Ares Capital Corporation Declares Second Quarter 2013 Dividend of $0.38 Per Share and Announces March 31, 2013 Financial

  Ares Capital Corporation Declares Second Quarter 2013 Dividend of $0.38 Per
  Share and Announces March31, 2013 Financial Results

                    Second Quarter 2013 Dividend Declared

Business Wire

NEW YORK -- May 07, 2013

Ares Capital Corporation (“Ares Capital”) (NASDAQ: ARCC) announced that its
Board of Directors has declared a second quarter dividend of $0.38 per share,
payable on June28, 2013 to stockholders of record as of June14, 2013.

MARCH31, 2013 FINANCIAL RESULTS

Ares Capital also announced financial results for its first quarter ended
March31, 2013.

HIGHLIGHTS

Financial

                           Q1-13                      Q1-12
(in millions, except per     Total        Per           Total      Per
share data)                  Amount        Share(1)      Amount      Share
Core EPS (2)                               $ 0.38                    $ 0.38
Net investment income        $ 99.1        $ 0.40        $ 77.0      $ 0.36
Net realized gains           $ 11.7        $ 0.04        $ (7.7  )   $ (0.04 )
(losses)
Net unrealized gains         $ (30.4   )   $ (0.12   )   $ 36.2      $ 0.17
(losses)
GAAP net income              $ 80.4        $ 0.32        $ 105.5     $ 0.49
Dividends declared                         $ 0.38                    $ 0.37
                             As of March 31,
(in millions, except per     2013          2012
share data)
Portfolio investment at      $ 6,030.5     $ 5,204.5
fair value
Total assets                 $ 6,353.1     $ 5,609.1
Stockholders’ equity         $ 3,978.6     $ 3,433.3
Net assets per share         $ 15.98       $ 15.47

(1) All per share amounts are basic and diluted.
    Basic and diluted Core EPS is a non-GAAP financial measure. Core EPS is
    the net per share increase (decrease) in stockholders’ equity resulting
    from operations less realized and unrealized gains and losses, any
    incentive fees attributable to such net realized and unrealized gains and
    losses and any income taxes related to such realized gains. Basic and
    diluted GAAP EPS is the most directly comparable GAAP financial measure.
(2) Ares Capital believes that Core EPS provides useful information to
    investors regarding financial performance because it is one method Ares
    Capital uses to measure its financial condition and results of operations.
    The presentation of this additional information is not meant to be
    considered in isolation or as a substitute for financial results prepared
    in accordance with GAAP. Reconciliations of basic and diluted Core EPS to
    the most directly comparable GAAP financial measure are set forth in
    Schedule 1 hereto.
    

Portfolio Activity

(dollar amounts in millions)                           Q1-13      Q1-12
Portfolio Activity During the Period:
Gross commitments                                        $ 410.0     $ 384.3
Exits of commitments                                     $ 221.7     $ 331.4
                                                                             
Portfolio as of the End of the Period:
Number of portfolio company investments                  156         143
Weighted average yield of debt and other income
producing securities:
At fair value(3)                                         11.0    %   12.0    %
At amortized cost(4)                                     11.1    %   12.2    %
Weighted average yield on total investments:
At fair value(5)                                         9.8     %   10.4    %
At amortized cost(6)                                     9.9     %   10.5    %

    Computed as (a) annual stated interest rate or yield earned plus the net
(3) annual amortization of original issue discount and market discount earned
    on accruing debt and other income producing securities, divided by (b)
    total debt and other income producing securities at fair value.
    Computed as (a) annual stated interest rate or yield earned plus the net
(4) annual amortization of original issue discount and market discount earned
    on accruing debt and other income producing securities, divided by (b)
    total debt and other income producing securities at amortized cost.
    Computed as (a) annual stated interest rate or yield earned plus the net
(5) annual amortization of original issue discount and market discount earned
    on accruing debt and other income producing securities, divided by (b)
    total investments at fair value.
    Computed as (a) annual stated interest rate or yield earned plus the net
(6) annual amortization of original issue discount and market discount earned
    on accruing debt and other income producing securities, divided by (b)
    total investments at amortized cost.
    

