Send us Feedback

Allied Capital (ALD)
Analysis
SUMMARY
BULLS
BEARS
TOPICS
Data
DATA CENTRAL
STOCK CHART
Financials
SEC FILINGS
BALANCE
INCOME
CASH FLOW

 
Annual Reports

 
Quarterly Reports

  • 10-Q (Nov 6, 2009)
  • 10-Q (Aug 10, 2009)
  • 10-Q (May 11, 2009)
  • 10-Q (Nov 10, 2008)
  • 10-Q (Aug 8, 2008)
  • 10-Q (May 12, 2008)

 
8-K

 
Other

Allied Capital 10-Q 2009

Documents found in this filing:

  1. 10-Q
  2. Ex-15
  3. Ex-31.1
  4. Ex-31.2
  5. Ex-31.3
  6. Ex-31.4
  7. Ex-32.1
  8. Ex-32.2
  9. Ex-32.3
  10. Ex-32.4
  11. Graphic
  12. Graphic
e10vq
 
FORM 10-Q
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
x  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
 
For The Quarterly Period
Ended June 30, 2009
 
o  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Commission File Number:
0-22832
 
 
     
Maryland
(State or Jurisdiction of
Incorporation or Organization) 		  52-1081052
(IRS Employer
Identification No.)
 
1919 Pennsylvania Avenue, N.W.
 
Registrant’s telephone number, including area code: (202) 721-6100
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES x  NO o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES o  NO o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o
(Do not check if a smaller reporting company)                                                             
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o  NO x
 
On August 6, 2009, there were 179,011,774 shares outstanding of the Registrant’s common stock, $0.0001 par value.
 

 

 
 
FORM 10-Q TABLE OF CONTENTS
 
     
   
   
  1
  2
  3
  4
  5
  17
  31
  65
  69
  105
  106
     
   
  107
  108
  117
  117
  117
  117
  118
  123

 

 
PART I: FINANCIAL INFORMATION
 
 
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
 
                 
    June 30,
 		    December 31,
 		 
(in thousands, except per share amounts)   2009     2008  
    (unaudited)
 		       
 
ASSETS
Portfolio at value:
               
Private finance
               
Companies more than 25% owned (cost: 2009-$2,037,757; 2008-$2,167,020)
  $ 1,014,871     $ 1,187,722  
Companies 5% to 25% owned (cost: 2009-$213,498; 2008-$392,516)
    161,368       352,760  
Companies less than 5% owned (cost: 2009-$2,000,141; 2008-$2,317,856)
    1,300,053       1,858,581  
                 
Total private finance (cost: 2009-$4,251,396; 2008-$4,877,392)
    2,476,292       3,399,063  
Commercial real estate finance (cost: 2009-$73,663; 2008-$85,503)
    73,738       93,887  
                 
Total portfolio at value (cost: 2009-$4,325,059; 2008-$4,962,895)
    2,550,030       3,492,950  
Accrued interest and dividends receivable
    44,600       55,638  
Other assets
    130,504       122,909  
Investments in money market and other securities
    415,025       287  
Cash
    68,985       50,402  
                 
Total assets
  $ 3,209,144     $ 3,722,186  
                 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
               
Notes payable (maturing within one year: 2009-$1,015,000; 2008-$1,015,000)
  $ 1,760,544     $ 1,895,000  
Revolving line of credit
    50,000       50,000  
Accounts payable and other liabilities
    57,271       58,786  
                 
Total liabilities
    1,867,815       2,003,786  
                 
Commitments and contingencies
               
Shareholders’ equity:
               
Common stock, $0.0001 par value, 400,000 shares authorized; 179,012 and 178,692 shares issued and outstanding at June 30, 2009, and December 31, 2008, respectively
    18       18  
Additional paid-in capital
    3,037,223       3,037,845  
Notes receivable from sale of common stock
    (805 )     (1,089 )
Net unrealized appreciation (depreciation)
    (1,855,936 )     (1,503,089 )
Undistributed earnings
    160,829       184,715  
                 
Total shareholders’ equity
    1,341,329       1,718,400  
                 
Total liabilities and shareholders’ equity
  $ 3,209,144     $ 3,722,186  
                 
Net asset value per common share
  $ 7.49     $ 9.62  
                 
 
The accompanying notes are an integral part of these consolidated financial statements.


1

 

 
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
 
                                 
    For the Three
 		    For the Six
 		 
    Months Ended
 		    Months Ended
 		 
    June 30,     June 30,  
(in thousands, except per share amounts)   2009     2008     2009     2008  
    (unaudited)
 		    (unaudited)
 		 
 
                                 
Interest and Related Portfolio Income:
                               
Interest and dividends
                               
Companies more than 25% owned
  $ 22,851     $ 26,844     $ 48,204     $ 55,468  
Companies 5% to 25% owned
    9,212       9,049       20,348       21,723  
Companies less than 5% owned
    43,594       83,319       95,835       176,681  
                                 
Total interest and dividends
    75,657       119,212       164,387       253,872  
                                 
Fees and other income
                               
Companies more than 25% owned
    7,309       11,043       12,585       16,508  
Companies 5% to 25% owned
    193       16       210       69  
Companies less than 5% owned
    1,471       4,307       2,630       9,073  
                                 
Total fees and other income
    8,973       15,366       15,425       25,650  
                                 
Total interest and related portfolio income
    84,630       134,578       179,812       279,522  
                                 
Expenses:
                               
Interest
    43,117       36,465       86,602       74,025  
Employee
    10,964       13,344       22,034       35,996  
Employee stock options
    1,204       3,859       1,977       8,054  
Administrative
    8,459       12,943       18,304       21,962  
Impairment of long-lived asset
    —       —       2,873       —  
                                 
