What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-10 compared with 2020-11-09 · 1469 added, 1469 removed, 2531 unchanged (54% of the section changed)

This section is long enough that the comparison stopped early. What follows is partial, and the remainder is not necessarily unchanged.

3 unchanged sentences

(in millions, except share and per share amounts)

September 30, 2020

March 31, 2021

December 31, 2020

11 unchanged sentences

Deferred financing costs

Deferred merger costs

Prepaid expenses and other assets

13 unchanged sentences

Common stock, $0.001 par value, 750,000,000 shares authorized, 123,755,965 and 123,755,965 shares issued and outstanding,

respectively (4)

Capital in excess of par value

6 unchanged sentences

See Note 10 for a discussion of the Companys commitments and contingencies.

As discussed in Note 3, the Company completed a Reverse Stock Split, effective as of June 15, 2020.

The outstanding shares and net asset

value per common share reflect the Reverse Stock Split on a retroactive basis.

See Note 5 for a discussion of the sources of distributions paid by the Company.

4 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Investment income

25 unchanged sentences

Controlled/affiliated investments

Net realized gain (loss) on swap contracts

Net realized gain (loss) on foreign currency forward contracts

4 unchanged sentences

Controlled/affiliated investments

Net change in unrealized appreciation (depreciation) on swap contracts

Net change in unrealized appreciation (depreciation) on foreign currency forward contracts

15 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net investment income (loss)

19 unchanged sentences

(in millions)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

7 unchanged sentences

Net change in unrealized (appreciation) depreciation on investments

Net change in unrealized (appreciation) depreciation on swap contracts

Net change in unrealized (appreciation) depreciation on foreign currency forward contracts

4 unchanged sentences

(Increase) decrease in income receivable

(Increase) decrease in deferred merger costs

(Increase) decrease in prepaid expenses and other assets

21 unchanged sentences

See Note 9 for a discussion of the Companys financing arrangements.

During the nine months ended September 30, 2020 and 2019, the

During the three months ended March 31, 2021 and 2020, the

Company paid $23 and $36, respectively, in interest expense on the financing arrangements.

2 unchanged sentences

Unaudited Consolidated Schedule of Investments

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

16 unchanged sentences

Consumer Durables & Apparel

Advanced Lighting Technologies Inc

Advantage Sales & Marketing Inc

Commercial & Professional Services

All Systems Holding LLC

Commercial & Professional Services

All Systems Holding LLC

Commercial & Professional Services

AM General LLC

Capital Goods

American Tire Distributors Inc

11 unchanged sentences

L+544, 2.3% PIK (2.3% Max PIK)

Ardonagh Group Ltd

L+544, 2.3% PIK (2.3% Max PIK)

Aspect Software Inc

3 unchanged sentences

Software & Services

Aspect Software Inc

Software & Services

(g)(n)(w)(x)(y)

10.0%, 0.0% PIK (8.0% Max PIK)

Berner Food & Beverage LLC

7 unchanged sentences

Food, Beverage & Tobacco

Brand Energy & Infrastructure Services Inc

Capital Goods

Charles Taylor PLC

Diversified Financials

Capital Goods

CSM Bakery Products

Food, Beverage & Tobacco

CTI Foods Holding Co LLC

Food, Beverage & Tobacco

L+577, 3.0% PIK (3.0% Max PIK)

Software & Services

Dental Care Alliance Inc

Health Care Equipment & Services

Dental Care Alliance Inc

Health Care Equipment & Services

Distribution International Inc

5 unchanged sentences

Food, Beverage & Tobacco

Electronics For Imaging Inc

Technology Hardware & Equipment

Empire Today LLC

8 unchanged sentences

L+575, 2.5% PIK (2.5% Max PIK)

FloWorks International LLC

Capital Goods

FloWorks International LLC

Capital Goods

Foundation Consumer Brands LLC

Pharmaceuticals, Biotechnology & Life Sciences

Foundation Consumer Brands LLC

Pharmaceuticals, Biotechnology & Life Sciences

Frontline Technologies Group LLC

Software & Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Greystone & Co Inc

2 unchanged sentences

Diversified Financials

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

Heniff Transportation Systems LLC

4 unchanged sentences

Transportation

Hilton Worldwide Finance LLC

Consumer Services

Heniff Transportation Systems LLC

Transportation

HM Dunn Co Inc

4 unchanged sentences

15.0% PIK (15.0% Max PIK)

HM Dunn Co Inc

Capital Goods

15.0% PIK (15.0% Max PIK)

Hudson Technologies Co

Commercial & Professional Services

E+500, 2.3% PIK (2.3% Max PIK)

Commercial & Professional Services

L+525, 2.3% PIK (2.3% Max PIK)

Individual FoodService

Capital Goods

Individual FoodService

Capital Goods

Individual FoodService

Capital Goods

Individual FoodService

Capital Goods

Industria Chimica Emiliana Srl

5 unchanged sentences

10.8%, 1.0% PIK (1.0% Max PIK)

JHT Holdings Inc

Capital Goods

Jarrow Formulas Inc

Household & Personal Products

Jo-Ann Stores Inc

Karman Space Inc

Capital Goods

Karman Space Inc

Capital Goods

Kellermeyer Bergensons Services LLC

2 unchanged sentences

Commercial & Professional Services

Kodiak BP LLC

Capital Goods

Kodiak BP LLC

Capital Goods

Koosharem LLC

Commercial & Professional Services

Technology Hardware & Equipment

Commercial & Professional Services

Lionbridge Technologies Inc

Consumer Services

Lipari Foods LLC

Food & Staples Retailing

Commercial & Professional Services

Lipari Foods LLC

3 unchanged sentences

L+463, 1.0% PIK (1.0% Max PIK)

MB2 Dental Solutions LLC

Health Care Equipment & Services

MB2 Dental Solutions LLC

Health Care Equipment & Services

Miami Beach Medical Group LLC

Health Care Equipment & Services

Miami Beach Medical Group LLC

Health Care Equipment & Services

Micronics Filtration Holdings Inc

8 unchanged sentences

L+750, 0.0% PIK (2.5% Max PIK)

Omnimax International Inc

Capital Goods

One Call Care Management Inc

6 unchanged sentences

Software & Services

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

Capital Goods

Petroplex Acidizing Inc

L+725, 1.8% PIK (1.8% Max PIK)

L+900 PIK (L+900 Max PIK)

Polyconcept North America Inc

3 unchanged sentences

Diversified Financials

Pretium Packaging LLC

Household & Personal Products

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Pretium Packaging LLC

Household & Personal Products

Project Marron

Consumer Services

Health Care Equipment & Services

7 unchanged sentences

Software & Services

Roadrunner Intermediate Acquisition Co LLC

Health Care Equipment & Services

RSC Insurance Brokerage Inc

2 unchanged sentences

RSC Insurance Brokerage Inc

Safe-Guard Products International LLC

12 unchanged sentences

Telecommunication Services

Sungard Availability Services Capital Inc

Sound United LLC

Consumer Durables & Apparel

Software & Services

Sungard Availability Services Capital Inc

Software & Services

Sutherland Global Services Inc

L+375, 3.8% PIK (3.8% Max PIK)

Sungard Availability Services Capital Inc

Software & Services

L+375, 3.8% PIK (3.8% Max PIK)

Sweeping Corp of America Inc

Commercial & Professional Services

Sweeping Corp of America Inc

Commercial & Professional Services

Sweeping Corp of America Inc

Commercial & Professional Services

Sweet Harvest Foods Management Co

10 unchanged sentences

L+500, 2.5% PIK (2.5% Max PIK)

ThreeSixty Group

L+375, 3.8% PIK (3.8% Max PIK)

Software & Services

Transaction Services Group Ltd

Consumer Services

Software & Services

Transaction Services Group Ltd

Consumer Services

Software & Services

Transaction Services Group Ltd

Consumer Services

Truck-Lite Co LLC

Capital Goods

Software & Services

Truck-Lite Co LLC

4 unchanged sentences

Capital Goods

United Rentals North America Inc

Capital Goods

Utility One Source LP

Capital Goods

Virgin Pulse Inc

4 unchanged sentences

Transportation

Wheels Up Partners LLC

Transportation

notes to unaudited consolidated financial statements.

1 unchanged sentence

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

7 unchanged sentences

Transportation

Wheels Up Partners LLC

Transportation

Z Gallerie LLC

Zeta Interactive Holdings Corp

Software & Services

Total Senior Secured LoansFirst Lien

4 unchanged sentences

Capital Goods

Agro Merchants Global LP

Transportation

Advanced Lighting Technologies Inc

Amtek Global Technology Pte Ltd

2 unchanged sentences

E+500 PIK (E+500 Max PIK)

athenahealth Inc

Health Care Equipment & Services

10.0% PIK (10.0% Max PIK)

Byrider Finance LLC

1 unchanged sentence

L+1,000, 0.5% PIK (0.5% Max PIK)

Chisholm Oil & Gas Operating LLC

L+550, 3.0% PIK (3.0% Max PIK)

CommerceHub Inc

Software & Services

Culligan International Co

Household & Personal Products

Software & Services

Gruden Acquisition Inc

Transportation

MedAssets Inc

Health Care Equipment & Services

Consumer Durables & Apparel

6 unchanged sentences

Health Care Equipment & Services

Peak 10 Holding Corp

Telecommunication Services

Capital Goods

Petrochoice Holdings Inc

3 unchanged sentences

11.0% PIK (11.0% Max PIK)

Pretium Packaging LLC

Household & Personal Products

Pure Fishing Inc

2 unchanged sentences

Food, Beverage & Tobacco

14.8% PIK (14.8% Max PIK)

Capital Goods

L+400, 6.8% PIK (6.8% Max PIK)

L+1,075, 0.0% PIK (6.8% Max

Sorenson Communications LLC

Telecommunication Services

L+1,150 PIK (L+1,150 PIK Max

Sparta Systems Inc

Software & Services

L+1,150 PIK (L+1,150 Max PIK)

Sound United LLC

Consumer Durables & Apparel

13.5% PIK (13.5% Max PIK)

Sungard Availability Services Capital Inc

8 unchanged sentences

E+850, 0.5% PIK (0.5% Max PIK)

Z Gallerie LLC

Total Senior Secured LoansSecond Lien

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Other Senior Secured Debt2.5%

Advanced Lighting Technologies Inc

L+1,700 PIK (L+1,700 Max PIK)

Angelica Corp

2 unchanged sentences

Black Swan Energy Ltd

Enterprise Development Authority

Consumer Services

JW Aluminum Co

Consumer Durables & Apparel

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

Velvet Energy Ltd

Z Gallerie LLC

Total Other Senior Secured Debt

Subordinated Debt2.5%

All Systems Holding LLC

Commercial & Professional Services

10.0% PIK (10.0% Max PIK)

Ardonagh Group Ltd

athenahealth Inc

Health Care Equipment & Services

L+1,113 PIK (L+1,113 Max PIK)

12.8% PIK (12.8% Max PIK)

ClubCorp Club Operations Inc

Consumer Services

Cornerstone (Ply Gem Holdings Inc)

Capital Goods

Craftworks Rest & Breweries Group Inc

1 unchanged sentence

14.0% PIK (14.0% Max PIK)

DEI Sales Inc

Consumer Durables & Apparel

9.0%, 7.0% PIK (7.0% Max PIK)

Hilding Anders

6 unchanged sentences

13.0% PIK (13.0% Max PIK)

Home Partners of America Inc

Total Subordinated Debt

3 unchanged sentences

8.0%, 3.0% PIK (3.0% Max PIK)

Abacus JV, Private Equity

Accelerator Investments Aggregator LP, Private Equity

9 unchanged sentences

Bank of Ireland, Class B Credit Linked Floating Rate Note

Byrider Finance LLC, Structured Mezzanine

Automobiles & Components

Byrider Finance LLC, Structured Mezzanine

Automobiles & Components

Byrider Finance LLC, Sub Note

Automobiles & Components

Callodine Commercial Finance LLC, 2L Term Loan A

Diversified Financials

Callodine Commercial Finance LLC, 2L Term Loan B

Diversified Financials

Capital Automotive LP, Private Equity

Capital Automotive LP, Structured Mezzanine

Global Jet Capital LLC, Preferred Stock

9 unchanged sentences

15.0% PIK (15.0% Max PIK)

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Global Jet Capital LLC, Structured Mezzanine

19 unchanged sentences

15.0% PIK (15.0% Max PIK)

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

Global Jet Capital LLC, Structured Mezzanine

15 unchanged sentences

11.0% PIK (11.0% Max PIK)

Kilter Finance, Preferred Stock

6.0%, 6.0% PIK (6.0% Max PIK)

Kilter Finance, Private Equity

3 unchanged sentences

Capital Goods

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware & Equipment

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware & Equipment

Music IP, Private Equity

Media & Entertainment

Opendoor Labs Inc, 2L Term Loan

7 unchanged sentences

5.0%, 6.0% PIK (6.0% Max PIK)

Rampart CLO 2007 1A Class Subord.

Diversified Financials

Sofi Lending Corp, Purchase Facility

17 unchanged sentences

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

Equity/Other18.7% (m)

Advanced Lighting Technologies Inc, Common Stock

Advanced Lighting Technologies Inc, Warrant

Alion Science & Technology Corp, Class A Membership Interest

Capital Goods

All Systems Holding LLC, Common Stock

Commercial & Professional Services

Amtek Global Technology Pte Ltd, Ordinary Shares

3 unchanged sentences

Automobiles & Components

Amtek Global Technology Pte Ltd, Trade Claim

Automobiles & Components

Angelica Corp, Limited Partnership Interest

17 unchanged sentences

AVF Parent LLC, Trade Claim

Belk Inc, Units

Belk Inc, Common Stock

Borden (New Dairy Opco), Common Stock

4 unchanged sentences

Chisholm Oil & Gas Operating LLC, Series A Units

CSafe Global, Common Stock

Capital Goods

CTI Foods Holding Co LLC, Common Stock

Food, Beverage & Tobacco

DEI Sales Inc, Class A Units

Consumer Durables & Apparel

DEI Sales Inc, Series I Units

Consumer Durables & Apparel

DEI Sales Inc, Series II Units

Consumer Durables & Apparel

Directed LLC, Warrant

1 unchanged sentence

Empire Today LLC, Common Stock

FourPoint Energy LLC, Common Stock

Fronton BV, Common Stock

14 unchanged sentences

Consumer Durables & Apparel

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Hilding Anders, Equity Options

8 unchanged sentences

Media & Entertainment

JHC Acquisition LLC, Common Stock

Capital Goods

Jones Apparel Holdings, Inc., Common Stock

Consumer Durables & Apparel

JSS Holdings Ltd, Net Profits Interest

Capital Goods

JW Aluminum Co, Common Stock

1 unchanged sentence

12.5% PIK (12.5% Max PIK)

Maverick Natural Resources, Common Stock

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

MB Precision Holdings LLC, Class A2 Units

Capital Goods

Miami Beach Medical Group LLC, Common Stock

Health Care Equipment & Services

Micronics Filtration Holdings Inc, Common Stock

10 unchanged sentences

7.5% PIK (7.5% Max PIK)

Mood Media LLC, Class A Warrants

Media & Entertainment

Mood Media LLC, Class B Warrants

Media & Entertainment

Mood Media LLC, Class C Warrants

Media & Entertainment

NBG Home, Common Stock

11 unchanged sentences

Petroplex Acidizing Inc, Preferred Stock A

2.0% PIK (2.0% Max PIK)

Petroplex Acidizing Inc, Warrant

3 unchanged sentences

Proserv Acquisition LLC, Class A Preferred Units

Quorum Health Corp, Common Stock

Health Care Equipment & Services

Quorum Health Corp, Trade Claim

7 unchanged sentences

Telecommunication Services

SSC (Lux) Limited S.a r.l., Common Stock

Health Care Equipment & Services

Sound United LLC, Class A Units

Consumer Durables & Apparel

Sound United LLC, Common Stock

Consumer Durables & Apparel

Sound United LLC, Series I Units

Consumer Durables & Apparel

Sound United LLC, Series II Units

Consumer Durables & Apparel

Stuart Weitzman Inc, Common Stock

5 unchanged sentences

ThermaSys Corp, Common Stock

(e)(f)(g)(n)(y)

Capital Goods

1 unchanged sentence

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Trace3 Inc, Common Stock

2 unchanged sentences

Warren Resources Inc, Common Stock

Z Gallerie LLC, Common Stock

Zeta Interactive Holdings Corp, Preferred Stock, Series E1

8 unchanged sentences

NET ASSETS100%

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

Foreign currency forward contracts

1 unchanged sentence

Settlement Date

September 30,

Unrealized Appreciation

11 unchanged sentences

JP Morgan Chase Bank

Security may be an obligation of one or more entities affiliated with the named company.

1 unchanged sentence

basis point spread.

As of September 30, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.23%, the Euro Interbank Offered Rate, or EURIBOR, was (0.50)%, Canadian Dollar Offer Rate, or CDOR, was 0.51% and the

As of March 31, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.19%, the Euro Interbank Offered Rate, or EURIBOR, was (0.54)%, Canadian Dollar Offer Rate, or CDOR, was 0.44% and the U.S.

Prime Lending Rate, or Prime, was 3.25%.

1 unchanged sentence

PIK income accruals may be adjusted based on the fair value of the underlying investment.

rate securities with no floor rate use the respective benchmark rate in all cases.

Variable rate

securities with no floor rate use the respective benchmark rate in all cases.

Denominated in U.S.

dollars unless otherwise noted.

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

(in millions, except share amounts)

Fair value determined by the Companys board of directors (see Note 8).

Security or portion thereof held within Locust Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the

term loan facility with JPMorgan Chase Bank, N.A.

(see Note 9).

Security or portion thereof held within Race Street Funding LLC.

7 unchanged sentences

Security or portion thereof held within CCT Dublin Funding Limited.

Position or portion thereof unsettled as of September 30, 2020.

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of March 31, 2021

(in millions, except share amounts)

The investment is not a qualifying asset under the Investment Company Act of 1940, as amended.

1 unchanged sentence

any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the companys total assets.

As of September 30, 2020, 75.4% of the Companys total assets represented

As of March 31, 2021, 74.3% of the Companys total assets represented

qualifying assets.

4 unchanged sentences

Security held within IC Arches Investments, LLC, a wholly-owned subsidiary of the Company.

Security held within CCT Holdings, LLC, a wholly-owned subsidiary of the Company.

Security held within CCT Holdings II, LLC, a wholly-owned subsidiary of the Company.

7 unchanged sentences

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

2 unchanged sentences

exercise control over the management or policies of such portfolio company.

As of September 30, 2020, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is not deemed to

The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person for the nine months ended September 30, 2020:

As of March 31, 2021, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is not deemed to

The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person for the three months ended March 31, 2021:

Portfolio Company

5 unchanged sentences

Fair Value at

September 30,

Senior Secured LoansFirst Lien

4 unchanged sentences

HM Dunn Co Inc

MB Precision Holdings LLC

Micronics Filtration Holdings Inc

1 unchanged sentence

Petroplex Acidizing Inc

Safariland LLC

ThermaSys Corp

Z Gallerie LLC

Senior Secured LoansSecond Lien

Z Gallerie LLC

Other Senior Secured Debt

JW Aluminum Co

Mood Media Corp

Z Gallerie LLC

Subordinated Debt

Home Partners of America Inc

Asset Based Finance

4 unchanged sentences

Orchard Marine Limited, Series A Preferred Stock

AltEn, LLC, Membership Units

ASG Technologies, Common Stock

5 unchanged sentences

HM Dunn Co Inc, Preferred Stock, Series B

Home Partners of America Inc, Common Stock

Home Partners of America Inc, Warrant

JW Aluminum Co, Common Stock

JW Aluminum Co, Preferred Stock

notes to unaudited consolidated financial statements.

1 unchanged sentence

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

6 unchanged sentences

Fair Value at

September 30,

Home Partners of America Inc, Common Stock

Home Partners of America Inc, Warrant

JW Aluminum Co, Common Stock

JW Aluminum Co, Preferred Stock

MB Precision Holdings LLC, Class A2 Units

MB Precision Holdings LLC, Preferred Stock

Micronics Filtration Holdings Inc, Common

Micronics Filtration Holdings Inc, Preferred Stock, Series

Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK (4)

Micronics Filtration Holdings Inc, Common Stock

Micronics Filtration Holdings Inc, Preferred Stock, Series A

Micronics Filtration Holdings Inc, Preferred Stock, Series B

Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK

Mood Media Corp, Common Stock

Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK

One Call Care Management Inc, Common Stock

5 unchanged sentences

Proserv Acquisition LLC, Class A Preferred Units

Safariland LLC, Common Equity

ThermaSys Corp, Common Stock

ThermaSys Corp, Preferred Stock

Z Gallerie LLC, Common Stock

Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of

2 unchanged sentences

sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

Interest, PIK, fee and dividend income presented for the full nine months ended September 30, 2020.

The Company held this investment as of December 31, 2019 but it was not deemed to be an affiliated person of the portfolio

company as of December 31, 2019.

Transfers in or out have been presented at amortized cost.

Interest, PIK, fee and dividend income presented for the full three months ended March 31, 2021.

notes to unaudited consolidated financial statements.

1 unchanged sentence

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

1 unchanged sentence

more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or policies of such portfolio company.

