10-Q 1 acas10q93015.htm FORM 10-Q 10-Q
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 September 30, 2015
 
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)



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 issuers common stock, $0.01 par value legally outstanding as of October 30, 2015, was 263,641,799.
________________________________________________________________________________________________________________________





2


PART I. FINANCIAL INFORMATION
 
ITEM 1.
Financial Statements

AMERICAN CAPITAL, LTD.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
 
 
September 30,
 
December 31,
 
2015
 
2014
 
(unaudited)
 
 
Assets
 
 
 
Investments at fair value
 
 
 
Non-Control/Non-Affiliate investments (cost of $4,383 and $3,846, respectively)
$
4,126

 
$
3,472

Affiliate investments (cost of $39 and $29, respectively)
68

 
26

Control investments (cost of $2,499 and $2,542, respectively)
2,912

 
2,782

Total investments at fair value (cost of $6,921 and $6,417, respectively)
7,106

 
6,280

Cash and cash equivalents
244

 
676

Restricted cash and cash equivalents
97

 
167

Interest and dividend receivable
53

 
46

Deferred tax asset, net
263

 
354

Trade date settlement receivable
304

 
4

Other
101

 
113

Total assets
$
8,168

 
$
7,640

Liabilities and Shareholders’ Equity
 
 
 
Debt ($234 and $5 due within one year, respectively)
$
2,649

 
$
1,703

Trade date settlement liability
77

 
191

Other
135

 
274

Total liabilities
2,861

 
2,168

Commitments and contingencies (Note 12)
 
 
 
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, 263.3 and 271.1 issued and 259.6 and 266.9 outstanding, respectively
3

 
3

Capital in excess of par value
6,112

 
6,246

Cumulative translation adjustment, net of tax
(109
)
 
(38
)
Distributions in excess of net realized earnings
(806
)
 
(505
)
Net unrealized appreciation (depreciation) of investments
107

 
(234
)
Total shareholders’ equity
5,307

 
5,472

Total liabilities and shareholders’ equity
$
8,168

 
$
7,640

Net Asset Value Per Common Share Outstanding
$
20.44

 
$
20.50

 
See accompanying notes.

3


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in millions, except per share data)
 
Three Months Ended September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Operating Revenue
 
 
 
 
 
 
 
Interest and dividend income
 
 
 
 
 
 
 
Non-Control/Non-Affiliate investments
$
80

 
$
39

 
$
243

 
$
80

Affiliate investments
1

 
(1
)
 
1

 
(6
)
Control investments
84

 
77

 
210

 
195

Total interest and dividend income
165

 
115

 
454

 
269

Fee income
 
 
 
 
 
 
 
Non-Control/Non-Affiliate investments
1

 
3

 
6

 
9

Affiliate investments

 
3

 

 
3

Control investments
10

 
8

 
38

 
32

Total fee income
11

 
14

 
44

 
44

Total operating revenue
176

 
129

 
498

 
313

Operating Expenses
 
 
 
 
 
 
 
Interest
21

 
14

 
58

 
37

Salaries, benefits and stock-based compensation
31

 
37

 
103

 
114

European Capital management fees
3

 

 
11

 

General and administrative
13

 
12

 
43

 
39

Total operating expenses
68

 
63

 
215

 
190

Net Operating Income Before Income Taxes
108

 
66

 
283

 
123

Tax provision
(33
)
 
(15
)
 
(91
)
 
(41
)
Net Operating Income
75

 
51

 
192

 
82

Net realized gain (loss)
 
 
 
 
 
 
 
Non-Control/Non-Affiliate investments
(1
)
 
10

 
(239
)
 
44

Affiliate investments

 
(24
)
 

 
(32
)
Control investments
(67
)
 
60

 
(319
)
 
41

Foreign currency transactions
(10
)
 
(8
)
 
(9
)
 
(5
)
Derivative agreements and other
(2
)
 
(44
)
 
(4
)
 
(42
)
Tax benefit
23

 
17

 
78

 
19

Total net realized (loss) gain
(57
)
 
11

 
(493
)
 
25

Net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
Portfolio company investments
(60
)
 
135

 
309

 
355

Foreign currency translation
(2
)
 
(66
)
 
30

 
(82
)
Derivative agreements and other
1

 
(11
)
 
72

 
(13
)
Tax benefit (provision)
6

 
(6
)
 
