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 SEPTEMBER 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 244,063,316 shares of the registrant’s common stock outstanding as of November 8, 2016.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS		1
	Consolidated Balance Sheets as of September 30, 2016 (Unaudited) and December 31, 2015		1
	Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015		2
	Unaudited Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2016 and 2015		3
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015		4
	Consolidated Schedules of Investments as of September 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		59
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		84
ITEM 4.	CONTROLS AND PROCEDURES		85
PART II—OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		86
ITEM 1A.	RISK FACTORS		86
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		86
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		86
ITEM 4.	MINE SAFETY DISCLOSURES		86
ITEM 5.	OTHER INFORMATION		86
ITEM 6.	EXHIBITS		87
	SIGNATURES		90

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FS Investment Corporation

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	September 30, 2016 (Unaudited)			December 31, 2015
Assets
Investments, at fair value
Non-controlled/unaffiliated investments (amortized cost—$3,790,661 and $4,027,950, respectively)	$	3,679,252		$	3,820,283
Non-controlled/affiliated investments (amortized cost—$126,209 and $91,248, respectively)		171,141			132,357
Controlled/affiliated investments (amortized cost—$79,698 and $75,988, respectively)		87,133			76,731
Total investments, at fair value (amortized cost—$3,996,568 and $4,195,186, respectively)		3,937,526			4,029,371
Cash		112,648			80,807
Foreign currency, at fair value (cost—$1,011 and $1,175, respectively)		1,013			1,180
Receivable for investments sold and repaid		27,160			66
Interest receivable		49,014			34,600
Deferred financing costs		573			1,420
Prepaid expenses and other assets		684			729
Total assets	$	4,128,618		$	4,148,173
Liabilities
Payable for investments purchased	$	6,984		$	—
Credit facilities payable		81,286			34,625
Unsecured notes payable (net of deferred financing costs of $1,231 and $1,490, respectively)		990,333			988,274
Repurchase agreement payable(1)		650,000			800,000
Secured borrowing, at fair value (proceeds of $2,830 and $0, respectively)(2)		2,863			—
Stockholder distributions payable		54,236			54,093
Management fees payable		17,872			18,415
Subordinated income incentive fees payable(3)		12,250			13,374
Administrative services expense payable		714			946
Interest payable		16,113			22,061
Directors’ fees payable		204			282
Other accrued expenses and liabilities		1,308			7,175
Total liabilities		1,834,163			1,939,245
Commitments and contingencies(4)		—			—
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(5)		(64,574	)		(45,748	)
Accumulated undistributed (distributions in excess of) net investment income(5)		141,160			147,946
Net unrealized appreciation (depreciation) on investments and secured borrowing and unrealized gain/loss on foreign currency		(52,384	)		(157,858	)
Total stockholders’ equity		2,294,455			2,208,928
Total liabilities and stockholders’ equity	$	4,128,618		$	4,148,173
Net asset value per share of common stock at period end	$	9.42		$	9.10

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

(2) See Note 8 for a discussion of the Company’s secured borrowing.

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

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

(5) 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 September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Investment income
From non-controlled/unaffiliated investments:
Interest income	$	93,380		$	99,468		$	285,151		$	319,180
Fee income		4,214			3,290			21,191			33,707
Dividend income		—			—			—			5,519
From non-controlled/affiliated investments:
Interest income		2,013			910			4,092			1,628
Fee income		—			—			633			—
Dividend income		—			—			224			—
From controlled/affiliated investments:
Interest income		950			—			2,540			—
Total investment income		100,557			103,668			313,831			360,034
Operating expenses
Management fees		17,872			18,852			53,258			56,993
Capital gains incentive fees(1)		—			(13,811	)		—			(18,418	)
Subordinated income incentive fees(1)		12,250			12,485			38,945			47,661
Administrative services expenses		750			900			2,846			2,773
Accounting and administrative fees		243			261			706			822
Interest expense		18,283			19,352			55,241			55,699
Directors’ fees		277			232			780			688
Other general and administrative expenses		1,879			1,631			6,274			4,877
Total operating expenses		51,554			39,902			158,050			151,095
Net investment income		49,003			63,766			155,781			208,939
Realized and unrealized gain/loss
Net realized gain (loss) on investments:
Non-controlled/unaffiliated investments		2,363			(21,246	)		(19,064	)		(42,135	)
Controlled/affiliated investments		(26	)		—			(26	)		—
Net realized gain (loss) on foreign currency		86			266			264			(631	)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/unaffiliated investments		64,039			(74,848	)		96,258			(88,560	)
Non-controlled/affiliated investments		(4,463	)		27,220			3,823			36,615
Controlled/affiliated investments		4,354			—			6,692			—
Net change in unrealized appreciation (depreciation) on secured borrowing		(33	)		—			(33	)		—
Net change in unrealized gain (loss) on foreign currency		(954	)		(437	)		(1,266	)		2,625
Total net realized and unrealized gain (loss)		65,366			(69,045	)		86,648			(92,086	)
Net increase (decrease) in net assets resulting from operations	$	114,369		$	(5,279	)	$	242,429		$	116,853
Per share information—basic and diluted
Net increase (decrease) in net assets resulting from operations (Earnings per Share)	$	0.47		$	(0.02	)	$	1.00		$	0.48
Weighted average shares outstanding		243,488,590			242,227,762			243,257,941			241,659,230

