UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended June 30, 2013

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number	Exact name of registrants as specified in their charters, addresses of principal executive offices, telephone numbers and states or other jurisdictions of incorporation or organization	I.R.S. Employer Identification Number
814-00839	New Mountain Finance Holdings, L.L.C. 787 Seventh Avenue, 48th Floor New York, New York 10019 Telephone: (212) 720-0300 State of Incorporation: Delaware	26-3633318

814-00832	New Mountain Finance Corporation 787 Seventh Avenue, 48th Floor New York, New York 10019 Telephone: (212) 720-0300 State of Incorporation: Delaware	27-2978010

814-00902	New Mountain Finance AIV Holdings Corporation 787 Seventh Avenue, 48th Floor New York, New York 10019 Telephone: (212) 720-0300 State of Incorporation: Delaware	80-0721242

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

New Mountain Finance Holdings, L.L.C.	Yes x No o
New Mountain Finance Corporation	Yes x No o
New Mountain Finance AIV Holdings Corporation	Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

New Mountain Finance Holdings, L.L.C.	Yes o No o
New Mountain Finance Corporation	Yes o No o
New Mountain Finance AIV Holdings Corporation	Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

New Mountain Finance Holdings, L.L.C.	Large accelerated filer o	Accelerated filer x
	Non-accelerated filer o	Smaller reporting company o
New Mountain Finance Corporation	Large accelerated filer o	Accelerated filer x
	Non-accelerated filer o	Smaller reporting company o
New Mountain Finance AIV Holdings Corporation	Large accelerated filer o	Accelerated filer x
	Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

New Mountain Finance Holdings, L.L.C.	Yes o No x
New Mountain Finance Corporation	Yes o No x
New Mountain Finance AIV Holdings Corporation	Yes o No x

Registrants	Description	Shares / Units as of August 7, 2013
New Mountain Finance Holdings, L.L.C.	Common membership units	44,720,486
New Mountain Finance Corporation	Common stock, $0.01 par value	38,148,548
New Mountain Finance AIV Holdings Corporation	Common stock, $0.01 par value	100

This combined Form 10-Q is filed separately by three registrants: New Mountain Finance Holdings, L.L.C., New Mountain Finance Corporation and New Mountain Finance AIV Holdings Corporation (collectively, the “New Mountain Finance Registrant(s)” or the “Registrant(s)”). Information contained herein relating to any New Mountain Finance Registrant is filed by such registrant solely on its own behalf. Each New Mountain Finance Registrant makes no representation as to information relating exclusively to the other registrants.

Table of Contents

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2013

TABLE OF CONTENTS

		PAGE

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	New Mountain Finance Holdings, L.L.C.
	Consolidated Statements of Assets, Liabilities and Members’ Capital as of June 30, 2013 (unaudited) and December 31, 2012	3
	Consolidated Statements of Operations for the three months and six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	4
	Consolidated Statements of Changes in Members’ Capital for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	6
	Consolidated Schedule of Investments as of June 30, 2013 (unaudited)	7
	Consolidated Schedule of Investments as of December 31, 2012	12
	New Mountain Finance Corporation
	Statements of Assets and Liabilities as of June 30, 2013 (unaudited) and December 31, 2012	18
	Statements of Operations for the three months and six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	19
	Statements of Changes in Net Assets for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	20
	Statements of Cash Flows for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	21
	New Mountain Finance AIV Holdings Corporation
	Statements of Assets and Liabilities as of June 30, 2013 (unaudited) and December 31, 2012	22
	Statements of Operations for the three months and six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	23
	Statements of Changes in Net Assets for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	24
	Statements of Cash Flows for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)	25

	Combined Notes to the Consolidated Financial Statements of New Mountain Finance Holdings, L.L.C., the Financial Statements of New Mountain Finance Corporation and the Financial Statements of New Mountain Finance AIV Holdings Corporation	26

	Report of Independent Registered Public Accounting Firm	51

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	71

PART II. OTHER INFORMATION		72

Item 1.	Legal Proceedings	72
Item 1A.	Risk Factors	72
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	72
	Signatures	77

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

New Mountain Finance Holdings, L.L.C.

Consolidated Statements of Assets, Liabilities and Members’ Capital

(in thousands, except units and per unit data)

	June 30, 2013		December 31, 2012
	(unaudited)
Assets
Investments at fair value (cost of $1,045,565 and $976,243, respectively)	$	1,059,001	$	989,820
Cash and cash equivalents	15,946		12,752
Interest and dividend receivable	11,202		6,340
Deferred credit facility costs (net of accumulated amortization of $2,751 and $2,016, respectively)	5,232		5,490
Receivable from affiliate	648		534
Receivable from unsettled securities sold	—		9,962
Other assets	2,394		666
Total assets	$	1,094,423	$	1,025,564
Liabilities
Holdings Credit Facility	209,436		206,938
SLF Credit Facility	207,100		214,262
Payable for unsettled securities purchased	19,600		9,700
Incentive fee payable	5,407		3,390
Capital gains incentive fee payable	5,388		4,407
Management fee payable	3,727		3,222
Interest payable	757		712
Payable to affiliate	46		—
Dividends payable	—		11,192
Other liabilities	2,667		1,802
Total liabilities	454,128		455,625
Members’ Capital	640,295		569,939
Total liabilities and members’ capital	$	1,094,423	$	1,025,564
Outstanding common membership units	44,720,486		40,548,189
Capital per unit	$	14.32	$	14.06

The accompanying notes are an integral part of these consolidated financial statements.