(70
)
 
29

Total net unrealized (depreciation) appreciation
(55
)
 
52

 
341

 
289

Total net (loss) gain
(112
)
 
63

 
(152
)
 
314

Net (Decrease) Increase in Net Assets Resulting from Operations (“Net (Loss) Earnings”)
$
(37
)
 
$
114

 
$
40

 
$
396

 
 
 
 
 
 
 
 
Net Operating Income Per Common Share
 
 
 
 
 
 
 
Basic
$
0.28

 
$
0.19

 
$
0.71

 
$
0.31

Diluted
$
0.28

 
$
0.18

 
$
0.68

 
$
0.29

Net (Loss) Earnings Per Common Share
 
 
 
 
 
 
 
Basic
$
(0.14
)
 
$
0.43

 
$
0.15

 
$
1.48

Diluted
$
(0.14
)
 
$
0.41

 
$
0.14

 
$
1.41

Weighted Average Shares of Common Stock Outstanding
 
 
 
 
 
 
 
Basic
267.7

 
267.1

 
270.4

 
268.0

Diluted
267.7

 
279.9

 
281.2

 
280.6

See accompanying notes.

4


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(in millions, except per share data)
 
Three Months Ended September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
Net (loss) earnings
$
(37
)
 
$
114

 
$
40

 
$
396

Other comprehensive income (loss):
 
 
 
 
 
 
 
Cumulative translation adjustment, net of tax of $2 and ($15), respectively
7

 

 
(71
)
 

Comprehensive (loss) income
$
(30
)
 
$
114

 
$
(31
)
 
$
396


See accompanying notes.


5


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
(in millions, except per share data)
 
 
Nine Months Ended
September 30,
 
2015
 
2014
Operations
 
 
 
Net operating income, net of tax
$
192

 
$
82

Net realized (loss) gain, net of tax
(493
)
 
25

Net unrealized appreciation, net of tax
341

 
289

Net earnings
40

 
396

Capital Share Transactions
 
 
 
Proceeds from issuance of common stock upon exercise of stock options
61

 
24

Repurchase of common stock
(227
)
 
(137
)
Stock-based compensation
26

 
24

Cumulative translation adjustment, net of tax
(71
)
 

Other
6

 
8

Net decrease in net assets resulting from capital share transactions
(205
)
 
(81
)
Total (decrease) increase in net assets
(165
)
 
315

Net assets at beginning of period
5,472

 
5,126

Net assets at end of period
$
5,307

 
$
5,441

 
 
 
 
Net asset value per common share outstanding
$
20.44

 
$
20.54

Common shares outstanding at end of period
259.6

 
264.9

 
See accompanying notes.

6


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in millions)
 
Nine Months Ended
September 30,
 
2015
 
2014
Operating Activities
 
 
 
Net earnings
$
40

 
$
396

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Net unrealized appreciation of investments before income taxes
(411
)
 
(260
)
Net realized loss (gain) on investments before income taxes
571

 
(6
)
Effect of exchange rate changes on assets and liabilities denominated in foreign currencies
3

 

Accrued PIK interest and dividends on investments
(86
)
 
(46
)
Stock-based compensation
20

 
29

Increase in interest and dividend receivable
(7
)
 
(8
)
Decrease (increase) in deferred tax asset, net
81

 
(12
)
(Increase) decrease in other assets
(11
)
 
5

Decrease in other liabilities
(13
)
 
(8
)
Payment of Long Term Incentive Plan Liability
(46
)
 

Other
4

 
(1
)
Net cash provided by operating activities
145

 
89

Investing Activities
 
 
 
Purchases and originations of investments
(2,733
)
 
(2,332
)
Fundings on portfolio company revolving credit facility investments, net
(4
)
 
(25
)
Principal repayments on debt investments
580

 
583

Proceeds from loan syndications and loan sales
335

 
53

Payment of accrued PIK notes and dividends and accreted original issue discounts
38

 
234

Proceeds from equity investments
360

 
1,122

Decrease (increase) in cash collateral on total return swaps
100

 
(35
)
Net cash used in investing activities
(1,324
)
 
(400
)
Financing Activities
 
 
 
Proceeds from revolving credit facilities, net
1,086

 
595

Payments on secured borrowings
(138
)
 
(5
)
Increase in debt service escrows
(26
)
 
(24
)
Proceeds from issuance of common stock upon exercise of stock options
61

 
24

Repurchase of common stock
(227
)
 
(137
)
Other
3

 
7

Net cash provided by financing activities
759

 
460

Effect of currency rate changes on cash and cash equivalents
(12
)
 

Net (decrease) increase in cash and cash equivalents
(420
)
 
149

Cash and cash equivalents at beginning of period
676

 
315

Cash and cash equivalents at end of period
$
244

 
$
464

 
See accompanying notes.

