BETHESDA, Md., Aug. 3, 2016 /PRNewswire/ -- American Capital,
Ltd. ("American Capital" or the "Company") (NASDAQ: ACAS) announced
consolidated net operating income ("NOI") before income taxes for
the quarter ended June 30, 2016 of $71
million, or $0.31 per diluted
share, a 6% annualized return on equity. Consolidated NOI for
the quarter ended June 30, 2016 was $46
million, or $0.20 per diluted
share. Consolidated net earnings for the quarter ended
June 30, 2016 was $106 million, or $0.47 per diluted share. As of
June 30, 2016, net asset value ("NAV") per share was
$20.77, a $0.63 per share increase from the March 31,
2016 NAV per share of $20.14.
On May 23, 2016, American Capital
entered into a Merger Agreement (the "Merger Agreement") with Ares
Capital Corporation ("Ares Capital") and certain of its affiliates
under which Ares Capital will acquire American Capital. In
connection with the Merger Agreement, American Capital incurred
non-recurring costs of approximately $13
million in the quarter ended June
30, 2016. American Capital also agreed under the
Merger Agreement to certain restrictions on its operations going
forward, including restrictions on new investment activity, asset
dispositions, personnel actions and certain other matters.
Also on May 23, 2016, American
Capital agreed to the sale of its wholly-owned affiliate American
Capital Mortgage Management, LLC ("ACMM") to American Capital
Agency Corp. ("AGNC") for $562
million. That transaction closed on July 1,
2016.
Q2 2016 CONSOLIDATED FINANCIAL SUMMARY
- $20.77 NAV per share outstanding
- $0.63 per share increase from Q1
2016
- 13% annualized economic return from Q1 2016
- $0.31 NOI before income taxes per
diluted share, or $71 million
- (23%), or $(0.09) per diluted
share, decline over Q1 2016, or $(23)
million
- 6% annualized return on equity
- 8% annualized return on equity, excluding non-recurring costs
- $13 million of transaction costs
associated with the strategic review process
- $0.20 NOI after income taxes per
diluted share, or $46 million
- (35%), or $(0.11) per diluted
share, decline over Q1 2016, or $(28)
million
- $0.47 net earnings per diluted
share, or $106 million
- $0.81 per diluted share
improvement over Q1 2016, or $186
million
- $877 million of cash proceeds
from realizations
- $562 million from American
Capital One Stop Buyouts®
- $222 million from Sponsor Finance
and Other Investments
- $166 million of new committed
investments
- $119 million in Sponsor Finance
Investments
- $46 million in American Capital
Asset Management, LLC ("ACAM")
- 11.5 million shares of American Capital common stock
repurchased for $180 million
- 5.2% of shares outstanding as of March 31, 2016
- $15.74 average price per
share
- Share repurchases terminated in May
2016
- On July 1, 2016, American Capital
repaid in full and terminated its secured term loan facility.
Additionally, American Capital provided notice of its election to
redeem its $350 million senior
unsecured five-year notes ("Private Notes") on September 15, 2016, and irrevocably
deposited with the trustee the aggregate redemption price of
101.625% of the principal amount plus accrued and unpaid interest
required to redeem all of the Private Notes.
PORTFOLIO VALUATION
For the quarter ended June 30, 2016, net unrealized
depreciation, before income taxes, on American Capital's
consolidated investment portfolio totaled $161 million. The primary components of the
net unrealized depreciation were:
- $181 million reversal of prior
period unrealized appreciation associated with net realized gains
on portfolio investments;
- $28 million unrealized
depreciation in ACAM primarily due to the sale of ACMM on
July 1, 2016;
- $23 million net unrealized
depreciation in American Capital One Stop Buyouts® primarily driven
by companies that were in a sales process; partially offset by
- $47 million net unrealized
appreciation in Sponsor Finance and Other Investments primarily
driven by portfolio companies that are currently in a sales process
as well as narrowing investment spreads; and
- $20 million net unrealized
appreciation in Structured Products investments primarily due to
higher dealer marks and increased secondary trading as well as an
increase in loan prices.
PORTFOLIO PERFORMANCE
As of June 30, 2016, the weighted average effective
interest rate on consolidated debt investments at cost was 8.4%, 20
basis points lower than the March 31, 2016 rate of 8.6%.
