<PAGE>
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended Commission file number:
SEPTEMBER 30, 1995 0-18016
- ------------------------------ -----------------------
ALLIED CAPITAL CORPORATION II
------------------------------------------------------
(exact name of Registrant as specified in its charter)
MARYLAND 52-1628801
- ----------------------------- --------------------
(State or jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1666 K STREET, N.W.
9TH FLOOR
WASHINGTON, DC 20006
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 331-1112
----------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods as the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
----- -----
On November 3, 1995 there were 6,944,857 shares outstanding of the
Registrant's common stock, $1 par value.
<PAGE>
ALLIED CAPITAL CORPORATION II AND SUBSIDIARIES
FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Financial Position as of
September 30, 1995 and December 31, 1994 . . . . . . . . . . . 1
Consolidated Statement of Operations - For the Three
and Nine Months Ended September 30, 1995 and 1994 . . . . . . 2
Consolidated Statement of Changes in Net Assets -
For the Nine Months Ended September 30, 1995 and 1994 . . . . 3
Consolidated Statement of Cash Flows - For the Nine
Months Ended September 30, 1995 and 1994 . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 8
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . 8
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . 8
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 8
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . 8
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 8
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
ALLIED CAPITAL CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands, except number of shares)
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
------------------ -----------------
(unaudited)
<S> <C> <C>
Assets
Investments at value:
Loans and debt securities . . . . . . . . . . . . . . $ 75,158 $ 79,423
Equity securities . . . . . . . . . . . . . . . . . . 13,402 6,714
Other investment assets . . . . . . . . . . . . . . . 1,252 1,993
------------------ -----------------
Total investments . . . . . . . . . . . . . . . . . 89,812 88,130
Cash and cash equivalents . . . . . . . . . . . . . . . . 17,766 11,591
U.S. government securities . . . . . . . . . . . . . . . -- 748
Other assets . . . . . . . . . . . . . . . . . . . . . . 1,106 1,465
------------------ -----------------
Total assets . . . . . . . . . . . . . . . . . . . $ 108,684 $ 101,934
================== =================
Liabilities
Dividends and distributions payable . . . . . . . . . . . $ -- $ 2,359
Investment advisory fee payable . . . . . . . . . . . . . 590 579
Due to affiliates . . . . . . . . . . . . . . . . . . . . 50 297
Other liabilities . . . . . . . . . . . . . . . . . . . . 1,037 1,224
------------------ -----------------
Total liabilities . . . . . . . . . . . . . . . . . 1,677 4,459
------------------ -----------------
Commitments and Contingencies
Shareholders' Equity
Common stock, $1 par value; 20,000,000 shares authorized;
6,944,857 and 6,938,191 shares issued and outstanding
at 9/30/95 and 12/31/94 . . . . . . . . . . . . . . . 6,945 6,938
Additional paid-in capital . . . . . . . . . . . . . . . 89,953 89,860
Notes receivable from sale of common stock . . . . . . . (691) (943)
Net unrealized appreciation on investments . . . . . . . 8,035 2,919
Undistributed (distributions in excess of)
accumulated earnings . . . . . . . . . . . . . . . . . 2,765 (1,299)
------------------ -----------------
Total shareholders' equity . . . . . . . . . . . . 107,007 97,475
------------------ -----------------
Total liabilities and shareholders' equity . . . . $ 108,684 $ 101,934
================== =================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
1
<PAGE>
ALLIED CAPITAL CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Investment income:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,940 $ 2,305 $ 8,390 $ 6,543
Other income . . . . . . . . . . . . . . . . . . . . . . . 218 -- 508 --
-------- -------- -------- --------
Total investment income . . . . . . . . . . . . . . . . 3,158 2,305 8,898 6,543
-------- -------- -------- --------
Expenses:
Investment advisory fee . . . . . . . . . . . . . . . . . 591 532 1,805 1,565
Legal and audit fees . . . . . . . . . . . . . . . . . . . 96 59 279 138
Other operating expenses . . . . . . . . . . . . . . . . . 89 54 321 228
-------- -------- -------- --------
Total expenses . . . . . . . . . . . . . . . . . . . . 776 645 2,405 1,931
-------- -------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . 2,382 1,660 6,493 4,612
Net realized gains on investments . . . . . . . . . . . . . . 3,097 528 3,193 1,148
-------- -------- -------- --------
Net investment income before net unrealized
appreciation (depreciation) on investments . . . . . . . . 5,479 2,188 9,686 5,760
