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Owl Rock Capital Corp (ORCC) SEC Filing 8-K Material Event for the period ending Wednesday, February 23, 2022

Owl Rock Capital Corp

CIK: 1655888 Ticker: ORCC

 

Exhibit 99.1

 

Owl Rock Capital Corp. Reports Full Year Results and Fourth Quarter Net Investment Income Per Share of $0.35 and NAV Per Share of $15.08

 

NEW YORK — February 23, 2022 — Owl Rock Capital Corporation (NYSE: ORCC, or the “Company”) today reported net investment income of $137.9 million, or $0.35 per share, and net income of $174.0 million, or $0.44 per share, for the fourth quarter ended December 31, 2021. Reported net asset value per share was $15.08 at December 31, 2021 as compared to $14.95 at September 30, 2021.

 

“2021 was a milestone year for us,” commented Craig W. Packer, Chief Executive Officer of Owl Rock Capital Corporation. “We fully deployed our portfolio, increased our leverage to comfortably within our target range, maintained very strong credit performance and continued to optimize our balance sheet. It culminated in our highest quarterly net investment income for the year, representing an annualized ROE of approximately 9%. We’re extremely pleased with this quarter’s results and we look forward to continuing to deliver for our shareholders in 2022.”

 

The Company’s Board of Directors has declared a first quarter 2022 dividend of $0.31 per share for stockholders of record as of March 31, 2022, payable on or before May 13, 2022.

 

PORTFOLIO AND INVESTING ACTIVITY

 

For the full year ended December 31, 2021, new investment commitments totaled $6,824.8 million. This compares to $3,444.8 million for year ended December 31, 2020.

 

For the full year ended December 31, 2021, the principal amount of new investments funded was $5,842.4 million and the Company had $4,258.8 million aggregate principal amount in exits and repayments.

 

For the full year ended December 31, 2020, the principal amount of new investments funded was $2,845.5 million and the Company had $1,151.9 million aggregate principal amount in exits and repayments.

 

For the three months ended December 31, 2021, new investment commitments totaled $1,589.2 million. This compares to $1,527.4 million for the three months ended December 31, 2020.

 

For the three months ended December 31, 2021, the principal amount of new investments funded was $1,459.8 million across 22 new portfolio companies and 9 existing portfolio companies. For this period, the Company had $909.6 million aggregate principal amount in exits and repayments.

 

For the three months ended December 31, 2020, the principal amount of new investments funded was $1,274.9 million across 12 new portfolio companies and 14 existing portfolio companies. For this period, the Company had $520.3 million aggregate principal amount in exits and repayments.

 

As of December 31, 2021 and December 31, 2020, the Company had investments in 143 and 119 portfolio companies with an aggregate fair value of $12.7 billion and $10.8 billion, respectively. As of December 31, 2021, the average investment size in each portfolio company was $89.1 million based on fair value.

 

As of December 31, 2021, based on fair value, our portfolio consisted of 74.9% first lien senior secured debt investments, 15.1% second lien senior secured debt investments, 1.5% unsecured debt investments, 1.9% investment funds and vehicles, 2.1% preferred equity investments and 4.5% common equity investments.

 

As of December 31, 2020, based on fair value, our portfolio consisted of 77.5% first lien senior secured debt investments, 18.5% second lien senior secured debt investments, 0.5% unsecured debt investments, 1.0% investment funds and vehicles, 0.2% preferred equity investments and 2.3% common equity investments.

 

 


 

 

As of December 31, 2021 and December 31, 2020, approximately 90.0% and 96.0% of the portfolio was invested in secured debt, respectively. As of December 31, 2021, 98.9% of our debt investments based on fair value in our portfolio were at floating rates.

 

As of December 31, 2021 and December 31, 2020, the weighted average total yield of accruing debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts)1 was 7.9% and 8.1%, respectively, and the weighted average total yield of accruing debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts)1 was 7.9% and 8.0%, respectively.

 

As of December 31, 2021, one portfolio company with an aggregate fair value of $16.5 million was on non-accrual status, representing 0.1% of the total fair value of the portfolio.

