FS KKR Capital Corp. Files 2023 Annual Report (10-K)

TL;DR

<b>FS KKR Capital Corp. has filed its 2023 annual report detailing its financial performance and associated risks.</b>

AI Summary

FS KKR Capital Corp (FSK) filed a Annual Report (10-K) with the SEC on February 26, 2024. FS KKR Capital Corp. filed its 10-K report for the fiscal year ending December 31, 2023. The company is incorporated in Maryland (MD). Its business and mailing address is 201 Rouse Boulevard, Philadelphia, PA 19112. The filing includes numerous risk factors related to market conditions, regulatory changes, and operational challenges. The report covers the period from January 1, 2023, to December 31, 2023.

Why It Matters

For investors and stakeholders tracking FS KKR Capital Corp, this filing contains several important signals. The 10-K filing provides a comprehensive overview of the company's financial health, investment strategies, and potential risks for the fiscal year 2023, crucial for investors assessing its stability and future prospects. Detailed risk factors highlight potential challenges such as market fluctuations, regulatory impacts, and operational issues, which are essential for understanding the company's risk profile and investment considerations.

Risk Assessment

Risk Level: medium — FS KKR Capital Corp shows moderate risk based on this filing. The company faces medium risk due to numerous identified risk factors, including market volatility, regulatory changes, and operational challenges, as detailed in the extensive list of risk factors within the filing.

Analyst Insight

Investors should carefully review the detailed risk factors and financial statements in the 10-K to assess the company's performance and potential future challenges.

Key Numbers

• 20231231 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 20240226 — Filing Date (FILED AS OF DATE)
• 2023-01-01 — Reporting Period Start (2023-01-01)
• 2023-12-31 — Reporting Period End (2023-12-31)

Key Players & Entities

• FS KKR Capital Corp (company) — FILER
• 201 Rouse Boulevard (address) — BUSINESS ADDRESS
• Philadelphia (location) — BUSINESS ADDRESS CITY
• PA (location) — BUSINESS ADDRESS STATE
• 19112 (postal_code) — BUSINESS ADDRESS ZIP
• MD (location) — STATE OF INCORPORATION
• 20080618 (date) — DATE OF NAME CHANGE
• 20071227 (date) — DATE OF NAME CHANGE

FAQ

Risk Factors

• HighlyCompetitiveMarketMember [medium — market]: The company operates in a highly competitive market.
• ChangeInLawsRegulationsOrOperationsOfBusinessPartnersMember [medium — regulatory]: Changes in laws, regulations, or the operations of business partners can impact the company.
• InabilityToAcquireFundingMember [medium — financial]: The company may face challenges in acquiring necessary funding.
• ThirdPartyDataSecurityMember [medium — operational]: Risks associated with third-party data security.
• ChangeInInterestRatesMember [medium — financial]: Fluctuations in interest rates can affect the company's financial performance.

Industry Context

FS KKR Capital Corp operates as a business development company (BDC), investing primarily in the debt of middle-market companies. The filing outlines its strategies and risks within this sector.

Regulatory Implications

As a BDC, the company is subject to specific regulations under the Investment Company Act of 1940, which impacts its investment activities and capital structure.

What Investors Should Do

1. Review the detailed risk factors section to understand potential headwinds for the company.
2. Analyze the company's investment portfolio and performance metrics for the fiscal year 2023.
3. Compare the company's financial health and risk profile against industry peers.

Year-Over-Year Comparison

This is the initial filing analyzed, so no comparison to a previous filing is available.

