Company: NMFCZ
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001496099-25-000027
Chunk: 16

Company: New Mountain Finance Corp
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 2
Chunk 16
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 continue to monitor the liquidation process of the private hedge fund. During the year ended December 31, 2018, we received a $1.5 million payment from our insurance carrier in respect to the settlement. As of June 30, 2025 and December 31, 2024, the SPP Agreement had a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $6.5 million and $6.5 million, respectively, which is reflective of the higher inherent risk in this transaction.

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Revenue Recognition

Sales and paydowns of investments:  Realized gains and losses on investments are determined on the specific identification method.

Interest and dividend income:  Interest income, including amortization of premium and discount using the effective interest method, is recorded on the accrual basis and periodically assessed for collectability. Interest income also includes interest earned from cash on hand. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as part of interest income. We have loans and certain preferred equity investments in the portfolio that contain a payment-in-kind (“PIK”) interest or dividend provision. PIK interest and dividends are accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest and dividends are added to the principal or share balances on the capitalization dates and are generally due at maturity or when redeemed by the issuer. For the three and six months ended June 30, 2025 we recognized PIK interest from investments of approximately $6.9 million and $14.5 million, respectively, and non-cash dividends from investments of approximately $6.6 million and $14.8 million, respectively. For the three and six months ended June 30, 2024 we recognized PIK interest from investments of approximately $9.0 million and $18.7 million, respectively, and non-cash dividends from investments of approximately $7.7 million and $15.2 million, respectively.

Dividend income on common equity is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Dividend income on preferred securities is recorded as dividend income on an accrual basis to the extent that such amounts are deemed collectible.

Non-accrual income:  Investments are placed on non-accrual status when principal or interest payments are past due for 30 days or more and when