As of September 30, 2020, the Company held investments in portfolio companies of

As of March 31, 2021, the Company held investments in portfolio companies of

which it is deemed to be an affiliated person and deemed to control.

During the nine months ended September 30, 2020, the Company disposed of investments in portfolio companies of which it was deemed to be an

During the three months ended March 31, 2021, the Company disposed of investments in portfolio companies of which it was deemed to be an

affiliated person and deemed to control.

The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person and deemed to control for

the nine months ended September 30, 2020:

the three months ended March 31, 2021:

Portfolio Company

5 unchanged sentences

Fair Value at

September 30,

Senior Secured LoansFirst Lien

1 unchanged sentence

Amtek Global Technology Pte Ltd

Sound United LLC

Senior Secured LoansSecond Lien

Amtek Global Technology Pte Ltd

Sound United LLC

Other Senior Secured Debt

4 unchanged sentences

Hilding Anders

Asset Based Finance

2 unchanged sentences

Avida Holding AB, Common Stock

Kilter Finance, Preferred Stock

Kilter Finance, Private Equity

2 unchanged sentences

Toorak Capital Funding LLC, Membership Interest

Toorak Capital LLC, Membership Interest

Toorak Capital Partners LLC, Private Equity

Strategic Credit Opportunities Partners, LLC

9 unchanged sentences

Hilding Anders, Equity Options

KKR BPT Holdings Aggregator LLC, Membership Interest

Sound United LLC, Class A Units

Sound United LLC, Common Stock

Sound United LLC, Series I Units

Sound United LLC, Series II Units

notes to unaudited consolidated financial statements.

1 unchanged sentence

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2020

As of March 31, 2021

(in millions, except share amounts)

3 unchanged sentences

sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

Interest, PIK and dividend income presented for the full nine months ended September 30, 2020.

Interest, PIK and dividend income presented for the full three months ended March 31, 2021.

notes to unaudited consolidated financial statements.

7 unchanged sentences

5 Arch Income Fund 2 LLC

(l)(n)(q)(v)(w)

Diversified Financials

8 unchanged sentences

Capital Goods

Acproducts Inc

Consumer Durables & Apparel

Advanced Lighting Technologies Inc

Advantage Sales & Marketing Inc

Commercial & Professional Services

Alion Science & Technology Corp

Capital Goods

All Systems Holding LLC

2 unchanged sentences

Commercial & Professional Services

L+400 PIK (L+400 Max PIK)

AM General LLC

Capital Goods

American Tire Distributors Inc

Automobiles & Components

Ammeraal Beltech Holding BV

Capital Goods

L+750, 0.0% PIK (1.5% Max PIK)

Amtek Global Technology Pte Ltd

6 unchanged sentences

Diversified Financials

Apex Group Limited

Diversified Financials

Ardonagh Group Ltd

L+750, 0.0% PIK (2.3% Max PIK)

Ardonagh Group Ltd

L+750, 0.0% PIK (2.3% Max PIK)

Aspect Software Inc

Software & Services

8.0% PIK (8.0% Max PIK)

Aspect Software Inc

Software & Services

athenahealth Inc

Health Care Equipment & Services

AVF Parent LLC

L+925 PIK (L+925 Max PIK)

Bellatrix Exploration Ltd

Berner Food & Beverage LLC

Food & Staples Retailing

Borden (New Dairy Opco)

Food, Beverage & Tobacco

Borden (New Dairy Opco)

Food, Beverage & Tobacco

L+700, 0.0% PIK (1.0% Max PIK)

Borden Dairy Co

Food, Beverage & Tobacco

Brand Energy & Infrastructure Services Inc

Capital Goods

Camping World Good Sam

Consumer Durables & Apparel

CEPSA Holdco (Matador Bidco)

CHS/Community Health Systems, Inc.

Health Care Equipment & Services

Commercial Barge Line Co

Transportation

Compassus LLC

Health Care Equipment & Services

Capital Goods

Charles Taylor PLC

Diversified Financials

Capital Goods

5 unchanged sentences

Food, Beverage & Tobacco

L+577, 3.0% PIK (3.0% Max PIK)

Distribution International Inc

1 unchanged sentence

Food, Beverage & Tobacco

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Eagle Family Foods Inc

Food, Beverage & Tobacco

Electronics For Imaging Inc

Technology Hardware & Equipment

Empire Today LLC

1 unchanged sentence

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)

Entertainment Benefits Group LLC

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)

Entertainment Benefits Group LLC

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)

FloWorks International LLC

Capital Goods

FloWorks International LLC

Capital Goods

FloWorks International LLC

Capital Goods

Frontline Technologies Group LLC

Software & Services

Frontline Technologies Group LLC

Software & Services

Greystone & Co Inc

Diversified Financials

Greystone Equity Member Corp

Diversified Financials

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Greystone Equity Member Corp

6 unchanged sentences

Transportation

Heniff Transportation Systems LLC

Transportation

HM Dunn Co Inc

6 unchanged sentences

Commercial & Professional Services

Hunt Mortgage

Diversified Financials

Icynene Group Ltd

Commercial & Professional Services

E+500, 2.3% PIK (2.3% Max PIK)

Commercial & Professional Services

Imagine Communications Corp

Media & Entertainment

L+525, 2.3% PIK (2.3% Max PIK)

Individual FoodService

Capital Goods

Individual FoodService

Capital Goods

Individual FoodService

Capital Goods

Individual FoodService

Capital Goods

Industria Chimica Emiliana Srl

5 unchanged sentences

10.8%, 1.0% PIK (1.0% Max PIK)

JHT Holdings Inc

Capital Goods

Jarrow Formulas Inc

Household & Personal Products

Jo-Ann Stores Inc

Consumer Services

Kellermeyer Bergensons Services LLC

2 unchanged sentences

Commercial & Professional Services

Kellermeyer Bergensons Services LLC

Commercial & Professional Services

Kodiak BP LLC

4 unchanged sentences

Commercial & Professional Services

Technology Hardware & Equipment

Commercial & Professional Services

1 unchanged sentence

Commercial & Professional Services

Lionbridge Technologies Inc

Consumer Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Lipari Foods LLC

2 unchanged sentences

Food & Staples Retailing

Lipari Foods LLC

Food & Staples Retailing

Matchesfashion Ltd

Consumer Durables & Apparel

MB Precision Holdings LLC

Capital Goods

L+463, 1.0% PIK (1.0% Max PIK)

MI Windows & Doors Inc

Capital Goods

Miami Beach Medical Group LLC

Health Care Equipment & Services

Miami Beach Medical Group LLC

Health Care Equipment & Services

Micronics Filtration Holdings Inc

Capital Goods

L+800, 0.5% PIK (0.5% Max PIK)

Motion Recruitment Partners LLC

Commercial & Professional Services

7.5% PIK (7.5% Max PIK)

Motion Recruitment Partners LLC

2 unchanged sentences

Commercial & Professional Services

Multi-Color Corp

Commercial & Professional Services

Consumer Durables & Apparel

Software & Services

North Haven Cadence Buyer Inc

Consumer Services

North Haven Cadence Buyer Inc

Consumer Services

North Haven Cadence Buyer Inc

Consumer Services

North Haven Cadence Buyer Inc

Consumer Services

One Call Care Management Inc

Ontic Engineering & Manufacturing Inc

Capital Goods

Ontic Engineering & Manufacturing Inc

L+500, 2.5% PIK (2.5% Max PIK)

Omnimax International Inc

Capital Goods

Telecommunication Services

PAE Holding Corp

Omnimax International Inc

Capital Goods

Peak 10 Holding Corp

Telecommunication Services

One Call Care Management Inc

Health Care Equipment & Services

P2 Energy Solutions Inc.

Software & Services

P2 Energy Solutions Inc.

Software & Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

P2 Energy Solutions Inc.

Software & Services

Petroplex Acidizing Inc

L+725, 1.8% PIK (1.8% Max PIK)

Power Distribution Inc

Capital Goods

L+900 PIK (L+900 Max PIK)

Polyconcept North America Inc

Household & Personal Products

L+450 PIK (L+450 Max PIK)

Premium Credit Ltd

Diversified Financials

Project Marron

1 unchanged sentence

Health Care Equipment & Services

Qdoba Restaurant Corp

Consumer Services

Quorum Health Corp

Health Care Equipment & Services

Reliant Rehab Hospital Cincinnati LLC

Health Care Equipment & Services

Revere Superior Holdings Inc

Software & Services

Revere Superior Holdings Inc

Software & Services

Roadrunner Intermediate Acquisition Co LLC

3 unchanged sentences

RSC Insurance Brokerage Inc

Safariland LLC

Capital Goods

Safariland LLC

Capital Goods

Safe-Guard Products International LLC

Diversified Financials

L+800, 0.8% PIK (0.8% Max PIK)

C+850, 0.8% PIK (0.8% Max PIK)

Capital Goods

L+675, 0.0% PIK (1.0% Max PIK)

3 unchanged sentences

Health Care Equipment & Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Sequential Brands Group Inc.

Consumer Durables & Apparel

Smart Foodservice

Food & Staples Retailing

SMART Global Holdings Inc

Semiconductors & Semiconductor Equipment

Sorenson Communications LLC

Telecommunication Services

Staples Canada

Sound United LLC

Consumer Durables & Apparel

Sungard Availability Services Capital Inc

Software & Services

L+375, 3.8% PIK (3.8% Max PIK)

Sungard Availability Services Capital Inc

Software & Services

Sutherland Global Services Inc

Software & Services

L+375, 3.8% PIK (3.8% Max PIK)

Sweeping Corp of America Inc

Commercial & Professional Services

Sweeping Corp of America Inc

Commercial & Professional Services

Sweeping Corp of America Inc

Commercial & Professional Services

Sweet Harvest Foods Management Co

1 unchanged sentence

L+775, 1.0% PIK (1.0% Max PIK)

Software & Services

Sweet Harvest Foods Management Co

Food & Staples Retailing

L+775, 1.0% PIK (1.0% Max PIK)

Software & Services

Team Health Inc

Health Care Equipment & Services

ThermaSys Corp

Capital Goods

L+1,100 PIK (L+1,100 Max PIK)

ThreeSixty Group

L+375, 3.8% PIK (3.8% Max PIK)

ThreeSixty Group

Total Safety US Inc

Capital Goods

L+375, 3.8% PIK (3.8% Max PIK)

Software & Services

Transaction Services Group Ltd

Consumer Services

Software & Services

Transaction Services Group Ltd

Consumer Services

Software & Services

Transaction Services Group Ltd

Software & Services

Truck-Lite Co LLC

Automobiles & Components

Capital Goods

Truck-Lite Co LLC

Automobiles & Components

Capital Goods

Truck-Lite Co LLC

Automobiles & Components

Capital Goods

Utility One Source LP

Capital Goods

Vertiv Group Corp

Technology Hardware & Equipment

Virgin Pulse Inc

Software & Services

Commercial & Professional Services

Warren Resources Inc

L+900, 1.0% PIK (1.0% Max PIK)

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Wheels Up Partners LLC

8 unchanged sentences

Transportation

Yak Access LLC

Capital Goods

Zeta Interactive Holdings Corp

Software & Services

Wheels Up Partners LLC

Transportation

Zeta Interactive Holdings Corp

6 unchanged sentences

Capital Goods

Access CIG LLC

Software & Services

Advantage Sales & Marketing Inc

Commercial & Professional Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Agro Merchants Global LP

Transportation

Albany Molecular Research Inc

Pharmaceuticals, Biotechnology & Life Sciences

Amtek Global Technology Pte Ltd

Automobiles & Components

Amtek Global Technology Pte Ltd

(g)(j)(l)(n)(w)(z)

Automobiles & Components

Arena Energy LP

L+900, 4.0% PIK (4.0% Max PIK)

E+500 PIK (E+500 Max PIK)

athenahealth Inc

Health Care Equipment & Services

Bellatrix Exploration Ltd

Byrider Finance LLC

1 unchanged sentence

L+1,000, 0.5% PIK (0.5% Max PIK)

Chisholm Oil & Gas Operating LLC

L+550, 3.0% PIK (3.0% Max PIK)

CommerceHub Inc

Software & Services

Culligan International Co

Household & Personal Products

EaglePicher Technologies LLC

Capital Goods

Electronics For Imaging Inc

Technology Hardware & Equipment

Emerald Performance Materials LLC

Excelitas Technologies Corp

Technology Hardware & Equipment

Software & Services

Gruden Acquisition Inc

Transportation

LBM Borrower LLC

Capital Goods

MedAssets Inc

Health Care Equipment & Services

Software & Services

Consumer Durables & Apparel

L+1,275 PIK (L+1,275 Max PIK)

NEP Broadcasting LLC

2 unchanged sentences

Software & Services

Ontic Engineering & Manufacturing Inc

Capital Goods

P2 Energy Solutions, Inc.

Software & Services

Paradigm Acquisition Corp

6 unchanged sentences

Household & Personal Products

11.0% PIK (11.0% Max PIK)

Pretium Packaging LLC

Household & Personal Products

Pure Fishing Inc

2 unchanged sentences

Food, Beverage & Tobacco

SIRVA Worldwide Inc

Commercial & Professional Services

Capital Goods

L+1,075, 0.0% PIK (6.8% Max PIK)

Sorenson Communications LLC

Telecommunication Services

L+1,150 PIK (L+1,150 Max PIK)

Sound United LLC

Consumer Durables & Apparel

13.5% PIK (13.5% Max PIK)

11 unchanged sentences

E+850, 0.5% PIK (0.5% Max PIK)

Z Gallerie LLC

Total Senior Secured LoansSecond Lien

11 unchanged sentences

Black Swan Energy Ltd

Cleaver-Brooks Inc

Capital Goods

Enterprise Development Authority

Consumer Services

FourPoint Energy LLC

JW Aluminum Co

Consumer Durables & Apparel

Maxim Crane Works LP / Maxim Finance Corp

Capital Goods

Mood Media Corp

Media & Entertainment

L+1,400 PIK (L+1,400 Max PIK)

MultiPlan Inc

Health Care Equipment & Services

Pattonair Holdings Ltd

Capital Goods

Rockport (Relay)

Consumer Durables & Apparel

15.0% PIK (15.0% Max PIK)

Capital Goods

Velvet Energy Ltd

Commercial & Professional Services

Z Gallerie LLC

Total Other Senior Secured Debt

Subordinated Debt5.5%

Alion Science & Technology Corp

Capital Goods

Alion Science & Technology Corp

Capital Goods

All Systems Holding LLC

1 unchanged sentence

10.0% PIK (10.0% Max PIK)

Ardonagh Group Ltd

athenahealth Inc

1 unchanged sentence

L+1,113 PIK (L+1,113 Max PIK)

Byrider Finance LLC

Automobiles & Components

20.0% PIK (20.0% Max PIK)

ClubCorp Club Operations Inc

Consumer Services

Cornerstone (Ply Gem Holdings Inc)

Capital Goods

Craftworks Rest & Breweries Group Inc

1 unchanged sentence

14.0% PIK (14.0% Max PIK)

DEI Sales Inc

Consumer Durables & Apparel

13.0% PIK (13.0% Max PIK)

Diamond Resorts International Inc

Consumer Services

GFL Environmental Inc

Commercial & Professional Services

Hilding Anders

(g)(l)(n)(w)(z)

Consumer Durables & Apparel

13.0% PIK (13.0% Max PIK)

Hilding Anders

(g)(l)(n)(w)(z)

Consumer Durables & Apparel

12.0% PIK (12.0% Max PIK)

Hilding Anders

2 unchanged sentences

13.0% PIK (13.0% Max PIK)

Hilding Anders

(g)(l)(n)(w)(z)

Consumer Durables & Apparel

18.0% PIK (18.0% Max PIK)

Imagine Communications Corp

Media & Entertainment

12.5% PIK (12.5% Max PIK)

Kenan Advantage Group Inc

Transportation

LifePoint Hospitals Inc

Health Care Equipment & Services

Nouryon (fka Akzo Nobel Specialty Chemicals)

PAREXEL International Corp

Pharmaceuticals, Biotechnology & Life Sciences

Plastipak Holdings Inc

Ply Gem Holdings Inc

Capital Goods

Quorum Health Corp

Health Care Equipment & Services

SRS Distribution Inc

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Team Health Inc

Health Care Equipment & Services

Vertiv Group Corp

Technology Hardware & Equipment

Commercial & Professional Services

Legends Hospitality LLC

Consumer Services

L+1,000 PIK (L+1,000 Max PIK)

Total Subordinated Debt

Asset Based Finance30.8%

801 5th Ave, Seattle, Structure Mezzanine

801 5th Ave, Seattle, Private Equity

801 5th Ave, Seattle, Structure Mezzanine

8.0%, 3.0% PIK (3.0% Max PIK)

Abacus JV, Private Equity

7 unchanged sentences

Transportation

Avida Holding AB, Common Stock

Diversified Financials

Bank of Ireland, Class B Credit Linked Floating Rate Note

Byrider Finance LLC, Structured Mezzanine

Automobiles & Components

Byrider Finance LLC, Structured Mezzanine

Automobiles & Components

Byrider Finance LLC, Sub Note

Automobiles & Components

Callodine Commercial Finance LLC, 2L Term Loan A

Diversified Financials

Callodine Commercial Finance LLC, 2L Term Loan B

Diversified Financials

Capital Automotive LP, Private Equity

Capital Automotive LP, Structured Mezzanine

11.0% PIK (11.0% Max PIK)

Global Jet Capital LLC, Preferred Stock

Commercial & Professional Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Global Jet Capital LLC, Structured Mezzanine

34 unchanged sentences

15.0% PIK (15.0% Max PIK)

Global Jet Capital LLC, Preferred Stock

Commercial & Professional Services

Global Lending Services LLC, Private Equity

Diversified Financials

Global Lending Services LLC, Private Equity

Diversified Financials

Home Partners JV, Common Stock

Home Partners JV, Private Equity

(g)(l)(n)(x)(y)

Home Partners JV, Structured Mezzanine

2 unchanged sentences

11.0% PIK (11.0% Max PIK)

Home Partners JV, Common Stock

Home Partners JV, Private Equity

(g)(l)(n)(x)(y)

Kilter Finance, Preferred Stock

6.0%, 6.0% PIK (6.0% Max PIK)

Kilter Finance, Private Equity

KKR Central Park Leasing Aggregator L.P., Partnership Interest

6 unchanged sentences

Technology Hardware & Equipment

Opendoor Labs Inc, 2L Term Loan

Orchard Marine Limited, Class B Common Stock

2 unchanged sentences

Transportation

Prime ST LLC, Private Equity

Prime ST LLC, Structured Mezzanine

5.0%, 6.0% PIK (6.0% Max PIK)

Rampart CLO 2007 1A Class Subord.

Diversified Financials

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Sofi Lending Corp, 2019-C R1

Sofi Lending Corp, Purchase Facility

Diversified Financials

2 unchanged sentences

Toorak Capital Funding LLC, Membership Interest

Diversified Financials

Toorak Capital LLC, Membership Interest

Diversified Financials

Toorak Capital Partners LLC, Private Equity

Wind River CLO Ltd.