Excluding the impact of debt investments on non-accrual, the
weighted average effective interest rate on consolidated debt
investments at cost as of June 30, 2016 was 9.6%, 10 basis
points lower than the March 31, 2016 rate of 9.7%. The
weighted average effective interest rate on European Capital's debt
investments at cost as of June 30, 2016 was 1.7%, the same as
the March 31, 2016 rate of 1.7%. Excluding the impact of
debt investments on non-accrual, the weighted average effective
interest rate on European Capital's debt investments at cost as of
June 30, 2016 was 8.2%, 70 basis points higher than the
March 31, 2016 rate of 7.5%.
As of June 30, 2016, excluding European Capital, loans with
a fair value of $129 million were on
non-accrual, representing 6.1% of total loans at fair value,
compared to $115 million, or 5.1%, of
total loans at fair value as of March 31, 2016. The
$14 million increase in the fair
value of loans on non-accrual was generally driven by the addition
of loans placed on non-accrual status offset by exits of loans on
non-accrual status. Excluding European Capital, loans on
non-accrual were valued at 65.8% of cost at the end of the quarter,
a 3.6% increase from the prior quarter. This is an estimate
of the amount the Company expects to recover on non-accruing
loans. Excluding European Capital, the estimated loss on
total loans at cost, defined as net accumulated depreciation on
non-accrual loans plus realized losses on loans during the period,
was $76 million, or 3.4%.
As of June 30, 2016, European Capital loans with a fair
value of $32 million were on
non-accrual, representing 62.7% of European Capital loans at fair
value, compared to $22 million, or
48.9%, of European Capital loans at fair value as of March 31,
2016. The $10 million increase
in the fair value of European Capital loans on non-accrual was
generally driven by an increase in fair value of existing loans on
non-accrual. Total European Capital loans on non-accrual were
valued at 33.7% of cost at the end of the quarter, an 11.0%
increase from the prior quarter. The estimated loss on total
European Capital loans at cost was $63
million, or 52.5%.
SHARE REPURCHASE PROGRAM
American Capital's previously announced share repurchase
program, which began in the third quarter of 2015, contemplated the
purchase of $600 million to $1 billion of shares of the
Company's common stock. Shortly before execution of the
Merger Agreement, the Board of Directors suspended the share
repurchase program, and under the Merger Agreement, the Company
agreed to make no further repurchases.
Prior to suspending repurchases, American Capital during the
second quarter made open market purchases of 11.5 million shares of
its common stock at an average price of $15.74 per share for an aggregate price of
$180 million. These shares
constituted 5.2% of the Company's outstanding shares as of
March 31, 2016. The Company purchased a total
of $910 million of its common stock under this share
repurchase program. Since August
2011, American Capital has made open market purchases of
171.2 million shares, or $2.2
billion, of American Capital common stock at an average
price of $12.83 per share. This
represents 50% of shares outstanding immediately prior to
