Financial Data and Key Metrics Changes - Net investment income for Q3 was $0.32 per share, exceeding the $0.30 dividend per share paid on September 30 [8] - Net asset value decreased by $0.22 or 1.6% to $13.20 per share, despite rising interest rates [9][52] - Total investment income increased to $78.1 million, a $5.3 million increase from the prior quarter [55] - Quarterly net investment income was $32.5 million, resulting in a coverage of the dividend [57] Business Line Data and Key Metrics Changes - The portfolio had over $3.2 billion in investments at fair value, with total assets of $3.3 billion and total liabilities of $2 billion [51] - The average yield of the portfolio increased from 10.3% in Q2 to 11.3% in Q3, benefiting from the rising LIBOR curve [45] - The company originated almost $125 million in Q3 in core defensive growth verticals, including software and business services [41] Market Data and Key Metrics Changes - The overall investing environment remains challenging due to higher interest rates and inflation, but corporate direct lending is resilient [25] - The direct lending market continues to gain share from syndicated loans and high-yield bonds, offering price clarity and capital certainty [28] - The weighted average EBITDA of borrowers has increased to over $130 million, indicating stronger financial health [48] Company Strategy and Development Direction - The company focuses on lending to defensive growth businesses, which are less sensitive to economic cycles [17] - The strategy includes avoiding sectors with high volatility and cyclicality, concentrating on acyclical growth sectors [17][19] - The management plans to maintain dividend protection through waiving incentive fees if necessary [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about future earnings potential due to the rise in interest rates, which is expected to positively impact quarterly earnings [11][29] - The company remains focused on maintaining high credit quality and is confident in the resilience of its portfolio amid rising rates [75] - Management highlighted the importance of the growth profile of underlying portfolio companies, which provides a cushion against rising rates [73] Other Important Information - The company has never experienced a bankruptcy or missed an interest payment since its inception [10] - The management team has been strengthened with key promotions, including John Kline becoming CEO effective January 1, 2023 [14] Q&A Session Summary Question: Future dividend coverage and strategy - The company intends to operate with a material coverage to the dividend, especially with rising rates [65] Question: Changes in terms and conditions for new originations - The company has not seen significant changes in interest rate floors for new transactions despite higher spreads [66] Question: Impact of rising rates on interest coverage - Management believes the portfolio can maintain adequate interest coverage even with rising rates, citing growth in underlying companies [75] Question: Current trends in portfolio growth - The company reports strong top-line growth trends, with some margin pressure but overall positive performance [80] Question: Software multiples and their impact - The company noted that while public software multiples have compressed, their lending positions remain secure with favorable loan-to-value ratios [84]

| --- | --- | |-------|-------| | | | | | | Important Notices and Safe Harbor Statement This presentation contains forward looking statements, which are not guarantees of future performance, conditions or results, and involve substantial risks and uncertainties, including the impact of COVID-19, the current conflict between Russia and Ukraine, and related changes in base interest rates and significant volatility on our business, portfolio companies, our industry, and the global economy. All forward-looking ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for New Mountain Finance Corporation as of September 30, 2022, and for the three and nine months then ended. It includes the Consolidated Statements of Assets and Liabilities, Operations, Changes in Net Assets, Cash Flows, a detailed Consolidated Schedule of Investments, and the accompanying Notes to the Financial Statements [Consolidated Statements of Assets and Liabilities](index=3&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of September 30, 2022, total assets were approximately $3.35 billion, a slight increase from $3.30 billion at year-end 2021. Total net assets increased marginally to $1.345 billion from $1.343 billion. However, Net Asset Value (NAV) per share decreased to $13.20 from $13.49 at the end of 2021, primarily due to an increase in shares outstanding Consolidated Statements of Assets and Liabilities Highlights (in thousands, except per share data) | Metric | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total investments at fair value** | **$3,234,433** | **$3,174,364** | | Total assets | $3,347,993 | $3,295,812 | | Net borrowings | $1,964,731 | $1,907,188 | | Total liabilities | $2,002,895 | $1,953,200 | | **Total net