10-Q 1 acas10q63012.htm FORM 10-Q ACAS 10Q 6.30.12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2012
 
OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 814-00149
 
 
AMERICAN CAPITAL, LTD.
(Exact name of registrant as specified in its charter)
Delaware
 
52-1451377
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
2 Bethesda Metro Center
14th Floor
Bethesda, Maryland 20814
(Address of principal executive offices)
(301) 951-6122
(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Name of each exchange
on which registered
Common Stock, $0.01 par value per share
 
The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
 
Securities registered pursuant to section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  o    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  x
 
 
  
Accelerated filer  o
Non-accelerated filer  o
 
(Do not check if a smaller reporting company)
  
Smaller Reporting Company  o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No.  x
 
The number of shares of the issuer's common stock, $0.01 par value legally outstanding as of July 30, 2012, was 324,654,956.
________________________________________________________________________________________________________________________





2


PART I. FINANCIAL INFORMATION
 
ITEM 1.
Financial Statements

AMERICAN CAPITAL, LTD.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
 
 
June 30,
 
December 31,
 
2012
 
2011
 
(unaudited)
 
 
Assets
 
 
 
Investments at fair value
 
 
 
Non-Control/Non-Affiliate investments (cost of $2,084 and $2,781, respectively)
$
1,538

 
$
2,113

Affiliate investments (cost of $307 and $148, respectively)
296

 
107

Control investments (cost of $3,602 and $3,810, respectively)
3,386

 
2,910

Total investments at fair value (cost of $5,993 and $6,739, respectively)
5,220

 
5,130

Cash and cash equivalents
306

 
204

Restricted cash and cash equivalents
150

 
80

Interest receivable
22

 
24

Deferred tax asset, net
541

 
428

Derivative agreements at fair value
11

 
10

Other
75

 
85

Total assets
$
6,325

 
$
5,961

Liabilities and Shareholders’ Equity
 
 
 
Debt ($263 and $227 due within one year, respectively)
$
941

 
$
1,251

Derivative agreements at fair value
47

 
99

Other
57

 
48

Total liabilities
1,045

 
1,398

Commitments and contingencies
 
 
 
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, 324.4 and 336.4 issued and 317.7 and 329.1 outstanding, respectively
3

 
3

Capital in excess of par value
6,953

 
7,053

Distributions in excess of net realized earnings
(1,045
)
 
(999
)
Net unrealized depreciation of investments
(631
)
 
(1,494
)
Total shareholders’ equity
5,280

 
4,563

Total liabilities and shareholders’ equity
$
6,325

 
$
5,961

Net Asset Value Per Common Share Outstanding
$
16.62

 
$
13.87

 
See accompanying notes.

3


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in millions, except per share data)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2011
 
2012
 
2011
Operating Income
 
 
 
 
 
 
 
Interest and dividend income
 
 
 
 
 
 
 
Non-Control/Non-Affiliate investments
$
76

 
$
63

 
$
145

 
$
157

Affiliate investments
11

 
2

 
14

 
4

Control investments
64

 
66

 
128

 
116

Total interest and dividend income
151

 
131

 
287

 
277

Fee income
 
 
 
 
 
 
 
Non-Control/Non-Affiliate investments
3

 
3

 
5

 
10

Control investments
9

 
8

 
20

 
14

Total fee income
12

 
11

 
25

 
24

Total operating income
163

 
142

 
312

 
301

Operating Expenses
 
 
 
 
 
 
 
Interest
16

 
20

 
32

 
49

Salaries, benefits and stock-based compensation
37

 
38

 
74

 
74

General and administrative
13

 
13

 
28

 
24

Total operating expenses
66

 
71

 
134

 
147

Net Operating Income Before Income Taxes
97

 
71

 
178

 
154

Tax benefit
97

 

 
65



Net Operating Income
194

 
71

 
243

 
154

Net realized (loss) gain
 
 
 
 
 
 
 
Non-Control/Non-Affiliate investments
(82
)
 
