UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2016

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 814-00757

FS Investment Corporation

(Exact name of registrant as specified in its charter)

Maryland	26-1630040
(State of Incorporation)	(I.R.S. Employer Identification Number)
201 Rouse Boulevard Philadelphia, Pennsylvania	19112
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (215) 495-1150

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 243,488,590 shares of the registrant’s common stock outstanding as of August 8, 2016.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS		1
	Consolidated Balance Sheets as of June 30, 2016 (Unaudited) and December 31, 2015		1
	Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015		2
	Unaudited Consolidated Statements of Changes in Net Assets for the six months ended June  30, 2016 and 2015		3
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015		4
	Consolidated Schedules of Investments as of June 30, 2016 (Unaudited) and December 31, 2015		5
	Notes to Unaudited Consolidated Financial Statements		25
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		56
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		80
ITEM 4.	CONTROLS AND PROCEDURES		81
PART II—OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		82
ITEM 1A.	RISK FACTORS		82
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		82
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		82
ITEM 4.	MINE SAFETY DISCLOSURES		82
ITEM 5.	OTHER INFORMATION		82
ITEM 6.	EXHIBITS		83
	SIGNATURES		88

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FS Investment Corporation

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	June 30, 2016 (Unaudited)			December 31, 2015
Assets
Investments, at fair value
Non-controlled/unaffiliated investments (amortized cost—$3,845,357 and $4,027,950, respectively)	$	3,669,909		$	3,820,283
Non-controlled/affiliated investments (amortized cost—$125,334 and $91,248, respectively)		174,729			132,357
Controlled/affiliated investments (amortized cost—$86,909 and $75,988, respectively)		89,990			76,731
Total investments, at fair value (amortized cost—$4,057,600 and $4,195,186, respectively)		3,934,628			4,029,371
Cash		43,197			80,807
Foreign currency, at fair value (cost—$977 and $1,175, respectively)		973			1,180
Receivable for investments sold and repaid		11,772			66
Interest receivable		48,945			34,600
Deferred financing costs		857			1,420
Prepaid expenses and other assets		820			729
Total assets	$	4,041,192		$	4,148,173
Liabilities
Payable for investments purchased	$	1,303		$	—
Credit facilities payable		57,854			34,625
Unsecured notes payable (net of deferred financing costs of $1,318 and $1,490, respectively)		989,642			988,274
Repurchase agreement payable(1)		650,000			800,000
Stockholder distributions payable		54,236			54,093
Management fees payable		17,574			18,415
Subordinated income incentive fees payable(2)		14,210			13,374
Administrative services expense payable		898			946
Interest payable		19,837			22,061
Directors’ fees payable		225			282
Other accrued expenses and liabilities		1,091			7,175
Total liabilities		1,806,870			1,939,245
Commitments and contingencies(3)		—			—
Stockholders’ equity
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.001 par value, 450,000,000 shares authorized, 243,488,590 and 242,847,016 shares issued and outstanding, respectively		243			243
Capital in excess of par value		2,270,010			2,264,345
Accumulated undistributed net realized gain/loss on investments and gain/loss on foreign currency(4)		(66,997	)		(45,748	)
Accumulated undistributed (distributions in excess of) net investment income(4)		146,393			147,946
Net unrealized appreciation (depreciation) on investments and unrealized gain/loss on foreign currency		(115,327	)		(157,858	)
Total stockholders’ equity		2,234,322			2,208,928
Total liabilities and stockholders’ equity	$	4,041,192		$	4,148,173
Net asset value per share of common stock at period end	$	9.18		$	9.10

(1) See Note 8 for a discussion of the Company’s repurchase transaction.

(2) See Note 2 and Note 4 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fees.

(3) See Note 9 for a discussion of the Company’s commitments and contingencies.

(4) See Note 5 for a discussion of the sources of distributions paid by the Company.

See notes to unaudited consolidated financial statements.

1

FS Investment Corporation

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Investment income
From non-controlled/unaffiliated investments:
Interest income	$	92,319		$	115,773		$	191,771		$	219,712
Fee income		15,335			25,721			16,977			30,417
Dividend income		—			5,519			—			5,519
From non-controlled/affiliated investments:
Interest income		1,112			718			2,079			718
Fee income		633			—			633			—
Dividend income		—			—			224			—
From controlled/affiliated investments:
Interest income		812			—			1,590			—
Total investment income		110,211			147,731			213,274			256,366
Operating expenses
Management fees		17,574			19,103			35,386			38,141
Capital gains incentive fees(1)		—			(8,355	)		—			(4,607	)
Subordinated income incentive fees(1)		14,210			21,271			26,695			35,176
Administrative services expenses		900			882			2,096			1,873
Accounting and administrative fees		235			285			463			561
Interest expense		18,064			19,048			36,958			36,347
Directors’ fees		274			229			503			456
Other general and administrative expenses		2,114			1,744			4,395			3,246
Total operating expenses		53,371			54,207			106,496			111,193
Net investment income		56,840			93,524			106,778			145,173
Realized and unrealized gain/loss
Net realized gain (loss) on investments:
Non-controlled/unaffiliated investments		(7,648	)		(24,174	)		(21,427	)		(20,889	)
Net realized gain (loss) on foreign currency		94			(1,007	)		178			(897	)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/unaffiliated investments		86,922			(24,301	)		32,219			(13,712	)
Non-controlled/affiliated investments		1,919			8,050			8,286			9,395
Controlled/affiliated investments		705			—			2,338			—
Net change in unrealized gain (loss) on foreign currency		1,325			(386	)		(312	)		3,062
Total net realized and unrealized gain (loss) on investments		83,317			(41,818	)		21,282			(23,041	)
Net increase (decrease) in net assets resulting from operations	$	140,157		$	51,706		$	128,060		$	122,132
Per share information—basic and diluted
Net increase (decrease) in net assets resulting from operations (Earnings per Share)	$	0.58		$	0.21		$	0.53		$	0.51
Weighted average shares outstanding		243,435,681			241,653,069			243,141,349			241,370,252

(1) See Note 2 and Note 4 for a discussion of the methodology employed by the Company in calculating the capital gains incentive fees and subordinated income incentive fees.

See notes to unaudited consolidated financial statements.

2

FS Investment Corporation

Unaudited Consolidated Statements of Changes in Net Assets

(in thousands)

	Six Months Ended June 30,
	2016			2015
Operations
Net investment income (loss)	$	106,778		$	145,173
Net realized gain (loss) on investments and foreign currency		(21,249	)		(21,786	)
Net change in unrealized appreciation (depreciation) on investments		42,843			(4,317	)
Net change in unrealized gain (loss) on foreign currency		(312	)		3,062
Net increase (decrease) in net assets resulting from operations		128,060			122,132
Stockholder distributions(1)
Distributions from net investment income		(108,331	)		(107,545	)
Distributions from net realized gain on investments		—			—
Net decrease in net assets resulting from stockholder distributions		(108,331	)		(107,545	)
Capital share transactions(2)
Reinvestment of stockholder distributions		5,665			7,970
Net increase (decrease) in net assets resulting from capital share transactions		5,665			7,970
Total increase (decrease) in net assets		25,394			22,557
Net assets at beginning of period		2,208,928			2,366,986
Net assets at end of period	$	2,234,322		$	2,389,543
Accumulated undistributed (distributions in excess of) net investment income(1)	$	146,393		$	106,286

(1) See Note 5 for a discussion of the sources of distributions paid by the Company.