Total operating expenses
    63,744       66,611       131,790       140,037  
                                 
Net investment income before income taxes
    20,886       67,967       48,022       139,485  
Income tax expense (benefit), including excise tax
    2,653       4,112       2,275       6,081  
                                 
Net investment income
    18,233       63,855       45,747       133,404  
                                 
Net Realized and Unrealized Gains (Losses):
                               
Net realized gains (losses)
                               
Companies more than 25% owned
    (72,912 )     1,172       (76,962 )     869  
Companies 5% to 25% owned
    (24,044 )     (15,046 )     (54,139 )     (13,803 )
Companies less than 5% owned
    (29,100 )     (3,981 )     (22,064 )     (1,778 )
                                 
Total net realized gains (losses)
    (126,056 )     (17,855 )     (153,165 )     (14,712 )
Net change in unrealized appreciation or depreciation
    (2,777 )     (148,203 )     (352,847 )     (261,607 )
                                 
Total net gains (losses)
    (128,833 )     (166,058 )     (506,012 )     (276,319 )
                                 
Gain on repurchase of debt
    81,537       —       83,532       —  
                                 
Net increase (decrease) in net assets resulting from operations
  $ (29,063 )   $ (102,203 )   $ (376,733 )   $ (142,915 )
                                 
Basic earnings (loss) per common share
  $ (0.16 )   $ (0.59 )   $ (2.11 )   $ (0.85 )
                                 
Diluted earnings (loss) per common share
  $ (0.16 )   $ (0.59 )   $ (2.11 )   $ (0.85 )
                                 
Weighted average common shares outstanding — basic
    178,695       172,968       178,694       167,238  
                                 
Weighted average common shares outstanding — diluted
    178,695       172,968       178,694       167,238  
                                 
 
The accompanying notes are an integral part of these consolidated financial statements.


2

 

 
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
 
                 
    For the Six Months
 		 
    Ended June 30,  
(in thousands, except per share amounts)   2009     2008  
    (unaudited)
 		 
 
Operations:
               
Net investment income
  $ 45,747     $ 133,404  
Net realized gains (losses)
    (153,165 )     (14,712 )
Net change in unrealized appreciation or depreciation
    (352,847 )     (261,607 )
Gain on repurchase of debt
    83,532       —  
                 
Net increase (decrease) in net assets resulting from operations
    (376,733 )     (142,915 )
                 
Shareholder distributions:
               
Common stock dividends
    —       (224,231 )
                 
Net decrease in net assets resulting from shareholder distributions
    —       (224,231 )
                 
Capital share transactions:
               
Sale of common stock
    —       402,478  
Issuance of common stock in lieu of cash distributions
    —       3,751  
Issuance of common stock upon exercise of stock options
    233       —  
Stock option expense
    2,046       8,180  
Net decrease in notes receivable from sale of common
stock
    284       275  
Purchase of common stock held in deferred compensation
trusts
    —       (943 )
Distribution of common stock held in deferred compensation trusts
    —       27,335  
Other
    (2,901 )     —  
                 
Net increase (decrease) in net assets resulting
from capital share transactions
    (338 )     441,076  
                 
Total increase (decrease) in net assets
    (377,071 )     73,930  
Net assets at beginning of period
    1,718,400       2,771,847  
                 
Net assets at end of period
  $ 1,341,329     $ 2,845,777  
                 
Net asset value per common share
  $ 7.49     $ 15.93  
                 
Common shares outstanding at end of period
    179,012       178,692  
                 
 
The accompanying notes are an integral part of these consolidated financial statements.


3

 

 
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
 
                 
    For the Six Months
 		 
    Ended June 30,  
(in thousands)   2009     2008  
    (unaudited)
 		 
 
Cash flows from operating activities:
               
Net increase (decrease) in net assets resulting from operations
  $ (376,733 )   $ (142,915 )
Adjustments:
               
Portfolio investments
    (98,734 )     (593,959 )
Principal collections related to investment repayments or sales
    416,283       597,577  
Collections of notes and other consideration received from sale of investments
    171,030       10,455  
Realized gains from the receipt of notes and other consideration from sale of investments
    —       (1,886 )
Realized losses
    174,524       52,395  
Gain on repurchase of debt
    (83,532 )     —  
Redemption of (investments in) U.S. Treasury bills, money market and other securities
    (414,738 )     101,173  
Payment-in-kind interest and dividends, net of cash collections
    (18,531 )     (24,497 )
Change in accrued interest and dividends
    9,928       (5,942 )
Net collection (amortization) of discounts and fees
    (4,506 )     (7,635 )
Stock option expense
    2,046       8,180  
Impairment of long-lived asset
    2,873       —  
Changes in other assets and liabilities
    (65,152 )     (58,377 )
Depreciation and amortization
    787       1,143  
Net change in unrealized (appreciation) or depreciation
    352,847       261,607  
                 
Net cash provided by (used in) operating activities
    68,392       197,319  
                 
Cash flows from financing activities:
               
Sale of common stock
    —       402,478  
Sale of common stock upon the exercise of stock options
    233       —  
Collections of notes receivable from sale of common stock
    284       275  
Borrowings under notes payable
    —       193,000  
Repurchase or repayment of notes payable
    (50,326 )     (153,000 )
Net borrowings under (repayments on) revolving line of credit
    —       (286,750 )
Purchase of common stock held in deferred compensation trusts
    —       (943 )
Other financing activities
    —       (6,658 )
Common stock dividends and distributions paid
    —       (220,480 )
                 
Net cash provided by (used in) financing activities
    (49,809 )     (72,078 )
                 
Net increase (decrease) in cash
    18,583       125,241  
Cash at beginning of period
    50,402       3,540  
                 
Cash at end of period
  $ 68,985     $ 128,781  
                 
 
The accompanying notes are an integral part of these consolidated financial statements.


