Owl Rock Capital Corp. Reports Full Year Results and Fourth Quarter Net Investment Income Per Share of $0.35 and NAV Per Share of $15.08
NEW YORK, Feb. 23, 2022 /PRNewswire/ -- Owl Rock Capital Corporation (NYSE: ORCC, or the "Company") today reported net investment income of $137.9 million, or $0.35 per share, and net income of $174.0 million, or $0.44 per share, for the fourth quarter ended December 31, 2021. Reported net asset value per share was $15.08 at December 31, 2021 as compared to $14.95 at September 30, 2021.
"2021 was a milestone year for us," commented Craig W. Packer, Chief Executive Officer of Owl Rock Capital Corporation. "We fully deployed our portfolio, increased our leverage to comfortably within our target range, maintained very strong credit performance and continued to optimize our balance sheet. It culminated in our highest quarterly net investment income for the year, representing an annualized ROE of approximately 9%. We're extremely pleased with this quarter's results and we look forward to continuing to deliver for our shareholders in 2022."
The Company's Board of Directors has declared a first quarter 2022 dividend of $0.31 per share for stockholders of record as of March 31, 2022, payable on or before May 13, 2022.
PORTFOLIO AND INVESTING ACTIVITY
For the full year ended December 31, 2021, new investment commitments totaled $6,824.8 million. This compares to $3,444.8 million for year ended December 31, 2020.
For the full year ended December 31, 2021, the principal amount of new investments funded was $5,842.4 million and the Company had $4,258.8 million aggregate principal amount in exits and repayments.
For the full year ended December 31, 2020, the principal amount of new investments funded was $2,845.5 million and the Company had $1,151.9 million aggregate principal amount in exits and repayments.
For the three months ended December 31, 2021, new investment commitments totaled $1,589.2 million. This compares to $1,527.4 million for the three months ended December 31, 2020.
For the three months ended December 31, 2021, the principal amount of new investments funded was $1,459.8 million across 22 new portfolio companies and 9 existing portfolio companies. For this period, the Company had $909.6 million aggregate principal amount in exits and repayments.
For the three months ended December 31, 2020, the principal amount of new investments funded was $1,274.9 million across 12 new portfolio companies and 14 existing portfolio companies. For this period, the Company had $520.3 million aggregate principal amount in exits and repayments.
As of December 31, 2021 and December 31, 2020, the Company had investments in 143 and 119 portfolio companies with an aggregate fair value of $12.7 billion and $10.8 billion, respectively. As of December 31, 2021, the average investment size in each portfolio company was $89.1 million based on fair value.
As of December 31, 2021, based on fair value, our portfolio consisted of 74.9% first lien senior secured debt investments, 15.1% second lien senior secured debt investments, 1.5% unsecured debt investments, 1.9% investment funds and vehicles, 2.1% preferred equity investments and 4.5% common equity investments.
As of December 31, 2020, based on fair value, our portfolio consisted of 77.5% first lien senior secured debt investments, 18.5% second lien senior secured debt investments, 0.5% unsecured debt investments, 1.0% investment funds and vehicles, 0.2% preferred equity investments and 2.3% common equity investments.
As of December 31, 2021 and December 31, 2020, approximately 90.0% and 96.0% of the portfolio was invested in secured debt, respectively. As of December 31, 2021, 98.9% of our debt investments based on fair value in our portfolio were at floating rates.
As of December 31, 2021 and December 31, 2020, the weighted average total yield of accruing debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts)1 was 7.9% and 8.1%, respectively, and the weighted average total yield of accruing debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts)1 was 7.9% and 8.0%, respectively.
As of December 31, 2021, one portfolio company with an aggregate fair value of $16.5 million was on non-accrual status, representing 0.1% of the total fair value of the portfolio.
RESULTS OF OPERATIONS FOR THE FULL YEAR AND QUARTER ENDED DECEMBER 31, 2021
Investment Income
Investment income increased to $1,021.4 million for the full year ended December 31, 2021 from $803.3 million for the full year ended December 31, 2020. The increase was primarily due to an increase in our debt investment portfolio, partially offset by a decrease in our portfolio's weighted average yield period over period.