August 2011.
|
AMERICAN CAPITAL,
LTD.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
As of June 30,
2016, March 31, 2016 and December 31, 2015
|
|
(in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
|
|
Q1
|
|
Q2 2016 Versus
Q1 2016
|
|
Q4
|
|
Q2 2016 Versus
Q4 2015
|
|
2016
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
$
|
|
%
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at fair
value (cost of $4,201, $4,725 and $4,905, respectively)
|
$
4,062
|
|
$
4,737
|
|
$
(675)
|
|
(14%)
|
|
$
4,998
|
|
$
(936)
|
|
(19%)
|
|
Cash and cash
equivalents
|
881
|
|
364
|
|
517
|
|
142%
|
|
483
|
|
398
|
|
82%
|
|
Restricted cash and
cash equivalents
|
33
|
|
32
|
|
1
|
|
3%
|
|
46
|
|
(13)
|
|
(28%)
|
|
Interest and dividend
receivable
|
37
|
|
54
|
|
(17)
|
|
(31%)
|
|
48
|
|
(11)
|
|
(23%)
|
|
Deferred tax asset,
net
|
235
|
|
212
|
|
23
|
|
11%
|
|
198
|
|
37
|
|
19%
|
|
Trade date settlement
receivable
|
3
|
|
32
|
|
(29)
|
|
(91%)
|
|
373
|
|
(370)
|
|
(99%)
|
|
Other
|
83
|
|
84
|
|
(1)
|
|
(1%)
|
|
94
|
|
(11)
|
|
(12%)
|
|
Total
assets
|
$
5,334
|
|
$
5,515
|
|
$
(181)
|
|
(3%)
|
|
$
6,240
|
|
$
(906)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt, net
|
$
784
|
|
$
887
|
|
$
(103)
|
|
(12%)
|
|
$
1,253
|
|
$
(469)
|
|
(37%)
|
|
Other
|
132
|
|
148
|
|
(16)
|
|
(11%)
|
|
165
|
|
(33)
|
|
(20%)
|
|
Total
liabilities
|
916
|
|
1,035
|
|
(119)
|
|
(11%)
|
|
1,418
|
|
(502)
|
|
(35%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 215.1, 227.6 and
247.3 issued and 212.7, 222.4 and 242.6 outstanding,
respectively
|
2
|
|
2
|
|
—
|
|
—%
|
|
2
|
|
—
|
|
—%
|
|
Capital in excess of
par value
|
5,398
|
|
5,561
|
|
(163)
|
|
(3%)
|
|
5,847
|
|
(449)
|
|
(8%)
|
|
Cumulative
translation adjustment, net of tax
|
(98)
|
|
(93)
|
|
(5)
|
|
(5%)
|
|
(101)
|
|
3
|
|
3%
|
|
Distributions in
excess of net realized earnings
|
(640)
|
|
(877)
|
|
237
|
|
27%
|
|
(879)
|
|
239
|
|
27%
|
|
Net unrealized
depreciation of investments
|
(244)
|
|
(113)
|
|
(131)
|
|
(116%)
|
|
(47)
|
|
(197)
|
|
(419%)
|
|
Total shareholders'
equity
|
4,418
|
|
4,480
|
|
(62)
|
|
(1%)
|
|
4,822
|
|
(404)
|
|
(8%)
|
|
Total liabilities and
shareholders' equity
|
$
5,334
|
|
$
5,515
|
|
$
(181)
|
|
(3%)
|
|
$
6,240
|
|
$
(906)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV per common share
outstanding
|
$
20.77
|
|
$
20.14
|
|
$
0.63
|
|
3%
|
|
$
19.88
|
|
$
0.89
|
|
4%
|
|
AMERICAN CAPITAL,
LTD.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Three Months Ended
June 30, 2016, March 31, 2016 and June 30, 2015
|
|
(in millions,
except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
Q2 2016 Versus
Q1 2016
|
|
|
|
Q2 2016 Versus
Q2 2015
|
|
|
Q2
2016
|
|
Q1
2016
|
|
$
|
|
%
|
|
Q2
2015
|
|
$
|
|
%
|
|
OPERATING
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income
|
|
$
121
|
|
$
149
|
|
$
(28)
|
|
(19%)
|
|
$
151
|
|
$
(30)
|
|
(20%)
|
|
Fee income
|
|
21
|
|
13
|
|
8
|
|
62%
|
|
17
|
|
4
|
|
24%
|
|
Total operating
revenue
|
|
142
|
|
162
|
|
(20)
|
|
(12%)
|
|
168
|
|
(26)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
15
|
|
15
|
|
—
|
|
—%
|
|
20
|
|
(5)
|
|
(25%)
|
|
Salaries, benefits
and stock-based compensation
|
|
27
|
|
34
|
|
(7)
|
|
(21%)
|
|
32
|
|
(5)
|
|
(16%)
|
|
European Capital
