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Fair Value of Other Securities (Tables)
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3 Months Ended |
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Mar. 31, 2013
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| Fair Value Disclosures [Abstract] |
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| Assets and liabilities measured on a recurring basis |
The following tables provide the fair value measurements of applicable Company assets and liabilities by level within the fair value hierarchy as of March 31, 2013, November 30, 2012 and December 31, 2012. These assets and liabilities are measured on a recurring basis.
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March 31, 2013 |
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Fair Value |
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March 31, 2013 |
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Level 1 |
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Level 2 |
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Level 3 |
Investments: |
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Trading securities |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Other equity securities |
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21,895,854 |
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— |
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— |
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21,895,854 |
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Total Assets |
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$ |
21,895,854 |
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$ |
— |
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$ |
— |
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$ |
21,895,854 |
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November 30, 2012 |
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November 30, 2012 |
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Fair Value |
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Level 1 |
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Level 2 |
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Level 3 |
Assets: |
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Trading securities |
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$ |
55,219,411 |
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$ |
27,480,191 |
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$ |
27,739,220 |
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$ |
— |
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Other equity securities |
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19,866,621 |
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— |
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— |
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19,866,621 |
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Total Assets |
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$ |
75,086,032 |
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$ |
27,480,191 |
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$ |
27,739,220 |
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$ |
19,866,621 |
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December 31, 2012 |
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December 31, 2012 |
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Fair Value |
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Level 1 |
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Level 2 |
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Level 3 |
Assets: |
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Trading securities |
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$ |
4,318,398 |
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$ |
4,318,398 |
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$ |
— |
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$ |
— |
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Other equity securities |
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19,707,126 |
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— |
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— |
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19,707,126 |
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Total Assets |
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$ |
24,025,524 |
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$ |
4,318,398 |
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$ |
— |
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$ |
19,707,126 |
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| The changes for all Level 3 assets measured at fair value on a recurring basis using significant unobservable inputs |
The changes for all Level 3 securities measured at fair value on a recurring basis using significant unobservable inputs for the three-month periods ended March 31, 2013 and February 29, 2012 and for the one-month transition period ended December 31, 2012 are as follows:
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For the Three-Month Periods Ended |
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For the One-Month Transition Period Ended December 31, 2012 |
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March 31, 2013 |
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February 29, 2012 |
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Fair value beginning balance |
$ |
19,707,126 |
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$ |
41,856,730 |
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$ |
19,866,621 |
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Total realized and unrealized gains (losses) included in net income |
2,425,986 |
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6,069,194 |
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(159,495 |
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Return of capital adjustments impacting cost basis of securities |
(237,258 |
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(656,195 |
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— |
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Fair value ending balance |
$ |
21,895,854 |
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$ |
47,269,729 |
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$ |
19,707,126 |
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Changes in unrealized gains (losses), included in net income, relating to securities still held (1) |
$ |
2,425,986 |
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$ |
6,069,194 |
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$ |
(159,495 |
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(1) Located in Net realized and unrealized gain (loss) on other equity securities in the Statements of Income
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| Quantitative table for Valuation Techniques |
The following table summarizes the significant unobservable inputs that the Company uses to value its portfolio investments categorized as Level 3 as of March 31, 2013.
Quantitative Table for Valuation Techniques
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Significant Unobservable Inputs Used To Value Portfolio Investments |
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Unobservable Inputs |
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Range |
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Weighted Average |
Assets at Fair Value |
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Fair Value |
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Valuation Technique |
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Low |
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High |
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Other equity securities, at fair value |
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$ |
21,895,854 |
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Public company historical EBITDA analysis |
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Historical EBITDA Valuation Multiples |
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9.0x |
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12.3x |
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10.7x |
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Public company projected EBITDA analysis |
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Projected EBITDA Valuation Multiples |
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8.8x |
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11.4x |
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10.1x |
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M&A company analysis |
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EV/LTM 2012 EBITDA |
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9.0x |
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10.3x |
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9.7x |
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Discounted cash flow |
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Weighted Average Cost of Capital |
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9.5% |
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14.0% |
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11.8% |
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| Financial instruments financial assets and financial liabilities at fair value |
Line of Credit — The carrying value of the line of credit approximates the fair value due to its short term nature.
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Carrying and Fair Value Amounts |
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Level within fair value hierarchy |
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March 31, 2013 |
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November 30, 2012 |
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December 31, 2012 |
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Carrying
Amount
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Fair Value |
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Carrying
Amount
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Fair Value |
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Carrying Amount |
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Fair Value |
Financial Assets: |
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Cash and cash equivalents |
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Level 1 |
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$ |
18,196,151 |
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$ |
18,196,151 |
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$ |
14,333,456 |
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$ |
14,333,456 |
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$ |
17,680,783 |
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$ |
17,680,783 |
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Escrow receivable |
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Level 2 |
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$ |
698,729 |
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$ |
698,729 |
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$ |
698,729 |
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$ |
698,729 |
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$ |
698,729 |
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$ |
698,729 |
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Financial Liabilities: |
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Long-term debt |
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Level 2 |
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$ |
70,000,000 |
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$ |
70,000,000 |
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$ |
— |
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$ |
— |
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$ |
70,000,000 |
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$ |
70,000,000 |
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Line of credit |
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Level 1 |
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$ |
139,397 |
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$ |
139,397 |
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$ |
120,000 |
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$ |
120,000 |
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$ |
— |
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$ |
— |
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