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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21348

Name of Fund: BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Muni Intermediate Duration Fund, Inc., 55 East 52^nd Street, New York, NY 10055

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

Date of fiscal year end: 04/30/2013

Date of reporting period: 10/31/2012

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Item 1 –  Report to Stockholders

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		October 31, 2012

Semi-Annual Report (Unaudited)

 

BlackRock MuniAssets Fund, Inc. (MUA)

BlackRock MuniEnhanced Fund, Inc. (MEN)

BlackRock MuniHoldings Fund, Inc. (MHD)

BlackRock MuniHoldings Fund II, Inc. (MUH)

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

BlackRock MuniVest Fund II, Inc. (MVT)

 

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Table of Contents

 

		Page
Dear Shareholder			3
Semi-Annual Report:
Municipal Market Overview			4
Fund Summaries			5
Call/Maturity Structure			12
Derivative Financial Instruments			12
The Benefits and Risks of Leveraging			13
Financial Statements:
Schedules of Investments			14
Statements of Assets and Liabilities			53
Statements of Operations			54
Statements of Changes in Net Assets			55
Statements of Cash Flows			57
Financial Highlights			58
Notes to Financial Statements			65
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements			74
Officers and Directors			78
Additional Information			79

 

2		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Dear Shareholder

 

In the final months of 2011, financial markets were highly volatile but were in a mode of gradual improvement. Global central bank actions and better-than-expected economic data tempered investors’ anxiety after markets had been upended in the previous quarter by sovereign debt turmoil in the United States and Europe. Improving sentiment carried over into early 2012 as investors felt some relief from the world’s financial woes. Volatility was low and risk assets (including stocks, commodities and high yield bonds) moved boldly higher through the first two months of 2012, while climbing Treasury yields pressured higher-quality fixed income assets.

Markets reversed course in the spring when Europe’s debt problems boiled over once again. High levels of volatility returned as political instability threatened Greece’s membership in the eurozone and debt problems in Spain grew increasingly severe. Sovereign debt yields in peripheral European countries continued to rise while finance leaders deliberated over the fiscal integration of the currency bloc. Alongside the drama in Europe, investors were discouraged by gloomy economic reports from various parts of the world. A slowdown in China, a key powerhouse for global growth, emerged as a particular concern. In the United States, disappointing jobs reports dealt a crushing blow to investor sentiment. Risk assets sold off in the second quarter as investors retreated to safe haven assets.

Despite ongoing concerns about the health of the global economy and the debt crisis in Europe, most asset classes enjoyed a robust summer rally powered mainly by expectations for policy stimulus from central banks in Europe and the United States. Global economic data continued to be mixed, but the spate of downside surprises seen in the second quarter had receded and, outside of some areas of Europe, the risk of recession largely subsided. Additionally, in response to mounting debt pressures, the European Central Bank allayed fears by affirming its conviction to preserve the euro bloc. Early in September, the European Central Bank announced its plan to purchase sovereign debt in the eurozone’s most troubled nations. Later that month, the US Federal Reserve announced its long- awaited — and surprisingly aggressive — stimulus program, committing to purchase $40 billion of agency mortgage-backed securities per month until the US economy exhibits enough strength to sustain real growth and the labor market shows solid improvement. These central bank actions boosted investor confidence and risk assets rallied globally.

European stocks continued their advance in the final month of the reporting period as progress toward fiscal integration created a more positive atmosphere for investors. However, as corporate earnings season got underway in the United States, lackluster results pointed to the fragility of global growth and pushed US equity markets down for the month of October. The period ended with increasing concern about how and when US politicians would resolve the nation’s looming fiscal crisis, known as the “fiscal cliff.”

All asset classes performed well for the 12-month period ended October 31, 2012, with the strongest returns coming from US stocks and high yield bonds. For the six-month period ended October 31, 2012, equities underperformed fixed income investments, where high yield was the leading sector. US and international stocks finished the six-month period with modest gains, while emerging market stocks lagged other asset classes amid ongoing uncertainty. Near-zero short term interest rates continued to keep yields on money market securities near their all-time lows.

Although the financial world remains highly uncertain, we believe there are new avenues of opportunity — new ways to invest and new markets to consider. We believe it’s our responsibility to help investors adapt to today’s new world of investing and build the portfolios these times require. We encourage you to visit www.blackrock.com/newworld for more information.

Sincerely,

 

Rob Kapito

President, BlackRock Advisors, LLC

 

“Although the financial world remains highly uncertain, we believe there are new avenues of opportunity.”

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of October 31, 2012
		6-month				12-month
US large cap equities (S&P 500® Index)			2.16	%			15.21	%
US small cap equities (Russell 2000® Index)			0.95				12.08
International equities (MSCI Europe, Australasia, Far East Index)			2.12				4.61
Emerging market equities (MSCI Emerging Markets Index)			(1.25	)			2.63
3-month Treasury bill (BofA Merrill Lynch 3-Month US Treasury Bill Index)			0.06				0.08
US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)			3.49				7.46
US investment grade bonds (Barclays US Aggregate Bond Index)			2.75				5.25
Tax-exempt municipal bonds (S&P Municipal Bond Index)			3.65				9.57
US high yield bonds (Barclays US Corporate High Yield 2% Issuer Capped Index)			6.24				13.58
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

		THIS PAGE NOT PART OF YOUR FUND REPORT				3

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Municipal Market Overview

 

For the 12-Month Period Ended October 31, 2012

Municipal bonds delivered exceptional performance, with the S&P Municipal Bond Index gaining 9.57% for the 12 months ended October 31, 2012. In the later part of 2011, heightened volatility in equity markets led to increased demand for municipal bonds as investors flocked to more stable asset classes. The municipal market benefited from an exuberant Treasury market amid global uncertainty in addition to muted new issuance. Supply was constrained while demand from both traditional and non-traditional buyers was strong, pushing long-term municipal bond yields lower and sparking a curve-flattening trend that continued through year end. Ultimately, 2011 was one of the strongest performance years in municipal market history and municipal bonds outperformed most fixed income asset classes for the year.

 

Market conditions remained favorable in 2012 even though supply picked up considerably. As the fiscal situation for municipalities continued to improve, the rate of new issuance came back in line with historical averages. Total new issuance for the first ten months of 2012 was $313 billion as compared to $288 billion for the entire year of 2011. It is important to note that refunding activity has accounted for a large portion of supply in 2012 as issuers refinanced their debt at lower interest rates. Refunding issues are easily absorbed by the market because when seasoned bonds are refinanced, issuers re-enter the market via cheaper and predominantly shorter-maturity financing. Investors, in turn, support these new issues with the proceeds from bond maturities or coupon payments.

Increased supply was met with the continuation of strong demand in 2012 as investors remained starved for yield in a low-rate environment. Investors poured into municipal bond mutual funds, particularly those with long-duration and high-yield investment mandates as they tend to provide higher levels of income. Year-to-date through October 2012, flows into municipal funds have totaled $48.034 billion (according to the Investment Company Institute). Following an extensive period of significant outflows from late 2010 through mid-2011, these robust 2012 inflows are telling of the complete turnaround in confidence. Municipal market supply-and-demand technicals typically strengthen considerably upon the conclusion of tax season as net negative supply takes hold (i.e., more bonds are being called and maturing than being issued) and this theme remained intact for 2012.

In the spring, a resurgence of concerns about Europe’s financial crisis and weakening US economic data drove municipal bond yields lower and prices higher. In addition to income and capital preservation, investors were drawn to the asset class for its relatively low volatility. As global sentiment improved over the summer, municipal bonds outperformed the more volatile US Treasury market. In September, unexpectedly muted new issuance drove prices higher. October, traditionally a weaker month for the municipal bond market, saw slight gains as demand continued to outpace supply. Given these positive market factors, the S&P Municipal Bond Index has gained 7.03% year-to-date through October 31, 2012.

Overall, the municipal yield curve moved lower during the period from October 31, 2011 to October 31, 2012. As measured by Thomson Municipal Market Data, yields declined by 93 basis points (“bps”) to 2.82% on AAA-rated 30-year municipal bonds and by 67 bps to 1.72% on 10-year bonds, while yields on 5-year issues fell 59 bps to 0.67%. While the entire municipal curve flattened over the 12-month time period, the spread between 2- and 30-year maturities tightened by 79 bps, and in the 2- to 10-year range, the spread tightened by 53 bps.

The fundamental picture for municipalities continues to improve. Austerity has been the general theme across the country as states set their budgets, although a small number of states continue to rely on a “kick-the-can” approach to close their budget gaps, using aggressive revenue projections and accounting gimmicks. It has been nearly two years since the fiscal problems plaguing state and local governments first became highly publicized and the prophecy of widespread defaults across the municipal market has not materialized. Year-to-date through October 2012, total outstanding municipal bonds entering into debt service cash-payment default for the first time had an aggregate par value of $1.99 billion. This amount represents only 0.65% of total issuance year-to-date and 0.053% of total municipal bonds outstanding. This compares favorably to data for the full year 2011 when first-time defaults totaled 0.84% of issuance and 0.065% of outstanding. (Data provided by Bank of America Merrill Lynch.) BlackRock maintains the view that municipal bond defaults will remain in the periphery and the overall market is fundamentally sound. We continue to recognize that careful credit research and security selection remain imperative amid uncertainty in this economic environment.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

4		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Fund Summary as of October 31, 2012		BlackRock MuniAssets Fund, Inc.

