FS KKR Capital Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net investment income was $0.46 per share for the quarter ended September 30, 2026, compared to $0.44 per share for the quarter ended June 30, 2026.
• Adjusted net investment income was $0.46 per share, compared to $0.43 per share for the quarter ended June 30, 2026.
• Earnings per share were $0.26, compared to a loss of $0.13 per share for the quarter ended June 30, 2026.
• Net asset value was $18.28 per share as of September 30, 2026, compared to $18.30 per share as of June 30, 2026.
• Total net realized and unrealized loss was $0.19 per share, compared to a loss of $0.56 per share for the quarter ended June 30, 2026.
• Adjusted net realized and unrealized loss was $0.18 per share, compared to a loss of $0.55 per share for the quarter ended June 30, 2026.
• Total investment income was $294 million for the three months ended September 30, 2026, down from $373 million for the same period in 2025.
• Net investment income was $127 million for the three months ended September 30, 2026, down from $159 million for the same period in 2025.
• Total net realized and unrealized loss was $54 million for the three months ended September 30, 2026, compared to a gain of $55 million for the same period in 2025.
• Net increase in net assets resulting from operations applicable to common stockholders was $71 million for the three months ended September 30, 2026, compared to $214 million for the same period in 2025.
• Total debt outstanding was $6.3 billion as of September 30, 2026, compared to $7.6 billion as of December 31, 2025.
• Common stockholders' equity was $5.0 billion as of September 30, 2026, compared to $5.8 billion as of December 31, 2025.
• Debt to equity ratio was 127% as of September 30, 2026, unchanged from June 30, 2026.
• Net debt to equity ratio was 125% as of September 30, 2026, up from 122% as of June 30, 2026.
• Weighted average stated interest rate on borrowings was 5.57% as of September 30, 2026.
• Cash, cash equivalents, and foreign currency totaled $111 million as of September 30, 2026.
• Availability under financing arrangements was $3.2 billion as of September 30, 2026.

Guidance and Future Outlook:

• Management expects the portfolio to move toward more first lien exposure as the investment team focuses on portfolio rotation.
• The board declared a fourth quarter 2026 distribution of $0.44 per share and a special distribution of $0.20 per share to common stockholders.
• The special distribution represents a portion of estimated accumulated spillback income intended to maintain regulated investment company status.

Business Segments and Product Lines:

• Total fair value of investments was $11.3 billion as of September 30, 2026, with 63.2% invested in senior secured securities.
• Weighted average annual yield on accruing debt investments was 10.0%, compared to 9.8% as of June 30, 2026.
• Weighted average annual yield on all debt investments was 9.0%, compared to 8.8% as of June 30, 2026.
• Senior secured loans—First Lien comprised 58.9% of the portfolio as of September 30, 2026, compared to 58.7% as of June 30, 2026.
• Asset Based Finance comprised 11.6% of the portfolio as of September 30, 2026, compared to 12.6% as of June 30, 2026.
• Equity/Other investments comprised 9.9% of the portfolio as of September 30, 2026, compared to 9.1% as of June 30, 2026.
• 60.1% of debt investments were variable rate as of September 30, 2026, compared to 59.4% as of June 30, 2026.
• Investments on non-accrual status represented 3.4% of the total investment portfolio at fair value as of September 30, 2026, compared to 3.8% as of June 30, 2026.
• Total purchases were $335 million versus $442 million of sales and repayments during the quarter.
• The company received full and partial repayments of portfolio investments totaling $442 million.

Market and Competitive Landscape:

• Exposure to the top ten largest portfolio companies by fair value was 21%, unchanged from June 30, 2026.
• 73% of total debt outstanding was unsecured and 27% was secured as of September 30, 2026.

Risks and Challenges:

• Forward-looking statements are subject to risks including changes in the economy, geo-political risks, terrorism, natural disasters, pandemics, and changes in laws or regulations.
• Actual results may differ materially from forward-looking statements due to uncertainties in predicting future results and conditions.
• There is no assurance that share repurchase plans will enhance stockholder value over the long term or that shares will be purchased at specific discount levels.

Management Commentary and Tone:

• Michael C. Forman, CEO and Chairman, stated the company continued making progress toward previously stated strategic goals.
• Management noted the investment team is focusing on portfolio rotation to increase first lien exposure.
• The tone indicates confidence in strategic execution despite a reduction in net assets resulting from operations compared to the prior year.

Other Key Points:

• The board declared a fourth quarter 2026 distribution of $0.44 per share to be paid on or about December 24, 2026.
• A special distribution of $0.20 per share was declared to be paid on or about December 15, 2026.
• A cash dividend on convertible preferred stock of $0.3125 per share was declared for the period September 30, 2026, to December 31, 2026, payable on or about December 31, 2026.
• During the third quarter, the company repurchased approximately six million shares of common stock at a weighted average price of $11.24 per share, totaling approximately $69 million.
• Subsequent to the quarter (October 1–30, 2026), the company repurchased 1,546,162 shares at an average price of $10.88 per share, totaling $17 million.
• From the commencement of the repurchase plan on June 29, 2026, through October 30, 2026, the company repurchased a total of 8,079,834 shares (6,533,672 in Q3 + 1,546,162 in Oct) at a weighted average price of $11.14 per share.
• The company paid a third quarter 2026 distribution of $0.44 per share to common stockholders.