American Capital Reports Net Operating Income Before Income Taxes of $81 Million, or $0.24 Per Diluted Share, and Net Earnings of $580 Million, or $1.71 Per Diluted Share, and Extends Stock Repurchase and Dividend Program

News provided by

American Capital, Ltd.

May 01, 2012, 04:45 ET

BETHESDA, Md., May 1, 2012 /PRNewswire/ -- American Capital, Ltd. ("American Capital" or the "Company") (Nasdaq: ACAS) announced net operating income ("NOI") before income taxes for the quarter ended March 31, 2012 of $81 million, or $0.24 per diluted share.  NOI after income taxes for the quarter ended March 31, 2012 was $49 million, or $0.14 per diluted share.  Net earnings for the quarter ended March 31, 2012 were $580 million, or $1.71 per diluted share.  As of March 31, 2012, net asset value ("NAV") per share was $15.71, a $1.84, or 13% per share, increase from the December 31, 2011 NAV per share of  $13.87.

Q1 2012 FINANCIAL SUMMARY

  • $0.24 NOI before income taxes per diluted share, or $81 million
    • $3 million decrease over Q4 2011
    • $0.14 NOI per diluted share, or $49 million, after income taxes
  • $(0.17) net realized loss per diluted share, or $(58) million
    • $195 million decrease over Q4 2011
  • $1.88 net unrealized appreciation per diluted share, or $638 million
    • $181 million increase over Q4 2011
  • $1.71 net earnings per diluted share, or $580 million
    • $14 million decrease over Q4 2011
  • $396 million of cash proceeds from realizations
  • $118 million of securitized debt repaid
  • 5.5 million shares repurchased, totaling $48 million, of American Capital common stock
    • $8.79 average price per share
    • $0.12 accretive to NAV per share
  • $15.71 NAV per share
    • $1.84 per share, or 13% increase over Q4 2011

"Our NAV per share grew by $1.84 for the quarter to $15.71, delivering a 53% annualized return for the quarter," said Malon Wilkus, Chairman and Chief Executive Officer.  "We have earned $2.7 billion of net income from when the U.S. GDP turned positive in the third quarter of 2009, while our shareholders' equity has grown from $1.9 billion to $5.1 billion.  We believe that the performance of our portfolio will continue to be positive as the U.S. economy continues to recover.  Based on this confidence and the current price to book ratio, we believe our shares are an excellent value.  Therefore, our Board of Directors extended by a year our stock repurchase and dividend program through December 31, 2013.  Since we initiated our stock buyback program, it has been accretive to our NAV by $0.44 per share.  If we had not repurchased these shares, we would have had to earn an additional $143 million during that three quarter period to have produced the $15.71 per share NAV we have today."

PORTFOLIO VALUATION

For the quarter ended March 31, 2012, net unrealized appreciation, before income taxes, totaled $659 million.  The primary components of the net unrealized appreciation were:

  • $287 million unrealized appreciation in American Capital's investment in American Capital, LLC, its alternative asset management company, due to an increase in actual and forecasted growth;
  • $78 million net unrealized appreciation from American Capital's private finance portfolio, generally as a result of improved portfolio company performance and improved multiples;
  • $117 million of reversals of net unrealized depreciation upon realization of portfolio company investments; and
  • $164 million net unrealized appreciation in American Capital's investment in European Capital, primarily due to an increase in European Capital's NAV and a decrease in the implied discount to European Capital's NAV.
    • The Company's equity investment in European Capital was valued at $711 million as of March 31, 2012, compared to the $868 million fair value of European Capital's NAV at the end of the first quarter, which was 82% of NAV as of March 31, 2012, compared to 67% of NAV at the end of the prior quarter.

"During the quarter, our balance sheet continued to strengthen, with shareholders' equity growing by $551 million and debt declining by $119 million," said John Erickson, Chief Financial Officer.  "The investment in our asset management company, American Capital, LLC, appreciated $287 million as a result of continued strong performance.  American Capital LLC's earning assets under management grew by $2.4 billion during the quarter as American Capital Agency Corp. and American Capital Mortgage Investment Corp. continued their market leading performance.  Looking forward, we continue to expect strong performance by American Capital, LLC as we grow existing funds under management as well as seek to raise new funds."