7


AMERICAN CAPITAL, LTD.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
(in millions, except per share data)
 
 
Nine Months Ended
September 30,
 
2015
 
2014
Per Share Data
 
 
 
Net asset value at beginning of the period
$
20.50

 
$
18.97

Net operating income(1)
0.71

 
0.31

Net realized (loss) gain, net of tax(1)
(1.82
)
 
0.09

Net unrealized appreciation, net of tax(1)
1.26

 
1.08

Net earnings(1)
0.15

 
1.48

Issuance of common stock from stock compensation plans
(0.39
)
 
(0.15
)
Repurchase of common stock
0.37

 
0.17

Cumulative translation adjustment, net of tax
(0.27
)
 

Other, net(2)
0.08

 
0.07

Net asset value at end of period
$
20.44

 
$
20.54

Ratio/Supplemental Data
 
 
 
Per share market value at end of period
$
12.16

 
$
14.16

Total investment loss(3)
(16.77
%)
 
(9.46
%)
Shares of common stock outstanding at end of period
259.6

 
264.9

Net assets at end of period
$
5,307

 
$
5,441

Average net assets(4)
$
5,415

 
$
5,238

Average debt outstanding(5)
$
2,124

 
$
907

Average debt outstanding per common share(1)
$
7.86

 
$
3.38

Portfolio turnover rate(6)
26.58
%
 
49.78
%
Ratio of operating expenses to average net assets(6)
5.31
%
 
4.85
%
Ratio of operating expenses, net of interest expense, to average net assets(6)
3.88
%
 
3.91
%
Ratio of interest expense to average net assets(6)
1.43
%
 
0.94
%
Ratio of net operating income to average net assets(6)
4.74
%
 
2.09
%
 
(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. The total investment return has not been annualized.
(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, excluding discounts, during the period.
(6)
Ratios are annualized.



See accompanying notes.

8


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2015
(unaudited)
(in millions, except share data)
Company(1)
 
Industry
 
Investments
Cash
Interest
Rate(2)
PIK
Interest
Rate(2)
Maturity
Date(2)
# of
Shares/
Units
Owned
 
Principal
 
Cost
 
Fair
Value
AMERICAN CAPITAL NON-CONTROL / NON-AFFILIATE INVESTMENTS
 
 
 
 
 
 
 
2 TransAm LLC(7)
 
Real Estate
 
First Lien Senior Debt(6)
5.4
%
N/A

1/18
 
 
$
5.7

 
$
5.7

 
$
5.7

Aderant North America, Inc.
 
Software
 
Second Lien Senior Debt(6)
10.0
%
N/A

6/19
 
 
27.6

 
27.5

 
27.9

AmWINS Group, LLC
 
Insurance
 
Second Lien Senior Debt
9.5
%
N/A

9/20
 
 
46.0

 
45.0

 
46.2

Bensussen Deutsch & Associates, LLC
 
Distributors
 
Second Lien Senior Debt(6)
12.0
%
2.0
%
9/19
 
 
44.9

 
42.8

 
45.8

 
 
 
Common Stock(4)
 
 
 
1,224,089

 
 
 
2.2

 
10.5

 
 
 
 
 
 
 
 
 
 
 
45.0

 
56.3

BeyondTrust Software, Inc.
 
Software
 
First Lien Senior Debt(6)
8.0
%
N/A

9/19
 
 
32.0

 
32.0

 
32.0

Blue Wolf Capital Fund II, L.P.(7)
 
Capital Markets
 
Limited Partnership Interest(4)
 
 
 
 
 
 
 
8.8

 
8.2

BRG Sports, Inc.
 
