American Capital Reports 2012 Net Operating Income Before Income Taxes Of $383 Million, Or $1.16 Per Diluted Share, And Net Earnings Of $1,136 Million, Or $3.44 Per Diluted Share

11 Feb, 2013, 07:30 ET from American Capital, Ltd.

BETHESDA, Md., Feb. 11, 2013 /PRNewswire/ -- American Capital, Ltd. ("American Capital" or the "Company") (Nasdaq: ACAS) announced net operating income ("NOI") before income taxes for the quarter and year ended December 31, 2012 of $115 million, or $0.36 per diluted share, and $383 million, or $1.16 per diluted share, respectively.  NOI after income taxes for the quarter and year ended December 31, 2012 was $83 million, or $0.26 per diluted share, and $397 million, or $1.20 per diluted share, respectively.  Net earnings for the quarter and year ended December 31, 2012 were $123 million, or $0.38 per diluted share, and $1,136 million, or $3.44 per diluted share, respectively.  As of December 31, 2012, net asset value ("NAV") per share was $17.84, a 10% annualized, or $0.45 per share, increase from the September 30, 2012 NAV per share of $17.39 and a 29%, or $3.97 per share, increase from the December 31, 2011 NAV per share of $13.87.

2012 FINANCIAL SUMMARY

  • $1.16 NOI before income taxes per diluted share, or $383 million 
    • $80 million increase over 2011  
    • $1.20 NOI after income taxes per diluted share, or $397 million  
  • $0.38 net realized earnings per diluted share, or $124 million  
    • $14 million decline from 2011   
  • $3.06 net unrealized appreciation per diluted share, or $1,012 million   
    • $176 million increase over 2011  
  • $3.44 net earnings per diluted share, or $1,136 million  
    • 22% annual return on average shareholders' equity  
    • $162 million increase over 2011  
  • $1,498 million of cash proceeds from realizations  
  • $487 million of securitized debt repaid  
  • 34.8 million shares of American Capital common stock repurchased, totaling $362 million   
    • $10.39 average price per share   
    • $0.77 accretive to NAV per share  
  • $17.84 NAV per share     
    • $3.97 per share, or 29%, increase over Q4 2011   

Q4 2012 FINANCIAL SUMMARY

  • $0.36 NOI before income taxes per diluted share, or $115 million
    • $31 million increase over Q4 2011
    • $0.26 NOI after income taxes per diluted share, or $83 million
  • $0.31 net realized earnings per diluted share, or $98 million
    • $39 million decline from Q4 2011
  • $0.08 net unrealized appreciation per diluted share, or $25 million
    • $432 million decline from Q4 2011
  • $0.38 net earnings per diluted share, or $123 million
    • 9% annualized return on average shareholders' equity
    • $471 million decline from Q4 2011
  • $634 million of cash proceeds from realizations
  • $28 million of securitized debt repaid
  • 8.8 million shares of American Capital common stock repurchased, totaling $103 million
    • $11.72 average price per share
    • $0.18 accretive to NAV per share
  • $17.84 NAV per share
    • $0.45 per share, or 10% annualized, increase over Q3 2012
  • S&P credit rating upgraded from B to B+

"The fourth quarter of 2012 capped an excellent year for American Capital," said Malon Wilkus, Chairman and Chief Executive Officer.  "For the year, NOI totaled $397 million, American Capital Asset Management appreciated $329 million, previously depreciated assets recovered approximately $325 million of net value, and the net value of our remaining portfolio of private finance companies grew by approximately $75 million, resulting in $1.1 billion in net earnings.  These earnings were 14% higher than our prior best in 2010.  Our NAV grew $3.97 per share to $17.84 per share as of December 31, 2012, increasing an impressive 29% for the year.  We also originated $719 million of new investments, which we believe will generate attractive returns for our shareholders.  Additionally, our highly accretive stock repurchase program continues to be an important enhancement to shareholder value."

PORTFOLIO VALUATION For the quarter ended December 31, 2012, net unrealized appreciation, before income taxes, totaled $61 million.  The primary components of the net unrealized appreciation were:

  • $50 million net unrealized appreciation in American Capital's investment in European Capital, primarily due to a strengthening of the Euro and an increase in the NAV of European Capital.
    • The Company's equity investment in European Capital was valued at $700 million as of December 31, 2012, or 75% of NAV, compared to $651 million as of September 30, 2012, or 75% of NAV;
  • $5 million net unrealized appreciation from American Capital's structured products investments, generally as a result of improved projected cash flows; and
  • $2 million net unrealized appreciation from American Capital's private finance portfolio.