8 unchanged sentences

Total Strategic Credit Opportunities Partners

Equity/Other14.8% (k)

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Equity/Other17.1% (m)

Advanced Lighting Technologies Inc, Common Stock

4 unchanged sentences

Commercial & Professional Services

AltEn, LLC, Membership Units

Amtek Global Technology Pte Ltd, Ordinary Shares

1 unchanged sentence

5,735,804,056

Amtek Global Technology Pte Ltd, Private Equity

Automobiles & Components

Amtek Global Technology Pte Ltd, Trade Claim

4 unchanged sentences

Capital Goods

Ardonagh Ltd, Ordinary Shares

Ardonagh Ltd, Preferred Stock

Arena Energy LP, Warrants

Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock

8 unchanged sentences

Software & Services

AVF Parent LLC, Trade Claim

Belk Inc, Units

Bellatrix Exploration Ltd, Warrant

Byrider Finance LLC, Common Stock

Automobiles & Components

Borden (New Dairy Opco), Common Stock

Food, Beverage & Tobacco

Cengage Learning, Inc, Common Stock

2 unchanged sentences

Chisholm Oil & Gas Operating LLC, Series A Units

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

CSafe Global, Common Stock

Capital Goods

CTI Foods Holding Co LLC, Common Stock

Food, Beverage & Tobacco

DEI Sales Inc, Class A Units

Consumer Durables & Apparel

DEI Sales Inc, Series I Units

Consumer Durables & Apparel

DEI Sales Inc, Series II Units

Consumer Durables & Apparel

Directed LLC, Warrant

1 unchanged sentence

Empire Today LLC, Common Stock

FourPoint Energy LLC, Common Stock, Class CIIA Units

FourPoint Energy LLC, Common Stock, Class D Units

FourPoint Energy LLC, Common Stock, Class EII Units

FourPoint Energy LLC, Common Stock, Class EIII Units

Fronton BV, Common Stock

2 unchanged sentences

Technology Hardware & Equipment

Genesys Telecommunications Laboratories Inc, Class A1A5 Shares

Technology Hardware & Equipment

Genesys Telecommunications Laboratories Inc, Ordinary Shares

Technology Hardware & Equipment

Genesys Telecommunications Laboratories Inc, Ordinary Shares

Technology Hardware & Equipment

Genesys Telecommunications Laboratories Inc, Preferred Stock

2 unchanged sentences

Capital Goods

Hilding Anders, ARLE PIK Interest

(g)(l)(n)(w)(z)

Consumer Durables & Apparel

12.0% PIK (12.0% Max PIK)

Hilding Anders, Class A Common Stock

12 unchanged sentences

Home Partners of America Inc, Warrant

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Imagine Communications Corp, Common Stock

Media & Entertainment

JHC Acquisition LLC, Common Stock

Capital Goods

Jones Apparel Holdings, Inc., Common Stock

Consumer Durables & Apparel

JSS Holdings Ltd, Net Profits Interest

Capital Goods

JW Aluminum Co, Common Stock

JW Aluminum Co, Preferred Stock

Keystone Australia Holdings Pty Limited, Residual Claim

Consumer Services

KKR BPT Holdings Aggregator LLC, Membership Interest

Diversified Financials

MB Precision Holdings LLC, Preferred Stock

Capital Goods

12.5% PIK (12.5% Max PIK)

Maverick Natural Resources, Common Stock

MB Precision Holdings LLC, Class A2 Units

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Miami Beach Medical Group LLC, Common Stock

Health Care Equipment & Services

Micronics Filtration Holdings Inc, Common Stock

4 unchanged sentences

Capital Goods

Mood Media Corp, Common Stock

Media & Entertainment

Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK

Capital Goods

3.0% PIK (3.0% Max PIK)

Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK

Capital Goods

7.5% PIK (7.5% Max PIK)

NBG Home, Common Stock

2 unchanged sentences

Consumer Durables & Apparel

North Haven Cadence Buyer Inc, Common Stock

Consumer Services

One Call Care Management Inc, Common Stock

Health Care Equipment & Services

4,370,566,806

One Call Care Management Inc, Preferred Stock A

Health Care Equipment & Services

One Call Care Management Inc, Preferred Stock B

Health Care Equipment & Services

9.0% PIK (9.0% Max PIK)

4 unchanged sentences

Household & Personal Products

Power Distribution Inc, Common Stock

Capital Goods

Proserv Acquisition LLC, Class A Common Units

Proserv Acquisition LLC, Class A Preferred Units

Quorum Health Corp, Common Stock

Health Care Equipment & Services

Quorum Health Corp, Trade Claim

Health Care Equipment & Services

Quorum Health Corp, Trust Initial Funding Units

Health Care Equipment & Services

Ridgeback Resources Inc, Common Stock

Rockport (Relay), Warrant

Consumer Durables & Apparel

Safariland LLC, Common Equity

Capital Goods

Sequential Brands Group Inc., Common Stock

2 unchanged sentences

Telecommunication Services

Sound United LLC, Class A Units

Consumer Durables & Apparel

Sound United LLC, Common Stock

Consumer Durables & Apparel

Sound United LLC, Series I Units

Consumer Durables & Apparel

Sound United LLC, Series II Units

Consumer Durables & Apparel

SSC (Lux) Limited S.a r.l., Common Stock

4 unchanged sentences

Software & Services

Sunnova Energy International Inc, Common Stock

Sweet Harvest Foods Management Co, Warrant

Food & Staples Retailing

ThermaSys Corp, Common Stock

(e)(f)(g)(n)(y)

Capital Goods

1 unchanged sentence

Capital Goods

Towergate, Preferred Stock

Towergate, Ordinary Shares

Trace3 Inc, Common Stock

2 unchanged sentences

Warren Resources Inc, Common Stock

Z Gallerie LLC, Common Stock

Zeta Interactive Holdings Corp, Preferred Stock, Series E1

2 unchanged sentences

Software & Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Zeta Interactive Holdings Corp, Warrant

4 unchanged sentences

NET ASSETS100%

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Foreign currency forward contracts

11 unchanged sentences

JP Morgan Chase Bank

Security may be an obligation of one or more entities affiliated with the named company.

1 unchanged sentence

basis point spread.

As of December 31, 2019, the three-month London Interbank Offered Rate, or LIBOR or L, was 1.91%, the Euro Interbank Offered Rate, or EURIBOR, was (0.38)% and the U.S.

As of December 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.24%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Canadian Dollar Offer Rate, or CDOR, was 0.48% and the

Prime Lending Rate, or Prime, was 3.25%.

means paid-in-kind.

PIK means paid-in-kind.

PIK income accruals may be adjusted based on the fair value of the underlying investment.

2 unchanged sentences

Fair value determined by the Companys board of directors (see Note 8).

Security or portion thereof held within Locust Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the

term loan facility with JPMorgan Chase Bank, N.A.

(see Note 9).

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Security or portion thereof held within Race Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the

6 unchanged sentences

Security or portion thereof was held within CCT Dublin Funding Limited

Position or portion thereof unsettled as of December 31, 2019.

The investment is not a qualifying asset under the Investment Company Act of 1940, as amended.

6 unchanged sentences

Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company.

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company.

Security held within IC Arches Investments LLC, a wholly-owned subsidiary of the Company.

Security held within IC Altus Investments, LLC, a wholly-owned subsidiary of the Company.

Security held within CCT Holdings, LLC, a wholly-owned subsidiary of the Company.

Security held within CCT Holdings II, LLC, a wholly-owned subsidiary of the Company.

Security held within FCF, LLC, a wholly-owned subsidiary of the Company.

Security is an unfunded commitment.

2 unchanged sentences

Security is classified as Level 1 or 2 in the Companys fair value hierarchy (see Note 8).

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Under the Investment Company Act of 1940, as amended, the Company generally is deemed to be an affiliated person of a portfolio

12 unchanged sentences

Senior Secured LoansFirst Lien

Aspect Software Inc (4)

Charlotte Russe Inc

Borden (New Dairy Opco)

Borden Dairy Co (4)

HM Dunn Co Inc

1 unchanged sentence

MB Precision Holdings LLC

Micronics Filtration Holdings Inc (4)

One Call Care Management Inc

3 unchanged sentences

ThermaSys Corp

Z Gallerie LLC

Senior Secured LoansSecond Lien

2 unchanged sentences

JW Aluminum Co

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2019

(in millions, except share amounts)

Portfolio Company

Fair Value at

Additions (1)

Reductions (2)

Net Change in

(Depreciation)

Fair Value at

December 31, 2019

Mood Media Corp

Rockport (Relay) (4)

Subordinated Debt

Z Gallerie LLC

Asset Based Finance

Home Partners JV, Structured Mezzanine

Home Partners JV, Common Stock

Home Partners JV, Private Equity

Home Partners JV, Structured Mezzanine

Orchard Marine Limited, Class B Common Stock

3 unchanged sentences

ASG Technologies, Warrants

Aspect Software Inc, Common Stock (4)

Borden (New Dairy Opco), Common Stock

Charlotte Russe Inc, Common Stock

2 unchanged sentences

HM Dunn Co Inc, Preferred Stock, Series B

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Consolidated Schedule of Investments (continued)

As of December 31, 2020

(in millions, except share amounts)

Portfolio Company

Fair Value at

Additions (1)

Reductions (2)

Net Change in

(Depreciation)

Fair Value at

December 31, 2020

Home Partners of America Inc, Common Stock

4 unchanged sentences

MB Precision Holdings LLC, Preferred Stock

Micronics Filtration Holdings Inc, Common

Micronics Filtration Holdings Inc, Preferred Stock, Series

Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK (4)

Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK (4)

Mood Media Corp, Common Stock

Mood Media LLC, Class A Warrants

Mood Media LLC, Class B Warrants

Mood Media LLC, Class C Warrants

One Call Care Management Inc, Common Stock

5 unchanged sentences

Proserv Acquisition LLC, Class A Preferred Units

Rockport (Relay), Class A

Safariland LLC, Common Equity

4 unchanged sentences

unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or

sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

Interest, PIK, fee and dividend income presented for the full year ended December 31, 2020.

The Company held this investment as of December 31, 2019 but it was not deemed to be an affiliated person of the portfolio

company as of December 31, 2019.

Transfers in or out have been presented at amortized cost.

notes to unaudited consolidated financial statements.

3 unchanged sentences

(in millions, except share amounts)

Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or

sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

Interest and PIK income presented for the full year ended December 31, 2019.

The Company held this investment as of December 31, 2019 but it was not deemed to be an affiliated person of the portfolio

company or deemed to control the portfolio company as of December 31, 2019.

Transfers in or out have been presented at amortized cost.

The Company held this investment as of December 31, 2018 but it was deemed to control the portfolio company as of

December 31, 2018.

Transfers in or out have been presented at amortized cost.

The Company held this investment as of December 31, 2018 but it was not deemed to be an affiliated person of the portfolio

company or deemed to control the portfolio company as of December 31, 2018.

Transfers in or out have been presented at amortized cost.

Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a portfolio company if it owns

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Amtek Global Technology Pte Ltd

Sound United LLC

Senior Secured LoansSecond Lien

Amtek Global Technology Pte Ltd

Sound United LLC

Other Senior Secured Debt

Advanced Lighting Technologies Inc

JW Aluminum Co (4)

Subordinated Debt

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Hilding Anders

Asset Based Finance

1 unchanged sentence

801 5th Ave, Seattle, Private Equity

Comet Aircraft S.a.r.l., Common Stock

Toorak Capital LLC, Membership Interest

Avida Holding AB, Common Stock

Kilter Finance, Preferred Stock

Kilter Finance, Private Equity

Prime ST LLC, Private Equity

Prime ST LLC, Structured Mezzanine

Toorak Capital Funding LLC, Membership Interest

Toorak Capital Partners LLC, Private Equity

Strategic Credit Opportunities Partners, LLC

Advanced Lighting Technologies Inc, Common

Advanced Lighting Technologies Inc,

Amtek Global Technology Pte Ltd, Ordinary Shares

Amtek Global Technology Pte Ltd, Trade Claim

Amtek Global Technology Pte Ltd, Private Equity

Hilding Anders, ARLE PIK Interest

notes to unaudited consolidated financial statements.

11 unchanged sentences

December 31, 2020

Advanced Lighting Technologies Inc, Common

Advanced Lighting Technologies Inc,

Amtek Global Technology Pte Ltd, Ordinary Shares

Amtek Global Technology Pte Ltd, Trade Claim

Hilding Anders, ARLE PIK Interest

Hilding Anders, Class A Common Stock

2 unchanged sentences

Hilding Anders, Equity Options

JW Aluminum Co, Common Stock (4)

JW Aluminum Co, Preferred Stock (4)

KKR BPT Holdings Aggregator LLC, Membership Interest

Sound United LLC, Class A Units

Sound United LLC, Common Stock

Sound United LLC, Series I Units

Sound United LLC, Series II Units

Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of

3 unchanged sentences

Interest, PIK and dividend income presented for the full year ended December 31, 2020.

The Company held this investment as of December 31, 2019 but it was not deemed to control the portfolio company as of

December 31, 2019.

Transfers in or out have been presented at amortized cost.

notes to unaudited consolidated financial statements.

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federal income tax purposes, and intends to qualify annually, as a regulated investment company, or RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code.

September 30, 2020, the Company had various wholly-owned subsidiaries, including special-purpose financing subsidiaries and subsidiaries through which it holds interests in portfolio companies.

March 31, 2021, the Company had various wholly-owned subsidiaries, including special-purpose financing subsidiaries and subsidiaries through which it holds interests in portfolio companies.

The unaudited consolidated financial statements

include both the Companys accounts and the accounts of its wholly-owned subsidiaries as of September 30, 2020.

All significant intercompany transactions have been eliminated in consolidation.

Certain of the Companys consolidated

subsidiaries are subject to U.S.

include both the Companys accounts and the accounts of its wholly-owned subsidiaries as of March 31, 2021.

All intercompany transactions have been eliminated in consolidation.

Certain of the Companys consolidated subsidiaries are

subject to U.S.

federal and state income taxes.

The Companys investment objectives are to generate

current income and, to a lesser extent, long-term capital appreciation.

The Companys investment objectives are to generate current income and,

to a lesser extent, long-term capital appreciation.

The Companys portfolio is comprised primarily of investments in senior secured loans and second lien secured loans of private middle-market U.S.

companies and, to a lesser

extent, subordinated loans and certain asset-based financing loans of private U.S.

In addition, a portion of the Companys portfolio may be comprised of equity and equity-related securities, corporate bonds, structured products,

other debt securities and derivatives, including total return swaps and credit default swaps.

The Company is externally

managed by FS/KKR Advisor, LLC, or the Advisor, pursuant to an investment advisory agreement, dated as of December 20, 2018, or the investment advisory agreement.

On April 9, 2018, GSO / Blackstone Debt Funds Management LLC, or GDFM,

resigned as the investment sub-adviser to the Company and terminated the investment sub-advisory agreement, or the investment

sub-advisory agreement, between FB Income Advisor, LLC, or FB Advisor, and GDFM, effective April 9, 2018.

In connection with GDFMs resignation as the investment

sub-adviser to the Company, on April 9, 2018, the Company entered into an investment advisory agreement, or the prior investment advisory agreement, with the Advisor.

The prior investment advisory

agreement replaced the amended and restated investment advisory agreement, dated July 17, 2014, or the FB Advisor investment advisory agreement, by and between the Company and FB Advisor.

On June 15, 2020, the Company filed Articles of Amendment to its Articles of Incorporation, or the Reverse Stock Split Amendment,

with the State Department of Assessments and Taxation of the State of Maryland to effect a 4 to 1 reverse split of the Companys shares of common stock, or the Reverse Stock Split.

The Reverse Stock Split became effective in accordance with the

terms of the Reverse Stock Split Amendment on June 15, 2020.

The Reverse Stock Split affected all shareholders uniformly

and did not alter any shareholders percentage interest in the Companys equity, except to the extent that the Reverse Stock Split resulted in some shareholders owning a fractional share.

In that regard, no fractional shares were issued in

connection with the Reverse Stock Split.

Shareholders of record who would have otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Companys common stock as reported on the

NYSE as of June 15, 2020.

A summary of the Companys weighted average number of shares of common stock outstanding and earnings per share after adjusting for the Reverse Stock Split is as follows:

September 30, 2019

companies and, to a lesser extent,

subordinated loans and certain asset-based financing loans of private U.S.

In addition, a portion of the Companys portfolio may be comprised of equity and equity-related securities, corporate bonds, structured products, other debt

securities and derivatives, including total return swaps and credit default swaps.

The Company is externally managed by FS/KKR

Advisor, LLC, or the Advisor, pursuant to an investment advisory agreement, dated as of December 20, 2018, or the investment advisory agreement.

On April 9, 2018, GSO / Blackstone Debt Funds Management LLC, or GDFM, resigned as the

investment sub-adviser to the Company and terminated the investment sub-advisory agreement, or the investment sub-advisory

agreement, between FB Income Advisor, LLC, or FB Advisor, and GDFM, effective April 9, 2018.

In connection with GDFMs resignation as the investment sub-adviser to the Company, on April 9, 2018,

the Company entered into an investment advisory agreement, or the prior investment advisory agreement, with the Advisor.

The prior investment advisory agreement replaced the amended and restated investment advisory agreement, dated July 17,

2014, or the FB Advisor investment advisory agreement, by and between the Company and FB Advisor.

On June 15, 2020, the

Company filed Articles of Amendment to its Articles of Incorporation, or the Reverse Stock Split Amendment, with the State Department of Assessments and Taxation of the State of Maryland to effect a 4 to 1 reverse split of the Companys shares

of common stock, or the Reverse Stock Split.

The Reverse Stock Split became effective in accordance with the terms of the Reverse Stock Split Amendment on June 15, 2020.

The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholders percentage interest in the Companys equity, except to the extent that the Reverse Stock Split

resulted in some shareholders owning a fractional share.

In that regard, no fractional shares were issued in connection with the Reverse Stock Split.

Shareholders of record who would have otherwise been entitled to receive a fractional share instead

received a cash payment based on the closing price of the Companys common stock as reported on the NYSE as of June 15, 2020.

A summary of the Companys weighted average number of shares of common stock outstanding and earnings per

share after adjusting for the Reverse Stock Split is as follows:

Weighted average number of shares of common stock outstanding (as previously reported)

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Earnings per share (as adjusted)

On November 23, 2020, the Company entered into an Agreement and Plan of Merger, or the 2020 Merger

Agreement, with FS KKR Capital Corp II., a Maryland corporation, or FSKR and, together with the Company, the Funds, Rocky Merger Sub, Inc.,

FS KKR Capital Corp.

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(in millions, except share and per share amounts)

Principal Business and

Organization (continued)

a Maryland corporation and wholly-owned subsidiary of the Company, or Merger Sub, and the Advisor.

The 2020 Merger Agreement provides that, subject to the conditions set forth in the 2020 Merger

Agreement, Merger Sub will merge with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned subsidiary of the Company, or the First Merger, and, immediately thereafter, FSKR will merge with and into the Company, with the

Company continuing as the surviving company or, together with the First Merger, the 2021 Merger.

See Note 12 for additional information.

Summary of Significant Accounting Policies

Basis of Presentation:

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance

with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals)

considered necessary for a fair presentation have been included.

For a more complete discussion of significant accounting policies and certain other information, the Companys interim unaudited consolidated financial statements should be read

in conjunction with its audited consolidated financial statements as of and for the year ended December 31, 2019 included in the Companys annual report on Form 10-K for the year ended

December 31, 2019.

Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

The December 31, 2019

consolidated balance sheet and consolidated schedule of investments are derived from the Companys audited consolidated financial statements as of and for the year ended December 31, 2019.

The Company is considered an investment company

under GAAP and follows the accounting and reporting guidance applicable to investment companies under Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies .

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United

States of America, or GAAP, for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include

all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

more complete discussion of significant accounting policies and certain other information, the Companys interim unaudited consolidated financial statements should be read in conjunction with its audited consolidated financial statements as of

and for the year ended December 31, 2020 included in the Companys annual report on Form 10-K for the year ended December 31, 2020.

Operating results for the three months ended March 31,

2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

The December 31, 2020 consolidated balance sheet and consolidated schedule of investments are derived from the Companys

audited consolidated financial statements as of and for the year ended December 31, 2020.

The Company is considered an investment company under GAAP and follows the accounting and reporting guidance applicable to investment companies under

Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies .

Use of Estimates:

The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period.

preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Capital Gains Incentive Fee:

to the terms of the investment advisory agreement, the incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement).

This fee equals 20.0% of the

Companys incentive fee capital gains, which shall equal both Corporate Capital Trust, Inc.s, or CCT, and the Companys realized capital gains (without duplication) on a cumulative basis from inception, calculated as of the end of

each calendar year, computed net of all realized capital losses and unrealized capital depreciation (without duplication) on a cumulative basis, less the aggregate amount of any capital gain incentive fees previously paid by CCT and the Company.

a quarterly basis, the Company accrues for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.

The Company includes unrealized gains in the calculation of the capital gains incentive fee expense and related accrued capital gains incentive fee.

This accrual reflects the incentive fees that would be

payable to the Advisor if the Companys entire portfolio was liquidated at its fair value as of the balance sheet date even though the Advisor is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are

actually realized.

Pursuant to the terms of the investment advisory agreement, the incentive fee on capital

gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement).

This fee equals 20.0% of the Companys incentive fee capital gains, which shall equal both Corporate

Capital Trust, Inc.s, or CCT, and the Companys realized capital gains (without duplication) on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized

capital depreciation (without duplication) on a cumulative basis, less the aggregate amount of any capital gain incentive fees previously paid by CCT and the Company.

On a quarterly basis, the Company accrues for the capital gains incentive fee by

calculating such fee as if it were due and payable as of the end of such period.

The Company includes unrealized gains in the

calculation of the capital gains incentive fee expense and related accrued capital gains incentive fee.

This accrual reflects the incentive fees that would be payable to the Advisor if the Companys entire portfolio was liquidated at its fair

value as of the balance sheet date even though the Advisor is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized.

Subordinated Income Incentive Fee:

Pursuant to the terms of the investment advisory

agreement, the Advisor may also be entitled to receive a subordinated incentive fee on income.

The subordinated incentive fee on income under the investment advisory agreement, which is calculated and payable quarterly in arrears, equals 20.0% of

the Companys pre-incentive fee net investment income for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate of return on the value of the

Pursuant to the terms of the investment advisory agreement, the Advisor may also be

entitled to receive a subordinated incentive fee on income.

The subordinated incentive fee on income under the investment advisory agreement, which is calculated and payable quarterly in arrears, equals 20.0% of the

Companys pre-incentive fee net investment income for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate of return on the value of the

Companys net assets, equal to 1.75% per quarter, or an annualized hurdle rate of 7.0%.

3 unchanged sentences

net investment income in any quarter exceeds the hurdle rate, the Advisor will be entitled to a catch-up fee equal to the amount of

the pre-incentive fee net investment income in excess of the hurdle rate, until the Companys pre-incentive fee net investment income for such

quarter equals 2.1875%, or 8.75% annually, of net assets.

Thereafter, the Advisor will be entitled to receive 20.0% of pre-incentive fee net investment income.

