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EX-32 - EXHIBIT 32 - AMERICAN CAPITAL, LTDacas10q33116ex32.htm
EX-31.1 - EXHIBIT 31.1 - AMERICAN CAPITAL, LTDacas10q33116ex311.htm
EX-31.2 - EXHIBIT 31.2 - AMERICAN CAPITAL, LTDacas10q33116ex312.htm

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 March 31, 2016
 
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 April 29, 2016, was 218,338,980.
________________________________________________________________________________________________________________________





2


PART I. FINANCIAL INFORMATION
 
ITEM 1.
Financial Statements

AMERICAN CAPITAL, LTD.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
 
 
March 31,
 
December 31,
 
2016
 
2015
 
(unaudited)
 
 
Assets
 
 
 
Investments at fair value
 
 
 
Non-Control/Non-Affiliate investments (cost of $2,211 and $2,368, respectively)
$
1,921

 
$
2,097

Affiliate investments (cost of $26 and $35, respectively)
84

 
77

Control investments (cost of $2,488 and $2,502, respectively)
2,732

 
2,824

Total investments at fair value (cost of $4,725 and $4,905, respectively)
4,737

 
4,998

Cash and cash equivalents
364

 
483

Restricted cash and cash equivalents
32

 
46

Interest and dividend receivable
54

 
48

Deferred tax asset, net
212

 
198

Trade date settlement receivable
32

 
373

Other
84

 
94

Total assets
$
5,515

 
$
6,240

Liabilities and Shareholders’ Equity
 
 
 
Debt ($109 and $204 due within one year, respectively), net
$
887

 
$
1,253

Long term incentive plan liability
27

 
34

Other
121

 
131

Total liabilities
1,035

 
1,418

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, 227.6 and 247.3 issued and 222.4 and 242.6 outstanding, respectively
2

 
2

Capital in excess of par value
5,561

 
5,847

Cumulative translation adjustment, net of tax
(93
)
 
(101
)
Distributions in excess of net realized earnings
(877
)
 
(879
)
Net unrealized depreciation of investments
(113
)
 
(47
)
Total shareholders’ equity
4,480

 
4,822

Total liabilities and shareholders’ equity
$
5,515

 
$
6,240

Net Asset Value Per Common Share Outstanding
$
20.14

 
$
19.88

 
See accompanying notes.

3


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in millions, except per share data)
 
Three Months Ended March 31,
 
2016
 
2015
Operating Revenue
 
 
 
Interest and dividend income
 
 
 
Non-Control/Non-Affiliate investments
$
59

 
$
78

Control investments
90

 
60

Total interest and dividend income
149

 
138

Fee income
 
 
 
Non-Control/Non-Affiliate investments
3

 
2

Control investments
10

 
14

Total fee income
13

 
16

Total operating revenue
162

 
154

Operating Expenses
 
 
 
Interest
15

 
17

Salaries, benefits and stock-based compensation
34

 
40

European Capital management fees
2

 
4

General and administrative
17

 
15

Total operating expenses
68

 
76

Net Operating Income Before Income Taxes
94

 
78

Tax provision
(20
)
 
(28
)
Net Operating Income
74

 
50

Net realized gain (loss)
 
 
 
Non-Control/Non-Affiliate investments
(15
)
 
(8
)
Affiliate investments
2

 

Control investments
(70
)
 
(198
)
Foreign currency transactions

 
(2
)
Derivative agreements and other
(17
)
 
(48
)
Tax benefit
12

 
43

Total net realized loss
(88
)
 
(213
)
Net unrealized appreciation (depreciation)
 
 
 
Portfolio company investments
(76
)
 
229

Foreign currency translation
(8
)
 
19

Derivative agreements and other
13

 
6

Tax benefit (provision)
5

 
(76
)
Total net unrealized (depreciation) appreciation
(66
)
 
178

Total net loss
(154
)
 
(35
)
Net (Decrease) Increase in Net Assets Resulting from Operations (“Net (Loss) Earnings”)
$
(80
)
 
$
15

 
 
 
 
Net Operating Income Per Common Share
 
 
 
Basic
$
0.31

 
$
0.18

Diluted
$
0.31

 
$
0.18

Net (Loss) Earnings Per Common Share
 
 
 
Basic
$
(0.34
)
 
$
0.06

Diluted
$
(0.34
)
 
$
0.05

Weighted Average Shares of Common Stock Outstanding
 
 
 
Basic
235.0

 
271.1

Diluted
235.0

 
282.9

See accompanying notes.