Leisure Products
 
Redeemable Preferred Stock(4)
 
 
 
2,009

 
 
 
2.5

 
3.0

 
 
 
 
Common Units(4)
 
 
 
6,566,655

 
 
 
0.7

 

 
 
 
 
 
 
 
 
 
 
 
 
3.2

 
3.0

Buena Vida CRP 17, LP(7)
 
Real Estate
 
First Lien Senior Debt(6)
5.4
%
N/A

10/18
 
 
2.9

 
2.9

 
2.9

CAMP International Holding Company
 
Transportation Infrastructure
 
Second Lien Senior Debt(6)
8.3
%
N/A

11/19
 
 
15.0

 
15.0

 
14.9

Cast & Crew Payroll, LLC
 
Commercial Services & Supplies
 
Second Lien Senior Debt(6)
8.8
%
N/A

8/23
 
 
36.0

 
35.7

 
36.0

CGSC of Delaware Holdings Corporation(7)
 
Insurance
 
Second Lien Senior Debt(6)
8.3
%
N/A

10/20
 
 
2.0

 
2.0

 
1.7

Chariot Acquisition, LLC
 
Distributors
 
First Lien Senior Debt(6)
7.3
%
N/A

9/21
 
 
30.0

 
29.7

 
29.7

Compusearch Software Systems, Inc.
 
Software
 
Second Lien Senior Debt(6)
9.8
%
N/A

11/21
 
 
51.0

 
51.0

 
51.0

Convergint Technologies, LLC
 
Commercial Services & Supplies
 
Second Lien Senior Debt(6)
9.0
%
N/A

12/17-12/20
 
 
94.0

 
94.0

 
94.0

CPI Buyer, LLC
 
Trading Companies & Distributors
 
Second Lien Senior Debt(6)
8.5
%
N/A

8/22
 
 
25.0

 
24.7

 
24.8

Crossroads Equity Holdings LLC
 
Real Estate
 
First Lien Senior Debt(6)
5.7
%
N/A

6/18
 
 
3.2

 
3.2

 
3.2

Datapipe, Inc.
 
IT Services
 
Second Lien Senior Debt(6)
8.5
%
N/A

9/19
 
 
29.5

 
29.1

 
28.9

Delsey Holding S.A.S.(7)
 
Textiles, Apparel & Luxury Goods
 
First Lien Senior Debt(6)
6.4
%
3.2
%
12/16
 
 
15.2

 
15.2

 
13.7

 
 
 
Mezzanine Debt(6)
N/A

11.0
%
12/22
 
 
2.2

 
2.2

 
1.5

 
 
 
 
 
 
 
 
 
 
 
 
17.4

 
15.2

Denver II Hospitality, LLC
 
Real Estate
 
First Lien Senior Debt(6)
5.2
%
N/A

7/18
 
 
12.0

 
12.0

 
12.0

DiversiTech Corporation
 
Building Products
 
Second Lien Senior Debt(6)
9.0
%
N/A

11/22
 
 
9.5

 
9.4

 
9.4

Electronic Warfare Associates, Inc.
 
IT Services
 
First Lien Senior Debt(6)
12.0
%
3.1%

2/19
 
 
21.8

 
21.1

 
21.1

 
 
 
Common Stock Warrants(4)
 
 
 
863,887

 
 
 
0.8

 
0.8

 
 
 
 
 
 
 
 
 
 
 
 
21.9

 
21.9

Exchange South Owner, LLC(7)
 
Real Estate
 
First Lien Senior Debt(6)
5.4
%
N/A

1/18
 
 
8.6

 
8.6

 
8.6

Financière OFIC S.A.S.(7)
 
Building Products
 
Warrants(4)
 
 
 
3,047,200

 
 
 

 
2.9

Flexera Software LLC
 
Software
 
Second Lien Senior Debt(6)
8.0
%
N/A

4/21
 
 
5.0

 
5.0

 
4.9

Foamex Innovations, Inc.
 
Household Durables
 
Common Stock(4)
 
 
 
2,708

 
 
 

 
0.7

 
 
 
 
Common Stock Warrants(4)(6)
 
 
 
7,067

 
 
 

 
0.6

 
 
 
 
 
 
 
 
 
 
 
 

 
1.3

HHG Stone Oak Hotel, LLC(7)
 
Real Estate
 
First Lien Senior Debt(6)
5.2
%
N/A

9/18
 
 
10.4

 
10.4

 
10.4

Hyland Software, Inc.
 
Software
 
Second Lien Senior Debt(6)
8.3
%
N/A

7/23
 
 
10.0

 
10.0

 
10.0

Inmar, Inc.
 
