What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-08 compared with 2021-08-09 · 1216 added, 1216 removed, 2784 unchanged (47% 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)

June 30, 2021

September 30, 2021

December 31, 2020

Investments, at fair value

Non-controlled/unaffiliated investments (amortized cost$11,025 and $5,314, respectively)

Non-controlled/affiliated investments (amortized cost$761 and $629, respectively)

Non-controlled/unaffiliated investments (amortized cost$12,092 and $5,314,

respectively)

Non-controlled/affiliated investments (amortized cost$901 and $629,

respectively)

Controlled/affiliated investments (amortized cost$2,731 and $1,510, respectively)

35 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Investment income

19 unchanged sentences

Total operating expenses

Incentive fee waiver (1)

Net investment income

15 unchanged sentences

Per share informationbasic and diluted

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

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

Weighted average shares outstanding

6 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Net investment income (loss)

Net realized gain (loss) on investments, foreign currency forward contracts and foreign currency

Net change in unrealized appreciation (depreciation) on investments and foreign currency forward contracts (1)

Net realized gain (loss) on investments, foreign currency forward contracts and foreign

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

contracts (1)

Net change in unrealized gain (loss) on foreign currency

17 unchanged sentences

(in millions)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

44 unchanged sentences

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

During the six

months ended June 30, 2021 and 2020, the Company paid $60 and $74, respectively, in interest expense on the financing arrangements.

nine months ended September 30, 2021 and 2020, the Company paid $138 and $110, respectively, in interest expense on the financing arrangements.

See notes to unaudited consolidated financial statements.

2 unchanged sentences

(in millions)

Supplemental disclosure of non-cash operating and financing activities:

In connection with the 2021 Merger, the Company issued common stock of $3,650 and acquired investments at cost of $7,227 and other assets

of $221 and assumed debt of $3,794 and other liabilities of $297.

See notes to unaudited consolidated financial statements.

Supplemental disclosure

of non-cash operating and financing activities:

In connection with the 2021 Merger, the Company issued common stock of $3,650 and acquired investments

at cost of $7,227 and other assets of $221 and assumed debt of $3,794 and other liabilities of $297.

See notes to unaudited

consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

Portfolio Company (a)

Senior Secured LoansFirst Lien125.2%

5 Arch Income Fund 2 LLC

(q)(r)(w)(y)(z)

Diversified Financials

5 Arch Income Fund 2 LLC

Diversified Financials

A10 Capital LLC

(w)(y)(z)(q)(r)

Diversified Financials

15 unchanged sentences

Software & Services

Affordable Care Inc

Health Care Equipment & Services

L+550, 0.0% PIK (1.3% Max PIK)

Affordable Care Inc

Health Care Equipment & Services

L+550, 0.0% PIK (1.3% Max PIK)

Affordable Care Inc

Health Care Equipment & Services

L+550, 0.0% PIK (1.3% Max PIK)

Alera Group Intermediate Holdings Inc

American Tire Distributors Inc

4 unchanged sentences

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

American Vision Partners

Health Care Equipment & Services

American Vision Partners

Health Care Equipment & Services

American Vision Partners

Health Care Equipment & Services

Amtek Global Technology Pte Ltd

5 unchanged sentences

Diversified Financials

Apex Group Limited

(f)(k)(l)(m)(t)(v)(w)

Diversified Financials

Apex Group Limited

Diversified Financials

Software & Services

1 unchanged sentence

Ardonagh Group Ltd

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

Ardonagh Group Ltd

Arrotex Australia Group Pty Ltd

6 unchanged sentences

ATX Networks Corp

(s)(v)(w)(y)(z)

Technology Hardware & Equipment

L+625, 1.5% PIK (1.5% Max PIK)

(f)(k)(l)(m)(t)(v)

(w)(v)(s)(ad)

Capital Goods

Software & Services

(f)(k)(l)(v)(m)(t)

Consumer Services

(v)(y)(z)(aa)(ac)

(ac)(aa)(y)(z)(v)

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

Berner Food & Beverage LLC

Food & Staples Retailing

BGB Group LLC

(f)(i)(k)(l)(v)(t)

Media & Entertainment

BGB Group LLC

Media & Entertainment

Borden (New Dairy Opco)

Food, Beverage & Tobacco

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

Borden (New Dairy Opco)

Food, Beverage & Tobacco

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

Borden Dairy Co

(v)(y)(z)(ac)

(ac)(y)(z)(v)

Food, Beverage & Tobacco

Caprock Midstream LLC

Charles Taylor PLC

Diversified Financials

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Bowery Farming Inc

Food, Beverage & Tobacco

Cimarron Energy Inc

5 unchanged sentences

Software & Services

Corsearch Intermediate Inc

Software & Services

(f)(k)(l)(m)(s)(t)(v)

(f)(k)(l)(v)(m)(s)(t)

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 June 30, 2021

(in millions, except share amounts)

Software & Services

Dental Care Alliance Inc

(f)(k)(m)(t)(v)

(f)(k)(v)(m)(t)

Health Care Equipment & Services

2 unchanged sentences

Distribution International Inc

Eagle Family Foods Inc

Food, Beverage & Tobacco

Eagle Family Foods Inc

Food, Beverage & Tobacco

Eagle Family Foods Inc

(f)(i)(k)(l)(m)(s)(v)

Food, Beverage & Tobacco

Eagleclaw Midstream Ventures LLC

EIF Van Hook Holdings LLC

Entertainment Benefits Group LLC

5 unchanged sentences

Entertainment Benefits Group LLC

(f)(k)(l)(v)(m)

Media & Entertainment

1 unchanged sentence

Entertainment Benefits Group LLC

(f)(k)(l)(m)(v)

Media & Entertainment

1 unchanged sentence

Fairway Group Holdings Corp

(v)(y)(z)(ac)

(ac)(y)(z)(v)

Food & Staples Retailing

1 unchanged sentence

Fairway Group Holdings Corp

(v)(y)(z)(ac)

(ac)(y)(z)(v)

Food & Staples Retailing

4 unchanged sentences

Capital Goods

FloWorks International LLC

Capital Goods

Follett Software Co

Software & Services

Follett Software Co

(f)(k)(l)(v)(t)

Software & Services

Follett Software Co

Software & Services

Foundation Consumer Brands LLC

8 unchanged sentences

Software & Services

Galway Partners Holdings LLC

L+525, 0.0% PIK (1.3% Max PIK)

Galway Partners Holdings LLC

L+525, 0.0% PIK (1.3% Max PIK)

Galway Partners Holdings LLC

L+525, 0.0% PIK (1.3% Max PIK)

General Datatech LP

(f)(k)(l)(t)(v)

(f)(k)(l)(v)(m)(t)

Software & Services

4 unchanged sentences

Heniff Transportation Systems LLC

(f)(i)(k)(l)(v)(m)

Transportation

Heniff Transportation Systems LLC

(f)(i)(k)(l)(m)(v)

Transportation

1 unchanged sentence

Transportation

(f)(k)(l)(m)(t)(v)

Hermes UK Ltd

Transportation

(f)(k)(l)(v)(m)(t)

Commercial & Professional Services

2 unchanged sentences

HM Dunn Co Inc

(v)(y)(z)(ad)

Capital Goods

L+875 PIK (L+875 Max PIK)

HM Dunn Co Inc

Capital Goods

15.0% PIK (15.0% Max PIK)

Hudson Technologies Co

Commercial & Professional Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Portfolio Company (a)

Individual FoodService

8 unchanged sentences

Pharmaceuticals, Biotechnology & Life Sciences

Industria Chimica Emiliana Srl

Pharmaceuticals, Biotechnology & Life Sciences

Industry City TI Lessor LP

1 unchanged sentence

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

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

(f)(i)(m)(s)(v)

Insight Global LLC

Commercial & Professional Services

Insight Global LLC

Commercial & Professional Services

(f)(i)(v)(m)(s)

Jarrow Formulas Inc

(f)(i)(k)(l)(m)(s)(t)(v)

(f)(i)(k)(l)(v)(m)(s)(t)

Household & Personal Products

7 unchanged sentences

Food & Staples Retailing

KBP Investments LLC

Food & Staples Retailing

Kellermeyer Bergensons Services LLC

(f)(i)(k)(l)(m)(s)(t)(v)

(f)(i)(k)(l)(v)(m)(s)(t)

Commercial & Professional Services

9 unchanged sentences

Food, Beverage & Tobacco

Lakeview Farms Inc

Food, Beverage & Tobacco

(i)(k)(l)(m)(v)

(i)(k)(l)(v)(m)

Commercial & Professional Services

9 unchanged sentences

MB2 Dental Solutions LLC

(k)(l)(m)(t)(v)

Health Care Equipment & Services

MB2 Dental Solutions LLC

(k)(l)(v)(m)(t)

Health Care Equipment & Services

1 unchanged sentence

Health Care Equipment & Services

Software & Services

Miami Beach Medical Group LLC

(k)(l)(m)(t)(v)

(k)(l)(v)(m)(t)

Health Care Equipment & Services

Micronics Filtration Holdings Inc

(v)(y)(z)(ac)

(ac)(y)(z)(v)

Capital Goods

6 unchanged sentences

Commercial & Professional Services

Monitronics International Inc

Commercial & Professional Services

Motion Recruitment Partners LLC

3 unchanged sentences

Consumer Durables & Apparel

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Software & Services

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

Net Documents

Software & Services

Net Documents

Software & Services

Net Documents

Software & Services

New Era Technology Inc

(i)(l)(m)(t)(v)

(i)(l)(v)(m)(t)

Software & Services

4 unchanged sentences

Omnimax International Inc

(i)(k)(l)(m)(v)

(f)(i)(k)(l)(v)(m)

Capital Goods

1 unchanged sentence

Health Care Equipment & Services

Parata Systems

Health Care Equipment & Services

Parata Systems

Health Care Equipment & Services

Parata Systems

Health Care Equipment & Services

Oxford Global Resources LLC

(f)(k)(l)(v)(t)

Commercial & Professional Services

Oxford Global Resources LLC

Commercial & Professional Services

Oxford Global Resources LLC

Commercial & Professional Services

Oxford Global Resources LLC

Commercial & Professional Services

P2 Energy Solutions Inc.

Software & Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

P2 Energy Solutions Inc.

(f)(i)(k)(v)(m)(s)(t)

Software & Services

P2 Energy Solutions Inc.

(f)(i)(k)(m)(s)(t)(v)

Software & Services

Parata Systems

Health Care Equipment & Services

Parata Systems

Health Care Equipment & Services

Parata Systems

Health Care Equipment & Services

Peak 10 Holding Corp

1 unchanged sentence

Capital Goods

Performance Health Holdings Inc

Health Care Equipment & Services

Petroplex Acidizing Inc

(v)(y)(z)(ac)

(ac)(y)(z)(v)

L+900 PIK (L+900 Max PIK)

4 unchanged sentences

Diversified Financials

Pretium Packaging LLC

Household & Personal Products

Production Resource Group LLC

3 unchanged sentences

Media & Entertainment

L+300, 5.5% PIK (5.5% Max PIK)

Production Resource Group LLC

3 unchanged sentences

Media & Entertainment

Production Resource Group LLC

Media & Entertainment

L+750, 0.0% PIK (3.1% Max PIK)

Project Marron

Consumer Services

Project Marron

Consumer Services

Production Resource Group LLC

Media & Entertainment

L+750, 0.0% PIK (3.1% Max PIK)

Propulsion Acquisition LLC

(f)(l)(s)(t)(v)

(f)(l)(v)(s)(t)

Capital Goods

(i)(l)(s)(t)(v)

(i)(l)(v)(s)(t)

Health Care Equipment & Services

Pure Fishing Inc

Consumer Durables & Apparel

Qdoba Restaurant Corp

1 unchanged sentence

Reliant Rehab Hospital Cincinnati LLC

(f)(i)(l)(m)(s)(v)

(f)(i)(l)(v)(m)(s)

Health Care Equipment & Services

3 unchanged sentences

Software & Services

RSC Insurance Brokerage Inc

Rise Baking Company

Food, Beverage & Tobacco

Rise Baking Company

Food, Beverage & Tobacco

Rise Baking Company

Food, Beverage & Tobacco

RSC Insurance Brokerage Inc

(f)(i)(k)(l)(m)(s)(v)

(f)(i)(k)(l)(v)(m)(s)

RSC Insurance Brokerage Inc

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Portfolio Company (a)

Safe-Guard Products International LLC

(f)(i)(m)(s)(t)(v)

Diversified Financials

SAMBA Safety Inc

Software & Services

SAMBA Safety Inc

Software & Services

SAMBA Safety Inc

Software & Services

Capital Goods

8 unchanged sentences

Health Care Equipment & Services

Sequel Youth & Family Services LLC

Health Care Equipment & Services

Sequential Brands Group Inc.

Consumer Durables & Apparel

SIRVA Worldwide Inc

Commercial & Professional Services

Sequential Brands Group Inc.

(y)(z)(k)(l)(v)

Consumer Durables & Apparel

Sequential Brands Group Inc.