assets** | **$1,345,098** | **$1,342,612** | | Shares outstanding | 100,937,026 | 97,907,441 | | **Net asset value per share** | **$13.20** | **$13.49** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the third quarter of 2022, total investment income rose to $78.4 million from $68.5 million year-over-year, driven by higher interest income. However, a significant net unrealized depreciation on investments led to a net increase in net assets of only $7.7 million, compared to $21.8 million in Q3 2021. Diluted EPS for the quarter was $0.08, down from $0.22 in the prior-year period Consolidated Statements of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total investment income** | **$78,449** | **$68,474** | **$220,522** | **$202,743** | | Net expenses | $45,653 | $37,837 | $126,106 | $113,899 | | **Net investment income** | **$32,809** | **$30,645** | **$94,421** | **$88,829** | | Net realized and unrealized (losses) gains | ($25,295) | ($7,740) | ($34,720) | $65,109 | | **Net increase in net assets (NMFC)** | **$7,705** | **$21,847** | **$59,851** | **$149,149** | | Basic earnings per share | $0.08 | $0.23 | $0.60 | $1.54 | | Diluted earnings per share | $0.08 | $0.22 | $0.59 | $1.42 | [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) For the nine months ended September 30, 2022, net assets increased by $10.7 million, resulting from a $59.9 million increase from operations offset by a $49.1 million net decrease from capital transactions, primarily distributions to stockholders, contrasting with a $63.0 million increase in 2021 Changes in Net Assets (Nine Months Ended, in thousands) | Description | September 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | Net assets at beginning of period | $1,321,245 | $1,221,875 | | Net increase in net assets from operations | $59,851 | $149,149 | | Net proceeds from shares sold | $40,006 | $0 | | Distributions declared to stockholders | ($90,085) | ($87,168) | | **Net assets at end of period** | **$1,331,955** | **$1,284,905** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2022, net cash used in operating activities was $8.8 million, a significant shift from the $84.7 million provided in the prior-year period, primarily due to changes in unrealized depreciation and investment activities, leading to an overall $9.2 million decrease in cash and cash equivalents Consolidated Statements of Cash Flows (Nine Months Ended, in thousands) | Cash Flow Activity | September 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($8,849) | $84,690 | | Net cash provided by (used in) financing activities | $45 | ($80,405) | | **Net (decrease) increase in cash and cash equivalents** | **($8,804)** | **$4,285** | | Cash and cash equivalents at beginning of period | $58,077 | $78,966 | | **Cash and cash equivalents at end of period** | **$48,919** | **$83,357** | [Consolidated Schedule of Investments](index=7&type=section&id=Consolidated%20Schedule%20of%20Investments) As of September 30, 2022, the company's investment portfolio had a total fair value of $3.23 billion, heavily weighted towards floating-rate, first-lien debt, with top industry concentrations in Software (27.4%), Business Services (15.3%), and Healthcare Services (14.9%), diversified across 107 companies - Total investments at fair value were **$3,234.4 million** as of September 30, 2022, with a cost basis of $3,258.9 million[75](index=75&type=chunk) Portfolio Composition by Investment Type (September 30, 2022) | Investment Type | Percent of Total Investments at Fair Value | | :--- | :--- | | First lien | 54.73% | | Second lien | 17.73% | | Subordinated | 2.28% | | Equity and other | 25.26% | Portfolio Composition by Industry Type (Top 5) (September 30, 2022) | Industry Type | Percent of Total Investments at Fair Value | | :--- | :--- | | Software | 27.38% | | Business Services | 15.30% | | Healthcare Services | 14.90% | | Investment Funds | 7.80% | | Education | 7.66% | Portfolio Composition by Interest Rate Type (September 30, 2022) | Interest Rate Type | Percent of Total Investments at Fair Value | | :--- | :--- | | Floating rates | 87.64% | | Fixed rates | 12.36% | [Notes to the Consolidated Financial Statements](index=60&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies and methodologies used to prepare the financial statements, covering business purpose, investment valuation, specific investments, borrowings, related-party transactions, commitments, and subsequent events - The company operates as a Business Development Company (BDC) and has elected to be treated as a Regulated Investment Company (RIC) for tax purposes[160](index=160&type=chunk) - The Board of Directors is ultimately responsible for determining the fair value of portfolio investments quarterly, using a three-level hierarchy (Level I, II, III) for inputs[169](index=169&type=chunk) - As of September 30, 2022, the company had unfunded commitments of **$97.9 million** on revolving credit facilities and **$156.5 million** in other future funding commitments[217](index=217&type=chunk)[364](index=364&type=chunk) - Subsequent to the quarter end, the company issued **$200 million** of 7.50% convertible notes due 2025, launched a tender offer for its existing 2018 convertible notes, and announced a CEO transition effective January 1, 2023[387](index=387&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=109&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results of operations, highlighting increased total investment income driven by higher interest rates and larger invested balances, portfolio performance including a detailed risk rating system, liquidity, capital resources, borrowing facilities, and the impact of COVID-19 and rising interest rates - The company's investment objective is to generate current income and capital appreciation by sourcing and originating debt securities, with a primary focus on defensive growth companies[404](index=404&type=chunk)[405](index=405&type=chunk) - As of September 30, 2022, the portfolio's weighted average yield to maturity at cost for income-producing investments was approximately **11.3%**[406](index=406&type=chunk) - The company utilizes a four-tier risk rating system (Red, Orange, Yellow, Green). As of September 30, 2022, **93.0%** of the portfolio by fair value was rated Green, indicating performance is in-line with or above expectations[461](index=461&type=chunk) Portfolio Risk Rating Summary (As of September 30, 2022) | Risk Rating | Cost (in millions) | Percent of Cost | Fair Value (in millions) | Percent of Fair Value | | :--- | :--- | :--- | :--- | :--- | | Red | $95.6 | 2.9% | $30.7 | 0.9% | | Orange | $46.0 | 1.4% | $32.9 | 1.0% | | Yellow | $195.1 | 5.9% | $166.5 | 5.1% | | Green | $2,952.3 | 89.8% | $3,023.7 | 93.0% | [Quantitative and Qualitative Disclosures About Market Risk](index=132&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is subject to market risk, primarily from interest rate fluctuations, as its net investment income is affected by the spread between the rates on its investments and borrowings. As of September 30, 2022, approximately 85.6% of its investments at fair value were floating-rate. A sensitivity analysis indicates that a 100 basis point increase in interest rates would increase net interest income by an estimated 6.31% Interest Rate Sensitivity Analysis | Change in Interest Rates | Estimated Percentage Change in Interest Income Net of Interest Expense | | :--- | :--- | | -25 Basis Points | (1.58)% | | +100 Basis Points | 6.31% | | +200 Basis Points | 12.68% | | +300 Basis Points | 19.04% | [Controls and Procedures](index=133&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of September 30, 2022, and concluded they were effective, with no material changes to internal controls over financial reporting identified during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[558](index=558&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[559](index=559&type=chunk) [PART II. OTHER INFORMATION](index=134&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=134&type=section&id=Item%201.%20Legal%20Proceedings) As of September 30, 2022, the company and its subsidiaries are not subject to any material pending legal proceedings outside the normal course of business - The Company is not currently subject to any material pending legal proceedings[563](index=563&type=chunk) [Risk Factors](index=134&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021, were reported for the nine months ended September 30, 2022[564](index=564&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=135&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of equity securities during the third quarter of 2022, and no shares were repurchased under its stock repurchase program during the nine months ended September 30, 2022 - The company did not engage in unregistered sales of its equity securities during the three months ended September 30, 2022[566](index=566&type=chunk) - The company's stock repurchase program, authorized for up to **$50 million**, was extended until December 31, 2022. No shares were repurchased under this program during the nine months ended September 30, 2022[569](index=569&type=chunk) [Defaults Upon Senior Securities](index=135&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - None[570](index=570&type=chunk) [Mine Safety Disclosures](index=135&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[571](index=571&type=chunk) [Other Information](index=135&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None[572](index=572&type=chunk) [Exhibits](index=136&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report, including certifications from the CEO and CFO as required by the Sarbanes-Oxley Act

NEW MOUNTAIN FINANCE | --- | --- | |----------------------------------------------|-------| | | | | | | | Earnings Presentation Q2 2022 August 9, 2022 | | Important Notices and Safe Harbor Statement This presentation contains forward looking statements, which are not guarantees of future performance, conditions or results, and involve substantial risks and uncertainties, including the impact of COVID-19, the current conflict between Russia and Ukraine, and related changes in base interest rates and signific ...

