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Earnings Presentation NASDAQ: OCSL First Quarter 2025
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Forward Looking Statements & Legal Disclosures First Quarter 2025 Investor Presentation NASDAQ: OCSL Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements as to: our future operating results and distribution projections; the ability of Oaktree Fund Advisors, LLC (together with its affiliates, “Oaktree”) to implement Oaktree’s future plans with respect to our business; the ability of Oaktree and its affiliates to attract and retain highly talented professionals; our business prospects and the prospects of our portfolio companies; the impact of the investments that we expect to make; the ability of our portfolio companies to achieve their objectives; our expected financings and investments and additional leverage we may seek to incur in the future; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our portfolio companies; the cost or potential outcome of any litigation to which we may be a party; and the impact of current global economic conditions, including those caused by inflation, an elevated (but decreasing) interest rate environment and geopolitical risks on all of the foregoing. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward- looking statements contained in this presentation involve risks and uncertainties. Our actual results could differ materiallyfrom those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in our annual report on Form 10-K for the fiscal year ended September 30, 2024 and our quarterly report on Form 10-Q for the quarter ended December 31, 2024. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment, including the impacts of inflation and elevated interest rates; risks associated with possible disruption in our operations or the economy generally due to terrorism, war or other geopolitical conflict, natural disasters, pandemics or cybersecurity incidents; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); conditions in our operating areas, particularly with respect to business development companies or regulated investment companies; and other considerations disclosed from time to time in our publicly disseminated documents and filings. We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annualreports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Calculation of Assets Under Management References to total "assets under management" or "AUM" represent assets managed by Oaktree and a proportionate amount of the AUM reported by DoubleLine Capital LP ("DoubleLine Capital"), in which Oaktree owns a 20% minority interest. Oaktree's methodology for calculating AUM includes (i) the net asset value (“NAV”) of assets managed directly by Oaktree, (ii) the leverage on which management fees are charged, (iii) undrawn capital that Oaktree is entitled to call from investors in Oaktree funds pursuant to their capital commitments, (iv) for collateralized loan obligation vehicles ("CLOs"), the aggregate par value of collateral assets and principal cash, (v) for publicly-traded business development companies, gross assets (including assets acquired with leverage), net of cash, and (vi) Oaktree's pro rata portion (20%) of the AUM reported by DoubleLine Capital. This calculation of AUM is not based on the definitions of AUM that may be set forth in agreements governing the investment funds, vehicles or accounts managed and is not calculated pursuant to regulatory definitions. Unless otherwise indicated, data provided herein are dated as of December 31, 2024.
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2 Strategic Actions In Support of OCSL Oaktree remains committed to the long-term growth and success of OCSL Equity Raise • On February 3, Oaktree purchased $100 million of newly issued shares of OCSL common stock at a price of $17.63/share equal to net asset value per share on January 31, 2025 • This transaction represented a 10% premium to the closing stock price on January 31, 2025, and resulted in a nearly 7% increase in net assets • The equity raise (coupled with additional leverage) will increase dry powder for deployment, enabling growth and further diversification of the portfolio New Incentive Fee Cap • Oaktree instituted an incentive fee cap (i.e., a total return hurdle) which resulted in a waiver of $6.4 million of Part I incentive fees during the quarter • This new arrangement includes a lookback provision that commences October 1, 2024, building to a rolling 12 quarter lookback by the Company's 2027 fiscal year-end • Although we have voluntarily waived fees in previous quarters, this formalizes our process and provides clarity
