Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Main Street Capital Corporation Third Quarter Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, November 8, 2012. I would now like to turn the call over to Mr. Ben Burnham with DRG&L. Please go ahead, sir.

Thank you, Camille, and good morning, everyone. Thanks for joining us for the Main Street Capital Corporation Third Quarter 2012 Earnings Conference Call. Joining me today on the call our Chairman, President and CEO Vince Foster; Executive Vice Chairman, Todd Reppert; and Chief Financial Officer, Dwayne Hyzak. Main Street issued a press release yesterday afternoon that details the company's quarterly financial and operating results. The document is available on the Investor Relations section of the company's website at www.mainstcapital.com. If you would like to be added to the company's e-mail list to receive press releases, please call DRG&L at (713) 529-6600. A replay of today's call will be available beginning about an hour after the completion of the call and will remain available until November 15. Information on how to access that replay is included in yesterday's press release. We also advise you that this conference call is being broadcast live through an Internet webcast that can be accessed on the company's web page. Please note that information reported on this call speaks only as of today, November 8, 2012. And therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening. Our conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's estimates, assumptions and projections as of the date of this call, and they are not guarantees of future performance. Actual results may differ materially from the results expressed or implied in these statements as a result of risks, uncertainties and other factors including, but not limited, to the factors set forth in the company's filings with the Securities and Exchange Commission. During today's call, management will discuss non-GAAP financial measures. Please refer to yesterday's press release which can be found on the company's website for a reconciliation to the most directly comparable GAAP financial measures. And now with that, I'd like to turn the call over to Vince.

Thanks, Ben, and thank you all for joining us today. I will comment on the performance of our investment portfolio, discuss our recently announced special dividend and our dividend outlook, highlight our origination activity and conclude by commenting on the current investment environment we're seeing. Following my comments, Todd will cover our third quarter portfolio activity in more detail, then Dwayne will comment on our third quarter financial results, our current liquidity position and certain key portfolio statistics. After which, we will take your questions. Our investment portfolio continued to deliver strong performance during the third quarter. Our lower middle market investments appreciated during the quarter by $19.6 million on a net basis, with 19 of our investments appreciating during the quarter and 6 depreciating. And our middle market investments appreciated by $3.9 million during the quarter. We finished the quarter with a net asset value per share of $17.49, a sequential increase of $0.60 a share over the last quarter. Our lower middle market portfolio of companies ended the quarter with $93 million of cash on their balance sheets and averaged a very conservative net debt to EBITDA ratio of 2:1 to our debt position and 2.2:1, including all debt. Yesterday, we announced that our board declared a special dividend of $0.35 a share, payable in mid to late January. Our board also declared regular monthly dividends for the first quarter of 2013 of $0.15 a month for each of January, February and March. The special dividend helps reduce our spillover taxable income, which is currently over $30 million or approximately $1 a share by roughly 1/3. Assuming we are able to maintain our current level of financial and operating performance, we should be postured to declare an annual special dividend at the end of both 2013 and 2014…

Okay. Thanks, Vince, and good morning, everyone. We are very pleased to report another strong quarter, which continues to reflect our key long-term goals for sustainable growth and earnings and dividends per share, while also generating meaningful growth in NAV per share. Since our IPO, Main Street has grown its quarterly distributable net investment income per share of 70% and has grown its dividends per share 36% and has grown its NAV per share by approximately 30%. In addition to increasing our regular monthly dividends, our performance has allowed us to generate significant spillover taxable income, which has led to our first special dividend, as Vince discussed. During the third quarter of 2012, our investment activity included approximately $47 million of investments in the lower middle market component of the portfolio, including investments in 3 new portfolio companies and several follow-on investments. We also received approximately $23 million in total cash prepayments and exit proceeds within the lower middle market portfolio during the quarter, primarily from several debt investments being refinanced. During the third quarter of 2012, our investment activity also included approximately $2 million of net middle market portfolio growth, which reflects new investments, net of all repayments and exits. We have generated net realized gains in 2012 from the exit or partial exit of several portfolio company equity positions, including a $9.9 million realized gain on the recent partial exit of our Laurus Healthcare equity position subsequent to September 30. These 2012 realized gains have contributed to the growth in our spillover income, and we have several additional portfolio companies in various stages of exit discussions that may generate additional gains in late 2012 or 2013. I'm also pleased to report that our overall portfolio performance remains strong and the portfolio continues to improve its diversification by issuer,…

