Financial and Operating Highlights for the Quarter Ended
- Net investment income of
$0.44 per share, compared to$0.42 per share for the quarter ended March 31, 2026- Adjusted net investment income(2) of
$0.43 per share, compared to$0.41 per share for the quarter endedMarch 31, 2026
- Adjusted net investment income(2) of
- Net asset value of
$18.30 per share as ofJune 30, 2026 , compared to$18.83 per share as ofMarch 31, 2026 - Total net realized and unrealized loss of
$0.56 per share, compared to a total net realized and unrealized loss of$2.00 per share for the quarter ended March 31, 2026- Adjusted net realized and unrealized loss(2) of
$0.55 per share, compared to adjusted net realized and unrealized loss of$1.99 per share for the quarter endedMarch 31, 2026
- Adjusted net realized and unrealized loss(2) of
- Earnings (Loss) per share of (
$0.13 ), compared to Earnings (Loss) per share of ($1.57 ) for the quarter endedMarch 31, 2026 - Total purchases of
$590 million versus$1,334 million of sales and repayments, including$9 million of net sales to the Company's joint venture,Credit Opportunities Partners JV, LLC - Debt to equity ratio as of
June 30, 2026 was 127%, compared to 138% as of March 31, 2026- Net debt to equity ratio(3) as of
June 30, 2026 was 122%, compared to 131% as ofMarch 31, 2026
- Net debt to equity ratio(3) as of
- Paid distributions to common stockholders totaling
$0.42 per share(4)
"During the second quarter, FSK generated Net Investment Income of
"The strategic actions we announced in May are progressing as planned and reflect the
Subsequent Events
During the period from
Declaration of Common Stock Distribution for Third Quarter 2026
On
Declaration of Convertible Preferred Stock Dividend for Third Quarter 2026
On
Portfolio Highlights as of
- Total fair value of investments was
$11.4 billion of which 63.0% was invested in senior secured securities. - Weighted average annual yield on accruing debt investments(5) was 9.8%, compared to 9.9% as of
March 31, 2026 . - Weighted average annual yield on all debt investments(5) was 8.8%, compared to 8.7% as of
March 31, 2026 . - Exposure to the top ten largest portfolio companies by fair value was 21%, compared to 20% as of
March 31, 2026 . - As of
June 30, 2026 , investments on non-accrual status represented 3.8% and 7.1% of the total investment portfolio at fair value and amortized cost, respectively, compared to 4.2% and 8.1% as ofMarch 31, 2026 .
Portfolio Data | As of | As of |
Total fair value of investments (in millions) | ||
Asset Class (based on fair value) | ||
Senior Secured Loans — First Lien | 58.7 % | 59.6 % |
Senior Secured Loans — Second Lien | 3.9 % | 3.8 % |
Other Senior Secured Debt | 0.4 % | 0.3 % |
Subordinated Debt | 0.9 % | 0.8 % |
Asset Based Finance | 12.6 % | 13.5 % |
| 14.4 % | 13.9 % |
Equity/Other | 9.1 % | 8.1 % |
Interest Rate Type (based on fair value) | ||
% Variable Rate Debt Investments | 59.4 % | 61.2 % |
% Fixed Rate Debt Investments | 9.1 % | 7.9 % |
% Other Income Producing Investments | 21.1 % | 20.3 % |
% Non-Income Producing Investments(6) | 6.6 % | 6.4 % |
% of Investments on Non-Accrual(7) | 3.8 % | 4.2 % |
Leverage and Liquidity as of
- Debt to equity ratio of 127%, based on
$6.5 billion in total debt outstanding and common stockholders' equity of$5.1 billion . Net debt to equity ratio(3) of 122%, based on$6.6 billion in total debt outstanding, including convertible preferred stock, net of$109 million of cash, cash equivalents, restricted cash(8) and foreign currency and$309 million of net receivable for investments sold and repaid and common stockholders' equity of$5.1 billion . FSK's weighted average effective interest rate (including the effect of non-usage fees) was 5.49%. - Cash, cash equivalents, restricted cash and foreign currency of
$109 million and availability under the Company's financing arrangements of$3.1 billion , subject to borrowing base and other limitations. - As of
June 30, 2026 , 72% of the Company's$6.5 billion of total debt outstanding was in unsecured debt and 28% was in secured debt.
Conference Call Information
FSK will host its second quarter 2026 results conference call via live webcast on
Research analysts who wish to participate in the conference call are requested to register a day in advance or at a minimum 15 minutes before the start of the call using the following URL: https://register-conf.media-server.com/register/BI2b07b127c5834f0ba23088267e658e7e. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN number that can be used to access the call.