The subordinated incentive fee on income is subject to a cap equal to (i) 20.0% of the per

share pre-incentive fee return for the then-current and eleven preceding calendar quarters minus the cumulative per share incentive fees accrued and/or payable for the

eleven preceding calendar quarters multiplied by (ii) the weighted average number of shares outstanding during the calendar quarter (or any portion thereof) for which the subordinated incentive fee on income is being calculated.

definitions of per share pre-incentive fee return and per share incentive fees under the investment advisory agreement take into account the historic per share pre-incentive fee return of both the Company and CCT, together with the historic per share

the pre-incentive fee net investment income in excess of the

FS KKR Capital Corp.

3 unchanged sentences

Policies (continued)

incentive fees paid by both the Company and CCT.

For the purpose of calculating the per share pre-incentive fee return, any

unrealized appreciation or depreciation recognized as a result of the purchase accounting for the Companys acquisition of CCT, or the Merger, is excluded.

hurdle rate, until the Companys pre-incentive fee net investment income for such quarter equals 2.1875%, or 8.75% annually, of net assets.

Thereafter, the Advisor will be entitled to receive 20.0% of pre-incentive fee net investment income.

The subordinated incentive fee on income is subject to a cap equal to (i) 20.0% of the per share pre-incentive fee return for the

then-current and eleven preceding calendar quarters minus the cumulative per share incentive fees accrued and/or payable for the eleven preceding calendar quarters multiplied by (ii) the weighted average number

of shares outstanding during the calendar quarter (or any portion thereof) for which the subordinated incentive fee on income is being calculated.

The definitions of per share pre-incentive fee

return and per share incentive fees under the investment advisory agreement take into account the historic per share pre-incentive fee return of both the Company and CCT, together

with the historic per share incentive fees paid by both the Company and CCT.

For the purpose of calculating the per share pre-incentive fee return, any unrealized appreciation or

depreciation recognized as a result of the purchase accounting for the Companys acquisition of CCT, or the 2018 Merger, is excluded.

Reclassifications:

Certain amounts in the unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2019 and the audited consolidated financial

statements as of and for the year ended December 31, 2019 may have been reclassified to conform to the classifications used to prepare the unaudited consolidated financial statements as of and for the three and nine months ended

September 30, 2020.

Certain amounts in the unaudited consolidated financial statements as of and for the three months ended March 31, 2020 and the audited consolidated financial statements as

of and for the year ended December 31, 2020 may have been reclassified to conform to the classifications used to prepare the unaudited consolidated financial statements as of and for the three months ended March 31, 2021.

Revenue Recognition:

Security transactions are accounted for on the trade date.

records interest income on an accrual basis to the extent that it expects to collect such amounts.

The Company records interest income on an accrual

basis to the extent that it expects to collect such amounts.

The Company records dividend income on the ex-dividend date.

Distributions received from limited liability

company (LLC) and limited partnership (LP) investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital.

The Company does not accrue as a receivable interest or

dividends on loans and securities if it has reason to doubt its ability to collect such income.

The Companys policy is to place investments on non-accrual status when there is reasonable doubt that

interest income will be collected.

The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status

of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment.

there is reasonable doubt that the Company will receive any previously accrued interest, then the accrued interest will be written-off.

Payments received on non-accrual

investments may be recognized as income or applied to principal depending upon the collectability of the remaining principal and interest.

Non-accrual investments may be restored to accrual status when

principal and interest become current and are likely to remain current based on the Companys judgment.

Loan origination

fees, original issue discount and market discount are capitalized and the Company amortizes such amounts as interest income over the respective term of the loan or security.

Upon the prepayment of a loan or security, any unamortized loan origination

fees and original issue discount are recorded as interest income.

Distributions received from limited liability company (LLC) and limited

partnership (LP) investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital.

The Company does not accrue as a receivable interest or dividends on loans and securities if it has

reason to doubt its ability to collect such income.

The Companys policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected.

considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business

conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment.

If there is reasonable doubt that the

Company will receive any previously accrued interest, then the accrued interest will be written-off.

Payments received on non-accrual investments may be recognized as

income or applied to principal depending upon the collectability of the remaining principal and interest.

Non-accrual investments may be restored to accrual status when principal and interest become current

and are likely to remain current based on the Companys judgment.

Loan origination fees, original issue discount and

market discount are capitalized and the Company amortizes such amounts as interest income over the respective term of the loan or security.

Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount

are recorded as interest income.

Structuring and other non-recurring upfront fees are recorded as fee income when earned.

For the nine months ended September 30, 2020, the

Company recognized $10 in structuring fee revenue.

For the three months ended March 31, 2021, the Company recognized $2 in

structuring fee revenue.

The Company records prepayment premiums on loans and securities as fee income when it receives such amounts.

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Recent Accounting Pronouncements:

In August 2018, the Financial Accounting

Standards Board, or FASB, issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework Changes to the Disclosure Requirements for Fair Value

Measurement , or ASU 2018-13.

ASU 2018-13 introduces new fair value disclosure requirements and eliminates and modifies certain existing fair value disclosure

requirements.

ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company implemented ASU

2018-13 during the nine months ended September 30, 2020, and it did not have a significant impact on the Companys disclosure over fair value.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848) , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by

reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging

relationships entered into or

FS KKR Capital Corp.

1 unchanged sentence

(in millions, except share and per share amounts)

Summary of Significant Accounting

Policies (continued)

evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the

end of the hedging relationship.

The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements.

Share Transactions

Below is a summary of transactions with respect to shares of the Companys common stock during the nine months ended

September 30, 2020 and 2019:

Nine Months Ended September 30,

Below is a summary of transactions with respect

to shares of the Companys common stock during the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

Share Repurchase Program

Fractional Share Repurchase

Net Proceeds from Share Transactions

The number of shares repurchased has been retroactively adjusted to reflect the Reverse Stock Split as discussed below.

During the nine months ended September 30, 2020, the administrator for the Companys distribution

During the three months ended March 31, 2021, the administrator for the Companys distribution

reinvestment plan, or DRP, purchased 275,642 shares of common stock in the open market at an average price per share of $17.21 (totaling $5) pursuant to the DRP, and distributed such shares to participants in the DRP.

During the nine months ended

September 30, 2019, the administrator for the DRP purchased 756,259 shares of common stock in the open market at an average price per share of $24.30 (totaling $18) pursuant to the DRP, and distributed such shares to participants in the

During the period from October 1, 2020 to November 6, 2020, the administrator for the DRP purchased 307,516 shares of common stock in the open market at an average price per share of $16.37 (totaling $5) pursuant to the DRP, and

During the three months ended

March 31, 2020, the administrator for the DRP purchased 270,663 shares of common stock in the open market at an average price per share of $25.12 (totaling $7) pursuant to the DRP, and distributed such shares to participants in the

During the period from April 1, 2021 to May 7, 2021, the administrator for the DRP purchased 221,020 shares of common stock in the open market at an average price per share of $20.94 (totaling $5) pursuant to the DRP, and

distributed such shares to participants in the DRP.

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Under the program, the Company was permitted to repurchase up to $200 in the aggregate of its outstanding common stock in the open market at prices below the then-current net asset value per share.

The program has terminated since the aggregate

repurchase amount that was approved by the Companys board of directors has been expended.

During the nine months ended

September 30, 2020, the Company repurchased 2,823,750 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $16.71 (totaling $47).

The number of shares repurchased and the average price per share amounts have been retroactively adjusted to reflect the Reverse Stock

Split as discussed below.

During the three months ended March 31, 2020, the Company repurchased 2,235,408 shares of common stock pursuant to the share

repurchase program at an average price per share (inclusive of commissions paid) of $17.79 (totaling $40).

The program has terminated since the aggregate repurchase amount that was approved by the Companys board of directors has been expended.

The number of shares repurchased and the average price per share amounts have been retroactively adjusted to reflect the

Reverse Stock Split as discussed below.

Reverse Stock Split and Fractional Shares

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Shareholders of record who

would have otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Companys common stock as reported on the NYSE as of June 15, 2020.

FS KKR Capital Corp.

1 unchanged sentence

(in millions, except share and per share amounts)

Share Transactions (continued)

otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Companys common stock as reported on the NYSE as of June 15,

Related Party Transactions

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The Advisor also performs, or oversees the performance of, the Companys corporate operations and required administrative services, which includes being responsible for the

financial records that the Company is required to maintain and preparing reports for the Companys stockholders and reports filed with the SEC.

In addition, the Advisor assists the Company in calculating its net asset value, overseeing the

preparation and filing of tax returns and the printing and dissemination of reports to the Companys stockholders, and generally overseeing the payment of the Companys expenses and the performance of administrative and professional

services rendered to the Company by others.

Pursuant to the administration agreement, the Company reimburses the Advisor for

expenses necessary to perform services related to its administration and operations, including the Advisors allocable portion of the compensation and related expenses of certain personnel of Franklin Square Holdings, L.P., which does business

as FS Investments, or FS Investments, and KKR Credit Advisors (US), LLC, or KKR Credit, providing administrative services to the Company on behalf of the Advisor.

The Company reimburses the Advisor no less than quarterly for all costs and expenses

incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration agreement.

The Advisor allocates the cost of such services to the Company based on factors such as total assets, revenues, time

allocations and/or other reasonable metrics.

The Companys board of directors reviews the methodology employed in determining how the expenses are allocated to the Company and the proposed allocation of administrative expenses among the Company

and certain affiliates of the Advisor.

The Companys board of directors then assesses the reasonableness of such reimbursements for expenses allocated to it based on the breadth, depth and quality of such services as compared to the estimated

cost to the Company of obtaining similar services from third-party service providers known to be available.

In addition, the Companys board of directors considers whether any single third-party service provider would be capable of providing

all such services at comparable cost and quality.

Finally, the Companys board of directors compares the total amount paid to the Advisor for such services as a percentage of the Companys net assets to the same ratio as reported by other

comparable BDCs.

The following table describes the fees and expenses accrued under the investment advisory agreement and the

administration agreement, as applicable, during the three and nine months ended September 30, 2020 and 2019:

financial records that the Company is required to maintain and preparing reports for the Companys stockholders and reports filed with the U.S.

Securities and Exchange Commission, or the SEC.

In addition, the Advisor assists the Company in

calculating its net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to the Companys stockholders, and generally overseeing the payment of the Companys expenses and the

performance of administrative and professional services rendered to the Company by others.

Pursuant to the administration

agreement, the Company reimburses the Advisor for expenses necessary to perform services related to its administration and operations, including the Advisors allocable portion of the compensation and related expenses of certain personnel of

Franklin Square Holdings, L.P., which does business as FS Investments, or FS Investments, and KKR Credit Advisors (US), LLC, or KKR Credit, providing administrative services to the Company on behalf of the Advisor.

The Company reimburses the Advisor

no less than quarterly for all costs and expenses incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration agreement.

The Advisor allocates the cost of such services to the Company based

on factors such as total assets, revenues, time allocations and/or other reasonable metrics.

The Companys board of directors reviews the methodology employed in determining how the expenses are allocated to the Company and the proposed

allocation of administrative expenses among the Company and certain affiliates of the Advisor.

The Companys board of directors then assesses the reasonableness of such reimbursements for expenses allocated to it based on the breadth, depth and

quality of such services as compared to the estimated cost to the Company of obtaining similar services from third-party service providers known to be available.

In addition, the Companys board of directors considers whether any single

third-party service provider would be capable of providing all such services at comparable cost and quality.

Finally, the Companys board of directors compares the total amount paid to the Advisor for such services as a percentage of the

Companys net assets to the same ratio as reported by other comparable BDCs.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Related Party

Transactions (continued)

The following table describes the fees and expenses accrued under the investment

advisory agreement and the administration agreement, as applicable, during the three months ended March 31, 2021 and 2020:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Related Party

2 unchanged sentences

Base Management Fee (1)

Investment advisory agreement

Subordinated Incentive Fee on

Administration agreement

Administrative Services Expenses (3)

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Related Party

Transactions (continued)

During the nine months ended September 30, 2020 and 2019, $86 and $77, respectively, in base management fees were paid to the Advisor.

of September 30, 2020, $24 in base management fees were payable to the Advisor.

During the nine months ended September 30, 2020 and 2019, $0 and $63, respectively, of subordinated incentive fees on income were paid to

During the nine months ended September 30, 2020 and 2019, $4 and $4, respectively, of administrative services expenses related to the

Administrative Services

During the three months ended March 31, 2021 and 2020, $25 and $30, respectively, in base management fees were paid to the Advisor.

March 31, 2021, $25 in base management fees were payable to the Advisor.

During the three months ended March 31, 2021 and 2020, $1 and $1, respectively, of administrative services expenses related to the

allocation of costs of administrative personnel for services rendered to the Company by the Advisor and the remainder related to other reimbursable expenses, including reimbursement of fees related to transactional expenses for prospective

investments, such as fees and expenses associated with performing due diligence reviews of investments that do not close, often referred to as broken deal costs.

Broken deal costs were $0.3 for the nine months ended September 30,

The Company paid $6 and $4, respectively, in administrative services expenses to the Advisor during the nine months ended September 30, 2020 and 2019.

Broken deal costs were $0.1 for the three months ended March 31, 2021.

The Company paid $1 and $3, respectively, in administrative services expenses to the Advisor during the three months ended March 31, 2021 and 2020.

Potential Conflicts of Interest

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effort to mitigate potential future conflicts of interest, the Companys board of directors authorized and directed that the Company (i) withdraw from the FS Order, except with respect to any transaction in which the Company participated

in reliance on the FS Order prior to April 9, 2018, and (ii) rely on an exemptive relief order, dated April 3, 2018, that permits the Company, subject to the satisfaction of certain conditions,

in reliance on the FS Order prior to April 9, 2018, and (ii) rely on an exemptive relief order, dated January 5, 2021, that permits the Company, subject to the satisfaction of certain conditions,

to co-invest in certain privately negotiated investment transactions, including investments originated and directly negotiated by the Advisor or KKR Credit, with certain affiliates of the Advisor.

Affiliated Purchaser Program

As previously disclosed, certain affiliates of the owners of the Advisor committed $100 to a $350 investment vehicle that may invest from time to time in shares of the Company.

In June 2020, that

investment vehicle entered into a written trading plan with a third party broker in accordance with Rule 10b5-1 and Rule 10b-18 promulgated under the Exchange Act to

facilitate the purchase of shares of the Companys common stock pursuant to the terms and conditions of such plan.

The Company is not a party to the plan or any transaction with the investment vehicle.

As previously disclosed, certain affiliates of the owners of the Advisor committed $100 to a $350 investment vehicle that may invest from time to time in shares of the Companys common stock.

Company is not a party to any transaction with the investment vehicle.

FS KKR Capital Corp.

2 unchanged sentences

Distributions

The following table reflects the cash distributions per share that the Company has declared on its common stock during the nine months ended September 30, 2020 and 2019:

The following table reflects the cash distributions per share that the Company has declared on its common stock during the three months ended March 31, 2021 and 2020:

For the Three Months Ended

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March 31, 2020

June 30, 2019

September 30, 2019

March 31, 2021

June 30, 2020

September 30, 2020

The amount of each per share distribution has been retroactively adjusted to reflect the Reverse Stock Split as discussed above in Note 3.

On October 29, 2020, the Companys board of directors declared a regular quarterly cash

distribution of $0.60 per share, which will be paid on or about January 5, 2021 to stockholders of record as of the close of business on December 16, 2020.

The timing and amount of any future distributions to stockholders are subject

to applicable legal restrictions and the sole discretion of the Companys board of directors.

Pursuant to the DRP, the

Company will reinvest all cash dividends or distributions declared by the Companys board of directors on behalf of stockholders who do not elect to receive their distributions in cash.

As a result, if the Companys board of directors

declares a distribution, then stockholders who have not elected to opt out of the DRP will have their distributions automatically reinvested in additional shares of the Companys common stock.

On May 7, 2021, the Companys board of directors declared a regular quarterly cash distribution of

$0.60 per share, which will be paid on or about July 2, 2021 to stockholders of record as of the close of business on June 11, 2021.

The timing and amount of any future distributions to stockholders are subject to applicable legal

restrictions and the sole discretion of the Companys board of directors.

Pursuant to the DRP, the Company will reinvest

all cash dividends or distributions declared by the Companys board of directors on behalf of stockholders who do not elect to receive their distributions in cash.

As a result, if the Companys board of directors declares a distribution,

then stockholders who have not elected to opt out of the DRP will have their distributions automatically reinvested in additional shares of the Companys common stock.

With respect to each distribution pursuant to the DRP, the Company reserves the right to either issue new shares of common stock or

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There can be no assurance that the Company will be able to pay distributions at a specific rate or at all.

The following table reflects the sources of the cash distributions on a tax basis that the Company has paid on its common stock during the nine months ended September 30, 2020 and 2019:

Nine Months Ended September 30,

The following table reflects the sources of the cash distributions on a tax basis that the Company has paid on its common stock during the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

Source of Distribution

3 unchanged sentences

Long-term capital gains proceeds from the sale of assets

During the nine months ended September 30, 2020 and 2019, 88.2% and 91.5%, respectively, of the Companys gross investment income

was attributable to cash income earned, 1.7% and 1.9%, respectively, was attributable to non-cash accretion of discount and 10.1% and 6.6%, respectively, was attributable to PIK interest.

During the three months ended March 31, 2021 and 2020, 86.7% and 89.4%, respectively, of the Companys gross investment income was

attributable to cash income earned, 2.0% and 1.7%, respectively, was attributable to non-cash accretion of discount and 11.3% and 8.9%, respectively, was attributable to PIK interest.

The determination of the tax attributes of the Companys distributions is made annually as of the end

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Net capital losses may be carried forward indefinitely, and their character is retained as short-term or long-term losses.

September 30, 2020, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $36 and $674, respectively.

March 31, 2021, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $37 and $862, respectively.

$85 of such losses were carried over from CCT due to the 2018 Merger, and $177

3 unchanged sentences

limitations may be carried forward into future years indefinitely.

As of September 30, 2020 and December 31, 2019,

the Companys gross unrealized appreciation on a tax basis was $1,001 and $1,087, respectively.

As of September 30, 2020 and December 31, 2019, the Companys gross unrealized depreciation on a tax basis was $1,394 and $1,002,

As of March 31, 2021 and December 31, 2020, the

Companys gross unrealized appreciation on a tax basis was $1,201 and $1,121, respectively.

As of March 31, 2021 and December 31, 2020, the Companys gross unrealized depreciation on a tax basis was $1,204 and $1,280,

respectively.

1 unchanged sentence

federal income tax purposes totaled $7,149 and

$7,973 as of September 30, 2020 and December 31, 2019, respectively.

The aggregate net unrealized appreciation (depreciation) on investments on a tax basis was $(1,097) and $(616) as of September 30, 2020 and December 31, 2019,

$7,622 as of March 31, 2021 and December 31, 2020, respectively.

The aggregate net unrealized appreciation (depreciation) on investments on a tax basis was $(692) and $(842) as of March 31, 2021 and December 31, 2020,

respectively.

The aggregate net unrealized appreciation (depreciation) on investments on a tax basis excludes net unrealized appreciation (depreciation) from merger accounting, foreign currency forward contracts and foreign currency transactions.

As of September 30, 2020, the Company had a deferred tax liability of $11 resulting from unrealized appreciation on

investments held by the Companys wholly-owned taxable subsidiaries and a deferred tax asset of $69 resulting from net

FS KKR Capital Corp.

2 unchanged sentences

Distributions (continued)

operating losses of the Companys wholly-owned taxable subsidiaries and unrealized depreciation on investments held by the Companys wholly-owned taxable subsidiaries.

September 30, 2020, certain wholly-owned taxable subsidiaries anticipated that they would be unable to fully utilize their generated net operating losses and capital losses, therefore the deferred tax asset was offset by a valuation allowance

For the nine months ended September 30, 2020, the Company did not record a provision for taxes related to wholly-owned taxable subsidiaries.

As of March 31, 2021, the Company had a deferred tax liability of $5 resulting from

unrealized appreciation on investments held by the Companys wholly-owned taxable subsidiaries and a deferred tax asset of $57 resulting from net operating losses of the Companys wholly-owned taxable subsidiaries and unrealized

depreciation on investments held by the Companys wholly-owned taxable subsidiaries.

As of March 31, 2021, certain wholly-owned taxable subsidiaries anticipated that they would be unable to fully

utilize their generated net operating losses and capital losses, therefore the deferred tax asset was offset by a valuation allowance of $52.

For the three months ended March 31, 2021, the Company did not record a provision for taxes related to

wholly-owned taxable subsidiaries.

Investment Portfolio

The following table summarizes the

composition of the Companys investment portfolio at cost and fair value as of September 30, 2020 and December 31, 2019:

September 30,

The following table summarizes the composition of the Companys investment portfolio at cost and fair value as of March 31, 2021

and December 31, 2020:

December 31, 2020

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5% or more of its voting securities.

As of September 30, 2020, the Company held investments in ten portfolio companies of

which it is deemed to control. As of September 30, 2020, the Company held investments in fifteen portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. For

additional information with respect to such portfolio companies, see footnotes (y) and (z) to the unaudited consolidated schedule of investments as of September 30, 2020 in this quarterly report on Form

As of December 31, 2019, the Company held investments in seven portfolio

companies of which it is deemed to control. As of December 31, 2019, the Company held investments in sixteen portfolio companies of which it is deemed to be an affiliated person but is not deemed to control.