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New Mountain Finance Holdings, L.L.C.

Consolidated Statements of Operations

(in thousands)

(unaudited)

	Three months ended						Six months ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Investment income

Interest income	$	27,321		$	20,124		$	52,364		$	38,725
Dividend income	6,436			—			6,433			—
Other income	1,399			175			1,677			596
Total investment income	35,156			20,299			60,474			39,321

Expenses

Incentive fee	5,407			2,718			8,865			5,169
Capital gains incentive fee	(1,701		)	53			981			964
Total incentive fee	3,706			2,771			9,846			6,133
Management fee	3,727			2,606			7,295			5,120
Interest and other credit facility expenses	3,118			2,401			6,189			4,884
Administrative expenses	939			504			1,698			1,060
Professional fees	563			426			1,135			874
Other general and administrative expenses	396			343			806			639
Total expenses	12,449			9,051			26,969			18,710
Less: expenses waived and reimbursed (See Note 5)	(836		)	(398		)	(1,665		)	(948		)
Net expenses	11,613			8,653			25,304			17,762
Net investment income	23,543			11,646			35,170			21,559

Net realized gains on investments	3,312			11,968			4,356			12,976
Net change in unrealized (depreciation) appreciation of investments	(12,031		)	(12,529		)	(141		)	216
Net increase in members’ capital resulting from operations	$	14,824		$	11,085		$	39,385		$	34,751

The accompanying notes are an integral part of these consolidated financial statements.

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New Mountain Finance Holdings, L.L.C.

Consolidated Statements of Changes in Members’ Capital

(in thousands)

(unaudited)

	Six months ended
	June 30, 2013			June 30, 2012
Increase (decrease) in members’ capital resulting from operations:
Net investment income	$	35,170		$	21,559
Net realized gains on investments	4,356			12,976
Net change in unrealized (depreciation) appreciation of investments	(141		)	216
Net increase in members’ capital resulting from operations	39,385			34,751
Net contributions	57,020			—
Dividends declared	(28,296		)	(27,518		)
Offering costs	(249		)	—
Reinvestment of dividends	2,496			—
Net increase in members’ capital	70,356			7,233
Members’ capital at beginning of period	569,939			420,502
Members’ capital at end of period	$	640,295		$	427,735

The accompanying notes are an integral part of these consolidated financial statements.

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New Mountain Finance Holdings, L.L.C.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six months ended
	June 30, 2013			June 30, 2012
Cash flows from operating activities
Net increase in members’ capital resulting from operations	$	39,385		$	34,751
Adjustments to reconcile net (increase) decrease in capital resulting from operations to net cash (used in) provided by operating activities:
Net realized gains on investments	(4,356		)	(12,976		)
Net change in unrealized depreciation (appreciation) of investments	141			(216		)
Amortization of purchase discount	(1,923		)	(3,006		)
Amortization of deferred credit facility costs	735			511
Non-cash interest income	(2,177		)	(715		)
(Increase) decrease in operating assets:
Purchase of investments	(262,254		)	(233,117		)
Proceeds from sales and paydowns of investments	201,388			203,830
Cash paid for drawn revolvers	—			(7,665		)
Cash repayments on drawn revolvers	—			6,300
Interest and dividend receivable	(4,862		)	261
Receivable from unsettled securities sold	9,962			—
Receivable from affiliate	(114		)	250
Other assets	(715		)	(439		)
Increase (decrease) in operating liabilities:
Payable for unsettled securities purchased	9,900			11,595
Incentive fee payable	2,017			401
Capital gains incentive fee payable	981			964
Management fee payable	505			405
Interest payable	45			(1,176		)
Payable to affiliate	46			—
Other liabilities	166			(61		)
Net cash flows used in operating activities	(11,130		)	(103		)
Cash flows from financing activities
Net contributions	57,020			—
Dividends paid	(36,992		)	(20,643		)
Offering costs paid	(542		)	(101		)
Proceeds from Holdings Credit Facility	171,818			177,618
Repayment of Holdings Credit Facility	(169,320		)	(167,899		)
Proceeds from SLF Credit Facility	3,238			46,943
Repayment of SLF Credit Facility	(10,400		)	(39,759		)
Deferred credit facility costs paid	(498		)	(1,867		)
Net cash flows provided by (used in) financing activities	14,324			(5,708		)
Net increase (decrease) in cash and cash equivalents	3,194			(5,811		)
Cash and cash equivalents at the beginning of the period	12,752			15,319
Cash and cash equivalents at the end of the period	$	15,946		$	9,508
Supplemental disclosure of cash flow information
Interest paid	$	5,256		$	5,324
Non-cash financing activities:
Dividends declared and payable	$	—		$	6,875
Value of members’ capital issued in connection with dividend reinvestment plan	2,496			—
Accrual for offering costs	1,276			86
Accrual for deferred credit facility costs	25			61

The accompanying notes are an integral part of these consolidated financial statements.