(217
)
 
(135
)
 
(205
)
Affiliate investments

 

 
(1
)
 

Control investments
(81
)
 
(18
)
 
(149
)
 
(20
)
Foreign currency transactions

 
1

 
1

 
1

Derivative agreements
(71
)
 
(14
)
 
(79
)
 
(27
)
Tax benefit
52

 

 
74

 

Total net realized loss
(182
)
 
(248
)
 
(289
)
 
(251
)
Net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
Portfolio company investments
247

 
558

 
874

 
814

Foreign currency translation
(76
)
 
29

 
(38
)
 
114

Derivative agreements
59

 

 
53

 
13

Tax provision
(5
)
 

 
(26
)
 

Total net unrealized appreciation
225

 
587

 
863

 
941

Total net gain
43

 
339

 
574

 
690

Net Increase in Net Assets Resulting from Operations (“Net Earnings”)
$
237

 
$
410

 
$
817

 
$
844

 
 
 
 
 
 
 
 
Net Operating Income Per Common Share
 
 
 
 
 
 
 
Basic
$
0.60

 
$
0.20

 
$
0.74

 
$
0.44

Diluted
$
0.58

 
$
0.20

 
$
0.72

 
$
0.43

Net Earnings Per Common Share
 
 
 
 
 
 
 
Basic
$
0.73

 
$
1.18

 
$
2.49

 
$
2.43

Diluted
$
0.71

 
$
1.13

 
$
2.43

 
$
2.34

Weighted Average Shares of Common Stock Outstanding
 
 
 
 
 
 
 
Basic
324.5

 
347.3

 
327.7

 
346.7

Diluted
333.9

 
361.6

 
336.8

 
360.0

See accompanying notes.

4


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
(in millions, except per share data)
 
 
Six Months Ended
June 30,
 
2012
 
2011
Operations
 
 
 
Net operating income
$
243

 
$
154

Net realized loss
(289
)
 
(251
)
Net unrealized appreciation
863

 
941

Net earnings
817

 
844

Capital Share Transactions
 
 
 
Proceeds from issuance of common stock upon exercise of stock options
10

 
9

Repurchase of common stock
(134
)
 

Stock-based compensation
24

 
20

Net (decrease) increase in net assets resulting from capital share transactions
(100
)
 
29

Total increase in net assets
717

 
873

Net assets at beginning of period
4,563

 
3,668

Net assets at end of period
$
5,280

 
$
4,541

 
 
 
 
Net asset value per common share outstanding
$
16.62

 
$
13.16

Common shares outstanding at end of period
317.7

 
345.1

 
See accompanying notes.

5


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in millions)
 
Six Months Ended
June 30,
 
2012
 
2011
Operating Activities
 
 
 
Net earnings
$
817

 
$
844

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Net unrealized appreciation
(889
)
 
(941
)
Net realized loss
363

 
251

Accrued payment-in-kind interest and dividends on investments
(123
)
 
(106
)
Amortization of deferred finance costs, premiums and discounts
5

 
11

Depreciation of property and equipment
3

 
4

Stock-based compensation
24

 
20

Increase in deferred tax asset, net
(113
)
 

Decrease in interest receivable

 
7

Increase in other assets
(4
)
 
(7
)
Increase (decrease) in other liabilities
5

 
(1
)
Other
(3
)
 
3

Net cash provided by operating activities
85

 
85

Investing Activities
 
 
 
Purchases and originations of investments
(173
)
 
(55
)
Repayments from portfolio company revolving credit facility investments, net
50

 
5

Principal repayments on debt investments
532

 
280

Proceeds from loan syndications and loan sales

 
6

Payment of accrued PIK notes and dividend and accreted original issue discounts
107

 
72

Proceeds from sales of equity investments
89

 
91

Interest rate derivative periodic interest payments, net
(17
)
 
(25
)
Interest rate derivative termination payments
(62
)
 
(2
)
Other
(5
)
 

