American Capital Reports First Quarter 2011 Net Earnings of $434 Million, or $1.21 Per Diluted Share and Net Operating Income of $83 Million, or $0.23 Per Diluted Share
BETHESDA, Md., May 3, 2011 /PRNewswire/ -- American Capital, Ltd. ("ACAS" or the "Company") (Nasdaq: ACAS) announced net operating income ("NOI") for the quarter ended March 31, 2011, of $83 million, or $0.23 per diluted share. Net earnings for the quarter were $434 million, or $1.21 per diluted share. Net asset value ("NAV") per share increased 12%, or $1.26 per share, from December 31, 2010 to $11.97 as of March 31, 2011.
Q1 2011 FINANCIAL SUMMARY
- $83 million NOI
- $16 million, or 24%, increase over Q4 2010
- Includes $15 million, or $0.04 per diluted share, of non-recurring income related to the removal of investments from non-accrual status
- $354 million net unrealized appreciation of investments
- $(22) million, or 6%, decrease over Q4 2010
- $80 million net realized earnings (net earnings less net unrealized appreciation)
- $75 million improvement over Q4 2010
- $434 million net earnings
- $53 million, or 14%, improvement over Q4 2010
- 44.6% annualized return on average equity ("ROE")
- $269 million of cash proceeds from realizations
- $517 million of debt repaid
- $11.97 NAV per share
- $1.26 per share, or 12%, increase over Q4 2010
"Our book value per share grew by $1.26 for the quarter to $11.97, delivering a 45% annualized return on equity for the quarter," said Malon Wilkus, Chairman and Chief Executive Officer. "We have now experienced seven consecutive quarters of net unrealized appreciation on our investments. We believe that the performance of our portfolio will continue to improve as the economy continues to recover. We remain focused on improving our balance sheet and originating high quality investment opportunities."
PORTFOLIO VALUATION
For the quarter ended March 31, 2011, net unrealized appreciation of investments totaled $354 million. The primary components of the net unrealized appreciation were:
- $133 million unrealized appreciation in American Capital's investment in European Capital, excluding any impact of foreign currency translation on European Capital's cost basis or cumulative unrealized depreciation, primarily due to an increase in European Capital's NAV and a decrease in the implied discount to its NAV,
- The equity investment in European Capital is valued at $780 million, compared to the $970 million fair value of European Capital's NAV;
- $75 million net unrealized appreciation from American Capital's private finance portfolio as a result of improved portfolio company performance and improved multiples;
- $60 million unrealized appreciation in American Capital's investment in American Capital, LLC, its alternative fund management company, primarily due to an increase in its funds under management; and
- $39 million net unrealized appreciation from structured products investments as a result of improved cash flow projections and improved pricing of comparable transactions.
"During the quarter, we followed up on our success in 2010 and continued to strengthen our balance sheet," said John Erickson, Chief Financial Officer. "We paid down an additional $517 million of debt, including $300 million of secured debt due 2013 and improved our asset coverage ratio to 336%. We continued to see strong liquidity in our portfolio during the quarter and focused on maximizing the value of our investments through organic growth and acquisitions to generate shareholder value. Additionally, we are adding shareholder value by growing our asset management business. Our assets under management grew by $14.6 billion as American Capital Agency Corp. raised $1.8 billion of equity and $13 billion of financing during the quarter."
PORTFOLIO LIQUIDITY AND PERFORMANCE
In the first quarter of 2011, $269 million of cash proceeds were received from realizations of portfolio investments and exits. The Company made $152 million in new committed investments during the quarter. The weighted average effective interest rate on the Company's private finance debt investments as of March 31, 2011, was 10.3%, which was 10 basis points higher than the December 31, 2010 rate of 10.2%.
As of March 31, 2011, loans with a fair value of $227 million were on non-accrual, representing 7.7% of total loans at fair value, compared to $239 million fair value of non-accrual loans, representing 7.8% of total loans at fair value as of December 31, 2010.
"The credit quality of our portfolio continued to improve this quarter," noted Gordon O'Brien, President, Specialty Finance and Operations. "Our past due accruing loans declined to $3 million as of quarter end and we are seeing continued improvement in the amount of non-accruing loans in our portfolio. As the economy continues to improve, we expect to see the credit quality of our portfolio continue to improve."
