DIVIDEND DECLARATIONS
Ares Capital Corporation (“Ares Capital”) (NASDAQ: ARCC)
announced that its Board of Directors has declared a first quarter
dividend of $0.40 per share. The first quarter dividend is payable
on March 31, 2020 to stockholders of record as of March 16,
2020.
DECEMBER 31, 2019 FINANCIAL RESULTS
Ares Capital also announced financial results for its fourth
quarter and year ended December 31, 2019.
HIGHLIGHTS
Financial
Q4-19
Q4-18
FY-19
FY-18
(dollar amounts in millions, except per
share data)
Total Amount
Per Share(1)
Total Amount
Per Share(1)
Total Amount
Per Share(1)
Total Amount
Per Share(1)
Core EPS(2)
$
0.45
$
0.45
$
1.89
$
1.68
GAAP EPS
$
0.48
$
0.36
$
1.86
$
2.01
Net investment income
$
190
$
0.44
$
203
$
0.48
$
811
$
1.90
$
694
$
1.63
Net realized gains (losses)
$
(79
)
$
(0.18
)
$
31
$
0.07
$
(65
)
$
(0.15
)
$
419
$
0.98
Net unrealized gains (losses)
$
93
$
0.22
$
(81
)
$
(0.19
)
$
47
$
0.11
$
(255
)
$
(0.60
)
GAAP net income
$
204
$
0.48
$
153
$
0.36
$
793
$
1.86
$
858
$
2.01
Dividends declared and payable
$
0.42
(3)
$
0.39
$
1.68
(4)
$
1.54
As of December 31,
(dollar amounts in millions, except per
share data)
2019
2018
Portfolio investments at fair value
$
14,426
$
12,417
Total assets
$
14,905
$
12,895
Stockholders’ equity
$
7,467
$
7,300
Net assets per share
$
17.32
$
17.12
Debt/equity ratio
0.95x
0.73x
____________________________________________
- All per share amounts are basic and diluted.
- Basic and diluted Core EPS is a non-GAAP financial measure.
Core EPS is the net per share increase (decrease) in stockholders’
equity resulting from operations less expense reimbursement (the
“Ares Reimbursement”) from Ares Capital Management LLC (“Ares
Capital Management” or Ares Capital’s “investment adviser”), 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. Basic and diluted GAAP EPS 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 basic and diluted Core EPS
to the most directly comparable GAAP financial measure are set
forth in Schedule 1 hereto.
- Includes an additional dividend of $0.02 per share paid in the
fourth quarter ended December 31, 2019.
- Includes additional dividends of $0.08 per share in the
aggregate paid in the year ended December 31, 2019.
Portfolio Activity
(dollar amounts in millions)
Q4-19
Q4-18
FY-19
FY-18
Portfolio Activity During the Period:
Gross commitments
$
1,608
$
2,709
$
7,261
$
8,045
Exits of commitments
$
1,224
$
1,021
$
5,350
$
6,476
Portfolio as of the End of the Period:
Number of portfolio company
investments
354
344
Weighted average yield of debt and other
income producing securities(5):
At amortized cost
9.6
%
10.2
%
At fair value
9.7
%
10.3
%
Weighted average yield on total
investments(6):
At amortized cost
8.6
%
9.0
%
At fair value
8.7
%
9.3
%
__________________________________________________
5. Weighted average yield of debt and other income producing
securities is computed as (a) the annual stated interest rate or
yield earned plus the net annual amortization of original issue
discount and market discount or premium earned on accruing debt and
other income producing securities divided by (b) the total accruing
debt and other income producing securities at amortized cost or at
fair value as applicable.
6. Weighted average yield on total investments is calculated as
(a) the annual stated interest rate or yield earned plus the net
annual amortization of original issue discount and market discount
or premium earned on accruing debt and other income producing
securities divided by (b) the total investments at amortized cost
or at fair value as applicable.
FOURTH QUARTER 2019 OPERATING RESULTS
For the fourth quarter of 2019, Ares Capital reported GAAP net
income of $204 million or $0.48 per share (basic and diluted), Core
EPS(2) of $0.45 per share (basic and diluted), net investment
income of $190 million or $0.44 per share (basic and diluted), and
net realized and unrealized gains of $14 million or $0.04 per share
(basic and diluted).
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.
