PHILADELPHIA, Nov. 9, 2017 /PRNewswire/ -- FS Investment
Corporation (NYSE: FSIC), a publicly traded business development
company focused on providing customized credit solutions to private
middle market U.S. companies, announced its operating results for
the quarter ended September 30, 2017,
and that its board of directors has declared its fourth quarter
2017 regular distribution.
Financial Highlights for the Quarter Ended September 30, 20171
- Net investment income of $0.21
per share, compared to $0.20 per
share for the quarter ended September 30,
2016
- Adjusted net investment income of $0.21 per share, compared to $0.20 per share for the quarter ended
September 30,
20162
- Total net realized loss of $0.07 per share and total net change in
unrealized appreciation of $0.21 per
share, compared to a total net realized gain of $0.01 per share and a total net change in
unrealized appreciation of $0.26 per
share for the quarter ended September
30, 2016
- Paid cash distributions to stockholders totaling
$0.22275 per
share3
- Total purchases of $183.4
million versus $225.5 million
of sales and repayments
- Net asset value of $9.43 per
share, compared to $9.30 per share as
of June 30, 2017
"As we've seen in prior quarters, the credit markets continue to
be very competitive," said Michael C.
Forman, Chairman and Chief Executive Officer of FSIC. "With
first lien senior secured loans representing 98% of purchases in
the quarter, we remain disciplined in our approach with an emphasis
on investing at the top of the capital structure."
Declaration of Regular Distribution for Fourth Quarter
2017
FSIC's board of directors has declared a regular cash
distribution for the fourth quarter of $0.19 per share, which will be paid on or about
January 3, 2018 to stockholders of
record as of the close of business on December 20, 2017.
Summary Consolidated Results
|
Three Months
Ended
|
(dollars in
thousands, except per share data)
(all per share amounts are basic and
diluted)1
|
September 30,
2017
|
June 30,
2017
|
September 30,
2016
|
Total investment
income
|
$103,691
|
$98,695
|
$100,557
|
Net investment
income
|
50,648
|
46,460
|
49,003
|
Net increase
(decrease) in net assets resulting from operations
|
85,398
|
18,442
|
114,369
|
|
|
|
|
Net investment income
per share
|
$0.21
|
$0.19
|
$0.20
|
Adjusted net
investment income per share2
|
$0.21
|
$0.19
|
$0.20
|
Total net realized
and unrealized gain (loss) per share
|
$0.14
|
$(0.11)
|
$0.27
|
Net increase
(decrease) in net assets resulting from operations (Earnings per
Share)
|
$0.35
|
$0.08
|
$0.47
|
Stockholder
distributions per share3
|
$0.22275
|
$0.22275
|
$0.22275
|
Net asset value per
share at period end
|
$9.43
|
$9.30
|
$9.42
|
Weighted average
shares outstanding
|
245,678,745
|
245,107,405
|
243,488,590
|
Shares outstanding,
end of period
|
245,725,416
|
245,153,010
|
243,488,590
|
|
|
As
of
|
As
of
|
(dollar amounts in
thousands)
|
|
September 30,
2017
|
December 31,
2016
|
Total fair value of
investments
|
|
$3,911,399
|
$3,726,816
|
Total
assets
|
|
4,135,463
|
4,110,071
|
Total stockholders'
equity
|
|
2,316,693
|
2,297,377
|
Portfolio Highlights as of September 30, 2017
- Total fair value of investments was $3.9
billion.
- Core investment strategies4 represented 99% of the
portfolio by fair value as of September 30,
2017, including 90% from direct originations and 9% from
opportunistic investments. Broadly syndicated/other investments
represented the remaining 1% of the portfolio by fair value.
- Gross portfolio yield prior to leverage (based on amortized
cost and excluding non-income producing assets)5 was
10.3%, compared to 10.4% as of June 30,
2017.