AMERICAN CAPITAL, LTD
CONSOLIDATED BALANCE SHEETS
As of March 31, 2011, December 31, 2010 and March 31, 2010
(in millions, except per share amounts)
Q1 2011
Versus
Q4 2010
Q1 Q4 ---------
2011 2010 $ %
---- ---- -- --
(unaudited)
Assets
Investments at fair value (cost of
$7,535, 7,698 and $9,013,
respectively) $5,652 $5,475 $177 3%
Cash and cash equivalents 98 269 (171) (64)%
Restricted cash and cash equivalents 98 185 (87) (47)%
Interest receivable 30 37 (7) (19)%
Derivative agreements at fair value 5 4 1 25%
Other 120 114 6 5%
--- --- -- --
Total assets $6,003 $6,084 $(81) (1)%
====== ====== ==== ==
Liabilities and Shareholders' Equity
Debt $1,742 $2,259 $(517) (23)%
Derivative agreements at fair value 95 106 (11) (10)%
Other 50 51 (1) (2)%
-- -- -- --
Total liabilities 1,887 2,416 (529) (22)%
----- ----- ---- ---
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, 353.8, 352.7 and
292.9 issued and 343.9, 342.4 and 281.3
outstanding, respectively 3 3 - -
Capital in excess of par value 7,145 7,131 14 -
Distributions in excess of net
realized earnings (1,056) (1,136) 80 7%
Net unrealized depreciation of
investments (1,976) (2,330) 354 15%
------ ------ --- --
Total shareholders' equity 4,116 3,668 448 12%
----- ----- --- --
Total liabilities and
shareholders' equity $6,003 $6,084 $(81) (1)%
====== ====== ==== ==
NAV per common share outstanding $11.97 $10.71 $1.26 12%
Q1 2011
Versus
Q1 2010
Q1 -----------
2010 $ %
---- -- --
(unaudited)
Assets
Investments at fair value (cost of
$7,535, 7,698 and $9,013,
respectively) $5,698 $(46) (1)%
Cash and cash equivalents 820 (722) (88)%
Restricted cash and cash equivalents 79 19 24%
Interest receivable 39 (9) (23)%
Derivative agreements at fair value 2 3 150%
Other 119 1 1%
--- - -
Total assets $6,757 $(754) (11)%
====== ===== ===
Liabilities and Shareholders' Equity
Debt $4,026 $(2,284) (57)%
Derivative agreements at fair value 109 (14) (13)%
Other 96 (46) (48)%
-- --- ---
Total liabilities 4,231 (2,344) (55)%
----- ------ ---
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, 353.8, 352.7 and
292.9 issued and 343.9, 342.4 and 281.3
outstanding, respectively 3 - -
Capital in excess of par value 6,745 400 6%
Distributions in excess of net
realized earnings (786) (270) (34)%
Net unrealized depreciation of
investments (3,436) 1,460 42%
------ ----- --
Total shareholders' equity 2,526 1,590 63%
----- ----- --
Total liabilities and
shareholders' equity $6,757 $(754) (11)%
====== ===== ===
NAV per common share outstanding $8.98 $2.99 33%
AMERICAN CAPITAL, LTD
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2011 and 2010
(in millions, except per share data)
(unaudited)
Three Months
Three Months Ended
Ended March 31, 2011
March 31, Versus 2010
--------- ------------
2011 2010 $ %
---- ---- -- --
OPERATING INCOME
Interest and dividend income $146 $150 $(4) (3)%
Fee income 13 14 (1) (7)%
-- -- -- --
Total operating income 159 164 (5) (3)%
--- --- -- --
OPERATING EXPENSES
Interest 29 57 (28) (49)%
Salaries, benefits and stock-based
compensation 36 34 2 6%
General and administrative 11 20 (9) (45)%
Debt refinancing costs - 4 (4) (100)%
