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 September 30, 2018.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181107005829/en/

Financial Highlights for the Quarter Ended September 30, 2018

• Pro forma net investment income of $49.3 million, or $0.40 per share, as compared to $50.3 million, or $0.40 per share, for the prior quarter1
• Net investment income of $43.8 million, or $0.35 per share, as compared to $49.4 million, or $0.39 per share, for the prior quarter
• Net realized and unrealized losses on investments of $12.4 million, or $0.10 per share, resulting from $13.0 million of net unrealized gains and $25.4 million of net realized losses. This compares to net realized and unrealized losses on investments of $11.4 million, or $0.09 per share, for the prior quarter
• Paid regular cash dividends to stockholders totaling $0.402 per share
• Net asset value of $19.44 per share, compared to $19.58 as of June 30, 2018

“This year, we’ve continued to focus on serving the needs of our borrowers and sourcing attractive new investment opportunities, which in turn has allowed us to deliver a competitive and stable dividend while preserving capital for our stockholders,” said Todd Builione, President of CCT. “Additionally, we are pleased with the progress we’ve made since announcing the formation of the partnership between FS Investments and KKR. Completing the merger with FSIC, efficiently leveraging our lower cost revolving credit facility and maintaining a robust origination pipeline will position us well to deliver consistent long-term performance.”

Announcement of Expected Dividend for Fourth Quarter 2018

CCT expects to declare a fourth quarter dividend of at least $0.40 per share, subject to approval by the board of directors. Assuming the merger with FSIC closes in Q4 following satisfaction of all conditions, the final size of the dividend will also be designed to distribute any undistributed taxable income and net realized capital gains.

Summary Consolidated Results2

        Three Months Ended (dollars in thousands, except per share data)(all per share amounts are basic and diluted)       Sept 30, 2018     June 30, 2018     Sept 30, 2017 Total investment income       $ 103,861       $ 103,764       $ 97,593   Net investment income       $ 43,784       $ 49,426       $ 53,364   Net increase in net assets resulting from operations       $ 31,414       $ 38,074       $ 45,281                         Net investment income per share       $ 0.35       $ 0.39       $ 0.39   Total net realized and unrealized gain (loss) per share       $ (0.10 )     $ (0.09 )     $ (0.06 ) Net increase (decrease) in net assets resulting from operations (Earnings per Share)       $ 0.25       $ 0.30       $ 0.33                         Net investment income per share – Adjusted1       $ 0.40       $ 0.40       $ 0.36   Total net realized and unrealized gain (loss) per share       $ (0.10 )     $ (0.09 )     $ (0.06 ) Net increase (decrease) in net assets resulting from operations (Earnings per Share) – Adjusted1       $ 0.30       $ 0.31       $ 0.30                         Regular Stockholder dividends per share       $ 0.40       $ 0.40       $ 0.40   Special Stockholder dividends per share         -       $ 0.10         -   Net asset value per share at period end       $ 19.44       $ 19.58       $ 20.01   Weighted average shares outstanding         124,195         126,056         136,485   Shares outstanding, end of period         124,120         124,663         135,903   (dollar amounts in thousands)    

As ofSept 30, 2018

 

   

As ofDecember 31, 2017

 

Total fair value of investments     $ 4,116,271     $ 3,969,097 Total assets     $ 4,371,114     $ 4,221,500 Total net assets     $ 2,413,478     $ 2,485,102  

Portfolio Highlights as of September 30, 2018

• Total fair value of investments was $4.1 billion
• New investment fundings for the quarter were $279 million. At September 30, 2018, 82.8% of total investments at fair market value were in Originated Strategy Investments3
• Average annual yield on debt investments was 10.4%4
• 74% of investments in senior secured debt, compared to 75% as of June 30, 2018

Total Portfolio Activity

      Three Months Ended (dollar amounts in millions)       Sept 30, 2018     June 30, 2018     Sept 30, 2017 Purchases       $278.7     $574.8     $549.5

Sales and redemptions5

      $241.7     $452.3     $700.6 Net investment activity       $37.0     $122.5     ($151.1) Net Sales to SCJV       $14.2     $206.9     171.4 Adjusted net investment activity       $51.2     $329.4     $20.3 Portfolio Data       As of Sept 30, 2018     As of December 31, 2017 Total fair value of investments       $4,116,271     $3,969,097 Number of Portfolio Companies       140     113 % of Investments on Non-Accrual

(based on fair value)

