Interim Management Statement -- European Capital Limited Reports 2011 Net Operating Income of Euro 53 Million and Net Loss of Euro (2) Million
ST. PETER PORT, Guernsey, March 23, 2012 /PRNewswire/ --
European Capital Limited ("European Capital" or the "Company") today issues an Interim Management Statement announcing net operating income ("NOI") for the half year and year ended 31 December 2011 of euro 14 million and euro 53 million, respectively. Net loss for the half year and year were euro (88) million and euro (2) million, respectively. As at 31 December 2011, net asset value ("NAV") was euro 627 million, a 12%, or euro 88 million decrease from the 30 June 2011 NAV of euro 715 million and a euro 2 million decrease from the 31 December 2010 NAV of euro 629 million.
H2 2011 FINANCIAL SUMMARY
- euro 14 million NOI
- euro (13) million net realised loss on investments
- euro (102) million net unrealised depreciation on investments
- euro (88) million net loss
- euro 79 million of cash proceeds from realisations
2011 FINANCIAL SUMMARY
- euro 53 million NOI
- euro 5 million, or 11%, increase over 2010
- euro (29) million net realised loss on investments
- euro 23 million improvement over 2010
- euro (4) million net unrealised depreciation on investments
- euro 93 million decline over 2010
- euro (2) million net loss
- euro 107 million decline over 2010
- euro 194 million of cash proceeds from realisations
- euro 89 million less than 2010
- euro 288 million of AAA rated debt raised
- euro 627 million NAV at year end
- euro 2 million decrease over Q4 2010
- 0.7:1 debt to equity at year end
"Considering the volatility in the eurozone during this past year, I am pleased with our performance," said Malon Wilkus, Chairman and Chief Executive Officer. "We were able to strengthen our balance sheet by generating euro 194 million of cash realisations, reducing our leverage while our net asset value remained relatively unchanged. Despite this challenging environment, we remain focused on improving our balance sheet, growing our portfolio companies and originating high quality investment opportunities."
PORTFOLIO VALUATION
For the year ended 31 December 2011, net unrealised depreciation of investments totalled euro (4) million. In the first half of the year there was appreciation of euro 98 million on our private finance portfolio mainly driven by improvements in the performance of portfolio companies. This first half appreciation has reversed in the second half of the year with total depreciation of euro 102 million. This depreciation has resulted from the negative effect on public markets of economic uncertainty in the eurozone and its effect on the performance at certain portfolio companies.
"During the year, we have continued to strengthen our balance sheet," said Ira Wagner, President. "We have improved our asset coverage ratio to 243%. We continued to see liquidity in the portfolio during the year and are focused not only on maximising the value of our current investments but also on originating new opportunities to generate shareholder value. This has been made possible through the debt refinancing that we completed in June last year."
PORTFOLIO LIQUIDITY AND PERFORMANCE
In the second half of 2011, euro 79 million of cash proceeds were received from realisations of portfolio investments. The Company made euro 3 million in new committed investments in the second half of the year to support the current portfolio.
Since inception, European Capital has invested euro 3.3 billion in 91 portfolio companies. European Capital has realised euro 1.9 billion from the portfolio since inception, including senior debt syndications. Out of the euro 1.9 billion we have exited fully 41 portfolio companies, realising an aggregate of euro 1.2 billion comprising:
- euro 789 million of principal repayments;
- euro 166 million from loan syndications and sales;
- euro 123 million of collections of PIK notes and dividends; and
- euro 111 million from sales of equity.
These exits achieved an aggregate IRR of 9.7%. The equity investments of these exited portfolio companies have achieved a 29.0% IRR.
European Capital's portfolio as of 31 December 2011 at fair market value was euro 1.0 billion, with an average investment size of euro 19 million per portfolio company. European Capital's largest investment represents 13.8% of total investment assets at fair value and the ten largest investments represent 54.3% of total investment assets at fair value as of 31 December 2011.
During the year to 31 December 2011, European Capital:
- Realised proceeds of euro 194 million, compared with euro 283 million in 2010. The proceeds were at an average of 4.9% above the prior half year's valuations of the realised investments. The realisations proceeds for the year included:
- euro 53 million repayment of a debt investment in Norma, resulting in a 13% annual mezzanine rate of return;
- euro 30 million repayment of a debt investment in Gondola, resulting in a 10% annual senior and mezzanine rate of return;
- euro 25 million repayment of a debt investment in Integrated Dental Holdings resulting in a 13% annual mezzanine rate of return;
- euro 23 million repayment of a debt investment in Flint Ink resulting in a 10% annual senior and mezzanine rate of return.