Thanks, Todd. As Vince and Todd previously mentioned, our third quarter results represent significant increases from the prior year in both total investment income and distributable net investment income and significant appreciation in our investment portfolio. Total investment income for the third quarter increased by 34% over the same period in 2011 to a total of $23 million. This increase was primarily driven by increased amounts of interest income associated with higher levels of portfolio debt investments and also included a $700,000 increase in dividend income from portfolio equity investments. The increase in investment income in the third quarter included an increase of approximately $800,000 in investment income, associated with higher levels of accelerated prepayment activity for certain portfolio debt investments and marketable securities investments in comparison to the third quarter of 2011. The total amount of investment income in the third quarter of 2012 from such prepayment activity was approximately $1.1 million or approximately $0.04 per share. Third quarter 2012 operating expenses, excluding noncash share-based compensation expense, increased by $600,000 over the third quarter of 2011 to a total of $6.7 million. The operating expense increase was a result of higher accrued compensation and other operating expenses related to the increases in investment income and the investment portfolio compared to the third quarter prior year and higher interest expense as a result of increased cost associated with the expansion of our credit facility subsequent to September 30, 2011. The higher accrued compensation expense in the third quarter of 2012 was offset by the reversal of certain bonus accruals recorded in the first and second quarters of 2012, totaling approximately $300,000 associated with changes to the company's expectations related to incentive compensation pay. The ratio of our total operating expenses, excluding interest expense as a percentage of average total assets,…

[Operator Instructions] Our first question is from the line of Robert Dodd with Raymond James. Robert J. Dodd - Raymond James & Associates, Inc., Research Division: Question, really, conceptually about what your approach is going to be to the special dividends going forward. I mean, obviously, you've disclosed the steady part [ph] the expectations that, that can be sustained for the next couple of years. My question really is if the additional realizations in the portfolio -- and you mentioned on the call that several other companies are in talks so that could certainly happen, in addition to Laurus, obviously. What the approach would be there? I mean obviously, Laurus alone the realization there is roughly, round number is $0.30, which is approximately how much your special is? So you're spillover doesn't look to me on a very round number math. And looks like, it actually could go down by the end of the year, just because you're doing too well. That's a good problem to have. So and I remember your -- but the question is if you have more realizations, would you expect a large proportion of additional realizations to be distributed in -- within the year or the year immediately following that, which they were incurred before, you realized them in.

Yes. Robert, it's a real big question and it's something we talk a lot about. And I think if you go back to what Todd said, we think what our shareholders really want and value is a steady dividend, one that they can count on. We have a lot of shareholders that are relying on the income for retirement, et cetera. And so I think introducing too much volatility into the dividends is kind of not really going to be appreciated. I don't think it might be that well understood. Just how these -- how the dividends are taxed is confusing. And now you introduce these new rates that we might see in January, it's going to be even more confusing. So what we want to do, if we perform -- if we continue to perform at this level, is we're at $0.45 a quarter run rate now, we want to take that up. We'd like to take it up gradually over time. You're not going to see it at the end of the year, the $0.55. But we -- it's not going to be $0.45 either. When the gains happen, they happen. We want to utilize -- we want to stay in a significant spillover position as kind of the safety net. And what's going to max out our spillover position and cause us to start having to pay special dividends is there is a statutory maximum amount of spillover you can have, which we -- I think we've discussed the offline, it's pretty complicated and the exception of the tax code. And that's really what's going to drive it. So as we get more -- as we generate more extraordinary gains, we're going to take the spillover up, and it'll last for more and more years. But we're going to be guided by the maximum spillover that we can have, which right now, it's roughly $1 a share. So I think that you can expect more the same, you can expect the spillover to increase, to last for more years and the regular dividend to increase, make kind of modestly. And at the same time, very importantly, we expect our net asset value to increase because unless all those things are happening at the same time, you're not optimizing the portfolio. So I would just kind of continue to expect more of the same. Robert J. Dodd - Raymond James & Associates, Inc., Research Division: Okay, I appreciate that. And then a follow-up, which is completely unrelated, but I'll take my chance. What is the market environment like right now? I mean, obviously, for your approach with [ph] and control at least as BDCs classify control.