Net cash provided by investing activities
521

 
372

Financing Activities
 
 
 
Payments on secured borrowings
(1
)
 
(300
)
Payments on notes payable from asset securitizations
(309
)
 
(317
)
Proceeds from issuance of common stock upon exercise of stock options
10

 
9

Repurchase of common stock
(134
)
 

(Increase) decrease in debt service escrows
(70
)
 
69

Other

 
(1
)
Net cash used in financing activities
(504
)
 
(540
)
Net increase (decrease) in cash and cash equivalents
102

 
(83
)
Cash and cash equivalents at beginning of period
204

 
269

Cash and cash equivalents at end of period
$
306

 
$
186

 
See accompanying notes.

6


AMERICAN CAPITAL, LTD.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
(in millions, except per share data)
 
 
Six Months Ended
June 30,
 
2012
 
2011
Per Share Data
 
 
 
Net asset value at beginning of the period
$
13.87

 
$
10.71

Net operating income(1)
0.74

 
0.44

Net realized loss(1)
(0.88
)
 
(0.72
)
Net unrealized appreciation(1)
2.63

 
2.71

Net earnings(1)
2.49

 
2.43

Issuance of common stock
(0.08
)
 
(0.03
)
Repurchase of common stock
0.33

 

Other, net(2)
0.01

 
0.05

Net asset value at end of period
$
16.62

 
$
13.16

Ratio/Supplemental Data
 
 
 
Per share market value at end of period
$
10.06

 
$
9.93

Total investment return(3)
49.48
%
 
31.35
%
Shares outstanding at end of period
317.7

 
345.1

Net assets at end of period
$
5,280

 
$
4,541

Average net assets(4)
$
4,986

 
$
4,108

Average debt outstanding(5)
$
1,097

 
$
1,839

Average debt outstanding per common share(1)
$
3.35

 
$
5.30

Portfolio turnover rate(6)
7.58
%
 
3.91
%
Ratio of operating expenses to average net assets(6)
5.40
%
 
7.22
%
Ratio of operating expenses, net of interest expense, to average net assets(6)
4.11
%
 
4.81
%
Ratio of interest expense to average net assets(6)
1.29
%
 
2.41
%
Ratio of net operating income to average net assets(6)
9.80
%
 
7.56
%
 
(1)
Weighted average basic per share data.
(2)
Represents the impact of (i) the other components in the changes in net assets, including other capital transactions such as the purchase of common stock held in deferred compensation trusts, stock-based compensation, income tax deductions related to the exercise of stock options and distribution of stock awards in excess of U.S. GAAP expense credited to additional paid-in capital and (ii) the different share amounts used in calculating per share data as a result of calculating certain per share data based upon the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end.
(3)
Total investment return is based on the change in the market value of our common stock taking into account dividends, if any, reinvested in accordance with the terms of our dividend reinvestment plan.
(4)
Based on the quarterly average of net assets as of the beginning and end of each period presented.
(5)
Based on a daily weighted average balance of debt outstanding during the period.
(6)
Ratios are annualized.



See accompanying notes.

7



AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2012
(unaudited)
(in millions, except share data)
Company (1)
 
Industry
 
Investments
 
Interest
Rate (2)
 
Maturity
Date (2)
 
# of
shares/
units
owned
 
Principal
 
Cost
 
Fair
Value
NON-CONTROL / NON-AFFILIATE INVESTMENTS
 
 
 
 
 
 
 
 
Affordable Care Holding Corp.
 