"In 2012, we experienced $1.5 billion of liquidity in our portfolio at excellent valuations which coupled with our cash flows from operations allowed us to continue to execute on our balance sheet management strategies," said John Erickson, Chief Financial Officer.  "With net debt of $304 million compared to equity of $5,429 million, our balance sheet is outstanding.  In fact, our net debt is now about the amount of the liquidity we generate on average in a quarter.  Looking forward to 2013, we believe that our liquidity can be invested in new assets at attractive returns and in repurchasing our shares.  We remain laser focused on maximizing shareholder value."

PORTFOLIO REALIZATIONS AND PERFORMANCE In the fourth quarter of 2012, $634 million of cash proceeds were received from realizations of portfolio investments.  American Capital made $527 million in new committed investments during the quarter.  The weighted average effective interest rate on American Capital's debt investments as of December 31, 2012 was 11.4%, 30 basis points higher than the September 30, 2012 rate of 11.1% and 70 basis points higher than the December 31, 2011 rate of 10.7%.  As of December 31, 2012, loans with a fair value of $177 million were on non-accrual, representing 9.0% of total loans at fair value, compared to $252 million fair value of non-accrual loans, or 12.5% of total loans at fair value as of September 30, 2012.  The $75 million decrease in the fair value of loans on non-accrual was generally driven by loans removed from non-accrual status as a result of improved company performance.

"We are extremely pleased with the two One Stop Buyouts® and six new Sponsor Finance investments we completed during the fourth quarter of 2012," said Darin Winn, Senior Vice President and Senior Managing Director.  "Collectively, we committed more than a half a billion dollars in the fourth quarter of 2012.  We believe that our two One Stop Buyouts® are synergistic with our existing Health Care Products and Services segment and energy investments and we will continue to seek One Stop Buyouts® in 2013."

STOCK REPURCHASE AND DIVIDEND PROGRAM During the third quarter of 2011, American Capital's Board of Directors adopted a program that may provide for repurchases of shares or dividend payments through December 31, 2013.  Under the program, American Capital will consider quarterly setting an amount to be utilized for stock repurchases or dividends.  Generally, the amount may be utilized for repurchases if the price of American Capital's common stock represents a discount to the NAV of its shares, and the amount may be utilized for the payment of cash dividends if the price of American Capital's common stock represents a premium to the NAV of its shares.  

In determining the quarterly amount for repurchases or dividends, the Company's Board will be guided by the Company's cumulative net cash provided by operating activities in the prior quarter and since the beginning of 2012, cumulative repurchases or dividends, cash on hand, debt service considerations, investment plans, forecasts of financial liquidity and economic conditions, operational issues and the then current trading price of American Capital stock.

The repurchase and dividend program may be suspended, terminated or modified at any time for any reason.  The program does not obligate American Capital to acquire any specific number of shares, and all repurchases will be made in accordance with SEC Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of stock repurchases.  During the fourth quarter of 2012, American Capital made open market purchases of 8.8 million shares, or $103 million, of American Capital common stock at an average price of $11.72 per share.  Since the inception of the program, American Capital has made open market purchases of 52.4 million shares, or $495 million, of American Capital common stock at an average price of $9.46 per share.

 

AMERICAN CAPITAL, LTD.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2012 and 2011

(in millions, except per share amounts)

2012 Versus 2011

2012

2011

$

%

(unaudited)

Assets

Investments at fair value (cost of $5,842 and $6,739, respectively)

$ 5,265

$ 5,130

$ 135

3%

Cash and cash equivalents

331

204

127

62%

Restricted cash and cash equivalents

140

80

60

75%

Interest receivable

17

24

(7)

(29%)

Deferred tax asset, net

455

428

27

6%

Derivative agreements at fair value

11

10

1

10%

Other

100

85

15

18%

Total assets

$ 6,319

$ 5,961

$ 358

6%

Liabilities and Shareholders' Equity

Debt

$ 775

$ 1,251

$ (476)

(38%)

Derivative agreements at fair value

38

99

(61)

(62%)