Well, I think the market -- again, we've said this for several years, we've got 4 independent teams in the lower middle market out originating deals and then taking them cradle to grave. We added a fourth this year. We're happy to do it. We grew at internally. And each of them have several deals they're working on in various stages of diligence. And if we close everything we had, we wouldn't have enough capital. On the other hand, we kill a lot of deals in diligence. When you're talking about lower middle market companies, it's an unaudited, closely held, tax-driven universe. And until you get in there, you really don't know what you have. And we are -- we will have 1 of our 4 teams throw [ph] all their deals, all their backlog and diligence. We might have another one closed all theirs and make it through, but we have a high fatality rate in diligence. So what drives our lower middle market activity is what we find in diligence. And we have not found a good way to predict that in advance. If we did, it would be great because it we'd save a lot of time and misery. But the good news is we're -- hold your estimate with what you're seeing, you're make it through, cradle to grave to close in terms of what you kill for diligence and when you're -- I'd say from cradle to grave, about 1/4 of stuff that we actually would want to transact on. But interestingly, that the -- what the input of transaction is about all these -- all the teams can handle at any one time. There's a continuous supply demand imbalance of the amount of businesses that need capital, that need to exit, aging on or partners that don't get along, you name it. There's no shortage of it. And we just -- we try to pick the ones that are most likely to make it through. To this point, we still kill 75% of those in diligence. So what we struggle with day to day is trying to make sure we have enough capital in place, they all make through, but they generally don't. So we're not seeing structural or pricing variables that impact the demand for our type of capital at all. And as we get bigger and work on bigger deals, we will inevitably encounter some more competition. Because as the companies are easier to understand, emergence to an audited universe and more well-known universe, et cetera, then there's competition. But we think we're a long way off from that meaningfully impacting us.

Our next question is from the line of Mickey Schleien with Ladenburg Thalmann. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: Just wanted to get back a little bit to the tone of the market. I'm getting the sense that despite the fact that the lower middle market tends to be somewhat insulated from broader trends and the credit markets that there is a little bit of frothiness spilling into the market in terms of covenants and multiples, and I was curious whether that was affecting the pace of your originations, either in the third quarter or on a go-forward basis.

Yes. Certainly, the middle market activities that we're involved in is experiencing tightening spreads, more aggressive structures. There's no question about it. There's a lot of retail inflows into loan funds to popular asset class. And the supply, demand and balance I talked about in the lower middle market kind of reverses itself in the middle market. So we're being very cautious. What we try to do is stay at the smaller end of that of the middle market, the smallest -- kind of the smallest term sizes and smallest companies that are eligible for that market, that's kind of where we hang out. But even in that lower range, you are seeing frothiness. There's no question about it. And so when you see some of the BDCs experiencing appreciation in that component of their portfolio is that's bad news on the upcoming yields that you can expect with your new origination, right? You kind of can't have it both ways. So a declining valuation environment is great for new originations and vice versa. So we're clearly seeing that. We're clearly being cautious. So we see -- no, we look for moderate growth there. We expect the bulk of our growth. We hope the bulk of our growth is in the lower middle market side of the portfolio. But that's more a function of maintenance for diligence. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: And if I'm understanding correctly, then you're not seeing those sort of trends yet in the lower middle market, at least among your target?

