American Capital Reports Net Operating Income Before Income Taxes Of $90 Million, Or $0.27 Per Diluted Share, And Net Earnings Of $196 Million, Or $0.60 Per Diluted Share

News provided by

American Capital, Ltd.

Oct 29, 2012, 04:18 ET

BETHESDA, Md., Oct. 29, 2012 /PRNewswire/ -- American Capital, Ltd. ("American Capital" or the "Company") (Nasdaq: ACAS) announced net operating income ("NOI") before income taxes for the quarter ended September 30, 2012 of $90 million, or $0.27 per diluted share.  NOI after income taxes for the quarter was $71 million, or $0.22 per diluted share, and net earnings for the quarter were $196 million, or $0.60 per diluted share.  As of September 30, 2012, net asset value ("NAV") per share was $17.39, a 5%, or $0.77 per share, increase from the June 30, 2012 NAV per share of $16.62.

Q3 2012 FINANCIAL SUMMARY

  • $0.27 NOI before income taxes per diluted share, or $90 million
    • $25 million increase over Q3 2011
    • $0.22 NOI after income taxes per diluted share, or $71 million
  • $0.22 net realized earnings per diluted share, or $72 million
    • $26 million decrease over Q3 2011
  • $0.38 net unrealized appreciation per diluted share, or $124 million
    • $686 million improvement over Q3 2011
  • $0.60 net earnings per diluted share, or $196 million
    • $660 million improvement over Q3 2011
  • $136 million of cash proceeds from realizations
  • $150 million of securitized debt repaid
  • 11.4 million shares of American Capital common stock repurchased, totaling $125 million
    • $10.99 average price per share
    • $0.23 accretive to NAV per share
  • $17.39 NAV per share
    • $0.77 per share, or 5%, increase over Q2 2012

"NAV per share grew by $0.77 for the quarter to $17.39, delivering a 19% annualized return for the quarter," said Malon Wilkus, Chairman and Chief Executive Officer. "In the past three months, our operating companies, excluding American Capital, LLC, experienced slight aggregate revenue growth and modest adjusted EBITDA growth, year over year.  Over the same period, European Capital's portfolio companies experienced moderate aggregate revenue growth and modest adjusted EBITDA declines.  Additionally, the fair value of our investment in European Capital also appreciated, primarily because of an increase in the stock price to NAV ratio of comparable public funds and the appreciation of the Euro against the U.S. dollar.  We are also pleased to continue to grow our funds under management, with the closing of a second managed CLO during the quarter and the raising $1.2 billion of equity by American Capital Agency Corp.  As a result of the increase in the assets under management by American Capital, LLC, our investment in American Capital, LLC maintained its fair value despite a reduction in its forecasted growth." 

PORTFOLIO VALUATION

For the quarter ended September 30, 2012, net unrealized appreciation, before income taxes, totaled $144 million.  The primary components of the net unrealized appreciation were:

  • $41 million net unrealized appreciation from American Capital's private finance portfolio, generally as a result of improved portfolio company performance and improved multiples;
  • $20 million net unrealized appreciation from American Capital's structured products investments, generally as a result of improved projected cash flows; and
  • $77 million net unrealized appreciation in American Capital's investment in European Capital, primarily due to a strengthening of the Euro and a decrease in the implied discount to European Capital's NAV.
    • The Company's equity investment in European Capital was valued at $651 million as of September 30, 2012, or 75% of NAV, compared to $574 million as of June 30, 2012, or 70% of NAV.

PORTFOLIO REALIZATIONS AND PERFORMANCE
In the third quarter of 2012, $136 million of cash proceeds were received from realizations of portfolio investments.  American Capital made $6 million in new committed investments during the quarter.  The weighted average effective interest rate on American Capital's debt investments as of September 30, 2012 was 11.1%, 10 basis points higher than the June 30, 2012 rate of 11.0%.  As of September 30, 2012, loans with a fair value of $252 million were on non-accrual, representing 12.5% of total loans at fair value, compared to $243 million fair value of non-accrual loans, or 12.3% of total loans at fair value as of June 30, 2012.  The $9 million increase in the fair value of loans on non-accrual was generally driven by appreciation in the fair value of loans already on non-accrual status.

