Exhibit 99.1
Allied Capital Announces Third Quarter 2007 Financial Results
November 7, 2007 — Washington, DC —Allied Capital Corporation (NYSE: ALD) today announced third quarter 2007 financial results. Allied Capital will host an investment community conference call today at 8:30 a.m. EDT.
Highlights for Q3 2007
| | • | | Net investment income was $0.12 per share, or $18.3 million |
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| | • | | Net realized gains were $1.37 per share, or $212.4 million |
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| | • | | The total of net investment income and net realized gains was $1.49 per share, or $230.7 million |
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| | • | | Net unrealized depreciation was $2.11 per share, or $327.2 million; including net declines in investment values of $0.96 per share, or $149.1 million, and the reversal of net unrealized appreciation associated with net realized gains of $1.15 per share or $178.1 million |
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| | • | | Net loss was $0.62 per share, or $96.5 million |
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| | • | | Third quarter 2007 dividend of $0.65 per share was paid; fourth quarter dividend of $0.65 and extra dividend of $0.07 per share to be paid |
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| | • | | Net asset value per share was $17.90 |
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| | • | | Shareholders’ equity was $2.8 billion |
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| | • | | New investments totaled $577.5 million for the quarter |
For the three months ended September 30, 2007, net investment income was $18.3 million or $0.12 per share compared to net investment income of $25.2 million or $0.16 per share for the three months ended June 30, 2007, and $48.7 million or $0.33 per share for the three months ended September 30, 2006. Net investment income was reduced in the third quarter by stock option expense of $18.3 million or $0.12 per share, which included a one-time charge of $14.4 million or $0.09 per share resulting from a FASB 123R expense related to the cancellation of stock options in conjunction with a tender offer that was completed in the third quarter. Stock option expense for the second quarter of 2007 was $9.5 million or $0.06 per share and was $3.6 million or $0.02 per share for the third quarter of 2006. Net investment income for the third quarter of 2007 was also reduced by income and excise taxes which were $11.2 million or $0.07 per share, as compared to $5.5 million or $0.04 per share in the second quarter of 2007 and $1.6 million or $0.01 per share in the third quarter of 2006.
For the three months ended September 30, 2007, the company had net realized gains of $212.4 million, including a $259.5 million gain from the sale of its investment in Mercury Air Centers, Inc., a $24.8 million loss from the sale of Jakel, Inc. and $20.2 million loss from the sale of its investment in Startec Global Communications Inc. For the three months ended September 30, 2006, the company had net realized gains of $9.9 million.
For the three months ended September 30, 2007, the sum of net investment and net realized gains was $230.7 million or $1.49 per share, as compared to $58.6 million or $0.40 per share for the quarter ended September 30, 2006.
For the three months ended September 30, 2007, net change in unrealized appreciation or depreciation was a decrease of $327.2 million or $2.11 per share. The net depreciation for the quarter resulted from net declines in investment values of $149.1 million or $0.96 per share and the reversal of net unrealized appreciation associated with net realized gains of $178.1 million or $1.15 per share. For the three months ended September 30, 2006, net change in unrealized appreciation or depreciation was an increase of $19.3 million or $0.13 per share.
The net change in unrealized appreciation or depreciation led to a third quarter 2007 net loss of $96.5 million or $0.62 per share, as compared to net income of $77.9 million or $0.53 per share for the quarter ended September 30, 2006. Net income (loss) can vary substantially from quarter to quarter due to the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.
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At December 31, 2006, the company had excess taxable income of $402.8 million available for distribution to shareholders in 2007. For the first three quarters of 2007, the company paid dividends of $293.7 million. The remainder of 2006’s taxable income will be distributed in the fourth quarter of 2007. The company’s Board of Directors previously declared a $0.65 per share dividend for the fourth quarter of 2007 and an extra cash dividend of $0.07 per share. The company expects that substantially all of the 2007 dividend payments will be made from excess 2006 taxable earnings. As a result, substantially all of the taxable income generated from 2007 net investment income and net realized gains will be available for distribution in 2008.
In addition to spillover taxable income, the company had $221.9 million in deferred taxable income resulting from installment sale gains as of December 31, 2006. These gains may be deferred for tax purposes until the notes or other amounts received from the sale of the related investments are sold or collected in cash. The company believes that the performance of the portfolio and related net realized gains has provided additional visibility for future dividend payments for shareholders.