(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)

	Nine Months Ended September 30,
	2016			2015
Operations
Net investment income (loss)	$	155,781		$	208,939
Net realized gain (loss) on investments and foreign currency		(18,826	)		(42,766	)
Net change in unrealized appreciation (depreciation) on investments and secured borrowing		106,740			(51,945	)
Net change in unrealized gain (loss) on foreign currency		(1,266	)		2,625
Net increase (decrease) in net assets resulting from operations		242,429			116,853
Stockholder distributions(1)
Distributions from net investment income		(162,567	)		(127,414	)
Distributions from net realized gain on investments		—			(34,097	)
Net decrease in net assets resulting from stockholder distributions		(162,567	)		(161,511	)
Capital share transactions(2)
Reinvestment of stockholder distributions		5,665			13,631
Net increase (decrease) in net assets resulting from capital share transactions		5,665			13,631
Total increase (decrease) in net assets		85,527			(31,027	)
Net assets at beginning of period		2,208,928			2,366,986
Net assets at end of period	$	2,294,455		$	2,335,959
Accumulated undistributed (distributions in excess of) net investment income(1)	$	141,160		$	150,183

(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)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	242,429		$	116,853
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments		(662,756	)		(1,084,274	)
Paid-in-kind interest		(23,276	)		(15,236	)
Proceeds from sales and repayments of investments		872,931			1,114,231
Net realized (gain) loss on investments		19,090			42,135
Net change in unrealized (appreciation) depreciation on investments and secured borrowing		(106,740	)		51,945
Accretion of discount		(7,371	)		(25,433	)
Amortization of deferred financing costs and discount		2,907			2,788
Unrealized (gain)/loss on borrowings in foreign currency		2,823			(2,804	)
(Increase) decrease in receivable for investments sold and repaid		(27,094	)		(15,245	)
(Increase) decrease in interest receivable		(14,414	)		1,395
(Increase) decrease in prepaid expenses and other assets		45			(261	)
Increase (decrease) in payable for investments purchased		6,984			(28,095	)
Increase (decrease) in management fees payable		(543	)		(715	)
Increase (decrease) in accrued capital gains incentive fees		—			(18,418	)
Increase (decrease) in subordinated income incentive fees payable		(1,124	)		(599	)
Increase (decrease) in administrative services expense payable		(232	)		(1,009	)
Increase (decrease) in interest payable		(5,948	)		2,567
Increase (decrease) in directors’ fees payable		(78	)		(77	)
Increase (decrease) in other accrued expenses and liabilities		(5,867	)		(5,360	)
Net cash provided by (used in) operating activities		291,766			134,388
Cash flows from financing activities
Reinvestment of stockholder distributions		5,665			13,631
Stockholder distributions		(162,424	)		(125,431	)
Borrowings under credit facilities(1)		262,000			114,200
Borrowings under unsecured notes(1)		—			275,000
Secured borrowing(3)		2,829			—
Repayments of credit facilities(1)		(218,162	)		(268,411	)
Repayments under repurchase agreement(2)		(150,000	)		(150,000	)
Deferred financing costs paid		—			(4,286	)
Net cash provided by (used in) financing activities		(260,092	)		(145,297	)
Total increase (decrease) in cash		31,674			(10,909	)
Cash and foreign currency at beginning of period		81,987			96,844
Cash and foreign currency at end of period	$	113,661		$	85,935
Supplemental disclosure
Local and excise taxes paid	$	5,925		$	5,638

(1) See Note 8 for a discussion of the Company’s credit facilities and unsecured notes. During the nine months ended September 30, 2016 and 2015, the Company paid $39,942 and $27,851, 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 nine months ended September 30, 2016 and 2015, the Company paid $18,340 and $22,493, respectively, in interest expense pursuant to the repurchase agreement.

(3) See Note 8 for a discussion of the Company’s secured borrowing. During the nine months ended September 30, 2016, the Company did not pay any interest expense on the secured borrowing.

See notes to unaudited consolidated financial statements.