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New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments

June 30, 2013
(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate	Maturity Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Members’ Capital

Funded Debt Investments - Bermuda
Stratus Technologies Bermuda Holdings Ltd.(4)**
Stratus Technologies Bermuda Ltd. / Stratus Technologies, Inc.
Information Technology	First lien (2)(7)	12.00%	3/29/2015	$	6,497	$	6,265	$	6,562	1.03	%
Total Funded Debt Investments - Bermuda				$	6,497	$	6,265	$	6,562	1.03	%
Funded Debt Investments - Cayman Islands
Pinnacle Holdco S.à r.l. / Pinnacle (US) Acquisition Co Limited**
Software	Second lien (2)	10.50% (Base Rate + 9.25%)	7/30/2020	$	30,000	$	29,445	$	30,350	4.74	%
Total Funded Debt Investments - Cayman Islands				$	30,000	$	29,445	$	30,350	4.74	%

Funded Debt Investments - United Kingdom
Magic Newco, LLC**
Software	First lien (3)	7.25% (Base Rate + 6.00%)	12/12/2018	$	14,887	$	14,499	$	14,994	2.34	%
Total Funded Debt Investments — United Kingdom				$	14,887	$	14,499	$	14,994	2.34	%
Funded Debt Investments - United States
McGraw-Hill Global Education Holdings, LLC
Education	First lien (2)	9.75%	4/1/2021	$	24,500	$	24,341	$	25,174
	First lien (2)	9.00% (Base Rate + 7.75%)	3/22/2019	19,950		19,372		19,706
				44,450		43,713		44,880		7.01	%
Edmentum, Inc.(fka Plato, Inc.)
Education	First lien (3)	6.00% (Base Rate + 4.75%)	5/17/2018	6,533		6,366		6,565
	Second lien (2)	11.25% (Base Rate + 9.75%)	5/17/2019	29,150		28,633		29,150
				35,683		34,999		35,715		5.58	%
SRA International, Inc.
Federal Services	First lien (3)	6.50% (Base Rate + 5.25%)	7/20/2018	20,436		19,792		20,351
	First lien (2)	6.50% (Base Rate + 5.25%)	7/20/2018	14,314		13,905		14,254
				34,750		33,697		34,605		5.40	%
Pharmaceutical Research Associates, Inc.
Healthcare Services	Second lien (2)	10.50% (Base Rate + 9.25%)	6/10/2019	33,988		33,422		34,432		5.38	%

UniTek Global Services, Inc.
Business Services	First lien (2)	11.75% (Base Rate + 6.50% + 2.00% PIK)*	4/16/2018	25,532		24,761		23,618
	First lien (2)	11.75% (Base Rate + 6.50% + 2.00% PIK)*	4/16/2018	6,181		6,023		5,717
	First lien (2)	11.75% (Base Rate + 6.50% + 2.00% PIK)*	4/16/2018	5,138		4,970		4,752
				36,851		35,754		34,087		5.32	%
YP Holdings LLC (8)
YP LLC
Media	First lien (2)	8.05% (Base Rate + 6.70%)	6/4/2018	31,920		31,129		31,574		4.93	%
Novell, Inc. (fka Attachmate Corporation, NetIQ Corporation)
Software	First lien (3)	7.27% (Base Rate + 5.72%)	11/22/2017	7,400		7,277		7,434
	Second lien (2)	11.00% (Base Rate + 9.50%)	11/22/2018	24,000		23,367		24,054
				31,400		30,644		31,488		4.92	%
Rocket Software, Inc.
Software	Second lien (2)	10.25% (Base Rate + 8.75%)	2/8/2019	30,875		30,721		30,888		4.82	%
Global Knowledge Training LLC
Education	First lien (3)	6.51% (Base Rate + 4.98%)	4/21/2017	4,685		4,633		4,685
	First lien (3)	6.50% (Base Rate + 5.00%)	4/21/2017	1,174		1,161		1,174
	Second lien (2)	11.50% (Base Rate + 9.75%)	10/21/2018	24,250		23,841		24,667
				30,109		29,635		30,526		4.77	%
Deltek, Inc.
Software	Second lien (2)	10.00% (Base Rate + 8.75%)	10/10/2019	30,000		29,700		29,700		4.64	%
KeyPoint Government Solutions, Inc.
Federal Services	First lien (2)	7.25% (Base Rate + 6.00%)	11/13/2017	29,250		28,640		29,250		4.57	%
Transtar Holding Company
Distribution & Logistics	Second lien (2)	9.75% (Base Rate + 8.50%)	10/9/2019	28,300		27,814		29,043		4.54	%
Kronos Incorporated
Software	Second lien (2)	9.75% (Base Rate + 8.50%)	4/30/2020	25,000		24,765		25,938		4.05	%
Meritas Schools Holdings, LLC
Education	First lien (2)	7.00% (Base Rate + 5.75%)	6/25/2019	17,000		16,830		16,830
	First lien (3)	7.00% (Base Rate + 5.75%)	6/25/2019	9,000		8,910		8,910
				26,000		25,740		25,740		4.02	%
Permian Tank & Manufacturing, Inc.
Energy	First lien (2)	10.50%	1/15/2018	24,500		24,783		23,887		3.73	%
Aderant North America, Inc.
Software	Second lien (2)	10.00% (Base Rate + 8.75%)	6/20/2019	22,500		22,181		23,147		3.62	%

