.09%) 21.57% (16.90%)
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses 2.38%+++ 2.36% 2.33% 2.36% 2.32% 2.36%
=========== =========== =========== =========== =========== ===========
Investment loss--net (1.67%)+++ (1.67%) (1.79%) (1.91%) (1.78%) (1.83%)
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 62,050 $ 68,034 $ 105,503 $ 117,482 $ 177,952 $ 194,543
=========== =========== =========== =========== =========== ===========
Portfolio turnover 79% 152% 120% 127% 141% 128%
=========== =========== =========== =========== =========== ===========
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
++ In 2006, approximately .23% of the Fund's total investment return was attributable to a payment by
Merrill Lynch Investment Managers, L.P. (an affiliate).
+++ Annualized.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Financial Highlights (continued)
Investor C
For the
The following per share data and ratios Six Months Ended
have been derived from information October 31, 2007 For the Year Ended April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 4.43 $ 4.92 $ 4.57 $ 4.96 $ 4.07 $ 4.91
----------- ----------- ----------- ----------- ----------- -----------
Investment loss--net** (.04) (.07) (.09) (.09) (.08) (.08)
Realized and unrealized gain (loss)--net .51 .41 .88 .07 .97 (.76)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .47 .34 .79 (.02) .89 (.84)
----------- ----------- ----------- ----------- ----------- -----------
Less distributions from realized gain--net (.49) (.83) (.44) (.37) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 4.41 $ 4.43 $ 4.92 $ 4.57 $ 4.96 $ 4.07
=========== =========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 11.65%+++++ 9.47% 17.50%++ (.09%) 21.87% (17.11%)
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses 2.35%+++ 2.36% 2.33% 2.37% 2.33% 2.37%
=========== =========== =========== =========== =========== ===========
Investment loss--net (1.64%)+++ (1.67%) (1.77%) (1.92%) (1.79%) (1.84%)
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 76,939 $ 69,535 $ 85,553 $ 68,743 $ 85,753 $ 76,606
=========== =========== =========== =========== =========== ===========
Portfolio turnover 79% 152% 120% 127% 141% 128%
=========== =========== =========== =========== =========== ===========
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
++ In 2006, there was no impact to the Fund's total investment return as a result of a payment by
Merrill Lynch Investment Managers, L.P. (an affiliate).
+++ Annualized.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Financial Highlights (concluded)
Class R
For the For the Period
The following per share data and ratios Six Months Ended For the January 3, 2003++
have been derived from information October 31, 2007 Year Ended April 30, to April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 4.57 $ 5.04 $ 4.66 $ 5.02 $ 4.09 $ 4.04
----------- ----------- ----------- ----------- ----------- -----------
Investment loss--net* (.03) (.05) (.06) (.06) (.02) (.01)
Realized and unrealized gain--net .52 .42 90 .07 .95 .06
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .49 .37 .84 .01 .93 .05
----------- ----------- ----------- ----------- ----------- -----------
Less distributions from realized gain--net (.52) (.84) (.46) (.37) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 4.54 $ 4.57 $ 5.04 $ 4.66 $ 5.02 $ 4.09
=========== =========== =========== =========== =========== ===========
Total Investment Return
Based on net asset value per share 11.81%+++++ 9.98% 18.25%++++ .54% 22.74% 1.24%+++++
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses 2.01%+++ 1.88% 1.80% 1.83% 1.73% 1.84%+++
=========== =========== =========== =========== =========== ===========
Investment loss--net (1.31%)+++ (1.20%) (1.20%) (1.37%) (1.15%) (.36%)+++
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 8,832 $ 6,145 $ 4,885 $ 1,853 $ 473 --**
=========== =========== =========== =========== =========== ===========
Portfolio turnover 79% 152% 120% 127% 141% 128%
=========== =========== =========== =========== =========== ===========
* Based on average shares outstanding.
** Amount is less than $1,000.
++ Commencement of operations.
++++ In 2006, there was no impact to the Fund's total investment return as a result of a payment by
Merrill Lynch Investment Managers, L.P. (an affiliate).