4


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(in millions, except per share data)
 
Three Months Ended March 31,
 
2016
 
2015
 
 
 
 
Net (loss) earnings
$
(80
)
 
$
15

Other comprehensive income (loss):
 
 
 
Cumulative translation adjustment, net of tax of $0 and ($21), respectively
8

 
(96
)
Comprehensive loss
$
(72
)
 
$
(81
)

See accompanying notes.


5


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
(in millions, except per share data)
 
 
Three Months Ended March 31,
 
2016
 
2015
Operations
 
 
 
Net operating income
$
74

 
$
50

Net realized loss, net of tax
(88
)
 
(213
)
Net unrealized (depreciation) appreciation, net of tax
(66
)
 
178

Net (loss) earnings
(80
)
 
15

Capital Share Transactions
 
 
 
Proceeds from issuance of common stock upon exercise of stock options
4

 
17

Repurchase of common stock
(297
)
 

Stock-based compensation
7

 
13

Cumulative translation adjustment, net of tax
8

 
(96
)
Other
16

 
5

Net decrease in net assets resulting from capital share transactions
(262
)
 
(61
)
Total decrease in net assets
(342
)
 
(46
)
Net assets at beginning of period
4,822

 
5,472

Net assets at end of period
$
4,480

 
$
5,426

 
 
 
 
Net asset value per common share outstanding
$
20.14

 
$
20.12

Common shares outstanding at end of period
222.4

 
269.7

 
See accompanying notes.

6


AMERICAN CAPITAL, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in millions)
 
Three Months Ended March 31,
 
2016
 
2015
Operating Activities
 
 
 
Net (loss) earnings
$
(80
)
 
$
15

Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities:
 
 
 
Net unrealized depreciation (appreciation) of investments
71

 
(254
)
Net realized loss on investments
100

 
256

Effects on exchange rate changes on assets and liabilities denominated in foreign currencies
1

 
3

Accrued PIK interest and dividends on investments
(29
)
 
(25
)
Stock-based compensation
7

 
7

(Increase) decrease in interest and dividend receivable
(7
)
 
5

(Increase) decrease in deferred tax asset, net
(14
)
 
62

Decrease (increase) in other assets
2

 
(6
)
Decrease in other liabilities
(5
)
 
(27
)
Payment of long term incentive plan liability
(12
)
 
(46
)
Other
16

 
(2
)
Net cash provided by (used in) operating activities
50

 
(12
)
Investing Activities
 
 
 
Purchases and originations of investments
(154
)
 
(807
)
Repayments from portfolio company revolving credit facility investments, net
7

 
2

Principal repayments on debt investments
50

 
61

Proceeds from loan syndications and loan sales
539

 
54

Payment of accrued PIK notes and dividend and accreted original issue discounts
14

 
17

Proceeds from equity investments
32

 
93

Increase in cash collateral on total return swaps

 
95

Other

 
(3
)
Net cash provided by (used in) investing activities
488

 
(488
)
Financing Activities
 
 
 
(Payments on) proceeds from revolving credit facilities, net
(368
)
 
304

Decrease (increase) in debt service escrows
1

 
(11
)
Proceeds from issuance of common stock upon exercise of stock options
4

 
17

Repurchase of common stock
(297
)
 

Other
3

 
2

Net cash (used in) provided by financing activities
(657
)
 
312

Effect of currency rate changes on cash and cash equivalents

 
(19
)
Net decrease in cash and cash equivalents
(119
)
 
(188
)
Cash and cash equivalents at beginning of period
483

 
676

Cash and cash equivalents at end of period
$
364

 
$
469

 
See accompanying notes.