No. Not when we're looking at $5 million EBITDA companies with enterprise value of $25 million. I don't -- Todd or Dwayne, if you're really seeing it.

Well I would just say that what we are seeing is probably a higher fatality rate than normal, just because there are some investors out there that are getting a little more aggressive. And so we won't -- we'll just lose the deal versus have a tough structure or worse returns. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: Fair enough. Just a couple of housekeeping questions. How much PIK did you accrue this quarter?

The number would be less than 5%. It's between 4% and 5% of total investment income. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: And are you going to release the Q after the call?

Yes, the Q should be filed immediately after the conference call ends.

[Operator Instructions] Our next question is from the line of Dan Nicholas was with Robert W. Baird. Bryce W. Rowe - Robert W. Baird & Co. Incorporated, Research Division: It's Bryce Rowe with Baird. Wanted to ask about the reversal of the incentive accrual. Just maybe provide a little bit more detail behind that. And then a follow-up would be what is a relatively good run rate from an expense standpoint for modeling purposes?

Sure. Well, I'll handle the first part of the question. I'm not sure I understood the second. But the first part is why did we do the incentive comp reversal? It's really pretty simple. As we've grown, added more people, started to recruit laterally, et cetera, we wanted -- we continue to try to tweak our incentive comp programs. Being internally managed, we don't have the 2 and 20. And in fact, '40 Act has some pretty specific limitations on the type of incentive comps that you can have, et cetera, which we can discuss offline because it really is complicated. But what we're trying to do is introduce more variability into our comp structure and try to reward. We've had significant appreciation in the portfolio. We don't want to -- we want to reward that. We don't want to reward that in cash in case the appreciation doesn't materialize. So we want to reward it in restricted stock. And when you do that, when you kind of migrate towards that change, the restricted stock that gets -- that you plan on issuing for 2012 performance gets issued in '13 and starts hitting '13 and forward years' earnings as it amortizes. And you don't need -- as you back off the cash, you don't need what you've accrued. So it's really kind of a change in mix between equity and cash because we think the equity more aligns with rewarding appreciation and exits and the cash aligns better with overperformance with respect in that investment income, which is not really impacted by gains or appreciation, et cetera. So if that makes sense, see that's really -- that's really what we're trying to do. And our [indiscernible] of our board kind of finalized, our new plan midyear. Because we didn't know we had it, we continued to accrue as if we didn't have it for the first 2 or 3 quarters. Now that we have it, we're truing up our accruals. So it's kind of a more or less a onetime deal. And again, it's tricky because when you're an internally managed '40 Act company, the incentive comp is very complicated. Bryce W. Rowe - Robert W. Baird & Co. Incorporated, Research Division: Okay. That's helpful, Vince. So the second part of the question was what's a good run rate from an operating expense perspective here? I mean, obviously, x the interest expense, just trying to get a feel for where you think roughly we should model out expenses in our earnings forecast.

That sounds tailor-made for Dwayne to response.

Yes, great. It's a good question. And when you look at -- I think we talk a lot about the metric we evaluate, which is total operating expenses as a percentage of average assets, and we target something below 2%. And this quarter, it was abnormally low because it's a light quarter for some nonrecurring items related to year end activities, as well as the $300,000 bonus reversal. So we would still target kind of a 2% with the range being 1.9% to 2.1% as a percentage of average total assets. And if you look at it on a dollar basis, I think that would put you around the $4 million level, if you're looking at expenses other than interest expense, maybe as high as $4.25 million, but it would be in that range.

[Operator Instructions] I'm showing no further questions at this time. I'd now like to turn the call back over to management for closing remarks.

Great. Well, we don't really have any closing remarks. We appreciate your participation, and thank you for your continued support and we look forward to talking to you after the first of the year.

Ladies and gentlemen, this concludes Main Street Capital Corporation's Third Quarter Earnings Conference Call. You may now disconnect. Thank you for using ECT conferencing.