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Corporate Capital Trust, Inc. Reports Second Quarter 2018 Results and Declares Regular Dividend for Third Quarter

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Corporate Capital Trust, Inc. (NYSE:CCT), a leading business development
company, announced its operating results for the quarter ended June 30,
2018, and announced that its board of directors has declared its third
quarter 2018 regular dividend.

Financial Highlights for the Quarter Ended June 30, 2018

  • Pro forma net investment income of $50.3 million, or $0.40 per
    share, as compared to $49.5 million, or $0.39 per share, for the prior
    quarter
    1
  • Net investment income of $49.4 million, or $0.39 per share, as
    compared to $49.5 million, or $0.39 per share, for the prior quarter
  • Net realized and unrealized losses on investments of $11.4 million,
    or $0.09 per share, resulting from $13.1 million of net realized
    losses and $1.7 million of net unrealized gains. This compares to net
    realized and unrealized gains on investments of $23.4 million, or
    $0.18 per share, for the prior quarter
  • Paid regular cash dividends to stockholders totaling $0.402 per
    share
  • Net asset value of $19.58 per share, compared to $19.72 as of March
    31, 2018
  • For the quarter ended June 30, 2018, the Net Investment Income /
    Dividend coverage ratio was 99% and 102% net of the dividend
    reinvestment and pro forma was 100% and 104% respectively
    1

"We are pleased with the progress we've made since announcing the
partnership between FS Investments and KKR," said Todd Builione,
President of CCT. "Completing the merger with FSIC, closing the $3.4
billion revolving credit facility, of which CCT will be allocated $1.45
billion, and maintaining our strong origination pipeline will position
us well to deliver consistent long-term performance and drive value for
our investors."

Declaration of Regular Dividend for Third Quarter 2018

CCT's board of directors has declared a regular quarterly cash dividend
for the third quarter of $0.402 per share, which will be payable on
October 9, 2018 to stockholders of record as of the close of business of
September 28, 2018.

 

     

Summary Consolidated Results2

Three Months Ended

(dollars in thousands, except per share data)
(all
per share amounts are basic and diluted)

  June 30, 2018   March 31, 2018   June 30, 2017
Total investment income   $ 103,764     $ 99,642   $ 100,474  
Net investment income   $ 49,426     $ 49,490   $ 52,914  
Net increase in net assets resulting from operations   $ 38,074     $ 72,903   $ 36,962  
             
Net investment income per share   $ 0.39     $ 0.39   $ 0.39  
Total net realized and unrealized gain (loss) per share   $ (0.09 )   $ 0.18

 

$ (0.12 )

Net increase (decrease) in net assets resulting from
operations
(Earnings per Share)

  $ 0.30     $ 0.57   $ 0.27  
             
Net investment income per share – Adjusted1   $ 0.40     $ 0.39   $ 0.39  
Total net realized and unrealized gain (loss) per share   $ (0.09 )   $ 0.18   $ (0.12 )

Net increase (decrease) in net assets resulting from
operations
(Earnings per Share) – Adjusted1

  $ 0.31     $ 0.57   $ 0.27  
             
Regular Stockholder dividends per share   $ 0.40     $ 0.40   $ 0.45  
Special Stockholder dividends per share   $ 0.10       -     -  
Net asset value per share at period end   $ 19.58     $ 19.72   $ 20.07  
Weighted average shares outstanding     126,056       127,130     137,064  
Shares outstanding, end of period     124,663       127,074     136,997  
 
(dollar amounts in thousands)  

As of

June 30, 2018

 

As of

December 31, 2017

Total fair value of investments   $ 4,082,314     $ 3,969,097
Total assets   $ 4,375,046     $ 4,221,500
Total net assets   $ 2,440,916     $ 2,485,102
 

Portfolio Highlights as of June 30, 2018

  • Total fair value of investments was $4.1 billion
  • New investment fundings for the quarter were $575 million. At June 30,
    2018, 83.2% of total investments at fair market value were in
    Originated Strategy Investments3
  • Average annual yield on debt investments was 10.5%, compared to 9.6%
    as of March 31, 20184
  • 75% of investments in senior secured debt, compared to 73% as of March
    31, 2018
 

Total Portfolio Activity

 

Three Months Ended
(dollar amounts in millions)   June 30, 2018   March 31, 2018   June 30, 2017
Purchases   $574.8     $ 378.1     $ 564.3

Sales and redemptions5
Q1 and Q2 2018 Sales and
Redemptions
include $97.0 million and $206.9 million
respectively
of investments sold to SCJV.