+++ Annualized.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Notes to Financial Statements (Unaudited)
1. Significant Accounting Policies:
BlackRock Healthcare Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Fund's financial statements are prepared in
conformity with U.S. generally accepted accounting principles, which may
require the use of management accruals and estimates. Actual results may
differ from these estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to present a
fair statement of the results for the interim period. All such adjustments are
of a normal, recurring nature. The Fund offers multiple classes of shares.
Institutional Shares are sold without a sales charge and only to certain
eligible investors. Investor A Shares are sold with a front-end sales charge.
Shares of Investor B and Investor C may be subject to a contingent deferred
sales charge. Class R Shares are sold only to certain retirement plans. All
classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that Investor A, Investor B,
Investor C and Class R Shares bear certain expenses related to the shareholder
servicing of such shares, and Investor B, Investor C and Class R Shares also
bear certain expenses related to the distribution of such shares. Each class
has exclusive voting rights with respect to matters relating to its
shareholder servicing and distribution expenditures (except that Investor B
shareholders may vote on material changes to the Investor A distribution
plan). Income, expenses (other than expenses attributable to a specific class)
and realized and unrealized gains and losses are allocated daily to each class
based on its relative net assets. The following is a summary of significant
accounting policies followed by the Fund:
(a) Valuation of investments--Equity securities held by the Fund that are
traded on stock exchanges or the NASDAQ Global Market are valued at the last
sale price or official close price on the exchange, as of the close of
business on the day the securities are being valued or, lacking any sales, at
the last available bid price for long positions, and at the last available
asked price for short positions. In cases where equity securities are traded
on more than one exchange, the securities are valued on the exchange
designated as the primary market by or under the authority of the Board of
Directors of the Fund. Long positions traded in the over-the-counter ("OTC")
markets, NASDAQ Capital Market or Bulletin Board are valued at the last
available bid price or yield equivalent obtained from one or more dealers or
pricing services approved by the Board of Directors of the Fund. Short
positions traded in the OTC markets are valued at the last available asked
price. Portfolio securities that are traded both in the OTC markets and on a
stock exchange are valued according to the broadest and most representative
market.
Effective September 4, 2007, 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 and previously were valued at the last sales price as
of the close of options trading on applicable exchanges. Options traded in the
OTC market are valued at the last asked price (options written) or the last
bid price (options purchased). Swap agreements are valued based upon fair
valuations received daily by the Fund from a pricing service or counterparty.
Financial futures contracts and options thereon, which are traded on
exchanges, are valued at their last sale price as of the close of such
exchanges. Valuation of other short-term investment vehicles is generally
based on the net asset value of the underlying investment vehicle or amortized
cost.
Repurchase agreements are valued at cost plus accrued interest. The Fund
employs pricing services to provide certain securities prices for the Fund.
Securities and assets for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the direction
of the Board of Directors of the Fund, including valuations furnished by the
pricing services retained by the Fund, which may use a matrix system for
valuations. The procedures of a pricing service and its valuations are
reviewed by the officers of the Fund under the general supervision of the
Fund's Board of Directors. Such valuations and procedures will be reviewed
periodically by the Board of Directors of the Fund.
Generally, trading in foreign securities, as well as U.S. government
securities, money market instruments and certain fixed income securities, is
substantially completed each day at various times prior to the close of
business on the New York Stock Exchange ("NYSE"). The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of the close of business on the NYSE. Foreign currency exchange
rates will generally be determined as of the close of business on the NYSE.
Occasionally, events affecting the values of such securities and such exchange
rates may occur between the times at which they are determined and the close
of business on the NYSE that may not be reflected in the computation of the
Fund's net asset value. If events (for example, a company announcement, market
volatility or a natural disaster) occur during such periods that are expected
to materially affect the value of such securities, those securities will be
valued at their fair value as determined in good faith by the Fund's Board of
Directors or by BlackRock Advisors, LLC (the "Manager"), an indirect, wholly
owned subsidiary of BlackRock, Inc., using a pricing service and/or procedures
approved by the Fund's Board of Directors.
(b) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized.