Consumer Durables & Apparel

Sorenson Communications LLC

(f)(k)(t)(v)(aa)(ac)

(ac)(aa)(f)(k)(v)(t)

Telecommunication Services

Source Code LLC

Software & Services

Source Code LLC

Software & Services

Sungard Availability Services Capital Inc

Software & Services

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

Software & Services

Summit Interconnect Inc

(f)(k)(l)(v)(t)

Capital Goods

Summit Interconnect Inc

Capital Goods

Sungard Availability Services Capital Inc

9 unchanged sentences

Commercial & Professional Services

(f)(i)(m)(s)(v)

(f)(i)(v)(m)(s)

Software & Services

ThermaSys Corp

(ac)(y)(z)(v)

Capital Goods

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

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

ThreeSixty Group

4 unchanged sentences

Capital Goods

(f)(i)(k)(l)(m)(s)(v)

(f)(i)(k)(l)(v)(m)(s)

Software & Services

6 unchanged sentences

Truck-Lite Co LLC

Capital Goods

Truck-Lite Co LLC

(f)(i)(k)(v)(m)(s)

Capital Goods

Truck-Lite Co LLC

(f)(i)(k)(m)(s)(v)

Capital Goods

1 unchanged sentence

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

Software & Services

Wheels Up Partners LLC

Transportation

Wheels Up Partners LLC

Transportation

Wheels Up Partners LLC

Transportation

Wheels Up Partners LLC

Transportation

Wheels Up Partners LLC

Transportation

(f)(k)(l)(m)(t)(v)

Wealth Enhancement Group LLC

Diversified Financials

Wealth Enhancement Group LLC

Diversified Financials

Wealth Enhancement Group LLC

Diversified Financials

(f)(k)(l)(v)(m)(t)

Capital Goods

3 unchanged sentences

Net Senior Secured LoansFirst Lien

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Portfolio Company (a)

Senior Secured LoansSecond Lien21.6%

3 unchanged sentences

Amtek Global Technology Pte Ltd

(g)(v)(w)(y)(z)(ad)

(ad)(w)(z)(g)(v)

Automobiles & Components

E+500 PIK (E+500 Max PIK)

BCA Marketplace PLC

(v)(y)(z)(ac)

Apex Group Limited

Diversified Financials

(ac)(y)(z)(v)

10.0% PIK (10.0% Max PIK)

6 unchanged sentences

Software & Services

Culligan International Co

Household & Personal Products

Software & Services

2 unchanged sentences

Fairway Group Holdings Corp

(v)(y)(z)(ac)

(ac)(y)(z)(v)

Food & Staples Retailing

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

Gruden Acquisition Inc

Transportation

11.0% PIK (11.0% Max PIK)

Software & Services

5 unchanged sentences

Software & Services

Ontic Engineering & Manufacturing Inc

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

Paradigm Acquisition Corp

9 unchanged sentences

Household & Personal Products

Pretium Packaging LLC

Household & Personal Products

Pure Fishing Inc

Consumer Durables & Apparel

Rise Baking Company

Food, Beverage & Tobacco

Capital Goods

4 unchanged sentences

Sorenson Communications LLC

(m)(s)(u)(v)(ac)

(ac)(v)(m)(s)(u)

Telecommunication Services

4 unchanged sentences

Vantage Specialty Chemicals Inc

Vestcom International Inc

Consumer Services

WireCo WorldGroup Inc

8 unchanged sentences

10.0% PIK (10.0% Max PIK)

Black Swan Energy Ltd

JW Aluminum Co

(s)(v)(aa)(ad)

(ad)(aa)(v)(s)

One Call Care Management Inc

2 unchanged sentences

Capital Goods

Velvet Energy Ltd

Total Other Senior Secured Debt

2 unchanged sentences

12.8% PIK (12.8% Max PIK)

ATX Networks Corp

(w)(y)(z)(v)(s)(ad)

Capital Goods

10.0% PIK (10.0% Max PIK)

ClubCorp Club Operations Inc

1 unchanged sentence

Hilding Anders

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Consumer Durables & Apparel

Hilding Anders

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Consumer Durables & Apparel

Hilding Anders

(v)(w)(y)(z)(ad)

(ad)(w)(y)(z)(v)

Consumer Durables & Apparel

13.0% PIK (13.0% Max PIK)

Home Partners of America Inc

Intelsat Jackson Holdings SA

(v)(w)(y)(z)(aa)

Media & Entertainment

Total Subordinated Debt

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

1 unchanged sentence

801 5th Ave, Seattle, Private Equity

(v)(w)(y)(ad)

(ad)(w)(y)(v)

801 5th Ave, Seattle, Structure Mezzanine

8 unchanged sentences

Avida Holding AB, Common Stock

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Diversified Financials

37 unchanged sentences

Global Jet Capital LLC, Structured Mezzanine

(j)(u)(v)(m)(w)

Commercial & Professional Services

7 unchanged sentences

Diversified Financials

Home Partners JV, Structured Mezzanine

11.0% PIK (11.0% Max PIK)

Home Partners JV 2, Private Equity

(v)(w)(y)(ac)

Home Partners JV, Common Stock

(v)(w)(y)(ac)

(ac)(w)(y)(v)

Home Partners JV 2, Private Equity

(ac)(w)(y)(v)

Home Partners JV 2, Structured Mezzanine

2 unchanged sentences

11.0% PIK (11.0% Max PIK)

Home Partners JV 2, Private Equity

(v)(w)(y)(ac)

Home Partners JV, Common Stock

(ac)(w)(y)(v)

Home Partners JV, Private Equity

(v)(w)(y)(ac)

(ac)(w)(y)(v)

Home Partners JV, Structured Mezzanine

11.0% PIK (11.0% Max PIK)

Jet Edge International LLC, Preferred Stock

Transportation

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

Jet Edge International LLC, Term Loan

4 unchanged sentences

10.0%, 2.0% PIK (2.0% Max PIK)

Kilter Finance, Private Equity

(v)(w)(y)(ad)

Jet Edge International LLC, Warrant

Transportation

Kilter Finance, Preferred Stock

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

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

Capital Goods

Kilter Finance, Private Equity

(ad)(w)(y)(v)

notes to unaudited consolidated financial statements.

1 unchanged sentence

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

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

Capital Goods

KKR Chord IP Aggregator LP, Partnership Interest

Media & Entertainment

KKR Rocket Loans Aggregator LLC, Partnership Interest

Diversified Financials

KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest

8 unchanged sentences

Technology Hardware & Equipment

Luxembourg Life FundAbsolute Return Fund III, Term Loan

Luxembourg Life FundLong Term Growth Fund, Term Loan

Music IP, Private Equity

Media & Entertainment

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware & Equipment

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware & Equipment

NewStar Clarendon 2014-1A Class D

2 unchanged sentences

Orchard Marine Limited, Class B Common Stock

(v)(w)(y)(ac)

(ac)(w)(y)(v)

Transportation

Orchard Marine Limited, Series A Preferred Stock

(v)(w)(y)(ac)

(ac)(w)(y)(v)

Transportation

1 unchanged sentence

2.8%, 5.3% PIK (5.3% Max PIK)

Pretium Partners LLC P2, Structured Mezzanine

2.0%, 7.5% PIK (7.5% Max PIK)

Prime ST LLC, Private Equity

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Prime ST LLC, Structured Mezzanine

2 unchanged sentences

Diversified Financials

Wind River CLO Ltd.

2012 1A Class Subord.

Diversified Financials

Toorak Capital Funding LLC, Membership Interest

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Toorak Capital Partners LLC, Private Equity

1 unchanged sentence

L+650 PIK (L+650 Max PIK)

Wind River CLO Ltd.

2012 1A Class Subord.

Diversified Financials

Total Asset Based Finance

1 unchanged sentence

Net Asset Based Finance

Credit Opportunities JV, LLC18.2%

Credit Opportunities Partners JV, LLC18.1%

Credit Opportunities Partners JV, LLC

Diversified Financials

Total Credit Opportunities Partners JV, LLC

Credit Opportunities Partners JV, LLC

Equity/Other10.9% (e)

1 unchanged sentence

Abaco Energy Technologies LLC, Preferred Stock

Alion Science & Technology Corp, Class A Membership Interest

Capital Goods

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

Affordable Care Inc, Preferred Stock

Health Care Equipment & Services

11.8% PIK (11.8% Max PIK)

American Vision Partners, Private Equity

Health Care Equipment & Services

Amtek Global Technology Pte Ltd, Common Stock

(g)(v)(w)(y)(ad)

(ad)(w)(y)(g)(v)

Automobiles & Components

Amtek Global Technology Pte Ltd, Ordinary Shares

(g)(w)(y)(ad)

(ad)(w)(y)(g)

Automobiles & Components

5,735,804,056

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Amtek Global Technology Pte Ltd, Private Equity

(g)(w)(y)(ad)

(ad)(w)(y)(g)

Automobiles & Components

17 unchanged sentences

ATX Networks Corp, Common Stock

Technology Hardware & Equipment

(w)(y)(v)(s)(ad)

Capital Goods

AVF Parent LLC, Trade Claim

1 unchanged sentence

Borden (New Dairy Opco), Common Stock

(h)(n)(y)(ac)

(ac)(y)(h)(n)

Food, Beverage & Tobacco

Bowery Farming Inc, Warrants

Food, Beverage & Tobacco

Catalina Marketing Corp, Common Stock

9 unchanged sentences

Constellis Holdings LLC, Private Equity

(f)(v)(y)(ac)

(ac)(y)(f)(v)

Capital Goods

Crossmark Holdings Inc, Warrant

Commercial & Professional Services

CTI Foods Holding Co LLC, Common Stock

20 unchanged sentences

Technology Hardware & Equipment

Harvey Industries Inc, Common Stock

Capital Goods

Hilding Anders, Class A Common Stock

(ad)(w)(y)(v)

Consumer Durables & Apparel

notes to unaudited consolidated financial statements.

1 unchanged sentence

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

Harvey Industries Inc, Common Stock

Capital Goods

Hilding Anders, Class C Common Stock

(v)(w)(y)(ad)

Consumer Durables & Apparel

Hilding Anders, Class B Common Stock

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Consumer Durables & Apparel

Hilding Anders, Class A Common Stock

(v)(w)(y)(ad)

Hilding Anders, Class C Common Stock

(ad)(w)(y)(v)

Consumer Durables & Apparel

Hilding Anders, Equity Options

(v)(w)(y)(ad)

(ad)(w)(y)(v)

Consumer Durables & Apparel

HM Dunn Co Inc, Preferred Stock, Series A

(s)(v)(y)(ad)

(ad)(y)(v)(s)

Capital Goods

HM Dunn Co Inc, Preferred Stock, Series B

(s)(v)(y)(ad)

(ad)(y)(v)(s)

Capital Goods

Home Partners of America Inc, Common Stock

Home Partners of America Inc, Warrant

Imagine Communications Corp, Common Stock

3 unchanged sentences

JW Aluminum Co, Common Stock

(j)(u)(v)(y)(ad)

(ad)(y)(j)(v)(u)

JW Aluminum Co, Preferred Stock

(j)(u)(v)(ad)

(ad)(j)(v)(u)

12.5% PIK (12.5% Max PIK)

2 unchanged sentences

Capital Goods

Med-Metrix, Common Stock

Software & Services

Miami Beach Medical Group LLC, Common Stock

25 unchanged sentences

Petroplex Acidizing Inc, Preferred Stock A

(ac)(v)(ac)(y)(v)

Petroplex Acidizing Inc, Warrant

7 unchanged sentences

Proserv Acquisition LLC, Class A Common Units

(v)(w)(y)(ac)

(ac)(w)(y)(v)

Proserv Acquisition LLC, Class A Preferred Units

(v)(w)(y)(ac)

(ac)(w)(y)(v)

Quorum Health Corp, Trade Claim

2 unchanged sentences

Health Care Equipment & Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

Ridgeback Resources Inc, Common Stock

(j)(u)(v)(w)(y)

(w)(y)(j)(v)(u)

Sequential Brands Group Inc., Common Stock

1 unchanged sentence

Sorenson Communications LLC, Common Stock

(j)(u)(v)(y)(ac)

(ac)(y)(j)(v)(u)

Telecommunication Services

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2021

(in millions, except share amounts)

Portfolio Company (a)

Sound United LLC, Common Stock

3 unchanged sentences

Sungard Availability Services Capital Inc, Common Stock

(s)(u)(v)(y)(ac)

(ac)(y)(v)(s)(u)

Software & Services

1 unchanged sentence

ThermaSys Corp, Common Stock

(u)(v)(y)(ac)

(ac)(y)(v)(u)

Capital Goods

11 unchanged sentences

NET ASSETS100%

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

2 unchanged sentences

Settlement Date

September 30,

Unrealized Appreciation

25 unchanged sentences

JP Morgan Chase Bank

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

Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a

basis point spread.

As of June 30, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.15%, the Euro Interbank Offered Rate, or EURIBOR, was (0.54)%, Candian Dollar Offer Rate, or CDOR was 0.44%, and the

Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.08%, and the U.S.

Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a

publicly disclosed base rate plus a basis point spread.

As of September 30, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.13%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Candian Dollar

Offer Rate, or CDOR was 0.45%, the Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.07%, the Reykjavik Interbank Offered Rate, or REIBOR, was 1.89%, the Stockholm Interbank Offered Rate, or STIBOR or SR, was (0.08)%,

the Sterling Interbank Offered Rate, or SONIA or SA, was 0.05%, and the U.S.

Prime Lending Rate, or Prime, was 3.25%.

2 unchanged sentences

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

Denominated in U.S.

dollars unless otherwise noted.

Denominated in U.S dollars unless otherwise noted.

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

Listed investments may be treated as debt for GAAP or tax purposes.

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

credit facility with Ally Bank (see Note 9).

notes to unaudited consolidated financial statements.