Portfolio and Investment Activity
New investments totaled $577.5 million for the third quarter of 2007. These investments included:
| | • | | $94.1 million to support the management-led recapitalization of Higginbotham Insurance Agency, Inc., a middle market insurance brokerage and risk management firm; |
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| | • | | $82.2 million to support the recapitalization of Woodstream Corporation, a marketer and manufacturer of branded natural solution products for pest control; |
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| | • | | $62.0 million to support the acquisition of Summit Energy Services, Inc., a provider of outsourced energy management and procurement services; |
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| | • | | $44.9 million to The Step2 Company, LLC, a designer, manufacturer and marketer of branded children’s and home products, to support the acquisition of Infantino, LLC, a maker of infant and newborn soft toys, activity toys and travel products; |
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| | • | | $41.4 million to support the buyout of CK Franchising Inc., a franchisor in the non-medical, in-home care market for seniors and other adults needing care; |
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| | • | | $40.0 million to EarthColor, Inc., a commercial printer focused on providing a one-stop printing solution of electronic prepress, printing and finishing, to support the strategic acquisition of L.P. Thebault Co., a commercial printer; |
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| | • | | $39.7 million to support the acquisition of Bushnell, Inc., a designer, distributor and marketer of branded products for consumers with active outdoor lifestyles; |
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| | • | | $30.0 million to support the buyout of Bojangles’, an operator and franchisor of chicken quick-service restaurants; and |
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| | • | | $25.2 million in the income notes of Callidus Debt Partner CLO Fund VI, Ltd. |
After principal collections related to investment repayments or sales of $351.1 million, portfolio exits and valuation and other changes during the quarter, the total portfolio at value was $4.3 billion at September 30, 2007. At September 30, 2007, the weighted average yield on the interest-bearing portfolio was 11.9%, as compared to 11.6% at June 30, 2007, and 11.9% at December 31, 2006.
Portfolio Quality
Grade 4 and Grade 5 assets were 3.3% of the total portfolio at value at September 30, 2007, as compared to 4.0% at June 30, 2007. Grade 5 assets included certain BLX Class B and Class C equity interests totaling $16.3 million or 0.4% of the total portfolio at value at September 30, 2007, and $55.6 million or 1.2% of the total portfolio at value at June 30, 2007.
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Loans on non-accrual were $250.1 million or 5.8% of the total portfolio at value at September 30, 2007, as compared to $298.1 million or 6.7% of the total portfolio at value at June 30, 2007. Investment in BLX Class A equity interests on non-accrual totaled $95.8 million or 2.2% of the total portfolio at value at September 30, 2007, and $95.8 million or 2.1% of the total portfolio at value at June 30, 2007.
Liquidity and Capital Resources
At September 30, 2007, the company had cash and money market and other securities totaling $305.9 million, including the liquidity portfolio of $200.7 million. The company had outstanding long-term debt of $1.9 billion. The company had availability under its revolving line of credit of $859.0 million. At September 30, 2007, the company had a weighted average cost of debt of 6.6% and its regulatory asset coverage was 244%. The company is required to maintain regulatory asset coverage of at least 200%.
Quarterly Dividend of $0.65 Per Share To Be Paid for the Fourth Quarter of 2007 and Extra Dividend of $0.07 To Be Paid for 2007
As previously released, the company declared a fourth quarter dividend of $0.65 per share and an extra dividend of $0.07 per share. The fourth quarter dividend represents the 177th consecutive quarterly dividend for Allied Capital shareholders since 1963. In accordance with regulated investment company distribution rules, the company declared the fourth quarter dividend during the third quarter because it is expected to be paid primarily from 2006 taxable income.
The dividends are payable as follows:
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| Fourth Quarter Dividend | | Extra Dividend |
| Record date: | December 14, 2007 | | Record date: | | December 14, 2007 |
| Payable date: | December 26, 2007 | | Payable date: | | December 27, 2007 |
The company’s dividend is paid from taxable income. It is estimated that 30% of the distributions made for 2007 will be generated from ordinary taxable income and 70% will be generated from taxable net long-term capital gains. This allocation is only an estimate and should not be relied upon for tax reporting purposes. The Board determines the dividend based on estimates of annual taxable income, which differs from book income due to changes in unrealized appreciation and depreciation and due to temporary and permanent differences in income and expense recognition, and the amount of taxable income carried over from the prior year for distribution in the current year.
