Main Street Capital CORP
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
MAIN$57.01+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001396440-24-000055
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001396440-25-000018
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 119 current paragraphs.
57 unchanged; 52 reworded; 9 added; 3 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
(c)The increase in fee income was primarily related to (i) a $5.7 million increase in fees related to increased investment activity and (ii) a $2.6 million increase from the refinancing and prepayment of debt investments.
Current report
(b)The increase in general and administrative expense was primarily attributable to an increase in business development activities, technology costs and professional fees.
Current report
In June 2024, we entered into an amendment to our Corporate Facility to, among other things: (i) increase the revolving commitments from $995.0 million to $1.11 billion, (ii) increase the accordion feature from up to a total of $1.4 billion to up to a total of $1.665 billion and (iii) extend the revolving period and the final maturity date through June 2028 and June 2029, respectively, on $1.035 billion of revolving commitments, with the original revolving period and final maturity date of August 2026 and August 2027, respectively, on $0.075 billion of revolving commitments remaining the same.
Current report
In September 2024, we entered into an amendment to our SPV Facility, to among other things: (i) increase the total commitments from $430.0 million to $600.0 million, (ii) increase the accordion feature to up to a total of $800.0 million, (iii) extend the revolving period from November 2025 to September 2027, (iv) extend the final maturity date from November 2027 to September 2029 and (v) decrease the interest rate to one-month term SOFR plus an applicable margin of (a) 2.35% during the revolving period (from 2.50% plus a 0.10% credit spread adjustment, or 2.60%), (b) 2.475% for the first year following the end of the revolving period (from 2.625%) and (c) 2.60% for the second year following the end of the revolving period (from 2.75%).
Current report
In June 2024, we issued $300.0 million in aggregate principal amount of 6.50% unsecured notes due June 4, 2027 (the “June 2027 Notes”). In September 2024, we issued an additional $100.0 million in aggregate principal amount of the June 2027 Notes at a public offering price of 102.134% resulting in a yield-to-maturity of 5.617% on such issuance. The June 2027 Notes issued in September 2024 have identical terms as, and are a part of a single series with, the June 2027 Notes issued in June 2024. The outstanding aggregate principal amount of the June 2027 Notes was $400.0 million and bear interest at a rate of 6.50% per year with a yield-to-maturity of approximately 6.34% as of December 31, 2024.
Current report
In May 2024, we repaid the entire $450.0 million principal amount of the issued and outstanding 5.20% unsecured notes (the “May 2024 Notes”).
Current report
In January 2025, MSC Income completed a follow-on public offering of 6,325,000 shares of its common stock (including the exercise of the underwriters’ overallotment option) at the public offering price of $15.53 per share (the “MSIF Public Offering”). In connection with the MSIF Public Offering, MSC Income’s shares of common stock began trading on the New York Stock Exchange under the ticker symbol “MSIF.”
Current report
We purchased 289,761 shares of MSC Income common stock in the MSIF Public Offering at the public offering price of $15.53. Additionally, following the closing of the MSIF Public Offering, we entered into a share purchase plan to purchase up to $20.0 million in the aggregate of shares of MSC Income common stock in the open market for a twelve-month period beginning in March 2025, at times when the market price per share of MSC Income common stock is trading below the most recently reported NAV per share of MSC Income’s common stock by certain pre-determined levels (including any updates, corrections or adjustments publicly announced by MSC Income to any previously announced NAV per share). The purchases of shares of MSC Income common stock pursuant to the share purchase plan are intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances. MSC Income also entered into a share repurchase plan to purchase up to $65.0 million in the aggregate of its common stock in the open market with terms and conditions substantially similar to our share purchase plan for shares of MSC Income common stock, and daily purchases under the two plans, if any, are expected to be split pro rata (or as close thereto as reasonably possible) between us and MSC Income based on the respective plan sizes. In connection with our potential acquisition in excess of 3% of MSC Income’s outstanding shares of common stock as a result of any purchases pursuant to our share purchase plan for shares of MSC Income common stock or otherwise, we entered into a Fund of Funds Investment Agreement with MSC Income. The Fund of Funds Investment Agreement provides for the acquisition by us of MSC Income’s shares of common stock, and MSC Income’s sale of such shares to us, in a manner consistent with the requirements of Rule 12d1-4 under the 1940 Act.