Net unrealized appreciation (depreciation) on investments . . 732 (880) 5,116 (355)
-------- -------- -------- --------
Net increase in net assets resulting from operations . . . . $ 6,211 $ 1,308 $ 14,802 $ 5,405
======== ======== ======== ========
Earnings per share . . . . . . . . . . . . . . . . . . . . . $ 0.89 $ 0.19 $ 2.13 $ 0.78
======== ======== ======== ========
Weighted average number of shares and share
equivalents outstanding. . . . . . . . . . . . . . . . . . 6,978 6,942 6,959 6,939
======== ======== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
2
<PAGE>
ALLIED CAPITAL CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
---------------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Increase in net assets resulting from operations:
Net investment income . . . . . . . . . . . . . . . . . . . $ 6,493 $ 4,612
Net realized gains on investments . . . . . . . . . . . . . 3,193 1,148
Net change in unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . . . . . . 5,116 (355)
---------- ----------
Net increase in net assets resulting from operations . . . 14,802 5,405
Distributions to Shareholders . . . . . . . . . . . . . . . . (5,621) (5,204)
Capital Share Transactions . . . . . . . . . . . . . . . . . . 351 33
---------- ----------
Net Increase in Net Assets . . . . . . . . . . . . . . . . . . 9,532 234
Net assets at beginning of period . . . . . . . . . . . . . . 97,475 96,225
---------- ----------
Net assets at end of period . . . . . . . . . . . . . . . . . $ 107,007 $ 96,459
========== ==========
Net asset value per share . . . . . . . . . . . . . . . . . . $ 15.41 $ 13.90
========== ==========
Shares outstanding at end of period . . . . . . . . . . . . . 6,945 6,938
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
3
<PAGE>
ALLIED CAPITAL CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
---------------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net increase in net assets resulting from operations . . . . . . . $ 14,802 $ 5,405
Adjustments to reconcile net increase in net assets resulting from
operations to net cash provided by operating activities:
Net unrealized appreciation on investments . . . . . . . . . (5,116) 355
Net realized gains on investments . . . . . . . . . . . . . (3,193) (1,148)
Changes in assets and liabilities:
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 359 (481)
Investment advisory fee payable . . . . . . . . . . . . . . 11 65
Due to affiliates . . . . . . . . . . . . . . . . . . . . . (247) (831)
Other liabilities . . . . . . . . . . . . . . . . . . . . . (187) 127
---------- ----------
Net cash provided by operating activities . . . . . . . . 6,429 3,492
---------- ----------
Cash Flows From Investing Activities:
Net decrease (increase) in investments . . . . . . . . . . . . . . 6,626 (8,385)
Net redemption of U.S. government securities . . . . . . . . . . . 748 11,196
Payments on notes receivable . . . . . . . . . . . . . . . . . . . 352 33
---------- ----------
Net cash provided by investing activities . . . . . . . . 7,726 2,844
---------- ----------
Cash Flows From Financing Activities:
Dividends and distributions paid . . . . . . . . . . . . . . . . . (7,980) (6,729)
---------- ----------
Net cash used in financing activities . . . . . . . . . . (7,980) (6,729)
---------- ----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . 6,175 (393)
Cash and cash equivalents, beginning of period . . . . . . . . . . . 11,591 10,947
---------- ----------
Cash and cash equivalents, end of period . . . . . . . . . . . . . . $ 17,766 $ 10,554
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
4
<PAGE>
ALLIED CAPITAL CORPORATION II AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
NOTE 1. GENERAL
In the opinion of management, the accompanying unaudited
consolidated financial statements of Allied Capital Corporation II
and subsidiaries (the Company) contain all adjustments necessary to
present fairly the Company's consolidated financial position as of
September 30, 1995 and the results of operations, changes in net
assets, and cash flows for the periods indicated. Certain information
and footnote disclosures normally included in the financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's
December 31, 1994 Annual Report. The results of operations for the
nine months ended September 30, 1995 are not necessarily indicative of
the operating results to be expected for the full year. Certain
reclassifications have been made to the 1994 financial statements in
order to conform to the 1995 presentation.
NOTE 2. DISTRIBUTIONS
The Company's Board of Directors declared a $0.29 per share third
quarter dividend that was paid on September 29, 1995 to shareholders
of record as of September 15, 1995. The Company's Board of Directors
also declared a $0.27 per share second quarter dividend that was paid
on June 28, 1995, and declared a $0.25 per share first quarter
dividend that was paid on March 29, 1995 to shareholders.
