FS KKR Capital Corp

Previous wording

Portfolio Investment Activity for the Three and Six Months Ended June 30, 2024 and for the Year Ended December 31, 2023

Current wording

Portfolio Investment Activity for the Three and Nine Months Ended September 30, 2024 and for the Year Ended December 31, 2023

Previous wording

The following tables present certain selected information regarding our portfolio investment activity for the three and six months ended June 30, 2024 and the year ended December 31, 2023:

Current wording

The following tables present certain selected information regarding our portfolio investment activity for the three and nine months ended September 30, 2024 and the year ended December 31, 2023:

Previous wording

For the six months ended June 30, 2024, our total return based on net asset value was 4.05% and our total return based on market value was 6.47%. For the year ended December 31, 2023, our total return based on net asset value was 10.12% and our total return based on market value was 32.45%. See footnotes 5 and 6 to the table included in Note 11 to our unaudited consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on market value, respectively.

Current wording

For the nine months ended September 30, 2024, our total return based on net asset value was 6.38% and our total return based on market value was 10.19%. For the year ended December 31, 2023, our total return based on net asset value was 10.12% and our total return based on market value was 32.45%. See footnotes 5 and 6 to the table included in Note 11 to our unaudited consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on market value, respectively.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and June 30, 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and September 30, 2023

Previous wording

Our investment income for the three and six months ended June 30, 2024 and 2023 was as follows:

Current wording

Our investment income for the three and nine months ended September 30, 2024 and 2023 was as follows:

Previous wording

(1)Such revenues represent $383 and $392 of cash income earned as well as $56 and $70 in non-cash portions relating to accretion of discount and PIK interest for the three months ended June 30, 2024 and 2023, respectively, and represent $771 and $791 of cash income earned as well as $102 and $127 in non-cash portions relating to accretion of discount and PIK interest for the six months ended June 30, 2024 and 2023, respectively. Cash flows related to such non-cash revenues may not occur for a number of reporting periods or years after such revenues are recognized.

Current wording

(1)Such revenues represent $365 and $395 of cash income earned as well as $76 and $70 in non-cash portions relating to accretion of discount and PIK interest for the three months ended September 30, 2024 and 2023, respectively, and represent $1,136 and $1,186 of cash income earned as well as $178 and $197 in non-cash portions relating to accretion of discount and PIK interest for the nine months ended September 30, 2024 and 2023, respectively. Cash flows related to such non-cash revenues may not occur for a number of reporting periods or years after such revenues are recognized.

Previous wording

The decrease in interest and PIK income during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 is primarily attributable to the repayment of higher yielding positions and lost interest income on certain assets that were placed on non-accrual status during the year ended December 31, 2023.

Current wording

The decrease in interest and PIK income during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 is primarily attributable to the repayment of higher yielding positions and lost interest income on certain assets that were placed on non-accrual status during the year ended December 31, 2023.

Previous wording

The increase in fee income for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 is primarily attributable to increased origination activity during the three and six months ended June 30, 2024.

Current wording

The increase in fee income for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 is primarily attributable to increased origination activity during the three and nine months ended September 30, 2024.

Previous wording

The decrease in dividend income during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 is primarily attributable to lower dividends on certain asset based finance investments during the three months ended June 30, 2024.

Current wording

The decrease in dividend income during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 is primarily attributable to lower dividends on certain asset based finance investments during the three and nine months ended September 30, 2024.

Previous wording

Our operating expenses for the three and six months ended June 30, 2024 and 2023 were as follows:

Current wording

Our operating expenses for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

The following table reflects selected expense ratios as a percent of average net assets for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reflects selected expense ratios as a percent of average net assets for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The decrease in expenses during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 can primarily be attributed to a decrease in subordinated income incentive fees and management fees as a result of the lower asset base and lower investment income as discussed above.

Current wording

The decrease in expenses during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 can primarily be attributed to a decrease in subordinated income incentive fees and management fees as a result of the lower asset base and lower investment income as discussed above.

