2. Nasdaq: ACAS
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This presentation contains statements that, to the extent they are not recitations of historical fact,
y
constitute "forward-looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe
harbor protection provided by the Reform Act. Actual outcomes and results could differ materially
from those forecast due to the impact of many factors beyond the control of American Capital. All
forward looking statements included in this presentation are made only as of the date of this
presentation and are subject to change without notice. Certain factors that could cause actual
results to differ materially from those contained in the forward-looking statements are included in
our periodic reports filed with the SEC. Copies are available on the SEC’s website at
www.sec.gov. We disclaim any obligation to update our forward looking statements unless
required by law.
The following slides contain summaries of certain financial and statistical information about
American Capital, Ltd. They should be read in conjunction with our periodic reports that are filed
from time-to-time with the Securities and Exchange Commission including our annual report on
Form 10-K for the year ended December 31, 2009 and our subsequent periodic filings. Historical
results discussed in this presentation are not indicative of future results.
Additional Information
No information contained in this presentation constitutes an offer or invitation to acquire or
dispose of any securities or investment advice in any jurisdiction. Any statements included herein
regarding earnings enhancement are not a profit forecast and should not be interpreted to mean
that American Capital’s future earnings will necessarily match or exceed those of any prior year.
Capital s
2
3. Nasdaq: ACAS
Q
Q1 2010 Financial Summary
y
$0.17 NOI Per Diluted Share
143% increase from Q4 2009
$(0.27) Net Realized Loss Per Diluted Share
$0.65 Net Earnings Per Diluted Share
$0.92 net unrealized appreciation per diluted share
31% annualized ROE
$8.98 Net Asset Value (“NAV”) Per Share
$0.69 increase in NAV per share from Q4 2009
● 8% increase
$2.5 B net asset value
$8.31 pro forma NAV per share as adjusted for April 19, 2010 $295 MM
equity offering
$820 MM Cash Balance
$1.2 B cash balance as of April 30, 2010
1.6:1 Debt to Equity
$449 MM debt repaid since June 30 2008
30,
$3.1 B Debt, Net of Cash
3
4. Nasdaq: ACAS
Net Unrealized Appreciation (Depreciation) of
Portfolio Investments*
oto o est e ts
$ In Millions US GDP
Net Unrealized Appreciation (Depreciation) of Porfolio Investments* US GDP
$1,000
$1 000 10%
5.6%
$528
$500 3.0% 5%
3.2% 3.6%
2.1% 2.2% $254
1.2% 1.5% $126
$45
$0 0%
($5)
-0.7% -0.7%
($224) ($269) -2.7% -6.4%
($500) ($384) -5%
($532) -5.4% ($554) ($626)
($1,000) ($951) -10%
($1,500) -15%
($1,588)
($1 588)
($2,000) -20%
Q1 06 Q1 07 Q1 09 Q1 10
* Excludes unrealized appreciation (deprecation) on derivative agreements, foreign currency translation
and the reversal of prior period net unrealized depreciation (appreciation) upon realization. 4
5. Nasdaq: ACAS
Q
Quarterly Financial Results
y
$ In Millions
Net Earnings (Loss) US GDP
US GDP
$1,000
$1 000 10%
5.6%
2.2% 3.0%
1.5% $107 $187
$77
$0 0%
-0.7% ($70)
-0.7%
-2.7% -6.4%
($548) ($547)
-5.4% ($547)
($1,000) ($813) -10%
($1,684)
($2,000) -20%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
5
6. Nasdaq: ACAS
Portfolio Statistics
As of March 31, 2010
$5.7 B Portfolio of Investments at Fair Value
10.3% weighted average yield on private finance debt investments*
as of March 31, 2010
$164 MM Q1 2010 Revenue from Portfolio Investments
7.0% Non-Accruing Loans at Fair Value
$263 MM of $3.8 B total loans at fair value
4.3x Mean Net Debt to Valuation EBITDA**
5.5x Total Net Debt to Valuation EBITDA**
2.2x Interest Coverage Ratio
* Reduced for non-accruing loans.
