American Capital Reports $0.17 Net Operating Income Per Diluted Share and $0.43 Net Earnings Per Diluted Share
BETHESDA, Md., Nov. 2, 2010 /PRNewswire-FirstCall/ -- American Capital, Ltd. ("ACAS" or the "Company") (Nasdaq: ACAS) announced net operating income ("NOI") for the quarter ended September 30, 2010 of $59 million, or $0.17 per diluted share. Net earnings (loss) less appreciation and (depreciation) ("Net Realized Loss") for the quarter was $(9) million, or $(0.03) per diluted share and net earnings for the quarter were $149 million, or $0.43 per diluted share.
Q3 2010 FINANCIAL SUMMARY
- $59 million NOI
- 84% increase over Q3 2009
- $158 million net unrealized appreciation of investments
- $(54) million net realized loss on portfolio investments
- $149 million net earnings
- $72 million increase over Q3 2009
- $305 million of cash proceeds from realizations
- $407 million of debt repaid
- Including $200 million of secured debt due 2013
- $9.59 net asset value ("NAV") per share
- $0.44 per share, or 5% increase over Q2 2010
"Our NAV per share grew by $0.44 for the quarter and $1.79 over the last year to $9.59," said Malon Wilkus, Chairman and Chief Executive Officer. "That is a 19% annualized return on equity for the quarter and 27% total return since the lowpoint of our valuation in Q2 of 2009. We believe the economy is continuing to recover, which should allow our portfolio to improve and for American Capital to experience continued growth in our book value. We invested $63 million during the quarter, including closing three accretive add-on acquisitions for portfolio companies. There are a considerable number of mezzanine and second-lien investment opportunities that we expect will translate into investments over the next year, as the volume of mergers and acquisitions increases."
NET OPERATING INCOME
NOI increased to $59 million, or $0.17 per diluted share, for the quarter ended September 30, 2010, compared to $32 million, or $0.11 per diluted share, for the comparable quarter in 2009.
NET REALIZED LOSS
Net Realized Loss improved to $(9) million, or $(0.03) per diluted share, for the quarter ended September 30, 2010, compared to $(34) million, or $(0.12) per diluted share, for the comparable quarter in 2009.
NET EARNINGS
Net earnings improved to $149 million, or $0.43 per diluted share, for the quarter ended September 30, 2010, compared to $77 million, or $0.27 per diluted share, for the comparable quarter in 2009.
PORTFOLIO VALUATION
For the quarter ended September 30, 2010, net unrealized appreciation of investments totaled $158 million. The primary components of the net unrealized appreciation were:
- $44 million of 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 a decrease to the implied discount to NAV;
- The equity investment in European Capital is valued at $0.5 billion compared to European Capital's NAV of approximately $0.8 billion.
- $10 million of net depreciation of American Capital's private finance portfolio;
- $53 million of net appreciation from foreign currency translation of foreign currency denominated investments, including $47 million related to the translation of European Capital's cost basis and cumulative unrealized depreciation; and
- $44 million of reversals of prior unrealized depreciation associated with net realized losses on portfolio investments.
As of September 30, 2010, NAV per share was $9.59, a 5%, or $0.44 per share, increase from the June 30, 2010 NAV per share of $9.15.
"Our balance sheet continues to strengthen," said John Erickson, Chief Financial Officer. "Our asset coverage ratio improved to 230% and we repaid $407 million of debt during the quarter, including $200 million of secured debt maturing in 2013. We expect to repay an additional $107 million of this debt in the fourth quarter, which will cause the interest rate to drop to the lowest rate available under the facility. We continue to experience strong liquidity in the portfolio at attractive valuations, which we believe will allow us to invest in new opportunities as well as continuing to make accretive acquisitions for our portfolio companies."
PORTFOLIO LIQUIDITY AND PERFORMANCE
In the third quarter of 2010, $305 million of cash proceeds were received from realizations of portfolio investments and exits. The proceeds were 2.9% less than the prior quarter's valuations of the realized investments. The Company made $63 million in new committed investments during the quarter. The weighted average effective interest rate on the Company's private finance debt investments as of September 30, 2010 was 10.0%, which was 30 basis points lower than the June 30, 2010 rate and 10 basis points higher than the December 31, 2009 rate.