PORTFOLIO LIQUIDITY AND PERFORMANCE

In the first quarter of 2012, $396 million of cash proceeds were received from realizations of portfolio investments.  The Company made $83 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, 2012 was 11.1%, 40 basis points higher than the December 31, 2011 rate of 10.7%. As of March 31, 2012, loans with a fair value of $178 million were on non-accrual, representing 8.1% of total loans at fair value, compared to $219 million fair value of non-accrual loans, representing 8.7% of total loans at fair value as of December 31, 2011.

"Since the beginning of 2011, our non-accruing loans at cost have declined by $346 million. If the economy continues to improve, we would expect this trend to continue," noted Gordon O'Brien, President, Specialty Finance and Operations.  "In addition, our Syndications Team has done a good job refinancing our majority owned portfolio companies with upcoming debt maturities.  This speaks to the underlying strength of our businesses." 

STOCK REPURCHASE AND DIVIDEND PROGRAM EXTENDED

During the third quarter of 2011, American Capital's Board of Directors adopted a program that may provide for additional repurchases of shares or dividend payments.  On April 26, 2012, American Capital's Board of Directors extended the stock repurchase and dividend program 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 dividends 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 first quarter of 2012, American Capital made open market purchases of 5.5 million shares, or $48 million, of American Capital common stock at an average price of $8.79 per share.

  












AMERICAN CAPITAL, LTD.

CONSOLIDATED BALANCE SHEETS

As of March 31, 2012, December 31, 2011 and March 31, 2011

(in millions, except per share amounts)















Q1

Q4

Q1 2012 Versus
Q4 2011

Q1

Q1 2012 Versus
Q1 2011

2012

2011

$

%

2011

$

%

(unaudited)






(unaudited)



Assets












Investments at fair value (cost of $6,322, $6,739 
    and $7,535, respectively)

$        5,379

$ 5,130

$  249

5 %

$        5,652

$ (273)

(5)%

Cash and cash equivalents

313

204

109

53 %

98

215

219%

Restricted cash and cash equivalents

205

80

125

156 %

98

107

109%

Interest receivable

22

24

(2)

(8)%

30

(8)

(27)%

Deferred tax asset, net

396

428

(32)

(7)%

-

396

100%

Derivative agreements at fair value

10

10

-

-

5

5

100%

Other

96

85

11

13 %

120

(24)

(20)%

Total assets

$        6,421

$ 5,961

$  460

8 %

$        6,003

$  418

7%














Liabilities and Shareholders' Equity












Debt

$        1,132

$ 1,251

$ (119)

(10)%

$        1,742

$ (610)

(35)%

Derivative agreements at fair value

105

99

6

6 %

95

10

11%

Other

70

48

22

46 %

50

20

40%

       Total liabilities

$        1,307

$ 1,398

$   (91)

(7)%

$        1,887

$ (580)

(31)%














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, 332.5, 336.4 and 353.8 
    issued and 325.6, 329.1 and 343.9
    outstanding, respectively

3

3

-

-

3

-

-

Capital in excess of par value

7,024

7,053

(29)

-

7,145

(121)

(2)%

Distributions in excess of net realized earnings

(1,058)

(999)

(59)

(6)%

(1,056)

(2)

-

Net unrealized depreciation of investments

(855)

(1,494)

639

43 %

(1,976)

1,121

57%

Total shareholders' equity

5,114

4,563

551

12 %

4,116

998

24%

Total liabilities and shareholders' equity

$        6,421

$ 5,961

$  460

8 %

$        6,003

$  418

7%














NAV per common share outstanding

$        15.71

$ 13.87

$ 1.84

13 %

$        11.97

$ 3.74

31%




























    








AMERICAN CAPITAL, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2012 and 2011

(in millions, except per share data)

(unaudited)
















