Ares Capital Corporation ("Ares Capital") (NASDAQ: ARCC) announced that
its Board of Directors has declared a second quarter dividend of $0.37
per share, payable on June 29, 2012 to stockholders of record as of
June 15, 2012.
MARCH 31, 2012 FINANCIAL RESULTS
Ares Capital also announced financial results for its first quarter
ended March 31, 2012.
HIGHLIGHTS
Financial
|
|
|
Q1-12
|
|
|
Q1-11
|
(in millions, except per share data)
|
|
|
Total Amount
|
|
|
Per Share(1)
|
|
|
Total Amount
|
|
|
Per Share(1)
|
Core EPS(2)
|
|
|
|
|
|
$
|
0.38
|
|
|
|
|
|
$
|
0.31
|
Net investment income
|
|
|
$
|
77.0
|
|
|
$
|
0.36
|
|
|
$
|
47.8
|
|
|
$
|
0.24
|
Net realized gains (losses)
|
|
|
$
|
(7.7
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
53.7
|
|
|
$
|
0.26
|
Net unrealized gains
|
|
|
$
|
36.2
|
|
|
$
|
0.17
|
|
|
$
|
22.2
|
|
|
$
|
0.11
|
GAAP net income
|
|
|
$
|
105.5
|
|
|
$
|
0.49
|
|
|
$
|
123.8
|
|
|
$
|
0.61
|
Dividends declared
|
|
|
|
|
|
$
|
0.37
|
|
|
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
As of March 31,
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
Portfolio investments at fair value
|
|
|
|
|
|
|
|
$
|
|
5,204.5
|
|
|
$
|
|
4,263.0
|
Total assets
|
|
|
|
|
|
|
|
$
|
|
5,609.1
|
|
|
$
|
|
4,707.0
|
Stockholders' equity
|
|
|
|
|
|
|
|
$
|
|
3,433.3
|
|
|
$
|
|
3,163.0
|
Net assets per share
|
|
|
|
|
|
|
|
$
|
|
15.47
|
|
|
$
|
|
15.45
|
(1) All per share amounts are basic and diluted.
(2) 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 realized and unrealized gains and losses,
any incentive management fees attributable to such net realized and
unrealized gains and losses and any income taxes related to such
realized gains. 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.
Reconciliation of basic and diluted Core EPS to the most directly
comparable GAAP financial measure is set forth in Schedule 1 hereto.
Portfolio Activity
(dollar amounts in millions)
|
|
|
Q1-12
|
|
|
|
Q1-11
|
|
Portfolio Activity During the Period:
|
|
|
|
|
|
|
|
|
Gross commitments
|
|
|
$
|
|
384.3
|
|
|
|
$
|
|
502.3
|
|
Exits of commitments
|
|
|
$
|
|
331.4
|
|
|
|
$
|
|
567.4
|
|
|
|
|
|
|
|
|
|
|
Portfolio as of the End of the Period:
|
|
|
|
|
|
|
|
|
Number of portfolio company investments
|
|
|
143
|
|
|
|
154
|
|
Weighted average yield of debt and other income producing securities:
|
|
|
|
|
|
|
|
|
At fair value(3)
|
|
|
12.0
|
%
|
|
|
12.6
|
%
|
At amortized cost(4)
|
|
|
12.2
|
%
|
|
|
12.8
|
%
|
OPERATING RESULTS
For the quarter ended March 31, 2012, Ares Capital reported GAAP net
income of $105.5 million or $0.49 per share (basic and diluted), Core
EPS(2) of $0.38 per share (basic and diluted), net investment income of
$77.0 million or $0.36 per share (basic and diluted), and net realized
and unrealized gains of $28.5 million or $0.13 per share (basic and
diluted).
Net income can vary substantially from period to period due to various
factors, including acquisitions, 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 March 31, 2012, total assets were $5.6 billion, stockholders'
equity was $3.4 billion and net asset value per share was $15.47.
In the first quarter of 2012, Ares Capital made $384.3 million in new
commitments, including commitments to six new portfolio companies, one
existing portfolio company and five additional companies (made through
the Senior Secured Loan Fund LLC (the "Senior Secured Loan Program")).
