Incentive management fees for the three months and year ended December 31, 2012 were $17.3 million and $22.5 million, respectively, as compared to $11.9 million for the three months and year ended December 31, 2011. With respect to incentive management fees based on income, $17.0 million was earned for the annual 2012 period, versus $11.9 million for 2011. The year over year increase is due to an increase in the overall portfolio returns from 11.4% to 12.8%, the factor from which the income based incentive management fees are derived. These returns are computed from the period's distributable net income to shareholders as compared to the beginning of period net asset value. Of the current period totals and new this year, $2.5 million and $5.5 million, respectively, represent incentive management fees accrued based on a hypothetical capital gains calculation, as required by GAAP. A hypothetical liquidation is performed each quarter possibly resulting in an incentive management fee accrual if the amount is positive. It should be noted, however, that a fee so calculated and accrued is not due and payable, if at all, until the end of each measurement period, or every June 30.
Interest and credit facility related expenses were $4.7 million and $19.6 million, respectively, for the three months and year ended December 31, 2012, compared to $4.7 million and $16.6 million for the three months and year ended December 31, 2011. The increase in the 2012 period is mainly a result of increased borrowing levels, as average debt outstanding increased over $90 million from 2011 levels to an average of $381.5 million for 2012.
Expenses also consist of amortization of debt issuance costs, investment advisor expenses, professional fees, administrative services expense, director fees and miscellaneous other expenses.
Net Investment IncomeContinuing our positive earnings momentum, net investment income totaled $8.3 million and $73.7 million, or $0.11 per share and $1.00 per share, respectively, for the three months and year ended December 31, 2012. For the three months and year ended December 31, 2011, net investment income totaled $11.3 million and $72.9 million, or $0.15 per share and $1.00 per share, respectively. Our portfolio continues to produce a stable amount of interest and dividend income relative to it's size, and the income based incentive management fee continues to be concentrated in the fourth quarter, producing an uncharacteristically low net investment income per share relative to that for the entire year. Had our incentive management fees been accrued ratably throughout the year rather than heavily weighted in the fourth quarter as is the result when applying GAAP, our net investment income, as adjusted, would have been $0.27 per share and $1.08 per share, respectively, for the three months and year ended December 31, 2012. Alternate presentations of net investment income per share adjusting to normalize this fourth quarter concentration can be found in the Supplemental table on page 9.