4

FS Investment Corporation

Unaudited Consolidated Schedule of Investments

As of September 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—89.7%
5 Arch Income Fund 2, LLC	(g)(i)(n)	Diversified Financials	10.5%		11/18/21	$	16,536	$	16,587	$	16,536
5 Arch Income Fund 2, LLC	(g)(i)(n)(p)	Diversified Financials	10.5%		11/18/21		21,464		21,464		21,464
A.P. Plasman Inc.	(e)(f)(g)(i)	Capital Goods	L+850	1.0%	12/29/19		203,676		201,638		204,949
Aeneas Buyer Corp.	(g)	Health Care Equipment & Services	L+500	1.0%	12/18/21		919		919		919
Aeneas Buyer Corp.	(g)(p)	Health Care Equipment & Services	L+500	1.0%	12/18/21		75		75		75
Aeneas Buyer Corp.	(e)(g)	Health Care Equipment & Services	L+812	1.0%	12/18/21		77,220		77,220		78,378
Aeneas Buyer Corp.	(g)(p)	Health Care Equipment & Services	L+750	1.0%	12/18/21		1,980		1,980		2,010
Altus Power America, Inc.	(g)	Energy	L+750	1.5%	10/10/21		3,125		3,125		3,188
AP Exhaust Acquisition, LLC	(f)(g)	Automobiles & Components	L+775	1.5%	1/16/21		15,811		15,811		13,755
ASG Technologies Group, Inc.	(e)(g)(s)	Software & Services	L+787, 1.2% PIK (1.2% Max PIK)	1.0%	4/30/20		53,796		53,431		54,872
Aspect Software, Inc.	(g)	Software & Services	L+950	1.0%	5/25/18		481		481		486
Aspect Software, Inc.	(g)(p)	Software & Services	L+950	1.0%	5/25/18		175		175		177
Aspect Software, Inc.	(g)	Software & Services	L+950	1.0%	5/25/20		701		701		708
Atlas Aerospace LLC	(g)	Capital Goods	L+806	1.0%	5/8/19		20,000		20,000		20,300
Atlas Aerospace LLC	(g)(p)	Capital Goods	L+750	1.0%	5/8/19		7,619		7,619		7,733
BenefitMall Holdings, Inc.	(e)(g)	Commercial & Professional Services	L+725	1.0%	11/24/20		14,738		14,738		15,032
BenefitMall Holdings, Inc.	(g)(p)	Commercial & Professional Services	L+725	1.0%	11/24/20		5,455		5,455		5,564
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		26,697		26,697		26,781
Blueprint Sub, Inc.	(g)(p)	Software & Services	L+750	1.0%	5/7/21		3,509		3,509		3,520
Cadence Aerospace Finance, Inc.	(g)	Capital Goods	L+525	1.3%	5/9/18		74		73		69
Caesars Entertainment Operating Co., Inc.	(e)(g)(i)(k)	Consumer Services	5.8%		3/1/17		11,935		11,778		12,112
Caesars Entertainment Operating Co., Inc.	(e)(i)(k)	Consumer Services	6.7%		3/1/17		2,299		2,276		2,357
Caesars Entertainment Operating Co., Inc.	(e)(f)(g)(i)(k)	Consumer Services	9.0%		3/1/17		64,172		64,059		64,383
Caesars Entertainment Resort Properties, LLC	(e)(g)	Consumer Services	L+600	1.0%	10/11/20		21,900		21,035		21,900
Corel Corp.	(g)(i)	Software & Services	Prime+725		6/7/18		6,000		6,000		6,000
Corel Corp.	(g)(i)(p)	Software & Services	Prime+725		6/7/18		4,000		4,000		4,000
Corel Corp.	(e)(f)(g)(i)	Software & Services	L+825		6/7/19		103,423		103,423		104,328
Corner Investment PropCo, LLC	(e)(g)	Consumer Services	L+975	1.3%	11/2/19		42,303		42,415		41,879
Crestwood Holdings LLC	(g)	Energy	L+800	1.0%	6/19/19		5,035		5,023		4,678
Eastman Kodak Co.	(g)	Consumer Durables & Apparel	L+625	1.0%	9/3/19		10,438		10,323		10,416

See notes to unaudited consolidated financial statements.