4

 

 
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Companies More Than 25% Owned
                       
                             
AGILE Fund I, LLC(5)
  Equity Interests           $ 678     $ 426  
                             
(Private Equity Fund)
    Total Investment             678       426  
                             
                             
AllBridge Financial, LLC
  Senior Loan (7.2%, Due 12/09)   $ 398       398       398  
(Asset Management)
  Equity Interests             34,865       8,047  
                             
      Total Investment             35,263       8,445  
                             
    Standby Letter of Credit ($15,000)                        
                             
Allied Capital Senior Debt Fund, L.P.(5)
  Limited Partnership Interests             31,800       33,044  
                             
(Private Debt Fund)
    Total Investment             31,800       33,044  
                             
                             
Avborne, Inc.(7)
  Preferred Stock (12,500 shares)             —       904  
(Business Services)
  Common Stock (27,500 shares)             —       —  
                             
      Total Investment             —       904  
                             
                             
Avborne Heavy Maintenance, Inc.(7)
  Common Stock (2,750 shares)             —       —  
                             
(Business Services)
    Total Investment             —       —  
                             
                             
Aviation Properties Corporation 
  Common Stock (100 shares)             93       —  
                             
(Business Services)
  Total Investment             93       —  
                             
    Standby Letters of Credit ($1,000)                        
                             
Border Foods, Inc. 
  Senior Loan (12.9%, Due 3/12)     34,876       29,199       34,876  
(Consumer Products)
  Preferred Stock (100,000 shares)             12,721       11,461  
    Common Stock (260,467 shares)             3,847       —  
                             
      Total Investment             45,767       46,337  
                             
                             
Calder Capital Partners, LLC(5)
  Senior Loan (12.5%, Due 5/09)(6)     4,496       4,496       980  
(Asset Management)
  Equity Interests             2,453       —  
                             
      Total Investment             6,949       980  
                             
                             
Callidus Capital Corporation
  Subordinated Debt (18.0%, Due 8/13)     16,927       16,927       16,927  
(Asset Management)
  Common Stock (100 shares)             —       21,012  
                             
      Total Investment             16,927       37,939  
                             
    Guaranty ($6,447)                        
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(5)
  Non-registered investment company.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(7)
  Avborne, Inc. and Avborne Heavy Maintenance, Inc. are affiliated companies.
 
The accompanying notes are an integral part of these consolidated financial statements.


5

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Ciena Capital LLC
  Senior Loan (5.5%, Due 3/09)(6)   $ 319,031     $ 319,031     $ 93,043  
(Financial Services)
  Class B Equity Interests             119,436       —  
    Class C Equity Interests             109,097       —  
                             
      Total Investment             547,564       93,043  
                             
    Guaranty ($5,000 — See Note 3)                        
    Standby Letters of Credit ($46,000 —
  See Note 3) 		                       
                             
CitiPostal Inc.
  Senior Loan (3.8%, Due 12/13)     692       682       682  
(Business Services)
  Unitranche Debt (12.0%, Due 12/13)     51,559       51,369       51,369  
    Subordinated Debt (16.0%, Due 12/15)     9,866       9,866       9,866  
    Common Stock (37,024 shares)             12,726       —  
                             
      Total Investment             74,643       61,917  
                             
                             
Coverall North America, Inc.
  Unitranche Debt (12.0%, Due 7/11)     31,627       31,556       31,556  
(Business Services)
  Subordinated Debt (15.0%, Due 7/11)     5,563       5,552       5,552  
    Common Stock (763,333 shares)             14,362       22,610  
                             
      Total Investment             51,470       59,718  
                             
                             
CR Holding, Inc.
  Subordinated Debt (16.6%, Due 2/13)(6)     40,623       40,510       10,710  
(Consumer Products)
  Common Stock (32,090,696 shares)             28,744       —  
                             
      Total Investment             69,254       10,710  
                             
                             
Crescent Equity Corp.(8)
  Senior Loan (10.0%, Due 6/10)     433       433       433  
(Business Services)
  Subordinated Debt (11.0%, Due 9/11 – 6/17)(6)     32,305       32,216       4,378  
    Common Stock (174 shares)             83,194       —  
                             
      Total Investment             115,843       4,811  
                             
    Guaranty ($900)                        
                             
Direct Capital Corporation
  Senior Loan (8.0%, Due 1/14)(6)     8,175       8,175       8,405  
(Financial Services)
  Subordinated Debt (16.0%, Due 3/13)(6)     55,671       55,496       7,109  
    Common Stock (2,317,020 shares)             25,732       —  
                             
      Total Investment             89,403       15,514  
                             
                             
Financial Pacific Company
  Subordinated Debt (17.4%, Due 2/12 – 8/12)     68,967       68,860       49,696  
(Financial Services)
  Preferred Stock (9,458 shares)             8,865       —  
    Common Stock (12,711 shares)             12,783       —  
                             
      Total Investment             90,508       49,696  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(8)
  Crescent Equity Corp. holds investments in Crescent Hotels & Resorts, LLC and affiliates.
 
The accompanying notes are an integral part of these consolidated financial statements.


