CCT Corporate Capital Trust, Inc. (delisted)

Corporate Capital Trust, Inc. (NYSE:CCT), a leading business development company, announced its operating results for the quarter ended June 30, 2018, and announced that its board of directors has declared its third quarter 2018 regular dividend.

Financial Highlights for the Quarter Ended June 30, 2018

• Pro forma net investment income of $50.3 million, or $0.40 per share, as compared to $49.5 million, or $0.39 per share, for the prior quarter1
• Net investment income of $49.4 million, or $0.39 per share, as compared to $49.5 million, or $0.39 per share, for the prior quarter
• Net realized and unrealized losses on investments of $11.4 million, or $0.09 per share, resulting from $13.1 million of net realized losses and $1.7 million of net unrealized gains. This compares to net realized and unrealized gains on investments of $23.4 million, or $0.18 per share, for the prior quarter
• Paid regular cash dividends to stockholders totaling $0.402 per share
• Net asset value of $19.58 per share, compared to $19.72 as of March 31, 2018
• For the quarter ended June 30, 2018, the Net Investment Income / Dividend coverage ratio was 99% and 102% net of the dividend reinvestment and pro forma was 100% and 104% respectively1

“We are pleased with the progress we’ve made since announcing the partnership between FS Investments and KKR,” said Todd Builione, President of CCT. “Completing the merger with FSIC, closing the $3.4 billion revolving credit facility, of which CCT will be allocated $1.45 billion, and maintaining our strong origination pipeline will position us well to deliver consistent long-term performance and drive value for our investors.”

Declaration of Regular Dividend for Third Quarter 2018

CCT’s board of directors has declared a regular quarterly cash dividend for the third quarter of $0.402 per share, which will be payable on October 9, 2018 to stockholders of record as of the close of business of September 28, 2018.

 

     

Summary Consolidated Results2

Three Months Ended

(dollars in thousands, except per share data)(all per share amounts are basic and diluted)

  June 30, 2018   March 31, 2018   June 30, 2017 Total investment income   $ 103,764     $ 99,642   $ 100,474   Net investment income   $ 49,426     $ 49,490   $ 52,914   Net increase in net assets resulting from operations   $ 38,074     $ 72,903   $ 36,962                 Net investment income per share   $ 0.39     $ 0.39   $ 0.39   Total net realized and unrealized gain (loss) per share   $ (0.09 )   $ 0.18

 

$ (0.12 )

Net increase (decrease) in net assets resulting fromoperations (Earnings per Share)

  $ 0.30     $ 0.57   $ 0.27                 Net investment income per share – Adjusted1   $ 0.40     $ 0.39   $ 0.39   Total net realized and unrealized gain (loss) per share   $ (0.09 )   $ 0.18   $ (0.12 )

Net increase (decrease) in net assets resulting fromoperations (Earnings per Share) – Adjusted1

  $ 0.31     $ 0.57   $ 0.27                 Regular Stockholder dividends per share   $ 0.40     $ 0.40   $ 0.45   Special Stockholder dividends per share   $ 0.10       -     -   Net asset value per share at period end   $ 19.58     $ 19.72   $ 20.07   Weighted average shares outstanding     126,056       127,130     137,064   Shares outstanding, end of period     124,663       127,074     136,997     (dollar amounts in thousands)  

As of

June 30, 2018

 

As of

December 31, 2017

Total fair value of investments   $ 4,082,314     $ 3,969,097 Total assets   $ 4,375,046     $ 4,221,500 Total net assets   $ 2,440,916     $ 2,485,102  

Portfolio Highlights as of June 30, 2018

• Total fair value of investments was $4.1 billion
• New investment fundings for the quarter were $575 million. At June 30, 2018, 83.2% of total investments at fair market value were in Originated Strategy Investments3
• Average annual yield on debt investments was 10.5%, compared to 9.6% as of March 31, 20184
• 75% of investments in senior secured debt, compared to 73% as of March 31, 2018

 

Total Portfolio Activity

 

Three Months Ended (dollar amounts in millions)   June 30, 2018   March 31, 2018   June 30, 2017 Purchases   $574.8     $ 378.1     $ 564.3

Sales and redemptions5Q1 and Q2 2018 Sales and Redemptionsinclude $97.0 million and $206.9 millionrespectively of investments sold to SCJV.

