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10-K – 2026-02-04 – arcc-20251231.htm
amount not exceeding 25% of our then outstanding common stock, at a price below the then current net asset value per share during a period that began on August 8, 2025 and expires on August 8, 2026. In addition, at our 2009 annual stockholders meeting, our stockholders approved a proposal authorizing us to sell or otherwise issue warrants or securities to subscribe for or convertible into shares of our common stock subject to certain limitations (including, without limitation, that the number of shares issuable does not exceed 25% of our then outstanding common stock and that the exercise or conversion price thereof is not, at the date of issuance, less than the greater of the market value per share and the net asset value per share of our common stock). The authorization granted to sell or issue warrants or securities to subscribe for or convertible into shares of our common stock has no expiration. Any decision to sell shares of our common stock below its then current net asset value per share or securities to subscribe for or convertible into shares of our common stock would be subject to the determination by our board of directors that such issuance is in our and our stockholders’ best interests. If we were to sell shares of our common stock below its then current net asset value per share, such sales would result in an immediate dilution to the net asset value per share of our common stock. This dilution would occur as a result of the sale of shares at a price below the then current net asset value per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted. In addition, if we issue warrants or securities to subscribe for or convertible into shares of our common stock, subject to certain limitations, the exercise or conversion price per share could be less than net asset value per share at the time of exercise or conversion (including through the operation of anti‑dilution protections). Because we would incur expenses in connection with any issuance of such securities, such issuance could result in a dilution of the net asset value per share at the time of exercise or conversion. This dilution would include reduction in net asset value per share as a result of the proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest than the increase in our assets resulting from such issuance. Further, if our current stockholders do not purchase any shares to maintain their percentage interest when we issue new shares, regardless of whether such offering is above or below the then current net asset value per share, their voting power will be diluted. Our stockholders will experience dilution in their ownership percentage if they opt out of our dividend reinvestment plan. All dividends declared in cash payable to stockholders that are participants in our dividend reinvestment plan are automatically reinvested in shares of our common stock. As a result, our stockholders that opt out of our dividend reinvestment plan will experience dilution in their ownership percentage of our common stock over time. Our stockholders may receive shares of our common stock as dividends, which could result in adverse cash flow consequences to them. In order to satisfy the Annual Distribution Requirement applicable to RICs, we have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash (which portion could be as low as 20%) and certain requirements are met, the entire distribution would be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder would be taxed on 100% of the fair market value of the shares received as part of the dividend on the date a stockholder received it in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock. Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock. Sales of substantial amounts of our common stock, or the availability of such common stock for sale, could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of securities should we desire to do so. 50 The trading market or market value of our publicly issued debt securities may fluctuate. Our publicly issued debt securities may or may not have an established trading market. We cannot assure holders of our debt securities that a trading market for our publicly issued debt securities will ever develop or be maintained if developed. In addition to our creditworthiness, many factors may materially adversely affect the trading market for, and market value of, our publicly issued debt securities. These factors include, but are not limited to, the following: • the time remaining to the maturity of these debt securities; • the outstanding principal amount of debt securities with terms identical to these debt securities; • the ratings assigned by national statistical ratings agencies; • the general economic environment; • the supply of such debt securities trading in the secondary market, if any; • the redemption or repayment features, if any, of these debt securities; • the level, direction and volatility of market interest rates generally; and • market rates of interest higher or lower than rates borne by the debt securities. Holders of our debt securities should also be aware that there may be a limited number of buyers if and when they decide to sell their debt securities. This too may materially adversely affect the market value of the debt securities or the trading market for the debt securities. Terms relating to redemption may materially adversely affect our noteholders’ return on any debt securities that we may issue. If our noteholders’ debt securities are redeemable at our option, we may choose to redeem their debt securities at times when prevailing interest rates are lower than the interest rate paid on their debt securities. In addition, if our noteholders’ debt securities are subject to mandatory redemption, we may be required to redeem their debt securities also at times when prevailing interest rates are lower than the interest rate paid on their debt securities. In this circumstance, our noteholders may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as their debt securities being redeemed. Our credit ratings may not reflect all risks of an investment in our debt securities. Our credit ratings are an assessment by third parties of our ability to pay our obligations. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of our debt securities. Our credit ratings, however, may not reflect the potential impact of risks related to market conditions generally or other factors discussed above on the market value of or trading market for the publicly issued debt securities. GENERAL RISK FACTORS Difficult market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of our investments or reducing our ability to raise or deploy capital, each of which could have a significant adverse effect on our business, financial condition and results of operations. We are materially affected by conditions in the global financial markets and economic and political conditions throughout the world that are outside our control. These conditions may affect the level and volatility of securities prices and the liquidity and value of our investments, and we may not be able to or may choose not to manage our exposure to these conditions. This could in turn have a significant adverse effect on our business, financial condition and results of operations. Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies, such as the ongoing war between Russia and Ukraine, conflicts in the Middle East and recent U.S. military action in Venezuela. Sanctions imposed by the U.S. and other countries, including in connection with hostilities between Russia and Ukraine and the tensions between China and Taiwan, have caused 51 additional financial market volatility and affected the global economy. Concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility. Market volatility has been further exacerbated by social unrest, changes regarding immigration and work permit policies and other political and security concerns both in the United States and across various international regions. Because of interrelationships within the global financial markets, if these issues do not abate, or they worsen or spread, our and our portfolio companies, businesses may be adversely affected both within and outside of the directly affected regions. Changes in trade policies, including the imposition of new tariffs or increases in existing tariffs between the United States, Mexico, Canada, China or other countries, or reactionary measures in response thereto, including retaliatory tariffs, legal challenges, or currency manipulation, could adversely affect the market conditions in which we and our portfolio companies operate. These factors may affect the level and volatility of credit and securities prices and the liquidity and value of our investments, and we and our portfolio companies may not be able to successfully manage our exposure to these conditions. In addition, numerous structural dynamics and persistent market trends have exacerbated volatility and market uncertainty. Concerns over significant volatility in the commodities markets, sluggish economic expansion in foreign economies, including continued concerns over growth prospects in China and emerging markets, growing debt loads for certain countries, uncertainty about the consequences of the U.S. and other governments withdrawing monetary stimulus measures, government agency closures, prolonged government shutdowns and speculation about a possible recession all highlight the fact that economic conditions remain unpredictable and volatile. U.S. debt ceiling and budget deficit concerns have increased the possibility of additional credit-rating downgrades and economic slowdowns or a recession in the U.S. In recent periods, geopolitical tensions, including between the U.S. and China, have escalated. Further escalation of such tensions and the related imposition of sanctions or other trade barriers may negatively impact the rate of global growth, particularly in China, where growth has slowed. Moreover, there is a risk of both sector-specific and broad-based volatility, corrections and/or downturns in the equity and credit markets. Any of the foregoing could have a significant impact on the markets in which we and our portfolio companies operate and have a significant adverse effect on our business, financial condition and results of operations. A number of factors have had and may continue to have an adverse impact on credit markets in particular. In 2025, the weakness and the uncertainty regarding the stability of the oil and gas markets resulted in a tightening of credit across multiple sectors. In addition, the Federal Reserve decreased the federal funds rate three times in 2025. Changes in and uncertainty surrounding interest rates may have a material effect on our business, particularly with respect to the cost and availability of financing, which could have a material adverse impact on our business prospects and financial condition. Additionally, the Republican Party currently controls both the executive and legislative branches of the U.S. federal government, which increases the likelihood that legislation may be adopted that could significantly affect the regulation of U.S. financial markets. Regulatory changes could result in greater competition from banks and other lenders with which we compete for lending and other investment opportunities. These and other conditions in the global financial markets and the global economy may result in adverse consequences for us and our portfolio companies, each of which could adversely affect the businesses of us or such portfolio companies, restrict our investment activities, impede our ability to effectively achieve our investment objectives and result in lower returns than we anticipated at the time certain of our investments were made. More specifically, these economic conditions could adversely affect our operating results by causing: • decreases in the market value of securities, debt instruments or investments held by us; • illiquidity in the market, which could adversely affect transaction volumes and the pace of realization of our investments or otherwise restrict our ability to realize value from our investments, thereby adversely affecting our ability to generate performance or other income; and • increases in costs or reduced availability of financial instruments that finance our funds. During periods of difficult market conditions or slowdowns (which may be across one or more industries, sectors or geographies), companies in which we invest may experience decreased revenues, financial losses, credit rating downgrades, difficulty in obtaining access to financing and increased funding costs. During such periods, these companies may also have difficulty in expanding their businesses and operations and be unable to meet their debt service obligations or other expenses as they become due, including expenses payable to us. Negative financial results in our portfolio companies may reduce the value of our portfolio companies, our net asset value and our investment returns, which could have a material adverse effect on our operating results and cash flow. In addition, such conditions would increase the risk of default with respect to our investments. We may be adversely affected by reduced opportunities to exit and realize value from our investments, by lower than expected 52 returns on investments made prior to the deterioration of the credit markets and by our inability to find suitable investments to effectively deploy capital. This could in turn materially reduce our net asset value and dividends and adversely affect our financial prospects and condition. We may experience fluctuations in our quarterly results. We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rates payable on the debt investments we make, the default rates on such investments, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods. Security incidents or cyber-attacks, affecting us or our third-party service providers, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation, any of which could negatively impact our business, financial condition and operating results. The efficient operation of our business is dependent on information systems and technology, including computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, all of which are potentially vulnerable to security incidents and cyber-attacks, which may include intentional attacks or accidental losses, either of which may result in unauthorized access to, or corruption of, our or our third-party service providers’ hardware, software, or data processing systems, or to our confidential, personal, or other sensitive information. In addition, we, our investment adviser, our administrator, or their employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to confidential, personal, or other sensitive information, which are becoming more sophisticated and difficult to detect, particularly as threat actors use artificial intelligence technologies to deploy these attacks. Artificial intelligence tools may also be susceptible to new forms of cyberattacks, such as prompt injection attacks, which may increase our cybersecurity risks where we implement artificial intelligence technologies in our business. Cybersecurity risks are also exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personal information of our investment adviser’s employees, our administrator’s employees, their affiliates’ employees, our investors and others, and other sensitive information that Ares collects, processes and stores in its data centers and on its networks or those of its third-party service providers. Many jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal information, with which we and Ares must comply in the event of a security incident or cyber-attack. The result of any security incident or cyber-attack may include disrupted operations, including in our and our investment adviser’s operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen or improperly accessed assets or information (including personal information), fines or penalties, investigations, increased cybersecurity protection and insurance costs, litigation, or damage to our business relationships and reputation, in each case, causing our business and results of operations to suffer or otherwise causing interruptions or malfunctions in our, our investment adviser’s employees’, our administrator’s employees’, their affiliates’ employees’, our investors’, our counterparties’ or third parties’ operations. Although we are not currently aware of any security incidents or cyber-attacks that, individually or in the aggregate, have materially affected, or would reasonably be expected to materially affect, our operations or financial condition, there has been an increase in the frequency and sophistication of the cyber and security threats that we face, with attacks ranging from those common to businesses generally to more advanced and persistent attacks. Security incidents or cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside or inside parties, as well as through employee malfeasance. We or our third-party providers may face a heightened risk of a security breach or disruption with respect to confidential, personal or other sensitive information resulting from an attack, including by foreign governments or cyber terrorists. We may be a target for attacks because, as a specialty finance company, we hold confidential and other sensitive information, including price information, about existing and potential investments. Further, we are dependent on third-party vendors for hosting hardware, software and data processing systems that we do not control. We also rely on third-party service providers for certain aspects of our businesses, including for certain information systems, technology and administration of our funds and compliance matters. While we rely on the cybersecurity strategy and policies implemented by Ares, which includes the performance of risk assessments on third-party providers, our reliance on them and their potential reliance on third-party providers removes certain cybersecurity functions from outside of our immediate control, and cyber-attacks on Ares, on us or on our third-party service providers could adversely affect us, our business and our reputation. We cannot guarantee that third parties and infrastructure in Ares’ networks and Ares’ and our partners’ networks have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to Ares’ information technology systems or the third-party information technology systems that support 53 our services. Ares’ and our ability to monitor these third parties’ information security practices is limited, and they may not have adequate information security measures in place. The costs related to cyber-attacks or other security threats or disruptions may not be fully insured or indemnified by others, including by our third-party providers. Security incidents and cyber-attacks may originate from a wide variety of sources, and while Ares has implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber-attacks, these measures do