The accompanying notes are an integral part of these consolidated financial statements.

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New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments (Continued)

June 30, 2013

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate	Maturity Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Members’ Capital
St. George’s University Scholastic Services LLC
Education	First lien (3)	8.50% (Base Rate + 7.00%)	12/20/2017	$	13,154	$	12,905	$	13,236
	First lien (2)	8.50% (Base Rate + 7.00%)	12/20/2017	9,646		9,469		9,707
				22,800		22,374		22,943		3.58	%
LM U.S. Member LLC (and LM U.S. Corp Acquisition Inc.)
Business Services	Second lien (3)	9.50% (Base Rate + 8.25%)	10/26/2020	20,000		19,717		20,263		3.16	%
First American Payment Systems, L.P.
Business Services	Second lien (3)	10.75% (Base Rate + 9.50%)	4/12/2019	20,000		19,631		20,188		3.15	%
Merrill Communications LLC
Business Services	First lien (2)	7.25% (Base Rate + 6.25%)	3/8/2018	19,950		19,760		20,033		3.13	%
Six3 Systems, Inc.
Federal Services	First lien (3)	7.00% (Base Rate + 5.75%)	10/4/2019	19,900		19,717		20,024		3.13	%
eResearchTechnology, Inc.
Healthcare Services	First lien (3)	6.00% (Base Rate + 4.75%)	5/2/2018	19,850		19,077		19,951		3.12	%
Distribution International, Inc.
Distribution & Logistics	First lien (2)	8.75% (Base Rate + 5.50%)	7/16/2019	20,000		19,600		19,600		3.06	%
Insight Pharmaceuticals LLC
Healthcare Products	Second lien (3)	13.25% (Base Rate + 11.75%)	8/25/2017	19,310		18,569		19,503		3.05	%
Smile Brands Group Inc.
Healthcare Services	First lien (3)	7.00% (Base Rate + 5.25%)	12/21/2017	19,758		19,520		19,289		3.01	%
PODS, Inc. (6)
Consumer Services
PODS Funding Corp. II	First lien (3)	7.25% (Base Rate + 6.00%)	11/29/2016	13,175		12,892		13,208
Storapod Holding Company, Inc.	Subordinated (2)	21.00% PIK*	11/29/2017	5,460		5,329		5,460
				18,635		18,221		18,668		2.92	%
Sotera Defense Solutions, Inc. (Global Defense Technology & Systems, Inc.)
Federal Services	First lien (3)	7.50% (Base Rate + 6.00%)	4/21/2017	19,360		19,135		17,424		2.72	%
Ascensus, Inc.
Business Services	First lien (3)	8.00% (Base Rate + 6.75%)	12/21/2018	16,915		16,599		16,978		2.65	%
IG Investments Holdings, LLC
Business Services	Second lien (3)	10.25% (Base Rate + 9.00%)	10/31/2020	15,000		14,858		15,113		2.36	%
OpenLink International, Inc.
Software	First lien (3)	7.75% (Base Rate + 6.25%)	10/30/2017	14,775		14,548		14,803		2.31	%
KPLT Holdings, Inc. (Centerplate, Inc., et al.)
Consumer Services	Subordinated (2)	11.75% (10.25% + 1.50% PIK)*	4/16/2019	14,747		14,477		14,411		2.25	%
Aspen Dental Management, Inc.
Healthcare Services	First lien (3)	7.00% (Base Rate + 5.50%)	10/6/2016	14,795		14,517		14,351		2.24	%
Landslide Holdings, Inc. (Crimson Acquisition Corp.)
Software	First lien (3)	7.00% (Base Rate + 5.75%)	6/19/2018	14,250		14,005		14,292		2.23	%
Brock Holdings III, Inc.
Industrial Services	Second lien (2)	10.00% (Base Rate + 8.25%)	3/16/2018	14,000		13,842		14,245		2.22	%
Packaging Coordinators, Inc. (10)
Healthcare Products	Second lien (2)	9.50% (Base Rate + 8.25%)	11/10/2020	14,000		13,862		13,860		2.16	%
Lonestar Intermediate Super Holdings, LLC
Business Services	Subordinated (2)	11.00% (Base Rate + 9.50%)	9/2/2019	12,000		11,683		12,600		1.97	%
Van Wagner Communications, LLC
Media	First lien (2)	8.25% (Base Rate + 7.00%)	8/3/2018	11,880		11,671		12,073		1.89	%
Vision Solutions, Inc.
Software	Second lien (2)	9.50% (Base Rate + 8.00%)	7/23/2017	12,000		11,922		11,850		1.85	%
Confie Seguros Holding II Co.
Consumer Services	Second lien (3)	10.25% (Base Rate + 9.00%)	5/8/2019	8,907		8,764		8,906
	Second lien (2)	10.25% (Base Rate + 9.00%)	5/8/2019	1,979		1,989		1,980
				10,886		10,753		10,886		1.70	%
Vertafore, Inc.
Software	Second lien (2)	9.75% (Base Rate + 8.25%)	10/29/2017	10,000		9,930		10,206		1.59	%
TransFirst Holdings, Inc.
Business Services	Second lien (3)	11.00% (Base Rate + 9.75%)	6/27/2018	10,000		9,720		10,200		1.59	%
Mailsouth, Inc.
Media	First lien (3)	6.75% (Base Rate + 5.00%)	12/14/2016	9,792		9,699		9,743		1.52	%
Virtual Radiologic Corporation
Healthcare Information Technology	First lien (3)	7.75% (Base Rate + 4.50%)	12/22/2016	13,667		13,542		8,884		1.39	%
Consona Holdings, Inc.
Software	First lien (3)	7.25% (Base Rate + 6.00%)	8/6/2018	8,436		8,362		8,447		1.32	%
Triple Point Technology, Inc.
Software	First lien (3)	6.25% (Base Rate + 5.00%)	10/27/2017	7,928		7,701		7,947		1.24	%
Physio-Control International, Inc.
Healthcare Products	First lien (2)	9.88%	1/15/2019	7,000		7,000		7,735		1.21	%
Research Pharmaceutical Services, Inc.
Healthcare Services	First lien (3)	6.76% (Base Rate + 5.24%)	2/18/2017	6,938		6,869		6,937		1.08	%
Alion Science and Technology Corporation
Federal Services	First lien (2)(7)	12.00% (10.00% + 2.00% PIK)*	11/1/2014	6,383		6,245		6,506		1.02	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments (Continued)