5

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Greystone Equity Member Corp.	(g)(i)	Diversified Financials	L+1050		3/31/21	$	3,434	$	3,449	$	3,430
Greystone Equity Member Corp.	(g)(i)(p)	Diversified Financials	L+1100		3/31/21		50,566		50,566		50,752
H.M. Dunn Co., Inc.	(g)	Capital Goods	L+906	1.0%	3/26/21		1,000		1,000		1,011
H.M. Dunn Co., Inc.	(g)(p)	Capital Goods	L+725	1.0%	3/26/21		357		357		361
Harvey Industries, Inc.	(g)	Capital Goods	L+800	1.0%	10/1/21		32,667		32,667		33,320
Imagine Communications Corp.	(e)(f)(g)	Media	L+825	1.0%	4/29/20		76,853		76,853		76,853
Imagine Communications Corp.	(g)(p)	Media	L+825	1.0%	4/29/20		28,600		28,600		28,600
Industrial Group Intermediate Holdings, LLC	(g)	Materials	L+800	1.3%	5/31/20		20,778		20,778		21,090
Industry City TI Lessor, L.P.	(g)	Consumer Services	10.8%, 1.0% PIK (1.0% Max PIK)		6/30/26		33,034		33,034		34,191
JMC Acquisition Merger Corp.	(g)	Capital Goods	L+857	1.0%	11/6/21		5,679		5,679		5,736
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		30,686		30,529		30,686
LEAS Acquisition Co Ltd.	(g)(i)	Capital Goods	L+875	1.5%	6/30/19	€	27,575		37,519		30,992
LEAS Acquisition Co Ltd.	(f)(i)	Capital Goods	L+875	1.5%	6/30/19	$	9,674		9,674		9,674
Logan’s Roadhouse, Inc.	(g)	Consumer Services	L+850 PIK (L+850 Max PIK)	1.0%	11/14/16		2,086		2,086		2,086
Logan’s Roadhouse, Inc.	(g)(p)	Consumer Services	L+850 PIK (L+850 Max PIK)	1.0%	11/14/16		2,963		2,963		2,963
MB Precision Holdings LLC	(g)	Capital Goods	L+725, 1.5% PIK (1.5% Max PIK)	1.3%	1/23/20		12,838		12,838		12,260
Micronics, Inc.	(e)(g)	Capital Goods	L+800	1.3%	12/11/19		63,624		63,413		62,351
MMM Holdings, Inc.	(g)	Health Care Equipment & Services	L+825	1.5%	12/12/17		8,130		8,082		7,865
MSO of Puerto Rico, Inc.	(g)	Health Care Equipment & Services	L+825	1.5%	12/12/17		5,911		5,876		5,718
New Star Metals Inc.	(e)(g)	Capital Goods	L+800	1.3%	3/20/20		37,077		37,077		38,189
Nobel Learning Communities, Inc.	(g)	Consumer Services	L+450	1.0%	4/27/20		59		59		59
Nobel Learning Communities, Inc.	(g)(p)	Consumer Services	L+450	1.0%	4/27/20		80		80		80
Nobel Learning Communities, Inc.	(g)	Consumer Services	L+842	1.0%	4/27/21		1,056		1,056		1,072
North Haven Cadence Buyer, Inc.	(g)(p)	Consumer Services	L+500	1.0%	9/2/21		938		938		938
North Haven Cadence Buyer, Inc.	(e)(g)	Consumer Services	L+813	1.0%	9/2/22		25,313		25,313		25,313
North Haven Cadence Buyer, Inc.	(g)(p)	Consumer Services	L+750	1.0%	9/2/22		5,938		5,938		5,938
Nova Wildcat Amerock, LLC	(g)	Consumer Durables & Apparel	L+865	1.3%	9/10/19		18,687		18,687		17,052

See notes to unaudited consolidated financial statements.

6

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost			Fair Value(d)
PHRC License, LLC	(f)(g)	Consumer Services	L+900	1.5%	8/14/20	$	44,091	$	44,091		$	44,091
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			16,858
PSKW, LLC	(e)(f)(g)	Health Care Equipment & Services	L+840	1.0%	11/25/21	$	30,000		30,000			29,391
Roadrunner Intermediate Acquisition Co., LLC	(e)(f)(g)	Health Care Equipment & Services	L+800	1.0%	9/22/21		36,075		36,075			36,546
Rogue Wave Software, Inc.	(e)(f)(g)	Software & Services	L+802	1.0%	9/25/21		31,313		31,313			30,843
Safariland, LLC	(e)(g)	Capital Goods	L+800	1.3%	9/20/19		187,076		187,076			189,882
Sequential Brands Group, Inc.	(e)(g)(i)	Consumer Durables & Apparel	L+900		7/1/22		80,652		80,652			82,265
Sorenson Communications, Inc.	(e)(g)	Telecommunication Services	L+575	2.3%	4/30/20		91,856		91,556			91,856
Sports Authority, Inc.	(g)(k)(q)	Retailing	L+600	1.5%	11/16/17		6,318		5,370			1,548
SunGard Availability Services Capital, Inc.	(g)	Software & Services	L+500	1.0%	3/29/19		4,382		4,192			4,140
Sunnova Asset Portfolio 5 Holdings, LLC	(g)	Energy	12.0% PIK (12.0% Max PIK)		11/14/21		4,709		4,636			4,756
Swiss Watch International, Inc.	(g)	Consumer Durables & Apparel	L+825	1.3%	11/8/18		11,732		11,732			10,383
Swiss Watch International, Inc.	(e)(g)	Consumer Durables & Apparel	L+825	1.3%	11/8/18		40,625		40,281			14,016
Transplace Texas, LP	(e)(f)(g)	Transportation	L+745	1.0%	9/16/21		22,973		22,973			23,088
Transplace Texas, LP	(g)(p)	Transportation	L+700	1.0%	9/16/21		541		541			543
U.S. Xpress Enterprises, Inc.	(e)(f)	Transportation	L+950, 0.0% PIK (1.3% Max PIK)	1.5%	5/30/19		65,162		65,162			65,162
Vertellus Performance Chemicals LLC	(f)(g)	Materials	L+950	1.0%	1/30/20		38,000		38,000			36,115
VPG Group Holdings LLC	(e)(g)	Materials	L+900	1.0%	6/30/18		62,395		62,200			61,615
Warren Resources, Inc.	(f)(g)(q)	Energy	L+850	1.0%	5/22/20		3,372		3,372			2,402
Waste Pro USA, Inc.	(e)(g)	Commercial & Professional Services	L+750	1.0%	10/15/20		94,794		94,794			96,571
Zeta Interactive Holdings Corp.	(e)(g)	Software & Services	L+750	1.0%	7/29/22		9,766		9,793			9,803
Zeta Interactive Holdings Corp.	(g)(r)	Software & Services	L+750	1.0%	7/29/22		2,857		2,830			2,861
Zeta Interactive Holdings Corp.	(g)(p)	Software & Services	L+750	1.0%	7/29/22		1,777		1,777			1,784
Zeta Interactive Holdings Corp.	(g)(p)(r)	Software & Services	L+750	1.0%	7/29/22		457		457			459
Total Senior Secured Loans—First Lien									2,224,911			2,196,095
Unfunded Loan Commitments									(137,196	)		(137,196	)
Net Senior Secured Loans—First Lien									2,087,715			2,058,899

See notes to unaudited consolidated financial statements.