not guarantee that a security incident or cyber-attack will not occur or that our financial results or operations will not be negatively impacted by such an incident, especially because the techniques of threat actors change frequently and are often not recognized until launched, and may be enhanced by artificial intelligence technologies. Ares relies on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on their information systems, as well as on policies and procedures to protect against the unauthorized or unlawful disclosure of confidential, personal or other sensitive information. Although Ares takes protective measures and endeavors to strengthen its computer systems, software, technology assets and networks to prevent and address potential security incidents and cyber-attacks, there can be no assurance that any of these measures prove effective. Ares expects to be required to devote increasing levels of funding and resources, which may in part be allocated to us, to comply with evolving cybersecurity and privacy laws and regulations and to continually monitor and enhance its cybersecurity procedures and controls. Our portfolio companies also rely on similar systems and face similar risks. A disruption or compromise of these systems could have a material adverse effect on the value of these businesses. We may invest in strategic assets having a national or regional profile or in infrastructure assets, the nature of which could expose them to a greater risk of being subject to a terrorist attack or cyber-attack than other assets or businesses. Such an event may have material adverse consequences on our investments or may require portfolio companies to increase preventative security measures or expand insurance coverage. In addition, cybersecurity is a priority for regulators in the U.S. and around the world. The SEC has adopted rules related to cybersecurity risk management for registered investment advisers, registered investment companies and business development companies. In addition, the SEC requires public companies to disclose material cybersecurity incidents on Form 8-K and provide periodic disclosure regarding their cybersecurity risk management, strategy, and governance in annual reports. In May 2024, the SEC adopted cybersecurity regulations as an amendment to Regulation S-P designed to establish a federal “minimum standard” for covered institutions to adopt an incident response program to govern their response to any unauthorized access of customer information. The adopted rule requires compliance as of December 2025 and applies to us as it includes investment companies and registered investment advisers. The amendments require implementation of written policies and procedures to safeguard customer records and information by imposing notification requirements to affected individuals whose sensitive customer information was or is reasonably likely to have been accessed or used without authorization and other requirements, such as review of incident response programs and having policies and procedures regarding compliance by third-party service providers. With the SEC particularly focused on cybersecurity, we expect increased scrutiny of our and Ares’ policies and systems designed to manage cybersecurity risks and related disclosures. We also may face increased costs to comply with the new SEC rules, including Ares’ increased costs for cybersecurity training and management, a portion of which may be allocated to us. In addition, the SEC has indicated in recent periods that one of its examination priorities for the Office of Compliance Inspections and Examinations is to continue to examine cybersecurity procedures and controls, including testing the implementation of these procedures and controls. Technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs. Artificial intelligence, including machine learning technology and generative artificial intelligence, is rapidly evolving. While the full extent of current or future risks related thereto is not possible to predict, artificial intelligence could significantly disrupt the business models and markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs, any of which could have a material adverse effect on our or our portfolio companies’ business, financial condition and results of operations. We, our investment adviser and our administrator use and plan to expand our use of artificial intelligence tools and technologies in the operation of our business. In addition, certain of our portfolio companies use and may plan to expand their use of artificial intelligence tools and technologies in the operation of their businesses. These uses come with potential risks, including, but not limited to, generation of inaccurate results, misuse or disclosures of confidential information, infringement of third-party intellectual property rights, potential cybersecurity vulnerabilities, reputational risk, and regulatory burdens. Artificial intelligence models may create outputs that are flawed, inaccurate, biased, or that infringe or misappropriate intellectual property of third parties. The models may also be subject to new or different modes of cyber attacks, including prompt injection attacks, and such attacks may be able to circumvent our cybersecurity tools and processes. To the extent we, our investment adviser, our administrator, or any of our portfolio companies rely on such technologies, these risks could 54 negatively impact us or our portfolio companies. There is also a risk that artificial intelligence tools or applications may be misused by employees and/or third parties engaged by us, our adviser or administrator, or by our portfolio companies. For example, an employee of our adviser may input confidential information, including material non-public information, trade secrets, or personal information, into artificial intelligence technologies in a manner that results in such information becoming part of a dataset that is accessible by third-party artificial intelligence applications and users, including our competitors. Further, we, our adviser or administrator or our portfolio companies may not be able to control how third-party artificial intelligence technologies that we or they choose to use are developed or maintained, or how data we or they input is used or disclosed, even where contractual protections with respect to these matters have been sought. The misuse or misappropriation of our data could have an adverse impact on our reputation and could subject us to legal and regulatory investigations and/or actions. The misuse or misappropriation of data of any of our portfolio companies could have an adverse impact on such businesses reputation and could subject such portfolio company to legal and regulatory investigations and/or actions. We or our portfolio companies may also be exposed to competitive risks related to the adoption of artificial intelligence or other new technologies by others within our respective industries. If our or our portfolio companies’ competitors are more successful than us or our portfolio companies in the use of artificial intelligence or development of services or products based on artificial intelligence, or we or our portfolio companies do so at a slower pace than others, we or our portfolio companies may be at a competitive disadvantage. In addition, our or our portfolio companies’ investments in technology systems and artificial intelligence may not deliver the benefits we or they expect, which could be costly for our or their respective businesses. Finally, regulations related to artificial intelligence may also impose on us or our portfolio companies certain obligations and costs related to monitoring and compliance, and we or they could be subject to regulatory actions if we or they are deemed not to have complied. We are subject to numerous privacy laws, and violation of such laws may subject us to significant fines or penalties, litigation, or reputational damage, and new privacy laws or changes in enforcement of existing privacy laws could impact our business and financial performance. Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including, the California Consumer Privacy Act (the “CCPA”), the New York SHIELD Act, the General Data Protection Regulation (“GDPR”) and the U.K. GDPR (collectively, “Privacy Laws”). These Privacy Laws and related regulations continue to evolve and may conflict with one another, resulting in compliance challenges. Moreover, to the extent that these laws and regulations or the enforcement of the same become more stringent or change, or if new laws or regulations are enacted, our financial performance or plans for growth may be adversely impacted. In addition, compliance with applicable Privacy Laws may require adhering to stringent legal and operational requirements, which could increase compliance costs for us and our investment adviser and require the dedication of additional time and resources to compliance by us, our investment adviser or Ares. A failure to comply with applicable Privacy Laws could result in fines, sanctions, enforcement actions or other penalties or reputational damage. Further, significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of investor, employee or other personal information, proprietary business data or other sensitive information, whether by third parties or as a result of employee malfeasance or otherwise, non-compliance with our, our investment adviser’s or Ares’ contractual or other legal obligations regarding such data or intellectual property or a violation of Ares’ privacy and security policies with respect to such data could result in significant investigation, remediation and other costs, fines, penalties, litigation or regulatory actions against us and significant reputational harm, any of which could harm our business and results of operations. In May 2024, the SEC adopted cybersecurity regulations as an amendment to Regulation S-P designed to establish a federal “minimum standard” for covered institutions to adopt an incident response program to govern their response to any unauthorized access of customer information. The adopted rule requires compliance as of December 2025 and applies to us as it includes broker-dealers, investment companies and registered investment advisers. The amendments require implementation of written policies and procedures to safeguard customer records and information by imposing notification requirements to affected individuals whose sensitive customer information was or is reasonably likely to have been accessed or used without authorization and other requirements, such as review of incident response programs and having policies and procedures regarding compliance by third party service providers. There may be substantial financial penalties or fines for breach of Privacy Laws (which may include insufficient security for personal or other sensitive information). For example, the maximum penalty for breach of the GDPR is the greater of 20 million Euros and 4% of group annual worldwide turnover, and fines for each violation of the CCPA are $2,500 per violation, or $7,500 per violation for intentional violations. Non-compliance with any applicable privacy or data security laws 55 represents a serious risk to our business, and compliance may be complicated by conflicting or inconsistent laws and regulations. Ineffective internal controls could impact our business and operating results. Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations. Item 1B. Unresolved Staff Comments None. Item 1C. Cybersecurity Assessment, Identification and Management of Material Risks from Cybersecurity Threats We rely on the cybersecurity strategy and policies implemented by Ares Management, the parent of both our investment adviser and our administrator. Ares Management’s cybersecurity strategy prioritizes the detection and analysis of, and response to, known, anticipated or unexpected threats, effective management of security risks and resilience against cyber incidents. Ares Management’s enterprise-wide cybersecurity program is aligned to the National Institute of Standards and Technology Cybersecurity Framework. Ares Management’s cybersecurity risk management processes include technical security controls, policy enforcement mechanisms, monitoring systems, tools and related services, which include tools and services from third-party providers, and management oversight to assess, identify and manage risks from cybersecurity threats. Ares Management has implemented and continues to implement risk-based controls designed to prevent, detect and respond to information security threats and we rely on those controls to help us protect our information, our information systems, and the information of our investors and other third parties who entrust us with their sensitive information. Ares Management’s cybersecurity program includes physical, administrative and technical safeguards, as well as plans and procedures designed to help Ares prevent and timely and effectively respond to cybersecurity threats and incidents, including threats or incidents that may impact us, our investment adviser or our administrator. Ares Management’s cybersecurity risk management process seeks to monitor cybersecurity vulnerabilities and potential attack vectors, evaluate the potential operational and financial effects of any threat and mitigate such threats. The assessment of cybersecurity threats, including those which may impact us, our investment adviser or our administrator, is integrated into Ares Management’s Enterprise Risk Management program, which is overseen by the Ares Enterprise Risk Committee (the “Ares Management ERC”), as discussed below. In addition, Ares Management periodically engages with third-party consultants and key vendors to assist it in assessing, enhancing, implementing and monitoring its cybersecurity risk management programs and responding to incidents. The Ares Management cybersecurity risk management and awareness programs include periodic identification and testing of vulnerabilities, regular phishing simulations and annual general cybersecurity awareness and data protection training including for employees of our investment adviser and our administrator. Ares Management also has annual certification requirements for employees, including employees who provide services to us pursuant to our investment advisory and management agreement and our administration agreement with respect to certain policies supporting the cybersecurity program including information security and electronic communications, data protection and privacy. Ares Management undertakes periodic internal security reviews of our information systems and related controls, including systems affecting personal data and the cybersecurity risks of Ares Management’s and our critical third-party service providers and other partners. Ares Management also completes periodic external reviews of its cybersecurity program and practices, which include assessments of relevant data protection practices and targeted attack simulations. In the event of a cybersecurity incident impacting us, our investment adviser, or our administrator, Ares Management has developed an incident response plan that provides guidelines for responding to such an incident and facilitates coordination across multiple operational functions of Ares Management, including coordinating with the relevant employees of our investment adviser and our administrator. The incident response plan includes notification to the applicable members of cybersecurity leadership, including Ares Management’s Chief Information Security Officer (“CISO”) , and, as appropriate, 56 escalation to the full Ares Management ERC and/or an internal ad-hoc group of senior employees, tasked with helping to manage the cybersecurity incident. Depending on their nature, incidents may also be reported to the audit committee or full board of directors of Ares Management, as well as to the audit committee of our board of directors and to our full board of directors, if appropriate. Material Impact of Risks from Cybersecurity Threats We have not experienced an information security breach incident that has materially affected our business strategy, results of operations or financial condition. The expenses we have incurred from information security breach incidents have been immaterial, and we are not aware of any cybersecurity risks that are reasonably likely to materially affect our business . However, future incidents could have a material impact on our business strategy, results of operations or financial condition. For additional discussion of the risks posed by cybersecurity threats, see “Item 1A. Risk Factors— General Risk Factors— Security incidents or cyber-attacks, affecting us or our third-party service providers, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation, any of which could negatively impact our business, financial condition and operating results.” Oversight of Cybersecurity Risks Our cybersecurity program is managed by Ares Management’s dedicated internal cybersecurity team, which is respo nsible for enterprise-wide cybersecurity strategy, policies, standards, engineering, architecture and processes. The team is led by Ares Management’s CISO who has a Master’s degree in Cybersecurity from Brown University and over 25 years of experience advising on and managing risks from cybersecurity threats as well as developing and implementing cybersecurity policies and procedures. The Ares Management CISO reports cybersecurity updates to the Ares Management ERC. The Ares Management ERC is a cross-functional committee that governs and oversees the Ares Management Enterprise Risk Program, including cybersecurity. The Ares Management ERC includes Ares Management’s CEO, Co-Presidents, CFO, General Counsel, Global Chief Compliance Officer, Chief Information Officer, Chief Compliance Officer, and Head of Enterprise Risk, who acts as chairperson of the Ares Management ERC . The Ares Management ERC, through regular consultation with the Ares Management internal cybersecurity team and employees of our investment adviser and administrator, assesses, discusses, and prioritizes Ares Management’s approach to high-level risks, mitigating controls and ongoing cybersecurity efforts. The audit committee has primary responsibility for oversight and review of guidelines and policies with respect to risk assessment and risk management, including cybersecurity. Periodically, reports are provided to our audit committee as well as our full board of directors, as appropriate, on cybersecurity matters, primarily through presentations by the CISO and the Ares Management Head of Enterprise Risk. Such reporting includes updates on Ares Management’s cybersecurity program as it impacts us, the external threat environment, and Ares Management’s programs to address and mitigate the risks associated with the evolving cybersecurity threat environment. These reports also include updates on Ares Management’s preparedness, prevention, detection, responsiveness and recovery with respect to cyber incidents. Item 2. Properties We do not own any real estate or other physical properties materially important to our operation. Our headquarters are currently located at 245 Park Avenue, 44th Floor, New York, New York 10167. We are party to office leases pursuant to which we are leasing office facilities from third parties. Item 3. Legal Proceedings From time to time, we, our executive officers, directors and our investment adviser, its affiliates and/or any of their respective principals and employees are subject to legal proceedings, including those arising from our investments in our portfolio companies, and we may, as a result, incur significant costs and expenses in connection with such legal proceedings. We and our investment adviser are also subject to extensive regulation, which, from time to time, results in requests for information from us or our investment adviser or legal or regulatory proceedings or investigations against us or our investment adviser. We incur significant costs and expenses in connection with any such proceedings, information requests and investigations. Item 4. Mine Safety Disclosures Not applicable. 