Investment income increased to $281.6 million for the three months ended December 31, 2021 from $221.3 million for the three months ended December 31, 2020. The increase was primarily due to an increase in our debt investment portfolio, partially offset by a decrease in our portfolio's weighted average yield period over period.
Expenses
Total expenses increased to $527.3 million for the full year ended December 31, 2021 from $283.8 million for the full year ended December 31, 2020, primarily due to an increase in interest expense and increase in gross management fees and incentive fees, coupled with the expiration of the management fee and incentive fee waivers in October 2020. The increase in interest expense was primarily driven by an increase in average daily borrowings, partially offset by a decrease in the average interest rate period over period.
Total expenses increased to $143.8 million for the three months ended December 31, 2021 from $106.7 million for the three months ended December 31, 2020, primarily due to an increase in interest expense and increase in gross management fees and incentive fees, coupled with the expiration of the management fee and incentive fee waivers. The increase in interest expense was primarily driven by an increase in average daily borrowings, partially offset by a decrease in the average interest rate period over period.
Liquidity and Capital Resources
As of December 31, 2021, we had $447.1 million in cash and restricted cash, $7.2 billion in total principal value of debt outstanding, and $1.4 billion of undrawn capacity on our credit facilities. The Company's weighted average interest rate on debt outstanding was 2.9% and 3.2% for the three months ended December 31, 2021 and December 31, 2020, respectively. Ending debt to equity was 1.13x and 0.87x for the periods ended December 31, 2021 and December 31, 2020, respectively.
1 For non-stated rate income producing investments, computed based on (a) the dividend or interest income earned for the respective trailing twelve months ended on the measurement date, divided by (b) the ending cost or fair value. In instances where historical dividend or interest income data is not available or not representative for the trailing twelve months ended, the dividend or interest income is annualized. Prior to September 30, 2021, non-stated rate income producing investments were computed based on (a) the IRR on the measurement date, divided by (b) the ending cost or fair value. Prior to September 30, 2021, the weighted average total yield of accruing debt and income producing securities at fair value and cost as of December 31, 2020 was reported as 8.3% and 8.2%, respectively. | |||||||
Conference Call and Webcast Information
Conference Call Information:
The conference call will be broadcast live on February 24, 2022 at 10:00 a.m. Eastern Time on the Investor Resources section of ORCC's website at www.OwlRockCapitalCorporation.com. Please visit the website to test your connection before the webcast.
Participants are also invited to access the conference call by dialing one of the following numbers:
- Domestic: 1 (888) 440-4182
- International: (646) 960-0653
- Conference ID: 7406736
All callers will need to enter the Conference ID followed by the # sign and reference "Owl Rock 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.