- - -- ----
Total operating expenses 76 115 (39) (34)%
-- --- --- ---
NET OPERATING INCOME 83 49 34 69%
-- -- -- --
Net realized gain (loss) on investments
Portfolio company investments 10 (107) 117 NM
Foreign currency transactions - (3) 3 100%
Derivative agreements (13) (16) 3 19%
--- --- -- --
Total net realized loss on
investments (3) (126) 123 98%
-- ---- --- --
NET REALIZED EARNINGS (LOSS) 80 (77) 157 NM
-- --- --- --
Net unrealized appreciation (depreciation)
of investments
Portfolio company investments 256 357 (101) (28)%
Foreign currency translation 85 (87) 172 NM
Derivative agreements 13 (6) 19 NM
-- -- -- --
Total net unrealized
appreciation of investments 354 264 90 34%
--- --- -- --
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ("NET EARNINGS") $434 $187 $247 132%
==== ==== ==== ===
NET OPERATING INCOME PER COMMON SHARE
Basic $0.24 $0.17 $0.07 41%
Diluted $0.23 $0.17 $0.06 35%
NET REALIZED EARNINGS (LOSS) PER
COMMON SHARE
Basic $0.23 $(0.27) $0.50 NM
Diluted $0.22 $(0.27) $0.49 NM
NET EARNINGS PER COMMON SHARE
Basic $1.25 $0.66 $0.59 89%
Diluted $1.21 $0.65 $0.56 86%
WEIGHTED AVERAGE SHARES OF COMMON
STOCK OUTSTANDING
Basic 346.1 283.7 62.4 22%
Diluted 358.4 286.0 72.4 25%
--------------------
NM = Not meaningful.
AMERICAN CAPITAL, LTD
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2011, December 31, 2010
and March 31, 2010
(in millions, except per share data)
(unaudited)
Q1 2011
Versus
Q4 2010
---------
Q1 2011 Q4 2010 $ %
------- ------- -- --
Assets Under Management
American Capital
Assets at Fair
Value $6,003 $6,084 $(81) (1)%
Externally Managed
Assets at Fair
Value(1) 31,205 16,561 14,644 88%
------ ------ ------ --
Total $37,208 $22,645 $14,563 64%
======= ======= ======= ==
New Investments
Senior Debt $138 $35 $103 294%
Preferred Equity - - - -
Mezzanine Debt - - - -
Common Equity 14 - 14 100%
-- - -- ---
Total $152 $35 $117 334%
==== === ==== ===
Direct Investments $14 $- $14 100%
Add-on Financing for
Recapitalizations 25 - 25 100%
Add-on Financing for
Purchase of Debt
of a Portfolio Company - 25 (25) (100)%
Add-on Financing for Working
Capital in Distressed
Situations 16 10 6 60%
Add-on Financing for Growth
and Working Capital 97 - 97 100%
-- - -- ---
Total $152 $35 $117 334%
==== === ==== ===
Realizations
Principal Prepayments $149 $330 $(181) (55)%
Sale of Equity Investments 63 97 (34) (35)%
Loan Syndications and Sales 6 - 6 100%
Payment of Accrued Payment-in-
Kind Notes and Dividends and
Accreted Original Issue
Discounts 43 33 10 30%
Scheduled Principal
Amortization 8 14 (6) (43)%
-- -- -- ---
Total $269 $474 $(205) (43)%
==== ==== ===== ===
Appreciation, Depreciation,
Gain and Loss
Gross Realized Gain $14 $24 $(10) (42)%
Gross Realized Loss (4) (71) 67 94%
-- --- -- --
Portfolio Net Realized
Gain (Loss) 10 (47) 57 NM
Foreign Currency - - - -
Derivative Agreements (13) (15) 2 13%
--- --- - --
Net Realized Loss (3) (62) 59 95%
-- --- -- --
Gross Unrealized Appreciation
Of Private Finance Portfolio
Investments 162 163 (1) (1)%
Gross Unrealized Depreciation
of Private Finance Portfolio
Investments (87) (81) (6) (7)%
--- --- -- --
