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~~JUNE 30, ~~2021~~

2022

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

COMMISSION FILE NUMBER: 814-00841

___________________________

FS Energy and Power Fund

(Exact name of registrant as specified in its charter)

___________________________

~~Delaware~~

~~27-6822130~~

~~(State or other jurisdiction of~~

~~incorporation or organization)~~

~~(I.R.S. Employer~~

~~Identification No.)~~

~~201 Rouse Boulevard~~

~~Philadelphia, Pennsylvania~~

~~19112~~

~~(Address of principal executive office)~~

~~(Zip Code)~~

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

~~Securities registered pursuant to Section 12(b) Act: None~~


~~Title~~ Delaware (State or other jurisdiction of ~~each class~~ incorporation or organization)	~~Trading~~ ~~symbol(s)~~	~~Name on each exchange~~ ~~on which registered~~ 27-6822130 (I.R.S. Employer Identification No.)
~~N/A~~	~~N/A~~
201 Rouse Boulevard Philadelphia, Pennsylvania (Address of principal executive office)	~~N/A~~ 19112 (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 such 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected to not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Securities registered pursuant to Section 12(b) Act: None

Title of each class

Trading symbol(s)

Name on each exchange on which registered

N/A

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The issuer had ~~446,089,270~~450,128,854 common shares of beneficial interest outstanding as of ~~November 15, 2021.~~

August 11, 2022.

TABLE OF CONTENTS


							Page
PART I—FINANCIAL INFORMATION
ITEM 1.		FINANCIAL STATEMENTS

~~ITEM 1.~~	~~FINANCIAL STATEMENTS~~

	Consolidated Balance Sheets as of ~~September~~June 30, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021					1

	Unaudited Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021					2

	Unaudited Consolidated Statements of Changes in Net Assets for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021					3

	Unaudited Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021					4

	Consolidated Schedules of Investments as of ~~September~~June 30, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021					5

	Notes to Unaudited Consolidated Financial Statements					19

ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS					44	38

ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	50
ITEM 4.		CONTROLS AND PROCEDURES			61			51

~~ITEM 4.~~						~~CONTROLS AND PROCEDURES~~			62

PART II—OTHER INFORMATION

ITEM 1.			LEGAL PROCEEDINGS					63	52

ITEM 1A.			RISK FACTORS					63	52

ITEM 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS					63	52

ITEM 3.			DEFAULTS UPON SENIOR SECURITIES					63	52

ITEM 4.			MINE SAFETY DISCLOSURES	52
ITEM 5.		OTHER INFORMATION			63 52
ITEM 6.		EXHIBITS			53

~~ITEM 5.~~	~~OTHER INFORMATION~~			63

~~ITEM 6.~~	~~EXHIBITS~~			64

	SIGNATURES					66	54

Table of Contents

PART I—FINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements.~~

Item 1. Financial Statements.

FS Energy and Power Fund

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

   September 30, 2021
(Unaudited) December 31,
2020
Assets

Investments, at fair value

Non-controlled/unaffiliated investments (amortized cost—$1,899,827 and $2,053,838, respectively)
   $ 1,936,736 $ 1,825,470
Non-controlled/affiliated investments (amortized cost—$202,741 and $406,430, respectively)
   181,013 239,279
Controlled/affiliated investments (amortized cost—$188,094 and $115,137, respectively)
   187,957 116,727


Total investments, at fair value (amortized cost—$2,290,662 and $2,575,405, respectively)
   2,305,706 2,181,476
Cash
   71,573 142,536
Receivable for investments sold and repaid
   13,176 7,691
Interest receivable
   17,902 26,705
Prepaid expenses and other assets
   200 234


Total assets
   $ 2,408,557 $ 2,358,642


Liabilities

Payable for investments purchased
   $ 80,184 $ —
Credit facilities payable (net of deferred financing costs of $2,602 and $5,816, respectively)⁽¹⁾
   229,065 410,851
Secured note payable (net of deferred financing costs of $3,870 and $5,284, respectively)⁽¹⁾
   481,417 478,521
Shareholder distributions payable
   13,339 13,188
Management fees payable
   9,051 10,156
Administrative services expense payable
   1,843 949
Interest payable
   4,769 14,236
Trustees’ fees payable
   189 192
Other accrued expenses and liabilities
   1,546 1,972


Total liabilities
   821,403 930,065


Commitments and contingencies⁽²⁾

Shareholders’ equity

Preferred shares, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding
   —   —
Common shares, $0.001 par value, 700,000,000 shares authorized, 444,629,043 and 440,020,123 shares issued and outstanding, respectively
   445 440
Capital in excess of par value
   3,168,360 3,152,485
Accumulated earnings (deficit)
   (1,581,651 ) (1,724,348 )


Total shareholders’ equity
   1,587,154 1,428,577


Total liabilities and shareholders’ equity
   $ 2,408,557 $ 2,358,642


Net asset value per common share at period end
   $ 3.57 $ 3.25

~~(1)~~

~~See Note 9 for a discussion of the Company’s financing arrangements.~~

~~(2)~~

~~See Note 10 for a discussion of the Company’s commitments and contingencies.~~

June 30, 2022
(Unaudited) December 31,
2021
Assets
Investments, at fair value
Non-controlled/unaffiliated investments (amortized cost—$1,964,688 and $1,961,617, respectively) $ 2,177,314 $ 2,037,956
Non-controlled/affiliated investments (amortized cost—$101,032 and $200,189, respectively) 78,880 175,908
Controlled/affiliated investments (amortized cost—$172,248 and $191,251, respectively) 175,142 181,359
Total investments, at fair value (amortized cost—$2,237,968 and $2,353,057, respectively) 2,431,336 2,395,223
Cash 131,334 33,879
Receivable for investments sold and repaid 7,291 4,975
Interest receivable 19,432 26,242
Dividends receivable 3,691 —
Prepaid expenses and other assets 58 156
Total assets $ 2,593,142 $ 2,460,475
Liabilities
Payable for investments purchased $ 447 $ 49,500
Credit facilities payable (net of deferred financing costs of $671 and $2,036, respectively)(1)
305,005 284,631
Secured note payable (net of deferred financing costs of $2,257 and $3,350, respectively)(1)
452,733 482,437
Unrealized depreciation on swap contracts 3,588 —
Swap income payable 453 —
Shareholder distributions payable 13,465 13,388
Management fees payable 9,576 10,466
Administrative services expense payable 1,677 1,324
Interest payable 13,232 14,170
Trustees' fees payable 190 200
Other accrued expenses and liabilities 1,521 2,036
Total liabilities 801,887 858,152
Commitments and contingencies(2)
Shareholders' equity
Preferred shares, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding — —
Common shares, $0.001 par value, 700,000,000 shares authorized, 448,830,667 and 446,089,499 shares issued and outstanding, respectively 449 446
Capital in excess of par value 3,139,709 3,129,252
Accumulated earnings (deficit) (1,348,903) (1,527,375)
Total shareholders' equity 1,791,255 1,602,323
Total liabilities and shareholders' equity $ 2,593,142 $ 2,460,475
Net asset value per common share at period end $ 3.99 $ 3.59

_________________________

(1) See Note 9 for a discussion of the Company's financing arrangements.