Replay Information:
An archived replay will be available for 14 days via a webcast link located on the Investor Resources section of ORCC's website, and via the dial-in numbers listed below:
- Domestic: 1 (800) 770-2030
- International: (647) 362-9199
- Conference ID: 7406736
Financial Highlights | ||||||||||||
For the three months ended | ||||||||||||
($ in thousands, except per share amounts) | December 31, | September 30, | December 31, | |||||||||
Investments at Fair Value | $ | 12,741,640 | $ | 12,110,098 | $ | 10,842,072 | ||||||
Total Assets | $ | 13,298,170 | $ | 13,075,878 | $ | 11,304,357 | ||||||
Net Asset Value Per Share | $ | 15.08 | $ | 14.95 | $ | 14.74 | ||||||
Investment Income | $ | 281,624 | $ | 269,191 | $ | 221,254 | ||||||
Net Investment Income | $ | 137,854 | $ | 130,499 | $ | 114,601 | ||||||
Net Income | $ | 174,006 | $ | 142,851 | $ | 180,664 | ||||||
Net Investment Income Per Share | $ | 0.35 | $ | 0.33 | $ | 0.29 | ||||||
Net Realized and Unrealized Gains (and Losses) Per Share | $ | 0.09 | $ | 0.03 | $ | 0.17 | ||||||
Net Income Per Share | $ | 0.44 | $ | 0.36 | $ | 0.46 | ||||||
Distributions Declared from Net Investment Income Per Share | $ | 0.31 | $ | 0.31 | $ | 0.39 | ||||||
Weighted Average Yield of Accruing Debt and Income Producing Securities at Fair Value1 | 7.9 | % | 7.9 | % | 8.1 | % | ||||||
Weighted Average Yield of Accruing Debt and Income Producing Securities at Amortized Cost1 | 7.9 | % | 7.9 | % | 8.0 | % | ||||||
Percentage of Debt Investment Commitments at Floating Rates | 98.9 | % | 99.9 | % | 99.9 | % | ||||||
1. | For non-stated rate income producing investments, computed based on (a) the dividend or interest income earned for the respective trailing twelve months ended on the measurement date, divided by (b) the ending cost or fair value. In instances where historical dividend or interest income data is not available or not representative for the trailing twelve months ended, the dividend or interest income is annualized. Prior to September 30, 2021, non-stated rate income producing investments were computed based on (a) the IRR on the measurement date, divided by (b) the ending cost or fair value. Prior to September 30, 2021, the weighted average total yield of accruing debt and income producing securities at fair value and cost as of December 31, 2020 was reported as 8.3% and 8.2%, respectively. | |||||
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | ||||||||
($ in thousands, except per share amounts) | December 31, 2021 | December 31, 2020 | ||||||
Assets | ||||||||
Investments at fair value | ||||||||
Non-controlled, non-affiliated investments (amortized cost of $12,073,126 and $10,653,613, respectively) | $ | 12,124,860 | $ | 10,569,691 | ||||
Controlled, affiliated investments (amortized cost of $575,427 and $275,105, respectively) | 616,780 | 272,381 | ||||||
Total investments at fair value (amortized cost of $12,648,553 and $10,928,718, respectively) | 12,741,640 | 10,842,072 | ||||||
Cash (restricted cash of $21,481 and $8,841, respectively) | 431,442 | 347,917 | ||||||
Foreign cash (cost of $16,096 and $9,641, respectively) | 15,703 | 9,994 | ||||||
Interest receivable | 81,716 | 57,108 | ||||||
Receivable for investments sold | — | 6,316 | ||||||
Receivable from a controlled affiliate | 3,953 | 2,347 | ||||||
Prepaid expenses and other assets | 23,716 | 38,603 | ||||||
Total Assets | $ | 13,298,170 | $ | 11,304,357 | ||||
Liabilities | ||||||||
Debt (net of unamortized debt issuance costs of $110,239 and $91,085, respectively) | $ | 7,079,326 | $ | 5,292,722 | ||||
Distribution payable | 122,068 | 152,087 | ||||||
Management fee payable | 46,770 | 35,936 | ||||||
Incentive fee payable | 29,242 | 19,070 | ||||||
Payables to affiliates | 5,802 | 6,527 | ||||||
Accrued expenses and other liabilities | 77,085 | 51,581 | ||||||
Total Liabilities | 7,360,293 | 5,557,923 | ||||||
Commitments and contingencies | ||||||||