6

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Global Communications, LLC
  Senior Loan (10.0%, Due 9/02)(6)   $ 1,335     $ 1,335     $ 992  
                             
(Business Services)
    Total Investment             1,335       992  
                             
                             
Hot Light Brands, Inc.
  Senior Loan (9.0%, Due 2/11)(6)     30,572       30,572       12,010  
(Retail)
  Common Stock (93,500 shares)             5,151       —  
                             
      Total Investment             35,723       12,010  
                             
                             
Hot Stuff Foods, LLC
  Senior Loan (3.8%, Due 2/11-2/12)     50,777       50,658       50,658  
(Consumer Products)
  Subordinated Debt (12.4%, Due 8/12-2/13)(6)     83,692       83,387       16,143  
    Common Stock (1,147,453 shares)             56,187       —  
                             
      Total Investment             190,232       66,801  
                             
                             
Huddle House, Inc.
  Subordinated Debt (15.0%, Due 12/15)     19,473       19,429       19,429  
(Retail)
  Common Stock (358,428 shares)             36,348       18,411  
                             
      Total Investment             55,777       37,840  
                             
                             
IAT Equity, LLC and Affiliates
  Subordinated Debt (9.0%, Due 6/14)     6,000       6,000       6,000  
d/b/a Industrial Air Tool
  Equity Interests             7,500       9,250  
                             
(Industrial Products)
    Total Investment             13,500       15,250  
                             
                             
Impact Innovations Group, LLC
  Equity Interests in Affiliate             —       322  
                             
(Business Services)
    Total Investment             —       322  
                             
                             
Insight Pharmaceuticals Corporation
  Subordinated Debt (15.0%, Due 9/12)     54,124       54,050       54,050  
(Consumer Products)
  Common Stock (155,000 shares)             40,413       11,033  
                             
      Total Investment             94,463       65,083  
                             
                             
Jakel, Inc.
  Subordinated Debt (15.5%, Due 3/08)(6)     748       748       374  
                             
(Industrial Products)
    Total Investment             748       374  
                             
                             
Knightsbridge CLO 2007-1 Ltd.(4)
  Class E Notes (10.1%, Due 1/22)     18,700       18,700       11,341  
(CLO)
  Income Notes (13.6%)(11)             39,556       25,858  
                             
      Total Investment             58,256       37,199  
                             
                             
Knightsbridge CLO 2008-1 Ltd.(4)
  Class C Notes (8.1%, Due 6/18)     12,800       12,800       12,173  
(CLO)
  Class D Notes (9.1%, Due 6/18)     8,000       8,000       6,985  
    Class E Notes (5.6%, Due 6/18)     13,200       10,879       8,896  
    Income Notes (17.3%)(11)             21,230       18,279  
                             
      Total Investment             52,909       46,333  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(11)
  Represents the effective interest yield earned on the cost basis of these preferred equity investments and income notes. The yield is included in interest income in the consolidated statement of operations.
 
The accompanying notes are an integral part of these consolidated financial statements.


7

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
MVL Group, Inc.
  Senior Loan (12.0%, Due 7/12)   $ 25,260     $ 25,256     $ 25,256  
(Business Services)
  Subordinated Debt (14.5%, Due 7/12)     41,434       41,399       33,843  
    Subordinated Debt (8.0%, Due 7/12)(6)     144       139       —  
    Common Stock (560,716 shares)             555       —  
                             
      Total Investment             67,349       59,099  
                             
                             
Penn Detroit Diesel Allison, LLC
  Equity Interests             20,081       20,005  
                             
(Business Services)
  Total Investment             20,081       20,005  
                             
                             
Senior Secured Loan Fund LLC
  Subordinated Certificates (8.9%)             166,293       154,200  
(Private Debt Fund)
  Equity Interests             1       —  
                             
      Total Investment             166,294       154,200  
                             
                             
Service Champ, Inc.
  Subordinated Debt (15.5%, Due 4/12)     27,393       27,337       27,337  
(Business Services)
  Common Stock (55,112 shares)             11,785       22,676  
                             
      Total Investment             39,122       50,013  
                             
                             
Stag-Parkway, Inc.
  Subordinated Debt (10.0%, Due 7/12)     19,044       18,997       18,997  
(Business Services)
  Common Stock (25,000 shares)             32,686       5,950  
                             
      Total Investment             51,683       24,947  
                             
                             
Startec Equity, LLC
  Equity Interests             211       —  
                             
(Telecommunications)
    Total Investment             211       —  
                             
                             
Worldwide Express Operations, LLC
  Subordinated Debt (14.0%, Due 2/14)(6)     2,827       2,684       919  
(Business Services)
  Equity Interests             11,084       —  
    Warrants             144       —  
                             
      Total Investment             13,912       919  
                             
                             
               Total companies more than 25% owned
          $ 2,037,757     $ 1,014,871  
                             
Companies 5% to 25% Owned
       
                             
10th Street, LLC
  Subordinated Debt (13.0%, Due 11/14)   $ 21,877     $ 21,777     $ 21,877  
(Business Services)
  Equity Interests             422       505  
    Option             25       25  
                             
      Total Investment             22,224       22,407  
                             
                             
Air Medical Group Holdings LLC
  Senior Loan (4.3%, Due 3/11)     —       —       —  
(Healthcare Services)
  Equity Interests             2,966       12,473  
                             
      Total Investment             2,966       12,473  
                             
                             
BB&T Capital Partners/Windsor
  Equity Interests             11,789       9,680  
Mezzanine Fund, LLC(5)
                         
(Private Equity Fund)
    Total Investment             11,789       9,680  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(5)
  Non-registered investment company.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
 
The accompanying notes are an integral part of these consolidated financial statements.