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

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

The repurchase and dividend program may be suspended, terminated or modified at any time for any reason.  The program does not obligate American Capital to acquire any specific number of shares, and all repurchases will be made in accordance with SEC Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of stock repurchases.  During the third quarter of 2012, American Capital made open market purchases of 11.4 million shares, or $125 million, of American Capital common stock at an average price of $10.99 per share.  Since the inception of the program, American Capital has made open market purchases of 43.6 million shares, or $392 million, of American Capital common stock at an average price of $9.00 per share.

CAPITAL MANAGEMENT
"During the quarter, we continued to strengthen our balance sheet and lower our cost of capital as we refinanced our secured debt with a $600 million four-year secured term facility and obtained a new $250 million four-year secured revolving credit facility," said John Erickson, Chief Financial Officer.  "Relative to the facility it replaced and assuming drawing 75% of the secured revolving credit facility, we lowered our cost of debt capital by approximately 3.5%. We also repaid an additional $150 million on our debt that is securitized in the business loan trusts (BLT's).  Given our strong liquidity and balance sheet, we are able to enhance shareholder value with our share repurchase program.  With 11.4 million of share repurchases during the quarter, we have now repurchased 12% of our shares issued at June 30, 2011 through September 30, 2012, which has accreted $0.90 to NAV per share."

AMERICAN CAPITAL, LTD.

CONSOLIDATED BALANCE SHEETS

As of September 30, 2012, December 31, 2011 and September 30, 2011

(in millions, except per share amounts)















Q3

Q4

Q3 2012 Versus
Q4 2011

Q3

Q3 2012 Versus
Q3 2011

2012

2011

$

%

2011

$

%

(unaudited)






(unaudited)



Assets












Investments at fair value (cost of $5,943, $6,739
   and $7,148, respectively)

$          5,309

$          5,130

$               179

3 %

$          5,295

$               14

 

-

Cash and cash equivalents

304

204

100

49 %

187

117

63 %

Restricted cash and cash equivalents

21

80

(59)

(74%)

85

(64)

(75%)

Interest receivable

19

24

(5)

(21%)

25

(6)

(24%)

Deferred tax asset, net

511

428

83

19 %

-

511

100 %

Derivative agreements at fair value

10

10

-

-

13

(3)

(23%)

Other

92

85

7

8 %

87

5

6 %

Total assets

$          6,266

$          5,961

$               305

5 %

$          5,692

$             574

10 %














Liabilities and Shareholders' Equity












Debt

$             803

$          1,251

$             (448)

(36%)

$          1,519

$           (716)

(47%)

Derivative agreements at fair value

40

99

(59)

(60%)

108

(68)

(63%)

Other

47

48

(1)

(2%)

49

(2)

(4%)

Total liabilities

890

1,398

(508)

(36%)

1,676

(786)

(47%)














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, 315.4, 336.4 and 344.8
       issued and 309.2, 329.1 and 337.0
       outstanding, respectively

3

3

-

-

3

-

-

Capital in excess of par value

6,853

7,053

(200)

(3%)

7,100

(247)

(3%)

Distributions in excess of net realized earnings

(974)

(999)

25

3 %

(1,137)

163

14 %

Net unrealized depreciation of investments

(506)

(1,494)

988

66 %

(1,950)

1,444

74 %

Total shareholders' equity

5,376

4,563

813

18 %

4,016

1,360

34 %

Total liabilities and shareholders' equity

$          6,266

$          5,961

$               305

5 %

$          5,692

$             574

10 %














NAV per common share outstanding

$          17.39

$          13.87

$              3.52

25 %

$          11.92

$            5.47

46 %

AMERICAN CAPITAL, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three and Nine Months Ended September 30, 2012 and 2011