7

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 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—Second Lien—27.0%
Alison US LLC	(g)(i)	Capital Goods	L+850	1.0%	8/29/22	$	4,444	$	4,299	$	4,114
AP Exhaust Acquisition, LLC	(f)	Automobiles & Components	12.0% PIK (12.0% Max PIK)		9/28/21		3,654		3,654		3,014
Arena Energy, LP	(g)	Energy	L+900, 4.0% PIK (4.0% Max PIK)	1.0%	1/24/21		7,875		7,875		7,840
Ascent Resources—Utica, LLC	(e)(f)(g)	Energy	L+950, 2.0% PIK (2.0% Max PIK)	1.5%	9/30/18		185,894		185,340		183,105
ASG Technologies Group, Inc.	(g)(s)	Software & Services	L+1100, 0.0% PIK (6.0% Max PIK)	1.0%	6/27/22		21,111		14,803		14,725
Brock Holdings III, Inc.	(g)	Energy	L+825	1.8%	3/16/18		6,923		6,889		6,576
Byrider Finance, LLC	(f)(g)	Automobiles & Components	L+1000, 0.5% PIK (0.5% Max PIK)	1.3%	8/22/20		10,034		10,034		9,934
Compuware Corp.	(g)	Software & Services	L+825	1.0%	12/15/22		6,550		5,960		6,185
DEI Sales, Inc.	(e)(f)	Consumer Durables & Apparel	L+900	1.5%	1/15/18		57,573		57,311		52,824
EagleView Technology Corp.	(g)	Software & Services	L+825	1.0%	7/14/23		11,538		11,389		11,500
Eastman Kodak Co.	(e)(f)	Consumer Durables & Apparel	L+950	1.3%	9/3/20		50,000		49,177		49,500
Gruden Acquisition, Inc.	(g)	Transportation	L+850	1.0%	8/18/23		15,000		14,349		11,610
JW Aluminum Co.	(e)(f)(g)(t)	Materials	L+850 PIK (L+850 Max PIK)	0.8%	11/17/20		36,209		36,191		36,481
National Surgical Hospitals, Inc.	(e)	Health Care Equipment & Services	L+900	1.0%	6/1/23		30,000		30,000		29,760
Nielsen & Bainbridge, LLC	(g)	Consumer Durables & Apparel	L+925	1.0%	8/15/21		16,675		16,473		16,175
Paw Luxco II Sarl	(f)(i)	Consumer Durables & Apparel	EURIBOR+950		1/29/19	€	16,364		20,817		13,265
PSAV Acquisition Corp.	(e)(g)	Technology Hardware & Equipment	L+825	1.0%	1/24/22	$	80,000		79,098		80,000
Spencer Gifts LLC	(e)	Retailing	L+825	1.0%	6/29/22		30,000		29,879		24,750
Stadium Management Corp.	(e)	Consumer Services	L+825	1.0%	2/27/21		56,776		56,776		56,208
Stardust Finance Holdings, Inc.	(g)(i)	Materials	L+950	1.0%	3/13/23		2,500		2,476		2,502
Total Senior Secured Loans—Second Lien									642,790		620,068
Senior Secured Bonds—7.4%
Advanced Lighting Technologies, Inc.	(f)(g)	Materials	10.5%		6/1/19		78,500		77,587		19,625
Caesars Entertainment Resort Properties, LLC	(e)(g)	Consumer Services	11.0%		10/1/21		24,248		24,024		26,097
FourPoint Energy, LLC	(e)(f)	Energy	9.0%		12/31/21		74,813		72,413		74,064
Global A&T Electronics Ltd.	(g)(i)	Semiconductors & Semiconductor Equipment	10.0%		2/1/19		7,000		6,950		5,521

See notes to unaudited consolidated financial statements.