Health Care Providers & Services
 
Mezzanine Debt(7)
 
15.1
%
 
6/16
 
 
 
$
71.9

 
$
71.4

 
$
71.9

 
 
 
Convertible Preferred Stock(7)
 
 
 
 
 
70,752

 
 
 
71.2

 
133.4

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
17,687,156

 
 
 
15.8

 
31.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
158.4

 
236.6

American Acquisition, LLC(9)
 
Capital Markets
 
Senior Debt(7)
 
14.3
%
 
12/12
 
 
 
6.0

 
6.0

 
6.0

AmWins Group LLC
 
Insurance
 
Senior Debt(7)
 
9.3
%
 
12/19
 
 
 
10.0

 
9.8

 
9.8

BBB Industries, LLC
 
Auto Components
 
Senior Debt(7)
 
9.3
%
 
6/14
 
 
 
21.2

 
21.2

 
20.7

Blue Wolf Capital Fund II, L.P.(9)
 
Capital Markets
 
Limited Partnership Interest(4)
 
 
 
 
 
 
 
 
 
6.5

 
6.0

CAMP International Holding Co.
 
Air Freight & Logistics
 
Senior Debt(7)
 
10.0
%
 
12/19
 
 
 
12.0

 
11.6

 
11.6

CIBT Investment Holdings, LLC
 
Commercial Services & Supplies
 
Common Stock(4)(7)
 
 
 
 
 
13,381

 
 
 
8.9

 
9.9

Delsey Holding(8)
 
Textiles, Apparel & Luxury Goods
 
Senior Debt(7)
 
8.7
%
 
2/14
 
 
 
20.6

 
20.5

 
14.8

DelStar, Inc.
 
Building Products
 
Redeemable Preferred Stock(7)
 
 
 
 
 
26,613

 
 
 
26.9

 
43.8

 
 
 
 
Convertible Preferred Stock(7)
 
 
 
 
 
29,569

 
 
 
3.9

 
3.9

 
 
 
 
Common Stock Warrants(4)(7)
 
 
 
 
 
89,020

 
 
 
16.9

 
8.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
47.7

 
55.7

Easton Bell Sports, LLC
 
Leisure Equipment & Products
 
Redeemable Preferred Stock
 
 
 
 
 
1,171

 
 
 
1.9

 
1.8

 
 
 
 
Common Units(4)
 
 
 
 
 
3,830,068

 
 
 
0.7

 
1.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.6

 
2.9

FAMS Acquisition, Inc.
 
Diversified Financial Services
 
Mezzanine Debt(7)
 
14.0
%
 
11/13
 
 
 
18.8

 
18.8

 
18.8

 
 
 
 
Mezzanine Debt(6)(7)
 
15.5
%
 
11/14
 
 
 
20.4

 
11.7

 
11.5

 
 
 
 
Redeemable Preferred Stock(4)(7)
 
 
 
 
 
919

 
 
 
0.9

 

 
 
 
 
Convertible Preferred Stock(4)(7)
 
 
 
 
 
861,364

 
 
 
20.9

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
52.3

 
30.3

Flexera Software, LLC
 
Software
 
Senior Debt(7)
 
11.0
%
 
10/18
 
 
 
15.0

 
14.0

 
15.0

FPI Holding Corporation
 
Food Products
 
Senior Debt(6)(7)
 
11.7
%
 
12/12-6/15
 
 
 
46.2

 
37.9

 
14.3

Groupe Unipex(8)
 
Personal Products
 
Mezzanine Debt(7)
 
10.9
%
 
5/17
 
 
 
7.0

 
6.2

 
6.9

 
 
 
 
Common Stock Warrants(4)
 
 
 
 
 
840,001

 
 
 
0.9

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.1

 
6.9

HMSC Corporation
 
Insurance
 
Senior Debt(6)(7)
 
5.7
%
 
10/14
 
 
 
3.5

 
2.8

 
0.9

IS Holdings I, Inc.
 
Software
 
Common Stock(4)(7)
 
 
 
 
 
1,165,930

 
 
 

 
14.4

JHCI Acquisition, Inc.
 
Air Freight & Logistics
 
Senior Debt(7)
 
5.8
%
 
12/14
 
 
 
19.0

 
19.0

 
16.5

KIK Custom Products, Inc.(8)
 
Household Products
 
Senior Debt(6)(7)
 
5.2
%
 
12/14
 
 
 
22.5

 
21.0

 
15.1

LCW Holdings, LLC
 
Real Estate
 
Senior Debt(7)
 
11.0
%
 
10/12
 
 
 
6.1

 
6.1

 
6.3

 
 
 
 
Warrant(4)
 
 
 
 
 
12.5
%
 
 
 
0.9

 
3.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.0

 
9.6

Mitchell International, Inc.
 