Commercial Services & Supplies
 
Second Lien Senior Debt(6)
8.0
%
N/A

1/22
 
 
20.0

 
19.8

 
19.6

Iotum Global Holdings, Inc.(7)
 
Diversified Telecommunication Services
 
First Lien Senior Debt(6)
N/A

10.0
%
5/17
 
 
1.7

 
1.7

 
1.7

iParadigms, LLC
 
Internet Software & Services
 
Second Lien Senior Debt(6)
8.3
%
N/A

7/22
 
 
39.5

 
39.3

 
39.3

Jazz Acquisition, Inc.
 
Aerospace & Defense
 
Second Lien Senior Debt(6)
7.8
%
N/A

6/22
 
 
25.0

 
24.9

 
24.2

Landslide Holdings, Inc.
 
Software
 
Second Lien Senior Debt(6)
8.3
%
N/A

2/21
 
 
9.0

 
9.0

 
8.7

Lenox Park C-F Owner, LLC
 
Real Estate
 
First Lien Senior Debt(6)
4.9
%
N/A

4/18
 
 
17.0

 
17.0

 
17.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
September 30, 2015
(unaudited)
(in millions, except share data)
Company(1)
 
Industry
 
Investments
Cash
Interest
Rate(2)
PIK
Interest
Rate(2)
Maturity
Date(2)
# of
Shares/
Units
Owned
 
Principal
 
Cost
 
Fair
Value
LTG Acquisition, Inc.
 
Communications Equipment
 
Second Lien Senior Debt(6)
9.0
%
N/A

10/20
 
 
46.0

 
46.0

 
44.4

 
 
 
Common Stock(4)(6)
 
 
 
5,000

 
 
 
5.0

 
4.9

 
 
 
 
 
 
 
 
 
 
 
 
51.0

 
49.3

Mitchell International, Inc.
 
Software
 
Second Lien Senior Debt(6)
8.5
%
N/A

10/21
 

 
17.0

 
16.9

 
17.0

M-IV Lake Center LLC(7)
 
Real Estate
 
First Lien Senior Debt(6)
5.4
%
N/A

12/17
 
 
7.0

 
7.0

 
7.0

OnCourse Learning Corporation
 
Diversified Consumer Services
 
First Lien Senior Debt(6)
8.5
%
N/A

2/19
 
 
19.8

 
19.6

 
19.6

Osmose Utility Services, Inc.
 
Commercial Services & Supplies
 
Second Lien Senior Debt(6)
10.0
%
N/A

8/23
 
 
34.0

 
33.7

 
34.0

Park Place Technologies, LLC
 
IT Services
 
Second Lien Senior Debt(6)
9.8
%
N/A

1/22
 
 
30.0

 
30.0

 
30.0

Parmenter Woodland Park Plaza, LLC(7)
 
Consumer Finance
 
First Lien Senior Debt(6)
5.2
%
N/A

9/18
 
 
16.9

 
16.9

 
16.9

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

 
 
 
6.4

 
1.8

Photonis Technologies SAS
 
Aerospace & Defense
 
First Lien Senior Debt(6)
8.5
%
N/A

9/19
 
 
29.9

 
29.6

 
29.6

Qualium I(7)
 
Capital Markets
 
Common Stock(4)
 
 
 
247,939

 
 
 
5.3

 
5.4

Ranpak Corp.
 
Containers & Packaging
 
Second Lien Senior Debt(6)
8.3
%
N/A

10/22
 
 
25.0

 
25.0

 
24.9

Sage Products Holdings III, LLC
 
Health Care Equipment & Supplies
 
Second Lien Senior Debt(6)
9.3
%
N/A

6/20
 
 
20.6

 
20.7

 
20.7

Severin Acquisition, LLC
 
Software
 
Second Lien Senior Debt(6)
9.3
%
N/A

7/22
 
 
20.0

 
19.7

 
19.7

Sparta Systems, Inc.
 
IT Services
 
First Lien Senior Debt(6)
6.5
%
N/A

7/20
 
 
24.8

 
24.6

 
24.9

 
 
 
 
Convertible Preferred Stock(6)
 
 
 
743

 
 
 
0.8

 
0.8

 
 
 
 
Common Stock(4)
 
 
 
308,224

 
 
 

 
0.4

 
 
 
 
 
 
 
 
 
 
 
 
25.4

 
26.1

Systems Maintenance Services Holding, Inc.
 