 

Fund Overview

BlackRock MuniAssets Fund, Inc.’s (MUA) (the “Fund”) investment objective is to provide high current income exempt from federal income taxes by investing primarily in a portfolio of medium- to lower-grade or unrated municipal obligations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests at least 65% of its assets in municipal bonds that are rated in the medium to lower categories by nationally recognized rating services (for example, Baa or lower by Moody’s Investors Service, Inc. or BBB or lower by Standard & Poor’s Corporation) or non-rated securities which are of comparable quality. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 10.02% based on market price and 7.49% based on net asset value (“NAV”). For the same period, the closed-end Lipper High Yield Municipal Debt Funds category posted an average return of 8.75% based on market price and 8.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Contributing positively to performance during the period were the Fund’s sector concentrations in transportation, utilities, health and corporate-related debt. The Fund’s yield curve-flattening bias also proved beneficial. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. Security selection detracted from performance in the state tax-backed, school districts, health and transportation sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly negative impact on performance. The distribution yield generated by the Fund’s holdings fell below the average of its Lipper category peers, causing a drag on the Fund’s total return for the period.

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

Symbol on New York Stock Exchange (“NYSE”)		MUA
Initial Offering Date		June 25, 1993
Yield on Closing Market Price as of October 31, 2012 ($14.08)1		5.33%
Tax Equivalent Yield2		8.20%
Current Monthly Distribution per Common Share3		$0.0625
Current Annualized Distribution per Common Share3		$0.7500
Economic Leverage as of October 31, 20124		11%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents tender option bond trusts (“TOBs”) as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	14.08			$	13.15				7.07	%		$	14.25			$	13.08
Net Asset Value		$	14.09			$	13.47				4.60	%		$	14.09			$	13.47

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		5

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Fund Summary as of October 31, 2012				BlackRock MuniEnhanced Fund, Inc.

 

Fund Overview

BlackRock MuniEnhanced Fund, Inc.’s (MEN) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal bonds rated investment grade quality at the time of investment and invests primarily in long-term municipal bonds with maturities of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 11.23% based on market price and 6.76% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. During the period, the Fund benefited from declining interest rates (bond prices rise when interest rates fall), the flattening of the yield curve (long-term rates fell more than short and intermediate rates), coupon income and the tightening of credit spreads. The Fund’s allocation to zero-coupon bonds delivered particularly strong performance amid declining interest rates. Exposure to the health sector also proved beneficial as spreads tightened significantly in that space. The Fund’s short position in US Treasury futures as a strategy for hedging interest rate risk was a modest detractor from performance during the period.

 

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

Symbol on NYSE		MEN
Initial Offering Date		March 2, 1989
Yield on Closing Market Price as of October 31, 2012 ($12.61)1		5.52%
Tax Equivalent Yield2		8.49%
Current Monthly Distribution per Common Share3		$0.058
Current Annualized Distribution per Common Share3		$0.696
Economic Leverage as of October 31, 20124		36%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents Variable Rate Demand Preferred Shares (“VRDP Shares”) and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	12.61			$	11.66				8.15	%		$	13.25			$	11.62
Net Asset Value		$	12.58			$	12.12				3.80	%		$	12.60			$	12.12

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

6		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Fund Summary as of October 31, 2012		BlackRock MuniHoldings Fund, Inc.

 

Fund Overview

BlackRock MuniHoldings Fund, Inc.’s (MHD) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 10.15% based on market price and 8.25% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Contributing positively to performance during the period were the Fund’s duration positioning (preference for securities with a higher sensitivity to interest rate movements) and yield curve-flattening bias. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. In addition, sector concentrations in health and transportation had a notable positive impact on returns. The Fund’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Security selection detracted from performance in the state tax-backed, health and tobacco sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly negative impact on performance.

 

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

Symbol on NYSE		MHD
Initial Offering Date		May 2, 1997
Yield on Closing Market Price as of October 31, 2012 ($19.32)1		5.68%
Tax Equivalent Yield2		8.74%
Current Monthly Distribution per Common Share3		$0.0915
Current Annualized Distribution per Common Share3		$1.0980
Economic Leverage as of October 31, 20124		37%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents Variable Rate Muni Term Preferred Shares (“VMTP Shares”) and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	19.32			$	18.08				6.86	%		$	19.76			$	17.39
Net Asset Value		$	18.23			$	17.36				5.01	%		$	18.23			$	17.36

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		7

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Fund Summary as of October 31, 2012				BlackRock MuniHoldings Fund II, Inc.

 

Fund Overview

BlackRock MuniHoldings Fund II, Inc.’s (MUH) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 10.76% based on market price and 7.95% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Contributing positively to performance during the period were the Fund’s duration positioning (preference for securities with a higher sensitivity to interest rate movements) and yield curve-flattening bias. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. In addition, sector concentrations in health and transportation had a notable positive impact on returns. The Fund’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Security selection detracted from performance in the state tax-backed, health and tobacco sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly negative impact on performance.

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

Symbol on NYSE		MUH
Initial Offering Date		February 27, 1998
Yield on Closing Market Price as of October 31, 2012 ($17.70)1		5.63%
Tax Equivalent Yield2		8.66%
Current Monthly Distribution per Common Share3		$0.083
Current Annualized Distribution per Common Share3		$0.996
Economic Leverage as of October 31, 20124		37%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	17.70			$	16.46				7.53	%		$	18.01			$	16.14
Net Asset Value		$	17.01			$	16.23				4.81	%		$	17.03			$	16.23

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

8		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Fund Summary as of October 31, 2012		BlackRock MuniHoldings Quality Fund, Inc.

 

Fund Overview

BlackRock MuniHoldings Quality Fund, Inc.’s (MUS) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 80% of its assets in investment grade municipal obligations with remaining maturities of one year or more at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 18.91% based on market price and 7.89% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s long duration posture (greater sensitivity to interest rates) contributed positively to performance as the municipal yield curve flattened (i.e., longer-term interest rates fell more than shorter rates) and bond prices moved higher on the long end of the curve. The Fund’s longer-dated holdings in the health, transportation and utilities sectors experienced the strongest price appreciation. The Fund’s small position in US Treasury futures as a strategy for hedging interest rate risk was a slight detractor from performance as rates generally declined. The Fund’s potential return was limited by its low exposure to tobacco, which was the strongest performing sector for the period.

 

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

Symbol on NYSE		MUS
Initial Offering Date		May 1, 1998
Yield on Closing Market Price as of October 31, 2012 ($16.77)1		5.30%
Tax Equivalent Yield2		8.15%
Current Monthly Distribution per Common Share3		$0.074
Current Annualized Distribution per Common Share3		$0.888
Economic Leverage as of October 31, 20124		41%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	16.77			$	14.52				15.50	%		$	16.94			$	14.52
Net Asset Value		$	15.31			$	14.61				4.79	%		$	15.33			$	14.61

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		9

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Fund Summary as of October 31, 2012		BlackRock Muni Intermediate Duration Fund, Inc.

 

Fund Overview

BlackRock Muni Intermediate Duration Fund, Inc.’s (MUI) (the “Fund”) investment objective is to provide common shareholders with high current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 75% of its assets in municipal bonds rated investment grade and invests at least 80% of its assets in municipal bonds with a duration of three to ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 9.16% based on market price and 6.09% based on NAV. For the same period, the closed-end Lipper Intermediate Municipal Debt Funds category posted an average return of 7.36% based on market price and 4.83% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund benefited from its neutral-to-long average duration bias (greater sensitivity to interest rates) and its preference for longer-dated maturities, within its intermediate duration mandate, as interest rates generally declined and the yield curve flattened (long-term interest rates fell more than short and intermediate rates) during the period. The Fund also benefited from a tightening of credit spreads during the period, with additional positive performance contributions from its allocations to the health and corporate sectors, which were among the better performing segments of the market for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly negative impact on performance.

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

Symbol on NYSE		MUI
Initial Offering Date		August 1, 2003
Yield on Closing Market Price as of October 31, 2012 ($17.50)1		4.90%
Tax Equivalent Yield2		7.54%
Current Monthly Distribution per Common Share3		$0.0715
Current Annualized Distribution per Common Share3		$0.8580
Economic Leverage as of October 31, 20124		38%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	17.50			$	16.45				6.38	%		$	17.65			$	16.04
Net Asset Value		$	16.76			$	16.21				3.39	%		$	16.83			$	16.18

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

10		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Fund Summary as of October 31, 2012		BlackRock MuniVest Fund II, Inc.