FIRST QUARTER 2013 OPERATING RESULTS

For the quarter ended March31, 2013, Ares Capital reported GAAP net income of
$80.4 million or $0.32 per share (basic and diluted), Core EPS(2)of $0.38 per
share (basic and diluted), net investment income of $99.1 million, or $0.40
per share (basic and diluted), and net realized and unrealized losses of
$(18.8) million or $(0.08) per share (basic and diluted).

Net income can vary substantially from period to period due to various
factors, including the level of new investment commitments, the recognition of
realized gains and losses and unrealized appreciation and depreciation. As a
result, quarterly comparisons of net income may not be meaningful.

As of March31, 2013, total assets were $6.4 billion, stockholders’ equity was
$4.0 billion and net asset value per share was $15.98.

In the first quarter of 2013, Ares Capital made approximately $410 million in
new commitments, including commitments to five new portfolio companies, eight
existing portfolio companies and four additional portfolio companies through
the Senior Secured Loan Fund LLC, which operates using the name “Senior
Secured Loan Program” (the “SSLP”) through which Ares Capital co-invests with
GE Global Sponsor Finance LLC and General Electric Capital Corporation
(together, “GE”) to fund first lien senior secured loans. Of these new
commitments, all 17 were sponsored transactions. As of March31, 2013, 97
separate private equity sponsors were represented in Ares Capital’s portfolio.
Of the $410 million in new commitments made during the first quarter of 2013,
approximately 60% were in first lien senior secured debt, 24% were in second
lien senior secured debt, 10% were in senior subordinated debt, 5% were in
subordinated certificates of the SSLP (the proceeds of which were applied to
co-investments with GE to fund first lien senior secured loans through the
SSLP), and 1% were in other equity securities. Of these commitments, 77% were
in floating rate debt securities, 93% of which contained interest rate floors
and the remaining 7% were in the subordinated certificates of the SSLP, the
proceeds of which were applied to co-investments with GE to fund floating rate
first lien senior secured loans through the SSLP, all of which contained
interest rate floors. We may seek to syndicate a portion of these new
investment commitments, although there can be no assurance that we will be
able to do so.

During the first quarter of 2013, significant new commitments included:

  *$78 million in a second lien senior secured term loan of a laundry service
    and equipment provider;
  *$57 million in first lien senior secured revolving and term loans of a
    collision repair site operator;
  *$40 million in first lien senior secured revolving and term loans of a
    dental equipment manufacturer;
  *$35 million in senior subordinated debt of a pet products manufacturer;
  *$25 million in first lien senior secured delayed draw term loan and equity
    of a chemical products manufacturer;
  *$23 million in first lien senior secured revolving and term loans of an
    anesthesia management services provider;
  *$23 million in a first lien senior secured term loan of a premier health
    club operator;
  *$21 million in the subordinated certificates of the SSLP, the proceeds of
    which were applied to co-investments with GE to fund first lien senior
    secured loans to four portfolio companies in a variety of industries;
  *$20 million in a first lien senior secured term loan of an IT security
    software provider; and
  *$14 million in first lien senior secured revolving and term loans of a
    healthcare education provider.

Also during the first quarter of 2013, Ares Capital exited approximately
$221.7 million of investment commitments.