Security or portion thereof held within Ambler Funding LLC and is pledged as collateral supporting the amounts

outstanding under the revolving credit facility with Ally Bank (see Note 9).

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

1 unchanged sentence

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

Security or portion thereof held within CCT Tokyo Funding LLC and pledged as collateral supporting the amounts outstanding under the revolving

credit facility with Sumitomo Mitsui Banking Corporation (see Note 9).

Security or portion thereof held within Cobbs Creek LLC and is pledged as collateral supporting the amounts outstanding under the senior

secured revolving credit facility (see Note 9).

Security or portion thereof held within Darby Creek LLC and is pledged as collateral supporting the amounts outstanding under a revolving

credit facility with Deutsche Bank AG, New York Branch (see Note 9).

Security or portion thereof held within Dunlap Funding LLC and is pledged as collateral supporting the amounts outstanding under a revolving

credit facility with Deutsche Bank AG, New York Branch (see Note 9).

Security or portion thereof held within CCT Tokyo Funding LLC and pledged as collateral supporting the amounts

outstanding under the revolving credit facility with Sumitomo Mitsui Banking Corporation (see Note 9).

Security or portion thereof held within Cobbs Creek LLC and is pledged as collateral supporting the amounts

outstanding under the senior secured revolving credit facility (see Note 9).

Security or portion thereof held within Darby Creek LLC and is pledged as collateral supporting the amounts

outstanding under a revolving credit facility with Deutsche Bank AG, New York Branch (see Note 9).

Security or portion thereof held within Dunlap Funding LLC and is pledged as collateral supporting the amounts

outstanding under a revolving credit facility with Deutsche Bank AG, New York Branch (see Note 9).

Security or portion thereof held within FS KKR MM CLO 1 LLC (see Note 9).

4 unchanged sentences

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

Security or portion thereof held within Juniata River LLC and is pledged as collateral supporting the amounts outstanding under a term loan

credit facility with JPMorgan Chase Bank, N.A.

Security or portion thereof held within Juniata River LLC and is pledged as collateral supporting the amounts

outstanding under a term loan credit facility with JPMorgan Chase Bank, N.A.

(see Note 9).

Security or portion thereof held within Meadowbrook Run LLC and is pledged as collateral supporting the amounts outstanding under a revolving

credit facility with Morgan Stanley Senior Funding, Inc.

Security or portion thereof held within Meadowbrook Run LLC and is pledged as collateral supporting the amounts

outstanding under a revolving credit facility with Morgan Stanley Senior Funding, Inc.

(see Note 9).

Security or portion thereof held within Race Street Funding LLC.

Security is available as collateral to support the amounts outstanding under

the Senior Secured Revolving Credit Facility (see Note 9).

Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured Revolving Credit Facility

(see Note 9).

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

development company may not acquire 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 June 30, 2021, 73.6% of the

Companys total assets represented qualifying assets.

Security is available as collateral to support

the amounts outstanding under the Senior Secured Revolving Credit Facility (see Note 9).

Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured

Revolving Credit Facility (see Note 9).

The investment, or portion of the investment is not a qualifying asset under the Investment Company Act of 1940,

A business development company may not acquire 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,

2021, 75.8% of the Companys total assets represented qualifying assets.

Security is an unfunded commitment.

Reflects the stated spread at the time of commitment, but may not be the actual rate received upon

Reflects the stated spread at the time of commitment, but may not be the

actual rate received upon funding.

Security is non-income producing.

Asset is on non-accrual status.

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

notes to unaudited consolidated financial statements.

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

(ab) Not used.

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(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

company if it owns 5% or more of the portfolio companys voting securities and generally is deemed to control a portfolio company if it owns 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 June 30, 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 as of June 30, 2021:

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

person of a portfolio company if it owns 5% or more of the portfolio companys voting securities and generally is deemed to control a portfolio company if it owns 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, 2021, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is

not 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 as of September 30, 2021:

Portfolio Company

5 unchanged sentences

Fair Value at

June 30, 2021

September 30,

Senior Secured LoansFirst Lien

Affordable Care Inc

Borden (New Dairy Opco)

6 unchanged sentences

HM Dunn Co Inc (5)

Micronics Filtration Holdings Inc

Micronics Filtration Holdings LLC

One Call Care Management Inc (5)

5 unchanged sentences

Constellis Holdings LLC

Fairway Holdings Group Corp

Sorenson Communications LLC (4)

12 unchanged sentences

Home Partners JV 2, Private Equity

Orchard Marine Limited, Class B Common Stock

Orchard Marine Limited, Series A Preferred Stock

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

6 unchanged sentences

Fair Value at

June 30, 2021

September 30,

Jet Edge International LLC, Preferred Stock

Jet Edge International, Warrant

Jet Edge International, Term Loan

Orchard Marine Limited, Class B Common Stock

Orchard Marine Limited, Series A Preferred Stock

Affordable Care Inc, Preferred Stock

ASG Technologies, Common Stock

ASG Technologies, Warrant

Belk Inc, Common Stock

Borden (New Dairy Opco), Common Stock

3 unchanged sentences

Fronton BV, Common Stock

HM Dunn Co Inc, Preferred Stock, Series A

HM Dunn Co Inc, Preferred Stock, Series B

HM Dunn Co Inc, Preferred Stock, Series

Home Partners of America Inc, Common Stock

7 unchanged sentences

Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK

One Call Care Management Inc, Common Stock

One Call Care Management Inc, Preferred Stock A

One Call Care Management Inc, Preferred Stock B

One Call Care Management Inc, Common

One Call Care Management Inc, Preferred Stock

Petroplex Acidizing Inc, Preferred Stock A

3 unchanged sentences

Sorenson Communications LLC, Common

Sungard Availbaility Services Capital Inc, Common

Sungard Availbaility Services Capital Inc, Common Stock (4)

ThermaSys Corp, Common Stock

ThermaSys Corp, Preferred Stock

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

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.

(3) Interest,

PIK and dividend income presented for the full six months ended June 30, 2021.

notes to unaudited consolidated financial statements.

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

interest, the amortization of 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.

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

The Company held this investment as of December 31, 2020 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, 2020.

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.

(3) Interest,

PIK, fee and dividend income presented for the full nine months ended September 30, 2021.

The Company held this investment as of December 31, 2020 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, 2020.

Transfers in or out have been presented at amortized cost.

The Company held this investment as of June 30, 2021 but it was deemed to control the portfolio company as of June 30,

The Company held this investment as of September 30, 2021 but it was deemed to control the

portfolio company as of September 30, 2021.

Transfers in or out have been presented at amortized cost.

notes to unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

(in millions, except share amounts)

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

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 June 30, 2021, the Company held investments in portfolio companies of which

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

During the six months ended June 30, 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 as of June 30,

Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a

portfolio company if it owns 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, 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, 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 as of September 30, 2021:

Portfolio Company

4 unchanged sentences

(Depreciation)

at June 30, 2021

Fair Value at

September 30,

Senior Secured LoansFirst Lien

1 unchanged sentence

Amtek Global Technology Pte Ltd

ATX Networks Corp

HM Dunn Co Inc (4)

5 unchanged sentences

Production Resource Group LLC

Sound United LLC

2 unchanged sentences

Amtek Global Technology Pte Ltd

Fairway Group Holdings Corp

Sound United LLC

4 unchanged sentences

Subordinated Debt

ATX Networks Corp

Hilding Anders

6 unchanged sentences

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

Toorak Capital Partners LLC, Structured Mezzanine

Credit Opportunities Partners JV, LLC

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2021

As of September 30, 2021

(in millions, except share amounts)

5 unchanged sentences

(Depreciation)

at June 30, 2021

Fair Value at

September 30,

Kilter Finance, Private Equity

KKR Rocket Loans Aggregtor LLC, Partnership Interest

Prime St LLC, Private Equity

Prime St LLC, Structured Mezzanine

Toorak Capital Funding LLC, Membership Interest

Toorak Capital Partners LLC, Private Equity

Toorak Capital Partners LLC, Structured Mezzanine

Credit Opportunities Partners JV, LLC

Advanced Lighting Technologies Inc, Common Stock

4 unchanged sentences

Amtek Global Technology Pte Ltd, Private Equity

ATX Networks Corp, Common Stock

Hilding Anders, Class A Common Stock

2 unchanged sentences

Hilding Anders, Equity Options

HM Dunn Preferred Stock, Series A (4)

HM Dunn Preferred Stock, Series A (5)

JW Aluminum Co, Common Stock (4)

JW Aluminum Co, Preferred Stock (4)

One Call Care Management Inc, Common Stock

One Call Care Management Inc, Preferred Stock A

One Call Care Management Inc, Preferred Stock B

One Call Care Management Inc, Common

One Call Care Management Inc, Preferred Stock

Production Resource Group LLC, Preferred Stock, Series A PIK

10 unchanged sentences

(3) Interest,

PIK, fee and dividend income presented for the full six months ended June 30, 2021.

PIK, fee and dividend income presented for the full nine months ended September 30, 2021.

Company held this investment as of December 31, 2020 but it was not deemed to control the portfolio company as of

6 unchanged sentences

(in millions, except share amounts)

Portfolio Company (a)

Senior Secured LoansFirst Lien111.4%

88 unchanged sentences

Diversified Financials

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(in millions, except share amounts)

Portfolio Company (a)

Greystone Equity Member Corp

80 unchanged sentences

Software & Services

notes to unaudited consolidated financial statements.

P2 Energy Solutions Inc.

Software & Services

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(in millions, except share amounts)

P2 Energy Solutions Inc.

Software & Services

Portfolio Company (a)

Petroplex Acidizing Inc

82 unchanged sentences

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

2 unchanged sentences

Transportation

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 (a)

Wheels Up Partners LLC

72 unchanged sentences

Total Senior Secured LoansSecond Lien

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)

Other Senior Secured Debt2.8%

6 unchanged sentences

JW Aluminum Co

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 (a)

Consumer Durables & Apparel

29 unchanged sentences

Total Subordinated Debt

Portfolio Company (a)

Asset Based Finance30.8%

32 unchanged sentences

15.0% PIK (15.0% 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)

Global Jet Capital LLC, Structured Mezzanine

13 unchanged sentences

15.0% PIK (15.0% Max PIK)

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 (a)

Global Jet Capital LLC, Structured Mezzanine

65 unchanged sentences

Total Strategic Credit Opportunities Partners

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(in millions, except share amounts)

Portfolio Company (a)

Equity/Other17.1% (m)

67 unchanged sentences

Home Partners of America Inc, Warrant

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(in millions, except share amounts)

Portfolio Company (a)

Imagine Communications Corp, Common Stock

78 unchanged sentences

Software & Services

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(in millions, except share amounts)

Portfolio Company (a)

Zeta Interactive Holdings Corp, Preferred Stock, Series F

9 unchanged sentences

Settlement Date

December 31, 2020

Unrealized Appreciation

15 unchanged sentences

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

Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a

basis point spread.

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

Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a

publicly disclosed base rate plus a basis point spread.

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 U.S.

Prime Lending Rate, or Prime, was 3.25%.

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 investment.

Denominated in U.S.

dollars unless otherwise noted.

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

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(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

revolving credit facility with ING Capital LLC (see Note 9).

Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured Revolving Credit Facility

(see Note 9).

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

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

amounts outstanding under the revolving credit facility with ING Capital LLC (see Note 9).

Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured

Revolving Credit Facility (see Note 9).

Security or portion thereof held within FS KKR MM CLO 1 LLC (see Note 9).

Security or portion thereof was held within CCT Tokyo Funding LLC and was pledged as collateral supporting the amounts outstanding under the

revolving credit facility with Sumitomo Mitsui Banking Corporation (see Note 9).

Security or portion thereof was held within CCT Tokyo Funding LLC and was pledged as collateral supporting the

amounts outstanding under the revolving credit facility with Sumitomo Mitsui Banking Corporation (see Note 9).

Security or portion thereof was held within CCT Dublin Funding Limited

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

A business development company may not acquire

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 December 31, 2020, 73.4% of the Companys total assets represented

qualifying assets.

development company may not acquire 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 December 31, 2020, 73.4% of the

Companys total assets represented qualifying assets.

Listed investments may be treated as debt for GAAP or tax purposes.

5 unchanged sentences

Security is an unfunded commitment.

Reflects the stated spread at the time of commitment, but may not be the actual rate received upon

Reflects the stated spread at the time of commitment, but may not be the

actual rate received upon funding.

Asset is on non-accrual status.

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

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(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

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

As of December 31, 2020, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is not deemed to

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

or it has the power to exercise control over the management or policies of such portfolio company.

As of December 31, 2020, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is

not 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 as of December 31, 2020:

41 unchanged sentences

HM Dunn Co Inc, Preferred Stock, Series B

Home Partners of America Inc, Common Stock

Home Partners of America Inc, Warrant

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

9 unchanged sentences

Fair Value at

Home Partners of America Inc, Common Stock

Home Partners of America Inc, Warrant

JW Aluminum Co, Common Stock

3 unchanged sentences

Micronics Filtration Holdings Inc, Common

Micronics Filtration Holdings Inc, Preferred Stock, Series

Micronics Filtration Holdings Inc, Preferred Stock, Series A (4)

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

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

15 unchanged sentences

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

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.

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

Gross reductions include decreases in the cost basis of investments resulting from principal collections related

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.

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.

unaudited consolidated financial statements.

FS KKR Capital Corp.