New Mountain Finance (NASDAQ:NMFC) Q2 2022 Earnings Conference Call August 9, 2022 10:00 AM ET Corporate Participants Robert Hamwee - Chief Executive Officer Shiraz Kajee - Chief Financial Officer Steve Klinsky - Chairman & Chief Executive Officer, New Mountain Capital John Kline - President Laura Holson - Chief Operating Officer Conference Call Participants Jordan Wathen - Wells Fargo Ryan Lynch - KBW Operator Good morning. And welcome to today's New Mountain Finance Corporation Second Quarter 2022 Earning ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2022 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Commission File Number | Exact name of registrant as specified in its charter, address of principal executive offices, telephone numbers and states or other jurisdictions of incorporation or organizatio ...

Financial Data and Key Metrics Changes - Net investment income for Q1 2022 was $0.30 per share, fully covering the dividend of $0.30 per share paid on March 31 [7] - Net asset value increased to $13.56 per share, a $0.07 increase from the previous quarter [8] - Total investment income was $68.6 million, a slight decrease from the prior quarter, while total net expenses were approximately $39 million, also a slight increase [58] Business Line Data and Key Metrics Changes - The first quarter represented a slower origination quarter due to seasonal factors and market volatility, with $154 million of gross originations and $74 million of repayments [44] - The average yield of the portfolio increased from 9.1% in Q4 to 9.8% in Q1, largely due to the rising LIBOR curve [47] Market Data and Key Metrics Changes - The market has experienced sustained volatility due to rising interest rates, inflation concerns, and geopolitical instability, but corporate direct lending has remained resilient [29] - Loan-to-value ratios in core industry verticals are less than 40%, with many under 30% [30] Company Strategy and Development Direction - The company focuses on lending to defensive growth businesses in sectors such as enterprise software, tech-enabled business services, and healthcare services, which are expected to perform well in challenging macro environments [10] - The company has decided to reduce exposure to its net lease portfolio to reinvest proceeds into its core strategy of floating rate defensive growth-oriented private credit [42][96] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for NMFC, emphasizing the focus on lending to stable and valuable businesses [66] - The company anticipates that rising interest rates could materially improve earnings, with potential increases in earnings per share if LIBOR rates rise [33] Other Important Information - The company has a dividend protection program in place, which could provide additional coverage if earnings fall below $0.30 per share [13] - The portfolio had approximately $3.3 billion in investments at fair value, with total assets of $3.4 billion and total liabilities of $2 billion [54] Q&A Session Summary Question: Impact of potential base rate increases on earnings - Management clarified that the earnings sensitivity is primarily based on short-term LIBOR rates, not the overall yield curve [70] Question: Potential for special dividends from real estate portfolio sales - Management indicated that the decision on special dividends will depend on the performance of the rest of the year and any potential losses to offset [78] Question: Interest coverage and impact of rate increases on borrowers - The weighted average interest coverage is above 2.5x, and management believes borrowers are well-positioned to handle rate increases [81] Question: Managing leverage amidst repayment activity - Management stated that they have sufficient deal flow to maintain their leverage profile and are committed to managing within established limits [84] Question: Feedback on portfolio performance amid inflation and labor pressures - Management noted that many companies in the portfolio have shown resilience and pricing power in the face of inflationary pressures [108]