** See slide 20 for definition of Mean and Total Net Debt to Valuation EBITDA
6
7. Nasdaq: ACAS
Past Due and Non Accrual Loans
$ in Millions Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
Current $ 5,115 $ 4,399 $ 4,047 $ 3,572 $ 3,648
0-30 Days Past Due $ 1 $ 1 $ 7 $ 38 $ -
31-60 Days Past Due
y - 4 113 - 3
61-90 Days Past Due 7 29 - - -
> 90 Days Past Due 28 6 89 50 44
Total Past Due Loans at Cost $ 36 $ 40 $ 209 $ 88 $ 47
Non-Accrual Loans at Cost $ 1,061 $ 996 $ 889 $ 811 $ 671
Total Loans at Cost $ 6,212 $ 5,435 $ 5,145 $ 4,471 $ 4,366
Non Accrual
Non-Accrual Loans at Fair Value $ 214 $ 310 $ 285 $ 290 $ 263
Total Loans at Fair Value $ 4,866 $ 4,288 $ 4,117 $ 3,729 $ 3,759
Non-Accrual Loans as a % of Total Loans at Cost 17.1% 18.3% 17.3% 18.1% 15.4%
Non-Accrual Loans as a % of Total Loans at Fair Value 4.4% 7.2% 6.9% 7.8% 7.0%
7
8. Nasdaq: ACAS
$
$2.1 B of Realizations Since Q2 2008
Q
Generated Significant Liquidity Through Realizations
Despite the declining economy, capital and M&A markets
$ in Millions
$600
$520
$463 $476
$400
$246
$200 $163
$125
$79
$0
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
8
9. Nasdaq: ACAS
$
$163 MM of Q Realizations
Q1
$114 MM Received from Principal Payments and Loan Sales
$90 MM in principal prepayments
$15 MM in loan syndications and sales
$7 MM in scheduled principal amortization
p p
$2 MM collection of PIK notes and dividends and accreted OID
$49 MM Received from the Sale of Equity Investments
$107 MM Net Portfolio Realized Losses
$8 MM gross portfolio realized gains
$115 MM gross portfolio realized losses
9
10. Nasdaq: ACAS
Realization Performance(1)
Despite Difficult Market Conditions, Assets Have Been Sold at or
Near Fair Value
100% Asset Sale Price Relative to Latest Fair Market Value
75%
50%
25%
1.4% 1.1%
0%
-1.9% -1.9% -0.6% -0.7% -3.7%
-25%
-50%
-75%
-100%
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
___________________________________
(1) Measure defined as the comparison of the realized asset sale price to the previous period’s fair market value for fully 10
exited debt and equity securities.
11. Nasdaq: ACAS
Portfolio Statistics
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
Control(1) Portfolio Company Assets at Fair Value as a % of 54% 55% 58% 54% 59% 57%
Prior Quarter Investments at Fair Value
Total Investments at Fair Value to Total Investments at Cost 69% 64% 60% 60% 61% 63%
Mean Net Debt to Valuation EBITDA(2) 4.0
40 4.2
42 4.4
44 4.6
46 4.5
45 4.3
43
Total Net Debt to Valuation EBITDA(2) 5.1 5.3 6.5 5.9 5.8 5.5
Average EBITDA Margin 20.4% 20.8% 20.8% 20.5% 20.1% 20.8%
Total Senior Debt as a % of Investments at Fair Value 32% 34% 35% 35% 32% 31%
Total Subordinated Debt as a % of Investments at Fair Value 37% 37% 35% 35% 35% 35%
Total Equity Assets as a % of Investments at Fair Value 29% 27% 28% 27% 30% 31%
(1) Includes private finance investments that we control or can gain control of the board of directors of the
portfolio company as of the measurement date, including equity securities and those securities held by
entities managed by American Capital, LLC on the a fully diluted basis.
(2) See slide 20 for definition of Mean and Total Net Debt to Valuation EBITDA. 11
12. Nasdaq: ACAS
Appreciation, Depreciation, Gains and Losses
pp , p ,
$ in Millions
NET REALIZED GAINS AND LOSSES Q1 2010
Private Finance Portfolio $ (106)
Structured Products (1)
Foreign Currency (3)
Derivative Agreements (16)
Net Realized Losses $ (126)
Cost Fair
NET UNREALIZED APPRECIATION AND DEPRECIATION Value Value
Reversal of Prior Period Unrealized Depreciation Upon Realization N/A N/A $ 103
Private Finance Portfolio $ 6,618 $ 5,016 111
European Capital Limited Investment 1,380
1 380 392 50
European Capital Limited Foreign Currency Translation* N/A N/A 69
American Capital Agency Corp. 50 64 (2)
American Capital, LLC 75 60 26
Structured Products 890 166 -
Foreign Currency Translation** N/A N/A (87)
Derivative Agreements - (107) (6)
Net Unrealized Appreciation $ 264
TOTAL $ 9,013 $ 5,591 $ 138
* Represents foreign currency translation on the accumulated unrealized depreciation on the investment and is reported as
unrealized appreciation of portfolio company investments on our Consolidated Statements of Operations.