As of September 30, 2010, loans with a fair value of $265 million were on non-accrual, representing 7.8% of total loans at fair value, compared to $308 million fair value of non-accrual loans, representing 8.5% of total loans at fair value as of June 30, 2010.
AMERICAN CAPITAL, LTD.
CONSOLIDATED BALANCE SHEETS
As of September 30, 2010, June 30, 2010 and December 31, 2009
(in millions, except per share amounts)
Q3 2010 Versus
Q2 2010
Q3 Q2 ----------------
2010 2010 $ %
------ ------ ------ ------
(unaudited) (unaudited)
Assets
Investments at fair value
(cost of $8,142, $8,439
and $9,158, respectively) $5,566 $5,694 $(128) -2%
Cash and cash equivalents 109 176 (67) -38%
Restricted cash and cash
equivalents 129 185 (56) -30%
Interest receivable 36 32 4 13%
Derivative agreements at fair value 4 3 1 33%
Other 128 131 (3) -2%
------ ------ ------ ------
Total assets $5,972 $6,221 $(249) -4%
====== ====== ====== ======
Liabilities and Shareholders'
Equity
Debt $2,517 $2,924 $(407) -14%
Derivative agreements at
fair value 130 120 10 8%
Other 54 64 (10) -16%
------ ------ ------ ------
Total liabilities 2,701 3,108 (407) -13%
------ ------ ------ ------
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, 351.8, 351.5
and 292.9 issued and 341.0,
340.1 and 280.9 outstanding,
respectively 3 3 - -
Capital in excess
of par value 7,060 7,051 9 -
Distributions in
excess of net
realized earnings (1,086) (1,077) (9) -1%
Net unrealized
depreciation of
investments (2,706) (2,864) 158 6%
------ ------ ------ ------
Total shareholders'
equity 3,271 3,113 158 5%
------ ------ ------ ------
Total liabilities
and shareholders'
equity $5,972 $6,221 $(249) -4%
====== ====== ====== ======
Net asset value
per common share $9.59 $9.15 $0.44 5%
====== ====== ====== ======
Q3 2010 Versus
Q4 2009
Q4 --------------
2009 $ %
----- ------ -----
Assets
Investments at fair value (cost of
$8,142, $8,439 and $9,158,
respectively) $5,575 $(9) -
Cash and cash equivalents 835 (726) -87%
Restricted cash and cash equivalents 96 33 34%
Interest receivable 38 (2) -5%
Derivative agreements at fair value 1 3 300%
Other 127 1 1%
----- ------ -----
Total assets $6,672 $(700) -10%
====== ===== =====
Liabilities and Shareholders' Equity
Debt $4,142 $(1,625) -39%
Derivative agreements at fair value 102 28 27%
Other 99 (45) -45%
----- ------ -----
Total liabilities 4,343 (1,642) -38%
----- ------ -----
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, 351.8,
351.5 and 292.9 issued and 341.0,
340.1 and 280.9 outstanding,
respectively 3 - -
Capital in excess of par value 6,735 325 5%
Distributions in excess of net
realized earnings (709) (377) -53%
Net unrealized depreciation of
investments (3,700) 994 27%
----- ------ -----
Total shareholders' equity 2,329 942 40%
----- ------ -----
Total liabilities and shareholders'
equity $6,672 $(700) -10%
====== ===== =====
Net asset value per common share $8.29 $1.30 16%
====== ===== =====
AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30, 2010 and 2009
(in millions, except per share data)
(unaudited)
Three Months Ended
Three Months Ended September 30, 2010
September 30, Versus 2009
----------------- ------------------
2010 2009 $ %
---- ---- ---- ----
Operating Income
Interest and
dividend income $125 $176 $(51) -29%
Fee income 17 17 - -
---- ---- ---- ----
Total operating
income 142 193 (51) -26%
---- ---- ---- ----
Operating Expenses
Interest 36 85 (49) -58%
Salaries, benefits and
stock-based compensation 31 47 (16) -34%
General and administrative 16 23 (7) -30%
Debt refinancing costs - 5 (5) -100%
---- ---- ---- ----
Total operating
expenses 83 160 (77) -48%
