Blue Owl Capital CorpOBDC
Blue Owl Capital Corp Income Taxes Disclosure
Income Taxes
The Company has elected to be treated as a RIC under Subchapter M of the Code, and intends to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, the Company must, among other things, distribute to its shareholders in each taxable year generally at least 90% of the Company’s investment company taxable income, as defined by the Code, and net tax-exempt income for that taxable year. In addition, a RIC may, in certain cases, satisfy this distribution requirement by distributing dividends relating to a taxable year after the close of such taxable year under the “spillover dividend” provisions of Subchapter M. To maintain tax treatment as a RIC, the Company, among other things, intends to make the requisite distributions to its shareholders, which generally relieves the Company from corporate-level U.S. federal income taxes.
Depending on the level of taxable income earned in a tax year, the Company can be expected to carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, the Company will accrue excise tax on estimated excess taxable incomeThe following table reconciles the increase in net assets resulting from operations to undistributed taxable income for the following periods:
| For the Years Ended December 31, | |||||||||||||||||
(in millions $) | 2025(1) | 2024 | 2023 | ||||||||||||||
| Increase in net assets resulting from operations | $ | 627.4 | $ | 595.0 | $ | 793.3 | |||||||||||
| Adjustments: | |||||||||||||||||
| Net unrealized (gain) loss on investments | $ | (6.3) | $ | 50.2 | $ | (92.9) | |||||||||||
| Other income (loss) for tax purposes, not book | (1.6) | 12.7 | (43.3) | ||||||||||||||
| Deferred organization costs | (0.1) | (0.1) | (0.1) | ||||||||||||||
| Other book-tax differences | 12.0 | 11.6 | 12.7 | ||||||||||||||
| Realized gain/loss differences | (72.7) | 84.4 | 53.0 | ||||||||||||||
| Taxable Income | $ | 558.7 | $ | 753.8 | $ | 722.7 | |||||||||||
_______________
(1)Tax information for the fiscal year ended December 31, 2025, is estimated and is not considered final until the Company files its tax return.
For the Year Ended December 31, 2025
Total distributions declared of $793.0 million resulted in a taxable dividend amount of $793.0 million that fully consisted of ordinary income for the tax year ending December 31, 2025. For the calendar year ended December 31, 2025, the Company had $181.8 million of undistributed ordinary income, $229.8 million of capital loss carryforward, as well as, $(51.9) million of net unrealized gains (losses) on investments and $(20.1) million of other temporary differences. For the year ended December 31, 2025, 85.7% of distributed ordinary income qualified as interest related dividend which is exempt from U.S. withholding tax applicable to non-U.S. shareholders.
During the year ended December 31, 2025, the Company increased the total distributable earnings (losses) and decreased additional paid-in-capital. These permanent differences were principally related to $12.0 million attributable to U.S. federal income tax, including excise taxes.
As of December 31, 2025, the net estimated unrealized loss for U.S. federal income tax purposes was $26.6 million based on a tax cost basis of $16.60 billion. As of December 31, 2025, the estimated aggregate gross unrealized loss for U.S. federal income tax purposes was $572.2 million and the estimated aggregate gross unrealized gain for U.S. federal income tax purposes was $545.6 million.
For the Year Ended December 31, 2024
Total distributions declared of $671.0 million resulted in a taxable dividend amount of $671.0 million that consisted of $670.7 million of ordinary income and $0.3 million of net long-term capital gains for the tax year ending December 31, 2024. For the calendar year ended December 31, 2024 the Company had $197.3 million of undistributed ordinary income, as well as, $(149.4) million of net unrealized gains (losses) on investments and $(18.5) million of other temporary differences. For the year ended December 31, 2024, 85.5% of distributed ordinary income qualified as interest related dividend which is exempt from U.S. withholding tax applicable to non-U.S. shareholders.
During the year ended December 31, 2024, the Company increased the total distributable earnings (losses) and decreased additional paid-in-capital. These permanent differences were principally related to $11.6 million attributable to U.S. federal income tax, including excise taxes.
As of December 31, 2024, the net estimated unrealized loss for U.S. federal income tax purposes was $146.1 million based on a tax cost basis of $13.30 billion. As of December 31, 2024, the estimated aggregate gross unrealized loss for U.S. federal income tax purposes was $560.6 million and the estimated aggregate gross unrealized gain for U.S. federal income tax purposes was $414.5 million.
For the Year Ended December 31, 2023
Total distributions declared of $620.3 million resulted in a taxable dividend amount of $620.3 million that consisted entirely of $612.9 million of ordinary income and $7.4 million of net long-term capital gains for the tax year ending December 31, 2023. For the calendar year ended December 31, 2023 the Company had $118.3 million of undistributed ordinary income, as well as, $(10.0) million of net unrealized gains (losses) on investments and $(14.7) million of other temporary differences. For the year ended December 31, 2023, 90.2% of distributed ordinary income qualified as interest related dividend which is exempt from U.S. withholding tax applicable to non-U.S. shareholders.
During the year ended December 31, 2023, the Company increased the total distributable earnings (losses) and decreased additional paid-in-capital. These permanent differences were principally related to $12.8 million attributable to U.S. federal income tax, including excise taxes.
As of December 31, 2023, the net estimated unrealized loss for U.S. federal income tax purposes was $0.4 million based on a tax cost basis of $12.70 billion. As of December 31, 2023, the estimated aggregate gross unrealized loss for U.S. federal income tax purposes was $325.3 million and the estimated aggregate gross unrealized gain for U.S. federal income tax purposes was $324.9 million.
Taxable Subsidiaries
Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes. For the years ended December 31, 2025, 2024 and 2023, the Company recorded a current tax expense (benefit) of approximately $(1.3) million, $2.5 million and $0.3 million for taxable subsidiaries, respectively.
The Company recorded a net deferred tax liability of $41.2 million, $31.4 million and $29.0 million as of December 31, 2025, 2024, and 2023 respectively, for taxable subsidiaries, which is significantly related to GAAP to tax outside basis differences in the taxable subsidiaries’ investment in certain partnership interests.About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.