NOTE 3. COMMITMENTS AND CONTINGENCIES
Commitments. The Company had loan commitments outstanding equal to
$20 million at September 30, 1995 to invest in various existing and
prospective portfolio companies.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Total investments increased by 1.9% from $88.1 million at
December 31, 1994 to $89.8 million at September 30, 1995. This
increase was primarily due to new investments of $21.8 million, net
of repayments and valuation changes, of approximately $20.1 million.
Cash and cash equivalents and U.S. government securities increased by
44% from $12.3 million at December 31, 1994 to $17.8 million at
September 30, 1995 due to the repayment of investments, net of new
investments and dividends paid to shareholders, and net cash provided
by operating activities. Net assets increased from $97.5 million at
December 31, 1994 to $107 million at September 30, 1995. This
increase is due to the net increase in net assets resulting from
operations, including net unrealized appreciation on investments, for
the nine months ended September 30, 1995 exceeding the year to date
dividends declared.
At September 30, 1995 outstanding commitments for future
financings were $20 million. The Company's current cash and cash
equivalents combined with its available $25 million line of credit is
adequate to satisfy these commitments, its operating needs and other
future investment opportunities that may arise throughout the
remainder of the year.
RESULTS OF OPERATIONS
Third Quarter Ended September 30, 1995 Compared with Third Quarter
Ended September 30, 1994.
The net increase in net assets resulting from operations for the
third quarter of 1995 was $6.2 million as compared to the 1994 net
increase in net assets resulting from operations of $1.3 million.
Earnings per share for the quarter increased to $0.89 per share from
$0.19 per share in 1994.
Total investment income increased 37% from $2.3 million for the
third quarter of 1994 to $3.2 million for the third quarter of 1995.
The increase in interest income resulted from a net increase in loans
and debt securities outstanding and a reduction in the Company's non-
performing assets since the end of 1994. The Company also received a
prepayment penalty on the early payoff of a debt in the third quarter
of 1995 totaling $270,000. Other income consists primarily of $99,000
of litigation costs from prior periods recovered during the third
quarter of 1995 and $113,000 of income from an equity participation
in one portfolio company.
Expenses increased 20% from $0.6 million for the third quarter of
1994 to $0.8 million for the third quarter of 1995. The investment
advisory fee increased 11% resulting from the increase in investments
and other assets that the investment advisory fee is based upon. The
largest single factor effecting the increase in net assets resulting
from operations for the third quarter ended September 30, 1995 related
to $3.1 million in net realized gains on investments resulting from
the disposition or early payoff of investments. A few of the early
payoffs were due to portfolio companies being sold. Net realized
gains are unpredictable; however, the Company exits transactions when
it believes realized gains can be maximized.
Nine Months Ended September 30, 1995 Compared with Nine Months Ended
September 30, 1994.
Net increase in net assets resulting from operations for the nine
months ended September 30, 1995 increased to $14.8 million, or 174%,
from $5.4 million in the same period of 1994. Earnings per share for
the period increased to $2.13 per share from $0.78 per share in 1994.
The increase in net assets resulting from operations for the nine
months was caused by the same factors discussed in the quarter-to-
quarter comparison above.
6
<PAGE>
PORTFOLIO CHANGES
The following represents portfolio investment balances in the
Company as of September 30, 1995 that have changes in appreciation or
depreciation by more than 10% as compared to the appreciation or
depreciation as of December 31, 1994.
<TABLE>
<CAPTION>
Appreciation (Depreciation)
----------------------------------------
Investment Company September 30, 1995 December 31, 1994 $ Change Percent Change
- ------------------ ------------------ ----------------- ---------- --------------
<S> <C> <C> <C> <C>
Allied Waste $1,045,257 $ 0 $1,045,257 *
Devlieg-Bullard, Inc. 86,358 0 86,358 *
Envirco Corp. ** 124,687 (124,687) (100%)
Enviroplan (527,586) 66,529 (594,115) (893%)
Esquire Communications 36,075 0 36,075 *
Garden Ridge 3,457,843 433,125 3,024,718 698%
Gateway Health (491,941) (1,942) (489,999) (25,232%)
Global Software 476,715 0 476,715 *
Grant Broadcasting 290,992 0 290,992 *
Jackson Products ** 183,418 (183,418) (100%)
June Broadcasting 1,274,371 411,970 862,401 209%
Markings and Equipment (632,140) (315,000) (317,140) (101%)
Mill It Striping (125,000) 0 (125,000) *
Montgomery Tank Lines 186,603 123,906 62,697 51%
Nobel Education Dynamics 1,070,877 0 1,070,877 *
Old Mill (32,338) 0 (32,338) *
R-Tex Decoratives (25,439) 0 (25,439) *
Trion, Inc. (51,744) 0 (51,744) *
West Virginia Radio (200,000) (150,000) (50,000) (33%)
Corporation
Williams Brothers 683,599 856,799 (173,200) (20%)
</TABLE>
* Percentage not applicable due to zero balance at December 31, 1994.