2 unchanged sentences

(in millions, except share amounts)

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

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 December 31, 2020, the Company held investments in one portfolio company of

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

During the year ended December 31, 2020, the Company disposed of investments in one portfolio 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 as of

December 31, 2020:

Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a

portfolio company if it owns 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 December 31, 2020, the Company held

investments in one portfolio company of which it is deemed to be an affiliated person and deemed to control.

During the year ended December 31, 2020, the Company disposed of investments in one portfolio 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 as of December 31, 2020:

Portfolio Company

37 unchanged sentences

Amtek Global Technology Pte Ltd, Trade Claim

Amtek Global Technology Pte Ltd, Private Equity

Hilding Anders, ARLE PIK Interest

Hilding Anders, Class A Common Stock

Hilding Anders, Class B Common Stock

Hilding Anders, Class C Common Stock

Hilding Anders, Equity Options

KKR BPT Holdings Aggregator LLC, Membership Interest

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

9 unchanged sentences

Fair Value at

Amtek Global Technology Pte Ltd, Private Equity

Hilding Anders, ARLE PIK Interest

Hilding Anders, Class A Common Stock

Hilding Anders, Class B Common Stock

Hilding Anders, Class C Common Stock

Hilding Anders, Equity Options

KKR BPT Holdings Aggregator LLC, Membership Interest

Sound United LLC, Class A Units

2 unchanged sentences

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

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.

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

Gross reductions include decreases in the cost basis of investments resulting from principal collections related

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

notes to unaudited consolidated financial statements.

unaudited consolidated financial statements.

FS KKR Capital Corp.

3 unchanged sentences

FS KKR Capital Corp.

FSK), or the Company, was incorporated under the general corporation laws of the State of

Maryland on December 21, 2007 and formally commenced investment operations on January 2, 2009.

The Company is an externally managed, non-diversified,

closed-end management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act.

In addition, the

Company has elected to be treated for U.S.

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.

June 30, 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 June 30, 2021.

FSK), or the Company, was incorporated under the general corporation laws of the State of Maryland on

December 21, 2007 and formally commenced investment operations on January 2, 2009.

The Company is an externally managed, non-diversified, closed-end management

investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act.

In addition, the Company has elected to be treated for U.S.

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.

As of September 30, 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, 2021.

All intercompany transactions have been eliminated in consolidation.

Certain of the Companys consolidated subsidiaries are subject to

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 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 June 16, 2021, or the investment advisory agreement.

Prior to entering into the investment advisory agreement, the Company was a party to an investment advisory

agreement, dated as of December 20, 2018, with the Advisor, or the prior investment advisory agreement, which remained in effect until June 16, 2021.

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 Companys investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation.

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

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 June 16, 2021, or the investment advisory agreement.

Prior to entering into the investment advisory agreement, the Company was a party to an investment advisory agreement, dated as of December 20, 2018, with the

Advisor, or the prior investment advisory agreement, which remained in effect until June 16, 2021.

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.

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.

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.

On June 16, 2021, the Company completed its acquisition, or the 2021 Merger, of FS KKR Capital Corp.

II, or FSKR, pursuant to that

certain Agreement and Plan of Merger, or the 2020 Merger Agreement, dated as of November 23, 2020, by and among the Company, FSKR, Rocky Merger Sub, Inc., a former wholly-owned subsidiary of the Company, or Merger Sub, and the Advisor.

12 for a discussion of the 2021 Merger.

II, or FSKR, pursuant to that certain

Agreement and Plan of Merger, or the 2020 Merger Agreement, dated as of November 23, 2020, by and among the Company, FSKR, Rocky Merger Sub, Inc., a former wholly-owned subsidiary of the Company, or Merger Sub, and the Advisor.

See Note 12 for

a discussion of the 2021 Merger.

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.

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.

4 unchanged sentences

December 31, 2020.

Operating results for the six months ended June 30, 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

Operating results for the nine months ended September 30, 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

FS KKR Capital Corp.

3 unchanged sentences

Policies (continued)

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

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

1 unchanged sentence

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.

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

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 the realized capital gains of Corporate Capital Trust, Inc., or CCT, (as predecessor-by-merger to the

Company), FSKR (as predecessor-by-merger to the Company) and the Company (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, FSKR 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 the realized capital gains of Corporate Capital Trust, Inc., or CCT, (as predecessor-by-merger to the Company), FSKR (as predecessor-by-merger to the Company) and the Company (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, FSKR 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

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 17.5% 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%.

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 17.5% 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%.

As a result, the Advisor will not earn this incentive fee for any quarter until the

8 unchanged sentences

Reclassifications:

Certain amounts

in the unaudited consolidated financial statements as of and for the three and six months ended June 30, 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 and six months ended June 30, 2021.

Certain amounts in the

unaudited consolidated financial statements as of and for the three and nine months ended September 30, 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 and nine months ended September 30, 2021.

Revenue Recognition:

Security transactions are accounted for on the trade date.

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

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.

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.

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

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.

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

FS KKR Capital Corp.

3 unchanged sentences

Policies (continued)

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.

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 six months ended June 30, 2021 and 2020,

the Company recognized $15 and $9, respectively, in structuring fee revenue.

For the nine months ended September 30, 2021 and 2020, the Company recognized $34 and $10,

respectively, in structuring fee revenue.

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

Derivative Instruments:

The Companys derivative instruments include foreign currency forward contracts and cross currency

The Companys derivative instruments include foreign currency forward contracts and cross currency swaps.

The Company recognizes all derivative instruments as assets or liabilities at fair value in its consolidated financial statements.

Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result,

the Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations.

Realized gains and losses of the derivative instruments are included in

net realized gains (losses) on derivative instruments in the consolidated statements of operations.

Recent Accounting

Pronouncements:

Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result, the

Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations.

Realized gains and losses of the derivative instruments are included in net

realized gains (losses) on derivative instruments in the consolidated statements of operations.

Recent Accounting Pronouncements:

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 London Interbank Offered Rate (LIBOR) or another reference

rate expected to be discontinued because of reference rate reform.

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 London Interbank Offered Rate

(LIBOR) or another reference rate expected to be discontinued because of reference rate reform.

In January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848) , which expanded the scope of Topic 848 to include derivative instruments

impacted by discounting transition.

ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022.

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

relationships entered into or 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.

2021-01, Reference Rate Reform (Topic 848) ,

which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition.

ASU 2020-04 and ASU 2021-01 are effective for all entities

through December 31, 2022.

The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or 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 the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.

Share Transactions

Below is a summary of transactions with respect

to shares of the Companys common stock during the six months ended June 30, 2021 and 2020:

Six Months Ended June 30,

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

September 30, 2021 and 2020:

Nine Months Ended September 30,

Share Repurchase Program

2 unchanged sentences

Net Proceeds from Share Transactions

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

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

Issuance of common stock for the 2021 Merger.

Shares were issued at fair value of FSK common stock at the merger date.

During the six months ended June 30, 2021, the administrator for the Companys distribution

Shares were issued at fair value of FSK common stock at the merger

During the nine months ended September 30, 2021, the administrator for the Companys distribution

reinvestment plan, or DRP, purchased 707,727 shares of common stock in the open market at an average price per share of $19.69 (totaling $14) pursuant to the DRP, and distributed such shares to participants in the DRP.

During the six months ended

June 30, 2020, the administrator for the DRP purchased 818,573 shares of common stock in the open market at an average price per share of $16.35 (totaling $13) pursuant to the DRP, and distributed such shares to participants in the

During the period from July 1, 2021 to August 9, 2021, the administrator for the DRP purchased 211,067 shares of common stock in the open market at an average price per share

During the nine months ended

September 30, 2020, the administrator for the DRP purchased 1,196,874 shares of common stock in the open market at an average price per share of

FS KKR Capital Corp.

2 unchanged sentences

Share Transactions (continued)

of $21.58 (totaling $5) pursuant to the DRP, and distributed such shares to participants in the DRP.

For additional information regarding the terms of the DRP, see Note 5.

$15.70 (totaling $19) pursuant to the DRP, and distributed such shares to participants in the DRP.

During the period from October 1, 2021 to November 5, 2021, the administrator for

the DRP purchased 613,887 shares of common stock in the open market at an average price per share of $22.68 (totaling $14) pursuant to the DRP, and distributed such shares to participants in the DRP.

For additional information regarding the terms of

the DRP, see Note 5.

September 2021 Share Repurchase Program

In November 2020, the Companys board of directors authorized a stock repurchase program, which went into effect in September 2021 following the consummation of the 2021 Merger.

program, the Company may repurchase up to $100 in the aggregate of its outstanding common stock in the open market at prices below the then-current net asset value per share.

The timing, manner, price and amount of any share repurchases was

determined by the Company based upon the evaluation of economic and market conditions, the Companys stock price, applicable legal and regulatory requirements and other factors.

The program is expected to be in effect for one year from the

effective date, unless extended, or until the aggregate repurchase amount that has been approved by the Companys board of directors has been expended, or the plan otherwise terminates pursuant to its terms.

The program does not require the

Company to repurchase any specific number of shares and the Company cannot assure stockholders that any shares will be repurchased under the program.

The program may be suspended, extended, modified or discontinued at any time.

During the nine months ended September 30, 2021, the Company repurchased 53,374 shares of common stock pursuant to the share

repurchase program at an average price per share (inclusive of commissions paid) of $22.32 (totaling $1).

During the period

from October 1, 2021 to October 31, 2021, the Company repurchased 92,410 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $22.65 (totaling $2).

December 2018 Share Repurchase Program

2 unchanged sentences

outstanding common stock in the open market at prices below the then- current net asset value per share.

During the three

months ended June 30, 2020, the Company repurchased 588,342 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $12.63 (totaling $7).

During the six months ended

June 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 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.

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.

Reverse Stock Split and Fractional Shares

As a result of the Reverse Stock Split, which was effective on June 15, 2020, every four shares of the Companys common stock issued and outstanding were automatically combined into one share of

the Companys common stock, and the number of outstanding shares of the Companys common stock was reduced from approximately 495.0 million to approximately 123.75 million as of June 15, 2020.

The Reverse Stock Split did not

modify the rights or preferences of the Companys common stock.

The Company also filed a separate Articles of Amendment to Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland to provide that

there would be no change in the par value of $0.001 per share as a result of the Reverse Stock Split.

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.

As a result of the Reverse Stock

Split, which was effective on June 15, 2020, every four shares of the Companys common stock issued and outstanding were automatically combined into one share of the Companys common stock, and the number of outstanding shares of the

Companys common stock was reduced from approximately 495.0 million to approximately 123.75 million as of June 15, 2020.

The Reverse Stock Split did not modify the rights or preferences of the Companys common stock.

Company also filed a separate Articles of Amendment to Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland to provide that there would be no change in the par value of $0.001 per share as a result

of the Reverse Stock Split.

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.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Share Transactions (continued)

Acquisition of FSKR

In accordance with the terms of the 2020 Merger Agreement, at the time of the transactions contemplated by the 2020 Merger Agreement, each

outstanding share of FSKR common stock was converted into the right to receive 0.9498 shares of the Companys common stock.

As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR

stockholders.

In accordance with the terms of the 2020 Merger Agreement, at the time of the transactions contemplated by the 2020 Merger Agreement, each outstanding share of FSKR common stock was converted into the

right to receive 0.9498 shares of the Companys common stock.

As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders.

Related Party Transactions

Compensation of the Investment Adviser

Pursuant to the investment advisory

agreement, the Advisor is entitled to a base management fee calculated at an annual rate of 1.50% of the average weekly value of the Companys gross assets excluding cash and cash equivalents (gross assets equal the total assets of the Company

as set forth on the Companys consolidated balance sheets) and an incentive fee based on the Companys performance.

Effective June 15, 2019, in connection with stockholder approval of the modification of the asset coverage requirement

applicable to senior securities from 200% to 150%, the Advisor reduced (by permanent waiver) the annual base management fee payable under the investment advisory agreement from 1.5% to 1.0% on all assets financed using leverage over 1.0x debt-to-equity.

Pursuant to the investment advisory agreement, the Advisor is entitled to a base management fee calculated at an annual rate of 1.50% of the average weekly value of the Companys gross assets

excluding cash and cash equivalents (gross assets equal the total assets of the Company as set forth on the Companys consolidated balance sheets) and an incentive fee based on the Companys performance.

Effective June 15, 2019, in

connection with stockholder approval of the modification of the asset coverage requirement applicable to senior securities from 200% to 150%, the Advisor reduced (by permanent waiver) the annual base management fee payable under the investment

advisory agreement from 1.5% to 1.0% on all assets financed using leverage over 1.0x debt-to-equity.

The base management fee is payable quarterly in arrears.

All or any part of the base management fee not taken as to any quarter will be deferred without

interest and may be taken in such other quarter as the Advisor determines.

The prior investment advisory agreement had substantially similar terms as the investment advisory agreement, except that the investment advisory agreement amended the prior

investment advisory agreement to (i) reduce the Companys income incentive

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Related Party

Transactions (continued)

fee rate from 20% to 17.5%;

and (ii) remove the total return lookback provision applicable to the subordinated incentive fee on income from the prior investment advisory agreement.

prior investment advisory agreement, the subordinated incentive fee on income was 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 was being calculated.

The definitions of per share pre-incentive fee return and per share incentive

fees under the prior investment advisory agreement took 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 was excluded.

See Note 2 for a discussion of the capital gains and subordinated income incentive fees that the Advisor may be entitled to under the investment advisory agreement.