Assets and liabilities denominated in foreign currencies are valued at the
exchange rate at the end of the period. Foreign currency transactions are the
result of settling (realized) or valuing (unrealized) assets or liabilities
expressed in foreign currencies into U.S. dollars. Realized and unrealized
gains or losses from investments include the effects of foreign exchange rates
on investments. The Fund invests in foreign securities, which may involve a
number of risk factors and special considerations not present with investments
in securities of U.S. corporations.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Notes to Financial Statements (continued)
(c) Derivative financial instruments--The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the
securities markets. Losses may arise due to changes in the value of the
contract due to an unfavorable change in the price of the underlying security
or index, or if the counterparty does not perform under the contract. The
counterparty for certain instruments may pledge cash or securities as
collateral.
* Financial futures contracts--The Fund may purchase or sell financial futures
contracts and options on such financial futures contracts. Financial 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 Fund deposits, and maintains as collateral, such initial margin as
required by the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees 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 variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records 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.
* Foreign currency options and futures--The Fund may also purchase or sell
listed or OTC foreign currency options, foreign currency futures and related
options on foreign currency futures as a short or long hedge against possible
variations in foreign exchange rates. Such transactions may be effected with
respect to hedges on non-U.S. dollar denominated securities owned by the Fund,
sold by the Fund but not yet delivered, or committed or anticipated to be
purchased by the Fund.
* Forward foreign exchange contracts--The Fund may enter into forward foreign
exchange contracts as a hedge against either specific transactions or
portfolio positions. The contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the value at the time it was opened and the value at the
time it was closed.
* Options--The Fund may purchase and write call and put options. When the Fund
writes an option, an amount equal to the premium received by the Fund is
reflected as an asset and an equivalent liability. 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 Fund enters into a
closing transaction), the Fund realizes 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 paid or received).
Written and purchased options are non-income producing investments.
(d) Income taxes--It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates.
(e) Security transactions and investment income--Security transactions 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 Fund has determined the ex-dividend date.
Interest income is recognized on the accrual basis.
(f) Prepaid registration fees--Prepaid registration fees are charged to
expense as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(h) Securities lending--The Fund may lend securities to financial institutions
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 determined at the close of business of the
Fund and any additional required collateral is delivered to the Fund on the
next business day. Where the Fund receives securities as collateral for the
loaned securities, the Fund typically receives the income on both the loaned
securities and the collateral and, as a result, the Fund's yield may increase.
Where the Fund receives cash collateral, it may invest such collateral and
retain the amount earned on such investment, net of any amount rebated to the
borrower. The 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 securities within five business days. The Fund may pay
reasonable finder's, lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any
other reason, the Fund could experience delays and costs in gaining access to
the collateral. The Fund 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.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Notes to Financial Statements (continued)
(i) Recent accounting pronouncements--Effective June 29, 2007, the Fund
implemented Financial Accounting Standards Board ("FASB") Interpretation
No. 48, "Accounting for Uncertainty in Income Taxes--an interpretation of
FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes the minimum recognition
threshold a tax position must meet in connection with accounting for
uncertainties in income tax positions taken or expected to be taken by an
entity, including investment companies, before being measured and recognized
in the financial statements. Management has evaluated the application of FIN
48 to the Fund, and has determined that the adoption of FIN 48 does not have
a material impact on the Fund's financial statements. The Fund files U.S.
and various state tax returns. No income tax returns are currently under
examination. The statute of limitations on the Fund's tax returns remains open
for the years ended April 30, 2004 through April 30, 2007.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of FAS 157. FAS 159 permits entities to choose
to measure many financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Fund's financial statements,
if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with the Manager.
The Fund has also entered into separate Distribution Agreements and
Distribution Plans with FAM Distributors, Inc. ("FAMD") and BlackRock
Distributors, Inc. and its affiliates ("BDI") (collectively, the
"Distributor"). FAMD is a wholly owned subsidiary of Merrill Lynch Group,
Inc., and BDI is an affiliate of BlackRock, Inc. Merrill Lynch & Co., Inc.
("Merrill Lynch") and The PNC Financial Services Group, Inc. ("PNC") are the
principal owners of BlackRock, Inc.
The Manager is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, the Fund
pays the Manager a monthly fee at an annual rate of 1.0% of the average daily
value of the Fund's net assets.