- Invested euro 19.7 million in existing portfolio companies for the year, compared with euro 2.4 million in the same period of 2010.
As at 31 December 2011, loans with a cost of euro 245 million and a fair value of euro 40 million were on non-accrual, representing 5.6% of total loans at fair value, compared to euro 301 million cost and euro 77 million fair value of non-accrual loans, representing 8.9% of total loans at fair value as of 31 December 2010.
DEBT REFINANCING
In the first half of 2011, European Capital's consolidated subsidiary ECAS 2011-1 Loan B.V. ("ECAS 2011-1") sold and issued euro 288 million of AAA-rated secured floating rate notes, backed by assets with a par value of euro 865 million originated by other European Capital consolidated subsidiaries. The notes were rated by Standard & Poor's and comply with recent regulations affecting securitisations. The notes have a coupon payment of Euribor plus 320 basis points, payable semi-annually, and are due in 2024. The proceeds of the sale were used to refinance two existing debt obligations of European Capital consolidated subsidiaries, including a secured senior multicurrency term loan facility and an issuance of secured senior notes, as well as to make new investments.
"Our balance sheet continues to strengthen," said Juan Carlos Morales Cortes, Director. "The refinancing has provided us with long term certainty for our borrowing. The majority of our borrowing now have a maturity beyond 2022. The refinancing also provides us with liquidity to invest in new opportunities and will allow us to invest in existing portfolio companies for organic growth and add-on acquisitions, as well as to make new mezzanine investments and One-Stop Buyouts® of operating companies."
The terms of this securitisation allow for the reinvestment of proceeds from sale or repayment of investments held by ECAS 2011-1. Reinvestment must be made into eligible assets in compliance with certain criteria. The reinvestment period is for a period of two years from the date of the securitisation in June 2011; with the final application of such proceeds to be reinvested by December 2013, in line with the reinvestment criteria. As at 31 December 2011, there were proceeds available for reinvestment of euro 108 million, which has risen to euro 137 million as of the date of this release. As of the date of this release euro 11 million of the realised proceeds has been committed.
EUROPEAN CAPITAL LIMITED
CONSOLIDATED BALANCE SHEETS
As of 31 December 2011, 30 June 2011 and 31 December 2010
(in thousands)
31 December 2011
31 December 30 June Versus
2011 2011 30 June 2011
euro euro euro %
(audited) (unaudited)
Assets
Investments at fair value
(Cost basis of euro
1,555,191, euro 1,638,416
and euro 1,721,230,
respectively) 973,607 1,099,214 (125,607) -11%
Cash and cash
equivalents 2,803 2,257 546 24%
Restricted cash and cash
equivalents 142,056 69,653 72,403 104%
Interest receivable 5,496 7,848 (2,352) -30%
Derivatives agreements
at fair value 126 3,021 (2,895) -96%
Other 4,529 6,522 (1,993) -31%
Total assets 1,128,617 1,188,515 (59,898) -5%
Liabilities and
Shareholder's Equity
Debt (maturing within one
year euro 2,356,
euro 1,704 and
euro 224,742,
respectively) 439,017 429,685 9,332 2%
Due to European Capital
Financial Services
(Guernsey) Limited 1,439 1,818 (379) -21%
Derivatives agreements
at fair value 24,272 915 23,357 NM
Other 37,153 41,266 (4,113) -10%
Total
liabilities 501,881 473,684 28,197 6%
Shareholder's equity:
Share Capital 224,475 224,475 - 0%
Undistributed net
realised earnings 1,078,718 1,087,988 (9,270) -1%
Net unrealised
foreign currency
depreciation (110,079) (133,373) 23,294 17%