57 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS Our common stock is traded on The NASDAQ Global Select Market under the symbol “ARCC.” Our common stock has historically traded at prices both above and below our net asset value per share. It is not possible to predict whether our common stock will trade at, above or below net asset value. See “Risk Factors—Risks Relating to Our Common Stock and Publicly Traded Notes—Our shares of common stock have traded at a discount from net asset value and may do so again, which could limit our ability to raise additional equity capital.” The following table sets forth, for each fiscal quarter for the fiscal years ended December 31, 2025 and 2024, the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock, the closing sales price as a premium (discount) to net asset value and the dividends or distributions declared by us. Net Asset Price Range High Sales Price Premium (Discount) to Net Asset Low Sales Price Premium (Discount) to Net Asset Cash Dividend Per Value(1) High Low Value(2) Value(2) Share(3) Year ended December 31, 2025 First Quarter $ 19.82 $ 23.81 $ 21.28 20.13 % 7.37 % $ 0.48 Second Quarter $ 19.90 $ 22.43 $ 18.91 12.71 % (4.97) % $ 0.48 Third Quarter $ 20.01 $ 23.25 $ 20.41 16.19 % 2.00 % $ 0.48 Fourth Quarter $ 19.94 $ 21.03 $ 18.90 5.47 % (5.22) % $ 0.48 Year ended December 31, 2024 First Quarter $ 19.53 $ 20.82 $ 19.94 6.61 % 2.10 % $ 0.48 Second Quarter $ 19.61 $ 21.58 $ 20.24 10.05 % 3.21 % $ 0.48 Third Quarter $ 19.77 $ 21.28 $ 19.80 7.64 % 0.15 % $ 0.48 Fourth Quarter $ 19.89 $ 22.27 $ 20.74 11.97 % 4.27 % $ 0.48 _______________________________________________________________________________ (1) Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset values shown are based on outstanding shares at the end of the relevant quarter. (2) Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the applicable quarter). (3) Represents the dividend or distribution declared in the relevant quarter. On January 29, 2026, the last reported closing sales price of our common stock on The NASDAQ Global Select Market was $20.16 per share, which represented a premium of approximately 1.10% to the net asset value per share reported by us as of December 31, 2025. HOLDERS As of January 29, 2026, there were 910 holders of record of our common stock (including Cede & Co.). DIVIDEND/DISTRIBUTION POLICY We currently intend to distribute dividends or make distributions to our stockholders on a quarterly basis out of assets legally available for distribution. We may also distribute additional dividends or make additional distributions to our 58 stockholders from time to time. Our quarterly and additional dividends or distributions, if any, will be determined by our board of directors. To maintain our RIC status under the Code, we must timely distribute an amount equal to at least 90% of our investment company taxable income (as defined by the Code, which generally includes net ordinary income and net short term capital gains) to our stockholders. In addition, we generally will be required to pay an excise tax equal to 4% on certain undistributed taxable income unless we distribute in a timely manner an amount at least equal to the sum of (i) 98% of our ordinary income recognized during a calendar year and (ii) 98.2% of our capital gain net income, as defined by the Code, recognized during a calendar year and (iii) any income recognized, but not distributed, in preceding years. The taxable income on which we pay excise tax is generally distributed to our stockholders in the next tax year. Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income for distribution in the following year, and pay any applicable excise tax. For the years ended December 31, 2025, 2024 and 2023, we recorded a net excise tax expense of $37 million, $35 million and $23 million, respectively. We cannot assure you that we will achieve results that will permit the payment of any cash distributions. We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend, stockholders’ cash dividends will be automatically reinvested in additional shares of our common stock, unless they specifically opt out of the dividend reinvestment plan so as to receive cash dividends. See “Dividend Reinvestment Plan.” RECENT SALES OF UNREGISTERED EQUITY SECURITIES We did not sell any securities during the period covered by this Annual Report that were not registered under the Securities Act of 1933, as amended (the “Securities Act”). ISSUER PURCHASES OF EQUITY SECURITIES Dividend Reinvestment Plan During the quarter ended December 31, 2025, as a part of our dividend reinvestment plan for our common stockholders, we did not purchase shares of our common stock in the open market in order to satisfy the reinvestment portion of our dividends. Stock Repurchase Program In February 2025, our board of directors authorized an amendment to our stock repurchase program to extend the expiration date of the program from February 15, 2025 to February 15, 2026. Under our stock repurchase program, we may repurchase up to $1.0 billion in the aggregate of our outstanding common stock in the open market at certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any share repurchases will be determined by us, in our sole discretion, based upon an evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. The stock repurchase program will be in effect through February 15, 2026, unless extended or until the approved dollar amount has been used to repurchase shares. The stock repurchase program does not require us to repurchase any specific number of shares of common stock or any shares of common stock at all. Consequently, we cannot assure stockholders that any specific number of shares of common stock, if any, will be repurchased under the stock repurchase program. As of December 31, 2025, the expiration date of our stock repurchase program was February 15, 2026. The stock repurchase program may be suspended, extended, modified or discontinued at any time. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments,” as well as Note 16 to our consolidated financial statements for the year ended December 31, 2025 for a subsequent event relating to our stock repurchase program. During the year ended December 31, 2025, there were no repurchases of our common stock under our stock repurchase program. As of December 31, 2025, the approximate dollar value of shares that may yet be purchased under the program was $1.0 billion. 59 COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ARES CAPITAL CORPORATION, S&P 500 INDEX AND S&P BDC INDEX Total Return Performance SOURCE: Bloomberg NOTES: Assumes $100 invested on December 31, 2020 in Ares Capital, the S&P 500 Index and the S&P BDC Index. Assumes all dividends are reinvested on the respective dividend payment dates without commissions. Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Ares Capital 100.00 136.18 130.96 157.07 188.17 190.28 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 S&P BDC Index 100.00 137.42 124.51 158.85 185.23 178.74 The stock performance graph and other information above shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act. The stock price performance included in the above graph is not necessarily indicative of future stock performance. 60 FEES AND EXPENSES The following table is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear, directly or indirectly, based on the assumptions set forth below. We caution you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests otherwise, whenever this Form 10-K contains a reference to our fees or expenses, we will pay such fees and expenses out of our net assets and, consequently, stockholders will indirectly bear such fees or expenses as investors in us. Stockholder transaction expenses (as a percentage of offering price): Sales load — (1) Offering expenses — (2) Dividend reinvestment plan expenses Up to $15.00 Transaction Fee (3) Total stockholder transaction expenses paid — (4) Annual expenses (as a percentage of consolidated net assets attributable to common stock)(5): Base management fee 3.12 % (6) Income based fee and capital gains incentive fee 2.33 % (7) Interest payments on borrowed funds 5.69 % (8) Other expenses 0.67 % (9) Acquired fund fees and expenses 1.95 % (10) Total annual expenses 13.76 % (11) _______________________________________________________________________________ (1) If shares of our common stock are sold to or through underwriters, the applicable prospectus or prospectus supplement will disclose the applicable sales load (underwriting discount or commission). Purchases of shares of our common stock on the secondary market are not subject to sales charges but may be subject to brokerage commissions or other charges. The table does not include any sales load that stockholders may have paid in connection with their purchase of shares of our common stock. (2) The applicable prospectus or prospectus supplement for any offering will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by us as a percentage of the offering price. (3) The expenses of the dividend reinvestment plan are included in “Other expenses.” The plan administrator’s fees under the plan are paid by us. If a participant elects by notice to the plan administrator in advance of termination to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a transaction fee of up to $15.00 plus a $0.12 per share fee from the proceeds. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Issuer Purchases of Equity Securities — Dividend Reinvestment Plan” for more information. (4) The applicable prospectus or prospectus supplement for any offering will disclose the offering price and the total stockholder transaction expenses as a percentage of the offering price. (5) The “consolidated net assets attributable to common stock” used to calculate the percentages in this table is our average net assets of $13.9 billion for the year ended December 31, 2025. (6) Our base management fee is calculated at an annual rate of 1.5% based on the average value of our total assets (other than cash or cash equivalents but including assets purchased with borrowed funds) at the end of the two most recently completed calendar quarters; provided, however, the base management fee is calculated at an annual rate of 1.0% on the average value of our total assets (other than cash or cash equivalents but including assets purchased with borrowed funds) that exceeds the product of (A) 200% and (B) our net asset value at the end of the most recently completed calendar quarter. The 3.12% reflected on the table is higher than 1.5% because it is calculated on our average net assets (rather than our average total assets) for the year ended December 31, 2025. See “Business — Investment Advisory and Management Agreement.” (7) This item represents our investment adviser’s income based fee and capital gains incentive fee based on the actual income based fee for the year ended December 31, 2025, and adding the capital gains incentive fee expense accrued in 61 accordance with GAAP for the year ended December 31, 2025, even though there was no capital gains incentive fee actually payable under the investment advisory and management agreement as of December 31, 2025. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Company Act or the investment advisory and management agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee actually payable under the investment advisory and management agreement plus the aggregate cumulative unrealized capital appreciation. If such amount is positive at the end of a period, then GAAP requires us to record a capital gains incentive fee equal to 20% of such cumulative amount, less the aggregate amount of actual capital gains incentive fee paid or capital gains incentive fee accrued under GAAP in all prior periods. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future or that the amount accrued for will ultimately be paid. For purposes of this table, we have assumed that these fees will be payable (in the case of the capital gains incentive fee) and that they will remain constant, although they are based on our performance and will not be paid unless we achieve certain goals. We expect to invest or otherwise utilize all of the net proceeds from securities registered under our registration statement pursuant to a particular prospectus supplement within three months of the date of the offering pursuant to such prospectus supplement and may have capital gains and interest income that could result in the payment of these fees to our investment adviser in the first year after completion of such offerings. Since our IPO through December 31, 2025, the average quarterly fees accrued related to the income based fee and capital gains incentive fee (including capital gains incentive fee accrued under GAAP even though they may not be payable) have been approximately 0.68% of our weighted average net assets for such period (2.71% on an annualized basis). For more detailed information about income based fee and capital gains incentive fee previously incurred by us, please see Note 3 to our consolidated financial statements for the year ended December 31, 2025. The income based fee is payable quarterly in arrears in an amount equal to 20% of our pre‑incentive fee net investment income (including interest that is accrued but not yet received in cash), subject to a 1.75% quarterly (7.0% annualized) hurdle rate and a “catch‑up” provision measured as of the end of each calendar quarter. Under this provision, in any calendar quarter, our investment adviser receives no income based fee until our net investment income equals the hurdle rate of 1.75% but then receives, as a “catch‑up,” 100% of our pre‑incentive fee net investment income with respect to that portion of such pre‑incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1875%. The effect of this provision is that, if pre‑incentive fee net investment income exceeds 2.1875% in any calendar quarter, our investment adviser will receive 20% of our pre‑incentive fee net investment income as if a hurdle rate did not apply. The capital gains incentive fee is payable annually in arrears in an amount equal to 20% of our realized capital gains on a cumulative basis from inception through the end of the year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of capital gains incentive fee paid in all prior years. We will defer cash payment of any income based fee and capital gains incentive fee otherwise earned by our investment adviser if, during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made, the sum of (a) our aggregate distributions to our stockholders and (b) our change in net assets (defined as total assets less indebtedness and before taking into account any income based fee or capital gains incentive fee accrued during the period) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. Any deferred income based fee and capital gains incentive fee are carried over for payment in subsequent calculation periods to the extent such payment is payable under the investment advisory and management agreement. These calculations will be adjusted for any share issuances or repurchases. See “Business — Investment Advisory and Management Agreement.” (8) “Interest payments on borrowed funds” represents our interest expenses estimated based on our actual interest and credit facility expenses incurred for the year ended December 31, 2025, which includes the impact of interest rate swaps. During the year ended December 31, 2025, our average outstanding borrowings were approximately $14.7 62 billion and cash paid for interest expense was $750 million. We had outstanding borrowings of approximately $16.0 billion (with a carrying value of approximately $16.0 billion) as of December 31, 2025. This item is based on the assumption that our borrowings and interest costs after an offering will remain similar to those prior to such offering. The amount of leverage that we may employ at any particular time will depend on, among other things, our investment adviser’s and our board of directors’ assessment of market and other factors at the time of any proposed borrowing. See “Risk Factors—Risks Relating to Our Business—We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.” We are currently allowed to borrow amounts such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 150% after such borrowing (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources.” (9) Includes our overhead expenses, including payments under our administration agreement based on our allocable portion of overhead and other expenses incurred by Ares Operations in performing its obligations under the administration agreement, and income taxes. Such expenses are estimated based on actual “Other expenses” for the year ended December 31, 2025. The holders of shares of our common stock (and not the holders of our debt securities or preferred stock, if any) indirectly bear the cost associated with our annual expenses. See “Business—Administration Agreement.” (10) Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles that would be investment companies under section 3(a) of the Investment Company Act but for the exceptions to that definition provided for in sections 3(c)(1) and 3(c)(7) of the Investment Company Act (“Acquired Funds”) in which we invest. This amount is estimated based on the estimated annual fees and operating expenses of Acquired Funds in which we are invested as of December 31, 2025. Certain of these Acquired Funds are subject to management fees, which generally range from 1% to 2.5% of total net assets, or incentive fees, which generally range between 15% and 25% of net profits. When applicable, fees and operating expenses estimates are based on historic fees and operating expenses for the Acquired Funds. For those Acquired Funds with little or no operating history, fees and operating expenses are estimates based on expected fees and operating expenses stated in the Acquired Funds’ offering memorandum, private placement memorandum or other similar communication without giving effect to any performance. Future fees and operating expenses for these Acquired Funds may be substantially higher or lower because certain fees and operating expenses are based on the performance of the Acquired Funds, which may fluctuate over time. This amount also includes an estimate of the annual fees and operating expenses of the SDLP. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity—Senior Direct Lending Program” and Note 4 to our consolidated financial statements for the year ended December 31, 2025 for more information on the SDLP. The annual fees and operating expenses of the SDLP were estimated based on the funded portfolio of the SDLP as of December 31, 2025 and include interest payments on the senior notes and intermediate funding notes provided by Varagon and its clients, which represent 94% of such expenses. (11) Total annual expenses as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage and increase our total assets. The SEC requires that the “Total annual expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness and before taking into account any income based fee or capital gains incentive fee accrued during the period), rather than the total assets, including assets that have been funded with borrowed monies. Example The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed that we would have no additional leverage, that none of our assets are cash or cash equivalents and that our annual operating expenses would remain at the levels set forth in the table above. Income based fee and the capital gains incentive fee under the investment advisory and management agreement, which, assuming a 5% annual return, would either not be payable or have an insignificant impact on the expense amounts shown below, are not included in the example, except as specifically set forth below. Transaction expenses are not included in the following example. 63 1 year 3 years 5 years 10 years You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return (none of which is subject to the capital gains incentive fee)(1) $ (117) $ (328) $ (512) $ (874) You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return resulting entirely from net realized capital gains (all of which is subject to the capital gains incentive fee)(2) $ (127) $ (355) $ (552) $ (932) _______________________________________________________________________________ (1) Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation. (2) Assumes no unrealized capital depreciation and a 5% annual return resulting entirely from net realized capital gains and not otherwise deferrable under the terms of the investment advisory and management agreement and therefore subject to the capital gains incentive fee. The foregoing table is to assist you in understanding the various costs and expenses that an investor in our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. If we were to achieve sufficient returns on our investments, including through the realization of capital gains, to trigger income based fee or capital gains incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, if our board of directors authorizes and we declare a cash dividend, participants in our dividend reinvestment plan who have not otherwise elected to receive cash will receive a number of shares of our common stock determined by dividing the total dollar amount of the dividend payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the dividend. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Issuer Purchases of Equity Securities — Dividend Reinvestment Plan” for more information regarding our dividend reinvestment plan. This example and the expenses in the table above should not be considered a representation of our future expenses as actual expenses (including the cost of debt, if any, and other expenses) that we incur in the future may be greater or less than those shown. 64 SENIOR SECURITIES (dollar amounts in millions, except per unit data) Information about our senior securities (including preferred stock, debt securities and other indebtedness) is shown in the following tables as of the end of the last ten fiscal years. The report of our independent registered public accounting firm, KPMG LLP, on the senior securities table as of December 31, 2025, is attached as an exhibit to this Annual Report on Form 10-K. The “-” indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities. Class and Year Total Amount Outstanding Exclusive of Treasury Securities(1) Asset Coverage Per Unit(2) Involuntary Liquidating Preference Per Unit(3) Average Market Value Per Unit(4) Revolving Credit Facility Fiscal 2025 $ 2,028 $ 1,893 $ — N/A Fiscal 2024 1,113 1,962 — N/A Fiscal 2023 1,413 1,937 — N/A Fiscal 2022 2,246 1,772 — N/A Fiscal 2021 1,507 1,792 — N/A Fiscal 2020 1,180 1,824 — N/A Fiscal 2019 2,250 2,042 — N/A Fiscal 2018 1,064 2,362 — N/A Fiscal 2017 395 2,415 — N/A Fiscal 2016 571 2,296 — N/A Revolving Funding Facility Fiscal 2025 $ 1,234 $ 1,893 $ — N/A Fiscal 2024 1,065 1,962 — N/A Fiscal 2023 863 1,937 — N/A Fiscal 2022 800 1,772 — N/A Fiscal 2021 762 1,792 — N/A Fiscal 2020 1,027 1,824 — N/A Fiscal 2019 638 2,042 — N/A Fiscal 2018 520 2,362 — N/A Fiscal 2017 600 2,415 — N/A Fiscal 2016 155 2,296 — N/A SMBC Funding Facility Fiscal 2025 $ 563 $ 1,893 $ — N/A Fiscal 2024 502 1,962 — N/A Fiscal 2023 401 1,937 — N/A Fiscal 2022 451 1,772 — N/A Fiscal 2021 401 1,792 — N/A Fiscal 2020 453 1,824 — N/A Fiscal 2019 301 2,042 — N/A Fiscal 2018 245 2,362 — N/A Fiscal 2017 60 2,415 — N/A Fiscal 2016 105 2,296 — N/A BNP Funding Facility Fiscal 2025 $ 717 $ 1,893 $ — N/A Fiscal 2024 889 1,962 — N/A Fiscal 2023 575 1,937 — N/A Fiscal 2022 245 1,772 — N/A Fiscal 2021 — 1,792 — N/A 65 Class and Year Total Amount Outstanding Exclusive of Treasury Securities(1) Asset Coverage Per Unit(2) Involuntary Liquidating Preference Per Unit(3) Average Market Value Per Unit(4) Fiscal 2020 150 1,824 — N/A SBA Debentures Fiscal 2017 $ — $ — $ — N/A Fiscal 2016 25 2,296 — N/A April 2036 CLO Notes(5) Fiscal 2025 $ 476 $ 1,893 $ — N/A Fiscal 2024 476 1,962 — N/A October 2036 CLO Secured Loans(5) Fiscal 2025 $ 544 $ 1,893 $ — N/A Fiscal 2024 544 1,962 — N/A January 2038 CLO Notes(5) Fiscal 2025 $ 700 $ 1,893 $ — N/A 2017 Convertible Notes Fiscal 2016 $ 163 $ 2,296 $ — N/A 2018 Convertible Notes Fiscal 2017 $ 270 $ 2,415 $ — N/A Fiscal 2016 270 2,296 — N/A 2019 Convertible Notes Fiscal 2018 $ 300 $ 2,362 $ — N/A Fiscal 2017 300 2,415 — N/A Fiscal 2016 300 2,296 — N/A 2022 Convertible Notes Fiscal 2021 $ 388 $ 1,792 $ — N/A Fiscal 2020 388 1,824 — N/A Fiscal 2019 388 2,042 — N/A Fiscal 2018 388 2,362 — N/A Fiscal 2017 388 2,415 — N/A 2024 Convertible Notes Fiscal 2023 $ 403 $ 1,937 $ — N/A Fiscal 2022 403 1,772 — N/A Fiscal 2021 403 1,792 — N/A Fiscal 2020 403 1,824 — N/A Fiscal 2019 403 2,042 — N/A 2018 Notes Fiscal 2017 $ 750 $ 2,415 $ — N/A Fiscal 2016 750 2,296 — N/A 2020 Notes Fiscal 2018 $ 600 $ 2,362 $ — N/A Fiscal 2017 600 2,415 — N/A Fiscal 2016 600 2,296 — N/A 2022 Notes Fiscal 2020 $ 600 $ 1,824 $ — N/A Fiscal 2019 600 2,042 — N/A Fiscal 2018 600 2,362 — N/A Fiscal 2017 600 2,415 — N/A 66 Class and Year Total Amount Outstanding Exclusive of Treasury Securities(1) Asset Coverage Per Unit(2) Involuntary Liquidating Preference Per Unit(3) Average Market Value Per Unit(4) Fiscal 2016 600 2,296 — N/A October 2022 Notes Fiscal 2016 $ 183 $ 2,296 $ — $ 1,017 2023 Notes Fiscal 2022 $ 750 $ 1,772 $ — N/A Fiscal 2021 750 1,792 — N/A Fiscal 2020 750 1,824 — N/A Fiscal 2019 750 2,042 — N/A Fiscal 2018 750 2,362 — N/A Fiscal 2017 750 2,415 — N/A June 2024 Notes Fiscal 2023 $ 900 $ 1,937 $ — N/A Fiscal 2022 900 1,772 — N/A Fiscal 2021 900 1,792 — N/A Fiscal 2020 900 1,824 — N/A Fiscal 2019 900 2,042 — N/A March 2025 Notes Fiscal 2024 $ 600 $ 1,962 $ — N/A Fiscal 2023 600 1,937 — N/A Fiscal 2022 600 1,772 — N/A Fiscal 2021 600 1,792 — N/A Fiscal 2020 600 1,824 — N/A Fiscal 2019 600 2,042 — N/A Fiscal 2018 600 2,362 — N/A July 2025 Notes Fiscal 2024 $ 1,250 $ 1,962 $ — N/A Fiscal 2023 1,250 1,937 — N/A Fiscal 2022 1,250 1,772 — N/A Fiscal 2021 1,250 1,792 — N/A Fiscal 2020 750 1,824 — N/A January 2026 Notes Fiscal 2025 $ 1,150 $ 1,893 $ — N/A Fiscal 2024 1,150 1,962 — N/A Fiscal 2023 1,150 1,937 — N/A Fiscal 2022 1,150 1,772 — N/A Fiscal 2021 1,150 1,792 — N/A Fiscal 2020 1,150 1,824 — N/A July 2026 Notes Fiscal 2025 $ 1,000 $ 1,893 $ — N/A Fiscal 2024 1,000 1,962 — N/A Fiscal 2023 1,000 1,937 — N/A Fiscal 2022 1,000 1,772 — N/A Fiscal 2021 1,000 1,792 — N/A January 2027 Notes Fiscal 2025 $ 900 $ 1,893 $ — N/A 67 Class and Year Total Amount Outstanding Exclusive of Treasury Securities(1) Asset Coverage Per Unit(2) Involuntary Liquidating Preference Per Unit(3) Average Market Value Per Unit(4) Fiscal 2024 900 1,962 — N/A Fiscal 2023 900 1,937 — N/A June 2027 Notes Fiscal 2025 $ 500 $ 1,893 $ — N/A Fiscal 2024 500 1,962 — N/A Fiscal 2023 500 1,937 — N/A Fiscal 2022 500 1,772 — N/A June 2028 Notes Fiscal 2025 $ 1,250 $ 1,893 $ — N/A Fiscal 2024 1,250 1,962 — N/A Fiscal 2023 1,250 1,937 — N/A Fiscal 2022 1,250 1,772 — N/A Fiscal 2021 1,250 1,792 — N/A March 2029 Notes Fiscal 2025 $ 1,000 $ 1,893 $ — N/A Fiscal 2024 1,000 1,962 — N/A July 2029 Notes Fiscal 2025 $ 850 $ 1,893 $ — N/A Fiscal 2024 850 1,962 — N/A September 2030 Notes Fiscal 2025 $ 750 $ 1,893 $ — N/A January 2031 Notes Fiscal 2025 $ 650 $ 1,893 $ — N/A November 2031 Notes Fiscal 2025 $ 700 $ 1,893 $ — N/A Fiscal 2024 700 1,962 — N/A Fiscal 2023 700 1,937 — N/A Fiscal 2022 700 1,772 — N/A Fiscal 2021 700 1,792 — N/A March 2032 Notes Fiscal 2025 $ 1,000 $ 1,893 $ — N/A 2047 Notes Fiscal 2020 $ 230 $ 1,824 $ — $ 1,013 Fiscal 2019 230 2,042 — 1,033 Fiscal 2018 230 2,362 — 1,013 Fiscal 2017 230 2,415 — 1,021 Fiscal 2016 230 2,296 — 1,015 _______________________________________________________________________________ (1) Total amount of each class of senior securities outstanding at principal value at the end of the period presented. (2) The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the “Asset Coverage Per Unit” (including for the October 2022 Notes and the 2047 Notes, which were issued in $25 increments). In June 2016, we received exemptive relief from the SEC allowing us to modify the asset coverage requirements to exclude debentures issued by Ares Venture Finance, L.P. and guaranteed by the Small Business Administration (the “SBA”), 68 subject to the issuance of a capital commitment by the SBA and other customary procedures (the “SBA Debentures”), from this calculation. As such, the asset coverage ratio beginning with Fiscal 2016 excludes the SBA Debentures. Certain prior year amounts have been reclassified to conform to the 2016 and 2017 presentation. In particular, unamortized debt issuance costs were previously included in other assets and were reclassified to long‑term debt as a result of the adoption of Accounting Standards Update 2015‑03, Interest-Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs during the first quarter of 2016. (3) The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it. (4) Not applicable, except for with respect to the October 2022 Notes and the 2047 Notes, as other senior securities are not registered for public trading on a stock exchange. The average market value per unit for each of the October 2022 Notes and the 2047 Notes is based on the average daily prices of such notes and is expressed per $1,000 of indebtedness (including for the October 2022 Notes and the 2047 Notes, which were issued in $25 increments). (5) Excludes the April 2036 CLO Subordinated Notes, the October 2036 CLO Subordinated Notes and the January 2038 CLO Subordinated Notes, which were retained by us and, as such, eliminated in consolidation. Item 6. [Reserved] 69 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The information contained in this section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Annual Report. In addition, some of the statements in this Annual Report (including in the following discussion) constitute forward-looking statements, which relate to future events or the future performance or financial condition of Ares Capital Corporation (the “Company,” “Ares Capital,” “we,” “us,” or “our”). The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning: • our, or our portfolio companies’, future business, operations, operating results or prospects; • the return or impact of current and future investments; • the impact of a protracted decline in the liquidity of credit markets on our business; • changes in the general economy, including those caused by tariffs and trade disputes with other countries, changes in inflation and risk of recession; • fluctuations in global interest rates; • the impact of changes in laws or regulations (including the interpretation thereof), including tax laws, governing our operations or the operations of our portfolio companies or the operations of our competitors; • the valuation of our investments in portfolio companies, particularly those having no liquid trading market; • our ability to recover unrealized losses; • market conditions and our ability to access different debt markets and additional debt and equity capital and our ability to manage our capital resources effectively; • our contractual arrangements and relationships with third parties; • political and regulatory conditions that contribute to uncertainty and market volatility including the impact of any prolonged U.S. government shutdown as well as the legislative, regulatory, trade, immigration and other policies associated with the current U.S. presidential administration; • the impact of supply chain constraints on our portfolio companies and the global economy; • uncertainty surrounding global financial stability; • ongoing conflicts in the Middle East, recent U.S. military action in Venezuela, and the Russia-Ukraine war, including the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest; • the disruption of global shipping activities; • the financial condition of our current and prospective portfolio companies and their ability to achieve their objectives; • the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks; • the impact of global health crises on our or our portfolio companies’ business and the U.S. and global economy; • our ability to anticipate and identify evolving market expectations with respect to environmental, social and governance matters, including the environmental impacts of our portfolio companies’ supply chain and operations; • our ability to successfully complete and integrate any acquisitions; • the outcome and impact of any litigation or regulatory proceeding; 70 • the adequacy of our cash resources and working capital; • the timing, form and amount of any dividend distributions; • the timing of cash flows, if any, from the operations of our portfolio companies; and • the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments. We use words such as “anticipates,” “believes,” “expects,” “intends,” “projects,” “seeks,” “estimates,” “will,” “should,” “could,” “would,” “likely,” “may” and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. You should not place undue reliance on these forward-looking statements, and our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and the other information included in this Annual Report. We have based the forward-looking statements included in this Annual Report on information available to us as of the filing date of this Annual Report, 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 have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. OVERVIEW We are a specialty finance company that is a closed-end, non-diversified management investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). We are externally managed by Ares Capital Management LLC (“Ares Capital Management” or our “investment adviser”), a subsidiary of Ares Management Corporation (“Ares Management”), a publicly traded, leading global alternative investment manager, pursuant to our investment advisory and management agreement. Ares Operations LLC (“Ares Operations” or our “administrator”), a subsidiary of Ares Management, provides certain administrative and other services necessary for us to operate. Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in first lien senior secured loans (including “unitranche” loans, which are loans that combine both senior and subordinated loans, generally in a first lien position) and second lien senior secured loans. In addition to senior secured loans, we also invest in subordinated loans (sometimes referred to as mezzanine debt) and preferred equity. To a lesser extent, we also make common equity investments, which have generally been non-control equity investments of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments. Since our initial public offering (“IPO”) on October 8, 2004 through December 31, 2025, our exited investments resulted in an asset level realized gross internal rate of return to us of approximately 13% (based on original cash invested, net of syndications, of approximately $55.7 billion and total proceeds from such exited investments of approximately $71.7 billion). Internal rate of return is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. Internal rate of return is gross of expenses related to investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized. Additionally, since our IPO on October 8, 2004 through December 31, 2025, our realized gains have exceeded our realized losses by approximately $1.0 billion (excluding a one-time gain on the acquisition of Allied Capital Corporation in April 2010 (the “Allied Acquisition”), income tax expense on net realized gains, and realized gains/losses from the extinguishment of debt and other transactions). For the same time period, our average annualized net realized gain rate was approximately 0.8% (excluding a one-time gain on the Allied Acquisition, income tax expense on net realized gains, and 71 realized gains/losses from the extinguishment of debt and other transactions). Net realized gain/loss rates for a particular period are the amount of net realized gains/losses during such period divided by the average quarterly investments at amortized cost in such period. Information included herein regarding internal rates of return, realized gains and losses and annualized net realized gain rates are historical results relating to our past performance and are not necessarily indicative of future results, the achievement of which cannot be assured. As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered “eligible portfolio companies” (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act. In addition, we, our investment adviser and certain of our affiliates have received an order from the SEC that permits us and other BDCs and registered closed-end management investment companies managed by Ares Management to co-invest in portfolio companies with each other and with other affiliated investment entities (the “Co-Investment Exemptive Order”). As required by the Co-Investment Exemptive Order, we have adopted, and our board of directors has approved, policies and procedures reasonably designed to ensure compliance with the terms of the Co-Investment Exemptive Order, and our investment adviser and our Chief Compliance Officer will provide reporting to our board of directors. Co-investments made under the Co-Investment Exemptive Order are subject to compliance with certain conditions and other requirements, which could limit our ability to participate in co-investment transactions. As a result of investments permitted by the Co-Investment Exemptive Order, there could be significant overlap in our investment portfolio and the investment portfolio of affiliated Ares Management entities that can rely on the Co-Investment Exemptive Order and have an investment objective similar to ours. We may also otherwise co-invest with funds managed by Ares Management or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our investment adviser’s allocation policy. We have elected to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”), and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must, among other requirements, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders generally at least 90% of our investment company taxable income, as defined by the Code, for each year. Pursuant to this election, we generally will not have to pay U.S. federal corporate-level taxes on any income that we distribute to our stockholders provided that we satisfy those requirements. MACROECONOMIC ENVIRONMENT In 2025, U.S. leveraged corporate credit markets delivered positive total returns, supported by growing U.S. gross domestic product and consumer spending, stable inflation and historically low unemployment. These tailwinds were partially offset by slower job growth and increased uncertainty related to tariff policies and risks from various geopolitical developments. Although future economic growth in the U.S. is expected to slow relative to 2024 levels, the U.S debt and equity markets have shown strength as the Federal Reserve’s anticipated accommodative monetary policies are expected to support overall economic activity. 