Earnings release
Page 1
NEWS RELEASE Oaktree Specialty Lending Corporation Announces First Fiscal Quarter 2026 Financial Results 2026-02-04 LOS ANGELES--(BUSINESS WIRE)-- Oaktree Specialty Lending Corporation (NASDAQ: OCSL) (“Oaktree Specialty Lending” or the “Company”), a specialty nance company, today announced its nancial results for the rst quarter ended December 31, 2025. Financial Highlights for the Quarter Ended December 31, 2025 Total investment income was $75.1 million ($0.85 per share) for the rst scal quarter of 2026 as compared to $77.3 million ($0.88 per share) for the fourth scal quarter of 2025. Adjusted total investment income was $74.5 million ($0.85 per share) for the rst scal quarter of 2026 as compared with $76.9 million ($0.87 per share) for the fourth scal quarter of 2025. The decrease was driven by lower interest income primarily attributable to lower reference rates and lower original issue discount ("OID") acceleration, partially o set by higher fee income primarily attributable to higher prepayment and exit fees. GAAP net investment income was $36.7 million ($0.42 per share) for the rst scal quarter of 2026 as compared with $35.8 million ($0.41 per share) for the fourth scal quarter of 2025. The increase for the quarter was primarily driven by lower net expenses due to lower income-based ("Part I") incentive fees (net of fees waived), o set by lower total investment income and higher interest expense. Adjusted net investment income was $36.1 million ($0.41 per share) for the rst scal quarter of 2026 as compared with $35.4 million ($0.40 per share) for the fourth scal quarter of 2025. The increase for the quarter was primarily driven by lower net expenses due to lower Part I incentive fees (net of fees waived), o set by lower total investment income and higher interest expense. Net asset value ("NAV") per share was $16.30 as of December 31, 2025, down as compared with $16.64 as of 1
Page 2
September 30, 2025. The decrease from September 30, 2025 was primarily driven by unrealized depreciation on certain debt and equity investments. Originated $316.6 million of new investment commitments and received $178.5 million of proceeds from prepayments, exits, other paydowns and sales during the quarter ended December 31, 2025. The weighted average yield on new debt investments was 8.7%. Total debt outstanding was $1,615.0 million as of December 31, 2025. The total debt to equity ratio was 1.12x, and the net debt to equity ratio was 1.07x, after adjusting for cash and cash equivalents. Liquidity as of December 31, 2025 was composed of $80.8 million of unrestricted cash and cash equivalents and $495.0 million of undrawn capacity under the Company's credit facility (subject to borrowing base and other limitations). Unfunded investment commitments were $274.5 million, or $247.3 million excluding unfunded commitments to the Company's joint ventures. A quarterly cash distribution was declared of $0.40 per share payable in cash on March 31, 2026 to stockholders of record on March 16, 2026. “We delivered solid results in the rst scal quarter of 2026 including adjusted net investment income of $36.7 million, or $0.41 per share, and fully covered our dividend,” said Armen Panossian, Chief Executive O cer and Chief Investment O cer of Oaktree Specialty Lending. “We also made continued progress in stabilizing our investment portfolio and are optimistic that we will see continued progress in the coming quarters. New deployments for the quarter were strong at $317 million. Looking ahead, we will continue to evaluate levers to help o set lower base rates and support net investment income.” Distribution Declaration The Board of Directors declared a quarterly distribution of $0.40 per share, payable in cash on March 31, 2026 to stockholders of record on March 16, 2026. Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a scal taxable year fall below the total amount of distributions for that scal year, a portion of those distributions may be deemed a return of capital to the Company’s stockholders. Results of Operations For the three months ended December 31,2025September 30,2025December 31,2024 2
Page 3
($ in thousands, except per share data) 2025(unaudited)2025(unaudited)2024(unaudited)GAAP operating results: Interest income $ 66,923$ 69,716$ 78,422PIK interest income 3,848 4,094 5,728Fee income 2,972 2,122 1,679Dividend income 1,353 1,383 818 Total investment income 75,09677,31586,647 Net expenses 38,376 41,249 42,082 Net investment income before taxes36,72036,06644,565 (Provision) bene t for taxes on net investment income(17) (264) (263) Net investment income 36,70335,80244,302 Net realized and unrealized gains (losses), net of taxes(31,095) (11,224) (37,063) Net increase (decrease) in net assets resulting fromoperations $ 5,608$ 24,578$ 7,239 Total investment income per common share$ 0.85$ 0.88$ 1.05Net investment income per common share$ 0.42$ 0.41$ 0.54Net realized and unrealized gains (losses), net of taxes percommon share $ (0.35)$ (0.13)$ (0.45)Earnings (loss) per common share — basic and diluted$ 0.06$ 0.28$ 0.09Non-GAAP Financial Measures:Adjusted total investment income$ 74,481$ 76,866$ 87,070Adjusted net investment income$ 36,088$ 35,353$ 44,725Adjusted net realized and unrealized gains (losses), net oftaxes $ (30,385)$ (10,849)$ (37,124)Adjusted earnings (loss)$ 5,703$ 24,504$ 7,601Adjusted total investment income per share$ 0.85$ 0.87$ 1.06Adjusted net investment income per share$ 0.41$ 0.40$ 0.54Adjusted net realized and unrealized gains (losses), net oftaxes per share $ (0.34)$ (0.12)$ (0.45)Adjusted earnings (loss) per share$ 0.06$ 0.28$ 0.09 ______________________See Non-GAAP Financial Measures below for a description of the non-GAAP measures and the reconciliations from the most comparable GAAP nancial measures to the Company's non-GAAP measures, including on a per share basis. The Company's management uses these non-GAAP nancial measures internally to analyze and evaluate nancial results and performance and believes that these non-GAAP nancial measures areuseful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company’s performance withoutgiving e ect to non-cash income/gain/loss resulting from the merger of Oaktree Strategic Income Corporation ("OCSI") with and into the Companyin March 2021 (the "OCSI Merger") and the merger of Oaktree Strategic Income II, Inc. ("OSI2") with and into the Company in January 2023 (the"OSI2 Merger") and, in the case of adjusted net investment income, without giving e ect to capital gains incentive fees. The presentation of non-GAAP measures is not intended to be a substitute for nancial results prepared in accordance with GAAP and should not be considered in isolation. As of ($ in thousands, except per share data and ratios) December 31,2025(unaudited)September 30,2025 December 31,2024(unaudited)Select balance sheet and other data: Cash and cash equivalents $ 80,813$ 79,630$ 112,913Investment portfolio at fair value 2,949,0922,847,7822,835,294Total debt outstanding (net of unamortized nancing costs)1,610,0221,486,8801,577,795Net assets 1,436,1871,465,8131,449,815Net asset value per share 16.30 16.64 17.63Total debt to equity ratio 1.12x 1.02x 1.11xNet debt to equity ratio 1.07x 0.97x 1.03x Adjusted total investment income for the quarter ended December 31, 2025 was $74.5 million and included $66.3 million of interest income from portfolio investments, $3.8 million of PIK interest income, $3.0 million of fee income 1 1 3
Page 4
and $1.4 million of dividend income. The $2.4 million quarterly decrease in adjusted total investment income was primarily attributable to lower reference rates and lower OID acceleration, partially o set by higher fee income primarily attributable to higher prepayment and exit fees. Net expenses for the quarter ended December 31, 2025 totaled $38.4 million, down $2.9 million from the quarter ended September 30, 2025. The decrease for the quarter was primarily driven by $4.0 million of lower Part I incentive fees (net of fees waived), partially o set by higher interest expense due to higher borrowings outstanding o set by lower reference rates. Adjusted net investment income was $36.1 million ($0.41 per share) for the quarter ended December 31, 2025, which was up from $35.4 million ($0.40 per share) for the quarter ended September 30, 2025. The increase of $0.7 million primarily re ected $2.9 million of lower net expenses, o set by $2.4 million of lower adjusted total investment income and higher interest expense. Adjusted net realized and unrealized losses, net of taxes, were $30.4 million for the quarter ended December 31, 2025, primarily re ecting unrealized losses on certain debt and equity investments. Portfolio and Investment Activity As of ($ in thousands) December 31,2025(unaudited) September 30,2025(unaudited) December 31,2024(unaudited) Investments at fair value $ 2,949,092$ 2,847,782$ 2,835,294Number of portfolio companies 167 143 136Average portfolio company debt size$ 18,068$ 20,500$ 22,000 Asset class: First lien debt 84.8% 83.5% 81.8%Second lien debt 1.6% 2.4% 3.0%Unsecured debt 3.7% 3.2% 3.9%Equity 4.4% 5.0% 4.8%JV interests 5.6% 6.0% 6.5% Non-accrual debt investments: Non-accrual investments at fair value$ 87,215$ 80,689$ 105,326Non-accrual investments at cost 190,458181,361138,703Non-accrual investments as a percentage of debt investments at fair value3.1% 3.0% 3.9%Non-accrual investments as a percentage of debt investments at cost6.5% 6.5% 5.1%Number of investments on non-accrual11 10 9 Interest rate type: Percentage oating-rate 91.3% 90.7% 87.6%Percentage xed-rate 8.7% 9.3% 12.4% Yields: Weighted average yield on debt investments9.3% 9.8% 10.7%Cash component of weighted average yield on debt investments8.5% 8.9% 9.5%Weighted average yield on total portfolio investments9.1% 9.4% 10.2% Investment activity: New investment commitments$ 316,600$ 208,200$ 198,100New funded investment activity$ 313,800$ 220,400$ 201,300Proceeds from prepayments, exits, other paydowns and sales$ 178,500$ 177,000$ 352,400Net new investments $ 135,300$ 43,400$ (151,100)Number of new investment commitments in new portfolio companies28 9 5Number of new investment commitments in existing portfolio companies13 10 8Nb f tfli it 4 15 13 1 2 3 4 4
Page 5
Number of portfolio company exits 4 15 13 ______________________Annual stated yield earned plus net annual amortization of OID or premium earned on accruing investments, including the Company's share of thereturn on debt investments in SLF JV I and Glick JV, and excluding any amortization or accretion of interest income resulting solely from the costbasis established by ASC 805 (see Non-GAAP Financial Measures below) for the assets acquired in connection with the OCSI Merger and OSI2Merger.Annual stated yield earned plus net annual amortization of OID or premium earned on accruing investments and dividend income, including theCompany's share of the return on debt investments in SLF JV I and Glick JV, and excluding any amortization or accretion of interest income resultingsolely from the cost basis established by ASC 805 for the assets acquired in connection with the OCSI Merger and OSI2 Merger.New funded investment activity includes drawdowns on existing revolver and delayed draw term loan commitments.Net new investments consists of new funded investment activity less proceeds from prepayments, exits, other paydowns and sales. As of December 31, 2025, the fair value of the investment portfolio was $2.9 billion and was composed of investments in 167 companies. These included debt investments in 147 companies, equity investments in 35 companies, and the Company's joint venture investments in Senior Loan Fund JV I, LLC ("SLF JV I") and OCSI Glick JV LLC ("Glick JV"). 17 of the equity investments were in companies in which the Company also had a debt investment. As of December 31, 2025, 95.4% of the Company's portfolio at fair value consisted of debt investments, including 84.8% of rst lien loans, 1.6% of second lien loans and 9.0% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV. This compared to 83.5% of rst lien loans, 2.4% of second lien loans and 8.7% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV, as of September 30, 2025. As of December 31, 2025, there were eleven investments on non-accrual status, which represented 6.5% and 3.1% of the debt portfolio at cost and fair value, respectively. As of September 30, 2025, there were ten investments on non-accrual status, which represented 6.5% and 3.0% of the debt portfolio at cost and fair value, respectively. SLF JV I The Company's investments in SLF JV I totaled $120.9 million at fair value as of December 31, 2025, down 3.0% from $124.6 million as of September 30, 2025. The decrease was primarily driven by SLF JV I’s use of leverage and unrealized losses in the underlying investment portfolio. As of December 31, 2025, SLF JV I had $410.0 million in assets, including senior secured loans to 74 portfolio companies. This compared to $447.4 million in assets, including senior secured loans to 72 portfolio companies, as of September 30, 2025. SLF JV I generated cash interest income of $3.2 million for the Company during the quarter ended December 31, 2025, down slightly from $3.3 million in the prior quarter. In addition, SLF JV I generated dividend income of $0.5 million for the Company during the quarter ended December 31, 2025, at from prior quarter. As of December 31, 2025, SLF JV I had $18.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $270 million senior revolving credit facility, and its debt to equity ratio was 1.8x. 1 2 3 4 5
Page 6
Glick JV The Company's investments in Glick JV totaled $43.9 million at fair value as of December 31, 2025, down 4.6% from $46.1 million as of September 30, 2025. The decrease was primarily driven by Glick JV’s use of leverage and realized losses in the underlying investment portfolio. As of December 31, 2025, Glick JV had $191.6 million in assets, including senior secured loans to 115 portfolio companies. This compared to $149.1 million in assets, including senior secured loans to 57 portfolio companies, as of September 30, 2025. Glick JV generated cash interest income of $1.3 million for the Company during the quarter ended December 31, 2025, at from the prior quarter. As of December 31, 2025, Glick JV had $22.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $100 million senior revolving credit facility, and its debt to equity ratio was 1.5x. Liquidity and Capital Resources As of December 31, 2025, the Company had total principal value of debt outstanding of $1,615.0 million, including $665.0 million of outstanding borrowings under its revolving credit facility and $950.0 million of unsecured notes payable. The funding mix was composed of 41% secured and 59% unsecured borrowings as of December 31, 2025. The Company was in compliance with all nancial covenants under its syndicated credit facility as of December 31, 2025. As of December 31, 2025, the Company had $80.8 million of unrestricted cash and cash equivalents and $495.0 million of undrawn capacity on its credit facility (subject to borrowing base and other limitations). As of December 31, 2025, unfunded investment commitments were $274.5 million, or $247.3 million excluding unfunded commitments to the Company's joint ventures. The Company has analyzed cash and cash equivalents, availability under its credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believes its liquidity and capital resources are su cient to invest in market opportunities as they arise. As of December 31, 2025, the weighted average interest rate on debt outstanding, including the e ect of the interest rate swap agreements was 6.1%, down from 6.5% as of September 30, 2025, primarily driven by lower reference rates. The Company’s total debt to equity ratio was 1.12x and 1.02x as of December 31, 2025 and September 30, 2025, respectively. The Company's net debt to equity ratio was 1.07x and 0.97x as of December 31, 2025 and September 30, 2025, respectively. 6
Page 7
Non-GAAP Financial Measures On a supplemental basis, the Company is disclosing certain adjusted nancial measures, each of which is calculated and presented on a basis of methodology other than in accordance with GAAP (“non-GAAP”). The Company's management uses these non-GAAP nancial measures internally to analyze and evaluate nancial results and performance and believes that these non-GAAP nancial measures are useful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company’s performance without giving e ect to non-cash income/gain/loss resulting from the OCSI Merger and the OSI2 Merger and in the case of adjusted net investment income, without giving e ect to capital gains incentive fees. The presentation of the below non-GAAP measures is not intended to be a substitute for nancial results prepared in accordance with GAAP and should not be considered in isolation. "Adjusted Total Investment Income" and "Adjusted Total Investment Income Per Share" – represents total investment income excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger. “Adjusted Net Investment Income” and “Adjusted Net Investment Income Per Share” – represents net investment income, excluding (i) any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger and (ii) capital gains incentive fees ("Part II incentive fees"). “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes” and “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share” – represents net realized and unrealized gains (losses) net of taxes excluding any net realized and unrealized gains (losses) resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger. “Adjusted Earnings (Loss)” and “Adjusted Earnings (Loss) Per Share” – represents the sum of (i) Adjusted Net Investment Income and (ii) Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes and includes the impact of Part II incentive fees , if any. The OCSI Merger and the OSI2 Merger (the "Mergers") were accounted for as asset acquisitions in accordance with the asset acquisition 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 were allocated to the individual assets acquired and liabilities assumed based on the relative fair values of the net identi able assets acquired other than "non-qualifying" assets, which established a new cost basis for the acquired investments under ASC 805 that, in aggregate, was di erent than the historical cost basis of the acquired investments prior to the OCSI Merger or the 1 7
Page 8
OSI2 Merger, as applicable. Additionally, immediately following the completion of the Mergers, the acquired investments were marked to their respective fair values under ASC 820, Fair Value Measurements, which resulted in unrealized appreciation/depreciation. The new cost basis established by ASC 805 on debt investments acquired will accrete/amortize over the life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation/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 of such equity investments acquired. The Company’s management uses the non-GAAP nancial measures described above internally to analyze and evaluate nancial results and performance and to compare its nancial results with those of other business development companies that have not adjusted the cost basis of certain investments pursuant to ASC 805. The Company’s management believes "Adjusted Total Investment Income", "Adjusted Total Investment Income Per Share", "Adjusted Net Investment 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 without giving e ect to the 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 Fund Advisors, LLC (the "Adviser") under its investment advisory agreement (as amended and restated from time to time, the "A&R Advisory Agreement"), and speci cally as its relates to "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share", without giving e ect 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 Earnings (Loss) Per Share” are useful to investors as they exclude the non-cash income and gain/loss resulting from the Mergers and are used by management to evaluate the economic earnings of its investment portfolio. Moreover, these metrics more closely align the Company's key nancial measures with the calculation of incentive fees payable to the Adviser 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 bene t of the Adviser absent such exclusion). ______________________Adjusted earnings (loss) includes accrued Part II incentive fees. As of and for the three months ended December 31, 2025, there was no accruedPart II incentive fee liability. Part II incentive fees are contractually calculated and paid at the end of the scal year in accordance with the A&RAdvisory Agreement, which di ers from Part II incentive fees accrued under GAAP. For the three months ended December 31, 2025, no Part IIincentive fees were payable under the A&R Advisory Agreement. The following table provides a reconciliation of total investment income (the most comparable U.S. GAAP measure) 1 8
Page 9
to adjusted total investment income for the periods presented: For the three months ended December 31, 2025(unaudited)September 30,2025 (unaudited)December 31, 2024(unaudited) ($ in thousands, except per share data)AmountPerShareAmountPerShareAmountPerShare GAAP total investment income$75,096$ 0.85$77,315$ 0.88$ 86,647$ 1.05Interest income amortization (accretion) related to mergeraccounting adjustments (615) (0.01) (449) (0.01) 423 0.01 Adjusted total investment income$74,481$ 0.85$76,866$ 0.87$ 87,070$ 1.06 The following table provides a reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented: For the three months ended December 31, 2025(unaudited)September 30,2025 (unaudited)December 31, 2024(unaudited) ($ in thousands, except per share data)AmountPerShareAmountPerShareAmountPerShare GAAP net investment income$36,703$ 0.42$35,802$ 0.41$ 44,302$ 0.54Interest income amortization (accretion) related to mergeraccounting adjustments (615) (0.01) (449) (0.01) 423 0.01Part II incentive fee — — — — — — Adjusted net investment income$36,088$ 0.41$35,353$ 0.40$ 44,725$ 0.52 The following table provides a reconciliation of net realized and unrealized gains (losses), net of taxes (the most comparable U.S. GAAP measure) to adjusted net realized and unrealized gains (losses), net of taxes for the periods presented: For the three months ended December 31, 2025(unaudited)September 30,2025 (unaudited)December 31, 2024(unaudited) ($ in thousands, except per share data)AmountPerShareAmountPerShareAmountPerShare GAAP net realized and unrealized gains (losses), net of taxes$(31,095) $ (0.35) $(11,224) $ (0.13) $(37,063) $ (0.45)Net realized and unrealized gains (losses) related to mergeraccounting adjustments 710 0.01 375 (0.01) (61) — Adjusted net realized and unrealized gains (losses), net of taxes$(30,385) $ (0.34) $(10,849) $ (0.12) $(37,124) $ (0.45) The following table provides a reconciliation of net increase (decrease) in net assets resulting from operations (the most comparable U.S. GAAP measure) to adjusted earnings (loss) for the periods presented: 9
Page 10
For the three months ended December 31, 2025(unaudited)September 30,2025 (unaudited)December 31, 2024(unaudited) ($ in thousands, except per share data)AmountPerShareAmountPerShareAmountPerShare Net increase (decrease) in net assets resulting from operations$ 5,608$ 0.06$24,578$ 0.28$ 7,239$ 0.09Interest income amortization (accretion) related to mergeraccounting adjustments (615) (0.01) (449) (0.01) 423 0.01Net realized and unrealized gains (losses) related to mergeraccounting adjustments 710 0.01 375 — (61) — Adjusted earnings (loss) $ 5,703$ 0.06$24,504$ 0.28$ 7,601$ 0.09 Conference Call Information Oaktree Specialty Lending will host a conference call to discuss its rst scal quarter ended December 31, 2025 results at 11:00 a.m. Eastern Time / 8:00 a.m. Paci c Time on February 4, 2026. The conference call may be accessed by dialing (800) 715-9871 (U.S. callers) or +1 (646) 307-1963 (non-U.S. callers). All callers will need to reference “Oaktree Specialty Lending” once connected with the operator. Alternatively, a live webcast of the conference call can be accessed through the Investors section of Oaktree Specialty Lending’s website, www.oaktreespecialtylending.com. During the conference call, the Company intends to refer to an investor presentation that will be available on the Investors section of its website. For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Specialty Lending’s website, or by dialing (800) 770-2030 (U.S. callers) or +1 (647) 362-9199 (non-U.S. callers), access code 5019258, beginning approximately one hour after the broadcast. About Oaktree Specialty Lending Corporation Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a specialty nance company dedicated to providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company's investment objective is to generate current income and capital appreciation by providing companies with exible and innovative nancing solutions including rst and second lien loans, unsecured and mezzanine loans, and preferred equity. The Company is regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Oaktree Fund Advisors, LLC, an a liate of Oaktree Capital Management, L.P. For additional information, please visit Oaktree Specialty Lending's website at www.oaktreespecialtylending.com. Forward-Looking Statements Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or nancial condition. The forward-looking statements may include statements as to: 10
Page 11
future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. 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 press release involve risks and uncertainties. Certain factors could cause actual results and conditions to di er materially from those projected, including the uncertainties associated with (i) changes or potential disruptions in the Company’s operations, the economy, nancial markets or political environment, including those caused by tari s and trade disputes with other countries, in ation and an elevated interest rate environment; (ii) risks associated with possible disruption in the operations of the Company, the operations of its portfolio companies or the economy generally due to terrorism, war or other geopolitical con ict, natural disasters, pandemics or cybersecurity incidents; (iii) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in the Company’s operating areas, particularly with respect to business development companies or regulated investment companies; and (iv) other considerations that may be disclosed from time to time in the Company’s publicly disseminated documents and lings. The Company has based the forward-looking statements included in this press release on information available to it on the date of this press release, and the Company assumes no obligation to update any such forward-looking statements. The Company undertakes 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 it may make directly to you or through reports that the Company in the future may le with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Oaktree Specialty Lending CorporationConsolidated Statements of Assets and Liabilities(in thousands, except per share amounts)December 31,2025(unaudited)September 30,2025ASSETSInvestments at fair value: Control investments (cost December 31, 2025: $376,790; cost September 30, 2025: $377,709)$ 217,869$ 227,748A liate investments (cost December 31, 2025: $82,049; cost September 30, 2025: $58,344)77,908 54,999Non-control/Non-a liate investments (cost December 31, 2025: $2,750,130; cost September 30, 2025:$2,639,069) 2,653,3152,565,035 Total investments at fair value (cost September 30, 2025: $3,208,969; costDecember 31, 2025: 3,075,122) 2,949,0922,847,782 Cash and cash equivalents 80,813 79,630Interest, dividends and fees receivable 23,850 31,868Due from portfolio companies 297 3,186Receivables from unsettled transactions 9,830 4,949Due from broker 15,550 15,550Deferred nancing costs 9,117 9,675Deferred o ering costs 176 143Derivative assets at fair value 8,173 8,713 Other assets 1,353 1,495 $ 3098251$ 3002991 11
Page 12
Total assets $ 3,098,251$ 3,002,991 LIABILITIES AND NET ASSETSLiabilities: Accounts payable, accrued expenses and other liabilities$ 2,214$ 1,538Base management fee and incentive fee payable8,732 12,515Due to a liate 1,658 1,569Interest payable 11,708 12,067Payables from unsettled transactions 23,178 15,011Derivative liabilities at fair value 4,264 7,329Deferred tax liability 288 269Credit facilities payable 665,000545,000Unsecured notes payable (net of $6,025 and $6,561 of unamortized nancing costs as of December 31,2025 and September 30, 2025, respectively)945,022941,880 Total liabilities 1,662,0641,537,178 Commitments and contingenciesNet assets: Common stock, $0.01 par value per share, 250,000 shares authorized; 88,086 shares issued andoutstanding as of December 31, 2025 and September 30, 2025881 881Additional paid-in-capital 2,350,0752,350,075 Accumulated overdistributed earnings (914,769) (885,143) Total net assets (equivalent to $16.30 and $16.64 per common share as ofDecember 31, 2025 and September 30, 2025, respectively)1,436,1871,465,813 Total liabilities and net assets $ 3,098,251$ 3,002,991 Oaktree Specialty Lending CorporationConsolidated Statements of Operations(in thousands, except per share amounts)Three monthsendedDecember 31,2025(unaudited) Three monthsendedSeptember 30,2025(unaudited) Three monthsendedDecember 31,2024(unaudited)Interest income: Control investments $ 4,898$ 5,009$ 5,226A liate investments 540 618 166Non-control/Non-a liate investments60,557 63,222 71,809Interest on cash and cash equivalents928 867 1,221 Total interest income 66,92369,71678,422 PIK interest income: Control investments — — 830A liate investments 447 28 28Non-control/Non-a liate investments3,401 4,066 4,870 Total PIK interest income 3,848 4,094 5,728 Fee income: A liate investments 4 — —Non-control/Non-a liate investments2,968 2,122 1,679 Total fee income 2,972 2,122 1,679 Dividend income: Control investments 525 525 700Non-control/Non-a liate investments— 30 118Non-control/Non-a liate investments - PIK828 828 — Total dividend income 1,353 1,383 818 Total investment income 75,09677,31586,647 Expenses: Base management fee 7,544 7,309 8,144Part I incentive fee 1,188 7,103 7,913Professional fees 1,414 1,244 1,067Directors fees 160 160 160Interest expense 26,659 26,031 30,562Administrator expense 570 600 437General and administrative expenses841 699 926 Total expenses 38,37643,14649,209 Management fees waived — — (750)PtIi tif i d (1897) (6377) 12
Page 13
Part I incentive fees waived — (1,897) (6,377) Net expenses 38,37641,24942,082 Net investment income before taxes36,72036,06644,565 (Provision) bene t for taxes on net investment income(17) (264) (263) Net investment income 36,70335,80244,302 Unrealized appreciation (depreciation): Control investments (8,960) (3,524) (23,230)A liate investments 958 (279) 320Non-control/Non-a liate investments(24,534) (21,044) (7,198)Foreign currency forward contracts 118 6,683 10,494 Net unrealized appreciation (depreciation)(32,418) (18,164) (19,614) Realized gains (losses): Control investments — (1) —A liate investments 52 1 (288)Non-control/Non-a liate investments76 10,655 (17,056)Foreign currency forward contracts 1,214 (3,715) 34 Net realized gains (losses) 1,342 6,940(17,310) (Provision) bene t for taxes on realized and unrealized gains(losses) (19) — (139) Net realized and unrealized gains (losses), net of taxes(31,095) (11,224) (37,063) Net increase (decrease) in net assets resulting from operations$ 5,608$ 24,578$ 7,239 Net investment income per common share — basic and diluted$ 0.42$ 0.41$ 0.54Earnings (loss) per common share — basic and diluted$ 0.06$ 0.28$ 0.09 Weighted average common shares outstanding — basic and diluted88,086 88,086 82,245 Investor Relations: Oaktree Specialty Lending Corporation Alison Mermey (213) 830-6946 ocsl-ir@oaktreecapital.com Media Relations: Financial Pro les, Inc. Moira Conlon (310) 478-2700 mediainquiries@oaktreecapital.com Source: Oaktree Specialty Lending Corporation 13