Net unrealised
depreciation
of investments (566,378) (464,259) (102,119) -22%
Total
shareholder's
equity 626,736 714,831 (88,095) -12%
Total
liabilities
and
shareholder's
equity 1,128,617 1,188,515 (59,898) -5%
NM = Not Meaningful
31 December 31 December 2011 Versus
2010 31 December 2010
euro euro %
(audited)
Assets
Investments at fair value
(Cost basis of euro
1,555,191, euro 1,638,416
and euro 1,721,230,
respectively) 1,075,766 (102,159) -9%
Cash and cash equivalents 3,006 (203) -7%
Restricted cash and cash
equivalents 21,380 120,676 NM
Interest receivable 5,282 214 4%
Derivatives agreements at
fair value 10,290 (10,164) -99%
Other 8,316 (3,787) -46%
Total assets 1,124,040 4,577 0%
Liabilities and Shareholder's
Equity
Debt (maturing within one
year euro 2,356, euro
1,704 and euro 224,742,
respectively) 484,872 (45,855) -9%
Due to European Capital
Financial Services
(Guernsey) Limited 1,351 88 7%
Derivatives agreements at
fair value 3,283 20,989 NM
Other 5,458 31,695 NM
Total liabilities 494,964 6,917 1%
Shareholder's equity:
Share Capital 224,475 - 0%
Undistributed net realised
earnings 1,064,903 13,815 1%
Net unrealised foreign
currency depreciation (98,147) (11,932) -12%
Net unrealised
depreciation of
investments (562,155) (4,223) -1%
Total shareholder's equity 629,076 (2,340) 0%
Total liabilities and
shareholder's equity 1,124,040 4,577 0%
NM = Not Meaningful
EUROPEAN CAPITAL LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months and Year Ended 31 December 2011 and 2010
(in thousands)
(unaudited)
Six Months Ended Six Months Ended
31 December 31 December
2011 2010 2011 Versus 2010
euro euro euro %
OPERATING INCOME:
Interest and dividend
income 39,484 62,215 (22,731) -37%
Fee and other income 407 921 (514) -56%
Total operating
income 39,891 63,136 (23,245) -37%
OPERATING EXPENSES:
Interest 13,584 17,728 (4,144) -23%
Management fee 11,686 8,101 3,585 44%
General and
administrative 1,015 3,006 (1,991) -66%
Corporate restructuring
costs - (162) 162 100%
Total operating
expenses 26,285 28,673 (2,388) -8%
OPERATING INCOME BEFORE
INCOME TAXES 13,606 34,463 (20,857) -61%
Provision for income
taxes (44) (67) 23 34%
NET OPERATING INCOME 13,562 34,396 (20,834) -61%
Net realised loss on
extinguishment
of debt - - - NM
Net realised loss on
investments
Portfolio company
investments (13,208) (60,071) 46,863 78%
Foreign currency
translations (9,335) 5,756 (15,091) -262%
Derivative
agreements (289) (180) (109) -61%
Total net
realised loss
on investments (22,832) (54,495) 31,663 58%
NET REALISED
(LOSS)
EARNINGS (9,270) (20,099) 10,829 54%
Net unrealised
(depreciation)
appreciation
on investments
Portfolio company
investments (101,955) 93,393 (195,348) -209%
Foreign currency
translations 23,294 (29,377) 52,671 179%
Derivative
agreements (164) 1,252 (1,416) -113%
Total net
unrealised
(depreciation)
appreciation
on investments (78,825) 65,268 (144,093) -221%
NET (DECREASE)INCREASE
IN NET ASSETS RESULTING
FROM OPERATIONS ("NET
EARNINGS") (88,095) 45,169 (133,264) -295%
NM = Not Meaningful
Year ended Year Ended
31 December 31 December
2011 2010 2011 Versus 2010
euro euro euro %
OPERATING INCOME:
Interest and dividend
income 105,724 118,457 (12,733) -11%
Fee and other income 915 1,385 (470) -34%
Total operating
income 106,639 119,842 (13,203) -11%
OPERATING EXPENSES:
Interest 26,471 46,492 (20,021) -43%
Management fee 22,666 17,313 5,353 31%
General and administrative 4,718 6,370 (1,652) -26%
Corporate restructuring costs - 1,858 (1,858) -100%
Total operating
expenses 53,855 72,033 (18,178) -25%
OPERATING INCOME BEFORE
INCOME TAXES 52,784 47,809 4,975 10%
Provision for income taxes (88) (146) 58 40%