 

RESULTS OF OPERATIONS FOR THE FULL YEAR AND QUARTER ENDED DECEMBER 31, 2021

 

Investment Income

Investment income increased to $1,021.4 million for the full year ended December 31, 2021 from $803.3 million for the full year ended December 31, 2020. The increase was primarily due to an increase in our debt investment portfolio, partially offset by a decrease in our portfolio’s weighted average yield period over period.

 

Investment income increased to $281.6 million for the three months ended December 31, 2021 from $221.3 million for the three months ended December 31, 2020. The increase was primarily due to an increase in our debt investment portfolio, partially offset by a decrease in our portfolio’s weighted average yield period over period.

 

Expenses

Total expenses increased to $527.3 million for the full year ended December 31, 2021 from $283.8 million for the full year ended December 31, 2020, primarily due to an increase in interest expense and increase in gross management fees and incentive fees, coupled with the expiration of the management fee and incentive fee waivers in October 2020. The increase in interest expense was primarily driven by an increase in average daily borrowings, partially offset by a decrease in the average interest rate period over period.

 

Total expenses increased to $143.8 million for the three months ended December 31, 2021 from $106.7 million for the three months ended December 31, 2020, primarily due to an increase in interest expense and increase in gross management fees and incentive fees, coupled with the expiration of the management fee and incentive fee waivers. The increase in interest expense was primarily driven by an increase in average daily borrowings, partially offset by a decrease in the average interest rate period over period.

 

Liquidity and Capital Resources

As of December 31, 2021, we had $447.1 million in cash and restricted cash, $7.2 billion in total principal value of debt outstanding, and $1.4 billion of undrawn capacity on our credit facilities. The Company’s weighted average interest rate on debt outstanding was 2.9% and 3.2% for the three months ended December 31, 2021 and December 31, 2020, respectively. Ending debt to equity was 1.13x and 0.87x for the periods ended December 31, 2021 and December 31, 2020, respectively.

 

 

 

 

 

 

 

 

1 

For non-stated rate income producing investments, computed based on (a) the dividend or interest income earned for the respective trailing twelve months ended on the measurement date, divided by (b) the ending cost or fair value.  In instances where historical dividend or interest income data is not available or not representative for the trailing twelve months ended, the dividend or interest income is annualized. Prior to September 30, 2021, non-stated rate income producing investments were computed based on (a) the IRR on the measurement date, divided by (b) the ending cost or fair value. Prior to September 30, 2021, the weighted average total yield of accruing debt and income producing securities at fair value and cost as of December 31, 2020 was reported as 8.3% and 8.2%, respectively.

 


 

 

 

 

 

Conference Call and Webcast Information

 

Conference Call Information:

The conference call will be broadcast live on February 24, 2022 at 10:00 a.m. Eastern Time on the Investor Resources section of ORCC’s website at www.OwlRockCapitalCorporation.com. Please visit the website to test your connection before the webcast.

 

Participants are also invited to access the conference call by dialing one of the following numbers:

 

Domestic: 1 (888) 440-4182

 

International: (646) 960-0653

 

Conference ID: 7406736

 

All callers will need to enter the Conference ID followed by the # sign and reference “Owl Rock Capital Corporation” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.

 

Replay Information:

An archived replay will be available for 14 days via a webcast link located on the Investor Resources section of ORCC’s website, and via the dial-in numbers listed below:

 

Domestic: 1 (800) 770-2030

 

International: (647) 362-9199

 

Conference ID: 7406736

 


 

 

Financial Highlights

 

 

For the three months ended

 

($ in thousands, except per share amounts)

 

December 31, 2021

 

 

September 30, 2021

 

 

December 31,      2020

 

Investments at Fair Value

 

$

12,741,640

 

 

$

12,110,098

 

 

$

10,842,072

 

Total Assets

 

$

13,298,170

 

 

$

13,075,878

 

 

$

11,304,357

 

Net Asset Value Per Share

 

$

15.08

 

 

$

14.95

 

 

$

14.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income

 

$

281,624

 

 

$

269,191

 

 

$

221,254

 

Net Investment Income

 

$

137,854

 

 

$

130,499

 

 

$

114,601

 

Net Income

 

$

174,006

 

 

$

142,851

 

 

$

180,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income Per Share

 

$

0.35

 

 

$

0.33

 

 

$

0.29

 