Webcast/ Conference Call at 8:30 a.m. EDT on Wednesday, November 7, 2007
The company will host a webcast/conference call at 8:30 a.m. (Eastern Time) on Wednesday, November 7, 2007, to discuss the results for the quarter.PLEASE VISIT THE PRESENTATIONS & REPORTS SECTION OF THE INVESTOR RESOURCES PORTION OF THE COMPANY’S WEBSITE FOR A SLIDE PRESENTATION THAT COMPLEMENTS TODAY’S CONFERENCE CALL.
All interested parties are welcome to attend the live webcast, which will be hosted through our web site at www.alliedcapital.com. Please visit the web site to test your connection before the call. You can also access the conference call by dialing (888) 689-4612 approximately 15 minutes prior to the call. International callers should dial (706) 645-0106. All callers should reference the passcode “Allied Capital.”
An archived replay of the event will be available through November 21, 2007 by calling (800) 642-1687 (international callers please dial (706) 645-9291). Please reference passcode “22213466.” An archived replay will also be available on our website. For complete information about the webcast/conference call and the replay, please visit our web site or call Allied Capital Investor Relations at (888) 818-5298.
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About Allied Capital
Allied Capital Corporation, a leading business development company with total assets of $5 billion, has paid regular, quarterly cash dividends to shareholders since 1963. Since its IPO in 1960, Allied Capital has provided long-term debt and equity financing to thousands of middle market companies. Allied Capital invests in the American entrepreneurial economy by providing capital to companies seeking a long-term financial partner and access to managerial resources often unavailable to smaller companies. In serving its shareholders, Allied Capital helps build middle market businesses and support American jobs. At September 30, 2007, the company’s private finance portfolio included investments in 151 companies that generate aggregate revenues of over $13 billion and employ more than 90,000 people.
Allied Capital provides flexible, competitive debt and equity capital for management and sponsor-led buyouts, recapitalizations, acquisitions and growth of middle market companies. Allied Capital’s seamless, one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or mezzanine debt and equity.
Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in the company’s New York Stock Exchange-listed stock, which is traded under the symbol ALD. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.
Forward-Looking Statements
The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in Allied Capital’s filings with the Securities and Exchange Commission. This press release should be read in conjunction with the company’s recent SEC filings.
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CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)
| | | | | | | | | |
| | | September 30, | | | December 31, | |
| | | 2007 | | | 2006 | |
| | | (unaudited) | | | | | |
| | | | | | | | | |
ASSETS | | | | | | | | |
| Portfolio at value: | | | | | | | | |
| Private finance | | $ | 4,207,128 | | | $ | 4,377,901 | |
| Commercial real estate finance | | | 119,739 | | | | 118,183 | |
| | | | | | | |
| Total portfolio at value | | | 4,326,867 | | | | 4,496,084 | |
| | | | | | | | | |
| Liquidity portfolio | | | 200,663 | | | | 201,768 | |
| Investments in money market and other securities | | | 90,406 | | | | 442 | |
| Accrued interest and dividends receivable | | | 74,829 | | | | 64,566 | |
| Other assets | | | 153,940 | | | | 122,958 | |
| Cash | | | 14,816 | | | | 1,687 | |
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| Total assets | | $ | 4,861,521 | | | $ | 4,887,505 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Liabilities: | | | | | | | | |
| Notes payable and debentures | | $ | 1,922,370 | | | $ | 1,691,394 | |
| Revolving line of credit | | | — | | | | 207,750 | |
| Accounts payable and other liabilities | | | 173,368 | | | | 147,117 | |
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| Total liabilities | | | 2,095,738 | | | | 2,046,261 | |
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| Commitments and contingencies | | | | | | | | |