Previous wording

Our net investment income totaled $215 ($0.77 per share) and $229 ($0.82 per share) for the three months ended June 30, 2024 and 2023, respectively. Our net investment income totaled $427 ($1.53 per share) and $458 ($1.63 per share) for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Our net investment income totaled $215 ($0.77 per share) and $234 ($0.84 per share) for the three months ended September 30, 2024 and 2023, respectively. Our net investment income totaled $642 ($2.29 per share) and $692 ($2.47 per share) for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

The decrease in net investment income during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 can primarily be attributed to lower investment income during the three and six months ended June 30, 2024 as discussed above.

Current wording

The decrease in net investment income during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 can primarily be attributed to lower investment income during the three and nine months ended September 30, 2024 as discussed above.

Previous wording

Our net realized gains (losses) on investments, foreign currency forward contracts and foreign currency for the three and six months ended June 30, 2024 and 2023 were as follows:

Current wording

Our net realized gains (losses) on investments, foreign currency forward contracts and foreign currency for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

(1)We sold investments and received principal repayments, respectively, of $11 and $1,325 during the three months ended June 30, 2024 and $631 and $214 during the three months ended June 30, 2023. We sold investments and received principal repayments, respectively, of $1,335 and $1,856 during the six months ended June 30, 2024 and $859 and $372 during the six months ended June 30, 2023.

Current wording

(1)We sold investments and received principal repayments, respectively, of $768 and $553 during the three months ended September 30, 2024 and $456 and $219 during the three months ended September 30, 2023. We sold investments and received principal repayments, respectively, of $2,103 and $2,409 during the nine months ended September 30, 2024 and $1,315 and $591 during the nine months ended September 30, 2023.

Previous wording

Our net change in unrealized appreciation (depreciation) on investments, foreign forward currency forward contracts and unrealized gain (loss) on foreign currency for the six months ended June 30, 2024 and 2023 were as follows:

Current wording

Our net change in unrealized appreciation (depreciation) on investments, foreign forward currency forward contracts and unrealized gain (loss) on foreign currency for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

The net change in unrealized appreciation (depreciation) during the three and six months ended June 30, 2024 was driven primarily by depreciation on several specific assets in the portfolio along with the conversion of unrealized depreciation to realized losses during the quarter. The net change in unrealized appreciation (depreciation) during the three and six months ended June 30, 2023 was driven primarily by depreciation on several specific assets in the portfolio, partially offset by appreciation on several assets in the portfolio.

Current wording

The net change in unrealized appreciation (depreciation) during the three and nine months ended September 30, 2024 was driven primarily by depreciation on several specific assets in the portfolio along with the conversion of unrealized depreciation to realized losses during the quarter. The net change in unrealized appreciation (depreciation) during the three and nine months ended September 30, 2023 was driven primarily by depreciation on several specific assets in the portfolio, partially offset by appreciation on several assets in the portfolio.

Previous wording

For the three months ended June 30, 2024, the net increase in net assets resulting from operations was $105 ($0.37 per share) compared to a net increase in net assets resulting from operations of $142 ($0.51 per share) during the three months ended June 30, 2023.

Current wording

For the three months ended September 30, 2024, the net increase in net assets resulting from operations was $160 ($0.57 per share) compared to a net increase in net assets resulting from operations of $265 ($0.95 per share) during the three months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024, the net increase in net assets resulting from operations was $278 ($0.99 per share) compared to a net increase in net assets resulting from operations of $341 ($1.22 per share) during the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, the net increase in net assets resulting from operations was $438 ($1.56 per share) compared to a net increase in net assets resulting from operations of $606 ($2.16 per share) during the nine months ended September 30, 2023.

Previous wording

As of June 30, 2024, we had $433 in cash and foreign currency, which we or our wholly-owned financing subsidiaries held in custodial accounts, and $4,072 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of June 30, 2024, we also held broadly syndicated investments and opportunistic investments that we believe could be sold to create additional liquidity. As of June 30, 2024, we had unfunded debt investments with aggregate unfunded commitments of $1,269.5, unfunded equity/other commitments of $481.4 and unfunded commitments of $735.2 of COPJV. We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise.

Current wording

As of September 30, 2024, we had $371 in cash, cash equivalents and foreign currency, which we or our wholly-owned financing subsidiaries held in custodial accounts, and $3,537 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of September 30, 2024, we also held broadly syndicated investments and opportunistic investments that we believe could be sold to create additional liquidity. As of September 30, 2024, we had unfunded debt investments with aggregate unfunded commitments of $1,600.5, unfunded equity/other commitments of $533.8 and unfunded commitments of $735.2 of COPJV. We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise.