 

Fund Overview

BlackRock MuniVest Fund II, Inc.’s (MVT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance

For the six-month period ended October 31, 2012, the Fund returned 12.00% based on market price and 7.98% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Contributing positively to performance during the period were the Fund’s duration positioning (preference for securities with a higher sensitivity to interest rate movements) and yield curve-flattening bias. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. In addition, sector concentrations in health and transportation had a notable positive impact on returns. The Fund’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Security selection detracted from performance in the health and tobacco sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly negative impact on performance.

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

Symbol on NYSE		MVT
Initial Offering Date		March 29, 1993
Yield on Closing Market Price as of October 31, 2012 ($18.16)1		6.01%
Tax Equivalent Yield2		9.25%
Current Monthly Distribution per Common Share3		$0.091
Current Annualized Distribution per Common Share3		$1.092
Economic Leverage as of October 31, 20124		41%

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

3

The distribution rate is not constant and is subject to change.

4

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

		10/31/12				4/30/12				Change				High				Low
Market Price		$	18.16			$	16.75				8.42	%		$	18.46			$	16.48
Net Asset Value		$	16.63			$	15.91				4.53	%		$	16.67			$	15.91

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		11

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Call/Maturity Structure

 

The following table summarizes the percentage of each Fund’s long-term investments with scheduled maturity dates and/or that are subject to potential calls by issuers over the next five years:

 

Calendar Year Ended December 31,		MUA				MEN				MHD				MUH				MUS				MUI				MVT
2012			9	%			1	%			5	%			5	%			1	%			4	%			6	%
2013			5				3				3				2				—				1				2
2014			7				10				5				6				3				7				2
2015			4				8				4				4				4				6				3
2016			3				3				3				4				3				7				4

 

Derivative Financial Instruments

 

 

12		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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The Benefits and Risks of Leveraging

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		13

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Schedule of Investments October 31, 2012 (Unaudited)		BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets)

 

Portfolio Abbreviations

 

 

See Notes to Financial Statements.

 

14		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments (continued)		BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		15

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

16		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		17

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

18		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments (concluded)		BlackRock MuniAssets Fund, Inc. (MUA)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		19

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Schedule of Investments October 31, 2012 (Unaudited)		BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

20		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		21

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

22		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		23

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

24		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments (concluded)		BlackRock MuniEnhanced Fund, Inc. (MEN)

 

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

		Level 1				Level 2				Level 3				Total
Assets:
Investments:
Long-Term Investments1			—			$	573,450,691				—			$	573,450,691
Short-Term Securities		$	4,871,693				—				—				4,871,693
Total		$	4,871,693			$	573,450,691				—			$	578,322,384

 

1

See above Schedule of Investments for values in each state or political subdivision.

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

		Level 1				Level 2				Level 3				Total
Liabilities:
Bank overdraft			—			$	(238,216	)			—			$	(238,216	)
TOB trust certificates			—				(70,315,120	)			—				(70,315,120	)
VRDP Shares			—				(142,500,000	)			—				(142,500,000	)
Total			—			$	(213,053,336	)			—			$	(213,053,336	)

There were no transfers between levels during the six months ended October 31, 2012.

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		25

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Schedule of Investments October 31, 2012 (Unaudited)		BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

26		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		27

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

28		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		29

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

30		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (concluded)		BlackRock MuniHoldings Fund, Inc. (MHD)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		31

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Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)		BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

32		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		33

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

34		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		35

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Schedule of Investments (concluded)		BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

36		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments October 31, 2012 (Unaudited)		BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		37

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

38		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		39

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Table of Contents

Schedule of Investments (concluded)		BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

 

(h)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

Ÿ

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

Ÿ

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Fund has the ability to access

 

Ÿ

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

Ÿ

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

		Level 1				Level 2				Level 3				Total
Assets:
Investments:
Long-Term Investments1			—			$	330,020,810				—			$	330,020,810
Short-Term Securities		$	67,427				4,020,000				—				4,087,427
Total		$	67,427			$	334,040,810				—			$	334,108,237

 

1

See above Schedule of Investment for values in each state or political subdivision.

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

		Level 1				Level 2				Level 3				Total
Liabilities:
TOB trust certificates			—			$	(50,254,556	)			—			$	(50,254,556	)
VMTP Shares			—				(87,000,000	)			—				(87,000,000	)
Total			—			$	(137,254,556	)			—			$	(137,254,556	)

There were no transfers between levels during the six month ended October 31, 2012.

 

See Notes to Financial Statements.

 

40		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments October 31, 2012 (Unaudited)		BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		41

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Table of Contents

Schedule of Investments (continued)		BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

42		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments (continued)		BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		43

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Schedule of Investments (continued)		BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

44		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		45

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Schedule of Investments (concluded)		BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

46		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Schedule of Investments October 31, 2012 (Unaudited)		BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		47

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

48		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		49

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

50		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Schedule of Investments (continued)		BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		51

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Schedule of Investments (concluded)		BlackRock MuniVest Fund II, Inc. (MVT)

 

 

See Notes to Financial Statements.

 

52		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Statements of Assets and Liabilities

 

October 31, 2012 (Unaudited)		BlackRock MuniAssets Fund, Inc. (MUA)				BlackRock MuniEnhanced Fund, Inc. (MEN)				BlackRock MuniHoldings Fund, Inc. (MHD)				BlackRock MuniHoldings Fund II, Inc. (MUH)				BlackRock MuniHoldings Quality Fund, Inc. (MUS)				BlackRock Muni Intermediate Duration Fund, Inc. (MUI)				BlackRock MuniVest Fund II, Inc. (MVT)
Assets
Investments at value — unaffiliated1		$	559,765,539			$	573,450,691			$	406,258,306			$	301,864,357			$	334,040,810			$	1,022,091,740			$	580,813,190
Investments at value — affiliated2			1,686,161				4,871,693				39,693				34,963				67,427				93,623				67,332
Interest receivable			9,202,057				7,707,684				5,796,977				4,200,114				4,204,309				13,406,969				8,855,416
Investments sold receivable			170,000				1,768,128				5,000				—				—				5,000				635,000
Deferred offering costs			—				238,022				134,039				115,318				136,663				1,043,864				179,749
Prepaid expenses			1,675				3,044				4,332				3,197				16,026				297,657				2,770
Total assets			570,825,432				588,039,262				412,238,347				306,217,949				338,465,235				1,036,938,853				590,553,457
Accrued Liabilities
Bank overdraft			—				238,216				—				—				—				464,222				—
Investments purchased payable			—				1,798,692				2,239,553				1,625,305				892,578				3,080,440				3,212,566
Income dividends payable — Common Shares			2,233,870				1,710,469				1,288,676				935,488				961,608				2,730,555				1,898,166
Investment advisory fees payable			264,472				247,306				374,828				278,855				293,565				482,349				487,151
Interest expense and fees payable			44,625				50,126				42,365				35,724				26,122				61,765				64,059
Officer’s and Directors’ fees payable			4,627				2				597				357				—				152,763				—
Other accrued expenses payable			378,383				107,941				104,906				67,376				82,251				166,354				120,562
Total accrued liabilities			2,925,977				4,152,752				4,050,925				2,943,105				2,256,124				7,138,448				5,782,504
Other Liabilities
TOB trust certificates			64,148,789				70,315,120				67,690,138				56,562,094				50,254,556				102,718,447				97,815,267
VRDP Shares, at liquidation value of $100,000 per share3,4			—				142,500,000				—				—				—				287,100,000				—
VMTP Shares, at liquidation value of $100,000 per share3,4			—				—				83,700,000				55,000,000				87,000,000				—				140,000,000
Total other liabilities			64,148,789				212,815,120				151,390,138				111,562,094				137,254,556				389,818,447				237,815,267
Total liabilities			67,074,766				216,967,872				155,441,063				114,505,199				139,510,686				396,956,895				243,597,771
Net Assets Applicable to Common Shareholders		$	503,750,666			$	371,071,390			$	256,797,284			$	191,712,750			$	198,954,555			$	639,981,958			$	346,955,686
Net Assets Applicable to Common Shareholders Consist of
Paid-in capital5		$	479,397,343			$	315,546,417			$	209,927,784			$	155,042,794			$	175,057,135			$	542,998,466			$	285,417,841
Undistributed net investment income			2,599,027				6,341,857				4,322,388				4,154,088				2,981,455				9,349,589				5,800,163
Undistributed net realized gain (accumulated net realized loss)			(15,196,582	)			(9,964,866	)			2,292,596				1,010,496				(9,108,252	)			2,184,887				(5,386,249	)
Net unrealized appreciation/depreciation			36,950,878				59,147,982				40,254,516				31,505,372				30,024,217				85,449,016				61,123,931
Net Assets Applicable to Common Shareholders		$	503,750,666			$	371,071,390			$	256,797,284			$	191,712,750			$	198,954,555			$	639,981,958			$	346,955,686
Net asset value, per Common Share		$	14.09			$	12.58			$	18.23			$	17.01			$	15.31			$	16.76			$	16.63
1  Investments at cost — unaffiliated		$	522,814,661			$	514,302,709			$	366,003,790			$	270,358,985			$	304,016,593			$	936,642,724			$	519,689,259
2  Investments at cost — affiliated		$	1,686,161			$	4,871,693			$	39,693			$	34,963			$	67,427			$	93,623			$	67,332
3  VRDP/VMTP Shares outstanding, par value $0.10 per share			—				1,425				837				550				870				2,871				1,400
4  Preferred Shares authorized			—				7,480				5,000				3,480				5,380				15,671				7,000
5  Common Shares outstanding, 200 million shares authorized, $0.10 par value			35,741,923				29,490,852				14,083,889				11,270,936				12,994,705				38,189,582				20,858,966