** Represents foreign currency translation on the cost basis of our foreign currency denominated assets and liabilities, of
which $84 MM relates to European Capital Limited. Reported as unrealized depreciation from foreign currency translation
on our Consolidated Statements of Operations. 12
13. Nasdaq: ACAS
European Capital Update
p p p
ECAS Net Asset Value is Approximately $0.8 B as of March 31, 2010
ACAS equity investment is fair valued at $278 MM
● $35 MM increase from Q4 2009
► $50 MM increase net of $15 MM in foreign currency translation
● Valuation includes significant discount to NAV
► Covenants and t
C t d tenor of credit facilities could affect realization of
f dit f iliti ld ff t li ti f
NAV
► Comparable publicly traded funds currently trading at discount
to NAV
Credit Facilities are in Compliance
$75 MM Bridge Loan Funded by ACAS in March 2010
Used to retire one of four credit facilities, eliminating an ACAS guarantee
$60 MM repaid in April 2010
id i A il
ECAS Generated Over €200 MM of Portfolio Realizations from November 2009
through April 2010
Proceeds exceeds prior quarter valuations by approximately 6%
p q y pp y
13
14. Nasdaq: ACAS
IRR by Static Pool and Exited Investments+
All Investments
Exited Investments+
40%
24% 24%
20% 21%
18% 17%
13% 13% 12%
9% 10%
10% 8%9% 8% 7%
3% 5% -1%
Pre-2001 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Aggregate 2005-
-3% -3% 2010
-11% Aggregate
-20%
-50%
-75%*
-80%
Static Pool Investments at Fair Value as % of Total 3/31/10 Portfolio at Fair Value
Pre-2001 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0.4% 0.0% 2.4% 7.3% 6.2% 21.5% 21.9% 29.7% 10.6% 0.0% 0.0%
+ Includes exited securities of existing portfolio companies.
* Not considered meaningful as only $55 MM, or 5.4%, of investments have been exited. 14
15. Nasdaq: ACAS
$
$295 MM Equity Issuance in April
q y p
58.3 MM Common Shares Issued to Group of Institutional Investors
75% Purchased by Paulson & Co. and Affiliates
y
Sold at $5.06 per Share
5% discount to closing price
Will be Used for General Corporate Purposes, Including the
Purposes
Company’s Investment and Lending Activities and to Repay
Indebtedness Under its Unsecured Debt Obligations
15
16. Nasdaq: ACAS
2010 Outlook and Business Forecast
We Believe Recession has Ended and Expect Growth in 2010
Generally asset valuations have stabilized and overall have
y
improved
We Remain Focused on
Restructuring our unsecured debt
Providing operational, managerial and financial support to our
portfolio companies
Improving operating efficiencies
Restructuring ECAS debt to maximize value
We are a Long-term, Patient Investor
Getting f i
G i fair values on realizations in a tough market
l li i i h k
16
19. Nasdaq: ACAS
Static Pool* % of Original Investments Exited
g
$ In Millions
Original Investments and Commitments
$8,000
$8 000 Total Exits and Prepayments of Original Investments and Commitments
$7,328
$7,000
$6,000
$5,179
$5,000 $4,636
$4,000
$3,277
$3,151
$3 151
$3,000
$2,266 $2,096
$2,000 $1,830
$1,434
$1,065
$998 $962 ,
$1,083 $1,021
$1,000
$1 000 $757
$376 $353
$55
$0
Pre-2001 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Static Pool % of Original Investments Exited
93.7% 93.9% 78.7% 75.5% 80.8% 45.2% 63.3% 43.0% 5.4% 0.0% 0.0%
* 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.
19
20. Nasdaq: ACAS
Credit Quality of Private Finance Portfolio*
Q y
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2007 2008 2008 2008 2008 2009 2009 2009 2009 2010
Mean Net Debt to Valuation EBITDA1 N/A N/A N/A N/A 4.0
40 4.2
42 4.4
44 4.6
46 4.5
45 4.3
43
Total Net Debt to Valuation EBITDA2 N/A N/A N/A N/A 5.1 5.3 6.5 5.9 5.8 5.5
Debt to EBITDA3 5.9 5.9 6.0 6.0 5.9 5.8 6.0 6.3 6.0 5.9
Interest Coverage4 2.0 1.9 1.8 1.9 2.0 2.0 2.1 2.0 2.2 2.2
Debt Service Coverage5 1.7 1.6 1.6 1.6 1.7 1.7 1.7 1.7 1.8 1.8
1. Mean Net Debt represents the sum of (i) debt and other liabilities senior to ACAS, (ii) normalization for working capital and (iii) the
mean of the total of ACAS’ debt in each portfolio company’s debt capitalization less cash of the portfolio company EBITDA is
capitalization, company.
defined as the earnings before interest, taxes, depreciation and amortization and other non-recurring charges. The Valuation
EBITDA is defined as the EBITDA used to value the current enterprise value of the portfolio company which may be the EBITDA of
the most recent twelve months or, when appropriate, the forecasted twelve months. Ratio excludes ACAS’ investments in
technology, real estate and financial services companies as well as debt investments valued at liquidation value.