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| Shareholders’ equity: | | | | | | | | |
| Common stock | | | 15 | | | | 15 | |
| Additional paid-in capital | | | 2,594,406 | | | | 2,493,335 | |
| Common stock held in deferred compensation trust | | | (37,079 | ) | | | (28,335 | ) |
| Notes receivable from sale of common stock | | | (2,708 | ) | | | (2,850 | ) |
| Net unrealized appreciation (depreciation) | | | (395,216 | ) | | | (123,084 | ) |
| Undistributed earnings | | | 606,365 | | | | 502,163 | |
| | | | | | | |
| Total shareholders’ equity | | | 2,765,783 | | | | 2,841,244 | |
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| Total liabilities and shareholders’ equity | | $ | 4,861,521 | | | $ | 4,887,505 | |
| | | | | | | |
| | | | | | | | | |
| Net asset value per common share | | $ | 17.90 | | | $ | 19.12 | |
| | | | | | | | | |
| Common shares outstanding | | | 154,506 | | | | 148,575 | |
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CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | | | | | | | | | | | |
Interest and related portfolio income | | | | | | | | | | | | | | | | |
| Interest and dividends | | $ | 105,669 | | | $ | 98,668 | | | $ | 310,466 | | | $ | 282,982 | |
| Fees and other income | | | 12,699 | | | | 14,715 | | | | 33,530 | | | | 51,868 | |
| | | | | | | | | | | | | |
| Total interest and related portfolio income | | | 118,368 | | | | 113,383 | | | | 343,996 | | | | 334,850 | |
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Expenses | | | | | | | | | | | | | | | | |
| Interest | | | 33,744 | | | | 26,109 | | | | 98,368 | | | | 72,455 | |
| Employee | | | 26,306 | | | | 25,228 | | | | 76,845 | | | | 67,054 | |
| Employee stock options | | | 18,312 | | | | 3,649 | | | | 31,492 | | | | 11,852 | |
| Administrative | | | 10,496 | | | | 8,153 | | | | 38,225 | | | | 29,348 | |
| | | | | | | | | | | | | |
| Total operating expenses | | | 88,858 | | | | 63,139 | | | | 244,930 | | | | 180,709 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net investment income before income taxes | | | 29,510 | | | | 50,244 | | | | 99,066 | | | | 154,141 | |
| | | | | | | | | | | | | | | | | |
| Income tax expense, including excise tax | | | 11,192 | | | | 1,586 | | | | 16,073 | | | | 13,988 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net investment income | | | 18,318 | | | | 48,658 | | | | 82,993 | | | | 140,153 | |
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| | | | | | | | | | | | | | | | | |
Net realized and unrealized gains (losses) | | | | | | | | | | | | | | | | |
| Net realized gains | | | 212,370 | | | | 9,916 | | | | 314,915 | | | | 542,991 | |
| | | | | | | | | | | | | | | | | |
| Net change in unrealized appreciation or depreciation | | | (327,156 | ) | | | 19,312 | | | | (272,132 | ) | | | (471,942 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total net gains (losses) | | | (114,786 | ) | | | 29,228 | | | | 42,783 | | | | 71,049 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from operations | | $ | (96,468 | ) | | $ | 77,886 | | | $ | 125,776 | | | $ | 211,202 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings (loss) per common share | | | ($0.62 | ) | | $ | 0.53 | | | $ | 0.81 | | | $ | 1.47 | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding — diluted | | | 155,329 | | | | 147,112 | | | | 154,708 | | | | 144,030 | |
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ALLIED CAPITAL CORPORATION
FINANCIAL & STATISTICAL SUMMARY
($ in millions, except per share amounts)
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| | | Unaudited |
| | | Q3 2007(1) | | Q2 2007(1) | | Q1 2007(1) | | | Q4 2006 | | Q3 2006 |
Income Summary | | | | | | | | | | | | | | | | | | | | | |
| Interest and related portfolio income | | $ | 118.4 | | | $ | 117.7 | | | $ | 108.0 | | | | $ | 117.7 | | | $ | 113.4 | |
Operating expenses(2)(3) | | | 88.9 | | | | 87.0 | | | | 69.1 | | | | | 67.4 | | | | 63.1 | |
Income tax expense (benefit), including excise tax(4) | | | 11.2 | | | | 5.5 | | | | (0.6 | ) | | | | 1.2 | | | | 1.6 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 18.3 | | | | 25.2 | | | | 39.5 | | | | | 49.1 | | | | 48.7 | |
| | | | | | | | | | | | | | | | | | | | | |
| Realized gains (losses): | | | | | | | | | | | | | | | | | | | | | |