7


AMERICAN CAPITAL, LTD.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
(in millions, except per share data)
 
 
Three Months Ended March 31,
 
2016
 
2015
Per Share Data
 
 
 
Net asset value at beginning of the period
$
19.88

 
$
20.50

Net operating income(1)
0.31

 
0.18

Net realized loss, net of tax(1)
(0.37
)
 
(0.78
)
Net unrealized (depreciation) appreciation, net of tax(1)
(0.28
)
 
0.66

Net (loss) earnings(1)
(0.34
)
 
0.06

Issuance of common stock from stock compensation plans
(0.02
)
 
(0.15
)
Repurchase of common stock
0.53

 

Cumulative translation adjustment, net of tax
0.04

 
(0.36
)
Other, net(2)
0.05

 
0.07

Net asset value at end of period
$
20.14

 
$
20.12

Ratio/Supplemental Data
 
 
 
Per share market value at end of period
$
15.24

 
$
14.79

Total investment return(3)
10.51
%
 
1.23
%
Shares of common stock outstanding at end of period
222.4

 
269.7

Net assets at end of period
$
4,480

 
$
5,426

Average net assets(4)
$
4,651

 
$
5,449

Average debt outstanding(5)
$
1,012

 
$
1,845

Average debt outstanding per common share(1)
$
4.31

 
$
6.81

Portfolio turnover rate(6)
11.09
%
 
14.60
%
Ratio of operating expenses to average net assets(6)
5.88
%
 
5.66
%
Ratio of operating expenses, net of interest expense, to average net assets(6)
4.58
%
 
4.39
%
Ratio of interest expense to average net assets(6)
1.30
%
 
1.27
%
Ratio of net operating income to average net assets(6)
6.40
%
 
3.72
%
 
(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 deferred financing costs and discounts, during the period.
(6)
Ratios are annualized.



See accompanying notes.

8


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2016
(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
 
 
 
 
 
 
 
AmWINS Group, LLC
 
Insurance
 
Second Lien Senior Debt(6)
9.5
%
N/A

9/20
 
 
$
46.0

 
$
45.0

 
$
45.1

Bensussen Deutsch & Associates, LLC
 
Distributors
 
Second Lien Senior Debt(6)
12.0
%
2.0
%
9/19
 
 
43.1

 
41.3

 
44.7

 
 
 
Common Stock
 
 
 
1,224,089

 
 
 
2.2

 
15.7

 
 
 
 
 
 
 
 
 
 
 
 
43.5

 
60.4

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

9/19
 
 
30.1

 
30.1

 
29.2

BluePay Processing, LLC
 
Consumer Finance
 
Second Lien Senior Debt(6)
9.5
%
N/A

8/22
 
 
32.8

 
32.8

 
32.8

Blue Wolf Capital Fund II, L.P.(7)
 
Capital Markets
 
Limited Partnership Interest(4)
 
 
 
 
 
 
 
9.0

 
8.0

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

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

11/19
 
 
15.0

 
15.0

 
13.7

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

8/23
 
 
36.0

 
35.7

 
34.5

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

10/20
 
 
2.0

 
2.0

 
2.0

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

9/21
 
 
29.9

 
29.6

 
28.5

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

 
23.7

Crossroads Equity Holdings LLC
 
Real Estate
 
First Lien Senior Debt(6)
5.9
%
N/A

6/18
 
 
3.2

 
3.2

 
2.9

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

9/19
 
 
29.5

 
29.2

 
28.8

Delsey Holding S.A.S.(7)
 
Textiles, Apparel & Luxury Goods
 
Mezzanine Debt(6)
N/A

13.5
%
7/21
 
 
1.4

 
1.4

 
1.1

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)
13.0
%
N/A

2/19
 
 
15.0

 
15.0

 
15.0

 
 
 
Common Stock Warrants(4)(6)
 
 
 
863,887

 
 
 
0.8

 
0.8

 
 
 
 
 
 
 
 
 
 
 
 
15.8

 
15.8

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

 
 
 

 
3.0

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

4/21
 
 
5.0

 
5.0

 
4.7

FXI Holdings, Inc.
 