Net Unrealized Appreciation
of Private Finance Portfolio
Investments 75 82 (7) (9)%
Net Unrealized Appreciation
of European Capital Investment 133 120 13 11%
Net Unrealized (Depreciation)
Appreciation of European
Capital Foreign Currency
Translation (43) 22 (65) NM
Net Unrealized Depreciation
of American Capital Agency Corp. - - - -
Net Unrealized Appreciation of
American Capital, LLC 60 49 11 22%
Net Unrealized Appreciation of
Structured Products 39 54 (15) (28)%
Reversal of Prior Period Net
Unrealized (Depreciation)
Appreciation Upon Realization (8) 61 (69) NM
-- -- --- --
Net Unrealized Appreciation of
Portfolio Investments 256 388 (132) (34)%
Foreign Currency Translation -
European Capital 82 (34) 116 NM
Foreign Currency Translation -
Other 3 (2) 5 NM
Derivative Agreements 13 24 (11) (46)%
-- -- --- ---
Net Unrealized Appreciation of
Investments 354 376 (22) (6)%
--- --- --- --
Net Gains, Losses, Appreciation
and Depreciation $351 $314 $37 12%
==== ==== === ==
Other Financial Data
NAV per Share $11.97 $10.71 $1.26 12%
Debt at Cost $1,742 $2,259 $(517) (23)%
Debt at Fair Value $1,708 $2,208 $(500) (23)%
Market Capitalization $3,408 $2,588 $820 32%
Total Enterprise Value(2) $5,052 $4,579 $473 10%
Asset Coverage Ratio 336% 262%
Debt to Equity Ratio 0.4x 0.6x
Credit Quality
Weighted Average Effective
Interest Rate on Private
Finance Debt Investments at
Period End 10.3% 10.2% 0.1% 1%
Loans on Non-Accrual at Cost $663 $702 $(39) (6)%
Loans on Non-Accrual at
Fair Value $227 $239 $(12) (5)%
Non-Accrual Loans at Cost
as a Percentage of Total
Loans at Cost 19.3% 19.6%
Non-Accrual Loans at Fair
Value as a Percentage of
Total Loans at Fair Value 7.7% 7.8%
Past Due Loans at Cost $3 $58 $(55) (95)%
Debt to Equity Conversions
at Cost $49 $9 $40 444%
Return on Equity
LTM Net Operating Income
Return on Average Equity
at Cost 4.0% 3.4%
LTM Net Realized Loss Return
On Average Equity at Cost (3.6)% (6.2)%
LTM Net Earnings (Loss)
Return on Average Equity at
Fair Value 37.3% 33.5%
Current Quarter Annualized Net
Operating Income Return on
Average Equity at Cost 5.5% 4.5%
Current Quarter Annualized Net
Realized Earnings (Loss)
Return on Average Equity at
Cost 5.3% 0.3%
Current Quarter Annualized Net
Earnings Return on Average
Equity at Fair Value 44.6% 44.0%
Q1 2011
Versus
Q1 2010
------------
Q1 2010 $ %
------- -- --
Assets Under Management
American Capital Assets at Fair
Value $6,757 $(754) (11)%
Externally Managed Assets at Fair
Value(1) 8,271 22,934 277%
----- ------ ---
Total $15,028 $22,180 148%
======= ======= ===
New Investments
Senior Debt $- $138 100%
Preferred Equity 81 (81) (100)%
Mezzanine Debt 1 (1) (100)%
Common Equity 2 12 600%
-- -- ---
Total $84 $68 81%
=== === ==
Direct Investments $- $14 100%
Add-on Financing for
Recapitalizations 75 (50) (67)%
Add-on Financing for Purchase of Debt
of a Portfolio Company - - -
Add-on Financing for Working Capital in
Distressed Situations 8 8 100%
Add-on Financing for Growth and Working
Capital 1 96 NM
-- -- --
Total $84 $68 81%
=== === ==
Realizations
Principal Prepayments $90 $59 66%
Sale of Equity Investments 49 14 29%
Loan Syndications and Sales 15 (9) (60)%