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3 Financial Highlights for the Quarter Ended December 31, 2024 1. See appendix for a description of this non-GAAP measure. Adjusted Net Investment Income1 • $0.54 per share for both adjusted net investment income and GAAP net investment income, as compared with $0.55 per share for the quarter ended September 30, 2024 Net Asset Value Per Share • $17.63 per share, down as compared with $18.09 per share as of September 30, 2024 • The decrease was primarily driven by write-downs on certain debt and equity investments Dividends • Instituted new dividend framework of a base plus supplemental dividend • Declared a quarterly and supplemental cash distribution of $0.40 per share and $0.07 per share, respectively • Distributions will be payable on March 31, 2025 to stockholders of record as of March 17, 2025 Investment Activity • $198 million of new investment commitments • 9.6% weighted average yield on new debt investments • $201 million of new investment fundings • Received $352 million of proceeds from prepayments, exits, other paydowns and sales Portfolio Characteristics • $2.8 billion at fair value across 136 portfolio companies • 10.7% weighted average yield on debt investments, down from 11.2% in the prior quarter • 85% senior secured, including 82% first lien loans • 88% of debt portfolio was floating rate Capital Structure & Liquidity • 1.03x net debt to equity ratio • $113 million of cash and $958 million of undrawn capacity on credit facilities
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4 Portfolio Characteristics Portfolio Composition Portfolio Summary As of December 31, 2024 Note: Numbers may not sum due to rounding. 1. Excludes investments in negative EBITDA borrowers, life sciences lending, royalty interest financings, structured products, non-accruals, recurring revenue businesses and other non-EBITDA borrowers. 2. Based on GICS industry group classification. 3. Excludes multi-sector holdings, which is primarily composed of investments in Senior Loan Fund JV I LLC (the “Kemper JV”) and OCSI Glick JV LLC (the “Glick JV”), joint ventures that invest primarily in senior secured loans of middle market companies. $2.8bn Total Investments 136 Portfolio Companies 10.7% Weighted Average Yield on Debt Investments $142mm Median Debt Portfolio Company EBITDA1 85% Senior Secured Debt Investments 88% Floating Rate (At fair value) (As % of total portfolio at fair value; $ in millions) 82% 3% 4% 5% 7% First Lien – $2,320 Second Lien – $84 Unsecured Debt – $110 Equity – $137 Joint Ventures – $185 Top 10 Industries2,3 % FV Software & Services 23.1% Health Care Equipment & Services 10.5% Capital Goods 9.3% Pharmaceuticals, Biotechnology & Life Sciences 6.5% Commercial & Professional Services 5.4% Real Estate 5.2% Consumer Services 5.2% Media & Entertainment 4.8% Diversified Financials 4.6% Consumer Discretionary Distribution & Retail 4.6% Total Top 10 79.3%
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5 New Investment Highlights Historical Funded Originations and Exits Investment Activity As of December 31, 2024 Note: Numbers rounded to the nearest million or percentage point and may not sum as a result. 1. New funded investments includes drawdowns on existing delayed draw and revolver commitments. 2. Investment exits includes proceeds from prepayments, exits, other paydowns and sales. 5 new borrowers 9.6% weighted average yield on new debt commitments 100% also held by other Oaktree funds (As % of new investment commitments; $ in millions) Seniority Breakdown $377 $293 $233 $201 $323 $185 $338 $352 $0 $100 $200 $300 $400 3/31/24 6/30/24 9/30/24 12/31/24 ($ in millions) New Funded Investments Investment Exits 100% First Lien - $198mm Second Lien - $0mm Subordinated Debt - $0mm 1 2 New Borrowers $148 Existing Borrowers $50 Total New Commitments $198 ($ in millions)
