New Mountain Finance Corporation · NASDAQ:NMFC
New Mountain Finance — Q4 2011 Earnings Presentation
20 slides from New Mountain Finance's earnings presentation, Mar 8, 2012
Slide 1: Q4 2011 Earnings Presentation
Q4 2011 Earnings Presentation March 8, 2012
Slide 2: Important Notice and Safe Harbor Statement
Important Notice and Safe Harbor Statement This presentation contains forward looking statements that involve substantial risks and uncertainties. All forward-looking statements included in this presentation are made only as of the date hereof and are subject to change without notice. Actual outcome
Slide 3: Management Participants
Management Participants Steven B. Klinsky Chairman of the Board of Directors Robert A. Hamwee Chief Executive Officer, President and Director Adam B. Ad B WWeinstein i t i Chief Financial Officer and Treasurer 3
Slide 4: Q4 2011 Highlights
Q4 2011 Highlights ▪ Q4 Adjusted Net Investment Income and dividend of $0.30 $ per share – Paid on December 30, 2011 to holders of record as of December 15, 2011 ▪ December 31 31, 2011 book value of $13 $13.60 60 per share ▪ Q1 2012 dividend of $0.32 per share announced – Payable on March 30 30, 201
Slide 5: Review of NMFC and NMFC Strategy
Review of NMFC and NMFC Strategy ▪ NMFC’s portfolio is externally managed by New Mountain Finance Advisers BDC, LLC, which is an affiliate of New Mountain Capital, L.L.C. (“New Mountain” or “NMC”), a leading private equity firm with approximately $9 billion of assets under management(1), over 90 sta
Slide 6: Credit Market Conditions
Credit Market Conditions ▪ Material improvement in credit markets over last three months ▪ Brightening U.S. economic outlook ▪ Reduced fear of European fiscal issues – LTRO implementation ▪ Supply / demand dynamics – Private equity M&A continues to drive supply – Fund-flows into high yield funds hav
Slide 7: Credit Performance
Credit Performance ($ in millions, unaudited) Cumulative Since As of 12/31/2011 Inception(1) Cost / FMV Cost Investments $699.9 / $703.5 $1,158.0 On Internal Watch List $4.4 / $0.8 $4.4 (3 or 4 Rating)(2) Non-Accrual $4.4 / $0.8 $4.4 Default Loss $0 / $0 $0 1 Since inception of predecessor entity in
Slide 8: Credit Performance – Operating Company ("OpCo") Portfolio
Credit Performance – Operating Company (“OpCo”) Portfolio (2) NMFC Leverage Ratio Variance (1) Portfolio Company At Purchase Current Positive / (Negative) Company A 4.8x 4.7x 0.1x Company B 5.0x 3.5x 1.5x Compan C Company 31 3.1x 31 3.1x (0 0 ) (0.0x) Company D 5.5x 5.0x 0.5x Company E 4.9x 4.4x 0.6
Slide 9: Credit Performance – Senior Loan Funding ("SLF") Portfolio
Credit Performance – Senior Loan Funding (“SLF”) Portfolio (2) NMFC Leverage Ratio Variance (1) Portfolio Company At Purchase Current Positive / (Negative) Company Z 4.2x 3.4x 0.8x Company AA 1.6x 1.9x (0.3x) Company AB 3.2x 3.9x (0.6x) Company AC 4.2x 3.7x 0.5x Company AD 3.5x 3.5x - Company AE 3.6
Slide 10: Q4 Originations and Repayments
Q4 Originations and Repayments ($ in millions) Portfolio Originations(1) Amount ($’s Tranche Type of Advance YTM at Purchase(3) Date(2) Name Industry Invested) Size Investment Rate Unlevered Levered 10/18/11 TriplePoint Software $13 9 $13.9 $165 1st Lien 67% 9 5% 9.5% 23 6% 23.6% 10/19/11 Renaissanc