8

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009
Portfolio Company
 		      (unaudited)
(in thousands, except number of shares)   Investment(1)(2)   Principal   Cost   Value
Driven Brands, Inc.
  Subordinated Debt (16.5%, Due 7/15)   $ 87,800     $ 87,424     $ 84,032  
(Consumer Services)
  Common Stock (3,772,098 shares)             9,516       2,200  
                             
      Total Investment             96,940       86,232  
                             
                             
Multi-Ad Services, Inc.
  Unitranche Debt (11.3%, Due 11/11)     2,516       2,497       2,453  
(Business Services)
  Equity Interests             1,737       1,247  
                             
      Total Investment             4,234       3,700  
                             
                             
Pendum Acquisition, Inc.
  Common Stock (8,872 shares)             —       —  
                             
(Business Services)
    Total Investment             —       —  
                             
                             
Postle Aluminum Company, LLC
  Senior Loan (6.0%, Due 10/12)(6)     35,000       34,876       14,369  
(Industrial Products)
  Subordinated Debt (3.0%, Due 10/12)(6)     23,953       23,868       —  
    Equity Interests             2,174       —  
                             
      Total Investment             60,918       14,369  
                             
                             
Progressive International
  Preferred Stock (500 shares)             500       1,171  
Corporation
  Common Stock (197 shares)             13       3,900  
(Consumer Products)
  Warrants             —       —  
                             
      Total Investment             513       5,071  
                             
                             
Regency Healthcare Group, LLC
  Equity Interests             1,302       1,817  
                             
(Healthcare Services)
    Total Investment             1,302       1,817  
                             
                             
SGT India Private Limited(4)
  Common Stock (150,596 shares)             4,142       —  
                             
(Business Services)
    Total Investment             4,142       —  
                             
                             
Soteria Imaging Services, LLC
  Subordinated Debt (11.3%, Due 11/10)     4,250       4,192       4,095  
(Healthcare Services)
  Equity Interests             1,881       1,515  
                             
      Total Investment             6,073       5,610  
                             
                             
Triax Holdings, LLC
  Equity Interests             798       9  
                             
(Consumer Products)
    Total Investment             798       9  
                             
                             
Universal Environmental Services, LLC
  Equity Interests             1,599       —  
                             
(Business Services)
    Total Investment             1,599       —  
                             
                             
               Total companies 5% to 25% owned
          $ 213,498     $ 161,368  
                             
Companies Less Than 5% Owned
                           
                             
3SI Security Systems, Inc.
  Subordinated Debt (16.0%, Due 8/13)   $ 20,500     $ 20,443     $ 17,869  
(Consumer Products)
  Subordinated Debt (18.0%, Due 8/13)(6)     9,048       9,030       —  
                             
      Total Investment             29,473       17,869  
                             
                             
Augusta Sportswear Group, Inc.
  Common Stock (2,500 shares)             2,500       1,400  
                             
(Consumer Products)
    Total Investment             2,500       1,400  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
 
The accompanying notes are an integral part of these consolidated financial statements.


9

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009
Portfolio Company
 		      (unaudited)
(in thousands, except number of shares)   Investment(1)(2)   Principal   Cost   Value
Axium Healthcare Pharmacy, Inc.
  Subordinated Debt (8.0%, Due 3/15)   $ 2,975     $ 2,975     $ 2,380  
                             
(Healthcare Services)
    Total Investment             2,975       2,380  
                             
                             
Baird Capital Partners IV Limited(5)
  Limited Partnership Interest             3,636       2,413  
                             
(Private Equity Fund)
    Total Investment             3,636       2,413  
                             
                             
BenefitMall Holdings Inc.
  Subordinated Debt (18.0%, Due 6/14)      40,326        40,246        40,246  
(Business Services)
  Common Stock (39,274,290 shares)(12)             39,274       74,761  
    Warrants(12)             —       —  
                             
      Total Investment             79,520       115,007  
                             
                             
Broadcast Electronics, Inc.
  Senior Loan (8.8%, Due 11/11)(6)     4,882       4,855       630  
(Business Services)
  Preferred Stock (2,044 shares)             —       —  
                             
      Total Investment             4,855       630  
                             
                             
Bushnell, Inc.
  Subordinated Debt (7.1%, Due 2/14)     41,325       40,106       29,901  
                             
(Consumer Products)
    Total Investment             40,106       29,901  
                             
                             
Callidus Debt Partners
  Class C Notes (12.9%, Due 12/13)(6)     19,420       19,527       4,926  
CDO Fund I, Ltd.(4)(10)
  Class D Notes (17.0%, Due 12/13)(6)     9,400       9,454       —  
(CDO)
                           
                             
      Total Investment             28,981       4,926  
                             
                             
Callidus Debt Partners
  Preferred Shares (23,600,000 shares)             20,138       1,492  
CLO Fund III, Ltd.(4)(10)
                           
                             
(CLO)
    Total Investment             20,138       1,492  
                             
                             
Callidus Debt Partners
  Class D Notes (5.7%, Due 4/20)     3,000       2,116       1,649  
CLO Fund IV, Ltd.(4)(10)
  Income Notes (0.0%)(11)             14,979       4,166  
(CLO)
                           
                             
      Total Investment             17,095       5,815  
                             
                             
Callidus Debt Partners
  Income Notes (0.7%)(11)             13,698       4,594  
CLO Fund V, Ltd.(4)(10)
                           
                             
(CLO)
    Total Investment             13,698       4,594  
                             
                             
Callidus Debt Partners
  Class D Notes (7.1%, Due 10/21)     9,160       7,388       3,751  
CLO Fund VI, Ltd.(4)(10)
  Income Notes (0.0%)(11)             29,144       5,629  
(CLO)
                           
                             
      Total Investment             36,532       9,380  
                             
                             
Callidus Debt Partners
  Income Notes (0.0%)(11)             24,824       4,772  
CLO Fund VII, Ltd.(4)(10)
                           
                             
(CLO)
    Total Investment             24,824       4,772  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(5)
  Non-registered investment company.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(10)
  The fund is managed by Callidus Capital, a portfolio company of Allied Capital.
(11)
  Represents the effective interest yield earned on the cost basis of these preferred equity investments and income notes. The yield is included in interest income in the consolidated statement of operations.
(12)
  Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.
 