(2) See Note 10 for a discussion of the Company's commitments and contingencies.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share amounts)

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2021 2020 2021 2020
Investment income

From non-controlled/unaffiliated investments:

Interest income
   $ 20,066 $ 28,644 $ 69,393 $ 125,230
Paid-in-kind interest income
   7,926 4,131 20,163 13,383
Fee income
   117 352 1,312 862
Dividend income
   —   —   —   66
From non-controlled/affiliated investments:

Interest income
   1,961 5,510 5,072 20,670
Paid-in-kind interest income
   43 5,921 175 9,153
Dividend income
   —   —   1,574 —
From controlled/affiliated investments:

Interest income
   2,173 1,561 6,242 1,561
Paid-in-kind interest income
   645 —   6,117 —
Dividend income
   4,960 —   4,960 —


Total investment income
   37,891 46,119 115,008 170,925


Operating expenses

Management fees
   10,077 10,626 31,005 38,619
Administrative services expenses
   1,457 2,628 4,480 4,937
Share transfer agent fees
   736 738 2,182 1,953
Accounting and administrative fees
   169 172 516 611
Interest expense⁽¹⁾
   12,783 19,834 41,017 60,152
Trustees’ fees
   189 190 587 597
Other general and administrative expenses
   732 1,236 2,064 4,415


Total operating expenses
   26,143 35,424 81,851 111,284
Less: Management fee offset⁽²⁾
   (1,026 ) (2 ) (1,349 ) (452 )


Net expenses
   25,117 35,422 80,502 110,832


Net investment income
   12,774 10,697 34,506 60,093


Realized and unrealized gain/loss

Net realized gain (loss) on investments:

Non-controlled/unaffiliated
   1,509 (176,011 ) 22,012 (503,067 )
Non-controlled/affiliated
   116 (309,777 ) (282,893 ) (427,633 )
Controlled/affiliated
   —   —   —   (27,464 )
Net realized gain (loss) on foreign currency
   —   —   (6 ) —
Net realized gain (loss) on swap contracts
   —   —   —   20,250
Net realized gain (loss) on debt extinguishment
   —   —   —   2,591
Net change in unrealized appreciation (depreciation) on investments:

Non-controlled/unaffiliated
   57,390 145,014 265,277 (203,544 )
Non-controlled/affiliated
   (11,500 ) 323,167 145,423 183,156
Controlled/affiliated
   3,104 447 (1,727 ) 27,608
Net change in unrealized appreciation (depreciation) on swap contracts
   —   —   —   (6,551 )
Net change in unrealized gain (loss) on foreign currency
   (21 ) 6 (13 ) (9 )


Total net realized and unrealized gain (loss)
   50,598 (17,154 ) 148,073 (934,663 )


Net increase (decrease) in net assets resulting from operations
   $ 63,372 $ (6,457 ) $ 182,579 $ (874,570 )


Per share information—basic and diluted

Net increase (decrease) in net assets resulting from operations (Earnings per Share)
   $ 0.14 $ (0.01 ) $ 0.41 $ (2.00 )


Weighted average shares outstanding
   444,498,317 438,305,464 443,021,423 436,850,956

~~(1)~~

~~See Note 9 for a discussion of the Company’s financing arrangements.~~

~~(2)~~

~~See Note 4 for a discussion of the offset by FS/EIG Advisor, LLC, the Company’s investment adviser, of certain management fees to which it was otherwise entitled during the applicable period.~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Investment income
From non-controlled/unaffiliated investments:
Interest income $ 23,713 $ 23,268 $ 46,853 $ 49,327
Paid-in-kind interest income 7,098 3,898 11,521 12,237
Fee income 9,226 679 10,459 1,195
Dividend income — 1,574 — 1,574
From non-controlled/affiliated investments:
Interest income 1,030 2,025 2,940 3,111
Paid-in-kind interest income 22 60 57 132
Dividend income 3,691 — 5,417 —
From controlled/affiliated investments:
Interest income 2,072 2,049 4,109 4,069
Paid-in-kind interest income 221 5,403 891 5,472
Dividend income — — 735 —
Total investment income 47,073 38,956 82,982 77,117
Operating expenses
Management fees 11,276 10,278 22,011 20,928
Administrative services expenses 1,490 1,442 2,910 3,023
Share transfer agent fees 728 728 1,448 1,446
Accounting and administrative fees 189 161 366 347
Interest expense(1)
13,196 12,744 26,890 28,234
Trustees' fees 190 191 417 398
Other general and administrative expenses 868 660 2,312 1,332
Total operating expenses 27,937 26,204 56,354 55,708
Less: Management fee offset(2)
(1,700) (321) (2,398) (323)
Net expenses 26,237 25,883 53,956 55,385
Net investment income 20,836 13,073 29,026 21,732
Realized and unrealized gain/loss
Net realized gain (loss) on investments:
Non-controlled/unaffiliated (3,938) 20,943 (20,602) 20,503
Non-controlled/affiliated 53,584 (283,009) 41,204 (283,009)
Controlled/affiliated 10,858 — 10,858 —
Net realized gain (loss) on foreign currency — (6) — (6)
Net realized gain (loss) on swap contracts (1,392) — (1,808) —
Net realized gain (loss) on debt extinguishment (183) — (929) —
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/unaffiliated 784 58,661 136,287 207,887
Non-controlled/affiliated (53,922) 163,364 2,129 156,923
Controlled/affiliated (10,941) 6,391 12,786 (4,831)
Net change in unrealized appreciation (depreciation) on swap contracts (106) — (3,588) —
Net change in unrealized gain (loss) on foreign currency — 4 — 8
Total net realized and unrealized gain (loss) (5,256) (33,652) 176,337 97,475
Net increase (decrease) in net assets resulting from operations $ 15,580 $ (20,579) $ 205,363 $ 119,207
Per share information—basic and diluted
Net increase (decrease) in net assets resulting from operations (Earnings per Share) $ 0.03 $ (0.05) $ 0.46 $ 0.27
Weighted average shares outstanding 448,730,149 443,011,321 448,070,934 442,270,736

________________________

(1) See Note 9 for a discussion of the Company's financing arrangements.

(2) See Note 4 for a discussion of the offset by FS/EIG Advisor, LLC, the Company's investment adviser, of certain management fees to which it was otherwise entitled during the applicable period.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Statements of Changes in Net Assets

(in thousands)

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2021 2020 2021 2020
Operations

Net investment income
   $ 12,774 $ 10,697 $ 34,506 $ 60,093
Net realized gain (loss) on investments, foreign currency, swap contracts and debt extinguishment
   1,625 (485,788 ) (260,887 ) (935,323 )
Net change in unrealized appreciation (depreciation) on investments
   48,994 468,628 408,973 7,220
Net change in unrealized appreciation (depreciation) on swap contracts
   —   —   —   (6,551 )
Net change in unrealized gain (loss) on foreign currency
   (21 ) 6 (13 ) (9 )


Net increase (decrease) in net assets resulting from operations
   63,372 (6,457 ) 182,579 (874,570 )


Shareholder distributions⁽¹⁾

Distributions to shareholders
   (13,339 ) (13,163 ) (39,882 ) (62,468 )


Net decrease in net assets resulting from shareholder distributions
   (13,339 ) (13,163 ) (39,882 ) (62,468 )


Capital share transactions⁽²⁾

Reinvestment of shareholder distributions
   5,262 5,442 15,880 20,871
Repurchases of common shares
   —   —   —   (26,823 )


Net increase (decrease) in net assets resulting from capital share transactions
   5,262 5,442 15,880 (5,952 )


Total increase (decrease) in net assets
   55,295 (14,178 ) 158,577 (942,990 )
Net assets at beginning of period
   1,531,859 1,450,793 1,428,577 2,379,605


Net assets at end of period
   $ 1,587,154 $ 1,436,615 $ 1,587,154 $ 1,436,615

~~(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 common share transactions.~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Operations
Net investment income $ 20,836 $ 13,073 $ 29,026 $ 21,732
Net realized gain (loss) on investments, swap contracts and debt extinguishment 58,929 (262,072) 28,723 (262,512)
Net change in unrealized appreciation (depreciation) on investments (64,079) 228,416 151,202 359,979
Net change in unrealized appreciation (depreciation) on swap contracts (106) — (3,588) —
Net change in unrealized gain (loss) on foreign currency — 4 — 8
Net increase (decrease) in net assets resulting from operations 15,580 (20,579) 205,363 119,207
Shareholder distributions(1)

Distributions to shareholders (13,465) (13,294) (26,891) (26,543)
Net decrease in net assets resulting from shareholder distributions (13,465) (13,294) (26,891) (26,543)
Capital share transactions(2)

Reinvestment of shareholder distributions 5,225 5,277 10,460 10,618
Net increase in net assets resulting from capital share transactions 5,225 5,277 10,460 10,618
Total increase (decrease) in net assets 7,340 (28,596) 188,932 103,282
Net assets at beginning of period 1,783,915 1,560,455 1,602,323 1,428,577
Net assets at end of period $ 1,791,255 $ 1,531,859 $ 1,791,255 $ 1,531,859

_________________________

(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 common share transactions.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Statements of Cash Flows

(in thousands)

   Nine Months Ended
September 30,
   2021 2020
Cash flows from operating activities

Net increase (decrease) in net assets resulting from operations
   $ 182,579 $ (874,570 )
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