(in millions, except per share data)

(unaudited)





















Three Months Ended




Nine Months Ended

Three Months Ended

September 30,

Nine Months Ended

September 30,

September 30,

2012 Versus 2011

September 30,

2012 Versus 2011

2012

2011

$

%

2012

2011

$

%
















OPERATING INCOME














Interest and dividend income

$             142

$             117

$               25

21 %

$             429

$             394

$               35

9 %

Fee income

12

13

(1)

(8%)

37

37

-

-

Total operating revene

154

130

24

18 %

466

431

35

8 %
















OPERATING EXPENSES














Interest

15

20

(5)

(25%)

47

69

(22)

(32%)

Salaries, benefits and stock-based compensation

34

33

1

3 %

108

107

1

1 %

General and administrative

15

12

3

25 %

43

36

7

19 %

Total operating expenses

64

65

(1)

(2%)

198

212

(14)

(7%)
















NET OPERATING INCOME BEFORE INCOME
   TAXES

90

65

25

38 %

268

219

49

22 %
















Tax (provision) benefit

(19)

-

(19)

(100 %)

46

-

46

100 %

NET OPERATING INCOME

71

65

6

9 %

314

219

95

43 %
















Loss on extinguishment of debt, net of tax

(3)

-

(3)

(100 %)

(3)

-

(3)

100 %

Net realized gain (loss)














Portfolio company investments

5

44

(39)

(89 %)

(280)

(181)

(99)

(55%)

Foreign currency transactions

-

(1)

1

100 %

1

-

1

100 %

Derivative agreements

(5)

(10)

5

50 %

(84)

(37)

(47)

(127%)

Tax benefit

4

-

4

100 %

78

-

78

100 %

Total net realized gain (loss)

4

33

(29)

(88%)

(285)

(218)

(67)

(31%)
















NET REALIZED EARNINGS

72

98

(26)

(27%)

26

1

25

2,500 %
















Net unrealized appreciation (depreciation)














Portfolio company investments

109

(477)

586

 NM 

983

337

646

192 %

Foreign currency translation

29

(80)

109

 NM 

(9)

34

(43)

 NM 

Derivative agreements

6

(5)

11

 NM 

59

8

51

638 %

Tax provision

(20)

-

(20)

(100%)

(46)

-

(46)

(100%)

Total net unrealized appreciation 
   (depreciation)

124

(562)

686

 NM 

987

379

608

160 %
















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

$             196

$           (464)

$             660

 NM 

$          1,013

$             380

$             633

167 %
















NET OPERATING INCOME PER COMMON 
   SHARE














  Basic

$            0.22

$            0.19

$            0.03

16 %

$            0.97

$            0.63

$            0.34

54 %

  Diluted

$            0.22

$            0.19

$            0.03

16 %

$            0.94

$            0.61

$            0.33

54 %
















NET REALIZED EARNINGS PER COMMON
   SHARE














  Basic

$            0.23

$            0.28

$          (0.05)

(18 %)

$            0.08

$                -

$            0.08

100 %

  Diluted

$            0.22

$            0.28

$          (0.06)

(21 %)

$            0.08

$                -

$            0.08

100 %
















NET EARNINGS (LOSS) PER COMMON
   SHARE














  Basic

$            0.62

$          (1.34)

$            1.96

 NM 

$            3.13

$            1.10

$            2.03

185 %

  Diluted

$            0.60

$          (1.34)

$            1.94

 NM 

$            3.04

$            1.06

$            1.98

187 %
















WEIGHTED AVERAGE SHARES OF COMMON
   STOCK OUTSTANDING














  Basic

316.4

345.3

(28.9)

(8%)

323.9

346.2

(22.3)

(6%)

  Diluted

327.3

345.3

(18.0)

(5%)

333.6

359.1

(25.5)

(7%)
















NM = Not meaningful.