Household Durables
 
Common Stock(4)
 
 
 
3,163

 
 
 

 
0.6

Galls, LLC
 
Specialty Retail
 
Second Lien Senior Debt(6)
9.5
%
N/A

6/17-8/21
 
 
31.6

 
31.6

 
31.6

The Gordian Group, Inc.
 
Internet Software & Services
 
First Lien Senior Debt(6)
5.6
%
N/A

7/19
 
 
40.7

 
40.7

 
39.9

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

7/23
 
 
10.0

 
10.0

 
9.5

Industrial Container Services, LLC
 
Containers & Packaging
 
First Lien Senior Debt(6)
6.8
%
N/A

12/18
 
 
49.7

 
49.7

 
49.7

 
 
Second Lien Senior Debt(6)
10.2
%
N/A

12/19
 
 
10.0

 
9.9

 
9.9

 
 
 
 
 
 
 
 
 
 
59.6

 
59.6

Infogix Parent Corporation
 
IT Services
 
First Lien Senior Debt(6)
7.8
%
N/A

12/21
 
 
90.0

 
88.3

 
88.1

 
 
 
 
Redeemable Preferred Stock(6)
 
 
 
2,475

 
 
 
2.6

 
2.6

 
 
 
 
 
 
 
 
 
 
 
 
90.9

 
90.7

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

1/22
 
 
20.0

 
19.8

 
15.6

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

10.0
%
5/17
 
 
1.3

 
1.3

 
1.3

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

7/22
 
 
39.5

 
39.3

 
38.7

Iron Bow Technologies, LLC
 
Electronic Equipment, Instruments & Components
 
Second Lien Senior Debt(6)
10.4
%
2.8%

2/21
 
 
15.1

 
15.1

 
15.1

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

6/22
 
 
25.0

 
24.9

 
18.8

Kele Holdco, Inc.
 
Trading Companies & Distributors
 
First Lien Senior Debt(6)
7.0
%
N/A

10/20-10/22
 
 
71.3

 
71.3

 
71.3

 
 
 
Common Stock(4)(6)
 
 
 
30,000

 
 
 
3.0

 
3.0

 
 
 
 
 
 
 
 
 
 
 
 
74.3

 
74.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
March 31, 2016
(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
Landslide Holdings, Inc.
 
Software
 
Second Lien Senior Debt(6)
8.3
%
N/A

2/21
 
 
9.0

 
9.0

 
8.1

Lenox Park C-F Owner, LLC
 
Real Estate
 
First Lien Senior Debt(6)
5.2
%
N/A

4/18
 
 
17.0

 
17.0

 
16.6

LTG Acquisition, Inc.
 
Communications Equipment
 
Second Lien Senior Debt(6)
9.0
%
N/A

10/20
 
 
46.0

 
46.0

 
42.2

 
 
 
Common Stock(4)(6)
 
 
 
5,000

 
 
 
5.0

 
3.6

 
 
 
 
 
 
 
 
 
 
 
 
51.0

 
45.8

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

10/21
 

 
17.0

 
16.9

 
15.1

M-IV Lake Center LLC
 
Real Estate
 
First Lien Senior Debt(6)
5.7
%
N/A

12/17
 
 
7.0

 
7.0

 
6.6

Novetta Solutions, LLC
 
IT Services
 
First Lien Senior Debt(6)
6.0
%
N/A

10/22
 
 
13.0

 
12.9

 
12.7

 
 
 
 
Second Lien Senior Debt(6)
9.5
%
N/A

10/23
 
 
31.0

 
30.7

 
29.9

 
 
 
 
 
 
 
 
 
 
 
 
43.6

 
42.6

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

2/19
 
 
19.5

 
19.4

 
19.4

Osmose Utility Services, Inc.
 