  $452.3     $ 394.8     $ 374.3
Net investment activity   $122.5       ($16.7 )   $ 190.0
Net Sales to SCJV   $206.9     $ 97.0       -
Adjusted net investment activity   $329.4     $ 80.3     $ 190.0
 
Portfolio Data   As of June 30, 2018  

As of December 31, 2017

Total fair value of investments   $4,082,314     $ 3,969,097  
Number of Portfolio Companies   132       113  

% of Investments on Non-Accrual

(based on fair value)

  1.5 %     1.2 %
Average yield on debt investments4   10.5 %     9.5 %
 
Asset Class (based on fair value)
First Lien Senior Secured Loans     38.5 %     42.1 %
Second Lien Senior Secured Loans     25.5 %     23.8 %
Other Senior Secured Debt     5.4 %     3.6 %
Subordinated Debt     6.8 %     9.6 %
Asset Based Finance     10.1 %     8.7 %
Strategic Credit Opportunities Partners     7.5 %     7.6 %
Equity/Other     6.2 %     4.6 %
 

Interest Rate Type (based on US$ Par)

% Variable Rate     74 %     78 %
% Fixed Rate     26 %     22 %
 

Funding and Liquidity Management as of June 30, 2018

  • Debt to equity ratio of 0.74x, based on $1.80 billion in total debt
    outstanding and net asset value of $2.44 billion. CCT's weighted
    average stated interest rate was 4.70%.
  • Cash and cash equivalents of approximately $89.8 million and
    availability under its financing arrangements of $383 million, subject
    to borrowing base and other limitations.

Conference Call Information

A conference call to discuss CCT's financial results will be held on
Friday, August 10, 2018 at 11:00 a.m. ET. The conference call may be
accessed by dialing (833) 818-6808 (U.S. callers) or +1 (409) 350-3502
(non-U.S. callers); a passcode is not required. Additionally, the
conference call will be broadcast live over the Internet and may be
accessed through the Investor Relations section of CCT's website at http://corporatecapitaltrust.com/investor-relations/events-presentations/.

A replay of the call will be available on CCT's website or by dialing
(855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers),
pass code 9182178, beginning approximately two hours after the broadcast.

Supplemental Information

An investor presentation of financial information will be made available
prior to the call in the Investor Relations section of CCT's website at http://corporatecapitaltrust.com/investor-relations/events-presentations/
under Events & Presentations.

About Corporate Capital Trust

Corporate Capital Trust is a business development company that provides
investors an opportunity to access middle market direct lending
investments. The Company is externally managed by FS/KKR Advisor, LLC,
and its investment objective is to provide shareholders with current
income and, to a lesser extent, long-term capital appreciation. The
Company intends to meet its investment objective by investing primarily
in the debt of privately owned companies, with a focus on originated
transactions. For additional information, please visit www.corporatecapitaltrust.com.

About FS/KKR Advisor, LLC

FS/KKR Advisor, LLC ("FS/KKR") is a partnership between FS Investments
and KKR Credit that serves as the investment adviser to six BDCs,
including FS Investment Corporation, FS Investment Corporation II, FS
Investment Corporation III, FS Investment Corporation IV, Corporate
Capital Trust, Inc. and Corporate Capital Trust II.

FS/KKR seeks to leverage the size of its platform, differentiated
origination capabilities and expertise in capital markets to maximize
returns and preserve capital for investors.