NET OPERATING INCOME 52,696 47,663 5,033 11%
Net realised loss on
extinguishment of debt (8,240) - (8,240) 100%
Net realised loss on
investments
Portfolio company
investments (28,826) (52,225) 23,399 45%
Foreign currency
translations (5,307) 22,786 (28,093) -123%
Derivative
agreements 3,492 (435) 3,927 NM
Total net
realised loss
on investments (30,641) (29,874) (767) -3%
NET REALISED (LOSS)
EARNINGS 13,815 17,789 (3,974) -22%
Net unrealised (depreciation)
appreciation on investments
Portfolio company
investments (3,624) 89,354 (92,978) -104%
Foreign currency
translations (11,932) (4,965) (6,967) -140%
Derivative agreements (599) 2,400 (2,999) -125%
Total net
unrealised
(depreciation)
appreciation
on investments (16,155) 86,789 (102,944) -119%
NET (DECREASE) INCREASE IN
NET ASSETS RESULTING FROM
OPERATIONS ("NET
EARNINGS") (2,340) 104,578 (106,918) -102%
NM = Not Meaningful
EUROPEAN CAPITAL LIMITED
OTHER FINANCIAL INFORMATION
Six Months Ended 31 December 2011, 30 June 2011 and 31 December 2010
(in thousands)
Six Months Ended
Six Months Ended 31 December 2011 Versus
31 December 30 June
2011 2011 30 June 2011
euro euro euro %
New Investments:
Subordinated debt 212 - 212 100%
Convertible Bond 223 6,300 (6,077) -96%
Preferred Equity - 10,053 (10,053) -100%
Common Equity 2,874 - 2,874 100%
Total 3,309 16,353 (13,044) -80%
Add-on Financing
for Acquisitions 297 - 297 100%
Add-on Financing for
Recapitalisations 3,012 16,353 (13,341) -82%
Total 3,309 16,353 (13,044) -80%
Realisations:
Principal Prepayments 47,688 75,824 (28,136) -37%
Payment of Accrued
Payment-in-kind
Interest and Dividends
and Original Issue
Discount 14,338 17,614 (3,276) -19%
Sale of Equity
Investments 1,293 - 1,293 100%
Sale of Loans 15,992 21,046 (5,054) -24%
Total 79,311 114,484 (35,173) -31%
Appreciation, Depreciation,
Gains and Losses:
Gross Realised Gains 419 - 419 100%
Gross Realised
Losses (13,627) (15,618) 1,991 13%
Portfolio Net
(Losses) Gains (13,208) (15,618) 2,410 15%
Foreign Currency (9,335) 4,028 (13,363) -332%
Derivative
Agreements (289) 3,781 (4,070) -108%
Extinguishment of
debt - (8,240) 8,240 100%
Net Realised
Losses (22,832) (16,049) (6,783) -42%
Gross Unrealised
Appreciation of
Portfolio
Investments 40,142 133,965 (93,823) -70%
Gross Unrealised
Depreciation of
Portfolio
Investments (158,510) (53,870) (104,640) -194%
Reversal of
Prior Period
Unrealised
(Depreciation)
Appreciation
Upon
Realisation 16,413 18,236 (1,823) -10%
Net Unrealised
Depreciation of
Portfolio
Investments (101,955) 98,331 (200,286) -204%
Foreign Currency 23,294 (35,226) 58,520 166%
Derivative
Agreements (164) (435) 271 62%
Net Unrealised
Depreciation of
Investments (78,825) 62,670 (141,495) -226%
Net Gains, Losses,
Appreciation and
Depreciation (101,657) 46,621 (148,278) -318%
Other Financial Data:
Net Asset Value 626,736 714,831 (88,095) -12%
Financial
Liabilities 439,017 429,685 9,332 2%
Asset Coverage
Ratio 243% 266%
Debt to Equity
Ratio 0.7 x 0.6 x
Credit Quality:
Weighted Average
Effective Interest
Rate on Debt
Investments 6.5% 8.9% -2.4% -27%
Loans on
Non-Accrual at
Cost 244,947 199,985 44,962 22%
Loans on
Non-Accrual at
Fair Value 39,940 65,190 (25,250) -39%
Non-Accrual Loans
at Cost as a
Percentage of
Total Loans 23.0% 17.3%
Non-Accrual Loans
at Fair Value as a
Percentage of
Total Loans 5.6% 7.8%
Return on Equity:
LTM Net Operating
Income Return on
Average Equity at
Cost 4.2% 5.8%
LTM Realised
Earnings Return on
Average Equity at
Cost 1.1% 0.2%
LTM Earnings
Return on Average
Equity -0.4% 20.4%
Current Half Year
Net Operating
Income Return on
Average Equity at
Cost Annualised 2.2% 6.2%
Current Half Year
Realised Earnings