IT Services
 
Second Lien Senior Debt(6)
9.3
%
N/A

10/20
 
 
33.0

 
32.8

 
32.8

Teasdale Foods, Inc.
 
Food & Staples Retailing
 
Second Lien Senior Debt(6)
8.8
%
N/A

10/21
 
 
31.5

 
31.5

 
31.5

Tectum Holdings, Inc.
 
Auto Components
 
Second Lien Senior Debt(6)
9.8
%
N/A

1/21
 
 
41.5

 
41.0

 
41.9

 
 
 
 
Convertible Preferred Stock(4)(6)
 
 
 
25,000

 
 
 
2.5

 
3.3

 
 
 
 
 
 
 
 
 
 
 
 
43.5

 
45.2

ThreeSixty Sourcing, Inc.(7)
 
Commercial Services & Supplies
 
Warrants(6)
 
 
 
35

 
 
 

 
1.3

Tyche Holdings, LLC
 
IT Services
 
Second Lien Senior Debt(6)
9.0
%
N/A

11/22
 
 
35.0

 
34.9

 
34.6

Tyden Cayman Holdings Corp.(7)
 
Electronic Equipment, Instruments & Components
 
Convertible Preferred Stock(4)(6)
 

 
 
46,276

 
 
 
0.1

 
0.2

 
 
Common Stock(4)(6)
 

 
 
5,521,203

 
 
 
5.5

 
3.0

 
 
 
 
 
 
 
 
 
 
 
5.6

 
3.2

W3 Co.
 
Commercial Services & Supplies
 
Second Lien Senior Debt(6)
9.3
%
N/A

9/20
 
 
10.7

 
10.6

 
8.5

WP CPP Holdings, LLC
 
Aerospace & Defense
 
Second Lien Senior Debt(6)
8.8
%
N/A

4/21
 
 
19.7

 
19.6

 
19.4

WRH, Inc.
 
Life Sciences Tools & Services
 
Mezzanine Debt(6)
9.0
%
6.2
%
8/18
 
 
101.4

 
101.1

 
97.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN CAPITAL NON-CONTROL / NON-AFFILIATE INVESTMENTS
 
 
 
 
 
 
 
Delsey Holding S.A.S.(7)
 
Textiles, Apparel & Luxury Goods
 
First Lien Senior Debt
6.4
%
3.2
%
12/16
 
 
82.8

 
82.8

 
82.8

 
 
 
Mezzanine Debt
N/A

11.0
%
12/22
 
 
12.2

 
12.2

 
9.3

 
 
 
 
 
 
 
 
 
 
 
 
95.0

 
92.1

Financière Newglass S.A.S.(7)
 
Building Products
 
Convertible Preferred Stock
 
 
 
15,000,000

 
 
 
17.5

 
14.2

Hilding Anders AB(7)
 
Household Durables
 
Mezzanine Debt(5)
N/A

12.0
%
12/19
 
 
36.5

 
16.4

 

Legendre Holding 31 S.A.(7)
 
Leisure Products
 
First Lien Senior Debt
7.2%

N/A

1/21
 
 
7.4

 
7.4

 
7.0

Modacin France S.A.S.(7)
 
Specialty Retail
 
Mezzanine Debt(5)
%
4.3
%
11/19
 
 
22.1

 
11.6

 

Mobipark S.A.S.(7)
 
 Electronic Equipment, Instruments & Components
 
First Lien Senior Debt
0.9
%
N/A

10/17-12/17
 
 
2.3

 
2.2

 
2.1

Parts Holding Coörperatief U.A.(7)
 
Distributors
 
Common Stock(4)
 
 
 
568,624

 
 
 

 
6.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
September 30, 2015
(unaudited)
(in millions, except share data)
Company(1)
 
Industry
 
Investments
Cash
Interest
Rate(2)
PIK
Interest
Rate(2)
Maturity
Date(2)
# of
Shares/
Units
Owned
 
Principal
 
Cost
 
Fair
Value
Tiama 2 S.A.S.(7)
 
Machinery
 
Mezzanine Debt(5)
4.6
%
5.0
%
2/17
 
 
49.7

 
26.0

 

Zodiac Marine and Pool S.A.(7)
 
Marine
 
Second Lien Senior Debt(5)
%
4.0
%
3/17
 
 
36.1

 
25.5

 