** Appreciation (depreciation) at September 30, 1995 is not applicable as the
investment was repaid, sold, or written off between December 31, 1994 and
September 30, 1995.
7
<PAGE>
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is not a defendant in any material pending legal proceeding
and no such material proceedings are know to be contemplated.
Item 2. CHANGES IN SECURITIES
No material changes have occurred in the securities of the Registrant.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
11 Statement of Computation of Earnings Per Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended September 30, 1995.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
ALLIED CAPITAL CORPORATION II
---------------------------------------
(Registrant)
Date: November 14, 1995
----------------------- ---------------------------------------
Jon A. DeLuca
Senior Vice President and
Chief Financial Officer
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
ALLIED CAPITAL CORPORATION II
---------------------------------------
(Registrant)
Date: November 14, 1995 s/Jon A. DeLuca
----------------------- ---------------------------------------
Jon A. DeLuca
Senior Vice President
Chief Financial Officer
10
<PAGE>
Allied Capital Corporation II and Subsidiaries
Exhibit 11 Computation of Earnings Per Common Share
Form 10-Q
September 30, 1995
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Primary Earnings Per Share:
Net Increase in Net Assets Resulting
from Operations $ 6,211,000 $ 1,308,000 $ 14,802,000 $ 5,405,000
============ ============ ============ ============
Weighted average number of
shares outstanding 6,940,437 6,938,191 6,938,948 6,938,191
Weighted average number of
shares issuable on exercise
of outstanding stock options 37,369 4,247 20,564 1,188
------------ ------------ ------------ ------------
Weighted average number of shares and
share equivalents outstanding 6,977,806 6,942,438 6,959,512 6,939,379
============ ============ ============ ============
Earnings per Share $ 0.89 $ 0.19 $ 2.13 $ 0.78
============ ============ ============ ============
Fully Diluted Earnings Per Share:
Net Increase in Net Assets Resulting
from Operations $ 6,211,000 $ 1,308,000 $ 14,802,000 $ 5,405,000
============ ============ ============ ============
Weighted average number of
shares and share equivalents
outstanding as computed for
primary earnings per share 6,977,806 6,942,438 6,959,512 6,939,379
Weighted average of additional
shares issuable on exercise
of outstanding stock options 210 -- 14,270 --
------------ ------------ ------------ ------------
Weighted average of shares and
share equivalents outstanding, as adjusted 6,978,016 6,942,438 6,973,782 6,939,379
============ ============ ============ ============
Earnings per Share $ 0.89 $ 0.19 $ 2.12 $ 0.78
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Allied
Capital Corporation II and Subsidiaries' Consolidated Statement of Financial
Position, Consolidated Statement of Operations, Consolidated Statement of
Changes in Net Assets and Consolidated Statement of Cash Flows and is qualified
in its entirety by reference to such Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 81,777
<INVESTMENTS-AT-VALUE> 89,812
<RECEIVABLES> 0
<ASSETS-OTHER> 1,106
<OTHER-ITEMS-ASSETS> 17,766
<TOTAL-ASSETS> 108,684
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,677
<TOTAL-LIABILITIES> 1,677
<SENIOR-EQUITY> 6,945
<PAID-IN-CAPITAL-COMMON> 89,953
<SHARES-COMMON-STOCK> 6,945
<SHARES-COMMON-PRIOR> 6,938
<ACCUMULATED-NII-CURRENT> 6,493
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,193
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,035
<NET-ASSETS> 107,007
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,390
<OTHER-INCOME> 508
<EXPENSES-NET> 2,405
<NET-INVESTMENT-INCOME> 6,493
<REALIZED-GAINS-CURRENT> 3,193
<APPREC-INCREASE-CURRENT> 5,116
<NET-CHANGE-FROM-OPS> 14,802
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,621
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 9,532
<ACCUMULATED-NII-PRIOR> 4,612
<ACCUMULATED-GAINS-PRIOR> 1,148
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,805
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,405
<AVERAGE-NET-ASSETS> 102,200
<PER-SHARE-NAV-BEGIN> 14.05
<PER-SHARE-NII> .93
<PER-SHARE-GAIN-APPREC> 1.20
<PER-SHARE-DIVIDEND> .81
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.41
<EXPENSE-RATIO> .02
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