In addition, the Manager has entered into a Sub-Advisory Agreement with
BlackRock Investment Management, LLC ("BIM"), an affiliate of the Manager,
under which the Manager pays the sub-adviser for services it provides a
monthly fee at an annual rate equal to a percentage of the management fee paid
by the Fund to the Manager.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays each Distributor
ongoing service and distribution fees. The fees are accrued daily and paid
monthly at annual rates based upon the average daily net assets of the shares
as follows:
Service Distribution
Fee Fee
Investor A .25% --
Investor B .25% .75%
Investor C .25% .75%
Class R .25% .25%
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, provide shareholder servicing and distribution
services to the Fund. The ongoing service fee compensates the Distributor and
each broker-dealer (including MLPF&S) for providing shareholder servicing to
Investor A, Investor B, Investor C and Class R shareholders. The ongoing
distribution fee compensates each Distributor and MLPF&S for providing
shareholder servicing and distribution-related services to Investor B,
Investor C and Class R shareholders.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Notes to Financial Statements (continued)
For the six months ended October 31, 2007, FAMD and BDI earned underwriting
discounts and direct commissions, and MLPF&S and BDI earned dealer concessions
on sales of the Fund's Investor A Shares which totaled $53,087.
For the six months ended October 31, 2007, affiliates received contingent
deferred sales charges of $20,623 and $2,612 relating to transactions in
Investor B and Investor C Shares, respectively. Furthermore, affiliates
received contingent deferred sales charges of $22 relating to transactions
subject to front-end sales charge waivers in Investor A Shares.
The Manager maintains a call center, which is responsible for providing
certain shareholder services to the Fund, such as responding to shareholder
inquiries and processing transactions based upon instructions from
shareholders with respect to the subscription and redemption of Fund shares.
For the six months ended October 31, 2007, the following amounts have been
accrued by the Fund to reimburse the Manager for costs incurred running the
call center, which are a component of the transfer agent fees in the
accompanying Statement of Operations.
Call Center
Fees
Institutional $ 5,430
Investor A $ 2,725
Investor B $ 1,119
Investor C $ 1,328
Class R $ 75
The Fund has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to MLPF&S or its
affiliates. As of October 31, 2007, the Fund lent securities with a value of
$8,933,651 to MLPF&S or its affiliates. Pursuant to that order, the 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 Manager or in
registered money market funds advised by the Manager or its affiliates. For
the six months ended October 31, 2007, BIM received $57,801 in securities
lending agent fees.
In addition, MLPF&S received $227,083 in commissions on the execution of
portfolio security transactions for the Fund for the six months ended October
31, 2007.
PFPC Inc., an indirect, wholly owned subsidiary of PNC and an affiliate of the
Manager, is the Fund's transfer agent.
For the six months ended October 31, 2007, the Fund reimbursed the Manager
$3,782 for certain accounting services.
Certain officers and/or directors of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
six months ended October 31, 2007, were $348,392,634 and $364,523,724,
respectively.
4. Short-Term Borrowings:
The Fund, along with certain other funds managed by the Manager and its
affiliates, is a party to a $500,000,000 credit agreement with a group of
lenders, which expires November 2007 and was substantially renewed. The Fund
may borrow under the credit agreement to fund shareholder redemptions and for
other lawful purposes other than for leverage. The Fund may borrow up to the
maximum amount allowable under the Fund's current prospectus and statement of
additional information, subject to various other legal, regulatory or
contractual limits. The Fund pays a commitment fee of .07% per annum based on
the Fund's pro rata share of the unused portion of the credit agreement.
Amounts borrowed under the credit agreement bear interest at a rate equal to,
at each Fund's election, the federal funds rate plus .50% or a base rate as
defined in the credit agreement. The Fund did not borrow under the credit
agreement during the six months ended October 31, 2007.
5. Commitments:
At October 31, 2007, the Fund had entered into foreign exchange contracts
under which it had agreed to sell a foreign currency with an approximate value
of $1,352,000.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Notes to Financial Statements (continued)
6. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share transactions
was $22,472,072 and $(46,379,248) for the six months ended October 31, 2007
and the year ended April 30, 2007, respectively.