Other

77

48

29

60%

      Total liabilities

890

1,398

(508)

(36%)

Shareholders' equity

   Undesignated preferred stock, $0.01 par value, 5.0 shares authorized, 0 issued and

      outstanding

-

-

-

-

   Common stock, $0.01 par value, 1,000.0 shares authorized, 310.1 and 336.4 issued

      and 304.4 and 329.1 outstanding, respectively

3

3

-

-

Capital in excess of par value

6,783

7,053

(270)

(4%)

Distributions in excess of net realized earnings

(875)

(999)

124

12%

Net unrealized depreciation of investments

(482)

(1,494)

1,012

68%

Total shareholders' equity

5,429

4,563

866

19%

Total liabilities and shareholders' equity

$ 6,319

$ 5,961

$ 358

6%

NAV per common share outstanding

$ 17.84

$ 13.87

$ 3.97

29%

 

AMERICAN CAPITAL, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months and Fiscal Years Ended December 31, 2012 and 2011

(in millions, except per share data)

Three Months Ended

Fiscal Year Ended

Three Months Ended

December 31,

Fiscal Year Ended

December 31,

December 31,

2012 Versus 2011

December 31,

2012 Versus 2011

2012

2011

$

%

2012

2011

$

%

(unaudited)

(unaudited)

(unaudited)

OPERATING REVENUE

Interest and dividend income

$             157

$             149

$                 8

5%

$             586

$             543

$               43

8%

Fee income

23

11

12

109%

60

48

12

25%

Total operating revenue

180

160

20

13%

646

591

55

9%

OPERATING EXPENSES

Interest

12

21

(9)

(43%)

59

90

(31)

(34%)

Salaries, benefits and stock-based

   compensation

40

36

4

11%

148

143

5

3%

General and administrative

13

19

(6)

(32%)

56

55

1

2%

Total operating expenses

65

76

(11)

(14%)

263

288

(25)

(9%)

NET OPERATING INCOME BEFORE

   INCOME TAXES

115

84

31

37%

383

303

80

26%

Tax (provision) benefit

(32)

145

(177)

 NM 

14

145

(131)

(90%)

NET OPERATING INCOME

83

229

(146)

(64%)

397

448

(51)

(11%)

Loss on extinguishment of debt, net of tax

-

-

-

-

(3)

-

(3)

(100%)

Net realized gain (loss)

   Portfolio company investments

9

(154)

163

 NM 

(271)

(335)

64

19%

   Foreign currency transactions

-

-

-

-

1

-

1

100%

   Derivative agreements

(3)

(13)

10

77%

(87)

(50)

(37)

(74%)

   Tax benefit

9

75

(66)

(88%)

87

75

12

16%

Total net realized gain (loss)

15

(92)

107

NM

(270)

(310)

40

13%

NET REALIZED EARNINGS

98

137

(39)

(28%)

124

138

(14)

(10%)

Net unrealized appreciation (depreciation)

Portfolio company investments

22

309

(287)

(93%)

1,005

646

359

56%

Foreign currency translation

36

(65)

101

 NM 

27

(31)

58

 NM 

Derivative agreements

3

5

(2)

(40%)

62

13

49

377%

Tax (provision) benefit

(36)

208

(244)

 NM 

(82)

208

(290)

 NM 

Total net unrealized appreciation

25

457

(432)

(95%)

1,012

836

176

21%

NET INCREASE IN NET ASSETS

   RESULTING FROM OPERATIONS

   ("NET EARNINGS")

$             123

$             594

$           (471)

(79%)

$          1,136

$             974

$             162

17%

NET OPERATING INCOME PER

   COMMON SHARE

Basic

$            0.27

$            0.68

$          (0.41)

(60%)

$            1.24

$            1.30

$          (0.06)

(5%)

Diluted

$            0.26

$            0.67

$          (0.41)

(61%)

$            1.20

$            1.26

$          (0.06)

(5%)

NET REALIZED EARNINGS PER

   COMMON SHARE

Basic

$            0.32

$            0.41

$          (0.09)

(22%)

$            0.39

$            0.40

$          (0.01)

(3%)

Diluted

$            0.31

$            0.40

$          (0.09)

(23%)

$            0.38

$            0.39

$          (0.01)

(3%)

NET EARNINGS PER COMMON

   SHARE

Basic

$            0.40

$            1.76

$          (1.36)

(77%)

$            3.55

$            2.83

$            0.72

25%

Diluted

$            0.38

$            1.73

$          (1.35)

(78%)

$            3.44

$            2.74

$            0.70

26%

WEIGHTED AVERAGE SHARES OF

   COMMON STOCK OUTSTANDING

Basic

309.7

337.1

(27.4)

(8%)

320.3

343.9

(23.6)

(7%)

Diluted

320.7

343.9

(23.2)

(7%)

330.3

355.3

(25.0)

(7%)

NM = Not meaningful.

