FEBRUARY 20, 2025 Barings BDC, Inc. Fourth Quarter 2024 Earnings Presentation Important Information & Cautionary Notice Regarding Forward-Looking Statements Cautionary Notice: Certain statements contained in this presentation are "forward-looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management's current estimates, projections, expectations or beliefs, and which are subject to r ...

Financial Performance - The company paid $0.2 million in brokerage commissions during the fiscal year ended December 31, 2024, compared to no commissions in the previous two fiscal years[73]. - The company intends to distribute substantially all of its income to stockholders to minimize U.S. federal income taxes, having met distribution requirements for 2022, 2023, and 2024[103]. - The company may face challenges in meeting the Annual Distribution Requirement if it recognizes taxable income without corresponding cash receipts[145]. - If the company fails to satisfy the Annual Distribution Requirement, it will be subject to corporate-level U.S. federal income tax on all taxable income[153]. - The company is authorized to borrow funds and sell assets to satisfy distribution requirements, but this may limit its ability to make advantageous investment decisions[152]. Investment Management - The Base Management Fee paid to Barings is calculated at an annual rate of 1.25% based on the company's gross assets, excluding cash and cash equivalents[89]. - The Income-Based Fee is calculated quarterly based on the Pre-Incentive Fee Net Investment Income exceeding a Hurdle Amount, which is 2.0625% of the NAV at the beginning of each quarter[90]. - The Catch-Up Amount is determined quarterly as 2.578125% of the NAV, allowing Barings to receive a 20% incentive fee on Pre-Incentive Fee Net Investment Income once it reaches this threshold[91]. - If Pre-Incentive Fee Net Investment Income exceeds the Catch-Up Amount, the Income-Based Fee equals 20% of the excess amount[92]. - The Capital Gains Fee is calculated annually, equal to 20% of cumulative realized capital gains minus cumulative realized capital losses, starting from the year ended December 31, 2018[92]. Compliance and Regulation - The company is regulated as a Business Development Company (BDC) under the 1940 Act, requiring a majority of directors to be non-interested persons[110]. - The company must ensure that qualifying assets represent at least 70.0% of total assets at the time of acquisition[112]. - The company is required to maintain a coverage ratio of total assets to total senior securities of at least 150% due to its BDC status[106]. - The company must provide significant managerial assistance to portfolio companies to count portfolio securities as qualifying assets[119]. - The company is subject to compliance with the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act, including filing quarterly and annual reports[131]. Corporate Governance - The company has adopted a Global Code of Ethics Policy and corporate governance guidelines applicable to its directors and employees[122]. - The Barings BDC Advisory Agreement was re-approved for an additional one-year term ending June 24, 2025, and can be terminated with 60 days' notice[96]. - The Administration Agreement allows Barings to perform necessary administrative services, with costs reimbursed by the company, capped at a mutually agreed quarterly amount[98]. - The company is prohibited from making certain negotiated co-investments with affiliates without prior SEC approval[128]. - The company is required to review its compliance policies and procedures annually for adequacy and effectiveness[124]. Investment Strategy - The company assists portfolio companies in developing exit strategies, including sales or mergers[70]. - The company competes with various investment funds and financial services companies, some of which have greater resources and fewer regulatory restrictions[71]. - The company estimates the fair value of investments in certain entities using the NAV and ownership percentage as a practical expedient[68]. - The company has wholly-owned taxable subsidiaries to hold certain portfolio investments, preserving its RIC status and tax advantages[104]. - The company has qualified and elected to be treated as a RIC under Subchapter M of the Code since the taxable year ended December 31, 2007[138]. Debt and Financing - As of December 31, 2024, approximately $1,881.9 million of the debt portfolio investments bore interest at variable rates, primarily SOFR-based[543]. - Approximately 50.5% of total borrowings, amounting to $738.6 million, bore interest at variable rates under the February 2019 Credit Facility and the February 2029 Notes[543]. - A hypothetical increase of 300 basis points in interest rates would result in an increase in net income by $34,299 thousand[545]. - A hypothetical decrease of 50 basis points in interest rates would result in a decrease in net income by $5,717 thousand[545]. - The balance of unused commitments to extend financing as of December 31, 2024, was reported, indicating adequate financial resources to satisfy unfunded commitments[548]. Shareholder Returns - A new 12-month share repurchase program was authorized, allowing the company to repurchase up to $30.0 million of its common stock starting March 1, 2025[557]. - The Board declared a quarterly distribution of $0.26 per share, payable on March 12, 2025, along with three special dividends totaling $0.15 per share throughout 2025[558]. - The first special dividend of $0.05 per share will be paid on March 12, 2025, with subsequent payments scheduled for June 11 and September 10, 2025[559].

Financial Performance - Barings BDC reported net investment income of $29.5 million, or $0.28 per share, for Q4 2024, with a total investment income of $70.6 million[6]. - Net investment income after taxes for the full year 2024 was $131,194,000, compared to $134,660,000 for the previous year, reflecting a decrease of about 3.5%[29]. - Total investment income for the full year 2024 was $286,169,000, a decrease from $286,169,000 in the previous year[29]. - The company reported a total dividend/distribution per share of $1.04 for the full year 2024, consistent with the previous year[31]. - The company recorded net unrealized appreciation of $9.2 million in Q4 2024, despite a net unrealized depreciation of $46.0 million on its current portfolio[9]. Assets and Liabilities - Total assets increased to $2,695.7 million, while total net assets (equity) decreased slightly to $1,190.4 million[4]. - Total liabilities increased from $1,480,894,000 in 2023 to $1,505,306,000 in 2024, representing an increase of approximately 1.6%[27]. - Total debt as of December 31, 2024, was $1,463,590,000, up from $1,372,811,000 as of September 30, 2024[36]. - The debt-to-equity ratio as of December 31, 2024, was 1.23x, up from 1.15x as of September 30, 2024[4]. - The total net debt-to-equity ratio increased to 1.16x as of December 31, 2024, compared to 1.09x as of September 30, 2024[36]. Cash and Investments - Cash and cash equivalents increased from $57,187,000 in 2023 to $74,381,000 in 2024, an increase of approximately 29.9%[27]. - Cash and foreign currencies at the end of the period increased to $91,339,000 from $70,528,000 in 2023[33]. - The investment portfolio at fair value as of December 31, 2024, was $2,449.3 million, with a weighted average yield on performing debt investments of 10.2%[4]. - Total investments at fair value decreased from $2,488,715,000 in 2023 to $2,449,272,000 in 2024, a decline of approximately 1.6%[27]. - Purchases of portfolio investments totaled $637,440,000 in 2024, compared to $614,648,000 in 2023, indicating a slight increase of 3.0%[33]. Shareholder Actions - The company declared a quarterly cash dividend of $0.26 per share and special dividends totaling $0.15 per share, to be paid in three equal installments in 2025[1]. - The company authorized a new share repurchase program allowing for the repurchase of up to $30.0 million of its common stock over the next 12 months[12]. - The company did not report any cash consideration paid for the Sierra merger in 2024, while it had $101,896,000 in 2023[33]. Operational Highlights - During Q4 2024, Barings BDC made 15 new investments totaling $137.9 million and invested an additional $156.5 million in existing portfolio companies[8]. - Net cash provided by operating activities for 2024 was $122,161,000, an increase of 58.8% compared to $76,944,000 in 2023[33]. - The company reported a net increase in net assets resulting from operations of $110,289,000 for 2024, down from $127,999,000 in 2023[33]. - The net realized losses on investments for the full year 2024 amounted to $23,773,000, compared to $6,129,000 in the previous quarter, indicating a significant increase in losses[31]. - Subsequent to December 31, 2024, Barings BDC made approximately $81.3 million of new commitments, with $49.9 million closed and funded[16].

Industry Overview - The Zacks SBIC & Commercial Finance industry focuses on providing financing to small and mid-sized privately held firms, often underserved by traditional banks [3] - The industry offers customized financing solutions, including senior debt instruments and equity capital, targeting firms undergoing ownership changes, buyouts, and growth initiatives [3] Key Themes - **Economic Strength and Interest Rates**: The Federal Reserve's interest rate cuts are expected to enhance demand for SBIC & Commercial Finance products, supported by solid economic growth and cooling inflation [4][5] - **Regulatory Changes**: The 2018 amendment to the Investment Company Act allowed increased leverage for these companies, enhancing funding flexibility and growth opportunities [6] - **Asset Quality Concerns**: Prolonged high interest rates may lead to a deterioration in asset quality as portfolio companies struggle to service debt, compounded by geopolitical risks [8] Performance Metrics - The Zacks SBIC & Commercial Finance industry ranks 42, placing it in the top 17% of over 250 Zacks industries, indicating robust prospects [9][10] - The industry has underperformed the S&P 500 and the broader finance sector over the past two years, with a collective rise of 17.8% compared to 48.5% for the S&P 500 [12] Valuation - The industry has a trailing 12-month price-to-tangible book (P/TB) ratio of 1.03X, significantly lower than the S&P 500's 17.24X, indicating a solid discount compared to the market [13][16] Investment Opportunities - **Main Street Capital Corporation (MAIN)**: Specializes in equity and debt capital for lower-middle-market companies, with total investments of $4.53 billion and a market cap of $5.4 billion [19][21] - **Barings BDC, Inc. (BBDC)**: Focuses on senior secured loans and has total investments of $2.42 billion, with a market cap of $1.09 billion [24][26] - **Crescent Capital BDC, Inc. (CCAP)**: Invests in the debt of private middle-market companies, with total investments of $1.59 billion and a market cap of $739.9 million [29][30]

Group 1: Barings BDC (BBDC) - Barings BDC is an externally managed business development company focused on debt investments in middle market companies [1] - The Zacks Consensus Estimate for its next year earnings has increased by 6.5% over the last 60 days [1] - The company has a dividend yield of 10.3%, which is higher than the industry average of 9.8% [1] Group 2: Noble Corporation PLC (NE) - Noble Corporation is an offshore drilling contractor serving the oil and gas industry [2] - The Zacks Consensus Estimate for its current year earnings has risen by nearly 4.3% over the last 60 days [2] - The company offers a dividend yield of 6.4%, significantly above the industry average of 0.0% [2] Group 3: Premier Financial (PFC) - Premier Financial operates as a Home Savings Bank and full-service insurance agency [3] - The Zacks Consensus Estimate for its current year earnings has increased by nearly 1.9% over the last 60 days [3] - The company has a dividend yield of 4.6%, compared to the industry average of 2.5% [3]

NOVEMBER 7, 2024 | --- | --- | --- | |-------------------|-------|-----------------------| | | | | | | | | | Barings BDC, Inc. | | | | | | Third Quarter 2024 | | | | Earnings Presentation | Important Information & Cautionary Notice Regarding Forward-Looking Statements Cautionary Notice: Certain statements contained in this presentation are "forward-looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made an ...

Financial Data and Key Metrics Changes - Net asset value per share increased to $11.32, reflecting a 0.4% increase from the prior fiscal year-end [10] - Net investment income for the quarter was $0.29 per share, exceeding the dividend of $0.26 per share by $0.03 or 10% [26] - Nonaccruals as a percentage of fair value remained low at 0.5%, down from 1.5% on a fair value basis as of December 31, 2023 [12] Business Line Data and Key Metrics Changes - The investment portfolio's weighted average yield at fair value was 11% [13] - BBDC deployed $125 million of capital in the quarter, offset by $121 million of sales and repayments, resulting in net deployments of $4 million [15] - The portfolio composition remains highly diversified, with 72% consisting of secured investments and approximately 68% being first lien securities [19] Market Data and Key Metrics Changes - LBO activity in 2024 remains muted, but the third quarter showed signs of improvement in deployment opportunities compared to the first half of the year [16] - Only 13% of transaction volume year-to-date represented "new money financings," indicating a focus on refinancings and repricings [16] Company Strategy and Development Direction - The company continues to focus on the top of the capital structure investments and sponsor-backed middle-market issuers, which are seen as the best segment for risk-adjusted returns [6] - BBDC's portfolio strategy includes simplifying the portfolio and selectively investing in compelling direct lending opportunities [16] - The company aims to align fees and credit performance hurdles with shareholders, with a hurdle rate of 8.25% compared to a median of 7.03% among peers [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a potential soft landing for the economy, which could lead to a reduction in interest rates and improved credit metrics [8] - The company is confident in its credit selection and underwriting discipline, which is expected to provide stable returns despite potential market volatility [9] - Management highlighted the importance of the portfolio's construction to withstand various economic scenarios [9] Other Important Information - The board declared a fourth quarter dividend of $0.26 per share, consistent with the previous quarter, representing a 9.2% yield on net asset value [35] - The company amended and extended its revolving credit facility, reducing the spread on borrowings and extending the maturity to November 2029 [33][34] - BBDC has $241 million of unfunded commitments to portfolio companies and $65 million of outstanding commitments to joint ventures, with strong overall liquidity of over $540 million [34] Q&A Session Summary - The call experienced technical difficulties, preventing access to questions from analysts and shareholders [37][38] - The company encouraged direct communication with the executive management team for any inquiries [38]

Barings BDC (BBDC) came out with quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.30 per share. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.33%. A quarter ago, it was expected that this business development company would post earnings of $0.30 per share when it actually produced earnings of $0.40, delivering a surprise of 33.33%.Over the last four quart ...

Investment Portfolio - As of September 30, 2024, the total value of the investment portfolio was $2,416.7 million, down from $2,488.7 million as of December 31, 2023[358]. - The company had investments in 328 portfolio companies with an aggregate cost of $2,446.9 million as of September 30, 2024, compared to 336 portfolio companies with an aggregate cost of $2,535.6 million as of December 31, 2023[358]. - The total investment portfolio fair value was $2,416,714,000, a decrease from $2,488,715,000 on December 31, 2023[360]. - The total fair value of investments in joint ventures and private equity funds was $104,243,000 as of September 30, 2024, down from $110,066,000 at the end of 2023[360]. - The fair value of investments categorized as Risk Rating 1 increased to $250,611,000 (10.5% of total portfolio) as of September 30, 2024, compared to $207,279,000 (8.5%) at the end of 2023[370]. - The fair value of investments in Risk Rating Category 2 decreased to $1,542,076,000 (65.0%) from $1,787,077,000 (73.0%)[370]. Investment Income - The company generates revenues primarily from interest income, loan origination fees, and dividend income from debt securities[350]. - Total investment income for the three months ended September 30, 2024, was $70.851 million, slightly up from $70.846 million in the same period of 2023[383]. - Net investment