Current report
Additionally, in connection with the listing, the External Investment Manager and MSC Income entered into an Amended and Restated Investment Advisory and Administrative Services Agreement to, among other things, (i) reduce the annual base management fees payable by MSC Income to 1.5% of its average total assets (including cash and cash equivalents), payable in arrears (with additional future contractual reductions based upon changes to MSC Income’s investment portfolio composition), (ii) reduce to 17.5% the subordinated incentive fee on pre-incentive fee net investment income above a specified investment return hurdle rate payable by MSC Income, subject to a 50% / 50% catch-up feature, (iii) reduce to 17.5% and reset the incentive fee on cumulative net realized capital gains payable by MSC Income and (iv) establish a cap on the amount of expenses payable by MSC Income relating to certain internal administrative services, which varies based on the value of MSC Income’s total assets.
Removed paragraphs (3)
Previous report
(b)The change in the non-cash deferred compensation plan expense was a result of deferred compensation expense recorded during the year ended December 31, 2023 resulting from an increase in the fair value of deferred compensation plan assets and corresponding liabilities during 2023 compared to a deferred compensation benefit recorded during the year ended December 31, 2022 resulting from a decrease in such fair values during 2022.
Previous report
During the year ended December 31, 2022, we completed a public equity offering of 1,345,500 shares of common stock at a public offering price of $42.85 per share, including the underwriters’ full exercise of their option to purchase 175,500 additional shares, resulting in total net proceeds, including exercise of the underwriters’ option to purchase additional shares and after deducting underwriting discounts and estimated offering expenses payable by us, of approximately $55.1 million.
Previous report
In January 2024, we issued $350.0 million in aggregate principal amount of 6.95% unsecured notes due March 1, 2029 (the “March 2029 Notes”) at an issue price of 99.865%. The total net proceeds from the offering of the March 2029 Notes were approximately $346.3 million after underwriting discounts and estimated offering expenses payable. We utilized the proceeds to repay outstanding borrowings under our Credit Facilities.
Reworded paragraphs (52)
Previous wording
The following tables provide a summary of our investments in the LMM, Private Loan and Middle Market portfolios as of December 31, 2023 and 2022 (this information excludes Other Portfolio investments, short-term portfolio investments and the External Investment Manager which are discussed further below):
Current wording
The following tables provide a summary of our investments in the LMM, Private Loan and Middle Market portfolios as of December 31, 2024 and 2023 (this information excludes Other Portfolio investments and the External Investment Manager which are discussed further below).
Previous wording
(a)At December 31, 2022, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 41%.
Current wording
(a)As of December 31, 2024, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 38%.
Previous wording
(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2022, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on our debt portfolio as of December 31, 2022 including debt investments on non-accrual status was 11.6% for our LMM portfolio, 11.2% for our Private Loan portfolio and 10.3% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
Current wording
(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments as of December 31, 2024, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2024. The weighted-average annual effective yield on our debt portfolio as of December 31, 2024, including debt investments on non-accrual status, was 12.3% for our LMM portfolio, 11.5% for our Private Loan portfolio and 10.1% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
Previous wording
(c)The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the Private Loan and Middle Market portfolios. These calculations exclude certain portfolio companies, including three LMM portfolio companies and two Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.
Current wording
(c)The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the Private Loan and Middle Market portfolios. These calculations exclude certain portfolio companies, including five LMM portfolio companies, five Private Loan portfolio companies and two Middle Market portfolio companies, as EBITDA is not a meaningful valuation metric for our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate and those portfolio companies whose primary operations have ceased and only residual value remains.