72 PORTFOLIO AND INVESTMENT ACTIVITY Our investment activity for the years ended December 31, 2025 and 2024 is presented below. For the Years Ended December 31, (dollar amounts in millions) 2025 2024 New investment commitments(1): New portfolio companies $ 7,185 $ 4,418 Existing portfolio companies 8,590 10,663 Total new investment commitments(2) $ 15,775 $ 15,081 Less: Investment commitments exited(3) (12,106) (10,103) Net investment commitments $ 3,669 $ 4,978 Principal amount of investments funded: First lien senior secured loans(4) $ 11,593 $ 11,269 Second lien senior secured loans 254 172 Subordinated certificates of the SDLP(5) 196 211 Senior subordinated loans 428 281 Preferred equity 187 148 Ivy Hill Asset Management, L.P.(6) 812 412 Other equity 394 374 Total $ 13,864 $ 12,867 Principal amount of investments sold or repaid: First lien senior secured loans(4) $ 9,096 $ 6,054 Second lien senior secured loans 723 2,120 Subordinated certificates of the SDLP(5) 362 271 Senior subordinated loans 168 241 Preferred equity 513 298 Ivy Hill Asset Management, L.P.(6) 282 474 Other equity 446 188 Total $ 11,590 $ 9,646 Number of new investment commitments(7) 321 293 Average new investment commitment amount $ 49 $ 51 Weighted average term for new investment commitments (in months) 71 74 Percentage of new investment commitments at floating rates 93 % 94 % Percentage of new investment commitments at fixed rates 4 % 3 % Weighted average yield of debt and other income producing securities(8): Funded during the period at amortized cost 9.7 % 10.6 % Funded during the period at fair value(9) 9.7 % 10.7 % Exited or repaid during the period at amortized cost 10.1 % 11.8 % Exited or repaid during the period at fair value(9) 10.1 % 12.0 % _______________________________________________________________________________ (1) New investment commitments include new agreements to fund revolving loans or delayed draw loans. See Note 7 to our consolidated financial statements for the year ended December 31, 2025 for more information on our commitments to fund revolving loans or delayed draw loans. (2) Includes both funded and unfunded commitments. Of these new investment commitments, we funded $11.4 billion and $11.8 billion for the years ended December 31, 2025 and 2024, respectively. 73 (3) Includes both funded and unfunded commitments. For the years ended December 31, 2025 and 2024, investment commitments exited included exits of unfunded commitments of $1.7 billion and $1.3 billion, respectively. (4) For the years ended December 31, 2025 and 2024, net fundings (repayments) of first lien secured revolving loans were $20 million and $(68) million, respectively. (5) See “Senior Direct Lending Program” below and Note 4 to our consolidated financial statements for the year ended December 31, 2025 for more information on the SDLP (as defined below). (6) Includes our subordinated loan to and equity investments in IHAM (as defined below), as applicable. See “Ivy Hill Asset Management, L.P.” below and Note 4 to our consolidated financial statements for the year ended December 31, 2025 for more information on IHAM. (7) Number of new investment commitments represents each commitment to a particular portfolio company or a commitment to multiple companies as part of an individual transaction (e.g., the purchase of a portfolio of investments). (8) “Weighted average yield of debt and other income producing securities” is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities (including the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end, as applicable), divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value (including the amortized cost or fair value of our equity investment in IHAM as applicable), as applicable. (9) Represents fair value for investments in the portfolio as of the most recent prior quarter end, if applicable. As of December 31, 2025 and 2024, our investments consisted of the following: As of December 31, 2025 2024 (in millions) Amortized Cost(1) Fair Value Amortized Cost(1) Fair Value First lien senior secured loans(2) $ 18,103 $ 17,858 $ 15,519 $ 15,179 Second lien senior secured loans 1,558 1,487 1,935 1,847 Subordinated certificates of the SDLP(3) 1,103 1,117 1,263 1,192 Senior subordinated loans 1,690 1,585 1,384 1,351 Preferred equity 2,597 2,475 2,667 2,649 Ivy Hill Asset Management, L.P.(4) 2,231 2,434 1,701 1,915 Other equity 1,968 2,529 1,905 2,587 Total $ 29,250 $ 29,485 $ 26,374 $ 26,720 _______________________________________________________________________________ (1) The amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and payment-in-kind (“PIK”) interest or dividends. (2) First lien senior secured loans include certain loans that we classify as “unitranche” loans. The total amortized cost and fair value of the loans that we classified as “unitranche” loans were $11.3 billion and $11.2 billion, respectively, as of December 31, 2025, and $8.8 billion and $8.6 billion, respectively, as of December 31, 2024. (3) The proceeds from these certificates were applied to co-investments with Varagon Capital Partners (“Varagon”) and its clients to fund first lien senior secured loans to 39 and 20 different borrowers as of December 31, 2025 and 2024, respectively. (4) Includes our subordinated loan to and equity investments in IHAM, as applicable. We have commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) our discretion. Our commitment to fund delayed draw loans is triggered 74 upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels). We are also party to subscription agreements to fund equity investments. See Note 7 to our consolidated financial statements for the year ended December 31, 2025 for more information on our unfunded commitments, including commitments to issue letters of credit, related to certain of our portfolio companies. The weighted average yields at amortized cost and fair value of the following portions of our portfolio as of December 31, 2025 and 2024 were as follows: As of December 31, 2025 2024 Amortized Cost Fair Value Amortized Cost Fair Value Debt and other income producing securities(1) 10.3 % 10.3 % 11.1 % 11.2 % Total portfolio(2) 9.4 % 9.3 % 10.0 % 9.9 % First lien senior secured loans(3) 9.1 % 9.2 % 9.9 % 10.1 % Second lien senior secured loans(3) 10.2 % 10.7 % 12.1 % 12.7 % Subordinated certificates of the SDLP(3)(6) 13.2 % 13.0 % 12.4 % 13.2 % Senior subordinated loans(3) 10.5 % 11.0 % 11.9 % 12.2 % Ivy Hill Asset Management L.P.(4) 17.2 % 15.3 % 16.7 % 14.8 % Other income producing equity securities(5) 11.0 % 11.3 % 11.3 % 11.5 % _______________________________________________________________________________ (1) “Weighted average yields on debt and other income producing securities” are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities (including the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end), divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value (including the amortized cost or fair value of our equity investment in IHAM as applicable), as applicable. (2) “Weighted average yields on total portfolio” are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities (including the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end), divided by (b) total investments at amortized cost or at fair value, as applicable. (3) “Weighted average yields” of investments are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on the relevant accruing investments, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable. (4) Represents the yield on our equity investment in IHAM, which is computed as (a) the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end, divided by (b) the amortized cost or fair value of our equity investment in IHAM, as applicable. (5) “Weighted average yield on other income producing equity securities” is computed as (a) the yield earned on the relevant income producing equity securities, divided by (b) the total relevant income producing equity securities at amortized cost or fair value, as applicable. (6) The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans. Ares Capital Management 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 origination or acquisition), although it may also take into account under certain circumstances the performance of the portfolio company’s business, the collateral coverage 75 of the investment and other relevant factors. The grade of a portfolio investment may be reduced or increased over time. The following is a description of each investment grade: Investment grade Description 4 Involves 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. 3 Involves 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. 2 Indicates 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 120 days past due. For investments graded 2, our investment adviser enhances its level of scrutiny over the monitoring of such portfolio company. 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, our investment adviser enhances its level of scrutiny over the monitoring of such portfolio company. Set forth below is the grade distribution of our portfolio companies as of December 31, 2025 and 2024: As of December 31, 2025 2024 (dollar amounts in millions) Fair Value % Number of Companies % Fair Value % Number of Companies % Grade 4 $ 5,040 17.1 % 65 10.8 % $ 4,792 17.9 % 64 11.6 % Grade 3 23,322 79.1 486 80.6 21,156 79.2 432 78.6 Grade 2 675 2.3 27 4.5 513 1.9 31 5.6 Grade 1 448 1.5 25 4.1 259 1.0 23 4.2 Total $ 29,485 100.0 % 603 100.0 % $ 26,720 100.0 % 550 100.0 % As of December 31, 2025 and 2024, the weighted average grade of the investments in our portfolio at fair value was 3.1 and 3.1, respectively. As of December 31, 2025 and 2024, loans on non-accrual status represented 1.8% of the total investments at amortized cost (or 1.2% at fair value) and 1.7% at amortized cost (or 1.0% at fair value), respectively. Ivy Hill Asset Management, L.P. Ivy Hill Asset Management, L.P. (“IHAM”), our wholly owned portfolio company, is an asset manager and an SEC-registered investment adviser. As of December 31, 2025, IHAM had assets under management of approximately $14.6 billion. As of December 31, 2025, IHAM managed 23 vehicles (the “IHAM Vehicles”). IHAM earns fee income from managing the IHAM Vehicles and has also invested in certain of these vehicles as part of its business strategy. The amortized cost of IHAM’s total investments as of December 31, 2025 and 2024 was $3,190 million and $2,237 million, respectively. For the years ended December 31, 2025 and 2024, IHAM had management and incentive fee income of $52 million and $53 million, respectively, and other investment-related income of $282 million and $344 million, respectively, which included net realized gains or losses on investments and other transactions. The amortized cost and fair value of our investments in IHAM as of December 31, 2025 and 2024 were as follows: 76 As of December 31, 2025 2024 (in millions) Amortized Cost Fair Value Amortized Cost Fair Value Subordinated loan(1) $ 530 $ 530 $ — $ — Equity 1,701 1,904 1,701 1,915 Total investment in IHAM $ 2,231 $ 2,434 $ 1,701 $ 1,915 _______________________________________________________________________________ (1) We have provided a commitment to fund up to $750 million and $500 million, as of December 31, 2025 and 2024, respectively, to IHAM, with availability of funding solely at our discretion. The interest income and dividend income that we earned from IHAM for the years ended December 31, 2025 and 2024 were as follows: For the Years Ended December 31, (in millions) 2025 2024 Interest income $ 8 $ 2 Dividend income $ 292 $ 285 From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, us. For any such sales or purchases by the IHAM Vehicles to or from us, the IHAM Vehicle must obtain approval from third parties unaffiliated with us or IHAM, as applicable. During the years ended December 31, 2025 and 2024, IHAM or certain of the IHAM Vehicles purchased $3.7 billion and $759 million, respectively, of loans from us. For the years ended December 31, 2025 and 2024, we recognized approximately $0 million and $1 million of net realized losses, respectively, from these sales. During the year ended December 31, 2025, neither IHAM nor any IHAM Vehicles sold any investments to us. During the year ended December 31, 2024, IHAM or certain IHAM vehicles sold $32 million of investments to us. The yields at amortized cost and fair value of our investments in IHAM as of December 31, 2025 and 2024 were as follows: As of December 31, 2025 2024 Amortized Cost Fair Value Amortized Cost Fair Value Subordinated loan 10.3 % 10.3 % — % — % Equity(1) 17.2 % 15.3 % 16.7 % 14.8 % _______________________________________________________________________________ (1) Represents the yield on our equity investment in IHAM, which is computed as (a) the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end, divided by (b) the amortized cost or fair value of our equity investment in IHAM, as applicable. Selected Financial Information Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of IHAM, in conformity with U.S. generally accepted accounting principles (“GAAP”), as of and for the years ended December 31, 2025 and 2024 are presented below. In conformity with GAAP, IHAM is required to consolidate entities in which IHAM has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model, which include certain of the IHAM Vehicles (the “Consolidated IHAM Vehicles”). As such, for GAAP purposes only, IHAM consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that it concludes are variable interest entities in which IHAM has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which IHAM is deemed to be the primary beneficiary. 77 When IHAM consolidates an IHAM Vehicle for GAAP purposes only, IHAM reflects the assets, liabilities, revenues and expenses of the Consolidated IHAM Vehicles on a gross basis, including the economic interests held by third-party investors in the Consolidated IHAM Vehicles as debt obligations, subordinated notes or non-controlling interests, in the consolidated IHAM financials below. All of the revenues earned by IHAM as the investment manager of the Consolidated IHAM Vehicles are eliminated in GAAP consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the GAAP consolidation of an IHAM Vehicle does not impact the net income or loss attributable to IHAM. As a result, we believe an assessment of IHAM’s business and the impact to our investment in IHAM is best viewed on a stand-alone basis as reflected in the first column in the tables below. As of December 31, 2025 (in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated Selected Balance Sheet Information: Assets Investments at fair value(2) $ 3,108 $ 11,504 $ (3,013) $ 11,599 Cash and cash equivalents 10 597 — 607 Other assets 93 146 (82) 157 Total assets $ 3,211 $ 12,247 $ (3,095) $ 12,363 Liabilities Debt $ 893 $ 8,622 $ — $ 9,515 Subordinated note from ARCC 531 — — 531 Subordinated notes(3) — 1,277 (941) 336 Other liabilities 20 311 (18) 313 Total liabilities 1,444 10,210 (959) 10,695 Equity Contributed capital 1,701 — — 1,701 Accumulated earnings 148 — — 148 Net unrealized losses on investments and foreign currency transactions(4) (82) — — (82) Non-controlling interests in Consolidated IHAM Vehicles(5) — 2,037 (2,136) (99) Total equity 1,767 2,037 (2,136) 1,668 Total liabilities and equity $ 3,211 $ 12,247 $ (3,095) $ 12,363 78 As of December 31, 2024 (in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated Selected Balance Sheet Information: Assets Investments at fair value(2) $ 2,160 $ 8,098 $ (2,086) $ 8,172 Cash and cash equivalents 9 967 — 976 Other assets 60 122 (54) 128 Total assets $ 2,229 $ 9,187 $ (2,140) $ 9,276 Liabilities Debt $ 406 $ 6,550 $ — $ 6,956 Subordinated notes(3) — 1,025 (714) 311 Other liabilities 16 266 (13) 269 Total liabilities 422 7,841 (727) 7,536 Equity Contributed capital 1,700 — — 1,700 Accumulated earnings 186 — — 186 Net unrealized losses on investments and foreign currency transactions(4) (79) — — (79) Non-controlling interests in Consolidated IHAM Vehicles(5) — 1,346 (1,413) (67) Total equity 1,807 1,346 (1,413) 1,740 Total liabilities and equity $ 2,229 $ 9,187 $ (2,140) $ 9,276 ____________________________________ (1) Consolidated for GAAP purposes only. (2) The determination of such fair value is determined in accordance with IHAM’s valuation process (separate and apart from our valuation process described elsewhere herein). The amortized cost of IHAM’s total investments as of December 31, 2025 and 2024 was $3,190 million and $2,237 million, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of December 31, 2025 and 2024 was $11,766 million and $8,343 million, respectively. (3) Subordinated notes generally represent the most junior capital in certain of the Consolidated IHAM Vehicles and effectively represent equity in such vehicles. (4) As of December 31, 2025 and 2024, net unrealized losses of $85 million and $70 million, respectively, have been eliminated upon consolidation and the elimination is included in “non-controlling interests in Consolidated IHAM Vehicles” in the selected balance sheet information. (5) Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $167 million and $171 million as of December 31, 2025 and 2024, respectively. 