Purchases of investments
   (668,351 ) (299,218 )
Paid-in-kind interest
   (26,455 ) (22,536 )
Proceeds from sales and repayments of investments
   725,937 677,114
Net realized (gain) loss on investments
   260,881 958,164
Net change in unrealized (appreciation) depreciation on investments
   (408,973 ) (7,220 )
Net change in unrealized (appreciation) depreciation on swap contracts
   —   6,551
Accretion of discount
   (7,269 ) (24,391 )
Amortization of deferred financing costs and discount
   6,238 5,793
(Increase) decrease in receivable for investments sold and repaid
   (5,485 ) 115
(Increase) decrease in interest receivable
   8,803 14,443
(Increase) decrease in swap income receivable
   —   395
(Increase) decrease in prepaid expenses and other assets
   34 79
Increase (decrease) in payable for investments purchased
   80,184 (28,518 )
Increase (decrease) in management fees payable
   (1,105 ) 16,009
Increase (decrease) in administrative services expense payable
   894 830
Increase (decrease) in interest payable⁽¹⁾
   (9,467 ) (11,522 )
Increase (decrease) in trustees’ fees payable
   (3 ) (2 )
Increase (decrease) in other accrued expenses and liabilities
   (426 ) (3,356 )


Net cash provided by (used in) operating activities
   138,016 408,160


Cash flows from financing activities

Repurchases of common shares
   —   (26,823 )
Shareholder distributions paid
   (23,851 ) (38,673 )
Borrowings under credit facilities⁽¹⁾
   —   160,000
Repayments of credit facilities⁽¹⁾
   (185,000 ) (480,000 )
Repayments under senior secured notes⁽¹⁾
   —   (11,000 )
Deferred financing costs paid
   (128 ) (2,513 )


Net cash provided by (used in) financing activities
   (208,979 ) (399,009 )


Total increase (decrease) in cash
   (70,963 ) 9,151
Cash at beginning of period
   142,536 150,419


Cash at end of period
   $ 71,573 $ 159,570


Supplemental disclosure

Reinvestment of shareholder distributions
   $ 15,880 $ 20,871


Non-cash purchases of investments
   $ (81,215 ) $ (297,623 )


Non-cash sales of investments
   $ 81,215 $ 297,623

~~(1)~~

See Note 9 for a discussion of the Company’s financing arrangements. During the nine months ended September 30, 2021 and 2020, the Company paid $44,246 and $65,881, respectively, in interest expense on the financing arrangements and Senior Secured Notes.

Six Months Ended
June 30,
2022 2021
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations $ 205,363 $ 119,207
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments (342,911) (329,073)
Paid-in-kind interest (12,469) (17,841)
Proceeds from sales and repayments of investments 505,815 430,599
Net realized (gain) loss on investments (31,460) 262,506
Net change in unrealized (appreciation) depreciation on investments (151,202) (359,979)
Net change in unrealized (appreciation) depreciation on swap contracts 3,588 —
Accretion of discount (3,886) (5,984)
Amortization of deferred financing costs and discount 3,718 4,653
(Increase) decrease in receivable for investments sold and repaid (2,316) 7,691
(Increase) decrease in interest receivable 6,810 6,459
(Increase) decrease in dividends receivable (3,691) —
(Increase) decrease in prepaid expenses and other assets 98 34
Increase (decrease) in payable for investments purchased (49,053) 55,387
Increase (decrease) in swap income payable 453 —
Increase (decrease) in management fees payable (890) (199)
Increase (decrease) in administrative services expense payable 353 658
Increase (decrease) in interest payable(1)
(938) (319)
Increase (decrease) in trustees' fees payable (10) (1)
Increase (decrease) in other accrued expenses and liabilities (515) 44
Net cash provided by (used in) operating activities 126,857 173,842
Cash flows from financing activities
Shareholder distributions paid (16,354) (15,819)
Borrowings under credit facilities(1)
29,009 —
Repayments of credit facilities(1)
(10,000) (185,000)
Repayments under senior secured notes(1)
(31,925) —
Deferred financing costs paid (132) (128)
Net cash provided by (used in) financing activities (29,402) (200,947)
Total increase (decrease) in cash 97,455 (27,105)
Cash at beginning of period 33,879 142,536
Cash at end of period $ 131,334 $ 115,431
Supplemental disclosure
Reinvestment of shareholder distributions $ 10,460 $ 10,618
Non-cash purchases of investments $ (1,587) $ (81,215)
Non-cash sales of investments $ 1,587 $ 81,215
Excise and state taxes paid $ 1,007 $ 71

_________________________

(1) See Note 9 for a discussion of the Company's financing arrangements. During the six months ended June 30, 2022 and 2021, the Company paid $24,110 and $23,900, respectively, in interest expense on the financing arrangements and Senior Secured Notes.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments

As of ~~September~~June 30, ~~2021~~

2022

(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—45.6%

AIRRO (Mauritius) Holdings II
(k)(p)(s) Power L+350, 3.5% PIK (3.5% Max PIK) 1.5% 7/24/25 $ 21,876 $ 19,224 $ 18,542
AIRRO (Mauritius) Holdings II
(e)(k)(p)(s) Power L+350, 3.5% PIK (3.5% Max PIK) 1.5% 7/24/25 14,601 14,601 12,375
Allied Downhole Technologies, LLC
(f)(s)(x) Service &
Equipment 8.0% PIK (8.0% Max PIK) 3/31/22 5,137 5,137 5,138
Allied Wireline Services, LLC
(f)(s)(x) Service & Equipment 10.0% PIK (10.0% Max PIK) 6/15/25 58,080 58,080 51,293
ARB Midstream Operating Company, LLC
(s) Midstream L+825 1.0% 5/6/22 898 897 897
Bioenergy Infrastructure Holdings Limited
(k)(s) Power L+725 1.0% 12/22/22 413 413 403
Birch Permian LLC
(s) Upstream L+800 1.5% 4/12/23 49,865 49,671 50,208
Brazos Delaware II LLC
Midstream L+400 5/21/25 39,791 38,120 39,269
Cimarron Energy Inc.
(s) Service & Equipment L+900 1.0% 12/31/22 7,500 7,500 3,713
Cox Oil Offshore, LLC, Volumetric Production Payments
(i)(o)(s)(v) Upstream 0.0% 12/31/23 100,000 26,702 31,325
CPV Maryland, LLC
Power L+400 1.0% 5/10/28 15,820 15,640 15,425
CPV Shore Holdings LLC
(h) Power L+375 12/29/25 6,274 5,964 6,081
EIF Van Hook Holdings, LLC
Midstream L+525 9/5/24 31,234 30,745 29,087
FR BR Holdings LLC
(f)(s) Midstream L+650 12/14/23 82,873 80,287 83,701
FR XIII PAA Holdings HoldCo, LLC
(s) Midstream L+725 0.5% 10/15/26 29,326 28,812 29,912
GasLog Ltd.
(e)(k)(o)(s) Midstream L+775 3/21/29 15,113 15,113 15,000
Generation Bridge LLC
(h) Power L+500 0.8% 8/6/28 7,837 7,680 7,876
Generation Bridge LLC
(h) Power L+500 0.8% 8/6/28 163 160 164
GIP II Blue Holding LP
Midstream L+450 1.0% 9/29/28 7,500 7,387 7,509
Limetree Bay Energy, LLC
(f)(o)(s)(w) Midstream 0.0% 10/31/21 26,444 13,910 3,167
Lower Cadence Holdings LLC
Midstream L+400 5/22/26 50,803 50,746 50,831
MECO IV Holdco, LLC
(s)(x) Upstream 8.0% 9/14/25 22,294 22,294 22,294
MRP CalPeak Holdings, LLC
(s) Power L+500 1.5% 1/27/25 14,085 14,085 14,237
MRP West Power Holdings II, LLC
(s) Power L+500 1.5% 1/27/25 13,924 13,924 14,044
Navitas Midstream Midland Basin LLC
(f) Midstream L+400 1.0% 12/13/24 68,519 66,741 68,562
NNE Holding LLC
(s) Upstream L+475, 4.5% PIK (4.5% Max PIK) 12/31/23 41,856 41,823 40,820
OE2 North, LLC
(s) Midstream L+525 1.0% 5/21/26 11,333 11,228 11,404
OE2 North, LLC
(e)(s) Midstream L+525 1.0% 5/21/26 18,667 18,667 18,495
Oryx Midstream Services Permian Basin LLC
(f)(h) Midstream L+325 0.5% 10/5/28 50,000 49,750 50,039
Permian Production Holdings, LLC
(f)(s)(w) Upstream 7.0%, 2.0% PIK (2.0% Max PIK) 11/23/25 7,849 6,598 7,849
Plainfield Renewable Energy Holdings LLC
(f)(s) Power 6.7%, 8.8% PIK (9.5% Max PIK) 8/22/25 12,182 12,182 12,328
Plainfield Renewable Energy Holdings LLC
(f)(s) Power 10.0% PIK (10.0% Max PIK) 8/22/25 3,304 3,304 —
Plainfield Renewable Energy Holdings LLC, Letter of Credit
(e)(o)(s) Power 10.0% 8/22/25 2,709 2,709 54