In connection with the entry into the investment advisory agreement, the Advisor has agreed to waive income incentive fees in the amount

of $15 per quarter for the first six full fiscal quarters of operations following the closing of the 2021 Merger, commencing on July 1, 2021, for a total waiver of $90.

In addition, the Advisor has agreed to exclude from the calculation of the

subordinated incentive fee on income and the incentive fee on capital gains any changes to the fair value recorded for the assets and liabilities of FSKR resulting solely from the new cost basis of the acquired FSKR investments determined in

accordance with Accounting Standards Codification Topic 805-50, Business CombinationsRelated Issues as a result of the Merger.

On April 9, 2018, the Company entered into an administration agreement with the Advisor, or the administration agreement.

the administration agreement, the Advisor oversees the Companys 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, 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 U.S.

part of the base management fee not taken as to any quarter will be deferred without interest and may be taken in such other quarter as the Advisor determines.

The prior investment advisory agreement had substantially similar terms as the investment

advisory agreement, except that the investment advisory agreement amended the prior investment advisory agreement to (i) reduce the Companys income incentive fee rate from 20% to 17.5%;

and (ii) remove the total return lookback

provision applicable to the subordinated incentive fee on income from the prior investment advisory agreement.

Under the prior investment advisory agreement, the subordinated incentive fee on income was 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 was being calculated.

The definitions of

per share pre-incentive fee return and per share incentive fees under the prior investment advisory agreement took 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 was excluded.

See Note 2 for a discussion of

the capital gains and subordinated income incentive fees that the Advisor may be entitled to under the investment advisory agreement.

In connection with the entry into the investment advisory agreement, the Advisor has agreed to waive income incentive fees in the amount of $15 per quarter for the first six full fiscal quarters of

operations following the closing of the 2021 Merger, commencing on July 1, 2021, for a total waiver of $90.

In addition, the Advisor has agreed to exclude from the calculation of the subordinated incentive fee on income and the incentive fee on

capital gains any changes to the fair value recorded for the assets and liabilities of FSKR resulting solely from the new cost basis of the acquired FSKR investments determined in accordance with Accounting Standards Codification Topic 805-50, Business CombinationsRelated Issues as a result of the 2021 Merger.

April 9, 2018, the Company entered into an administration agreement with the Advisor, or the administration agreement.

Pursuant to the administration agreement, the Advisor oversees the Companys 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

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 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

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.

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.

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.

FS KKR Capital Corp.

3 unchanged sentences

Transactions (continued)

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

advisory agreement, the prior investment advisory agreement and the administration agreement, as applicable, during the three and six months ended June 30, 2021 and 2020:

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, the prior investment

advisory agreement and the administration agreement, as applicable, during the three and nine months ended September 30, 2021 and 2020:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Related Party

3 unchanged sentences

Investment advisory agreement and prior investment advisory agreement

Subordinated Incentive Fee on

Subordinated Incentive Fee on Income (2)

Administration agreement

Administrative Services Expenses (3)

During the six months ended June 30, 2021 and 2020, $50 and $60, respectively, in base management fees were paid to the Advisor.

June 30, 2021, $54 in base management fees were payable to the Advisor, a portion of which were fees payable by FSKR at the time of the 2021 Merger.

During the six months ended June 30, 2021 and 2020, $0 and $0, respectively, of subordinated incentive fees on income were paid to the

As of June 30, 2021, subordinated incentive fees on income of $29 were payable to the Advisor, a portion of which were fees payable by FSKR at the time of the 2021 Merger.

During the six months ended June 30, 2021 and 2020, $3 and $3, 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 $0.2 for the six months ended June 30, 2021.

The Company paid $3 and $5, respectively, in administrative services expenses to the Advisor during the six months ended June 30, 2021 and 2020.

During the nine months ended September 30, 2021 and 2020, $104 and $86, respectively, in base management

fees were paid to the Advisor.

As of September 30, 2021, $58 in base management fees were payable to the Advisor.

The Advisor agreed, effective July 1, 2021, to waive up to $15 per quarter of the subordinated incentive

fee on income to which it is entitled to under the investment advisory agreement.

During the three and nine months ended September 30, 2021, the amount shown is net of waivers of $15 and $15, respectively.

During the nine months ended

September 30, 2021 and 2020, $29 and $0, respectively, of subordinated incentive fees on income were paid to the Advisor.

As of September 30, 2021, subordinated incentive fees on income of $20 were payable to the Advisor.

During the nine months ended September 30, 2021 and 2020, $7 and $4, 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 $1.0 for the nine months

ended September 30, 2021.

The Company paid $7 and $6, respectively, in administrative services expenses to the Advisor during the nine months ended September 30, 2021 and 2020.

Potential Conflicts of Interest

The members of the senior management and

investment teams of the Advisor serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Company does, or of investment vehicles managed by the same personnel.

The officers,

managers and other personnel of the Advisor may serve in similar or other capacities for the investment advisers to future investment vehicles affiliated with FS Investments or KKR Credit.

In serving in these multiple and other capacities, they may

have obligations to other clients or investors in those entities, the fulfillment of which may not be in the Companys best interests or in the best interest of the Companys stockholders.

The Companys investment objectives may

overlap with the investment objectives of such investment funds, accounts or other investment vehicles.

For additional information regarding potential conflicts of interest, see the Companys annual report on Form

10-K for the year ended December 31, 2020.

Exemptive Relief

As a BDC, the Company is subject to certain regulatory restrictions in making its investments.

For example, BDCs generally are not

permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC.

However, BDCs are permitted to, and

may, simultaneously co-invest in transactions where price is the only negotiated term.

In an order dated June 4, 2013, or the FS Order, the SEC granted exemptive relief permitting the Company, subject to the satisfaction of certain conditions,

to co-invest in certain privately negotiated investment transactions with certain affiliates of its former investment adviser, including FS Energy and Power Fund and any future BDCs that are advised

by its former investment adviser or its affiliated investment advisers.

However, in connection with the investment advisory relationship with the Advisor, and in an 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 January 5, 2021, that permits the

members of the senior management and investment teams of the Advisor serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Company does, or of investment vehicles managed by

the same personnel.

The officers, managers and other personnel of the Advisor may serve in similar or other capacities for the investment advisers to future investment vehicles affiliated with FS Investments or KKR Credit.

In serving in these

multiple and other capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the Companys best interests or in the best interest of the Companys stockholders.

Companys investment objectives may overlap with the investment objectives of such investment funds, accounts or other investment

FS KKR Capital Corp.

3 unchanged sentences

Transactions (continued)

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

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.

For additional information regarding potential conflicts of interest, see the Companys annual report on Form 10-K for the year ended

December 31, 2020.

Exemptive Relief

As a BDC, the Company is subject to certain regulatory restrictions in making its investments.

For example, BDCs generally are not permitted

to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC.

However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term.

In an order dated June 4, 2013, or the FS Order, the SEC granted exemptive relief permitting the Company, subject to the satisfaction

of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of its former investment adviser, including FS Energy and Power Fund and any future

BDCs that are advised by its former investment adviser or its affiliated investment advisers.

However, in connection with the investment advisory relationship with the Advisor, and in an 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 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 Companys common stock.

In September 2021, 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 any transaction with the investment vehicle.

Distributions

The following table reflects the cash distributions

per share that the Company has declared on its common stock during the six months ended June 30, 2021 and 2020:

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, 2021 and 2020:

For the Three Months Ended

2 unchanged sentences

June 30, 2020

September 30, 2020

March 31, 2021

June 30, 2021

September 30, 2021

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

On August 6, 2021, the Companys board of directors declared a regular quarterly cash distribution

of $0.65 per share, which will be paid on or about October 4, 2021 to stockholders of record as of the close of business on September 15, 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

purchase shares of common stock in the open market in connection with implementation of the DRP.

Unless the Company, in its sole discretion, otherwise directs the plan administrator, (A) if the per share market price (as defined in the DRP) is

equal to or greater than the estimated net asset value per share (rounded up to the nearest whole cent) of the Companys common stock on the payment date for the distribution, then the Company will issue shares of common stock at the greater of

(i) net asset value per share of common stock or (ii) 95% of the market price;

or (B) if the market price is less than the net asset value per share, then, in the sole discretion of the Company, (i) shares of common stock will be

purchased in open market transactions for the accounts of participants to the extent practicable, or (ii) the Company will issue shares of common stock at net asset value per share.

Pursuant to the terms of the DRP, the number of shares of

common stock to be issued to a participant will be determined by dividing the total dollar amount of the distribution payable to a participant by the price per share at which the Company issues such shares;

provided, however, that shares purchased

in open market transactions by the plan administrator will be allocated to a participant based on the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased in the open market.

On November 5, 2021, the Companys board of directors declared a regular quarterly cash

distribution of $0.62 per share, which will be paid on or about January 4, 2022 to stockholders of record as of the close of business on December 15, 2021.

FS KKR Capital Corp.

2 unchanged sentences

Distributions (continued)

If a stockholder receives distributions in the form of common stock pursuant to the DRP,

such stockholder generally will be subject to the same federal, state and local tax consequences as if it elected to receive distributions in cash.

If the Companys common stock is trading at or below net asset value, a stockholder receiving

distributions in the form of additional common stock will be treated as receiving a distribution in the amount of cash that they would have received if they had elected to receive the distribution in cash.

If the Companys common stock is

trading above net asset value, a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of the fair market value of the Companys common stock.

The stockholders

basis for determining gain or loss upon the sale of common stock received in a distribution will be equal to the total dollar amount of the distribution payable to the stockholder.

Any stock received in a distribution will have a holding period for

tax purposes commencing on the day following the day on which the shares of common stock are credited to the stockholders account.

The Company may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale of shares of the Companys common stock, borrowings,

net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, and dividends or other distributions paid to the Company on account of

preferred and common equity investments in portfolio companies.

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 purchase shares of common stock in the open market in connection with implementation of the DRP.

Unless the Company, in its sole discretion, otherwise directs

the plan administrator, (A) if the per share market price (as defined in the DRP) is equal to or greater than the estimated net asset value per share (rounded up to the nearest whole cent) of the Companys common stock on the payment date

for the distribution, then the Company will issue shares of common stock at the greater of (i) net asset value per share of common stock or (ii) 95% of the market price;

or (B) if the market price is less than the net asset value per

share, then, in the sole discretion of the Company, (i) shares of common stock will be purchased in open market transactions for the accounts of participants to the extent practicable, or (ii) the Company will issue shares of common stock

at net asset value per share.

Pursuant to the terms of the DRP, the number of shares of common stock to be issued to a participant will be determined by dividing the total dollar amount of the distribution payable to a participant by the price per

share at which the Company issues such shares;

provided, however, that shares purchased in open market transactions by the plan administrator will be allocated to a participant based on the average purchase price, excluding any brokerage charges or

other charges, of all shares of common stock purchased in the open market.

If a stockholder receives distributions in the form of common

stock pursuant to the DRP, such stockholder generally will be subject to the same federal, state and local tax consequences as if it elected to receive distributions in cash.

If the Companys common stock is trading at or below net asset value,

a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of cash that they would have received if they had elected to receive the distribution in cash.

Companys common stock is trading above net asset value, a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of the fair market value of the Companys

common stock.

The stockholders basis for determining gain or loss upon the sale of common stock received in a distribution will be equal to the total dollar amount of the distribution payable to the stockholder.

Any stock received in a

distribution will have a holding period for tax purposes commencing on the day following the day on which the shares of common stock are credited to the stockholders account.

The Company may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale

of shares of the Companys common stock, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, and

dividends or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies.

The Company has not established limits on the amount of funds it may use from available sources to make distributions.

During certain periods, the Companys distributions may

exceed its earnings.

During certain periods, the Companys distributions may exceed its earnings.

As a result, it is possible that a portion of the distributions the Company makes may represent a return of capital.

A return of capital generally is a return of a stockholders investment rather than a return of earnings

or gains derived from the Companys investment activities.

Each year a statement on Form 1099-DIV identifying the sources of the distributions (i.e., paid from ordinary income, paid from net capital gains

on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to the Companys stockholders.

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 six months ended June 30, 2021 and 2020:

Six Months Ended June 30,

A return of capital generally is a return of a

stockholders investment rather than a return of earnings or gains derived from the Companys investment activities.

Each year a statement on Form 1099-DIV identifying the sources of the

distributions (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to the Companys stockholders.

There can be no assurance that

the Company will be able to pay distributions at a specific rate or at all.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Distributions (continued)

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, 2021 and 2020:

Nine Months Ended September 30,

Source of Distribution

3 unchanged sentences

Long-term capital gains proceeds from the sale of assets

During the six months ended June 30, 2021 and 2020, 87.4% and 88.8%, respectively, of the Companys gross investment income was

attributable to cash income earned, 2.8% and 1.8%, respectively, was attributable to non-cash accretion of discount and 9.8% and 9.4%, respectively, was attributable to PIK interest.

During the nine months ended September 30, 2021 and 2020, 85.5% and 88.2%, respectively, of the Companys gross investment income

was attributable to cash income earned, 4.7% and 1.7%, respectively, was attributable to non-cash accretion of discount and 9.8% and 10.1%, respectively, was attributable to PIK interest.

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

4 unchanged sentences

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

June 30, 2021, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $101 and $1,940, respectively.

September 30, 2021, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $69 and $1,732, respectively.

$85 of such losses were carried over from CCT due to the Companys

3 unchanged sentences

Any unused balances resulting from such limitations may be carried forward into future years indefinitely.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Distributions (continued)

As of June 30, 2021 and December 31, 2020, the Companys gross unrealized

appreciation on a tax basis was $1,768 and $1,121, respectively.

