American Capital Reports NOI Before Income Taxes of $0.31 Per Diluted Share, Net Earnings of $0.47 Per Diluted Share and NAV Per Share of $20.77

BETHESDA, Md., Aug. 3, 2016

On May 23, 2016, American Capital entered into a Merger Agreement (the "Merger Agreement") with Ares Capital Corporation ("Ares Capital") and certain of its affiliates under which Ares Capital will acquire American Capital.  In connection with the Merger Agreement, American Capital incurred non-recurring costs of approximately $13 million in the quarter ended June 30, 2016.  American Capital also agreed under the Merger Agreement to certain restrictions on its operations going forward, including restrictions on new investment activity, asset dispositions, personnel actions and certain other matters.  Also on May 23, 2016, American Capital agreed to the sale of its wholly-owned affiliate American Capital Mortgage Management, LLC ("ACMM") to American Capital Agency Corp. ("AGNC") for $562 million.  That transaction closed on July 1, 2016.

Q2 2016 CONSOLIDATED FINANCIAL SUMMARY

• $20.77 NAV per share outstanding
  • $0.63 per share increase from Q1 2016
  • 13% annualized economic return from Q1 2016
• $0.31 NOI before income taxes per diluted share, or $71 million
  • (23%), or $(0.09) per diluted share, decline over Q1 2016, or $(23) million
  • 6% annualized return on equity
  • 8% annualized return on equity, excluding non-recurring costs
    • $13 million of transaction costs associated with the strategic review process
• $0.20 NOI after income taxes per diluted share, or $46 million
  • (35%), or $(0.11) per diluted share, decline over Q1 2016, or $(28) million
• $0.47 net earnings per diluted share, or $106 million
  • $0.81 per diluted share improvement over Q1 2016, or $186 million
• $877 million of cash proceeds from realizations
  • $562 million from American Capital One Stop Buyouts^®
  • $222 million from Sponsor Finance and Other Investments
• $166 million of new committed investments
  • $119 million in Sponsor Finance Investments
  • $46 million in American Capital Asset Management, LLC ("ACAM")
• 11.5 million shares of American Capital common stock repurchased for $180 million
  • 5.2% of shares outstanding as of March 31, 2016
  • $15.74 average price per share
  • Share repurchases terminated in May 2016
• On July 1, 2016, American Capital repaid in full and terminated its secured term loan facility.  Additionally, American Capital provided notice of its election to redeem its $350 million senior unsecured five-year notes ("Private Notes") on September 15, 2016, and irrevocably deposited with the trustee the aggregate redemption price of 101.625% of the principal amount plus accrued and unpaid interest required to redeem all of the Private Notes.

PORTFOLIO VALUATION

For the quarter ended June 30, 2016, net unrealized depreciation, before income taxes, on American Capital's consolidated investment portfolio totaled $161 million.  The primary components of the net unrealized depreciation were:

• $181 million reversal of prior period unrealized appreciation associated with net realized gains on portfolio investments;
• $28 million unrealized depreciation in ACAM primarily due to the sale of ACMM on July 1, 2016;
• $23 million net unrealized depreciation in American Capital One Stop Buyouts® primarily driven by companies that were in a sales process; partially offset by
• $47 million net unrealized appreciation in Sponsor Finance and Other Investments primarily driven by portfolio companies that are currently in a sales process as well as narrowing investment spreads; and
• $20 million net unrealized appreciation in Structured Products investments primarily due to higher dealer marks and increased secondary trading as well as an increase in loan prices.

PORTFOLIO PERFORMANCE

As of June 30, 2016, the weighted average effective interest rate on consolidated debt investments at cost was 8.4%, 20 basis points lower than the March 31, 2016 rate of 8.6%.  Excluding the impact of debt investments on non-accrual, the weighted average effective interest rate on consolidated debt investments at cost as of June 30, 2016 was 9.6%, 10 basis points lower than the March 31, 2016 rate of 9.7%.  The weighted average effective interest rate on European Capital's debt investments at cost as of June 30, 2016 was 1.7%, the same as the March 31, 2016 rate of 1.7%.  Excluding the impact of debt investments on non-accrual, the weighted average effective interest rate on European Capital's debt investments at cost as of June 30, 2016 was 8.2%, 70 basis points higher than the March 31, 2016 rate of 7.5%.