IT Services
 
Senior Debt(7)
 
5.8
%
 
3/15
 
 
 
5.0

 
5.0

 
4.7

NBD Holdings Corp.
 
Diversified Financial Services
 
Convertible Preferred Stock(4)
 
 
 
 
 
84,174

 
 
 
8.6

 
2.1

 
 
 
 
Common Stock(4)
 
 
 
 
 
633,408

 
 
 
0.1

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.7

 
2.1

Net1 Las Colinas Manager, LLC
 
Real Estate
 
Senior Debt(7)
 
7.7
%
 
10/15
 
 
 
2.9

 
2.9

 
2.5

Pan Am International Flight Academy, Inc.
 
Professional Services
 
Mezzanine Debt(7)
 
17.5
%
 
7/14
 
 
 
46.1

 
46.0

 
46.1

 
 
 
Convertible Preferred Stock(4)(7)
 
 
 
 
 
14,938

 
 
 
15.0

 
13.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
61.0

 
59.5

Parts Holding Coörperatief U.A(8)
 
Distributors
 
Membership Entitlements(4)(7)
 
 
 
 
 
173,060

 
 
 
6.4

 
0.8

Qioptiq S.à r.l.(8)
 
Electronic Equipment, Instruments & Components
 
Mezzanine Debt(7)
 
12.0
%
 
3/18
 
 
 
35.5

 
35.4

 
35.4

Qualium I(8)
 
Capital Markets
 
Common Stock(4)
 
 
 
 
 
241,879

 
 
 
2.1

 
1.9

RDR Holdings, Inc.
 
Household Durables
 
Mezzanine Debt(7)
 
15.6
%
 
10/14
 
 
 
31.3

 
31.2

 
31.3

 
 
 
 
Redeemable Preferred Stock(4)(7)
 
 
 
 
 
133

 
 
 
13.3

 

 
 
 
 
Convertible Preferred Stock(4)(7)
 
 
 
 
 
1,541

 
 
 
192.3

 

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
15,414

 
 
 
32.7

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
269.5

 
31.3

Renaissance Learning, Inc.
 
Software
 
Senior Debt(7)
 
12.0
%
 
10/18
 
 
 
10.0

 
9.6

 
10.2

Roark - Money Mailer, LLC
 
Media
 
Common Membership Units(4)
 
 
 
 
 
3.5
%
 
 
 
0.9

 
1.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
June 30, 2012
(unaudited)
(in millions, except share data)
Company (1)
 
Industry
 
Investments
 
Interest
Rate (2)
 
Maturity
Date (2)
 
# of
shares/
units
owned
 
Principal
 
Cost
 
Fair
Value
Scanner Holdings Corporation
 
Computers & Peripherals
 
Mezzanine Debt(7)
 
14.0
%
 
6/14
 
 
 
18.0

 
17.9

 
18.0

 
 
 
Convertible Preferred Stock(7)
 
 
 
 
 
77,640,000

 
 
 
11.7

 
17.9

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
78,242

 
 
 
0.1

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
29.7

 
35.9

Soil Safe Holdings, LLC
 
Professional Services
 
Senior Debt(7)
 
9.8
%
 
8/13-8/14
 
 
 
36.0

 
35.9

 
36.1

 
 
 
 
Mezzanine Debt(7)
 
15.5
%
 
8/15-8/16
 
 
 
42.3

 
42.1

 
41.3

 
 
 
 
Mezzanine Debt(6)(7)
 
17.5
%
 
8/17
 
 
 
36.9

 
27.4

 
24.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
105.4

 
102.2

SPL Acquisition Corp.
 