---- ---- ---- ----
Operating Income Before
Income Taxes 59 33 26 79%
---- ---- ---- ----
(Provision) Benefit for
income taxes - (1) 1 100%
---- ---- ---- ----
Net Operating Income 59 32 27 84%
---- ---- ---- ----
Net gain on extinguishment
of debt - - - -
---- ---- ---- ----
Net realized loss on
investments
Portfolio company
investments (54) (47) (7) -15%
Foreign currency
transactions - - - -
Derivative and
option agreements (14) (19) 5 26%
---- ---- ---- ----
Total net realized
loss on
investments (68) (66) (2) -3%
---- ---- ---- ----
Net Realized Loss (9) (34) 25 74%
---- ---- ---- ----
Net unrealized appreciation
(depreciation)
of investments
Portfolio company
investments 28 86 (58) -67%
Foreign currency
translation 141 57 84 147%
Derivative and
option agreements (11) (32) 21 66%
---- ---- ---- ----
Total net unrealized
appreciation
(depreciation)
of investments 158 111 47 42%
---- ---- ---- ----
Net Increase (Decrease)
in Net Assets Resulting
From Operations ("Net
Earnings (Loss)") $149 $77 $72 94%
==== ==== ==== ====
Net Operating Income Per
Common Share
Basic $0.17 $0.12 $0.05 42%
Diluted $0.17 $0.11 $0.06 55%
Net Realized Loss
Per Common Share
Basic $(0.03) $(0.13) $0.10 77%
Diluted $(0.03) $(0.12) $0.09 75%
Net Earnings (Loss) Per
Common Share
Basic $0.43 $0.30 $0.13 43%
Diluted $0.43 $0.27 $0.16 59%
Weighted Average Shares
of Common Stock
Outstanding
Basic 343.5 256.5 87.0 34%
Diluted 348.0 284.3 63.7 22%
Dividends Declared Per
Common Share $- $- $- -
Nine Months Ended
Nine Months Ended September 30, 2010
September 30, Versus 2009
----------------- ------------------
2010 2009 $ %
---- ---- ----- ----
Operating Income
Interest and dividend
income $413 $482 $(69) -14%
Fee income 44 46 (2) -4%
---- ---- ----- ----
Total operating
income 457 528 (71) -13%
---- ---- ----- ----
Operating Expenses
Interest 149 197 (48) -24%
Salaries, benefits and
stock-based compensation 99 147 (48) -33%
General and administrative 51 63 (12) -19%
Debt refinancing costs 21 15 6 40%
---- ---- ---- ----
Total operating
expenses 320 422 (102) -24%
---- ---- ----- ----
Operating Income Before
Income Taxes 137 106 31 29%
---- ---- ----- ----
(Provision) Benefit for
income taxes - 10 (10) -100%
---- ---- ----- ----
Net Operating Income 137 116 21 18%
---- ---- ----- ----
Net gain on
extinguishment of debt - 12 (12) -100%
---- ---- ----- ----
Net realized loss on
investments
Portfolio company
investments (452) (434) (18) -4%
Foreign currency
transactions (2) (2) - -
Derivative and
option agreements (60) (87) 27 31%
---- ---- ----- ----
Total net
realized loss
on investments (514) (523) 9 2%
---- ---- ----- ----
Net Realized Loss (377) (395) 18 5%
---- ---- ----- ----
Net unrealized
appreciation
(depreciation)
of investments
Portfolio company
investments 1,080 (750) 1,830 NM
Foreign currency
translation (71) 54 (125) NM
Derivative and
option agreements (15) 74 (89) NM
---- ---- ---- ----
Total net
unrealized
appreciation
(depreciation)
of investments 994 (622) 1,616 NM
---- ---- ----- ----
Net Increase (Decrease)
in Net Assets Resulting
From Operations ("Net
Earnings (Loss)") $617 $(1,017) $1,634 NM
==== ======= ====== ===
Net Operating Income
Per Common Share
Basic $0.43 $0.51 $(0.08) -16%
Diluted $0.42 $0.51 $(0.09) -18%
Net Realized Loss Per
Common Share
Basic $(1.18) $(1.74) $0.56 32%
Diluted $(1.17) $(1.74) $0.57 33%
Net Earnings (Loss) Per
Common Share
Basic $1.93 $(4.48) $6.41 NM
Diluted $1.91 $(4.48) $6.39 NM
Weighted Average Shares
of Common Stock
Outstanding
Basic 319.6 226.9 92.7 41%
Diluted 323.5 226.9 96.6 43%
Dividends Declared Per
Common Share $- $1.07 (1.07) -100%
NM = Not meaningful.