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor(b)
Maturity
Principal
Amount(c)
Amortized
Cost
Fair
Value(d)
Senior Secured Loans—First Lien—42.6%
AIRRO (Mauritius) Holdings II (k)(p)(s) Power L+350, 3.5% PIK (3.5% Max PIK) 1.5% 7/24/25 $ 22,390 $ 19,799 $ 19,627
AIRRO (Mauritius) Holdings II (e)(k)(p)(s) Power L+350, 3.5% PIK (3.5% Max PIK) 1.5% 7/24/25 14,602 14,602 12,800
Allied Downhole Technologies, LLC (f)(s)(z) Service & Equipment 8.0% PIK (8.0% Max PIK) 9/30/23 8,101 8,101 8,101
Allied Downhole Technologies, LLC (e)(s)(z) Service & Equipment 8.0% PIK (8.0% Max PIK) 9/30/23 2,500 2,500 2,500
Allied Wireline Services, LLC (f)(s)(z) Service & Equipment 10.0% PIK (10.0% Max PIK) 6/15/25 63,888 63,888 53,669
Brazos Delaware II LLC Midstream L+400 5/21/25 39,472 38,098 38,120
Cimarron Energy Inc. (f)(m)(o)(s) Service & Equipment L+900 1.0% 12/31/24 7,500 6,939 5,522
Compass Power Generation LLC Power L+425 1.0% 4/7/29 34,175 33,168 32,808
Cox Oil Offshore, LLC, Volumetric Production Payments (i)(s)(v) Upstream 10.5% 12/31/23 100,000 17,847 33,459
CPV Maryland, LLC Power L+400 1.0% 5/11/28 15,215 15,057 14,727
CPV Shore Holdings LLC Power L+375 12/29/25 23,601 22,642 21,837
EIF Van Hook Holdings, LLC Midstream L+525 9/5/24 29,249 28,888 28,176
FR BR Holdings LLC (f)(s) Midstream L+650 12/14/23 82,126 80,355 82,061
FR XIII PAA Holdings HoldCo, LLC (s) Midstream L+725 0.5% 10/15/26 17,497 17,226 17,442
GasLog Ltd. (k)(s) Midstream L+775 3/31/29 14,648 14,550 14,371
Generation Bridge LLC Power L+500 0.8% 12/1/28 7,817 7,652 7,642
Generation Bridge LLC Power L+500 0.8% 12/1/28 144 160 160
GIP II Blue Holding LP Midstream L+450 1.0% 9/29/28 6,033 5,951 5,870
Goodnight Water Solutions, LLC (s) Midstream L+775 0.5% 6/3/27 15,000 14,777 14,775
Hamilton Intermediate Holdings, LLC (s) Power 16.5% (16.5% Max PIK) 6/17/25 28,000 28,791 28,800
Lucid Energy Group II Borrower LLC Midstream L+425 0.8% 11/22/28 24,875 24,643 24,622
Medallion Midland Acquisition LP Midstream L+375 0.8% 10/18/28 7,960 7,924 7,657
NNE Holding LLC (s) Upstream L+475, 4.5% PIK (4.5% Max PIK) 12/31/23 42,333 42,309 42,098
OE2 North, LLC (s) Midstream L+525 1.0% 5/21/26 18,025 17,731 18,148
OE2 North, LLC (e)(s) Midstream L+525 1.0% 5/21/26 12,179 12,179 12,262
Oryx Midstream Services Permian Basin LLC (f) Midstream L+325 0.5% 10/5/28 32,835 32,686 31,330
Parkway Generation LLC Power L+475 0.8% 2/18/29 6,140 6,081 5,915
Parkway Generation LLC Power L+475 0.8% 2/18/29 43,750 43,330 42,274
Permian Production Holdings, LLC (f)(h)(s)(y) Upstream 7.0%, 2.0% PIK (2.0% Max PIK) 11/23/25 4,718 4,156 4,719
Pinnacle Midland Gas Holdco LLC (s) Midstream L+675 1.0% 12/9/26 7,001 6,928 6,971
Pinnacle Midland Gas Holdco LLC (e)(s) Midstream L+675 1.0% 12/9/26 4,847 4,847 4,826
Plainfield Renewable Energy Holdings LLC (f)(s) Power 6.4%, 9.1% PIK (9.5% Max PIK) 8/22/25 12,400 12,400 11,853

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of ~~September~~June 30, ~~2021~~

2022

(in thousands, except share amounts)

Portfolio Company^(a)

Footnotes

Industry

Rate^(b)
Floor Maturity Principal
Amount^(c) Amortized
Cost Fair
Value^(d)
Traverse Midstream Partners LLC
Midstream L+550 9/27/24 $ 28,744 $ 28,853 $ 28,811
Warren Resources, Inc.
(s)(x) Upstream L+900, 1.0% PIK (1.0% Max PIK) 1.0% 5/22/24 23,627 23,627 23,627

Total Senior Secured Loans—First Lien
792,574 774,480
Unfunded Loan Commitments
(51,090 ) (51,090 )

Net Senior Secured Loans—First Lien
741,484 723,390

Senior Secured Loans—
Second Lien—6.3%

Aethon III BR LLC
(f)(s) Upstream L+750 1.5% 1/10/25 20,000 19,778 20,585
Chisholm Energy Holdings, LLC
(f)(s) Upstream L+625 1.5% 5/15/26 17,143 17,089 17,197
Olympus Energy, LLC
(f)(s) Upstream L+750 1.0% 7/23/26 15,000 15,000 15,000
Olympus Energy, LLC
(e)(s) Upstream L+750 1.0% 7/23/26 15,000 15,000 15,000
Peak Exploration & Production, LLC
(f)(s) Upstream L+675 1.5% 11/16/23 13,545 13,508 13,405
Peak Exploration & Production, LLC
(e)(s) Upstream L+675 1.5% 11/16/23 1,505 1,505 1,489
Penn Virginia Holdings Corp.
(f)(k)(s) Upstream P+725 9/30/24 15,086 14,784 15,105
SilverBow Resources, Inc.
(f)(k)(s) Upstream L+750 1.0% 12/15/24 19,000 18,897 18,809

Total Senior Secured Loans—Second Lien
115,561 116,590
Unfunded Loan Commitments
(16,505 ) (16,505 )

Net Senior Secured Loans—Second Lien
99,056 100,085

Senior Secured Bonds—4.9%

Great Western Petroleum, LLC
(f)(w) Upstream 12.0% 9/1/25 55,096 53,860 56,062
SM Energy Co.
(k) Upstream 10.0% 1/15/25 10,000 11,194 11,170
ST EIP Holdings Inc.
(s) Midstream 6.1% 1/10/30 10,526 10,005 10,000

Total Senior Secured Bonds
75,059 77,232

Unsecured Debt—25.5%

Aethon United BR LP
Upstream 8.3% 2/15/26 40,500 40,500 43,791
Archrock Partners, LP
(f)(h)(k) Midstream 6.3% 4/1/28 19,035 19,883 19,713
Cheniere Energy Partners LP Holdings, LLC
(f)(k) Midstream 3.3% 1/31/32 3,750 3,750 3,767
Cheniere Energy Partners LP Holdings, LLC
(f)(k) Midstream 4.5% 10/1/29 13,500 14,561 14,369
Colgate Energy Partners III LLC
(f) Upstream 5.9% 7/1/29 8,000 8,112 8,070
Colgate Energy Partners III LLC
Upstream 7.8% 2/15/26 23,365 24,811 24,641
Encino Acquisition Partners Holdings LLC
(f) Upstream 8.5% 5/1/28 6,080 6,080 6,225
Endeavor Energy Resources, LP
(h) Upstream 5.8% 1/30/28 33,299 35,260 35,089
Endeavor Energy Resources, LP
Upstream 5.5% 1/30/26 11,000 11,411 11,473
EnLink Midstream, LLC
(f)(k) Midstream 5.6% 1/15/28 5,881 6,350 6,269
Global Jet Capital Holdings, LP
(f)(s) Industrials 15.0% PIK (15.0% Max PIK) 1/30/25 1,486 1,272 1,193
Global Jet Capital Holdings, LP
(f)(s) Industrials 15.0% PIK (15.0% Max PIK) 9/29/25 1,838 1,572 1,475