 

AMERICAN CAPITAL, LTD.

OTHER FINANCIAL INFORMATION

Three Months Ended December 31, 2012 and September 30, 2012 and Fiscal Years Ended December 31, 2012 and 2011

(in millions, except per share data)

(unaudited)

 

Q4 2012 Versus  Q3 2012

2012 Versus 2011

Q4 2012

Q3 2012

$

%

2012

2011

$

%

Assets Under Management

American Capital Assets at Fair Value

$           6,319

$        6,266

$                53

1%

$           6,319

$        5,961

$              358

6%

Third-Party Assets at Fair Value(1)

110,481

112,083

(1,602)

(1%)

110,481

62,168

48,313

78%

Total

$       116,800

$    118,349

$         (1,549)

(1%)

$       116,800

$      68,129

$         48,671

71%

Third-Party Earning Assets Under Management(2)

$         12,381

$      12,359

$                22

-

$         12,381

$        7,593

$           4,788

63%

Total Earning Assets Under Management(3)

$         18,642

$      18,567

$                75

-

$         18,642

$      13,496

$           5,146

38%

New Investments

Senior Debt

$              349

$                -

$              349

100%

$              417

$           184

$              233

127%

Mezzanine Debt

27

-

27

100%

56

57

(1)

(2%)

Preferred Equity

79

6

73

NM

87

15

72

480%

Common Equity

63

-

63

100%

149

59

90

153%

Equity Warrants

-

-

-

-

1

1

-

-

Structured Products

9

-

9

100%

9

1

8

800%

Total

$              527

$               6

$              521

NM

$              719

$           317

$              402

127%

Financing for Private Equity Buyouts

$                87

$                -

$                87

100%

$              109

$             25

$                84

336%

Investments in Managed Funds

50

-

50

100%

50

137

(87)

(64%)

American Capital Buyouts

301

-

301

100%

301

1

300

NM

Direct and Other Investments

-

-

-

-

-

15

(15)

(100%)

Structured Products

9

-

9

100%

9

-

9

100%

Add-on Investment in American Capital Asset

   Management, LLC

30

-

30

100%

116

11

105

955%

Add-on Financing for Growth and Working Capital

6

-

6

100%

22

4

18

450%

Add-on Financing for Working Capital in

   Distressed Situations

5

-

5

100%

22

35

(13)

(37%)

Add-on Financing for Acquisitions

10

6

4

67%

19

58

(39)

(67%)

Add-on Financing for Recapitalizations, not

   Including Distressed Investments

29

-

29

100%

71

27

44

163%

Add-on Financing for Purchase of Debt of a

   Portfolio Company

-

-

-

-

-

4

(4)

(100%)

Total

$              527

$               6

$              521

NM

$              719

$           317

$              402

127%

Realizations

Sale of Equity Investments

$              129

$             56

$                73

130%

$              274

$           394

$            (120)

(30%)

Principal Prepayments

403

24

379

NM

938

510

428

84%

Payment of Accrued Payment-in-Kind Notes and

   Dividends and Accreted Original Issue

   Discounts

93

42

51

121%

242

108

134

124%

Scheduled Principal Amortization

6

14

(8)

(57%)

41

38

3

8%

Loan Syndications and Sales

3

-

3

100%

3

16

(13)

(81%)

Total

$              634

$           136

$              498

366%

$           1,498

$        1,066

$              432

41%

Appreciation, Depreciation, Gain and Loss

Gross Realized Gain

$                33

$             10

$                23

230%

$                66

$           158

$              (92)

(58%)

Gross Realized Loss

(24)

(5)

(19)

(380%)

(337)

(493)

156

32%

Portfolio Net Realized Gain (Loss)

9

5

4

80%

(271)

(335)