Previous wording
(a)At December 31, 2023, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 40%.
Current wording
(a)As of December 31, 2023, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 40%.
Previous wording
(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2023, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on our debt portfolio as of December 31, 2023 including debt investments on non-accrual status was 12.9% for our LMM portfolio, 12.5% for our Private Loan portfolio and 10.8% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
Current wording
(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments as of December 31, 2023, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2023. The weighted-average annual effective yield on our debt portfolio as of December 31, 2023, including debt investments on non-accrual status, was 12.9% for our LMM portfolio, 12.5% for our Private Loan portfolio and 10.8% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
Previous wording
For the years ended December 31, 2023 and 2022, we achieved a total return on investments of 16.3% and 11.1%, respectively. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. Our total return on investments is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
Current wording
For the years ended December 31, 2024 and 2023, we achieved a total return on investments of 17.9% and 16.3%, respectively. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. Our total return on investments is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
Previous wording
As of December 31, 2023, we had Other Portfolio investments in 15 entities, collectively totaling $142.0 million in fair value and $149.1 million in cost basis and which comprised 3.3% and 4.0% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2022, we had Other Portfolio investments in 14 entities, collectively totaling $116.3 million in fair value and $120.4 million in cost basis and which comprised 2.8% and 3.2% of our Investment Portfolio at fair value and cost, respectively.
Current wording
As of December 31, 2024, we had Other Portfolio investments in 31 entities, spread across 12 investment managers, collectively totaling $124.1 million in fair value and $122.5 million in cost basis and which comprised 2.5% and 2.9% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2023, we had Other Portfolio investments in 30 entities, spread across 13 investment managers, collectively totaling $142.0 million in fair value and $149.1 million in cost basis and which comprised 3.3% and 4.0% of our Investment Portfolio at fair value and cost, respectively.
Previous wording
As previously discussed, the External Investment Manager is a wholly-owned subsidiary that is treated as a portfolio investment. As of December 31, 2023, this investment had a fair value of $174.1 million and a cost basis of $29.5 million, which comprised 4.1% and 0.8% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2022, this investment had a fair value of $122.9 million and a cost basis of $29.5 million, which comprised 3.0% and 0.8% of our Investment Portfolio at fair value and cost, respectively.
Current wording
As previously discussed in Item 1. Business — Overview of Our Businessof this Annual Report on Form 10-K, we hold an investment in the External Investment Manager, a wholly-owned subsidiary that is treated as a portfolio investment. As of December 31, 2024, this investment had a fair value of $246.0 million and a cost basis of $29.5 million, which comprised 5.0% and 0.7% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2023, this investment had a fair value of $174.1 million and a cost basis of $29.5 million, which comprised 4.1% and 0.8% of our Investment Portfolio at fair value and cost, respectively.
Previous wording
The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our Investment Portfolio and the related amounts of unrealized appreciation and depreciation. We consider this determination to be a critical accounting estimate, given the significant judgments and subjective measurements required. As of December 31, 2023 and 2022, our Investment Portfolio valued at fair value represented 96% and 97% of our total assets, respectively. We are required to report our investments at fair value. We follow the provisions of FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. See Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a detailed discussion of our Investment Portfolio valuation process and procedures.
Current wording
The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our Investment Portfolio and the related amounts of unrealized appreciation and depreciation. We consider this determination to be a critical accounting estimate, given the significant judgments and subjective measurements required. As of both December 31, 2024 and 2023, our Investment Portfolio valued at fair value represented 96% of our total assets. We are required to report our investments at fair value. We follow the provisions of FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. See Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a detailed discussion of our Investment Portfolio valuation process and procedures.