As of December 31, 2019, total assets were $14.9 billion,
stockholders’ equity was $7.5 billion and net asset value per share
was $17.32.
In the fourth quarter of 2019, Ares Capital made $1.6 billion in
new investment commitments, including commitments to 14 new
portfolio companies, 28 existing portfolio companies and one
additional portfolio company through the Senior Direct Lending
Program, LLC (the “SDLP”), through which Ares Capital co-invests
with Varagon Capital Partners (“Varagon”) and its clients to fund
first lien senior secured loans. Of the new commitments, 37 were
sponsored transactions. As of December 31, 2019, 165 separate
private equity sponsors were represented in Ares Capital’s
portfolio. Of the $1.6 billion in new commitments made during the
fourth quarter of 2019, 75% were in first lien senior secured
loans, 12% were in senior subordinated loans, 7% were in the
subordinated certificates of the SDLP, 5% were in second lien
senior secured loans and 1% were in other equity securities. Of
these commitments, 95% were in floating rate debt securities. Ares
Capital may seek to sell all or a portion of these new investment
commitments, although there can be no assurance that Ares Capital
will be able to do so.
In the fourth quarter of 2019, significant new commitments
included:
- $150 million in first lien senior secured revolving and term
loans of an ignition interlock device provider;
- $139 million in first lien senior secured revolving, delayed
draw and term loans and equity of an operator of veterinary
hospitals;
- $135 million in a first lien senior secured term loan and a
senior subordinated loan of a residential solar energy
provider;
- $112 million in first lien senior secured delayed draw and term
loans and equity of a provider of mission critical services to
health plans and health systems;
- $110 million in the subordinated certificates of the SDLP to
make co-investments with Varagon and its clients in first lien
senior secured loans to three portfolio companies in a variety of
industries;
- $81 million in first lien senior secured delayed draw and term
loans of a janitorial and facilities management services
provider;
- $68 million in first and second lien senior secured delayed
draw loans of an operator of veterinary hospitals;
- $61 million in first lien senior secured revolving, delayed
draw and term loans of an insurance broker;
- $58 million in first lien senior secured revolving, delayed
draw and term loans of an insurance broker;
- $53 million in a senior subordinated loan of a solar power
generation facilities developer and operator;
- $49 million in first lien senior secured revolving and term
loans of an aerospace precision components manufacturer;
- $46 million in first lien senior secured revolving and term
loans and equity in a footwear and orthopedic foot care brand;
- $45 million in first lien senior secured revolving and term
loans of a provider of lab testing services for nicotine related
products;
- $41 million in first lien senior secured revolving and term
loans of an IT operations management and cybersecurity software
provider;
- $40 million in first lien senior secured delayed draw and term
loans of a medical device company;
- $37 million in first lien senior secured revolving and term
loans of a manufacturer of scientific instruments;
- $35 million in a first lien senior secured term loan of a
provider of student information system software solutions to the
K-12 education market; and
- $34 million in a second lien senior secured term loan of a fast
casual restaurant chain operator.
Also in the fourth quarter of 2019, Ares Capital exited
approximately $1.2 billion of investment commitments. Of the total
investment commitments exited, 81% were first lien senior secured
loans, 17% were second lien senior secured loans, 1% were in
preferred equity securities and 1% were other equity securities. Of
the approximately $1.2 billion of exited investment commitments,
89% were floating rate, 9% were on non-accrual status and 2% were
non-income producing.
The fair value of Ares Capital’s portfolio investments at
December 31, 2019 was $14.4 billion, including $12.9 billion in
accruing debt and other income producing securities. The total
portfolio investments at fair value were comprised of approximately
44% of first lien senior secured loans, 30% of second lien senior
secured loans, 6% of subordinated certificates of the SDLP (the
proceeds of which were applied to co-investments with Varagon and
its clients to fund first lien senior secured loans through the
SDLP), 6% of senior subordinated loans, 5% of preferred equity
securities and 9% of other equity securities. As of December 31,
2019, the weighted average yield of debt and other income producing
securities in the portfolio at amortized cost and fair value was
9.6% and 9.7%, respectively, the weighted average yield on total
investments in the portfolio at amortized cost and fair value was
8.6% and 8.7%, respectively, and 84% of the total investments at
fair value were in floating rate securities.