(2) See Note 3 for a discussion of the Company’s capital share transactions.

See notes to unaudited consolidated financial statements.

3

FS Investment Corporation

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	128,060		$	122,132
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments		(445,419	)		(800,306	)
Paid-in-kind interest		(15,453	)		(10,818	)
Proceeds from sales and repayments of investments		582,167			984,564
Net realized (gain) loss on investments		21,427			20,889
Net change in unrealized (appreciation) depreciation on investments		(42,843	)		4,317
Accretion of discount		(5,136	)		(22,580	)
Amortization of deferred financing costs and discount		1,931			1,804
Unrealized (gain)/loss on borrowings in foreign currency		2,004			(2,817	)
(Increase) decrease in receivable for investments sold and repaid		(11,706	)		1,067
(Increase) decrease in interest receivable		(14,345	)		11,706
(Increase) decrease in prepaid expenses and other assets		(91	)		(398	)
Increase (decrease) in payable for investments purchased		1,303			(27,100	)
Increase (decrease) in management fees payable		(841	)		(479	)
Increase (decrease) in accrued capital gains incentive fees		—			(4,607	)
Increase (decrease) in subordinated income incentive fees payable		836			8,182
Increase (decrease) in administrative services expense payable		(48	)		(645	)
Increase (decrease) in interest payable		(2,224	)		5,960
Increase (decrease) in directors’ fees payable		(57	)		(8	)
Increase (decrease) in other accrued expenses and liabilities		(6,084	)		(4,678	)
Net cash provided by (used in) operating activities		193,481			286,185
Cash flows from financing activities
Reinvestment of stockholder distributions		5,665			7,970
Stockholder distributions		(108,188	)		(71,592	)
Borrowings under credit facilities(1)		179,000			114,200
Borrowings under unsecured notes(1)		—			275,000
Repayments of credit facilities(1)		(157,775	)		(267,586	)
Repayments under repurchase agreement(2)		(150,000	)		(150,000	)
Deferred financing costs paid		—			(4,105	)
Net cash provided by (used in) financing activities		(231,298	)		(96,113	)
Total increase (decrease) in cash		(37,817	)		190,072
Cash and foreign currency at beginning of period		81,987			96,844
Cash and foreign currency at end of period	$	44,170		$	286,916
Supplemental disclosure
Local and excise taxes paid	$	5,925		$	5,547

(1) See Note 8 for a discussion of the Company’s credit facilities and unsecured notes. During the six months ended June 30, 2016 and 2015, the Company paid $23,489 and $11,001, respectively, in interest expense on the credit facilities and unsecured notes.

(2) See Note 8 for a discussion of the Company’s repurchase transaction. During the six months ended June 30, 2016 and 2015, the Company paid $13,762 and $17,582, respectively, in interest expense pursuant to the repurchase agreement.

See notes to unaudited consolidated financial statements.

4

FS Investment Corporation

Unaudited Consolidated Schedule of Investments

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Senior Secured Loans—First Lien—93.5%
5 Arch Income Fund 2, LLC	(g)(i)(n)	Diversified Financials	10.5%		11/18/21	$	8,590	$	8,642	$	8,590
5 Arch Income Fund 2, LLC	(g)(i)(n)(p)	Diversified Financials	10.5%		11/18/21		29,410		29,410		29,410
A.P. Plasman Inc.	(e)(f)(g)(i)	Capital Goods	L+850	1.0%	12/29/19		229,234		226,775		227,801
Aeneas Buyer Corp.	(g)	Health Care Equipment & Services	L+500	1.0%	12/18/21		497		497		496
Aeneas Buyer Corp.	(g)(p)	Health Care Equipment & Services	L+500	1.0%	12/18/21		500		500		499
Aeneas Buyer Corp.	(e)	Health Care Equipment & Services	L+813	1.0%	12/18/21		66,000		66,000		66,990
Aeneas Buyer Corp.	(g)(p)	Health Care Equipment & Services	L+750	1.0%	12/18/21		13,200		13,200		13,398
Allen Systems Group, Inc.	(e)(g)(r)	Software & Services	L+788, 1.2% PIK (1.2% Max PIK)	1.0%	4/30/20		53,152		52,782		54,215
Altus Power America, Inc.	(g)	Energy	L+750	1.5%	10/10/21		2,474		2,474		2,499
Altus Power America, Inc.	(g)(p)	Energy	L+750	1.5%	10/10/21		651		651		657
American Racing and Entertainment, LLC	(e)	Consumer Services	L+800	1.0%	7/1/18		4,825		4,825		4,855
AP Exhaust Acquisition, LLC	(f)(g)	Automobiles & Components	L+775	1.5%	1/16/21		15,811		15,811		13,933
Aspect Software, Inc.	(g)(p)	Software & Services	L+950	1.0%	5/25/18		656		656		661
Aspect Software, Inc.	(g)	Software & Services	L+950	1.0%	5/25/20		706		706		711
Atlas Aerospace LLC	(g)	Capital Goods	L+806	1.0%	5/8/19		20,000		20,000		20,100
Atlas Aerospace LLC	(g)(p)	Capital Goods	L+750	1.0%	5/8/19		7,619		7,619		7,657
BenefitMall Holdings, Inc.	(e)(g)	Commercial & Professional Services	L+725	1.0%	11/24/20		14,775		14,775		14,775
BenefitMall Holdings, Inc.	(g)(p)	Commercial & Professional Services	L+725	1.0%	11/24/20		5,455		5,455		5,455
Blue Coat Holdings, Inc.	(g)(p)	Technology Hardware & Equipment	L+350	1.0%	5/22/20		2,136		2,136		2,119
Blueprint Sub, Inc.	(g)	Software & Services	L+450	1.0%	5/7/21		702		702		702
Blueprint Sub, Inc.	(g)(p)	Software & Services	L+450	1.0%	5/7/21		702		702		702
Blueprint Sub, Inc.	(e)	Software & Services	L+750	1.0%	5/7/21		26,765		26,765		26,702
Blueprint Sub, Inc.	(g)(p)	Software & Services	L+750	1.0%	5/7/21		3,509		3,509		3,501
Cadence Aerospace Finance, Inc.	(g)	Capital Goods	L+525	1.3%	5/9/18		74		74		69
Caesars Entertainment Operating Co., Inc.	(e)(g)(i)(k)	Consumer Services	5.6%		3/1/17		12,621		12,375		11,915
Caesars Entertainment Operating Co., Inc.	(e)(i)(k)	Consumer Services	6.5%		3/1/17		2,363		2,329		2,245
Caesars Entertainment Operating Co., Inc.	(e)(f)(g)(i)(k)	Consumer Services	8.7%		3/1/17		84,594		84,386		78,096
Caesars Entertainment Resort Properties, LLC	(e)(g)	Consumer Services	L+600	1.0%	10/11/20		21,956		21,047		21,067
Corel Corp.	(g)(i)(p)	Software & Services	Prime+725		6/7/18		10,000		10,000		10,000
Corel Corp.	(e)(f)(g)(i)	Software & Services	L+825		6/7/19		103,630		103,630		104,925
Corner Investment PropCo, LLC	(e)(g)	Consumer Services	L+975	1.3%	11/2/19		42,303		42,426		41,457
Crestwood Holdings LLC	(g)	Energy	L+800	1.0%	6/19/19		5,065		5,052		4,483

See notes to unaudited consolidated financial statements.