- Total commitments to direct originations (including unfunded
commitments) made during the third quarter of 2017 was $199.2 million in 4 companies, 2 of which were
existing portfolio companies.
- Approximately 0.3% of investments were on non-accrual based on
fair value.6
Total Portfolio Activity
|
Three Months
Ended
|
|
(dollar amounts in
thousands)
|
September 30,
2017
|
June 30,
2017
|
September 30,
2016
|
|
Purchases
|
$183,384
|
$298,682
|
$217,337
|
|
Sales and
redemptions
|
(255,483)
|
(310,569)
|
(290,764)
|
|
Net portfolio
activity
|
$(42,099)
|
$(11,887)
|
$(73,427)
|
|
|
|
Portfolio
Data
|
As of
September 30, 2017
|
As of
December, 2016
|
|
Total fair value of
investments
|
$3,911,399
|
$3,726,816
|
|
Number of Portfolio
Companies
|
104
|
102
|
|
Average Annual EBITDA
of Portfolio Companies
|
$91,700
|
$100,000
|
|
Weighted Average
Purchase Price of Debt Investments
(as a % of
par)
|
97.5%
|
98.6%
|
|
% of Investments on
Non-Accrual
(based on fair
value)6
|
0.3%
|
0.2%
|
|
|
|
|
Asset Class
(based on fair value)
|
|
|
Senior Secured Loans
— First Lien
|
61%
|
52%
|
|
Senior Secured Loans
— Second Lien
|
5%
|
16%
|
|
Senior Secured
Bonds
|
5%
|
4%
|
|
Subordinated
Debt
|
14%
|
12%
|
|
Collateralized
Securities
|
1%
|
2%
|
|
Equity/Other
|
14%
|
14%
|
|
|
|
|
Portfolio
Composition by Strategy (based on fair
value)4
|
|
|
Direct
Originations
|
90%
|
88%
|
|
Opportunistic
|
9%
|
9%
|
|
Broadly
Syndicated/Other
|
1%
|
3%
|
|
|
|
|
Interest Rate
Type (based on fair value)
|
|
|
% Variable
Rate
|
65.3%
|
67.0%
|
|
% Fixed
Rate
|
21.0%
|
19.4%
|
|
% Income Producing
Equity/Other Investments
|
2.7%
|
2.7%
|
|
% Non-Income
Producing Equity/Other Investments
|
11.0%
|
10.9%
|
|
|
|
|
Yields (based
on amortized cost)5
|
|
|
Gross Portfolio Yield
Prior to Leverage
|
9.4%
|
9.1%
|
|
Gross Portfolio Yield
Prior to Leverage — Excluding Non-Income Producing
Assets
|
10.3%
|
10.1%
|
|
|
|
|
|
|
|
|
Direct Origination Activity
|
Three Months
Ended
|
(dollar amounts in
thousands)
|
September 30,
2017
|
June 30,
2017
|
September 30,
2016
|
Total
Commitments
(including unfunded
commitments)
|
$199,157
|
$197,084
|
$144,226
|
Exited Investments
(including partial paydowns)
|
(169,035)
|
(218,280)
|
(198,010)
|
Net Direct
Originations
|
$30,122
|
$(21,196)
|
$(53,784)
|
Direct
Originations Portfolio Data
|
As of September
30, 2017
|
As of December 31,
2016
|
Total Fair Value of
Direct Originations
|
$3,507,097
|
$3,264,395
|
Number of Portfolio
Companies
|
74
|
67
|
Average Annual EBITDA
of Portfolio Companies
|
$70,700
|
$64,600
|
Average Leverage
Through Tranche of Portfolio Companies —
Excluding
Equity/Other and Collateralized Securities
|
4.8x
|
4.8x
|
% of Investments on
Non-Accrual (based on fair value)6
|
—
|
0.1%
|
|
|
|
|
|
|
Three Months
Ended
|
|
New Direct
Originations by Asset Class (including unfunded
commitments)
|
September 30,
2017
|
June 30,
2017
|
September 30,
2016
|
|
Senior Secured Loans
— First Lien
|
85%
|
97%
|
94%
|
|
Senior Secured Loans
— Second Lien
|
2%
|
—
|
5%
|
|
Senior Secured
Bonds
|
—
|
1%
|
—
|
|
Subordinated
Debt
|
13%
|
—
|
—
|
|
Collateralized
Securities
|
—
|
—
|
—
|
|
Equity/Other
|
—
|
2%
|
1%
|
|
Average New Direct
Origination Commitment Amount
|
$49,789
|
$15,160
|
$20,604
|
|
Weighted Average
Maturity for New Direct Originations
|
5/5/2023
|
12/17/2022
|
12/11/2021
|
