Ares Capital(US:ARCC)2024-05-01 01:40Registrant Information - Ares Capital Corporation is a Maryland-incorporated, large accelerated filer. As of April 26, 2024, the company had 607,763,554 shares of common stock outstanding12 Part I. Financial Information Item 1. Financial Statements This section presents Ares Capital Corporation's unaudited consolidated financial statements, detailing its investment portfolio and financial performance for the period ended March 31, 2024 Consolidated Balance Sheet The Consolidated Balance Sheet shows an increase in total assets and stockholders' equity as of March 31, 2024, primarily driven by increased investments at fair value | Metric | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :-------------------------- | :--------------------------- | :------------------------------ | | Total Assets | $24,256 | $23,800 | | Investments at Fair Value | $23,124 | $22,874 | | Debt | $11,695 | $11,884 | | Total Liabilities | $12,384 | $12,599 | | Total Stockholders' Equity | $11,872 | $11,201 | | Net Assets Per Share | $19.53 | $19.24 | Consolidated Statement of Operations For the three months ended March 31, 2024, the company reported increased total investment income and net increase in stockholders' equity from operations, driven by higher net unrealized gains | Metric | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | | :---------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Total Investment Income | $701 | $618 | | Total Expenses | $369 | $298 | | Net Investment Income Before Income Taxes | $332 | $320 | | Net Realized Losses | $(18) | $(50) | | Net Unrealized Gains | $156 | $10 | | Net Increase in Stockholders' Equity from Operations | $449 | $278 | | Basic Net Income Per Common Share | $0.76 | $0.52 | | Diluted Net Income Per Common Share | $0.76 | $0.51 | Consolidated Schedule of Investments This schedule details the company's investment portfolio by industry, with total investments at fair value reaching $23,124.3 million as of March 31, 2024 Investments by Industry (as of March 31, 2024) The investment portfolio demonstrates diversification across various industries, with significant concentrations in key sectors | Industry | Fair Value (in millions) | % of Net Assets | | :------------------------------------------ | :----------------------- | :-------------- | | Software and Services | $5,227.2 | 44.03% | | Health Care Services | $2,887.4 | 24.32% | | Financial Services | $2,623.4 | 22.10% | | Commercial and Professional Services | $2,358.0 | 19.86% | | Investment Funds and Vehicles | $1,308.8 | 11.02% | | Insurance Services | $1,257.4 | 10.59% | | Consumer Services | $1,090.4 | 9.19% | | Power Generation | $1,024.4 | 8.63% | | Consumer Durables and Apparel | $712.5 | 6.00% | | Media and Entertainment | $667.6 | 5.62% | | Retailing and Distribution | $586.4 | 4.94% | | Capital Goods | $550.1 | 4.63% | | Food and Beverage | $487.0 | 4.10% | | Energy | $428.5 | 3.61% | | Consumer Staples Distribution and Retail | $422.9 | 3.56% | | Pharmaceuticals, Biotechnology and Life Sciences | $373.0 | 3.14% | | Automobiles and Components | $355.1 | 2.99% | | Materials | $321.3 | 2.71% | | Household and Personal Products | $159.7 | 1.35% | | Technology Hardware and Equipment | $137.1 | 1.15% | | Telecommunication Services | $51.5 | 0.43% | | Transportation | $50.2 | 0.42% | | Education | $44.4 | 0.37% | | Total Investments | $23,124.3 | 194.79% | Derivative Instruments The company uses derivative instruments, including foreign currency forward contracts and interest rate swaps, to manage market risks | Derivative Type | Unrealized Appreciation / (Depreciation) (in millions) | | :-------------------------- | :----------------------------------------------------- | | Foreign currency contracts | $4 | | Interest rate swaps | $(8) | Notes to Consolidated Schedule of Investments These notes clarify the nature of the company's investments, including control definitions, collateral pledges, and unfunded commitments, with 24% classified as non-qualifying assets - The company does not 'Control' most of its portfolio companies, defined as owning less than 25% of voting securities or not having control over management/policies, for Investment Company Act purposes468 - As of March 31, 2024, 24% of the company's total assets are considered 'non-qualifying assets' under Section 55(a) of the Investment Company Act477 - Several loans were on non-accrual status as of March 31, 2024, indicating potential issues with repayment480 | Commitment Type | Total Net Unfunded Commitments (in millions) | | :-------------------------------------------- | :------------------------------------------- | | Revolving and Delayed Draw Loan Commitments | $2,354.0 | | Equity Investment Commitments | $60.4 | Consolidated Statement of Stockholders' Equity This statement details changes in stockholders' equity for the three months ended March 31, 2024, and the year ended December 31, 2023 Consolidated Statement of Cash Flows This statement outlines the cash inflows and outflows for the three months ended March 31, 2024 and 2023 Notes to Consolidated Financial Statements This section contains detailed notes accompanying the consolidated financial statements, providing further context and explanations for the presented figures Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, changes, and results of operations Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, such as interest rate and foreign currency risk, and their management Item 4. Controls and Procedures This section describes the effectiveness of the company's disclosure controls and internal control over financial reporting Part II. Other Information Item 1. Legal Proceedings This section discloses any material legal proceedings the company is involved in Item 1A. Risk Factors This section outlines significant risks and uncertainties that could materially affect the company's business and financial condition Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on unregistered equity security sales and the application of their proceeds Item 3. Defaults Upon Senior Securities This section discloses any material defaults on senior securities Item 4. Mine Safety Disclosures This section provides disclosures related to mine safety, if applicable to the company's operations Item 5. Other Information This section includes any other information deemed important but not required under other items Item 6. Exhibits This section lists the exhibits filed as part of the report, such as material contracts and bylaws Signatures This section contains the required signatures of the registrant's authorized officers