5

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Eastman Kodak Co.	(g)	Consumer Durables & Apparel	L+625	1.0%	9/3/19	$	10,582	$	10,457	$	10,308
Greystone Equity Member Corp.	(g)(i)	Diversified Financials	L+1050		3/31/21		3,663		3,679		3,618
Greystone Equity Member Corp.	(g)(i)(p)	Diversified Financials	L+1100		3/31/21		50,337		50,337		50,332
H.M. Dunn Co., Inc.	(g)	Capital Goods	L+957	1.0%	3/26/21		1,000		1,000		1,000
H.M. Dunn Co., Inc.	(g)(p)	Capital Goods	L+725	1.0%	3/26/21		357		357		357
Harvey Industries, Inc.	(g)	Capital Goods	L+800	1.0%	10/1/21		32,667		32,667		33,402
Imagine Communications Corp.	(e)(f)(g)	Media	L+825	1.0%	4/29/20		92,677		92,677		90,592
Imagine Communications Corp.	(g)(p)	Media	L+825	1.0%	4/29/20		28,600		28,600		27,957
Industrial Group Intermediate Holdings, LLC	(g)	Materials	L+800	1.3%	5/31/20		20,799		20,799		21,006
Industry City TI Lessor, L.P.	(g)	Consumer Services	10.8%, 1.0% PIK (1.0% Max PIK)		6/30/26		33,445		33,445		34,114
JMC Acquisition Merger Corp.	(g)	Capital Goods	L+857	1.0%	11/6/21		5,679		5,679		5,623
Latham Pool Products, Inc.	(e)	Commercial & Professional Services	L+775	1.0%	6/29/21		70,000		70,000		70,000
Leading Edge Aviation Services, Inc.	(e)(f)(g)	Capital Goods	L+875	1.5%	6/30/19		31,119		30,938		30,807
LEAS Acquisition Co Ltd.	(g)(i)	Capital Goods	L+875	1.5%	6/30/19	€	27,963		38,049		30,559
LEAS Acquisition Co Ltd.	(f)(i)	Capital Goods	L+875	1.5%	6/30/19	$	9,810		9,810		9,712
MB Precision Holdings LLC	(g)	Capital Goods	L+725	1.3%	1/23/20		12,788		12,788		11,493
Micronics, Inc.	(e)(g)	Capital Goods	L+800	1.3%	12/11/19		63,786		63,556		62,510
MMM Holdings, Inc.	(g)	Health Care Equipment & Services	L+825	1.5%	12/12/17		8,130		8,074		6,219
MSO of Puerto Rico, Inc.	(g)	Health Care Equipment & Services	L+825	1.5%	12/12/17		5,911		5,870		4,521
New Star Metals Inc.	(e)(g)	Capital Goods	L+800	1.3%	3/20/20		36,710		36,710		37,811
Nobel Learning Communities, Inc.	(g)	Consumer Services	L+450	1.0%	4/27/20		72		72		72
Nobel Learning Communities, Inc.	(g)(p)	Consumer Services	L+450	1.0%	4/27/20		68		68		68
Nobel Learning Communities, Inc.	(g)	Consumer Services	L+843	1.0%	4/27/21		1,056		1,056		1,072
Nova Wildcat Amerock, LLC	(g)	Consumer Durables & Apparel	L+865	1.3%	9/10/19		18,687		18,687		15,978
PHRC License, LLC	(f)(g)	Consumer Services	L+900	1.5%	8/14/20		44,312		44,312		43,868
Polymer Additives, Inc.	(g)	Materials	L+888	1.0%	12/20/21		10,511		10,511		10,564
Polymer Additives, Inc.	(g)	Materials	L+875	1.0%	12/20/21	€	15,000		16,982		16,559
PSKW, LLC	(e)(f)(g)	Health Care Equipment & Services	L+841	1.0%	11/25/21	$	30,000		30,000		29,543
Roadrunner Intermediate Acquisition Co., LLC	(e)(f)(g)	Health Care Equipment & Services	L+800	1.0%	9/22/21		36,306		36,306		36,539
Rogue Wave Software, Inc.	(e)(f)(g)	Software & Services	L+803	1.0%	9/25/21		31,313		31,313		30,843
Safariland, LLC	(e)(g)	Capital Goods	L+800	1.3%	9/20/19		189,176		189,176		192,014
Sequential Brands Group, Inc.	(e)(g)(i)	Consumer Durables & Apparel	L+825		12/4/21		80,000		80,000		80,000
Shell Topco L.P.	(g)	Materials	L+750	1.5%	9/28/18		30,000		29,806		30,000

See notes to unaudited consolidated financial statements.

6

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes		Industry	Rate(b)		Floor		Maturity		Principal Amount(c)		Amortized Cost			Fair Value(d)
Smile Brands Group Inc.		(g)	Health Care Equipment & Services		L+625, 1.5% PIK (1.5% Max PIK)		1.3%		8/16/19	$	20,128	$	19,868		$	17,628
Sorenson Communications, Inc.		(e)(g)	Telecommunication Services		L+575		2.3%		4/30/20		92,090		91,773			91,054
Sports Authority, Inc.		(g)(k)(q)	Retailing		L+600		1.5%		11/16/17		6,318		6,320			1,706
SunGard Availability Services Capital, Inc.		(g)	Software & Services		L+500		1.0%		3/29/19		4,382		4,173			3,938
Sunnova Asset Portfolio 5 Holdings, LLC		(g)	Energy		12.0% PIK (12.0% Max PIK)				11/14/21		4,683		4,606			4,730
Swiss Watch International, Inc.		(e)(g)	Consumer Durables & Apparel		L+825		1.3%		11/8/18		40,125		39,752			22,470
Transplace Texas, LP		(e)(f)	Transportation		L+746		1.0%		9/16/21		20,000		20,000			20,525
U.S. Xpress Enterprises, Inc.		(e)(f)	Transportation		L+950, 0.0% PIK (1.3% Max PIK)		1.5%		5/30/19		65,349		65,349			68,617
Vertellus Performance Chemicals LLC		(f)(g)	Materials		L+950		1.0%		1/30/20		38,000		38,000			35,828
VPG Group Holdings LLC		(e)(g)	Materials		L+900		1.0%		6/30/18		62,995		62,917			61,892
Warren Resources, Inc.		(f)(g)(q)	Energy		L+850		1.0%		5/22/20		3,372		3,372			2,344
Waste Pro USA, Inc.		(e)(g)	Commercial & Professional Services		L+750		1.0%		10/15/20		89,354		89,354			91,364
Waste Pro USA, Inc.		(g)(p)	Commercial & Professional Services		L+750		1.0%		10/15/20		5,667		5,667			5,794
Zeta Interactive Holdings Corp.		(e)(g)	Software & Services		L+750		1.0%		7/9/21		10,337		10,337			10,395
Zeta Interactive Holdings Corp.		(g)(p)	Software & Services		L+750		1.0%		7/9/21		2,234		2,234			2,247
Total Senior Secured Loans—First Lien													2,293,414			2,250,278
Unfunded Loan Commitments													(161,101	)		(161,101	)
Net Senior Secured Loans—First Lien													2,132,313			2,089,177
Senior Secured Loans—Second Lien—27.4%
Alison US LLC		(g)(i)	Capital Goods		L+850		1.0%		8/29/22		4,444		4,295			3,931
Allen Systems Group, Inc.		(g)(r)	Software & Services		L+1100, 0.0% PIK (6.0% Max PIK)		1.0%		6/27/22		21,111		14,577			14,567
American Racing and Entertainment, LLC		(f)	Consumer Services		12.0%				7/1/18		5,800		5,705			5,829
AP Exhaust Acquisition, LLC		(f)	Automobiles & Components		12.0% PIK (12.0% Max PIK)				9/28/21		3,547		3,547			2,975
Arena Energy, LP		(g)	Energy		L+1100		1.0%		1/24/21		5,000		5,000			4,615
Ascent Resources—Utica, LLC		(e)(f)(g)	Energy		L+950, 2.0% PIK (2.0% Max PIK)		1.5%		9/30/18		184,950		184,328			180,326

See notes to unaudited consolidated financial statements.