June 30, 2013

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate	Maturity Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Members’ Capital
Immucor, Inc.
Healthcare Services	Subordinated (2)(7)	11.13%	8/15/2019	$	5,000	$	4,946		$	5,450		0.85	%
GCA Services Group, Inc.
Business Services	Second lien (2)	9.25% (Base Rate + 8.00)%	11/1/2020	5,000		4,953			5,096			0.80	%
Learning Care Group (US), Inc.
Education	Subordinated (2)	15.00% PIK*	5/8/2020	4,066		3,939			4,066
	Subordinated (2)	15.00% PIK*	5/8/2020	744		688			744
				4,810		4,627			4,810			0.75	%
Education Management LLC**
Education	First lien (3)	8.25% (Base Rate + 7.00)%	3/30/2018	5,031		4,904			4,650			0.73	%
Brickman Group Holdings, Inc.
Business Services	Subordinated (2)	9.13%	11/1/2018	3,650		3,361			3,923			0.61	%
ATI Acquisition Company (fka Ability Acquisition, Inc.)
Education	First lien (2)	12.25% (Base Rate + 5.00% + 4.00% PIK) (5)*	12/30/2014	4,432		4,306			—
	First lien (2)	17.25% (Base Rate + 10.00% + 4.00% PIK) (5)*	6/30/2012 - Past Due	1,665		1,517			316
	First lien (2)	17.25% (Base Rate + 10.00% + 4.00% PIK) (5)*	6/30/2012 - Past Due	103		94			103
				6,200		5,917			419			0.07	%
Total Funded Debt Investments - United States				$	990,222	$	973,171		$	979,201		152.93	%
Total Funded Debt Investments				$	1,041,606	$	1,023,380		$	1,031,107		161.04	%
Equity - Bermuda
Stratus Technologies Bermuda Holdings Ltd.(4)**
Information Technology	Ordinary shares (2)	—	—	156,247		$	65		$	25
	Preferred shares (2)	—	—	35,558		15			6
						80			31			0.01	%
Total Shares - Bermuda						$	80		$	31		0.01	%
Equity - United States
Black Elk Energy Offshore Operations, LLC
Energy	Preferred shares (2)	17.00%	—	20,000,000		$	20,000		$	20,000		3.12	%
Global Knowledge Training LLC
Education	Ordinary shares (2)	—	—	2		2			3
	Preferred shares (2)	—	—	2,423		1,193			3,018
						1,195			3,021			0.47	%
Packaging Coordinators, Inc. (10)
Packaging Coordinators Holdings, LLC
Healthcare Products	Ordinary shares (2)	—	—	19,427		1,000			1,000			0.16	%
Total Shares - United States						$	22,195		$	24,021		3.75	%
Total Shares						$	22,275		$	24,052		3.76	%
Warrants - United States
Learning Care Group (US), Inc.
Education	Warrants (2)	—	—	844		$	194		$	412
	Warrants (2)	—	—	3,589		61			1,753
						255			2,165			0.34	%
YP Holdings LLC (8)
YP Equity Investors LLC
Media	Warrants (2)	—	—	5		466			1,907			0.30	%
PODS, Inc. (6)
Storapod Holding Company, Inc.
Consumer Services	Warrants (2)	—	—	360,129		156			368			0.05	%
Alion Science and Technology Corporation
Federal Services	Warrants (2)	—	—	6,000		293			189			0.03	%
Total Warrants - United States						$	1,170		$	4,629		0.72	%
Total Funded Investments						$	1,046,825		$	1,059,788		165.52	%
Unfunded Debt Investments - United States
Advantage Sales & Marketing Inc.
Business Services	First lien (2)(9) - Undrawn	—	12/17/2015	$	10,500	$	(1,260	)	$	(787	)	(0.13	)%
Total Unfunded Debt Investments				$	10,500	$	(1,260	)	$	(787	)	(0.13	)%
Total Investments						$	1,045,565		$	1,059,001		165.39	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments (Continued)