The fair value of Ares Capital’s portfolio investments at March31, 2013 was
$6.0 billion, including $5.4 billion in debt and other income producing
securities. These portfolio investments at fair value were comprised of
approximately 60% of senior secured debt securities (40% in first lien loans
and 20% in second lien loans), 21% of subordinated certificates of the SSLP
(the proceeds of which were applied to co-investments with GE in first lien
senior secured loans through the SSLP), 5% of senior subordinated debt
securities, 4% of preferred equity securities and 10% of other equity
securities. As of March31, 2013, the weighted average yield of debt and other
income producing securities in the portfolio at fair value was 11.0%(3)(11.1%
at amortized cost(4)), the weighted average yield on total investments in the
portfolio at fair value was 9.8%(5)(9.9% at amortized cost(6)), and 75% of
the investments at fair value were in floating rate securities.

Chief Executive Officer Michael Arougheti commented, “For the first quarter,
we reported solid core earnings per share and fully covered our quarterly
dividend. We are finding a greater number of attractive new investments in the
second quarter to date, while remaining highly selective with a focus on
senior debt assets. Our credit quality remains strong as our non-accruing
investments held steady at low levels.” Mr. Arougheti continued, “After
quarter end, we took advantage of favorable market conditions and further
strengthened our financial position by raising new equity on an attractive
basis and improving the terms on our revolving credit facility.”

PORTFOLIO QUALITY

Ares Capital Management LLC, our investment adviser, employs an investment
rating system to categorize our investments. In addition to various risk
management and monitoring tools, our investment adviser grades the credit risk
of all investments on a scale of 1 to 4 no less frequently than quarterly.
This system is intended primarily to reflect the underlying risk of a
portfolio investment relative to our initial cost basis in respect of such
portfolio investment (i.e., at the time of acquisition), although it may also
take into account under certain circumstances the performance of the portfolio
company’s business, the collateral coverage of the investment and other
relevant factors. Under this system, investments with a grade of 4 involve the
least amount of risk to our initial cost basis. The trends and risk factors
for this investment since origination or acquisition are generally favorable,
which may include the performance of the portfolio company or a potential
exit. Investments graded 3 involve a level of risk to our initial cost basis
that is similar to the risk to our initial cost basis at the time of
origination or acquisition. This portfolio company is generally performing as
expected and the risk factors to our ability to ultimately recoup the cost of
our investment are neutral to favorable. All investments or acquired
investments in new portfolio companies are initially assessed a grade of 3.
Investments graded 2 indicate that the risk to our ability to recoup the
initial cost basis of such investment has increased materially since
origination or acquisition, including as a result of factors such as declining
performance and non-compliance with debt covenants; however, payments are
generally not more than 120days past due. An investment grade of 1 indicates
that the risk to our ability to recoup the initial cost basis of such
investment has substantially increased since origination or acquisition, and
the portfolio company likely has materially declining performance. For debt
investments with an investment grade of 1, most or all of the debt covenants
are out of compliance and payments are substantially delinquent. For
investments graded 1, it is anticipated that we will not recoup our initial
cost basis and may realize a substantial loss of our initial cost basis upon
exit. For investments graded 1 or 2, our investment adviser enhances its level
of scrutiny over the monitoring of such portfolio company. Our investment
adviser grades the investments in our portfolio at least each quarter and it
is possible that the grade of a portfolio investment may be reduced or
increased over time.

As of March31, 2013, the weighted average grade of the investments in our
portfolio at fair value was 3.0. Also, as of March31, 2013, loans on
non-accrual status represented 2.3% of total investments at amortized cost (or
0.6% at fair value).