The accompanying notes are an integral part of these consolidated financial statements.


10

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Callidus MAPS CLO Fund I LLC(10)
  Class E Notes (6.1%, Due 12/17)   $ 17,000     $ 17,000     $ 10,200  
(CLO)
  Income Notes (0.0%)(11)             42,492       12,388  
                             
      Total Investment             59,492       22,588  
                             
                             
Callidus MAPS CLO Fund II, Ltd.(4)(10)
  Class D Notes (5.4%, Due 7/22)     7,700       3,696       3,037  
(CLO)
  Income Notes (0.0%)(11)             18,300       4,164  
                             
      Total Investment             21,996       7,201  
                             
                             
Carlisle Wide Plank Floors, Inc.
  Senior Loan (4.2%, Due 6/11)     500       498       409  
(Consumer Products)
  Unitranche Debt (12.8%, Due 6/11)     3,161       3,143       2,585  
    Preferred Stock (345,056 Shares)             345       —  
                             
      Total Investment             3,986       2,994  
                             
                             
Catterton Partners VI, L.P.(5)
  Limited Partnership Interest             2,952       1,521  
                             
(Private Equity Fund)
    Total Investment             2,952       1,521  
                             
                             
Centre Capital Investors V, L.P.(5)
  Limited Partnership Interest             2,798       1,715  
                             
(Private Equity Fund)
    Total Investment             2,798       1,715  
                             
                             
CK Franchising, Inc.
(Consumer Services)
  Senior Loan (5.5%, Due 7/12)     300       286       286  
    Subordinated Debt (12.3%, Due 7/12 – 7/17)     21,152       21,090       21,090  
    Preferred Stock (1,281,887 shares)             1,282       1,710  
    Common Stock (7,585,549 shares)             7,586       16,497  
                             
      Total Investment             30,244       39,583  
                             
                             
Commercial Credit Group, Inc.
  Subordinated Debt (15.0%, Due 6/15)     22,000       21,970       21,970  
(Financial Services)
  Preferred Stock (64,679 shares)             15,543       8,783  
    Warrants             —       —  
                             
      Total Investment             37,513       30,753  
                             
                             
Community Education Centers, Inc.
  Subordinated Debt (19.5%, Due 11/13)     35,972       35,916       35,972  
                             
(Education Services)
    Total Investment             35,916       35,972  
                             
                             
Component Hardware Group, Inc.
  Subordinated Debt (13.5%, Due 1/13)     18,851       18,802       16,303  
                             
(Industrial Products)
    Total Investment             18,802       16,303  
                             
                             
Cook Inlet Alternative Risk, LLC
  Unitranche Debt (10.8%, Due 4/13)     87,600       87,264       69,000  
(Business Services)
  Equity Interests             552       —  
                             
      Total Investment             87,816       69,000  
                             
                             
Cortec Group Fund IV, L.P.(5)
  Limited Partnership Interest             4,970       2,717  
                             
(Private Equity)
    Total Investment             4,970       2,717  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(5)
  Non-registered investment company.
(10)
  The fund is managed by Callidus Capital, a portfolio company of Allied Capital.
(11)
  Represents the effective interest yield earned on the cost basis of these preferred equity investments and income notes. The yield is included in interest income in the consolidated statement of operations.
 
The accompanying notes are an integral part of these consolidated financial statements.


11

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Digital VideoStream, LLC
  Unitranche Debt (11.0%, Due 2/12)   $ 13,676     $ 13,622     $ 13,478  
(Business Services)
  Convertible Subordinated Debt (10.0%, Due 2/16)     4,775       4,764       4,764  
                             
      Total Investment             18,386       18,242  
                             
                             
DirectBuy Holdings, Inc.
  Subordinated Debt (14.5%, Due 5/13)     76,389       76,122       59,663  
(Consumer Products)
  Equity Interests             8,000       —  
                             
      Total Investment             84,122       59,663  
                             
                             
Distant Lands Trading Co.
  Senior Loan (6.3%, Due 11/11)     10,000       9,979       9,240  
(Consumer Products)
  Unitranche Debt (11.0%, Due 11/11)     43,499       43,408       41,571  
    Common Stock (3,451 shares)             3,451       1,077  
                             
      Total Investment             56,838       51,888  
                             
                             
Diversified Mercury
  Senior Loan (4.5%, Due 3/13)     2,960       2,948       2,593  
                             
Communications, LLC
    Total Investment             2,948       2,593  
                             
(Business Services)
                           
                             
Dryden XVIII Leveraged
Loan 2007 Limited(4)
  Class B Notes (5.6%, Due 10/19)(6)
Income Notes (0.0%)(11) 		    9,092       7,872
23,164 		      2,271
773 		 
                             
(CLO)
    Total Investment             31,036       3,044  
                             
                             
Dynamic India Fund IV(4)(5)
  Equity Interests             9,350       9,540  
                             
(Private Equity Fund)
    Total Investment             9,350       9,540  
                             
                             
EarthColor, Inc.
  Subordinated Debt (15.0%, Due 11/13)(6)     123,819       123,385       —  
(Business Services)
  Common Stock (63,438 shares)(12)             63,438       —  
    Warrants(12)             —       —  
                             
