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 September 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 November 12, 2013
New Mountain Finance Holdings, L.L.C.	Common membership units	47,831,859
New Mountain Finance Corporation	Common stock, $0.01 par value	45,159,921
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 SEPTEMBER 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 September 30, 2013 (unaudited) and December 31, 2012	3
	Consolidated Statements of Operations for the three months and nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	4
	Consolidated Statements of Changes in Members’ Capital for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	6
	Consolidated Schedule of Investments as of September 30, 2013 (unaudited)	7
	Consolidated Schedule of Investments as of December 31, 2012	13
	New Mountain Finance Corporation
	Statements of Assets and Liabilities as of September 30, 2013 (unaudited) and December 31, 2012	19
	Statements of Operations for the three months and nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	20
	Statements of Changes in Net Assets for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	21
	Statements of Cash Flows for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	22
	New Mountain Finance AIV Holdings Corporation
	Statements of Assets and Liabilities as of September 30, 2013 (unaudited) and December 31, 2012	23
	Statements of Operations for the three months and nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	24
	Statements of Changes in Net Assets for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	25
	Statements of Cash Flows for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	26

	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	27

	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	71
Item 4.	Controls and Procedures	72

PART II. OTHER INFORMATION		73

Item 1.	Legal Proceedings	73
Item 1A.	Risk Factors	73
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibits	73
	Signatures	78

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)

	September 30, 2013		December 31, 2012
	(unaudited)
Assets
Investments at fair value (cost of $1,025,337 and $976,243, respectively)	$	1,041,432	$	989,820
Cash and cash equivalents	17,629		12,752
Interest and dividend receivable	11,097		6,340
Deferred credit facility costs (net of accumulated amortization of $3,147 and $2,016, respectively)	4,838		5,490
Receivable from affiliate	317		534
Receivable from unsettled securities sold	—		9,962
Other assets	1,981		666
Total assets	$	1,077,294	$	1,025,564
Liabilities
SLF Credit Facility	215,000		214,262
Holdings Credit Facility	159,091		206,938
Payable for unsettled securities purchased	43,400		9,700
Capital gains incentive fee payable	6,974		4,407
Incentive fee payable	3,534		3,390
Management fee payable	3,754		3,222
Interest payable	755		712
Payable to affiliate	3		—
Dividends payable	—		11,192
Other liabilities	2,978		1,802
Total liabilities	435,489		455,625
Members’ Capital	641,805		569,939
Total liabilities and members’ capital	$	1,077,294	$	1,025,564
Outstanding common membership units	44,831,859		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						Nine months ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Investment income

Interest income	$	27,175		$	21,362		$	79,539		$	60,087
Dividend income	(1,631		)	215			4,802			215
Other income	249			175			1,926			771
Total investment income	25,793			21,752			86,267			61,073

Expenses

Incentive fee	3,533			2,978			12,398			8,147
Capital gains incentive fee	1,587			2,583			2,568			3,547
Total incentive fee	5,120			5,561			14,966			11,694
Management fee	3,754			2,768			11,049			7,887
Interest and other credit facility expenses	3,190			2,402			9,379			7,286
Administrative expenses	743			544			2,441			1,604
Professional fees	549			405			1,684			1,279
Other general and administrative expenses	378			375			1,184			1,015
Total expenses	13,734			12,055			40,703			30,765
Less: expenses waived and reimbursed (See Note 5)	(600		)	(439		)	(2,265		)	(1,387		)
Net expenses	13,134			11,616			38,438			29,378
Net investment income	12,659			10,136			47,829			31,695

Net realized gains on investments	5,160			1,615			9,516			14,591
Net change in unrealized appreciation (depreciation) of investments	2,659			10,494			2,518			10,710
Net increase in members’ capital resulting from operations	$	20,478		$	22,245		$	59,863		$	56,996

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)

	Nine months ended
	September 30, 2013			September 30, 2012
Increase in members’ capital resulting from operations:
Net investment income	$	47,829		$	31,695
Net realized gains on investments	9,516			14,591
Net change in unrealized appreciation (depreciation) of investments	2,518			10,710
Net increase in members’ capital resulting from operations	59,863			56,996
Net contributions	57,020			82,300
Dividends declared	(48,877		)	(40,046		)
Offering costs	(249		)	(377		)
Reinvestment of dividends	4,109			980
Net increase in members’ capital	71,866			99,853
Members’ capital at beginning of period	569,939			420,502
Members’ capital at end of period	$	641,805		$	520,355