| Realized gains | | | 275.8 | | | | 87.4 | | | | 33.2 | | | | | 7.4 | | | | 12.6 | |
| Realized losses | | | (63.4 | ) | | | (12.5 | ) | | | (5.5 | ) | | | | (17.1 | ) | | | (2.7 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net realized gains (losses) | | | 212.4 | | | | 74.9 | | | | 27.7 | | | | | (9.7 | ) | | | 9.9 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net change in unrealized appreciation or depreciation: | | | | | | | | | | | | | | | | | | | | | |
| Net unrealized appreciation (depreciation) | | | (149.1 | ) | | | 27.5 | | | | 92.2 | | | | | (20.5 | ) | | | 27.3 | |
| Reversals of previously recorded net unrealized appreciation or depreciation associated with realized gains or losses: | | | | | | | | | | | | | | | | | | | | | |
| Unrealized appreciation reversed for realized gains | | | (243.9 | ) | | | (55.0 | ) | | | (32.1 | ) | | | | (2.1 | ) | | | (10.2 | ) |
| Unrealized depreciation reversed for realized losses | | | 65.8 | | | | 16.6 | | | | 5.8 | | | | | 17.1 | | | | 2.2 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net change in unrealized appreciation or depreciation | | | (327.2 | ) | | | (10.9 | ) | | | 65.9 | | | | | (5.5 | ) | | | 19.3 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | | ($96.5 | ) | | $ | 89.2 | | | $ | 133.1 | | | | $ | 33.9 | | | $ | 77.9 | |
| | | | | | | | | | | | | | | | | | | | | |
Total of net investment income and net realized gains (losses)(5) | | $ | 230.7 | | | $ | 100.1 | | | $ | 67.2 | | | | $ | 39.4 | | | $ | 58.6 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | |
Per Share Statistics (diluted) | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 0.12 | | | $ | 0.16 | | | $ | 0.26 | | | | $ | 0.33 | | | $ | 0.33 | |
| Net realized gains (losses) | | | 1.37 | | | | 0.48 | | | | 0.18 | | | | | (0.06 | ) | | | 0.07 | |
| Net change in unrealized appreciation or depreciation | | | (2.11 | ) | | | (0.07 | ) | | | 0.43 | | | | | (0.04 | ) | | | 0.13 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | | ($0.62 | ) | | $ | 0.57 | | | $ | 0.87 | | | | $ | 0.23 | | | $ | 0.53 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total of net investment income and net realized gains (losses)(5) | | $ | 1.49 | | | $ | 0.64 | | | $ | 0.44 | | | | $ | 0.26 | | | $ | 0.40 | |
Dividends per share(6) | | $ | 0.65 | | | $ | 0.64 | | | $ | 0.63 | | | | $ | 0.67 | | | $ | 0.61 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | |
Balance Sheet Summary | | | | | | | | | | | | | | | | | | | | | |
| Total portfolio at value: | | | | | | | | | | | | | | | | | | | | | |
| Private finance | | $ | 4,207.1 | | | $ | 4,348.3 | | | $ | 4,376.3 | | | | $ | 4,377.9 | | | $ | 3,987.8 | |
| Commercial real estate finance | | | 119.7 | | | | 122.8 | | | | 122.5 | | | | | 118.2 | | | | 131.8 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total portfolio at value | | $ | 4,326.9 | | | $ | 4,471.1 | | | $ | 4,498.8 | | | | $ | 4,496.1 | | | $ | 4,119.6 | |
| Yield on interest-bearing portfolio | | | 11.9 | % | | | 11.6 | % | | | 11.7 | % | | | | 11.9 | % | | | 12.4 | % |
| Liquidity portfolio (includes money market and other securities) | | $ | 200.7 | | | $ | 200.7 | | | $ | 205.0 | | | | $ | 201.8 | | | $ | 201.6 | |
| Cash and investments in money market and other securities | | $ | 105.2 | | | $ | 149.2 | | | $ | 66.5 | | | | $ | 2.1 | | | $ | 46.0 | |
| Total assets | | $ | 4,861.5 | | | $ | 5,045.5 | | | $ | 4,986.1 | | | | $ | 4,887.5 | | | $ | 4,565.5 | |
| Total debt outstanding | | $ | 1,922.4 | | | $ | 1,921.8 | | | $ | 1,891.5 | | | | $ | 1,899.1 | | | $ | 1,590.7 | |
| Undistributed earnings | | $ | 606.4 | | | $ | 476.0 | | | $ | 473.6 | | | | $ | 502.2 | | | $ | 540.0 | |
| Total shareholders’ equity | | $ | 2,765.8 | | | $ | 2,991.1 | | | $ | 2,978.3 | | | | $ | 2,841.2 | | | $ | 2,823.9 | |
| Net asset value per share | | $ | 17.90 | | | $ | 19.59 | | | $ | 19.58 | | | | $ | 19.12 | | | $ | 19.38 | |
| Debt to equity ratio | | | 0.70 | | | | 0.64 | | | | 0.64 | | | | | 0.67 | | | | 0.56 | |
| | | | |
This summary should be read in conjunction with the Company’s SEC filings. Certain reclassifications have been made to prior period balances to conform with the current period financial statement presentation.