7

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes		Industry	Rate(b)		Floor		Maturity		Principal Amount(c)		Amortized Cost		Fair Value(d)
Brock Holdings III, Inc.		(g)	Energy		L+825		1.8%		3/16/18	$	6,923	$	6,884	$	6,092
Byrider Finance, LLC		(f)(g)	Automobiles & Components		L+1000, 0.5% PIK (0.5% Max PIK)		1.3%		8/22/20		10,021		10,021		9,921
Compuware Corp.		(g)	Software & Services		L+825		1.0%		12/15/22		6,550		5,937		5,442
DEI Sales, Inc.		(e)(f)	Consumer Durables & Apparel		L+900		1.5%		1/15/18		57,500		57,197		54,625
EagleView Technology Corp.		(g)	Software & Services		L+825		1.0%		7/14/23		11,538		11,384		11,019
Eastman Kodak Co.		(e)(f)	Consumer Durables & Apparel		L+950		1.3%		9/3/20		50,000		49,137		46,250
Gruden Acquisition, Inc.		(g)	Transportation		L+850		1.0%		8/18/23		15,000		14,326		11,300
JW Aluminum Co.		(e)(f)(g)(h)(s)	Materials		9.3% PIK (9.3% Max PIK)				11/17/20		35,359		35,340		35,359
National Surgical Hospitals, Inc.		(e)	Health Care Equipment & Services		L+900		1.0%		6/1/23		30,000		30,000		29,511
Nielsen & Bainbridge, LLC		(g)	Consumer Durables & Apparel		L+925		1.0%		8/15/21		16,675		16,465		16,175
Paw Luxco II Sarl		(f)(i)	Consumer Durables & Apparel		EURIBOR+950				1/29/19	€	16,364		20,720		12,012
PSAV Acquisition Corp.		(e)(g)	Technology Hardware & Equipment		L+825		1.0%		1/24/22	$	80,000		79,067		80,000
Spencer Gifts LLC		(e)	Retailing		L+825		1.0%		6/29/22		30,000		29,873		24,750
Stadium Management Corp.		(e)	Consumer Services		L+825		1.0%		2/27/21		56,776		56,776		54,647
Stardust Finance Holdings, Inc.		(g)(i)	Materials		L+950		1.0%		3/13/23		2,500		2,475		2,425
Total Senior Secured Loans—Second Lien													643,054		611,771
Senior Secured Bonds—8.1%
Advanced Lighting Technologies, Inc.		(f)(g)	Materials		10.5%				6/1/19		78,500		77,526		25,513
Caesars Entertainment Resort Properties, LLC		(e)(g)	Consumer Services		11.0%				10/1/21		24,248		24,009		23,884
FourPoint Energy, LLC		(e)(f)	Energy		9.0%				12/31/21		74,813		72,309		72,568
Global A&T Electronics Ltd.		(g)(i)	Semiconductors & Semiconductor Equipment		10.0%				2/1/19		7,000		6,945		4,953
JW Aluminum Co.		(g)(s)	Materials		8.0%				12/29/16		8,141		8,062		8,060
Lightstream Resources Ltd.		(f)(i)	Energy		9.9%				6/15/19		2,112		2,112		1,922
Logan’s Roadhouse, Inc.		(f)(g)	Consumer Services		4.0%, 10.5% PIK (10.5% Max PIK)				10/15/17		59,249		48,677		17,283
SandRidge Energy, Inc.		(g)(k)(q)	Energy		8.8%				6/1/20		19,500		19,458		7,873
Sorenson Communications, Inc.		(f)	Telecommunication Services		9.0%, 0.0% PIK (9.0% Max PIK)				10/31/20		19,898		19,302		17,759
Total Senior Secured Bonds													278,400		179,815

See notes to unaudited consolidated financial statements.

8

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Subordinated Debt—18.7%
Alta Mesa Holdings, LP	(g)	Energy	9.6%		10/15/18	$	11,165	$	11,111	$	9,420
Aspect Software, Inc.	(g)	Software & Services	3.0% PIK (3.0% Max PIK)		5/25/23		2,941		2,941		2,941
Aurora Diagnostics, LLC	(e)(f)	Health Care Equipment & Services	10.8%		1/15/18		14,935		14,950		12,844
Bellatrix Exploration Ltd.	(g)(i)	Energy	8.5%		5/15/20		5,000		4,919		3,319
Brooklyn Basketball Holdings, LLC	(f)(g)	Consumer Services	L+725		10/25/19		19,873		19,873		19,475
CEC Entertainment, Inc.	(f)	Consumer Services	8.0%		2/15/22		5,000		5,011		4,859
Ceridian HCM Holding, Inc.	(f)(g)	Commercial & Professional Services	11.0%		3/15/21		16,800		17,341		16,758
EV Energy Partners, L.P.	(f)	Energy	8.0%		4/15/19		265		241		160
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		1/30/25		679		679		674
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		4/30/25		4,312		4,312		4,285
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		9/3/25		891		891		886
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		9/29/25		839		839		834
Global Jet Capital Inc.	(f)(g)(i)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		12/4/25		61,925		61,925		61,538
Global Jet Capital Inc.	(f)(g)(i)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		12/9/25		10,128		10,128		10,064
Global Jet Capital Inc.	(f)(i)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		1/29/26		5,304		5,304		5,270
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		4/14/26		10,837		10,837		10,769
Imagine Communications Corp.	(g)	Media	12.5% PIK (12.5% Max PIK)		8/4/18		550		550		550
Jupiter Resources Inc.	(f)(g)(i)	Energy	8.5%		10/1/22		6,425		5,450		4,634
Mood Media Corp.	(f)(g)(i)	Media	9.3%		10/15/20		43,135		42,327		29,601
Navistar International Corp.	(f)(i)	Capital Goods	8.3%		11/1/21		4,695		4,582		3,329
NewStar Financial, Inc.	(g)(i)	Diversified Financials	8.3%, 0.0% PIK (8.8% Max PIK)		12/4/24		75,000		61,168		54,750
P.F. Chang’s China Bistro, Inc.	(f)(g)	Consumer Services	10.3%		6/30/20		11,433		11,780		10,565

See notes to unaudited consolidated financial statements.

9

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity		Principal Amount(c)		Amortized Cost		Fair Value(d)
PriSo Acquisition Corp.	(g)	Capital Goods	9.0%			5/15/23	$	6,000	$	5,945	$	5,910
Sequel Industrial Products Holdings, LLC	(f)	Commercial & Professional Services	14.5%, 2.5% PIK (2.5% Max PIK)			9/30/19		7,044		6,990		7,150
Sorenson Communications, Inc.	(f)	Telecommunication Services	13.0%, 0.0% PIK (13.0% Max PIK)			10/31/21		15,122		14,252		14,177
SunGard Availability Services Capital, Inc.	(f)(g)	Software & Services	8.8%			4/1/22		10,750		8,216		5,899
ThermaSys Corp.	(e)(f)(g)	Capital Goods	9.0%, 1.8% PIK (5.0% Max PIK)			5/3/20		136,885		136,885		112,417
VPG Group Holdings LLC	(e)(g)	Materials	11.0%, 2.0% PIK (2.0% Max PIK)			6/30/18		5,301		5,301		5,109
Total Subordinated Debt										474,748		418,187
Collateralized Securities—3.9%
ACASC 2013-2A Class Subord. B	(f)(g)(i)	Diversified Financials	6.3%			10/25/25		30,500		19,087		15,657
Dryden CDO 23A Class Subord.	(g)(i)	Diversified Financials	8.8%			7/17/23		10,000		3,628		3,432
JPMorgan Chase Bank, N.A. Credit-Linked Notes	(f)(i)	Diversified Financials	11.1%			12/20/21		16,740		16,619		16,238
NewStar Clarendon 2014-1A Class D	(g)(i)	Diversified Financials	L+435			1/25/27		1,560		1,473		1,389
NewStar Clarendon 2014-1A Class Subord. B	(g)(i)	Diversified Financials	15.5%			1/25/27		17,900		15,196		14,781
Rampart CLO 2007 1A Class Subord.	(g)(i)	Diversified Financials	13.6%			10/25/21		10,000		2,434		2,273
Stone Tower CLO VI Class Subord.	(f)(i)	Diversified Financials	16.1%			4/17/21		5,000		1,667		1,735
Wind River CLO Ltd. 2012 1A Class E	(g)(i)	Diversified Financials	L+525			1/15/24		5,000		4,537		4,544
Wind River CLO Ltd. 2012 1A Class Subord. B	(g)(i)	Diversified Financials	13.6%			1/15/24		42,504		28,067		27,697
Total Collateralized Securities										92,708		87,746

See notes to unaudited consolidated financial statements.

10

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes		Industry	Number of Shares		Amortized Cost		Fair  Value(d)
Equity/Other—24.5%(j)
5 Arches, LLC, Common Equity		(g)(i)(k)(m)	Diversified Financials		9,475	$	250	$	250
A.P. Plasman Inc., Warrants, 5/25/2026		(g)(i)(k)	Capital Goods		4,633		2,545		2,522
Allen Systems Group, Inc., Common Equity		(g)(k)(r)	Software & Services		1,689,767		36,422		84,911
Allen Systems Group, Inc., Warrants, 6/27/2022		(g)(k)(r)	Software & Services		229,541		6,542		6,542
Altus Power America Holdings, LLC, Preferred Equity		(g)	Energy		824,759		785		1,320
Altus Power America Management, LLC, Class B Units		(g)(k)(o)	Energy		83		—		—
Amaya Inc., Warrants, 5/15/2024		(g)(i)(k)	Consumer Services		2,000,000		16,832		18,160
AP Exhaust Holdings, LLC, Common Equity		(g)(k)(m)	Automobiles & Components		811		811		24
Aquilex Corp., Common Equity, Class A Shares		(g)(k)(m)	Commercial & Professional Services		15,128		1,087		3,675
Aquilex Corp., Common Equity, Class B Shares		(g)(k)(m)	Commercial & Professional Services		32,637		1,690		7,928
Ascent Resources Utica Holdings, LLC, Common Equity		(g)(k)(l)	Energy		96,800,082		29,100		24,200
Aspect Software, Inc., Common Equity		(g)(k)	Software & Services		311,927		15,409		16,361
Burleigh Point, Ltd., Warrants, 7/16/2020		(g)(i)(k)	Retailing		3,451,216		1,898		276
Eastman Kodak Co., Common Equity		(e)(g)(k)	Consumer Durables & Apparel		61,859		1,203		995
FourPoint Energy, LLC, Common Equity, Class C-II-A Units		(g)(k)(m)	Energy		21,000		21,000		8,348
FourPoint Energy, LLC, Common Equity, Class D Units		(g)(k)(m)	Energy		3,937		2,601		1,575
FourPoint Energy, LLC, Common Equity, Class E-II Units		(g)(k)(m)	Energy		87,400		21,850		33,431
FourPoint Energy, LLC, Common Equity, Class E-III Units		(g)(k)(m)	Energy		70,875		17,719		28,173
Fronton Investor Holdings, LLC, Class B Units		(g)(m)(r)	Consumer Services		14,943		15,011		14,494
Global Jet Capital Holdings, LP, Preferred Equity		(f)(g)(i)(k)	Commercial & Professional Services		37,425,082		37,425		37,425
Harvey Holdings, LLC, Common Equity		(g)(k)	Capital Goods		2,333,333		2,333		4,550
Imagine Communications Corp., Common Equity, Class A Units		(g)(k)	Media		33,034		3,783		1,695
Industrial Group Intermediate Holdings, LLC, Common Equity		(g)(k)(m)	Materials		441,238		441		728
JMC Acquisition Holdings, LLC, Common Equity		(g)(k)	Capital Goods		483		483		483
JW Aluminum Co., Common Equity		(e)(f)(g)(h)(k)(s)	Materials		972		—		1,581
JW Aluminum Co., Preferred Equity		(e)(f)(g)(h)(k)(s)	Materials		4,499		43,507		44,990
Leading Edge Aviation Services, Inc., Common Equity		(f)(k)	Capital Goods		4,401		464		8
Leading Edge Aviation Services, Inc., Preferred Equity		(f)(k)	Capital Goods		1,303		1,303		1,303
MB Precision Investment Holdings LLC, Class A-2 Units		(g)(k)(m)	Capital Goods		490,213		490		74
Micronics, Inc., Common Equity		(g)(k)	Capital Goods		53,073		553		478
Micronics, Inc., Preferred Equity		(g)(k)	Capital Goods		55		553		740
New Star Metals Inc., Common Equity		(g)(k)	Capital Goods		741,082		750		2,371

See notes to unaudited consolidated financial statements.

11

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Number of Shares		Amortized Cost		Fair  Value(d)
NewStar Financial, Inc., Warrants, 11/4/2024	(g)(i)(k)	Diversified Financials		3,000,000	$	15,058	$	6,780
Plains Offshore Operations Inc., Preferred Equity	(e)(f)	Energy		52,666		68,020		64,907
Plains Offshore Operations Inc., Warrants, 11/18/2019	(e)(f)(k)	Energy		1,067,481		1,722		9
PSAV Holdings LLC, Common Equity	(f)	Technology Hardware & Equipment		10,000		10,000		27,000
Safariland, LLC, Common Equity	(f)(k)	Capital Goods		25,000		2,500		11,023
Safariland, LLC, Preferred Equity	(f)	Capital Goods		2,042		24,593		25,339
Safariland, LLC, Warrants, 7/27/2018	(f)(k)	Capital Goods		2,263		246		998
Safariland, LLC, Warrants, 9/20/2019	(f)(k)	Capital Goods		2,273		227		1,002
Sequel Industrial Products Holdings, LLC, Common Equity	(f)(g)(k)	Commercial & Professional Services		33,306		3,400		8,616
Sequel Industrial Products Holdings, LLC, Preferred Equity	(f)(g)	Commercial & Professional Services		8,000		11,615		11,621
Sequel Industrial Products Holdings, LLC, Warrants, 9/28/2022	(g)(k)	Commercial & Professional Services		1,293		1		178
Sequel Industrial Products Holdings, LLC, Warrants, 5/10/2022	(f)(k)	Commercial & Professional Services		19,388		12		3,077
Sequential Brands Group, Inc., Common Equity	(g)(i)(k)	Consumer Durables & Apparel		206,664		2,790		1,649
Sorenson Communications, Inc., Common Equity	(f)(k)	Telecommunication Services		46,163		—		31,682
Sunnova Energy Corp., Common Equity	(g)(k)	Energy		192,389		722		1,216
Sunnova Energy Corp., Preferred Equity	(g)(k)	Energy		18,182		97		97
ThermaSys Corp., Common Equity	(f)(k)	Capital Goods		51,813		1		—
ThermaSys Corp., Preferred Equity	(f)(k)	Capital Goods		51,813		5,181		—
VPG Group Holdings LLC, Class A-2 Units	(f)(k)	Materials		3,637,500		3,638		1,273
Zeta Interactive Holdings Corp., Preferred Equity	(g)(k)	Software & Services		215,662		1,714		1,854
Total Equity/Other						436,377		547,932
TOTAL INVESTMENTS—176.1%					$	4,057,600		3,934,628
LIABILITIES IN EXCESS OF OTHER ASSETS—(76.1%)								(1,700,306	)
NET ASSETS—100%							$	2,234,322

(a) Security may be an obligation of one or more entities affiliated with the named company.

(b) Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. As of June 30, 2016, the three-month London Interbank Offered Rate, or LIBOR, was 0.65%, the Euro Interbank Offered Rate, or EURIBOR, was (0.29)% and the U.S. Prime Lending Rate, or Prime, was 3.50%.

(c) Denominated in U.S. dollars unless otherwise noted.

See notes to unaudited consolidated financial statements.

12

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

(d) Fair value determined by the Company’s board of directors (see Note 7).

(e) Security or portion thereof held within Locust Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the Class A Notes issued to Race Street Funding LLC pursuant to an indenture with Citibank, N.A., as trustee (see Note 8).

(f) Security or portion thereof held within Race Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the repurchase agreement with JPMorgan Chase Bank, N.A., London Branch (see Note 8).

(g) Security or portion thereof is pledged as collateral supporting the amounts outstanding under the revolving credit facility with ING Capital LLC (see Note 8).

(h) Position or portion thereof unsettled as of June 30, 2016.

(i) The investment is not a qualifying asset under the Investment Company Act of 1940, as amended. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of June 30, 2016, 77.4% of the Company’s total assets represented qualifying assets.

(j) Listed investments may be treated as debt for GAAP or tax purposes.

(k) Security is non-income producing.

(l) Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company.

(m) Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company.

(n) Security held within IC Arches Investments, LLC, a wholly-owned subsidiary of the Company.

(o) Security held within IC Altus Investments, LLC, a wholly-owned subsidiary of the Company.

(p) Security is an unfunded commitment. The stated rate reflects the spread disclosed at the time of commitment and may not indicate the actual rate received upon funding.

(q) Asset is on non-accrual status.

(r) Under the Investment Company Act of 1940, as amended, the Company generally is deemed to be an “affiliated person” of a portfolio company if it owns 5% or more of the portfolio company’s voting securities and generally is deemed to “control” a portfolio company if it owns more than 25% of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of June 30, 2016, the Company held investments in portfolio companies of which it is deemed to be an “affiliated person” but is not deemed to “control”. The following table presents certain information with respect to such portfolio companies for the six months ended June 30, 2016:

Portfolio Company	Purchases		Sales and Repayments			Interest Income		Fee Income		Dividend Income		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)
Senior Secured Loans—First Lien
Allen Systems Group, Inc.	$	14,563		—		$	2,043		—		—		—	$	1,053
Senior Secured Loans—Second Lien
Allen Systems Group, Inc.	$	14,569		—		$	36	$	633		—		—	$	(10	)
Equity/Other
Allen Systems Group, Inc., Common Equity		—		—			—		—		—		—	$	7,013
Allen Systems Group, Inc., Warrants, 6/27/2022	$	6,542		—			—		—		—		—		—
Fronton Investor Holdings, LLC, Class B Units		—	$	(1,874	)		—		—	$	224		—	$	230

See notes to unaudited consolidated financial statements.

13

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of June 30, 2016

(in thousands, except share amounts)

(s) Under the Investment Company Act of 1940, as amended, the Company generally is deemed to “control” a portfolio company if it owns more than 25% of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of June 30, 2016, the Company held investments in one portfolio company of which it is deemed to be an “affiliated person” of and deemed to “control”. The following table presents certain information with respect to such portfolio company for the six months ended June 30, 2016:

Portfolio Company	Purchases		Sales and Repayments		Interest Income		Fee Income		Dividend Income		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)
Senior Secured Loans—Second Lien
JW Aluminum Co.	$	897		—	$	1,581		—		—		—	$	19
Senior Secured Bonds
JW Aluminum Co.	$	8,060		—	$	9		—		—		—	$	(2	)
Equity/Other
JW Aluminum Co., Common Equity		—		—		—		—		—		—	$	1,581
JW Aluminum Co., Preferred Equity	$	406		—		—		—		—		—	$	740

See notes to unaudited consolidated financial statements.

14

FS Investment Corporation

Consolidated Schedule of Investments

As of December 31, 2015

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal  Amount(c)		Amortized Cost		Fair  Value(d)
Senior Secured Loans—First Lien—98.4%
5 Arch Income Fund 2, LLC	(g)(h)(m)	Diversified Financials	10.5%		11/18/21	$	2,384	$	2,437	$	2,384
5 Arch Income Fund 2, LLC	(g)(h)(m)(n)	Diversified Financials	10.5%		11/18/21		35,616		35,616		35,616
A.P. Plasman Inc.	(e)(f)(g)(h)	Capital Goods	L+775	1.0%	12/29/19		170,437		170,437		171,716
Aeneas Buyer Corp.	(g)	Health Care Equipment & Services	L+500	1.0%	12/18/21		500		500		500
Aeneas Buyer Corp.	(g)(n)	Health Care Equipment & Services	L+500	1.0%	12/18/21		500		500		500
Aeneas Buyer Corp.	(e)	Health Care Equipment & Services	L+813	1.0%	12/18/21		66,000		66,000		66,000
Aeneas Buyer Corp.	(g)(n)	Health Care Equipment & Services	L+750	1.0%	12/18/21		13,200		13,200		13,200
Allen Systems Group, Inc.	(e)(g)(q)	Software & Services	L+789, 1.2% PIK (1.2% Max PIK)	1.0%	4/30/20		37,941		37,941		38,321
Altus Power America, Inc.	(g)	Energy	L+750	1.5%	10/10/21		1,724		1,724		1,707
Altus Power America, Inc.	(g)(n)	Energy	L+750	1.5%	10/10/21		1,401		1,401		1,387
American Racing and Entertainment, LLC	(e)	Consumer Services	L+800	1.0%	7/1/18		5,450		5,450		5,491
AP Exhaust Acquisition, LLC	(f)(g)	Automobiles & Components	L+775	1.5%	1/16/21		15,811		15,811		14,842
Aspect Software, Inc.	(g)	Software & Services	L+550, 0.3% PIK (0.3% Max PIK)	1.8%	5/7/16		1,158		1,153		1,072
Atlas Aerospace LLC	(g)	Capital Goods	L+807	1.0%	5/8/19		20,000		20,000		19,900
Atlas Aerospace LLC	(g)(n)	Capital Goods	L+750	1.0%	5/8/19		7,619		7,619		7,581
BenefitMall Holdings, Inc.	(g)	Commercial & Professional Services	L+725	1.0%	11/24/20		14,850		14,850		14,702
BenefitMall Holdings, Inc.	(g)(n)	Commercial & Professional Services	L+725	1.0%	11/24/20		5,455		5,455		5,400
Blue Coat Holdings, Inc.	(g)(n)	Technology Hardware & Equipment	L+350	1.0%	5/22/20		2,136		2,136		2,004
Blueprint Sub, Inc.	(e)	Software & Services	L+750	1.0%	5/7/21		26,891		26,891		26,805
Blueprint Sub, Inc.	(g)(n)	Software & Services	L+750	1.0%	5/7/21		3,509		3,509		3,498
Blueprint Sub, Inc.	(g)	Software & Services	L+450	1.0%	5/7/21		702		702		702
Blueprint Sub, Inc.	(g)(n)	Software & Services	L+450	1.0%	5/7/21		702		702		702
Cadence Aerospace Finance, Inc.	(g)	Capital Goods	L+525	1.3%	5/9/18		74		74		73
Caesars Entertainment Operating Co., Inc.	(e)(g)(h)(j)	Consumer Services	5.2%		3/1/17		12,621		12,218		10,811
Caesars Entertainment Operating Co., Inc.	(e)(h)(j)	Consumer Services	6.0%		3/1/17		2,363		2,308		2,030
Caesars Entertainment Operating Co., Inc.	(e)(f)(g)(h)(j)	Consumer Services	8.1%		3/1/17		84,594		84,262		66,163
Caesars Entertainment Resort Properties, LLC	(e)(g)	Consumer Services	L+600	1.0%	10/11/20		22,069		21,072		20,152
Corel Corp.	(e)(f)(g)(h)	Software & Services	L+825		6/7/19		134,662		134,662		135,840
Corel Corp.	(g)(h)(n)	Software & Services	Prime+725		6/7/18		10,000		10,000		10,000
Corner Investment PropCo, LLC	(e)(g)	Consumer Services	L+975	1.3%	11/2/19		42,336		42,480		41,435
CoSentry.Net, LLC	(e)(g)	Software & Services	L+800	1.3%	12/31/19		62,331		62,331		63,578

See notes to unaudited consolidated financial statements.

15

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2015

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal  Amount(c)		Amortized Cost		Fair  Value(d)
Crestwood Holdings LLC	(g)	Energy	L+600	1.0%	6/19/19	$	5,166	$	5,150	$	3,349
Eastman Kodak Co.	(g)	Consumer Durables & Apparel	L+625	1.0%	9/3/19		10,636		10,494		9,218
Flanders Corp.	(e)(g)	Capital Goods	L+950	1.5%	5/14/18		33,993		33,574		34,672
Fronton Holdings, LLC	(e)	Consumer Services	15.0%		4/30/19		3,736		3,708		3,736
Greystone Bridge Manager LLC	(g)(h)	Diversified Financials	L+1050		5/1/20		3,367		3,384		3,300
Greystone Bridge Manager LLC	(g)(h)(n)	Diversified Financials	L+1050		5/1/20		403		403		395
H.M. Dunn Co., Inc.	(g)	Capital Goods	L+809	1.0%	3/26/21		1,000		1,000		990
H.M. Dunn Co., Inc.	(g)(n)	Capital Goods	L+725	1.0%	3/26/21		357		357		354
Harvey Industries, Inc.	(g)	Capital Goods	L+800	1.0%	10/1/21		32,667		32,667		32,667
Imagine Communications Corp.	(e)(f)(g)	Media	L+825	1.0%	4/29/20		101,367		101,367		97,566
Imagine Communications Corp.	(g)(n)	Media	L+825	1.0%	4/29/20		30,000		30,000		28,875
Industrial Group Intermediate Holdings, LLC	(g)	Materials	L+800	1.3%	5/31/20		13,954		13,954		13,814
Industry City TI Lessor, L.P.	(g)	Consumer Services	10.3%, 0.0% PIK (5.3% Max PIK)		6/30/26		25,377		25,377		26,519
JMC Acquisition Merger Corp.	(g)	Capital Goods	L+858	1.0%	11/6/21		5,000		5,000		5,000
JMC Acquisition Merger Corp.	(g)(n)	Capital Goods	L+750	1.0%	11/6/21		906		906		906
Latham Pool Products, Inc.	(e)	Commercial & Professional Services	L+775	1.0%	6/29/21		70,000		70,000		68,600
Leading Edge Aviation Services, Inc.	(e)(f)(g)	Capital Goods	L+875	1.5%	6/30/19		31,983		31,757		31,183
LEAS Acquisition Co Ltd.	(g)(h)	Capital Goods	L+875	1.5%	6/30/19	€	28,738		39,110		30,424
LEAS Acquisition Co Ltd.	(f)(h)	Capital Goods	L+875	1.5%	6/30/19	$	10,083		10,083		9,830
MB Precision Holdings LLC	(g)	Capital Goods	L+725	1.3%	1/23/20		12,855		12,855		12,726
Micronics, Inc.	(e)(g)	Capital Goods	L+800	1.3%	12/11/19		64,110		63,843		63,148
MMM Holdings, Inc.	(g)	Health Care Equipment & Services	L+825	1.5%	12/12/17		8,414		8,338		3,954
MSO of Puerto Rico, Inc.	(g)	Health Care Equipment & Services	L+825	1.5%	12/12/17		6,117		6,061		2,874
New Star Metals Inc.	(e)(g)	Capital Goods	L+800	1.3%	3/20/20		40,250		40,250		40,250
Nobel Learning Communities, Inc.	(g)	Consumer Services	L+845	1.0%	4/27/21		1,056		1,056		1,052
Nobel Learning Communities, Inc.	(g)	Consumer Services	L+450	1.0%	4/27/20		45		45		45
Nobel Learning Communities, Inc.	(g)(n)	Consumer Services	L+450	1.0%	4/27/20		94		94		94
Nova Wildcat Amerock, LLC	(g)	Consumer Durables & Apparel	L+330, 5.4% PIK (5.4% Max PIK)	1.3%	9/10/19		18,817		18,817		16,276
PHRC License, LLC	(f)(g)	Consumer Services	L+900	1.5%	8/14/20		44,569		44,569		44,123
Pittsburgh Glass Works, LLC	(e)	Automobiles & Components	L+916	1.0%	11/25/21		67,944		67,944		67,944
Polymer Additives, Inc.	(g)	Materials	L+838	1.0%	12/20/21		10,511		10,511		10,722
PSKW, LLC	(e)(f)(g)	Health Care Equipment & Services	L+842	1.0%	11/25/21		30,000		30,000		30,020
Reddy Ice Corp.	(g)	Food, Beverage & Tobacco	L+550	1.3%	5/1/19		321		319		264

See notes to unaudited consolidated financial statements.