AMERICAN CAPITAL, LTD.

OTHER FINANCIAL INFORMATION

Three Months Ended September 30, 2012, June 30, 2012 and September 30, 2011

(in millions, except per share data)

(unaudited)



















 Q3 2012 Versus
Q2 2012


Q3 2012 Versus
Q3 2011

Q3 2012

Q2 2012

$

%

Q3 2011

$

%














Assets Under Management












American Capital Assets at Fair Value

$           6,266

$        6,325

$               (59)

(1%)

$           5,692

$              574

10 %

Externally Managed Assets at Fair Value(1)

111,566

93,845

17,721

19 %

50,941

60,625

119 %

Total

$       117,832

$    100,170

$         17,662

18 %

$         56,633

$         61,199

108 %














Third-Party Earning Assets Under Management(2)

$         12,359

$      10,991

$           1,368

12 %

$           6,496

$           5,863

90 %

Total Earning Assets Under Management(3)

$         18,567

$      17,245

$           1,322

8 %

$         12,134

$           6,433

53 %














New Investments












Senior Debt

$                  -

$             43

$              (43)

(100%)

$                27

$              (27)

(100%)

Mezzanine Debt

-

29

(29)

(100%)

57

(57)

(100%)

Preferred Equity

6

-

6

100 %

-

6

100 %

Common Equity

-

30

(30)

(100%)

43

(43)

(100%)

Equity Warrants

-

1

(1)

(100%)

1

(1)

(100%)

Total

$                  6

$           103

$              (97)

(94%)

$              128

$            (122)

(95%)














Financing for Private Equity Buyouts

$                  -

$             22

$              (22)

(100%)

$                15

$              (15)

(100%)

Investments in Managed Funds

-

-

-

-

40

(40)

(100%)

American Capital Buyouts

-

-

-

-

1

(1)

(100%)

Add-on Investment in American Capital, LLC

-

30

(30)

(100%)

11

(11)

(100%)

Add-on Financing for Acquisitions

6

3

3

100 %

57

(51)

(89%)

Add-on Financing for Working Capital in Distressed Situations

-

2

(2)

(100%)

2

(2)

(100%)

Add-on Financing for Growth and Working Capital

-

4

(4)

(100%)

2

(2)

(100%)

Add-on Financing for Recapitalizations, not Including Distressed

   Investments

-

42

(42)

(100%)

-

-

-

Total

$                  6

$           103

$              (97)

(94%)

$              128

$            (122)

(95%)














Realizations












Sale of Equity Investments

$                56

$             42

$                14

33 %

$              127

$              (71)

(56%)

Principal Prepayments

24

223

(199)

(89%)

96

(72)

(75%)

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

42

56

(14)

(25%)

16

26

163 %

Scheduled Principal Amortization

14

11

3

27 %

11

3

27 %

Loan Syndications and Sales

-

-

-

-

10

(10)

(100%)

Total

$              136

$           332

$            (196)

(59%)

$              260

$            (124)

(48%)














Appreciation, Depreciation, Gain and Loss












Gross Realized Gain

$                10

$               8

$                  2

25 %

$                96

$              (86)

(90 %)

Gross Realized Loss

(5)

(171)

166

97 %

(52)

47

90 %

Portfolio Net Realized Gain (Loss)

5

(163)

168

103 %

44

(39)

(89 %)

Foreign Currency Transactions

-

-

-

-

(1)

1

100 %

Derivative Agreements

(5)

(71)

66

93 %

(10)

5

50 %

Tax Benefit

4

52

(48)

(92%)

-

4

100 %

Net Realized Gain (Loss)

4

(182)

186

102 %

33

(29)

(88 %)














Gross Unrealized Appreciation of Private Finance Portfolio
   Investments

152

133

19

14 %

82

70

85 %

Gross Unrealized Depreciation of Private Finance Portfolio
   Investments

(111)