Previous wording
We hold certain debt and preferred equity instruments in our Investment Portfolio that contain PIK interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.10. — Summary of Significant Accounting Policies — Income Taxes included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the PIK interest and cumulative dividends in cash. We stop accruing PIK interest and cumulative dividends and write off any accrued and uncollected interest and dividends in arrears when we determine that such PIK interest and dividends in arrears are no longer collectible. For the years ended December 31, 2023, 2022 and 2021 (i) 2.2%, 1.4% and 2.6%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.3%, 0.5% and 0.6%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.
Current wording
We hold certain debt and preferred equity instruments in our Investment Portfolio that contain PIK interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.10. — Summary of Significant Accounting Policies — Income Taxes included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the PIK interest and cumulative dividends in cash. We stop accruing PIK interest and cumulative dividends and write off any accrued and uncollected interest and dividends in arrears when we determine that such PIK interest and dividends in arrears are no longer collectible. For the years ended December 31, 2024, 2023 and 2022 (i) 4.2%, 2.2% and 1.4%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.5%, 0.3% and 0.5%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.
Previous wording
The following tables summarize the composition of our total combined LMM, Private Loan and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM, Private Loan and Middle Market portfolio investments as of December 31, 2023 and 2022 (this information excludes Other Portfolio investments, short-term portfolio investments and the External Investment Manager).
Current wording
The following tables summarize the composition of our total combined LMM, Private Loan and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM, Private Loan and Middle Market portfolio investments as of December 31, 2024 and 2023 (this information excludes Other Portfolio investments and the External Investment Manager).
Previous wording
We utilize an internally developed investment rating system to rate the performance of each LMM, Private Loan and Middle Market portfolio company and to monitor our expected level of returns on each of our LMM, Private Loan and Middle Market investments in relation to our expectations for the portfolio company. The investment rating system takes into consideration various factors, including each investment’s expected level of returns, the collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments, comparisons to competitors and other industry participants, the portfolio company’s future outlook and other factors that are deemed to be significant to the portfolio company.
Current wording
We utilize an internally developed investment rating system to rate the performance of each LMM, Private Loan and Middle Market portfolio company and to monitor our expected level of returns on each of our LMM, Private Loan and Middle Market investments in relation to our expectations for the portfolio company. The investment rating system takes into consideration various factors, including, but not limited to, each investment’s expected level of returns, the collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments, comparisons to competitors and other industry participants, the portfolio company’s future outlook and other factors that are deemed to be significant to the portfolio company.
Previous wording
As of December 31, 2023, investments on non-accrual status comprised 0.6% of our total Investment Portfolio at fair value and 2.3% at cost. As of December 31, 2022, investments on non-accrual status comprised 0.6% of our total Investment Portfolio at fair value and 3.7% at cost.
Current wording
As of December 31, 2024, investments on non-accrual status comprised 0.9% of our total Investment Portfolio at fair value and 3.5% at cost. As of December 31, 2023, investments on non-accrual status comprised 0.6% of our total Investment Portfolio at fair value and 2.3% at cost.
Previous wording
Total investment income for the year ended December 31, 2023 was $500.4 million, a 33% increase from the $376.9 million of total investment income for the prior year. The following table provides a summary of the changes in the comparable period activity.
Current wording
Total investment income for the year ended December 31, 2024 was $541.0 million, an 8% increase from the $500.4 million of total investment income for the prior year. The following table provides a summary of the changes in the comparable period activity.
Previous wording
(a)The increase in interest income was primarily due to (i) an increase in interest rates on floating rate Investment Portfolio debt investments primarily resulting from increases in benchmark index rates and (ii) higher average levels of income producing Investment Portfolio debt investments.
Current wording
(a)The increase in interest income was primarily due to (i) higher average levels of income producing Investment Portfolio debt investments and (ii) increases in weighted-average interest rates on floating rate Investment Portfolio debt investments primarily resulting from increases in market spreads, partially offset by an increase in investments on non-accrual status.