An investor presentation of financial information will be available by visiting the
A replay of the call will be available beginning shortly after the end of the call by visiting the
About
FSK is a leading publicly traded business development company (BDC) focused on providing customized credit solutions to private middle market
About FS/KKR Advisor, LLC
FS/KKR Advisor, LLC (FS/KKR) is a partnership between Future Standard and KKR Credit that serves as the investment adviser to FSK and other business development companies.
Future Standard is a global alternative asset manager serving institutional and private wealth clients, investing across private equity, credit and real estate. With a 30+ year track record of value creation and over $94 billion in assets under management, we back the business owners and financial sponsors that drive growth and innovation across the middle market, transforming untapped potential into durable value(9).
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group's website at www.globalatlantic.com.
Forward-Looking Statements and Important Disclosure Notice
This communication and our quarterly earnings call contain certain forward-looking statements that are not historical facts, including, without limitation, statements with regard to future events or our future performance or financial condition, and statements regarding share repurchase activity, distribution levels and frequency, expectations for net investment income levels in future quarters, and the financial position, business strategy and plans and objectives of management for FSK's future operations. Words such as "anticipate," "believe," "expect," "intend," "project," and "future" or similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. These forward-looking statements are not guarantees of performance or events and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause our actual results or future events to differ materially from those expressed or forecasted in the forward-looking statements for any reason, including those factors set forth in "Item 1A. Risk Factors" in our Annual Report on Form 10-K and subsequent filings. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results or events to differ materially from those projected in these forward-looking statements. Factors that could cause actual results or events to differ materially include, without limitation, changes in the economy, geo-political risks, risks associated with possible disruption in FSK's operations or the economy generally due to terrorism, natural disasters or pandemics, future changes in laws or regulations and conditions in FSK's operating area and the price at which shares of FSK's common stock trade on the New York Stock Exchange. Some of these factors are enumerated in the filings FSK makes with the SEC. In addition, the FSK board-authorized share repurchase program does not require FSK to repurchase any specific number of shares of FSK's common stock. There is no assurance that FSK or any of its affiliates will purchase shares of its common stock at any specific discount levels or in any specific amounts or that the market price of FSK's common stock, either absolutely or relative to net asset value, will increase as a result of any share repurchases, or that any repurchase plan will enhance stockholder value over the long term. The forward-looking statements included in this communication and on our quarterly earnings call are based on information available as of the date hereof and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Except as required by the federal securities laws, FSK undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on these forward-looking statements.
The press release above contains summaries of certain financial and statistical information about FSK. The information contained in this press release is summary information that is intended to be considered in the context of FSK's SEC filings and other public announcements that FSK may make, by press release or otherwise, from time to time. FSK undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSK, or information about the market, as indicative of FSK's future results.
Other Information
The information in this press release is summary information only and should be read in conjunction with FSK's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, which FSK filed with the SEC on August 6, 2026, as well as FSK's other reports filed with the SEC. Copies of FSK's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and FSK's other reports filed with the SEC can be found on FSK's website at www.fskkrcapitalcorp.com and the SEC's website at www.sec.gov.
Certain Information About Distributions
The determination of the tax attributes of FSK's distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. FSK intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSK's shares of common stock are subject to applicable legal restrictions and the sole discretion of its board of directors. There can be no assurance as to the amount or timing of any such future distributions.
FSK may fund its distributions to stockholders from any sources of funds legally available to it, including net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies, proceeds from the sale of shares of FSK's common stock and borrowings. FSK has not established limits on the amount of funds it may use from available sources to make distributions. In addition, portions of our distributions may be funded indirectly through the waiver of certain investment advisory fees by our investment adviser. Any distributions funded through waivers of investment advisory fees will not be based on our investment performance and can only be sustained if we achieve positive investment performance in future periods and/or our investment adviser and its affiliates continue to make such reimbursements or waivers of such fees. There can be no assurance that FSK will be able to pay distributions at a specific rate or at all.