Three Months Ended


Three Months Ended

March 31,


March 31,

2012 Versus 2011

2012

2011

$

%











OPERATING INCOME








Interest and dividend income

$   136

$  146

$    (10)

(7)%

Fee income

13

13

-

-

Total operating income

149

159

(10)

(6)%











OPERATING EXPENSES








Interest

16

29

(13)

(45)%

Salaries, benefits and stock-based compensation

37

36

1

3 %

General and administrative

15

11

4

36 %

Total operating expenses

68

76

(8)

(11)%











NET OPERATING INCOME BEFORE INCOME TAXES

81

83

(2)

(2)%











Tax provision

(32)

-

(32)

(100) %

NET OPERATING INCOME

49

83

(34)

(41)%











Net realized (loss) gain








Portfolio company investments

(122)

10

(132)

 NM 

Foreign currency transactions

1

-

1

100 %

Derivative agreements

(8)

(13)

5

38 %

Tax benefit

22

-

22

100 %

Total net realized loss

(107)

(3)

(104)

 NM 











NET REALIZED (LOSS) EARNINGS

(58)

80

(138)

 NM 











Net unrealized appreciation (depreciation)








Portfolio company investments

627

256

371

145 %

Foreign currency translation

38

85

(47)

(55)%

Derivative agreements

(6)

13

(19)

 NM 

Tax provision

(21)

-

(21)

(100) %

Total net unrealized appreciation

638

354

284

80%











NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ("NET
     EARNINGS")

$   580

$  434

$   146

34 %











NET OPERATING INCOME PER COMMON SHARE








Basic

$  0.15

$ 0.24

$ (0.09)

(38)%

Diluted

$  0.14

$ 0.23

$ (0.09)

(39)%











NET REALIZED (LOSS) EARNINGS PER COMMON SHARE








Basic

$ (0.18)

$ 0.23

$ (0.41)

 NM 

Diluted

$ (0.17)

$ 0.22

$ (0.39)

 NM 











NET EARNINGS PER COMMON SHARE








Basic

$  1.75

$ 1.25

$  0.50

40 %

Diluted

$  1.71

$ 1.21

$  0.50

41 %











WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING








Basic

330.9

346.1

(15.2)

(4)%

Diluted

339.6

358.4

(18.8)

(5)%











NM = Not meaningful.

















































AMERICAN CAPITAL, LTD.




OTHER FINANCIAL INFORMATION




Three Months Ended March 31, 2012, December 31, 2011 and March 31, 2011




(in millions, except per share data)




(unaudited)




























 Q1 2012 Versus
 Q4 2011


Q1 2012 Versus
Q1 2011





Q1 2012

Q4 2011

$

%

Q1 2011

$

%























Assets Under Management

















American Capital Assets at Fair Value

$        6,421

$      5,961

$         460

8 %

$      6,003

$         418

7 %




Externally Managed Assets at Fair Value(1)

62,107

62,168

(61)

-

31,205

30,902

99 %




Total

$      68,528

$    68,129

$    399

1 %

$    37,208

$  31,320

84 %























Earning Assets Under Management(3)

$        9,816

$      7,408

$      2,408

33 %

$      4,585

$      5,231

114 %























New Investments

















Senior Debt

$             25

$           14

$           11

79 %

$         138

$       (113)

(82)%




Preferred Equity

2

14

(12)

(86)%

-

2

100 %




Common Equity

56

2

54

 NM 

14

42

300 %




Structured Products

-

1

(1)

(100)%

-

-

-




Total

$             83

$           31

$           52

168 %

$         152

$         (69)

(45)%























Financing for Private Equity Buyouts

$              -

$           10

$         (10)

(100)%

$            -

$            -

-




Direct and Other Investments

-

1

(1)

(100)%

14

(14)

(100)%




Add-on Financing for Acquisitions

56

-

56

100 %

-

56

100 %




Add-on Financing for Working Capital in Distressed Situations

15

14

1

7 %

16

(1)

(6)%




Add-on Financing for Growth and Working Capital

12

-

12

100 %

97

(85)