      1.3%     1.2% Average yield on debt investments4       10.4%     9.5%   Asset Class (based on fair value) First Lien Senior Secured Loans       39.1%     42.1% Second Lien Senior Secured Loans       24.3%     23.8% Other Senior Secured Debt       4.8%     3.6% Subordinated Debt       8.0%     9.6% Asset Based Finance       10.4%     8.7% Strategic Credit Opportunities Partners       7.5%     7.6% Equity/Other       5.9%     4.6%

Interest Rate Type (based on US$ Par)

% Variable Rate       75%     78% % Fixed Rate       25%     22%          

Funding and Liquidity Management as of September 30, 2018

• Debt to equity ratio of 0.75x, based on $1.82 billion in total debt outstanding and net asset value of $2.41 billion. CCT’s weighted average stated interest rate was 4.37%.
• Cash and cash equivalents of approximately $148.7 million and availability under its financing arrangements of $471 million, subject to borrowing base and other limitations.

Conference Call Information

A conference call to discuss CCT’s financial results will be held on Thursday, November 8, 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 4989618, 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. Inc. (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 September 30, 2018, which CCT filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 8, 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 September 30, 2018 and CCT’s other reports filed with the SEC can be found on CCT’s website at www.corporatecapitaltrust.com and the SEC’s website at www.sec.gov.

       

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Assets and Liabilities (unaudited)

(in thousands, except share and per share amounts)

  September 30, 2018 December 31, 2017 Assets Investments at fair value: Non-controlled, non-affiliated investments (amortized cost of $3,257,152 and $3,319,093, respectively) $ 3,182,671 $ 3,225,827 Non-controlled, affiliated investments (amortized cost of $302,845 and $298,489, respectively) 261,305 242,985 Controlled, affiliated investments (amortized cost of $712,653 and $540,609, respectively) 672,295   500,285   Total investments, at fair value (amortized cost of $4,272,650 and $4,158,191, respectively) 4,116,271 3,969,097 Cash 129,797 127,186 Cash denominated in foreign currency (cost of $19,094 and $3,724, respectively) 18,939 3,778 Restricted cash 10,008 51,181 Dividends and interest receivable 43,737 42,517 Receivable for investments sold 20,276 2,320 Principal receivable 3,480 3,389 Unrealized appreciation on swap contracts 6,644 3,763 Unrealized appreciation on foreign currency forward contracts 1,179 1,194 Receivable from advisers — 2,802 Other assets 20,783   14,273   Total assets 4,371,114   4,221,500   Liabilities Revolving credit facilities 1,579,226 965,000 Term loan payable, net — 382,768 Unsecured notes payable, net 241,267 240,612 Payable for investments purchased 29,586 47,097 Unrealized depreciation on swap contracts 19,673 29,604 Unrealized depreciation on foreign currency forward contracts 793 3,401 Accrued performance-based incentive fees 10,946 8,418 Accrued investment advisory fees 5,176 5,214 Shareholders’ distributions payable 49,920 46,959 Deferred tax liability 3,410 178 Accrued directors' fees 3 — Other accrued expenses and liabilities 17,636   7,147   Total liabilities 1,957,636 1,736,398 Commitments and contingencies (Note 11)     Net Assets $ 2,413,478   $ 2,485,102   Components of Net Assets Common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 124,119,644 and 127,130,589 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively $ 124 $ 127 Paid-in capital in excess of par value 2,749,403 2,799,400 Accumulated deficit (336,049 ) (314,425 ) Net assets $ 2,413,478   $ 2,485,102   Net asset value per share $ 19.44   $ 19.55            

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except share and per share amounts)