      Total Investment             186,823       —  
                             
                             
eCentury Capital Partners, L.P.(5)
  Limited Partnership Interest             7,274       112  
                             
(Private Equity Fund)
    Total Investment             7,274       112  
                             
                             
eInstruction Corporation
  Subordinated Debt (12.1%, Due 7/14-1/15)     35,328       35,204       31,981  
(Education Services)
  Common Stock (2,406 shares)             2,500       850  
                             
      Total Investment             37,704       32,831  
                             
                             
Farley’s & Sathers Candy Company, Inc.
  Subordinated Debt (8.3%, Due 3/11)     2,500       2,495       2,393  
                             
(Consumer Products)
    Total Investment             2,495       2,393  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(5)
  Non-registered investment company.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(11)
  Represents the effective interest yield earned on the cost basis of these preferred equity investments and income notes. The yield is included in interest income in the consolidated statement of operations.
(12)
  Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.
 
The accompanying notes are an integral part of these consolidated financial statements.


12

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Fidus Mezzanine Capital, L.P.(5)
  Limited Partnership Interest           $ 12,828     $ 8,325  
                             
(Private Equity Fund)
    Total Investment             12,828       8,325  
                             
                             
Freedom Financial Network, LLC
  Subordinated Debt (13.5%, Due 2/14)   $ 8,000       7,950       8,000  
                             
(Financial Services)
    Total Investment             7,950       8,000  
                             
                             
Geotrace Technologies, Inc.
  Warrants             2,027       2,335  
                             
(Energy Services)
    Total Investment             2,027       2,335  
                             
                             
Gilchrist & Soames, Inc.
(Consumer Products)
  Subordinated Debt (13.4%, Due 10/13)     25,304       25,179       23,079  
                             
      Total Investment             25,179       23,079  
                             
                             
Havco Wood Products LLC
  Equity Interests             910       —  
                             
(Industrial Products)
    Total Investment             910       —  
                             
                             
Higginbotham Insurance Agency, Inc.
  Subordinated Debt (13.7%, Due 8/13 – 8/14)     53,305       53,109       53,109  
(Business Services)
  Common Stock (23,695 shares)(12)             23,695       14,190  
    Warrant(12)             —       —  
                             
      Total Investment             76,804       67,299  
                             
                             
The Homax Group, Inc.
  Senior Loan (6.4%, Due 10/12)     10,194       10,150       9,110  
(Consumer Products)
  Subordinated Debt (14.5%, Due 4/14)     14,159       13,589       6,986  
    Preferred Stock (76 shares)             76       —  
    Common Stock (24 shares)             5       —  
    Warrants             954       —  
                             
      Total Investment             24,774       16,096  
                             
                             
Ideal Snacks Corporation
  Senior Loan (7.3%, Due 6/10)     1,333       1,333       1,290  
                             
(Consumer Products)
    Total Investment             1,333       1,290  
                             
                             
Kodiak Fund LP(5)
  Equity Interests             9,350       900  
                             
(Private Equity Fund)
    Total Investment             9,350       900  
                             
                             
Market Track Holdings, LLC
  Senior Loan (8.0%, Due 6/14)     2,500       2,450       2,483  
(Business Services)
  Subordinated Debt (15.9%, Due 6/14)     24,600       24,499       23,306  
                             
      Total Investment             26,949       25,789  
                             
                             
NetShape Technologies, Inc.
  Senior Loan (4.1%, Due 2/13)     875       875       445  
                             
(Industrial Products)
    Total Investment             875       445  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(5)
  Non-registered investment company.
(12)
  Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.
 
The accompanying notes are an integral part of these consolidated financial statements.


13

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Network Hardware Resale, Inc.
  Unitranche Debt (12.8%, Due 12/11)   $ 16,618     $ 16,676     $ 16,618  
(Business Services)
  Convertible Subordinated Debt (9.8%, Due 12/15)     15,953       16,002       16,002  
                             
      Total Investment             32,678       32,620  
                             
                             
Novak Biddle Venture Partners III, L.P.(5)
  Limited Partnership Interest             2,018       1,221  
                             
(Private Equity Fund)
    Total Investment             2,018       1,221  
                             
                             
Oahu Waste Services, Inc.
  Stock Appreciation Rights             206       385  
                             
(Business Services)
    Total Investment             206       385  
                             
                             
Pangaea CLO 2007-1 Ltd.(4)
  Class D Notes (5.9%, Due 1/21)      15,000       11,919       6,190  
                             
(CLO)
    Total Investment             11,919       6,190  
                             
                             
PC Helps Support, LLC
  Senior Loan (3.6%, Due 12/13)     8,417       8,328       7,795  
(Business Services)
  Subordinated Debt (12.8%, Due 12/13)     27,507       27,393       25,948  
                             
      Total Investment             35,721       33,743  
                             
                             
Performant Financial Corporation
  Common Stock (478,816 shares)             734       560  
                             
(Business Services)
    Total Investment             734       560  
                             
                             
Promo Works, LLC
  Unitranche Debt (12.3%, Due 12/11)     23,111       22,980       17,566  
                             
(Business Services)
    Total Investment             22,980       17,566  
                             
                             
Reed Group, Ltd.
  Senior Loan (7.0%, Due 12/13)     12,338       12,206       10,946  
(Healthcare Services)
  Subordinated Debt (15.8%, Due 12/13)     18,897       18,830       16,383  
    Equity Interests             1,800       245  
                             