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6 Investment Activity (continued) New Investment Commitment Detail Note: Numbers may not sum due to rounding. Excludes any positions originated, purchased and sold within the same quarter and the assets acquired in the OSI2 Merger. Security Type Market Fiscal Quarter Investment Commitments Number of Deals First LienSecond Lien Unsecured & Other Private Placement Primary (Public) Secondary (Public) Avg. Secondary Purchase Price 1Q2021 $286 21 $196 $90 -- $181 $84 $22 93% 2Q2021 $318 20 $253 $44 $21 $245 $63 $10 93% 3Q2021 $178 10 $141 $25 $12 $104 $70 $5 97% 4Q2021 $385 20 $350 $13 $23 $304 $79 $2 100% 1Q2022 $300 21 $220 $77 $2 $227 $73 -- N/A 2Q2022 $228 25 $163 $17 $48 $162 $26 $40 96% 3Q2022 $132 28 $100 $6 $25 $63 $5 $63 91% 4Q2022 $97 11 $65 -- $32 $71 $22 $4 92% 1Q2023 $250 25 $214 $10 $26 $188 $49 $14 82% 2Q2023 $124 9 $124 -- -- $118 $5 $1 81% 3Q2023 $251 10 $227 $24 $0.2 $224 $20 $7 85% 4Q2023 $87 6 $87 -- -- $76 $12 -- N/A 1Q2024 $370 24 $354 -- $16 $302 -- $68 90% 2Q2024 $396 35 $364 -- $32 $205 $99 $92 98% 3Q2024 $339 20 $302 $3 $34 $256 $58 $24 97% 4Q2024 $259 19 $252 $5 $2 $227 $32 -- N/A 1Q2025 $198 13 $198 -- -- $198 -- -- N/A ($ in millions)
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7 I n v e s t o r P r e s e n t a 1. See appendix for a description of the non-GAAP measures as necessary. 2. Net of unamortized financing costs. 3. Includes effect of the interest rate swap agreements the Company entered into in connection with the issuance of the 2027 Notes and the 2029 Notes. Financial Highlights ($ and number of shares in thousands, except per share amounts) As of 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 GAAP Net Investment Income per Share $0.54 $0.55 $0.54 $0.52 $0.57 Adjusted Net Investment Income per Share1 $0.54 $0.55 $0.55 $0.56 $0.57 Net Realized and Unrealized Gains (Losses), Net of Taxes per Share -$0.45 -$0.10 -$0.53 -$0.40 -$0.43 Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes per Share1 -$0.45 -$0.10 -$0.54 -$0.44 -$0.42 Earnings (Loss) per Share $0.09 $0.45 $0.01 $0.12 $0.14 Adjusted Earnings (Loss) per Share1 $0.09 $0.45 $0.01 $0.12 $0.15 Quarterly Distributions per Share $0.40 $0.55 $0.55 $0.55 $0.55 Quarterly Supplemental Distributions per Share $0.07 -- -- -- -- Total Quarterly Distributions per Share $0.47 $0.55 $0.55 $0.55 $0.55 Special Distributions per Share -- -- -- -- $0.07 NAV per Share $17.63 $18.09 $18.19 $18.72 $19.14 Weighted Average Shares Outstanding 82,245 82,245 81,830 79,763 77,840 Shares Outstanding, End of Period 82,245 82,245 82,245 81,396 78,965 Investment Portfolio (at Fair Value) $2,835,294 $3,021,279 $3,121,703 $3,047,445 $3,018,552 Cash and Cash Equivalents $112,913 $63,966 $96,321 $125,031 $112,369 Total Assets $3,083,792 $3,198,341 $3,322,181 $3,297,939 $3,266,195 Total Debt Outstanding2 $1,577,795 $1,638,693 $1,679,164 $1,635,642 $1,622,717 Net Assets $1,449,815 $1,487,811 $1,496,133 $1,524,099 $1,511,651 Total Debt to Equity Ratio 1.11x 1.12x 1.16x 1.10x 1.10x Net Debt to Equity Ratio 1.03x 1.07x 1.10x 1.02x 1.02x Weighted Average Interest Rate on Debt Outstanding3 6.2% 6.7% 7.0% 7.0% 7.0%
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8 Note: Numbers may not sum due to rounding. 1. Annual stated yield earned plus net annual amortization of OID or premium earned on accruing investments, including the Company's share of the return on debt investments in the Kemper JV and Glick JV, and excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 for the assets acquired in connection with the mergers of Oaktree Strategic Income Corporation (the “OCSI Merger”) and the OSI2 Merger. See appendix for a description of the non-GAAP financial measures. 2. Annual stated yield earned plus net annual amortization of OID or premium earned on accruing investments and dividend income, including the Company's share of the return on debt investments in the Kemper JV and Glick JV, and excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 for the assets acquired in connection with the OCSI Merger and the OSI2 Merger. See appendix for a description of the non-GAAP financial measures. Portfolio Highlights ($ in thousands, at fair value) As of 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Investments at Fair Value $2,835,294 $3,021,279 $3,121,703 $3,047,445 $3,018,552 Number of Portfolio Companies 136 144 158 151 146 Average Portfolio Company Debt Investment Size $22,000 $22,000 $19,900 $20,100 $20,200 Asset Class: First Lien 81.8% 81.7% 82.5% 80.8% 77.9% Second Lien 3.0% 3.5% 3.5% 5.4% 8.4% Unsecured Debt 3.9% 3.6% 3.8% 2.6% 2.5% Equity 4.8% 5.0% 4.2% 4.8% 4.8% Joint Venture Interests 6.5% 6.1% 6.0% 6.4% 6.4% Interest Rate Type for Debt Investments: % Floating-Rate 87.6% 88.4% 85.3% 85.4% 84.3% % Fixed-Rate 12.4% 11.6% 14.7% 14.6% 15.7% Yields: Weighted Average Yield on Debt Investments 1 10.7% 11.2% 11.9% 12.2% 12.2% Cash Component of Weighted Average Yield on Debt Investments 9.5% 10.0% 10.6% 11.0% 11.1% Weighted Average Yield on Total Portfolio Investments2 10.2% 10.7% 11.5% 11.7% 11.7%
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9 I n v e s t o r P r e s e n t a 1. New funded investment activity includes drawdowns on existing revolver commitments. 2. Net new investments consists of new funded investment activity less proceeds from prepayments, exits, other paydowns and sales. Investment Activity ($ in thousands) As of 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 New Investment Commitments $198,100 $259,000 $338,700 $395,600 $370,300 New Funded Investment Activity1 $201,300 $232,700 $293,200 $377,400 $367,600 Proceeds from Prepayments, Exits, Other Paydowns and Sales $352,400 $338,300 $185,500 $322,600 $213,500 Net New Investments2 -$151,100 -$105,600 $107,700 $54,800 $154,100 New Investment Commitments in New Portfolio Companies 5 9 11 20 14 New Investment Commitments in Existing Portfolio Companies 8 10 9 15 10 Portfolio Company Exits 13 23 3 15 10 Weighted Average Yield at Cost on New Debt Investment Commitments 9.6% 9.9% 11.1% 11.1% 11.6%
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10 I n v e s t o r P r e s e n t a Net Asset Value Per Share Bridge Note: Numbers may not sum due to rounding. Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares outstanding for the period. Numbers may not sum due to rounding. See appendix for a description of the non-GAAP measures. 1. Excludes reclassifications of net unrealized appreciation / (depreciation) to net realized gains / (losses) as a result of investments exited during the quarter. $18.09 $17.63 $0.54 $0.01 $0.41 -$0.04 -$0.00 -$0.55 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 9/30/24 NAV GAAP Net Investment Income Interest Income Accretion Related to Merger Accounting Adjustments Net Unrealized Appreciation / (Depreciation) Net Realized Gain / (Loss) Net Realized & Unrealized Loss Related to Merger Accounting Adjustments Quarterly Distribution 12/31/24 NAV Adjusted NII $0.54 Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes -$0.45 1 1
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11 Capital Structure Overview 0.90x to 1.25x Target Leverage Ratio Investment Grade Rated By Moody’s And Fitch 59% Unsecured Borrowings $1.1bn Available Liquidity2 Funding Sources Maturities $300 $350 $300$430 $230 $788 $170 $0 $500 $1,000 $1,500 2025 2026 2027 2028 2029 Unsecured Debt Credit Facilities Drawn Credit Facilities Undrawn ($ in millions) Diverse and flexible sources of debt capital with ample liquidity As of December 31, 2024 Note: Numbers may not sum due to rounding. 1. The Company entered into an interest rate swap agreement under which the Company receives a fixed interest rate and pays a floating rate based on three-month SOFR plus a spread. 2. Liquidity was composed of $113 million of unrestricted cash and cash equivalents and $958 million of undrawn capacity under the credit facilities (subject to borrowing base and other limitations). ($ in millions) Facility Size 12/31/24 Outstanding Interest Rate Maturity Secured Credit Facilities Syndicated Facility $1,218 $430 SOFR + 2.00% Jun-28 Citibank Facility $400 $230 SOFR + 2.35% Jan-29 Secured Debt Subtotal $1,618 $660 Unsecured Debt 2025 Notes $300 $300 3.50% Feb-25 2027 Notes $350 $350 2.70% (SOFR + 1.658%)1 Jan-27 2029 Notes $300 $300 7.10% (SOFR + 3.126%)1 Feb-29 Unsecured Debt Subtotal $950 $950 Total Debt $2,568 $1,610
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12 Leverage Utilization Liquidity Overview Funding and Liquidity Metrics Note: Numbers may not sum due to rounding, 1. Excludes unfunded commitments to the Kemper JV and Glick JV. 2. Includes unfunded commitments ineligible to be drawn due to certain limitations in credit agreements. 3. As of December 31, 2024, we have analyzed cash and cash equivalents, availability under our credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believe our liquidity and capital resources are sufficient to invest in market opportunities as they arise. ($ in millions) $1,680 $1,740 $1,660 $1,610 $888 $828 $908 $958 $2,568 $2,568 $2,568 $2,568 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 3/31/24 6/30/24 9/30/24 12/31/2024 Total Debt Outstanding Undrawn Capacity Ample liquidity to support funding needs3 2 ($ in millions) 3/31/24 6/30/24 9/30/24 12/31/24 Cash and Equivalents $125 $96 $64 $113 Net Assets $1,524 $1,496 $1,488 $1,450 Total Leverage 1.10x 1.11x 1.12x 1.11x Net Leverage 1.02x 1.05x 1.07x 1.03x ($ in millions) 3/31/24 6/30/24 9/30/24 12/31/24 Credit Facilities Committed $1,618 $1,618 $1,618 $1,618 Credit Facilities Drawn -$730 -$790 -$710 -$660 Cash and Equivalents $125 $96 $64 $113 Total Liquidity $1,013 $924 $971 $1,071 Unfunded Commitments1 -$209 -$264 -$284 -$275 Unavailable Unfunded Commitments2 $30 $45 $37 $32 Adjusted Liquidity $834 $705 $724 $827
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13 As of December 31, 2024 1. Represents OCSL’s 87.5% share of the Kemper JV’s net investment income (excluding subordinated note interest expense) earned during the quarter ended December 31, 2024. 2. Calculated as OCSL’s share of each respective joint venture’s net investment income anmberalized, divided by the fair value of OCSL’s investments in each joint venture as of September 30, 2024. 3. Represents OCSL’s 87.5% share of the Glick JV’s net investment income (excluding subordinated note interest expense) earned during the quarter ended December 31, 2024. Strategic Joint Ventures are Accretive to Earnings OCSL’s JVs are income-enhancing vehicles that primarily invest in senior secured loans of middle market companies and other corporate debt securities Key Attributes: • Equity ownership: 87.5% OCSL and 12.5% joint venture partner • Shared voting control: 50% OCSL and 50% joint venture partner (At fair value) Glick JV Characteristics (At fair value) Kemper JV Characteristics Investment Portfolio First Lien Portfolio Company Count Wtd. Avg. Debt Portfolio Yield Leverage Ratio $417mm 97% 44 9.4% 1.2x Combined Portfolio Summary $135mm OCSL’s Investments in the Kemper JV 4.8% % of OCSL’s Portfolio $4.0mm Net Investment Income1 11.8% Return on OCSL’s Investment (Annualized) 2 $50mm OCSL’s Investments in the Glick JV 1.7% % of OCSL’s Portfolio $1.5mm Net Investment Income3 12.4% Return on OCSL’s Investment (Annualized) 2
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Appendix
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15 I n v e s t o r P r e s e n t a Note: See appendix for a description of the non-GAAP measures. 1. Includes professional fees, directors fees, administrator expense and general and administrative expenses. Quarterly Statement of Operations ($ in thousands) For the three months ended 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Investment income Interest income $78,422 $83,626 $85,953 $85,256 $91,414 PIK interest income $5,728 $6,018 $6,149 $4,816 $3,849 Fee income $1,679 $3,897 $1,460 $2,546 $1,307 Dividend income $818 $1,144 $1,404 $1,411 $1,415 GAAP total investment income $86,647 $94,685 $94,966 $94,029 $97,985 Interest income amortization related to merger accounting adjustments $423 $315 $607 $3,311 $29 Adjusted total investment income $87,070 $95,000 $95,573 $97,340 $98,014 Expenses Base management fee $8,144 $8,550 $11,781 $11,604 $11,477 Part I incentive fee $7,913 $8,943 $8,341 $8,452 $9,028 Part II incentive fee -- -- -- -- -- Interest expense $30,562 $32,058 $32,513 $31,881 $32,170 Other operating expenses1 $2,590 $2,191 $2,466 $2,225 $2,621 Total expenses $49,209 $51,742 $55,101 $54,162 $55,296 Fees waived -$750 -$750 -$1,500 -$1,500 -$1,500 Part I incentive fees waived -$6,377 -$1,228 -$3,210 -- -- Net expenses $42,082 $49,764 $50,391 $52,662 $53,796 (Provision) benefit for taxes on net investment income (263) -- -- -- -- GAAP net investment income $44,302 $44,921 $44,575 $41,367 $44,189 Less: Interest income accretion related to merger accounting adjustments $423 $315 $607 $3,311 $29 Add: Part II incentive fee -- -- -- -- -- Adjusted net investment income $44,725 $45,236 $45,182 $44,678 $44,218
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16 I n v e s t o r P r e s e n t a Quarterly Statement of Operations (continued) ($ in thousands, except per share amounts) For the three months ended 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) -$19,614 $43,179 $26,199 -$25,252 -$25,025 Net realized gains (losses) -$17,310 -$51,848 -$69,452 -$6,603 -$8,453 (Provision) benefit for taxes on realized and unrealized gains (losses) -$139 $661 -$202 -$175 -$176 GAAP net realized and unrealized gains (losses), net of taxes -$37,063 -$8,008 -$43,455 -$32,030 -$33,654 Net realized and unrealized losses (gains) related to merger accounting adjustments -$61 -$314 -$600 -$3,314 $796 Adjusted net realized and unrealized gains (losses), net of taxes -$37,124 -$8,322 -$44,055 -$35,344 -$32,858 GAAP net increase (decrease) in net assets resulting from operations $7,239 $36,913 $1,120 $9,337 $10,535 Interest income amortization (accretion) related to merger accounting adjustments $423 $315 $607 $3,311 $29 Net realized and unrealized losses (gains) related to merger accounting adjustments -$61 -$314 -$600 -$3,314 $796 Adjusted earnings (loss) $7,601 $36,914 $1,127 $9,334 $11,360 Per share data: GAAP total investment income $1.05 $1.15 $1.16 $1.18 $1.26 Adjusted total investment income $1.06 $1.16 $1.17 $1.22 $1.26 GAAP net investment income $0.54 $0.55 $0.54 $0.52 $0.57 Adjusted net investment income $0.54 $0.55 $0.55 $0.56 $0.57 GAAP net realized and unrealized gains (losses), net of taxes -$0.45 -$0.10 -$0.53 -$0.40 -$0.43 Adjusted net realized and unrealized gains (losses), net of taxes -$0.45 -$0.10 -$0.54 -$0.44 -$0.42 GAAP net increase/decrease in net assets resulting from operations $0.09 $0.45 $0.01 $0.12 $0.14 Adjusted earnings (loss) $0.09 $0.45 $0.01 $0.12 $0.15 Weighted average common shares outstanding 82,245 82,245 81,830 79,763 77,840 Shares outstanding, end of period 82,245 82,245 82,245 81,396 78,965
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17 Non-GAAP Disclosures I n v e s t o r P r e s e n t a The OCSI Merger and the OSI2 Merger (the “Mergers”) were accounted for as asset acquisitions in accordance with the asset acq uisition method of accounting as detailed in ASC 805-50, Business Combinations—Related Issues ("ASC 805"). The consideration paid to each of the stockholders of OCSI and OSI2 we re allocated to the individual assets acquired and liabilities assumed based on the relative fair values of the net identifiable assets acquired other than "non -qualifying" assets, which established a new cost basis for the acquired investments under ASC 805 that, in aggregate, was different than the historical cost basis of the acquired inves tments prior to the OCSI Merger or OSI2 Merger, as applicable. Additionally, immediately following the completion of the Mergers, the acquired investments were marked to their res pective fair values under ASC 820, Fair Value Measurements, which resulted in unrealized appreciation / depreciation. The new cost basis established by ASC 805 on debt inv estments acquired will accrete / amortize over the life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized apprecia tion / depreciation on such investment acquired through its ultimate disposition. The new cost basis established by ASC 805 on equity investments acquired will not accrete / amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company will recognize a realized gain / loss with a corresponding reversal of the unrealized appreciation / depreciation on disposition o f such equity investments acquired. The Company’s management uses the non-GAAP financial measures described above internally to analyze and evaluate financial resul ts and performance and to compare its financial results with those of other business development companies that have not adjusted the cost basis of certain investm ents pursuant to ASC 805. The Company’s management believes "Adjusted Total Investment Income", "Adjusted Total Investment Income Per Share", "Adjusted Net Investmen t Income" and "Adjusted Net Investment Income Per Share" are useful to investors as an additional tool to evaluate ongoing results and trends for the Company withou t giving effect to the accretion income resulting from the new cost basis of the investments acquired in the Mergers because these amounts do not impact the fees payable to Oaktree under its second amended and restated investment advisory agreement (the “A&R Advisory Agreement”), and specifically as its relates to "Adjusted Net Investment Income" and " Adjusted Net Investment Income Per Share", without giving effect to Part II incentive fees. In addition, the Company’s management believes that “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes”, “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share”, “Adjusted Earnings (Loss)” and “Adjusted Earni ngs (Loss) Per Share” are useful to investors as they exclude the non-cash income/gain resulting from the Mergers and used by management to evaluate the economic earnings of its investment portfolio. Moreover, these metrics align the Company's key financial measures with the calculation of incentive fees payable to Oaktree under with the A &R Advisory Agreement (i.e., excluding amounts resulting solely from the lower cost basis of the acquired investments established by ASC 805 that would have been to the ben efit of Oaktree absent such exclusion).
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