AMERICAN CAPITAL, LTD.
OTHER FINANCIAL INFORMATION
Three Months Ended September 30, 2010, June 30, 2010
and December 31, 2009
(in millions, except per share data)
(Unaudited)
Q3 2010 Versus Q2 2010
----------------------
Q3 2010 Q2 2010 $ %
------- ------- ------- --------
Assets Under Management
American Capital Assets at
Fair Value(1) $5,972 $6,221 $(249) -4%
Externally Managed Assets
at Fair Value(2) 11,560 8,961 2,599 29%
------ ----- ----- ---
Total $17,532 $15,182 $2,350 15%
======= ======= ====== ===
Capital Resources Under
Management
American Capital Assets at
Fair Value plus Available
Capital Resources(1) $5,972 $6,221 $(249) -4%
Externally Managed Assets
at Fair Value plus
Available Capital
Resources(2) 11,778 9,179 2,599 28%
------ ----- ----- ---
Total $17,750 $15,400 $2,350 15%
======= ======= ====== ===
New Investments
Senior Debt $41 $47 $(6) -13%
Preferred Equity 22 1 21 2100%
Subordinated Debt - 4 (4) -100%
Common Equity - - - -
------ ----- ----- ---
Total $63 $52 $11 21%
======= ======= ====== ===
Financing for Private
Equity Buyouts $- $35 $(35) -100%
Add-on Financing for
Recapitalizations - 5 (5) -100%
Add-on Financing for Purchase
in Secondary Market of Debt of
a Portfolio Company 32 - 32 100%
Add-on Financing for
Acquisitions 22 - 22 100%
Add-on Financing for
Working Capital in
Distressed Situations 8 12 (4) -33%
Add-on Financing for
Growth and Working
Capital 1 - 1 100%
------ ----- ----- ---
Total $63 $52 $11 21%
======= ======= ====== ===
Realizations
Principal Prepayments $181 $272 $(91) -33%
Sale of Equity Investments 75 45 30 67%
Loan Syndications and Sales 25 - 25 100%
Payment of Accrued
Payment-in-kind Notes
and Dividends and
Accreted Loan Discounts 17 25 (8) -32%
Scheduled Principal
Amortization 7 9 (2) -22%
------ ----- ----- ---
Total $305 $351 $(46) -13%
======= ======= ====== ===
Appreciation, Depreciation,
Gain and Loss
Gross Realized Gain $11 $10 $1 10%
Gross Realized Loss (65) (301) 236 78%
------ ----- ----- ---
Portfolio Net Realized Loss (54) (291) 237 81%
Foreign Currency - 1 (1) -100%
Derivative and Option
Agreements (14) (30) 16 53%
------ ----- ----- ---
Net Realized Loss (68) (320) 252 79%
------ ----- ----- ---
Gross Unrealized Appreciation
of Private Finance Portfolio
Investments 135 213 (78) -37%
Gross Unrealized Depreciation
of Private Finance Portfolio
Investments (145) (74) (71) -96%
------ ----- ----- ---
Net Unrealized (Depreciation)
Appreciation of Private
Finance Portfolio
Investments (10) 139 (149) NM
Net Unrealized Appreciation of
European Capital Investment 44 157 (113) -72%
Net Unrealized (Depreciation)
Appreciation of European
Capital Foreign Currency
Translation (88) 94 (182) NM
Net Unrealized Appreciation
(Depreciation) of American
Capital Agency Corp. - 2 (2) -100%
Net Unrealized Appreciation
of American Capital, LLC 26 10 16 160%
Net Unrealized Appreciation
(Depreciation) of
Structured Products 12 (16) 28 NM
Reversal of Prior Period Net