  $452.3     $ 394.8     $ 374.3 Net investment activity   $122.5       ($16.7 )   $ 190.0 Net Sales to SCJV   $206.9     $ 97.0       - Adjusted net investment activity   $329.4     $ 80.3     $ 190.0   Portfolio Data   As of June 30, 2018  

As of December 31, 2017

Total fair value of investments   $4,082,314     $ 3,969,097   Number of Portfolio Companies   132       113  

% of Investments on Non-Accrual

(based on fair value)

  1.5 %     1.2 % Average yield on debt investments4   10.5 %     9.5 %   Asset Class (based on fair value) First Lien Senior Secured Loans     38.5 %     42.1 % Second Lien Senior Secured Loans     25.5 %     23.8 % Other Senior Secured Debt     5.4 %     3.6 % Subordinated Debt     6.8 %     9.6 % Asset Based Finance     10.1 %     8.7 % Strategic Credit Opportunities Partners     7.5 %     7.6 % Equity/Other     6.2 %     4.6 %  

Interest Rate Type (based on US$ Par)

% Variable Rate     74 %     78 % % Fixed Rate     26 %     22 %  

Funding and Liquidity Management as of June 30, 2018

• Debt to equity ratio of 0.74x, based on $1.80 billion in total debt outstanding and net asset value of $2.44 billion. CCT’s weighted average stated interest rate was 4.70%.
• Cash and cash equivalents of approximately $89.8 million and availability under its financing arrangements of $383 million, subject to borrowing base and other limitations.

Conference Call Information

A conference call to discuss CCT’s financial results will be held on Friday, August 10, 2018 at 11:00 a.m. ET. The conference call may be accessed by dialing (833) 818-6808 (U.S. callers) or +1 (409) 350-3502 (non-U.S. callers); a passcode is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Investor Relations section of CCT’s website at http://corporatecapitaltrust.com/investor-relations/events-presentations/.

A replay of the call will be available on CCT’s website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 9182178, beginning approximately two hours after the broadcast.

Supplemental Information

An investor presentation of financial information will be made available prior to the call in the Investor Relations section of CCT’s website at http://corporatecapitaltrust.com/investor-relations/events-presentations/ under Events & Presentations.

About Corporate Capital Trust

Corporate Capital Trust is a business development company that provides investors an opportunity to access middle market direct lending investments. The Company is externally managed by FS/KKR Advisor, LLC, and its investment objective is to provide shareholders with current income and, to a lesser extent, long-term capital appreciation. The Company intends to meet its investment objective by investing primarily in the debt of privately owned companies, with a focus on originated transactions. For additional information, please visit www.corporatecapitaltrust.com.

About FS/KKR Advisor, LLC

FS/KKR Advisor, LLC (“FS/KKR”) is a partnership between FS Investments and KKR Credit that serves as the investment adviser to six BDCs, including FS Investment Corporation, FS Investment Corporation II, FS Investment Corporation III, FS Investment Corporation IV, Corporate Capital Trust, Inc. and Corporate Capital Trust II.

FS/KKR seeks to leverage the size of its platform, differentiated origination capabilities and expertise in capital markets to maximize returns and preserve capital for investors.

FS Investments is a leading asset manager dedicated to helping individuals, financial professionals and institutions design better portfolios. The firm provides access to alternative sources of income and growth and focuses on setting industry standards for investor protection, education and transparency. FS Investments is headquartered in Philadelphia, PA with offices in New York, NY, Orlando, FL and Washington, DC. Visit www.fsinvestments.com to learn more.

KKR Credit is a subsidiary of KKR & Co. Inc., a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic manager partnerships that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

Forward-Looking Statements

The information in this press release may include “forward-looking statements.” These statements are based on the beliefs and assumptions of the Company’s management and on the information currently available to management at the time of such statements. Forward-looking statements generally can be identified by the words “believes,” “expects,” “intends,” “plans,” “estimates” or similar expressions that indicate future events. Important factors that could cause actual results to differ materially from the Company’s expectations include the factors disclosed in the Company’s filings with the SEC, including the Company’s annual report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on March 14, 2018. The Company undertakes no obligation to update such statements to reflect subsequent events.

Other Information

The information in this press release is summary information only and should be read in conjunction with CCT’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2018, which CCT filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 9, 2018, as well as CCT’s other reports filed with the SEC. A copy of CCT’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2018 and CCT’s other reports filed with the SEC can be found on CCT’s website at www.corporatecapital trust.com and the SEC’s website at www.sec.gov.