As of June 30, 2021 and December 31, 2020, the Companys gross unrealized depreciation on a tax basis was $1,885 and $1,280, respectively.

As of September 30, 2021 and December 31, 2020, the Companys gross unrealized appreciation on a tax basis was $1,671 and $1,121, respectively.

As of September 30, 2021 and

December 31, 2020, the Companys gross unrealized depreciation on a tax basis was $1,927 and $1,280, respectively.

The aggregate cost of the Companys investments for U.S.

federal income tax purposes totaled $15,566 and $7,622 as of June 30,

2021 and December 31, 2020, respectively.

The aggregate net unrealized appreciation (depreciation) on investments on a tax basis was $(832) and $(842) as of June 30, 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 June 30, 2021, the Company had a deferred tax liability of $7 resulting from unrealized appreciation on investments held by the

Companys wholly-owned taxable subsidiaries and a deferred tax asset of $69 resulting from net operating losses, capital losses, and interest expense limitation carryforwards of the Companys wholly-owned taxable subsidiaries and

federal income tax purposes totaled $16,807 and $7,622 as of

September 30, 2021 and December 31, 2020, respectively.

The aggregate net unrealized appreciation (depreciation) on investments on a tax basis was $(983) and $(842) as of September 30, 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, 2021, the Company had a deferred tax liability of $7 resulting from unrealized appreciation on investments held

by the Companys wholly-owned taxable subsidiaries and a deferred tax asset of $50 resulting from net operating losses, capital losses, and interest expense limitation carryforwards of the Companys wholly-owned taxable subsidiaries and

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

As of June 30, 2021, certain wholly-owned taxable subsidiaries anticipated that they would be unable to fully utilize their generated net

As of September 30, 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 $43.

For the six months ended June 30, 2021, the Company did not record a provision for taxes related to wholly-owned taxable

For the nine months ended September 30, 2021, the Company did not record a provision for taxes related to wholly-owned taxable

subsidiaries.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio

The following table summarizes the composition of the Companys investment portfolio at cost and fair value as of June 30, 2021 and December 31, 2020:

The following table summarizes the composition of the Companys investment portfolio at cost and fair value as of September 30,

2021 and December 31, 2020:

September 30,

December 31, 2020

9 unchanged sentences

5% or more of its voting securities.

As of June 30, 2021, the Company held investments in fourteen portfolio companies of

which it is deemed to control. As of June 30, 2021, 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 (ac) and (ad) to the unaudited consolidated schedule of investments as of June 30, 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.

As of September 30, 2021, the Company held investments in sixteen portfolio

companies of which it is deemed to control. As of September 30, 2021, the Company held investments in seventeen 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 (ac) and (ad) to the unaudited consolidated schedule of investments as of September 30, 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.

September 30, 2021, the Company had unfunded debt investments with aggregate unfunded commitments of $(1,313.7), unfunded equity/other commitments of $511.3 and unfunded commitments of $350.2 to Credit Opportunities Partners JV, LLC.

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 to Credit Opportunities Partners JV, 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, 2021 and the Companys audited consolidated schedule of investments as of December 31, 2020.

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

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 June 30, 2021, the Company had unfunded debt investments with aggregate unfunded commitments of $951.2, unfunded equity/other commitments of $454.7 and unfunded commitments of $350.2 to Credit Opportunities

Partners JV, 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 to Credit Opportunities Partners JV,

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 June 30, 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 June 30, 2021 and

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 September 30, 2021 and December 31, 2020:

September 30,

December 31, 2020

5 unchanged sentences

Consumer Services

Credit Opportunities Partners JV, LLC

Diversified Financials

6 unchanged sentences

Software & Services

Credit Opportunities Partners JV, LLC

Technology Hardware & Equipment

5 unchanged sentences

an increase in the aggregate capital commitment (but not the percentage of the aggregate capital committed by each member) to COPJV.

Effective as of

Effective as of June 18, 2021, Credit Opportunities Partners, LLC, or COP, merged with and into COPJV, with

COPJV surviving the merger, or the COPJV Merger.

As of June 18, 2021, COPJV assumed all of COPs obligations under its credit facilities, and COPs wholly-owned special purpose financing subsidiaries became wholly-owned special

purpose financing subsidiaries of COPJV, in each case, as a result of the consummation of the COPJV Merger.

COPJVs second amended and restated limited liability company agreement, or the COPJV Agreement, requires the Company and SCRS to

provide capital to COPJV of up to $2,000 in the aggregate where the Company and SCRS would provide 87.5% and 12.5%, respectively, of the committed capital.

Pursuant to the terms of the COPJV Agreement, the Company and SCRS each have 50% voting

control of COPJV and are required to agree on all investment decisions as well as certain other significant actions for COPJV.

COPJV invests its capital in a range of investments, including senior secured loans (both first lien and second lien) to

middle market companies, broadly syndicated loans, equity, warrants and other investments.

As administrative agent of COPJV, the Company performs certain day-to-day

management responsibilities on behalf of COPJV and is entitled to a fee of 0.25% of COPJVs assets under administration,

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

June 18, 2021, Credit Opportunities Partners, LLC, or COP, merged with and into COPJV, with COPJV surviving the merger, or the COPJV Merger.

As of June 18, 2021, COPJV assumed all of

COPs obligations, including any obligations under the credit facilities of COPs wholly-owned special purpose financing subsidiaries, and such subsidiaries became wholly-owned special purpose financing subsidiaries of COPJV, in ease case,

as a result of the consummation of the COPJV Merger.

COPJVs second amended and restated limited liability company agreement, or the COPJV Agreement, requires the Company and SCRS to provide capital to COPJV of up to $2,000 in the aggregate

where the Company and SCRS would provide 87.5% and 12.5%, respectively, of the committed capital.

Pursuant to the terms of the COPJV Agreement, the Company and SCRS each have 50% voting control of COPJV and are required to agree on all investment

decisions as well as certain other significant actions for COPJV.

COPJV invests its capital in a range of investments, including senior secured loans (both first lien and second lien) to middle market companies, broadly syndicated loans, equity,

warrants and other investments.

As administrative agent of COPJV, the Company performs certain day-to-day management responsibilities on behalf of COPJV and is entitled

to a fee of 0.25% of COPJVs assets under administration, calculated and payable quarterly in arrears.

As of June 30, 2021, the Company and SCRS have funded approximately $1,599.8 to COPJV, of which $1,399.8 was from the Company.

Jersey City Funding LLC, or Jersey City Funding, a wholly-owned subsidiary of COPJV, 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 June 30, 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 (subject to a 0% floor) plus 2.25%.

Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus the spread applicable

to the specified currency.

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 June 30, 2021, total outstanding borrowings under

the Jersey City Funding Credit Facility were $195.0.

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 COPJV, 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 June 30, 2021.

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

dollars, Australian dollars,

Canadian dollars, Euros and pounds sterling.

calculated and payable quarterly in arrears.

As of September 30, 2021, the Company and SCRS have funded approximately $1,599.8 to COPJV, of which $1,399.8 was from the Company.

On September 2, 2021, Jersey City Funding LLC, or Jersey City Funding, a wholly-owned subsidiary of COPJV, prepaid all outstanding

borrowings under, and terminated, its revolving credit facility with Goldman Sachs Bank.

Chestnut Street Funding LLC, or Chestnut Street

Funding, a wholly-owned subsidiary of COPJV, 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 September 30, 2021.

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 (subject to a 0% floor) plus 2.25%.

Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus

Foreign currency

loans bear interest at the applicable floating rate (subject to a 0% floor) 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 June 30, 2021, total outstanding borrowings under the

Chestnut Street Funding Credit Facility were $182.7.

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 COPJV, has a revolving credit facility with BNP Paribas,

or as amended, the Boxwood Drive Funding Credit Facility, which provides for up to $300 of borrowings as of June 30, 2021.

The Chestnut Street Funding Credit Facility matures on

September 18, 2024.

As of September 30, 2021, total outstanding borrowings under the Chestnut Street Funding Credit Facility were $177.6.

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 COPJV, has a

revolving credit facility with BNP Paribas, or as amended, the Boxwood Drive Funding Credit Facility, which provides for up to $300 of borrowings as of September 30, 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 (subject to a 0% floor) plus a spread of 2.05% to 3.15% during the reinvestment period and 2.50% to 3.25% thereafter.

Foreign currency loans bear

interest at the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency.

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 June 30, 2021, total outstanding borrowings under the Boxwood Drive Funding Credit Facility were $29.0.

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

assets of Boxwood Drive Funding.

Big Cedar Creek LLC, or Big Cedar Creek Funding, a wholly-owned subsidiary of COPJV, has a

revolving credit facility with BNP Paribas, or as amended, the Big Cedar Creek Funding Credit Facility, which provides for up to $300 of borrowings as of June 30, 2021.

The Big Cedar Creek Funding Credit Facility provides loans in U.S.

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

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

dollar loans bear interest at the rate of LIBOR (subject to a 0% floor) plus a spread of 2.05% to 3.15% during the reinvestment period and 2.50% to

Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus a spread of 1.85% to 2.55% during the reinvestment period

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

and 2.00% to 2.65% thereafter.

Big Cedar Creek Funding also pays a commitment fee of up to 1.00% on undrawn commitments.

3.25% thereafter.

Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency.

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

The Boxwood Drive Funding Credit Facility matures on April 15, 2025.

As of September 30, 2021, total outstanding borrowings under the Boxwood Drive Funding Credit Facility were $49.7.

Borrowings under the Boxwood Drive Funding

Credit Facility are secured by substantially all of the assets of Boxwood Drive Funding.

Big Cedar Creek LLC, or Big Cedar Creek Funding,

a wholly-owned subsidiary of COPJV, has a revolving credit facility with BNP Paribas, or as amended, the Big Cedar Creek Funding Credit Facility, which provides for up to $300 of borrowings as of September 30, 2021.

The Big Cedar Creek Funding

Credit Facility provides 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 (subject to a 0% floor) plus a spread of 1.85% to 2.55% during

the reinvestment period and 2.00% to 2.65% thereafter.

Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus a spread of 1.85% to 2.55% during the reinvestment period and 2.00% to 2.65% thereafter.

Cedar Creek Funding also pays a commitment fee of up to 1.00% on undrawn commitments.

The Big Cedar Creek Funding Credit Facility matures on March 11, 2025.

As of June 30, 2021, total outstanding borrowings under the Big Cedar Creek Funding Credit Facility were $94.3.

Borrowings under the Big Cedar Creek Funding Credit Facility are secured by substantially all of the assets of Big Cedar

Green Creek LLC, or Green Creek Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with

Goldman Sachs Bank, or as amended, the Green Creek Funding Credity Facility, which provides for up to $500 of borrowings as of June 30, 2021.

As of September 30, 2021, total outstanding borrowings under the Big Cedar Creek

Funding Credit Facility were $87.6.

Borrowings under the Big Cedar Creek Funding Credit Facility are secured by substantially all of the assets of Big Cedar Creek.

Green Creek LLC, or Green Creek Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with Goldman Sachs Bank, or as

amended, the Green Creek Funding Credit Facility, which provides for up to $500 of borrowings as of September 30, 2021.

The Green Creek Credit Facility provides for loans in U.S.

dollars, Canadian dollars, Euros and pounds

dollar loans bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 3.30%.

Foreign currency loans bear interest at the rate of the applicable floating rate (subject to a 0% floor) plus the spread applicable to the

specified currency.

dollars, Canadian dollars, Euros and pounds sterling.

loans bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 3.30%.

Foreign currency loans bear interest at the rate of the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency.

Green Creek Funding also pays a commitment fee of up to 3.30% on undrawn commitments.

The Green Creek Funding Credit Facility matures on January 30, 2022.

As of June 30, 2021, total outstanding borrowings under the Green

Creek Funding Credity Facility were $420.3.

As of September 30, 2021, total outstanding borrowings under the Green Creek Funding

Credit Facility were $348.9.

Borrowings under the Green Creek Funding Credit Facility are secured by substantially all of the assets of Green Creek Funding.

On March 31, 2021, COPJV sold in a private placement $300 million of aggregate principal amount of unsecured notes, or the COPJV Notes, to qualified institutional buyers in reliance on

Section 4(a)(2) of the Securities Act.

Interest of the COPJV 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 COPJV Notes cease to be rated investment grade, and the COPJV Notes will be subject to an additional 2.0% of default interest during the continuance of an event of default.

The COPJV Notes mature on

April 1, 2026, unless redeemed, purchased or prepaid prior to such date by COPJV in accordance with their terms.

The COPJV Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured and unsubordinated

indebtedness that COPJV may issue.

COPJV used the net proceeds from the private placement for general corporate purposes, including to make investments, repay existing debt and make permitted distributions.

COPJV was in compliance with all covenants required by its financing arrangements as of June 30, 2021 and December 31, 2020.

During the six months ended June 30, 2021, the Company sold investments with a cost of $237.6 for proceeds of $251.0 to

COPJV and recognized a net realized gain (loss) of $13.4 in connection with the transactions.

As of June 30, 2021, $317.7 of these sales to COPJV are included in receivable for investments sold in the consolidated statements of assets and

As of June 30, 2021 and December 31, 2020, COPJV had total investments with a fair value of $2,852.3

and $1,544.3, respectively.

As of June 30, 2021 and December 31, 2020, COPJV had two and two investments on non-accrual status, respectively.