For additional information with respect to such portfolio companies, see footnotes (y) and (z) to the consolidated schedule of investments as of December 31, 2019 in this quarterly report on Form

The Companys investment portfolio may contain loans and other unfunded

arrangements that are in the form of lines of credit, revolving credit facilities, delayed draw credit facilities or other investments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms

of the underlying agreements.

As of September 30, 2020, the Company had unfunded debt investments with aggregate unfunded commitments of $310.8, unfunded equity/other commitments of $211.7 and unfunded commitments of $118.3 of Strategic Credit

Opportunities Partners, LLC.

As of December 31, 2019, the Company had unfunded debt investments with aggregate unfunded commitments of $438.0, unfunded equity commitments of $240.1 and unfunded commitments of $385.2 of Strategic Credit

Opportunities Partners, LLC.

The Company maintains sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise.

For additional details regarding the Companys unfunded debt investments, see the

Companys unaudited consolidated schedule of investments as of September 30, 2020 and the Companys audited consolidated schedule of investments as of December 31, 2019.

As of March 31, 2021, the Company held investments in nine portfolio companies of

which it is deemed to control. As of March 31, 2021, the Company held investments in fourteen portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. For additional

information with respect to such portfolio companies, see footnotes (y) and (z) to the unaudited consolidated schedule of investments as of March 31, 2021 in this quarterly report on Form 10-Q.

As of December 31, 2020, the Company held investments in ten portfolio companies of which it is deemed to

control. As of December 31, 2020, the Company held investments in thirteen portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. For additional information with

respect to such portfolio companies, see footnotes (y) and (z) to the consolidated schedule of investments as of December 31, 2020 in this quarterly report on Form 10-Q.

The Companys investment portfolio may contain loans and other unfunded arrangements that are in the form of lines of credit,

revolving credit facilities, delayed draw credit facilities or other investments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements.

As of March 31,

2021, the Company had unfunded debt investments with aggregate unfunded commitments of $252.0, unfunded equity/other commitments of $205.7 and unfunded commitments of $65.8 of Strategic Credit Opportunities Partners, LLC.

As of December 31,

2020, the Company had unfunded debt investments with aggregate unfunded commitments of $228.4, unfunded equity commitments of $142.9 and unfunded commitments of $65.8 of Strategic Credit Opportunities Partners, LLC.

The Company maintains sufficient

cash on hand and available borrowings to fund such unfunded commitments should the need arise.

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

The table below describes investments by industry classification and enumerates the

percentage, by fair value, of the total portfolio assets in such industries as of September 30, 2020 and December 31, 2019:

September 30,

For additional details regarding the Companys unfunded debt investments, see the Companys unaudited consolidated schedule of investments as of March 31, 2021 and the

Companys audited consolidated schedule of investments as of December 31, 2020.

The table below describes

investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets in such industries as of March 31, 2021 and December 31, 2020:

December 31, 2020

Industry Classification

Percentage of

Automobiles & Components

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Pharmaceuticals, Biotechnology & Life Sciences

Semiconductors & Semiconductor Equipment

Software & Services

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day-to-day management responsibilities on behalf of SCJV and is entitled to a fee of 0.25% of SCJVs assets under administration, calculated and payable quarterly

As of September 30, 2020, the Company and SCRS have funded approximately $864.8 to SCJV, of which $756.7 was from the Company.

As of March 31, 2021, the Company and SCRS have funded approximately $924.8 to SCJV, of which $809.2 was from the Company.

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

On September 29, 2017, Jersey City Funding LLC, or Jersey City Funding, a

wholly-owned subsidiary of SCJV, entered into a revolving credit facility, or as subsequently amended and restated, the Jersey City Funding Credit Facility, with Goldman Sachs Bank, as sole lead arranger, syndication agent, and administrative agent,

each of the lenders from time to time party thereto, State Street Bank and Trust Company, as collateral administrator and collateral agent, and Cortland Capital Market Services LLC, as collateral custodian.

The Jersey City Funding Credit Facility

provides for borrowings in U.S.

dollars, and certain agreed upon foreign currencies, in an aggregate principal amount up to $350 on a committed basis.

The maturity date for the Jersey City Funding Credit Facility is September 29, 2021.

dollar borrowings bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 2.25% per annum.

Foreign currency borrowings bear interest at the rate of the relevant reference rate (subject to a 0% floor) plus the spread applicable to

the specified currency.

Jersey City Funding is subject to an unused fee of up to 0.50% per annum on the average daily unborrowed portion of the committed facility amount.

Borrowings under the Jersey City Funding Credit Facility are secured by a

first priority security interest in substantially all of the assets of Jersey City Funding, including its portfolio of assets.

As of September 30, 2020, total outstanding borrowings under the Jersey City Funding Credit Facility were $355.4.

On February 18, 2020, the Jersey City Funding Credit Facility maximum facility amount was reduced from $400 to $350

pursuant to the Commitment Decrease and Amendment No.

4 between Jersey City Funding, SCJV, Goldman Sachs Bank, and the other parties thereto.

On September 18, 2019, Chestnut Street Funding LLC, or Chestnut Street Funding, a wholly-owned subsidiary of SCJV, entered into a revolving credit facility, or as subsequently amended, the Chestnut

Street Funding Credit Facility, with Citibank, N.A., or Citibank, as administrative agent, each of the lenders from time to time party thereto, SCJV, as collateral manager, and Wells Fargo Bank, National Association, as collateral agent, account

bank, and collateral custodian.

The Chestnut Street Funding Credit Facility provides for borrowings in U.S.

dollars and certain agreed upon foreign currencies in an aggregate principal amount up to $400 on a committed basis.

The end of the

reinvestment period and the maturity date for the Chestnut Street Funding Credit Facility are September 18, 2022 and September 18, 2024, respectively.

Under the Chestnut Street Funding Credit Facility, borrowings bear interest at the rate

of three-month LIBOR (or the relevant reference rate for any foreign currency borrowings) (subject to a 0% floor) plus 2.25% per annum.

During the reinvestment period, Chestnut Street Funding is subject to an unused fee of 0.50% per annum on the

average daily unborrowed portion of the committed facility amount.

Borrowings under the Chestnut Street Funding Credit Facility are secured by a first priority security interest in substantially all of the assets of Chestnut Street Funding,

including its portfolio of assets.

As of September 30, 2020, total outstanding borrowings under the Chestnut Street Funding Credit Facility were $322.9.

On February 21, 2020, the Chestnut Street Funding Credit Facility maximum facility amount was increased from $300 to $400 pursuant to the First Amendment to Loan and Servicing Agreement between

Chestnut Street Funding, SCJV, Citibank, and the other parties thereto.

SCJV was in compliance with all covenants required by its financing arrangements as of September 30, 2020 and December 31, 2019.

On April 15, 2020, Boxwood Drive Funding LLC, or Boxwood Drive Funding, a wholly-owned special-purpose financing subsidiary of SCJV,

entered into a revolving credit facility, or the Boxwood Drive Funding Credit Facility, with BNP Paribas, as lender and administrative agent, each of the lenders from time to time party thereto, SCJV, as equityholder and servicer, and Wells Fargo,

as collateral agent.

The Boxwood Drive Funding Credit Facility provides for borrowings in U.S.

dollars and certain agreed upon foreign currencies in an aggregate principal amount up to $300 on a committed basis.

The end of the reinvestment period

and the maturity date for the Boxwood Drive Funding Credit Facility are April 15, 2023 and April 15, 2025, respectively.

Under the Boxwood Drive Funding Credit Facility, borrowings bear interest at the rate of LIBOR (or the relevant

reference rate for any foreign currency borrowings) (subject to a 0% floor) plus a spread of (i) during the reinvestment period, 2.05% to 3.15% per annum, and (ii) after the reinvestment period, 2.50% to 3.25% per annum, in each case,

determined based on the currency of the borrowing and the composition of the collateral portfolio.

During the reinvestment period, Boxwood Drive Funding is subject to an unused fee ranging from 0.375% to 1.00% per annum on the average daily

unborrowed portion of the facility amount below 85% of the facility amount.

Borrowings under the Boxwood Drive Funding Credit Facility are secured by a first priority security interest in substantially all of the assets of Boxwood Drive Funding,

including its portfolio of assets.

As of September 30, 2020, total outstanding borrowings under the Boxwood Drive Funding Credit Facility were $25.0.

Jersey City Funding LLC, or Jersey City Funding, a wholly-owned subsidiary of SCJV, has

a revolving credit facility with Goldman Sachs Bank, or as amended, the Jersey City Funding Credit Facility, which provides for up to $350 of borrowings as of March 31, 2021.

The Jersey City Funding Credit Facility provides loans in U.S.

dollars, Australian dollars, Canadian dollars Euros and pounds sterling.

dollar loans bear interest at the rate of LIBOR plus 2.25%.

Foreign currency loans bear interest at the floating rate plus the spread applicable to the specified

Jersey City Funding also pays a commitment fee of up to 0.50% on undrawn commitments.

The Jersey City Funding Credit Facility matures on September 29, 2021.

As of March 31, 2021, total outstanding borrowings under the Jersey City

Funding Credit Facility were $242.8.

Borrowings under the Jersey City Funding Credit Facility are secured by substantially all of the assets of Jersey City Funding.

Chestnut Street Funding LLC, or Chestnut Street Funding, a wholly-owned subsidiary of SCJV, has a revolving credit facility with Citibank, N.A., or as amended, the Chestnut Street Funding Credit Facility,

which provides for up to $400 of borrowings as of March 31, 2021.

The Chestnut Street Funding Credit Facility provides loans in U.S.

dollars, Australian dollars, Canadian dollars, Euros and pounds sterling.

dollar loans bear interest at

the rate of three-month LIBOR plus 2.25%.

Foreign currency loans bear interest at the applicable floating rate plus 2.25%.

Chestnut Street Funding also pays a commitment fee of up to 0.50% on undrawn commitments.

The Chestnut Street Funding Credit

Facility matures on September 18, 2024.

As of March 31, 2021, total outstanding borrowings under the Chestnut Street Funding Credit Facility were $182.4.

Borrowings under the Chestnut Street Funding Credit Facility are secured by

substantially all of the assets of Chestnut Street Funding.

Boxwood Drive Funding LLC, or Boxwood Drive Funding, a

wholly-owned subsidiary of SCJV, has a revolving credit facility with BNP Paribas, or the Boxwood Drive Funding Credit Facility, which provides for up to $300 of borrowings as of March 31, 2021.

The Boxwood Drive Funding Credit Facility

provides for loans in U.S.

dollars, Australian dollars, Canadian dollars, New Zealand dollars, Euros and pounds sterling.

dollar loans bear interest at the rate of LIBOR plus a spread of 2.05% to 3.15% during the reinvestment period and 2.50%

to 3.25% thereafter.

Foreign currency of loans bear interest at the applicable floating rate plus the applicable spread.

Boxwood Drive Funding also pays a commitment fee of up to 1.00% on undrawn commitments.

The Boxwood Drive Funding Credit

Facility matures on April 15, 2025.

As of March 31, 2021, total outstanding borrowings under the Boxwood Drive Funding Credit Facility were $28.8.

Borrowings under the Boxwood Drive Funding Credit Facility are secured by substantially all

of the assets of Boxwood Drive Funding.

On March 31, 2021, SCJV sold in a private placement $300 million of aggregate

principal amount of unsecured notes, or the SCJV Notes, to qualified institutional buyers in reliance on Section 4(a)(2) of the Securities Act.

Interest on the SCJV Notes is payable quarterly on the 1st of each of January, April, July and October,

at a fixed annual rate of 4.25%, commencing July 1, 2021.

This interest rate is subject to increase up to 4.75% in the event that the SCJV Notes cease to have an investment grade rating, and the SCJV Notes will be subject to an additional 2.0% of

default interest during the continuance of an event of default.

The SCJV Notes mature on April 1, 2026, unless redeemed, purchased or prepaid prior to such date by SCJV in accordance with their terms.

The SCJV Notes are general unsecured obligations

that rank pari passu with all outstanding and future unsecured and unsubordinated indebtedness that SCJV may issue.

SCJV used the net proceeds from the private placement for general corporate purposes, including to make investments, repay existing

debt and make permitted distributions.

SCOP was in compliance with all covenants required by its financing arrangements as of March 31, 2021 and December 31, 2020.

During the three months ended March 31, 2021, the Company sold investments with a cost of $186.1 for proceeds of $193.3 to SCJV and recognized a net realized gain (loss) of $7.2 in connection with

the transactions.

As of March 31, 2021, $259.6 of these sales to SCJV are included in receivable for investments sold in the consolidated statements of assets and liabilities.

As of March 31, 2021 and December 31, 2020, SCJV had total investments with a fair value of $1,655.2 and $1,544.3, respectively.

As of March 31, 2021 and December 31, 2020, SCJV had two and two investments on non-accrual status, respectively.

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

During the nine months ended September 30, 2020, the Company sold investments with

a cost of $353.6 for proceeds of $319.5 to SCJV and recognized a net realized gain (loss) of $(34.1) in connection with the transactions.

As of September 30, 2020, $218.1 of these sales to SCJV are included in receivable for investments sold in

the consolidated statements of assets and liabilities.

As of September 30, 2020 and December 31, 2019, SCJV had

total investments with a fair value of $1,559.8 and $1,438.5, respectively.

As of September 30, 2020, SCJV had eight investments on non-accrual status.

As of December 31, 2019, SCJV had no

investments on non-accrual status.

Below is a summary of SCJVs portfolio,

followed by a listing of the individual loans in SCJVs portfolio as of September 30, 2020 and December 31, 2019:

September 30,

Below is a summary of SCJVs portfolio, followed by a listing of the individual

loans in SCJVs portfolio as of March 31, 2021 and December 31, 2020:

Total debt investments (1)

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Computed as the (a) annual stated interest rate on accruing debt, divided by (b) total debt at par amount.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Strategic Credit Opportunities Partners, LLC Portfolio

As of September 30, 2020 (in millions)

As of March 31, 2021 (in millions)

Interest Rate (b)

Senior Secured LoansFirst Lien130.3%

A10 Capital LLC

Diversified Financials

ABB CONCISE Optical Group LLC

7 unchanged sentences

Pharmaceuticals, Biotechnology & Life Sciences

BearCom Acquisition Corp

Technology Hardware & Equipment

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Interest Rate (b)

Arrotex Australia Group Pty Ltd

Pharmaceuticals, Biotechnology & Life Sciences

BearCom Acquisition Corp

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Consumer Services

Brand Energy & Infrastructure Services Inc

Capital Goods

Bugaboo International BV

Consumer Durables & Apparel

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Interest Rate (b)

Cambium Learning Group Inc

Consumer Services

Camping World Good Sam

Consumer Durables & Apparel

Casual Dining Group Ltd

Consumer Services

Casual Dining Group Ltd

Consumer Services

Catapult Learning LLC

10 unchanged sentences

Consumer Services

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Interest Rate (b)

Catapult Learning LLC

Consumer Services

Charles Taylor PLC

Diversified Financials

Child Development Schools Inc

2 unchanged sentences

Consumer Services

CommerceHub Inc

Software & Services

Capital Goods

CSM Bakery Products

Food, Beverage & Tobacco

Health Care Equipment & Services

Diamond Resorts International Inc

Consumer Services

Eacom Timber Corp

Frontline Technologies Group LLC

Software & Services

Greystone Equity Member Corp

Diversified Financials

HealthChannels LLC

Health Care Equipment & Services

Highline Aftermarket Acquisition LLC

Automobiles & Components

Huws Gray Ltd

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Commercial & Professional Services

Print Solutions Inc

Media & Entertainment

Industria Chimica Emiliana Srl

Pharmaceuticals, Biotechnology & Life Sciences

Consumer Services

Kellermeyer Bergensons Services LLC

Commercial & Professional Services

Kettle Cuisine LLC

Food, Beverage & Tobacco

Koosharem LLC

Commercial & Professional Services

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

Kellermeyer Bergensons Services LLC

Commercial & Professional Services

Kettle Cuisine LLC

Food, Beverage & Tobacco

Lionbridge Technologies Inc

Consumer Services

MedAssets Inc

Health Care Equipment & Services

MI Windows and Doors Inc

Capital Goods

Telecommunication Services

Parts Authority Inc

Automobiles & Components

Parts Authority Inc

Automobiles & Components

Parts Town LLC

2 unchanged sentences

Diversified Financials

Pretium Packaging LLC

Household & Personal Products

Project Marron

4 unchanged sentences

Consumer Services

Quirch Foods Co

Food & Staples Retailing

Roadrunner Intermediate Acquisition Co LLC

Health Care Equipment & Services

Sentry Data Systems Inc.

Reliant Rehab Hospital Cincinnati LLC

Health Care Equipment & Services

Safe-Guard Products International LLC

Diversified Financials

Capital Goods

6 unchanged sentences

Transaction Services Group Ltd

Consumer Services

Weld North Education LLC

Software & Services

Virgin Pulse Inc

Software & Services

Yak Access LLC

11 unchanged sentences

Commercial & Professional Services

Albany Molecular Research Inc

Pharmaceuticals, Biotechnology & Life Sciences

Ammeraal Beltech Holding BV

1 unchanged sentence

BCA Marketplace PLC

Casual Dining Group Ltd

Consumer Services

Excelitas Technologies Corp

3 unchanged sentences

Capital Goods

L+1,075, 0.0%

SIRVA Worldwide Inc

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Total Senior Secured LoansSecond Lien

Other Senior Secured Debt1.1%

Cleaver-Brooks Inc

Capital Goods

Total Senior Secured Debt

Subordinated Debt5.1%

Diamond Resorts International Inc

Consumer Services

Home Partners of America Inc

Total Subordinated Debt

Asset Based Finance27.3%

Abacus JV, Private Equity

Comet Aircraft S.a.r.l., Common Stock

Capital Goods

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

Kenan Advantage Group Inc

Transportation

MultiPlan Inc

Health Care Equipment & Services

Plastipak Holdings Inc

Software & Services

Commercial & Professional Services

Total Subordinated Debt

Asset Based Finance27.0%

Comet Aircraft S.a.r.l., Common Stock

Capital Goods

GA Capital Specialty Lending Fund, Limited Partnership Interest

8 unchanged sentences

Technology Hardware & Equipment

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware & Equipment

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware & Equipment

Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan

Luxembourg Life FundLong Term Growth Fund, 1L Term Loan

MP4 2013-2A Class Subord.

Diversified Financials

NewStar Clarendon 2014-1A Class D

Diversified Financials

Pretium Partners LLC P1, Structured Mezzanine

Pretium Partners LLC P2, Structured Mezzanine

Sealane Trade Finance

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

Pretium Partners LLC P1, Structured Mezzanine

Pretium Partners LLC P2, Structured Mezzanine

Sealane Trade Finance

Total Asset Based Finance

2 unchanged sentences

Software & Services

Casual Dining Group Ltd, Common Stock

Consumer Services

Belk Inc, Common Stock

Home Partners of America Inc, Common Stock

6 unchanged sentences

basis point spread.

As of September 30, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.23%, the Euro Interbank Offered Rate, or EURIBOR, was (0.50)%, the Australian Bank Bill Swap Bid Rate, or BBSY or

As of March 31, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.19%, the Euro Interbank Offered Rate, or EURIBOR, was (0.54)%, the Australian Bank Bill Swap Bid Rate, or BBSY or

B, was 0.09% and the Canadian Dollar Offer Rate, or CDOR, was 0.44%.

10 unchanged sentences

rate received upon funding.

Asset is on non-accrual status.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Asset is on non-accural status.

Security or portion thereof held within Jersey City Funding LLC and is pledged as collateral supporting the amounts outstanding under the

4 unchanged sentences

credit facility with Goldman Sachs Bank.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Security or portion thereof held within Boxwood Drive Funding and is pledged as collateral supporting the amounts outstanding under the

5 unchanged sentences

Senior Secured LoansFirst Lien124.6%

1a Smart Start LLC

Technology Hardware & Equipment

1a Smart Start LLC

Technology Hardware & Equipment

A10 Capital LLC

Diversified Financials

ABB CONCISE Optical Group LLC

Apex Group Limited

2 unchanged sentences

Diversified Financials

Apex Group Limited

Diversified Financials

Ardonagh Group Ltd

E+750, 0.0% PIK

(2.3% Max PIK)

Ardonagh Group Ltd

L+750, 0.0% PIK

(2.3% Max PIK)

Arrotex Australia Group Pty Ltd

Pharmaceuticals, Biotechnology & Life Sciences

BearCom Acquisition Corp

Technology Hardware & Equipment

Arrotex Australia Group Pty Ltd

Pharmaceuticals, Biotechnology & Life Sciences

BearCom Acquisition Corp

8 unchanged sentences

Consumer Services

Brand Energy & Infrastructure Services Inc

Capital Goods

Bugaboo International BV

Consumer Durables & Apparel

(7.8% Max PIK)

Casual Dining Group Ltd

Cambium Learning Group Inc

Consumer Services

PIK (0.8% Max

Casual Dining Group Ltd

Catapult Learning LLC

Consumer Services

Casual Dining Group Ltd

Catapult Learning LLC

Consumer Services

12 unchanged sentences

Consumer Services

Catapult Learning LLC

Consumer Services

Catapult Learning LLC

Consumer Services

Child Development Schools Inc

2 unchanged sentences

Consumer Services

CommerceHub Inc

Software & Services

Commercial Barge Line Co

Transportation

DB Datacenter Holdings Inc

Software & Services

Health Care Equipment & Services

E+825, 1.8% PIK

(1.8% Max PIK)

Health Care Equipment & Services

E+825, 1.8% PIK

(1.8% Max PIK)

CSM Bakery Products

Food, Beverage & Tobacco

Diamond Resorts International Inc

1 unchanged sentence

Eacom Timber Corp

Frontline Technologies Group LLC

Software & Services

HealthChannels LLC

Health Care Equipment & Services

Highline Aftermarket Acquisition LLC

Automobiles & Components

Huws Gray Ltd

Commercial & Professional Services

E+500, 2.3% PIK

(2.3% Max PIK)

Commercial & Professional Services

L+525, 2.3% PIK

(2.3% Max PIK)

Commercial & Professional Services

E+500, 2.3% PIK

(2.3% Max PIK)

Commercial & Professional Services

Imagine Communications Corp

Media & Entertainment

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Interest Rate (b)

Imagine Communications Corp

Media & Entertainment

Print Solutions Inc

Media & Entertainment

L+525, 2.3% PIK

(2.3% Max PIK)

Industria Chimica Emiliana Srl

Pharmaceuticals, Biotechnology & Life Sciences

Kellermeyer Bergensons Services LLC

Commercial & Professional Services

Kettle Cuisine LLC

2 unchanged sentences

Commercial & Professional Services

Marshall Retail Group LLC

Lionbridge Technologies Inc

Consumer Services

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Interest Rate (b)

MedAssets Inc

Health Care Equipment & Services

P2 Energy Solutions, Inc.