“Our fourth quarter results concluded another great year for
ARCC, demonstrated by higher annual earnings, expanded net asset
value per share, stable credit quality and strong dividend
coverage,” said Kipp deVeer, Chief Executive Officer of Ares
Capital. “We have significant available capital and believe we are
well positioned to be opportunistic to find attractive investments
in varying market conditions.”
“In 2019 and so far this year, we have further strengthened our
balance sheet by extending the maturities of our liabilities and
accessing diverse forms of attractive financing,” said Penni Roll,
Chief Financial Officer of Ares Capital. “Subsequent to year-end,
we also took advantage of favorable market conditions to expand our
committed capital and issued the lowest cost unsecured notes in our
history.”
PORTFOLIO QUALITY
Ares Capital’s investment adviser employs an investment rating
system to categorize Ares Capital’s investments. In addition to
various risk management and monitoring tools, Ares Capital’s
investment adviser grades the credit risk of all investments on a
scale of 1 to 4 no less frequently than quarterly. This system is
intended primarily to reflect the underlying risk of a portfolio
investment relative to Ares Capital’s 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. Under this system, investments with a grade of 4 involve
the least amount of risk to Ares Capital’s initial cost basis. The
trends and risk factors for this investment since origination or
acquisition are generally favorable, which may include the
performance of the portfolio company or a potential exit.
Investments graded 3 involve a level of risk to Ares Capital’s
initial cost basis that is similar to the risk to Ares Capital’s
initial cost basis at the time of origination or acquisition. This
portfolio company is generally performing as expected and the risk
factors to Ares Capital’s ability to ultimately recoup the cost of
Ares Capital’s investment are neutral to favorable. All investments
or acquired investments in new portfolio companies are initially
assessed a grade of 3. Investments graded 2 indicate that the risk
to Ares Capital’s ability to recoup the initial cost basis of such
investment has increased materially since origination or
acquisition, including as a result of factors such as declining
performance and non-compliance with debt covenants; however,
payments are generally not more than 120 days past due. An
investment grade of 1 indicates that the risk to Ares Capital’s
ability to recoup the initial cost basis of such investment has
substantially increased since origination or acquisition, and the
portfolio company likely has materially declining performance. For
debt investments with an investment grade of 1, most or all of the
debt covenants are out of compliance and payments are substantially
delinquent. For investments graded 1, it is anticipated that Ares
Capital will not recoup Ares Capital’s initial cost basis and may
realize a substantial loss of Ares Capital’s initial cost basis
upon exit. For investments graded 1 or 2, Ares Capital’s investment
adviser enhances its level of scrutiny over the monitoring of such
portfolio company. The grade of a portfolio investment may be
reduced or increased over time.
As of December 31, 2019 and December 31, 2018, the weighted
average grade of the investments in Ares Capital’s portfolio at
fair value was 3.0 and 3.0, respectively, and loans on non-accrual
status represented 1.9% and 2.5%, respectively, of total
investments at amortized cost (or 0.9% and 0.6%, respectively, at
fair value).
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2019, Ares Capital had $176 million in cash
and cash equivalents and $7.1 billion in total aggregate principal
amount of debt outstanding ($7.0 billion at carrying value).
Subject to leverage, borrowing base and other restrictions, Ares
Capital had approximately $2.0 billion available for additional
borrowings under its existing credit facilities as of December 31,
2019.
In November 2019, Ares Capital entered into equity distribution
agreements with two sales agents (the “Equity Distribution
Agreements”), pursuant to which Ares Capital may offer and sell,
from time to time, shares of its common stock having an aggregate
offering amount of up to $500 million. Subject to the terms and
conditions of the Equity Distribution Agreements, sales of common
stock, if any, may be made in transactions that are deemed to be an
“at the market offering” as defined in Rule 415(a)(4) under the
Securities Act of 1933, as amended. During the three months ended
December 31, 2019, Ares Capital issued and sold approximately 3.5
million shares of common stock under the Equity Distribution
Agreements, with net proceeds totaling approximately $64 million,
after deducting sales agents’ commissions and other offering
expenses of approximately $1 million. As of December 31, 2019,
common stock with an aggregate offering amount of approximately
$435 million remained available for issuance under the Equity
Distribution Agreements.