Net Realized and Unrealized Gains (and Losses) Per Share

 

$

0.09

 

 

$

0.03

 

 

$

0.17

 

Net Income Per Share

 

$

0.44

 

 

$

0.36

 

 

$

0.46

 

Distributions Declared from Net Investment Income Per Share

 

$

0.31

 

 

$

0.31

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Yield of Accruing Debt and Income Producing Securities at Fair Value1

 

 

7.9

%

 

 

7.9

%

 

 

8.1

%

Weighted Average Yield of Accruing Debt and Income Producing Securities at Amortized Cost1

 

 

7.9

%

 

 

7.9

%

 

 

8.0

%

Percentage of Debt Investment Commitments at Floating Rates

 

 

98.9

%

 

 

99.9

%

 

 

99.9

%

 

1.

For non-stated rate income producing investments, computed based on (a) the dividend or interest income earned for the respective trailing twelve months ended on the measurement date, divided by (b) the ending cost or fair value.  In instances where historical dividend or interest income data is not available or not representative for the trailing twelve months ended, the dividend or interest income is annualized. Prior to September 30, 2021, non-stated rate income producing investments were computed based on (a) the IRR on the measurement date, divided by (b) the ending cost or fair value. Prior to September 30, 2021, the weighted average total yield of accruing debt and income producing securities at fair value and cost as of December 31, 2020 was reported as 8.3% and 8.2%, respectively.

 


 

consolidated statements of ASSETS and LIABILITIES

($ in thousands, except per share amounts)

 

December 31, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments (amortized cost of $12,073,126 and $10,653,613, respectively)

 

$

12,124,860

 

 

$

10,569,691

 

Controlled, affiliated investments (amortized cost of $575,427 and $275,105, respectively)

 

 

616,780

 

 

 

272,381

 

Total investments at fair value (amortized cost of $12,648,553 and $10,928,718, respectively)

 

 

12,741,640

 

 

 

10,842,072

 

Cash (restricted cash of $21,481 and $8,841, respectively)

 

 

431,442

 

 

 

347,917

 

Foreign cash (cost of $16,096 and $9,641, respectively)

 

 

15,703

 

 

 

9,994

 

Interest receivable

 

 

81,716

 

 

 

57,108

 

Receivable for investments sold

 

 

 

 

 

6,316

 

Receivable from a controlled affiliate

 

 

3,953

 

 

 

2,347

 

Prepaid expenses and other assets

 

 

23,716

 

 

 

38,603

 

Total Assets

 

$

13,298,170

 

 

$

11,304,357

 

Liabilities

 

 

 

 

 

 

 

 

Debt (net of unamortized debt issuance costs of $110,239 and $91,085, respectively)

 

$

7,079,326

 

 

$

5,292,722

 

Distribution payable

 

 

122,068

 

 

 

152,087

 

Management fee payable

 

 

46,770

 

 

 

35,936

 

Incentive fee payable

 

 

29,242

 

 

 

19,070

 

Payables to affiliates

 

 

5,802

 

 

 

6,527

 

Accrued expenses and other liabilities

 

 

77,085

 

 

 

51,581

 

Total Liabilities

 

 

7,360,293

 

 

 

5,557,923

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

 

 

 

Common shares $0.01 par value, 500,000,000 shares authorized; 393,766,855 and 389,966,688 shares issued and outstanding, respectively

 

 

3,938

 

 

 

3,900

 

Additional paid-in-capital

 

 

5,990,360

 

 

 

5,940,979

 

Total distributable earnings (losses)

 

 

(56,421

)

 

 

(198,445

)

Total Net Assets

 

 

5,937,877

 

 

 

5,746,434

 

Total Liabilities and Net Assets

 

$

13,298,170

 

 

$

11,304,357

 

Net Asset Value Per Share

 

$

15.08

 

 

$

14.74

 

 


 

 

consolidated statements of operations

 

 

For the Years Ended December 31,

 

 

($ in thousands, except per share amounts)

 

2021

 

 

2020

 

 

2019

 

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income from non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

887,753

 

 

$

732,309

 

 

$

674,949

 

 

Payment-in-kind interest income

 

 

53,185

 

 

 

36,408

 

 

 

16,905

 

 