 
 
 
Mezzanine Debt(5)
%
8.3
%
9/17
 
 
74.4

 
38.8

 

 
 
 
 
 
 
 
 
 
 
 
 
64.3

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SENIOR FLOATING RATE LOANS
 
 
 
 
 
 
 
1011778 B.C. Unlimited Liability Company(7)
 
Hotels, Restaurants & Leisure
 
First Lien Senior Debt(6)
3.8
%
N/A

12/21
 
 
17.8

 
17.7

 
17.8

24 Hour Fitness Worldwide, Inc.
 
Hotels, Restaurants & Leisure
 
First Lien Senior Debt(6)
4.8
%
N/A

5/21
 
 
7.5

 
7.6

 
7.1

Accellent Inc.
 
Health Care Equipment & Supplies
 
First Lien Senior Debt(6)
4.5
%
N/A

3/21
 
 
17.3

 
17.3

 
17.3

Acosta, Inc.
 
Media
 
First Lien Senior Debt(6)
4.3
%
N/A

9/21
 
 
26.8

 
26.9

 
26.5

Advantage Sales & Marketing Inc.
 
Professional Services
 
First Lien Senior Debt(6)
4.3
%
N/A

7/21
 
 
25.8

 
25.8

 
25.3

 
 
 
Second Lien Senior Debt(6)
7.5
%
N/A

7/22
 
 
1.0

 
1.0

 
1.0

 
 
 
 
 
 
 
 
 
 
 
 
26.8

 
26.3

Affinia Group Inc.
 
Auto Components
 
First Lien Senior Debt(6)
5.1
%
N/A

4/20
 
 
7.6

 
7.6

 
7.6

Air Medical Group Holdings, Inc.
 
Health Care Providers & Services
 
First Lien Senior Debt(6)
4.5
%
N/A

4/22
 
 
4.0

 
4.0

 
3.9

Akorn, Inc.(7)
 
Pharmaceuticals
 
First Lien Senior Debt(6)
5.5
%
N/A

4/21
 
 
5.0

 
5.0

 
4.9

Albertson's LLC
 
Food & Staples Retailing
 
First Lien Senior Debt(6)
5.4
%
N/A

3/19
 
 
5.0

 
5.0

 
5.0

AlixPartners, LLP
 
Diversified Financial Services
 
First Lien Senior Debt(6)
4.5
%
N/A

7/22
 
 
11.5

 
11.5

 
11.5

Alliant Holdings Intermediate, LLC
 
Insurance
 
First Lien Senior Debt(6)
4.5
%
N/A

8/22
 
 
12.5

 
12.5

 
12.3

Allison Transmission, Inc.(7)
 
Auto Components
 
First Lien Senior Debt(6)
3.5
%
N/A

8/19
 
 
5.0

 
5.0

 
5.0

American Airlines, Inc.(7)
 
Airlines
 
First Lien Senior Debt(6)
3.3
%
N/A

6/20
 
 
9.9

 
9.9

 
9.8

American Renal Holdings Inc.
 
Health Care Providers & Services
 
First Lien Senior Debt(6)
4.5
%
N/A

8/19
 
 
5.0

 
5.0

 
5.0

American Tire Distributors, Inc.
 
Distributors
 
First Lien Senior Debt(6)
5.3
%
N/A

9/21
 
 
4.9

 
4.9

 
5.0

Amneal Pharmaceuticals LLC
 
Pharmaceuticals
 
First Lien Senior Debt(6)
4.5
%
N/A

11/19
 
 
6.0

 
6.0

 
6.0

AmSurg Corp.(7)
 
Health Care Providers & Services
 
First Lien Senior Debt(6)
3.5
%
N/A

7/21
 
 
16.8

 
16.9

 
16.9

AmWINS Group, LLC
 
Insurance
 
First Lien Senior Debt(6)
5.3
%
N/A

9/19
 
 
8.7

 
8.8

 
8.8

Anchor Glass Container Corporation
 
Containers & Packaging
 
First Lien Senior Debt(6)
4.5
%
N/A

7/22
 
 
10.2

 
10.2

 
10.2

Applied Systems, Inc.
 