64

19%

Foreign Currency Transactions

-

-

-

-

1

-

1

100%

Derivative Agreements

(3)

(5)

2

40%

(87)

(50)

(37)

(74%)

Tax Benefit

9

4

5

125%

87

75

12

16%

Net Realized Gain (Loss)

15

4

11

275%

(270)

(310)

40

13%

Gross Unrealized Appreciation of Private Finance

   Portfolio Investments

103

152

(49)

(32%)

412

403

9

2%

Gross Unrealized Depreciation of Private Finance

   Portfolio Investments

(101)

(111)

10

9%

(218)

(428)

210

49%

Net Unrealized Appreciation (Depreciation) of

   Private Finance Portfolio Investments

2

41

(39)

(95%)

194

(25)

219

NM

Unrealized Appreciation (Depreciation) of

   European Capital Investment

31

65

(34)

(52%)

146

(34)

180

NM

Unrealized (Depreciation) Appreciation of

   European Capital Foreign Currency Translation

(16)

(15)

(1)

(7%)

(19)

3

(22)

NM

Unrealized Appreciation of American Capital Asset

   Management, LLC

-

1

(1)

(100%)

329

280

49

18%

Unrealized Appreciation (Depreciation) of

   American Capital Mortgage Investment Corp.

-

-

-

-

12

(5)

17

NM

Net Unrealized Appreciation of Structured

   Products

5

20

(15)

(75%)

47

52

(5)

(10%)

Reversal of Prior Period Net Unrealized

   (Appreciation) Depreciation Upon Realization

-

(3)

3

100%

296

375

(79)

(21%)

Net Unrealized Appreciation of Portfolio Company

   Investments

22

109

(87)

(80%)

1,005

646

359

56%

Foreign Currency Translation - European Capital

35

27

8

30%

26

(29)

55

NM

Foreign Currency Translation - Other

1

2

(1)

(50%)

1

(2)

3

NM

Derivative Agreements

3

6

(3)

(50%)

7

8

(1)

(13%)

Reversal of Prior Period Net Unrealized

   Depreciation Upon Realization of Terminated

   Swaps

-

-

-

-

55

5

50

NM

Tax (Provision) Benefit

(36)

(20)

(16)

(80%)

(82)

208

(290)

NM

Net Unrealized Appreciation of

   Investments

25

124

(99)

(80%)

1,012

836

176

21%

Net Gains, Losses, Appreciation and

   Depreciation

$                40

$           128

$              (88)

(69%)

$              742

$           526

$              216

41%

Other Financial Data

NAV per Share

$           17.84

$        17.39

$             0.45

3%

$           17.84

$        13.87

$             3.97

29%

Debt at Cost

$              775

$           803

$              (28)

(3%)

$              775

$        1,251

$            (476)

(38%)

Debt at Fair Value

$              781

$           797

$              (16)

(2%)

$              781

$        1,210

$            (429)

(35%)

Market Capitalization

$           3,659

$        3,509

$              150

4%

$           3,659

$        2,215

$           1,444

65%

Total Enterprise Value(4)

$           4,103

$        4,008

$                95

2%

$           4,103

$        3,262

$              841

26%

Asset Coverage Ratio

801 %

769 %

801 %

465 %

Debt to Equity Ratio

0.1x

0.1x

0.1x

0.3x

Credit Quality

Weighted Average Effective Interest Rate on

   Private Finance Debt Investments at Period End

11.4 %

11.1 %

11.4 %

10.7 %

Loans on Non-Accrual at Cost

$              260

$           370

$            (110)

(30%)

$              260

$           419

$            (159)

(38%)

Loans on Non-Accrual at Fair Value

$              177

$           252

$              (75)

(30%)

$              177

$           219

$              (42)

(19%)

Non-Accrual Loans at Cost as a Percentage of

   Total Loans at Cost

12.9%

17.4%

12.9%

15.3%

Non-Accrual Loans at Fair Value as a Percentage

   of Total Loans at Fair Value

9.0%

12.5 %

9.0%

8.7 %

Non-Accruing Loans at Fair Value as a Percentage 

   of Non-Accruing Loans at Cost

68.1%

68.1%

68.1%

52.3%

Past Due Loans at Cost

$               53

$               9

$                44

489%

$                53

$             22

$                31

141%

Debt to Equity Conversions at Cost

$                  -

$               2

$                (2)

(100%)

