Third Quarter 2016 Earnings Presentation 1
Important Notice This presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. Actual outcomes and results could differ materially from those suggested by this presentation due to the impact of many factors beyond the control of Ares Capital Corporation, including those listed in the “Risk Factors” section of our filings with the Securities and Exchange Commission (“SEC”). Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and Ares Capital Corporation assumes no obligation to update or revise any such forward-looking statements. Certain information discussed in this presentation (including information relating to portfolio companies) was derived from third party sources and has not been independently verified and, accordingly, Ares Capital Corporation makes no representation or warranty in respect of this information. The following slides contain summaries of certain financial and statistical information about Ares Capital Corporation. The information contained in this presentation is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this presentation. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of Ares Capital Corporation, or information about the market, as indicative of Ares Capital Corporation’s future results. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of Ares Capital Corporation. 2
Financial and Portfolio Highlights Financial Highlights (all per share amounts, excluding net asset value per share, are basic and diluted) Q3-16 Q2-16 Q3-15 Core EPS* (1) $ 0.43 $ 0.39 $ 0.41 Net Investment Income Per Share $ 0.44 $ 0.34 $ 0.42 Net Realized Gains Per Share $ 0.06 $ 0.10 $ 0.15 Net Unrealized Gains (Losses) Per Share $ (0.15) $ 0.06 $ (0.20) GAAP Net Income Per Share $ 0.35 $ 0.50 $ 0.37 Net Asset Value Per Share $ 16.59 $ 16.62 $ 16.79 Portfolio Highlights (dollar amounts in millions) Q3-16 Q2-16 Q3-15 Gross Commitments $ 1,529.1 $ 539.9 $ 1,523.9 Exits of Commitments (2) $ 1,499.2 $ 758.8 $ 1,340.5 Total Fair Value of Investments $ 8,804.7 $ 8,900.4 $ 8,692.5 Weighted Average Yield of Debt & Other Income Producing Securities at Amortized Cost (3) 9.7% 9.8% 10.3% Weighted Average Yield on Total Investments at Amortized Cost (4) 8.7% 8.9% 9.4% *See page 22 hereof for reconciliations of basic and diluted Core EPS to GAAP EPS, the most directly comparable GAAP financial measure. Note: Endnotes begin on page 23. 3
Selected Historical Financial Information As of and for the Three Months Ended (unaudited) (Dollar amounts in 000s, except per share data and stock prices) 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 Core EPS – Basic and Diluted* (1) $ 0.43 $ 0.39 $ 0.37 $ 0.40 $ 0.41 Net Investment Income Per Share – Basic and Diluted $ 0.44 $ 0.34 $ 0.36 $ 0.47 $ 0.42 Net Realized and Unrealized Gains (Losses) Per Share – Basic and Diluted $ (0.09) $ 0.16 $ 0.06 $ (0.42) $ (0.05) GAAP EPS – Basic and Diluted $ 0.35 $ 0.50 $ 0.42 $ 0.05 $ 0.37 Dividend Declared and Payable Per Share $ 0.38 $ 0.38 $ 0.38 $ 0.38 $ 0.38 Stockholders' Equity $ 5,208,979 $ 5,218,041 $ 5,179,944 $ 5,173,332 $ 5,279,802 Net Asset Value Per Share $ 16.59 $ 16.62 $ 16.50 $ 16.46 $ 16.79 Principal Debt/Book Equity Ratio .73x .74x .78x .81x .70x Principal Debt/Book Equity Ratio, Net of Available Cash (5) .71x .72x .77x .77x .66x Unsecured Principal Debt to Total Principal Debt 81.4% 64.6% 67.1% 78.6% 94.2% Weighted Average Stated Interest on Debt (6) 4.2% 3.9% 4.0% 4.4% 5.0% Net Interest and Dividend Margin (7) 7.8% 7.8% 7.7% 7.7% 7.6% Ratio of Earnings to Fixed Charges (8) 4.1 3.6 3.4 3.4 3.3 Market Capitalization Principal Debt $ 3,800,557 $ 3,859,557 $ 4,062,557 $ 4,196,557 $ 3,715,557 Equity 4,866,287 4,458,147 4,659,077 4,479,445 4,553,507 Total Market Capitalization $ 8,666,844 $ 8,317,704 $ 8,721,634 $ 8,676,002 $ 8,269,064 Common Stock Data: High Price during the period $ 16.40 $ 15.38 $ 14.84 $ 15.87 $ 16.58 Low Price during the period $ 13.96 $ 13.87 $ 12.54 $ 13.97 $ 14.06 Closing Price $ 15.50 $ 14.20 $ 14.84 $ 14.25 $ 14.48 *See page 22 hereof for reconciliations of basic and diluted Core EPS to GAAP EPS, the most directly comparable GAAP financial measure 4