Eleven of these new commitments were sponsored transactions. As of
March 31, 2012, 86 separate private equity sponsors were represented in
Ares Capital's portfolio. Of the $384.3 million in new commitments made
during the first quarter of 2012, approximately 82% were in first lien
senior secured debt, 17% were in subordinated certificates of the Senior
Secured Loan Program (the proceeds of which were applied to
co-investments with GE Global Sponsor Finance LLC and General Electric
Capital Corporation (together, "GE") to fund "stretch senior" and
"unitranche" loans through the Senior Secured Loan Program) and 1% were
in equity securities. Of these commitments, 99% were in floating rate
debt securities of which 83% contained interest rate floors and 17% were
in the subordinated certificates of the Senior Secured Loan Program, the
proceeds of which were applied to co-investments with GE to fund
"stretch senior" and "unitranche" secured loans through the Senior
Secured Loan Program, all of which carried interest rate floors. We may
seek to syndicate a portion of these new investment commitments to third
parties, although there can be no assurance that we will be able to do
so.
During the first quarter of 2012, significant new commitments included:
-
$74 million in a first lien senior term loan of a fast food restaurant
operator;
-
$81 million in a first lien senior term loan of a healthcare
professional services provider;
-
$50 million in first lien senior revolving, delayed draw and term
loans and equity of an airport restaurant operator;
-
$38 million in first lien senior delayed draw and term loans of an
endurance sports media and event operator;
-
$35 million in first lien senior revolving and term loans of a
designer, manufacturer and marketer of taxidermy forms and supplies;
and
-
$34 million co-investment in the Senior Secured Loan Program for the
program to provide a unitranche loan to a library automation software
provider.
(3) Computed as (a) annual stated interest rate or yield earned plus the
net annual amortization of original issue discount and market discount
earned on accruing debt and other income producing securities, divided
by (b) total debt and other income producing securities at fair value.
(4) Computed as (a) annual stated interest rate or yield earned plus the
net annual amortization of original issue discount and market discount
earned on accruing debt and other income producing securities, divided
by (b) total debt and other income producing securities at amortized
cost.
The fair value of Ares Capital's portfolio investments at March 31, 2012
was $5.2 billion, including $4.5 billion in debt and other income
producing securities. These portfolio investments at fair value were
comprised of approximately 52% of senior secured debt securities (36% in
first lien assets and 16% in second lien assets), 22% of subordinated
certificates of the Senior Secured Loan Program (the proceeds of which
were applied to co-investments with GE through the Senior Secured Loan
Program), 9% of senior subordinated debt securities, 5% of preferred
equity securities, 11% of other equity securities and 1% of
collateralized loan obligations. As of March 31, 2012, the weighted
average yield of debt and other income producing securities in Ares
Capital's portfolio at fair value was 12.0%(3) (12.2% at amortized
cost(4)) and 68% of the Company's investments at fair value were in
floating rate securities.
President Michael Arougheti commented, "We reported solid core earnings
per share well above the same period a year ago despite a lower level of
investment activity this quarter. Our investment portfolio continues to
perform well, which is reflected in both the stability in the
portfolio's investment grade and the improvement in our net asset value.
Given the recent success we have had raising attractive long-term
capital, we believe we are well positioned to leverage our scale and
origination strength to pursue the long-term opportunity in the
underserved middle market."
PORTFOLIO QUALITY
Ares Capital Management LLC, our investment adviser, employs an
investment rating system to categorize our investments. In addition to
various risk management and monitoring tools, our 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 our initial
cost basis in respect of such portfolio investment (i.e., at the time of
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 our 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 our
initial cost basis that is similar to the risk to our initial cost basis
at the time of origination or acquisition. This portfolio company is
generally performing as expected and the risk factors to our ability to
ultimately recoup the cost of our 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 our 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
our 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 we will not
recoup our initial cost basis and may realize a substantial loss of our
initial cost basis upon exit. For investments graded 1 or 2, our
investment adviser enhances its level of scrutiny over the monitoring of
such portfolio company. Our investment adviser grades the investments in
our portfolio at least each quarter and it is possible that the grade of
the portfolio investments may be reduced or increased over time.
As of March 31, 2012, the weighted average grade of the investments in
our portfolio was 3.0. Also, as of March 31, 2012, 3.6% of the
investments in our portfolio at amortized cost (or 1.0% at fair value)
were on non accrual status.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2012, Ares Capital had $216 million in cash and cash
equivalents and $2.1 billion in aggregate principal amount of debt
outstanding ($2.0 billion in carrying value). Subject to leverage and
borrowing base restrictions, Ares Capital had approximately $945.8
million available for additional borrowings under its existing credit
facilities as of March 31, 2012.
