Blue Owl Capital Inc.

Hello and welcome to the Blue Owl Capital Corp Q4 and fiscal year 2023 earnings call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Dana Scafani, head of BDC Investor Relations for Blue Owl. Please go ahead, Dana.

Thank you, Operator. Good morning, everyone, and welcome to Blue Owl Capital Corporation's fourth quarter earnings call. Joining me this morning are Chief Executive Officer Craig Packer and our Chief Financial Officer and Chief Operating Officer Jonathan Lamb, as well as Alexis Magid, our Chief Credit Officer, and Logan Nicholson, Portfolio Manager for OBDC. I'd like to remind our listeners that remarks made during today's call may contain forward-looking statements, which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described in OBDC's filings with the SEC. The company assumes no obligation to update any forward-looking statements. Certain information discussed on this call and in our earnings materials, including information related to portfolio companies, was derived from third-party sources and has not been independently verified. The company makes no such representations or warranties with respect to this information. OBDC's earnings release, 10-K, and supplemental earnings presentation are available on the investor relations section of our website at blueowlcapitalcorporation.com. With that, I'll turn the call over to Craig.

Thanks, Dana. Good morning, everyone, and thank you all for joining us today. We are very pleased to report another record quarter of earnings with continued excellent credit performance across the portfolio. Net investment income was 51 cents per share, up 2 cents from last quarter. Our NII increased in each quarter of 2023, and we generated new record NII for the fourth consecutive quarter. In total, we earned $1.93 of NAI in 2023, up 52 cents, or 37% year over year. Our strong results throughout the year are the outcome of our emphasis on great credit selection and a proactive approach to liability management. Results also benefited from the higher rate environment and continued strong economic conditions. Based on these results, our board has approved another two cent increase in our base dividend, the 37 cents per share. This is our third two cent increase since the fourth quarter of 2022. This reflects our strong results to date and incorporates our expectations for the future trajectory of earnings, even in a more normalized rate environment. In addition, for the fourth quarter, our board declared a supplemental dividend of eight cents. We instituted the supplemental dividend framework in the third quarter of 2022 to allow shareholders to participate in our earnings upside in a predictable manner, and we are pleased to have paid 36 cents per share of supplemental dividends over these last six quarters, while also meaningfully growing net asset value. Going forward, we believe shareholders will continue to benefit from this supplemental dividend framework. Net asset value per share increased to $15.45, up 5 cents from the third quarter. This represents the highest NAV per share since our inception and the second quarter in a row of record net asset value. As a result of strong earnings and continued NAV growth, we earned a record 13.2% return on equity in the fourth quarter, resulting in an annual ROE of 12.7% for the full year. This is right in line with the expectations we set at our investor day in May. Looking at our borrowers results, we saw continued resilience across our portfolio companies throughout 2023. We came into the year appropriately cautious and prepared for a more challenging economic environment. Over the last 12 months, our borrowers on average delivered low to mid single digit growth in both revenue and EBITDA each quarter. They were proactive in cutting costs and raising prices where appropriate to combat inflationary pressure and supply chain challenges. These initiatives contributed to the solid performance we saw this year. Further, we believe our borrowers are well positioned coming into 2024. Our largest sectors continue to be software, insurance brokerage, food and beverage, and healthcare, all of which serve diversified and durable end markets. The weighted average EBITDA of our portfolio companies is over $200 million. And we believe this scale provides strategic benefits and operational stability, as many of our borrowers remain market leaders within their sectors. Looking forward, while markets are expecting rates to decline, short-term rates remain elevated. And as a result, we remain focused on potential portfolio company challenges. We believe coverage levels will trough in the first half of 2024 at around 1.5 to 1.6 times interest coverage. We continue to have a small list of borrowers who we believe may see challenges in the months ahead. Our underwriting and portfolio management teams are closely monitoring these situations, and we believe any challenges ultimately will be manageable across our portfolio as a whole. I would note we had a few borrowers migrate lower in our rating scale, but overall, the names on our watch list remains consistent. Based on the visibility we have today and the strong positioning of our borrowers, we expect that the vast majority of our portfolio companies will maintain solid coverage metrics and adequate liquidity throughout this period. While we added one very small position to non-accrual in the quarter for a total of four names, our non-accrual rate remains low at 1.1% of the fair value of the debt portfolio. Overall, our record year in 2023 demonstrates the resilience of our portfolio companies and the strength of our investment and portfolio management process. With that, I'll turn it over to Jonathan to provide more detail on our financial results.