June 30, 2013

(unaudited)

(1) New Mountain Finance Holdings, L.L.C. (the “Operating Company”) generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to certain limitations on resale, and may be deemed to be “restricted securities” under the Securities Act.

(2) Investment is pledged as collateral for the Holdings Credit Facility, a revolving credit facility among the Operating Company as the Borrower and Collateral Administrator, Wells Fargo Securities, L.L.C. as the Administrative Agent, and Wells Fargo Bank, National Association, as the Collateral Custodian. See Note 7, Borrowing Facilities, for details.

(3) Investment is pledged as collateral for the SLF Credit Facility, a revolving credit facility among New Mountain Finance SPV Funding, L.L.C. as the Borrower, the Operating Company as the Collateral Administrator, Wells Fargo Securities, L.L.C. as the Administrative Agent, and Wells Fargo Bank, National Association, as the Collateral Custodian. See Note 7, Borrowing Facilities, for details.

(4) The Operating Company holds investments in two related entities of Stratus Technologies Bermuda Holdings, Ltd. (“Stratus Holdings”). The Operating Company directly holds ordinary and preferred equity in Stratus Holdings and has a credit investment in the joint issuers of Stratus Technologies Bermuda Ltd. (“Stratus Bermuda”) and Stratus Technologies, Inc. (“Stratus U.S.”), collectively, the “Stratus Notes”. Stratus U.S. is a wholly-owned subsidiary of Stratus Bermuda, which in turn is a wholly-owned subsidiary of Stratus Holdings. Stratus Holdings is the parent guarantor of the credit investment of the Stratus Notes.

(5) Investment is on non-accrual status.

(6) The Operating Company holds investments in two related entities of PODS, Inc. The Operating Company directly holds warrants in Storapod Holding Company, Inc. (“Storapod”) and has a credit investment in Storapod through Storapod WCF II Limited (“Storapod WCF II”). Storapod WCF II is a special purpose entity used to enter into a Shari’ah-compliant financing arrangement with Storapod. Additionally, the Operating Company has a credit investment in PODS Funding Corp. II (“PODS II”). PODS, Inc. is a wholly-owned subsidiary of PODS Holding, Inc., which in turn is a majority-owned subsidiary of Storapod. PODS II is a special purpose entity used to enter into a Shari’ah-compliant financing arrangement with PODS, Inc. and its subsidiary, PODS Enterprises, Inc.

(7) Securities are registered under the Securities Act.

(8) The Operating Company holds investments in two related entities of YP Holdings LLC. The Operating Company directly holds warrants to purchase a 4.96% membership interest of YP Equity Investors, LLC (which at closing represented an indirect 1.0% equity interest in YP Holdings LLC) and holds an investment in the Term Loan B loans issued by YP LLC, a subsidiary of YP Holdings LLC.

(9) Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities. Cost amounts represent the cash received at settlement date net the impact of paydowns and cash paid for drawn revolvers.

(10) The Operating Company holds investments in Packaging Coordinators, Inc. and one related entity of Packaging Coordinators, Inc. The Operating Company has a credit investment in Packaging Coordinators, Inc. and holds ordinary equity in Packaging Coordinators Holdings, LLC, a wholly-owned subsidiary of Packaging Coordinators, Inc.

* All or a portion of interest contains payments-in-kind (“PIK”).