Transactions in capital shares for each class were as follows:
For the For the
Six Months Ended Year Ended
October 31, 2007 April 30, 2007
Shares Dollar Amount Shares Dollar Amount
Institutional Shares
Shares sold 975,211 $ 6,805,310 1,680,191 $ 11,164,078
Shares issued to shareholders in reinvestment
of distributions 1,433,530 9,533,170 2,574,159 15,775,291
-------------------------------- --------------------------------
Total issued 2,408,741 16,338,480 44,254,350 26,939,369
Shares redeemed (1,788,903) (12,471,472) (5,218,571) (34,370,859)
-------------------------------- --------------------------------
Net increase (decrease) 619,838 $ 3,867,008 (964,221) $ (7,431,490)
================================ ================================
Investor A Shares
Shares sold and automatic conversion of shares 4,001,494 $ 25,054,471 5,529,150 $ 33,428,253*
Shares issued to shareholders in reinvestment
of distributions 1,928,422 11,532,101 3,406,307 18,923,333
-------------------------------- --------------------------------
Total issued 5,929,916 36,586,572 8,935,457 52,351,586
Shares redeemed (3,431,797) (21,453,544) (9,662,117) (57,886,509)
-------------------------------- --------------------------------
Net increase (decrease) 2,498,119 $ 15,133,028 (726,660) $ (5,534,923)
================================ ================================
Investor B Shares
Shares sold 587,706 $ 2,493,338 1,243,186 $ 5,325,187
Shares issued to shareholders in reinvestment
of distributions 1,488,137 5,982,366 3,689,599 14,366,476
-------------------------------- --------------------------------
Total issued 2,075,843 8,475,704 4,932,785 19,691,663
-------------------------------- --------------------------------
Shares redeemed and automatic conversion of shares (3,390,562) (14,535,660) (11,030,047) (46,535,654)
-------------------------------- --------------------------------
Total redeemed (3,390,562) (14,535,660) (11,030,047) (46,535,654)
-------------------------------- --------------------------------
Net decrease (1,314,719) $ (6,059,956) (6,097,262) $ (26,843,991)
================================ ================================
* In September 2006, certain brokerages, including a wholly owned subsidiary
of Merrill Lynch, entered into a remediation agreement with a regulatory
organization, which among other things, permitted certain shareholders of
Investor B Shares to convert their shares into the Fund's Investor A
Shares. As a result, a wholly owned subsidiary of Merrill Lynch
supplemented the Investor A Share purchase by approximately $61,000.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Notes to Financial Statements (concluded)
For the For the
Six Months Ended Year Ended
October 31, 2007 April 30, 2007
Shares Dollar Amount Shares Dollar Amount
Investor C Shares
Shares sold 2,094,155 $ 8,839,586 2,129,339 $ 9,034,668
Shares issued to shareholders in reinvestment
of distributions 1,704,632 6,818,579 3,078,519 11,960,130
-------------------------------- --------------------------------
Total issued 3,798,787 15,658,165 5,207,858 20,994,798
Shares redeemed (2,033,560) (8,651,228) (6,907,028) (29,145,267)
-------------------------------- --------------------------------
Net increase (decrease) 1,765,227 $ 7,006,937 (1,699,170) $ (8,150,469)
================================ ================================
Class R Shares
Shares sold 827,202 $ 3,585,612 870,793 $ 3,790,289
Shares issued to shareholders in reinvestment
of distributions 179,220 736,596 210,784 840,798
-------------------------------- --------------------------------
Total issued 1,006,422 4,322,208 1,081,577 4,631,087
Shares redeemed (404,463) (1,797,153) (707,165) (3,049,462)
-------------------------------- --------------------------------
Net increase 601,959 $ 2,525,055 374,412 $ 1,581,625
================================ ================================
7. Subsequent Event:
The Fund paid an ordinary income dividend in the amount of $.272835 per
Institutional Share, $.264683 per Investor A Share, $.242334 per Investor B
Share, $.247478 per Investor C Share and $.257158 per Class R Share on
December 13, 2007 to shareholders of record on December 11, 2007.
The Fund paid a long-term capital gain distribution in the amount of $.149800
per Institutional Share, $.149800 per Investor A Share, $.149800 per Investor
B Share, $.149800 per Investor C Share and $.149800 per Class R Share on
December 13, 2007 to shareholders of record on December 11, 2007.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
Officers and Directors as of October 31, 2007
Robert C. Doll, Jr., Fund President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Jean Margo Reid, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Donald C. Burke, Vice President and Treasurer
Karen Clark, Chief Compliance Officer
Howard Surloff, Secretary
Custodian
JPMorgan Chase Bank, N.A.