(88)%




Add-on Financing for Purchase of Debt of a Portfolio Company

-

4

(4)

(100)%

-

-

-




Add-on Financing for Recapitalizations, not Including Distressed
    Investments

-

2

(2)

(100)%

25

(25)

(100)%




Total

$             83

$           31

$           52

168 %

$         152

$         (69)

(45)%























Realizations

















Sale of Equity Investments

$             47

$         176

$       (129)

(73)%

$           63

$         (16)

(25)%




Principal Prepayments

288

151

137

91 %

149

139

93 %




Payment of Accrued Payment-in-Kind Notes and Dividends and
    Accreted Original Issue Discounts

51

19

32

168 %

43

8

19 %




Scheduled Principal Amortization

10

10

-

-

8

2

25 %




Loan Syndications and Sales

-

-

-

-

6

(6)

(100)%




Total

$           396

$         356

$           40

11 %

$         269

$         127

47 %























Appreciation, Depreciation, Gain and Loss

















Gross Realized Gain

$             15

$           46

$         (31)

(67)%

$           14

$             1

7 %




Gross Realized Loss

(137)

(200)

63

32 %

(4)

(133)

 NM 




Portfolio Net Realized (Loss) Gain

(122)

(154)

32

21 %

10

(132)

 NM 




Foreign Currency Transactions

1

-

1

100 %

-

1

100 %




Derivative Agreements

(8)

(13)

5

38 %

(13)

5

38 %




Tax Benefit

22

75

(53)

(71)%

-

22

100 %




Net Realized Loss

(107)

(92)

(15)

(16)%

(3)

(104)

 NM 























Gross Unrealized Appreciation of Private Finance Portfolio
    Investments

134

147

(13)

(9)%

162

(28)

(17)%




Gross Unrealized Depreciation of Private Finance Portfolio
    Investments

(56)

(79)

23

29 %

(87)

31

36 %




Net Unrealized Appreciation of Private Finance Portfolio
    Investments

78

68

10

15 %

75

3

4 %




Unrealized Appreciation (Depreciation) of European Capital
     Investment

148

(56)

204

 NM 

133

15

11 %




Unrealized (Depreciation) Appreciation of European Capital
    Foreign Currency Translation

(21)

33

(54)

 NM 

(43)

22

51 %




Unrealized Appreciation of American Capital, LLC

287

111

176

159 %

60

227

378 %




Net Unrealized Appreciation (Depreciation) of Structured Products

18

(1)

19

 NM 

39

(21)

(54)%




Reversal of Prior Period Net Unrealized Depreciation 
    (Appreciation) Upon Realization

117

154

(37)

(24)%

(8)

125

 NM 




Net Unrealized Appreciation of Portfolio Company Investments

627

309

318

103 %

256

371

145 %




Foreign Currency Translation - European Capital

37

(62)

99

 NM 

82

(45)

(55)%




Foreign Currency Translation - Other

1

(3)

4

 NM 

3

(2)

(67)%




Derivative Agreements

(6)

5

(11)

 NM 

13

(19)

 NM 




Net Unrealized Appreciation of Investments

659

249

410

165 %

354

305

86 %




Tax (Provision) Benefit

(21)

208

(229)

 NM 

-

(21)

100 %




Net Gains, Losses, Appreciation and Depreciation

$           531

$         365

$         166

45 %

$         351

$         180

51 %























Other Financial Data

















NAV per Share

$        15.71

$      13.87

$        1.84

13 %

$      11.97

$        3.74

31 %




Debt at Cost

$        1,132

$      1,251

$       (119)

(10)%

$      1,742

$       (610)

(35)%




Debt at Fair Value

$        1,116

$      1,210

$         (94)

(8)%

$      1,708

$       (592)

(35)%




Market Capitalization

$        2,826

$      2,215

$         611

28 %

$      3,408

$       (582)

(17)%




Total Enterprise Value(2)

$        3,645

$      3,262

$         383

12 %

$      5,052

$    (1,407)