$                60

$           153

$              (93)

(61%)

Return on Average Equity

LTM Net Operating Income Return on Average

   Shareholders' Equity

7.7 %

11.1 %

7.7 %

10.7 %

LTM Net Realized Earnings Return on Average

   Shareholders' Equity

2.5 %

3.5 %

2.5 %

3.3 %

LTM Net Earnings Return on Average

   Shareholders' Equity

22.1 %

33.0 %

22.1 %

23.3 %

Current Quarter Annualized Net Operating Income

   Return on Average Shareholders' Equity

6.1 %

5.3 %

6.1 %

21.4 %

Current Quarter Annualized Net Realized Earnings

   Return on Average Shareholders' Equity

7.3 %

5.7 %

7.3 %

12.8 %

Current Quarter Annualized Net Earnings Return

   on Average Shareholders' Equity

9.1 %

14.7 %

9.1 %

55.4 %

NM = Not meaningful.

(1) Includes total assets of American Capital Agency Corp., American Capital Mortgage Investment Corp., European Capital, American Capital Equity I, American Capital Equity II, ACAS CLO 2007-1 and ACAS CLO 2012-1, less        American Capital's investment in the funds. 

(2) Represents third-party earning assets under management from which the associated base management fees are calculated.

(3) Represents total assets of American Capital less American Capital's investment in the funds as well as third-party earning assets under management from which the associated base management fees are calculated.

(4) Enterprise value is calculated as debt at cost plus market capitalization less cash and cash equivalents on hand.

 

Static Pool (1)

Portfolio Statistics ($ in millions, unaudited)

Pre-2001 -

2012 Static

Pools

Aggregate

Aggregate

Pre-

2001

2001

2002

2003

2004

2005

2006

2007

2008

2011

2012

IRR at Fair Value of All Investments(2)

8.1 %

18.1 %

7.6 %

20.4 %

13.6 %

12.7 %

10.8 %

(3.0%)

7.9 %

23.5 %

NM

8.8 %

IRR of Exited Investments(3)

9.2 %

18.6 %

9.7 %

20.0 %

15.8 %

22.1 %

8.4 %

(5.2%)

3.7 %

32.5 %

NM

10.2 %

IRR at Fair Value of Equity Investments Only(2)(4)(5)

6.2 %

46.4 %

11.2 %

27.6 %

26.2 %

11.5 %

14.9 %

(7.5%)

19.8 %

30.8 %

NM

11.1 %

IRR of Exited Equity Investments Only(3)(4)(5)

10.9 %

46.4 %

21.4 %

36.7 %

45.8 %

50.2 %

11.5 %

9.5 %

35.3 %

35.1 %

N/A

26.6 %

IRR at Fair Value of All One Stop Buyout® Investments(2)

1.9 %

17.1 %

9.9 %

18.9 %

16.0 %

28.4 %

13.0 %

2.7 %

15.4 %

—%

NM

13.7 %

IRR at Fair Value of Current One Stop Buyout® Investments(2)

10.0 %

N/A

(2.6%)

17.6 %

5.6 %

24.3 %

11.9 %

0.4 %

15.5 %

—%

NM

11.3 %

IRR of Exited One Stop Buyout® Investments(3)

1.4 %

17.1 %

14.7 %

16.3 %

21.4 %

30.8 %

11.9 %

14.8 %

13.9 %

N/A

N/A

15.2 %

Committed Investments(7)

$1,065

$376

$966

$1,437

$2,267

$4,943

$5,297

$7,501

$1,045

$137

$419

$25,453

Total Exits and Prepayments of Committed Investments(7)

$999

$367

$836

$1,267

$2,081

$2,611

$4,384

$5,275

$503

$50

$2

$18,375

Total Interest, Dividends and Fees Collected

$400

$143

$344

$448

$702

$1,259

$1,375

$1,358

$355

$19

$12

$6,415

Total Net Realized (Loss) Gain on Investments

$(135)

$(23)

$(118)

$143

$18

$375

$(305)

$(1,137)

$(104)

$10

$ —

$(1,276)