|
Gross Portfolio Yield
Prior to Leverage (based on amortized cost) of New Direct
Originations Funded during Period5
|
9.6%
|
9.6%
|
9.3%
|
|
Gross Portfolio Yield
Prior to Leverage (based on amortized cost) of New Direct
Originations Funded during Period —
Excluding Non-Income
Producing Assets5
|
9.6%
|
9.7%
|
9.3%
|
|
Gross Portfolio Yield
Prior to Leverage (based on amortized cost) of Direct Originations
Exited during Period5
|
12.0%
|
9.9%
|
8.6%
|
|
|
|
|
|
|
|
Leverage and Liquidity as of September 30, 2017
- Debt to equity ratio of 74%, based on $1.72 billion in total debt outstanding and
stockholders' equity of $2.32
billion. FSIC's weighted average effective interest rate
(including the effect of non-usage fees) was 4.21%
- Cash and foreign currency of approximately $179.0 million and availability under its
financing arrangements of $261.4
million, subject to borrowing base and other
limitations
- Twenty unfunded debt investments with aggregate unfunded
commitments of $176.5 million and two
unfunded equity commitments with aggregate unfunded commitments of
$311 thousand
Conference Call Information
FSIC will host a
conference call at 10:00 a.m. (Eastern
Time) on Friday, November 10,
2017, to discuss its third quarter financial results. All
interested parties are welcome to participate. You can access the
conference call by dialing (877) 443-2408 and using the conference
ID 9799008 approximately 10 minutes prior to the call. The
conference call will also be webcast, which can be accessed from
the Investor Relations section of FSIC's website at
www.fsinvestmentcorp.com under Presentations and
Reports.
A replay of the call will be available for a period of 30 days
following the call by visiting the Investor Relations section of
FSIC's website at www.fsinvestmentcorp.com under
Presentations and Reports.
Supplemental Information
An investor presentation of
financial information will be made available prior to the call in
the Investor Relations section of FSIC's website at
www.fsinvestmentcorp.com under Presentations and
Reports.
About FS Investment Corporation
FS Investment
Corporation (NYSE: FSIC) is a publicly traded business development
company ("BDC") focused on providing customized credit solutions to
private middle market U.S. companies. FSIC seeks to invest
primarily in the senior secured debt and, to a lesser extent, the
subordinated debt of private middle market companies to achieve the
best risk-adjusted returns for its investors. In connection with
its debt investments, FSIC may receive equity interests such as
warrants or options.
FSIC is advised by FB Income Advisor, LLC, an affiliate of FS
Investments, and is sub-advised by GSO / Blackstone Debt Funds
Management LLC, an affiliate of GSO Capital Partners ("GSO"). GSO,
with approximately $99.5 billion in
assets under management as of September 30,
2017, is the credit platform of Blackstone, one of the
world's leading managers of alternative investments. For more
information, please visit www.fsinvestmentcorp.com.
About FS Investments
FS Investments is a leading asset
manager dedicated to helping individuals, financial professionals
and institutions design better portfolios. The firm provides access
to alternative sources of income and growth and focuses on setting
industry standards for investor protection, education and
transparency.