(28)%




Asset Coverage Ratio

552 %

465 %




336 %








Debt to Equity Ratio

0.2x

0.3x




0.4x








Credit Quality

















Weighted Average Effective Interest Rate on Private Finance Debt
    Investments at Period End

11.1 %

10.7 %




10.3 %








Loans on Non-Accrual at Cost

$           356

$         419

$         (63)

(15)%

$         663

$       (307)

(46)%




Loans on Non-Accrual at Fair Value

$           178

$         219

$         (41)

(19)%

$         227

$         (49)

(22)%




Non-Accrual Loans at Cost as a Percentage of Total Loans at Cost

15.0%

15.3 %




19.3 %








Non-Accrual Loans at Fair Value as a Percentage of Total Loans at
    Fair Value

8.1%

8.7 %




7.7 %








Non-Accruing Loans at Fair Value as a Percent of Non-
    Accruing Loans at Cost

50.0%

52.3%




34.2%








Past Due Loans at Cost

$             22

$           22

-

-

$             3

$           19

633 %




Debt to Equity Conversions at Cost

$             20

$           46

$         (26)

(57)%

$           49

$         (29)

(59)%




Return on Average Equity

















LTM Net Operating Income Return on Average Equity at Cost

6.9 %

7.5 %




4.0 %








LTM Net Realized Earnings (Loss) Return on
    Average Equity at Cost

-

2.3 %




(3.6)%








LTM Net Earnings Return on Average Equity at Fair Value

25.1 %

23.3 %




37.3 %








Current Quarter Annualized Net Operating Income Return
    on Average Equity at Cost

3.3 %

15.2 %




5.5 %








Current Quarter Annualized Net Realized (Loss) Earnings Return
    on Average Equity at Cost

(3.9)%

9.1 %




5.3 %








Current Quarter Annualized Net Earnings Return on Average
    Equity at Fair Value

47.9 %

55.4 %




44.6 %

































































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. Total assets of American Capital Agency Corp. and American Capital Mortgage Investment Corp. are as of December 31, 2011. 



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




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





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

IRR at Fair Value of All Investments(2)

8.3 %

18.1 %

8.2 %

20.3 %

13.5 %

12.7 %

10.3 %

(5.3%)

6.5 %

19.9 %

8.3 %

IRR of Exited Investments(3)

9.1 %

18.6 %

9.7 %

20.0 %

17.1 %

22.0 %

10.4 %

(9.6%)

3.5 %

N/A

10.7 %

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

6.7 %

46.4 %

11.1 %

27.7 %

26.5 %

11.2 %

14.6 %

(9.5%)

18.6 %

20.7 %

10.7 %

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

10.9 %

46.4 %

21.4 %

36.7 %

49.0 %

51.0 %

18.1 %

9.5 %

35.5 %

N/A

28.3 %

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

2.3 %

17.1 %

10.8 %

18.8 %

16.0 %

28.7 %

12.6 %

1.4 %

15.1 %

—%

13.5 %

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

14.1 %

N/A

(0.1%)

17.3 %

6.8 %

23.9 %

11.4 %

(1.4%)

15.1 %

—%

10.8 %

IRR of Exited One Stop Buyout® Investments(3)

1.3 %

17.1 %

14.7 %

16.3 %

27.5 %

30.6 %

14.9 %

15.5 %

14.2 %

N/A

16.2 %

Committed Investments(7)

$1,065

$376

$966

$1,436

$2,267

$4,811

$5,239

$7,481

$1,039

$137

$24,817

Total Exits and Prepayments of Committed Investments(7)

$995

$367

$836

$1,266

$1,971

$2,597

$3,877

$4,717

$496

$—

$17,122

Total Interest, Dividends and Fees Collected

$407

$148

$347

$455

$695

$1,187

$1,228

$1,175

$335

$7

$5,984

Total Net Realized (Loss) Gain on Investments

($137)

($23)

($118)

$143

$16

$375

($170)

($1,097)

($116)

$—

($1,127)