2. Total Net Debt represents the sum of (i) debt and other liabilities senior to ACAS, (ii) normalization for working capital and (iii) the
total of ACAS’ debt in each portfolio company’s debt capitalization, less cash of the portfolio company. Ratio excludes ACAS’
p p y p , p p y
investments in technology, real estate and financial services companies as well as debt investments valued at liquidation value.
3. Debt represents the sum of (i) total debt senior to ACAS and (ii) the total of ACAS’ debt in each portfolio company’s debt
capitalization. EBITDA represents the EBITDA of the most recent twelve months. For portfolio companies with a nominal EBITDA,
the Debt to EBITDA calculation is limited to 15 times EBITDA.
4. EBITDA divided by the total cash interest expense of the portfolio company during the most recent twelve month period, or when
appropriate as a result of a new debt capital structure, the forecasted twelve months.
5.
5 EBITDA divided by the total scheduled principal amortization and total cash interest expense of the portfolio company during th
di id d b th t t l h d l d i i l ti ti dt t l hi t t f th tf li d i the
most recent twelve month period, or when appropriate, the forecast twelve months.
* Weighted average based on total private financing portfolio assets at fair value
20
21. Nasdaq: ACAS
Portfolio Statistics(1)
Pre-2001-
Pre- 2001 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2010 2005-2010
Static Static Static Static Static Static Static Static Static Static Static Aggregate Aggregate
$ In Millions Pool Pool Pool Pool Pool Pool Pool Pool Pool Pool Pool Portfolio Portfolio
IRR - Fair Value - All 7.9% 18.1% 7.9% 20.9% 13.2% 2.9% 7.2% -10.5% -2.5% - - 4.5% -0.9%
Investments(2)
IRR - Fair Value - Equity 5.8%
5 8% 46.9%
46 9% 11.4%
11 4% 28.7%
28 7% 27.6%
27 6% -8.2%
8 2% 12.7%
12 7% -16.5%
16 5% -9.6%
9 6% - - 2.5%
2 5% -5.0%
5 0%
Investments Only(2)(3)(4)
IRR - Exited Investments(5) 8.6% 20.2% 9.1% 23.5% 17.0% 23.9% 9.7% -3.3% -74.9% - - 13.0% 11.5%
Original Investments $ 1,065 $ 376 $ 962 $ 1,434 $ 2,266 $ 4,636 $ 5,179 $ 7,328 $ 1,021 $ - $ - $24,267 $18,164
and Commitments
Total Exits & Prepayments $ 998 $ 353 $ 757 $ 1,083 $ 1,830 $ 2,096 $ 3,277 $ 3,151 $ 55 $ - $ - $13,600 $8,579
of Original Investments
and Commitments
Total Interest, Dividends $ 386 $ 142 $ 307 $ 365 $ 540 $ 696 $ 785 $ 815 $ 154 $ - $ - $4,190 $2,450
and Fees Collected
Total Net Realized (Loss) $ (128) $ (4) $ (90) $ 142 $ 29 $ 293 $ (92) $ (377) $ (50) $ - $ - $(277) $(226)
Gain
Current Cost of $ 76 $ 23 $ 196 $ 331 $ 471 $ 2,326 $ 1,570 $ 3,221 $ 799 $ - $ - $9,013 $7,916
Investments
Current Fair Value of $ 20 $ 2 $ 136 $ 418 $ 351 $ 1,224 $ 1,249 $ 1,691 $ 607 $ - $ - $5,698 $4,771
Investments
Current Fair Value of 0.4% 0.0% 2.4% 7.3% 6.2% 21.5% 21.9% 29.7% 10.6% - - 100.0% 83.7%
Investments as a % of
Total Investments
Net Unrealized $ (56) $ (21) $ (60) $ 87 $ (120) $ (1 102) $
(1,102) (321) $ (1 530) $
(1,530) (192) $ - $ - $(3,315)
$(3 315) $(3,145)
$(3 145)
Appreciation (Depreciation)
(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.
(2) Assumes investments are exited at current fair value.
( )
(3) Excludes investments in Structured Products.
(4) Excludes equity investments that are the result of conversions of debt and warrants received with the issuance of debt.
(5) Includes exited securities of existing portfolio companies.