Unrealized Depreciation Upon
Realization 44 309 (265) -86%
------ ----- ----- ---
Net Unrealized Appreciation
of Portfolio Investments 28 695 (667) -96%
Foreign Currency Translation
-European Capital 135 (120) 255 NM
Foreign Currency
Translation -Other 6 (5) 11 NM
Derivative Agreements and
Other (11) 2 (13) NM
------ ----- ----- ---
Net Unrealized
Appreciation of
Investments 158 572 (414) -72%
------ ----- ----- ---
Net Gains, Losses,
Appreciation and
Depreciation $90 $252 $(162) -64%
======= ======= ====== ===
Other Financial Data
NAV per Share $9.59 $9.15 $0.44 5%
Debt at Cost $2,517 $2,924 $(407) -14%
Debt at Fair Value $2,490 $2,844 $(354) -12%
Market Capitalization $1,981 $1,639 $342 21%
Total Enterprise Value(3) $4,389 $4,387 $2 0%
Asset Coverage Ratio 230% 206%
Debt to Equity Ratio 0.8x 0.9x
Credit Quality
Weighted Average Effective
Interest Rate on Private
Finance Debt Investments
at Period End 10.0% 10.3% -0.3% -3%
Loans on Non-Accrual at Cost $746 $686 $60 9%
Loans on Non-Accrual at
Fair Value $265 $308 $(43) -14%
Non-Accrual Loans at Cost as
a Percentage of Total Loans
at Cost 18.8% 16.5%
Non-Accrual Loans at Fair
Value as a Percentage of
Total Loans at Fair Value 7.8% 8.5%
Past Due Loans at Cost $152 $57 $95 167%
Debt to Equity Conversions
at Cost $- $- $- -
Return on Equity
LTM Net Operating Income
Return on Average Equity
at Cost 2.6% 2.1%
LTM Realized Loss Return on
Average Equity at Cost -10.9% -11.3%
LTM Net Earnings (Loss)
Return on Average Equity 26.9% 27.0%
Current Quarter Net
Operating Income Return
on Average Equity at Cost
Annualized 4.0% 2.0%
Current Quarter Realized
Loss Return on Average
Equity at Cost Annualized -0.6% -19.5%
Current Quarter Earnings
Return on Average Equity
Annualized 18.7% 39.8%
Q3 2010 Versus Q4 2009
----------------------
Q4 2009 $ %
------- ------- -------
Assets Under Management
American Capital Assets
at Fair Value(1) $6,672 $(700) -10%
Externally Managed Assets at Fair
Value(2) 5,802 5,758 99%
----- ----- ---
Total $12,474 $5,058 41%
======= ====== ===
Capital Resources Under Management
American Capital Assets at Fair
Value plus Available Capital
Resources(1) $6,672 $(700) -10%
Externally Managed Assets at Fair
Value plus Available Capital
Resources(2) 6,020 5,758 96%
----- ----- ---
Total $12,692 $5,058 40%
======= ====== ===
New Investments
Senior Debt $12 $29 242%
Preferred Equity 4 18 450%
Subordinated Debt - - -
Common Equity 7 (7) -100%
----- ----- ---
Total $23 $40 174%
======= ====== ===
Financing for Private Equity Buyouts $- $- -
Add-on Financing for Recapitalizations 1 (1) -100%
Add-on Financing for Purchase in
Secondary Market of Debt of a
Portfolio Company - 32 100%
Add-on Financing for Acquisitions 3 19 633%
Add-on Financing for Working
Capital in Distressed Situations 17 (9) -53%
Add-on Financing for Growth and
Working Capital 2 (1) -50%
----- ----- ---
Total $23 $40 174%
======= ====== ===
Realizations
Principal Prepayments $88 $93 106%