FS Investments is headquartered in Philadelphia, PA with offices in Orlando, FL and Washington, DC. The firm had more than
$20 billion in assets under
management as of September 30,
2017.
Visit www.fsinvestments.com to learn more.
Forward-Looking Statements and Important Disclosure
Notice
This announcement may contain certain forward-looking
statements, including statements with regard to future events or
the future performance or operations of FSIC. Words such as
"believes," "expects," "projects," and "future" or similar
expressions are intended to identify 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 to differ materially from those
projected in these forward-looking statements. Factors that could
cause actual results to differ materially include changes in the
economy, risks associated with possible disruption in FSIC's
operations or the economy generally due to terrorism or natural
disasters, future changes in laws or regulations and conditions in
FSIC's operating area, and the price at which shares of FSIC's
common stock trade on the New York Stock Exchange. Some of these
factors are enumerated in the filings FSIC makes with the SEC. FSIC
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
The press release above contains summaries of certain financial
and statistical information about FSIC. The information contained
in this press release is summary information that is intended to be
considered in the context of FSIC's SEC filings and other public
announcements that FSIC may make, by press release or otherwise,
from time to time. FSIC undertakes no duty or obligation to update
or revise the information contained in this press release. In
addition, information related to past performance, while helpful as
an evaluative tool, is not necessarily indicative of future
results, the achievement of which cannot be assured. Investors
should not view the past performance of FSIC, or information about
the market, as indicative of FSIC's future results.
Other Information
The information in this press
release is summary information only and should be read in
conjunction with FSIC's quarterly report on Form 10-Q for the
quarterly period ended September 30,
2017, which FSIC filed with the U.S. Securities and Exchange
Commission (the "SEC") on November 9,
2017, as well as FSIC's other reports filed with the SEC. A
copy of FSIC's quarterly report on Form 10-Q for the quarterly
period ended September 30, 2017 and
FSIC's other reports filed with the SEC can be found on FSIC's
website at www.fsinvestmentcorp.com and the SEC's website at
www.sec.gov.
Certain Information About Distributions
The
determination of the tax attributes of FSIC's distributions is made
annually as of the end of its fiscal year based upon its taxable
income and distributions paid, in each case, for the full year.
Therefore, a determination as to the tax attributes of the
distributions made on a quarterly basis may not be representative
of the actual tax attributes for a full year. FSIC intends to
update stockholders quarterly with an estimated percentage of its
distributions that resulted from taxable ordinary income. The
actual tax characteristics of distributions to stockholders will be
reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSIC's
shares of common stock are subject to applicable legal restrictions
and the sole discretion of its board of directors. There can be no
assurance as to the amount or timing of any such future
distributions, including the special distribution referenced
herein.
FSIC may fund its cash distributions to stockholders from any
sources of funds legally available to it, including proceeds from
the sale of shares of FSIC's common stock, borrowings, net
investment income from operations, capital gains proceeds from the
sale of assets, non-capital gains proceeds from the sale of assets
and dividends or other distributions paid to it on account of
preferred and common equity investments in portfolio companies.
FSIC has not established limits on the amount of funds it may use
from available sources to make distributions. There can be no
assurance that FSIC will be able to pay distributions at a specific
rate or at all.