management fees
|
|
2
|
|
2
|
|
—
|
|
—%
|
|
4
|
|
(2)
|
|
(50%)
|
|
General and
administrative
|
|
27
|
|
17
|
|
10
|
|
59%
|
|
15
|
|
12
|
|
80%
|
|
Total operating
expenses
|
|
71
|
|
68
|
|
3
|
|
4%
|
|
71
|
|
—
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET OPERATING
INCOME BEFORE INCOME TAXES
|
|
71
|
|
94
|
|
(23)
|
|
(24%)
|
|
97
|
|
(26)
|
|
(27%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
(25)
|
|
(20)
|
|
(5)
|
|
(25%)
|
|
(30)
|
|
5
|
|
17%
|
|
NET OPERATING
INCOME
|
|
46
|
|
74
|
|
(28)
|
|
(38%)
|
|
67
|
|
(21)
|
|
(31%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio company
investments
|
|
191
|
|
(83)
|
|
274
|
|
NM
|
|
(284)
|
|
475
|
|
NM
|
|
Foreign currency
transactions
|
|
(4)
|
|
—
|
|
(4)
|
|
(100%)
|
|
3
|
|
(7)
|
|
NM
|
|
Derivative agreements
and other
|
|
—
|
|
(17)
|
|
17
|
|
100%
|
|
46
|
|
(46)
|
|
(100%)
|
|
Tax
benefit
|
|
4
|
|
12
|
|
(8)
|
|
(67%)
|
|
12
|
|
(8)
|
|
(67%)
|
|
Total net realized
gain (loss)
|
|
191
|
|
(88)
|
|
279
|
|
NM
|
|
(223)
|
|
414
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
appreciation (depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio company
investments
|
|
(161)
|
|
(76)
|
|
(85)
|
|
(112%)
|
|
140
|
|
(301)
|
|
NM
|
|
Foreign currency
translation
|
|
(11)
|
|
(8)
|
|
(3)
|
|
(38%)
|
|
13
|
|
(24)
|
|
NM
|
|
Derivative agreements
and other
|
|
(6)
|
|
13
|
|
(19)
|
|
NM
|
|
65
|
|
(71)
|
|
NM
|
|
Tax
benefit
|
|
47
|
|
5
|
|
42
|
|
840%
|
|
—
|
|
47
|
|
100%
|
|
Total net unrealized
(depreciation) appreciation
|
|
(131)
|
|
(66)
|
|
(65)
|
|
(98%)
|
|
218
|
|
(349)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ("NET EARNINGS
(LOSS)")
|
|
$
106
|
|
$
(80)
|
|
$
186
|
|
NM
|
|
$
62
|
|
$
44
|
|
71%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET OPERATING
INCOME BEFORE INCOME TAXES PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.33
|
|
$
0.40
|
|
$
(0.07)
|
|
(18%)
|
|
$
0.36
|
|
$
(0.03)
|
|
(8%)
|
|
Diluted
|
|
$
0.31
|
|
$
0.40
|
|
$
(0.09)
|
|
(23%)
|
|
$
0.34
|
|
$
(0.03)
|
|
(9%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET OPERATING
INCOME PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.21
|
|
$
0.31
|
|
$
(0.10)
|
|
(32%)
|
|
$
0.25
|
|
$
(0.04)
|
|
(16%)
|
|
Diluted
|
|
$
0.20
|
|
$
0.31
|
|
$
(0.11)
|
|
(35%)
|
|
$
0.24
|
|
$
(0.04)
|
|
(17%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET REALIZED GAIN
(LOSS) PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.09
|
|
$
(0.06)
|
|
$
1.15
|
|
NM
|
|
$
(0.57)
|
|
$
1.66
|
|
NM
|
|
Diluted
|
|
$
1.05
|
|
$
(0.06)
|
|
$
1.11
|
|
NM
|
|
$
(0.55)
|
|
$
1.60
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
(LOSS) PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.49
|
|
$
(0.34)
|
|
$
0.83
|
|
NM
|
|
$
0.23
|
|
$
0.26
|
|
113%
|
|
Diluted
|
|
$
0.47
|
|
$
(0.34)
|
|
$
0.81
|
|
NM
|
|
$
0.22
|
|
$
0.25
|
|
114%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OF COMMON STOCK OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
216.6
|
|
235.0
|
|
(18.4)
|
|
(8%)
|
|
272.4
|
|
(55.8)
|
|
(20%)
|
|
Diluted
|
|
226.7
|
|
235.0
|
|
(8.3)
|
|
(4%)
|
|
283.4
|
|
(56.7)
|
|
(20%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________________
NM = Not meaningful
|
|
AMERICAN CAPITAL,
LTD.
