FS KKR Capital Corp. Announces June 30, 2021 Financial Results and Declares Third Quarter 2021 Dividend of $0.65 Per Share

FS KKR Capital Corp. reported net investment income of $116 million, or $0.77 per share for the second quarter ended June 30, 2021. The Company’s net asset value (“NAV”) was $26.84 per share as of June 30, 2021, compared to $26.03 per share as of March 31, 2021. On June 16, 2021, FSK completed its previously announced merger (the “Merger”) with FS KKR Capital Corp. II (“FSKR”). Pursuant to the Merger, FSKR merged with and into FSK, with FSK continuing as the surviving company.

Financial and Operating Highlights for the Quarter Ended June 30, 2021⁽¹⁾

• Net investment income of $0.77 per share, compared to $0.63 per share for the quarter ended March 31, 2021
• Adjusted net investment income⁽²⁾ of $0.74 per share, compared to $0.63 per share for the quarter ended March 31, 2021
• Net asset value of $26.84 per share, compared to $26.03 per share as of March 31, 2021, an increase of 3.1%
• Total net realized and unrealized gain of $4.98 per share, compared to a total net realized and unrealized gain of $0.98 per share for the quarter ended March 31, 2021
• Excluding the impact of the Merger, total net realized and unrealized gain of $0.87 per share
• Total purchases of $8.6 billion versus $1.0 billion of sales and repayments, including $58 million of sales to its joint venture Credit Opportunities Partners JV, LLC
• Excluding the impact of the Merger, total FSK purchases of $1.3 billion
• Excluding the impact of the Merger, total pro forma combined purchases of $2.3 billion and total net purchases of $557 million
• Net debt to equity ratio⁽³⁾ as of the end of the quarter was 90%, down from 100% as of March 31, 2021
• Weighted average shares outstanding throughout the quarter of 150 million and shares outstanding as of June 30, 2021 of 285 million
• Paid cash distributions to stockholders totaling $0.60 per share⁽⁴⁾

“The second quarter was an extremely active quarter for FSK,” commented Michael C. Forman, CEO and Chairman. “From a strategic perspective, we consummated our merger with FS KKR Capital Corp. II, creating a premier BDC franchise with approximately $15.7 billion in assets. From an operational perspective, we reported strong financial results, including Adjusted Net Investment Income of $0.74 per share and a 3.1% increase in our net asset value per share. In addition, we originated $2.3 billion in new portfolio company investments across our combined company, and we issued

$400 million of unsecured notes. Based on this positive activity, and pursuant to our policy of distributing excess earnings to shareholders, we are pleased to announce a $0.65 per share dividend for the third quarter of 2021.”

Declaration of Distribution for Third Quarter 2021

FSK’s board of directors has declared a cash distribution for the third quarter 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.

Portfolio Highlights as of June 30, 2021

• Total fair value of investments was $14.7 billion of which 70% was invested in senior secured securities.
• Weighted average annual yield on accruing debt investments⁽⁵⁾ was 9.9%, compared to 8.6% as of March 31, 2021. Excluding the impact of the Merger, weighted average annual yield on accruing debt investments was 8.5%.
• Weighted average annual yield on all debt investments⁽⁵⁾ was 9.2%, compared to 7.7% as of March 31, 2021. Excluding the impact of the Merger, weighted average annual yield on all debt investments was 7.7%.
• Exposure to the top ten largest portfolio companies by fair value was 20% as of June 30, 2021, compared to 23% as of March 31, 2021.
• As of June 30, 2021, investments on non-accrual status represented 3.0% and 4.4% of the total investment portfolio at fair value and amortized cost, respectively, compared to 3.6% and 6.8% as of March 31, 2021.

Leverage and Liquidity as of June 30, 2021

• Net debt to equity ratio⁽³⁾ of 90%, based on $7.7 billion in total debt outstanding, $499 million of cash and foreign currency and $325 million of net receivable for investments sold and repaid and stockholders’ equity of $7.7 billion. FSK’s weighted average effective interest rate (including the effect of non-usage fees) was 3.38%.
• Cash and foreign currency of $499 million and availability under its financing arrangements of $2,727 million, subject to borrowing base and other limitations.
• As of June 30, 2021, 48% of the Company’s approximately $7,740 million of total debt outstanding was in unsecured debt and 52% in secured debt.

Conference Call Information

FSK will host a conference call at 9:00 a.m. (Eastern Time) on Tuesday, August 10, 2021, to discuss its second quarter 2021 financial and operating results. All interested parties are welcome to participate. Interested parties can access the conference call by dialing (833) 818-6808 and using the conference ID 5069344 approximately 10 minutes prior to the call. The conference call also will be webcast, which can be accessed from the Investor Relations section of FSK’s website at www.fskkradvisor.com under Events.

A replay of the call will be available shortly after the end of the call for a period of 30 days following the call by visiting the Investor Relations section of FSK’s website at www.fskkradvisor.com under Events or by dialing (855) 859-2056 and using conference ID 5069344.

Supplemental Information

An investor presentation containing financial and operating information will be made available prior to the call in the Investor Relations section of FSK’s website at www.fskkradvisor.com under Earnings presentations.

About FS KKR Capital Corp.

FSK is a leading publicly traded business development company (BDC) focused on providing customized credit solutions to private middle market U.S. companies. FSK seeks to invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies. FSK is advised by FS/KKR Advisor, LLC. For more information, please visit www.fskkradvisor.com.

About FS/KKR Advisor, LLC

FS/KKR Advisor, LLC (FS/KKR) is a partnership between FS Investments and KKR Credit that serves as the investment adviser to FSK.

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

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