Contact Information:
Investors
Chris Condelles
christopher.condelles@fsinvestments.com
267-439-4365
Dominic Mammarella
dominic.mammarella@fsinvestments.com
215-220-4280
Media
Marc Yaklofsky / Kate Beers
media@fsinvestments.com
215-495-1174
Income
Statement
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Investment
income
|
|
|
|
|
|
|
|
|
From
non-controlled/unaffiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
82,349
|
|
|
$
|
86,569
|
|
|
$
|
230,115
|
|
|
$
|
264,717
|
|
Paid-in-kind interest
income
|
|
8,430
|
|
|
6,811
|
|
|
22,899
|
|
|
20,434
|
|
Fee income
|
|
5,005
|
|
|
4,214
|
|
|
34,081
|
|
|
21,191
|
|
Dividend
income
|
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
From
non-controlled/affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
3,448
|
|
|
1,851
|
|
|
10,485
|
|
|
3,656
|
|
Paid-in-kind interest
income
|
|
550
|
|
|
162
|
|
|
1,855
|
|
|
436
|
|
Fee income
|
|
1,232
|
|
|
—
|
|
|
1,263
|
|
|
633
|
|
Dividend
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
224
|
|
From
controlled/affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
966
|
|
|
100
|
|
|
3,407
|
|
|
134
|
|
Paid-in-kind interest
income
|
|
1,690
|
|
|
850
|
|
|
4,324
|
|
|
2,406
|
|
Total investment
income
|
|
103,691
|
|
|
100,557
|
|
|
308,450
|
|
|
313,831
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Management
fees
|
|
18,038
|
|
|
17,872
|
|
|
54,772
|
|
|
53,258
|
|
Subordinated income
incentive fees
|
|
12,662
|
|
|
12,250
|
|
|
37,426
|
|
|
38,945
|
|
Administrative
services expenses
|
|
750
|
|
|
750
|
|
|
2,226
|
|
|
2,846
|
|
Accounting and
administrative fees
|
|
254
|
|
|
243
|
|
|
774
|
|
|
706
|
|
Interest
expense
|
|
19,885
|
|
|
18,283
|
|
|
58,941
|
|
|
55,241
|
|
Directors'
fees
|
|
277
|
|
|
277
|
|
|
822
|
|
|
780
|
|
Other general and
administrative expenses
|
|
1,177
|
|
|
1,879
|
|
|
3,791
|
|
|
6,274
|
|
Total operating
expenses
|
|
53,043
|
|
|
51,554
|
|
|
158,752
|
|
|
158,050
|
|
Net investment
income
|
|
50,648
|
|
|
49,003
|
|
|
149,698
|
|
|
155,781
|
|
|
|
|
|
|
|
|
|
|
Realized and
unrealized gain/loss
|
|
|
|
|
|
|
|
|
Net realized gain
(loss) on investments:
|
|
|
|
|
|
|
|
|
Non-controlled/unaffiliated investments
|
|
(24,767)
|
|
|
2,363
|
|
|
(87,361)
|
|
|
(19,064)
|
|
Non-controlled/affiliated investments
|
|
6,551
|
|
|
—
|
|
|
6,856
|
|
|
—
|
|
Controlled/affiliated
investments
|
|
—
|
|
|
(26)
|
|
|
(52,879)
|
|
|
(26)
|
|
Net realized gain
(loss) on foreign currency
|
|
(19)
|
|
|
86
|
|
|
165
|
|
|
264
|
|
Net change in
unrealized appreciation (depreciation) on investments:
|
|
|
|
|
|
|
|
|
Non-controlled/unaffiliated investments
|
|
29,820
|
|
|
64,039
|
|
|
149,622
|
|
|
96,258
|
|
Non-controlled/affiliated investments
|
|
16,951
|
|
|
(4,463)
|
|
|
(979)
|
|
|
3,823
|
|
Controlled/affiliated
investments
|
|
7,408
|
|
|
4,354
|
|
|
7,041
|
|
|
6,692
|
|
Net change in
unrealized appreciation (depreciation) on secured
borrowing
|
|
3
|
|
|
(33)
|
|
|
(7)
|
|
|
(33)
|
|
Net change in
unrealized gain (loss) on foreign currency
|
|
$
|
(1,197)
|
|
|
$
|
(954)
|
|
|
$
|
(4,923)
|
|
|
$
|
(1,266)
|
|
Total net realized and
unrealized gain (loss)
|
|
34,750
|
|
|
65,366
|
|
|
17,535
|
|
|
86,648
|
|
Net increase
(decrease) in net assets resulting from operations
|
|
$
|
85,398
|
|
|
$
|
114,369
|
|
|
$
|
167,233
|
|
|
$
|
242,429
|
|
|
|
|
|
|
|
|
|
|
Per share
information—basic and diluted
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in net assets resulting from operations (Earnings per
Share)
|
|
$
|
0.35
|
|
|
$
|
0.47
|
|
|
$
|
0.68
|
|
|
$
|
1.00
|
|
