Supplemental Financial Information for Quarter Ended June 30, August 8, 2013

Transcription

1 Supplemental Financial Information for Quarter Ended June 30, 2013 August 8, 2013

2 Disclaimers Forward-Looking Statements We make forward-looking statements in this presentation and other filings we make with the SEC within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives, including information about our ability to generate attractive returns while attempting to mitigate risk. When used in this release, the words "believe," "expect, "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; new strategic initiatives; the ability to reposition the investment portfolio; the market outlook; future investment activity; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described in the company's filings with the Securities and Exchange Commission. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation may contain statistics and other data that in some cases has been obtained from or compiled from information made available by third-party service providers. Past Performance Past performance is not indicative or a guarantee of future returns. 1

3 Financial Highlights $ in thousands, except per share amount OPERATING RESULTS June 30, 2013 March 31, 2013 December 31, 2012 September 30, 2012 June 30, Net investment income $52,367 $42,066 $42,080 $44,482 $39,802 Net realized and unrealized gain (loss) on assets $(33,563) $23,755 $(64,824) $28,554 $(50,374) Net increase (decrease) in net assets from operations $18,804 $65,821 $(22,744) $73,036 $(10,572) Net investment income per share $0.25 $0.21 $0.21 $0.22 $0.20 Net realized and unrealized gain (loss) per share $(0.16) $0.12 $(0.32) $0.14 $(0.24) Earnings (loss) per share basic $0.09 $0.32 $(0.11) $0.36 $(0.05) Earnings (loss) per share diluted 2 $0.09 $0.31 $(0.11) $0.35 $(0.05) Dividend declared per common share $0.20 $0.20 $0.20 $0.20 $0.20 SELECT BALANCE SHEET AND OTHER DATA June 30, 2013 March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 Investment portfolio $3.04 billion $2.85 billion $2.63 billion $2.68 billion $2.58 billion Net assets $1.83 billion $1.68 billion $1.65 billion $1.72 billion $1.68 billion Net asset value per share $8.16 $8.27 $8.14 $8.46 $8.30 Number of portfolio companies at period end Debt outstanding (000 s) $1.13 billion $1.16 billion $1.04 billion $0.93 billion $1.02 billion Debt-to-equity Leverage ratio Exclusive of non-recurring expenses related to refinancing of revolving credit facility. During the June 2012 quarter, the company recognized net $1.1 million in non-recurring expenses relating to the refinancing of its revolving credit facility. 2. In applying the if-converted method, conversion shall not be assumed for purposes of computing diluted EPS if the effect would be anti-dilutive. 3. The Company s leverage ratio is defined as debt outstanding plus payable for investments purchased and cash equivalents, plus due to custodian, less receivable for investments sold, less cash equivalents, less cash, less foreign currency, divided by total net assets. 2

4 Financial Highlights (continued) PORTFOLIO ACTIVITY June 30, 2013 March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 Investments made during period $788 million $428 million $515 million $395 million $199 million Investments sold $105 million $(98) million $(307) million $(143) million $(169) million Net investment activity before repayments $683 million $330 million $208 million $252 million $30 million Investments repaid $475 million $(131) million $(204) million $(200) million $(86) million Net investment activity $208 million $199 million $4 million $52 million $(56) million Number of new portfolio companies Number of existing portfolio companies Number of portfolio company exits Weighted average yield on total debt portfolio % 11.9% 11.9% 11.9% 12.1% 1. On a cost basis, exclusive of investments on non-accrual status.. 3

5 Other Recent Highlights Invested $788 million during the quarter (1), representing the second highest level of quarterly activity in the Company s history Net investment activity was $208 million for the quarter (1) Declared a dividend of $0.20 per share for the quarter Raised $182 million of common equity and issued $150 million of 30-year senior unsecured notes during the quarter (1) Apollo Investment Corporation held its 2013 Annual Meeting of Stockholders and a Special Meeting of Stockholders on August 6, At these meetings, stockholders approved all three proposals. Proposal 1: Election of two Class III Directors Proposal 2: Ratification of the selection of PricewaterhouseCoopers LLP as accounting firm Proposal 3: Authorization of flexibility to sell common shares below net asset value 1. For the quarter ended June 30,

6 Quarterly Portfolio Highlights Portfolio Composition (fair value) Q (Jun-13) Q (Mar-13) Q (Dec-12) Q (Sep-12) Q (June-12) Q (Mar-12) 1 st lien 22% 16% 13% 11% 5% 5% 2 nd lien 26% 28% 30% 30% 25% 27% Total secured debt 48% 44% 43% 41% 30% 32% Unsecured debt 39% 43% 45% 48% 58% 57% Structured products 6% 7% 7% 5% 2% 3% Preferred equity 0% 0% 0% 1% 1% 1% Common equity and warrants 7% 6% 5% 5% 9% 7% Investment Activity (in millions) Q (Jun-13) Q (Mar-13) Q (Dec-12) Q (Sep-12) Q (June-12) New Investments (cost) $788 $428 $515 $395 $199 Investments sold / repaid (proceeds) $580 $229 $511 $343 $255 5