Current Cost of Investments

$75

$4

$110

$166

$218

$2,038

$682

$1,850

$355

$60

$284

$5,842

Current Fair Value of Investments

$27

$ —

$62

$343

$145

$2,147

$792

$1,096

$320

$61

$272

$5,265

Current Fair Value of Investments as a % of Total Investments at

   Fair Value

0.5 %

—%

1.2 %

6.5 %

2.7 %

40.8 %

15.0 %

20.8 %

6.1 %

1.2 %

5.2 %

100.0 %

Net Unrealized (Depreciation) Appreciation

$(48)

$(4)

$(48)

$177

$(73)

$109

$110

$(754)

$(35)

$1

$(12)

$(577)

Non-Accruing Loans at Cost

$ —

$ —

$47

$ —

$10

$58

$48

$75

$22

$ —

$ —

$260

Non-Accruing Loans at Fair Value

$ —

$ —

$22

$ —

$6

$53

$16

$49

$31

$ —

$ —

$177

Equity Interest at Fair Value(4)

$ —

$ —

$ —

$305

$82

$1,743

$411

$348

$96

$5

$71

$3,061

Debt to Adjusted EBITDA(8)(9)(12)(13)(16)

6.5

N/A

13.2

2.8

3.4

1.8

4.5

6.4

6.4

5.1

4.6

4.3

Interest Coverage(10)(12)(13)(16)

1.9

N/A

1.2

3.4

3.9

0.9

2.7

1.9

2.3

1.9

3.0

1.9

Debt Service Coverage(11)(12)(13)(16)

1.8

N/A

1.2

3.1

3.5

0.6

1.7

1.7

2.1

1.6

2.4

1.5

Average Age of Companies(13)(16)

43 yrs

 N/A 

29 yrs

41 yrs

40 yrs

17 yrs

37 yrs

29 yrs

19 yrs

26 yrs

19 yrs

26 yrs

Diluted Ownership Percentage(4)(17)

62 %

—%

—%

56 %

73 %

49 %

48 %

61 %

58 %

26 %

90 %

53 %

Average Revenue(13)(14)(16)

$48

$ —

$42

$220

$47

$162

$154

$189

$87

$168

$190

$162

Average Adjusted EBITDA(8)(13)(16)

$5

$ —

$8

$48

$13

$65

$41

$32

$21

$45

$47

$44

Total Revenue(13)(14)

$81

$225

$78

$1,513

$243

$1,319

$3,043

$4,553

$1,209

$354

$2,913

$15,531

Total Adjusted EBITDA(8)(13)

$7

$2

$10

$204

$40

$296

$431

$628

$213

$108

$576

$2,515

% of Senior Loans(12)(13)(15)

75 %

—%

77 %

—%

39 %

32 %

31 %

51 %

29 %

27 %

69 %

43 %

% of Loans with Lien(12)(13)(15)

100 %

—%

100 %

100 %

100 %

84 %

90 %

85 %

67 %

27 %

100 %

67 %

Majority Owned Portfolio Companies ("MOPC")(6)

Pre-2001 - 2012

Static Pools

Aggregate

Total Number of MOPC

45

Total Revenue(14)

$3,299

Total Gross Profit(14)

$1,691

Total Adjusted EBITDA(8)

$768

Total Capital Expenditures(14)

$118

Total Current ACAS Investment in MOPC at Fair Value

$3,384

Total Current ACAS Investment in MOPC at Cost Basis

$3,178

Total Current ACAS Debt Investment in MOPC at Fair Value

$1,207

Total Current ACAS Debt Investment in MOPC at Cost Basis

$1,260

Diluted Ownership Percentage of ACAS in MOPC(17)

72 %

Total Cash(18)

$212

Total Assets(18)

$4,506

Total Debt(18)

$3,895

Total Third-party Debt at Cost(18)

$2,164

Total Shareholders' Equity(18)(19)

$3,075

NM - Not meaningful

(1)   Static pool classification is based on the year the initial investment was made. Subsequent add-on investments are included in the static pool year of the original investment. There were no investments made in 2009 and 2010 static pool years.

(2)   Assumes investments are exited at current fair value.

(3)   Includes fully exited investments of existing portfolio companies.

(4)   Excludes investments in Structured Products.

(5)   Excludes equity investments that are the result of conversions of debt and warrants received with the issuance of debt.

(6)   MOPC investments represent portfolio company investments in which American Capital, or its affiliates, have a fully diluted ownership percentage of 50% or more or have over 50% board representation at the portfolio company. Excludes         our investment in European Capital.

(7)   Represents committed investment amount at the time of origination.