Previous wording
(b)The increase in dividend income from Investment Portfolio equity investments was primarily a result of (i) growth in dividend income from certain of our LMM portfolio companies resulting from the continued strong operating results, financial condition and liquidity positions of those portfolio companies and (ii) a $2.0 million increase in dividend income from the External Investment Manager. The increase includes a $10.0 million increase related to dividend income considered to be less consistent or non-recurring.
Current wording
(b)The increase in dividend income from Investment Portfolio equity investments was primarily a result of an increase of $3.8 million in dividend income from our LMM portfolio companies, partially offset by (i) a decrease of $0.8 million in dividend income from our Other Portfolio investments and (ii) a decrease of $0.6 million in dividend income from our Private Loan portfolio companies.
Previous wording
(c)The increase in total investment income includes a net increase of $12.8 million in the impact of certain income considered less consistent or non-recurring, including (i) a $10.0 million increase in dividend income and (ii) a $2.8 million increase in accelerated prepayments, repricing and other activity related to certain Investment Portfolio debt investments.
Current wording
(d)The increase in total investment income includes a net reduction of $3.4 million in certain income considered less consistent or non-recurring, including (i) a $6.2 million decrease in such dividend income and (ii) a $0.4 million decrease in accelerated interest income from accelerated prepayment, repricing and other activity related to certain Investment Portfolio debt investments, partially offset by a $3.3 million increase in such fee income.
Previous wording
Total expenses for the year ended December 31, 2023 were $161.4 million, a 23% increase from $131.5 million in the prior year. The following table provides a summary of the changes in the comparable period activity.
Current wording
Total expenses for the year ended December 31, 2024 were $186.0 million, a 15% increase from $161.4 million in the prior year. The following table provides a summary of the changes in the comparable period activity.
Previous wording
(a)The increase in cash compensation expense was primarily related to increased incentive compensation accruals, increased base compensation rates and increased headcount to support our growing Investment Portfolio and asset management activities.
Current wording
(a)The increase in cash compensation was primarily attributable to (i) increased base compensation rates and (ii) increased headcount to support our growing investment portfolio and asset management activities.
Previous wording
(c)The increase in interest expense was primarily related to an increased weighted average interest rate on our debt obligations resulting from (i) increased average interest rates on our floating rate multi-year revolving credit facility (the “Corporate Facility”) and special purpose vehicle revolving credit facility (the “SPV Facility” and, together with the Corporate Facility, the “Credit Facilities”) due to increases in benchmark index rates, (ii) the addition of the SPV Facility and the December 2025 Notes at higher contractual interest rates than debt obligations repaid in the fourth quarter of 2022 and (iii) increased average outstanding borrowings.
Current wording
(c)The increase in interest expense was primarily related to (i) an increased weighted-average interest rate on our debt obligations resulting primarily from the issuance of the March 2029 Notes and the June 2027 Notes and the repayment at maturity of the May 2024 Notes (each as defined in the Liquidity and Capital Resources section below) and (ii) an increase in average borrowings outstanding of unsecured notes used to fund a portion of the growth of our Investment Portfolio, partially offset by a decrease in average borrowing outstanding on our floating rate multi-year revolving credit facility (the “Corporate Facility”) and special purpose vehicle revolving credit facility (the “SPV Facility” and, together with the Corporate Facility, the “Credit Facilities”).
Previous wording
(d)The increase in share-based compensation was principally attributable to incentive based grants related to incentive compensation awards for 2022 and the accelerated vesting of certain prior incentive grants.
Current wording
(d)The increase in share-based compensation expense was primarily attributable to an increase in incentive based grants related to incentive compensation awards issued in April 2024.
Previous wording
(e)The increase in expenses allocated to the External Investment Manager was primarily related to (i) increased overall operating costs at Main Street, (ii) an increase in assets under management and (iii) the positive operating results from the assets managed for clients of the External Investment Manager.