Key Financial Figures

• $0.001 — ) of the Act: Common Stock, par value $0.001 per share FSK The New York Stock Exchan
• $15.5 billion — 3, we had total assets of approximately $15.5 billion. We are managed by FS/KKR Advisor, LLC
• $50 million — ciation and amortization, or EBITDA, of $50 million to $150 million at the time of investme
• $150 million — rtization, or EBITDA, of $50 million to $150 million at the time of investment; investing p
• $79 billion — apital solutions. The firm manages over $79 billion in assets for a wide range of clients,
• $219 billion — the Advisers Act. It had approximately $219 billion of assets under management as of Decemb
• $553 billion — obal investment firm with approximately $553 billion in assets under management as of Decemb
• $1 billion — mmit to and hold positions in excess of $1 billion in a given transaction. This size allow
• $100 million — middle market companies with more than $100 million in EBITDA. We believe our ability to un

Filing Documents

• fsk-20231231.htm (10-K) — 12027KB
• descriptionofsecurities.htm (EX-4.27) — 45KB
• exhibit211.htm (EX-21.1) — 11KB
• deloitteconsent.htm (EX-23.1) — 2KB
• a34actcertification-ceo.htm (EX-31.1) — 8KB
• a34actcertification-cfo.htm (EX-31.2) — 8KB
• soxcertification-ceo.htm (EX-32.1) — 4KB
• soxcertification-cfo.htm (EX-32.2) — 4KB
• clawbackpolicy.htm (EX-97.1) — 39KB
• copjvfinancials.htm (EX-99.1) — 1784KB
• fsk-20231231_g1.jpg (GRAPHIC) — 9KB
• fsk-20231231_g2.jpg (GRAPHIC) — 86KB
• imagea.jpg (GRAPHIC) — 9KB
• 0001628280-24-006912.txt (&nbsp;) — 36366KB
• fsk-20231231.xsd (EX-101.SCH) — 103KB
• fsk-20231231_cal.xml (EX-101.CAL) — 117KB
• fsk-20231231_def.xml (EX-101.DEF) — 556KB
• fsk-20231231_lab.xml (EX-101.LAB) — 1042KB
• fsk-20231231_pre.xml (EX-101.PRE) — 729KB
• fsk-20231231_htm.xml (XML) — 10195KB

RISK FACTORS 17

ITEM 1A. RISK FACTORS 17

UNRESOLVED STAFF COMMENTS

ITEM 1B. UNRESOLVED STAFF COMMENTS 44

CYBERSECURITY

ITEM 1C. CYBERSECURITY 45

PROPERTIES

ITEM 2. PROPERTIES 45

LEGAL PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS 46

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 46 PART II

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 47

RESERVED

ITEM 6. RESERVED 49

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 49

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 63

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 66

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 155

CONTROLS AND PROCEDURES

ITEM 9A. CONTROLS AND PROCEDURES 155

OTHER INFORMATION

ITEM 9B. OTHER INFORMATION 156 PART III

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 157

EXECUTIVE COMPENSATION

ITEM 11. EXECUTIVE COMPENSATION 157

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 157

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 157

PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 157 PART IV

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 158

SIGNATURES

SIGNATURES 165 Table of Contents PART I Many of the amounts and percentages presented in Part I have been rounded for convenience of presentation.

Business

Item 1. Business. Summary FS KKR Capital Corp. (NYSE: FSK), or the Company, which may also be referred to as "we," "us" or "our," 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. We are 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. As such, we are required to comply with certain regulatory requirements. In addition, we have elected to be treated for U.S. federal income tax purposes, and intend to qualify annually, as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As of December 31, 2023, we had total assets of approximately $15.5 billion. We are managed by FS/KKR Advisor, LLC, or the Adviser, a registered investment adviser under the Investment Advisers Act of 1940, as amended, or the Advisers Act, which oversees the management of our operations and is responsible for making investment decisions with respect to our portfolio. Our investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. We seek to meet our investment objectives by: utilizing the experience and expertise of the management team of the Adviser; employing a defensive investment approach focused on long-term credit performance and principal protection; focusing primarily on debt investments in a broad array of private U.S. companies, including middle-market companies, which we define as companies with annual earnings before interest, taxes, depreciation and amortization, or EBITDA, of $50 million to $150 million at the time of investment; investing primarily in established, stable enterprises with positive cash flows; and maintaining rigorous portfolio monitoring in an attempt to a

View Full Filing

View this 10-K filing on SEC EDGAR