Net Assets | ||||||||
Common shares $0.01 par value, 500,000,000 shares authorized; 393,766,855 and 389,966,688 shares issued and outstanding, respectively | 3,938 | 3,900 | ||||||
Additional paid-in-capital | 5,990,360 | 5,940,979 | ||||||
Total distributable earnings (losses) | (56,421) | (198,445) | ||||||
Total Net Assets | 5,937,877 | 5,746,434 | ||||||
Total Liabilities and Net Assets | $ | 13,298,170 | $ | 11,304,357 | ||||
Net Asset Value Per Share | $ | 15.08 | $ | 14.74 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
For the Years Ended December 31, | |||||||||||||
($ in thousands, except per share amounts) | 2021 | 2020 | 2019 | ||||||||||
Investment Income | |||||||||||||
Investment income from non-controlled, non-affiliated investments: | |||||||||||||
Interest income | $ | 887,753 | $ | 732,309 | $ | 674,949 | |||||||
Payment-in-kind interest income | 53,185 | 36,408 | 16,905 | ||||||||||
Dividend income | 28,052 | 10,409 | — | ||||||||||
Other income | 25,845 | 14,736 | 16,119 | ||||||||||
Total investment income from non-controlled, non-affiliated investments | 994,835 | 793,862 | 707,973 | ||||||||||
Investment income from controlled, affiliated investments: | |||||||||||||
Interest income | 5,531 | 327 | — | ||||||||||
Dividend income | 20,394 | 9,063 | 10,046 | ||||||||||
Other Income | 643 | 35 | — | ||||||||||
Total investment income from controlled, affiliated investments | 26,568 | 9,425 | 10,046 | ||||||||||
Total Investment Income | 1,021,403 | 803,287 | 718,019 | ||||||||||
Expenses | |||||||||||||
Interest expense | 219,132 | 152,939 | 136,445 | ||||||||||
Management fee | 178,472 | 144,448 | 89,947 | ||||||||||
Performance based incentive fees | 103,968 | 93,892 | 45,114 | ||||||||||
Professional fees | 15,071 | 14,654 | 10,029 | ||||||||||
Directors' fees | 1,021 | 849 | 623 | ||||||||||
Other general and administrative | 9,593 | 7,936 | 8,374 | ||||||||||
Total Operating Expenses | 527,257 | 414,718 | 290,532 | ||||||||||
Management and incentive fees waived | — | (130,906) | (73,403) | ||||||||||
Net Operating Expenses | 527,257 | 283,812 | 217,129 | ||||||||||
Net Investment Income (Loss) Before Taxes | 494,146 | 519,475 | 500,890 | ||||||||||
Income tax expense (benefit), including excise tax expense (benefit) | 4,009 | 2,019 | 1,984 | ||||||||||
Net Investment Income (Loss) After Taxes | $ | 490,137 | $ | 517,456 | $ | 498,906 | |||||||
Net Realized and Change in Unrealized Gain (Loss) | |||||||||||||
Net change in unrealized gain (loss): | |||||||||||||
Non-controlled, non-affiliated investments | $ | 148,300 | $ | (75,039) | $ | (7,235) | |||||||
Income tax (provision) benefit | (8,604) | (3,686) | — | ||||||||||
Controlled affiliated investments | 44,081 | (1,913) | 3,705 | ||||||||||
Translation of assets and liabilities in foreign currencies | (3,953) | 4,634 | (222) | ||||||||||
Total Net Change in Unrealized Gain (Loss) | 179,824 | (76,004) | (3,752) | ||||||||||
Net realized gain (loss): | |||||||||||||
Non-controlled, non-affiliated investments | (46,332) | (51,376) | 2,633 | ||||||||||
Foreign currency transactions | 1,253 | (2,336) | 214 | ||||||||||
Total Net Realized Gain (Loss) | (45,079) | (53,712) | 2,847 | ||||||||||
Total Net Realized and Change in Unrealized Gain (Loss) | 134,745 | (129,716) | (905) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 624,882 | $ | 387,740 | $ | 498,001 | |||||||
Earnings Per Share - Basic and Diluted | $ | 1.59 | $ | 1.00 | $ | 1.53 | |||||||
Weighted Average Shares Outstanding - Basic and Diluted | 392,297,907 | 388,645,561 | 324,630,279 | ||||||||||
PORTFOLIO AND INVESTMENT ACTIVITY | ||||||||||||
For the Years Ended December 31, | ||||||||||||
($ in thousands) | 2021 | 2020 | 2019 | |||||||||
New investment commitments | ||||||||||||
Gross originations | $ | 7,456,901 | 3,667,048 | 4,625,939 | ||||||||
Less: Sell downs | (632,072) | (222,276) | (191,277) | |||||||||