Dividend income

 

 

28,052

 

 

 

10,409

 

 

 

 

 

Other income

 

 

25,845

 

 

 

14,736

 

 

 

16,119

 

 

Total investment income from non-controlled, non-affiliated investments

 

 

994,835

 

 

 

793,862

 

 

 

707,973

 

 

Investment income from controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

5,531

 

 

 

327

 

 

 

 

 

Dividend income

 

 

20,394

 

 

 

9,063

 

 

 

10,046

 

 

Other Income

 

 

643

 

 

 

35

 

 

 

 

 

Total investment income from controlled, affiliated investments

 

 

26,568

 

 

 

9,425

 

 

 

10,046

 

 

Total Investment Income

 

 

1,021,403

 

 

 

803,287

 

 

 

718,019

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

219,132

 

 

 

152,939

 

 

 

136,445

 

 

Management fee

 

 

178,472

 

 

 

144,448

 

 

 

89,947

 

 

Performance based incentive fees

 

 

103,968

 

 

 

93,892

 

 

 

45,114

 

 

Professional fees

 

 

15,071

 

 

 

14,654

 

 

 

10,029

 

 

Directors' fees

 

 

1,021

 

 

 

849

 

 

 

623

 

 

Other general and administrative

 

 

9,593

 

 

 

7,936

 

 

 

8,374

 

 

Total Operating Expenses

 

 

527,257

 

 

 

414,718

 

 

 

290,532

 

 

Management and incentive fees waived

 

 

 

 

 

(130,906

)

 

 

(73,403

)

 

Net Operating Expenses

 

 

527,257

 

 

 

283,812

 

 

 

217,129

 

 

Net Investment Income (Loss) Before Taxes

 

 

494,146

 

 

 

519,475

 

 

 

500,890

 

 

Income tax expense (benefit), including excise tax expense (benefit)

 

 

4,009

 

 

 

2,019

 

 

 

1,984

 

 

Net Investment Income (Loss) After Taxes

 

$

490,137

 

 

$

517,456

 

 

$

498,906

 

 

Net Realized and Change in Unrealized Gain (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

$

148,300

 

 

$

(75,039

)

 

$

(7,235

)

 

Income tax (provision) benefit

 

 

(8,604

)

 

 

(3,686

)

 

 

 

 

Controlled affiliated investments

 

 

44,081

 

 

 

(1,913

)

 

 

3,705

 

 

Translation of assets and liabilities in foreign currencies

 

 

(3,953

)

 

 

4,634

 

 

 

(222

)

 

Total Net Change in Unrealized Gain (Loss)

 

 

179,824

 

 

 

(76,004

)

 

 

(3,752

)

 

Net realized gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(46,332

)

 

 

(51,376

)

 

 

2,633

 

 

Foreign currency transactions

 

 

1,253

 

 

 

(2,336

)

 

 

214

 

 

Total Net Realized Gain (Loss)

 

 

(45,079

)

 

 

(53,712

)

 

 

2,847

 

 

Total Net Realized and Change in Unrealized Gain (Loss)

 

 

134,745

 

 

 

(129,716

)

 

 

(905

)

 

Net Increase (Decrease) in Net Assets Resulting from Operations

 

$

624,882

 

 

$

387,740

 

 

$

498,001

 

 

Earnings Per Share - Basic and Diluted

 

$

1.59

 

 

$

1.00

 

 

$

1.53

 

 

Weighted Average Shares Outstanding - Basic and Diluted

 

 

392,297,907

 

 

 

388,645,561

 

 

 

324,630,279

 

 

 


 

 

portfolio and investment activity

 

 

For the Years Ended December 31,

 

($ in thousands)

 

2021

 

 

2020

 

 

2019

 

New investment commitments

 

 

 

 

 

 

 

 

 

 

 

 

Gross originations

 

$

7,456,901

 

 

 

3,667,048

 

 

 

4,625,939

 

Less: Sell downs

 

 

(632,072

)

 

 

(222,276

)

 

 

(191,277

)

Total new investment commitments

 

$

6,824,829

 

 

$

3,444,772

 

 

$

4,434,662

 

Principal amount of investments funded:

 

 

 

 

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

$

4,369,794

 

 

$

2,132,417

 