  Condensed Consolidated Statements of Assets and Liabilities (in thousands, except share and per share amounts)     June 30, 2018 December 31, 2017 (unaudited) Assets Investments at fair value:

Non-controlled, non-affiliated investments (amortized cost of $3,214,260 and$3,319,093, respectively)

$ 3,152,849 $ 3,225,827

Non-controlled, affiliated investments (amortized cost of $336,507 and $298,489,respectively)

258,487 242,985

Controlled, affiliated investments (amortized cost of $697,995 and $540,609,respectively)

670,978   500,285  

Total investments, at fair value (amortized cost of $4,248,762 and $4,158,191,respectively)

4,082,314 3,969,097 Cash 82,658 127,186 Cash denominated in foreign currency (cost of $7,217 and $3,724, respectively) 7,111 3,778 Restricted cash 905 51,181 Dividends and interest receivable 48,847 42,517 Receivable for investments sold 126,770 2,320 Principal receivable 6,339 3,389 Unrealized appreciation on swap contracts 4,674 3,763 Unrealized appreciation on foreign currency forward contracts 2,641 1,194 Receivable from advisers 707 2,802 Other assets 12,080   14,273   Total assets 4,375,046   4,221,500   Liabilities Revolving credit facilities 1,175,000 965,000 Term loan payable, net 381,563 382,768 Unsecured notes payable, net 241,040 240,612 Payable for investments purchased 32,715 47,097 Unrealized depreciation on swap contracts 22,606 29,604 Unrealized depreciation on foreign currency forward contracts 2,340 3,401 Accrued performance-based incentive fees 11,710 8,418 Accrued investment advisory fees 5,262 5,214 Shareholders’ distributions payable 50,186 46,959 Deferred tax liability 1,442 178 Accrued directors' fees 23 — Other accrued expenses and liabilities 10,243   7,147   Total liabilities 1,934,130 1,736,398 Commitments and contingencies     Net Assets $ 2,440,916   $ 2,485,102   Components of Net Assets

Common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 124,663,131and 127,130,589 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively

$ 125 $ 127 Paid-in capital in excess of par value 2,758,334 2,799,400 Undistributed net investment income 22,454 37,633 Accumulated net realized losses (154,397 ) (134,874 )

Accumulated net unrealized depreciation on investments, swap contracts, foreign currencyforward contracts and foreign currency translation (net of provision for taxes of $1,442 and$178, respectively)

(185,600 ) (217,184 ) Net assets $ 2,440,916   $ 2,485,102   Net asset value per share $ 19.58   $ 19.55       Condensed Consolidated Statements of Operations (unaudited) (in thousands, except share and per share amounts)   Three Months Ended June 30, Six Months Ended June 30, 2018   2017 2018   2017 Investment income Interest income:

Non-controlled, non-affiliated investments (net of taxwithholding, $3, $1,528, $64 and $1,801, respectively)

$ 78,586 $ 75,894 $ 161,492 $ 159,629 Non-controlled, affiliated investments 2,234 3,122 3,975 3,122 Controlled, affiliated investments 2,691   —   2,691   —   Total interest income 83,511   79,016   168,158   162,751   Payment-in-kind interest income: Non-controlled, non-affiliated investments 1,330 1,109 2,439 2,136 Non-controlled, affiliated investments — — —

 