FS Investments is a leading asset manager dedicated to helping
individuals, financial professionals and institutions design better
portfolios. The firm provides access to alternative sources of income
and growth and focuses on setting industry standards for investor
protection, education and transparency. FS Investments is headquartered
in Philadelphia, PA with offices in New York, NY, Orlando, FL and
Washington, DC. Visit www.fsinvestments.com
to learn more.

KKR Credit is a subsidiary of KKR & Co. Inc., a leading global
investment firm that manages multiple alternative asset classes,
including private equity, energy, infrastructure, real estate and
credit, with strategic manager partnerships that manage hedge funds. KKR
aims to generate attractive investment returns for its fund investors by
following a patient and disciplined investment approach, employing
world-class people, and driving growth and value creation with KKR
portfolio companies. KKR invests its own capital alongside the capital
it manages for fund investors and provides financing solutions and
investment opportunities through its capital markets business.
References to KKR's investments may include the activities of its
sponsored funds. For additional information about KKR & Co. L.P. (NYSE: KKR), please visit KKR's website at www.kkr.com
and on Twitter @KKR_Co.

Forward-Looking Statements

The information in this press release may include "forward-looking
statements." These statements are based on the beliefs and assumptions
of the Company's management and on the information currently available
to management at the time of such statements. Forward-looking statements
generally can be identified by the words "believes," "expects,"
"intends," "plans," "estimates" or similar expressions that indicate
future events. Important factors that could cause actual results to
differ materially from the Company's expectations include the factors
disclosed in the Company's filings with the SEC, including the Company's
annual report on Form 10-K for the year ended December 31, 2017, which
was filed with the SEC on March 14, 2018. The Company undertakes no
obligation to update such statements to reflect subsequent events.

Other Information

The information in this press release is summary information only and
should be read in conjunction with CCT's quarterly report on Form 10-Q
for the quarterly period ended June 30, 2018, which CCT filed with the
U.S. Securities and Exchange Commission (the "SEC") on August 9, 2018,
as well as CCT's other reports filed with the SEC. A copy of CCT's
quarterly report on Form 10-Q for the quarterly period ended June 30,
2018 and CCT's other reports filed with the SEC can be found on CCT's
website at www.corporatecapital
trust.com
and the SEC's website at www.sec.gov.

 
Condensed Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
   
June 30, 2018 December 31, 2017
(unaudited)
Assets
Investments at fair value:

Non-controlled, non-affiliated investments (amortized cost of
$3,214,260 and
$3,319,093, respectively)

$ 3,152,849 $ 3,225,827

Non-controlled, affiliated investments (amortized cost of $336,507
and $298,489,
respectively)

258,487 242,985

Controlled, affiliated investments (amortized cost of $697,995 and
$540,609,
respectively)

670,978   500,285  

Total investments, at fair value (amortized cost of $4,248,762 and
$4,158,191,
respectively)

4,082,314 3,969,097
Cash 82,658 127,186
Cash denominated in foreign currency (cost of $7,217 and $3,724,
respectively)
7,111 3,778
Restricted cash 905 51,181
Dividends and interest receivable 48,847 42,517
Receivable for investments sold 126,770 2,320
Principal receivable 6,339 3,389
Unrealized appreciation on swap contracts 4,674 3,763
Unrealized appreciation on foreign currency forward contracts 2,641 1,194
Receivable from advisers 707 2,802
Other assets 12,080   14,273  
Total assets 4,375,046   4,221,500  
Liabilities
Revolving credit facilities 1,175,000 965,000
Term loan payable, net 381,563 382,768
Unsecured notes payable, net 241,040 240,612
Payable for investments purchased 32,715 47,097
Unrealized depreciation on swap contracts 22,606 29,604
Unrealized depreciation on foreign currency forward contracts 2,340 3,401
Accrued performance-based incentive fees 11,710 8,418
Accrued investment advisory fees 5,262 5,214
Shareholders' distributions payable 50,186 46,959
Deferred tax liability 1,442 178
Accrued directors' fees 23
Other accrued expenses and liabilities 10,243   7,147  
Total liabilities 1,934,130 1,736,398
Commitments and contingencies    
Net Assets $ 2,440,916   $ 2,485,102  
Components of Net Assets