LIQUIDITY AND CAPITAL RESOURCES

As of March31, 2013, Ares Capital had $102.5 million in cash and cash
equivalents and $2.3 billion in aggregate principal amount of debt outstanding
($2.2 billion in carrying value). Subject to leverage and borrowing base
restrictions, Ares Capital had approximately $1.6 billion available for
additional borrowings under its existing credit facilities as of March31,
2013. On January25, 2013, Ares Capital and Ares Capital Funding LLC (“Ares
Capital CP”), an indirect wholly owned subsidiary of Ares Capital, entered
into an amendment to Ares Capital CP’s revolving funding facility (the
“Revolving Funding Facility”). The amendment, among other things, modified the
interest charged on the Revolving Funding Facility from the previous
applicable spreads of 2.50% over LIBOR and 1.50% over “base rate” (as defined
in the agreements governing the Revolving Funding Facility) to applicable
spreads ranging from 2.25% to 2.50% over LIBOR and ranging from 1.25% to 1.50%
over “base rate,” in each case, determined monthly based on the composition of
the borrowing base relative to outstanding borrowings under the facility.
After giving effect to the amendment and the relevant borrowing base and
amounts outstanding thereunder, the interest charged on the Revolving Funding
Facility as of January25, 2013 was based on a spread over one-month LIBOR of
2.25% or a spread over “base rate” of 1.25%.

FIRST QUARTER 2013 DIVIDEND

For the three months ended March31, 2013, Ares Capital declared a dividend on
February27, 2013 of $0.38 per share for a total of approximately $94.5
million. The record date for the dividend was March15, 2013 and the dividend
was paid on March29, 2013.

RECENT DEVELOPMENTS

In April2013, we completed a public add-on equity offering (the “April2013
Offering”) pursuant to which we sold 19.1 million shares of common stock at a
price of $17.43 per share to the participating underwriters. Total proceeds
from the April2013 Offering, net of estimated offering expenses payable by
us, were approximately $333.2 million.

In May2013, we entered into an amendment to our senior secured revolving
credit facility (the “Revolving Credit Facility”). The amendment, among other
things, (1)extended the expiration of the revolving period from May4, 2015
to May4, 2017, (2)extended the stated maturity date from May4, 2016 to
May4, 2018, (3)reduced the interest rate charged from LIBOR plus an
applicable spread of 2.25% or a “base rate” (as defined in the agreements
governing the Revolving Credit Facility) plus an applicable spread of 1.25% to
LIBOR plus an applicable spread of 2.00% or a “base rate” plus an applicable
spread of 1.00% and (4)increased total commitments to $930 million as well as
provided for a feature that allows us, under certain circumstances, to
increase the size of the Revolving Credit Facility to a maximum of $1,400
million.

From April1, 2013 through May3, 2013, we made new investment commitments of
$388million, of which $376million were funded. Of these new commitments, 74%
were in first lien senior secured loans, 21% were investments in subordinated
certificates of the SSLP, the proceeds of which were applied to co-investments
with GE to fund first lien senior secured loans through the SSLP, and 5% were
in second lien senior secured loans. Of the $388million of new investment
commitments, 94% were floating rate and 6% were fixed rate. The weighted
average yield of debt and other income producing securities funded during the
period at amortized cost was 10.1%. We may seek to syndicate a portion of
these new investment commitments, although there can be no assurance that we
will be able to do so.

From April1, 2013 through May3, 2013, we exited $27 million of investment
commitments. Of these investment commitments, 100% were first lien senior
secured loans. Of the $27million of exited investment commitments, 83% were
floating rate, 5% were fixed rate and 12% were on non-accrual status. The
weighted average yield of debt and other income producing securities exited or
repaid during the period at amortized cost was 7.9%. On the $27 million of
investment commitments exited from April1, 2013 through May3, 2013, we
recognized total net realized losses of approximately $1 million.

In addition, as of May3, 2013, we had an investment backlog and pipeline of
approximately $640million and $690million, respectively. Investment backlog
includes transactions approved by our investment adviser’s investment
committee and/or for which a formal mandate, letter of intent or a signed
commitment have been issued, and therefore we believe are likely to close.
Investment pipeline includes transactions where due diligence and analysis are
in process, but no formal mandate, letter of intent or signed commitment have
been issued. The consummation of any of the investments in this backlog and
pipeline depends upon, among other things, one or more of the following:
satisfactory completion of our due diligence investigation of the prospective
portfolio company, our acceptance of the terms and structure of such
investment and the execution and delivery of satisfactory transaction
documentation. In addition, we may syndicate a portion of these investments.
We cannot assure you that we will make any of these investments or that we
will syndicate any portion of these investments.