Previous wording

We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments, as well as principal repayments and proceeds from sales of our investments. To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of the Adviser, but in no event will leverage employed exceed the maximum amount permitted by the 1940 Act. Prior to June 14, 2019, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of June 30, 2024, the aggregate amount outstanding of the senior securities issued by us was $8.0 billion. As of June 30, 2024, our asset coverage was 184%. See “—Financing Arrangements.”

Current wording

We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments, as well as principal repayments and proceeds from sales of our investments. To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of the Adviser, but in no event will leverage employed exceed the maximum amount permitted by the 1940 Act. Prior to June 14, 2019, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30, 2024, the aggregate amount outstanding of the senior securities issued by us was $8.1 billion. As of September 30, 2024, our asset coverage was 183%. See “—Financing Arrangements.”

Previous wording

(3)As of June 30, 2024, there was $155 term loan outstanding at SOFR+1.90% and $77 revolving commitment outstanding at SOFR+2.05%.

Current wording

(3)As of September 30, 2024, there was $139 term loan outstanding at SOFR+1.90% and $69 revolving commitment outstanding at SOFR+2.05%.

Previous wording

(5)Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars. Euro balance outstanding of €472 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.07 as of June 30, 2024 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD3 has been converted to U.S dollars at an exchange rate of CAD1.00 to $0.73 as of June 30, 2024 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £142 has been converted to U.S dollars at an exchange rate of £1.00 to $1.26 as of June 30, 2024 to reflect total amount outstanding in U.S. dollars.

Current wording

(5)Amount includes borrowing in Euros, Canadian dollars and pounds sterling. Euro balance outstanding of €464 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.11 as of September 30, 2024 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD3 has been converted to U.S dollars at an exchange rate of CAD1.00 to $0.74 as of September 30, 2024 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £146 has been converted to U.S dollars at an exchange rate of £1.00 to $1.34 as of September 30, 2024 to reflect total amount outstanding in U.S. dollars.

Previous wording

(6)The amount available for borrowing under the Senior Secured Revolving Credit Facility is reduced by any standby letters of credit issued under the Senior Secured Revolving Credit Facility. As of June 30, 2024, $23 of such letters of credit have been issued.

Current wording

(6)The amount available for borrowing under the Senior Secured Revolving Credit Facility is reduced by any standby letters of credit issued under the Senior Secured Revolving Credit Facility. As of September 30, 2024, $26 of such letters of credit have been issued.

Previous wording

(7)As of June 30, 2024, the fair value of the 4.625% notes, the 1.650% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes, the 2.625% notes, the 3.250% notes, the 3.125% notes, the 7.875% notes and the 6.875% notes was approximately $400, $494, $464, $469, $253, $952, $361, $453, $651, $413 and $595, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.

Current wording

(7)As of September 30, 2024, the fair value of the 1.650% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes, the 2.625% notes, the 3.250% notes, the 3.125% notes, the 7.875% notes and the 6.875% notes was approximately $499, $467, $472, $253, $975, $376, $474, $682, $430 and $625, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.

Previous wording

(8)The carrying values of the 6.875% Notes due 2029 as of June 30, 2024 includes a $1 decrease as a result of an effective hedge accounting relationship. See Note 7 for additional information.

Current wording

(8)The carrying value of the 6.875% Notes due 2029 as of September 30, 2024 includes a $18 increase as a result of an effective hedge accounting relationship. See Note 7 for additional information.

Previous wording

(9)As of June 30, 2024, there were $203.7. of Class A-1R notes outstanding at SOFR+1.85%, $20.5 of Class A-2R notes outstanding at SOFR+2.25%, $32.4 of Class B-1R notes outstanding at SOFR+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%. In addition to the spread over the benchmark rate, a credit spread adjustment of 0.26161% is applicable to Class A-1R and Class B-1R notes outstanding.

Current wording

(9)As of September 30, 2024, there were $178.4 of Class A-1R notes outstanding at SOFR+1.85%, $20.5 of Class A-2R notes outstanding at SOFR+2.25%, $32.4 of Class B-1R notes outstanding at SOFR+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%. In addition to the spread over the benchmark rate, a credit spread adjustment of 0.26161% is applicable to Class A-1R and Class B-1R notes outstanding.