Common stock, $0.001 par value per share, 1,000,000,000 shares
authorized, 124,663,131
and 127,130,589 shares issued and
outstanding at June 30, 2018 and December 31, 2017, respectively

$ 125 $ 127
Paid-in capital in excess of par value 2,758,334 2,799,400
Undistributed net investment income 22,454 37,633
Accumulated net realized losses (154,397 ) (134,874 )

Accumulated net unrealized depreciation on investments, swap
contracts, foreign currency
forward contracts and foreign
currency translation (net of provision for taxes of $1,442 and
$178,
respectively)

(185,600 ) (217,184 )
Net assets $ 2,440,916   $ 2,485,102  
Net asset value per share $ 19.58   $ 19.55  
 
 
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share amounts)
 
Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Investment income
Interest income:

Non-controlled, non-affiliated investments (net of tax
withholding,
$3, $1,528, $64 and $1,801, respectively)

$ 78,586 $ 75,894 $ 161,492 $ 159,629
Non-controlled, affiliated investments 2,234 3,122 3,975 3,122
Controlled, affiliated investments 2,691     2,691    
Total interest income 83,511   79,016   168,158   162,751  
Payment-in-kind interest income:
Non-controlled, non-affiliated investments 1,330 1,109 2,439 2,136
Non-controlled, affiliated investments

 

Controlled, affiliated investments 3,751   2,940   7,446   5,403  
Total payment-in-kind interest income 5,081   4,049   9,885   7,539  
Fee income:
Non-controlled, non-affiliated investments 4,179   5,645   4,886   8,250  
Total fee income 4,179   5,645   4,886   8,250  
Dividend and other income:
Non-controlled, non-affiliated investments 1,166 3,893 2,132 4,189
Non-controlled, affiliated investments
Controlled, affiliated investments 9,827   7,871   18,345   10,593  
Total dividend and other income 10,993   11,764   20,477   14,782  
Total investment income 103,764   100,474   203,406   193,322  
Operating expenses
Investment advisory fees 15,563 20,914 30,778 41,685
Interest expense 22,272 15,207 42,086 29,355
Performance-based incentive fees 11,710 4,748 24,083 5,675
Professional services 2,631 1,959 3,893 3,005
Investment adviser expenses 267 1,713 460 2,609
Administrative services 796 770 1,457 1,610
Custodian and accounting fees 443 399 838 836
Offering expenses 122 327
Director fees and expenses 150 168 298 301
Other 528   1,362   972   2,141  
Total operating expenses 54,360   47,362   104,865   87,544  
Net investment income before taxes 49,404 53,112 98,541 105,778
Income tax expense (benefit), including excise tax (22 ) 198   (375 ) 321  
Net investment income 49,426   52,914   98,916   105,457  
Net realized and unrealized gains (losses)
Net realized gains (losses) on:
Non-controlled, non-affiliated investments (11,179 ) (85,586 ) (16,127 ) (70,108 )
Controlled, affiliated investments (12,797 ) (7,567 ) (12,797 ) (7,413 )
Swap contracts 787 11,995 2,411 14,311
Foreign currency forward contracts 6,653 (633 ) 4,477 (78 )
Foreign currency transactions 3,471   2,397   2,513   1,882  
Net realized losses (13,065 ) (79,394 ) (19,523 ) (61,406 )
 
 
Condensed Consolidated Statements of Operations
Continued
(in thousands, except share and per share amounts)
 