 

See Notes to Financial Statements.
		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		53

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Table of Contents

Statements of Operations

 

Six Months Ended October 31, 2012 (Unaudited)		BlackRock MuniAssets Fund, Inc. (MUA)				BlackRock MuniEnhanced Fund, Inc. (MEN)				BlackRock MuniHoldings Fund, Inc. (MHD)				BlackRock MuniHoldings Fund II, Inc. (MUH)				BlackRock MuniHoldings Quality Fund, Inc. (MUS)				BlackRock Muni Intermediate Duration Fund, Inc. (MUI)				BlackRock MuniVest Fund II, Inc. (MVT)
Investment Income
Interest		$	16,062,433			$	13,380,661			$	9,733,053			$	7,216,700			$	7,258,853			$	22,407,503			$	14,118,930
Income — affiliated			271				950				11				4				9				6				9
Total income			16,062,704				13,381,611				9,733,064				7,216,704				7,258,862				22,407,509				14,118,939
Expenses
Investment advisory			1,545,538				1,458,195				1,117,463				828,159				916,525				2,816,183				1,454,590
Liquidity fees			—				153,163				—				—				—				1,793,457				—
Professional			68,987				92,340				93,563				67,815				72,463				108,273				80,588
Accounting services			49,463				52,230				38,785				32,195				30,819				74,997				49,712
Remarketing fees on Preferred Shares			—				19,792				—				—				—				146,740				—
Transfer agent			28,513				25,416				17,675				14,178				13,938				29,591				17,109
Officer and Directors			28,354				17,374				12,432				9,333				9,333				33,024				15,921
Custodian			12,283				14,823				8,582				6,568				7,655				23,380				11,090
Printing			5,848				10,440				7,305				5,268				4,492				15,462				8,987
Registration			6,125				5,124				4,758				4,673				4,661				6,588				4,941
Miscellaneous			21,828				33,534				30,454				27,004				24,141				42,021				28,739
Total expenses excluding interest expense, fees and amortization of offering costs			1,766,939				1,882,431				1,331,017				995,193				1,084,027				5,089,716				1,671,677
Interest expense, fees and amortization of offering costs1			299,360				915,354				782,679				559,384				724,056				777,787				1,232,194
Total expenses			2,066,299				2,797,785				2,113,696				1,554,577				1,808,083				5,867,503				2,903,871
Less fees waived by Manager			(637	)			(1,916	)			(24	)			(10	)			(85,563	)			(41	)			(11	)
Total expenses after fees waived			2,065,662				2,795,869				2,113,672				1,554,567				1,722,520				5,867,462				2,903,860
Net investment income			13,997,042				10,585,742				7,619,392				5,662,137				5,536,342				16,540,047				11,215,079
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments			4,310,762				1,121,940				1,585,914				1,358,688				4,103,365				6,426,260				2,285,512
Financial futures contracts			(839,470	)			(986,834	)			(850,912	)			(640,706	)			(736,216	)			(2,816,605	)			(1,154,575	)
			3,471,292				135,106				735,002				717,982				3,367,149				3,609,655				1,130,937
Net change in unrealized appreciation/depreciation on:
Investments			17,607,767				12,962,577				11,313,551				7,709,065				5,636,865				15,568,577				13,670,008
Financial futures contracts			480,188				316,943				346,118				261,175				285,365				1,393,556				470,479
			18,087,955				13,279,520				11,659,669				7,970,240				5,922,230				16,962,133				14,140,487
Total realized and unrealized gain			21,559,247				13,414,626				12,394,671				8,688,222				9,289,379				20,571,788				15,271,424
Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations		$	35,556,289			$	24,000,368			$	20,014,063			$	14,350,359			$	14,825,721			$	37,111,835			$	26,486,503
1 Related to TOBs, VRDP and/or VMTP Shares.

 

 

See Notes to Financial Statements.
54		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Statements of Changes in Net Assets

 

		BlackRock MuniAssets Fund, Inc. (MUA)										BlackRock MuniEnhanced Fund, Inc. (MEN)
Increase (Decrease) in Net Assets Applicable to Common Shareholders:		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012						Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012
Operations
Net investment income		$	13,997,042			$	27,317,491					$	10,585,742			$	20,340,510
Net realized gain			3,471,292				7,126,365						135,106				(675,114	)
Net change in unrealized appreciation/depreciation			18,087,955				40,188,787						13,279,520				54,234,700
Dividends to AMPS Shareholders from net investment income			—				—						—				(86,943	)
Net increase in net assets applicable to Common Shareholders resulting from operations			35,556,289				74,632,643						24,000,368				73,813,153
Dividends to Common Shareholders From1
Net investment income			(13,403,221	)			(26,925,856	)					(10,257,400	)			(20,207,814	)
Capital Share Transactions
Reinvestment of common dividends			—				—						311,391				147,962
Net Assets Applicable to Common Shareholders
Total increase in net assets applicable to Common Shareholders			22,153,068				47,706,787						14,054,359				53,753,301
Beginning of period			481,597,598				433,890,811						357,017,031				303,263,730
End of period		$	503,750,666			$	481,597,598					$	371,071,390			$	357,017,031
Undistributed net investment income		$	2,599,027			$	2,005,206					$	6,341,857			$	6,013,515
		BlackRock MuniHoldings Fund, Inc. (MHD)										BlackRock MuniHoldings Fund II, Inc. (MUH)
Increase (Decrease) in Net Assets Applicable to Common Shareholders:		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012						Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012
Operations
Net investment income		$	7,619,392			$	15,666,101					$	5,662,137			$	11,523,683
Net realized gain			735,002				1,157,061						717,982				482,184
Net change in unrealized appreciation/depreciation			11,659,669				36,408,737						7,970,240				27,132,279
Dividends to AMPS Shareholders from net investment income			—				(208,121	)					—				(87,811	)
Net increase in net assets applicable to Common Shareholders resulting from operations			20,014,063				53,023,778						14,350,359				39,050,335
Dividends to Common Shareholders From1
Net investment income			(7,725,522	)			(15,317,116	)					(5,608,691	)			(11,059,908	)
Capital Share Transactions
Reinvestment of common dividends			519,246				914,394						346,746				375,140
Net Assets Applicable to Common Shareholders
Total increase in net assets applicable to Common Shareholders			12,807,787				38,621,056						9,088,414				28,365,567
Beginning of period			243,989,497				205,368,441						182,624,336				154,258,769
End of period		$	256,797,284			$	243,989,497					$	191,712,750			$	182,624,336
Undistributed net investment income		$	4,322,388			$	4,428,518					$	4,154,088			$	4,100,642

 

1

Dividends are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.
		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		55

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Table of Contents

Statements of Changes in Net Assets

 

		BlackRock MuniHoldings Quality Fund, Inc. (MUS)								BlackRock Muni Intermediate Duration Fund, Inc. (MUI)
Increase (Decrease) in Net Assets Applicable to Common Shareholders:		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012				Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012
Operations
Net investment income		$	5,536,342			$	11,513,767			$	16,540,047			$	32,774,021
Net realized gain			3,367,149				1,695,833				3,609,655				3,176,086
Net change in unrealized appreciation/depreciation			5,922,230				26,035,352				16,962,133				63,908,723
Dividends to AMPS Shareholders from net investment income			—				(137,099	)			—				—
Net increase in net assets applicable to Common Shareholders resulting from operations			14,825,721				39,107,853				37,111,835				99,858,830
Dividends to Common Shareholders From1
Net investment income			(5,765,327	)			(11,509,551	)			(16,364,152	)			(32,680,904	)
Capital Share Transactions
Reinvestment of common dividends			327,172				249,057				1,797,161				742,887
Net Assets Applicable to Common Shareholders
Total increase in net assets applicable to Common Shareholders			9,387,566				27,847,359				22,544,844				67,920,813
Beginning of period			189,566,989				161,719,630				617,437,114				549,516,301
End of period		$	198,954,555			$	189,566,989			$	639,981,958			$	617,437,114
Undistributed net investment income		$	2,981,455			$	3,210,440			$	9,349,589			$	9,173,694
										BlackRock MuniVest Fund II, Inc. (MVT)
Increase (Decrease) in Net Assets Applicable to Common Shareholders:										Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30, 2012
Operations
Net investment income										$	11,215,079			$	23,162,488
Net realized gain											1,130,937				2,351,347
Net change in unrealized appreciation/depreciation											14,140,487				47,733,695
Dividends to AMPS Shareholders from net investment income											—				(473,170	)
Net increase in net assets applicable to Common Shareholders resulting from operations											26,486,503				72,774,360
Dividends to Common Shareholders From1
Net investment income											(11,376,739	)			(22,158,463	)
Capital Share Transactions
Reinvestment of common dividends											904,937				2,041,162
Net Assets Applicable to Common Shareholders
Total increase in net assets applicable to Common Shareholders											16,014,701				52,657,059
Beginning of period											330,940,985				278,283,926
End of period										$	346,955,686			$	330,940,985
Undistributed net investment income										$	5,800,163			$	5,961,823