Software & Services

Parts Authority Inc

Automobiles & Components

Parts Authority Inc

Automobiles & Components

Parts Authority Inc

Automobiles & Components

Parts Town LLC

Precision Global Corp

Premium Credit Ltd

Diversified Financials

Project Marron

2 unchanged sentences

Consumer Services

Quirch Foods Co

Food & Staples Retailing

Sentry Data Systems Inc

Health Care Equipment & Services

Sentry Data Systems Inc

Qdoba Restaurant Corp

Consumer Services

Reliant Rehab Hospital Cincinnati LLC

Health Care Equipment & Services

Sentry Data Systems Inc

Roadrunner Intermediate Acquisition Co LLC

Health Care Equipment & Services

Safe-Guard Products International LLC

Diversified Financials

Capital Goods

PIK (1.0% Max

Smart & Final Stores LLC

Food & Staples Retailing

SMART Global Holdings Inc

Semiconductors & Semiconductor Equipment

SMART Global Holdings Inc

Semiconductors & Semiconductor Equipment

Staples Canada

Technimark LLC

Transaction Services Group Ltd

Consumer Services

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Interest Rate (b)

Utility One Source LP

Total Safety US Inc

Capital Goods

Weld North Education LLC

Transaction Services Group Ltd

Software & Services

Virgin Pulse Inc

Software & Services

Yak Access LLC

Capital Goods

Total Senior Secured LoansFirst Lien

2 unchanged sentences

Senior Secured LoansSecond Lien28.9%

Access CIG LLC

Commercial & Professional Services

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Ammeraal Beltech Holding BV

Capital Goods

Software & Services

BCA Marketplace PLC

Casual Dining Group Ltd

Consumer Services

11.5% PIK (11.5%

Excelitas Technologies Corp

Technology Hardware & Equipment

Software & Services

Resource Label Group LLC

Capital Goods

L+1,075, 0.0%

PIK (6.8% Max

SIRVA Worldwide Inc

Commercial & Professional Services

Watchfire Enterprises Inc

Technology Hardware & Equipment

WireCo WorldGroup Inc

Capital Goods

Wittur Holding GmbH

2 unchanged sentences

Total Senior Secured LoansSecond Lien

Other Senior Secured Debt1.0%

Cleaver-Brooks Inc

Capital Goods

Total Other Senior Secured Debt

Subordinated Debt5.3%

Home Partners of America Inc

Kenan Advantage Group Inc

Transportation

Software & Services

Total Subordinated Debt

2 unchanged sentences

Capital Goods

GA Capital Specialty Lending Fund, Limited Partnership Interest

Diversified Financials

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

GA Capital Specialty Lending Fund, Limited Partnership Interest

Diversified Financials

Interest Rate (b)

Global Lending Services LLC, Private Equity

Diversified Financials

KKR Zeno Aggregator LP (K2 Aviation)

KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest

Capital Goods

3 unchanged sentences

Technology Hardware & Equipment

Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan

Luxembourg Life FundLong Term Growth Fund, 1L Term Loan

MP4 2013-2A Class Subord.

3 unchanged sentences

Pretium Partners LLC P1, Structured Mezzanine

2.8%, 5.3% PIK

(5.3% Max PIK)

PIK (5.3% Max

Pretium Partners LLC P2, Structured Mezzanine

2.0%, 7.5% PIK

(7.5% Max PIK)

PIK (7.5% Max

Sealane Trade Finance

1 unchanged sentence

Total Asset Based Finance

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Equity/Other6.1%

1 unchanged sentence

Software & Services

Casual Dining Group Ltd, Common Stock

Consumer Services

Home Partners of America Inc, Common Stock

1 unchanged sentence

TOTAL INVESTMENTS189.7%

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Derivative Instruments(1.4)%

Foreign currency forward contracts

Security may be an obligation of one or more entities affiliated with the named company.

1 unchanged sentence

basis point spread.

As of December 31, 2019, the three-month London Interbank Offered Rate, or LIBOR or L, was 1.91% and the Euro Interbank Offered Rate, or EURIBOR, was (0.38)% and the Australian Interbank Rate, or BBSY or

B, was 0.92%.

As of December 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.24% and the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Canadian Dollar Offer Rate, or CDOR, was 0.48% and

the Australian Interbank Rate, or BBSY or B, was 0.06%.

PIK means paid-in-kind.

PIK income accruals may be adjusted based on the fair value of the underlying investment.

PIK income accruals may be adjusted based on the fair value of the underlying

Denominated in U.S.

5 unchanged sentences

rate received upon funding.

Asset is on non-accrual status.

Security or portion thereof held within Jersey City Funding LLC and is pledged as collateral supporting the amounts outstanding under the

2 unchanged sentences

revolving credit facility with Citibank, N.A.

Below is selected balance sheet information for SCJV as of

September 30, 2020 and December 31, 2019:

September 30,

Security or portion thereof held within JCF Cayman Ltd and is pledged as collateral supporting the amounts outstanding under the revolving

credit facility with Goldman Sachs.

Security or portion thereof held within Boxwood Drive Funding LLC and is pledged as collateral supporting the amounts outstanding under the

revolving credit facility with BNP Paribas.

Security is non-income producing.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Below is selected balance sheet information for SCJV as of March 31, 2021 and

December 31, 2020:

Selected Balance Sheet Information

4 unchanged sentences

Members equity

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

Below is selected statement of operations information for SCJV for the three and nine

months ended September 30, 2020 and 2019:

Below is selected statement of operations information for SCJV for the three months ended March 31,

2021 and 2020:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Selected Statement of Operations Information

9 unchanged sentences

Financial Instruments

The following is a summary of the fair value and location of the Companys derivative instruments in the consolidated balance sheets held as of September 30, 2020 and December 31, 2019:

The following is a summary of the fair value and location of the Companys derivative instruments in the consolidated balance sheets held as of March 31, 2021 and December 31, 2020:

Derivative Instrument

Statement Location

September 30,

Foreign currency forward contracts

2 unchanged sentences

Unrealized depreciation on foreign currency forward contracts

Net realized and unrealized gains and losses on derivative instruments recorded by the Company for the

nine months ended September 30, 2020 and 2019 are in the following locations in the consolidated statements of operations:

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Instruments (continued)

Net realized and unrealized gains and losses on derivative instruments recorded by the

Company for the three months ended March 31, 2021 and 2020 are in the following locations in the consolidated statements of operations:

Net Realized Gains (Losses)

Nine Months Ended

September 30, 2020

Three Months Ended

Derivative Instrument

Statement Location

Cross currency swaps

Net realized gain (loss) on swap contracts

Foreign currency forward contracts

Net realized gain (loss) on foreign currency forward contracts

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Instruments (continued)

Net Unrealized Gains (Losses)

Nine Months Ended

September 30, 2020

Three Months Ended

Derivative Instrument

Statement Location

Cross currency swaps

Net change in unrealized appreciation (depreciation) on swap contracts

Foreign currency forward contracts

6 unchanged sentences

present the Companys assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any collateral received or pledged by the Company for such assets and

liabilities as of September 30, 2020 and December 31, 2019:

As of September 30, 2020

liabilities as of March 31, 2021 and December 31, 2020:

As of March 31, 2021

Assets Subject to

5 unchanged sentences

Available for

Net Amount of

Liabilities (3)

JP Morgan Chase Bank

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Instruments (continued)

As of December 31, 2020

Assets Subject to

Assets Subject

Master Netting

4 unchanged sentences

Available for

Net Amount of

Liabilities (3)

JP Morgan Chase Bank

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Instruments (continued)

In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization.

19 unchanged sentences

The Company utilizes cross currency swaps from time to time in order to hedge a portion of its investments in foreign currency.

The average notional balance for foreign currency forward contracts during the nine months ended September 30, 2020 and 2019 was

The average notional balance for foreign currency forward contracts during the three months ended March 31, 2021 and 2020 was $65.0

and $27.9, respectively.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Instruments (continued)

As of September 30, 2020 and December 31, 2019, the Companys open

foreign currency forward contracts were as follows:

As of September 30,

Settlement Date

September 30, 2020

(Depreciation)

JP Morgan Chase Bank

As of December 31,

Settlement Date

December 31, 2019

(Depreciation)

JP Morgan Chase Bank

Fair Value of Financial Instruments

5 unchanged sentences

Inputs may be observable or unobservable.

Observable inputs are

inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the assumptions market

participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current

accounting guidance:

Inputs that are quoted prices (unadjusted) in active markets for

identical assets or liabilities.

Inputs that are quoted prices for similar assets or

liabilities in active markets.

Inputs that are unobservable for an asset or liability.

A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is

significant to the fair value measurement.

FS KKR Capital Corp.

3 unchanged sentences

Instruments (continued)

As of September 30, 2020 and December 31, 2019, the Companys investments

were categorized as follows in the fair value hierarchy:

September 30, 2020

Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the

Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

The Company classifies the inputs used to

measure these fair values into the following hierarchy as defined by current accounting guidance:

Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Inputs that are quoted prices for similar assets or liabilities in active markets.

Inputs that are unobservable for an asset or liability.

A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to

the fair value measurement.

As of March 31, 2021 and December 31, 2020, the Companys investments were

categorized as follows in the fair value hierarchy:

March 31, 2021

Valuation Inputs

8 unchanged sentences

In addition, the Company had foreign currency forward contracts, as described in Note 7, which were categorized as Level 2 in the

fair value hierarchy as of September 30, 2020 and December 31, 2019.

The Companys investments consist

primarily of debt investments that were acquired directly from the issuer.

Debt investments, for which broker quotes are not available, are valued by independent valuation firms, which determine the fair value of such investments by considering,

among other factors, the borrowers ability to adequately service its debt, prevailing interest rates for like investments, expected cash flows, call features, anticipated repayments and other relevant terms of the investments.

described below, all of the Companys equity/other investments are also valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such

investments, as well as various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value.

An investment

that is newly issued and purchased near the date of the financial statements is valued at cost if the Companys board of directors determines that the cost of such investment is the best indication of its fair value.

Such investments described

above are typically classified as Level 3 within the fair value hierarchy.

Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements and are classified as Level 1

within the fair value hierarchy.

Except as described above, the Company typically values its other investments by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which are provided by

independent third-party pricing services and screened for validity by such services and are typically classified as Level 2 within the fair value hierarchy.

fair value hierarchy as of March 31, 2021 and December 31, 2020.

The Companys investments consist primarily of

debt investments that were acquired directly from the issuer.

Debt investments, for which broker quotes are not available, are valued by independent valuation firms, which determine the fair value of such investments by considering, among other

factors, the borrowers ability to adequately service its debt, prevailing interest rates for like investments, expected cash flows, call features, anticipated repayments and other relevant terms of the investments.

Except as described below,

all of the Companys equity/other investments are also valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such investments, as well as

various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value.

An investment that is newly issued and

purchased near the date of the financial statements is valued at cost if the Companys board of directors determines that the cost of such investment is the best indication of its fair value.

Such investments described above are typically

classified as Level 3 within the fair value hierarchy.

Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements and are classified as Level 1 within the fair value

pricing services and screened for validity by such services and are typically classified as Level 2 within the fair value hierarchy.

The Company periodically benchmarks the bid and ask prices it receives from the third-party pricing services and/or dealers and independent valuation firms as applicable, against the actual prices at

which the Company purchases and sells its investments.

Based on the results of the benchmark analysis and the experience of the Companys management in purchasing and selling these investments, the Company believes that these prices are

reliable indicators of fair value.

The valuation committee of the Companys board of directors, or the valuation committee, and the board of directors reviewed and approved the valuation determinations made with respect to these investments in

a manner consistent with the Companys valuation policy.

Based on the results of the benchmark analysis and the experience of the Companys management in purchasing and

FS KKR Capital Corp.

3 unchanged sentences

Instruments (continued)

The following is a reconciliation for the nine months ended September 30, 2020 and

2019 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:

For the Nine Months Ended September 30, 2020

selling these investments, the Company believes that these prices are reliable indicators of fair value.

The valuation committee of the Companys board of directors, or the valuation

committee, and the board of directors reviewed and approved the valuation determinations made with respect to these investments in a manner consistent with the Companys valuation policy.

The following is a reconciliation for the three months ended March 31, 2021 and 2020 of investments for which significant

unobservable inputs (Level 3) were used in determining fair value:

For the Three Months Ended March 31, 2021

Fair value at beginning of period

6 unchanged sentences

Fair value at end of period

The amount of total gains or losses for the period included in changes in net assets attributable to the change in

unrealized gains or losses relating to investments still held at the reporting date

For the Nine Months Ended September 30, 2019

The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized

gains or losses relating to investments still held at the reporting date

For the Three Months Ended March 31, 2020

Fair value at beginning of period

14 unchanged sentences

The valuation techniques and significant unobservable inputs used in recurring

Level 3 fair value measurements as of September 30, 2020 and December 31, 2019 were as follows:

Level 3 fair value measurements as of March 31, 2021 and December 31, 2020 were as follows:

Type of Investment

Fair Value at

September 30, 2020

March 31, 2021

Technique (1)

24 unchanged sentences

50.0% - 50.0% (50.0%)

Investments using a market quotes valuation technique were primarily valued by using the midpoint of the prevailing bid and ask prices from

dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened for validity by such services.

Investments valued using an EBITDA multiple or a revenue multiple pursuant to the market

comparables valuation technique may be conducted using an enterprise valuation waterfall analysis.

Represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding

unobservable input.

A decrease to the input would have the opposite effect.

Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

Fair value based on expected outcome of proposed corporate transactions and/or other factors.

Discount Rate

10.0% - 10.0% (10.0%)

Type of Investment

Fair Value at

December 31, 2020

13 unchanged sentences

7.8x - 11.5x (7.8x)

Option Pricing Model

Equity Illiquidity Discount

25.0% - 25.0% (25.0%)

Asset Based Finance

4 unchanged sentences

4.2% - 15.2% (9.9%)

Indicative Dealer Quotes

4.7% - 32.7% (32.4%)

EBITDA Multiple

12 unchanged sentences

Fair value based on expected outcome of proposed corporate transactions and/or other factors.

Financing Arrangements

Prior to June 14, 2019, in accordance with the 1940 Act, the Company was allowed to borrow amounts such that its asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such

Effective June 15, 2019, the Companys asset coverage requirement applicable to senior securities was reduced from 200% to 150%.

As of March 31, 2021, the aggregate amount outstanding of the senior securities issued by

the Company was $3,633.

As of March 31, 2021, the Companys asset coverage was 189%.

The following tables

present summary information with respect to the Companys outstanding financing arrangements as of March 31, 2021 and December 31, 2020.

For additional information regarding these financing arrangements, see the notes to the

FS KKR Capital Corp.

1 unchanged sentence

(in millions, except share and per share amounts)

Financing Arrangements

Prior to June 14, 2019, in accordance with the 1940 Act, the Company was allowed to borrow amounts such that its asset coverage,

calculated pursuant to the 1940 Act, was at least 200% after such borrowing.

Effective June 15, 2019, the Companys asset coverage requirement applicable to senior securities was reduced from 200% to 150%.

As of September 30,

2020, the aggregate amount outstanding of the senior securities issued by the Company was $3,980.

As of September 30, 2020, the Companys asset coverage was 176%.

The following tables present summary information with respect to the Companys outstanding financing arrangements as of

September 30, 2020 and December 31, 2019.

For additional information regarding these financing arrangements, see the notes to the Companys audited consolidated financial statements contained in its annual report on Form 10-K for the year ended December 31, 2019.

Any significant changes to the Companys financing arrangements during the nine months ended September 30, 2020 are discussed below.

As of September 30, 2020 (Unaudited)

Financing Arrangements (continued)

Companys audited consolidated financial statements contained in its annual report on Form 10-K for the year ended December 31, 2020.

significant changes to the Companys financing arrangements during the three months ended March 31, 2021 are discussed below.

As of March 31,

Type of Arrangement

2 unchanged sentences

Revolving Credit Facility

Locust Street Credit Facility (2)

Revolving Credit Facility

September 28, 2022

December 2, 2023

Senior Secured Revolving Credit Facility (2)

1 unchanged sentence

L+1.75% - 2.00% (1)(4)

November 7, 2024

December 23, 2025

4.750% Notes due 2022 (6)

11 unchanged sentences

Unsecured Notes

2019-1 Notes (2)(7)

3.400% Notes due 2026 (6)

Unsecured Notes

January 15, 2026

CLO-1 Notes (2)(7)

Collateralized Loan Obligation

July 15, 2030

January 15, 2031

LIBOR is subject to a 0% floor.

3 unchanged sentences

outstanding indebtedness of the Company.

Amount includes borrowing in Euros, Canadian dollars, pound sterling and Australian dollars.

Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars.

Euro balance outstanding of 159 has been

converted to U.S.

dollars at an exchange rate of 1.00 to $1.17 as of September 30, 2020 to reflect total amount outstanding in U.S.

Canadian dollar balance outstanding of CAD $74 has been converted to U.S dollars at an exchange

rate of CAD $1.00 to $0.75 as of September 30, 2020 to reflect total amount outstanding in U.S.

Pound sterling balance outstanding of £125 has been converted to U.S dollars at an exchange rate of £1.00 to $1.29 as of

September 30, 2020 to reflect total amount outstanding in U.S.

Australian dollar balance outstanding of A$6 has been converted to U.S dollars at an exchange rate of A$1.00 to $0.72 as of September 30, 2020 to reflect total amount

outstanding in U.S.

As of September 30, 2020, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes and the 8.625% notes

was approximately $456, $244, $405, $467, and $277, respectively.

dollars at an exchange rate of 1.00 to $1.17 as of March 31, 2021 to reflect total amount outstanding in U.S.

Canadian dollar balance outstanding of CAD92 has been converted to U.S dollars at an exchange rate of

CAD1.00 to $0.80 as of March 31, 2021 to reflect total amount outstanding in U.S.

Pounds sterling balance outstanding of £110 has been converted to U.S dollars at an exchange rate of £1.00 to $1.38 as of March 31, 2021

to reflect total amount outstanding in U.S.

Australian dollar balance outstanding of AUD6 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.76 as of March 31, 2021 to reflect total amount outstanding in U.S.

As of March 31, 2021, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 8.625% notes and the

3.400% notes was approximately $466, $245, $425, $484, $282 and $993, respectively.

These valuations are considered Level 2 valuations within the fair value hierarchy.

As of September 30, 2020, there were $299.4 of Class A-1 notes outstanding at L+1.70% and

$52.3 of Class A-2 notes outstanding at L+2.50%.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financing Arrangements (continued)

As of March 31, 2021, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5 of

Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R

notes outstanding at 3.011%.

As of December 31, 2020

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Revolving Credit Facility

Locust Street Credit Facility (2)

Revolving Credit Facility

September 28, 2022

L+1.75% - 2.00% (1)(3)

December 2, 2023

Senior Secured Revolving Credit Facility (2)

Revolving Credit Facility

L+1.75% - 2.00% (1)(4)

November 7, 2024

December 23, 2025

4.750% Notes due 2022 (6)

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February 1, 2025

2019-1 Notes (2)(7)

8.625% Notes due 2025 (6)

Unsecured Notes

3.400% Notes due 2026 (6)

Unsecured Notes

January 15, 2026

CLO-1 Notes (2)(7)

Collateralized Loan Obligation

July 15, 2030

January 15, 2031

LIBOR is subject to a 0% floor.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financing Arrangements (continued)

The carrying amount outstanding under the facility approximates its fair value.

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outstanding indebtedness of the Company.

Amount includes borrowing in Euros, Canadian dollars, pound sterling and Australian dollars.

Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars.

Euro balance outstanding of 164 has been

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dollars at an exchange rate of 1.00 to $1.22 as of December 31, 2020 to reflect total amount outstanding in U.S.