| | |
| (1) | | The results for the interim periods are not necessarily indicative of the operating results to be expected for the full year. |
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| (2) | | Operating expenses included employee stock option expenses totaling $18.3 million or $0.12 per share, $9.5 million or $0.06 per share, $3.7 million or $0.02 per share, $3.7 million or $0.02 per share, and $3.6 million or $0.02 per share for the respective periods. Included in the $18.3 million for Q3 2007 is $14.4 million or $0.09 per share related to the Company’s option cancellation payment made in connection with the tender offer completed in July 2007. |
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| (3) | | Operating expenses included investigation and litigation expenses totaling $0.8 million or $0.01 per share, $0.9 million or $0.01 per share, $3.3 million or $0.02 per share, $1.0 million or $0.01 per share, and $0.5 million or $0.00 per share for the respective periods. |
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| (4) | | Income tax expense (benefit), including excise tax included excise tax expense of $9.0 million or $0.06 per share, $4.0 million or $0.03 per share, $3.6 million or $0.02 per share, $1.3 million or $0.01 per share, and $2.5 million or $0.02 per share for the respective periods. |
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| (5) | | Dividends are based on taxable income, which differs from income for financial reporting purposes. Net investment income and net realized gains are the most significant components of our taxable income from which dividends are paid. |
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| (6) | | Dividends per share for Q4 2006 include an extra dividend of $0.05 per share. |
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ALLIED CAPITAL CORPORATION
FINANCIAL & STATISTICAL SUMMARY
($ in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Unaudited |
| | | Q3 2007 | | Q2 2007 | | Q1 2007 | | | Q4 2006 | | Q3 2006 |
Private Finance New Investments | | | | | | | | | | | | | | | | | | | | | |
| By security type: | | | | | | | | | | | | | | | | | | | | | |
| Senior loans | | $ | 151.5 | | | $ | 163.2 | | | $ | 53.9 | | | | $ | 115.5 | | | $ | 103.0 | |
| Unitranche debt | | | 47.0 | | | | 51.8 | | | | 5.3 | | | | | 123.0 | | | | 239.3 | |
| Subordinated debt | | | 247.5 | | | | 141.3 | | | | 76.5 | | | | | 175.7 | | | | 190.6 | |
| | | | | | | | | | | | | | | | | | | | |
| Total loans and debt securities | | | 446.0 | | | | 356.3 | | | | 135.7 | | | | | 414.2 | | | | 532.9 | |
| Equity | | | 130.1 | | | | 117.3 | | | | 34.5 | | | | | 142.6 | | | | 96.3 |
| | | | | | | | | | | | | | | | | | | | | |
| Total new investments | | $ | 576.1 | | | $ | 473.6 | | | $ | 170.2 | | | | $ | 556.8 | | | $ | 629.2 | |
| | | | | | | | | | | | | | | | | | | | | |
| By transaction type: | | | | | | | | | | | | | | | | | | | | | |
| Debt investments | | $ | 376.2 | | | $ | 377.0 | | | $ | 70.6 | | | | $ | 197.2 | | | $ | 287.2 | |
| Buyout investments | | | 199.9 | | | | 96.6 | | | | 99.6 | | | | | 359.6 | | | | 342.0 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total new investments | | $ | 576.1 | | | $ | 473.6 | | | $ | 170.2 | | | | $ | 556.8 | | | $ | 629.2 | |
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Private Finance Repayments or Sales(7) | | | | | | | | | | | | | | | | | | | | | |
| By security type: | | | | | | | | | | | | | | | | | | | | | |
| Loans and debt securities | | $ | 292.6 | | | $ | 437.6 | | | $ | 199.1 | | | | $ | 141.9 | | | $ | 105.8 | |
| Equity | | | 53.6 | | | | 44.3 | | | | 36.0 | | | | | 5.6 | | | | 9.8 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total repayments or sales | | $ | 346.2 | | | $ | 481.9 | | | $ | 235.1 | | | | $ | 147.5 | | | $ | 115.6 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | |
Private Finance Portfolio at Value | | | | | | | | | | | | | | | | | | | | | |
| Loans and debt securities | | | | | | | | | | | | | | | | | | | | | |
| Senior loans | | $ | 481.6 | | | $ | 409.8 | | | $ | 365.0 | | | | $ | 405.2 | | | $ | 342.4 | |