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor(b)
Maturity
Principal
Amount(c)
Amortized
Cost
Fair
Value(d)
Plainfield Renewable Energy Holdings LLC (f)(s) Power 10.0% PIK (10.0% Max PIK) 8/22/25 $ 3,469 $ 3,469 $ —
Plainfield Renewable Energy Holdings LLC, Letter of Credit (e)(s) Power 10.0% 8/22/25 2,709 2,709 —
Potomac Energy Center, LLC (s) Power L+600 0.5% 11/10/26 58,754 57,702 58,329
Traverse Midstream Partners LLC Midstream S+425 1.0% 9/27/24 30,791 30,859 29,457
Warren Resources, Inc. (s)(z) Upstream L+900, 1.0% PIK (1.0% Max PIK) 1.0% 5/22/24 23,464 23,464 23,464
Wattbridge Inc. (s) Power L+785 1.8% 6/30/27 33,198 33,198 33,198
Wattbridge Inc. (e)(s) Power L+785 1.8% 6/30/27 9,302 9,302 9,302
Total Senior Secured Loans—First Lien 816,908 808,892
Unfunded Loan Commitments (46,139) (46,139)
Net Senior Secured Loans—First Lien 770,769 762,753
Senior Secured Loans—Second Lien—9.9%
Aethon III BR LLC (f)(s) Upstream L+750 1.5% 1/10/25 20,000 19,819 20,200
Citizen Energy Operating, LLC (s) Upstream L+765 1.0% 6/29/27 40,000 39,400 39,400
ERA II Minerals, LLC (f)(s) Upstream S+625 0.8% 3/7/27 39,000 38,539 38,864
Olympus Energy, LLC (f)(s) Upstream L+750 1.0% 7/23/26 30,000 30,000 30,413
Olympus Energy, LLC (e)(s) Upstream L+750 1.0% 7/23/26 12,955 12,955 12,955
Peak Exploration & Production, LLC (f)(s) Upstream L+675 1.5% 11/16/23 13,545 13,520 13,394
Peak Exploration & Production, LLC (e)(s) Upstream L+675 1.5% 11/16/23 1,505 1,505 1,488
SilverBow Resources, Inc. (f)(k)(s) Upstream L+750 1.0% 12/15/26 14,250 14,188 14,393
Tenrgys, LLC (s) Upstream L+750 1.0% 3/17/27 20,537 20,537 20,537
Total Senior Secured Loans—Second Lien 190,463 191,644
Unfunded Loan Commitments (14,460) (14,460)
Net Senior Secured Loans—Second Lien 176,003 177,184
Senior Secured Bonds—0.6%
ST EIP Holdings Inc. (s) Midstream 6.1% 1/10/30 10,526 10,040 10,356
Total Senior Secured Bonds 10,040 10,356
Unsecured Debt—20.1%
Aethon United BR LP (f) Upstream 8.3% 2/15/26 40,500 40,500 39,422
Archrock Partners, L.P. (f)(k) Midstream 6.3% 4/1/28 22,239 23,079 19,723
Cheniere Energy Partners LP Holdings, LLC (f)(k) Midstream 4.5% 10/1/29 13,825 14,627 12,369
Colgate Energy Partners III LLC (f) Upstream 5.9% 7/1/29 11,000 11,118 9,654

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of ~~September~~June 30, ~~2021~~

2022

(in thousands, except share amounts)

Portfolio Company^(a)

Footnotes

Industry

Rate^(b)
Floor Maturity Principal
Amount^(c) Amortized
Cost Fair
Value^(d)
Global Jet Capital Holdings, LP
(f)(s) Industrials 15.0% PIK (15.0% Max PIK) 9/3/25 $ 1,952 $ 1,670 $ 1,567
Global Jet Capital Holdings, LP
(f)(s) Industrials 15.0% PIK (15.0% Max PIK) 4/30/25 9,446 8,083 7,582
Global Jet Capital Holdings, LP
(f)(s) Industrials 15.0% PIK (15.0% Max PIK) 12/2/26 1,616 1,383 1,297
Hammerhead Resources Inc.
(f)(k)(s) Upstream 12.0% PIK (12.0% Max PIK) 7/15/24 63,889 63,378 63,889
Moss Creek Resources, LLC
(f) Upstream 7.5% 1/15/26 11,693 9,947 10,855
NRG Energy, Inc.
(k) Power 3.9% 2/15/32 8,625 8,676 8,539
Penn Virginia Escrow LLC
(k) Upstream 9.3% 8/15/26 29,772 29,596 30,226
Range Resources Corp.
(k) Upstream 8.3% 1/15/29 5,000 5,661 5,632
Range Resources Corp.
(k) Upstream 9.3% 2/1/26 3,000 3,269 3,274
SM Energy Co.
(h)(k) Upstream 5.6% 6/1/25 8,000 8,044 8,059
Southwestern Energy Co.
Upstream 5.4% 2/1/29 18,928 19,755 20,273
Suburban Propane Partners LP
(f)(k) Midstream 5.0% 6/1/31 6,750 7,035 7,012
Suburban Propane Partners LP
(f)(k) Midstream 5.9% 3/1/27 2,501 2,623 2,616
Tallgrass Energy Partners, LP
(f)(h) Midstream 7.5% 10/1/25 13,629 14,761 14,770
Tallgrass Energy Partners, LP
(f)(h) Midstream 6.0% 3/1/27 1,500 1,571 1,573
Tenrgys, LLC
(f)(m)(n)(o)(s) Upstream L+900 2.5% 12/23/18 75,000 75,300 37,400
Vistra Operations Company LLC
(f)(h)(k) Midstream 5.6% 2/15/27 3,547 3,689 3,676

Total Unsecured Debt
438,003 404,315

Portfolio Company^(a)

Footnotes

Industry

Rate^(b)
Floor Maturity Number of
Shares Amortized
Cost Fair
Value^(d)
Preferred Equity—30.6%^(l)

Abaco Energy Technologies LLC, Preferred Equity
(f)(o)(s) Service & Equipment 28,942,003 $ 1,447 $ 3,980
Altus Midstream LP, Series A Preferred Units
(j)(s) Midstream 11.0% 6/28/26 52,856 58,066 59,826
Global Jet Capital Holdings, LP, Preferred Equity
(f)(o)(s) Industrials 27,856 2,786 —
NGL Energy Partners, LP, Preferred Equity
(f)(k)(m)(o)(s) Midstream 14.2% 7/2/27 156,250 157,633 125,000
NuStar, Preferred Equity
(f)(k)(s) Midstream 12.8% 6/29/28 3,910,165 102,642 124,050
Segreto Power Holdings, LLC, Preferred Equity
(g)(s) Power 13.1% 6/30/25 70,297 99,761 82,903
USA Compression Partners, LP, Preferred Equity
(k)(s) Midstream 9.8% 4/3/28 79,336 77,721 90,379

Total Preferred Equity
500,056 486,138

Number of
Shares Cost Fair
Value^(d)
Sustainable Infrastructure Investments, LLC—3.4%

Sustainable Infrastructure Investments, LLC
(k)(s)(x) Power 60,603 $ 54,514 $ 54,430