WEBCAST / CONFERENCE CALL

Ares Capital will host a webcast/conference call on Tuesday, May7, 2013, at
12:00p.m. (ET) to discuss its financial results for the first quarter ended
March31, 2013. PLEASE VISIT OUR WEBCAST LINK LOCATED ON THE HOME PAGE OF THE
INVESTOR RESOURCES SECTIONOF OUR WEBSITE FOR A SLIDE PRESENTATION THAT
COMPLEMENTS THE EARNINGS CONFERENCE CALL.

All interested parties are invited to participate via telephone or the live
webcast, which will be hosted on a webcast link located on the Home pageof
the Investor Resources section of our website at
http://www.arescapitalcorp.com. Please visit the website to test your
connection before the webcast. Domestic callers can access the conference call
by dialing (888) 317-6003. International callers can access the conference
call by dialing +1 (412) 317-6061. All callers will need to enter the
Participant Elite Entry Number 1191205 followed by the # sign and reference
“Ares 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. For interested parties, an archived replay of
the call will be available approximately one hour after the end of the call
through May20, 2013 at 12:00p.m. (Eastern Time) to domestic callers by
dialing (877) 344-7529 and to international callers by dialing +1 (412)
317-0088. For all replays, please reference conference number 10027054. An
archived replay will also be available on a webcast link located on the Home
pageof the Investor Resources section of our website.

ABOUT ARES CAPITAL CORPORATION

Ares Capital is a leading specialty finance company that provides one-stop
financing solutions to U.S. middle market companies and private equity
sponsors. The Company originates and invests in senior secured loans,
mezzanine debt and, to a lesser extent, equity investments through its
national direct origination platform. Ares Capital’s investment objective is
to generate both current income and capital appreciation through debt and
equity investments primarily in private companies. Ares Capital has elected to
be regulated as a business development company, and is externally managed by a
wholly owned subsidiary of Ares Management LLC. Ares Management is a global
alternative asset manager and a SEC-registered investment adviser with
approximately $59 billion of committed capital under management as of
March31, 2013. For more information, visit http://www.arescapitalcorp.com.
However, the contents of such website are not and should not be deemed to be
incorporated by reference herein.

FORWARD-LOOKING STATEMENTS

Statements included herein or on the webcast/conference call may constitute
“forward-looking statements,” which relate to future events or our future
performance or financial condition. These statements are not guarantees of
future performance, condition or results and involve a number of risks and
uncertainties. Actual results and conditions may differ materially from those
in the forward-looking statements as a result of a number of factors,
including those described from time to time in our filings with the Securities
and Exchange Commission. Ares Capital Corporation undertakes no duty to update
any forward-looking statements made herein or on the webcast/conference call.

AVAILABLE INFORMATION

Ares Capital Corporation’s filings with the Securities and Exchange
Commission, press releases, earnings releases and other financial information
are available on its website at http://www.arescapitalcorp.com. The
information on Ares Capital’s website is not and should not be deemed to be
incorporated by reference herein.

                                     
                                                                             
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except per share data)
                                                                             