Commercial Services & Supplies
 
Second Lien Senior Debt(6)
8.8
%
N/A

8/23
 
 
34.0

 
33.7

 
33.1

Park Place Technologies, LLC
 
IT Services
 
Second Lien Senior Debt(6)
10.0
%
N/A

12/22
 
 
41.5

 
41.5

 
41.5

Parmenter Woodland Park Plaza, LLC
 
Real Estate
 
First Lien Senior Debt(6)
5.3
%
N/A

9/18
 
 
17.5

 
17.5

 
16.2

Photonis Technologies SAS(7)
 
Aerospace & Defense
 
First Lien Senior Debt(6)
8.5
%
N/A

9/19
 
 
29.7

 
29.4

 
29.2

Project Silverback Holdings Corp.
 
IT Services
 
First Lien Senior Debt(6)
6.5
%
N/A

7/20
 
 
23.9

 
23.7

 
23.2

 
 
 
Convertible Preferred Stock(6)
 
 
 
743

 
 
 
0.9

 
0.7

 
 
 
 
Common Stock(4)
 
 
 
308,224

 
 
 

 
0.4

 
 
 
 
 
 
 
 
 
 
 
 
24.6

 
24.3

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

 
 
 
5.2

 
5.0

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

10/22
 
 
25.0

 
25.0

 
22.0

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

6/20
 
 
20.6

 
20.7

 
20.6

Severin Acquisition, LLC
 
Software
 
Second Lien Senior Debt(6)
9.8
%
N/A

7/22
 
 
29.9

 
29.4

 
29.4

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

10/20
 
 
35.0

 
34.8

 
34.8

TA THI Parent, 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

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

10/21
 
 
31.5

 
31.5

 
30.4

Tyche Holdings, LLC
 
IT Services
 
Second Lien Senior Debt(6)
10.5
%
N/A

11/22
 
 
35.0

 
34.9

 
35.0

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

 
 
46,276

 
 
 
0.1

 
0.1

 
 
Common Stock(4)(6)
 

 
 
5,521,203

 
 
 
5.5

 
3.4

 
 
 
 
 
 
 
 
 
 
 
5.6

 
3.5

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

9/20
 
 
8.9

 
8.8

 
4.0

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

4/21
 
 
19.7

 
19.6

 
17.1

WRH, Inc.
 
Life Sciences Tools & Services
 
Mezzanine Debt(6)
8.9
%
6.3
%
8/18
 
 
104.2

 
103.9

 
100.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN CAPITAL NON-CONTROL / NON-AFFILIATE INVESTMENTS
 
 
 
 
 
 
 
Delsey Holding S.A.S.(7)
 
Textiles, Apparel & Luxury Goods
 
Mezzanine Debt
N/A

13.5
%
7/21
 
 
8.0

 
8.0

 
6.7

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

 
 
 
18.2

 
16.4

Modacin France S.A.S.(7)
 
Specialty Retail
 
Mezzanine Debt(5)
%
4.0
%
11/19
 
 
22.7

 
11.7

 

Mobipark S.A.S.(7)
 
 Electronic Equipment, Instruments & Components
 
First Lien Senior Debt
0.7
%
N/A

10/17-12/17
 
 
2.3

 
2.2

 
2.2

Zodiac Marine and Pool S.A.(7)
 
Marine
 
Second Lien Senior Debt(5)
%
4.0
%
3/17
 
 
37.2

 
25.7

 
0.4

 
 
Mezzanine Debt(5)
%
8.6
%
9/17
 
 
77.4

 
38.8

 
0.2

 
 
 
 
 
 
 
 
 
 
 
 
64.5

 
0.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
March 31, 2016
(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
SENIOR FLOATING RATE LOANS
 
 
 
 
 
 
 
BarBri, Inc.
 
Diversified Consumer Services
 
First Lien Senior Debt(6)
4.5
%
N/A

7/19
 
 
4.0

 
4.0

 
3.1

Mitchell International, Inc.
 