** Indicates assets that the Operating Company deems to be “non-qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70.00% of the Operating Company’s total assets at the time of acquisition of any additional non-qualifying assets.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments (Continued)

June 30, 2013
(unaudited)

	June 30, 2013
Investment Type	Percent of Total Investments at Fair Value
First lien	52.02	%
Second lien	40.87	%
Subordinated	4.40	%
Equity and other	2.71	%
Total investments	100.00	%

	June 30, 2013
Industry Type	Percent of Total Investments at Fair Value
Software	23.99	%
Education	16.51	%
Business Services	14.89	%
Federal Services	10.20	%
Healthcare Services	9.48	%
Media	5.22	%
Distribution & Logistics	4.59	%
Consumer Services	4.19	%
Energy	4.14	%
Healthcare Products	3.98	%
Industrial Services	1.35	%
Healthcare Information Technology	0.84	%
Information Technology	0.62	%
Total investments	100.00	%

	June 30, 2013
Interest Rate Type	Percent of Total Investments at Fair Value
Floating rates	88.30	%
Fixed rates	11.70	%
Total investments	100.00	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments

December 31, 2012

(in thousands, except shares)

Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate	Maturity Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Members’ Capital
Funded Debt Investments—Bermuda
Stratus Technologies Bermuda Holdings Ltd.(4)**
Stratus Technologies Bermuda Ltd. / Stratus Technologies, Inc.
Information Technology	First lien(2)(7)	12.00%	3/29/2015	$	6,664	$	6,396	$	6,631	1.16	%
Total Funded Debt Investments—Bermuda				$	6,664	$	6,396	$	6,631	1.16	%
Funded Debt Investments—Cayman Islands
Pinnacle Holdco S.à r.l. / Pinnacle (US) Acquisition Co Limited**
Software	First lien(3)	6.50% (Base Rate + 5.25%)	7/30/2019	$	2,992	$	2,971	$	2,999
	Second lien(2)	10.50% (Base Rate + 9.25%)	7/30/2020	30,000		29,420		30,488
				32,992		32,391		33,487		5.88	%
Total Funded Debt Investments—Cayman Islands				$	32,992	$	32,391	$	33,487	5.88	%
Funded Debt Investments—United Kingdom
Magic Newco, LLC**
Software	First lien(3)	7.25% (Base Rate + 6.00%)	12/12/2018	$	14,963	$	14,543	$	15,105	2.65	%
Total Funded Debt Investments—United Kingdom				$	14,963	$	14,543	$	15,105	2.65	%
Funded Debt Investments—United States
Edmentum, Inc.(fka Plato, Inc.)
Education	First lien(3)	7.50% (Base Rate + 6.00%)	5/17/2018	$	11,700	$	11,378	$	11,744
	Second lien(2)	11.25% (Base Rate + 9.75%)	5/17/2019	29,150		28,604		28,567
				40,850		39,982		40,311		7.07	%
Novell, Inc. (fka Attachmate Corporation, NetIQ Corporation)
Software	First lien(3)	7.25% (Base Rate + 5.75%)	11/22/2017	7,700		7,560		7,785
	Second lien(2)	11.00% (Base Rate + 9.50%)	11/22/2018	24,000		23,326		23,560
				31,700		30,886		31,345		5.50	%
Rocket Software, Inc.
Software	Second lien(2)	10.25% (Base Rate + 8.75%)	2/8/2019	30,875		30,711		30,933		5.43	%
Pharmaceutical Research Associates, Inc.
Healthcare Services	Second lien(2)	10.50% (Base Rate + 9.25%)	6/10/2019	30,000		29,402		30,319		5.32	%
UniTek Global Services, Inc.
Business Services	First lien(2)	9.00% (Base Rate + 7.50%)	4/16/2018	19,650		19,202		19,331
	First lien(2)	9.00% (Base Rate + 7.50%)	4/16/2018	5,970		5,798		5,873
	First lien(2)	9.00% (Base Rate + 7.50%)	4/16/2018	4,963		4,781		4,882
				30,583		29,781		30,086		5.28	%
KeyPoint Government Solutions, Inc.
Federal Services	First lien(3)	7.25% (Base Rate + 6.00%)	11/13/2017	20,000		19,608		19,900
	First lien(2)	7.25% (Base Rate + 6.00%)	11/13/2017	10,000		9,703		9,950
				30,000		29,311		29,850		5.24	%
Global Knowledge Training LLC
Education	First lien(3)	6.50% (Base Rate + 4.99%)	4/21/2017	4,776		4,718		4,705
	First lien(3)	7.25% (Base Rate + 4.00%)	4/21/2017	1,174		1,159		1,156
	Second lien(2)	11.50% (Base Rate + 9.75%)	10/21/2018	24,250		23,814		23,755
				30,200		29,691		29,616		5.20	%
Managed Health Care Associates, Inc.
Healthcare Services	First lien(2)	3.47% (Base Rate + 3.25%)	8/1/2014	14,756		13,240		14,276
	Second lien(2)	6.72% (Base Rate + 6.50%)	2/1/2015	15,000		12,790		14,475
				29,756		26,030		28,751		5.05	%
Transtar Holding Company
Distribution & Logistics (10)	Second lien(2)	9.75% (Base Rate + 8.50%)	10/9/2019	28,300		27,787		28,654		5.03	%
Meritas Schools Holdings, LLC
Education	First lien(3)	7.50% (Base Rate + 6.00%)	7/29/2017	8,150		8,084		8,171
	Second lien(2)	11.50% (Base Rate + 10.00%)	1/29/2018	20,000		19,747		20,000
				28,150		27,831		28,171		4.94	%
Kronos Incorporated
Software	Second lien(2)	9.75% (Base Rate + 8.50%)	4/30/2020	25,000		24,753		25,125		4.41	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Holdings, L.L.C.