21
22. Nasdaq: ACAS
Portfolio Statistics(1)
Pre-2001 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Pre-2001-2010 2005-2010
$ In Millions Static Static Static Static Static Static Static Static Static Static Static Aggregate Aggregate
Pool Pool Pool Pool Pool Pool Pool Pool Pool Pool Pool Portfolio Portfolio
Non-accrual Loans at Cost
N lL tC t $ 18 $ 14 $ 27 $ - $ 39 $ 99 $ 136 $ 334 $ 4 $ - $ - $671 $573
Non-accrual Loans at Fair $ 20 $ 2 $ 20 $ - $ 11 $ 78 $ 58 $ 70 $ 4 $ - $ - $263 $210
Value
Equity Interests at Fair $ - $ - $ 1 $ 191 $ 73 $ 554 $ 422 $ 394 $ 138 $ - $ - $1,773 $1,508
Value(3)
Debt to EBITDA(6)(7)(8) 7.0 NM 8.1 4.5 6.2 4.6 5.3 6.9 6.3 - - 5.9 5.9
Interest Coverage(6)(8) 1.9 NM 0.9 2.7 2.1 2.4 2.5 2.2 1.4 - - 2.2 2.2
Debt Service Coverage(6)(8) 1.9 NM 0.8 2.5 1.5 1.6 2.0 1.9 1.2 - - 1.8 1.8
Average Age of 37 yrs 25 yrs 50 yrs 40 yrs 45 yrs 29 yrs 31 yrs 28 yrs 25 yrs - - 31 yrs 29 yrs
Companies(8)
Diluted Ownership 63% 59% 39% 52% 46% 49% 43% 47% 33% - - 45% 44%
Percentage(3)
(1) Static pool classification is based on the year the initial investment was made. Subsequent add-on investments are included in the static
made
pool year of the original investment.
(3) Excludes investments in structured products.
(6) These amounts do not include investments in which American Capital owns only equity.
(7) For portfolio companies with a nominal EBITDA amount, the portfolio company’s maximum debt leverage is limited to 15 times EBITDA.
(8) Excludes investments in Structured Products, managed funds and American Capital, LLC.
(9) Sales of the most recent twelve months, or when appropriate the forecasted twelve months.
(10) EBITDA of the most recent twelve months, or when appropriate the forecasted twelve months.
(11) As a percentage of the company’s total debt investments.
22
23. Nasdaq: ACAS
Portfolio Statistics(1)
Pre-2001 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Pre-2001-2010 2005-2010
$ I Milli
In Millions Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Static
St ti Aggregate
A t Aggregate
A t
Pool Pool Pool Pool Pool Pool Pool Pool Pool Pool Pool Portfolio Portfolio
Average Sales(8)(9) $ 46 $ 7 $ 46 $ 187 $ 95 $ 122 $ 132 $ 234 $ 98 $ - $ - $159 $166
Average EBITDA(8)(10) $ 4 $ - $ 9 $ 36 $ 23 $ 24 $ 36 $ 40 $ 28 $ - $ - $33 $34
Average EBITDA Margin 8.7% - 19.6% 19.3% 24.2% 19.7% 27.3% 17.1% 28.6% - - 20.8% 20.5%
Total Sales(8)(9) $ 70 $ 267 $ 169 $ 1,269 $ 820 $ 1,954 $ 5,854 $ 8,107 $ 1,190 $ - $ - $19,700 $17,105
Total EBITDA(8)(10) $ 6 $ 4 $ 18 $ 179 $ 167 $ 323 $ 896 $ 1,538 $ 234 $ - $ - $3,365 $2,991
% of Senior Loans(8)(11) 86% 21% 57% 61% 41% 38% 37% 62% 26% - - 47% 46%
% o Loans with Lien(8)(11)
of oa s t e (8)( ) 100% 68% 100% 100% 91% 89% 93% 93% 61% - - 89% 87%
(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.
(8) Excludes investments in Structured Products, managed funds and American Capital, LLC.
(9) Sales of the most recent twelve months, or when appropriate the forecasted twelve months.
( )
(10) EBITDA of the most recent twelve months, or when appropriate the forecasted twelve months.
, pp p
(11) As a percentage of the company’s total debt investments.
23
25. Nasdaq: ACAS
American Capital Overview
Global Asset Manager
$14 B of Capital Resources Under Management as of 3/31/10
$7 B at A
t American C it l*
i Capital*
$7 B externally managed assets**
Founded in 1986, IPO in 1997
$24
$ B invested by American Capital since IPO
Balance Sheet
$6.8 B of assets
$2.5 B net asset value
1.6:1 debt to equity
Financial Performance Since IPO
$30.32 of dividends paid since 1997 IPO at $15.00 per share
* Includes American Capital’s investment in its externally managed funds.
** Includes American Capital Agency Corp., American Capital Equity I, American Capital Equity II, ACAS
CLO-1 and ACAS CRE CDO 2007-1. European Capital Limited not included. 25
26. Nasdaq: ACAS
American Cap ta & Its Funds U de Management
e ca Capital ts u ds Under a age e t
$34 B Invested** in 521 Portfolio Companies* Since IPO
122 One Stop Buyouts
Buyouts™
229 PE buyouts sponsored by over 145 PE firms
177 direct & other investments
Over 252 Portfolio Companies* as of 3/31/10
$60 B of revenues*
$10 B EBITDA*
$5 MM to $100 MM Investment Size in North America
€5 MM to €25 MM Investment Size in Europe
* Includes portfolio companies of European Capital Limited.