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)

	Nine months ended
	September 30, 2013			September 30, 2012
Cash flows from operating activities
Net increase in members’ capital resulting from operations	$	59,863		$	56,996
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	(9,516		)	(14,591		)
Net change in unrealized (appreciation) depreciation of investments	(2,518		)	(10,710		)
Amortization of purchase discount	(2,671		)	(4,549		)
Amortization of deferred credit facility costs	1,131			825
Non-cash interest income	(2,697		)	(888		)
(Increase) decrease in operating assets:
Purchase of investments	(349,349		)	(392,162		)
Proceeds from sales and paydowns of investments	315,139			268,369
Cash paid for drawn revolvers	—			(10,710		)
Cash repayments on drawn revolvers	—			9,870
Interest and dividend receivable	(4,757		)	(1,272		)
Receivable from affiliate	217			198
Receivable from unsettled securities sold	9,962			—
Other assets	(302		)	(642		)
Increase (decrease) in operating liabilities:
Payable for unsettled securities purchased	33,700			12,195
Capital gains incentive fee payable	2,567			3,547
Incentive fee payable	144			661
Management fee payable	532			567
Interest payable	43			(1,166		)
Payable to affiliate	3			23
Other liabilities	590			(322		)
Net cash flows provided by (used in) operating activities	52,081			(83,761		)
Cash flows from financing activities
Net contributions	57,020			82,300
Dividends paid	(55,961		)	(39,066		)
Offering costs paid	(656		)	(259		)
Proceeds from Holdings Credit Facility	246,923			311,326
Repayment of Holdings Credit Facility	(294,770		)	(304,699		)
Proceeds from SLF Credit Facility	11,138			89,031
Repayment of SLF Credit Facility	(10,400		)	(54,959		)
Deferred credit facility costs paid	(498		)	(2,561		)
Net cash flows (used in) provided by financing activities	(47,204		)	81,113
Net increase (decrease) in cash and cash equivalents	4,877			(2,648		)
Cash and cash equivalents at the beginning of the period	12,752			15,319
Cash and cash equivalents at the end of the period	$	17,629		$	12,671
Supplemental disclosure of cash flow information
Interest paid	$	7,938		$	7,185
Non-cash operating activities:
Non-cash activity on investments	$	1,986		$	—
Non-cash financing activities:
Value of members’ capital issued in connection with dividend reinvestment plan	$	4,109		$	980
Accrual for offering costs	1,162			326
Accrual for deferred credit facility costs	25			59