Unaudited Consolidated Statements of Operations (dollar amounts in millions, except per share amounts, unless otherwise noted)
| ||||||||
Three Months Ended | Six Months Ended | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Investment income | ||||||||
From non-controlled/unaffiliated investments: | ||||||||
Interest income | $ 166 | $ 224 | $ 343 | $ 441 | ||||
Paid-in-kind interest income | 8 | 15 | 14 | 31 | ||||
Fee income | 4 | 9 | 6 | 23 | ||||
Dividend and other income | 2 | 12 | 11 | 24 | ||||
From non-controlled/affiliated investments: | ||||||||
Interest income | 2 | 8 | 3 | 16 | ||||
Paid-in-kind interest income | 13 | 18 | 25 | 36 | ||||
Fee income | — | — | — | 3 | ||||
Dividend and other income | — | 6 | 2 | 15 | ||||
From controlled/affiliated investments: | ||||||||
Interest income | 7 | 13 | 15 | 28 | ||||
Paid-in-kind interest income | 21 | 20 | 41 | 48 | ||||
Fee income | 1 | — | 1 | — | ||||
Dividend and other income | 66 | 73 | 133 | 133 | ||||
Total investment income | 290 | 398 | 594 | 798 | ||||
Operating expenses | ||||||||
Management fees | 44 | 53 | 92 | 105 | ||||
Subordinated income incentive fees | 23 | 36 | 48 | 75 | ||||
Administrative services expenses | 3 | 2 | 5 | 5 | ||||
Accounting and administrative fees | 1 | 1 | 2 | 2 | ||||
Interest expense | 101 | 125 | 206 | 238 | ||||
Other general and administrative expenses | 7 | 8 | 13 | 13 | ||||
Total operating expenses | 179 | 225 | 366 | 438 | ||||
Subordinated income incentive fee waiver | (11) | — | (11) | — | ||||
Net expenses | 168 | 225 | 355 | 438 | ||||
Net investment income | 122 | 173 | 239 | 360 | ||||
Realized and unrealized gain/loss | ||||||||
Net realized gain (loss) on investments: | ||||||||
Non-controlled/unaffiliated investments | (5) | (66) | (46) | (106) | ||||
Non-controlled/affiliated investments | (72) | (1) | (170) | 8 | ||||
Controlled/affiliated investments | — | (68) | (56) | (55) | ||||
Net realized gain (loss) on foreign currency forward contracts | — | (3) | (4) | (3) | ||||
Net realized gain (loss) on foreign currency | (4) | (6) | (9) | (5) | ||||
Net change in unrealized appreciation (depreciation) on investments: | ||||||||
Non-controlled/unaffiliated investments | (47) | 58 | (286) | 116 | ||||
Non-controlled/affiliated investments | 85 | (62) | 95 | (82) | ||||
Controlled/affiliated investments | (116) | (151) | (264) | (203) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts | (1) | (10) | 8 | (20) | ||||
Net change in unrealized gain (loss) on foreign currency | 6 | (59) | 20 | (85) | ||||
Total net realized and unrealized gain (loss) | (154) | (368) | (712) | (435) | ||||
Provision for taxes on investments | — | (11) | — | (11) | ||||
Realized loss on extinguishment of debt | (2) | (3) | (2) | (3) | ||||
Net increase (decrease) in net assets resulting from operations | $ (34) | $ (209) | $ (475) | $ (89) | ||||
Net increase (decrease) in net assets resulting from operations (Earnings | $ (0.13) | $ (0.75) | $ (1.70) | $ (0.32) | ||||
Weighted average shares of common stock outstanding—basic | 280,060,267 | 280,066,433 | 280,063,316 | 280,066,433 | ||||
Net increase (decrease) in net assets resulting from operations (Earnings | $ (0.13) | $ (0.75) | $ (1.70) | $ (0.32) | ||||
Weighted average shares of common stock outstanding—diluted | 280,235,393 | 280,066,433 | 280,151,363 | 280,066,433 | ||||
Consolidated Balance Sheets (dollar amounts in millions, except per share amounts, unless otherwise noted)
| ||||
(Unaudited) | ||||
Assets | ||||
Investments, at fair value | ||||
Non-controlled/unaffiliated investments (amortized cost—$7,393 and | $ 6,864 | $ 8,164 | ||
Non-controlled/affiliated investments (amortized cost—$743 and | 765 | 855 | ||
Controlled/affiliated investments (amortized cost—$4,469 and | 3,789 | 3,990 | ||
Total investments, at fair value (amortized cost—$12,605 and | 11,418 | 13,009 | ||
Cash and cash equivalents | 107 | 181 | ||
Foreign currency, at fair value (cost—$2 and | 2 | 27 | ||
Receivable for investments sold and repaid | 310 | 313 | ||
Income receivable | 89 | 98 | ||
Unrealized appreciation on foreign currency forward contracts | 1 | — | ||
Deferred financing costs | 31 | 32 | ||
Prepaid expenses and other assets | 36 | 69 | ||
Total assets | $ 11,994 | $ 13,729 | ||
Liabilities | ||||
Payable for investments purchased | $ 1 | $ 8 | ||
Debt (net of deferred financing costs and discount of | 6,471 | 7,634 | ||
Unrealized depreciation on foreign currency forward contracts | 3 | 10 | ||
Stockholder distributions payable | 118 | — | ||
Management fees payable | 44 | 50 | ||
Subordinated income incentive fees payable | 12 | 28 | ||
Administrative services expense payable | 3 | 1 | ||
Interest payable | 61 | 77 | ||
Other accrued expenses and liabilities | 13 | 72 | ||
Total liabilities | 6,726 | 7,880 | ||
Commitments and contingencies | ||||
Preferred stock, | 150 | — | ||