8

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Lightstream Resources Ltd.	(f)(i)(k)(q)	Energy	9.9%		6/15/19	$	2,112	$	2,112	$	1,890
Logan’s Roadhouse, Inc.	(g)(k)(q)	Consumer Services	4.0%, 10.5% PIK (10.5% Max PIK)		10/15/17		59,249		48,677		16,495
SandRidge Energy, Inc.	(g)(k)(q)	Energy	8.8%		6/1/20		19,500		19,458		7,069
Sorenson Communications, Inc.	(f)	Telecommunication Services	9.0%, 0.0% PIK (9.0% Max PIK)		10/31/20		19,898		19,328		17,709
Total Senior Secured Bonds									270,549		168,470
Subordinated Debt—19.4%
Alta Mesa Holdings, LP	(g)	Energy	9.6%		10/15/18		11,165		11,119		10,509
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		14,945		11,948
Bellatrix Exploration Ltd.	(g)(i)	Energy	8.5%		5/15/20		5,000		4,923		4,665
Brooklyn Basketball Holdings, LLC	(f)(g)	Consumer Services	L+725		10/25/19		19,873		19,873		19,773
CEC Entertainment, Inc.	(f)	Consumer Services	8.0%		2/15/22		5,000		5,011		5,003
Ceridian HCM Holding, Inc.	(f)(g)(h)	Commercial & Professional Services	11.0%		3/15/21		21,800		22,596		23,108
EV Energy Partners, L.P.	(f)	Energy	8.0%		4/15/19		265		243		176
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		1/30/25		705		705		705
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		4/30/25		4,478		4,478		4,478
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		9/3/25		925		925		925
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		9/29/25		871		871		871
Global Jet Capital Inc.	(f)(g)(i)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		12/4/25		64,298		64,298		64,298
Global Jet Capital Inc.	(f)(g)(i)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		12/9/25		10,516		10,516		10,516
Global Jet Capital Inc.	(f)(i)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		1/29/26		5,507		5,507		5,507
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		4/14/26		11,257		11,257		11,257

See notes to unaudited consolidated financial statements.

9

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Imagine Communications Corp.	(g)	Media	12.5% PIK (12.5% Max PIK)		8/4/18	$	567	$	567	$	567
Jupiter Resources Inc.	(f)(g)(i)	Energy	8.5%		10/1/22		6,425		5,479		5,417
Mood Media Corp.	(f)(g)(i)	Media	9.3%		10/15/20		43,135		42,368		33,699
NewStar Financial, Inc.	(g)(i)	Diversified Financials	8.3%, 0.0% PIK (8.8% Max PIK)		12/4/24		75,000		61,388		63,000
P.F. Chang’s China Bistro, Inc.	(f)(g)	Consumer Services	10.3%		6/30/20		11,433		11,758		10,876
PriSo Acquisition Corp.	(g)	Capital Goods	9.0%		5/15/23		10,155		10,041		9,876
Sequel Industrial Products Holdings, LLC	(f)	Commercial & Professional Services	14.5%, 2.5% PIK (2.5% Max PIK)		9/30/19		7,044		6,997		7,132
Sorenson Communications, Inc.	(f)	Telecommunication Services	13.0%, 0.0% PIK (13.0% Max PIK)		10/31/21		15,122		14,276		14,177
SunGard Availability Services Capital, Inc.	(f)(g)	Software & Services	8.8%		4/1/22		10,750		8,292		7,035
ThermaSys Corp.	(e)(f)(g)	Capital Goods	9.0%, 1.8% PIK (5.0% Max PIK)		5/3/20		137,491		137,491		110,680
VPG Group Holdings LLC	(e)(g)	Materials	11.0%, 2.0% PIK (2.0% Max PIK)		6/30/18		5,328		5,328		5,175
Total Subordinated Debt									484,193		444,314
Collateralized Securities—3.4%
ACASC 2013-2A Class Subord. B	(f)(g)(i)	Diversified Financials	12.2%		10/25/25		30,500		18,466		19,848
Dryden CDO 23A Class Subord.	(g)(i)	Diversified Financials	9.1%		7/17/23		10,000		3,265		3,248
NewStar Clarendon 2014-1A Class D	(g)(i)	Diversified Financials	L+435		1/25/27		1,560		1,475		1,420
NewStar Clarendon 2014-1A Class Subord. B	(g)(i)	Diversified Financials	14.8%		1/25/27		17,900		14,606		14,568
Rampart CLO 2007 1A Class Subord.	(g)(i)	Diversified Financials	0.0%		10/25/21		10,000		778		1,500
Stone Tower CLO VI Class Subord.	(f)(i)	Diversified Financials	21.7%		4/17/21		5,000		1,603		2,498
Wind River CLO Ltd. 2012 1A Class E	(g)(i)	Diversified Financials	L+525		1/15/24		5,000		4,552		5,000
Wind River CLO Ltd. 2012 1A Class Subord. B	(g)(i)	Diversified Financials	13.4%		1/15/24		42,504		27,085		30,597
Total Collateralized Securities									71,830		78,679

See notes to unaudited consolidated financial statements.