 

1

Dividends are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.
56		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Statements of Cash Flows

 

Six Months Ended October 31, 2012 (Unaudited)		BlackRock MuniEnhanced Fund, Inc. (MEN)				BlackRock MuniHoldings Fund, Inc. (MHD)				BlackRock MuniHoldings Fund II, Inc. (MUH)				BlackRock MuniHoldings Quality Fund, Inc. (MUS)				BlackRock Muni Intermediate Duration Fund, Inc. (MUI)				BlackRock MuniVest Fund II, Inc. (MVT)
Cash Provided by (Used for) Operating Activities
Net increase in net assets resulting from operations		$	24,000,368			$	20,014,063			$	14,350,359			$	14,825,721			$	37,111,835			$	26,486,503
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities:
(Increase) decrease in interest receivable			91,061				(156,864	)			(210,944	)			1,468				(166,830	)			(220,347	)
Decrease in cash pledged as collateral for financial futures contracts			264,000				278,000				209,000				254,000				951,000				377,000
(Increase) decrease in prepaid expenses			106,216				11,053				8,021				(8,406	)			27,967				9,962
Increase in investment advisory fees payable			15,957				201,080				151,113				163,284				40,474				260,650
Decrease in variation margin payable			(25,000	)			(26,250	)			(19,750	)			(24,000	)			(90,000	)			(35,625	)
Increase in interest expense and fees payable			10,158				14,998				14,149				9,211				24,324				20,312
Increase (decrease) in Officer’s and Directors’ fees payable			(5,045	)			(3,009	)			(2,225	)			(2,701	)			8,242				(4,753	)
Decrease in other accrued expenses payable			(51,928	)			(6,801	)			(15,220	)			(22,232	)			(10,676	)			(47,726	)
Net realized and unrealized gain on investments			(14,084,517	)			(12,899,465	)			(9,067,753	)			(9,740,230	)			(21,994,837	)			(15,955,520	)
Amortization of premium and accretion of discount on investments			(618,607	)			(231,775	)			(285,077	)			376,208				682,081				(20,219	)
Amortization of deferred offering costs.			19,823				30,871				26,932				31,329				18,541				40,767
Proceeds from sales of long-term investments			38,788,494				45,252,598				29,963,810				58,069,406				100,422,948				53,495,485
Purchases of long-term investments			(44,082,054	)			(43,110,045	)			(34,543,641	)			(66,205,045	)			(121,442,510	)			(54,487,882	)
Net proceeds from sales (purchases) of short-term securities			4,256,264				(8,097,079	)			(3,607,413	)			(914,757	)			(2,752,406	)			(8,727,174	)
Cash provided by (used for) operating activities			8,685,190				1,271,375				(3,028,639	)			(3,186,744	)			(7,169,847	)			1,191,433
Cash Provided by (Used for) Financing Activities
Cash receipts from TOB trust certificates			5,440,078				8,052,790				9,889,266				8,763,400				26,839,766				9,320,660
Cash payments for TOB trust certificates			(4,407,042	)			(2,120,547	)			(1,600,409	)			(140,116	)			(5,551,011	)			(45,266	)
Cash dividends paid to Common Shareholders			(9,944,567	)			(7,203,618	)			(5,260,218	)			(5,436,540	)			(14,559,206	)			(10,466,827	)
Increase in bank overdraft			226,341				—				—				—				440,298				—
Cash provided by (used for) financing activities			(8,685,190	)			(1,271,375	)			3,028,639				3,186,744				7,169,847				(1,191,433	)
Cash
Net increase (decrease) in cash			—				—				—				—				—				—
Cash at beginning of period			—				—				—				—				—				—
Cash at end of period			—				—				—				—				—				—
Cash Flow Information
Cash paid during the period for interest		$	885,372			$	736,810			$	518,303			$	683,516			$	734,922			$	1,171,115
Non-cash Financing Activities
Capital shares issued in reinvestment of dividends paid to Common Shareholders		$	311,391			$	519,246			$	346,746			$	327,172			$	1,797,161			$	904,937

A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to average total assets.

 

See Notes to Financial Statements.
		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		57

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Table of Contents

Financial Highlights		BlackRock MuniAssets Fund, Inc. (MUA)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,												Period June 1, 2008 to April 30, 2009				Year Ended May 31,
						2012				2011				2010								2008				2007
Per Share Operating Performance
Net asset value, beginning of period		$	13.47			$	12.14			$	12.63			$	10.59			$	12.79			$	13.87			$	13.65
Net investment income1			0.39				0.76				0.73				0.80				0.72				0.78				0.82
Net realized and unrealized gain (loss)			0.61				1.32				(0.46	)			2.06				(2.18	)			(1.04	)			0.24
Net increase (decrease) from investment operations			1.00				2.08				0.27				2.86				(1.46	)			(0.26	)			1.06
Dividends and distributions from:7
Net investment income			(0.38	)			(0.75	)			(0.76	)			(0.82	)			(0.74	)			(0.82	)			(0.84	)
Net realized gain			—				—				—				—				—				(0.00	)2			—
Total dividends and distributions			(0.38	)			(0.75	)			(0.76	)			(0.82	)			(0.74	)			(0.82	)			(0.84	)
Net asset value, end of period		$	14.09			$	13.47			$	12.14			$	12.63			$	10.59			$	12.79			$	13.87
Market price, end of period		$	14.08			$	13.15			$	11.27			$	12.65			$	10.91			$	13.35			$	15.29
Total Investment Return3
Based on net asset value			7.49%	4			17.90%				2.31%				27.72%				(11.29)%	4			(1.90)%				7.72%
Based on market price			10.02%	4			23.99%				(5.17)%				24.17%				(12.45)%	4			(7.12)%				14.71%
Ratios to Average Net Assets
Total expenses			0.83%	5			0.77%				0.78%				0.72%				0.77%	5			0.70%				0.68%
Total expenses after fees waived and paid indirectly			0.83%	5			0.77%				0.78%				0.72%				0.76%	5			0.69%				0.68%
Total expenses after fees waived and paid indirectly and excluding interest expense and fees6			0.71%	5			0.70%				0.74%				0.67%				0.70%	5			0.66%				0.68%
Net investment income			5.62%	5			6.00%				6.07%				6.72%				7.13%	5			5.81%				5.91%
Supplemental Data
Net assets, end of period (000)		$	503,751			$	481,598			$	433,891			$	266,831				$221,899			$	266,913			$	287,367
Portfolio turnover			11%				28%				24%				44%				23%				23%				25%

 

1

Based on average shares outstanding.

 

2

Amount is less than $(0.01) per share.

 

3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4

Aggregate total investment return.

 

5

Annualized.