79 For the Year Ended December 31, 2025 (in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated Selected Statement of Operations Information: Revenues Investment income $ 310 $ 930 $ (304) $ 936 Management fees and other income 52 11 (51) 12 Total revenues 362 941 (355) 948 Expenses Interest expense 64 487 — 551 Distributions to subordinated notes — 147 (105) 42 Management fees and other expenses 17 59 (51) 25 Total expenses 81 693 (156) 618 Net operating income 281 248 (199) 330 Net realized losses on investments and foreign currency (28) (99) 18 (109) Net realized gains (losses) on extinguishment of debt — 21 (23) (2) Net unrealized gains (losses) on investments, foreign currency and other transactions (3) (13) 16 — Total net realized and unrealized losses on investments, foreign currency and other transactions (31) (91) 11 (111) Net income 250 157 (188) 219 Less: Net income (loss) attributable to non-controlling interests in Consolidated IHAM Vehicles — 157 (188) (31) Net income attributable to Ivy Hill Asset Management, L.P. $ 250 $ — $ — $ 250 For the Year Ended December 31, 2024 (in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated Selected Statement of Operations Information: Revenues Investment income $ 344 $ 1,014 $ (337) $ 1,021 Management fees and other income 53 12 (50) 15 Total revenues 397 1,026 (387) 1,036 Expenses Interest expense 37 564 — 601 Distributions to subordinated notes — 207 (152) 55 Management fees and other expenses 15 61 (50) 26 Total expenses 52 832 (202) 682 Net operating income 345 194 (185) 354 Net realized gains (losses) on investments and foreign currency — (132) (4) (136) Net realized gain on extinguishment of debt — 1 2 3 Net unrealized gains (losses) on investments, foreign currency and other transactions (64) 62 57 55 Total net realized and unrealized losses on investments, foreign currency and other transactions (64) (69) 55 (78) Net income 281 125 (130) 276 Less: Net income (loss) attributable to non-controlling interests in Consolidated IHAM Vehicles — 125 (130) (5) Net income attributable to Ivy Hill Asset Management, L.P. $ 281 $ — $ — $ 281 ____________________________________ (1) Consolidated for GAAP purposes only. 80 Senior Direct Lending Program We have established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle-market companies. The joint venture is called the Senior Direct Lending Program, LLC (d/b/a the “Senior Direct Lending Program” or the “SDLP”). In July 2016, we and Varagon and its clients completed the initial funding of the SDLP. We, and other BDCs, registered closed-end management investment companies and other affiliated investment entities managed by our investment adviser or its affiliates, may directly co-invest with the SDLP in accordance with the terms of the Co-Investment Exemptive Order. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP, including co-investment transactions made by the SDLP in accordance with the terms of the Co-Investment Order, must be approved by an investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required). We provide capital to the SDLP in the form of subordinated certificates (the “SDLP Certificates”), and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and the SDLP Certificates. As of December 31, 2025, we and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates. As of December 31, 2025 and 2024, we and Varagon and its clients had agreed to make capital available to the SDLP of $6.2 billion and $6.2 billion, respectively, in the aggregate, of which $1.4 billion and $1.4 billion, respectively, is to be made available from us. This capital will only be committed to the SDLP upon approval of transactions by the investment committee of the SDLP. Below is a summary of the funded capital and unfunded capital commitments of the SDLP. As of December 31, (in millions) 2025 2024 Total capital funded to the SDLP(1) $ 4,606 $ 5,054 Total capital funded to the SDLP by the Company(1) $ 1,285 $ 1,310 Total unfunded capital commitments to the SDLP(2) $ 259 $ 489 Total unfunded capital commitments to the SDLP by the Company(2) $ 60 $ 119 ___________________________________________________________________________ (1) At principal amount. (2) These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met. The SDLP Certificates pay a coupon equal to Secured Overnight Financing Rate (“SOFR”) plus 8.0% and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes. The amortized cost and fair value of our SDLP Certificates and our yield on our investment in the SDLP Certificates at amortized cost and fair value as of December 31, 2025 and 2024 were as follows: As of December 31, 2025 2024 (dollar amounts in millions) Amortized Cost Fair Value Amortized Cost Fair Value Investment in the SDLP Certificates $ 1,103 $ 1,117 $ 1,263 $ 1,192 Yield on the investment in the SDLP Certificates 13.2 % 13.0 % 12.4 % 13.2 % The interest income and capital structuring service fees and other income earned with respect to our investment in the SDLP Certificates for the years ended December 31, 2025 and 2024 were as follows: 81 For the Years Ended December 31, (in millions) 2025 2024 Interest income $ 145 $ 173 Capital structuring service fees and other income $ 9 $ 17 As of December 31, 2025 and 2024, the SDLP portfolio was comprised of first lien senior secured loans to primarily U.S. middle-market companies in industries similar to the companies in our portfolio. As of December 31, 2025, none of the loans in the SDLP portfolio were on non-accrual status. As of December 31, 2024, two of the loans in the SDLP portfolio were on non-accrual status. Below is a summary of the SDLP portfolio as of December 31, 2025 and 2024: As of December 31, (dollar amounts in millions) 2025 2024 Total first lien senior secured loans(1)(2) $ 4,297 $ 4,759 Weighted average yield on first lien senior secured loans(3) 8.5 % 8.9 % Largest loan to a single borrower(1) $ 413 $ 400 Total of five largest loans to borrowers(1) $ 1,719 $ 1,692 Number of borrowers in the SDLP 39 20 Commitments to fund delayed draw loans(4) $ 259 $ 489 _______________________________________________________________________________ (1) At principal amount. (2) First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of December 31, 2025 and 2024, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $2,844 million and $3,937 million, respectively. (3) Computed as (a) the annual stated interest rate on accruing first lien senior secured loans, divided by (b) total first lien senior secured loans at principal amount. (4) These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met. Selected financial information of the SDLP, in conformity with GAAP, as of December 31, 2025 and 2024 and for the years ended December 31, 2025 and 2024 is presented below: As of December 31, (in millions) 2025 2024 Selected Balance Sheet Information: Investments at fair value (amortized cost of $4,305 and $4,591, respectively) $ 4,159 $ 4,390 Other assets 128 449 Total assets $ 4,287 $ 4,839 Senior notes $ 3,024 $ 3,428 Intermediate funding notes 113 130 Other liabilities 94 124 Total liabilities 3,231 3,682 Subordinated certificates and members’ capital 1,056 1,157 Total liabilities and members’ capital $ 4,287 $ 4,839 82 For the Years Ended December 31, (in millions) 2025 2024 Selected Statement of Operations Information: Total investment income $ 406 $ 541 Interest expense 225 292 Other expenses 16 17 Total expenses 241 309 Net investment income 165 232 Net realized and unrealized losses on investments (45) (157) Net increase in members’ capital resulting from operations $ 120 $ 75 Additional supplemental financial information for the SDLP is set forth in Exhibit 99.2 to this Form 10-K. 83 RESULTS OF OPERATIONS For the years ended December 31, 2025 and 2024 Operating results for the years ended December 31, 2025 and 2024 were as follows: For the Years Ended December 31, (in millions) 2025 2024 Total investment income $ 3,052 $ 2,990 Total expenses 1,594 1,514 Net investment income before income taxes 1,458 1,476 Income tax expense, including excise taxes 43 40 Net investment income 1,415 1,436 Net realized losses (20) (88) Net unrealized gains (losses) (96) 188 Realized loss on extinguishment of debt — (14) Net increase in stockholders’ equity resulting from operations $ 1,299 $ 1,522 Net income can vary substantially from period to period due to various factors, including acquisitions, the level of new investment commitments, the level of base interest rates and the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, comparisons of net increase in stockholders’ equity resulting from operations may not be meaningful. Investment Income For the Years Ended December 31, (in millions) 2025 2024 Interest income from investments $ 2,183 $ 2,162 Capital structuring service fees 185 172 Dividend income 591 594 Other income 93 62 Total investment income $ 3,052 $ 2,990 Interest income from investments for the year ended December 31, 2025 increased from the comparable period in 2024 primarily due to the increase in the average size of our portfolio, which was partially offset by declining base rates. The average size and weighted average yield of our portfolio at amortized cost for the years ended December 31, 2025 and 2024 were as follows: For the Years Ended December 31, (dollar amounts in millions) 2025 2024 Average size of portfolio(1) $ 27,685 $ 24,402 Weighted average yield on portfolio 10.0 % 11.2 % _______________________________________________________________________________ (1) Includes non-interest earning investments. Capital structuring service fees for the year ended December 31, 2025 increased from the comparable period in 2024 primarily due to an increase in new investment commitments. The new investment commitments and weighted average capital structuring service fee percentages for the years ended December 31, 2025 and 2024 were as follows: 84 For the Years Ended December 31, (dollar amounts in millions) 2025 2024 New investment commitments(1) $ 13,337 $ 12,152 Weighted average capital structuring service fee percentage(1) 1.4 % 1.4 % _______________________________________________________________________________ (1) Excludes $1.6 billion and $2.5 billion of new investment commitments sold to third-party lenders during the years ended December 31, 2025 and 2024, respectively. Excludes $812 million and $412 million of investment commitments to IHAM for the years ended December 31, 2025 and 2024, respectively. Dividend income for the years ended December 31, 2025 and 2024 were as follows: For the Years Ended December 31, (in millions) 2025 2024 Dividend income received from IHAM $ 292 $ 285 Recurring dividend income 278 287 Non-recurring dividend income 21 22 Total dividend income $ 591 $ 594 Recurring dividend income for the year ended December 31, 2025 decreased from the comparable period in 2024 primarily due to a decrease in yielding preferred equity investments. Operating Expenses For the Years Ended December 31, (in millions) 2025 2024 Interest and credit facility fees $ 793 $ 715 Base management fee 425 374 Income based fee 348 364 Capital gains incentive fee(1) (23) 18 Administrative and other fees 15 12 Other general and administrative 36 31 Total expenses $ 1,594 $ 1,514 _______________________________________________________________________________ (1) Accrued in accordance with GAAP as discussed below. As of December 31, 2025 and 2024, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. Interest and credit facility fees for the years ended December 31, 2025 and 2024 were comprised of the following: For the Years Ended December 31, (in millions) 2025 2024 Stated interest expense(1) $ 736 $ 665 Credit facility fees 24 23 Amortization of debt issuance costs 34 33 Net amortization of discount/premium on notes payable — (6) Net gain on interest rate swaps accounted for as hedge instruments and the related hedged items (1) — Total interest and credit facility fees $ 793 $ 715 ________________________________________ (1) Includes the impact of the interest rate swaps. 85 Stated interest expense for the year ended December 31, 2025 increased from the comparable period in 2024 primarily due to the increase in the average principal amount of our outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the years ended December 31, 2025 and 2024 were as follows: For the Years Ended December 31, (dollar amounts in millions) 2025 2024 Average outstanding debt $ 14,669 $ 12,860 Weighted average stated interest rate on outstanding debt(1) 4.7 % 5.1 % ________________________________________ (1) The weighted average stated interest rate on our outstanding debt includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the year ended December 31, 2025 for more information on the interest rate swaps. The base management fee for the year ended December 31, 2025 increased from the comparable period in 2024 primarily due to the increase in the average size of our portfolio. The income based fee for the year ended December 31, 2025 decreased from the comparable period in 2024 primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the year ended December 31, 2025 being lower than in the comparable period in 2024. For the year ended December 31, 2025, the reduction in the capital gains incentive fee accrued in accordance with GAAP was $23 million. For the year ended December 31, 2024, the capital gains incentive fee accrued in accordance with GAAP was $18 million. The capital gains incentive fee accrual for the year ended December 31, 2025 changed from the comparable period in 2024 primarily due to net losses on investments, foreign currency, other transactions and the extinguishment of debt of $116 million compared to net gains of $86 million for the comparable period in 2024. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our investment advisory and management agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of December 31, 2025, there was $82 million of capital gains incentive fee accrued in accordance with GAAP. As of December 31, 2025, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial statements for the year ended December 31, 2025 for more information on the base management fee, income based fee and capital gains incentive fee. Cash payment of any income based fee and capital gains incentive fee otherwise earned by our investment adviser is deferred if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to our stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fee and capital gains incentive fee payable during the period) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations will be adjusted for any share issuances or repurchases. Any income based fee and capital gains incentive fee deferred for payment are carried over for payment in subsequent calculation periods to the extent such fees are payable under the terms of the investment advisory and management agreement. See Note 3 to our consolidated financial statements for the year ended December 31, 2025 for more information on the related deferral terms. Administrative and other fees represent fees paid to Ares Operations and our investment adviser for our allocable portion of overhead and other expenses incurred by Ares Operations and our investment adviser in performing their obligations under the administration agreement and the investment advisory and management agreement, respectively, including our allocable portion of the compensation, rent and other expenses of certain of our officers and their respective staffs. See Note 3 to our consolidated financial statements for the year ended December 31, 2025, for more information on the administrative and other fees. Other general and administrative expenses include, among other costs, professional fees, insurance, fees and expenses related to evaluating and making investments in portfolio companies and independent directors’ fees. 86 Income Tax Expense, Including Excise Taxes We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must, among other requirements, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders at least 90% of our investment company taxable income, as defined by the Code, for each year. We have made and intend to continue to make the requisite distributions to our stockholders which will generally relieve us from U.S. federal corporate-level income taxes. Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax, if any, on estimated excess taxable income as such taxable income is earned. For the years ended December 31, 2025 and 2024, we recorded a net expense of $37 million and $35 million, respectively, for U.S. federal excise taxes. Certain of our consolidated subsidiaries are subject to U.S. federal and state income taxes. For the years ended December 31, 2025 and 2024, we recorded a net tax expense of $121 million and $38 million, respectively, for such subsidiaries. The income tax expense for our taxable consolidated subsidiaries will vary depending on the level of realized gains from the exits of investments held by such taxable subsidiaries during the respective periods. Net Realized Gains/Losses The net realized gains (losses) from the sales, repayments or exits of investments during the years ended December 31, 2025 and 2024 were comprised of the following: For the Years Ended December 31, (in millions) 2025 2024 Sales, repayments or exits of investments(1) $ 11,565 $ 9,554 Net realized gains (losses) on investments: Gross realized gains $ 614 $ 325 Gross realized losses (513) (385) Total net realized gains (losses) on investments $ 101 $ (60) _______________________________________________________________________________ (1) Includes $3,707 million and $759 million of loans sold to IHAM or certain IHAM Vehicles during the years ended December 31, 2025 and 2024, respectively. Net realized losses of approximately $0 million and $1 million were recorded on these transactions with IHAM during the years ended December 31, 2025 and 2024, respectively. See Note 4 to our consolidated financial statements for the year ended December 31, 2025 for more information on IHAM and the IHAM Vehicles. 