7 Investment Portfolio as of June 30, 2013 As of June 30, 2013, the investment portfolio had a fair value of $3.0 billion and consisted of 94 portfolio companies. (1) (2) Fixed vs. Floating Floating Rate 33% Fixed Rate 67% 1. On a fair value basis. 2. Of income bearing portfolio. 3. Other consists of Distribution, Leisure Equipment, Manufacturing, Electronics, Telecommunications, Transportation, Consumer Products, Diversified Natural Resources, Previous Metals and Minerals, Insurance, Packaging, Power, Retail, Utilities, Education, Printing & Publishing, Mining, Grocery, Homebuilding, Broadcast & Entertainment, Media, and Consulting Services. 6

8 Interest Rate Exposure AIC has taken several steps to prepare its balance sheet for higher interest rates by having a significant portion of its portfolio in floating rate assets and issuing fixed rate debt. $867 million or 32% of the income-bearing portfolio was floating rate (1) (2) Issued $300 million of 30-year fixed rate senior unsecured over the past 12 months; only 12% of funding sources (the drawn portion of the revolving credit facility) are directly sensitive to interest rates Interest Rate Sensitivity (1) Basis Point Change Net Income Net Income per (in thousands) Share Up 300 basis points $12,176 $0.05 Up 200 basis points $8,035 $0.04 Up 100 basis points $(2,091) $(0.01) (1) (2) Investment Portfolio Funding Floating Rate Debt Floor Breakdown (1) (2) Sources Fixed Rate 68% Floating Rate 32% Fair Value ($ millions) % of Floating Rate Portfolio No Floor 78 9% < 1.25% 23 3% >1.25% to < 1.75% % > % Total % Common Equity 62% Floating Rate Credit Facility 12% Fixed Rate Debt 26% 1. As of June 30, 2013 on AIC s debt portfolio. 2. On a cost basis. 7

9 Portfolio Turnover 1Q 2014 During our first fiscal quarter, we invested $788 million across 23 new and 23 existing companies. The weighted average yield on new debt investments was 10.5%. During our first fiscal quarter, investments sold or repaid totaled $580 million. The weighted average yield on sold or repaid debt investments was 11.9%. The yield on repaid debt investments was 12.3% and the yield on sold debt investments was 10.0%. NEW INVESTMENTS (in millions) Yield at Cost Cost % of Total 1st Lien $ % 30% 2nd Lien % 26% Total Secured % 56% Unsecured Debt % 32% Total/WA Debt % 88% Yielding Structured Products (1) 59 8% Total Yielding % Equity 32 4% Total (incl non-yielding) $ % INVESTMENTS SOLD OR REPAID (in millions) Yield at Proceeds Cost (2) % of Total 1st Lien ($35) 10.4% 6% 2nd Lien (193) 9.5% 33% Total Secured (228) 9.6% 39% Unsecured Debt (320) 13.5% 55% Total/WA Debt (548) 11.9% 94% Yielding Structured Products (17) 3% Total/WA Yielding (565) 97% Equity - 0% Total/WA (incl non-yielding) (565) 97% Non-Accrual (15) 3% Total ($580) 100% Note: Restructured investments may impact the weighted average yield of the total debt portfolio but are not reflected in new, sold, or repaid investments. 1. Yield on structured products reflects gross yield on SLM Student Loan Trust , exclusive of hedges. 2. Weighted average calculated on proceeds 8

10 Net Asset Value Quarter ended Quarter ended Quarter ended Quarter ended Quarter ended 30-Jun Mar Dec Sep Jun-12 $ Per Share $ Per Share $ Per Share $ Per Share $ Per Share (in 000 s) (in 000 s) (in 000 s) (in 000 s) (in 000 s) NAV, beginning of period 1,677,389 $ ,652,147 $ ,715,469 $ ,683,011 $ ,685,231 $ 8.55 Net investment income 52, , , , , Net realized and unrealized gain (loss) on assets (33,563) (0.16) 23, (64,824) (0.32) 28, (50,374) (0.24) Net increase (decrease) in net assets resulting from operations 18, , (22,744) (0.11) 73, (11,642) (0.05) Dividends to stockholders (44,948) (0.20) (40,579) (0.20) (40,578) (0.20) (40,578) (0.20) (40,578) (0.20) Net proceeds from equity issuance 181, ,000 - NAV, end of period 1,833,168 $ ,677,389 $ ,652,147 $ ,715,469 $ ,683,011 $ 8.30 *Dividends to stocholders represent dividends declared during the period. Net Asset Value Per Share $8.46 $8.30 $8.14 $8.27 $8.16 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 9

11 Investments on Non-Accrual Status 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Mar % Percentage of Portfolio on Non-Accrual Status (based on fair value) 0.2% 0.2% Jun-10 Sep % 1.8% Dec-10 Mar % 0.2% 0.2% 0.1% 0.1% 0.0% 0.0% Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec % Mar % Jun % 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 6.8% Mar-10 Percentage of Portfolio on Non-Accrual Status (based on cost) 8.1% Jun % Sep % 6.5% Dec-10 Mar % Jun % Sep % Dec % Mar % Jun % 3.2% Sep-12 Dec % Mar % Jun-13 Investments on non-accrual status as of June 30, 2013 Company Industry Investment Par Amount (000 s) Cost (000 s) Fair Value (000 s) Gryphon Colleges Corporation (Delta Educational Systems) (2 investments) Education Preferred Stock, 13.50% PIK, 05/12/14 Preferred Stock, 12.50% PIK N/A $34,549 $8,535 10

12 Contact Information For investor inquiries regarding Apollo Investment Corporation: Elizabeth Besen Investor Relations Manager