** Includes investments of European Capital Limited, American Capital Agency Corp., American Capital
Equity I, American Capital Equity II and ACAS CLO-1. Excludes investment of ACAS CRE CDO 2007-1.
26
27. Nasdaq: ACAS
People and Offices
318 Employees as of March 31, 2010
8 Offices in the U.S., Europe and Asia
26 Investment Teams
95 investment professionals
36 CPAs, Audit and Valuation Professionals (FACT)
Unique in our industry
19 P
Person OOperations Team
ti T
One of the largest in our industry
6 CEOs & Presidents
2 COOs
1 CFO
5 Financial VPs and Associates
3 Supply Chain Management Professionals
4 Person Syndication Team
25 Person Legal Team
9 Person Human Resource Team
Includes 57 Employees at American Capital, LLC
y
Primarily in Europe
27
29. Nasdaq: ACAS
Appreciation, Depreciation, Gains and Losses
pp , p ,
$ in Millions
NET REALIZED GAINS AND LOSSES Q1 2010
Private Finance Portfolio $ (106)
Structured Products (1)
Foreign Currency (3)
Derivative Agreements (16)
Net Realized Losses $ (126)
Cost Fair
NET UNREALIZED APPRECIATION AND DEPRECIATION Value Value
Reversal of Prior Period Unrealized Depreciation Upon Realization N/A N/A $ 103
Private Finance Portfolio $ 6,618 $ 5,016 111
European Capital Limited Investment 1,380
1 380 392 50
European Capital Limited Foreign Currency Translation* N/A N/A 69
American Capital Agency Corp. 50 64 (2)
American Capital, LLC 75 60 26
Structured Products 890 166 -
Foreign Currency Translation** N/A N/A (87)
Derivative Agreements - (107) (6)
Net Unrealized Appreciation $ 264
TOTAL $ 9,013 $ 5,591 $ 138
* Represents foreign currency translation on the accumulated unrealized depreciation on the investment and is reported as
unrealized appreciation of portfolio company investments on our Consolidated Statements of Operations.
** Represents foreign currency translation on the cost basis of our foreign currency denominated assets and liabilities, of
which $84 MM relates to European Capital Limited. Reported as unrealized depreciation from foreign currency translation
on our Consolidated Statements of Operations. 29
31. Nasdaq: ACAS
$
$163 MM of Q Realizations
Q1
$114 MM Received from Principal Payments and Loan Sales
$90 MM in principal prepayments
$15 MM in loan syndications and sales
$7 MM in scheduled principal amortization
p p
$2 MM collection of PIK notes and dividends and accreted OID
$49 MM Received from the Sale of Equity Investments
$107 MM Net Portfolio Realized Losses
$8 MM gross portfolio realized gains
$115 MM gross portfolio realized losses
31
32. Nasdaq: ACAS
ACAS Realizations
1997 IPO-to-Date
13% Weighted Avg IRR on Senior and Subordinated Debt, Equity
and Structured Products Exits*
d St t d P d t E it *
289 realizations
● $13 B of capital committed
● 56% of total capital committed
Proceeds exceed prior quarter valuations by less than 1%
Inclusive of fees earned
28% Weighted Average IRR on Equity Realizations**
Inclusive of fees earned
$340 MM of Accrued PIK and Accreted OID Repaid
fA d dA t d R id
36% of total accrued PIK and accreted OID
* Includes fully exited portfolio companies and exited securities of existing portfolio companies.
** Excludes Structured Products, equity investments that are the result of conversions of debt to equity
and equity warrants received with debt fundings.
32
33. Nasdaq: ACAS
$
$84 MM of Q 2010 New Investments*
Q1
By Use of Funds
$75 MM for
Recapitalization in 2
Portfolio Companies**
$1 MM for Growth and
Working Capital in 1
Portfolio Company 1% 89%
10%
$8 MM for 5 Distressed
Portfolio Companies
* New investments reported on committed amounts at origination.
**Includes $75 MM for bridge loan financing to European Capital Limited to refinance its debt
obligations, of which $60 MM was repaid subsequent to 3/31/10
33
36. Nasdaq: ACAS
Industry Diversification
y
$5.7 Billion Total Investments at Fair Value
Global Industry Classification Standard (GICS)
Other, 11.5% Commercial Services and
Capital Markets, 1.5%
Supplies, 10.8%
Leisure Equipment and
L i E i t d
Products, 1.7%
Diversified Consumer Electrical Equipment, 6.3%
Services, 2.0%
Construction and
Engineering, 2.0%
Food Products, 2.1%
Household Durables, 5.9%
Computers and Peripherals,
2.2%
Building Products, 2.3%
Internet and Catalog Retail,
Electronic Equipment, 5.4%
Instruments and
Components, 2.4%
Pharmaceuticals, 2.8%
Hotels, Restaurants and
Leisure, 5.0%
Professional Services 2 8%
Services, 2.8%
Diversified Financial IT Services, 4.9%
Services, 3.0%
Life Sciences Tools and Health Care Providers and
Services, 3.0% Services, 4.6%
Real E t t
R l Estate and Real Estate
dR lE t t
Health Care Equipment and Investment Trusts, 3.9%
Supplies, 3.2% Auto Components, 3.8%
Software, 3.4% Internet Software and
Services, 3.5%
European Capital Limited, CLOs and CDOs are excluded from industry diversification break-out.