87 The net realized gains on investments during the year ended December 31, 2025 consisted of the following: (in millions) Portfolio Company Net Realized Gains (Losses) Potomac Intermediate Holdings II LLC $ 262 SageSure Holdings, LLC and SageSure LLC 68 Redwood Services, LLC and Redwood Services Holdco, LLC 59 Accommodations Plus Technologies LLC and Accommodations Plus Technologies Holdings LLC 39 Corient Holdings, Inc. 21 FS Squared Holding Corp. and FS Squared, LLC 19 Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc. 15 Align Precision Group, LLC and Align Precision Topco, L.P. (15) North Haven Falcon Buyer, LLC and North Haven Falcon Holding Company, LLC (17) Aimbridge Acquisition Co., Inc. (19) H-Food Holdings, LLC and Matterhorn Parent, LLC (20) SVP-Singer Holdings Inc. and SVP-Singer Holdings LP (22) Florida Food Products, LLC (23) Visual Edge Technology, Inc. (37) Production Resource Group, L.L.C. and PRG III, LLC (43) Implus Footcare, LLC, Implus Holdings, LLC, and Implus Topco, LLC (49) Olympia Acquisition, Inc., Olympia TopCo, L.P., and Asclepius Holdings LLC (56) Vobev, LLC and Vobev Holdings, LLC (63) Senior Direct Lending Program, LLC (112) Other, net 94 Total $ 101 During the year ended December 31, 2025, we also recognized net realized losses on foreign currency and other transactions of $6 million. The net realized losses on investments during the year ended December 31, 2024 consisted of the following: (in millions) Portfolio Company Net Realized Gains (Losses) Heelstone Renewable Energy, LLC $ 146 Benecon Midco II LLC 23 Precinmac (US) Holdings Inc., Trimaster Manufacturing Inc. and Blade Group Holdings, LP. 22 Pegasus Global Enterprise Holdings, LLC 20 RF HP SCF Investor, LLC 19 Murchison Oil and Gas, LLC and Murchison Holdings, LLC 16 Wellpath Holdings, Inc. (19) SVP-Singer Holdings Inc. and SVP-Singer Holdings LP (19) OTG Management, LLC (20) SSE Buyer, Inc. (21) Emergency Communications Network, LLC (22) Pluralsight, Inc. (60) H-Food Holdings, LLC (62) SHO Holding I Corporation, Shoes For Crews (Europe) Limited and Never Slip TopCo, Inc. (119) Other, net 36 Total $ (60) 88 During the year ended December 31, 2024, we also recognized net realized gains on foreign currency and other transactions of $5 million. During the year ended December 31, 2024, we repaid in full the $403 million in aggregate principal amount of our unsecured convertible notes, which bore interest at a rate of 4.625% per year, upon their maturity in March 2024 with a combination of cash and shares of our common stock, resulting in a realized loss on extinguishment of debt of approximately $14 million. Net Unrealized Gains/Losses We value our portfolio investments at least quarterly and the changes in value are recorded as unrealized gains or losses in our consolidated statement of operations. Net unrealized gains and losses on investments, including the net change in deferred tax liabilities, for the years ended December 31, 2025 and 2024, were comprised of the following: For the Years Ended December 31, (in millions) 2025 2024 Unrealized appreciation $ 585 $ 793 Unrealized depreciation (648) (657) Net unrealized (appreciation) depreciation reversed related to net realized gains or losses(1) 8 2 Total net unrealized gains (losses) on investments $ (55) $ 138 _______________________________________________________________________________ (1) The net unrealized (appreciation) depreciation reversed related to net realized gains or losses represents the unrealized appreciation or depreciation recorded on the related asset at the end of the prior periods. The changes in net unrealized appreciation and depreciation on investments during the year ended December 31, 2025 consisted of the following: (in millions) Portfolio Company Net Unrealized Appreciation (Depreciation) Global Medical Response, Inc. and GMR Buyer Corp. $ 37 Storm Investment S.a.r.l. 35 Imaging Business Machines, L.L.C. and Scanner Holdings Corporation 31 FEH Group, LLC. 25 Neptune Bidco US Inc. 22 Senior Direct Lending Program, LLC 20 CoreLogic, Inc. and T-VIII Celestial Co-Invest LP 20 SageSure Holdings, LLC 18 Teasdale Foods, Inc. and Familia Group Holdings Inc. (15) Balrog Acquisition, Inc., Balrog Topco, Inc. and Balrog Parent, L.P. (16) Pluralsight, Inc. (17) EP Purchaser, LLC and TPG VIII EP Co-Invest II, L.P. (19) Symplr Software Inc. and Symplr Software Intermediate Holdings, Inc. (24) Sunrun Atlas Depositor 2019-2, LLC and Sunrun Atlas Holdings 2019-2, LLC (24) Absolute Dental Group LLC and Absolute Dental Equity, LLC (27) Eagle Football Holdings BidCo Limited and Eagle Football Holdings Limited (46) VPROP Operating, LLC and V SandCo, LLC (48) Other, net (35) Total $ (63) During the year ended December 31, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $41 million. 89 The changes in net unrealized appreciation and depreciation on investments during the year ended December 31, 2024 consisted of the following: (in millions) Portfolio Company Net Unrealized Appreciation (Depreciation) Potomac Intermediate Holdings II LLC $ 221 Global Medical Response, Inc. and GMR Buyer Corp. 39 Apex Clean Energy TopCo, LLC 31 SageSure Holdings, LLC 31 Cloud Software Group, Inc. 26 Centric Brands LLC 18 Corient Holdings, Inc. 17 High Street Buyer, Inc. and High Street Holdco LLC 17 Bragg Live Food Products, LLC 16 PS Operating Company LLC (15) Dcert Buyer, Inc., DCert Preferred Holdings, Inc. and Destiny Digital Holdings, L.P. (15) Storm Investment S.a.r.l. (17) Aimbridge Acquisition Co., Inc. (17) ADG, LLC (20) Cornerstone OnDemand, Inc. (24) North American Science Associates, LLC, Cardinal Purchaser LLC and Cardinal Topco Holdings, L.P. (25) VPROP Operating, LLC and V SandCo, LLC (29) Production Resource Group, L.L.C. (40) Senior Direct Lending Program, LLC (43) Vobev, LLC and Vobev Holdings, LLC (49) Other, net 14 Total $ 136 During the year ended December 31, 2024, we also recognized net unrealized gains on foreign currency and other transactions of $50 million. For the years ended December 31, 2024 and 2023 The comparison of the fiscal years ended December 31, 2024 and 2023 can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 located within Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated herein by reference. 90 FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our liquidity and capital resources are generated primarily from the net proceeds of public offerings of equity and debt securities, advances from our credit facilities (the Revolving Credit Facility, the Revolving Funding Facility, the SMBC Funding Facility and the BNP Funding Facility (each as defined below, and together, the “Credit Facilities”)), net proceeds from the issuance of other securities, including unsecured notes and debt securitizations, as well as cash flows from operations. In accordance with the Investment Company Act, we are allowed to borrow amounts such that our asset coverage, calculated pursuant to the Investment Company Act, is at least 150% after such borrowings (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). As of December 31, 2025, we had $638 million in cash and cash equivalents and $16.0 billion in total aggregate principal amount of outstanding debt ($16.0 billion at carrying value) and our asset coverage was 189%. Subject to borrowing base and other restrictions, we had approximately $5.5 billion available for additional borrowings under the Credit Facilities as of December 31, 2025. We may from time to time seek to retire or repurchase our common stock through cash purchases, as well as retire, cancel or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into additional credit facilities, increase the size of existing facilities or issue additional debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of common stock or outstanding debt, or incurrence or issuance of additional debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. Equity Capital Activities As of December 31, 2025 and 2024, our total equity market capitalization was $14.5 billion and $14.7 billion, respectively. We may from time to time issue and sell shares of our common stock through public or “at the market” offerings. During the year ended December 31, 2025, we issued and sold the following shares of common stock: (in millions, except per share amount) Issuances of Common Stock Number of Shares Issued Gross Proceeds Underwriting Fees/Offering Expenses Net Proceeds Average Offering Price Per Share(1) “At the market” offerings 42.4 $ 937.2 $ 9.7 $ 927.5 $ 22.11 Total 42.4 $ 937.2 $ 9.7 $ 927.5 ________________________________________ (1) Represents the gross offering price per share before deducting underwriting discounts and commissions and offering expenses. “At the Market” Offerings We are a party to equity distribution agreements with several banks (the “Equity Distribution Agreements”). The Equity Distribution Agreements provide that we may from time to time issue and sell, by means of “at the market” offerings, up to $1.5 billion of our common stock. Subject to the terms and conditions of the Equity Distribution Agreements, sales of common stock, if any, may be made in transactions that are deemed to be “at the market” offerings as defined in Rule 415(a)(4) under the Securities Act. Under the currently effective Equity Distribution Agreements, common stock with an aggregate offering amount of $563 million remained available for issuance as of December 31, 2025. Dividend Reinvestment Plan See Note 12 to our consolidated financial statements for the year ended December 31, 2025 for information regarding shares of common stock issued or purchased in accordance with our dividend reinvestment plan. Stock Repurchase Program We are authorized under our stock repurchase program to purchase up to $1.0 billion in the aggregate of our outstanding common stock in the open market at certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing, 91 manner, price and amount of any share repurchases will be determined by us, in our sole discretion, based upon an evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. The stock repurchase program does not require us to repurchase any specific number of shares of common stock or any shares of common stock at all. Consequently, we cannot assure stockholders that any specific number of shares of common stock, if any, will be repurchased under the stock repurchase program. As of December 31, 2025, the expiration date of the stock repurchase program was February 15, 2026. The program may be suspended, extended, modified or discontinued at any time. As of December 31, 2025, there was $1.0 billion available for additional repurchases under the program. During the years ended December 31, 2025 and 2024, we did not repurchase any shares of our common stock in the open market under the stock repurchase program. See “Recent Developments,” as well as Note 16 to our consolidated financial statements for the year ended December 31, 2025 for a subsequent event relating to our stock repurchase program. Debt Capital Activities Our debt obligations consisted of the following as of December 31, 2025 and 2024: As of December 31, 2025 2024 (in millions) Total Aggregate Principal Amount Available/ Outstanding(1) Principal Amount Outstanding Carrying Value Total Aggregate Principal Amount Available/ Outstanding(1) Principal Amount Outstanding Carrying Value Revolving Credit Facility $ 5,493 (2) $ 2,028 $ 2,031 $ 4,513 (2) $ 1,113 $ 1,113 Revolving Funding Facility 2,250 1,234 1,234 2,150 1,065 1,065 SMBC Funding Facility 1,100 (3) 563 563 800 (3) 502 502 BNP Funding Facility 1,265 717 717 1,265 889 889 April 2036 CLO Notes(4) 476 476 473 (5) 476 476 473 (5) October 2036 CLO Secured Loans(4) 544 544 541 (5) 544 544 541 (5) January 2038 CLO Notes (4) 700 700 697 (5) — — — March 2025 Notes — — — (5) 600 600 600 (5) July 2025 Notes — — — (5) 1,250 1,250 1,252 (5) January 2026 Notes 1,150 1,150 1,150 (5) 1,150 1,150 1,148 (5) July 2026 Notes 1,000 1,000 999 (5) 1,000 1,000 996 (5) January 2027 Notes 900 900 900 (5)(6) 900 900 891 (5)(6) June 2027 Notes 500 500 498 (5) 500 500 497 (5) June 2028 Notes 1,250 1,250 1,248 (5) 1,250 1,250 1,248 (5) March 2029 Notes 1,000 1,000 999 (5)(6) 1,000 1,000 985 (5)(6) July 2029 Notes 850 850 861 (5)(6) 850 850 835 (5)(6) September 2030 Notes 750 750 743 (5)(6) — — — January 2031 Notes 650 650 634 (5)(6) — — — November 2031 Notes 700 700 693 (5) 700 700 692 (5) March 2032 Notes 1,000 1,000 1,010 (5)(6) — — — Total $ 21,578 $ 16,012 $ 15,991 $ 18,948 $ 13,789 $ 13,727 ________________________________________ 92 (1) Represents the total aggregate amount committed or outstanding, as applicable, under such instrument. Borrowings under the Credit Facilities are subject to borrowing base and other restrictions. (2) Provides for an “accordion” feature that allows us, under certain circumstances, to increase the size of the Revolving Credit Facility to a maximum of $7.9 billion and $6.7 billion as of December 31, 2025 and 2024, respectively. (3) Provides for an “accordion” feature that allows ACJB (as defined below), under certain circumstances, to increase the size of the SMBC Funding Facility to a maximum of $1.3 billion and $1.0 billion as of December 31, 2025 and 2024, respectively. (4) Excludes the April 2036 CLO Subordinated Notes, the October 2036 CLO Subordinated Notes and the January 2038 CLO Subordinated Notes (each as defined below), which were retained by us and, as such, eliminated in consolidation. (5) Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the net unaccreted/amortized discount or premium recorded upon issuance. In March 2025 and July 2025, we repaid in full the March 2025 Notes and the July 2025 Notes (each as defined below), respectively, upon their maturity. See “Recent Developments,” as well as Note 16 to our consolidated financial statements for the year ended December 31, 2025 for subsequent events relating to the January 2026 Notes and an additional issuance of unsecured notes. (6) The carrying value of the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes, the January 2031 Notes and the March 2032 Notes (each as defined below) includes adjustments as a result of effective hedge accounting relationships. See Note 6 to our consolidated financial statements for the year ended December 31, 2025 for more information on the interest rate swaps related to these unsecured notes issuances. The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all our outstanding debt as of December 31, 2025 were 4.9% and 4.2 years, respectively, and as of December 31, 2024 were 4.9% and 3.8 years, respectively. The weighted average stated interest rate of all our outstanding debt as of December 31, 2025 and 2024 includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the year ended December 31, 2025 for more information on the interest rate swaps. The ratio of total principal amount of outstanding debt to stockholders’ equity as of December 31, 2025 was 1.12:1.00 compared to 1.03:1.00 as of December 31, 2024. Revolving Credit Facility We are party to a senior secured revolving credit facility (as amended and restated, the “Revolving Credit Facility”), that allows us to borrow up to approximately $5.5 billion at any one time outstanding. The Revolving Credit Facility consists of an approximately $4.4 billion revolving tranche and an approximately $1.1 billion term loan tranche. As of December 31, 2025, the end of the revolving periods and the stated maturity dates of the various revolving and term loan tranches of the Revolving Credit Facility were as follows: (in millions) Total Aggregate Principal Amount Committed End of Revolving Period Maturity Date Revolving tranche $ 4,058 April 15, 2029 April 15, 2030 246 March 31, 2026 March 31, 2027 45 April 12, 2028 April 12, 2029 4,349 Term loan tranche 1,035 April 15, 2030 45 April 12, 2029 40 April 19, 2028 24 March 31, 2027 1,144 $ 5,493 The Revolving Credit Facility also provides for an “accordion” feature that allows us, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of approximately $7.9 billion. 93 Subject to certain exceptions, the interest rate charged on the Revolving Credit Facility is based on SOFR plus a credit spread adjustment of 0.10% (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in certain approved foreign currencies plus a spread adjustment, if applicable) plus an applicable spread of either 1.525%, 1.650%, 1.775% or an “alternate base rate” (as defined in the documents governing the Revolving Credit Facility) plus an applicable spread of either 0.525%, 0.650% or 0.775%, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving credit exposure and term loans outstanding under the Revolving Credit Facility and (b) 85% of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving credit exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of December 31, 2025, the applicable weighted average spread in effect was 1.53%. Subject to certain exceptions, we are required to pay a commitment fee of 0.325% per annum on any unused portion of the Revolving Credit Facility. We are also required to pay letter of credit fees of 1.775%, 1.900% or 2.025% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of December 31, 2025, there was $2.0 billion outstanding under the Revolving Credit Facility and we were in compliance in all material respects with the terms of the Revolving Credit Facility. Revolving Funding Facility We and our consolidated subsidiary, Ares Capital CP Funding LLC (“Ares Capital CP”), are party to a revolving funding facility (as amended, the “Revolving Funding Facility”), that allows Ares Capital CP to borrow up to $2.3 billion at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and our membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are July 28, 2028 and July 28, 2030, respectively. The interest rate charged on the Revolving Funding Facility is based on SOFR or a “base rate” (as defined in the documents governing the Revolving Funding Facility) plus an applicable spread of 1.80% per annum. Ares Capital CP is also required to pay a commitment fee of between 0.50% and 1.25% per annum depending on the size of the unused portion of the Revolving Funding Facility. As of December 31, 2025, there was $1.2 billion outstanding under the Revolving Funding Facility and we and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility. SMBC Funding Facility We and our consolidated subsidiary, Ares Capital JB Funding LLC (“ACJB”), are party to a revolving funding facility (as amended, the “SMBC Funding Facility”), with ACJB, as the borrower, and Sumitomo Mitsui Banking Corporation, as the administrative agent and collateral agent, that allows ACJB to borrow up to $1.1 billion at any one time outstanding. The SMBC Funding Facility also provides for an “accordion” feature that allows ACJB, under certain circumstances, to increase the overall size of the SMBC Funding Facility to $1.3 billion. The SMBC Funding Facility is secured by all of the assets held by ACJB. The end of the reinvestment period and the stated maturity date for the SMBC Funding Facility are July 25, 2028 and July 25, 2030, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement. The interest rate charged on the SMBC Funding Facility is based on an applicable spread of either (i) 1.80% over SOFR or (ii) 0.80% over a “base rate” (as defined in the documents governing the SMBC Funding Facility). ACJB is also required to pay a commitment fee of between 0.50% and 1.00% per annum depending on the size of the unused portion of the SMBC Funding Facility. As of December 31, 2025, there was $563 million outstanding under the SMBC Funding Facility and we and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility. BNP Funding Facility We and our consolidated subsidiary, ARCC FB Funding LLC (“AFB”), are party to a revolving funding facility (as amended, the “BNP Funding Facility”) with AFB, as the borrower, and BNP Paribas, as the administrative agent and lender, that allows AFB to borrow up to approximately $1.3 billion at any one time outstanding. The BNP Funding Facility is secured by all of the assets held by AFB. The end of the reinvestment period and the stated maturity date for the BNP Funding Facility are March 20, 2028 and March 20, 2030, respectively. The interest rate charged on the BNP Funding Facility is based on applicable SOFR, or a “base rate” (as defined in the documents governing the BNP Funding Facility) plus a