Software
 
First Lien Senior Debt(6)(8)
4.5
%
N/A

10/20
 
 
2.2

 
2.2

 
2.1

Southwire Company, LLC
 
Electrical Equipment
 
First Lien Senior Debt(6)(8)
3.2
%
N/A

2/21
 
 
8.0

 
8.0

 
7.6

Wesco Aircraft Hardware Corp.(7)
 
Aerospace & Defense
 
First Lien Senior Debt(6)(8)
3.3
%
N/A

2/21
 
 
1.7

 
1.7

 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AMERICAN CAPITAL CLO INVESTMENTS
 
 
 
 
 
 
 
ACAS CLO 2007-1, Ltd.(7)
 
 
 
Secured Notes(6)
 
 
4/21
 
 
8.5

 
8.4

 
8.3

 
 
 
Subordinated Notes(6)
 
 
4/21
 
 
25.9

 
11.6

 
12.6

 
 
 
 
 
 
 
 
 
 
 
 
20.0

 
20.9

Apidos CLO XVIII, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
7/26
 
 
39.4

 
32.3

 
20.2

Apidos CLO XXI(7)
 
 
 
Subordinated Notes(6)
 
 
6/27
 
 
12.4

 
10.9

 
8.8

Ares IIIR/IVR CLO Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
4/21
 
 
20.0

 
11.1

 
3.9

Babson CLO Ltd. 2006-II(7)
 
 
 
Income Notes(4)(6)
 
 
10/20
 
 
15.0

 
2.7

 

Babson CLO Ltd. 2013-II(7)
 
 
 
Income Notes(6)
 
 
1/25
 
 
5.0

 
3.7

 
2.5

Babson CLO Ltd. 2014-I(7)
 
 
 
Subordinated Notes(6)
 
 
7/25
 
 
8.5

 
6.2

 
3.3

Babson CLO Ltd. 2014-II(7)
 
 
 
Subordinated Notes(6)
 
 
9/26
 
 
25.0

 
19.9

 
8.5

Blue Hill CLO, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
1/26
 
 
23.1

 
17.3

 
5.8

Carlyle Global Market Strategies CLO 2013-3, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
7/25
 
 
5.0

 
3.4

 
2.6

Carlyle Global Market Strategies CLO 2015-3, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
7/28
 
 
28.2

 
24.1

 
20.6

Cent CDO 12 Limited(7)
 
 
 
Income Notes(6)
 
 
11/20
 
 
26.4

 
13.4

 
26.0

Cent CLO 22 Limited(7)
 
 
 
Subordinated Notes(6)
 
 
11/26
 
 
45.4

 
36.6

 
15.2

Cent CLO 24 Limited(7)
 
 
 
Subordinated Notes(6)
 
 
10/26
 
 
28.0

 
27.0

 
20.2

Centurion CDO 8 Limited(7)
 
 
 
Subordinated Notes(4)(6)
 
 
3/17
 
 
5.0

 
0.2

 

CoLTs 2005-1 Ltd.(7)
 
 
 
Preference Shares(4)(6)
 
 
3/16
360

 
 
 
1.7

 
0.1

CoLTs 2005-2 Ltd.(7)
 
 
 
Preference Shares(4)(6)
 
 
12/18
34,170,000

 
 
 
11.0

 
0.4

CREST Exeter Street Solar 2004-1(7)
 
 
 
Preferred Securities(4)(6)
 
 
6/39
3,500,000

 
 
 
3.2

 

Dryden 40 Senior Loan Fund(7)
 
 
 
Subordinated Notes(6)
 
 
8/28
 
 
9.5

 
8.3

 
6.2

Eaton Vance CDO X plc(7)
 
 
 
Secured Subordinated Notes(6)
 
 
2/27
 
 
15.0

 
11.1

 
4.1

Flagship CLO V(7)
 
 
 
Deferrable Notes(6)
 
 
9/19
 
 
1.7

 
1.5

 
1.7

 
 
 
 
Subordinated Securities(6)
 
 
9/19
15,000

 
 
 
7.1

 
0.7

 
 
 
 
 
 
 
 
 
 
 
 
8.6

 
2.4

Galaxy III CLO, Ltd(7)
 
 
 
Subordinated Notes(4)
 
 
8/16
 
 
4.0

 
0.2

 

GoldenTree Loan Opportunities VII, Limited(7)
 
 
 
Subordinated Notes(6)
 
 
4/25
 
 
35.3

 
30.5

 
20.7

Halcyon Loan Advisors Funding 2014-1 Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
2/26
 