Previous wording

Wehave elected to be subject to tax as a RIC under Subchapter M of the Code. In order to qualify for RIC tax treatment, we must, among other things, make distributions of an amount at least equal to 90% of our investment company taxable income, determined without regard to any deduction for distributions paid, each tax year. As long as the distributions are declared by the later of the fifteenth day of the tenth month following the close of a tax year or the due date of the tax return for such tax year, including extensions, distributions paid up to twelve months after the current tax year can be carried back to the prior tax year for determining the distributions paid in such tax year. We intend to make sufficient distributions to our stockholders to qualify for and maintain our RIC tax status each tax year. We are also subject to a 4% nondeductible federal excise tax on certain undistributed income unless we make distributions in a timely manner to our stockholders generally of an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income, which is the excess of capital gains in excess of capital losses, or“capital gain net income” (adjusted for certain ordinary losses), for the one-year period ending October 31 of that calendar year and (3) any net ordinary income and capital gain net income for the preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. Any distribution declared by us during October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following calendar year, will be treated as if it had been paid by us, as well as received by our stockholders, on December 31 of the calendar year in which the distribution was declared. We can offer no assurance that we will achieve results that will permit us to pay any cash distributions. If we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

Current wording

RIC tax status each tax year. We are also subject to a 4% nondeductible federal excise tax on certain undistributed income unless we make distributions in a timely manner to our stockholders generally of an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income, which is the excess of capital gains in excess of capital losses, or“capital gain net income” (adjusted for certain ordinary losses), for the one-year period ending October 31 of that calendar year and (3) any net ordinary income and capital gain net income for the preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. Any distribution declared by us during October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following calendar year, will be treated as if it had been paid by us, as well as received by our stockholders, on December 31 of the calendar year in which the distribution was declared. We can offer no assurance that we will achieve results that will permit us to pay any cash distributions. If we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

Previous wording

During certain periods, our distributions may exceed our earnings. As a result, it is possible that a portion of the distributions we make may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from our investment activities. Each year a statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our stockholders. No portion of the distributions paid during the six months ended June 30, 2024 or 2023 represented a return of capital.

Current wording

During certain periods, our distributions may exceed our earnings. As a result, it is possible that a portion of the distributions we make may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from our investment activities. Each year a statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our stockholders. No portion of the distributions paid during the nine months ended September 30, 2024 or 2023 represented a return of capital.

Previous wording

We intend to continue to make our regular distributions in the form of cash, out of assets legally available for distribution, except for those stockholders who receive their distributions in the form of shares of our common stock under the DRP. Any distributions reinvested under the plan will nevertheless remain taxable to a U.S. stockholder.

Current wording

We intend to make our regular distributions in the form of cash, out of assets legally available for distribution, except for those stockholders who receive their distributions in the form of shares of our common stock under the DRP. Any distributions reinvested under the plan will nevertheless remain taxable to a U.S. stockholder.

Previous wording

The following table reflects the cash distributions per share that we have declared on our common stock during the six months ended June 30, 2024 and 2023:

Current wording

The following tables reflect the distributions per share that we have declared on our common stock during the nine months ended September 30, 2024 and 2023:

Previous wording

We have entered into agreements with the Adviser to provide us with investment advisory and administrative services. Payments for investment advisory services under the investment advisory agreement are equal to (a) an annual base management fee based on the average weekly value of our gross assets (excluding cash and cash equivalents) and (b) an incentive fee based on our performance. The Adviser is reimbursed for administrative expenses incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein for a discussion of these agreements and for the amount of fees and expenses accrued under these agreements during the six months ended June 30, 2024 and 2023.

Current wording

We have entered into agreements with the Adviser to provide us with investment advisory and administrative services. Payments for investment advisory services under the investment advisory agreement are equal to (a) an annual base management fee based on the average weekly value of our gross assets (excluding cash and cash equivalents) and (b) an incentive fee based on our performance. The Adviser is reimbursed for administrative expenses incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein for a discussion of these agreements and for the amount of fees and expenses accrued under these agreements during the nine months ended September 30, 2024 and 2023.