CMBS and ACAS CRE CDO are included in Real Estate and Real Estate Investment Trusts grouping. 36
37. Nasdaq: ACAS
$31 MM ACAS Average Investment Size
Size*
0.5% of Total ACAS Assets
$ in Millions
Average I
A Investment
t t
Average Investment as a % of Total Assets
$60 1.00%
$53
$52
$50
$50 $47
$44 $43 $43 $44 $44 0.75%
$40
$40 $38
$33 $32
$30 $30 $31
$30 $29 0.50%
$20
0.25%
0 25%
$10
$0 0.00%
Q1 06 Q1 07 Q1 08 Q1 09 Q1 10
* Investments at Fair Value 37
38. Nasdaq: ACAS
LTM Realizations as a % of Prior Year Assets
American Capital Controls 57% of Investments, thus Controls Timing of Exits***
$ in Billions
LTM Amortization, Prepayments and Exits*
$6.0 100%
LTM Investment Turnover Rate**
Quarterly Investment Turnover Rate**
$5.0 4.9
4.5 4.5 4.4 75%
$4.0
$4 0 3.8
38 60%
57% 57% 57%
55% 56% 3.4
3.1
$3.0 2.9 50%
43%
42%
36% 38%
2.2
2.0 31%
$2.0
$2 0
1.5 1.5
20% 1.3
1.1 1.2 25%
14% 1.0 1.0 15% 18%
$1.0 20%
10% 10%
12% 13% 14%
11%
7% 9% 8%
7% 7%
5% 5% 5%
$0.0
$0 0 3% 1% 2% 3%
0%
Q1 Q1 Q1 Q1 Q1
06 07 08 09 10
Total Investments at Fair Value as of December 31 (in millions):
2006 2007 2008 2009 Q1 2010
$8,056 $10,924 $7,418 $5,575 $5,598
* Excludes repayments of bridge notes and accrued PIK interest from European Capital Limited.
** Based on total investments at fair value at the beginning of the respective period.
*** Includes private finance investments that we control or can gain control of the board of directors of the portfolio company as of the measurement
date, including equity securities and those securities held by entities managed by American Capital, LLC on the a fully diluted basis. 38
39. Nasdaq: ACAS
Realizations as a % of Prior Quarter Assets
Q
Realizations
$ in millions Net Realized Gain (Loss) on Portfolio Company Investments*
$800 Realizations as a % of Prior Quarter Investment Assets at Fair Value
R li ti fP i Q t I t tA t tF i V l 10%
8%
$600 $520
$463
7% $476
5%
$400 5%
$246 3% 3%
$200 $163
$125
$79
$73 2%
$0 1% 0%
($32)
($79) ($47)
($107)
-$200
($308) ($282)
-$400 -5%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
Total Investments at Fair Value (in millions):
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
$9,095 $7,418 $6,839 $6,185 $5,893 $5,575 $5,698
* Excluding taxes on realized net gain, foreign currency transactions and derivative agreements.
39
41. Nasdaq: ACAS
Past Due and Non Accrual Loans
$ in Millions Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
Current $ 5,115 $ 4,399 $ 4,047 $ 3,572 $ 3,648
0-30 Days Past Due $ 1 $ 1 $ 7 $ 38 $ -
31-60 Days Past Due
y - 4 113 - 3
61-90 Days Past Due 7 29 - - -
> 90 Days Past Due 28 6 89 50 44
Total Past Due Loans at Cost $ 36 $ 40 $ 209 $ 88 $ 47
Non-Accrual Loans at Cost $ 1,061 $ 996 $ 889 $ 811 $ 671
Total Loans at Cost $ 6,212 $ 5,435 $ 5,145 $ 4,471 $ 4,366
Non Accrual
Non-Accrual Loans at Fair Value $ 214 $ 310 $ 285 $ 290 $ 263
Total Loans at Fair Value $ 4,866 $ 4,288 $ 4,117 $ 3,729 $ 3,759
Non-Accrual Loans as a % of Total Loans at Cost 17.1% 18.3% 17.3% 18.1% 15.4%
Non-Accrual Loans as a % of Total Loans at Fair Value 4.4% 7.2% 6.9% 7.8% 7.0%
41
44. Nasdaq: ACAS
First Quarter Income Statements
Q
2006 2007 2008 2009 2010
($ in Millions)
Total Operating Income $ 173 $ 250 $ 292 $ 195 $ 164
Total Operating Expense(1) 38 76 79 79 58
Interest Expense 36 62 63 52 57
(Provision) Benefit for Income Taxes (6) 2 1 - -
Net Operating Income 93 114 151 64 49
Net Gain on Extinguishment of Debt - - - 12 -
Net Realized Gain (Loss) 44 13 33 (131) (126)
Unrealized Appreciation
( p
(Depreciation)
) 24 7 (997) (492) 264
Cumulative Effect of Accounting
Change, Net of Income Tax 1 - - - -
Net Increase (Decrease) in Net
Assets from Operations $ 162 $ 134 $(
(813)
) $(
(547)
) $ 187
(1) Salaries, benefits and stock-based compensation and general and administrative expenses.