Sale of Equity Investments 57 18 32%
Loan Syndications and Sales 303 (278) -92%
Payment of Accrued Payment-in-
kind Notes and Dividends and
Accreted Loan Discounts 16 1 6%
Scheduled Principal Amortization 12 (5) -42%
----- ----- ---
Total $476 $(171) -36%
======= ====== ===
Appreciation, Depreciation, Gain and Loss
Gross Realized Gain $3 $8 267%
Gross Realized Loss (285) 220 77%
---- --- ---
Portfolio Net Realized Loss (282) 228 81%
Foreign Currency (1) 1 100%
Derivative and Option Agreements (19) 5 26%
----- ----- ---
Net Realized Loss (302) 234 77%
----- ----- ---
Gross Unrealized Appreciation of
Private Finance Portfolio
Investments 163 (28) -17%
Gross Unrealized Depreciation of
Private Finance Portfolio Investments (141) (4) -3%
----- ----- ---
Net Unrealized (Depreciation)
Appreciation of Private Finance
Portfolio Investments 22 (32) NM
Net Unrealized Appreciation of
European Capital Investment 102 (58) -57%
Net Unrealized (Depreciation)
Appreciation of European Capital
Foreign Currency Translation 22 (110) NM
Net Unrealized Appreciation (Depreciation)
of American Capital Agency Corp. (5) 5 100%
Net Unrealized Appreciation of
American Capital, LLC 10 16 160%
Net Unrealized Appreciation (Depreciation)
of Structured Products (25) 37 NM
Reversal of Prior Period Net Unrealized
Depreciation Upon Realization 284 (240) -85%
----- ----- ---
Net Unrealized Appreciation of
Portfolio Investments 410 (382) -93%
Foreign Currency Translation -
European Capital (25) 160 NM
Foreign Currency Translation - Other (1) 7 NM
Derivative Agreements and Other 6 (17) NM
----- ----- ---
Net Unrealized Appreciation of
Investments 390 (232) -59%
----- ----- ---
Net Gains, Losses, Appreciation and
Depreciation $88 $2 2%
======= ====== ===
Other Financial Data
NAV per Share $8.29 $1.30 16%
Debt at Cost $4,142 $(1,625) -39%
Debt at Fair Value $3,929 $(1,439) -37%
Market Capitalization $685 $1,296 189%
Total Enterprise Value(3) $3,992 $397 10%
Asset Coverage Ratio 156%
Debt to Equity Ratio 1.8x
Credit Quality
Weighted Average Effective Interest
Rate on Private Finance Debt
Investments at Period End 9.9% 0.1% 1%
Loans on Non-Accrual at Cost $811 $(65) -8%
Loans on Non-Accrual at Fair Value $290 $(25) -9%
Non-Accrual Loans at Cost as a
Percentage of Total Loans at Cost 18.1%
Non-Accrual Loans at Fair Value as
a Percentage of Total Loans at
Fair Value 7.8%
Past Due Loans at Cost $88 $64 73%
Debt to Equity Conversions at Cost $54 $(54) -100%
Return on Equity
LTM Net Operating Income Return on
Average Equity at Cost 2.1%
LTM Realized Loss Return on Average
Equity at Cost -10.7%
LTM Net Earnings (Loss) Return on
Average Equity -37.3%
Current Quarter Net Operating
Income Return on Average Equity at
Cost Annualized 1.2%
Current Quarter Realized Loss
Return on Average Equity at Cost
Annualized -18.4%
Current Quarter Earnings Return on
Average Equity Annualized 18.9%
NM = Not meaningful
(1) Includes American Capital's investment in its externally managed
funds.