| Unitranche debt | | | 698.1 | | | | 681.4 | | | | 780.2 | | | | | 799.2 | | | | 745.8 | |
| Subordinated debt | | | 1,927.1 | | | | 1,892.2 | | | | 1,946.1 | | | | | 1,980.8 | | | | 1,817.0 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total loans and debt securities | | | 3,106.8 | | | | 2,983.4 | | | | 3,091.3 | | | | | 3,185.2 | | | | 2,905.2 | |
| Equity securities | | | | | | | | | | | | | | | | | | | | | |
| Preferred shares/ income notes of CLOs and CDOs | | | 131.5 | | | | 111.3 | | | | 96.1 | | | | | 97.2 | | | | 87.7 | |
| Other equity securities | | | 968.8 | | | | 1,253.6 | | | | 1,188.9 | | | | | 1,095.5 | | | | 994.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total equity securities | | | 1,100.3 | | | | 1,364.9 | | | | 1,285.0 | | | | | 1,192.7 | | | | 1,082.6 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total portfolio | | $ | 4,207.1 | | | $ | 4,348.3 | | | $ | 4,376.3 | | | | $ | 4,377.9 | | | $ | 3,987.8 | |
| | | | | | | | | | | | | | | | | | | | | |
Yields(8): | | | | | | | | | | | | | | | | | | | | | |
| Senior debt | | | 9.3 | % | | | 8.3 | % | | | 8.4 | % | | | | 8.4 | % | | | 8.7 | % |
| Unitranche debt | | | 11.5 | % | | | 11.4 | % | | | 11.4 | % | | | | 11.2 | % | | | 11.2 | % |
| Subordinated debt | | | 12.6 | % | | | 12.5 | % | | | 12.5 | % | | | | 12.9 | % | | | 13.7 | % |
| Total loans and debt securities | | | 11.8 | % | | | 11.7 | % | | | 11.7 | % | | | | 11.9 | % | | | 12.5 | % |
| Preferred shares/ income notes of CLOs and CDOs | | | 15.1 | % | | | 14.0 | % | | | 13.5 | % | | | | 15.5 | % | | | 13.7 | % |
| Total number of portfolio companies | | | 151 | | | | 143 | | | | 144 | | | | | 145 | | | | 143 | |
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Valuation Assistance Received | | | | | | | | | | | | | | | | | | | | | |
| Number of private finance portfolio companies reviewed by third parties | | | 135 | | | | 92 | | | | 88 | | | | | 81 | | | | 105 | |
| Percentage of private finance portfolio reviewed at value | | | 92.1 | % | | | 92.1 | % | | | 91.8 | % | | | | 82.9 | % | | | 86.5 | % |
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This summary should be read in conjunction with the Company’s SEC filings. Certain reclassifications have been made to prior period balances to conform with the current period financial statement presentation.
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| (7) | | Represents principal collections from investment repayments or sales excluding realized gains. |
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| (8) | | The weighted average yield on loans and debt securities is computed as the (a) annual stated interest on accruing loans and debt securities plus the annual amortization of loan origination fees, original issue discount, and market discount on accruing loans and debt securities less the annual amortization of loan origination costs, divided by (b) total loans and debt securities at value. The weighted average yield on the preferred shares/income notes of CLOs and CDOs is calculated as the (a) effective interest yield on the preferred shares/income notes of CLOs and CDOs, divided by (b) total preferred shares/income notes of CLOs and CDOs at value. The weighted average yields are computed as of the balance sheet date. |
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ALLIED CAPITAL CORPORATION
FINANCIAL & STATISTICAL SUMMARY
($ in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Unaudited |
| | | Q3 2007 | | Q2 2007 | | Q1 2007 | | | Q4 2006 | | Q3 2006 | |
Portfolio Quality Data | | | | | | | | | | | | | | | | | | | | | |
By Grade(9) | | | | | | | | | | | | | | | | | | | | | |
| Portfolio at value by grade: | | | | | | | | | | | | | | | | | | | | | |
| Grade 1 | | $ | 1,605.3 | | | $ | 1,727.2 | | | $ | 1,468.8 | | | | $ | 1,307.3 | | | $ | 1,082.1 | |
| Grade 2 | | | 2,320.6 | | | | 2,207.0 | | | | 2,457.6 | | | | | 2,672.3 | | | | 2,767.1 | |
| Grade 3 | | | 258.1 | | | | 359.4 | | | | 339.7 | | | | | 308.1 | | | | 153.4 | |
| Grade 4 | | | 90.5 | | | | 72.8 | | | | 99.3 | | | | | 84.2 | | | | 57.9 | |