N M F NEW MOUNTAIN FINANCE CORPORATION Q1 2022 Earnings Presentation May 10, 2022 Important Notices and Safe Harbor Statement This presentation contains forward looking statements, which are not guarantees of future performance, conditions or results, and involve substantial risks and uncertainties, including the impact of COVID-19, the current conflict between Russia and Ukraine, and related changes in base interest rates and significant volatility on our business, portfolio companies, our industry, and th ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for New Mountain Finance Corporation, detailing financial position, operations, cash flows, and investment portfolio as of March 31, 2022 [Consolidated Statements of Assets and Liabilities](index=3&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to **$3.36 billion** as of March 31, 2022, driven by investment fair value, leading to a rise in total net assets to **$1.37 billion** and NAV per share to **$13.56** Consolidated Assets and Liabilities (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Investments at Fair Value** | $3,256,965 | $3,174,364 | | **Total Assets** | $3,361,843 | $3,295,812 | | **Net Borrowings** | $1,942,518 | $1,907,188 | | **Total Liabilities** | $1,994,003 | $1,953,200 | | **Total Net Assets** | $1,367,840 | $1,342,612 | | **Net Asset Value Per Share** | $13.56 | $13.49 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Total investment income slightly increased to **$69.0 million** for Q1 2022, resulting in a net increase in net assets from operations of **$37.0 million**, or **$0.37** per basic share, primarily due to lower net realized and unrealized gains Three Months Ended March 31 (in thousands, except per share data) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Total Investment Income** | $68,963 | $67,708 | | **Net Expenses** | $38,960 | $38,713 | | **Net Investment Income** | $29,908 | $28,994 | | **Net Realized and Unrealized Gains** | $7,139 | $22,861 | | **Net Increase in Net Assets from Operations** | $37,047 | $51,855 | | **Basic Earnings Per Share** | $0.37 | $0.53 | | **Diluted Earnings Per Share** | $0.34 | $0.49 | [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased by **$28.1 million** for the three months ended March 31, 2022, driven by operations and partially offset by capital transactions including distributions and share sales - Net assets increased by **$28.1 million** in Q1 2022, compared to a **$22.4 million** increase in Q1 2021[13](index=13&type=chunk) - Capital transactions resulted in a net decrease of **$8.1 million**, primarily due to distributions of **$29.6 million**, partially offset by **$20.5 million** in net proceeds from shares sold and **$1.1 million** from distribution reinvestments[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$45.2 million** for Q1 2022, a shift from prior year, partially offset by **$22.5 million** provided by financing activities, resulting in a **$22.6 million** net decrease in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Net Cash (Used in) Provided by Operating Activities** | $(45,170) | $44,289 | | **Net Cash Provided by (Used in) Financing Activities** | $22,547 | $(75,956) | | **Net Decrease in Cash and Cash Equivalents** | $(22,623) | $(31,667) | | **Cash and Cash Equivalents at End of Period** | $35,376 | $47,299 | [Consolidated Schedule of Investments](index=7&type=section&id=Consolidated%20Schedule%20of%20Investments) The investment portfolio, valued at **$3.26 billion** across 107 companies, is primarily composed of first and second lien debt, with significant concentrations in Software, Business Services, and Healthcare Services Portfolio Composition by Investment Type (March 31, 2022) | Investment Type | Percent of Total Investments at Fair Value | | :--- | :--- | | First lien | 54.10% | | Second lien | 18.62% | | Subordinated | 1.68% | | Equity and other | 25.60% | | **Total** | **100.00%** | Portfolio Composition by Industry (March 31, 2022) | Industry Type | Percent of Total Investments at Fair Value | | :--- | :--- | | Software | 25.14% | | Business Services | 16.28% | | Healthcare Services | 15.78% | | Education | 8.12% | | Investment Funds | 7.75% | | **Total** | **100.00%** | - The total fair value of investments was **$3.257 billion** as of March 31, 2022, up from **$3.174 billion** as of December 31, 2021[9](index=9&type=chunk)[70](index=70&type=chunk) [Notes to the Consolidated Financial Statements](index=57&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail accounting policies, investment portfolio, fair value measurements, debt facilities, and related-party agreements, including valuation methodology for Level III assets and investment management fee waivers - The company has elected to be regulated as a Business Development Company (BDC) and treated as a Regulated