Net Realized Gain or Loss
Total net realized gain or loss for the three and nine months ended September 30, 2012 was a gain of $2.8 million and a loss of $73.4 million, respectively, compared to a gain of $1.1 million and a loss of $42.4 million for the three and nine months ended September 30, 2011. Net realized gain for the three months ended September 30, 2012 was the result of $3.8 million in net gains realized from the sales, repayments and other exits of our investments, the realization of a $1.4 million tax provision on the disposition of an equity investment through a consolidated subsidiary, and $0.4 million in net gains realized on foreign currency transactions. Net realized gain on investments resulted primarily from the disposition of our equity investment in Conney Prime Holdings LLC. Excluding the realization of the tax provision, nearly the entire net realized gain on investments represents amounts that had been reflected in unrealized appreciation on investments in prior periods. Foreign currency gains mainly represent net gains on forward currency contracts used to mitigate the impact that changes in foreign exchange rates would have on our investments denominated in foreign currencies.
Net Unrealized Appreciation or Depreciation
For the three and nine months ended September 30, 2012, the change in net unrealized appreciation on investments and foreign currency translation was a (decrease) increase in net unrealized appreciation of ($12.4) million and $63.7 million, respectively, versus ($9.2) million and $50.7 million for the three and nine months ended September 30, 2011. The decrease in net unrealized appreciation on investments for the three months ended September 30, 2012 includes $3.8 million relating to reversals of prior periods’ net unrealized appreciation as a result of investment dispositions. Net unrealized appreciation (depreciation) was $11.7 million at September 30, 2012 and ($55.2) million at September 30, 2011. For the three months ended September 30, 2012, certain of our portfolio companies had strong performance while there was underperformance in certain others. Removing the effects of reversals due to dispositions during the quarter, the net decrease in unrealized appreciation for the three months ended September 30, 2012 was a decline of 0.7% of our total portfolio at fair market value.
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