Total Sustainable Infrastructure Investments, LLC
54,514 54,430

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor(b)
Maturity
Principal
Amount(c)
Amortized
Cost
Fair
Value(d)
Colgate Energy Partners III LLC Upstream 7.8% 2/15/26 $ 26,365 $ 27,676 $ 25,111
Earthstone Energy Holdings, LLC (k) Upstream 8.0% 4/15/27 11,400 11,400 10,803
Endeavor Energy Resources, L.P. (f) Upstream 5.8% 1/30/28 31,299 32,905 29,899
EnLink Midstream, LLC (k) Midstream 5.4% 6/1/29 1,000 1,043 877
Hammerhead Resources Inc. (f)(k)(s) Upstream 12.0% PIK (12.0% Max PIK) 7/15/24 67,889 67,492 67,889
Moss Creek Resources, LLC (f) Upstream 7.5% 1/15/26 11,693 10,186 10,479
NRG Energy, Inc. (k) Power 3.9% 2/15/32 19,125 18,648 15,233
Range Resources Corp. (k) Upstream 8.3% 1/15/29 8,750 9,714 8,935
Ranger Oil Corp. (k) Upstream 9.3% 8/15/26 29,772 29,618 28,611
SM Energy Co. (k) Upstream 5.6% 6/1/25 8,000 8,036 7,570
Southwestern Energy Co. Upstream 5.4% 2/1/29 18,928 19,683 17,593
Suburban Propane Partners LP (f)(k) Midstream 5.0% 6/1/31 17,690 18,330 15,071
Tallgrass Energy Partners, LP (f) Midstream 6.0% 3/1/27 28,261 28,526 25,257
Tallgrass Energy Partners, LP (f) Midstream 7.5% 10/1/25 15,424 16,458 14,954
Total Unsecured Debt 389,039 359,450
Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor(b)
Maturity Number of Shares Amortized
Cost
Fair
Value(d)
Preferred Equity—26.5%(l)
Abaco Energy Technologies LLC, Preferred Equity (f)(o)(s) Service & Equipment 28,942,003 $ 1,447 $ 5,687
Global Jet Capital Holdings, LP, Preferred Equity (f)(m)(o)(s) Industrials 9.0% PIK (9.0% Max PIK) 10/1/28 173,855 12,493 9,453
Global Jet Capital Holdings, LP, Preferred Equity (f)(o)(s) Industrials 27,856 2,786 —
Kinetik Holdings, LP, Series A Preferred Units (j)(s) Midstream 11.0% 6/28/26 33,828 38,296 39,335
NGL Energy Partners, LP, Preferred Equity (f)(k)(m)(o)(s) Midstream 14.2% 7/2/27 156,250 157,633 125,000
NuStar, Preferred Equity (f)(k)(s) Midstream 12.8% 6/29/28 3,910,165 106,752 117,890
Segreto Power Holdings, LLC, Preferred Equity (f)(g)(m)(o)(s) Power 13.1% 6/30/25 70,297 99,761 90,824
USA Compression Partners, LP, Preferred Equity (k)(s) Midstream 9.8% 4/3/28 79,336 77,851 86,888
Total Preferred Equity 497,019 475,077
Principal
Amount(c)
Cost
Fair
Value(d)
Sustainable Infrastructure Investments, LLC—2.9%
Sustainable Infrastructure Investments, LLC (k)(s)(z) Power $ 60,603 $ 54,514 $ 52,131
Total Sustainable Infrastructure Investments, LLC 54,514 52,131

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of ~~September~~June 30, ~~2021~~

2022

(in thousands, except share amounts)

Portfolio Company^(a)

Footnotes

Industry
Number of
Shares Amortized
Cost Fair
Value^(d)
Equity/Other—29.0%^(l)

Abaco Energy Technologies LLC, Common Equity
(f)(o)(s) Service & Equipment

6,944,444 $ 6,944 $ 653
AIRRO (Mauritius) Holdings II, Warrants
(f)(k)(o)(p)(s) Power 35 2,652 2,090
Allied Wireline Services, LLC, Common Equity
(f)(n)(o)(s)(x) Service & Equipment 48,400 1,527 —
Allied Wireline Services, LLC, Warrants
(f)(n)(o)(s)(x) Service & Equipment 22,000 —   —
Arena Energy, LP, Contingent Value Rights
(f)(o)(s) Upstream 126,632,117 351 923
Ascent Resources Utica Holdings, LLC, Common Equity
(f)(o)(q)(s) Upstream 148,692,909 44,700 36,579
Chisholm Oil and Gas, LLC, Series A Units
(g)(o)(s) Upstream 14,700,000 14,700 —
Cimarron Energy Holdco Inc., Common Equity
(f)(o)(s) Service & Equipment 4,302,293 3,950 —
Cimarron Energy Holdco Inc., Participation Option
(f)(o)(s) Service & Equipment 25,000,000 1,289 —
Great Western Petroleum, LLC, Common Equity
(f)(o)(r)(s)(w) Upstream 105,785 30,790 36,236
Harvest Oil & Gas Corp., Common Equity
(f)(o)(w) Upstream 135,062 17,153 2,838
Limetree Bay Energy, LLC, Class A Units
(f)(o)(s)(w) Midstream 50,494,585 19,069 6,046
Lonestar Resources US Inc., Common Equity
(f)(o)(w) Upstream 864,000 2,376 11,552
Maverick Natural Resources, LLC, Common Equity
(f)(g)(n)(o)(s) Upstream 503,176 138,208 260,142
MB Precision Investment Holdings LLC, Class A-2 Units
(f)(n)(o)(s) Industrials 1,426,110 490 —
MECO IV Holdco, LLC, Class A-1 Units
(f)(n)(o)(s)(x) Upstream 1,225,000 2,161 4,460
NGL Energy Partners, LP, Warrants (Premium)
(f)(k)(o)(s) Midstream 2,187,500 3,083 572
NGL Energy Partners, LP, Warrants (Par)
(f)(k)(o)(s) Midstream 3,125,000 2,623 662
NGL Energy Partners, LP, Warrants (Premium)
(f)(k)(o)(s) Midstream 781,250 576 156
NGL Energy Partners, LP, Warrants (Par)
(f)(k)(o)(s) Midstream 546,880 630 138
Permian Production Holdings, LLC, Common Equity
(f)(n)(o)(s)(w) Upstream 1,951,667 —   8,392
Ridgeback Resources Inc., Common Equity
(f)(k)(o)(s)(t)(w) Upstream 9,599,928 58,985 48,871
Rosehill Operating Company, LLC, Common Equity
(f)(n)(o)(s) Upstream 13,973 2,182 3,985
Swift Worldwide Resources Holdco Limited, Common Equity
(f)(k)(o)(s)(u) Service & Equipment 3,750,000 6,028 2,963
USA Compression Partners, LP, Warrants (Market)
(f)(k)(o)(s) Midstream 793,359 555 2,408
USA Compression Partners, LP, Warrants (Premium)
(f)(k)(o)(s) Midstream 1,586,719 714 3,735
Warren Resources, Inc., Common Equity
(f)(o)(s)(x) Upstream 4,415,749 20,754 26,715

Total Equity/Other 382,490 460,116

TOTAL INVESTMENTS—145.3%
$ 2,290,662 2,305,706

LIABILITIES IN EXCESS OF OTHER ASSETS—(45.3%)
(718,552 )

NET ASSETS—100.0%
$ 1,587,154

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor(b)
Maturity Number of Shares Amortized
Cost
Fair
Value(d)
Equity/Other—33.2%(l)
Abaco Energy Technologies LLC, Common Equity (f)(o)(s) Service & Equipment 6,944,444 $ 6,944 $ 872
AIRRO (Mauritius) Holdings II, Warrants, Strike: $1.00 (f)(k)(o)(p)(s) Power 7/24/25 35 2,652 1,928
Allied Wireline Services, LLC, Common Equity (f)(n)(o)(s)(z) Service & Equipment 48,400 1,527 —
Allied Wireline Services, LLC, Warrants (f)(n)(o)(s)(z) Service & Equipment 22,000 — —
Arena Energy, LP, Contingent Value Rights (f)(o)(s) Upstream 2/1/25 126,632,117 351 1,697
Ascent Resources Utica Holdings, LLC, Common Equity (f)(o)(q)(s) Upstream 148,692,909 44,700 53,009
Cimarron Energy Holdco Inc., Common Equity (f)(o)(s) Service & Equipment 4,302,293 3,950 —
Cimarron Energy Holdco Inc., Participation Option (f)(o)(s) Service & Equipment 25,000,000 1,289 —
GWP Midstream Holdco, LLC, Common Equity (f)(o)(r)(s)(y) Midstream 105,785 6,681 6,681
Harvest Oil & Gas Corp., Common Equity (f)(o)(y) Upstream 135,062 15,059 810
Limetree Bay Energy, LLC, Class A Units (f)(o)(s)(y) Midstream 76,938,973 21,458 4,616
Maverick Natural Resources, LLC, Common Equity (f)(g)(n)(o)(s) Upstream 503,176 138,208 410,778
MB Precision Investment Holdings LLC, Class A-2 Units (f)(n)(o)(s) Industrials 1,426,110 490 —
NGL Energy Partners, LP, Warrants (Par), Strike: $14.54 (f)(k)(o)(s) Midstream 12/31/25 2,187,500 3,083 129
NGL Energy Partners, LP, Warrants (Premium), Strike: $17.45 (f)(k)(o)(s) Midstream 12/31/25 3,125,000 2,623 130
NGL Energy Partners, LP, Warrants (Premium), Strike: $16.27 (f)(k)(o)(s) Midstream 12/31/25 781,250 576 31
NGL Energy Partners, LP, Warrants (Par), Strike: $13.56 (f)(k)(o)(s) Midstream 12/31/25 546,880 630 32
Permian Production Holdings, LLC, Common Equity (f)(n)(o)(s)(y) Upstream 1,968,861 1 10,594
Ridgeback Resources Inc., Common Equity (f)(k)(o)(s)(t)(y) Upstream 9,599,928 53,677 51,460
Swift Worldwide Resources Holdco Limited, Common Equity (f)(k)(o)(s)(u) Service & Equipment 3,750,000 6,029 2,194
Telpico, LLC, Common Equity (f)(n)(o)(s)(y) Upstream 50 — —
Tenrgys, LLC, Common Equity (f)(n)(o)(s) Upstream 50 7,571 6,483
USA Compression Partners, LP, Common Equity (f)(k)(o) Midstream 84,779 1,617 1,418
USA Compression Partners, LP, Warrants (Premium), Strike: $19.59 (f)(k)(o)(s) Midstream 4/2/28 1,586,719 714 3,746
Warren Resources, Inc., Common Equity (f)(o)(s)(z) Upstream 4,415,749 20,754 37,777
Total Equity/Other 340,584 594,385
TOTAL INVESTMENTS—135.8% $ 2,237,968 2,431,336
LIABILITIES IN EXCESS OF OTHER ASSETS—(35.8%) (x) (640,081)
NET ASSETS—100.0% $ 1,791,255

