Ares Capital Corp (ARCC) 10-Q Quarterly Report October 2022

New York, NY — October 25, 2022 — Ares Capital Corporation (“Ares Capital”) (NASDAQ: ARCC) announced that its Board of Directors has declared a fourth quarter dividend of $0.48 per share. The fourth quarter dividend is payable on December 29, 2022 to stockholders of record as of December 15, 2022. The Board of Directors previously declared on February 9, 2022 an additional dividend of $0.03 per share, subject to the satisfaction of certain Maryland law requirements, payable on December 29, 2022 to stockholders of record as of December 15, 2022.

SEPTEMBER 30, 2022 FINANCIAL RESULTS

Ares Capital also announced financial results for its third quarter ended September 30, 2022.

OPERATING RESULTS


	Q3-22(1)					Q3-21(1)
(dollar amounts in millions, except per share data)	Total Amount		Per Share			Total Amount		Per Share
Core EPS(3)			$	0.50				$	0.47
GAAP net income per share(2)(4)			$	0.21				$	0.73
Net investment income(2)	$	288	$	0.57		$	184	$	0.40
Net realized gains (losses)(2)	$	—	$	—		$	149	$	0.33
Net unrealized gains (losses)(2)	$	(184)	$	(0.36)		$	1	$	—
GAAP net income(2)(4)	$	104	$	0.21		$	334	$	0.73


Dividends declared and payable			$	0.46	(5)			$	0.41


	As of
(dollar amounts in millions, except per share data)	September 30, 2022		December 31, 2021
Portfolio investments at fair value	$	21,339	$	20,009
Total assets	$	22,038	$	20,843
Stockholders’ equity	$	9,436	$	8,868
Net assets per share	$	18.56	$	18.96
Debt/equity ratio	1.27x		1.26x

____________________________________________

(1)Net income can vary substantially from period to period due to various factors, including the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.

(2)All per share amounts and weighted average shares outstanding are basic. The basic weighted average shares outstanding for the three months ended September 30, 2022 and 2021 were approximately 503 million and 453 million, respectively.

(3)Core EPS is a non-GAAP financial measure. Core EPS is the net increase (decrease) in stockholders’ equity resulting from operations less net realized and unrealized gains and losses, any capital gains incentive fees attributable to such net realized and unrealized gains and losses and any income taxes related to such net realized gains and losses, divided by the basic weighted average shares outstanding for the relevant period. Basic GAAP net income (loss) per share is the most directly comparable GAAP financial measure. Ares Capital believes that Core EPS provides useful information to investors regarding financial performance because it is one method Ares Capital uses to measure its financial condition and results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Reconciliations of Core EPS to the most directly comparable GAAP financial measure are set forth in Schedule 1 hereto.

The following information was filed by Ares Capital Corp (ARCC) on Tuesday, October 25, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Ares Capital Corp's 10-Q Quarterly Report:

Financial - Dividend Highlight
Dividend income for the three and nine months ended September 30, 2022 and 2021 were as follows: Dividend income received from IHAM for the three and nine months ended September 30, 2022 increased from the comparable periods primarily due to the continued increase in IHAM's assets under management, which generally has been supported by our additional investments in IHAM.

Financial - Shares Highlight
Stock Repurchase Program We are authorized under our stock repurchase program to purchase up to $500 million in the aggregate of our outstanding common stock in the open market at certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Securities Exchange Act of 1934, as amended.
Financial - Shares Highlight
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our liquidity and capital resources are generated primarily from the net proceeds of public offerings of equity and debt securities, advances from the Revolving Credit Facility, the Revolving Funding Facility, the SMBC Funding Facility and the BNP Funding Facility (each as defined below, and together, the "Facilities"), net proceeds from the issuance of other securities, including unsecured notes, as well as cash flows from operations.
Other - Other Highlight
The interest rate charged on the SMBC Funding Facility is based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over a "base rate" (as defined in the agreements governing the SMBC Funding Facility), in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility.
Financial - Expense Highlight
This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors.
Financial - Debt
The 2024 Convertible Notes and...Read more
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Our actual results and condition...Read more
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In addition, changes in the...Read more
Revenue - Geography
The capital gains incentive fee...Read more
Financial - Expense
3 Involves a level of...Read more
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Recurring dividend income for the...Read more
Revenue - Geography
162 The net realized losses...Read more
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Rule 2a-5 permits boards of...Read more
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(2)"Weighted average yield on total...Read more
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(8)"Weighted average yield of debt...Read more
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We are externally managed by...Read more
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(5)"Weighted average yield on other...Read more
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Debt and equity securities that...Read more
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Income Tax Expense, Including Excise...Read more
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MACRO-ECONOMIC ENVIRONMENT Credit markets continued...Read more
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2 Indicates that the risk...Read more
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(2)The proceeds from these certificates...Read more
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As of September 30, 2022,...Read more
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Internal rate of return is...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Ares Capital Corp provided additional information to their SEC Filing as exhibits

Exhibit 10.1: Material Contract

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: ARCC
CIK: 1287750
Form Type: 10-Q Quarterly Report
Accession Number: 0001287750-22-000052
Submitted to the SEC: Tue Oct 25 2022 6:22:05 AM EST
Accepted by the SEC: Tue Oct 25 2022
Period: Friday, September 30, 2022
Industry: 1287750