Total new investment commitments | $ | 6,824,829 | $ | 3,444,772 | $ | 4,434,662 | ||||||
Principal amount of investments funded: | ||||||||||||
First-lien senior secured debt investments | $ | 4,369,794 | $ | 2,132,417 | 3,083,777 | |||||||
Second-lien senior secured debt investments | 846,299 | 518,480 | 596,421 | |||||||||
Unsecured debt investments | 132,288 | 55,873 | — | |||||||||
Preferred equity investments3 | 238,367 | 22,163 | — | |||||||||
Common equity investments3 | 113,780 | 97,617 | 1,991 | |||||||||
Investment funds and vehicles | 141,876 | 18,950 | — | |||||||||
Total principal amount of investments funded | $ | 5,842,404 | $ | 2,845,500 | $ | 3,682,189 | ||||||
Principal amount of investments sold or repaid: | ||||||||||||
First-lien senior secured debt investments | $ | (3,343,381) | $ | (1,060,352) | $ | (820,602) | ||||||
Second-lien senior secured debt investments | (910,582) | (90,686) | (116,700) | |||||||||
Unsecured debt investments | — | — | (23,000) | |||||||||
Preferred equity investments3 | — | — | — | |||||||||
Common equity investments3 | (4,827) | (867) | (1,991) | |||||||||
Investment funds and vehicles | — | — | (2,250) | |||||||||
Total principal amount of investments sold or repaid | $ | (4,258,790) | $ | (1,151,905) | $ | (964,543) | ||||||
Number of new investment commitments in new portfolio companies1 | 67 | 30 | 38 | |||||||||
Average new investment commitment amount | 82,831 | $ | 84,891 | $ | 107,981 | |||||||
Weighted average term for new debt investment commitments (in years) | 6.3 | 5.9 | 6.3 | |||||||||
Percentage of new debt investment commitments at floating rates | 98.1 | % | 96.3 | % | 100.0 | % | ||||||
Percentage of new debt investment commitments at fixed rates | 1.9 | % | 3.7 | % | 0.0 | % | ||||||
Weighted average interest rate of new debt investment commitments2 | 7.3 | % | 7.8 | % | 8.0 | % | ||||||
Weighted average spread over LIBOR of new floating rate debt investment commitments | 6.4 | % | 6.9 | % | 6.1 | % | ||||||
1. | Number of new investment commitments represents commitments to a particular portfolio company. |
2. | Assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month LIBOR, which was 0.21%, 0.24% and 1.91% as of December 31, 2021, 2020 and 2019, respectively. |
3. | As of December 30, 2020 and 2019, preferred equity investments and common equity investments were reported in aggregate as equity investments. |
ABOUT OWL ROCK CAPITAL CORPORATION
Owl Rock Capital Corporation (ORCC) is a specialty finance company focused on lending to U.S. middle-market companies. As of December 31, 2021, ORCC had investments in 143 portfolio companies with an aggregate fair value of $12.7 billion. ORCC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. ORCC is externally managed by Owl Rock Capital Advisors LLC, an SEC-registered investment adviser that is an indirect affiliate of Blue Owl Capital Inc. ("Blue Owl") (NYSE: OWL) and part of Owl Rock, a division of Blue Owl. Owl Rock, together with its subsidiaries, is a New York based direct lending platform with approximately $39.2 billion of assets under management as of December 31, 2021.
Certain information contained herein may constitute "forward-looking statements" that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about ORCC, its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," "outlook," "potential," "predicts" and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond ORCC's control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in ORCC's filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which ORCC makes them. ORCC does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.
INVESTOR CONTACTS
Investor Contact:
Dana Sclafani
212-651-4705
[email protected]
Media Contact:
Prosek Partners
David Wells / Josh Clarkson
[email protected]
SOURCE Owl Rock Capital Corporation
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