      Total Investment             32,836       27,574  
                             
                             
S.B. Restaurant Company
  Unitranche Debt (9.8%, Due 4/11)     38,327       38,160       34,036  
(Retail)
  Preferred Stock (46,690 shares)             117       117  
    Warrants             534       —  
                             
      Total Investment             38,811       34,153  
                             
                             
Snow Phipps Group, L.P.(5)
  Limited Partnership Interest             5,850       4,308  
                             
(Private Equity Fund)
    Total Investment             5,850       4,308  
                             
                             
SPP Mezzanine Funding II, L.P.(5)
  Limited Partnership Interest             9,097       7,949  
                             
(Private Equity Fund)
    Total Investment             9,097       7,949  
                             
                             
STS Operating, Inc.
  Subordinated Debt (11.0%, Due 1/13)     30,386       30,307       27,378  
                             
(Industrial Products)
    Total Investment             30,307       27,378  
                             
                             
Summit Energy Services, Inc.
  Common Stock (415,982 shares)             1,861       2,100  
                             
(Business Services)
    Total Investment             1,861       2,100  
                             
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(4)
  Non-U.S. company or principal place of business outside the U.S.
(5)
  Non-registered investment company.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
 
The accompanying notes are an integral part of these consolidated financial statements.


14

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
                             
Private Finance
 		      June 30, 2009  
Portfolio Company
 		      (unaudited)  
(in thousands, except number of shares)   Investment(1)(2)   Principal     Cost     Value  
Tappan Wire & Cable Inc.
  Unitranche Debt (15.0%, Due 8/14)(6)   $ 22,346     $ 22,248     $ 6,961  
(Business Services)
  Common Stock (12,940 shares)(12)             2,043       —  
    Warrant(12)             —       —  
                             
      Total Investment             24,291       6,961  
                             
                             
The Step2 Company, LLC
  Unitranche Debt (11.0%, Due 4/12)     94,843       94,616       89,432  
(Consumer Products)
  Equity Interests             2,156       1,376  
                             
      Total Investment             96,772       90,808  
                             
                             
Tradesmen International, Inc.
  Subordinated Debt (12.0%, Due 12/12)     40,000       39,723       34,413  
                             
(Business Services)
    Total Investment             39,723       34,413  
                             
                             
TransAmerican Auto Parts, LLC
  Subordinated Debt (18.3%, Due 11/12)(6)     24,561       24,409       —  
(Consumer Products)
  Equity Interests             1,034       —  
                             
      Total Investment             25,443       —  
                             
                             
Trover Solutions, Inc.
  Subordinated Debt (12.0%, Due 11/12)     56,676       56,496       53,019  
                             
(Business Services)
    Total Investment             56,496       53,019  
                             
                             
United Road Towing, Inc.
  Subordinated Debt (11.8%, Due 1/14)     19,060       18,984       18,641  
                             
(Consumer Services)
    Total Investment             18,984       18,641  
                             
                             
Venturehouse-Cibernet Investors, LLC
  Equity Interest             —       —  
                             
(Business Services)
    Total Investment             —       —  
                             
                             
WMA Equity Corporation and Affiliates
  Subordinated Debt (16.8%, Due 4/13-4/14)(6)     139,455       138,559       60,000  
d/b/a Wear Me Apparel
  Common Stock (86 shares)             39,635       —  
                             
(Consumer Products)
    Total Investment             178,194       60,000  
                             
                             
Webster Capital II, L.P.(5)
  Limited Partnership Interest             1,929       1,649  
                             
(Private Equity Fund)
    Total Investment             1,929       1,649  
                             
                             
Woodstream Corporation
  Subordinated Debt (12.0%, Due 2/15)     90,000       89,663       73,064  
(Consumer Products)
  Common Stock (6,960 shares)             6,961       1,100  
                             
      Total Investment             96,624       74,164  
                             
                             
Other companies
  Other debt investments     37       (147 )     (147 )
    Other equity investments             41       8  
                             
      Total Investment             (106 )     (139 )
                             
                             
Total companies less than 5% owned
          $   2,000,141     $   1,300,053  
                             
Total private finance (120 portfolio investments)
          $ 4,251,396     $ 2,476,292  
                             
     
(1)
  Interest rates represent the weighted average annual stated interest rate on loans and debt securities, which are presented by nature of indebtedness for a single issuer. The maturity dates represent the earliest and the latest maturity dates.
(2)
  Common stock, preferred stock, warrants, options, and equity interests are generally non-income producing and restricted.
(5)
  Non-registered investment company.
(6)
  Loan or debt security is on non-accrual status and therefore is considered non-income producing.
(12)
  Common stock is non-voting. In addition to non-voting stock ownership, the Company has an option to acquire a majority of the voting securities of the portfolio company at fair market value.
 
The accompanying notes are an integral part of these consolidated financial statements.


15

 

ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF INVESTMENTS — (Continued)
 
Commercial Real Estate Finance
(in thousands, except number of loans)
 
                                 
            June 30, 2009
            (unaudited)
    Stated Interest
 		  Number of
 		       
    Rate Ranges   Loans   Cost   Value
Commercial Mortgage Loans
                               
                                 
      Up to 6.99%       3     $ 31,385     $ 30,097  
      7.00%–8.99%       2       1,946       1,929  
      9.00%–10.99%       1       6,472       6,472  
      11.00%–12.99%       1       10,475       9,051  
      15.00% and above       2       3,970       5,485  
                                 
Total commercial mortgage loans(13)
                  $ 54,248     $ 53,034  
                                 
Real Estate Owned
                  $ 5,920     $ 6,579  
                                 
Equity Interests(2) — Companies more than 25% owned
          $ 13,495     $ 14,125  
Guarantees ($6,871)
                               
                                 
Total commercial