Return on Average
Equity at Cost
Annualised -1.5% 3.6%
Current Half Year
Earnings Return on
Average Equity
Annualised -26.2% 25.2%
NM = Not Meaningful
Six Months Ended
31 December 2011 Versus
31 December 2010 31 December 2010
euro euro %
New Investments:
Subordinated debt - 212 100%
Convertible Bond - 223 100%
Preferred Equity 555 (555) -100%
Common Equity 1,000 1,874 187%
Total 1,555 1,754 113%
Add-on Financing for
Acquisitions - 297 100%
Add-on Financing for
Recapitalisations 1,555 1,457 94%
Total 1,555 1,754 113%
Realisations:
Principal Prepayments 90,888 (43,200) -48%
Payment of Accrued
Payment-in-kind
Interest and
Dividends and
Original Issue
Discount 23,814 (9,476) -40%
Sale of Equity
Investments 17,138 (15,845) -92%
Sale of Loans 1,558 14,434 NM
Total 133,398 (54,087) -41%
Appreciation, Depreciation, Gains
and Losses:
Gross Realised Gains 7,677 (7,258) -95%
Gross Realised Losses (67,749) 54,122 80%
Portfolio Net
(Losses) Gains (60,072) 46,864 78%
Foreign Currency 5,756 (15,091) -262%
Derivative Agreements (179) (110) -61%
Extinguishment of
debt - - 100%
Net Realised Losses (54,495) 31,663 58%
Gross Unrealised Appreciation
of Portfolio Investments 95,928 (55,786) -58%
Gross Unrealised Depreciation
of Portfolio Investments (63,491) (95,019) -150%
Reversal of Prior Period
Unrealised (Depreciation)
Appreciation Upon Realisation 60,957 (44,544) -73%
Net Unrealised Depreciation
of Portfolio Investments 93,394 (195,349) -209%
Foreign Currency (29,377) 52,671 179%
Derivative Agreements 1,252 (1,416) -113%
Net Unrealised
Depreciation of
Investments 65,269 (144,094) -221%
-
Net Gains, Losses,
Appreciation and
Depreciation 10,774 (112,431) -1044%
Other Financial Data:
Net Asset Value 629,076 (2,340) 0%
Financial Liabilities 484,872 (45,855) -9%
Asset Coverage Ratio 230%
Debt to Equity Ratio 0.8 x
Credit Quality:
Weighted Average
Effective Interest
Rate on Debt
Investments 8.8% -2.3% -25.9%
Loans on Non-Accrual
at Cost 300,669 (55,722) -19%
Loans on Non-Accrual
at Fair Value 77,180 (37,240) -48%
Non-Accrual Loans at
Cost as a Percentage
of Total Loans 23.8%
Non-Accrual Loans at
Fair Value as a
Percentage of Total
Loans 8.9%
Return on Equity:
LTM Net Operating
Income Return on
Average Equity at
Cost 3.7%
LTM Realised Earnings
Return on Average
Equity at Cost 1.4%
LTM Earnings Return
on Average Equity 18.0%
Current Half Year Net
Operating Income
Return on Average
Equity at Cost
Annualised 5.4%
Current Half Year
Realised Earnings
Return on Average
Equity at Cost
Annualised -3.2%
Current Half Year
Earnings Return on
Average Equity
Annualised 15.1%
NM = Not Meaningful
EUROPEAN CAPITAL LIMITED
STATIC POOL INFORMATION
Portfolio Statistics for Investments Made in Each of the
Following Years
(all numbers in thousands of euro, unless otherwise stated)
Portfolio statistics (1)(15) 2005 2006
IRR at Fair Value of All
Investments (2)(14) 11.7% 5.1%
IRR of Exited Investments (3)(14) 14.4% 8.3%
IRR at Fair Value of Equity
Investments only (2)(4)(5)(14) 4.9% 8.5%
IRR of Exited Equity
Investments only (3)(4)(5)(14) 21.1% 18.8%
IRR at Fair Value of All One
Stop Buyout(R) Investments (2)(14) (24.7)% 10.0%
IRR at Fair Value of Current
One Stop Buyout(R)
Investments (2)(14) (27.8)% 7.6%
IRR at Exited One Stop
Buyout(R) Investments (3)(14) 6.9% 16.9%
Committed Investments (14) 240,673 1,236,637
Total Exits and Prepayments
of Comitted Investments (14) 223,645 899,917
Total Interest, Dividends and
Fees Collected (14) 81,216 179,371
Total Net Realised Gains
(Loss) on Investments 11,750 (55,611)
Current Cost of Investments 17,111 405,847
Current Fair Value of
Investments 539 304,438
Current Fair Value of
Investments as a % of Total