 

6

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

7

Dividends and distributions are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.
58		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Financial Highlights		BlackRock MuniEnhanced Fund, Inc. (MEN)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,												Period February 1, 2009 to April 30, 2009				Year Ended January 31,
						2012				2011				2010								2009				2008
Per Share Operating Performance
Net asset value, beginning of period		$	12.12			$	10.30			$	10.90			$	9.77			$	9.15			$	11.16			$	11.55
Net investment income1			0.36				0.69				0.73				0.75				0.18				0.72				0.78
Net realized and unrealized gain (loss)			0.45				1.82				(0.62	)			1.04				0.58				(2.02	)			(0.41	)
Dividends to AMPS shareholders from net investment income			—				(0.00	)2			(0.03	)			(0.03	)			(0.01	)			(0.19	)			(0.24	)
Net increase (decrease) from investment operations			0.81				2.51				0.08				1.76				0.75				(1.49	)			0.13
Dividends to Common Shareholders from net investment income9			(0.35	)			(0.69	)			(0.68	)			(0.63	)			(0.13	)			(0.52	)			(0.52	)
Net asset value, end of period		$	12.58			$	12.12			$	10.30			$	10.90			$	9.77			$	9.15			$	11.16
Market price, end of period		$	12.61			$	11.66			$	9.99			$	10.81			$	8.88			$	8.31			$	10.66
Total Investment Return Applicable to Common Shareholders3
Based on net asset value			6.76%	4			25.12%				0.78%				18.76%				8.40%	4			(13.19)%				1.44%
Based on market price			11.23%	4			24.11%				(1.44)%				29.59%				8.48%	4			(17.46)%				3.92%
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses5			1.52%	6			1.70%				1.24%				1.20%				1.46%	6			1.77%				1.72%
Total expenses after fees waived and paid indirectly5			1.52%	6			1.70%				1.24%				1.20%				1.45%	6			1.76%				1.72%
Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5,7			1.02%	6,8			1.35%	8			1.09%				1.04%				1.22%	6			1.18%				1.08%
Net investment income5			5.76%	6			6.12%				6.89%				7.17%				7.72%	6			7.43%				6.85%
Dividends to AMPS Shareholders			—				0.03%				0.29%				0.32%				0.56%	6			1.92%				2.08%
Net investment income to Common Shareholders			5.76%	6			6.09%				6.60%				6.85%				7.16%	6			5.51%				4.77%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)		$	371,071			$	357,017			$	303,264			$	320,083			$	287,078				$368,689			$	327,711
AMPS Shares outstanding at $25,000 liquidation preference, end of period (000)			—				—			$	142,575			$	142,575			$	158,850				$158,850			$	187,000
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)		$	142,500			$	142,500				—				—				—				—				—
Portfolio turnover			7%				22%				9%				23%				6%				24%				18%
Asset coverage per AMPS at $25,000 liquidation preference, end of period			—				—			$	78,179			$	81,128			$	70,185				$  67,294			$	68,834
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period		$	360,401			$	350,538				—				—				—				—				—

 

1

Based on average Common Shares outstanding.

 

2

Amount is less than $(0.01) per share.

 

3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4

Aggregate total investment return.

 

5

Do not reflect the effect of dividends to AMPS Shareholders.

 

6

Annualized.

 

7

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

8

For the six months ended October 31, 2012 and the year ended April 30, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were 0.93% and 0.98%, respectively.

 

9

Dividends are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.
		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		59

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Table of Contents

Financial Highlights		BlackRock MuniHoldings Fund, Inc. (MHD)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,
						2012				2011				2010				2009				2008
Per Share Operating Performance
Net asset value, beginning of period		$	17.36			$	14.67			$	15.75			$	13.27			$	15.20			$	16.51
Net investment income1			0.54				1.12				1.14				1.13				1.07				1.16
Net realized and unrealized gain (loss)			0.88				2.67				(1.01	)			2.39				(1.94	)			(1.20	)
Dividends and distributions to AMPS shareholders from:
Net investment income			—				(0.01	)			(0.03	)			(0.03	)			(0.18	)			(0.31	)
Net realized gain			—				—				(0.00	)2			(0.00	)2			(0.01	)			(0.03	)
Net increase (decrease) from investment operations			1.42				3.78				0.10				3.49				(1.06	)			(0.38	)
Dividends and distributions to Common Shareholders from:9
Net investment income			(0.55	)			(1.09	)			(1.07	)			(0.99	)			(0.85	)			(0.85	)
Net realized gain			—				—				(0.11	)			(0.02	)			(0.02	)			(0.08	)
Total dividends and distributions to Common Shareholders			(0.55	)			(1.09	)			(1.18	)			(1.01	)			(0.87	)			(0.93	)
Net asset value, end of period		$	18.23			$	17.36			$	14.67			$	15.75			$	13.27			$	15.20
Market price, end of period		$	19.32			$	18.08			$	14.51			$	15.70			$	11.97			$	14.77
Total Investment Return Applicable to Common Shareholders3
Based on net asset value			8.25%	4			26.57%				0.57%				27.31%				(6.24)%				(2.08)%
Based on market price			10.15%	4			33.28%				(0.21)%				40.68%				(12.97)%				(4.74)%
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses5			1.67%	6			1.41%				1.28%				1.25%				1.65%				1.56%
Total expenses after fees waived and paid indirectly5			1.67%	6			1.41%				1.28%				1.25%				1.64%				1.56%
Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5,7			1.05%	6			1.09%	8			1.13%				1.11%				1.25%				1.20%
Net investment income5			6.02%	6			6.95%				7.41%				7.67%				7.98%				7.27%
Dividends to AMPS Shareholders			—				0.09%				0.20%				0.24%				1.32%				1.96%
Net investment income to Common Shareholders			6.02%	6			6.86%				7.21%				7.43%				6.66%				5.31%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)		$	256,797			$	243,989			$	205,368			$	219,133				$184,685			$	211,429
AMPS outstanding at $25,000 liquidation preference, end of period (000)			—				—			$	83,700			$	83,700				$  91,925			$	125,000
VMTP Shares outstanding at $100,000 liquidation value, end of period (000)		$	83,700			$	83,700				—				—				—				—
Portfolio turnover			10%				19%				15%				41%				19%				30%
Asset coverage per AMPS at $25,000 liquidation preference, end of period			—				—			$	86,342			$	90,454				$  75,230			$	67,294
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period		$	406,807			$	391,505				—				—				—				—

 

1

Based on average Common Shares outstanding.

 

2

Amount is less than $(0.01) per share.

 

3

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4

Aggregate total investment return.

 

5

Do not reflect the effect of dividends to AMPS Shareholders.

 

6

Annualized.

 

7

Interest expense, fees and amortization of offering costs relate to TOBs and/or WMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

8

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

9

Dividends and distributions are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.
60		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Financial Highlights		BlackRock MuniHoldings Fund II, Inc. (MUH)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,												Period August 1, 2008 to April 30, 2009				Year Ended July 31,
						2012				2011				2010								2008				2007
Per Share Operating Performance
Net asset value, beginning of period		$	16.23			$	13.74			$	14.65			$	12.47			$	13.66			$	14.78			$	14.82
Net investment income1			0.50				1.03				1.03				1.02				0.72				1.04				1.05
Net realized and unrealized gain (loss)			0.78				2.45				(0.88	)			2.08				(1.22	)			(1.14	)			(0.05	)
Dividends and distributions to AMPS Shareholders from:
Net investment income			—				(0.01	)			(0.02	)			(0.02	)			(0.10	)			(0.26	)			(0.27	)
Net realized gain			—				—				(0.00	)2			—				—				—				—
Net increase (decrease) from investment operations			1.28				3.47				0.13				3.08				(0.60	)			(0.36	)			0.73
Dividends and distributions to Common Shareholders from:9
Net investment income			(0.50	)			(0.98	)			(0.97	)			(0.90	)			(0.59	)			(0.76	)			(0.77	)
Net realized gain			—				—				(0.07	)			—				—				—				—
Total dividends and distributions			(0.50	)			(0.98	)			(1.04	)			(0.90	)			(0.59	)			(0.76	)			(0.77	)
Net asset value, end of period		$	17.01			$	16.23			$	13.74			$	14.65			$	12.47			$	13.66			$	14.78
Market price, end of period		$	17.70			$	16.46			$	13.35			$	14.68			$	11.33			$	13.01			$	13.99
Total Investment Return Applicable to Common Shareholders3
Based on net asset value			7.95%	4			26.08%				0.92%				25.71%				(3.55)%	4			(2.30)%				5.08%
Based on market price			10.76%	4			31.60%				(2.14)%				38.64%				(7.99)%	4			(1.69)%				4.39%
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses5			1.64%	6			1.37%				1.23%				1.25%				1.60%	6			1.55%				1.63%
Total expenses after fees waived and paid indirectly5			1.64%	6			1.37%				1.23%				1.25%				1.60%	6			1.55%				1.63%
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs5,7			1.05%	6			1.07%	8			1.07%				1.10%				1.22%	6			1.18%				1.19%
Net investment income5			5.97%	6			6.81%				7.18%				7.41%				7.84%	6			7.07%				6.97%
Dividends to AMPS Shareholders			—				0.05%				0.14%				0.16%				1.07%	6			1.79%				1.82%
Net investment income to Common Shareholders			5.97%	6			6.76%				7.04%				7.25%				6.77%	6			5.28%				5.15%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)		$	191,713			$	182,624			$	154,259			$	163,722			$	139,377			$	152,633			$	165,185
AMPS outstanding at $25,000 liquidation preference, end of period (000)			—				—			$	55,050			$	55,050			$	61,000			$	61,000			$	87,000
VMTP Shares outstanding at $100,000 liquidation value, end of period (000)		$	55,000			$	55,000				—				—				—				—				—
Portfolio turnover			9%				18%				15%				41%				19%				28%				15%
Asset coverage per AMPS Share at $25,000 liquidation preference, end of period			—				—			$	95,056			$	99,353			$	81,123			$	87,562			$	72,478
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period		$	448,569			$	432,044				—				—				—				—				—

 

1

Based on average Common Shares outstanding.

 

2

Amount is less than $(0.01) per share.