Payment of Accrued Payment-in-Kind
Notes and Dividends and Accreted
Original Issue Discounts 2 41 NM
Scheduled Principal Amortization 7 1 14%
-- -- --
Total $163 $106 65%
==== ==== ==
Appreciation, Depreciation, Gain and Loss
Gross Realized Gain $8 $6 75%
Gross Realized Loss (115) 111 97%
---- --- --
Portfolio Net Realized Gain (Loss) (107) 117 NM
Foreign Currency (3) 3 100%
Derivative Agreements (16) 3 19%
--- - --
Net Realized Loss (126) 123 98%
---- --- --
Gross Unrealized Appreciation of
Private Finance Portfolio
Investments 195 (33) (17)%
Gross Unrealized Depreciation of
Private Finance Portfolio
Investments (84) (3) (4)%
--- -- --
Net Unrealized Appreciation of Private
Finance Portfolio Investments 111 (36) (32)%
Net Unrealized Appreciation of European
Capital Investment 50 83 166%
Net Unrealized (Depreciation)
Appreciation of European Capital
Foreign Currency Translation 69 (112) NM
Net Unrealized Depreciation of American
Capital Agency Corp. (2) 2 100%
Net Unrealized Appreciation of American
Capital, LLC 26 34 131%
Net Unrealized Appreciation of
Structured Products - 39 100%
Reversal of Prior Period Net Unrealized
(Depreciation) Appreciation Upon
Realization 103 (111) NM
--- ---- --
Net Unrealized Appreciation of
Portfolio Investments 357 (101) (28)%
Foreign Currency Translation - European
Capital (85) 167 NM
Foreign Currency Translation - Other (2) 5 NM
Derivative Agreements (6) 19 NM
-- -- --
Net Unrealized Appreciation of
Investments 264 90 34%
--- -- --
Net Gains, Losses, Appreciation and
Depreciation $138 $213 154%
==== ==== ===
Other Financial Data
NAV per Share $8.98 $2.99 33%
Debt at Cost $4,026 $(2,284) (57)%
Debt at Fair Value $3,955 $(2,247) (57)%
Market Capitalization $1,429 $1,979 138%
Total Enterprise Value(2) $4,635 $417 9%
Asset Coverage Ratio 163%
Debt to Equity Ratio 1.6x
Credit Quality
Weighted Average Effective Interest
Rate on Private Finance Debt
Investments at Period End 10.3% - -
Loans on Non-Accrual at Cost $671 $(8) (1)%
Loans on Non-Accrual at Fair Value $263 $(36) (14)%
Non-Accrual Loans at Cost as a
Percentage of Total Loans at Cost 15.4%
Non-Accrual Loans at Fair Value as a
Percentage of Total Loans at Fair
Value 7.0%
Past Due Loans at Cost $47 $(44) (94)%
Debt to Equity Conversions at Cost $77 $(28) (36)%
Return on Equity
LTM Net Operating Income Return on
Average Equity at Cost 1.9%
LTM Net Realized Loss Return on
Average Equity at Cost (11.3)%
LTM Net Earnings (Loss) Return on
Average Equity at Fair Value (7.6)%
Current Quarter Annualized Net
Operating Income Return on Average
Equity at Cost 3.2%
Current Quarter Annualized Net
Realized Earnings (Loss) Return on
Average Equity at Cost (5.1)%
Current Quarter Annualized Net
Earnings Return on Average Equity at
Fair Value 30.7%
--------------------
NM = Not meaningful.
(1) Includes total assets of American Capital Agency Corp., European
Capital, American Capital Equity I, American Capital Equity II and
ACAS CLO-1 less American Capital's investment in the funds.
(2) Enterprise value is calculated as debt at cost plus market
capitalization less cash and cash equivalents on hand.