Investments
at Fair Value 0.1% 31.3%
Net Unrealised Depreciation
(16) (16,550) (58,184)
Non-Accruing Loans at Cost 9,212 13,860
Non-Accruing Loans at Fair
Value - 2,127
Equity Interest at Fair Value(4) 257 167,832
Debt to adjusted EBITDA (4)
(7)(8)(9)(12) 5.6 4.1
Interest Coverage (4)(9)(12) 0.0 5.8
Debt Service Coverage (4)(9)(12) 0.0 3.0
Average Age of Companies (4)(12) 20 63
Diluted Ownership Percentage(4)(13) 0.2% 61.9%
Average Revenue (4)(10)(12) 733,870 261,365
Average Adjusted EBITDA (4)(7)(12) 134,266 32,112
Total Revenues (4)(10) 1,202,092 5,850,669
Total Adjusted EBITDA(4)(7) 205,301 626,848
% Senior Loans (4)(9)(11) 0.0% 25.4%
% Loans with Lien (4)(9)(11) 100.0% 100.0%
2005-2008
Majority Owned Portfolio Static Pools
Companies ("MOPC") (6) Aggregate
Number of MOPC 8
Total Revenues (10) 633,966
Total Gross Profits (10) 320,068
Total Adjusted EBITDA (7) 83,988
Total Capital Expenditure
(10) 12,284
Total Current European
Capital Investment in MOPC At
Fair Value 294,035
Diluted Ownership Percentage
of European Capital in MOPC(13) 74.6%
Total Cash 64,377
Total Assets 752,800
Total Debt 504,680
Total Third Party Debt at Cost 368,323
Total Shareholders' Equity at
Fair Value 256,754
Portfolio statistics (1)(15) 2007 2008 Aggregate
IRR at Fair Value of All
Investments (2)(14) (2.3)% 2.0% 1.7%
IRR of Exited Investments (3)(14) (0.5)% (0.5)% 5.6%
IRR at Fair Value of Equity
Investments only (2)(4)(5)(14) (16.1)% (60.1)% (1.4)%
IRR of Exited Equity Investments
only (3) (4) (5) (14) (45.1)% 0.0% (16.4)%
IRR at Fair Value of All One Stop
Buyout(R) Investments (2) (14) (21.6)% (1.0)%
IRR at Fair Value of Current One
Stop Buyout(R) Investments (2)(14) (10.0)% 2.3%
IRR at Exited One Stop Buyout(R)
Investments (3) (14) (100.0)% (22.5)%
Committed Investments (14) 1,511,315 333,927 3,322,552
Total Exits and Prepayments of
Comitted Investments (14) 643,314 83,041 1,849,917
Total Interest, Dividends and Fees
Collected (14) 307,136 72,244 639,967
Total Net Realised Gains (Loss) on
Investments (65,397) (27,797) (137,055)
Current Cost of Investments 877,308 254,925 1,555,191
Current Fair Value of Investments 457,237 211,393 973,607
Current Fair Value of Investments
as a % of Total Investments
at Fair Value 47.0% 21.7% 100.0%
Net Unrealised Depreciation (16) (391,345) (61,496) (527,575)
Non-Accruing Loans at Cost 210,323 11,552 244,947
Non-Accruing Loans at Fair Value 31,435 6,378 39,940
Equity Interest at Fair Value (4) 78,035 1,826.00 247,950
Debt to adjusted EBITDA (4)(7)(8)(9)(12) 6.1 5.3 5.3
Interest Coverage (4) (9) (12) 6.2 3.2 5.4
Debt Service Coverage (4) (9) (12) 5.0 2.2 3.8
Average Age of Companies (4) (12) 46 39 50
Diluted Ownership Percentage (4) (13) 13.5% 0.3% 25.8%
Average Revenue (4) (10) (12) 251,552 199,837 243,670
Average Adjusted EBITDA (4)(7)(12) 45,383 37,802 39,635
Total Revenues (4) (10) 13,271,151 1,325,965 21,649,877
Total Adjusted EBITDA (4) (7) 2,318,982 241,752 3,392,883
% Senior Loans (4) (9) (11) 35.5% 0.0% 25.2%
% Loans with Lien (4) (9) (11) 100.0% 100.0% 100.0%
Majority Owned Portfolio Companies
("MOPC") (6)
Number of MOPC
Total Revenues (10)
Total Gross Profits (10)
Total Adjusted EBITDA (7)
Total Capital Expenditure (10)
Total Current European Capital
Investment in MOPC At Fair Value
Diluted Ownership Percentage of
European Capital in MOPC (13)
Total Cash
Total Assets
Total Debt
Total Third Party Debt at Cost
Total Shareholders' Equity at Fair
Value
(1) Static pool classification is based on the year the initial
investment was made. Subsequent add-on investments are included in
the static pool year of the original investment. There were no new
investments made in 2009 to 2011.