Current wording
(e)The increase in expenses allocated to the External Investment Manager was primarily related to (i) increased overall operating costs at Main Street, (ii) the positive operating results from the assets managed for clients of the External Investment Manager and (iii) an increase in assets under management.
Previous wording
Net investment income for the year ended December 31, 2023 increased 38% to $339.0 million, or $4.14 per share, compared to net investment income of $245.3 million, or $3.29 per share, in 2022. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by higher operating expenses, both as discussed above. The increase in net investment income per share reflects these changes and the impact of the increase in weighted-average shares outstanding for the year ended December 31, 2023, primarily due to shares issued since the beginning of the prior year through our (i) at-the-market equity program (the “ATM Program”) and public offering in August 2022, (ii) dividend reinvestment plan and (iii) equity incentive plans. The increase in net investment income on a per share basis includes (i) a $0.15 per share increase in investment income considered less consistent or non-recurring, partially offset by an increase in deferred compensation expense of $0.03 per share resulting from the comparable period difference in the fair value of deferred compensation plan assets and corresponding liabilities, both of which are discussed above.
Current wording
Net investment income for the year ended December 31, 2024 increased 5% to $355.1 million, or $4.09 per share, compared to net investment income of $339.0 million, or $4.14 per share, in 2023. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by higher operating expenses, both as discussed above. Net investment income per share reflects these changes and the impact of the increase in weighted-average shares outstanding for the year ended December 31, 2024, primarily due to shares issued through our (i) at-the-market offering program (the “ATM Program”), (ii) dividend reinvestment plan and (iii) equity incentive plans. The decrease in net investment income on a per share basis includes a $0.05 per share decrease in investment income considered less consistent or non-recurring in nature.
Previous wording
Distributable net investment income for the year ended December 31, 2023 increased 39% to $356.8 million, or $4.36 per share, compared with $257.5 million, or $3.46 per share, in 2022. The increase in distributable net investment income was primarily due to the increased level of total investment income, partially offset by higher operating expenses, excluding the impact of share-based compensation expense and deferred compensation expense (benefit), both as discussed above. The increase in distributable net investment income per share also reflects the impact of the increase in weighted-average shares outstanding for the year ended December 31, 2023 as discussed above. The increase in distributable net investment income on a per share basis includes a $0.15 per share increase in investment income considered less consistent or non-recurring, as discussed above.
Current wording
Distributable net investment income for the year ended December 31, 2024 increased 5% to $375.0 million, or $4.32 per share, compared to $356.8 million, or $4.36 per share, in 2023. The increase in distributable net investment income was primarily due to the increased level of total investment income, partially offset by higher operating expenses, excluding the impact of share-based compensation expense, as discussed above, and deferred compensation expense. The decrease in distributable net investment income per share reflects the impact of the increase in weighted-average shares outstanding for the year ended December 31, 2024, as discussed above. The decrease in distributable net investment income on a per share basis includes a $0.05 per share decrease in investment income considered less consistent or non-recurring in nature.
Previous wording
Net Realized Gain (Loss) from Investments
Current wording
Net Realized Gain (Loss)
Previous wording
The following table provides a summary of the primary components of the total net realized loss on investments of $5.2 million for the year ended December 31, 2022.
Current wording
The following table provides a summary of the primary components of the total net realized gain on investments of $46.0 million for the year ended December 31, 2024.
Previous wording
(a)Other activity includes realized gains and losses from transactions involving 17 portfolio companies which are not considered to be significant individually or in the aggregate.
Current wording
(a)Other activity includes realized gains and losses from transactions involving 40 portfolio companies which are not considered to be significant individually or in the aggregate.
Previous wording
The following table provides a summary of the total net unrealized appreciation of $24.8 million for the year ended December 31, 2022.
Current wording
The following table provides a summary of the total net unrealized appreciation of $137.7 million for the year ended December 31, 2024.
Previous wording
(a)Includes unrealized appreciation on 38 LMM portfolio investments and unrealized depreciation on 28 LMM portfolio investments.