Canadian dollar balance outstanding of CAD $69 has been converted to U.S dollars at an exchange

rate of CAD $1.00 to $0.77 as of December 31, 2019 to reflect total amount outstanding in U.S.

Pound sterling balance outstanding of £100 has been converted to U.S dollars at an exchange rate of £1.00 to $1.33 as of

Canadian dollar balance outstanding of CAD63 has been converted to U.S dollars at an exchange rate

of CAD1.00 to $0.78 as of December 31, 2020 to reflect total amount outstanding in U.S.

Pounds sterling balance outstanding of £111 has been converted to U.S dollars at an exchange rate of £1.00 to $1.37 as of

December 31, 2020 to reflect total amount outstanding in U.S.

Australian dollar balance outstanding of A$173 has been converted to U.S dollars at an exchange rate of A$1.00 to $0.70 as of December 31, 2019 to reflect total amount

Australian dollar balance outstanding of AUD6 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.77 as of December 31, 2020 to reflect total amount

outstanding in U.S.

As of December 31, 2019, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes and the 4.125% notes was approximately

$467, $250, $416 and $478, respectively.

As of December 31, 2020, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 8.625% notes and

the 3.400% notes was approximately $468, $245, $422, $490, $285 and $994 respectively.

These valuations are considered Level 2 valuations within the fair value hierarchy.

As of December 31, 2019, there were $299.4 of Class A-1 notes outstanding at L+1.70% and

$52.3 of Class A-2 notes outstanding at L+2.50%.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financing Arrangements (continued)

For the three and nine months ended September 30, 2020 and 2019, the components of

total interest expense for the Companys financing arrangements were as follows:

Three Months Ended September 30,

As of December 31, 2020, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5

of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%.

For the three months ended March 31, 2021 and 2020, the components of total interest expense for the Companys financing

arrangements were as follows:

Three Months Ended March 31,

Arrangement (1)

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Total Interest

CCT New York Funding Credit Facility (2)

CCT Tokyo Funding Credit Facility (2)

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3.400% Notes due 2026

8.625% Notes due 2025

Nine Months Ended September 30,

Arrangement (1)

Amortization of

Financing Costs

Total Interest

Amortization of

Financing Costs

Total Interest

CCT New York Funding Credit Facility (2)

CCT Tokyo Funding Credit Facility (2)

Locust Street Funding Credit Facility

Senior Secured Revolving Credit Facility

4.000% Notes due 2019

4.250% Notes due 2020

4.750% Notes due 2022

5.000% Notes due 2022

4.625% Notes due 2024

4.125% Notes due 2025

8.625% Notes due 2025

Borrowings of each of the Companys wholly-owned, special-purpose financing subsidiaries are considered borrowings of the Company for

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The Companys average borrowings and weighted average interest rate, including the effect

of non-usage fees, for the nine months ended September 30, 2020 were $4,269 and 3.72%, respectively.

As of September 30, 2020, the Companys weighted average effective interest rate on

of non-usage fees, for the three months ended March 31, 2021 were $4,041 and 3.88%, respectively.

As of March 31, 2021, the Companys weighted average effective interest rate on

borrowings, including the effect of non-usage fees, was 4.17%.

Companys average borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2019 were $3,522 and 4.56%, respectively.

of September 30, 2019, the Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 4.44%.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financing Arrangements (continued)

Under its financing arrangements, the Company has made certain representations and

warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar financing arrangements.

The Company was in compliance with all covenants required by its financing arrangements as of

September 30, 2020 and December 31, 2019.

CCT Tokyo Funding Credit Facility

On May 14, 2020, CCT Tokyo Funding LLC, or CCT Tokyo Funding, a wholly-owned special-purpose financing subsidiary of the Company,

elected to extend the reinvestment period of its revolving credit facility, or the CCT Tokyo Funding Credit Facility, with Sumitomo Mitsui Banking Corporation, as the administrative agent, collateral agent, and lender, by an additional six months to

December 2, 2020.

Senior Secured Revolving Credit Facility

On March 3, 2020, the Company entered into a Commitment Increase Agreement in connection with its senior secured revolving credit

facility, or as subsequently amended and restated, the Senior Secured Revolving Credit Facility, with FS KKR Capital Corp.

II, as an additional borrower, JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and

the lenders party thereto, which, among other things, increased the total facility amount from $3,890 to $3,980.

There was no change to the sublimit of the total facility amount available for the Company to borrow.

On May 5, 2020, the Company entered into that certain Amendment No.

1 to Amended and Restated Senior Secured Revolving Credit

Agreement, or the Amendment, to the Senior Secured Revolving Credit Facility, with FS KKR Capital Corp.

II, JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders party thereto to, among other

things, reset the quarterly minimum shareholders equity test as the greater of (a) 30% of the total assets as at the last day of such fiscal quarter and (b) $1,968.2 plus 37.5% of net equity proceeds after April 15, 2021.

8.625% Notes due 2025

April 30, 2020, the Company and U.S.

Bank National Association, as trustee, or U.S.

Bank, entered into that certain Sixth Supplemental Indenture, or the Sixth Supplemental Indenture, to the Indenture, dated as of July 14, 2014 between the

Company and U.S.

Bank, or the Base Indenture, and together with the Sixth Supplemental Indenture, the Indenture.

The Sixth Supplemental Indenture relates to the Companys issuance of $250 aggregate principal amount of its 8.625% notes due 2025,

or the Notes, and such issuance of the Notes, the Offering.

The Notes will mature on May 15, 2025 and may be redeemed in

whole or in part at the Companys option at any time or from time to time at the redemption prices set forth in the Indenture.

The Notes bear interest at a rate of 8.625% per year, subject to adjustment during any downgrade period

as described in the Indenture, payable semi-annually on May 15th and November 15th of each year, commencing on November 15, 2020.

The Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the

Companys existing and future indebtedness that is expressly subordinated in right of payment to the Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior

to any of the Companys secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future

indebtedness (including trade payables) incurred by the Companys subsidiaries, financing vehicles or similar facilities.

The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage

requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those requirements, to provide financial information to the holders of the

Notes and U.S.

Bank if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, and to use reasonable best efforts to obtain a rating of the Notes (but not a specific rating) from two or

more rating agencies within two months after the issuance of the Notes.

These covenants are subject to important limitations and exceptions that are described in the Indenture.

Companys average borrowings and weighted average interest rate, including the effect of non-usage fees, for the three months ended March 31, 2020 were $4,519 and 3.88%, respectively.

March 31, 2020, the Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 3.71%.

Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various

covenants, reporting requirements and other customary requirements for similar financing arrangements.

The Company was in compliance with all covenants required by its financing arrangements as of March 31, 2021 and December 31, 2020.

FS KKR Capital Corp.

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(in millions, except share and per share amounts)

Financing Arrangements (continued)

In addition, on the occurrence of a change of control repurchase event, as

defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding Notes at a price equal to 100% of the principal amount of such Notes plus accrued and unpaid interest to the repurchase date.

The Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act

and to certain non-U.S.

persons outside the United States pursuant to Regulation S under the Securities Act.

The Notes have not been registered under the Securities Act or any state securities laws and may not

be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

Commitments and Contingencies

The Company enters into contracts that contain a variety of indemnification provisions.

Companys maximum exposure under these arrangements is unknown;

The Companys maximum exposure under these

arrangements is unknown;

however, the Company has not had prior claims or losses pursuant to these contracts.

The Advisor has reviewed the Companys existing contracts and expects the risk of loss to

the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Companys

knowledge, no material legal proceedings are threatened against the Company.

From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the

Companys rights under contracts with its portfolio companies.

While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its financial

condition or results of operations.

The Advisor has reviewed the Companys existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Companys knowledge, no material legal proceedings

are threatened against the Company.

From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Companys rights under contracts with

its portfolio companies.

While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its financial condition or results of operations.

FS KKR Capital Corp.

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to fund these commitments.

As of September 30, 2020, the Companys unfunded commitments consisted of the following:

As of March 31, 2021, the Companys unfunded commitments consisted of the following:

Category / Company (1)

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A10 Capital LLC

All Systems Holding LLC

Apex Group Limited

Ardonagh Group Ltd

Aspect Software Inc

Dental Care Alliance Inc

Eagle Family Foods Inc

Entertainment Benefits Group LLC

FloWorks International LLC

Foundation Consumer Brands LLC

Heniff Transportation Systems LLC

Individual FoodService

Karman Space Inc

Kellermeyer Bergensons Services LLC

Kodiak BP LLC

MB2 Dental Solutions LLC

Miami Beach Medical Group LLC

Motion Recruitment Partners LLC

P2 Energy Solutions Inc.

Pretium Packaging LLC

Revere Superior Holdings Inc

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RSC Insurance Brokerage Inc

Sungard Availability Services Capital Inc

Sweeping Corp of America Inc

Sweet Harvest Foods Management Co

Truck-Lite Co LLC

Asset Based Finance

Byrider Finance LLC, Structured Mezzanine

Callodine Commercial Finance LLC, 2L Term Loan B

Home Partners JV, Structured Mezzanine

Opendoor Labs Inc, 2L Term Loan

Unfunded Other Asset Based Finance/Other commitments

Unfunded Asset Based Finance/Other commitments

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Commitments and

Contingencies (continued)

May be commitments to one or more entities affiliated with the named company.

As of September 30, 2020, the Companys debt commitments are comprised of $46.5 revolving credit facilities, $252.5 delayed draw

term loans and $11.8 term loans, which generally are used for acquisitions or capital expenditures and are subject to certain performance tests.

As of March 31, 2021, the Companys debt commitments are comprised of $48.1 revolving credit facilities and $203.9 delayed draw

term loans, which generally are used for acquisitions or capital expenditures and are subject to certain performance tests.

Such unfunded debt commitments have a fair value representing unrealized appreciation (depreciation) of $(2.5).

The Companys unfunded Asset Based Finance/Other commitments generally require certain conditions to be met or actual approval from the Advisor prior to funding.

As of September 30, 2020, the Company also has an unfunded commitment to provide $118.3 of capital to SCJV.

Companys unfunded Asset Based Finance/Other commitments generally require certain conditions to be met or actual approval from the Advisor prior to funding.

As of March 31, 2021, the Company also has an unfunded commitment to provide $65.8 of capital to SCJV.

The capital commitment can be satisfied with contributions of cash and/or

The capital commitments cannot be drawn without an affirmative vote by both the Companys and SCRSs representatives on SCJVs board of managers.

While the Company does not expect to fund all of its unfunded commitments, there can be no assurance that it will not be required to do so.

In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies.

Under such arrangements, the

Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations.

The Company has no such guarantees outstanding at March 31, 2021 and December 31,

FS KKR Capital Corp.

1 unchanged sentence

(in millions, except share and per share amounts)

Commitments and

Contingencies (continued)

While the Company does not expect to fund all of its unfunded commitments, there can be

no assurance that it will not be required to do so.

In the normal course of business, the Company may enter into guarantees on

behalf of portfolio companies.

Under such arrangements, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations.

The Company has no such guarantees outstanding

at September 30, 2020 and December 31, 2019.

Financial Highlights

The following is a schedule of financial highlights of the Company for the nine months ended September 30, 2020 and the year ended

The following is a schedule of financial highlights of the Company for the three months ended March 31, 2021 and the year ended

December 31, 2020:

Nine Months Ended

September 30, 2020

Three Months Ended

March 31, 2021

December 31, 2020

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Asset coverage per unit (10)

The share information utilized to determine per share data has been retroactively adjusted to reflect the Reverse Stock Split discussed in

Per share data may be rounded in order to recompute the ending net asset value per share.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Highlights (continued)

The per share data was derived by using the weighted average shares outstanding during the applicable period.

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Total return based on net asset value does not consider the

effect of any sales commissions or charges that may be incurred in connection with the sale of shares of the Companys common stock.

The historical calculation of total return based on net asset value in the table should not be considered a

representation of the Companys future total return based on net asset value, which may be greater or less than the return shown in the table due to a number of factors, including the Companys ability or inability to make investments in

companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Companys expenses, variations in and the timing of the recognition of realized and unrealized gains or

losses, the degree to which the Company encounters competition in its markets and general economic conditions.

As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future

effect of any sales commissions or

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Highlights (continued)

charges that may be incurred in connection with the sale of shares of the Companys common stock.

The historical calculation of total return based on net asset value in the table should not

be considered a representation of the Companys future total return based on net asset value, which may be greater or less than the return shown in the table due to a number of factors, including the Companys ability or inability to make

investments in companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Companys expenses, variations in and the timing of the recognition of realized and unrealized

gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions.

As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in

future periods.

The total return calculations set forth above represent the total return on the Companys investment portfolio during the applicable period and do not represent an actual return to stockholders.

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Weighted average net assets during the applicable period are used for this calculation.

Ratios for the nine months ended September 30,

Ratios for the three months ended March 31, 2021

are annualized.

Annualized ratios for the nine months ended September 30, 2020 are not necessarily indicative of the ratios that may be expected for the year ending December 31, 2020.

The following is a schedule of supplemental ratios

for the nine months ended September 30, 2020 and year ended December 31, 2019:

Nine Months Ended

September 30, 2020

Annualized ratios for the three months ended March 31, 2021 are not necessarily indicative of the ratios that may be expected for the year ending December 31, 2021.

The following is a schedule of supplemental ratios for the

three months ended March 31, 2021 and year ended December 31, 2020:

Three Months Ended

March 31, 2021

December 31, 2020

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Ratio of excise taxes to average net assets

Portfolio turnover for the nine months ended September 30, 2020 is not annualized.

Portfolio turnover for the three months ended March 31, 2021 is not annualized.

Asset coverage per unit is the ratio of the carrying value of the Companys total consolidated assets, less liabilities and indebtedness

not represented by senior securities, to the aggregate amount of senior securities representing indebtedness.

Pending Merger with FSKR

On November 23, 2020, the Company entered into the 2020 Merger Agreement with FSKR, Merger

Sub, Inc., and the Advisor.

The 2020 Merger Agreement provides that, subject to the conditions set forth in the 2020 Merger Agreement, Merger Sub will merge with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned

subsidiary of FSK, or the First Merger, and, immediately thereafter, FSKR will merge with and into FSK, with FSK continuing as the surviving company, or together with the First Merger, the 2021 Merger.

The board of directors of each Fund has

approved the 2021 Merger, with the participation throughout by, and the unanimous support of, its respective independent directors.

The parties to the 2020 Merger Agreement intend the 2021 Merger to be treated as a reorganization within

the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

In the 2021 Merger, each share of FSKR

common stock issued and outstanding immediately prior to the effective time of the First Merger will be converted into a number of shares of FSK common stock equal to an exchange ratio to be determined in connection with the closing of the 2021

Merger, or the Exchange Ratio.

The Exchange Ratio will equal the net asset value per share of FSKR common stock, respectively (determined no earlier than 48 hours (excluding Sundays and holidays) prior to the closing date of the 2021 Merger),

divided by the net asset value per share of FSK common stock (determined, in each case, no earlier than 48 hours (excluding Sundays and holidays) prior to the closing date of the 2021 Merger).

Holders of FSKR common stock may receive fractional

shares or cash in lieu of fractional shares, at the election of FSK.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Pending Merger with

FSKR (continued)

The 2020 Merger Agreement contains representations, warranties and covenants, including,

among others, covenants relating to the operation of each of the Funds and FS/KKR Advisors businesses during the period prior to the closing of the 2021 Merger.

The Funds have agreed to convene and hold meetings of their respective

stockholders for the purpose of obtaining the required approvals of the Funds stockholders, respectively, and have agreed to recommend that their stockholders approve their respective proposals.

The 2020 Merger Agreement provides that the board of directors of each Fund may not solicit proposals relating to alternative

transactions, or, subject to certain exceptions, enter into discussions or negotiations or provide information in connection with any proposal for an alternative transaction.

However, each of the Funds may, subject to certain conditions, change its

recommendation to their respective stockholders, terminate the 2020 Merger Agreement and enter into an agreement with respect to a superior alternative proposal if the board of directors of such Fund determines in its reasonable good faith judgment,

after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to breach its standard of conduct under applicable law (taking into account any changes to the 2020 Merger Agreement proposed by the

Consummation of the 2021 Merger, which is currently anticipated to occur during the second or third quarter of

2021, is subject to certain closing conditions, including (1) requisite approvals of the Funds stockholders, (2) the absence of certain legal impediments to the consummation of the 2021 Merger, (3) effectiveness of the

registration statement on Form N-14, which includes a joint proxy statement of the Funds and a prospectus of FSK, or the Proxy Statement, (4) subject to certain exceptions, the accuracy of the

representations and warranties and compliance with the covenants of each party to the 2020 Merger Agreement and (5) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act

of 1976, as amended).

The 2020 Merger Agreement also contains certain termination rights in favor of each Fund including if

the 2021 Merger is not completed on or before November 23, 2021 or if the requisite approvals of the applicable Funds stockholders are not obtained.

The 2020 Merger Agreement also provides that, upon the termination of the 2020 Merger

Agreement under certain circumstances, a third party may be required to pay FSKR a termination fee of approximately $90.8, or a third party may be required to pay FSK a termination fee of approximately $126.2.

In connection with the 2021 Merger, the Company is seeking stockholder approval to amend the Companys investment advisory agreement

to (a) reduce FSKs income incentive fee rate from 20% to 17.5% and (b) remove the total return lookback provision applicable to the subordinated incentive fee on income.

The Advisor has also agreed to waive income incentive fees in

the amount of $15 per quarter for the first six full fiscal quarters of operations following the 2021 Merger for a total waiver of $90.

Managements Discussion and Analysis of Financial Condition and Results of Operations.

17 unchanged sentences

our contractual arrangements and relationships with third parties;

actual and potential conflicts of interest with the Advisor, FS Investments, KKR Credit or any of their respective affiliates;

actual and potential conflicts of interest with the other funds in the Advisor, FS Investments, KKR Credit or any of their respective affiliates;

the dependence of our future success on the general economy and its effect on the industries in which we may invest;

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the tax status of the enterprises in which we may invest;

In addition, words such as anticipate, believe, expect and intend indicate a forward-looking statement, although not all forward-looking statements include

the 2021 Merger, the likelihood the 2021 Merger is completed and the anticipated timing of their completion.

In addition, words such as anticipate, believe, expect and intend indicate a

forward-looking statement, although not all forward-looking statements include these words.

The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties.

Our actual results could differ materially from those implied or expressed in the

forward-looking statements for any reason.

actual results could differ materially from those implied or expressed in the forward-looking statements for any reason.

Factors that could cause actual results to differ materially include:

62 unchanged sentences

We may invest without limit in debt or other securities of any rating, as well as debt or other securities that have not been rated

The principal measure of our financial performance is net increase in net assets resulting from operations, which includes net investment income, net realized gain or loss on investments, net realized

gain or loss on foreign currency, net unrealized appreciation or depreciation on investments and net unrealized gain or loss on foreign currency.

Net investment income is the difference between our income from interest, dividends, fees and other

investment income and our operating and other expenses.

Net realized gain or loss on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized

gain or loss on foreign currency for those foreign denominated investment transactions.

Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations.

Net unrealized appreciation

or depreciation on investments is the net change in the fair value of our investment portfolio, including the respective unrealized gain or loss on foreign currency for those foreign denominated investments.

Net unrealized gain or loss on foreign

currency is the net change in the value of receivables or accruals due to the impact of foreign currency fluctuations.

principally generate revenues in the form of interest income on the debt investments we hold.

In addition, we generate revenues in the form of non-recurring commitment, closing, origination, structuring or

diligence fees, monitoring fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees.

We may also generate revenues in the form of dividends and other distributions on the equity or other securities

Our primary operating expenses include the payment of management and incentive fees and other expenses under the investment advisory agreement and the administration agreement, interest expense from

financing arrangements and other indebtedness, and other expenses necessary for our operations.

The management and incentive fees compensate the Advisor for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our

The Advisor oversees our

day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory

affairs activities, and other administrative services.

The Advisor also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsible for the financial records that we are

required to maintain and preparing reports for our stockholders and reports filed with the SEC.

In addition, the Advisor assists us in calculating our net asset value, overseeing the preparation and filing of tax returns and the printing and

dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.

Pursuant to the administration agreement, we reimburse the Advisor for expenses necessary to perform services related to our

administration and operations, including the Advisors allocable portion of the compensation and related expenses of certain personnel of FS Investments and KKR Credit providing administrative services to us on behalf of the Advisor.

reimburse the Advisor no less than quarterly for all costs and expenses incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration agreement.

The Advisor allocates the cost of such services

to us based on factors such as total assets, revenues, time allocations and/or other reasonable metrics.

Our board of directors reviews the methodology employed in determining how the expenses are allocated to us and the proposed allocation of

administrative expenses among us and certain affiliates of the Advisor.

Our board of directors then assesses the reasonableness of such reimbursements for expenses allocated to us based on the breadth, depth and quality of such services as compared

to the estimated cost to us of obtaining

similar services from third-party service providers known to be available.

In addition, our board of directors considers whether any single third-party service provider would be capable of

providing all such services at comparable cost and quality.

Finally, our board of directors compares the total amount paid to the Advisor for such services as a percentage of our net assets to the same ratio as reported by other comparable BDCs.