In January 2012, Ares Capital and its wholly owned subsidiary, Ares
Capital CP Funding LLC ("Ares Capital CP"), amended Ares Capital CP's
revolving funding facility (the "Revolving Funding Facility") to, among
other things, (i) extend the reinvestment period by one year to
January 18, 2015, (ii) extend the maturity date by one year to
January 18, 2017, and (iii) replace the pricing grid with an applicable
spread over LIBOR of 2.50% (with no floor) and an applicable spread over
''base rate'' of 1.50% (with no floor).
In January 2012, we established, through our wholly owned subsidiary,
Ares Capital JB Funding LLC ("ACJB"), a secured revolving funding
facility with Sumitomo Mitsui Banking Corporation ("SMBC") (the "SMBC
Funding Facility") by entering into a loan and servicing agreement
pursuant to which SMBC has agreed to extend credit to ACJB in an
aggregate principal amount up to $200 million at any one time
outstanding. The SMBC Funding Facility is a revolving funding facility
with a reinvestment period ending January 20, 2015 and a final maturity
date of January 20, 2020. The reinvestment period and final maturity
date are both subject to two one-year extensions by mutual agreement of
SMBC and ACJB. Subject to certain exceptions, the interest rate charged
on the SMBC Funding Facility is based on LIBOR plus 2.125% (with no
floor) or a ''base rate" plus 1.125% (with no floor).
In January 2012, we completed a public add-on equity offering (the
''January 2012 Offering'') through which we sold 16.4 million shares of
common stock to certain underwriters at a net price of $15.41 per share.
Total proceeds from the January 2012 Offering, net of underwriting
discounts and offering costs paid by us, were approximately $252.4
million.
In February 2012, we issued $143.8 million aggregate principal amount of
senior unsecured notes (the "2022 Notes"). The 2022 Notes mature on
February 15, 2022 and may be redeemed in whole or in part at any time or
from time to time at our option on or after February 15, 2015 at a par
redemption price of $25 per security plus accrued and unpaid interest.
The principal amount of the 2022 Notes will be payable at maturity. The
2022 Notes bear interest at a rate of 7.00% per year payable quarterly
commencing on May 15, 2012. Total proceeds from the issuance of the 2022
Notes, net of underwriting discounts and offering costs, were
approximately $138 million.
In March 2012, we issued $162.5 million aggregate principal amount of
unsecured convertible senior notes that mature on March 15, 2017 (the
"2017 Convertible Notes"), unless converted or repurchased in accordance
with their terms prior to such date. We do not have the right to redeem
the 2017 Convertible Notes prior to maturity. The 2017 Convertible Notes
bear interest at a rate of 4.875% per year, payable semi-annually. In
certain circumstances, the 2017 Convertible Notes will be convertible
into cash, shares of our common stock or a combination of cash and
shares of our common stock, at our election, at an initial conversion
rate of 51.7050 shares of common stock per one thousand dollar principal
amount of the 2017 Convertible Notes, which is equivalent to an initial
conversion price of approximately $19.34 per share of our common stock,
subject to customary anti-dilution adjustments. The initial conversion
price is approximately 17.5% above the $16.46 per share closing price of
our common stock on March 8, 2012.
We used the net proceeds of the January 2012 Offering and the issuances
of the 2022 Notes and the 2017 Convertible Notes to repay outstanding
indebtedness and for general corporate purposes, which included funding
investments.
FIRST QUARTER 2012 DIVIDEND
For the three months ended March 31, 2012, Ares Capital declared a
dividend on February 28, 2012 of $0.37 per share for a total of
approximately $82.0 million. The record date was March 15, 2012 and the
dividend was paid on March 30, 2012.
RECENT DEVELOPMENTS
In May 2012, Ares Capital amended its revolving credit facility (the
"Revolving Credit Facility") to, among other things, (i) increase the
commitment size of the facility from $810 million to $900 million,
(ii) extend the maturity date from January 22, 2013 to May 4, 2016,
(iii) extend the expiration of the revolving period from January 22,
2013 to May 4, 2015, (iv) reduce the stated interest rate by replacing
the pricing grid with an applicable spread over LIBOR of 2.25% (with no
floor) and an applicable spread over "base rate" of 1.25% (with no
floor) and (v) reduce the commitment fee to 0.375% for any unused
portion of the Revolving Credit Facility. The amended Revolving Credit
Facility includes an "accordion" feature that allows Ares Capital, under
certain circumstances, to increase the size of the facility to a maximum
of $1,350 million.