Below is a summary of COPJVs portfolio, followed by a listing of the individual loans in COPJVs portfolio as of June 30,

2021 and December 31, 2020:

On August 17, 2021, COPJV sold in a private placement $225 of aggregate principal amount of Series B senior unsecured notes, or the COPJV

Notes, to qualified institutional buyers in reliance on Section 4(a)(2) of the Securities Act.

Interest of the COPJV Notes is payable semi-annually on the 17th of each of February and August, at a fixed annual rate of 3.62%, commencing

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

February 17, 2022.

This interest rate is subject to increase up to 4.12% in the event that the COPJV Notes cease to be rated investment grade, and the COPJV Notes will be subject to an

additional 2.0% of default interest during the continuance of an event of default.

The COPJV Notes mature on August 17, 2026, unless redeemed, purchased or prepaid prior to such date by COPJV in accordance with their terms.

The COPJV Notes are

general unsecured obligations that rank pari passu with all outstanding and future unsecured and unsubordinated indebtedness that COPJV may issue.

COPJV used the net proceeds from the private placement for general corporate purposes, including to

make investments, repay existing debt and make permitted distributions.

COPJV was in compliance with all covenants required by

its financing arrangements as of September 30, 2021 and December 31, 2020.

During the nine months ended

September 30, 2021, the Company sold investments with a cost of $596.1 for proceeds of $615.5 to COPJV and recognized a net realized gain (loss) of $19.4 in connection with the transactions.

As of September 30, 2021, $351.9 of these sales

to COPJV are included in receivable for investments sold in the consolidated statements of assets and liabilities.

September 30, 2021 and December 31, 2020, COPJV had total investments with a fair value of $2,481.7 and $1,544.3, respectively.

As of September 30, 2021 and December 31, 2020, COPJV had two and two investments on non-accrual status, respectively.

Below is a summary of COPJVs portfolio, followed by

a listing of the individual loans in COPJVs portfolio as of September 30, 2021 and December 31, 2020:

September 30,

Total debt investments (1)

Weighted average current interest rate on debt investments (2)

Weighted average annual yield on accruing debt investments (2)

Number of portfolio companies in COPJV

1 unchanged sentence

Unfunded commitments (1)

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

Debt Investments means investments that pay or are expected to pay 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.

FS KKR Capital Corp.

3 unchanged sentences

Credit Opportunities Partners JV, LLC Portfolio

As of June 30, 2021 (in millions)

As of September 30, 2021 (in millions)

Interest Rate (b)

Senior Secured LoansFirst Lien99.6%

A10 Capital LLC

Diversified Financials

ABB CONCISE Optical Group LLC

Advania Sverige AB

Software & Services

Advania Sverige AB

Software & Services

Transportation

1 unchanged sentence

Capital Goods

Apex Group Limited

Diversified Financials

Apex Group Limited

Diversified Financials

Apex Group Limited

Diversified Financials

Apex Group Limited

Diversified Financials

Ardonagh Group Ltd

12 unchanged sentences

Technology Hardware &

Big Bus Tours Ltd

Consumer Services

FS KKR Capital Corp.

5 unchanged sentences

Consumer Services

Big Bus Tours Ltd

Consumer Services

Bugaboo International BV

Consumer Durables &

Cambium Learning Group Inc

Consumer Services

Caprock Midstream LLC

Catapult Learning LLC

8 unchanged sentences

Consumer Services

Charles Taylor PLC

Diversified Financials

Child Development Schools Inc

4 unchanged sentences

Software & Services

Distribution International Inc

Eagle Family Foods Inc

Food, Beverage &

Eagleclaw Midstream Ventures LLC

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)

EIF Van Hook Holdings LLC

9 unchanged sentences

Equipment & Services

Professional 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)

Industria Chimica Emiliana Srl

8 unchanged sentences

Professional 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)

Lionbridge Technologies Inc

4 unchanged sentences

Professional Services

One Call Care Management Inc

Equipment & Services

Ontic Engineering & Manufacturing Inc

9 unchanged sentences

Consumer Services

Pure Fishing Inc

Consumer Durables &

Qdoba Restaurant Corp

4 unchanged sentences

Software & Services

Rise Baking Company

Food, Beverage &

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)

Rise Baking Company

Food, Beverage &

Rise Baking Company

Food, Beverage &

RSC Insurance Brokerage Inc

2 unchanged sentences

Capital Goods

Smart & Final Stores LLC

Food & Staples

SIRVA Worldwide Inc

Professional Services

Staples Canada

(e)(h)(i)(k)(n)

Technimark LLC

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)

Total Safety US Inc

3 unchanged sentences

Software & Services

WireCo WorldGroup Inc

Capital Goods

Yak Access LLC

8 unchanged sentences

Capital Goods

BCA Marketplace PLC

EaglePicher Technologies LLC

Capital Goods

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)

Excelitas Technologies Corp

5 unchanged sentences

Consumer Durables &

Resource Label Group LLC

Rise Baking Company

Food, Beverage &

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)

Capital Goods

11 unchanged sentences

Other Senior Secured Debt1.4%

Velvet Energy Ltd

One Call Care Management Inc

Equipment & Services

Total Other Senior Secured Debt

Subordinated Debt2.7%

Home Partners of America Inc

Total Subordinated Debt

Asset Based Finance24.6%

1 unchanged sentence

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

(e)(g)(n) (o)

(e)(o)(p)(g)(n)

Capital Goods

GA Capital Specialty Lending Fund, Limited Partnership Interest

Diversified Financials

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

GA Capital Specialty Lending Fund, Limited Partnership Interest

Diversified Financials

Global Lending Services LLC, Private Equity

12 unchanged sentences

Technology Hardware &

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware &

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware &

Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan

Luxembourg Life FundAbsolute Return Fund III, Term Loan

(e)(h)(k) (n)

Luxembourg Life FundAbsolute Return Fund III, Term Loan

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

Luxembourg Life FundAbsolute Return Fund III, Term Loan

Luxembourg Life FundLong Term Growth Fund, Term Loan

1 unchanged sentence

NewStar Clarendon 2014-1A Class D

(e)(k)(n) (o)

Diversified Financials

Pretium Partners LLC P1, Structured Mezzanine

Pretium Partners LLC P2, Structured Mezzanine

Sealane Trade Finance

6 unchanged sentences

Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim

Belk Inc, Common Stock

One Call Care Management Inc, Common Stock

Equipment & Services

One Call Care Management Inc, Preferred Stock A

Equipment & Services

One Call Care Management Inc, Preferred Stock B

Equipment & Services

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

Belk Inc, Common Stock

Home Partners of America Inc, Common Stock

Zeta Interactive Holdings Corp, Common Stock

7 unchanged sentences

basis point spread.

Swap Bid Rate, or BBSY was 0.08%, and the U.S.

Prime Lending Rate, or Prime, was 3.25%.

As of September 30, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.13%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Candian Dollar Offer Rate, or CDOR was 0.45%, the

Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.07%, the Reykjavik Interbank Offered Rate, or REIBOR, was 1.89%, the Stockholm Interbank Offered Rate, or STIBOR or SR, was (0.08)%, and the U.S.

Prime Lending Rate, or

Prime, was 3.25%.

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 investment.

Denominated in U.S.

14 unchanged sentences

credit facility with Goldman Sachs Bank.

Security or portion thereof held within IC II American Energy Investment, Inc., a wholly-owned subsidiary of the company.

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 Bank.

FS KKR Capital Corp.

2 unchanged sentences

Investment Portfolio (continued)

Security or portion thereof held within IC II American Energy Investment, Inc., a wholly-owned subsidiary of the company.

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 Bank.

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

1 unchanged sentence

Security is non-income producing.

Asset is on non-accrual status.

Credit Opportunities Partners JV, LLC Portfolio

61 unchanged sentences

Software & Services

HealthChannels LLC

Equipment & Services

Huws Gray Ltd

FS KKR Capital Corp.

3 unchanged sentences

Interest Rate (b)

HealthChannels LLC

Equipment & Services

Huws Gray Ltd

Professional Services

23 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)

Qdoba Restaurant Corp

4 unchanged sentences

Equipment & 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)

Safe-Guard Products International LLC

Diversified Financials

Capital Goods

Smart & Final Stores LLC

Food & Staples

Staples Canada

3 unchanged sentences

Transaction Services Group Ltd

Software & Services

Virgin Pulse Inc

Software & Services

Yak Access LLC

3 unchanged sentences

Net Senior Secured LoansFirst Lien

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)

Senior Secured LoansSecond Lien28.9%

Access CIG LLC

Professional Services

Ammeraal Beltech Holding BV

2 unchanged sentences

Excelitas Technologies Corp

Hardware & Equipment

Software & Services

Resource Label Group LLC

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)

Capital Goods

12 unchanged sentences

Total Other Senior Secured Debt

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)

Subordinated Debt5.3%

6 unchanged sentences

Diversified Financials

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)

Global Lending Services LLC, Private Equity

5 unchanged sentences

Lenovo Group Ltd, Structured Mezzanine

Technology Hardware &

Hardware & Equipment

Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan

Luxembourg Life FundLong Term Growth Fund, 1L Term Loan

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)

MP4 2013-2A Class Subord.

7 unchanged sentences

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)

Interest Rate (b)

Equity/Other6.1%

10 unchanged sentences

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%.

the Australian Interbank Rate,

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Investment Portfolio (continued)

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

PIK income accruals may be adjusted based on the fair

value of the underlying investment.

Denominated in U.S.

3 unchanged sentences

Security is an unfunded commitment.

The stated rate reflects the spread disclosed at the time of commitment and may not indicate the actual

rate received upon funding.

The stated rate reflects the spread disclosed at the time of commitment and

may not indicate the actual 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

revolving credit facility with Goldman Sachs.

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

revolving credit facility with Citibank, N.A.

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

amounts outstanding under the revolving credit facility with Goldman Sachs.

Security or portion thereof held within Chestnut Street Funding LLC and is pledged as collateral supporting the

amounts outstanding under the revolving credit facility with Citibank, N.A.

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 COPJV as of June 30, 2021 and

December 31, 2020:

Below is selected balance sheet information for COPJV as of September 30, 2021 and December 31, 2020:

September 30,

Selected Balance Sheet Information

4 unchanged sentences

Members equity

Below is selected statement of operations information for COPJV for the three and six months ended

June 30, 2021 and 2020:

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 COPJV for the three and nine months

ended September 30, 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 June 30, 2021 and December 31, 2020:

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, 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

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 six months ended June 30, 2021 and 2020 are in the following locations in the consolidated statements of operations:

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

months ended September 30, 2021 and 2020 are in the following locations in the consolidated statements of operations:

Net Realized Gains (Losses)

Nine Months Ended

September 30,

Derivative Instrument

2 unchanged sentences

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,

Derivative Instrument

4 unchanged sentences

The Company has derivative instruments that are subject to master netting agreements.

These agreements include provisions to offset positions with the same counterparty in the event of default by one of

The Companys unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the consolidated balance sheets.

The following tables 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 June 30, 2021

and December 31, 2020:

As of June 30, 2021

These agreements include provisions to offset positions

with the same counterparty in the event of default by one of the parties.

The Companys unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the consolidated balance

The following tables 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, 2021 and December 31, 2020:

As of September 30, 2021

Assets Subject to

1 unchanged sentence

Available for

Cash Collateral

Net Amount of

2 unchanged sentences

Available for

Cash Collateral

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

2 unchanged sentences

Available for

Cash Collateral

Net Amount of

2 unchanged sentences

Available for

Cash Collateral

Net Amount of

Liabilities (3)

JP Morgan Chase Bank

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

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

due to overcollateralization.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financial Instruments (continued)

Net amount of derivative assets represents the net amount due from the counterparty to the Company.

1 unchanged sentence

Foreign Currency Forward Contracts and Cross Currency Swaps:

The Company may enter into foreign currency forward contracts and cross currency swaps from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies

and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of the Companys investments denominated in foreign currencies.

A foreign currency forward contract is a commitment to purchase or

sell a foreign currency at a future date at a negotiated forward rate.

These contracts are marked-to-market by recognizing the difference between the contract forward

exchange rate and the forward market exchange rate on the last day of the period presented as unrealized appreciation or depreciation.

Realized gains or losses are recognized when forward contracts are settled.

Risks arise as a result of the

potential inability of the counterparties to meet the terms of their contracts.

The Company may enter into foreign currency forward contracts and cross currency swaps from time to time to facilitate settlement of purchases

and sales of investments denominated in foreign currencies and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of the Companys investments denominated in foreign currencies.

currency forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate.

These contracts are marked-to-market by

recognizing the difference between the contract forward exchange rate and the forward market exchange rate on the last day of the period presented as unrealized appreciation or depreciation.

Realized gains or losses are recognized when forward

contracts are settled.

Risks arise as a result of the potential inability of the counterparties to meet the terms of their contracts.

The Company attempts to limit counterparty risk by only dealing with well-known counterparties.

Cross currency swaps are interest rate swaps in which interest cash flows are exchanged between two parties based on the notional amounts of two different currencies.

These swaps are marked-to-market by recognizing the difference between the present value of cash flows of each leg of the swaps as unrealized appreciation or depreciation.

Realized gain or

loss is recognized when periodic payments are received or paid and the swaps are terminated.

The entire notional value of a cross currency swap is subject to the risk that the counterparty to the swap will default on its contractual delivery

Cross currency swaps are interest rate swaps in which interest cash flows are exchanged between two parties based on the notional amounts of

two different currencies.