|
|
OTHER FINANCIAL
INFORMATION
|
|
Three Months Ended
June 30, 2016, March 31, 2016 and June 30, 2015
|
|
(in millions,
except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2016 Versus
Q1 2016
|
|
|
|
Q2 2016 Versus
Q2 2015
|
|
Q2
2016
|
|
Q1
2016
|
|
$
|
|
%
|
|
Q2
2015
|
|
$
|
|
%
|
|
Assets Under
Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Capital
Total Assets at Fair Value
|
$
5,334
|
|
$
5,515
|
|
$
(181)
|
|
(3%)
|
|
$
8,085
|
|
$
(2,751)
|
|
(34%)
|
|
Externally Managed
Assets at Fair Value(1)
|
70,294
|
|
71,925
|
|
(1,631)
|
|
(2%)
|
|
73,389
|
|
(3,095)
|
|
(4%)
|
|
Total
|
$
75,628
|
|
$
77,440
|
|
$
(1,812)
|
|
(2%)
|
|
$
81,474
|
|
$
(5,846)
|
|
(7%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Earning
Assets Under Management(2)
|
$
13,922
|
|
$
14,168
|
|
$
(246)
|
|
(2%)
|
|
$
14,667
|
|
$
(745)
|
|
(5%)
|
|
Total Earning Assets
Under Management(3)
|
$
19,256
|
|
$
19,683
|
|
$
(427)
|
|
(2%)
|
|
$
22,752
|
|
$
(3,496)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Lien
Senior Debt
|
$
-
|
|
$
50
|
|
$
(50)
|
|
(100%)
|
|
$
393
|
|
$
(393)
|
|
(100%)
|
|
Second Lien
Senior Debt
|
119
|
|
52
|
|
67
|
|
129%
|
|
94
|
|
25
|
|
27%
|
|
Mezzanine
Debt
|
—
|
|
—
|
|
—
|
|
—%
|
|
4
|
|
(4)
|
|
(100%)
|
|
Preferred
Equity
|
1
|
|
9
|
|
(8)
|
|
(89%)
|
|
89
|
|
(88)
|
|
(99%)
|
|
Common
Equity
|
46
|
|
21
|
|
25
|
|
119%
|
|
241
|
|
(195)
|
|
(81%)
|
|
Structured
Products
|
—
|
|
—
|
|
—
|
|
—%
|
|
155
|
|
(155)
|
|
(100%)
|
|
Total by Security
Type
|
$
166
|
|
$
132
|
|
$
34
|
|
26%
|
|
$
976
|
|
$
(810)
|
|
(83%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sponsor Finance and
Other Investments
|
$
97
|
|
$
48
|
|
$
49
|
|
102%
|
|
$
129
|
|
$
(32)
|
|
(25%)
|
|
Investments in ACAM
and Fund Development
|
46
|
|
33
|
|
13
|
|
39%
|
|
28
|
|
18
|
|
64%
|
|
European
Capital
|
1
|
|
7
|
|
(6)
|
|
(86%)
|
|
179
|
|
(178)
|
|
(99%)
|
|
Structured
Products
|
—
|
|
—
|
|
—
|
|
—%
|
|
155
|
|
(155)
|
|
(100%)
|
|
Senior Floating Rate
Loans
|
—
|
|
—
|
|
—
|
|
—%
|
|
300
|
|
(300)
|
|
(100%)
|
|
Add-on Financing for
Acquisitions
|
22
|
|
4
|
|
18
|
|
450%
|
|
—
|
|
22
|
|
100%
|
|
Add-on Financing for
ACE Buybacks
|
—
|
|
—
|
|
—
|
|
—%
|
|
145
|
|
(145)
|
|
(100%)
|
|
Add-on Financing for
Growth and Working Capital
|
—
|
|
27
|
|
(27)
|
|
(100%)
|
|
36
|
|
(36)
|
|
(100%)
|
|
Add-on Financing for
Distressed Situations
|
—
|
|
13
|
|
(13)
|
|
(100%)
|
|
4
|
|
(4)
|
|
(100%)
|
|
Total by
Use
|
$
166
|
|
$
132
|
|
$
34
|
|
26%
|
|
$
976
|
|
$
(810)
|
|
(83%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realizations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Investments
|
$
447
|
|
$
32
|
|
$
415
|
|
NM
|
|
$
90
|
|
$
357
|
|
397%
|
|
Principal
Prepayments
|
223
|
|
31
|
|
192
|
|
619%
|
|
147
|
|
76
|
|
52%
|
|
Payment of Accrued
PIK Notes and Dividends and Accreted OID
|
122
|
|
14
|
|
108
|
|
771%
|
|
12
|
|
110
|
|
917%
|
|
Loan Syndications and
Sales
|
64
|
|
539
|
|
(475)
|
|
(88%)
|