Pharmaceuticals
 
Senior Debt(7)
 
11.0
%
 
6/14
 
 
 
46.6

 
46.4

 
46.6

 
 
 
 
Mezzanine Debt(7)
 
15.3
%
 
6/15-6/16
 
 
 
56.1

 
55.7

 
56.1

 
 
 
 
Convertible Preferred Stock(7)
 
 
 
 
 
84,043

 
 
 
63.3

 
63.3

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
84,043

 
 
 

 
19.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
165.4

 
185.3

Survey Sampling International, LLC
 
Media
 
Mezzanine Debt(7)
 
15.0
%
 
7/18
 
 
 
41.2

 
40.8

 
40.8

Swank Audio Visuals, LLC
 
Commercial Services & Supplies
 
Senior Debt(7)
 
9.5
%
 
8/15
 
 
 
57.5

 
57.3

 
49.3

ThreeSixty Sourcing, Inc.(8)
 
Commercial Services & Supplies
 
Common Stock Warrants(4)(7)
 
 
 
 
 
35

 
 
 
4.1

 

TransFirst Holdings, Inc.
 
Commercial Services & Supplies
 
Senior Debt(7)
 
6.3
%
 
6/15
 
 
 
54.0

 
53.7

 
49.1

Tyden Cayman Holdings Corp.(8)
 
Electronic Equipment, Instruments & Components
 
Convertible Preferred Stock(4)(7)
 
 
 
 
 
26,977

 
 
 
0.1

 
0.1

 
 
Common Stock(4)(7)
 
 

 
 
 
3,218,667

 
 
 
3.8

 
3.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.9

 
3.8

WRH, Inc.
 
Life Sciences Tools & Services
 
Mezzanine Debt(7)
 
15.0
%
 
7/16
 
 
 
101.1

 
100.8

 
99.3

 
 
 
 
Convertible Preferred Stock(7)
 
 
 
 
 
2,008,575

 
 
 
233.5

 
105.5

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
502,144

 
 
 
49.8

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
384.1

 
204.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CMBS INVESTMENTS
 
 
 
 
 
 
 
 
Banc of America Commercial Mortgage Trust 2007-1(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
5.9
%
 
2/17-2/18
 
 
 
12.4

 
4.0

 
0.3

CD 2007-CD4 Commercial Mortgage Trust(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
5.9
%
 
4/17
 
 
 
14.0

 
8.7

 
0.3

CD 2007-CD5 Mortgage Trust(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.3
%
 
12/17
 
 
 
14.8

 
8.9

 
1.1

Citigroup Commercial Mortgage Securities Trust 2007-C6(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
5.9
%
 
7/17
 
 
 
67.5

 
32.3

 
7.7

COBALT CMBS Commercial Mortgage Trust 2007-C3(9)
 
Real Estate
 
Commercia1 Mortgage Pass-Through Certificates(4)(7)
 
5.2
%
 
10/17
 
 
 
6.2

 
4.3

 
0.1

Credit Suisse Commercial Mortgage Trust Series 2007-C4(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.0
%
 
8/17
 
 
 
20.8

 
10.5

 
2.9

J.P. Morgan Chase Commercial Mortgage Securities Trust 2007-LDP11(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.0
%
 
7/17
 
 
 
52.3

 
9.0

 
1.0

LB-UBS Commercial Mortgage Trust 2007-C6(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.4
%
 
8/17
 
 
 
36.6

 
20.7

 
1.6

LB-UBS Commercial Mortgage Trust 2008-C1(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.3
%
 
7/23-7/24
 
 
 
19.4

 
7.4

 
0.4

ML-CFC Commercial Mortgage Trust 2007-6(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.0
%
 
4/17
 
 
 
9.8

 
3.2

 
0.1

ML-CFC Commercial Mortgage Trust 2007-8(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.2
%
 
8/17
 
 
 
18.8

 
11.0

 
0.4

Wachovia Bank Commercial Mortgage Trust 2007-C31(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.0
%
 
5/17
 
 
 