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

September 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	$	6,305	$	6,513	1.01	%
Total Funded Debt Investments - Bermuda				$	6,497	$	6,305	$	6,513	1.01	%
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	$	29,458	$	30,394	4.74	%
Total Funded Debt Investments - Cayman Islands				$	30,000	$	29,458	$	30,394	4.74	%
Funded Debt Investments - United States
McGraw-Hill Global Education Holdings, LLC
Education	First lien (2)	9.75%	4/1/2021	$	24,500	$	24,345	$	26,093
	First lien (3)	9.00% (Base Rate + 7.75%)	3/22/2019	19,900		19,342		20,174
				44,400		43,687		46,267		7.21	%
UniTek Global Services, Inc.
Business Services	First lien (2)	15.00% (Base Rate + 9.50% + 4.00% PIK)*	4/15/2018	26,176		25,265		25,543
	First lien (2)	15.00% (Base Rate + 9.50% + 4.00% PIK)*	4/15/2018	6,337		6,117		6,184
	First lien (2)	15.00% (Base Rate + 9.50% + 4.00% PIK)*	4/15/2018	5,268		5,084		5,140
				37,781		36,466		36,867		5.74	%
Edmentum, Inc.(fka Plato, Inc.)
Education	First lien (3)	6.00% (Base Rate + 4.75%)	5/17/2018	6,449		6,291		6,486
	Second lien (2)	11.25% (Base Rate + 9.75%)	5/17/2019	29,150		28,649		29,405
				35,599		34,940		35,891		5.59	%
SRA International, Inc.
Federal Services	First lien (2)	6.50% (Base Rate + 5.25%)	7/20/2018	34,750		33,739		34,533		5.38	%
Rocket Software, Inc.
Software	Second lien (2)	10.25% (Base Rate + 8.75%)	2/8/2019	30,875		30,726		30,921		4.82	%
Global Knowledge Training LLC
Education	First lien (3)	6.51% (Base Rate + 4.99%)	4/21/2017	4,624		4,575		4,624
	First lien (3)	6.51% (Base Rate + 4.99%)	4/21/2017	1,159		1,147		1,159
	Second lien (2)	11.50% (Base Rate + 9.75%)	10/21/2018	24,250		23,855		24,643
				30,033		29,577		30,426		4.74	%
Novell, Inc. (fka Attachmate Corporation, NetIQ Corporation)
Software	First lien (3)	7.25% (Base Rate + 5.75%)	11/22/2017	7,158		7,044		7,195
	Second lien (2)	11.00% (Base Rate + 9.50%)	11/22/2018	23,353		22,758		23,090
				30,511		29,802		30,285		4.72	%
Deltek, Inc.
Software	Second lien (2)	10.00% (Base Rate + 8.75%)	10/10/2019	30,000		29,709		30,275		4.72	%
JHCI Acquisition, Inc.
Distribution & Logistics	First lien (3)	7.00% (Base Rate + 5.75%)	7/11/2019	19,950		19,658		20,000
	Second lien (2)	11.00% (Base Rate + 9.75%)	7/11/2020	10,000		9,707		9,700
				29,950		29,365		29,700		4.63	%
Transtar Holding Company
Distribution & Logistics	Second lien (2)	9.75% (Base Rate + 8.50%)	10/9/2019	28,300		27,828		28,866		4.50	%
KeyPoint Government Solutions, Inc.
Federal Services	First lien (3)	7.25% (Base Rate + 6.00%)	11/13/2017	17,392		17,023		17,218
	First lien (2)	7.25% ( Base Rate + 6.00%)	11/13/2017	10,483		10,303		10,378
				27,875		27,326		27,596		4.30	%
YP Holdings LLC (8)
YP LLC
Media	First lien (2)	8.06% (Base Rate + 6.69%)	6/4/2018	27,120		26,476		26,984		4.20	%
Meritas Schools Holdings, LLC
Education	First lien (3)	7.00% (Base Rate + 5.75%)	6/25/2019	18,953		18,769		18,988
	First lien (2)	7.00% ( Base Rate + 5.75%)	6/25/2019	6,983		6,915		6,996
				25,936		25,684		25,984		4.05	%
Kronos Incorporated
Software	Second lien (2)	9.75% (Base Rate + 8.50%)	4/30/2020	25,000		24,771		25,953		4.04	%
Permian Tank & Manufacturing, Inc.
Energy	First lien (2)	10.50%	1/15/2018	24,500		24,770		24,010		3.74	%

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)