Weighted average
shares outstanding
|
|
245,678,745
|
|
|
243,488,590
|
|
|
245,117,823
|
|
|
243,257,941
|
|
Balance
Sheet
|
|
September 30,
2017
|
|
|
|
|
(Unaudited)
|
|
December 31,
2016
|
Assets
|
|
|
|
|
Investments, at fair
value
|
|
|
|
|
Non-controlled/unaffiliated investments (amortized
cost—$3,514,012 and $3,509,899, respectively)
|
|
$
|
3,594,686
|
|
|
$
|
3,440,951
|
|
Non-controlled/affiliated investments (amortized
cost—$173,626 and $153,167, respectively)
|
|
222,275
|
|
|
202,795
|
|
Controlled/affiliated
investments (amortized cost—$85,201 and $80,874,
respectively)
|
|
94,438
|
|
|
83,070
|
|
Total investments, at
fair value (amortized cost—$3,772,839 and $3,743,940,
respectively)
|
|
3,911,399
|
|
|
3,726,816
|
|
Cash
|
|
176,445
|
|
|
264,594
|
|
Foreign currency, at
fair value (cost—$2,451 and $4, respectively)
|
|
2,546
|
|
|
4
|
|
Receivable for
investments sold and repaid
|
|
1,896
|
|
|
75,921
|
|
Income
receivable
|
|
38,811
|
|
|
36,106
|
|
Deferred financing
costs
|
|
3,712
|
|
|
5,828
|
|
Prepaid expenses and
other assets
|
|
654
|
|
|
802
|
|
Total
assets
|
|
$
|
4,135,463
|
|
|
$
|
4,110,071
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Payable for
investments purchased
|
|
$
|
606
|
|
|
$
|
5,748
|
|
Credit facilities
payable (net of deferred financing costs of $3,461 and $0,
respectively)
|
|
637,669
|
|
|
619,932
|
|
Unsecured notes
payable (net of deferred financing costs of $1,563 and $1,884,
respectively)
|
|
1,072,714
|
|
|
1,070,701
|
|
Secured borrowing, at
fair value (amortized proceeds of $2,835 and $2,831,
respectively)
|
|
2,891
|
|
|
2,880
|
|
Stockholder
distributions payable
|
|
54,733
|
|
|
54,364
|
|
Management fees
payable
|
|
18,038
|
|
|
18,022
|
|
Subordinated income
incentive fees payable
|
|
12,662
|
|
|
12,885
|
|
Administrative
services expense payable
|
|
495
|
|
|
516
|
|
Interest
payable
|
|
17,463
|
|
|
20,144
|
|
Directors' fees
payable
|
|
267
|
|
|
281
|
|
Other accrued
expenses and liabilities
|
|
1,232
|
|
|
7,221
|
|
Total
liabilities
|
|
1,818,770
|
|
|
1,812,694
|
|
Commitments and
contingencies
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred stock,
$0.001 par value, 50,000,000 shares authorized, none issued and
outstanding
|
|
—
|
|
|
—
|
|
Common stock, $0.001
par value, 450,000,000 shares authorized, 245,725,416 and
244,063,357 shares issued and outstanding, respectively
|
|
246
|
|
|
244
|
|
Capital in excess of
par value
|
|
2,276,946
|
|
|
2,261,040
|
|
Accumulated
undistributed net realized gain/loss on investments and gain/loss
on foreign currency
|
|
(237,493)
|
|
|
(104,274)
|
|
Accumulated
undistributed (distributions in excess of) net investment
income
|
|
133,899
|
|
|
148,026
|
|
Net unrealized
appreciation (depreciation) on investments and secured borrowing
and unrealized gain/loss on foreign currency
|
|
143,095
|
|
|
(7,659)
|
|
Total
stockholders' equity
|
|
2,316,693
|
|
|
2,297,377
|
|
Total
liabilities and stockholders' equity
|
|
$
|
4,135,463
|
|
|
$
|
4,110,071
|
|
Net asset value per
share of common stock at period end
|
|
$
|
9.43
|
|
|
$
|
9.41
|
|
Non-GAAP Financial Measures
This press release contains certain financial measures that have
not been prepared in accordance with generally accepted accounting
principles in the United States
("GAAP"). FSIC uses these non-GAAP financial measures internally in
analyzing financial results and believes that the use of these
non-GAAP financial measures is useful to investors as an additional
tool to evaluate ongoing results and trends and in comparing FSIC's
financial results with other BDCs.
