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- **Dividend Strength**: Core earnings of $0.50 per share exceed $0.48 dividend, supported by $1.26 per share taxable income spillover.
- **Realized Gains Surge**: $247 million in net realized gains, including 15% IRR on Potomac Energy restructuring and 3x+ returns on equity co-investments.
- **Portfolio Resilience**: Nonaccruals at 1.8%, below historical averages, with 10%+ EBITDA growth across borrowers.
- **Market Leadership**: $3.9 billion in Q3 originations at stable spreads, outpacing broadly syndicated market with tighter documentation.
- **Strategic Flexibility**: 1.02x debt-to-equity ratio and $6.2 billion liquidity enable opportunistic growth in 30% nonqualifying asset basket.

**【CEO Summary Section】**
- Reported core earnings of $0.50 per share, exceeding the quarterly dividend of $0.48, marking the 20th consecutive quarter of dividend coverage.
- Generated $247 million in net realized gains, driven by exits of equity co-investments and restructuring of Potomac Energy Center, achieving a 15% IRR on the investment.
- Portfolio at fair value grew to $28.7 billion, with nonaccruals at 1.8% (down 20 basis points quarter-over-quarter) and strong credit metrics (interest coverage >2x, LTV <40%).
- Highlighted market leadership in software lending, with borrowers demonstrating 10%+ EBITDA growth and conservative leverage (average LTV 36%).
- Emphasized strategic flexibility with $6.2 billion in liquidity and debt-to-equity ratio of 1.02x, below the 1.25x target range.

**【CFO Financial Commentary】**
- GAAP net income of $0.57 per share, up 10% sequentially, driven by realized gains and cost control.
- Total portfolio fair value increased 3% Q/Q, with 587 companies across 25 industries, reducing concentration risk (largest investment <2% of portfolio).
- Capital structure optimized with $500 million in new credit facility capacity and $650 million in unsecured notes issued at 5.1%, positioning for rate declines.
- Taxable income spillover of $1.26 per share provides a buffer for dividend stability.

**【Q&A Highlights】**
- **Dividend Sustainability**: CEO Kort Schnabel reaffirmed confidence in maintaining the $0.48 dividend, citing core earnings coverage, spillover income, and balance sheet flexibility.
- **Market Competition**: Despite narrow spreads, ARCC's selective origination (Q3 originations +50% YoY) and superior documentation (tight baskets, conservative LTVs) differentiate it from broadly syndicated lenders.
- **AI Impact**: Software portfolio focused on B2B, mission-critical platforms with high switching costs; AI complements rather than disrupts these systems, with borrowers backed by leading sponsors investing in AI integration.
- **Nonqualifying Assets**: Expansion of IHAM and SDLP joint ventures, with SDLP yield increased 100bps post-liability cost reduction, driving higher returns in the 30% nonqualifying basket.
- **Credit Quality**: No exposure to First Brands or Tricolor; rigorous due diligence on receivables financing ensures alignment with credit policy (e.g., capped at 5% of EBITDA).

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