20.0

 
10.7

 
0.9

Wachovia Bank Commercial Mortgage Trust, Series 2007-C32(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
5.9
%
 
10/17
 
 
 
39.5

 
18.5

 
2.1

Wachovia Bank Commercial Mortgage Trust, Series 2007-C34(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
5.7
%
 
10/17-12/23
 
 
 
70.3

 
35.2

 
4.9

Wachovia Bank Commercial Trust 2006-C28(9)
 
Real Estate
 
Commercial Mortgage Pass-Through Certificates(4)(7)
 
6.2
%
 
11/16
 
 
 
5.0

 
2.8

 
0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
June 30, 2012
(unaudited)
(in millions, except share data)
Company (1)
 
Industry
 
Investments
 
Interest
Rate (2)
 
Maturity
Date (2)
 
# of
shares/
units
owned
 
Principal
 
Cost
 
Fair
Value
CLO INVESTMENTS
 
 
 
 
 
 
 
 
ACAS CLO 2007-1, Ltd.(8)(9)
 
 
 
Secured Notes(7)
 
 
 
 
 
 
 
8.5

 
8.4

 
6.1

 
 
 
Subordinated Notes(7)
 
 
 
 
 
 
 
25.9

 
14.8

 
18.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
23.2

 
24.2

Ares IIIR/IVR CLO Ltd.(8)(9)
 
 
 
Subordinated Notes(7)
 
 
 
 
 
 
 
20.0

 
16.4

 
14.6

Ares VIII CLO, Ltd.(8)(9)
 
 
 
Preference Shares(7)
 
 
 
 
 
6,241

 
 
 
5.1

 
3.3

Avalon Capital Ltd. 3(8)(9)
 
 
 
Preferred Securities(7)
 
 
 
 
 
13,796

 
 
 
4.7

 
6.7

Babson CLO Ltd. 2006-II(8)(9)
 
 
 
Income Notes(7)
 
 
 
 
 
 
 
15.0

 
9.4

 
15.1

BALLYROCK CLO 2006-2 LTD.(8)(9)
 
 
 
Deferrable Notes(7)
 
 
 
 
 
 
 
2.0

 
1.6

 
1.5

Cent CDO 12 Limited(8)(9)
 
 
 
Income Notes(7)
 
 
 
 
 
 
 
26.4

 
14.3

 
23.9

Centurion CDO 8 Limited(8)(9)
 
 
 
Subordinated Notes(7)
 
 
 
 
 
 
 
5.0

 
2.0

 
2.7

Champlain CLO(8)(9)
 
 
 
Preferred Securities(7)
 
 
 
 
 
1,000,000

 
 
 
1.1

 
0.7

CoLTs 2005-1 Ltd.(8)(9)
 
 
 
Preference Shares(4)(7)
 
 
 
 
 
360

 
 
 
2.0

 
0.4

CoLTs 2005-2 Ltd.(8)(9)
 
 
 
Preference Shares(7)
 
 
 
 
 
34,170,000

 
 
 
23.1

 
9.0

CREST Exeter Street Solar 2004-2(8)(9)
 
 
 
Preferred Securities(7)
 
 
 
 
 
3,089,177

 
 
 
4.3

 
2.7

Eaton Vance CDO X PLC(8)(9)
 
 
 
Secured Subordinated Income Notes(7)
 
 
 
 
 
 
 
15.0

 
12.4

 
10.7

Essex Park CDO Ltd.(8)(9)
 
 
 
Preferred Securities(7)
 
 
 
 
 
5,750,000

 
 
 
2.6

 
2.9

Flagship CLO V(8)(9)
 
 
 
Deferrable Notes(7)
 
 
 
 
 
 
 
1.7

 
1.4

 
1.3

 
 
 
 
Subordinated Securities(7)
 
 
 
 
 
15,000

 
 
 
8.1

 
10.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.5

 
12.0

Galaxy III CLO, Ltd(8)(9)
 
 
 