Three Months Ended June 30,   Six Months Ended June 30,
2018   2017 2018   2017
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments $ 2,624 $ 88,101 $ 31,855 $ 99,441
Non-controlled, affiliated investments (13,088 ) (2,879 ) (22,516 ) (708 )
Controlled, affiliated investments (5,193 ) 17,117 13,307 22,805
Swap contracts 15,855 (38,262 ) 7,909 (39,890 )
Foreign currency forward contracts 2,265 (9,345 ) 2,508 (11,981 )
Foreign currency translation (519 ) (393 ) (215 ) (725 )
Provision for taxes (231 ) 9,103   (1,264 ) 8,689  
Net change in unrealized appreciation 1,713   63,442   31,584   77,631  
Net realized and unrealized gains (losses) (11,352 ) (15,952 ) 12,061   16,225  
Net increase in net assets resulting from operations $ 38,074   $ 36,962   $ 110,977   $ 121,682  
Net investment income per share $ 0.39   $ 0.39   $ 0.78   $ 0.77  
Diluted and basic earnings per share $ 0.30   $ 0.27   $ 0.88   $ 0.89  

Weighted average number of shares of common stock
outstanding
(basic and diluted)

126,056,390   137,064,172   126,558,009   137,275,134  
Distributions declared per share $ 0.50   $ 0.45   $ 0.90   $ 0.90  
 
 

Summary Consolidated Results – reconciliation

 
  Three Months Ended

(dollars in thousands, except per share data)

   

(all per share amounts are basic and diluted)

  June 30, 2018   March 31, 2018   June 30, 2017
Pre-incentive fee Net Investment Income   $ 0.48     $ 0.49     $ 0.42  
Adjust Management Fee to 1.5%     -       -     $ 0.04  
Add back one time listing / merger expenses   $ 0.01       -       -  
Adjusted Pre-incentive fee Net Investment Income   $ 0.49     $ 0.49     $ 0.46  
Adjusted Incentive Fee     ($0.09 )     ($0.10 )     ($0.09 )
Adjusted Net Investment Income   $ 0.40     $ 0.39     $ 0.37  
 
Three Months Ended

(dollars in thousands, except per share data)

(all per share amounts are basic and diluted)

  June 30, 2018        
Pre-incentive fee Net Investment Income   $ 61,136          
Adjust Management Fee to 1.5%     -          
Add back one time listing / merger expenses   $ 1,041          
Adjusted Pre-incentive fee Net Investment Income   $ 62,177          
Adjusted Incentive Fee     ($11,918 )        
Adjusted Net Investment Income   $ 50,259          
 
1 For comparison purposes to Q1 and Q2 2018, 2017
management fees have been adjusted to 1.5% and income incentive fee
has been recalculated based on current advisor contract.
Additionally, one-time merger related expenses have been added back.
See full reconciliation above.
2 All per share metrics are presented pro forma for the
1-for-2.25 reverse stock split which occurred on October 31, 2017.
Schedule may include balancing figures derived from the other
figures in the schedule and may differ slightly due to rounding
associated with the 2.25x stock split.
3 Originated Strategy Investments are defined as
investments where our Advisor negotiates the terms of the
transaction beyond just the price, which, for example, may include
negotiating financial covenants, maturity dates or interest rate
terms or where we participate in other originated investment where
there may be third parties involved, or a bank acting as an
intermediary, for a closely held club, or similar investment.
4 The weighted average annual yield for accruing debt
investments is computed as (i) the sum of (a) the stated annual
interest rate of each debt, and debt like, investment, multiplied by
its par amount, adjusted to U.S. dollars and for any partial income
accrual when necessary, as of the end of the applicable reporting
period, plus (b) the annual amortization of the purchase or original
issue discount or premium of each accreting debt investment; divided
by (ii) the total amortized cost of debt investments included in the
calculated group as of the end of the applicable reporting period.
Prior to Q3 2017 our weighted average annual yield did not adjust
for any non-accreting or partial accrual investments. Beginning in
Q2 2018, asset based finance investments with an effective interest
rate are being included in the calculation.
5 Q1 and Q2 2018 Sales and Redemptions include $97.0
million and $206.9 million respectively of investments sold to SCJV.
 

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