 
1.3

 
1.0

 
0.4

Halcyon Loan Advisors Funding 2015-2, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
7/27
 
 
21.7

 
18.9

 
14.8

Herbert Park B.V.(7)
 
 
 
Subordinated Notes(6)
 
 
10/26
 
 
25.5

 
26.7

 
19.8

LightPoint CLO IV, LTD(7)
 
 
 
Income Notes(4)(6)
 
 
4/18
 
 
6.7

 
3.6

 

LightPoint CLO VII, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
5/21
 
 
9.0

 
2.6

 
1.4

Madison Park Funding XII, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
7/26
 
 
10.0

 
8.3

 
6.4

Madison Park Funding XIII, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
1/25
 
 
30.9

 
24.8

 
18.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

11


AMERICAN CAPITAL, LTD.
CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)
March 31, 2016
(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
NYLIM Flatiron CLO 2006-1 LTD.(7)
 
 
 
Subordinated Securities(6)
 
 
8/20
10,000

 
 
 
4.4

 
2.4

Och Ziff Loan Management XIII, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
7/27
 
 
15.0

 
13.2

 
11.7

Octagon Investment Partners XVIII, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
12/24
 
 
16.4

 
12.4

 
7.5

Octagon Investment Partners XIX, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
4/26
 
 
25.0

 
18.2

 
12.8

OHA Credit Partners XI, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
10/28
 
 
33.5

 
30.9

 
26.7

Sapphire Valley CDO I, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
12/22
 
 
14.0

 
17.6

 
10.9

THL Credit Wind River 2014-2 CLO Ltd.(7)
 
 
 
Income Notes
 
 
7/26
 
 
15.0

 
9.7

 
7.4

Vitesse CLO, Ltd.(7)
 
 
 
Preferred Securities(4)(6)
 
 
8/20
20,000,000

 
 
 
11.9

 

Voya CLO 2014-4, Ltd.(7)
 
 
 
Subordinated Notes(6)
 
 
10/26
 
 
26.7

 
22.6

 
15.4

Subtotal Non-Control / Non-Affiliate Investments (40% of total investments at fair value)
 
 
 
$
2,211.3

 
$
1,921.4

 
 
 
 
 
 
 
 
AMERICAN CAPITAL AFFILIATE INVESTMENTS
 
 
 
 
 
 
 
IS Holdings I, Inc.
 
Software
 
Common Stock(4)(6)
 
 
 
2,000,000

 
 
 
$
5.2

 
$
11.5

Mobipark S.A.S.(7)
 
Electronic Equipment, Instruments & Components
 
First Lien Senior Debt(6)
2.1
%
N/A

12/17
 
 
$
4.0

 
3.8

 
3.4

 
 
 
Convertible Preferred Stock(4)(6)
 
 
 
28,317,268

 
 
 
9.1

 
28.2

 
 
 
Redeemable Preferred Stock(4)(6)
 
 
 
25,751,312

 
 
 
7.2

 
31.0

 
 
 
 
 
 
 
 
 
 
 
 
20.1

 
62.6

Primrose Holding Corporation
 
Diversified Consumer Services
 
Common Stock(4)(6)
 
 
 
7,227

 
 
 

 
8.1

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

 
 
6.0
%
 
 
 
0.7

 
1.7

Subtotal Affiliate Investments (2% of total investments at fair value)
 
 
 
$
26.0

 
$
83.9

 
 
 
 
 
 
 
 
AMERICAN CAPITAL CONTROL INVESTMENTS
 
 
 
 
 
 
 
ACAS Real Estate Holdings Corporation
 
Real Estate
 
Common Stock(6)
 
 
 
100
%
 
 
 
$
4.5

 
$
9.9

Alcami Holdings LLC
 
Life Sciences Tools & Services
 
First Lien Senior Debt(6)
6.5
%
N/A

3/17-10/20
 
 
103.6

 
102.8

 
105.7

 
 
 
Mezzanine Debt(6)
7.1
%
6.1%

10/20
 
 
143.1

 
142.1

 
143.1