(53)

(58)

(109%)

(285)

174

61 %

Net Unrealized Appreciation (Depreciation) of Private Finance
   Portfolio Investments

41

80

(39)

(49%)

(203)

244

 NM 

Unrealized Appreciation (Depreciation) of European Capital
   Investment

65

(98)

163

166 %

(248)

313

 NM 

Unrealized (Depreciation) Appreciation of European Capital
   Foreign Currency Translation

(15)

33

(48)

 NM 

25

(40)

 NM 

Unrealized Appreciation (Depreciation) of American Capital,
   LLC

1

41

(40)

(98%)

(47)

48

 NM 

Unrealized Appreciation of American Capital Mortgage
   Investment Corp.

-

5

(5)

(100%)

-

-

-

Net Unrealized Appreciation of Structured Products

20

4

16

400 %

6

14

233 %

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

(3)

182

(185)

 NM 

(10)

7

70 %

Net Unrealized Appreciation (Depreciation) of Portfolio
   Company Investments

109

247

(138)

(56%)

(477)

586

 NM 

Foreign Currency Translation - European Capital

27

(73)

100

 NM 

(77)

104

 NM 

Foreign Currency Translation - Other

2

(3)

5

 NM 

(3)

5

 NM 

Derivative Agreements

6

4

2

50 %

(6)

12

 NM 

Reversal of Prior Period Net Unrealized Depreciation Upon
   Realization of Terminated Swaps

-

55

(55)

(100%)

1

(1)

(100%)

Tax Provision

(20)

(5)

(15)

(300%)

-

(20)

(100%)

Net Unrealized Appreciation (Depreciation) of
   Investments

124

225

(101)

(45%)

(562)

686

 NM 














Net Gains, Losses, Appreciation and Depreciation

$              128

$             43

$                85

198 %

$            (529)

$              657

 NM 














Other Financial Data












NAV per Share

$           17.39

$        16.62

$             0.77

5 %

$           11.92

$             5.47

46 %

Debt at Cost

$              803

$           941

$            (138)

(15%)

$           1,519

$            (716)

(47%)

Debt at Fair Value

$              797

$           928

$            (131)

(14%)

$           1,443

$            (646)

(45%)

Market Capitalization

$           3,509

$        3,196

$              313

10 %

$           2,299

$           1,210

53 %

Total Enterprise Value(4)

$           4,008

$        3,831

$              177

5 %

$           3,631

$              377

10 %

Asset Coverage Ratio

769 %

661 %




364 %



Debt to Equity Ratio

0.1x

0.2x




0.4x



Credit Quality












Weighted Average Effective Interest Rate on Debt Investments at
   Period End

11.1 %

11.0 %




10.3 %



Loans on Non-Accrual at Cost

$              370

$           402

$              (32)

(8%)

$              569

$            (199)

(35%)

Loans on Non-Accrual at Fair Value

$              252

$           243

$                  9

4 %

$              173

$                79

46 %

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

17.4 %

18.8 %




18.6 %



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

12.5 %

12.3 %




6.6 %



Non-Accrual Loans at Fair Value as a Percentage of Non-
   Accruing Loans at Cost

68.1 %

60.4 %




30.4%



Past Due Loans at Cost

$                  9

$               9

$                  -

-

$                  3

$                  6

200 %

Debt to Equity Conversions at Cost

$                  2

$             38

$              (36)

(95%)

$                  -

$                  2

100 %

Return on Average Equity












LTM Net Operating Income Return on Average Equity at Cost

9.1 %

9.0 %




4.8 %



LTM Net Realized Earnings Return on Average Equity at Cost

2.8 %

3.2 %




0.1 %



LTM Net Earnings Return on Average Equity at Fair Value

33.0 %

20.1 %




19.4 %



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

4.8 %

13.1 %




4.3 %



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

5.2 %

0.9 %




6.6 %



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

14.7 %

18.3 %




(43.4%)













































NM = Not meaningful.