Consolidated Schedule of Investments (Continued)

December 31, 2012

(in thousands, except shares)

Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate	Maturity Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Members’ Capital
St. George’s University Scholastic Services LLC
Education	First lien(2)	8.50% (Base Rate + 7.00%)	12/20/2017	$	25,000	$	24,501	$	24,500	4.30	%
SRA International, Inc.
Federal Services	First lien(3)	6.50% (Base Rate + 5.25%)	7/20/2018	20,436		19,741		19,542
	First lien(2)	6.50% (Base Rate + 5.25%)	7/20/2018	4,315		4,225		4,126
				24,751		23,966		23,668		4.15	%
Aderant North America, Inc.
Software	Second lien(2)	11.00% (Base Rate + 7.75%)	6/20/2019	22,500		22,163		23,062		4.05	%
LM U.S. Member LLC (and LM U.S. Corp Acquisition Inc.)
Business Services	Second lien(2)	9.50% (Base Rate + 8.25%)	10/26/2020	20,000		19,704		20,150		3.54	%
Learning Care Group (US), Inc.
Education	First lien(2)	12.00%	4/27/2016	17,369		17,174		16,696
	Subordinated(2)	15.00% PIK*	6/30/2016	3,782		3,639		3,434
				21,151		20,813		20,130		3.53	%
Six3 Systems, Inc.
Federal Services	First lien(2)	7.00% (Base Rate + 5.75%)	10/4/2019	20,000		19,805		20,025		3.51	%
First American Payment Systems, L.P.
Business Services	Second lien(2)	10.75% (Base Rate + 9.50%)	4/12/2019	20,000		19,609		19,900		3.49	%
eResearchTechnology, Inc.
Healthcare Services	First lien(3)	8.00% (Base Rate + 6.50%)	5/2/2018	19,950		19,202		19,850		3.48	%
Insight Pharmaceuticals LLC
Healthcare Products	Second lien(2)	13.25% (Base Rate + 11.75%)	8/25/2017	19,310		18,659		19,503		3.42	%
Transplace Texas, L.P.
Distribution & Logistics (10)	Second lien(2)	11.00% (Base Rate + 9.00%)	4/12/2017	20,000		19,586		19,500		3.42	%
PODS, Inc.(6)
Consumer Services
PODS Funding Corp. II	First lien(3)	7.25% (Base Rate + 6.00%)	11/29/2016	14,007		13,668		13,972
Storapod Holding Company, Inc.	Subordinated(2)	21.00% PIK*	11/29/2017	5,296		5,156		5,113
				19,303		18,824		19,085		3.35	%
Smile Brands Group Inc.
Healthcare Services	First lien(3)	7.00% (Base Rate + 5.25%)	12/21/2017	19,859		19,598		18,767		3.29	%
Ascensus, Inc.
Business Services	First lien(2)	8.00% (Base Rate + 6.75%)	12/21/2018	8,500		8,330		8,330
	First lien(3)	8.00% (Base Rate + 6.75%)	12/21/2018	8,500		8,330		8,330
				17,000		16,660		16,660		2.92	%
Sotera Defense Solutions, Inc. (Global Defense Technology & Systems, Inc.)
Federal Services	First lien(3)	7.50% (Base Rate + 6.00%)	4/21/2017	15,758		15,644		15,600		2.74	%
IG Investments Holdings, LLC
Business Services	Second lien(2)	10.25% (Base Rate + 9.00%)	10/31/2020	15,000		14,852		14,925		2.62	%
OpenLink International, Inc.
Software	First lien(3)	7.75% (Base Rate + 6.25%)	10/30/2017	14,850		14,600		14,850		2.61	%
Landslide Holdings, Inc. (Crimson Acquisition Corp.)
Software	First lien(3)	7.00% (Base Rate + 5.75%)	6/19/2018	14,625		14,353		14,671		2.57	%
KPLT Holdings, Inc. (Centerplate, Inc., et al.)
Consumer Services	Subordinated(2)	11.75% (10.25% + 1.50% PIK)*	4/16/2019	14,637		14,351		14,344		2.52	%
Sabre Inc.
Software	First lien(3)	7.25% (Base Rate + 6.00%)	12/29/2017	13,965		13,918		14,186		2.49

New Mountain Finance Holdings, L.L.C. 10-Q