(2) Includes American Capital Agency Corp., American Capital Equity I,
American Capital Equity II and ACAS CLO-1.
(3) Enterprise value is calculated as debt at cost plus market
capitalization less cash and cash equivalents on hand.
Static Pool (1)
-------------------------------------
Portfolio Statistics Pre-2001 2001 2002 2003 2004
($ in millions, unaudited) -------- ---- ---- ---- ----
--------------------------
IRR at Fair Value of All
Investments(2) 8.1% 18.1% 8.3% 20.4% 13.3%
IRR of Exited Investments(5) 8.6% 20.3% 9.1% 23.4% 17.1%
IRR at Fair Value of Equity
Investments Only(2)(3)(4) 6.0% 46.9% 11.5% 27.4% 27.1%
IRR of Exited Equity
Investments Only(3)(4)(5) 8.5% 48.8% 18.3% 32.2% 43.0%
Original Investments and
Commitments $1,065 $376 $962 $1,436 $2,266
Total Exits and Prepayments of
Original Investments and
Commitments $998 $353 $757 $1,083 $1,830
Total Interest, Dividends and
Fees Collected $451 $148 $345 $423 $629
Total Net Realized (Loss) Gain
on Investments $(128) $(4) $(90) $142 $27
Current Cost of Investments $82 $23 $202 $340 $468
Current Fair Value of Investments $32 $3 $148 $417 $356
Current Fair Value of
Investments as a % of Total
Investments at Fair Value 0.6% 0.1% 2.6% 7.5% 6.4%
Net Unrealized Appreciation
(Depreciation) $(50) $(20) $(54) $77 $(112)
Non-Accruing Loans at Cost $- $13 $28 $- $47
Non-Accruing Loans at Fair Value $1 $2 $21 $- $16
Equity Interest at Fair Value(3) $7 $- $7 $184 $72
Debt to EBITDA(6)(7)(8) 4.4 NM 7.4 3.9 6.0
Interest Coverage(6)(8) 2.3 NM 1.5 3.5 2.1
Debt Service Coverage(6)(8) 2.2 NM 1.3 3.3 1.6
Average Age of Companies(8) 42 yrs 25 yrs 53 yrs 40 yrs 45 yrs
Diluted Ownership Percentage(3) 63% 86% 37% 52% 44%
Average Sales(8)(9) $44 $6 $53 $199 $104
Average EBITDA(8)(10) $5 $(1) $10 $40 $25
Average EBITDA Margin 11.4% -16.7% 18.9% 20.1% 24.0%
Total Sales(8)(9) $79 $296 $177 $1,325 $842
Total EBITDA(8)(10) $8 $5 $21 $198 $167
% of Senior Loans(8)(11) 72% 33% 55% 61% 40%
% of Loans with Lien(8)(11) 100% 68% 100% 100% 90%
Static Pool (1)
-----------------------------
Portfolio Statistics 2005 2006 2007 2008
($ in millions, unaudited) ---- ---- ---- ----
--------------------------
IRR at Fair Value of All
Investments(2) 6.8% 8.4% -9.9% 3.6%
IRR of Exited Investments(5) 21.9% 10.1% -10.1% -74.9%
IRR at Fair Value of Equity
Investments Only(2)(3)(4) -2.8% 13.4% -16.2% 5.2%
IRR of Exited Equity Investments
Only(3)(4)(5) 47.3% 18.9% 8.2% 69.0%
Original Investments and
Commitments $4,643 $5,188 $7,409 $1,036
Total Exits and Prepayments of
Original Investments and
Commitments $2,355 $3,521 $3,622 $55
Total Interest, Dividends and Fees
Collected $1,015 $977 $974 $226
Total Net Realized (Loss) Gain on
Investments $279 $(103) $(695) $(50)
Current Cost of Investments $2,050 $1,332 $2,830 $815
Current Fair Value of Investments $1,283 $1,098 $1,544 $685
Current Fair Value of Investments
as a % of Total Investments at
Fair Value 23.1% 19.7% 27.7% 12.3%
Net Unrealized Appreciation
(Depreciation) $(767) $(234) $(1,286) $(130)
Non-Accruing Loans at Cost $70 $128 $438 $22
Non-Accruing Loans at Fair Value $71 $54 $74 $26
Equity Interest at Fair Value(3) $822 $415 $318 $210
Debt to EBITDA(6)(7)(8) 5.1 5.2 6.7 5.5
Interest Coverage(6)(8) 3.5 2.8 2.1 1.7
Debt Service Coverage(6)(8) 2.8 2.0 1.8 1.6