From April 1, 2012 through May 4, 2012, we had made new investment
commitments of $340 million, of which $335 million were funded. Of these
new commitments, 65% were in first lien senior secured debt, 31% were in
second lien senior secured debt and 4% were investments in subordinated
certificates of the SSLP which were applied to co-investments with GE in
"stretch senior" and "unitranche" loans. Of the $340 million of new
investment commitments, 88% were floating rate and 12% were fixed rate.
The weighted average yield of debt and other income producing securities
funded during the period at amortized cost was 9.3%. We may seek to
syndicate a portion of these new investment commitments to third
parties, although there can be no assurance that we will be able to do
so.
From April 1, 2012 through May 4, 2012, we exited $221 million of
investment commitments. Of these investment commitments, 41% were first
lien senior secured debt, 24% were other equity securities, 20% were
senior subordinated debt, 8% were investments in subordinated
certificates of the SSLP, 6% were second lien senior secured debt and 1%
were preferred equity securities. Of the $221 million of exited
investment commitments, 53% were floating rate investments, 25% were
non-interest bearing and 22% were fixed rate investments. The weighted
average yield of debt and other income producing securities exited or
repaid during the period at amortized cost was 13.1%. On the
$221 million of investment commitments exited from April 1, 2012 through
May 4, 2012, we recognized total net realized gains of approximately
$15 million.
In addition, as of May 4, 2012, we had an investment backlog and
pipeline of approximately $460 million and $590 million, respectively.
Investment backlog includes transactions for which a formal mandate,
letter of intent or a signed commitment have been issued, and therefore
we believe are likely to close. Investment pipeline includes
transactions where significant 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 our due diligence
investigation of the prospective portfolio company, our acceptance of
the terms and structure of such investment and the execution and
delivery of satisfactory transaction documentation. In addition, we may
syndicate a portion of these investments to third parties. We cannot
assure you that we will make any of these investments or that we will
syndicate any portion of these investments.
WEBCAST / CONFERENCE CALL
Ares Capital will host a webcast/conference call on Tuesday, May 8,
2012, at 11:00 a.m. (ET) to discuss its financial results for the first
quarter ended March 31, 2012. PLEASE VISIT OUR WEBCAST LINK LOCATED ON
THE HOME PAGE OF THE INVESTOR RESOURCES SECTION OF OUR 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 our website at http://www.arescapitalcorp.com.
Please visit the website to test your connection before the webcast.
Domestic callers can access the conference call by dialing (866)
843-0890. International callers can access the conference call by
dialing +1 (412) 317-9250. All callers will need to enter the
Participant Elite Entry Number 2492583 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 conference through May 21, 2012 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
10012156. An archived replay will also be available on a webcast link
located on the home page of the Investor Resources section of our
website.
ABOUT ARES CAPITAL CORPORATION
Ares Capital is a leading specialty finance company that provides
one-stop financing solutions to U.S. middle market companies and private
equity sponsors. The Company 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, and is externally managed by a wholly owned
subsidiary of Ares Management LLC. Ares Management is a global
alternative asset manager and a SEC-registered investment adviser with
approximately $52 billion of committed capital under management as of
April 30, 2012. For more information, visit www.arescapitalcorp.com.
FORWARD-LOOKING STATEMENTS
Statements included herein or on the webcast/conference call may
constitute "forward-looking statements," which relate to future events
or our 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 our filings with the Securities and Exchange Commission. Ares
Capital Corporation undertakes no duty to update any forward-looking
statements made herein or on the webcast/conference call.
AVAILABLE INFORMATION
Ares Capital Corporation's filings with the Securities and Exchange
Commission, press releases, earnings releases and other financial
information are available on its website at www.arescapitalcorp.com.
The information on Ares Capital's website is not deemed incorporated by
reference herein.