Static Pool (1)
---------------
Portfolio Statistics
($ in millions,
unaudited) Pre-2001 2001 2002 2003
-------------------- -------- ---- ---- ----
IRR at Fair Value
of All
Investments(2) 8.5% 18.1% 8.2% 20.3%
IRR of Exited
Investments(5) 8.6% 20.3% 9.7% 23.3%
IRR at Fair Value
of Equity
Investments
Only(2)(3)(4) 6.7% 46.3% 11.5% 27.2%
IRR of Exited
Equity Investments
Only(3)(4)(5) 8.6% 48.2% 18.3% 32.2%
Original
Investments and
Commitments $1,065 $376 $962 $1,436
Total Exits and
Prepayments of
Original
Investments and
Commitments $998 $353 $810 $1,098
Total Interest,
Dividends and Fees
Collected $405 $148 $340 $419
Total Net Realized
(Loss) Gain on
Investments $(128) $(4) $(90) $143
Current Cost of
Investments $82 $23 $157 $329
Current Fair Value
of Investments $55 $1 $97 $420
Current Fair Value
of Investments as a
% of Total
Investments at Fair
Value 1.0% - 1.7% 7.4%
Net Unrealized
Appreciation
(Depreciation) $(27) $(22) $(60) $91
Non-Accruing Loans
at Cost $- $15 $27 $-
Non-Accruing Loans
at Fair Value $1 $1 $14 $-
Equity Interest at
Fair Value(3) $31 $- $8 $201
Debt to
EBITDA(6)(7)(8) 3.6 NM 9.5 4.0
Interest
Coverage(6)(8) 3.2 NM 1.7 3.1
Debt Service
Coverage(6)(8) 3.0 NM 1.6 2.9
Average Age of
Companies(8) 33 yrs 26 yrs 34 yrs 41 yrs
Diluted Ownership
Percentage(3) 56% 86% 45% 53%
Average Sales(8)(9) $48 $7 $45 $193
Average
EBITDA(8)(10) $6 $- $9 $40
Average EBITDA
Margin 12.5% (6.8)% 20.6% 20.7%
Total Sales(8)(9) $89 $306 $194 $1,343
Total EBITDA(8)(10) $11 $6 $26 $198
% of Senior
Loans(8)(11) 71% 100% 58% 58%
% of Loans with
Lien(8)(11) 100% 67% 100% 100%
Portfolio Statistics
($ in millions,
unaudited) 2004 2005 2006 2007
-------------------- ---- ---- ---- ----
IRR at Fair Value
of All
Investments(2) 13.5% 10.0% 9.6% (7.4)%
IRR of Exited
Investments(5) 16.8% 21.8% 10.7% (5.9)%
IRR at Fair Value
of Equity
Investments
Only(2)(3)(4) 26.6% 2.2% 14.1% (12.1)%
IRR of Exited
Equity Investments
Only(3)(4)(5) 42.8% 47.2% 18.7% 9.3%
Original
Investments and
Commitments $2,266 $4,740 $5,223 $7,451
Total Exits and
Prepayments of
Original
Investments and
Commitments $1,908 $2,373 $3,743 $4,128
Total Interest,
Dividends and Fees
Collected $637 $1,056 $1,113 $1,060
Total Net Realized
(Loss) Gain on
Investments $28 $279 $(103) $(756)
Current Cost of
Investments $421 $2,050 $1,217 $2,547
Current Fair Value
of Investments $323 $1,701 $1,064 $1,366
Current Fair Value
of Investments as a
% of Total
Investments at Fair
Value 5.7% 30.1% 18.8% 24.2%
Net Unrealized
Appreciation
(Depreciation) $(98) $(349) $(153) $(1,181)
Non-Accruing Loans
at Cost $33 $36 $100 $430
Non-Accruing Loans
at Fair Value $11 $25 $35 $111
Equity Interest at
Fair Value(3) $75 $1,225 $410 $330
Debt to
EBITDA(6)(7)(8) 5.9 5.1 4.7 6.9
Interest
Coverage(6)(8) 2.5 3.4 2.6 1.7
Debt Service
Coverage(6)(8) 1.8 2.4 2.2 1.5
Average Age of
Companies(8) 49 yrs 28 yrs 36 yrs 31 yrs
Diluted Ownership
Percentage(3) 53% 74% 44% 50%
Average Sales(8)(9) $72 $115 $155 $183
Average
EBITDA(8)(10) $16 $22 $37 $36
Average EBITDA
Margin 22.3% 19.0% 24.0% 19.6%
Total Sales(8)(9) $446 $1,319 $4,556 $5,071
Total EBITDA(8)(10) $84 $243 $472 $906
% of Senior
Loans(8)(11) 26% 40% 29% 54%
% of Loans with
Lien(8)(11) 88% 93% 93% 91%
Portfolio Statistics Pre-2001 - 2006 -
($ in millions, 2011 2011
unaudited) 2008 2011 Aggregate Aggregate
-------------------- ---- ---- ---------- ----------
IRR at Fair Value
of All
Investments(2) 7.8% - 7.3% 1.0%
IRR of Exited
Investments(5) 12.9% - 11.8% 3.3%
IRR at Fair Value
of Equity
Investments