Current Cost of Investments

$78

$4

$120

$157

$276

$1,921

$1,075

$2,211

$372

$108

$6,322

Current Fair Value of Investments

$44

$—

$86

$296

$195

$1,981

$1,048

$1,305

$313

$111

$5,379

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

0.8 %

—%

1.6 %

5.5 %

3.6 %

36.8 %

19.5 %

24.3 %

5.8 %

2.1 %

100.0 %

Net Unrealized (Depreciation) Appreciation

($34)

($4)

($34)

$139

($81)

$60

($27)

($906)

($59)

$3

($943)

Non-Accruing Loans at Cost

$—

$—

$18

$—

$31

$58

$43

$174

$32

$—

$356

Non-Accruing Loans at Fair Value

$1

$—

$7

$—

$11

$30

$7

$96

$26

$—

$178

Equity Interest at Fair Value(4)

$18

$—

$—

$259

$110

$1,623

$484

$326

$93

$45

$2,958

Debt to Adjusted EBITDA(8)(9)(10)(11)(14)

4.3

 NM 

10.3

2.8

5.2

1.9

4.4

6.1

5.8

5.7

4.4

Interest Coverage(10)(11)(14)

4.2

 NM 

1.5

4.3

2.4

2.1

2.7

2.1

2.3

2.1

2.3

Debt Service Coverage(10)(11)(14)

3.8

 NM 

1.5

3.8

2.1

0.6

2.4

1.8

1.9

2.0

1.7

Average Age of Companies(11)(14)

 46 yrs 

—

 29 yrs 

 39 yrs 

 53 yrs 

 15 yrs 

 39 yrs 

 31 yrs 

 20 yrs 

 25 yrs 

 29 yrs 

Diluted Ownership Percentage(4)(15)

62 %

—%

43 %

55 %

71 %

87 %

47 %

51 %

33 %

9 %

63 %

Average Revenue(11)(12)(14)

$47

$—

$43

$211

$65

$158

$170

$179

$91

$159

$158

Average Adjusted EBITDA(8)(11)(14)

$6

$—

$10

$44

$16

$67

$41

$38

$21

$42

$44

Total Revenue(11)(12)

$95

$238

$73

$1,458

$349

$1,245

$3,391

$4,882

$1,543

$478

$13,752

Total Adjusted EBITDA(8)(11)

$13

$6

$10

$202

$55

$287

$448

$846

$250

$142

$2,259

% of Senior Loans(10)(11)(13)

72 %

—%

52 %

—%

33 %

31 %

26 %

50 %

31 %

38 %

39 %

% of Loans with Lien(10)(11)(13)

100 %

—%

100 %

100 %

100 %

84 %

99 %

87 %

69 %

38 %

73 %























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

Pre-2001 - 2012
Static Pools
Aggregate








Total Revenue(12)

$3,116








Total Gross Profit(12)

$1,561








Total Adjusted EBITDA(8)

$703



















Total Capital Expenditures(12)

$95








Total Current ACAS Investment in MOPC at Fair Value

$3,429








Diluted Ownership Percentage of ACAS in MOPC(15)

69%



















Total Cash

$197








Total Assets

$4,571








Total Debt

$3,347








Total Third-party Debt at Cost

$1,486








Total Shareholders' Equity(16)

$2,984































(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, 2010 and 2012 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)  For portfolio companies with a nominal Adjusted EBITDA amount, the portfolio company's maximum debt leverage is limited to 15 times Adjusted
       EBITDA.

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

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

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

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

(14) Weighted average based on fair value. 

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

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

SHAREHOLDER CALL

American Capital invites shareholders, analysts and interested parties to attend the shareholder call on May 2, 2012 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) 270-2148 (U.S. domestic) or (412) 902-6510 (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 in advance of the shareholder call.  Select the Q1 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 May 2, 2012.  In addition, there will be a phone recording available from 2:00 pm ET May 2, 2012 until 9:00 am ET May 16, 2012.  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 10013312.

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 $69 billion in assets under management and seven offices in the U.S. and Europe.  American Capital and European Capital will consider investment opportunities from $10 million to $500 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.

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