In December 2019, Ares Capital and Ares Capital JB Funding LLC
(“ACJB”), a wholly owned subsidiary of Ares Capital, entered into
an amendment (the “SMBC Amendment”) to the documents governing
ACJB’s revolving funding facility (the “SMBC Funding Facility”)
with Sumitomo Mitsui Banking Corporation and each of the other
parties thereto. The SMBC Amendment increased total commitments
under the SMBC Funding Facility from $500 million to $650 million,
with the ability to further increase commitments up to a total of
$1.0 billion subject to receiving the necessary consents.
FOURTH QUARTER 2019 DIVIDEND PAID AND 2019 DECLARED
ADDITIONAL DIVIDENDS
On October 30, 2019, Ares Capital declared a fourth quarter 2019
dividend of $0.40 per share for a total of approximately $172
million. The fourth quarter dividend was paid on December 30, 2019
to stockholders of record as of December 16, 2019. On February 12,
2019, Ares Capital declared an additional fourth quarter 2019
dividend of $0.02 per share for a total of approximately $9
million. The additional dividend was paid on December 27, 2019 to
stockholders of record as of December 16, 2019.
RECENT DEVELOPMENTS
In January 2020, Ares Capital issued $750 million in aggregate
principal amount of unsecured notes that mature on July 15, 2025
and bear interest at a rate of 3.250% per year (the ‘‘July 2025
Notes’’). The July 2025 Notes require payment of interest
semi-annually, and all principal is due upon maturity. The July
2025 Notes may be redeemed in whole or in part at any time at Ares
Capital’s option at the redemption prices determined pursuant to
the indenture governing the July 2025 Notes, and any accrued and
unpaid interest. The July 2025 Notes were issued at a discount to
the principal amount.
In January 2020, Ares Capital and ACJB increased total
commitments under the SMBC Funding Facility by $75 million, from
$650 million to $725 million.
In January 2020, Ares Capital and Ares Capital CP Funding LLC, a
wholly owned subsidiary of Ares Capital, entered into an agreement
to amend the revolving funding facility (as amended, the “Revolving
Funding Facility”) that, among other things, (a) increased the
commitments under the Revolving Funding Facility from $1,275
million to $1,525 million, (b) extended the reinvestment period
from January 3, 2022 to January 31, 2023 and (c) extended the
stated maturity date from January 3, 2024 to January 31, 2025.
In February 2020, Ares Capital’s Board of Directors authorized
an amendment to Ares Capital’s $500 million stock repurchase
program to extend the expiration date of the program from February
15, 2020 to February 15, 2021. Under the stock repurchase program,
Ares Capital may repurchase up to $500 million in the aggregate of
its outstanding common stock in the open market at a price per
share that meets certain thresholds below its net asset value per
share, in accordance with the guidelines specified in Rule 10b-18
of the Securities Exchange Act of 1934, as amended. The timing,
manner, price and amount of any share repurchases will be
determined by Ares Capital, in its discretion, based upon the
evaluation of economic and market conditions, stock price,
applicable legal and regulatory requirements and other factors.
From January 1, 2020 through February 6, 2020, Ares Capital made
new investment commitments of approximately $453 million, of which
$361 million were funded. Of these new commitments, 61% were in
first lien senior secured loans, 18% were in second lien senior
secured loans, 17% were in senior subordinated loans and 4% were in
other equity securities. Of the approximately $453 million of new
investment commitments, 96% were floating rate and 4% were
non-interest bearing. The weighted average yield of debt and other
income producing securities funded during the period at amortized
cost was 8.1%. Ares Capital may seek to sell all or a portion of
these new investment commitments, although there can be no
assurance that it will be able to do so.
From January 1, 2020 through February 6, 2020, Ares Capital
exited approximately $282 million of investment commitments. Of the
total investment commitments exited, 55% were first lien senior
secured loans, 38% were second lien senior secured loans, 3% were
senior subordinated loans, 3% were other equity securities and 1%
were subordinated certificates of the SDLP. Of the approximately
$282 million of exited investment commitments, 96% were floating
rate, 3% were non-interest bearing and 1% were fixed rate. The
weighted average yield of debt and other income producing
securities exited or repaid during the period at amortized cost was
8.8%, and the weighted average yield on total investments exited or
repaid during the period at amortized cost was 8.6%. On the
approximately $282 million of investment commitments exited from
January 1, 2020 through February 6, 2020, Ares Capital recognized
total net realized gains of approximately $21 million.