Current wording
(a)Includes unrealized appreciation on 44 LMM portfolio investments and unrealized depreciation on 32 LMM portfolio investments.
Previous wording
(b)Includes (i) $17.5 million of unrealized depreciation relating to the External Investment Manager and (ii) $1.7 million of net unrealized depreciation relating to the assets of the deferred compensation plan, partially offset by $7.2 million of net unrealized appreciation relating to the Other Portfolio.
Current wording
(b)Other primarily consists of (i) $71.9 million of unrealized appreciation relating to the External Investment Manager, (ii) $4.4 million of net unrealized appreciation relating to the Other Portfolio and (iii) $1.1 million of net unrealized appreciation relating to the assets of the deferred compensation plan.
Previous wording
(b)Includes (i) $51.1 million of unrealized appreciation relating to the External Investment Manager, (ii) $4.1 million of net unrealized appreciation relating to the Other Portfolio and (iii) $1.2 million of net unrealized appreciation relating to the assets of the deferred compensation plan.
Current wording
(b)Other includes (i) $51.1 million of unrealized appreciation relating to the External Investment Manager, (ii) $4.1 million of net unrealized appreciation relating to the Other Portfolio and (iii) $1.2 million of net unrealized appreciation relating to the assets of the deferred compensation plan.
Previous wording
The income tax provision for the year ended December 31, 2023 of $22.6 million principally consisted of (i) a deferred tax provision of $16.0 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss and interest expense carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences and (ii) a current tax provision of $6.6 million related to a $3.4 million provision for current U.S. federal and state income taxes and a $3.2 million provision for excise tax on our estimated undistributed taxable income.
Current wording
The income tax provision for the year ended December 31, 2024 of $30.6 million principally consisted of (i) a deferred tax provision of $22.3 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss and interest expense carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences and (ii) a current tax provision of $8.4 million related to a $5.9 million provision for excise tax on our estimated undistributed taxable income and a $2.5 million provision for current U.S. federal and state income taxes.
Previous wording
The income tax provision for the year ended December 31, 2022 of $23.3 million principally consisted of (i) a deferred tax provision of $18.1 million and (ii) a current tax provision of $5.2 million primarily related to a $2.8 million provision for excise tax on our estimated undistributed taxable income and a $2.4 million provision for current U.S. federal and state income taxes.
Current wording
The income tax provision for the year ended December 31, 2023 of $22.6 million principally consisted of (i) a deferred tax provision of $16.0 million and (ii) a current tax provision of $6.6 million primarily related to a $3.4 million provision for current U.S. federal and state income taxes and a $3.2 million provision for excise tax on our estimated undistributed taxable income.
Previous wording
The net increase in net assets resulting from operations for the year ended December 31, 2023 was $428.4 million, or $5.23 per share, compared with $241.6 million, or $3.24 per share, during the year ended December 31, 2022. The tables above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Current wording
The net increase in net assets resulting from operations for the year ended December 31, 2024 was $508.1 million, or $5.85 per share, compared to $428.4 million, or $5.23 per share, during the year ended December 31, 2023. The tables above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Previous wording
For the year ended December 31, 2022, we realized a net increase in cash and cash equivalents of $16.5 million, which is the net result of $246.9 million of cash used in our operating activities and $263.4 million of cash provided by our financing activities.
Current wording
For the year ended December 31, 2024, we realized a net increase in cash and cash equivalents of $18.2 million, which is the net result of $87.1 million of cash used in our operating activities and $105.3 million of cash provided by our financing activities.
Previous wording
The $246.9 million of cash used in our operating activities resulted primarily from (i) cash uses totaling $1,152.6 million for the funding of new and follow-on portfolio company investments and settlement of accruals for portfolio investments existing as of December 31, 2021 and (ii) cash payments of $14.2 million related to changes in other assets and liabilities, partially offset by (i) cash proceeds totaling $680.0 million from the sales and repayments of debt investments and sales of and return on capital from equity investments and (ii) cash flows that we generated from the operating profits earned totaling $239.9 million, which is our distributable net investment income, excluding the non-cash effects of the accretion of unearned income, payment-in-kind interest income, cumulative dividends and the amortization expense for deferred financing costs.