We bear all other expenses of our operations and transactions, including all other expenses incurred by the Advisor in

performing services for us and administrative personnel paid by the Advisor, to the extent they are not controlling persons of the Advisor or any of its affiliates, subject to the limitations included in the investment advisory agreement and the

administration agreement.

In addition, we have contracted with State Street Bank and Trust Company to provide various

accounting and administrative services, including, but not limited to, preparing preliminary financial information for review by the Advisor, preparing and monitoring expense budgets, maintaining accounting and corporate books and records,

processing trade information provided by us and performing testing with respect to RIC compliance.

Pending Merger with FSKR

On November 23, 2020, we entered into an Agreement and Plan of Merger, or the 2020 Merger Agreement with FS KKR Capital Corp II., a Maryland corporation, or FSKR, and together with FSK, the Funds,

Rocky Merger Sub, Inc., a Maryland corporation and wholly-owned subsidiary of FSK, or Merger Sub and the Advisor.

Merger Agreement provides that, subject to the conditions set forth in the 2020 Merger Agreement, Merger Sub will merge with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned subsidiary of FSK, or the First Merger,

and, immediately thereafter, FSKR will merge with and into the Company, with the Company continuing as the surviving company, or together with the First Merger, the 2021 Merger.

The board of directors of each Fund has approved the 2021 Merger, with

the participation throughout by, and the unanimous support of, its respective independent directors.

The parties to the 2020 Merger Agreement intend the 2021 Merger to be treated as a reorganization within the meaning of

Section 368(a) of the Internal Revenue Code of 1986, as amended.

In the 2021 Merger, each share of FSKRs common

stock issued and outstanding immediately prior to the effective time of the First Merger will be converted into a number of shares of the Companys common stock equal to an exchange ratio to be determined in connection with the closing of the

2021 Merger, or the Exchange Ratio.

The Exchange Ratio will equal the net asset value per share of FSKRs common stock, respectively (determined no earlier than 48 hours (excluding Sundays and holidays) prior to the closing date of the 2021

Merger), divided by the net asset value per share of the Companys common stock (determined, in each case, no earlier than 48 hours (excluding Sundays and holidays) prior to the closing date of the 2021 Merger).

Holders of the FSKRs

common stock may receive fractional shares or cash in lieu of fractional shares, at the election of the Company.

Merger Agreement contains representations, warranties and covenants, including, among others, covenants relating to the operation of each of the Funds and the Advisors businesses during the period prior to the closing of the 2021 Merger.

Funds have agreed to convene and hold meetings of their respective stockholders for the purpose of obtaining the required approvals of the Funds stockholders, respectively, and have agreed to recommend that their stockholders approve their

respective proposals.

The 2020 Merger Agreement provides that the board of directors of each Fund may not solicit proposals

relating to alternative transactions, or, subject to certain exceptions, enter into discussions or negotiations or provide information in connection with any proposal for an alternative transaction.

However, each of the Funds may, subject to certain

conditions, change its recommendation to their respective stockholders, terminate the 2020 Merger Agreement and enter into an agreement with respect to a superior alternative proposal if the board of directors of such Fund determines in its

reasonable good faith judgment, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to breach its standard of conduct under applicable law (taking into account any changes to the 2020

Merger Agreement proposed by the other Fund).

Consummation of the 2021 Merger, which is currently anticipated to occur during

the second or third quarter of 2021, is subject to certain closing conditions, including (1) requisite approvals of the Funds stockholders, (2) the absence of certain legal impediments to the consummation of the 2021 Merger,

(3) effectiveness of the registration statement on Form N-14, which includes a joint proxy statement of the Funds and a prospectus of the Company, or the Proxy Statement, (4) subject to certain

exceptions, the accuracy of the representations and warranties and compliance with the covenants of each party to the 2020

Merger Agreement and (5) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended).

The 2020 Merger Agreement also contains certain termination rights in favor of each Fund including if the 2021 Merger is not completed on

or before November 23, 2021 or if the requisite approvals of the applicable Funds stockholders are not obtained.

The 2020 Merger Agreement also provides that, upon the termination of the 2020 Merger Agreement under certain circumstances,

a third party may be required to pay FSKR a termination fee of approximately $90.8, or a third party may be required to pay FSK a termination fee of approximately $126.2.

In connection with the 2021 Merger, the Company is seeking stockholder approval to amend the Companys investment advisory agreement to (a) reduce FSKs income incentive fee rate from 20%

to 17.5% and (b) remove the total return lookback provision applicable to the subordinated incentive fee on income.

The Advisor has also agreed to waive income incentive fees in the amount of $15 per quarter for the first six full fiscal

quarters of operations following the 2021 Merger for a total waiver of $90.

The principal measure of our financial performance is net increase in net assets resulting from operations, which includes net investment

income, net realized gain or loss on investments, net realized gain or loss on foreign currency, net unrealized appreciation or depreciation on investments and net unrealized gain or loss on foreign currency.

Net investment income is the difference

between our income from interest, dividends, fees and other investment income and our operating and other expenses.

Net realized gain or loss on investments is the difference between the proceeds received from dispositions of portfolio investments

and their amortized cost, including the respective realized gain or loss on foreign currency for those foreign denominated investment transactions.

Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to

foreign currency fluctuations.

Net unrealized appreciation or depreciation on investments is the net change in the fair value of our investment portfolio, including the respective unrealized gain or loss on foreign currency for those foreign

denominated investments.

Net unrealized gain or loss on foreign currency is the net change in the value of receivables or accruals due to the impact of foreign currency fluctuations.

We principally generate revenues in the form of interest income on the debt investments we hold.

In addition, we generate revenues in the

form of non-recurring commitment, closing, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees.

may also generate revenues in the form of dividends and other distributions on the equity or other securities we hold.

Our primary operating expenses include the payment of management and incentive fees and other expenses under the

investment advisory agreement and the administration agreement, interest expense from financing arrangements and other indebtedness, and other expenses necessary for our operations.

The management and incentive fees compensate the Advisor for its

work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments.

The Advisor oversees our day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs

activities, and other administrative services.

The Advisor also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsible for the financial records that we are required

to maintain and preparing reports for our stockholders and reports filed with the SEC.

In addition, the Advisor assists us in calculating our net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of

reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.

Pursuant to the administration agreement, we reimburse the Advisor for expenses necessary to perform services related to our administration and operations, including the Advisors allocable portion

of the compensation and related expenses of certain personnel of FS Investments and KKR Credit providing administrative services to us on behalf of the Advisor.

We reimburse the Advisor no less than quarterly for all costs and expenses incurred by

the Advisor in performing its obligations and providing personnel and facilities under the administration agreement.

The Advisor allocates the cost of such services to us based on factors such as total assets, revenues, time allocations and/or other

reasonable metrics.

Our board of directors reviews the methodology employed in determining how the expenses are allocated to us and the proposed allocation of administrative expenses among us and certain affiliates of the Advisor.

directors then assesses the reasonableness of such reimbursements for expenses allocated to us based on the breadth, depth and quality of such services as compared to the estimated cost to us of obtaining similar services from third-party service

providers known to be available.

In addition, our board of directors considers whether

any single third-party service provider would be capable of providing all such services at comparable cost and quality.

Finally, our board of directors compares the total amount paid to the

Advisor for such services as a percentage of our net assets to the same ratio as reported by other comparable BDCs.

all other expenses of our operations and transactions, including all other expenses incurred by the Advisor in performing services for us and administrative personnel paid by the Advisor, to the extent they are not controlling persons of the Advisor

or any of its affiliates, subject to the limitations included in the investment advisory agreement and the administration agreement.

In addition, we have contracted with State Street Bank and Trust Company to provide various accounting and administrative services, including, but not limited to, preparing preliminary financial

information for review by the Advisor, preparing and monitoring expense budgets, maintaining accounting and corporate books and records, processing trade information provided by us and performing testing with respect to RIC compliance.

COVID-19 Developments

2 unchanged sentences

impact, the business operations of some of our portfolio companies.

We cannot at this time fully predict the impact of COVID-19 on our business or the business of our portfolio companies, its duration or

magnitude or the extent to which it will negatively impact our portfolio companies operating results or our own results of operations or financial condition.

We expect that certain of our portfolio companies will continue to experience

economic distress for the foreseeable future and may significantly limit business operations if subjected to prolonged economic distress.

We cannot at this time fully predict the continued impact of COVID-19 on our business or the business of our portfolio companies, its

duration or magnitude or the extent to which it will negatively impact our portfolio companies operating results or our own results of operations or financial condition.

We expect that certain of our portfolio companies may continue to

experience economic distress for the foreseeable future and may significantly limit business operations if subjected to prolonged economic distress.

These developments could result in a decrease in the value of our investments.

COVID-19 has already had adverse effects on our investment income and we expect that such adverse

effects will continue for some time.

effects may continue for some time.

These adverse effects may require us to restructure certain of our investments, which could result in further reductions to our investment income or in impairments on our investments.

disruptions in the capital markets have resulted in illiquidity in certain market areas.

In addition, disruptions

in the capital markets have resulted in illiquidity in certain market areas.

These market disruptions and illiquidity are likely to have an adverse effect on our business, financial condition, results of operations and cash flows.

Unfavorable economic conditions caused by COVID-19 can also be expected to increase our funding costs and limit our access to the capital markets.

These events have limited our investment originations, which

is likely to continue for the immediate future, and have also had a material negative impact on our operating results.

continue to carefully monitor the impact of the COVID-19 pandemic on our business and the business of our portfolio companies.

Because the full effects of the COVID-19

pandemic are not capable of being known at this time, we cannot estimate the impacts of COVID-19 on our future financial condition, results of operations or cash flows.

We do, however, expect that it will

continue to have a negative impact on our business and the financial condition of our portfolio companies.

Portfolio Investment Activity

economic conditions caused by COVID-19 can also be expected to increase our funding costs and limit our access to the capital markets.

These events have limited our investment originations, which is likely to

continue for the immediate future, and have also had a material negative impact on our operating results.

We will continue to

carefully monitor the impact of the COVID-19 pandemic on our business and the business of our portfolio companies.

Because the full effects of the COVID-19 pandemic are

not capable of being known at this time, we cannot estimate the impacts of COVID-19 on our future financial condition, results of operations or cash flows.

We do, however, expect that it may continue to have a

negative impact on our business and the financial condition of certain of our portfolio companies.

Portfolio Investment Activity for the

Three Months Ended March 31, 2021 and for the Year Ended December 31, 2020

Total Portfolio Activity

The following tables present certain selected information regarding our portfolio investment activity for the three months ended

March 31, 2021 and the year ended December 31, 2020:

Net Investment Activity

For the Three Months Ended

March 31, 2021

For the Year Ended

December 31, 2020

Sales and Repayments

Net Portfolio Activity

For the Three Months Ended March 31, 2021

New Investment Activity by Asset Class

Senior Secured LoansFirst Lien

Senior Secured LoansSecond Lien

Other Senior Secured Debt

Subordinated Debt

Asset Based Finance

Strategic Credit Opportunities Partners, LLC

The following table summarizes the composition of our investment portfolio at cost and fair value as of

March 31, 2021 and December 31, 2020:

December 31, 2020

Senior Secured LoansFirst Lien

Senior Secured LoansSecond Lien

Other Senior Secured Debt

Subordinated Debt

Asset Based Finance

Strategic Credit Opportunities Partners, LLC

Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on

The following table presents certain selected information regarding the composition of our

investment portfolio as of March 31, 2021 and December 31, 2020:

March 31, 2021

December 31, 2020

Number of Portfolio Companies

% Variable Rate Debt Investments (based on fair value) (1)(2)

% Fixed Rate Debt Investments (based on fair value) (1)(2)

% Other Income Producing Investments (based on fair value) (3)

% Non-Income Producing Investments (based on fair value) (2)

% of Investments on Non-Accrual (based on fair value)

Weighted Average Annual Yield on Accruing Debt Investments (2)(4)

Weighted Average Annual Yield on All Debt Investments (5)

Debt Investments means investments that pay or are expected to pay a stated interest rate, stated dividend rate or other similar

stated return.

Does not include investments on non-accrual status.

Other Income Producing Investments means investments that pay or are expected to pay interest, dividends or other income to the

Company on an ongoing basis but do not have a stated interest rate, stated dividend rate or other similar stated return.

The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,

dividend rate or other similar stated return of each accruing Debt 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 accruing 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.

The Weighted Average Annual Yield on All Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,

dividend rate or other similar stated return of each Debt 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 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.

For the three months ended March 31, 2021, our total return based on net asset value was 6.43% and our total return based on market

value was 23.18%.

For the year ended December 31, 2020, our total return based on net asset value was (9.69)% and our total return based on market value was (19.73)%.

See footnotes 6 and 7 to the table included in Note 11 to our unaudited

consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on market value, respectively.

Direct Originations

The following table presents certain selected

information regarding our Direct Originations as of March 31, 2021 and December 31, 2020:

Characteristics of All Direct Originations held in Portfolio

March 31, 2021

December 31, 2020

Number of Portfolio Companies

% of Investments on Non-Accrual (based on fair value)

Total Cost of Direct Originations

Total Fair Value of Direct Originations

% of Total Investments, at Fair Value

Weighted Average Annual Yield on Accruing Debt Investments (1)

Weighted Average Annual Yield on All Debt Investments (2)

The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,

dividend rate or other similar stated return of each accruing Debt 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 accruing 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.

Does not include Debt Investments on non-accrual status.

The Weighted Average Annual Yield on All Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,

dividend rate or other similar stated return of each Debt 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 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.

Portfolio Composition by Industry Classification

The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio

assets in such industries as of March 31, 2021 and December 31, 2020:

March 31, 2021

December 31, 2020

Industry Classification

Automobiles & Components

Capital Goods

Commercial & Professional Services

Consumer Durables & Apparel

Consumer Services

Diversified Financials

Food & Staples Retailing

Food, Beverage & Tobacco

Health Care Equipment & Services

Household & Personal Products

Media & Entertainment

Pharmaceuticals, Biotechnology & Life Sciences

Software & Services

Strategic Credit Opportunities Partners, LLC

Technology Hardware & Equipment

Telecommunication Services

Transportation

Portfolio Asset Quality

In addition to various risk management and monitoring tools, the Advisor uses an investment rating system to characterize and monitor the expected level of returns on each investment in our portfolio.

Advisor uses an investment rating scale of 1 to 4.

The following is a description of the conditions associated with each investment rating:

Summary Description

Performing investmentgenerally executing in accordance with plan and there are no concerns about the portfolio companys performance or ability to meet covenant

requirements.

Performing investmentno concern about repayment of both interest and our cost basis but companys recent performance or trends in the industry require closer

Underperforming investmentsome loss of interest or dividend possible, but still expecting a positive return on investment.

Underperforming investmentconcerns about the recoverability of principal or interest.

The following table shows the distribution of our investments on the 1 to 4 investment

rating scale at fair value as of March 31, 2021 and December 31, 2020:

March 31, 2021

December 31, 2020

Investment Rating

The amount of the portfolio in each grading category may vary substantially from period to period

resulting primarily from changes in the composition of the portfolio as a result of new investment, repayment and exit activities.

In addition, changes in the grade of investments may be made to reflect our expectation of performance and changes in

investment values.

Results of Operations

Comparison of the Three Months Ended March 31, 2021 and March 31, 2020

Our investment

income for the three months ended March 31, 2021 and 2020 was as follows:

Three Months Ended March 31,

Percentage of

Interest income

Paid-in-kind interest income

Dividend income

Total investment income (1)

Such revenues represent $131 and $160 of cash income earned as well as $20 and $19 in non-cash

portions relating to accretion of discount and PIK interest for the three months ended March 31, 2021 and 2020, respectively.

Cash flows related to such non-cash revenues may not occur for a number of

reporting periods or years after such revenues are recognized.

The level of interest income we receive is

generally related to the balance of income-producing investments, multiplied by the weighted average yield of our investments.

Fee income is transaction based, and typically consists of amendment and consent fees, prepayment fees, structuring fees

and other non-recurring fees.

As such, fee income is generally dependent on new direct origination investments and the occurrence of events at existing portfolio companies resulting in such fees.

The decrease in interest income during the three months ended March 31, 2021 compared to the three months ended March 31, 2020

can primarily be attributed to the repayment of higher yielding assets replaced by lower yielding assets, the impact of the decline in LIBOR on our floating rate investments and the impact of in non-accrual

assets during the past year.

A portion of each of these factors was impacted by the ongoing COVID-19 pandemic.

The increase in dividend income during the three months ended March 31, 2021 compared

to the three months ended March 31, 2020 can be primarily attributed to the increase in dividends paid in respect to our investment in Strategic Credit Opportunities Partners, LLC.

Our operating expenses for the three months ended March 31, 2021 and 2020 were as follows:

Three Months Ended

Management fees

Subordinated income incentive fees

Administrative services expenses

Accounting and administrative fees

Interest expense

Total operating expenses

The following table reflects selected expense ratios as a percent of average net assets for the three

months ended March 31, 2021 and 2020:

Three Months Ended

Ratio of operating expenses to average net assets

Ratio of incentive fees and interest expense to average net assets (1)

Ratio of net operating expenses, excluding certain expenses, to average net assets

Ratio data may be rounded in order to recompute the ending ratio of net operating expenses to average net assets or net operating expenses,

excluding certain expenses, to average net assets.

Incentive fees and interest expense, among other things,

may increase or decrease our expense ratios relative to comparative periods depending on portfolio performance and changes in amounts outstanding under our financing arrangements and benchmark interest rates such as LIBOR, among other factors.

Net Investment Income

Our net investment income totaled $78 ($0.63 per share) and $98 ($0.78 per share) for the three months ended March 31, 2021 and 2020, respectively.

The decrease in net investment income during the

three months ended March 31, 2021 compared to the three months ended March 31, 2020 can primarily be attributed to lower investment income during the three months ended March 31, 2021 as discussed above, partially offset by lower

Net Realized Gains or Losses

Our net realized gains (losses) on investments and foreign currency for the three months ended March 31, 2021 and 2020 were as follows:

Three Months Ended

Net realized gain (loss) on investments (1)

Net realized gain (loss) on foreign currency

Total net realized gain (loss)

We sold investments and received principal repayments, respectively, of $248 and $629 during the three months ended March 31, 2021 and

$459 and $455 during the three months ended March 31, 2020.

Net Change in Unrealized Appreciation (Depreciation)

Our net change in unrealized appreciation (depreciation) on investments and unrealized gain (loss) on foreign currency for the three

months ended March 31, 2021 and 2020 were as follows:

Three Months Ended

Net change in unrealized appreciation (depreciation) on investments

Net change in unrealized appreciation (depreciation) on foreign currency forward contracts

Net change in unrealized gain (loss) on foreign currency

Total net change in unrealized appreciation (depreciation)

The net change in unrealized appreciation (depreciation) during the three months ended March 31, 2021

was driven primarily by continued mark to market improvements in the portfolio since the bottom of the COVID-19 pandemic as well as the reversal of unrealized losses that were sole or repaid during the quarter and converted to realized losses.

net change in unrealized appreciation (depreciation) during the three months ended March 31, 2020 was driven primarily by mark to market declines across the portfolio resulting from uncertainty related to the current COVID-19 pandemic.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the three months ended March 31, 2021, the net increase in net assets resulting from operations was $199 ($1.61 per share)

compared to a net decrease in net assets resulting from operations of $703 ($5.59 per share) during the three months ended March 31, 2020.

This Results of Operations section should be read in conjunction with COVID-19 Developments above.

Financial Condition, Liquidity and Capital Resources

As of March 31, 2021, we had $149 in cash and foreign

currency, which we or our wholly-owned financing subsidiaries held in custodial accounts, and $1,449 in borrowings available under our financing arrangements, subject to borrowing base and other limitations.

As of March 31, 2021, we also held

broadly syndicated investments and opportunistic investments that we believe could be sold to create additional liquidity.

As of March 31, 2021, we had unfunded debt investments with aggregate unfunded commitments of $252.0, unfunded

equity/other commitments of $205.7 and unfunded commitments of $65.8 of Strategic Credit Opportunities Partners, LLC.

We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need

We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments, as

well as principal repayments and proceeds from sales of our investments.

To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of the Advisor, but in no event will leverage employed exceed the

maximum amount permitted by the 1940 Act.

Prior to June 14, 2019, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing.

Effective June 15, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%.

As of March 31, 2021, the aggregate amount outstanding of the senior securities issued by us was $3.6 billion.

As of March 31, 2021, our asset coverage was 189%.

See Financing Arrangements.

investing in securities of portfolio companies, we invest the cash received from fees, interest and dividends earned from our investments and principal repayments and proceeds from sales of our investments primarily in cash, cash equivalents,

including money market funds, U.S.

government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, consistent with our BDC election and our election to be taxed as a RIC.

This Financial Condition, Liquidity and Capital Resources section should be read in conjunction with COVID-19 Developments above.

Financing Arrangements

The following table presents summary information with respect to our outstanding financing arrangements as of March 31, 2021:

As of March 31, 2021

Type of Arrangement

Maturity Date

CCT Tokyo Funding Credit Facility (2)

Revolving Credit Facility

L+1.75% - 2.00% (1)(3)

December 2, 2023

Senior Secured Revolving Credit Facility (2)

Revolving Credit Facility

December 23, 2025

4.750% Notes due 2022 (6)

Unsecured Notes

5.000% Notes due 2022 (6)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements