PART I [Business](index=4&type=section&id=Item%201.%20Business) ORCC is a BDC focused on direct lending to U.S. middle-market companies, aiming for income and capital appreciation, with a $13.0 billion portfolio as of December 2022 [Our Company](index=4&type=section&id=Our%20Company) ORCC is a specialty finance BDC lending to U.S. middle-market companies, with a $13.0 billion portfolio of primarily floating-rate senior secured debt - ORCC is a specialty finance company focused on lending to U.S. middle-market companies, defined as having EBITDA between **$10 million** and **$250 million** annually[13](index=13&type=chunk)[15](index=15&type=chunk) - The company's investment objective is to generate current income and, to a lesser extent, capital appreciation by targeting investments with favorable risk-adjusted returns[16](index=16&type=chunk) Portfolio Snapshot as of December 31, 2022 | Metric | Value | | :--- | :--- | | Portfolio Companies | 184 | | Average Investment Size (Fair Value) | ~$70.7 million | | First Lien Debt Investments (by FV) | 71.4% | | Second Lien Debt Investments (by FV) | 14.3% | | Floating Rate Debt Investments (by FV) | 98.3% | | Largest Industry (Internet Software & Services) | 13.3% | - ORCC is regulated as a BDC and has elected to be treated as a RIC for U.S. federal income tax purposes, requiring it to distribute substantially all of its available earnings quarterly[18](index=18&type=chunk) [The Adviser and Administrator – Owl Rock Capital Advisors LLC](index=5&type=section&id=The%20Adviser%20and%20Administrator%20%E2%80%93%20Owl%20Rock%20Capital%20Advisors%20LLC) Owl Rock Capital Advisors LLC, an affiliate of Blue Owl Capital Inc., manages ORCC's investments and administration, overseeing **$68.6 billion** in assets - The company is externally managed by Owl Rock Capital Advisors LLC, an indirect affiliate of Blue Owl Capital Inc. (NYSE: OWL) and part of its Owl Rock direct lending division[23](index=23&type=chunk) Owl Rock Division AUM by Strategy (as of Dec 31, 2022) | Strategy | Assets Under Management | | :--- | :--- | | Diversified Lending | $39.6 billion | | Technology Lending | $16.0 billion | | First Lien Lending | $3.3 billion | | Opportunistic Lending | $2.3 billion | | CLO Strategy | $7.4 billion | | **Total Owl Rock AUM** | **$68.6 billion** | - To manage conflicts of interest from overlapping investment objectives with other Owl Rock Clients, the Adviser uses an allocation policy and an SEC exemptive order to permit co-investments[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Market Trends](index=7&type=section&id=Market%20Trends) Favorable market trends for middle-market lending are driven by reduced bank capital, a financing gap, and strong private equity demand, leading to attractive investment dynamics - Regulatory and structural changes have reduced capital availability from traditional banks for U.S. middle-market companies, creating an opportunity for alternative lenders[31](index=31&type=chunk) - High-yield bond and syndicated loan markets are often inaccessible to middle-market companies due to issue size and liquidity requirements, leaving a financing gap[32](index=32&type=chunk)[33](index=33&type=chunk) - Strong demand for debt capital is driven by private equity firms, which held an estimated **$2.5 trillion** in uninvested capital as of December 31, 2022[34](index=34&type=chunk) - The supply/demand imbalance for middle-market debt creates attractive investment dynamics, including favorable pricing, stronger covenants, and better call protection for lenders[36](index=36&type=chunk) [Potential Competitive Advantages](index=8&type=section&id=Potential%20Competitive%20Advantages) ORCC's competitive advantages include an experienced team, direct origination, a defensive investment philosophy, and active portfolio monitoring - The Investment Committee members possess an average of over **25 years** of experience in private lending and investing through multiple business and credit cycles[39](index=39&type=chunk) - A substantial majority of investments are sourced directly through an origination platform of over **100 professionals**. Since inception through Dec 31, 2022, the Adviser and its affiliates have reviewed over **7,800 opportunities** from more than **650 private equity sponsors**[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) - The Adviser employs a defensive, income-oriented investment approach focused on long-term credit performance and principal protection[46](index=46&type=chunk) - Active portfolio monitoring is conducted through regular dialogue with management, review of financial covenants, and a dedicated portfolio management team with workout experts to mitigate risks[47](index=47&type=chunk) [Investment Selection and Process](index=9&type=section&id=Investment%20Selection%20and%20Process) The investment process targets established, cash-flow positive companies with strong sponsorship, emphasizing diversification, due diligence, and tailored transaction structuring - Investment selection criteria prioritize established companies with positive cash flow, strong competitive positions, experienced management, diversified customer/supplier bases, and a clear exit strategy[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - The company seeks to participate in transactions sponsored by high-quality private equity firms and aims for diversification, targeting no more than **20%** of the portfolio in any single industry and individual portfolio companies comprising **1-2%** of the portfolio[56](index=56&type=chunk)[57](index=57&type=chunk) - The investment process includes origination from various sources, intensive due diligence, selective approval by a majority of the Investment Committee, and careful structuring of investment terms[58](index=58&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - While many investments will have financial maintenance covenants for early warning of potential issues, the company may also invest in "covenant-lite" loans, which offer fewer protections for lenders[63](index=63&type=chunk)[47](index=47&type=chunk) [Structure of Investments](index=11&type=section&id=Structure%20of%20Investments) ORCC's portfolio primarily consists of tailored debt investments, including unitranche loans, with a smaller allocation to non-control equity and strategic investments in specialty finance companies - The portfolio primarily consists of debt investments, including first-lien, second-lien, mezzanine, and broadly syndicated loans. As of Dec 31, 2022, **69%** of first-lien debt was comprised of unitranche loans[66](index=66&type=chunk)[69](index=69&type=chunk) - Equity investments are typically non-control oriented and may include common stock, preferred stock, or equity-linked instruments like warrants[71](index=71&type=chunk) - The company makes equity investments in specialty financing portfolio companies, including Wingspire (asset-based lending), Amergin (railcar/aviation leasing), Fifth Season (life settlements), ORCC SLF (senior secured loans), and LSI Financing (life sciences revenue rights)[72](index=72&type=chunk)[73](index=73&type=chunk) [Investment Portfolio](index=13&type=section&id=Investment%20Portfolio) As of December 2022, ORCC's investment portfolio grew to **$13.0 billion** across 184 companies, primarily senior secured debt, concentrated in U.S. internet software and services Portfolio Composition by Investment Type (Fair Value) | Investment Type | Dec 31, 2022 ($ in thousands) | Dec 31, 2021 ($ in thousands) | | :--- | :--- | :--- | | First-lien senior secured debt | $9,279,179 | $9,539,774 | | Second-lien senior secured debt | $1,860,978 | $1,921,447 | | Unsecured debt | $248,019 | $196,485 | | Preferred equity | $355,261 | $260,869 | | Common equity | $977,927 | $576,004 | | Investment funds and vehicles | $288,981 | $247,061 | | **Total Investments** | **$13,010,345** | **$12,741,640** | - As of December 31, 2022, the company had outstanding unfunded investment commitments totaling **$926.1 million**, a decrease from **$963.8 million** at the end of 2021[77](index=77&type=chunk) Top 5 Industry Concentrations (Fair Value) | Industry | Dec 31, 2022 (%) | Dec 31, 2021 (%) | | :--- | :--- | :--- | | Internet software and services | 13.3% | 11.3% | | Insurance | 9.3% | 8.8% | | Food and beverage | 6.7% | 6.2% | | Manufacturing | 5.8% | 5.7% | | Financial services | 5.0% | 8.4% | - The geographic composition of the portfolio remains concentrated in the United States, with the South region being the largest at **34.4%** of fair value as of December 31, 2022[82](index=82&type=chunk) [ORCC Senior Loan Fund (fka Sebago Lake LLC)](index=16&type=section&id=ORCC%20Senior%20Loan%20Fund%20(fka%20Sebago%20Lake%20LLC)) ORCC SLF, a joint venture, primarily invests in senior secured loans, with ORCC holding an **87.5%** economic interest and a **$997.4 million** portfolio as of December 2022 - ORCC holds an **87.5%** economic interest in the ORCC SLF joint venture, with Nationwide Life Insurance Company holding the remaining **12.5%**. Total capital commitments were increased to **$571.5 million** in July 2022[83](index=83&type=chunk) ORCC SLF Portfolio Summary | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Investments (Fair Value) | $997.4 million | $790.3 million | | Number of Portfolio Companies | 56 | 38 | | Total Senior Secured Debt (Par) | $1,045.9 million | $798.4 million | | Weighted Avg. Spread Over Base Rate | 4.05% | 4.14% | [Capital Resources and Borrowings](index=16&type=section&id=Capital%20Resources%20and%20Borrowings) ORCC finances investments through diverse debt facilities, maintaining a **179%** asset coverage ratio and **$1.35 billion** available borrowing capacity as of December 2022 - The company's asset coverage requirement for senior securities is **150%**, with a current target leverage ratio of **0.90x-1.25x**. As of December 31, 2022, the asset coverage ratio was **179%**[88](index=88&type=chunk)[87](index=87&type=chunk) Debt Obligations Summary ($ in thousands) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Debt Principal Committed | $8,841,275 | $8,588,500 | | Outstanding Principal | $7,443,419 | $7,170,813 | | Amount Available | $1,353,057 | $1,362,370 | | Net Carrying Value | $7,281,744 | $7,079,326 | [Dividend Policy and Reinvestment Plan](index=18&type=section&id=Dividend%20Policy%20and%20Reinvestment%20Plan) To maintain RIC status, ORCC must distribute at least **90%** of taxable income, declaring **$1.29** per share in 2022, and operates an opt-out dividend reinvestment plan - As a RIC, the company must distribute at least **90%** of its investment company taxable income annually to avoid corporate-level U.S. federal income tax[94](index=94&type=chunk) Distributions Declared Per Share | Year | Total Distributions per Share | | :--- | :--- | | 2022 | $1.29 | | 2021 | $1.24 | | 2020 | $1.56 | - The company has an opt-out dividend reinvestment plan (DRIP) that automatically reinvests cash distributions into additional shares of common stock for participating shareholders[97](index=97&type=chunk) [Repurchase Offers](index=20&type=section&id=Repurchase%20Offers) The company concluded its **$100 million** 2020 stock repurchase program and initiated a new **$150 million** program in November 2022 - The 2020 Stock Repurchase Program, which authorized **$100 million** in buybacks, expired in November 2022. A total of **944,076 shares** were repurchased for approximately **$12.6 million** under this program[104](index=104&type=chunk) - In November 2022, the Board approved a new **18-month**, **$150 million** stock repurchase program. As of December 31, 2022, approximately **$15.9 million** had been used to repurchase **1,346,326 shares**[106](index=106&type=chunk)[107](index=107&type=chunk) [Investment Advisory and Administration Agreements](index=22&type=section&id=Investment%20Advisory%20and%20Administration%20Agreements) ORCC is managed by Owl Rock Capital Advisors LLC under agreements that define management and incentive fees, and administrative service reimbursements - The Adviser is responsible for managing assets, making investment decisions, and monitoring the portfolio under the Investment Advisory Agreement[110](index=110&type=chunk)[111](index=111&type=chunk) Advisory Fee Structure | Fee Type | Rate/Structure | | :--- | :--- | | **Management Fee** | 1.5% on average gross assets above 200% asset coverage; 1.0% on assets below 200% asset coverage | | **Income Incentive Fee** | 17.5% of pre-incentive fee net investment income over a 1.5% quarterly hurdle rate, with a catch-up provision | | **Capital Gains Incentive Fee** | 17.5% of cumulative realized capital gains less cumulative realized/unrealized losses since the IPO | - Under the Administration Agreement, the Adviser provides administrative services, and the company reimburses the Adviser for these services and its allocable portion of compensation for the CFO and CCO and their staff[127](index=127&type=chunk)[130](index=130&type=chunk) [Regulation as a Business Development Company](index=27&type=section&id=Regulation%20as%20a%20Business%20Development%20Company) As a BDC, ORCC must invest at least **70%** of assets in qualifying assets, adhere to a **150%** asset coverage ratio, and manage affiliate transactions under an SEC exemptive order - A BDC must invest at least **70%** of its total assets in "qualifying assets," primarily securities of private or small public U.S. companies to whom it must offer managerial assistance[149](index=149&type=chunk)[155](index=155&type=chunk) - Effective June 9, 2020, the company's minimum asset coverage requirement was reduced from **200%** to **150%**, allowing for increased leverage[144](index=144&type=chunk)[159](index=159&type=chunk) - Transactions with affiliates are restricted, but the company has an SEC exemptive order permitting co-investments with other funds managed by the Adviser, subject to board approval and specific conditions[161](index=161&type=chunk) - The company qualifies as a "limited derivatives user" under Rule 18f-4, exempting it from certain derivatives-related requirements but requiring policies to manage derivatives risks[167](index=167&type=chunk) [Certain U.S. Federal Income Tax Considerations](index=31&type=section&id=Certain%20U.S.%20Federal%20Income%20Tax%20Considerations) To avoid corporate-level tax, ORCC maintains RIC status by meeting annual distribution, income source, and asset diversification tests, but may face a **4%** excise tax - To qualify as a RIC and avoid corporate-level income tax, the company must annually distribute at least **90%** of its investment company taxable income[174](index=174&type=chunk) - RIC qualification also requires meeting a **90%** Income Test (sourcing income from dividends, interest, gains, etc.) and quarterly Diversification Tests that limit investments in single issuers[177](index=177&type=chunk)[178](index=178&type=chunk) - The company may be subject to a **4%** nondeductible U.S. federal excise tax if it does not distribute at least **98%** of its net ordinary income and **98.2%** of its capital gain net income within a calendar year[176](index=176&type=chunk) - The company may be required to recognize taxable income before receiving corresponding cash (e.g., from PIK interest or OID), which could create challenges in meeting the Annual Distribution Requirement[177](index=177&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces economic, business, adviser-related, regulatory, investment-specific, and common stock risks, including illiquidity, leverage, and conflicts of interest [Risks Related to the Economy](index=37&type=section&id=Risks%20Related%20to%20the%20Economy) The company's business is vulnerable to global economic and political volatility, which can impair portfolio companies, increase defaults, and reduce asset values - Global economic and political conditions, including the war between Russia and Ukraine and the after-effects of the COVID-19 pandemic, could adversely affect the business, financial condition, and results of operations[208](index=208&type=chunk)[210](index=210&type=chunk)[212](index=212&type=chunk) - Economic recessions or downturns could impair portfolio companies, leading to an increase in non-performing assets and a decrease in the value of collateral securing loans[221](index=221&type=chunk)[222](index=222&type=chunk) - Inflation may increase the operating costs of portfolio companies, potentially impacting their ability to service debt. In response, the Federal Reserve's interest rate hikes could further stress borrowers[225](index=225&type=chunk) [Risks Related to Our Business](index=40&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include illiquid investments, leverage, dependence on the Adviser, increasing competition, LIBOR discontinuation, and cybersecurity threats - The company's investments are primarily in illiquid, privately held securities, which are difficult to value and may be hard to sell, potentially leading to losses if liquidation is required[228](index=228&type=chunk)[230](index=230&type=chunk) - Borrowing money magnifies the potential for gain or loss. A decline in asset value would cause net asset value to decline more sharply, and defaults under borrowing facilities could force premature asset sales[232](index=232&type=chunk)[240](index=240&type=chunk) - The company's success depends on the Adviser's ability to manage the investment process and retain key professionals. Termination of the Investment Advisory Agreement could significantly harm operations[250](index=250&type=chunk)[253](index=253&type=chunk) - The discontinuation of LIBOR and transition to alternative rates like SOFR affects borrowing costs and investment returns and introduces operational risks[265](index=265&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) [Risks Related to Our Adviser and Its Affiliates](index=46&type=section&id=Risks%20Related%20to%20Our%20Adviser%20and%20Its%20Affiliates) Conflicts of interest arise from the Adviser's fee structure, management of other funds, and potential for separate fees from portfolio companies, potentially impacting shareholder interests - The management and incentive fee structure may create incentives for the Adviser to make speculative investments or use substantial leverage, as fees are based on average gross assets and investment performance[273](index=273&type=chunk)[274](index=274&type=chunk)[285](index=285&type=chunk) - The Adviser manages other investment vehicles (Blue Owl Clients) with similar strategies, creating competition for investment opportunities and conflicts in allocation[276](index=276&type=chunk)[278](index=278&type=chunk)[287](index=287&type=chunk) - The company's ability to enter into transactions with its affiliates is restricted by the 1940 Act, though an SEC exemptive order permits co-investments under specific conditions[298](index=298&type=chunk)[300](index=300&type=chunk) - The incentive fee may be paid on accrued, non-cash income (like PIK interest), which may never be collected, and the Adviser is not obligated to reimburse such fees[294](index=294&type=chunk)[295](index=295&type=chunk) [Risks Related to Business Development Companies](index=51&type=section&id=Risks%20Related%20to%20Business%20Development%20Companies) BDC regulations impose constraints on investment types, capital raising (e.g., issuing shares below NAV), and leverage, potentially limiting growth and flexibility - The requirement to invest at least **70%** of assets in qualifying assets could preclude the company from making certain attractive investments or force the sale of non-qualifying assets at inopportune times[309](index=309&type=chunk) - Failure to maintain BDC status would subject the company to more restrictive regulations as a closed-end investment company, reducing operating flexibility[310](index=310&type=chunk) - BDC and RIC regulations affect the ability to raise capital. The company is generally prohibited from issuing shares below NAV and must maintain a **150%** asset coverage ratio, which exposes it to leverage risks[311](index=311&type=chunk)[313](index=313&type=chunk) [Risks Related to Our Investments](index=52&type=section&id=Risks%20Related%20to%20Our%20Investments) Investments in middle-market debt are risky, often below investment grade, include "covenant-lite" loans, and expose the company to interest rate, subordination, and CLO-related risks - Investments in middle-market companies are risky, and the debt is often below investment grade ("junk") or unrated. The portfolio includes "covenant-lite" loans, which provide fewer protections to lenders[315](index=315&type=chunk)[316](index=316&type=chunk) - Subordinated debt investments (second-lien and mezzanine) rank junior to senior debt, increasing the risk of loss of principal in the event of a portfolio company's insolvency[319](index=319&type=chunk)[355](index=355&type=chunk) - The company is exposed to interest rate risk; rising rates increase borrowing costs and may strain portfolio companies' ability to service their floating-rate debt[365](index=365&type=chunk)[366](index=366&type=chunk)[373](index=373&type=chunk) - Investments in CLOs expose the company to leverage and subordination risk, where payment defaults or failure to satisfy coverage tests can divert cash flows away from the company's equity position[396](index=396&type=chunk)[397](index=397&type=chunk)[401](index=401&type=chunk) [Risks Related to an Investment in Our Common Stock](index=65&type=section&id=Risks%20Related%20to%20an%20Investment%20in%20Our%20Common%20Stock) Investing in common stock carries risks including trading at a discount to NAV, potential dilution, uncertain distributions (potentially return of capital), and anti-takeover provisions - Shares of BDCs, including ORCC, frequently trade at a discount to their net asset value per share[408](index=408&type=chunk) - Shareholders may experience dilution if additional shares are issued, particularly if the company sells shares below the current NAV, which is permissible with board and shareholder approval[409](index=409&type=chunk)[410](index=410&type=chunk) - The amount of distributions is uncertain and may be funded from offering proceeds, which would constitute a return of capital and reduce the funds available for investment[413](index=413&type=chunk)[414](index=414&type=chunk) - The company's stock repurchase program may affect the stock price and volatility, and there is no guarantee it will enhance shareholder value[419](index=419&type=chunk)[420](index=420&type=chunk) [Risks Related to U.S. Federal Income Tax](index=68&type=section&id=Risks%20Related%20to%20U.S.%20Federal%20Income%20Tax) Maintaining RIC status is crucial to avoid corporate-level tax, requiring strict adherence to distribution, income, and diversification tests, with cash flow timing posing a challenge - The company will be subject to corporate-level U.S. federal income tax if it fails to maintain its status as a RIC, which would substantially reduce net assets and distributions[427](index=427&type=chunk)[430](index=430&type=chunk) - To maintain RIC status, the company must meet annual distribution, income source, and asset diversification tests. Failure to meet these could force asset sales at disadvantageous prices[427](index=427&type=chunk)[429](index=429&type=chunk) - Recognizing taxable income before receiving cash (e.g., from PIK interest or OID) may make it difficult to pay the required distributions to maintain RIC status[432](index=432&type=chunk)[434](index=434&type=chunk) [Unresolved Staff Comments](index=71&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[458](index=458&type=chunk) [Properties](index=71&type=section&id=Item%202.%20Properties) The company's corporate headquarters are located at 399 Park Avenue, New York, provided by the Adviser and deemed suitable - The company's principal executive offices are located at 399 Park Avenue, 37th Floor, New York, New York 10022, and are provided by the Adviser[459](index=459&type=chunk) [Legal Proceedings](index=71&type=section&id=Item%203.%20Legal%20Proceedings) Neither the company nor its Adviser is currently subject to any material legal proceedings expected to impact financial condition - The company is not currently subject to any material legal proceedings[460](index=460&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[461](index=461&type=chunk) PART II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) ORCC's common stock trades on NYSE, with a **$1.29** per share dividend in 2022, an opt-out DRIP, and active stock repurchase programs - The company's common stock (NYSE: ORCC) closed at **$13.18** on February 17, 2023, a **12.1%** discount to its December 31, 2022 NAV per share[464](index=464&type=chunk) Dividends Declared per Share | Year | Total Dividends Declared | | :--- | :--- | | 2022 | $1.29 | | 2021 | $1.24 | | 2020 | $1.56 | - A **$150 million** stock repurchase program was approved in November 2022. As of December 31, 2022, **$15.9 million** had been used to repurchase **1,346,326 shares** at an average price of **$11.84**[476](index=476&type=chunk)[477](index=477&type=chunk) Senior Securities Outstanding ($ in millions) | Security Type | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Revolving Credit Facility | $557.1 | $892.3 | | SPV Asset Facilities | $500.0 | $445.0 | | CLOs | $2,501.3 | $2,048.5 | | Unsecured Notes | $3,875.0 | $3,875.0 | | **Total Debt** | **$7,433.4** | **$7,260.8** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=81&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting increased investment income to **$1.2 billion** in 2022, a **$90.4 million** net decrease in net assets from operations due to unrealized losses, and a **$13.0 billion** portfolio [Portfolio and Investment Activity](index=89&type=section&id=Portfolio%20and%20Investment%20Activity) As of December 2022, the **$13.0 billion** portfolio, primarily senior secured debt, saw its weighted average yield increase to **11.0%**, with new commitments decreasing to **$1.8 billion** and non-accruals rising to **1.9%** Investment Activity (at par, $ in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Total New Investment Commitments | $1,772,422 | $6,824,829 | | Total Principal Funded | $1,177,063 | $5,842,404 | | Total Principal Sold or Repaid | $(1,208,003) | $(4,258,790) | Portfolio Yields (at Fair Value) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Weighted Avg. Total Yield of Portfolio | 11.0% | 7.7% | | Weighted Avg. Total Yield of Debt & Income Producing Securities | 11.5% | 7.9% | Portfolio Credit Quality (by Fair Value) | Investment Rating | Dec 31, 2022 (%) | Dec 31, 2021 (%) | | :--- | :--- | :--- | | 1 (Least Risk) | 12.6% | 11.7% | | 2 (Acceptable Risk) | 76.5% | 78.4% | | 3 (Increased Risk) | 9.7% | 9.8% | | 4 (Materially Increased Risk) | 0.8% | 0.1% | | 5 (Substantially Increased Risk) | 0.4% | 0.0% | - Loans on non-accrual status represented **1.9%** of the total debt portfolio at amortized cost as of December 31, 2022, up from **0.2%** at the end of 2021[563](index=563&type=chunk) [Results of Operations](index=126&type=section&id=Results%20of%20Operations) In 2022, total investment income rose to **$1.2 billion**, net investment income to **$556.7 million**, but unrealized losses of **$94.5 million** led to a net decrease in net assets Consolidated Statement of Operations Data ($ in millions) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Investment Income | $1,202.0 | $1,021.4 | $803.3 | | Net Operating Expenses | $639.5 | $527.3 | $283.8 | | Net Investment Income After Taxes | $556.7 | $490.1 | $517.5 | | Net Change in Unrealized Gain (Loss) | $(94.5) | $179.8 | $(76.0) | | Net Realized Gain (Loss) | $4.1 | $(45.0) | $(53.8) | | **Net Increase in Net Assets** | **$466.3** | **$624.9** | **$387.7** | - The increase in investment income in 2022 was primarily due to a higher portfolio yield (**11.0%** vs **7.7%** in 2021), offset by a decrease in non-recurring fee income from unscheduled paydowns (**$11.8 million** in 2022 vs **$63.9 million** in 2021)[623](index=623&type=chunk)[624](index=624&type=chunk) - Total expenses increased in 2022 mainly due to an **$88.4 million** rise in interest expense from higher average borrowings and interest rates, as well as increased management and incentive fees[628](index=628&type=chunk) - The net unrealized loss of **$88.4 million** on investments in 2022 was primarily driven by widening market credit spreads, causing the fair value of debt investments as a percentage of principal to decrease to **97.0%** from **98.2%** at the end of 2021[640](index=640&type=chunk)[641](index=641&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=133&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) As of December 2022, the company had **$7.4 billion** in total debt, **$1.4 billion** available borrowing capacity, a **179%** asset coverage ratio, and sufficient liquidity for near-term operations - As of December 31, 2022, the company had **$1.4 billion** of available borrowing capacity under its credit facilities and an asset coverage ratio of **179%**[654](index=654&type=chunk)[655](index=655&type=chunk) Cash Flow Summary ($ in millions) | Cash Flow Activity | Year Ended Dec 31, 2022 | | :--- | :--- | | Net Cash from Operating Activities | $217.3 | | Net Cash from Financing Activities | $(219.3) | | **Net Change in Cash** | **$(2.0)** | - The company has various debt instruments, including a **$1.855 billion** Revolving Credit Facility, multiple SPV Asset Facilities, seven CLOs, and several series of unsecured notes maturing between 2024 and 2028[672](index=672&type=chunk)[682](index=682&type=chunk)[688](index=688&type=chunk)[710](index=710&type=chunk)[785](index=785&type=chunk) [Critical Accounting Policies](index=160&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant estimates for fair value investment valuation (Level 3 inputs), accrual-based income recognition, and maintaining RIC tax status - Substantially all investments are valued at fair value using significant unobservable (Level 3) inputs, as determined in good faith by the Adviser, which was designated as the valuation designee by the Board[811](index=811&type=chunk)[812](index=812&type=chunk) - The valuation process for Level 3 assets involves a yield analysis for debt investments and a market approach (using multiples like EBITDA or revenue) for equity investments[1122](index=1122&type=chunk)[1123](index=1123&type=chunk) - Interest income, including PIK interest, is recorded on an accrual basis. Loans are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected[820](index=820&type=chunk)[821](index=821&type=chunk) - The company has elected to be treated as a RIC, which requires distributing at least **90%** of its investment company taxable income annually to avoid corporate-level income tax[824](index=824&type=chunk)[830](index=830&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=162&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces valuation, interest rate, currency, and inflation risks, with **98.3%** of debt investments floating rate, benefiting from rising interest rates - The company's primary market risks are valuation risk for its illiquid private investments and interest rate risk due to its use of leverage[837](index=837&type=chunk)[838](index=838&type=chunk)[839](index=839&type=chunk) Annualized Impact of Interest Rate Changes on Net Income ($ in millions) | Change in Basis Points | Impact on Net Income | | :--- | :--- | | +300 | $227.1 | | +200 | $151.4 | | +100 | $75.7 | | +50 | $37.8 | | -50 | $(37.8) | | -100 | $(75.7) | - As of December 31, 2022, **98.3%** of the company's debt investments by fair value were at floating rates, positioning it to benefit from rising interest rates[841](index=841&type=chunk) - Currency risk from foreign-denominated investments is managed through hedging techniques, including forward contracts and borrowing in local currencies[845](index=845&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=166&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for fiscal year 2022, including balance sheets, statements of operations, changes in net assets, cash flows, and comprehensive notes [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=150&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[1323](index=1323&type=chunk) [Controls and Procedures](index=150&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[1324](index=1324&type=chunk) - Management assessed the internal control over financial reporting based on the COSO framework and concluded it was effective as of December 31, 2022[1325](index=1325&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2022[1328](index=1328&type=chunk) [Other Information](index=150&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[1329](index=1329&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=151&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The Board of Directors comprises six members, five independent, with an independent Chairman and three standing committees, operating under a Code of Business Conduct and Ethics - The Board consists of **six directors**, **five** of whom are independent. The Board is classified, with directors serving staggered three-year terms[1333](index=1333&type=chunk) - The Board has an independent Chairman, Edward D'Alelio, and has determined that its leadership structure is appropriate for effective oversight[1354](index=1354&type=chunk) - The Board has established an Audit Committee, a Nominating and Corporate Governance Committee, and a Compensation Committee, each composed solely of independent directors[1358](index=1358&type=chunk)[1359](index=1359&type=chunk) - The company has adopted a Code of Business Conduct and Ethics, which is available on its website[1375](index=1375&type=chunk) [Executive Compensation](index=162&type=section&id=Item%2011.%20Executive%20Compensation) The company directly compensates no executive officers, reimbursing the Adviser for CCO/CFO compensation, while independent directors received approximately **$1.09 million** in 2022 - The company does not directly compensate its executive officers. It reimburses the Adviser for an allocable portion of the compensation for the CCO and CFO and their staffs[1401](index=1401&type=chunk)[1402](index=1402&type=chunk) Independent Director Compensation Structure (2022) | Compensation Type | Amount | | :--- | :--- | | Annual Cash Retainer | $150,000 | | Board Meeting Fee (in person) | $2,500 | | Committee Meeting Fee | $1,000 | | Chair of the Board Retainer | $25,000 | | Audit Committee Chair Retainer | $15,000 | | Other Committee Chair Retainer | $5,000 | - Total compensation paid to all directors for the fiscal year ended December 31, 2022 was **$1,090,053**[1405](index=1405&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=163&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) As of February 2023, two beneficial owners held over **5%** of common stock, while officers and directors collectively owned less than **1%** of the **390,954,494** outstanding shares Beneficial Ownership as of February 17, 2023 | Owner | Percentage of Class | | :--- | :--- | | Regents of the University of California | 7% | | State of New Jersey Common Pension Fund E | 6% | | All officers and directors as a group (14 persons) | < 1% | - The percentage of ownership is based on **390,954,494 shares** of common stock outstanding as of February 17, 2023[1408](index=1408&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=165&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Related-party transactions with the Adviser create conflicts of interest, managed by allocation policies and an SEC exemptive order, with five of six directors deemed independent - The company's primary related-party transactions are the Investment Advisory and Administration Agreements with the Adviser[1415](index=1415&type=chunk) - Conflicts of interest regarding the allocation of investment opportunities are managed through a formal allocation policy and an SEC exemptive order permitting co-investments[1417](index=1417&type=chunk)[1419](index=1419&type=chunk)[1424](index=1424&type=chunk) - The Board has determined that **five** of its **six directors** are independent under the 1940 Act and NYSE listing standards[1428](index=1428&type=chunk) [Principal Accounting Fees and Services](index=167&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) KPMG LLP served as auditor, with total fees of approximately **$1.50 million** in 2022, and the Audit Committee pre-approves all audit and non-audit services Fees Billed by KPMG LLP | Fee Type | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Audit Fees | $1,249,500 | $1,292,000 | | Tax Fees | $252,860 | $252,540 | | **Total Fees** | **$1,502,360** | **$1,544,540** | - The Audit Committee pre-approves all audit and non-audit services to ensure the auditor's independence is not impaired[1434](index=1434&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=169&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the annual report, including consolidated financial statements and various corporate and legal exhibits - The consolidated financial statements are included in Item 8 of the report[1438](index=1438&type=chunk) - A comprehensive list of exhibits is provided, incorporating by reference previously filed documents such as articles of incorporation, bylaws, indentures, credit agreements, and advisory agreements[1439](index=1439&type=chunk) [Form 10-K Summary](index=174&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[1445](index=1445&type=chunk)

Owl Rock Capital Corporation (ORCC) Q3 2022 Earnings Conference Call November 3, 2022 10:00 AM ET Company Participants Dana Sclafani - Head of IR Craig Packer - CEO Jonathan Lamm - CFO & COO Conference Call Participants Mickey Schleien - Ladenburg Thalmann Robert Dodd - Raymond James Ryan Lynch - KBW Kevin Fultz - JMP Securities Kenneth Lee - RBC Capital Markets Operator Hello, and welcome to the Owl Rock Capital Corp. Q3 2022 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal quarter ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 814-01190 ______________________________________________ OWL ROCK CAPITAL CORPORATION (Exact name of Registrant as specified in ...

Company and Industry Overview * **Company**: Owl Rock Capital Corporation (ORCC) * **Industry**: Business Development Companies (BDCs), Direct Lending * **Focus**: ORCC specializes in providing senior secured loans to middle market companies, particularly in non-cyclical sectors such as software, insurance, and healthcare. Key Financial Results * **Net Asset Value (NAV) Per Share**: $14.48 (down from $14.88 in Q1 2022) * **Net Investment Income (NII) Per Share**: $0.32 (up from $0.31 in Q1 2022) * **Total Portfolio Investments**: $12.6 billion * **Outstanding Debt**: $7.1 billion * **Total Net Assets**: $5.7 billion * **Net Leverage**: 1.2 times debt to equity Market Environment and Strategy * **Market Volatility**: ORCC views market volatility as an opportunity due to increased demand for private credit solutions as banks pull back. * **Specialized Lending**: ORCC is actively seeking opportunities in specialized lending verticals, such as asset-based lending and senior loan funds, to enhance returns. * **Credit Quality**: ORCC maintains a strong credit quality with only one company on non-accrual status and an annualized loss ratio of approximately 15 basis points. Portfolio Composition * **Sector Allocation**: Software, insurance, healthcare, and food and beverage are the primary sectors in ORCC's portfolio. * **Loan Structure**: Senior secured first lien loans with an average loan-to-value ratio of approximately 45%. Future Outlook * **NII Growth**: ORCC expects NII to grow in Q3 2022 based on interest rate elections and potentially in Q4 2022 if rates continue to rise or repayment activity increases. * **Specialized Lending**: ORCC plans to continue growing its specialized lending investments, targeting a mid-single-digit increase in the next few years. * **Dividend Payout**: ORCC is considering increasing its dividend payout if earnings continue to be strong and the rate environment remains favorable. Risks and Uncertainties * **Economic Uncertainty**: ORCC is monitoring economic conditions and preparing for a potential recession. * **Credit Risk**: While ORCC maintains a strong credit quality, there is always a risk of credit issues in the portfolio. * **Market Conditions**: Changes in market conditions could impact ORCC's ability to originate new loans and invest in specialized lending verticals.

| --- | --- | --- | |-----------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Owl Rock Capital Corporation | | | | Quarterly Earnings Presentation June 30, 2022 | | | | | | | | | | | | | | | | | | | NYSE: ORCC Review of Q2 2022 Earnings Summary | --- | --- | |-------|-------| | | | | • | | | • | | | • | | | • | | | • | | Net asset value per share of $14.48, down from $14.88 as of 3/31/22 Net investment income per share of $0.32, up from $0.31 as of 3/31/22 N ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal quarter ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 814-01190 ______________________________________________ OWL ROCK CAPITAL CORPORATION (Exact name of Registrant as specified in its C ...

Owl Rock Capital Corporation (ORCC) Q1 2022 Earnings Conference Call May 5, 2022 10:00 AM ET Company Participants Dana Sclafani - Head of Investor Relations Craig Packer - Chief Executive Officer Jonathan Lamm - Chief Financial Officer & Chief Operating Officer Conference Call Participants Mickey Schleien - Ladenburg Robert Dodd - Raymond James Finian O'Shea - Wells Fargo Securities Kevin Fultz - JMP Securities Kenneth Lee - RBC Operator Good morning. My name is Rob, and I will be your conference operator ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 814-01190 OWL ROCK CAPITAL CORPORATION (Exact name of Registrant as specified in its Charter) Maryland 47-5402460 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 399 Park Aven ...

| --- | --- | --- | |---------------------------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | Owl Rock Capital Corporation Quarterly Earnings Presentation December 31, 2021 | | | | | | | | | | | | | | | | | | | NYSE: ORCC | --- | --- | |-------|-----------------------------------------------------------------------| | | | | • | Net asset value per share of $15.08, up from $14.95 as of 9/30/21 | | • | Net investment income per share of $0.35, up fro ...

Owl Rock Capital Corporation (ORCC) Q4 2021 Earnings Conference Call February 24, 2022 10:00 AM ET Company Participants Dana Sclafani – Head of Investor Relations Craig Packer – Chief Executive Officer Jonathan Lamm – Chief Financial Officer and Chief Operating Officer Conference Call Participants Kevin Fultz – JMP Securities Robert Dodd – Raymond James Ryan Lynch – KBW Mickey Schleien – Ladenburg Casey Alexander – Compass Point Kenneth Lee – RBC Capital Markets Operator Good morning, and welcome to the Owl ...