Swap Contracts—Crude Oil(i)

Counterparty Type Location Period Bbls Weighted Average Price
($/Bbls)
Unrealized Appreciation(w)
Unrealized Depreciation(w)
BP Energy Co. Fixed ICE Brent July 1, 2022 – December 31, 2023 255,958 $82.47 $ — $ 3,156
Total Swap Contracts—Crude Oil $ — $ 3,156

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of ~~September~~June 30, ~~2021~~

2022

(in thousands, except share amounts)

~~(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, 2021, the three-month London Interbank Offered Rate, or LIBOR, or “L”, was 0.13% and the U.S. Prime Lending Rate, or Prime, was 3.25%. PIK means ~~paid-in-kind.~~ ~~PIK income accruals may be adjusted based on the fair value of the underlying investment.~~

~~(c)~~

~~Denominated in U.S. dollars, unless otherwise noted.~~

~~(d)~~

~~Fair value determined by the Company’s board of trustees (see Note 8).~~

~~(e)~~

~~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.~~

~~(f)~~

~~Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured Notes with JPMorgan Chase Bank, N.A. (see Note 9).~~

~~(g)~~

~~Security held within FS Energy Investments, LLC, a wholly-owned subsidiary of the Company.~~

~~(h)~~

~~Position or portion thereof unsettled as of September 30, 2021.~~

~~(i)~~

~~Security held within EP Northern Investments, LLC, a wholly-owned subsidiary of the Company.~~

~~(j)~~

~~Security held within FS Power Investments, LLC, a wholly-owned subsidiary of the Company.~~

~~(k)~~

The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. As of September 30, 2021, 71.2% of the Company’s total assets represented qualifying assets.

~~(l)~~

~~Listed investments may be treated as debt for U.S. generally accepted accounting principles, or GAAP, or tax purposes.~~

~~(m)~~

~~Security was on~~ ~~non-accrual~~ ~~status as of September 30, 2021.~~

~~(n)~~

~~Security held within FSEP Investments, Inc., a wholly-owned subsidiary of the Company.~~

~~(o)~~

~~Security is~~ ~~non-income~~ ~~producing.~~

~~(p)~~

~~Security or portion thereof held within FS Power Investments II, LLC, a wholly-owned subsidiary of the Company.~~

~~(q)~~

~~Security held within EP American Energy Investments, Inc., a wholly-owned subsidiary of the Company.~~

~~(r)~~

~~Security held within EP Synergy Investments, Inc., a wholly-owned subsidiary of Gladwyne Funding LLC.~~

~~(s)~~

~~Security is classified as Level 3 in the Company’s fair value hierarchy (See Note 8).~~

~~(t)~~

~~Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of September 30, 2021.~~

~~(u)~~

~~Investment denominated in British pounds. Amortized cost and fair value are converted into U.S. dollars as of September 30, 2021.~~

~~(v)~~

~~Investment is a real property interest and is included with Senior Secured Loans—First Lien to facilitate comparison with other investments.~~

~~(w)~~

Under the 1940 Act, 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, 2021, 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 nine months ended September 30, 2021:

Swap Contracts—Natural Gas(i)

Counterparty Type Location Period MMBtu Weighted Average Price
($/MMBtu)
Unrealized Appreciation(w)
Unrealized Depreciation(w)
BP Energy Co. Fixed NYMEX Henry Hub July 1, 2022 – December 31, 2023 492,834 $4.04 $ — $ 432
Total Swap Contracts—Natural Gas $ — $ 432
TOTAL SWAP CONTRACTS $ — $ 3,588

__________________

Bbls – Barrels

MMBtu – One million British thermal units

(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, 2022, the three-month London Interbank Offered Rate, or LIBOR, or L, was 2.29% and the Secured Overnight Financing Rate, or SOFR, or S, was 2.12%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment. Variable rate securities with no floor rate use the respective benchmark rate in all cases.

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

(d) Fair value determined by the Company’s board of trustees (see Note 8).

(e) 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.

(f) Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured Notes with JPMorgan Chase Bank, N.A. (see Note 9).

(g)Security held within FS Energy Investments, LLC, a wholly-owned subsidiary of the Company.

(h) Position or portion thereof unsettled as of June 30, 2022.

(i)Security held within EP Northern Investments, LLC, a wholly-owned subsidiary of the Company.

(j)Security held within FS Power Investments, LLC, a wholly-owned subsidiary of the Company.

(k) The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. As of June 30, 2022, 73.9% of the Company’s total assets represented qualifying assets.

(l)Listed investments may be treated as debt for U.S. generally accepted accounting principles, or GAAP, or tax purposes.

(m) Security was on non-accrual status as of June 30, 2022.

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

(o) Security is non-income producing.

(p) Security or portion thereof held within FS Power Investments II, LLC, a wholly-owned subsidiary of the Company.

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

(r) Security held within EP Synergy Investments, Inc., a wholly-owned subsidiary of Gladwyne Funding LLC.

(s)Security is classified as Level 3 in the Company’s fair value hierarchy (see Note 8).

(t) Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of June 30, 2022.

(u) Investment denominated in British pounds. Amortized cost and fair value are converted into U.S. dollars as of June 30, 2022.

(v) Investment is a real property interest and is included with Senior Secured Loans—First Lien to facilitate comparison with other investments.

(w) Represents the amounts the Company would pay or receive under each swap contract if it were to settle on June 30, 2022 (see Note 6).

(x) Includes the effect of swap contracts.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of ~~September~~June 30, ~~2021~~

2022

(in thousands, except share amounts)

Portfolio Company
Fair
Value at
December 31,
2020 Purchases,
Paid-
in-Kind
Interest
and
Transfers In Sales,
Repayments
and
Transfers
Out Accretion
of
Discount Net
Realized
Gain
(Loss) Net
Change in
Unrealized
Appreciation
(Depreciation) Fair Value at
September 30,
2021 Interest
Income⁽¹⁾ PIK
Income⁽¹⁾ Dividend
Income⁽¹⁾
Senior Secured Loans—First Lien

Limetree Bay Energy, LLC
$ —   $ 13,910 $ —   $ —   $ —   $ (10,743 ) $ 3,167 $ —   $ —   $ —
Permian Production Holdings, LLC
11,446 175 (6,401 ) 220 1,106 1,303 7,849 898 175 —
Warren Resources, Inc.⁽²⁾
27,788 69 (27,857 ) —   —   —   —   —   —   —
Senior Secured Bonds

Great Western Petroleum, LLC
—   53,727 —   133 —   2,202 56,062 4,155 —   —
Limetree Bay Ventures, LLC
25,538 —   (3,810 ) —   (21,752 ) 24 —   —   —   —
Limetree Bay Ventures, LLC
36,308 —   (5,137 ) 19 (29,021 ) (2,169 ) —   19 —   —
Limetree Bay Ventures, LLC
89,968 43,291 (9,889 ) —   (49,783 ) (73,587 ) —   —   —   —
Unsecured Debt