Average Age of Companies(8) 29 yrs 35 yrs 31 yrs 25 yrs
Diluted Ownership Percentage(3) 66% 41% 44% 41%
Average Sales(8)(9) $105 $148 $206 $101
Average EBITDA(8)(10) $21 $35 $40 $29
Average EBITDA Margin 20.0% 23.6% 19.4% 28.7%
Total Sales(8)(9) $1,266 $5,397 $8,192 $1,294
Total EBITDA(8)(10) $237 $665 $1,574 $258
% of Senior Loans(8)(11) 36% 31% 59% 26%
% of Loans with Lien(8)(11) 90% 93% 93% 61%
Static Pool (1)
-------------------------------
Pre-2001 2005 -
- 2010 2010
Portfolio Statistics 2009 2010 Aggregate Aggregate
($ in millions, unaudited) ---- ---- --------- ---------
--------------------------
IRR at Fair Value of All
Investments(2) - - 5.7% 1.4%
IRR of Exited Investments(5) - - 11.6% 8.5%
IRR at Fair Value of Equity
Investments Only(2)(3)(4) - - 4.3% -1.8%
IRR of Exited Equity Investments
Only(3)(4)(5) - - 26.3% 27.7%
Original Investments and
Commitments $- $- $24,381 $18,276
Total Exits and Prepayments of
Original Investments and
Commitments $- $- $14,574 $9,553
Total Interest, Dividends and Fees
Collected $- $- $5,188 $3,192
Total Net Realized (Loss) Gain on
Investments $- $- $(622) $(569)
Current Cost of Investments $- $- $8,142 $7,027
Current Fair Value of Investments $- $- $5,566 $4,610
Current Fair Value of Investments
as a % of Total Investments at
Fair Value - - 100.0% 82.8%
Net Unrealized Appreciation
(Depreciation) $- $- $(2,576) $(2,417)
Non-Accruing Loans at Cost $- $- $746 $658
Non-Accruing Loans at Fair Value $- $- $265 $225
Equity Interest at Fair Value(3) $- $- $2,035 $1,765
Debt to EBITDA(6)(7)(8) - - 5.7 5.8
Interest Coverage(6)(8) - - 2.5 2.5
Debt Service Coverage(6)(8) - - 2.1 2.0
Average Age of Companies(8) - - 33 yrs 31 yrs
Diluted Ownership Percentage(3) - - 49% 49%
Average Sales(8)(9) $- $- $151 $155
Average EBITDA(8)(10) $- $- $33 $34
Average EBITDA Margin - - 21.9% 21.9%
Total Sales(8)(9) $- $- $18,868 $16,149
Total EBITDA(8)(10) $- $- $3,133 $2,734
% of Senior Loans(8)(11) - - 45% 43%
% of Loans with Lien(8)(11) - - 90% 88%
(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.
(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 November 3, 2010 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). Please provide the operator with the conference ID number 16312690. If you do not plan on asking a question on the call and have access to the internet, please take advantage of 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 Q3 2010 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. In addition, there will be a phone recording available from 2:00 pm ET November 3, 2010 until 11:59 pm ET November 17, 2010. 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 16312690.
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 $18 billion in capital resources under management and eight offices in the U.S., Europe and Asia. American Capital and its affiliates will consider investment opportunities from $5 million to $100 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, 2009 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: |
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Investors - (301) 951-5917 |
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Media - (301) 968-9400 |
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SOURCE American Capital Ltd.
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