September 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
Aderant North America, Inc.
Software	Second lien (2)	10.00% (Base Rate + 8.75%)	6/20/2019	$	22,500	$	22,191	$	23,119	3.60	%
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		19,724		20,333		3.17	%
Merrill Communications LLC
Business Services	First lien (3)	7.31% (Base Rate + 6.20%)	3/8/2018	19,900		19,708		20,033		3.12	%
First American Payment Systems, L.P.
Business Services	Second lien (3)	10.75% (Base Rate + 9.50%)	4/12/2019	20,000		19,642		19,988		3.11	%
Six3 Systems, Inc.
Federal Services	First lien (3)	7.00% (Base Rate + 5.75%)	10/4/2019	19,850		19,674		19,974		3.11	%
eResearchTechnology, Inc.
Healthcare Services	First lien (3)	6.00% (Base Rate + 4.75%)	5/2/2018	19,800		19,061		19,899		3.10	%
Distribution International, Inc.
Distribution & Logistics	First lien (2)	7.50% (Base Rate + 6.50%)	7/16/2019	19,950		19,562		19,862		3.09	%
ARSloane Acquisition, LLC
Business Services	First lien (2)	7.50% (Base Rate + 6.25%)	10/1/2019	20,000		19,800		19,800		3.09	%
Envision Acquisition Company, LLC
Healthcare Services	Second lien (2)	9.75% (Base Rate + 8.75%)	11/4/2021	20,000		19,600		19,600		3.05	%
Insight Pharmaceuticals LLC
Healthcare Products	Second lien (3)	13.25% (Base Rate + 11.75%)	8/25/2017	19,310		18,738		19,214		2.99	%
St. George’s University Scholastic Services LLC
Education	First lien (3)	8.50% (Base Rate + 7.00%)	12/20/2017	11,947		11,733		12,052
	First lien (2)	8.50% (Base Rate + 7.00%)	12/20/2017	6,391		6,280		6,447
				18,338		18,013		18,499		2.88	%
PODS, Inc. (6)
Consumer Services
PODS Funding Corp. II	First lien (3)	7.25% (Base Rate + 6.00%)	11/29/2016	12,575		12,323		12,606
Storapod Holding Company, Inc.	Subordinated (2)	21.00% PIK*	11/29/2017	5,460		5,334		5,460
				18,035		17,657		18,066		2.82	%
Ascensus, Inc.
Business Services	First lien (3)	8.00% (Base Rate + 6.75%)	12/21/2018	16,873		16,568		17,125		2.67	%
Sotera Defense Solutions, Inc. (Global Defense Technology & Systems, Inc.)
Federal Services	First lien (3)	7.50% (Base Rate + 6.00%)	4/21/2017	18,527		18,323		16,674		2.60	%
IG Investments Holdings, LLC
Business Services	Second lien (3)	10.25% (Base Rate + 9.00%)	10/31/2020	15,000		14,861		15,075		2.35	%
Confie Seguros Holding II Co.
Consumer Services	Second lien (3)	10.25% (Base Rate + 9.00%)	5/8/2019	8,906		8,769		8,970
	Second lien (2)	10.25% (Base Rate + 9.00%)	5/8/2019	5,979		5,988		6,021
				14,885		14,757		14,991		2.34	%
OpenLink International, Inc.
Software	First lien (3)	7.75% (Base Rate + 6.25%)	10/30/2017	14,738		14,522		14,793		2.31	%
KPLT Holdings, Inc. (Centerplate, Inc., et al.)
Consumer Services	Subordinated (2)	11.75% (10.25% + 1.50% PIK)*	4/16/2019	14,802		14,539		14,576		2.27	%
Smile Brands Group Inc.
Healthcare Services	First lien (2)	7.50% (Base Rate + 6.25%)	8/16/2019	14,500		14,297		14,337		2.23	%
Aspen Dental Management, Inc.
Healthcare Services	First lien (3)	7.00% (Base Rate + 5.50%)	10/6/2016	14,757		14,500		14,241		2.22	%
Brock Holdings III, Inc.
Industrial Services	Second lien (2)	10.00% (Base Rate + 8.25%)	3/16/2018	14,000		13,850		14,222		2.22	%
Packaging Coordinators, Inc. (10)
Healthcare Products	Second lien (2)	9.50% (Base Rate + 8.25%)	11/10/2020	14,000		13,865		14,000		2.18	%
Lonestar Intermediate Super Holdings, LLC
Business Services	Subordinated (2)	11.00% (Base Rate + 9.50%)	9/2/2019	12,000		11,692		12,570		1.96	%
Van Wagner Communications, LLC
Media	First lien (2)	6.25% (Base Rate + 5.00%)	8/3/2018	11,821		11,633		12,087		1.88	%
Vision Solutions, Inc.
Software	Second lien (2)	9.50% (Base Rate + 8.00%)	7/23/2017	12,000		11,927		11,850		1.85	%
Vertafore, Inc.
Software	Second lien (2)	9.75% (Base Rate + 8.25%)	10/29/2017	10,000		9,933		10,215		1.59	%
TransFirst Holdings, Inc.
Business Services	Second lien (3)	11.00% (Base Rate + 9.75%)	6/27/2018	10,000		9,731		10,163		1.58	%

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)