income after taxes for the three months ended September 30, 2024, was $30.185 million, compared to $33.309 million for the same period in 2023[383]. - Dividends from portfolio companies for the three months ended September 30, 2024, were $9.8 million, up from $8.5 million in the same period of 2023[384]. - Total recurring fee and other income for the three months ended September 30, 2024, was $2,322,000, compared to $2,258,000 for the same period in 2023, reflecting a 2.83% increase[472]. - Total non-recurring fee and other income for the three months ended September 30, 2024, was $1,967,000, significantly higher than $392,000 for the same period in 2023[472]. - Total fee and other income for the nine months ended September 30, 2024, reached $11,532,000, compared to $10,250,000 for the same period in 2023, indicating a 12.47% increase[472]. Expenses and Losses - Total operating expenses for the three months ended September 30, 2024, were $39.633 million, an increase from $37.125 million in the same period of 2023[385]. - The company experienced a net realized loss of $12.6 million from the restructuring of investments in two portfolio companies during the nine months ended September 30, 2024[361]. - Net realized losses for Q3 2024 totaled $10.9 million, primarily from an $8.5 million loss on the investment portfolio and a $2.9 million loss on forward currency contracts[396]. - During the nine months ended September 30, 2024, net realized losses amounted to $24.3 million, with $17.6 million from the investment portfolio and $7.5 million from forward currency contracts[396]. - The company reported a net loss on its investment portfolio of $62.1 million for the nine months ended September 30, 2023, primarily due to a $43.6 million loss on debt investments[397]. Debt and Borrowings - The company had U.S. dollar borrowings of $131.0 million outstanding under the February 2019 Credit Facility, with a weighted average interest rate of 7.105%[410]. - The fair value of the borrowings outstanding under the February 2019 Credit Facility was $347.8 million as of September 30, 2024[411]. - The company issued $50.0 million in aggregate principal amount of Series A senior unsecured notes due August 2025, with a fixed interest rate of 4.66% per year[412]. - The Series B Notes and Series C Notes under the November 2020 NPA have fixed interest rates of 4.25% and 4.75% per year, respectively[417]. - The company had net repayments under the February 2019 Credit Facility totaling $377.1 million during the nine months ended September 30, 2024[404]. - The February 2019 Credit Facility was increased to $1,065.0 million as of April 1, 2022, with a maturity date extended to February 21, 2026[406]. Share Repurchase and Distributions - The company authorized a share repurchase program allowing for the repurchase of up to $30.0 million of common stock, which terminated on March 1, 2024[440]. - During the nine months ended September 30, 2024, the company did not repurchase any shares under the share repurchase program[440]. - The company authorized a new 12-month share repurchase program allowing for the repurchase of up to $30.0 million of common stock starting March 1, 2024[441]. - The company intends to pay quarterly distributions to stockholders, with a declared distribution of $0.26 per share payable on December 11, 2024[449]. Risk Management - The company is exposed to foreign currency fluctuations, with investments translated into U.S. dollars based on spot rates[495]. - Interest rate risk management systems are in place to monitor and hedge against fluctuations, utilizing instruments like interest rate swaps and options[494]. - The complexity of transitioning away from LIBOR could materially affect the company's financial condition and operations[492]. - A hypothetical increase of 300 basis points in interest rates could result in a net income increase of $36.121 million, while a decrease of 50 basis points could lead to a net income decrease of $6.020 million[496]. Investment Strategy - The company focuses on investing in senior secured private debt investments in well-established middle-market businesses across various industries[348]. - The company employs a strategy that targets investments with relatively low levels of cyclicality and operating risk, enhancing returns through prudent leverage[349]. - The company must distribute at least 90% of its investment company taxable income (ICTI) to maintain its status as a regulated investment company (RIC)[445]. - The company has historically met its minimum distribution requirements and continually monitors compliance with the Code[443].

Barings BDC, Inc. Third Quarter 2024 Results [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Barings BDC reported Q3 2024 net investment income of $0.29 per share, exceeding dividends, with NAV at $11.32 Q3 2024 Key Financial Results (per share) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Jun 30, 2024 | | :--- | :--- | :--- | | Net Investment Income | $0.29 | $0.40 | | Net Realized Loss on Investments | $(0.10) | $0.08 | | Net Unrealized Appreciation (Depreciation) | $0.02 | $(0.29) | | Net Increase in Net Assets | $0.21 | $0.18 | | Dividend Declared | $0.26 | $0.26 | Key Balance Sheet and Portfolio Metrics (in millions) | Metric | As of Sep 30, 2024 | As of Jun 30, 2024 | | :--- | :--- | :--- | | Investment Portfolio (Fair Value) | $2,416.7 M | $2,395.7 M | | Total Net Assets (Equity) | $1,194.4 M | $1,201.9 M | | Net Asset Value (NAV) per Share | $11.32 | $11.36 | | Debt-to-Equity Ratio | 1.15x | 1.14x | | Net Debt-to-Equity Ratio | 1.09x | 1.07x | - CEO Eric Lloyd stated that the company continues to deliver attractive returns through its disciplined investment strategy, with **net investment income well above the dividend**, **strong credit metrics**, and a **resilient portfolio**[4](index=4&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) Q3 2024 total investment income was $70.9 million, net investment income $30.2 million, and NAV per share decreased to $11.32 Q3 2024 Financial Performance (in millions, except per share data) | Metric | Amount | Per Share | | :--- | :--- | :--- | | Total Investment Income | $70.9 | N/A | | Net Investment Income | $30.2 | $0.29 | | Net Increase in Net Assets | $22.0 | $0.21 | - The decrease in NAV per share from $11.36 to $11.32 was primarily attributed to: - **$(0.10) per share** from net realized loss on investments and currency transactions - **+$0.03 per share** from net investment income exceeding the dividend - **+$0.02 per share** from net unrealized appreciation - **+$0.01 per share** from the accretive impact of share repurchases[6](index=6&type=chunk) [Portfolio and Capital Management](index=2&type=section&id=Portfolio%20and%20Capital%20Management) Q3 saw $125.0 million in investments and $111.9 million in repayments, alongside strong liquidity and share repurchases [Recent Portfolio Activity](index=2&type=section&id=Recent%20Portfolio%20Activity) Q3 portfolio activity involved significant investments and repayments, leading to both realized losses and unrealized appreciation - **New Investments:** Made 11 new investments totaling **$88.4 million** - **Follow-on Investments:** Invested **$36.6 million** in existing portfolio companies - **Repayments/Sales:** Received **$111.9 million** from loan repayments and principal payments, recognizing a net realized loss of **$13.2 million** on these transactions - **Equity Sales:** Received **$5.9 million** from equity sales, recognizing a net realized gain of **$4.3 million**[7](index=7&type=chunk) - The company recorded net unrealized appreciation of **$2.7 million**. This was primarily driven by a **$21.6 million positive impact from foreign currency exchange rates** on investments, which was partially offset by **negative credit/fundamental performance of $11.1 million** and unrealized depreciation on currency and forward contracts[8](index=8&type=chunk) [Liquidity and Capitalization](index=2&type=section&id=Liquidity%20and%20Capitalization) The company maintained $66.0 million in cash and $1.37 billion in total debt, later amending its credit facility to extend maturity Liquidity Position as of September 30, 2024 (in millions) | Item | Amount | | :--- | :--- | | Cash and Foreign Currencies | $66.0 | | Borrowings under Credit Facility | $347.8 | | Unsecured Notes Outstanding | $1,025.0 | - On November 5, 2024, the company amended its credit facility, extending the revolving period to November 2028 and the maturity date to November 2029, while reducing total commitments from **$1,065 million** to **$825 million**[10](index=10&type=chunk) - The CFO highlighted **over $540.0 million of available capital** and a **net leverage level below 1.10x**, positioning the company for new origination activity[11](index=11&type=chunk) [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) The company repurchased 199,054 shares at $9.84 per share in Q3 2024 under its $30.0 million program - The Board authorized a 12-month, **$30.0 million share repurchase program** effective March 1, 2024, for open market purchases at prices below the current NAV per share[12](index=12&type=chunk) - During Q3 2024, the company repurchased **199,054 shares** at an average price of **$9.84 per share**. As of November 6, 2024, a total of **508,132 shares** have been repurchased under the program[13](index=13&type=chunk) [Shareholder Information](index=3&type=section&id=Shareholder%20Information) The Board declared a Q4 2024 cash dividend of $0.26 per share, payable December 11, 2024, with a DRIP option [Fourth Quarter 2024 Dividend](index=3&type=section&id=Fourth%20Quarter%202024%20Dividend) A Q4 2024 cash dividend of $0.26 per share was declared, with a December 4 record date and December 11 payment | Item | Detail | | :--- | :--- | | Amount per share | $0.26 | | Record date | December 4, 2024 | | Payment date | December 11, 2024 | [Dividend Reinvestment Plan (DRIP)](index=3&type=section&id=Dividend%20Reinvestment%20Plan%20%28DRIP%29) The company offers a Dividend Reinvestment Plan (DRIP) for automatic reinvestment of cash dividends into shares - Stockholders who have not opted out of the DRIP will have their cash dividends automatically reinvested in additional shares of the Company's common stock[15](index=15&type=chunk) [Subsequent Events & Conference Call](index=3&type=section&id=Subsequent%20Events%20%26%20Conference%20Call) Subsequent to Q3, Barings BDC made $117.1 million in new commitments, with $95.8 million funded, and scheduled a Q3 results conference call - After September 30, 2024, the Company made new commitments of **~$117.1 million**, with **$95.8 million funded**. The funded amount consisted primarily of **$91.2 million in first lien senior secured debt** with a weighted average yield of **9.6%**[17](index=17&type=chunk) - A conference call to discuss Q3 2024 results is scheduled for Thursday, November 7, 2024, at 9:00 a.m. ET[18](index=18&type=chunk) [Financial Statements (Unaudited)](index=4&type=section&id=Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements for periods ended September 30, 2024, covering assets, operations, and cash flows [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of September 30, 2024, total assets were $2.61 billion, with net assets of $1.19 billion and an investment portfolio of $2.42 billion Balance Sheet Summary (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total investments at fair value | $2,416,714 | $2,488,715 | | Total assets | $2,605,078 | $2,677,453 | | Total liabilities | $1,410,637 | $1,480,894 | | Total net assets | $1,194,441 | $1,196,559 | | Net asset value per share | $11.32 | $11.28 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2024 total investment income was $70.9 million, yielding $30.2 million net investment income and a $22.0 million net increase in net assets Statement of Operations Summary - Three Months Ended (in thousands) | Account | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Total investment income | $70,851 | $70,846 | | Total operating expenses | $39,633 | $37,125 | | Net investment income after taxes | $30,185 | $33,309 | | Net realized/unrealized loss | $(8,165) | $(15,250) | | Net increase in net assets | $22,020 | $18,321 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Nine months ended September 30, 2024: operating activities provided $167.3 million cash, financing used $171.9 million, resulting in a $4.5 million net cash decrease Cash Flow Summary - Nine Months Ended (in thousands) | Activity | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $167,318 | $(62,060) | | Net cash provided by (used in) financing activities | $(171,852) | $(27,597) | | Net increase (decrease) in cash | $(4,534) | $(89,657) | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company provides a reconciliation for its non-GAAP net debt-to-equity ratio, 1.09x as of September 30, 2024, used to monitor leverage - The company uses non-GAAP measures such as **net debt** and **net debt-to-equity ratio** to supplement GAAP financial information, as management believes these measures enhance investors' ability to analyze leverage and financial condition[22](index=22&type=chunk) Reconciliation of Net Debt-to-Equity Ratio (in millions) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total debt (principal) | $1,372.8 M | $1,375.8 M | $1,465.4 M | $1,444.9 M | | Total net debt | $1,298.2 M | $1,285.9 M | $1,412.8 M | $1,374.2 M | | Total net assets | $1,194.4 M | $1,201.9 M | $1,211.9 M | $1,196.6 M | | **Total net debt-to-equity ratio** | **1.09x** | **1.07x** | **1.17x** | **1.15x** |