  Three Months Ended September 30, Nine Months Ended September 30, 2018     2017 2018     2017 Investment income Interest income: Non-controlled, non-affiliated investments (net of tax withholding, $-, $(1,416), $64 and $385, respectively) $ 80,970 $ 80,539 $ 242,462 $ 240,168 Non-controlled, affiliated investments 1,190 1,475 5,165 4,597 Controlled, affiliated investments 1,942   5   4,633   5   Total interest income 84,102   82,019   252,260   244,770   Payment-in-kind interest income: Non-controlled, non-affiliated investments 1,501 2,531 3,940 4,667 Non-controlled, affiliated investments 58 — 58 — Controlled, affiliated investments 4,086   2,706   11,532   8,109   Total payment-in-kind interest income 5,645   5,237   15,530   12,776   Fee income: Non-controlled, non-affiliated investments 1,881   4,416   6,767   12,666   Total fee income 1,881   4,416   6,767   12,666   Dividend and other income: Non-controlled, non-affiliated investments 569 722 2,701 4,911 Non-controlled, affiliated investments — — — — Controlled, affiliated investments 11,664   5,199   30,009   15,792   Total dividend and other income 12,233   5,921   32,710   20,703   Total investment income 103,861   97,593   307,267   290,915   Operating expenses Investment advisory fees 15,817 21,173 46,595 62,858 Interest expense 23,663 18,177 65,749 47,532 Performance-based incentive fees 10,946 2,046 35,029 7,721 Professional services 5,885 1,045 9,778 4,050 Investment adviser expenses 905 373 1,365 2,982 Administrative services 827 876 2,284 2,486 Custodian and accounting fees 435 439 1,273 1,275 Offering expenses — 67 — 394 Director fees and expenses 118 131 416 432 Other 740   926   1,712   3,067   Total operating expenses 59,336   45,253   164,201   132,797   Net investment income before taxes 44,525 52,340 143,066 158,118 Income tax expense (benefit), including excise tax 741   (1,024 ) 366   (703 ) Net investment income 43,784   53,364   142,700   158,821   Net realized and unrealized gains (losses) Net realized gains (losses) on: Non-controlled, non-affiliated investments (411 ) (11,731 ) (16,538 ) (81,839 ) Non-controlled, affiliated investments (27,146 ) — (27,146 ) — Controlled, affiliated investments (550 ) (7,869 ) (13,347 ) (15,282 ) Swap contracts 82 3,471 2,493 17,782 Foreign currency forward contracts 2,604 (7,848 ) 7,081 (7,926 ) Foreign currency transactions 10   1,471   2,523   3,353   Net realized losses (25,411 ) (22,506 ) (44,934 ) (83,912 )          

Corporate Capital Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (unaudited), continued

(in thousands, except share and per share amounts)

  Three Months Ended September 30, Nine Months Ended September 30, 2018     2017 2018     2017 Net change in unrealized appreciation (depreciation) on: Non-controlled, non-affiliated investments $ (13,070 ) $ 21,464 $ 18,785 $ 120,905 Non-controlled, affiliated investments 36,480 189 13,964 (519 ) Controlled, affiliated investments (13,341 ) 12,720 (34 ) 35,525 Swap contracts 4,903 (13,558 ) 12,812 (53,448 ) Foreign currency forward contracts 85 2,746 2,593 (9,235 ) Foreign currency translation (48 ) (1,911 ) (263 ) (2,636 ) Provision for taxes   (1,968 )   (7,227 )   (3,232 )   1,462   Net change in unrealized appreciation   13,041     14,423     44,625     92,054   Net realized and unrealized gains (losses)   (12,370 )   (8,083 )   (309 )   8,142   Net increase in net assets resulting from operations $ 31,414   $ 45,281   $ 142,391   $ 166,963   Net investment income per share $ 0.35   $ 0.39   $ 1.13   $ 1.16   Diluted and basic earnings per share $ 0.25   $ 0.33   $ 1.13   $ 1.22   Weighted average number of shares of common stock outstanding (basic and diluted)   124,194,701     136,484,597     125,761,583     137,008,726   Distributions declared per share $ 0.40   $ 0.40   $ 1.31   $ 1.31          

Summary Consolidated Results – reconciliation

  Three Months Ended (dollars in thousands, except per share data)(all per share amounts are basic and diluted)     Sept 30, 2018     June 30, 2018     Sept 30, 2017 Pre-incentive fee Net Investment Income     $0.44     $0.48     $0.41 Adjust Management Fee to 1.5%     -     -     $0.04 Add back one time listing / merger expenses / Refi     $0.06     $0.01     $0.01 Adjusted Pre-incentive fee Net Investment Income     $0.50     $0.49     $0.45 Incentive Fee     ($0.09)     ($0.09)     ($0.01) Incremental Pro-forma Incentive Fee     ($0.01)           ($0.08) Adjusted Net Investment Income     $0.40     $0.40     $0.36       Three Months Ended (dollars in thousands, except per share data)(all per share amounts are basic and diluted)     Sept 30, 2018     June 30, 2018 Pre-incentive fee Net Investment Income     $54,730     $61,136 Adjust Management Fee to 1.5%     -     - Add back one time listing / merger expenses     $6,865     $1,041 Adjusted Pre-incentive fee Net Investment Income     $61,595     $62,177 Incentive Fee     ($10,946)     ($11,710) Incremental Pro-forma Incentive Fee     ($1,373)     ($208) Adjusted Net Investment Income     $49,276     $50,259     _____________________________ 1 For comparison purposes to 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, listing & refinancing 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 Q3 2018, Q2 2018 and Q3 2017 Sales and Redemptions include $14.2 million, $206.9 million and $171.4 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