In addition, as of February 6, 2020, Ares Capital had an
investment backlog and pipeline of approximately $735 million and
$390 million, respectively. Investment backlog includes
transactions approved by Ares Capital’s investment adviser’s
investment committee and/or for which a formal mandate, letter of
intent or a signed commitment have been issued, and therefore Ares
Capital believes are likely to close. Investment pipeline includes
transactions where due diligence and analysis are in process, but
no formal mandate, letter of intent or signed commitment have been
issued. The consummation of any of the investments in this backlog
and pipeline depends upon, among other things, one or more of the
following: satisfactory completion of Ares Capital due diligence
investigation of the prospective portfolio company, Ares Capital’s
acceptance of the terms and structure of such investment and the
execution and delivery of satisfactory transaction documentation.
In addition, Ares Capital may sell all or a portion of these
investments and certain of these investments may result in the
repayment of existing investments. Ares Capital cannot assure you
that it will make any of these investments or that Ares Capital
will sell all or any portion of these investments.
WEBCAST / CONFERENCE CALL
Ares Capital will host a webcast/conference call on Wednesday,
February 12, 2020 at 12:00 p.m. (Eastern Time) to discuss its
quarter and year ended December 31, 2019 financial results. PLEASE
VISIT ARES CAPITAL’S WEBCAST LINK LOCATED ON THE HOME PAGE OF THE
INVESTOR RESOURCES SECTION OF ARES CAPITAL’S WEBSITE FOR A SLIDE
PRESENTATION THAT COMPLEMENTS THE EARNINGS CONFERENCE CALL.
All interested parties are invited to participate via telephone
or the live webcast, which will be hosted on a webcast link located
on the Home page of the Investor Resources section of Ares
Capital’s website at www.arescapitalcorp.com. Please visit the website
to test your connection before the webcast. Domestic callers can
access the conference call by dialing (888) 317-6003. International
callers can access the conference call by dialing +1 (412)
317-6061. All callers will need to enter the Participant Elite
Entry Number 2583563 followed by the # sign and reference “Ares
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. For interested parties,
an archived replay of the call will be available approximately one
hour after the end of the call through February 26, 2020 at 5:00
p.m. (Eastern Time) to domestic callers by dialing (877) 344-7529
and to international callers by dialing +1 (412) 317-0088. For all
replays, please reference conference number 10137626. An archived
replay will also be available through February 26, 2020 on a
webcast link located on the Home page of the Investor Resources
section of Ares Capital’s website.
ABOUT ARES CAPITAL CORPORATION
Ares Capital is a leading specialty finance company that
provides one-stop debt and equity financing solutions to U.S.
middle market companies and power generation projects. Ares Capital
originates and invests in senior secured loans, mezzanine debt and,
to a lesser extent, equity investments through its national direct
origination platform. Ares Capital’s investment objective is to
generate both current income and capital appreciation through debt
and equity investments primarily in private companies. Ares Capital
has elected to be regulated as a business development company
(“BDC”) and is the largest BDC by both market capitalization and
total assets. Ares Capital is externally managed by a subsidiary of
Ares Management Corporation (NYSE: ARES), a publicly traded,
leading global alternative asset manager. For more information
about Ares Capital Corporation, visit www.arescapitalcorp.com. However, the contents of
such website are not and should not be deemed to be incorporated by
reference herein.
FORWARD-LOOKING STATEMENTS
Statements included herein or on the webcast/conference call may
constitute “forward-looking statements,” which relate to future
events or Ares Capital’s future performance or financial condition.
These statements are not guarantees of future performance,
condition or results and involve a number of risks and
uncertainties. Actual results and conditions may differ materially
from those in the forward-looking statements as a result of a
number of factors, including those described from time to time in
Ares Capital’s filings with the Securities and Exchange Commission.
Ares Capital undertakes no duty to update any forward-looking
statements made herein or on the webcast/conference call.