Current wording
The $87.1 million of cash used in our operating activities resulted primarily from cash uses totaling $1.576 billion for the funding of new and follow-on portfolio investments, partially offset by (i) cash proceeds totaling $1.157 billion from the sales and repayments of debt investments and sales and return of capital from equity investments, (ii) cash flows that we generated from the operating profits earned totaling $332.8 million, which is our distributable net investment income, excluding the non-cash effects of the accretion of unearned income, payment-in-kind interest income, cumulative dividends and the amortization expense for deferred financing costs and (iii) $8.5 million in cash proceeds related to other assets and liabilities.
Previous wording
The $263.4 million of cash provided by our financing activities principally consisted of (i) $287.0 million in net proceeds from the Credit Facilities, (ii) $265.6 million in net cash proceeds from equity offerings from our ATM Program, equity offering in August 2022 and direct stock purchase plan and (iii) $100.0 million in proceeds from the initial issuance of the December 2025 Notes, partially offset by (i) $194.2 million in cash dividends paid to stockholders, (ii) $185.0 million for the redemption of the 4.50% unsecured notes (the “December 2022 Notes”), (iii) $5.1 million for payments of deferred debt issuance costs, SBIC debenture fees and other costs, net of debt issuance premiums and (iv) $4.9 million for purchases of vested restricted stock from employees to satisfy their tax withholding requirements upon the vesting of such restricted stock.
Current wording
The $105.3 million of cash provided by our financing activities principally consisted of (i) $400.0 million in cash proceeds from the issuance of the June 2027 Notes, (ii) $350.0 million in cash proceeds from the issuance of the March 2029 Notes, (iii) $122.6 million in net cash proceeds from equity offerings from our ATM Program, (iv) $63.8 million in proceeds from the issuance of SBIC debentures and (v) $24.0 million in net borrowings from our Credit Facilities, partially offset by (i) $450.0 million on the repayment of the May 2024 Notes, (ii) $320.4 million in dividends paid to our stockholders, (iii) $63.8 million in repayments of SBIC debentures, (iv) $13.6 million in debt issuance costs and (v) $7.3 million in purchases of vested stock for employee payroll tax withholdings.
Previous wording
As of December 31, 2023, we had $60.1 million in cash and cash equivalents and $1,065.0 million of unused capacity under the Credit Facilities which we maintain to support our investment and operating activities. As of December 31, 2023, our NAV totaled $2,477.4 million, or $29.20 per share.
Current wording
As of December 31, 2024, we had $78.3 million in cash and cash equivalents and $1.326 billion of unused capacity under our Credit Facilities which we maintain to support our investment and operating activities. As of December 31, 2024, our NAV totaled $2.798 billion, or $31.65 per share.
Previous wording
As of December 31, 2023, we had $200.0 million outstanding and $795.0 million of undrawn commitments under the Corporate Facility, and $160.0 million outstanding and $270.0 million of undrawn commitments under our SPV Facility, both of which we estimated approximated fair value. Availability under the Credit Facilities is subject to certain leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for similar credit facilities. For further information on our Credit Facilities, including key terms and financial covenants, refer to Note E — Debt included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Current wording
As of December 31, 2024, we had $208.0 million outstanding and $902.0 million of undrawn commitments under our Corporate Facility, and $176.0 million outstanding and $424.0 million of undrawn commitments under our SPV Facility, both of which we estimated approximated fair value. Availability under our Credit Facilities is subject to certain leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for similar credit facilities, as described below.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For further information on our Credit Facilities, including key terms and financial covenants, refer to Note E — Debt included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K.