Stockholders' equity | ||||
Common stock, | 0 | 0 | ||
Capital in excess of par value | 9,195 | 9,199 | ||
Retained earnings (accumulated deficit) | (4,077) | (3,350) | ||
Total stockholders' equity | 5,118 | 5,849 | ||
Total liabilities, preferred stock and stockholders' equity | $ 11,994 | $ 13,729 | ||
Net asset value per share of common stock at period end | $ 18.30 | $ 20.89 | ||
Non-GAAP Financial Measures
This press release contains certain financial measures that have not been prepared in accordance with generally accepted accounting principles in
Reconciliation of Non-GAAP Financial Measures(1)
Three Months Ended | |||
GAAP net investment income per share | |||
Accrual for the capital gains incentive fee | — | — | |
Excise tax (net of incentive fee impact) | — | — | |
Accretion resulting from merger accounting | ( | ( | |
Non-recurring expenses | — | — | |
Adjusted net investment income per share(2) | |||
Three Months Ended | |||
GAAP Net realized and unrealized gain (loss) per share | ( | ( | |
Unrealized appreciation from merger accounting | |||
Adjusted net realized and unrealized gain (loss)(2) | ( | ( | |
(in millions) | |||
Debt outstanding (principal) | |||
Convertible preferred stock | — | ||
Cash, cash equivalents, restricted cash and foreign currency | ( | ( | |
Net receivable investments sold and repaid | ( | ( | |
Net debt outstanding(3) | |||
Debt to equity ratio | 127 % | 138 % | |
Net debt to equity ratio(3) | 122 % | 131 % |
Endnotes | |
1) | Per share data was derived by using the weighted average shares of FSK's common stock outstanding during the applicable period. Per share numbers may not sum due to rounding. |
2) | Adjusted net investment income is a non-GAAP financial measure. Adjusted net investment income is presented for all periods as GAAP net investment income excluding (i) the accrual for the capital gains incentive fee for realized and unrealized gains; (ii) excise taxes (net of incentive fee impact) (iii) the impact of accretion resulting from merger accounting; and (iv) certain non-recurring operating expenses that are one-time in nature and are not representative of ongoing operating expenses incurred during FSK's normal course of business. FSK uses this non-GAAP financial measure internally in analyzing financial results and believes that the use of this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing its financial results with other business development companies. Adjusted net realized and unrealized gain (loss) is a non-GAAP financial measure. Adjusted net realized and unrealized gain (loss) is presented for all periods as GAAP realized and unrealized gains to exclude the impact of the merger accounting. FSK uses this non-GAAP financial measure internally in analyzing financial results and believes that the use of this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing its financial results with other business development companies. The presentation of this additional non-GAAP financial measure information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of GAAP net investment income to adjusted net investment income and GAAP net realized and unrealized gain (loss) to adjusted net realized and unrealized gain can be found above. |
3) | Net debt and the net debt-to-equity ratio are non-GAAP financial measures. Net debt to equity ratio is debt outstanding including convertible preferred stock outstanding, net of cash, cash equivalents, restricted cash and foreign currency and net payable/receivable for investments purchased/sold and repaid, divided by net assets. FSK uses these non-GAAP financial measures internally to monitor and evaluate its leverage and financial condition and believes the presentation of these measures enhances investors' ability to analyze trends in FSK's business and to evaluate FSK's leverage and ability to take on additional debt. The presentation of this additional non-GAAP financial measure information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of GAAP debt outstanding to net debt outstanding and GAAP debt-to-equity ratio to the net debt-to-equity ratio can be found above. |
4) | The per share data for distributions reflects the amount of distributions paid per share of our common stock to stockholders of record during each applicable period. |
5) | See FSK's Quarterly Report on Form 10-Q for the quarter ended |
6) | Does not include investments on non-accrual status. |
7) | Interest income is recorded on an accrual basis. See FSK's Quarterly Report on Form 10-Q for the quarter ended |
8) | Restricted cash is the cash collateral required to be posted pursuant to the Company's derivative contracts. |
9) | Total AUM estimated as of |
Contact Information:
Investor Relations Contact
Anna.Kleinhenn@futurestandard.com
Future Standard Media Team
Marc.Hazelton@futurestandard.com
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SOURCE Future Standard