— Controlled, affiliated investments 3,751   2,940   7,446   5,403   Total payment-in-kind interest income 5,081   4,049   9,885   7,539   Fee income: Non-controlled, non-affiliated investments 4,179   5,645   4,886   8,250   Total fee income 4,179   5,645   4,886   8,250   Dividend and other income: Non-controlled, non-affiliated investments 1,166 3,893 2,132 4,189 Non-controlled, affiliated investments — — — — Controlled, affiliated investments 9,827   7,871   18,345   10,593   Total dividend and other income 10,993   11,764   20,477   14,782   Total investment income 103,764   100,474   203,406   193,322   Operating expenses Investment advisory fees 15,563 20,914 30,778 41,685 Interest expense 22,272 15,207 42,086 29,355 Performance-based incentive fees 11,710 4,748 24,083 5,675 Professional services 2,631 1,959 3,893 3,005 Investment adviser expenses 267 1,713 460 2,609 Administrative services 796 770 1,457 1,610 Custodian and accounting fees 443 399 838 836 Offering expenses — 122 — 327 Director fees and expenses 150 168 298 301 Other 528   1,362   972   2,141   Total operating expenses 54,360   47,362   104,865   87,544   Net investment income before taxes 49,404 53,112 98,541 105,778 Income tax expense (benefit), including excise tax (22 ) 198   (375 ) 321   Net investment income 49,426   52,914   98,916   105,457   Net realized and unrealized gains (losses) Net realized gains (losses) on: Non-controlled, non-affiliated investments (11,179 ) (85,586 ) (16,127 ) (70,108 ) Controlled, affiliated investments (12,797 ) (7,567 ) (12,797 ) (7,413 ) Swap contracts 787 11,995 2,411 14,311 Foreign currency forward contracts 6,653 (633 ) 4,477 (78 ) Foreign currency transactions 3,471   2,397   2,513   1,882   Net realized losses (13,065 ) (79,394 ) (19,523 ) (61,406 )     Condensed Consolidated Statements of Operations Continued (in thousands, except share and per share amounts)   Three Months Ended June 30,   Six Months Ended June 30, 2018   2017 2018   2017 Net change in unrealized appreciation (depreciation) on: Non-controlled, non-affiliated investments $ 2,624 $ 88,101 $ 31,855 $ 99,441 Non-controlled, affiliated investments (13,088 ) (2,879 ) (22,516 ) (708 ) Controlled, affiliated investments (5,193 ) 17,117 13,307 22,805 Swap contracts 15,855 (38,262 ) 7,909 (39,890 ) Foreign currency forward contracts 2,265 (9,345 ) 2,508 (11,981 ) Foreign currency translation (519 ) (393 ) (215 ) (725 ) Provision for taxes (231 ) 9,103   (1,264 ) 8,689   Net change in unrealized appreciation 1,713   63,442   31,584   77,631   Net realized and unrealized gains (losses) (11,352 ) (15,952 ) 12,061   16,225   Net increase in net assets resulting from operations $ 38,074   $ 36,962   $ 110,977   $ 121,682   Net investment income per share $ 0.39   $ 0.39   $ 0.78   $ 0.77   Diluted and basic earnings per share $ 0.30   $ 0.27   $ 0.88   $ 0.89  

Weighted average number of shares of common stockoutstanding (basic and diluted)

126,056,390   137,064,172   126,558,009   137,275,134   Distributions declared per share $ 0.50   $ 0.45   $ 0.90   $ 0.90      

Summary Consolidated Results – reconciliation

    Three Months Ended

(dollars in thousands, except per share data)

   

(all per share amounts are basic and diluted)

  June 30, 2018   March 31, 2018   June 30, 2017 Pre-incentive fee Net Investment Income   $ 0.48     $ 0.49     $ 0.42   Adjust Management Fee to 1.5%     -       -     $ 0.04   Add back one time listing / merger expenses   $ 0.01       -       -   Adjusted Pre-incentive fee Net Investment Income   $ 0.49     $ 0.49     $ 0.46   Adjusted Incentive Fee     ($0.09 )     ($0.10 )     ($0.09 ) Adjusted Net Investment Income   $ 0.40     $ 0.39     $ 0.37     Three Months Ended

(dollars in thousands, except per share data)

(all per share amounts are basic and diluted)

  June 30, 2018         Pre-incentive fee Net Investment Income   $ 61,136           Adjust Management Fee to 1.5%     -           Add back one time listing / merger expenses   $ 1,041           Adjusted Pre-incentive fee Net Investment Income   $ 62,177           Adjusted Incentive Fee     ($11,918 )         Adjusted Net Investment Income   $ 50,259             1 For comparison purposes to Q1 and Q2 2018, 2017 management fees have been adjusted to 1.5% and income incentive fee has been recalculated based on current advisor contract. Additionally, one-time merger related expenses have been added back. See full reconciliation above. 2 All per share metrics are presented pro forma for the 1-for-2.25 reverse stock split which occurred on October 31, 2017. Schedule may include balancing figures derived from the other figures in the schedule and may differ slightly due to rounding associated with the 2.25x stock split. 3 Originated Strategy Investments are defined as investments where our Advisor negotiates the terms of the transaction beyond just the price, which, for example, may include negotiating financial covenants, maturity dates or interest rate terms or where we participate in other originated investment where there may be third parties involved, or a bank acting as an intermediary, for a closely held club, or similar investment. 4 The weighted average annual yield for accruing debt investments is computed as (i) the sum of (a) the stated annual interest rate of each debt, and debt like, investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each accreting debt investment; divided by (ii) the total amortized cost of debt investments included in the calculated group as of the end of the applicable reporting period. Prior to Q3 2017 our weighted average annual yield did not adjust for any non-accreting or partial accrual investments. Beginning in Q2 2018, asset based finance investments with an effective interest rate are being included in the calculation. 5 Q1 and Q2 2018 Sales and Redemptions include $97.0 million and $206.9 million respectively of investments sold to SCJV.  

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Corporate Capital Trust, Inc.MediaKristi Huller or Cara Majormedia@kkr.comorInvestor RelationsDanny McMahonCCT-IR@kkr.com