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ARCC Reports Q4/15

|Includes: Ares Capital (ARCC)

The NAV loss of 2% is about as good as one could hope for in this environment. The NII beat was huge - but it was due to negative incentive management fees.

Ares Capital Corporation reported for Q4-15 Total Investment Income of $261.676 million ($0.8322/share); (after tax) Net Investment Income of $147.103 million ($0.4678/share); and a Net Increase in Net Assets Resulting from Operations of $14.713 million ($0.0468/share). 'Core' NII was $0.40/share. The NII/TII ratio was 56.21%. The Net Asset Value per share was $16.46 compared to $16.79 at the end of Q3-15.

The Yahoo projections:

Earnings Est Current Qtr.
Dec 15
Next Qtr.
Mar 16
Current Year
Dec 15
Next Year
Dec 16
Avg. Estimate 0.39 0.39 1.54 1.59
No. of Analysts 19.00 18.00 15.00 19.00
Low Estimate 0.37 0.36 1.52 1.50
High Estimate 0.41 0.43 1.57 1.77
Year Ago EPS 0.41 0.39 1.43 1.54
 
Revenue Est Current Qtr.
Dec 15
Next Qtr.
Mar 16
Current Year
Dec 15
Next Year
Dec 16
Avg. Estimate 256.38M 255.68M 1.02B 1.05B
No. of Analysts 12 11 12 12
Low Estimate 243.78M 236.77M 1.01B 954.19M
High Estimate 267.10M 272.70M 1.03B 1.12B
Year Ago Sales 270.92M 253.25M 988.96M 1.02B

My ARCC spreadsheets

 

  Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14 Q4-13 Q3-13 Q2-13 Q1-13
Realized & Unrealized Gains -125.818 -13.618 38.019 -17.262 25.202 72.449 50.840 4.728 22.374 14.575 39.921 -18.755
Realized & Unrealized Gains/share - 0.4001 - 0.0433 0.1209 - 0.0549 0.0802 0.2306 0.1702 0.0159 0.0751 0.0543 0.1500 -0.0754
Cap Gain Incentive Expense -27.555 -2.628 7.682 -4.220 5.277 13.087 10.168 935 4.492 2.915 7.984 x
Cap Gain Expense/share - .0876 -.0084 .0244 -.0139 .0168 .0417 .0340 .0031 .0151 .0098 .0268 x


On 9-02-15 I received a reply Ares Capital Corporation IR to the following question: "I want to know if loan origination fees, loan prepayment fees and accelerated amortization of OIDs are components of the 'structuring fee' income line." Their reply: "Structuring fee income only includes origination fees. All other items mentioned are captured as realized gains." That accounting treatment could explain why portfolio change is 'more positive' for ARCC than average.

  Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14 Q4-13
Total investment income 261.676 260.948 249.479 253.247 270.917 253.396 224.927 239.719 233.742
Net investment income 147.103 130.477 108.503 121.677 128.185 105.290 91.991 112.336 111.510
Investments @ fair value 9.055 8.692 8.573 8.482 9.028 8.784 8.068 7.800 7.633
Wt Av Share Count 314.450 314.469 314.469 314.108 314.108 314.108 298.583 298.270 297.971
TII/share $0.8322 $0.8298 $0.7933 $0.8062 $0.8625 $0.8067 $0.7533 $0.8037 $0.7844
NII/share $0.4678 $0.4149 $0.3450 $0.3873 $0.4081 $0.3352 $0.3081 $0.3766 $0.3742
Dividend/share $0.38 $0.38 $0.38 $0.43 $0.38 $0.38 $0.38 $0.43 $0.43
NAV/share $16.46 $16.79 $16.80 $16.71 $16.82 $16.71 $16.52 $16.42 $16.46
Wt Av Yield @ FV 10.3% 10.4% 10.6% 10.5% 10.1% 9.9% 10.0% 10.2% 10.4%
NII/TII 56.2% 51.0% 43.5% 48.0% 47.3% 41.6% 40.9% 46.9% 47.7%

 

Parsing Ares Capital's Total Investment Income

Investment Income Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14 Q4-13
Interest 209.487 207.937 201.272 198.656 200.952 190.812 176.150 173,524 176.164
Structuring fees 21.523 29.768 23.082 20.181 39.220 31.712 21.732 20.898 29.986
Dividend income 20.038 14.083 14.825 24.555 17.134 19.687 16.749 30.726 16.929
Management fees 5.485 6.148 6.235 6.038 6.207 6.359 6.078 5.952 5.328
Other income 5.143 3.012 4.065 3.817 7.404 4.826 4.218 8.619 5.335
Total investment income 261.676 260.948 249.479 253.247 270.917 253.396 224.927 239.719 233.742

Disclosure: I am/we are long ARCC.