44
45. Nasdaq: ACAS
Balance Sheet Highlights
g g
Q1 10 vs. Q1 09
Change
($ in Millions, except per share data and financial metrics) Q1 09 Q4 09 Q1 10 $ %
Assets
Cash and Cash Equivalents $88 $835 $820 $732 832%
Debt Investments $4,866
$ , $3,729
$ , $3,759
$ , $(1,107)
$( , ) -23%
Equity Investments $1,830 $1,679 $1,773 $(57) -3%
Structured Products $143 $167 $166 $23 16%
Total Investments at Fair Value $6,839 $5,575 $5,698 $(1,141) -17%
Liabilities
Total Debt Outstanding $4,377 $4,142 $4,026 $(351) -8%
% Secured / % Unsecured 47% / 53% 43% / 57% 42% / 58% NA NA
Equity
Shareholders
Shareholders’ Equity $2,654
$2 654 $2,329
$2 329 $2,526
$2 526 $(128) -5%
Net Asset Value per Share $12.32 $8.29 $8.98 $(3.34) -27%
Ratios
Debt-to-Equity 1.6:1 1.8:1 1.6:1 NA NA
Price-to-Book
Price to Book 0.1
01X 0.3
03X 0.6
06X NA NA
45
47. Nasdaq: ACAS
Equity Interests at Fair Value
q y
Structured to Grow at 18% – 30% IRRs
$ in Millions
$ ,
$5,000 Warrants
$4,762
$4 762
Preferred $4,433 $4,375
Common $3,975
$4,000 $3,790
$3,045 $3,118
$3,000 $2,852
$2,766
$2,610
$2,051 ,
$2,120
$2,000 $1,830
$1,722 $1,679
$1,773
$1,580
$1,000
$0
Q1 Q1 Q1 Q1 Q1
06 07 08 09 10
47
48. Nasdaq: ACAS
Net Operating Income Per Diluted Share
p g
$1.00
$0.91 $0.90
$0.81 $0.81
$0.80 $0.77 $0.77 $0.76 $0.77
$0.73 $0.71 $0.74
$0.60
$0.40
$0.31
$0 31
$0.21
$0.20 $0.17
$0.12
$0.09
$0.07
$0.00
Q1 Q1 Q1 Q1 Q1
06 07 08 09 10
Annual NOI per Diluted Share Totals*
2006 2007 2008 2009 YTD 2010
$3.10 $3.36 $2.42 $0.56 $0.17
* May not equal the sum of the 4 quarters due to changes in the weighted shares outstanding
48
49. Nasdaq: ACAS
Net Realized Earnings (Loss) Per Diluted Share
Net Earnings (Loss) Less Net Appreciation & Depreciation
$1.50 $1.42
$1.13 $1.13 $1.13 $1.18 $1.13
$0.97 $0.98 $0.95
$1.00
$0.81 $0.72
$0.50
$0.00
($0.01)
($0.13)
($0.27) ($0.27)
-$0.50
-$1.00
($1.00)
-$1.50 ($1.41)
-$2 00
$2.00
Q1 Q1 Q1 Q1 Q1
06 07 08 09 10
Annual Net Realized Earnings (Loss) per Diluted Share*
2006 2007 2008 2009 YTD 2010
$4.37 $4.57 $2.58 $(2.81) $(0.27)
* May not equal the sum of the 4 quarters due to changes in the weighted shares outstanding
49
50. Nasdaq: ACAS
Net Unrealized Appreciation (Depreciation) of
Portfolio Investments*
oto o est e ts
$ in Millions
$1,000
$528
$500
$192 $254
$160 $126
$40 $12 $45
$0 ($5)
($224) ($269)
($500) ($384)
($532) ($554)
($626)
($1,000) ($951)
($1,500)
($1,588)
($2,000)
Q1 06 Q1 07 Q1 08 Q1 09 Q1 10
* Excludes unrealized appreciation (deprecation) on derivative agreements, foreign currency translation
and the reversal of prior period net unrealized depreciation (appreciation) upon realization. 50