ARES CAPITAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEET
(in millions, except per share
data)
As of December 31,
2019
2018
ASSETS
Total investments at fair value (amortized
cost of $14,696 and $12,754, respectively)
$
14,426
$
12,417
Cash and cash equivalents
176
296
Interest receivable
117
91
Operating lease right-of-use asset
94
—
Other assets
78
79
Receivable for open trades
14
12
Total assets
$
14,905
$
12,895
LIABILITIES
Debt
$
6,971
$
5,214
Interest and facility fees payable
54
64
Base management fees payable
54
45
Income based fees payable
48
36
Capital gains incentive fees payable
58
112
Operating lease liabilities
121
33
Accounts payable and other liabilities
99
66
Payable for open trades
33
25
Total liabilities
7,438
5,595
STOCKHOLDERS’ EQUITY
Common stock, par value $0.001 per share,
600 common shares authorized; 431 and 426 common shares issued and
outstanding, respectively
—
—
Capital in excess of par value
7,760
7,173
Accumulated (overdistributed)
undistributed earnings
(293
)
127
Total stockholders’ equity
7,467
7,300
Total liabilities and stockholders’
equity
$
14,905
$
12,895
NET ASSETS PER SHARE
$
17.32
$
17.12
ARES CAPITAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENT OF
OPERATIONS
(in millions, except per share
data)
For the Three Months
Ended
December 31,
For the Years Ended December
31,
2019
2018
2019
2018
(unaudited)
(unaudited)
INVESTMENT INCOME
Interest income from investments
$
296
$
263
$
1,180
$
1,041
Capital structuring service fees
38
47
162
143
Dividend income
44
26
152
97
Other income
8
9
34
56
Total investment income
386
345
1,528
1,337
EXPENSES
Interest and credit facility fees
79
60
291
240
Base management fees
54
45
205
180
Income based fees
48
46
194
169
Capital gains incentive fees
3
(10
)
(4
)
33
Administrative fees
3
3
14
13
Other general and administrative
6
6
31
29
Total expenses
193
150
731
664
Waiver of income based fees
—
(10
)
(30
)
(40
)
Total expenses, net of waiver of income
based fees
193
140
701
624
NET INVESTMENT INCOME BEFORE INCOME
TAXES
193
205
827
713
Income tax expense, including excise
tax
3
2
16
19
NET INVESTMENT INCOME
190
203
811
694
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
Net realized gains (losses)
(79
)
31
(65
)
419
Net unrealized gains (losses)
93
(81
)
47
(255
)
Net realized and unrealized gains (losses)
on investments, foreign currency and other transactions
14
(50
)
(18
)
164
NET INCREASE IN STOCKHOLDERS’ EQUITY
RESULTING FROM OPERATIONS
$
204
$
153
$
793
$
858
BASIC AND DILUTED EARNINGS PER COMMON
SHARE
$
0.48
$
0.36
$
1.86
$
2.01
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING - BASIC AND DILUTED
429
426
427
426
SCHEDULE 1
Reconciliations of basic and diluted Core
EPS to basic and diluted GAAP EPS
Reconciliations of basic and diluted Core EPS to basic and
diluted GAAP EPS, the most directly comparable GAAP financial
measure, for the three months and years ended December 31, 2019 and
2018 are provided below.
For the Three Months
Ended
December 31,
For the Years Ended December
31,
2019
2018
2019
2018
(unaudited)
(unaudited)
Basic and diluted Core EPS(1)
$
0.45
$
0.45
$
1.89
$
1.68
Ares Reimbursement
—
—
—
0.03
Net realized and unrealized gains
(losses)
0.04
(0.12
)
(0.04
)
0.38
Capital gains incentive fees attributable
to net realized and unrealized gains and losses
(0.01
)
0.03
0.01
(0.08
)
Income tax expense related to net realized
gains and losses
—
—
—
—
Basic and diluted GAAP EPS
$
0.48
$
0.36
$
1.86
$
2.01
__________________________________________________
(1) Basic and diluted Core EPS is a non-GAAP financial measure.
Core EPS is the net per share increase (decrease) in stockholders’
equity resulting from operations less the Ares Reimbursement, 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. Basic and diluted GAAP EPS 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. For more information about the Ares
Reimbursement, see Note 13 “Related Party Transactions” in Part IV,
Item 15 “Financial Statements” in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200212005262/en/
INVESTOR RELATIONS CONTACTS Ares Capital Corporation Carl
G. Drake or John Stilmar (888) 818-5298 irarcc@aresmgmt.com
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