|
206
|
|
(142)
|
|
(69%)
|
|
Scheduled Principal
Amortization
|
21
|
|
19
|
|
2
|
|
11%
|
|
139
|
|
(118)
|
|
(85%)
|
|
Total by
Source
|
$
877
|
|
$
635
|
|
$
242
|
|
38%
|
|
$
594
|
|
$
283
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Capital One
Stop Buyouts®
|
$
562
|
|
$
31
|
|
$
531
|
|
NM
|
|
$
98
|
|
$
464
|
|
473%
|
|
Sponsor Finance and
Other Investments
|
222
|
|
126
|
|
96
|
|
76%
|
|
33
|
|
189
|
|
573%
|
|
Senior Floating Rate
Loans
|
35
|
|
378
|
|
(343)
|
|
(91%)
|
|
186
|
|
(151)
|
|
(81%)
|
|
European
Capital
|
23
|
|
44
|
|
(21)
|
|
(48%)
|
|
175
|
|
(152)
|
|
(87%)
|
|
American Capital
Asset Management
|
20
|
|
1
|
|
19
|
|
NM
|
|
3
|
|
17
|
|
567%
|
|
Structured
Products
|
15
|
|
55
|
|
(40)
|
|
(73%)
|
|
99
|
|
(84)
|
|
(85%)
|
|
Total by Business
Line
|
$
877
|
|
$
635
|
|
$
242
|
|
38%
|
|
$
594
|
|
$
283
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation,
Depreciation, Gain and Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Realized
Gain
|
$
347
|
|
$
6
|
|
$
341
|
|
NM
|
|
$
8
|
|
$
339
|
|
NM
|
|
Gross Realized
Loss
|
(156)
|
|
(89)
|
|
(67)
|
|
(75%)
|
|
(292)
|
|
136
|
|
47%
|
|
Portfolio Net
Realized Gain (Loss)
|
191
|
|
(83)
|
|
274
|
|
NM
|
|
(284)
|
|
475
|
|
NM
|
|
Foreign Currency
Transactions
|
(4)
|
|
—
|
|
(4)
|
|
(100%)
|
|
3
|
|
(7)
|
|
NM
|
|
Derivative Agreements
and Other
|
—
|
|
(5)
|
|
5
|
|
100%
|
|
46
|
|
(46)
|
|
(100%)
|
|
Long Term Incentive
Plan Liability
|
—
|
|
(12)
|
|
12
|
|
100%
|
|
—
|
|
—
|
|
—%
|
|
Tax
Benefit
|
4
|
|
12
|
|
(8)
|
|
(67%)
|
|
12
|
|
(8)
|
|
(67%)
|
|
Net Realized Gain
(Loss)
|
191
|
|
(88)
|
|
279
|
|
NM
|
|
(223)
|
|
414
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Unrealized
(Depreciation) Appreciation of American Capital One Stop
Buyouts®
|
(23)
|
|
26
|
|
(49)
|
|
NM
|
|
(9)
|
|
(14)
|
|
(156%)
|
|
Net Unrealized
Appreciation (Depreciation) of American Capital Sponsor Finance and
Other Investments
|
47
|
|
(27)
|
|
74
|
|
NM
|
|
(5)
|
|
52
|
|
NM
|
|
Net Unrealized
Appreciation of European Capital Investments
|
4
|
|
11
|
|
(7)
|
|
(64%)
|
|
6
|
|
(2)
|
|
(33%)
|
|
Net Unrealized
Depreciation of ACAM
|
(28)
|
|
(151)
|
|
123
|
|
81%
|
|
(10)
|
|
(18)
|
|
(180%)
|
|
Net Unrealized
Depreciation of Senior Floating Rate Loans
|
-
|
|
(2)
|
|
2
|
|
100%
|
|
(11)
|
|
11
|
|
100%
|
|
Net Unrealized
Appreciation (Depreciation) of Structured Products
|
20
|
|
(30)
|
|
50
|
|
NM
|
|
(11)
|
|
31
|
|
NM
|
|
Reversal of Prior
Period Net Unrealized (Appreciation) Depreciation Upon
Realization
|
(181)
|
|
97
|
|
(278)
|
|
NM
|
|
180
|
|
(361)
|
|
NM
|
|
Net Unrealized
(Depreciation) Appreciation of Portfolio Company
Investments
|
(161)
|
|
(76)
|
|
(85)
|
|
(112%)
|
|
140
|
|
(301)
|
|
NM
|
|
Foreign Currency
Translation - European Capital Investments
|
(14)
|
|
(12)
|
|
(2)
|
|
(17%)
|
|
11
|
|
(25)
|
|
NM
|
|
Foreign Currency
Translation - Other
|
3
|
|
4
|
|
(1)
|
|
(25%)
|
|
2
|
|
1
|
|
50%
|
|
Derivative Agreements
and Other
|
(6)
|
|
13
|
|
(19)
|
|
NM
|
|
65
|
|
(71)
|
|
NM
|
|
Tax
Benefit
|
47
|
|
5
|
|
42
|
|
840%
|
|
—
|
|
47
|
|
100%
|
|
Net Unrealized
(Depreciation) Appreciation of Investments
|
(131)
|
|
(66)
|
|
(65)
|
|
(98%)
|
|
218
|
|
(349)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Gains, Losses,
Appreciation and Depreciation
|
$
60
|
|
$
(154)
|
|
$
214
|
|
NM
|
|
$
(5)
|
|
$
65
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV per
Share
|
$
20.77
|
|
$
20.14
|
|
$
0.63
|
|
3%
|
|
$
20.35
|
|
$
0.42
|
|
2%
|
|
Market
Capitalization
|
$
3,367
|
|
$
3,389
|
|
$
(22)
|
|
(1%)
|
|
$
3,633
|
|
$
(266)
|
|
(7%)
|
|
Total Enterprise
Value(4)
|
$
3,270
|
|
$
3,912
|
|
$
(642)
|
|
(16%)
|
|
$
5,466
|
|
$
(2,196)
|
|
(40%)
|
|
Asset Coverage
Ratio
|
658%
|
|
600%
|
|
|
|
|
|
358%
|
|
|
|
|
|
Debt to Equity
Ratio
|
0.2x
|
|
0.2x
|
|
|
|
|
|
0.4x
|
|
|
|
|
|
Credit
Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Effective Interest Rate on SFRLs at Period End(5)
|
—%
|
|
3.7%
|
|
|
|
|
|
4.2%
|
|
|
|
|
|
Weighted Average
Effective Interest Rate on Debt Investments, Excluding SFRLs, at
Period End(5)
|
8.4%
|
|
8.6%
|
|
|
|
|
|
8.8%
|
|
|
|
|
|
Weighted Average
Effective Interest Rate on European Capital's Debt Investments at
Period End(5)
|
1.7%
|
|
1.7%
|
|
|
|
|
|
4.1%
|
|
|
|
|
|
Weighted Average
Effective Interest Rate on All Debt Investments at Period
End(5)
|
8.4%
|
|
8.6%
|
|
|
|
|
|
6.4%
|
|
|
|
|
|
European Capital
Loans on Non-Accrual at Cost
|
$
95
|
|
$
97
|
|
$
(2)
|
|
(2%)
|
|
$
154
|
|
$
(59)
|
|
(38%)
|
|
Loans on Non-Accrual
at Cost, excluding European Capital
|
$
196
|
|
$
185
|
|
$
11
|
|
6%
|
|
$
178
|
|
$
18
|
|
10%
|
|
Total Loans on
Non-Accrual at Cost
|
$
291
|
|
$
282
|
|
$
9
|
|
3%
|
|
$
332
|
|
$
(41)
|
|
(12%)
|
|
European Capital
Loans on Non-Accrual at Fair Value
|
$
32
|
|
$
22
|
|
$
10
|
|
45%
|
|
$
28
|
|
$
4
|
|
14%
|
|
Loans on Non-Accrual
at Fair Value, excluding European Capital
|
$
129
|
|
$
115
|
|
$
14
|
|
12%
|
|
$
109
|
|
$
20
|
|
18%
|
|
Total Loans on
Non-Accrual at Fair Value
|
$
161
|
|
$
137
|
|
$
24
|
|
18%
|
|
$
137
|
|
$
24
|
|
18%
|
|
Total Non-Accrual
Loans at Cost as a Percentage of Total Loans at Cost
|
12.6%
|
|
11.4%
|
|
|
|
|
|
7.4%
|
|
|
|
|
|
Total Non-Accrual
Loans at Fair Value as a Percentage of Total Loans at Fair
Value
|
7.4%
|
|
6.0%
|
|
|
|
|
|
3.2%
|
|
|
|
|
|
Total Non-Accruing
Loans at Fair Value as a Percentage of Non-Accruing Loans at
Cost
|
55.3%
|
|
48.6%
|
|
|
|
|
|
41.3%
|
|
|
|
|
|
Estimated Loss on
Non-Accrual Loans(6)
|
$
139
|
|
$
167
|
|
$
(28)
|
|
(17%)
|
|
$
227
|
|
$
(88)
|
|
(39%)
|
|
Estimated Loss as a
Percentage of Total Loans at Cost
|
6.0%
|
|
6.7%
|
|
|
|
|
|
5.1%
|
|
|
|
|
|
Past Due Loans at
Cost
|
$
18
|
|
$
64
|
|
$
(46)
|
|
(72%)
|
|
$
—
|
|
$
18
|
|
100%
|
|
Debt to Equity
Conversions at Cost
|
$
—
|
|
$
39
|
|
$
(39)
|
|
(100%)
|
|
$
—
|
|
$
—
|
|
—%
|
|
Return on Average
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM Net Operating
Income Before Income Taxes Return on Average Shareholders'
Equity
|
7.5%
|
|
7.7%
|
|
|
|
|
|
5.6%
|
|
|
|
|
|
LTM Net Operating
Income Return on Average Shareholders' Equity
|
5.2%
|
|
5.5%
|
|
|
|
|
|
3.7%
|
|
|
|
|
|
LTM Net Realized
Earnings (Loss) Return on Average Shareholders' Equity
|
3.4%
|
|
(4.4%)
|
|
|
|
|
|
(1.7%)
|
|
|
|
|
|
LTM Net (Loss)
Earnings Return on Average Shareholders' Equity
|
(4.9%)
|
|
(5.5%)
|
|
|
|
|
|
4.2%
|
|
|
|
|
|
Current Quarter
Annualized Net Operating Income Before Income Taxes Return on
Average Shareholders' Equity
|
6.4%
|
|
8.1%
|
|
|
|
|
|
7.1%
|
|
|
|
|
|
Current Quarter
Annualized Net Operating Income Return on Average Shareholders'
Equity
|
4.1%
|
|
6.4%
|
|
|
|
|
|
4.9%
|
|
|
|
|
|
Current Quarter
Annualized Net Realized Gain (Loss) Return on Average Shareholders'
Equity
|
21.2%
|
|
(1.2%)
|
|
|
|
|
|
(11.5%)
|
|
|
|
|
|
Current Quarter
Annualized Net Earnings (Loss) Return on Average Shareholders'
Equity
|
9.5%
|
|
(6.9%)
|
|
|
|
|
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________________
NM = Not meaningful
|
|
(1) Includes
total assets of American Capital Agency, American Capital Mortgage,
American Capital Senior Floating, American Capital Equity I,
American Capital Equity II, American Capital Equity III, ACAS CLO
2007-1,
ACAS CLO 2012-1, ACAS CLO 2013-1,
ACAS CLO 2013-2, ACAS CLO 2014-1, ACAS CLO 2014-2, ACAS CLO 2015-1,
ACAS CLO 2015-2, ACAS CLO Fund I, ACAS CLO IX, Ltd., European
Capital UK SME Debt and European Capital
Private Debt, 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, less American
Capital's investment in the funds.
|
|
(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.
|
|
(5) The
weighted average effective interest rate is computed as (a) annual
stated interest rate or yield earned plus the net annual
amortization of original issue discount and market discount or
premium earned on debt investments, divided
by (b) total debt investments
at cost basis.
|
|
(6) Net
accumulated depreciation on non-accrual loans plus realized losses
on loans during the period presented.
|
ABOUT AMERICAN CAPITAL
American Capital, Ltd. (NASDAQ: ACAS) 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 and structured products.
American Capital manages $10 billion
of assets, including assets on its balance sheet and fee earning
assets under management by affiliated managers. Through a
wholly owned affiliate, American Capital manages publicly traded
American Capital Senior Floating, Ltd. (NASDAQ: ACSF) with
$117 million of total net book
value. American Capital and its affiliates operate out of six
offices in the U.S. and Europe. 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, 2015 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
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/american-capital-reports-noi-before-income-taxes-of-031-per-diluted-share-net-earnings-of-047-per-diluted-share-and-nav-per-share-of-2077-300308179.html
SOURCE American Capital, Ltd.