margin of (i) 1.90% during the reinvestment period and (ii) 2.40% following the reinvestment period. As of December 31, 2025, the applicable spread in effect was 1.90%. AFB is required to pay a commitment fee of between 0.00% and 1.25% per annum depending on the size of the unused portion of the BNP Funding Facility. As of December 31, 2025, there was $717 million outstanding under the BNP Funding Facility and we and AFB were in compliance in all material respects with the terms of the BNP Funding Facility. Debt Securitizations 94 ADL CLO 1 Debt Securitization In May 2024, our wholly owned consolidated subsidiary, Ares Direct Lending CLO 1 LLC (“ADL CLO 1”), completed a $702 million term debt securitization (the “ADL CLO 1 Debt Securitization”). The ADL CLO 1 Debt Securitization is also known as a collateralized loan obligation and is an on-balance sheet financing incurred by ADL CLO 1, which is consolidated by us for financial reporting purposes and subject to our overall asset coverage requirement. The notes offered in the ADL CLO 1 Debt Securitization that mature on April 25, 2036 (collectively, the “April 2036 CLO Notes”) were issued by ADL CLO 1 pursuant to the indenture governing the April 2036 CLO Notes and include (i) $406 million of Class A Senior Notes (the “April 2036 Class A CLO Notes”); (ii) $70 million of Class B Senior Notes (the “April 2036 Class B CLO Notes” and, together with the April 2036 Class A CLO Notes, the “April 2036 CLO Secured Notes”); and (iii) approximately $226 million of subordinated notes (the “April 2036 CLO Subordinated Notes”). We retained all of the April 2036 CLO Subordinated Notes, as such, the April 2036 CLO Subordinated Notes are eliminated in consolidation. The following table presents information on the April 2036 CLO Notes as of December 31, 2025 (dollar amounts in millions): Class Type Principal Outstanding Maturity Date Interest Rate April 2036 Class A CLO Notes Senior Secured Floating Rate $ 406 April 25, 2036 SOFR+1.80% April 2036 Class B CLO Notes Senior Secured Floating Rate 70 April 25, 2036 SOFR+2.20% Total April 2036 CLO Secured Notes 476 April 2036 CLO Subordinated Notes Subordinated 226 April 25, 2036 None Total April 2036 CLO Notes $ 702 The April 2036 CLO Secured Notes are the secured obligations of ADL CLO 1 and are backed by a diversified portfolio of first lien senior secured loans contributed by us to ADL CLO 1 pursuant to the terms of a contribution agreement. The interest rate charged on the April 2036 CLO Secured Notes is based on SOFR plus a blended weighted average spread of 1.86%. Our investment adviser serves as asset manager to ADL CLO 1 under an asset management agreement and is entitled to receive certain management fees for providing these services under the agreement. Our investment adviser has agreed to waive any management fees from ADL CLO 1 . ADL CLO 4 Debt Securitization In November 2024, our wholly owned consolidated subsidiary, Ares Direct Lending CLO 4 LLC (“ADL CLO 4”), completed a $804 million term debt securitization (the “ADL CLO 4 Debt Securitization”). The ADL CLO 4 Debt Securitization is also known as a collateralized loan obligation and is an on-balance sheet financing incurred by ADL CLO 4, which is consolidated by us for financial reporting purposes and subject to our overall asset coverage requirement. The loans incurred by ADL CLO 4 in the ADL CLO 4 Debt Securitization that mature on October 24, 2036 (collectively, the “October 2036 CLO Secured Loans”) include (i) $464 million of Class A Senior Loans (the “October 2036 Class A CLO Loans”), and (ii) $80 million of Class B Senior Loans (the “October 2036 Class B CLO Loans”). The October 2036 CLO Secured Loans may be converted by the lender into notes issued by ADL CLO 4 and bearing the same economic terms, subject to certain conditions under the documents governing the October 2036 CLO Secured Loans and the indenture governing such loans. In addition, in connection with the ADL CLO 4 Debt Securitization, ADL CLO 4 issued approximately $260 million of subordinated notes (the “October 2036 CLO Subordinated Notes”). We retained all of the October 2036 CLO Subordinated Notes, as such, the October 2036 CLO Subordinated Notes are eliminated in consolidation. The following table presents information on the October 2036 CLO Notes as of December 31, 2025 (dollar amounts in millions): Class Type Principal Outstanding Maturity Date Interest Rate October 2036 Class A CLO Loans Senior Secured Floating Rate $ 464 October 24, 2036 SOFR+1.54% October 2036 Class B CLO Loans Senior Secured Floating Rate 80 October 24, 2036 SOFR+1.83% Total October 2036 CLO Secured Loans 544 October 2036 CLO Subordinated Notes Subordinated 260 October 24, 2036 None Total October 2036 CLO Notes $ 804 95 The October 2036 CLO Secured Loans are the secured obligations of ADL CLO 4 and are backed by a diversified portfolio of first lien senior secured loans contributed by us to ADL CLO 4 pursuant to the terms of a contribution agreement. The interest rate charged on the October 2036 CLO Secured Loans is based on SOFR plus a blended weighted average spread of 1.58%. Our investment adviser serves as asset manager to ADL CLO 4 under an asset management agreement and is entitled to receive certain management fees for providing these services under the agreement. Our investment adviser has agreed to waive any management fees from ADL CLO 4 . ADL CLO 7 Debt Securitization In December 2025, our wholly owned consolidated subsidiary, Ares Direct Lending CLO 7 LLC (“ADL CLO 7”), completed a $1.0 billion term debt securitization (the “ADL CLO 7 Debt Securitization”). The ADL CLO 7 Debt Securitization is also known as a collateralized loan obligation and is an on-balance sheet financing incurred by ADL CLO 7, which is consolidated by us for financial reporting purposes and subject to our overall asset coverage requirement. The notes offered in the ADL CLO 7 Debt Securitization that mature on January 2038 (collectively, the “January 2038 CLO Notes”) were issued by ADL CLO 7 pursuant to the indenture governing the January 2038 CLO Notes and include (i) $570 million of Class A-1 Senior Notes (the “January 2038 Class A-1 CLO Notes”); (ii) $50 million of Class A-2 Senior Notes (the “January 2038 Class A-2 CLO Notes”); (iii) $80 million of Class B Senior Notes (the “January 2038 Class B CLO Notes” and, together with the January 2038 Class A-1 CLO Notes and January 2038 Class A-2 CLO Notes, the “January 2038 CLO Secured Notes”); and (iv) approximately $303 million of subordinated notes (the “January 2038 CLO Subordinated Notes”). We retained all of the January 2038 CLO Subordinated Notes, as such, the January 2038 CLO Subordinated Notes are eliminated in consolidation. The following table presents information on the January 2038 CLO Notes as of December 31, 2025 (dollar amounts in millions): Class Type Principal Outstanding Maturity Date Interest Rate January 2038 Class A-1 CLO Notes Senior Secured Floating Rate $ 570 January 20, 2038 SOFR+1.40% January 2038 Class A-2 CLO Notes Senior Secured Floating Rate 50 January 20, 2038 SOFR+1.65% January 2038 Class B CLO Notes Senior Secured Floating Rate 80 January 20, 2038 SOFR+1.85% Total January 2038 CLO Secured Notes 700 January 2038 CLO Subordinated Notes Subordinated 303 January 20, 2038 None Total January 2038 CLO Notes $ 1,003 The January 2038 CLO Secured Notes are the secured obligations of ADL CLO 7 and are backed by a diversified portfolio of first lien senior secured loans contributed by us to ADL CLO 7 pursuant to the terms of a contribution agreement. The interest rate charged on the January 2038 CLO Secured Notes is based on SOFR plus a blended weighted average spread of 1.47%. Our investment adviser serves as asset manager to ADL CLO 7 under an asset management agreement and is entitled to receive certain management fees for providing these services under the agreement. Our investment adviser has agreed to waive any management fees from ADL CLO 7 . Unsecured Notes We issued certain unsecured notes (we refer to each series of unsecured notes using the defined term set forth under the “Unsecured Notes” column of the table below and collectively refer to all such series as the “Unsecured Notes”), that pay interest semi-annually and all principal amounts are due upon maturity. Each of the Unsecured Notes may be redeemed in whole or in part at any time at our option at a redemption price equal to par plus a “make whole” premium, if applicable, as determined pursuant to the indentures governing each of the Unsecured Notes, plus any accrued and unpaid interest. Certain key terms related to the features for the Unsecured Notes as of December 31, 2025 are listed below. 96 (dollar amounts in millions) Unsecured Notes Aggregate Principal Amount Issued Effective Stated Interest Rate Original Issuance Date Maturity Date January 2026 Notes $ 1,150 3.875% July 15, 2020 January 15, 2026 July 2026 Notes $ 1,000 2.150% January 13, 2021 July 15, 2026 January 2027 Notes(1) $ 900 6.331% August 3, 2023 January 15, 2027 June 2027 Notes $ 500 2.875% January 13, 2022 June 15, 2027 June 2028 Notes $ 1,250 2.875% June 10, 2021 June 15, 2028 March 2029 Notes(1) $ 1,000 5.895% January 23, 2024 March 1, 2029 July 2029 Notes(1) $ 850 5.393% May 13, 2024 July 15, 2029 September 2030 Notes(1) $ 750 5.643% June 3, 2025 September 1, 2030 January 2031 Notes $ 650 5.100% September 9, 2025 January 15, 2031 November 2031 Notes $ 700 3.200% November 4, 2021 November 15, 2031 March 2032 Notes $ 1,000 5.800% January 8, 2025 March 8, 2032 ________________________________________ (1) The effective stated interest rates of the January 2027 Notes, the March 2029 Notes, the July 2029 Notes and the September 2030 Notes include the impact of interest rate swaps. In March 2025, we repaid in full the $600 million in aggregate principal amount outstanding of unsecured notes (the “March 2025 Notes”) upon their maturity. The March 2025 Notes bore interest at a rate of 4.250% per annum. In July 2025, we repaid in full the $1,250 million in aggregate principal amount outstanding of unsecured notes (the “July 2025 Notes”) upon their maturity. The July 2025 Notes bore interest at a rate of 3.250% per annum. See “Recent Developments,” as well as Note 16 to our consolidated financial statements for the year ended December 31, 2025 for subsequent events relating to the January 2026 Notes and an additional issuance of unsecured notes. In connection with certain of the unsecured notes issued by us, we have entered into interest rate swaps to more closely align the interest rates of such liabilities with our investment portfolio, which consists primarily of floating rate loans. We designated these interest rate swaps and the associated unsecured notes as qualifying fair value hedge accounting relationships. Under the interest rate swaps, we receive a fixed interest rate and pay a floating interest rate of one-month SOFR plus an applicable spread, as disclosed below. Certain information related to our interest rate swaps as of December 31, 2025 is presented below. (dollar amounts in millions) Description Hedged Item Company Receives Company Pays Maturity Date Notional Amount Interest rate swap January 2027 Notes 7.000 % SOFR +2.5810% January 15, 2027 $ 900 Interest rate swap March 2029 Notes 5.875 % SOFR +2.0230% March 1, 2029 $ 1,000 Interest rate swap July 2029 Notes 5.950 % SOFR +1.6430% July 15, 2029 $ 850 Interest rate swap September 2030 Notes 5.500 % SOFR +1.7705% September 1, 2030 $ 750 Interest rate swap(1) January 2031 Notes 5.100 % SOFR +1.7270% January 15, 2031 $ 650 Interest rate swap(1) March 2032 Notes 5.800 % SOFR +1.6995% March 8, 2032 $ 1,000 ________________________________________ (1) In connection with the issuances of the January 2031 Notes and the March 2032 Notes, we entered into forward-starting interest rate swaps with an effective date of July 15, 2026 and January 8, 2026, respectively. See Note 6 to our consolidated financial statements for the year ended December 31, 2025 for more information on our interest rate swaps. See “Recent Developments,” as well as Note 16 to our consolidated financial statements for the year ended December 31, 2025 for subsequent events relating to an additional interest rate swap in connection with an additional issuance of unsecured notes. 97 As of December 31, 2025, we were in compliance in all material respects with the indentures governing the Unsecured Notes. The Unsecured Notes are our senior unsecured obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Unsecured Notes; equal in right of payment to our existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities. RECENT DEVELOPMENTS In January 2026, we issued $750 million in aggregate principal amount of unsecured notes, which bear interest at a rate of 5.250% per annum and mature on April 12, 2031 (the “April 2031 Notes”). The April 2031 Notes pay interest semi-annually and all principal is due upon maturity. The April 2031 Notes may be redeemed in whole or in part at any time at our option at a redemption price equal to par plus a “make whole” premium, if applicable, as determined pursuant to the indenture governing the April 2031 Notes, and any accrued and unpaid interest. The April 2031 Notes were issued at a discount to the principal amount. In connection with the April 2031 Notes, we entered into an interest rate swap for a total notional amount of $750 million that matures on April 12, 2031. Under the interest rate swap, we will receive a fixed interest rate of 5.250% and pay a floating interest rate of one-month SOFR plus 1.7217%. In January 2026, we repaid in full the January 2026 Notes upon their maturity, which bore interest at a rate of 3.875% per annum. In February 2026, our board of directors authorized an amendment to our existing stock repurchase program to extend the expiration date of the program from February 15, 2026 to February 15, 2027. Under the program, we may repurchase up to $1.0 billion in the aggregate of our outstanding common stock in the open market at a price per share that meets certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. From January 1, 2026 through January 29, 2026, we made new investment commitments of approximately $1.4 billion, of which approximately $966 million were funded. Of the approximately $1.4 billion in new investment commitments, 90% were in first lien senior secured loans, 5% were in Ares Capital’s subordinated loan to IHAM, 3% were in preferred equity and 2% were in other equity. Of the approximately $1.4 billion in new investment commitments, 94% were floating rate, 2% were fixed rate and 4% were non-income producing. The weighted average yield of debt and other income producing securities funded during the period at amortized cost was 9.0% and the weighted average yield on total investments funded during the period at amortized cost was 8.5%. We may seek to sell all or a portion of these new investment commitments, although there can be no assurance that we will be able to do so. From January 1, 2026 through January 29, 2026, we exited approximately $709 million of investment commitments. Of the approximately $709 million of exited investment commitments, 89% were first lien senior secured loans, 9% were second lien senior secured loans, 1% were subordinated certificates of the SDLP and 1% were other equity. Of the approximately $709 million of exited investment commitments, 97% were floating rate, 2% were fixed rate and 1% were non-income producing. The weighted average yield of debt and other income producing securities exited or repaid during the period at amortized cost was 10.1% and the weighted average yield on total investments exited or repaid during the period at amortized cost was 10.0%. Of the approximately $709 million of investment commitments exited from January 1, 2026 through January 29, 2026, we recognized total net realized gains of approximately $16 million. In addition, as of January 29, 2026, we had an investment backlog of approximately $2.2 billion. Investment backlog includes transactions approved by our investment adviser’s U.S. direct lending 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. The consummation of any of the investments in this backlog depends upon, among other things, one or more of the following: our acceptance of the terms and structure of such investment and the execution and delivery of satisfactory transaction documentation. In addition, we may sell all or a portion of these investments and certain of these investments may result in the repayment of existing investments. We cannot assure you that we will make any of these investments or that we will sell all or any portion of these investments. 98 CRITICAL ACCOUNTING ESTIMATES The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 1A. Risk Factors.” See Note 2 to our consolidated financial statements for the year ended December 31, 2025 for more information on our critical accounting policies. Investments Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized. Pursuant to Rule 2a-5 under the Investment Company Act, our board of directors designated our investment adviser as our valuation designee (the “Valuation Designee”) to perform the fair value determinations for investments held by us without readily available market quotations, subject to the oversight of our board of directors. All investments are recorded at their fair value. Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Valuation Designee looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available (i.e., substantially all of our investments) are valued at least quarterly at fair value as determined in good faith by the Valuation Designee, subject to the oversight of our board of directors, based on, among other things, the input of our independent third‑party valuation providers (“IVPs”) that have been engaged to support the valuation of such portfolio investments quarterly, beginning as of the third quarter after origination (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. The valuation process is conducted at the end of each fiscal quarter by the Valuation Designee, and beginning with the first quarter of 2025, substantially all investments in our investment portfolio at fair value are subject to review by an IVP each quarter, as discussed further below. However, we may use these IVPs to review the value of our investments more frequently, including in connection with the occurrence of significant events or changes in value affecting a particular investment. In addition, our independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, our valuation process within the context of performing our integrated audit. As part of the valuation process, the Valuation Designee may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent sale occurs, the Valuation Designee considers the pricing indicated by the external event to corroborate the valuation. Because there is not a readily available market value for most of the investments in our portfolio, substantially all of our portfolio investments are valued at fair value as determined in good faith by the Valuation Designee, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.