 

 

3,083,777

 

Second-lien senior secured debt investments

 

 

846,299

 

 

 

518,480

 

 

 

596,421

 

Unsecured debt investments

 

 

132,288

 

 

 

55,873

 

 

 

 

Preferred equity investments3

 

 

238,367

 

 

 

22,163

 

 

 

 

Common equity investments3

 

 

113,780

 

 

 

97,617

 

 

 

1,991

 

Investment funds and vehicles

 

 

141,876

 

 

 

18,950

 

 

 

 

Total principal amount of investments funded

 

$

5,842,404

 

 

$

2,845,500

 

 

$

3,682,189

 

Principal amount of investments sold or repaid:

 

 

 

 

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

$

(3,343,381

)

 

$

(1,060,352

)

 

$

(820,602

)

Second-lien senior secured debt investments

 

 

(910,582

)

 

 

(90,686

)

 

 

(116,700

)

Unsecured debt investments

 

 

 

 

 

 

 

 

(23,000

)

Preferred equity investments3

 

 

 

 

 

 

 

 

 

Common equity investments3

 

 

(4,827

)

 

 

(867

)

 

 

(1,991

)

Investment funds and vehicles

 

 

 

 

 

 

 

 

(2,250

)

Total principal amount of investments sold or repaid

 

$

(4,258,790

)

 

$

(1,151,905

)

 

$

(964,543

)

Number of new investment commitments in new portfolio companies1

 

 

67

 

 

30

 

 

38

 

Average new investment commitment amount

 

 

82,831

 

 

$

84,891

 

 

$

107,981

 

Weighted average term for new debt investment commitments (in years)

 

 

6.3

 

 

 

5.9

 

 

 

6.3

 

Percentage of new debt investment commitments at floating rates

 

 

98.1

%

 

 

96.3

%

 

 

100.0

%

Percentage of new debt investment commitments at fixed rates

 

 

1.9

%

 

 

3.7

%

 

 

0.0

%

Weighted average interest rate of new debt investment commitments2

 

 

7.3

%

 

 

7.8

%

 

 

8.0

%

Weighted average spread over LIBOR of new floating rate debt investment commitments

 

 

6.4

%

 

 

6.9

%

 

 

6.1

%

 

1.

Number of new investment commitments represents commitments to a particular portfolio company.

2.

Assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month LIBOR, which was 0.21%, 0.24% and 1.91% as of December 31, 2021, 2020 and 2019, respectively.

3.

As of December 30, 2020 and 2019, preferred equity investments and common equity investments were reported in aggregate as equity investments.

 


 

ABOUT OWL ROCK CAPITAL CORPORATION

 

Owl Rock Capital Corporation (ORCC) is a specialty finance company focused on lending to U.S. middle-market companies. As of December 31, 2021, ORCC had investments in 143 portfolio companies with an aggregate fair value of $12.7 billion. ORCC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. ORCC is externally managed by Owl Rock Capital Advisors LLC, an SEC-registered investment adviser that is an indirect affiliate of Blue Owl Capital Inc. (“Blue Owl”) (NYSE: OWL) and part of Owl Rock, a division of Blue Owl. Owl Rock, together with its subsidiaries, is a New York based direct lending platform with approximately $39.2 billion of assets under management as of December 31, 2021.

 

Certain information contained herein may constitute “forward-looking statements” that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about ORCC, its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond ORCC’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in ORCC’s filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which ORCC makes them. ORCC does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.

 

INVESTOR CONTACTS

 

Investor Contact:

Dana Sclafani

212-651-4705

owlrockir@blueowl.com

 

Media Contact:

Prosek Partners

David Wells / Josh Clarkson

pro-owlrock@prosek.com

 

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Owl Rock Capital Corp provided additional information to their SEC Filing as exhibits

Ticker: ORCC
CIK: 1655888
Form Type: 8-K Corporate News
Accession Number: 0001564590-22-006242
Submitted to the SEC: Wed Feb 23 2022 4:07:44 PM EST
Accepted by the SEC: Wed Feb 23 2022
Period: Wednesday, February 23, 2022
Events:
  1. Earnings Release
  2. Financial Exhibit

External Resources:
Stock Quote
Social Media

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