Investment Company (RIC) for tax purposes[152](index=152&type=chunk) - As of March 31, 2022, investments with a fair value of **$3.05 billion** (out of **$3.26 billion** total) were classified as Level III, indicating reliance on unobservable inputs for valuation[254](index=254&type=chunk) - The Investment Adviser has agreed to waive a portion of its base management fee to target a reduced rate of **1.25%** on gross assets through the end of 2023, amounting to approximately **$1.1 million** for Q1 2022[271](index=271&type=chunk) - The company's asset coverage ratio was **181.3%** as of March 31, 2022, above the regulatory minimum of **150%**[290](index=290&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=101&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results, highlighting increased investment income, portfolio composition focused on defensive growth, joint venture performance, liquidity, and capital resources - As of March 31, 2022, the portfolio had a fair value of approximately **$3.26 billion** in 107 portfolio companies, with a weighted average yield to maturity at cost for income-producing investments of **9.8%**[373](index=373&type=chunk) - As of March 31, 2022, **90.6%** of the portfolio by fair value was rated 'Green', indicating performance in-line with or above expectations[425](index=425&type=chunk) - Total investment income increased by **2%** year-over-year, driven by higher LIBOR rates on larger invested balances and increased dividend income from joint ventures[433](index=433&type=chunk) - The company's asset coverage ratio was **181.3%** as of March 31, 2022, compliant with the **150%** regulatory requirement[438](index=438&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=123&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is subject to interest rate risk, with **86.2%** of investments being floating-rate, and a **100 basis point** interest rate increase estimated to raise net interest income by **4.89%** Interest Rate Sensitivity Analysis | Change in Interest Rates | Estimated Percentage Change in Net Interest Income | | :--- | :--- | | -25 Basis Points | 0.38% | | +100 Basis Points | 4.89% | | +200 Basis Points | 14.70% | | +300 Basis Points | 24.50% | - As of March 31, 2022, approximately **86.21%** of the company's income-producing investments at fair value were floating-rate, while its credit facilities also have floating rates[499](index=499&type=chunk) [Controls and Procedures](index=124&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls over financial reporting identified during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2022[503](index=503&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[504](index=504&type=chunk) [PART II. OTHER INFORMATION](index=125&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=125&type=section&id=Item%201.%20Legal%20Proceedings) As of March 31, 2022, the company was not subject to any material pending legal proceedings outside the normal course of business - The company is not currently subject to any material pending legal proceedings[508](index=508&type=chunk) [Risk Factors](index=125&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the previously disclosed risk factors were reported for the three months ended March 31, 2022 - No material changes to risk factors were reported for the three months ended March 31, 2022[509](index=509&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=126&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of equity securities or repurchase any common stock under its **$50 million** program during Q1 2022 - No unregistered sales of equity securities occurred in Q1 2022[511](index=511&type=chunk) - The company did not repurchase any of its common stock under its **$50 million** Repurchase Program during Q1 2022, which is effective until December 31, 2022[513](index=513&type=chunk) [Defaults Upon Senior Securities](index=126&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - None[514](index=514&type=chunk)

New Mountain Finance (NASDAQ:NMFC) Q4 2021 Earnings Conference Call March 1, 2022 10:00 AM ET Company Participants Rob Hamwee - CEO Steve Klinsky - Chairman John Kline - President Shiraz Kajee - CFO Laura Holson - COO Conference Call Participants Paul Johnson - KBW Bryce Rowe - Hovde Group Operator [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rob Hamwee, CEO. Please go ahead. Rob Hamwee Thank you, and good morning, everyone. And welcome t ...