Subordinated Notes(4)(7)
 
 
 
 
 
 
 
4.0

 
1.4

 
0.6

LightPoint CLO IV, LTD(8)(9)
 
 
 
Income Notes(7)
 
 
 
 
 
 
 
6.7

 
7.5

 
5.4

LightPoint CLO VII, Ltd.(8)(9)
 
 
 
Subordinated Notes(7)
 
 
 
 
 
 
 
9.0

 
4.6

 
6.2

LightPoint CLO VIII, Ltd.(8)(9)
 
 
 
Deferrable Notes(7)
 
 
 
 
 
 
 
7.0

 
6.6

 
6.0

Mayport CLO Ltd.(8)(9)
 
 
 
Income Notes(7)
 
 
 
 
 
 
 
14.0

 
9.9

 
9.7

NYLIM Flatiron CLO 2006-1 LTD.(8)(9)
 
 
 
Subordinated Securities(7)
 
 
 
 
 
10,000

 
 
 
4.6

 
7.0

Octagon Investment Partners VII, Ltd.(8)(9)
 
 
 
Preferred Securities(7)
 
 
 
 
 
5,000,000

 
 
 
1.7

 
2.5

Sapphire Valley CDO I, Ltd.(8)(9)
 
 
 
Subordinated Notes(7)
 
 
 
 
 
 
 
14.0

 
15.4

 
14.4

Vitesse CLO, Ltd.(8)(9)
 
 
 
Preferred Securities(7)
 
 
 
 
 
20,000,000

 
 
 
13.3

 
14.1

Subtotal Non-Control / Non-Affiliate Investments (29% of total investments at fair value)
 
 
 
$
2,084.1

 
$
1,537.8

 
 
 
 
 
 
 
 
 
AFFILIATE INVESTMENTS
 
 
 
 
 
 
 
 
American Capital Mortgage Investment Corp.(5)(9)
 
Real Estate
 
Common Stock(7)
 
 
 
 
 
2,000,100

 
 
 
$
40.0

 
$
46.7

Anchor Drilling Fluids USA, Inc.
 
Energy Equipment & Services
 
Senior Debt(7)
 
11.3
%
 
12/13
 
 
 
$
6.4

 
6.4

 
6.3

 
 
 
Redeemable Preferred Stock(4)(7)
 
 
 
 
 
859

 
 
 
1.6

 
0.8

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
3,061

 
 
 
5.0

 

 
 
 
 
 
 
 
 
 
 
 

 
 
 
13.0

 
7.1

Comfort Co., Inc.
 
Household Durables
 
Senior Debt(7)
 
11.5
%
 
3/15
 
 
 
8.5

 
8.5

 
8.6

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
110,684

 
 
 
11.7

 
12.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
20.2

 
21.4

Egenera, Inc.
 
Computers & Peripherals
 
Mezzanine Debt(6)
 
15.0
%
 
8/12
 
 
 
5.2

 
3.2

 
1.2

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
8,569,905

 
 
 
25.4

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
28.6

 
1.2

HALT Medical, Inc.
 
Health Care Equipment & Supplies
 
Senior Debt(7)
 
16.1
%
 
12/12-7/13
 
 
 
15.0

 
13.4

 
13.4

 
 
 
Convertible Preferred Stock(4)(7)
 
 
 
 
 
5,592,367

 
 
 
8.9

 
10.8

 
 
 
 
Common Stock(4)(7)
 
 
 
 
 
131,315

 
 
 
0.1

 
0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
22.4

 
24.3

IEE Holding 1 S.A.(8)
 
Auto Components
 
Common Stock(4)
 
 
 
 
 
250,000

 
 
 
4.5

 
7.7

Neways Holdings, L.P.
 
Personal Products
 
Senior Debt(7)
 
16.0
%
 
8/14
 
 
 
9.5

 
9.5

 
9.1

 
 
 
 
Common Units(4)(7)
 
 
 
 
 
10.6
%
 
 
 
9.5

 
5.2