September 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
Mailsouth, Inc.
Media	First lien (3)	6.75% (Base Rate + 5.00%)	12/14/2016	$	9,792	$	9,705	$	9,450	1.47	%
Virtual Radiologic Corporation
Healthcare Information Technology	First lien (3)	7.25% (Base Rate + 5.50%)	12/22/2016	13,598		13,481		8,838		1.38	%
Consona Holdings, Inc.
Software	First lien (3)	7.25% (Base Rate + 6.00%)	8/6/2018	8,415		8,345		8,436		1.32	%
Physio-Control International, Inc.
Healthcare Products	First lien (2)	9.88%	1/15/2019	6,651		6,651		7,482		1.17	%
Alion Science and Technology Corporation
Federal Services	First lien (2)(7)	12.00% (10.00% + 2.00% PIK)*	11/1/2014	6,383		6,271		6,426		1.00	%
Immucor, Inc.
Healthcare Services	Subordinated (2)(7)	11.13%	8/15/2019	5,000		4,948		5,525		0.86	%
GCA Services Group, Inc.
Business Services	Second lien (2)	9.25% (Base Rate + 8.00%)	11/1/2020	5,000		4,954		5,096		0.79	%
Education Management LLC**
Education	First lien (3)	8.25% (Base Rate + 7.00%)	3/30/2018	5,017		4,896		4,930		0.77	%
Learning Care Group (US), Inc.
Education	Subordinated (2)	15.00% PIK*	5/8/2020	4,066		3,944		4,066
	Subordinated (2)	15.00% PIK*	5/8/2020	744		689		744
				4,810		4,633		4,810		0.75	%
Brickman Group Holdings, Inc.
Business Services	Subordinated (2)	9.13%	11/1/2018	3,650		3,371		3,924		0.61	%
ATI Acquisition Company (fka Ability Acquisition, Inc.) (11)
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		1,434		233
	First lien (2)	17.25% (Base Rate + 10.00% + 4.00% PIK) (5)*	6/30/2012 - Past Due	103		94		103
				6,200		5,834		336		0.05	%
Total Funded Debt Investments - United States				$	982,732	$	966,323	$	975,117	151.93	%
Total Funded Debt Investments				$	1,019,229	$	1,002,086	$	1,012,024	157.68	%
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	3.11	%
Global Knowledge Training LLC
Education	Ordinary shares (2)	—	—	2		2		3
	Preferred shares (2)	—	—	2,423		1,193		3,039
						1,195		3,042		0.48	%
Packaging Coordinators, Inc. (10)
Packaging Coordinators Holdings, LLC
Healthcare Products	Ordinary shares (2)	—	—	19,427		1,000		1,000		0.16	%
Ancora Acquisition LLC (11)
Education	Preferred shares (2)	—	—	372		83		83		0.01	%
Total Shares - United States						$	22,278	$	24,125	3.76	%
Total Shares						$	22,358	$	24,156	3.77	%

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)

September 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
Warrants - United States
Learning Care Group (US), Inc.
Education	Warrants (2)	—	—	844		$	194		$	522
	Warrants (2)	—	—	3,589		61			2,218
						255			2,740			0.43		%
YP Holdings LLC (8)
YP Equity Investors LLC
Media	Warrants (2)	—	—	5		—			1,634			0.25		%
Unitek Global Services, Inc.
Business Services	Warrants (2)	—	—	1,014,451		1,449			1,009			0.16		%
PODS, Inc. (6)
Storapod Holding Company, Inc.
Consumer Services	Warrants (2)	—	—	360,129		156			467			0.07		%
Alion Science and Technology Corporation
Federal Services	Warrants (2)	—	—	6,000		293			189			0.03		%
Ancora Acquisition LLC (11)
Education	Warrants (2)	—	—	20		—			—			—		%
Total Warrants - United States						$	2,153		$	6,039		0.94		%
Total Funded Investments						$	1,026,597		$	1,042,219		162.39		%
Unfunded Debt Investments - United States
Advantage Sales & Marketing Inc.
Business Services	First lien (2)(9) - Undrawn	—	12/17/2015	$	10,500	$	(1,260	)	$	(787	)	(0.12		)%
Total Unfunded Debt Investments				$	10,500	$	(1,260	)	$	(787	)	(0.12		)%
Total Investments						$	1,025,337		$	1,041,432		$	162.27	%

(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.

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)

September 30, 2013

(unaudited)

(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.

(11) The Operating Company holds investments in ATI Acquisition Company and Ancora Acquisition LLC. The Operating Company has credit investments in ATI Acquisition Company and preferred equity and warrants to purchase units of common membership interests of Ancora Acquisition LLC. The Operating Company received its investments in Ancora Acquisition LLC as a result of its investments in ATI Acquisition Company.

* 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)

September 30, 2013
(unaudited)

	September 30, 2013
Investment Type	Percent of Total Investments at Fair Value
First lien	51.20	%
Second lien	41.40	%
Subordinated	4.50	%
Equity and other	2.90	%
Total investments	100.00	%

	September 30, 2013
Industry Type	Percent of Total Investments at Fair Value
Software	20.76	%
Business Services	17.40	%
Education	16.61	%
Federal Services	10.12	%
Distribution & Logistics	7.53	%
Healthcare Services	7.07	%
Media	4.82	%
Consumer Services	4.62	%
Energy	4.22	%
Healthcare Products	4.00	%
Industrial Services	1.37	%
Healthcare Information Technology	0.85	%
Information Technology	0.63	%
Total investments	100.00	%

	September 30, 2013
Interest Rate Type	Percent of Total Investments at Fair Value
Floating rates	88.01	%
Fixed rates	11.99	%
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

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