These swaps are marked-to-market by recognizing the difference between the present value of cash flows of each leg of the swaps as unrealized

appreciation or depreciation.

Realized gain or loss is recognized when periodic payments are received or paid and the swaps are terminated.

The entire notional value of a cross currency swap is subject to the risk that the counterparty to the swap

will default on its contractual delivery obligations.

The Company attempts to limit counterparty risk by only dealing with well-known counterparties.

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 six months ended June 30, 2021 and 2020 was $98.4 and

$28.3, respectively.

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, 2021 and 2020 was $129.0 and $36.1, respectively.

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)

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 June 30, 2021 and December 31, 2020, the Companys investments were

As of September 30, 2021 and December 31, 2020, the Companys investments were

categorized as follows in the fair value hierarchy:

June 30, 2021

September 30, 2021

Valuation Inputs

3 unchanged sentences

Level 3Significant unobservable inputs

Investments measured at net asset value (1)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been

categorized in the fair value hierarchy.

Investments measured at net asset

Certain investments that are measured at fair value using the net asset value per share (or its equivalent)

practical expedient have not been categorized in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

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 June 30, 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

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.

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

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, 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.

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.

independent third-party 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.

FS KKR Capital Corp.

3 unchanged sentences

Instruments (continued)

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 six months ended June 30, 2021 and 2020 of investments for which significant unobservable

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

For the Six Months Ended June 30, 2021

The following is a reconciliation for the nine months ended September 30, 2021 and

2020 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:

For the Nine Months Ended September 30, 2021

Fair value at beginning of period

4 unchanged sentences

Sales and repayments

Net transfers in or out of Level 3

Transfers into Level 3

Transfers out of Level 3

Fair value at end of period

1 unchanged sentence

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

For the Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2020

Fair value at beginning of period

4 unchanged sentences

Sales and repayments

Net transfers in or out of Level 3

Transfers into Level 3

Transfers out of Level 3

Fair value at end of period

6 unchanged sentences

Instruments (continued)

The valuation techniques and significant unobservable inputs used in recurring

Level 3 fair value measurements as of June 30, 2021 and December 31, 2020 were as follows:

The valuation techniques and significant unobservable inputs used in recurring Level 3

fair value measurements as of September 30, 2021 and December 31, 2020 were as follows:

Type of Investment

Fair Value at

September 30, 2021

Technique (1)

10 unchanged sentences

7.0x - 8.0x (7.9x)

Discounted Cash Flow

Discount Rate

6.3% - 6.3% (6.3%)

Asset Based Finance

8 unchanged sentences

0.1x - 15.3x (7.5x)

Option Pricing Model

Equity Illiquidity

30.0% - 30.0% (30.0%)

Discounted Cash Flow

2 unchanged sentences

Type of Investment

Fair Value at

December 31, 2020

24 unchanged sentences

11.0% - 50.0% (11.9%)

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.

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.

2 unchanged sentences

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

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,

2021, the aggregate amount outstanding of the senior securities issued by the Company was $8,511.

As of September 30, 2021, the Companys asset coverage was 191%.

FS KKR Capital Corp.

2 unchanged sentences

Financing Arrangements (continued)

asset coverage requirement applicable to senior securities was reduced from 200% to 150%.

As of June 30, 2021, the aggregate amount outstanding of the senior securities issued by the

Company was $7,740.

As of June 30, 2021, the Companys asset coverage was 199%.

The following tables

present summary information with respect to the Companys outstanding financing arrangements as of June 30, 2021 and December 31, 2020.

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, 2020.

Any significant changes to the Companys financing

arrangements during the six months ended June 30, 2021 are discussed below.

As of June 30,

The following tables present summary information with respect to the Companys

outstanding financing arrangements as of September 30, 2021 and December 31, 2020.

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, 2020.

Any significant changes to the Companys financing arrangements during the nine months ended September 30, 2021 are

discussed below.

As of September 30, 2021

Type of Arrangement

3 unchanged sentences

November 22, 2024

Burholme Prime Brokerage Facility (2)(8)

Burholme Prime Brokerage

Facility (2)(8)

Prime Brokerage Facility

September 26, 2021

March 28, 2022

CCT Tokyo Funding Credit Facility (2)

14 unchanged sentences

November 22, 2024

Senior Secured Revolving Credit Facility (2)

Senior Secured Revolving Credit

Revolving Credit Facility

23 unchanged sentences

January 15, 2027

CLO-1 Notes (2)(7)

Collateralized Loan

4 unchanged sentences

The spread over LIBOR is determined by reference to the amount outstanding under the facility.

The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain

outstanding indebtedness of the Company.

The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the

aggregate amount of certain outstanding indebtedness of the Company.

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

Euro balance outstanding of 278 has been

converted to U.S.

dollars at an exchange rate of 1.00 to $1.19 as of June 30, 2021 to reflect total amount outstanding in U.S.

Canadian dollar balance outstanding of CAD30 has been converted to U.S dollars at an exchange rate of

CAD1.00 to $0.81 as of June 30, 2021 to reflect total amount outstanding in U.S.

Pounds sterling balance outstanding of £207 has been converted to U.S dollars at an exchange rate of £1.00 to $1.38 as of June 30, 2021

to reflect total amount outstanding in U.S.

Australian dollar balance outstanding of AUD152 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.75 as of June 30, 2021 to reflect total amount outstanding in U.S.

As of June 30, 2021, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 4.250% notes, the

8.625% notes, the 3.400% notes and the 2.625% notes was approximately $463, $245, $432, $500, $500, $282, $1,035 and $397, respectively.

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

outstanding of 236 has been converted to U.S.

dollars at an exchange rate of 1.00 to $1.16 as of September 30, 2021 to reflect total amount outstanding in U.S.

Canadian dollar balance outstanding of CAD4 has been converted

to U.S dollars at an exchange rate of CAD1.00 to $0.79 as of September 30, 2021 to reflect total amount outstanding in U.S.

Pounds sterling balance outstanding of £98 has been converted to U.S dollars at an exchange rate of

£1.00 to $1.35 as of September 30, 2021 to reflect total amount outstanding in U.S.

Australian dollar balance outstanding of AUD118 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.72 as of

September 30, 2021 to reflect total amount outstanding in U.S.

As of September 30, 2021, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the

4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes and the 2.625% notes was approximately $460, $245, $432, $502, $502, $280, $1,045 and $401, respectively.

These valuations are considered Level 2 valuations within the fair

value hierarchy.

As of September 30, 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%.

FS KKR Capital Corp.

2 unchanged sentences

Financing Arrangements (continued)

As of June 30, 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 June 16, 2021, the Company assumed all of FSKRs obligations under its credit facilities, and FSKRs wholly-owned special

purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger.

As of June 16, 2021, the Company assumed all of FSKRs obligations under its notes, credit facilities, and FSKRs wholly-owned

special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger.

As of December 31, 2020

3 unchanged sentences

Revolving Credit Facility

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

December 2, 2023

48 unchanged sentences

Financing Arrangements (continued)

For the three and six months ended June 30, 2021 and 2020, the components of total

For the three and nine months ended September 30, 2021 and 2020, the components of total

interest expense for the Companys financing arrangements were as follows:

Three Months Ended June 30,

Three Months Ended September 30,

Arrangement (1)

1 unchanged sentence

Financing Costs

and Discount /

Total Interest

10 unchanged sentences

Meadowbrook Run Credit Facility (2)

Senior Secured Revolving Credit Facility (2)

Senior Secured Revolving Credit

4.750% Notes due 2022

6 unchanged sentences

2.625% Notes due 2027

Six Months Ended June 30,

Nine Months Ended September 30,

Arrangement (1)

1 unchanged sentence

Financing Costs

and Discount /

Total Interest

8 unchanged sentences

Juniata River Credit Facility (2)

Locust Street Funding Credit Facility (2)

Locust Street Funding Credit

Meadowbrook Run Credit Facility (2)

Senior Secured Revolving Credit Facility (2)

Senior Secured Revolving Credit

4.750% Notes due 2022

10 unchanged sentences

Financing Arrangements (continued)

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

purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.

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

borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.

Direct interest expense includes the effect of non-usage fees.

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

of non-usage fees, for the six months ended June 30, 2021 were $4,213 and 3.88%, respectively.

As of June 30, 2021, the Companys weighted average effective interest rate on

The Companys average borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2021 were $5,502 and 3.59%, respectively.

As of September 30, 2021, the Companys weighted average effective interest rate on

borrowings, including the effect of non-usage fees, was 3.22%.

Companys average borrowings and weighted average interest rate, including the effect of non-usage fees, for the six months ended June 30, 2020 were $4,415 and 3.76%, respectively.

June 30, 2020, the Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 3.86%.

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 June 30, 2021 and December 31, 2020.

2.625% Notes due 2027

On June 17, 2021, the Company and U.S.

Bank National Association, or the Trustee entered into an Eighth Supplemental Indenture, or the Eighth Supplemental Indenture, to the Indenture, dated

July 14, 2014, between the Company and the Trustee, or the Base Indenture, and together with the Eighth Supplemental Indenture, the Indenture.

The Eighth Supplemental Indenture relates to the Companys issuance of $400 aggregate principal

amount of its 2.625% notes due 2027, or the 2.625% notes.

The Notes will mature on January 15, 2027 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 2.625% per year payable semi-annually on January 15th and July 15th of each

year, commencing on January 15, 2022.

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, and to provide financial

information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended.

These covenants are subject to important limitations and exceptions that

are described in the Indenture.

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.

FSKR Credit Facilities

On June 16, 2021, as a result of the consummation of the 2021 Merger, the Company assumed all of FSKRs obligations under its Senior Secured Revolving Credit Facility, resulting in FSK remaining

the sole borrower thereunder, and the various wholly-owned special purpose financing subsidiaries of FSKR became wholly-owned special purpose financing subsidiaries of the Company.

Such special purpose financing subsidiaries and their outstanding

credit facilities are (a) Darby Creek LLC and the Darby Creek Credit Facility, (b) Dunlap Funding LLC and the Dunlap Credit Facility, (c) Juniata River LLC and the Juniata

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Financing Arrangements (continued)

River Credit Facility, (d) Burholme Funding LLC and the Burholme Prime Brokerage Facility, (e) Ambler Funding LLC and the Ambler Credit Facility and (f) Meadowbrook Run LLC and the

Meadowbrook Run Credit Facility (such credit facilities, together with the prior obligations of FSKR under the Senior Secured Revolving Credit Facility, collectively, the FSKR Credit Facilities).

Information regarding the FSKR Credit

Facilities is set forth in Part IItem 1.

Financial StatementsNotes to Unaudited Consolidated Financial StatementsNote 9.

Financing Arrangements in FSKRs Quarterly Report on Form

10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 10, 2021.

Commitments and Contingencies

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

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.

Unfunded commitments to provide funds to portfolio companies are not recorded in the Companys consolidated balance sheets.

these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.

The Company has sufficient liquidity to fund these commitments.

As of June 30, 2021, the

Companys unfunded commitments consisted of the following:

Category / Company (1)

Senior Secured LoansFirst Lien

5 Arch Income Fund 2 LLC

Advanced Dermatology & Cosmetic Surgery

Advania Sverige AB

Apex Group Limited

Arrotex Australia Group Pty Ltd

Corsearch Intermediate Inc

Dental Care Alliance Inc

Eagle Family Foods Inc

Entertainment Benefits Group LLC

FloWorks International LLC

Foundation Consumer Brands LLC

Heniff Transportation Systems LLC

Higginbotham Insurance Agency Inc

Individual FoodService

Karman Space Inc

KBP Investments LLC

Kellermeyer Bergensons Services LLC

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Commitments and

Contingencies (continued)

Category / Company (1)

Lakeview Farms Inc

MB2 Dental Solutions LLC

Monitronics International Inc

Motion Recruitment Partners LLC

New Era Technology Inc

Parata Systems

P2 Energy Solutions Inc.

Revere Superior Holdings Inc

RSC Insurance Brokerage Inc

Sungard Availability Services Capital Inc

Sweeping Corp of America Inc

Truck-Lite Co LLC

Asset Based Finance

Byrider Finance LLC, Structured Mezzanine

Callodine Commercial Finance LLC, 2L Term Loan B

Home Partners JV 2, Structured Mezzanine

Jet Edge International LLC, Term Loan

Luxembourg Life FundAbsolute Return Fund III, Term Loan

Toorak Capital Partners LLC, Structured Mezzanine

Unfunded Asset Based Finance/Other commitments

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

As of June 30, 2021, the Companys debt commitments are comprised of $176.4 revolving credit facilities and $774.9 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 $(16.3).

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 June 30, 2021, the Company also has an unfunded commitment to provide $350.2 of capital to COPJV.

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 COPJVs 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.

FS KKR Capital Corp.

Notes to Unaudited Consolidated Financial Statements (continued)

(in millions, except share and per share amounts)

Commitments and

Contingencies (continued)

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 June 30, 2021 and December 31, 2020.

Financial Highlights

The following is a schedule of financial highlights of the Company for the six months ended June 30, 2021 and the year ended

December 31, 2020:

Six Months Ended

June 30, 2021

December 31, 2020

Per Share Data:

Net asset value, beginning of period

Results of operations (2)

Net investment income (loss)

Net realized and unrealized appreciation (depreciation) on investments and secured borrowing and gain/loss on foreign

Net increase (decrease) in net assets resulting from operations

Stockholder distributions (3)

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.

September 30, 2020, the Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 3.65%.

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

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