3 Chase Metrotech Center
Brooklyn, NY 11245
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public
Accounting Firm
Deloitte & Touche llp
Princeton, NJ 08540
Legal Counsel
Sidley Austin llp
New York, NY 10019
Proxy Results
During the six-month period ended October 31, 2007, the shareholders of
BlackRock Healthcare Fund, Inc. voted on the following proposal, which was
approved at a special shareholders' meeting on September 7, 2007. This
proposal was a part of the reorganization of the Fund's Board of Directors to
take effect on or about November 1, 2007. A description of the proposal and
number of shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Board of Directors: David O. Beim 60,515,916 2,948,868
Richard S. Davis 60,528,174 2,936,610
Ronald W. Forbes 60,517,960 2,946,824
Henry Gabbay 60,523,912 2,940,872
Dr. Matina Horner 60,516,319 2,948,465
Rodney D. Johnson 60,517,086 2,947,698
Herbert I. London 60,517,929 2,946,855
Cynthia A. Montgomery 60,530,035 2,934,749
Joseph P. Platt, Jr. 60,528,981 2,935,803
Robert C. Robb, Jr. 60,528,736 2,936,048
Toby Rosenblatt 60,514,460 2,950,324
Kenneth L. Urish 60,528,114 2,936,670
Frederick W. Winter 60,527,437 2,937,347
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
BlackRock Fund Information
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 nonpublic personal information. The following information
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 nonpublic information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated 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 nonaffiliated 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 nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site or shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site
at http://www.blackrock.com/edelivery
2) Select "eDelivery" under the "More Information" section
3) Log into your account
The Fund will mail only one copy of shareholder documents, including
prospectuses, 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
eliminate 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 Fund at
(800) 441-7762.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
BlackRock Fund Information (concluded)
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund has delegated proxy voting responsibilities to BlackRock and its
affiliates, subject to the general oversight of the Fund's Board of Directors.
A description of the policies and procedures that BlackRock and its affiliates
use to determine how to vote proxies relating to portfolio securities is
available without charge, upon request, on our Web site at www.blackrock.com,
by calling (800) 441-7762, or on the Web site of the Securities and Exchange
Commission (the "Commission") at http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Fund's voting securities were voted
(if any) by the Fund's previous manager during the most recent 12-month period
ended June 30 is available, upon request and without charge, on our Web site
at www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Fund files its complete schedule of portfolio holdings for the first and
third quarters of its fiscal year with the Commission on Form N-Q. The Fund's
Forms N-Q are available on the Commission's Web site at http://www.sec.gov and
may be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information regarding the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q may also
be obtained upon request, without charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us
on the Web at www.blackrock.com/funds.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have
$50 or more automatically deducted from their checking or savings account and
invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock funds, as long
as their account is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover,
Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
A World-Class Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all
investment styles and managed by experts in equity, fixed income and
tax-exempt investing.
Equity Funds
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio++
BlackRock Balanced Capital Fund++
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund++
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio
BlackRock Global Science & Technology
Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio*
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock Technology Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
BlackRock Commodity Strategies Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government
Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Total Return Fund
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* See the prospectus for information on specific limitations on
investments in the fund.
++ Mixed asset fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should
consider the investment objectives, risks, charges and expenses of the funds
under consideration carefully before investing. Each fund's prospectus
contains this and other information and is available at www.blackrock.com or
by calling 800-882-0052 or from your financial advisor. The prospectus should
be read carefully before investing.
BLACKROCK HEALTHCARE FUND, INC. OCTOBER 31, 2007
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
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable
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
registrant's Nominating Committee will consider nominees to the
Board 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 registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
15d-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's 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
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 Healthcare Fund, Inc.
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer of
BlackRock Healthcare Fund, Inc.
Date: December 19, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Healthcare Fund, Inc.
Date: December 19, 2007
By: /s/ Neal J. Andrews
-------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock Healthcare Fund, Inc.
Date: December 19, 2007