Only(2)(3)(4) 13.1% - 6.8% 1.9%
IRR of Exited
Equity Investments
Only(3)(4)(5) 35.7% - 26.2% 16.3%
Original
Investments and
Commitments $1,036 $14 $24,569 $13,724
Total Exits and
Prepayments of
Original
Investments and
Commitments $238 $- $15,649 $8,109
Total Interest,
Dividends and Fees
Collected $275 $- $5,453 $2,448
Total Net Realized
(Loss) Gain on
Investments $(28) $- $(659) $(887)
Current Cost of
Investments $706 $3 $7,535 $4,473
Current Fair Value
of Investments $622 $3 $5,652 $3,055
Current Fair Value
of Investments as a
% of Total
Investments at Fair
Value 11.0% 0.1% 100.0% 54.1%
Net Unrealized
Appreciation
(Depreciation) $(84) $- $(1,883) $(1,418)
Non-Accruing Loans
at Cost $22 $- $663 $552
Non-Accruing Loans
at Fair Value $29 $- $227 $175
Equity Interest at
Fair Value(3) $181 $3 $2,464 $924
Debt to
EBITDA(6)(7)(8) 5.5 - 5.6 5.8
Interest
Coverage(6)(8) 1.7 - 2.4 2.0
Debt Service
Coverage(6)(8) 1.6 - 2.0 1.8
Average Age of
Companies(8) 26 yrs 1 yr 33 yrs 33 yrs
Diluted Ownership
Percentage(3) 42% - 56% 56%
Average Sales(8)(9) $115 $- $145 $159
Average
EBITDA(8)(10) $32 $- $31 $36
Average EBITDA
Margin 28.2% - 20.9% 22.4%
Total Sales(8)(9) $1,381 $- $14,705 $11,008
Total EBITDA(8)(10) $284 $- $2,230 $1,662
% of Senior
Loans(8)(11) 16% - 40% 39%
% of Loans with
Lien(8)(11) 56% - 89% 87%
(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) Excludes investments in structured products.
(4) Excludes equity investments that are the result of conversions of
debt and warrants received with the issuance of debt.
(5) Includes exited securities of existing portfolio companies.
(6) These amounts do not include investments in which we own only
equity.
(7) For portfolio companies with a nominal EBITDA amount, the
portfolio company’s maximum debt leverage is limited to 15 times
EBITDA.
(8) Excludes investments in structured products, managed funds and
American Capital, LLC.
(9) Sales of the most recent twelve months, or when appropriate, the
forecasted twelve months.
(10) EBITDA of the most recent twelve months, or when appropriate, the
forecasted twelve months.
(11) As a percentage of our total debt investments.
SHAREHOLDER CALL
American Capital invites shareholders, analysts and interested parties to attend the shareholder call on May 4, 2011 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 (877) 569-8701 (U.S. domestic) or +1 (574) 941-7382 (international). All callers are asked to dial in 10-15 minutes prior to the call to register. Please provide the operator with the conference ID number 58071190. 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 in advance of the shareholder call. Select the Q1 2011 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 May 4, 2011. In addition, there will be a phone recording available from 2:00 pm ET May 4, 2011 until 11:59 pm ET May 18, 2011. If you are interested in hearing the recording of the presentation, please dial (800) 642-1687 (U.S. domestic) or +1 (706) 645-9291 (international). The access code for both domestic and international callers is 58071190.
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. Founded in 1986, American Capital has $37 billion in assets under management and eight offices in the U.S., Europe and Asia. American Capital and European Capital will consider investment opportunities from $10 million to $300 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, 2010 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.
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