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except per share data)
|
|
|
|
|
|
|
As of
|
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Investments at fair value (amortized cost of $5,182,508 and
$5,108,663, respectively)
|
|
$
|
5,204,531
|
|
$
|
5,094,506
|
|
Cash and cash equivalents
|
|
216,412
|
|
120,782
|
|
Receivable for open trades
|
|
45
|
|
550
|
|
Interest receivable
|
|
101,197
|
|
99,078
|
|
Other assets
|
|
86,953
|
|
72,521
|
|
Total assets
|
|
$
|
5,609,138
|
|
$
|
5,387,437
|
|
LIABILITIES
|
|
|
|
|
|
Debt
|
|
$
|
2,018,866
|
|
$
|
2,073,602
|
|
Management and incentive fees payable
|
|
95,329
|
|
92,496
|
|
Accounts payable and accrued expenses
|
|
39,035
|
|
47,691
|
|
Interest and facility fees payable
|
|
22,647
|
|
26,383
|
|
Total liabilities
|
|
2,175,877
|
|
2,240,172
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Common stock, par value $.001 per share, 400,000 common shares
authorized, 221,875 and 205,130 common shares issued and
outstanding, respectively
|
|
222
|
|
205
|
|
Capital in excess of par value
|
|
3,652,760
|
|
3,390,354
|
|
Accumulated overdistributed net investment income
|
|
(15,385
|
)
|
(10,449
|
)
|
Accumulated net realized loss on investments, foreign currency
transactions, extinguishment of debt, other assets and acquisitions
|
|
(226,359
|
)
|
(218,688
|
)
|
Net unrealized gain (loss) on investments
|
|
22,023
|
|
(14,157
|
)
|
Total stockholders' equity
|
|
3,433,261
|
|
3,147,265
|
|
Total liabilities and stockholders' equity
|
|
$
|
5,609,138
|
|
$
|
5,387,437
|
|
NET ASSETS PER SHARE
|
|
$
|
15.47
|
|
$
|
15.34
|
|
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
INVESTMENT INCOME:
|
|
|
|
|
|
Interest income
|
|
$
|
132,885
|
|
$
|
110,613
|
|
Capital structuring service fees
|
|
17,660
|
|
10,958
|
|
Dividend income
|
|
9,219
|
|
8,791
|
|
Management fees
|
|
4,932
|
|
3,449
|
|
Other income
|
|
3,042
|
|
1,880
|
|
Total investment income
|
|
167,738
|
|
135,691
|
|
EXPENSES:
|
|
|
|
|
|
Interest and credit facility fees
|
|
32,776
|
|
30,175
|
|
Incentive management fees
|
|
26,386
|
|
30,941
|
|
Base management fees
|
|
19,986
|
|
16,730
|
|
Professional fees
|
|
3,686
|
|
2,632
|
|
Administrative fees
|
|
2,320
|
|
2,425
|
|
Other general and administrative
|
|
2,801
|
|
2,918
|
|
Total expenses
|
|
87,955
|
|
85,821
|
|
NET INVESTMENT INCOME BEFORE INCOME TAXES
|
|
79,783
|
|
49,870
|
|
Income tax expense, including excise tax
|
|
2,745
|
|
2,047
|
|
NET INVESTMENT INCOME
|
|
77,038
|
|
47,823
|
|
REALIZED AND UNREALIZED NET GAINS (LOSSES) ON INVESTMENTS:
|
|
|
|
|
|
Net realized gains (losses)
|
|
(7,671
|
)
|
62,569
|
|
Net unrealized gains
|
|
36,180
|
|
22,234
|
|
Net realized and unrealized gains on investments
|
|
28,509
|
|
84,803
|
|
REALIZED LOSS ON EXTINGUISHMENT OF DEBT
|
|
--
|
|
(8,860
|
)
|
NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS
|
|
$
|
105,547
|
|
$
|
123,766
|
|
BASIC AND DILUTED EARNINGS PER COMMON SHARE
|
|
$
|
0.49
|
|
$
|
0.61
|
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING -- BASIC AND
DILUTED
|
|
217,044
|
|
204,419
|
|
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 ended March 31, 2012 and 2011 are provided below.
|
|
|
For the three months ended March 31,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Basic and diluted Core EPS(1)
|
|
|
$
|
0.38
|
|
|
$
|
0.31
|
|
Net realized and unrealized gains
|
|
|
0.13
|
|
|
0.37
|
|
Incentive fees attributed to net realized and unrealized gains and
losses
|
|
|
(0.02
|
)
|
|
(0.07
|
)
|
Income tax expense related to realized gains
|
|
|
--
|
|
|
--
|
|
Basic and diluted GAAP EPS
|
|
|
$
|
0.49
|
|
|
$
|
0.61
|
|
(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 realized and unrealized gains and losses,
any incentive management fees attributable to such net realized and
unrealized gains and losses and any income taxes related to such
realized gains. 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.

Ares Capital Corporation
Carl Drake, 888-818-5298