Slide 11: Q4 Originations and Repayments
Q4 Originations and Repayments Originations by Type(1) Sales / Repayments by Type(1) Equity Subordinated ( 1%) (<1%) Debt 10% Subordinated Debt 23% SLF First Lien Debt 32% Second 27% Lien Debt 13% OpCo First 64% SLF First Lien Debt Lien Debt 31% OpCo First Lien Debt 11 1 By $s invested / $s received
Slide 12: Investment Activity Since Quarter End
Investment Activity Since Quarter End ($ in millions) Amountt A Portfolio Originations(1) ($’s Tranche Type of Advance YTM at Purchase(3) Date(2) Name Industry Invested) Size Investment Rate Unlevered Levered Healthcare 1/19/12 TriplePoint $9.3 $210 1st Lien 45% 12.3% 20.8% Services 1/25/12 Renaissa
Slide 13: Investment Portfolio Review
Investment Portfolio Review (unaudited) As of 12/31/2011 As of 9/30/2011 As of 6/30/2011 Fair Value $704 million $604 million $544 million Unadjusted / 10.7% / 13.1% 10.9% / 14.0% 10.4% / 12.7% Adjusted YTM(1) YTM at Cost((2)) 10 3% 10.3% 10 0% 10.0% 9 7% 9.7% # Portfolio Companies 55 50 47 Middle M
Slide 14: Investment Portfolio Review – Top 15 portfolio companies
Investment Portfolio Review – As of 12/31/2011 Portfolio Names By Fair Value Attachmate 4.7% Decision Resources 4 5% Lawson 4.5% Software 4.5% Global Top 15 portfolio Knowledge 4.4% companies Meritas 4.1% represent $360 $360.3 3 40 Other Portfolio million, or 51.3%, Managed Health Companies 48.7% Ca
Slide 15: Net Asset Value – As of 12/31/2011
Net Asset Value – As of 12/31/2011 ($ in millions, unaudited) Net Asset Value (1) Unconsolidated Consolidated OpCo Portfolio $446.5 Portfolio $703.5 SLF Equity 91 1 91.1 Cash & Equivalents 15 3 15.3 Cash & Equivalents 15.3 Other Assets (2) 11.8 Other Assets (2) 11.8 Total Assets 564.7 Total Assets 7
Slide 16: OpCo Adjusted Consolidated Income Statement
OpCo Adjusted Consolidated Income Statement ($ in millions, unaudited)(1) Three Months Ended 12/31/2011 Adj. Three Months Ended (2) Unadjusted Adjustments Adjusted 9/30/2011 6/30/2011 Investment income Interest income $17.0 ($0.3) $16.7 $13.7 $11.7 Other income 0.2 0.2 0.2 0.3 Total investment incom
Slide 17: Dividend – Q1 2012
Dividend – Q1 2012 ($ in millions, unaudited) Estimated 6/30/2011 9/30/2011 12/31/2011 3/31/2012 Nett Asset N A t Value V l $440.6 $440 6 $411.9 $411 9 $420.5 $420 5 NAV / Share (1) $13.98 $13.32 $13.60 Hurdle Rate $8.6 $8.8 $8.2 $8.4 Catch-up 22 2.2 22 2.2 21 2.1 21 2.1 Total 10.8 11.0 10.3 10.5 Pr
Slide 18: New Mountain Finance Corporation
NIM|E NEw MOUNTAIN FINANCE CORPORATION
Slide 19: Appendix A: Structure Chart
Appendix A: Structure Chart Concurrent Public Private Shareholders Placement Common Stock Common Stock New Mountain Finance New Mountain Finance AIV Corporation Holdings Corporation (“PubCo”) (“AIV Holdings”) Common Membership Units (34.6%) New Mountain Finance Holdings, L.L.C. (“OpCo”) Investments
Slide 20: Appendix B: Adjusted Consolidated Income Statement
Appendix B: Adjusted Consolidated Income Statement ($ in millions, unaudited)(1) OpCo PubCo Adjusted Three Months Ended Three Months Ended Three Months Ended 12/31/2011 12/31/2011 Adjustments (2) 12/31/2011 Investment income Interest income $17.0 $5.9 ($0.1) $5.8 Other income 0.2 0.1 0.1 Total inves