10

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Number of Shares		Amortized Cost		Fair Value(d)
Equity/Other—24.7%(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		2,326
Altus Power America Holdings, LLC, Preferred Equity	(g)	Energy		1,041,667		1,002		1,719
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		18,020
AP Exhaust Holdings, LLC, Common Equity	(g)(k)(m)	Automobiles & Components		811		811		—
Aquilex Corp., Common Equity, Class A Shares	(g)(k)(m)	Commercial & Professional Services		15,128		1,087		3,856
Aquilex Corp., Common Equity, Class B Shares	(g)(k)(m)	Commercial & Professional Services		32,637		1,690		8,319
Ascent Resources Utica Holdings, LLC, Common Equity	(g)(k)(l)	Energy		96,800,082		29,100		21,296
ASG Technologies Group, Inc., Common Equity	(g)(k)(s)	Software & Services		1,689,767		36,422		80,771
ASG Technologies Group, Inc., Warrants, 6/27/2022	(g)(k)(s)	Software & Services		229,541		6,542		5,980
Aspect Software, Inc., Common Equity	(g)(k)	Software & Services		311,927		15,409		21,960
Burleigh Point, Ltd., Warrants, 7/16/2020	(g)(i)(k)	Retailing		3,451,216		1,898		242
Eastman Kodak Co., Common Equity	(e)(g)(k)	Consumer Durables & Apparel		61,859		1,203		928
FourPoint Energy, LLC, Common Equity, Class C-II-A Units	(g)(k)(m)	Energy		21,000		21,000		9,188
FourPoint Energy, LLC, Common Equity, Class D Units	(g)(k)(m)	Energy		3,937		2,601		1,742
FourPoint Energy, LLC, Common Equity, Class E-II Units	(g)(k)(m)	Energy		87,400		21,850		36,490
FourPoint Energy, LLC, Common Equity, Class E-III Units	(g)(k)(m)	Energy		70,875		17,719		31,008
Fronton Investor Holdings, LLC, Class B Units	(g)(m)(s)	Consumer Services		14,943		15,011		14,793
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		3,967
Imagine Communications Corp., Common Equity, Class A Units	(g)(k)	Media		33,034		3,783		2,065
Industrial Group Intermediate Holdings, LLC, Common Equity	(g)(k)(m)	Materials		441,238		441		816
JMC Acquisition Holdings, LLC, Common Equity	(g)(k)	Capital Goods		483		483		512
JW Aluminum Co., Common Equity	(e)(f)(g)(k)(t)	Materials		972		—		1,311
JW Aluminum Co., Preferred Equity	(e)(f)(g)(k)(t)	Materials		4,499		43,507		49,341
Leading Edge Aviation Services, Inc., Common Equity	(f)(k)	Capital Goods		4,401		464		82
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		472
Micronics, Inc., Preferred Equity	(g)(k)	Capital Goods		55		553		758
New Star Metals Inc., Common Equity	(g)(k)	Capital Goods		741,082		750		2,446
NewStar Financial, Inc., Warrants, 11/4/2024	(g)(i)(k)	Diversified Financials		3,000,000		15,058		8,490
North Haven Cadence Buyer, Inc., Common Equity	(g)(k)	Consumer Services		1,041,667		1,042		1,042

See notes to unaudited consolidated financial statements.

11

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

Portfolio Company(a)	Footnotes	Industry	Number of Shares		Amortized Cost		Fair Value(d)
Plains Offshore Operations Inc., Preferred Equity	(e)(f)	Energy		52,666	$	69,193	$	64,668
Plains Offshore Operations Inc., Warrants, 11/18/2019	(e)(f)(k)	Energy		1,067,481		1,722		—
PSAV Holdings LLC, Common Equity	(f)	Technology Hardware & Equipment		10,000		10,000		28,000
Safariland, LLC, Common Equity	(f)(k)	Capital Goods		25,000		2,500		10,393
Safariland, LLC, Preferred Equity	(f)	Capital Goods		2,042		24,999		25,722
Safariland, LLC, Warrants, 7/27/2018	(f)(k)	Capital Goods		2,263		246		941
Safariland, LLC, Warrants, 9/20/2019	(f)(k)	Capital Goods		2,273		227		945
Sequel Industrial Products Holdings, LLC, Common Equity	(f)(g)(k)	Commercial & Professional Services		33,306		3,400		8,017
Sequel Industrial Products Holdings, LLC, Preferred Equity	(f)(g)	Commercial & Professional Services		8,000		11,891		11,897
Sequel Industrial Products Holdings, LLC, Warrants, 9/28/2022	(g)(k)	Commercial & Professional Services		1,293		1		155
Sequel Industrial Products Holdings, LLC, Warrants, 5/10/2022	(f)(k)	Commercial & Professional Services		19,388		12		2,728
Sequential Brands Group, Inc., Common Equity	(g)(i)(k)	Consumer Durables & Apparel		206,664		2,790		1,653
Sorenson Communications, Inc., Common Equity	(f)(k)	Telecommunication Services		46,163		—		38,325
Sunnova Energy Corp., Common Equity	(g)(k)	Energy		192,389		722		1,033
Sunnova Energy Corp., Preferred Equity	(g)(k)	Energy		18,182		97		98
SWI Holdco LLC, Common Equity	(e)(g)(k)	Consumer Durables & Apparel		950		—		—
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		1,637
Zeta Interactive Holdings Corp., Preferred Equity	(g)(k)	Software & Services		215,662		1,714		1,892
Total Equity/Other						439,491		567,096
TOTAL INVESTMENTS—171.6%					$	3,996,568		3,937,526
LIABILITIES IN EXCESS OF OTHER ASSETS—(71.6%)								(1,643,071	)
NET ASSETS—100%							$	2,294,455

(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 September 30, 2016, the three-month London Interbank Offered Rate, or LIBOR, was 0.85%, the Euro Interbank Offered Rate, or EURIBOR, was (0.30)% and the U.S. Prime Lending Rate, or Prime, was 3.50%.

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

(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).

See notes to unaudited consolidated financial statements.