(1)  Includes total assets of American Capital Agency Corp., American Capital Mortgage Investment Corp., European Capital, American Capital Equity I, American Capital Equity II, ACAS CLO 2007-1 and ACAS

       CLO 2012-1, less American Capital's investment in the funds.  Total assets of American Capital Mortgage Investment Corp. are as of June 30, 2012.

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

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

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

Static Pool (1)

Portfolio Statistics
($ in millions, unaudited)










Pre-2001 - 2012 Static Pools Aggregate

Aggregate

Pre-2001

2001

2002

2003

2004

2005

2006

2007

2008

2011

2012

IRR at Fair Value of All Investments(2)

8.2 %

18.1 %

8.1 %

20.5 %

13.5 %

12.6 %

10.6 %

(3.6%)

7.6 %

24.4 %

11.9 %

8.7 %

IRR of Exited Investments(3)

9.2 %

18.6 %

9.7 %

20.0 %

16.7 %

21.9 %

7.3 %

(6.5%)

3.7 %

35.1 %

N/A

10.1 %

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

6.2 %

46.4 %

11.2 %

27.9 %

26.1 %

11.4 %

14.9 %

(7.7%)

19.8 %

31.4 %

N/A

11.2 %

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

10.9 %

46.4 %

21.4 %

36.7 %

49.0 %

50.8 %

11.5 %

9.5 %

35.3 %

35.1 %

N/A

26.8 %

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

1.8 %

17.1 %

10.6 %

19.1 %

15.9 %

28.5 %

12.9 %

2.5 %

15.3 %

—%

N/A

13.7 %

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

10.0 %

N/A

(0.4%)

17.8 %

7.0 %

24.0 %

11.6 %

0.1 %

15.4 %

—%

N/A

11.3 %

IRR of Exited One Stop Buyout® Investments(3)

1.4 %

17.1 %

14.7 %

16.3 %

26.0 %

30.5 %

10.6 %

14.9 %

13.9 %

N/A

N/A

15.3 %

Committed Investments(7)

$1,065

$376

$966

$1,436

$2,267

$4,856

$5,267

$7,495

$1,039

$137

$22

$24,926

Total Exits and Prepayments of Committed Investments(7)

$999

$367

$836

$1,267

$1,987

$2,597

$4,243

$5,132

$503

$40

$—

$17,971

Total Interest, Dividends and Fees Collected

$408

$148

$349

$456

$697

$1,223

$1,277

$1,249

$358

$11

$—

$6,176

Total Net Realized (Loss) Gain on Investments

$(135)

$(23)

$(118)

$143

$16

$375

$(306)

$(1,131)

$(115)

$9

$—

$(1,285)

Current Cost of Investments

$74

$4

$114

$162

$271

$1,971

$916

$1,991

$349

$70

$21

$5,943

Current Fair Value of Investments

$34

$—

$80

$339

$192

$2,016

$1,039

$1,201

$316

$71

$21

$5,309

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

   Fair Value

0.6 %

—%

1.5 %

6.4 %

3.6 %

38.0 %

19.6 %

22.6 %

6.0 %

1.3 %

0.4 %

100.0 %

Net Unrealized (Depreciation) Appreciation

$(40)

$(4)

$(34)

$177

$(79)

$45

$123

$(790)

$(33)

$1

$—

$(634)

Non-Accruing Loans at Cost

$—

$—

$26

$—

$30

$58

$47

$187

$22

$—

$—

$370

Non-Accruing Loans at Fair Value

$—

$—

$15

$—

$9

$40

$17

$147

$24

$—

$—

$252

Equity Interest at Fair Value(4)