Selected Historical Financial Information (cont’d) As of and for the Three Months Ended (unaudited) (Dollar amounts in 000s) 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 Investments at Fair Value $ 8,804,651 $ 8,900,377 $ 9,072,101 $ 9,055,496 $ 8,692,480 Number of Portfolio Companies (9) 215 214 220 218 216 Asset Class (at fair value): First Lien Senior Secured Loans 25% 29% 29% 29% 31% Second Lien Senior Secured Loans 32% 31% 31% 32% 30% Senior Direct Lending Program (10) 2% —% —% —% —% Senior Secured Loan Program (11) 22% 21% 21% 21% 23% Senior Subordinated Debt 8% 8% 8% 7% 7% Preferred Equity 4% 4% 4% 4% 2% Other Equity and Other 7% 7% 7% 7% 7% Interest Rate Type (at fair value): % Floating Rate (12) 80% 81% 80% 80% 81% % Fixed Rate 10% 10% 10% 9% 9% % Equity and Other Non-Interest Earning 10% 10% 10% 11% 10% Yields: Weighted Avg. Yield on Debt and Other Income Producing Securities at Amortized Cost (3) 9.7% 9.8% 10.1% 10.1% 10.3% Weighted Avg. Yield on Debt and Other Income Producing Securities at Fair Value (3) 9.8% 9.9% 10.3% 10.3% 10.4% Weighted Average Yield on Total Investments at Amortized Cost (4) 8.7% 8.9% 9.2% 9.1% 9.4% Weighted Average Yield on Total Investments at Fair Value (4) 8.8% 9.0% 9.3% 9.2% 9.3% Commitments: Gross Commitments $ 1,529,115 $ 539,883 $ 470,645 $ 972,208 $ 1,523,886 Exits of Commitments (2) (1,499,179) (758,829) (484,343) (569,095) (1,340,485) Net Commitments (13) $ 29,936 $ (218,946) $ (13,698) $ 403,113 $ 183,401 Gross Commitments Information: Number of Transactions 28 11 19 24 23 Weighted Average Commitment Term in Months 94 64 59 58 66 Average Commitment in Period $ 54,611 $ 49,080 $ 24,771 $ 40,509 $ 66,256 Fundings: Gross Fundings $ 1,384,822 $ 517,665 $ 498,261 $ 1,023 $ 1,486,544 Net Fundings (13) $ (68,253) $ (202,303) $ 14,849 $ 510 $ 179,126 Portfolio Turnover 0.16 0.06 0.05 0.06 0.15 5
Quarterly Operating Results For the Three Months Ended (unaudited) (Amounts in 000s, except per share data) 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 Investment income $ 258,670 $ 245,262 $ 248,050 $ 261,676 $ 260,948 Expenses 117,404 135,992 130,124 103,846 129,587 Net investment income before income taxes 141,266 109,270 117,926 157,830 131,361 Income tax expense, including excise tax 3,570 4,006 5,196 10,727 884 Net investment income 137,696 105,264 112,730 147,103 130,477 Net realized and unrealized gains (losses) (27,455) 52,136 18,811 (132,390) (13,618) Net Income $ 110,241 $ 157,400 $ 131,541 $ 14,713 $ 116,859 Per Share: Core EPS - Basic and Diluted* (1) $ 0.43 $ 0.39 $ 0.37 $ 0.40 $ 0.41 Net Income - Basic and Diluted $ 0.35 $ 0.50 $ 0.42 $ 0.05 $ 0.37 Dividends Declared and Payable $ 0.38 $ 0.38 $ 0.38 $ 0.38 $ 0.38 Weighted average shares of common stock outstanding - Basic and Diluted 313,954 313,954 314,293 314,450 314,469 Common shares outstanding at end of period 313,954 313,954 313,954 314,347 314,469 For the Nine Months Ended (unaudited) (Amounts in 000s, except per share data) 9/30/16 9/30/15 Investment income $ 751,982 $ 763,674 Expenses 383,520 395,992 Net investment income before taxes 368,462 367,682 Income tax expense, including excise tax 12,772 7,025 Net investment income 355,690 360,657 Net realized and unrealized gains (losses) 43,492 3,300 Net Income $ 399,182 $ 363,957 Per Share: Core EPS - Basic and Diluted* (1) $ 1.19 $ 1.15 Net Income - Basic and Diluted $ 1.27 $ 1.16 Dividends Declared and Payable $ 1.14 $ 1.19 Weighted average shares of common stock outstanding - Basic and Diluted 314,067 314,350 Common shares outstanding at end of period 313,954 314,469 *See page 22 hereof for reconciliations of basic and diluted Core EPS to GAAP EPS, the most directly comparable GAAP financial measure. 6
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