Software
 
First Lien Senior Debt(6)
4.3
%
N/A

1/21
 
 
10.9

 
10.9

 
10.9

Aquilex LLC
 
Commercial Services & Supplies
 
First Lien Senior Debt(6)
5.0
%
N/A

12/20
 
 
2.0

 
2.0

 
1.9

Aramark Corporation(7)
 
Commercial Services & Supplies
 
First Lien Senior Debt(6)
3.3
%
N/A

2/21
 
 
14.7

 
14.6

 
14.6

ARG IH Corporation
 
Hotels, Restaurants & Leisure
 
First Lien Senior Debt(6)
4.8
%
N/A

11/20
 
 
6.8

 
6.9

 
6.8

Aristocrat Leisure Limited(7)
 
Hotels, Restaurants & Leisure
 
First Lien Senior Debt(6)
4.8
%
N/A

10/21
 
 
6.9

 
6.8

 
6.9

Ascend Learning, LLC
 
Diversified Consumer Services
 
First Lien Senior Debt(6)
5.5
%
N/A

7/19
 
 
4.4

 
4.4

 
4.4

Ascensus, Inc.
 
Commercial Services & Supplies
 
First Lien Senior Debt(6)
5.0
%
N/A

12/19
 
 
5.7

 
5.7

 
5.7

Asurion, LLC
 
Commercial Services & Supplies
 
First Lien Senior Debt(6)
5.0
%
N/A

5/19-8/22
 
 
13.7

 
13.6

 
13.0

Atlantic Power Limited Partnership(7)
 
Independent Power & Renewable Electricity Producers
 
First Lien Senior Debt(6)
4.8
%
N/A

2/21
 
 
2.1

 
2.1

 
2.1

Axalta Coating Systems Dutch Holding B B.V.(7)
 
Chemicals
 
First Lien Senior Debt(6)
3.8
%
N/A

2/20
 
 
5.0

 
4.9

 
4.9

AZ Chem US Inc.
 
Chemicals
 
First Lien Senior Debt(6)
4.5
%
N/A

6/21
 
 
0.2

 
0.2

 
0.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

11


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
September 30, 2015
(unaudited)
(in millions, except share data)
Company(1)
 
Industry
 
Investments
Cash
Interest
Rate(2)
PIK
Interest
Rate(2)
Maturity
Date(2)
# of
Shares/
Units
Owned
 
Principal
 
Cost
 
Fair
Value
B/E Aerospace, Inc.(7)
 
Aerospace & Defense
 
First Lien Senior Debt(6)
4.0
%
N/A

12/21
 
 
5.6

 
5.7

 
5.7

BarBri, Inc.
 
Diversified Consumer Services
 
First Lien Senior Debt(6)
4.5
%
N/A

7/19
 
 
9.3

 
9.3

 
8.7

Bass Pro Group, LLC
 
Specialty Retail
 
First Lien Senior Debt(6)
4.0
%
N/A

6/20
 
 
10.0

 
10.0

 
9.9

Beacon Roofing Supply, Inc.
 
Trading Companies & Distributors
 
First Lien Senior Debt(6)
4.0
%
N/A

10/22
 
 
1.0

 
1.0

 
1.0

Berlin Packaging L.L.C.
 
Containers & Packaging
 
First Lien Senior Debt(6)
4.5
%
N/A

10/21
 
 
9.4

 
9.4

 
9.4

BJ's Wholesale Club, Inc.
 
Food & Staples Retailing
 
First Lien Senior Debt(6)
4.5
%
N/A

9/19
 
 
8.9

 
8.9

 
8.8

Blackboard Inc.
 
Software
 
First Lien Senior Debt(6)
4.8
%
N/A

10/18
 
 
4.9

 
5.0

 
4.9

Blue Coat Holdings, Inc.
 
Communications Equipment
 
First Lien Senior Debt(6)
4.5
%
N/A

5/22
 
 
9.0

 
9.0

 
8.9

Booz Allen Hamilton Inc.
 
IT Services
 
First Lien Senior Debt(6)
3.8
%
N/A

7/19
 
 
2.5

 
2.5

 
2.5

Boulder Brands, Inc.(7)
 
Food Products
 
First Lien Senior Debt(6)
4.5
%
N/A

7/20
 
 
2.8

 
2.8

 
2.8

Boyd Gaming Corporation(7)
 
Hotels, Restaurants & Leisure
 
First Lien Senior Debt(6)
4.0
%
N/A

8/20
 
 
6.0

 
5.9

 
6.0