                                        As of
                                        March31, 2013    December31, 2012
                                        (unaudited)
ASSETS
Total investments at fair value
(amortized cost of $5,959,788 and       $   6,030,459      $    5,924,555
$5,823,451, respectively)
Cash and cash equivalents               102,451            269,043
Interest receivable                     115,991            108,998
Receivable for open trades              50                 131
Other assets                            104,111            98,497
Total assets                            $   6,353,062      $    6,401,224
LIABILITIES
Debt                                    $   2,179,127      $    2,195,872
Management and incentive fees           112,600            131,585
payable
Accounts payable and other              49,262             53,178
liabilities
Interest and facility fees payable      27,976             30,603
Payable for open trades                 5,500              1,640
Total liabilities                       2,374,465          2,412,878
STOCKHOLDERS’ EQUITY
Common stock, par value $0.001 per
share, 500,000 common shares
authorized, 248,896                     249                249
and 248,653 common shares issued
and outstanding, respectively
Capital in excess of par value          4,121,914          4,117,517
Accumulated overdistributed net         (23,301        )   (27,910           )
investment income
Accumulated net realized loss on
investments, foreign currency
transactions,                           (190,936       )   (202,614          )
extinguishment of debt and other
assets
Net unrealized gain on investments      70,671             101,104
Total stockholders’ equity              3,978,597          3,988,346
Total liabilities and stockholders’     $   6,353,062      $    6,401,224
equity
NET ASSETS PER SHARE                    $   15.98          $    16.04

                                    
                                                                             
ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
                                                                             
                                        For the three months ended March31,
                                        2013                   2012
                                        (unaudited)             (unaudited)
INVESTMENT INCOME:
Interest income from investments        $     144,177           $   132,885
Capital structuring service fees        5,991                   17,660
Dividend income                         32,089                  9,219
Management and other fees               4,498                   4,932
Other income                            8,300                   3,042
Total investment income                 195,055                 167,738
EXPENSES:
Interest and credit facility fees       39,347                  32,776
Base management fees                    23,218                  19,986
Incentive fees                          20,085                  26,386
Professional fees                       3,144                   3,686
Administrative fees                     2,592                   2,320
Other general and administrative        3,768                   2,801
Total expenses                          92,154                  87,955
NET INVESTMENT INCOME BEFORE            102,901                 79,783
INCOME TAXES
Income tax expense, including           3,804                   2,745
excise tax
NET INVESTMENT INCOME                   99,097                  77,038
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains (losses)             11,678                  (7,671       )
Net unrealized gains (losses)           (30,433          )      36,180
Net realized and unrealized gains       (18,755          )      28,509
(losses) on investments
NET INCREASE IN STOCKHOLDERS’           $     80,342            $   105,547
EQUITY RESULTING FROM OPERATIONS
BASIC AND DILUTED EARNINGS PER          $     0.32              $   0.49
COMMON SHARE
WEIGHTED AVERAGE SHARES OF COMMON
STOCK OUTSTANDING — BASIC AND           248,658                 217,044
DILUTED

                             

SCHEDULE 1
Reconciliations of basic and diluted Core EPS to basic and diluted GAAP EPS
                                                                            
Reconciliations of basic and diluted Core EPS to basic and diluted GAAP EPS,
the most directly comparable GAAP financial measure, for the three months
ended March31, 2013 and 2012 are provided below.
                                                                            
                                   For the three months ended March 31,
                                   2013                     2012
                                   (unaudited)              (unaudited)
Basic and diluted Core             $       0.38             $      0.38
EPS(1)
Net realized and
unrealized gains                   (0.08              )     0.13
(losses)
Incentive fees
attributed to net
realized and                       0.02                     (0.02           )
unrealized gains and
losses
Income tax expense
related to realized                —                        —
gains
Basic and diluted GAAP             $       0.32             $      0.49
EPS

    Basic and diluted Core EPS is a non-GAAP financial measure. Core EPS is
    the net per share increase (decrease) in stockholders’ equity resulting
    from operations less realized and unrealized gains and losses, any
    incentive fees attributable to such net realized and unrealized gains and
    losses and any income taxes related to such realized gains. Basic and
(1) diluted GAAP EPS is the most directly comparable GAAP financial measure.
    Ares Capital believes that Core EPS provides useful information to
    investors regarding financial performance because it is one method Ares
    Capital uses to measure its financial condition and results of operations.
    The presentation of this additional information is not meant to be
    considered in isolation or as a substitute for financial results prepared
    in accordance with GAAP.

Contact:

Ares Capital Corporation
Carl Drake, 888-818-5298