(2) Assumes investments are exited at current US GAAP fair value.
(3) Includes fully exited investments of existing portfolio companies.
(4) Excludes investments in Structured Products.
(5) Excludes equity investments that are the result of conversions of
debt and warrants received with the issuance of debt.
(6) Majority Owned Portfolio Company ("MOPC") investments represents
investments in which European Capital, or its affiliates, have a
fully diluted ownership percentage of 50% or more or has over 50%
board representation at the portfolio company.
(7) Adjusted EBITDA may reflect certain adjustments to the reported
EBITDA of a portfolio company for non-recurring, unusual or
infrequent items or other pro-forma items or events to normalize
current earnings which a buyer may consider in a change in control
transactions. These adjustments may be material and are highly
subjective in nature. Portfolio company reported EBITDA is for the
most recently available twelve months, or when appropriate, the
forecasted twelve months or current annualized run-rate
(8) For portfolio companies with a nominal Adjusted EBITDA amount, the
portfolio company's maximum debt leverage is limited to 15 times
Adjusted EBITDA.
(9) Excludes investments in which we own only equity.
(10) For the most recent twelve months, or when appropriate, the
forecasted twelve months.
(11) As a percentage of our total debt investments.
(12) Weighted average based on fair value.
(13) Weighted average based on fair value of equity investments.
(14) Non euro-denominated amounts are retranslated at the exchange rate
ruling at the date of original investment.
(15) Non euro-denominated balances, other than those referred to in (14),
are retranslated at the exchange rate ruling at the balance sheet
date.
(16) Balance Sheet appreciation (depreciation) of investments excluding
foreign exchange revaluation.
IMPORTANT DISCLOSURES
NAV
Any valuation information relating to the portfolio companies of European Capital stated or referred to in this release has been determined by the Board of European Capital in good faith, on a basis consistent with past practice and for the purposes of complying with its reporting obligations under applicable laws.
Forward-looking statements
This document may contain "forward-looking statements." By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Many of these risks and uncertainties relate to factors beyond European Capital's control or which cannot be estimated precisely. These factors include, but are not limited to, uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, and changes in the conditions of the industries in which European Capital has made investments. Actual outcomes and results may therefore differ materially from any outcomes or results expressed or implied by any such forward-looking statements.
Performance data quoted above represents past performance of European Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in European Capital will likely fluctuate. Additionally, European Capital's current performance may be lower or higher than the performance data quoted above.
Basis of preparation
This interim management statement has been prepared to provide further transparent information about European Capital and should not be relied on by any person for any other purpose. Certain financial information in this interim management statement is based on unaudited management accounts. Nothing in this document is intended to be, or should be construed as, a profit forecast.
ABOUT EUROPEAN CAPITAL
European Capital is an investment company for pan-European equity, mezzanine and senior debt investments with euro 1.0 billion in assets under management. European Capital is a wholly-owned affiliate of American Capital, Ltd ("American Capital"). It is managed by European Capital Financial Services (Guernsey) Limited ("ECFSG" or the "Investment Manager"), a wholly-owned affiliate of American Capital. The Investment Manager has offices in London and Paris. As of 31 December 2011 the Investment Manager had 5 investment teams with 20 investment professionals and employed 26 support staff. European Capital and its affiliates will consider senior and mezzanine debt investment opportunities from 5 million to 40 million in either euros or sterling and up to 100 million for One Stop Buyouts®. For further information, please refer to http://www.EuropeanCapital.com.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $68 billion in assets under management and seven offices in the U.S. and Europe American Capital and its affiliates will consider investment opportunities up to $300 million. For further information, please refer to http://www.AmericanCapital.com.
Contact: European Capital Financial Services Limited
+44-207-539-7000
Ira Wagner, President
Juan Carlos Morales Cortes, Director
Richard Smith, Finance Director
Share this article