Non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP financial
measures, and should be read only in conjunction with FSIC's
consolidated financial statements prepared in accordance with GAAP.
A reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures has been provided in this press
release, and investors are encouraged to review the
reconciliation.
Reconciliation of Non-GAAP Financial
Measures1
|
Three Months
Ended
|
|
September 30,
2017
|
June 30,
2017
|
September 30,
2016
|
GAAP net investment
income per share
|
$0.21
|
$0.19
|
$0.20
|
Plus capital gains
incentive fees per share
|
—
|
—
|
—
|
Plus excise taxes per
share
|
—
|
—
|
—
|
Plus one-time
expenses per share
|
—
|
—
|
—
|
Adjusted net
investment income per share2
|
$0.21
|
$0.19
|
$0.20
|
1)
|
Per share data was
derived by using the weighted average shares of FSIC's common stock
outstanding during the applicable period. Per share numbers may not
sum due to rounding.
|
2)
|
Adjusted net
investment income is a non-GAAP financial measure. Adjusted net
investment income is presented for all periods as GAAP net
investment income excluding (i) the accrual for the capital gains
incentive fee for realized and unrealized gains; (ii) excise taxes;
and (iii) certain non-recurring operating expenses that are
one-time in nature and are not representative of ongoing operating
expenses incurred during FSIC's normal course of business (referred
to herein as one-time expenses). FSIC uses this non-GAAP financial
measure internally in analyzing financial results and believes that
the use of this non-GAAP financial measure is useful to investors
as an additional tool to evaluate ongoing results and trends and in
comparing its financial results with other business development
companies. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for
financial results prepared in accordance with GAAP. A
reconciliation of GAAP net investment income to adjusted net
investment income can be found above.
|
3)
|
The per share data
for distributions reflects the amount of distributions paid per
share of our common stock to stockholders of record during each
applicable period.
|
|
|
4)
|
See FSIC's quarterly
report on Form 10-Q for the three months ended September 30, 2017
for a description of FSIC's investment strategies.
|
5)
|
Gross portfolio yield
represents the expected annualized yield of FSIC's investment
portfolio based on the composition of the portfolio as of the
applicable date. FSIC's estimated gross portfolio yield may be
higher than an investor's yield on an investment in shares of
FSIC's common stock because it does not reflect sales commissions
or charges that may be incurred in connection with the purchase or
sale of such shares, or operating expenses that may be incurred by
FSIC. FSIC's estimated gross portfolio yield does not represent an
actual investment return to stockholders, is subject to change and,
in the future, may be greater or less than the rates set forth
herein.
|
6)
|
Interest income is
recorded on an accrual basis. See FSIC's quarterly report on Form
10-Q for the three months ended September 30, 2017 for a
description of FSIC's revenue recognition policy.
|
|
|
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SOURCE FS Investment Corporation