12

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

(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 September 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 September 30, 2016, 78.2% 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) The transfer of a portion of this loan does not qualify for sale accounting under Accounting Standards Codification Topic 860, Transfers and Servicing, and therefore, the entire senior secured loan remains in the unaudited consolidated schedule of investments as of September 30, 2016 (see Note 8).

(s) 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 September 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 investments in portfolio companies of which the Company was determined to be an affiliated person of for the nine months ended September 30, 2016:

Portfolio Company	Fair Value at December 31, 2015		Purchases and Paid-in-kind Interest		Sales and Repayments			Accretion of Discount		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)			Fair Value at September 30, 2016		Interest Income		Fee Income		Dividend Income
Senior Secured Loans—First Lien
ASG Technologies Group, Inc.	$	38,321	$	15,466		—		$	24		—	$	1,061		$	54,872	$	3,416		—		—
Senior Secured Loans—Second Lien
ASG Technologies Group, Inc.		—	$	14,569		—		$	234		—	$	(78	)	$	14,725	$	676	$	633		—
Equity/Other
ASG Technologies Group, Inc., Common Equity	$	77,898		—		—			—		—	$	2,873		$	80,771		—		—		—
ASG Technologies Group, Inc., Warrants, 6/27/2022		—	$	6,542		—			—		—	$	(562	)	$	5,980		—		—		—
Fronton Investor Holdings, LLC, Class B Units	$	16,138		—	$	(1,874	)		—		—	$	529		$	14,793		—		—	$	224

See notes to unaudited consolidated financial statements.

13

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2016

(in thousands, except share amounts)

(t) 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 September 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 investments in portfolio companies of which the Company was deemed to be an affiliated person of and deemed to control for the nine months ended September 30, 2016:

Portfolio Company	Fair Value at December 31, 2015		Purchases and Paid-in-kind Interest		Sales and Redemptions			Accretion of Discount		Net Realized Gain (Loss)			Net Change in Unrealized Appreciation (Depreciation)		Fair Value at September 30, 2016		Interest Income		Fee Income		Dividend Income
Senior Secured Loans—Second Lien
JW Aluminum Co.	$	32,887	$	3,303		—		$	1		—		$	290	$	36,481	$	2,437		—		—
Senior Secured Bonds
JW Aluminum Co.		—	$	8,060	$	(8,141	)	$	107	$	(26	)		—		—	$	103		—		—
Equity/Other
JW Aluminum Co., Common Equity		—		—		—			—		—		$	1,311	$	1,311		—		—		—
JW Aluminum Co., Preferred Equity	$	43,844	$	406		—			—		—		$	5,091	$	49,341		—		—		—

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

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)
CoSentry.Net, LLC	(e)(g)	Software & Services	L+800	1.3%	12/31/19	$	62,331	$	62,331	$	63,578
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

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)
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
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

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)
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
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%		12/31/20		5,906		5,877		4,592
Global A&T Electronics Ltd.	(g)(h)	Semiconductors & Semiconductor Equipment	10.0%		2/1/19		7,000		6,936		5,530
Lightstream Resources Ltd.	(f)(h)	Energy	9.9%		6/15/19		2,112		2,112		1,764

See notes to unaudited consolidated financial statements.

18

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)
Logan’s Roadhouse, Inc.	(f)(g)	Consumer Services	4.0%, 10.5% PIK (10.5% Max PIK)		10/15/17	$	59,249	$	47,267		$	49,432
SandRidge Energy, Inc.	(g)	Energy	8.8%		6/1/20		19,500		19,457			5,953
Sorenson Communications, Inc.	(f)	Telecommunication Services	9.0%, 0.0% PIK (9.0% Max PIK)		10/31/20		19,898		19,250			18,592
Total Senior Secured Bonds									350,073			246,631
Unfunded Bond Commitments									(5,877	)		(5,877	)
Net Senior Secured Bonds									344,196			240,754
Subordinated Debt—19.8%
Alta Mesa Holdings, LP	(g)	Energy	9.6%		10/15/18		11,165		11,102			3,922
Aurora Diagnostics, LLC	(e)(f)	Health Care Equipment & Services	10.8%		1/15/18		18,065		18,089			11,754
Bellatrix Exploration Ltd.	(g)(h)	Energy	8.5%		5/15/20		5,000		4,911			3,369
Brooklyn Basketball Holdings, LLC	(f)(g)	Consumer Services	L+725		10/25/19		19,873		19,873			19,773
CEC Entertainment, Inc.	(f)	Consumer Services	8.0%		2/15/22		5,000		5,012			4,756
Ceridian HCM Holding Inc.	(f)(g)	Commercial & Professional Services	11.0%		3/15/21		10,800		11,354			8,532
EV Energy Partners, L.P.	(f)	Energy	8.0%		4/15/19		265		237			132
Flanders Corp.	(e)(f)	Capital Goods	13.8% PIK (13.8% Max PIK)		5/14/18		25,666		25,569			26,693
Flanders Corp.	(f)(g)	Capital Goods	17.5% PIK (17.5% Max PIK)		5/14/18		25,754		24,651			27,750
Global Jet Capital Inc.	(g)	Commercial & Professional Services	15.0% PIK (15.0% Max PIK)		1/30/25