(8)   Adjusted EBITDA may reflect certain adjustments to the reported EBITDA of a portfolio company for non-recurring, unusual or infrequent items or other pro-forma items or events to normalize current earnings which a buyer may consider in         a change in control transactions. These adjustments may be material and are highly subjective in nature. Portfolio company reported EBITDA is for the most recently available twelve months, or when appropriate, the  forecasted twelve         months or current annualized run-rate.

(9)   Debt, which represents the debt and other liabilities senior to ACAS and the total of ACAS's debt in each portfolio company's debt capitalization, divided by Adjusted EBITDA. For portfolio companies with a nominal Adjusted EBITDA amount,         the portfolio company's maximum debt leverage is limited to 15 times Adjusted EBITDA.

(10) Adjusted EBITDA divided by the total cash interest expense of the portfolio company during the most recent twelve month period, or when appropriate as a result of a new debt capital structure, the forecasted twelve months.

(11) Adjusted EBITDA divided by the total scheduled principal amortization and total cash interest expense of the portfolio company during the most recent twelve month period, or when appropriate, the forecasted twelve months.

(12) Excludes investments in which we own only equity.

(13) Excludes investments in Structured Products and managed funds.

(14) For the most recent twelve months, or when appropriate, the forecasted twelve months.

(15) As a percentage of our total debt investments.

(16) Weighted average based on fair value.

(17) Weighted average based on fair value of equity investments.

(18) As of the most recent month end available.

(19) Calculated as the estimated enterprise value of the MOPC less the cost basis of any outstanding debt of the MOPC.

 

SHAREHOLDER CALL American Capital invites shareholders, analysts and interested parties to attend the shareholder call on February 11, 2013 at 11:00 am ET.  The shareholder call can be accessed through a live webcast, free of charge, at www.AmericanCapital.com or by dialing (888) 317-6016 (U.S. domestic) or (412) 317-6016 (international).  All callers are asked to dial in 10-15 minutes prior to the call to register.  Please advise the operator you are dialing in for the American Capital shareholder call.  Callers who do not plan on asking a question and have access to the internet are asked to utilize the webcast. 

A slide presentation will accompany the shareholder call and will be available at www.AmericanCapital.com.  Select the Q4 2012 Earnings Presentation link to download and print the presentation in advance of the shareholder call.

An archived audio replay of the shareholder call combined with the slide presentation will be made available on our website after the call on February 11, 2013.  In addition, there will be a phone recording available from 2:00 pm ET February 11, 2013 until 9:00 am ET February 26, 2013.  If you are interested in hearing the recording of the presentation, please dial (877) 344-7529 (U.S. domestic) or (412) 317-0088 (international).  The access code for both domestic and international callers is 10024416.

ABOUT AMERICAN CAPITAL American Capital is a publicly traded private equity firm and global asset manager.  American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products.  American Capital manages $18.6 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $117 billion of total assets under management (including levered assets). Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC) with approximately $10 billion market capitalization and American Capital Mortgage Investment Corp. (Nasdaq: MTGE) with approximately $850 million market capitalization.  From its eight offices in the U.S. and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million.  For further information, please refer to www.AmericanCapital.com.

ADDITIONAL INFORMATION
Persons considering an investment in American Capital should consider the investment objectives, risks and charges and expenses of the Company carefully before investing.  Such information and other information about the Company is available in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q and in the prospectuses the Company issues from time to time in connection with its offering of securities.  Such materials are filed with the Securities and Exchange Commission ("SEC") and copies are available on the SEC's website, www.sec.gov.  Prospective investors should read such materials carefully before investing.  Performance data quoted above represents past performance of American Capital.  Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate.  Consequently, an investor's shares, when sold, may be worth more or less than their original cost.  Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements.  Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the Company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions.  Actual results could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation, the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions or changes in the conditions of the industries in which American Capital has made investments.  Certain factors that could cause actual results to differ materially from those contained in the forward-looking statements are included in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and the Company's subsequent periodic filings. Copies are available on the SEC's website at www.sec.gov.  Forward-looking statements are made as of the date of this press release, and are subject to change without notice.  We disclaim any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.

CONTACT:
Investors - (301) 951-5917
Media - (301) 968-9400

 

SOURCE American Capital, Ltd.



RELATED LINKS

http://www.americancapital.com