16

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2015

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes		Industry	Rate(b)		Floor	Maturity	Principal  Amount(c)		Amortized Cost			Fair  Value(d)
Roadrunner Intermediate Acquisition Co., LLC		(e)(f)(g)	Health Care Equipment & Services		L+800	1.0%	9/22/21	$	36,769	$	36,769		$	36,655
Rogue Wave Software, Inc.		(e)(f)(g)	Software & Services		L+804	1.0%	9/25/21		31,313		31,313			30,921
Safariland, LLC		(e)(g)	Capital Goods		L+800	1.3%	9/20/19		193,376		193,376			196,277
Sequential Brands Group, Inc.		(e)(g)(h)	Consumer Durables & Apparel		L+825		12/4/21		80,000		80,000			79,200
Shell Topco L.P.		(g)	Materials		L+750	1.5%	9/28/18		30,000		29,768			30,075
Smile Brands Group Inc.		(g)	Health Care Equipment & Services		L+650, 1.3% PIK (1.5% Max PIK)	1.3%	8/16/19		20,063		19,768			14,571
Sorenson Communications, Inc.		(e)(g)	Telecommunication Services		L+575	2.3%	4/30/20		92,560		92,208			92,792
Sports Authority, Inc.		(g)	Retailing		L+600	1.5%	11/16/17		6,318		6,321			2,069
Stallion Oilfield Holdings, Inc.		(g)	Energy		L+675	1.3%	6/19/18		4,760		4,735			2,580
SunGard Availability Services Capital, Inc.		(g)	Software & Services		L+500	1.0%	3/29/19		4,424		4,177			3,860
Sunnova Asset Portfolio 5 Holdings, LLC		(g)	Energy		12.0% (12.0% Max PIK)		11/14/21		7,217		7,080			7,055
Sunnova Asset Portfolio 5 Holdings, LLC		(g)(n)	Energy		12.0% (12.0% Max PIK)		11/14/21		207		207			202
Swiss Watch International, Inc.		(e)(g)	Consumer Durables & Apparel		L+725	1.3%	11/8/18		41,000		40,552			25,420
Transplace Texas, LP		(e)(f)	Transportation		L+747	1.0%	9/16/21		20,000		20,000			19,825
U.S. Xpress Enterprises, Inc.		(e)(f)	Transportation		L+1000, 0.0% PIK (1.5% Max PIK)	1.5%	5/30/19		66,546		66,546			66,546
Vertellus Performance Chemicals LLC		(f)(g)	Materials		L+950	1.0%	1/30/20		38,000		38,000			35,940
VPG Group Holdings LLC		(e)(g)	Materials		L+900	1.0%	6/30/18		63,695		63,541			62,421
Warren Resources, Inc.		(f)(g)	Energy		L+850	1.0%	5/22/20		3,372		3,372			2,748
Waste Pro USA, Inc.		(e)(f)(g)	Commercial & Professional Services		L+750	1.0%	10/15/20		86,020		86,020			87,310
Waste Pro USA, Inc.		(g)(n)	Commercial & Professional Services		L+750	1.0%	10/15/20		9,444		9,444			9,586
Zeta Interactive Holdings Corp.		(e)(g)	Software & Services		L+750	1.0%	7/9/21		10,337		10,337			10,325
Zeta Interactive Holdings Corp.		(g)(n)	Software & Services		L+750	1.0%	7/9/21		2,234		2,234			2,232
Total Senior Secured Loans—First Lien											2,372,202			2,297,612
Unfunded Loan Commitments											(123,783	)		(123,783	)
Net Senior Secured Loans—First Lien											2,248,419			2,173,829
Senior Secured Loans—Second Lien—28.3%
AdvancePierre Foods, Inc.		(e)(g)	Food, Beverage & Tobacco		L+825	1.3%	10/10/17		10,556		10,491			10,384
Alison US LLC		(g)(h)	Capital Goods		L+850	1.0%	8/29/22		4,444		4,286			3,611
American Racing and Entertainment, LLC		(f)	Consumer Services		12.0%		7/1/18		5,800		5,688			5,836

See notes to unaudited consolidated financial statements.

17

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2015

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes		Industry	Rate(b)		Floor		Maturity		Principal  Amount(c)		Amortized Cost		Fair  Value(d)
AP Exhaust Acquisition, LLC		(f)	Automobiles & Components		12.0%, 0.0% PIK (12.0% Max PIK)				9/28/21	$	3,243	$	3,243	$	2,959
Arena Energy, LP		(g)	Energy		L+1000		1.0%		1/24/21		5,000		5,000		4,604
Ascent Resources—Utica, LLC		(e)(f)(g)	Energy		L+950, 2.0% PIK (2.0% Max PIK)		1.5%		9/30/18		183,088		182,329		163,864
Brock Holdings III, Inc.		(g)	Energy		L+825		1.8%		3/16/18		6,923		6,874		5,331
Byrider Finance, LLC		(f)(g)	Automobiles & Components		L+1000		1.3%		8/22/20		10,000		10,000		9,800
Compuware Corp.		(g)	Software & Services		L+825		1.0%		12/15/22		6,550		5,893		5,928
DEI Sales, Inc.		(e)(f)	Consumer Durables & Apparel		L+900		1.5%		1/15/18		57,500		57,121		55,344
EagleView Technology Corp.		(g)	Software & Services		L+825		1.0%		7/14/23		11,538		11,373		11,063
Eastman Kodak Co.		(e)(f)	Consumer Durables & Apparel		L+950		1.3%		9/3/20		50,000		49,060		43,250
Gruden Acquisition, Inc.		(g)	Transportation		L+850		1.0%		8/18/23		15,000		14,281		14,288
JW Aluminum Co.		(e)(f)(g)(r)	Materials		L+850		0.8%		11/17/20		32,887		32,887		32,887
National Surgical Hospitals, Inc.		(e)	Health Care Equipment & Services		L+900		1.0%		6/1/23		30,000		30,000		29,092
Nielsen & Bainbridge, LLC		(g)	Consumer Durables & Apparel		L+925		1.0%		8/15/21		16,675		16,450		16,425
Paw Luxco II Sarl		(f)(h)	Consumer Durables & Apparel		EURIBOR+950				1/29/19	€	16,364		20,535		12,460
PSAV Acquisition Corp.		(e)(g)	Technology Hardware & Equipment		L+825		1.0%		1/24/22	$	80,000		79,008		79,600
Spencer Gifts LLC		(e)(g)	Retailing		L+825		1.0%		6/29/22		60,000		59,723		60,300
Stadium Management Corp.		(e)	Consumer Services		L+825		1.0%		2/27/21		57,500		57,500		57,788
Total Senior Secured Loans—Second Lien													661,742		624,814
Senior Secured Bonds—10.9%
Advanced Lighting Technologies, Inc.		(f)(g)	Materials		10.5%				6/1/19		78,500		77,390		38,661
Aspect Software, Inc.		(f)(g)	Software & Services		10.6%				5/15/17		8,500		8,424		6,981
Avaya Inc.		(e)(f)(g)	Technology Hardware & Equipment		10.5%				3/1/21		48,800		44,622		16,714
Caesars Entertainment Resort Properties, LLC		(e)(g)	Consumer Services		11.0%				10/1/21		29,248		28,993		26,469
FourPoint Energy, LLC		(e)(f)	Energy		8.0%				12/31/20		92,531		89,745		71,943
FourPoint Energy, LLC		(f)(n)	Energy		8.0%