 

3

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4

Aggregate total investment return.

 

5

Do not reflect the effect of dividends to AMPS Shareholders.

 

6

Annualized.

 

7

Interest expense and fees relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

8

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.03%.

 

9

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.
		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		61

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Table of Contents

Financial Highlights		BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,
						2012				2011				2010				2009				2008
Per Share Operating Performance
Net asset value, beginning of period		$	14.61			$	12.48			$	13.34			$	12.27			$	13.31			$	14.10
Net investment income1			0.43				0.89				0.91				0.94				0.93				1.05
Net realized and unrealized gain (loss)			0.71				2.14				(0.85	)			0.97				(1.20	)			(0.87	)
Dividend to AMPS Shareholders from net investment income			—				(0.01	)			(0.03	)			(0.03	)			(0.19	)			(0.38	)
Net increase (decrease) from investment operations			1.14				3.02				0.03				1.88				(0.46	)			(0.20	)
Dividends to Common Shareholders from net investment income8			(0.44	)			(0.89	)			(0.89	)			(0.81	)			(0.58	)			(0.59	)
Net asset value, end of period		$	15.31			$	14.61			$	12.48			$	13.34			$	12.27			$	13.31
Market price, end of period		$	16.77			$	14.52			$	12.31			$	13.40			$	10.87			$	11.97
Total Investment Return Applicable to Common Shareholders2
Based on net asset value			7.89%	3			24.96%				0.21%				16.05%				(2.52)%				(0.95)%
Based on market price			18.91%	3			25.90%				(1.60)%				31.59%				(3.97)%				(4.34)%
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses4			1.84%	5			1.49%				1.34%				1.36%				1.88%				1.64%
Total expenses after fees waived4			1.75%	5			1.41%				1.25%				1.20%				1.65%				1.51%
Total expenses after fees waived and excluding interest expense and fees4,6			1.02%	5			1.06%	7			1.10%				1.04%				1.17%				1.27%
Net investment income4			5.63%	5			6.50%				7.04%				7.23%				7.69%				7.72%
Dividends to AMPS Shareholders			—				0.08%				0.21%				0.24%				1.61%				2.80%
Net investment income to Common Shareholders			5.63%	5			6.43%				6.83%				6.99%				6.08%				4.92%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)		$	198,955			$	189,567			$	161,720			$	171,977			$	158,061			$	171,510
AMPS outstanding at $25,000 liquidation preference, end of period (000)			—				—			$	87,000			$	87,000			$	94,200			$	134,000
VMTP Shares outstanding at $100,000 liquidation value, end of period (000)		$	87,000			$	87,000				—				—				—				—
Portfolio turnover			18%				30%				28%				22%				35%				57%
Asset coverage per AMPS at $25,000 liquidation preference, end of period			—				—			$	71,472			$	74,420			$	66,951			$	57,008
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period		$	328,683			$	317,893				—				—				—				—

 

1

Based on average Common Shares outstanding.

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

3

Aggregate total investment return.

 

4

Do not reflect the effect of dividends to AMPS Shareholders.

 

5

Annualized.

 

6

Interest expense and fees relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

7

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.01%.

 

8

Dividends are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.
62		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Table of Contents

Financial Highlights		BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,												Period June 1, 2008 to April 30, 2009				Year Ended May 31,
						2012				2011				2010								2008				2007
Per Share Operating Performance
Net asset value, beginning of period		$	16.21			$	14.45			$	14.75			$	13.05			$	14.45			$	15.10			$	15.07
Net investment income1			0.43				0.86				0.95				1.02				0.89				1.04				1.03
Net realized and unrealized gain (loss)			0.55				1.76				(0.31	)			1.57				(1.42	)			(0.63	)			0.18
Dividends and distributions to AMPS Shareholders from:
Net investment income			—				—				(0.10	)			(0.11	)			(0.23	)			(0.33	)			(0.28	)
Net realized gain			—				—				—				—				—				—				(0.04	)
Net increase (decrease) from investment operations			0.98				2.62				0.54				2.48				(0.76	)			0.08				0.89
Dividends and distributions to Common Shareholders from:8
Net investment income			(0.43	)			(0.86	)			(0.84	)			(0.78	)			(0.64	)			(0.73	)			(0.74	)
Net realized gain			—				—				—				—				—				—				(0.12	)
Total dividends and distributions to Common Shareholders			(0.43	)			(0.86	)			(0.84	)			(0.78	)			(0.64	)			(0.73	)			(0.86	)
Net asset value, end of period		$	16.76			$	16.21			$	14.45			$	14.75			$	13.05			$	14.45			$	15.10
Market price, end of period		$	17.50			$	16.45			$	13.65			$	14.13			$	11.77			$	13.70			$	14.85
Total Investment Return Applicable to Common Shareholders2
Based on net asset value			6.09%	3			18.74%				3.86%				19.85%				(4.56)%	3			0.86%				6.14%
Based on market price			9.16%	3			27.56%				2.41%				27.29%				(9.21)%	3			(2.76)%				8.34%
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses4			1.85%	5			1.88%				1.45%				1.20%				1.44%	5			1.30%				1.31%
Total expenses after fees waived and paid indirectly4			1.85%	5			1.88%				1.43%				1.10%				1.25%	5			1.07%				1.07%
Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs4,6			1.60%	5,7			1.65%	7			1.30%				1.01%				1.02%	5			0.90%				0.87%
Net investment income4			5.21%	5			5.58%				6.48%				7.22%				7.46%	5			6.97%				6.71%
Dividend to AMPS Shareholders			—				—				0.70%				0.81%				1.94%	5			2.23%				1.80%
Net investment income to Common Shareholders			5.21%	5			5.58%				5.78%				6.41%				5.52%	5			4.74%				4.91%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)		$	639,982			$	617,437			$	549,516			$	561,140			$	496,247			$	549,415			$	574,225
AMPS outstanding at $25,000 liquidation preference, end of period (000)			—				—				—			$	287,175			$	287,175			$	320,000			$	320,000
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)		$	287,100			$	287,100			$	287,100				—				—				—				—
Portfolio turnover			10%				27%				21%				29%				13%				14%				12%
Asset coverage per AMPS at $25,000 liquidation preference, end of period			—				—				—			$	73,857			$	68,207			$	67,941			$	69,875
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period		$	322,913			$	315,060			$	291,402				—				—				—				—

 

1

Based on average Common Shares outstanding.

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

3

Aggregate total investment return.

 

4

Do not reflect the effect of dividends to AMPS Shareholders.

 

5

Annualized.

 

6

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

7

For the six months ended October 31, 2012 and year ended April 30, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were 0.99% and 0.99%, respectively.

 

8

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.
		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		63

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Table of Contents

Financial Highlights		BlackRock MuniVest Fund II, Inc. (MVT)

 

		Six Months Ended October 31, 2012 (Unaudited)				Year Ended April 30,												Period November 1, 2008 to April 30, 2009				Year Ended October 31,
						2012				2011				2010								2008				2007
Per Share Operating Performance
Net asset value, beginning of period		$	15.91			$	13.47			$	14.41			$	11.95			$	10.95			$	14.49			$	15.35
Net investment income1			0.54				1.12				1.14				1.18				0.53				1.12				1.16
Net realized and unrealized gain (loss)			0.73				2.41				(0.99	)			2.32				0.95				(3.49	)			(0.84	)
Dividends to AMPS Shareholders from net investment income			—				(0.02	)			(0.04	)			(0.05	)			(0.05	)			(0.32	)			(0.32	)
Net increase (decrease) from investment operations			1.27				3.51				0.11				3.45				1.43				(2.69	)			—
Dividends to Common Shareholders from net investment income8			(0.55	)			(1.07	)			(1.05	)			(0.99	)			(0.43	)			(0.85	)			(0.86	)
Net asset value, end of period		$	16.63			$	15.91			$	13.47			$	14.41			$	11.95			$	10.95			$	14.49
Market price, end of period		$	18.16			$	16.75			$	13.72			$	14.94			$	11.65			$	9.75			$	13.91
Total Investment Return Applicable to Common Shareholders2
Based on net asset value			7.98%	3			26.86%				0.73%				29.75%				13.71%	3			(19.33)%				(0.02)%
Based on market price			12.00%	3			31.13%				(1.04)%				37.99%				24.49%	3			(25.18)%				(9.56)%
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses4			1.69%	5			1.41%				1.23%				1.25%				1.51%	5			1.67%				1.67%
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs4,6			0.97%	5			1.04%	7			1.07%				1.10%				1.26%	5			1.16%				1.12%
Net investment income4			6.53%	5			7.57%				8.14%				8.72%				9.77%	5			8.03%				7.74%
Dividends to AMPS Shareholders			—				0.15%				0.32%				0.36%				0.95%	5			2.31%				2.11%
Net investment income to Common Shareholders			6.53%	5			7.42%				7.82%				8.36%				8.82%	5			5.72%				5.63%
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000)		$	346,956			$	330,941			$	278,284			$	295,465			$	243,583				$223,210			$	293,836
AMPS outstanding at $25,000 liquidation preference, end of period (000)			—				—			$	140,000			$	140,000			$	150,800				$150,800			$	175,000
VMTP Shares outstanding at $100,000 liquidation value, end of period (000)		$	140,000			$	140,000				—				—				—				—				—
Portfolio turnover			8%				13%				16%				30%				9%				49%				43%
Asset coverage per AMPS at $25,000 liquidation preference, end of period			—				—			$	74,698			$	77,767			$	65,388				$  62,019			$	67,004
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period		$	347,825			$	336,386				—				—				—				—				—

 

1

Based on average Common Shares outstanding.

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

3

Aggregate total investment return.

 

4

Do not reflect the effect of dividends to AMPS Shareholders.

 

5

Annualized.

 

6

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

7

For the year ended April 30, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.99%.

 

8

Dividends are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.
64		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Notes to Financial Statements (Unaudited)

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		65

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Notes to Financial Statements (continued)

 

 

66		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Notes to Financial Statements (continued)

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		67

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Notes to Financial Statements (continued)

 

 

Derivative Financial Instruments Categorized by Risk Exposure:
The Effect of Derivative Financial Instruments in the Statements of Operations Six Months Ended October 31, 2012
		Net Realized Gain (Loss) From
		MUA				MEN				MHD				MUH				MUS				MUI				MVT
Interest rate contracts:
Financial future contracts		$	(839,470	)		$	(986,834	)		$	(850,912	)		$	(640,706	)		$	(736,216	)		$	(2,816,605	)		$	(1,154,575	)
		Net Change in Unrealized Appreciation/Depreciation on
		MUA				MEN				MHD				MUH				MUS				MUI				MVT
Interest rate contracts:
Financial future contracts		$	480,188			$	316,943			$	346,118			$	261,175			$	285,365			$	1,393,556			$	470,479
For the six months ended October 31, 2012, the average quarterly balances of outstanding derivative financial instruments were as follows:
		MUA				MEN				MHD				MUH				MUS				MUI				MVT
Financial future contracts:
Average number of contracts sold			—				200				141				106				128				360				191
Average notional value of contracts sold			—			$	26,552,745			$	18,719,685			$	14,072,955			$	16,993,757			$	47,794,941			$	25,357,871

 

 

68		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Notes to Financial Statements (continued)

 

5. Income Tax Information:

As of April 30, 2012, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

Expires April 30,		MUA				MEN				MUS				MUI				MVT
2013		$	3,378,868				—				—				—				—
2014			3,072,949				—				—				—				—
2015			5,065,527				—				—				—				—
2016			901,327			$	2,508,309			$	166,265				—			$	4,202,338
2017			3,645,754				3,540,378				5,373,343				—				—
2018			396,366				1,225,298				6,614,798			$	560,259				—
2019			2,194,154				732,655				—				—				—
No expiration date1			—				1,798,076				654,703				—				795,838
Total		$	18,654,945			$	9,804,716			$	12,809,109			$	560,259			$	4,998,176

 

1

Must be utilized prior to losses subject to expiration.

As of October 31, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

		MUA				MEN				MHD				MUH				MUS				MUI				MVT
Tax cost		$	459,882,249			$	449,304,078			$	298,126,842			$	214,100,064			$	253,829,463			$	834,116,726			$	421,706,842
Gross unrealized appreciation		$	57,669,846			$	59,593,987			$	42,996,725			$	32,280,596			$	30,381,878			$	86,164,711			$	65,426,144
Gross unrealized depreciation			(20,249,184	)			(890,801	)			(2,515,706	)			(1,043,434	)			(357,660	)			(814,521	)			(4,067,731	)
Net unrealized appreciation		$	37,420,662			$	58,703,186			$	40,481,019			$	31,237,162			$	30,024,218			$	85,350,190			$	61,358,413

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		69

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Notes to Financial Statements (continued)

 

 

70		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Notes to Financial Statements (continued)

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		71

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Notes to Financial Statements (continued)

 

 

72		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Notes to Financial Statements (concluded)

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		73

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

 

 

74		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		75

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

 

 

76		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		77

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Officers and Directors

 

 

78		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Additional Information

 

Proxy Results

The Annual Meeting of Shareholders was held on July 27, 2012 for shareholders of record on May 31, 2012 to elect director nominees for each Fund. There were no broker non-votes with regard to any of the Funds.

Approved the Class II Directors as follows:

 

		Frank J. Fabozzi						James T. Flynn						Karen P. Robards
		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain
MUA		33,089,103		1,025,211		0		32,964,575		1,149,739		0		33,090,301		1,024,013		0

For the Fund listed above, Directors whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Paul L. Audet, Michael J. Castellano, Richard E. Cavanagh, Frank J. Fabozzi, Kathleen F. Feldstein, James T. Flynn, Henry Gabbay, Jerrold B. Harris, R. Glenn Hubbard and W. Carl Kester.

Approved the Directors as follows:

 

		Paul L. Audet						Michael J. Castellano						Richard E. Cavanagh
		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain
MEN		26,872,913		709,506		0		26,835,561		746,858		0		26,847,201		735,218		0
MHD		13,295,145		316,753		0		13,261,326		350,572		0		13,289,398		322,500		0
MUH		10,546,729		207,580		0		10,560,944		193,365		0		10,561,137		193,172		0
MUS		11,821,709		796,315		0		11,755,699		862,325		0		11,756,332		861,692		0
MUI		36,367,742		692,848		0		36,303,050		757,540		0		36,388,257		672,333		0
MVT		19,520,869		510,132		0		19,524,745		506,256		0		19,500,033		530,968		0
		Frank J. Fabozzi1						Kathleen F. Feldstein						James T. Flynn
		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain
MEN		1,025		0		0		26,814,906		767,513		0		26,808,450		773,969		0
MHD		837		0		0		13,264,657		347,241		0		13,247,692		364,206		0
MUH		550		0		0		10,542,326		211,983		0		10,552,432		201,877		0
MUS		870		0		0		11,751,703		866,321		0		11,745,952		872,072		0
MUI		2,215		656		0		36,230,570		830,020		0		36,298,234		762,356		0
MVT		1,400		0		0		19,456,640		574,361		0		19,466,942		564,059		0
		Henry Gabbay						Jerrold B. Harris						R. Glenn Hubbard
		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain
MEN		26,871,358		711,061		0		26,827,662		754,757		0		26,829,296		753,123		0
MHD		13,290,485		321,413		0		13,247,560		364,338		0		13,227,791		384,107		0
MUH		10,572,512		181,797		0		10,535,375		218,934		0		10,570,947		183,362		0
MUS		11,795,155		822,869		0		11,748,068		869,956		0		11,819,565		798,459		0
MUI		36,304,882		755,708		0		36,345,474		715,116		0		36,317,473		743,117		0
MVT		19,525,004		505,997		0		19,469,088		561,913		0		19,470,583		560,418		0

		W. Carl Kester1						Karen P. Robards
		Votes For		Votes Withheld		Abstain		Votes For		Votes Withheld		Abstain
MEN		1,025		0		0		26,885,165		697,254		0
MHD		837		0		0		13,225,526		386,372		0
MUH		550		0		0		10,552,216		202,093		0
MUS		870		0		0		11,822,718		795,306		0
MUI		2,215		656		0		36,331,494		729,096		0
MVT		1,400		0		0		19,493,323		537,678		0

 

1

Voted on by holders of Preferred Shares only.

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		79

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Additional Information (continued)

 

Dividend Policy

 

 

80		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Additional Information (continued)

 

 

General Information

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		81

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Additional Information (continued)

 

 

General Information (concluded)

 

 

82		SEMI-ANNUAL REPORT		OCTOBER 31, 2012

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Additional Information (concluded)

 

 

BlackRock Privacy Principles

 

 

		SEMI-ANNUAL REPORT		OCTOBER 31, 2012		83

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This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Certain of the Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

#CEMUNI7-10/12-SAR

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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 registrant’s 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

(a) Not Applicable to this semi-annual report

(b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

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 – There have been no material changes to these procedures.

Item 11 – Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

(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

(a)(1) – Code of Ethics – Not Applicable to this semi-annual report

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(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 Muni Intermediate Duration Fund, Inc.

 

By:		/s/  John  M. Perlowski
		John  M. Perlowski
		Chief Executive Officer (principal executive officer) of BlackRock Muni Intermediate Duration Fund, Inc.

Date: January 3, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:		/s/  John  M. Perlowski
		John  M. Perlowski
		Chief Executive Officer (principal executive officer) of BlackRock Muni Intermediate Duration Fund, Inc.

Date: January 3, 2013

 

By:		/s/  Neal J. Andrews
		Neal  J. Andrews
		Chief Financial Officer (principal financial officer) of BlackRock Muni Intermediate Duration Fund, Inc.

Date: January 3, 2013