| Grade 5 | | | 52.4 | | | | 104.7 | | | | 133.4 | | | | | 124.2 | | | | 59.1 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 4,326.9 | | | $ | 4,471.1 | | | $ | 4,498.8 | | | | $ | 4,496.1 | | | $ | 4,119.6 | |
| | | | | | | | | | | | | | | | | | | | | |
| Portfolio at value by grade, % portfolio at value: | | | | | | | | | | | | | | | | | | | | | |
| Grade 1 | | | 37.1 | % | | | 38.6 | % | | | 32.6 | % | | | | 29.1 | % | | | 26.3 | % |
| Grade 2 | | | 53.6 | % | | | 49.4 | % | | | 54.6 | % | | | | 59.4 | % | | | 67.2 | % |
| Grade 3 | | | 6.0 | % | | | 8.0 | % | | | 7.6 | % | | | | 6.9 | % | | | 3.7 | % |
| Grade 4 | | | 2.1 | % | | | 1.6 | % | | | 2.2 | % | | | | 1.9 | % | | | 1.4 | % |
| Grade 5 | | | 1.2 | % | | | 2.4 | % | | | 3.0 | % | | | | 2.7 | % | | | 1.4 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | | 100.0 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
Total Grade 4 and 5(10) | | | 3.3 | % | | | 4.0 | % | | | 5.2 | % | | | | 4.6 | % | | | 2.8 | % |
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Loans and Debt Securities on Non-Accrual Status | | | | | | | | | | | | | | | | | | | | | |
Loans and debt securities not accruing interest(11) | | $ | 250.1 | | | $ | 298.1 | | | $ | 285.9 | | | | $ | 238.8 | | | $ | 161.7 | |
| Loans and debt securities not accruing interest, % portfolio at value | | | 5.8 | % | | | 6.7 | % | | | 6.4 | % | | | | 5.3 | % | | | 3.9 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Loans and Debt Securities Over 90 Days Delinquent | | | | | | | | | | | | | | | | | | | | | |
Loans and debt securities over 90 days delinquent(12) | | $ | 162.7 | | | $ | 138.0 | | | $ | 179.3 | | | | $ | 48.4 | | | $ | 44.9 | |
| Loans and debt securities over 90 days delinquent, % portfolio at value | | | 3.8 | % | | | 3.1 | % | | | 4.0 | % | | | | 1.1 | % | | | 1.1 | % |
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Loans and Debt Securities on Non-Accrual Statusand Over 90 Days Delinquent | | | | | | | | | | | | | | | | | | | | | |
| Loans and debt securities not accruing interest and over 90 days delinquent | | $ | 162.7 | | | $ | 138.0 | | | $ | 159.2 | | | | $ | 44.3 | | | $ | 44.9 | |
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This summary should be read in conjunction with the Company’s SEC filings. Certain reclassifications have been made to prior period balances to conform with the current period financial statement presentation.
| (9) | | We employ a grading system for our entire portfolio. Grade 1 is used for those investments from which a capital gain is expected. Grade 2 is used for investments performing in accordance with plan. Grade 3 is used for investments that require closer monitoring; however, no loss of investment return or principal is expected. Grade 4 is used for investments that are in workout and for which some loss of current investment return is expected, but no loss of principal is expected. Grade 5 is used for investments that are in workout and for which some loss of principal is expected. |
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| (10) | | Includes certain Class B and Class C equity interests in BLX of $16.3 million or 0.4% of the total portfolio at value at September 30, 2007, $55.6 million or 1.2% at June 30, 2007, and $74.8 million or 1.7% at March 31, 2007, and December 31, 2006. |
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| (11) | | Includes Class A equity interests in BLX of $95.8 million or 2.2% of the total portfolio at value at September 30, 2007, $95.8 million or 2.1% at June 30, 2007, $85.8 million or 1.9% at March 31, 2007, and $66.6 million or 1.5% at December 31, 2006. The Class A equity interests were placed on non-accrual in the fourth quarter of 2006. |
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| (12) | | Includes Class A equity interests in BLX of $95.8 million or 2.2% of the total portfolio at value at September 30, 2007, $95.8 million or 2.1% at June 30, 2007, and $85.8 million or 1.9% at March 31, 2007. The Class A equity interests became over 90 days delinquent in the first quarter of 2007. |
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