$8

$—

$—

$302

$117

$1,654

$501

$365

$104

$5

$—

$3,056

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

7.0

NM

12.3

3.0

5.0

1.8

4.1

6.2

5.8

5.4

6.7

4.3

Interest Coverage(10)(11)(14)

1.8

NM

1.3

3.6

2.7

4.9

2.8

2.2

2.4

1.9

4.3

3.3

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

1.8

NM

1.3

3.2

1.9

0.5

2.4

2.0

2.1

1.7

3.8

1.7

Average Age of Companies(11)(14)

 40 yrs 

—

 28 yrs 

 40 yrs 

 52 yrs 

 16 yrs 

 38 yrs 

 31 yrs 

 18 yrs 

 25 yrs 

 31 yrs 

 28 yrs 

Diluted Ownership Percentage(4)(15)

66 %

—%

—%

56 %

80 %

91 %

46 %

60 %

55 %

25 %

—%

74 %

Average Revenue(11)(12)(14)

$50

$—

$42

$225

$67

$168

$170

$197

$84

$152

$261

$167

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

$5

$—

$8

$49

$14

$71

$44

$36

$19

$43

$84

$46

Total Revenue(11)(12)

$83

$216

$76

$1,509

$365

$1,300

$3,031

$4,563

$1,186

$441

$557

$13,327

Total Adjusted EBITDA(8)(11)

$7

$2

$11

$211

$56

$301

$425

$734

$206

$145

$176

$2,274

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

75 %

—%

59 %

—%

27 %

36 %

19 %

60 %

30 %

38 %

100 %

42 %

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

100 %

—%

100 %

100 %

100 %

97 %

94 %

89 %

67 %

38 %

100 %

72 %


























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

Pre-2001 - 2012 Static Pools Aggregate









Total Number of MOPC

44









Total Revenue(12)

$3,221









Total Gross Profit(12)

$1,612









Total Adjusted EBITDA(8)

$716





















Total Capital Expenditures(12)

$105









Total Current ACAS Investment in MOPC at Fair Value

$3,460









Total Current ACAS Investment in MOPC at Cost Basis

$3,240









Total Current ACAS Debt Investment in MOPC at Fair Value

$1,264









Total Current ACAS Debt Investment in MOPC at Cost Basis

$1,341









Diluted Ownership Percentage of ACAS in MOPC(15)

72 %





















Total Cash(16)

$205









Total Assets(16)

$4,403









Total Debt(16)

$3,484









Total Third-party Debt at Cost(16)

$1,707









Total Shareholders' Equity(16)(17)

$3,214



































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

        investments made in 2009 and 2010  static pool years.

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

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

(4)   Excludes investments in Structured Products.

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

(6)   MOPC investments represent portfolio company investments in which American Capital, or its affiliates, have a fully diluted ownership percentage of 50% or more or have over 50% board

        representation at the portfolio company. Excludes our investment in European Capital.

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

(8)   Adjusted EBITDA may reflect certain adjustments to the reported EBITDA of a portfolio company for non-recurring, unusual or infrequent items or other pro-forma items or events to normalize

        current earnings which a buyer may consider in a change in control transactions. These adjustments may be material and are highly subjective in nature. Portfolio company reported EBITDA is for

        the most recently available twelve months, or when appropriate, the forecasted twelve months or current annualized run-rate. 

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

(17) 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 November 1, 2012 at 2:00 pm 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.  The shareholder call may be postponed depending on when equity markets reopen following Hurricane Sandy.

A slide presentation will accompany the shareholder call and will be available at www.AmericanCapital.com.  Select the Q3 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 November 1, 2012.  In addition, there will be a phone recording available from 4:00 pm ET November 1, 2012 until 9:00 am ET November 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 10019010.

ABOUT AMERICAN CAPITAL
American Capital is a publicly traded private equity firm and global asset manager.  American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products.  American Capital manages $18.6 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $118 billion of total assets under management (including levered assets).  From its seven offices in the U.S. and Europe, American Capital and its affiliate, 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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