Limetree Bay Ventures, LLC
—   —   (6,298 ) —   (31,516 ) 37,814 —   —   —   —
Limetree Bay Ventures, LLC
—   —   (1,648 ) —   (8,244 ) 9,892 —   —   —   —
Preferred Equity

Limetree Bay Ventures, LLC, Preferred Equity
—   —   —   —   (53,548 ) 53,548 —   —   —   —
Limetree Bay Ventures, LLC, Preferred Equity
—   —   —   —   (86,729 ) 86,729 —   —   —   —
Equity/Other

Great Western Petroleum, LLC, Common Equity
—   30,790 —   —   —   5,446 36,236 —   —   —
Harvest Oil & Gas Corp., Common Equity
2,794 —   (405 ) —   —   449 2,838 —   —   —
Limetree Bay Energy, LLC, Class A Units
—   19,069 —   —   —   (13,023 ) 6,046 —   —   —
Limetree Bay Ventures, LLC, Common Equity
—   —   —   —   (3,406 ) 3,406 —   —   —   —
Lonestar Resources US Inc., Common Equity
2,592 —   —   —   —   8,960 11,552 —   —   —
Permian Production Holdings, LLC, Common Equity
—   —   —   —   —   8,392 8,392 —   —   1,574
Ridgeback Resources Inc., Common Equity
38,385 —   —   —   —   10,486 48,871 —   —   —
Warren Resources, Inc., Common Equity⁽²⁾
4,460 —   (20,754 ) —   —   16,294 —   —   —   —

$ 239,279 $ 161,031 $ (82,199 ) $ 372 $ (282,893 ) $ 145,423 $ 181,013 $ 5,072 $ 175 $ 1,574

~~(1)~~

~~Interest, PIK and dividend income presented for the nine months ended September 30, 2021.~~

~~(2)~~

The Company held this investment as of September 30, 2021 but it was not deemed to be an “affiliated person” of the portfolio company as of September 30, 2021. Transfers in or out have been presented at amortized cost.

(y)Under the 1940 Act, 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, 2022, 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 deemed to be an affiliated person as of June 30, 2022:

Portfolio Company Fair Value at December 31, 2021
Gross
Additions(1)
Gross
Reductions(2)
Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value at June 30, 2022
Interest Income(3)
PIK Income(3)
Dividend Income(3)
Senior Secured Loans—First Lien
Limetree Bay Energy, LLC $ 3,166 $ — $ (1,587) $ (12,756) $ 11,177 $ — $ — $ — $ —
Permian Production Holdings, LLC 7,889 587 (3,674) 551 (634) 4,719 291 57 —
Senior Secured Bonds
Great Western Petroleum, LLC 58,055 96 (55,096) 1,087 (4,142) — 2,649 — —
Equity/Other
Great Western Petroleum, LLC, Common Equity 40,731 — (82,883) 52,093 (9,941) — — — —
GWP Midstream Holdco, LLC, Common Equity — 6,681 — — — 6,681 — — —
Harvest Oil & Gas Corp., Common Equity 2,836 — (743) — (1,283) 810 — — —
Limetree Bay Energy, LLC, Class A Units 6,046 1,795 — — (3,225) 4,616 — — —
Permian Production Holdings, LLC, Common Equity 8,829 — — — 1,765 10,594 — — 1,726
Ridgeback Resources Inc., Common Equity 48,356 — (5,537) 229 8,412 51,460 — — 3,691
Telpico, LLC, Common Equity — — — — — — — — —
$ 175,908 $ 9,159 $ (149,520) $ 41,204 $ 2,129 $ 78,880 $ 2,940 $ 57 $ 5,417

______________________

(1) Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and/or the movement of an existing portfolio company into this category from a different category.

(2) Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and/or the movement of an existing portfolio company out of this category into a different category.

(3) Interest, PIK and dividend income presented for the six months ended June 30, 2022.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of ~~September~~June 30, ~~2021~~

2022

(in thousands, except share amounts)

~~(x)~~

Under the 1940 Act, 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, 2021, the Company held investments in portfolio companies 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 companies for the nine months ended September 30, 2021:

Portfolio Company
Fair
Value at
December 31,
2020 Purchases,
Paid-
in-Kind
Interest
and
Transfers In Sales,
Repayments
and
Transfers
Out Accretion
of
Discount Net
Realized
Gain
(Loss) Net
Change in
Unrealized
Appreciation
(Depreciation) Fair Value at
September 30,
2021 Interest
Income(1) PIK
Income(1) Dividend
Income(1)
Senior Secured Loans—First Lien

Allied Wireline Services, LLC
$ 53,007 $ 5,280 $ (207 ) $ —   $ —   $ (6,787 ) $ 51,293 $ 4,104 $ 5,280 $ —
Allied Downhole Technologies, LLC
—   7,637 (2,500 ) —   —   1 5,138 139 137 —
MECO IV Holdco, LLC
—   22,294 —   —   —   —   22,294 2 500 —
Warren Resources, Inc.⁽²⁾
—   27,073 (3,446 ) —   —   —   23,627 1,997 200 —
Sustainable Infrastructure Investments, LLC

Sustainable Infrastructure Investments, LLC
61,816 —   (6,089 ) —   —   (1,297 ) 54,430 —   —   4,960
Equity/Other

Allied Wireline Services, LLC, Common Equity
1,904 —   —   —   —   (1,904 ) —   —   —   —
Allied Wireline Services, LLC, Warrants
—   —   —   —   —   —   —   —   —   —
MECO IV Holdco, LLC, Class A-1 Units
—   2,161 —   —   —   2,299 4,460 —   —   —
Warren Resources, Inc., Common Equity⁽²⁾
—   20,754 —   —   —   5,961 26,715 —   —   —

$ 116,727 $ 85,199 $ (12,242 ) $ —   $ —   $ (1,727 ) $ 187,957 $ 6,242 $ 6,117 $ 4,960

~~(1)~~

~~Interest, PIK and dividend income presented for the nine months ended September 30, 2021.~~

~~(2)~~

The Company held this investment as of December 31, 2020 but it was deemed to be an “affiliated person” of the portfolio company as of December 31, 2020. Transfers in or out have been presented at amortized cost.

(z)Under the 1940 Act, 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, 2022, the Company held investments in portfolio companies 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 and deemed to control as of June 30, 2022:

Portfolio Company Fair Value at December 31, 2021
Gross
Additions(1)
Gross
Reductions(2)
Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value at June 30, 2022
Interest Income(3)
PIK Income(3)
Dividend Income(3)
Senior Secured Loans—First Lien
Allied Downhole Technologies, LLC(4)
$ 7,782 $ 319 $ — $ — $ — $ 8,101 $ — $ 319 $ —
Allied Wireline Services, LLC 46,339 5,808 — — 1,522 53,669 2,930 — —
MECO IV Holdco, LLC 22,745 455 (23,200) — — — — 455 —
Warren Resources, Inc. 23,688 117 (341) — — 23,464 1,179 117 —
Sustainable Infrastructure Investments, LLC
Sustainable Infrastructure Investments, LLC 50,770 — — — 1,361 52,131 — — 735
Equity/Other
Allied Wireline Services, LLC, Common Equity — — — — — — — — —
Allied Wireline Services, LLC, Warrants — — — — — — — — —
MECO IV Holdco, LLC, Class A-1 Units 4,181 — (13,019) 10,858 (2,020) — — — —
Warren Resources, Inc., Common Equity 25,854 — — — 11,923 37,777 — — —
$ 181,359 $ 6,699 $ (36,560) $ 10,858 $ 12,786 $ 175,142 $ 4,109 $ 891 $ 735

______________________

(3) Interest, PIK and dividend income presented for the six months ended June 30, 2022.

(4) Security includes a partially unfunded commitment with amortized cost of $2,500 and fair value of $2,500.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments

As of December 31, ~~2020~~

2021

(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—42.5%

AIRRO (Mauritius) Holdings II
(k)(p)(s) Power L+350, 3.5% PIK, (3.5% Max PIK) 1.5% 7/24/25 $ 20,734 $ 18,082 $ 15,992
AIRRO (Mauritius) Holdings II
(e)(k)(p)(s) Power L+350, 3.5% PIK, (3.5% Max PIK) 1.5% 7/24/25 15,189 15,189 11,715
Allied Wireline Services, LLC
(f)(n)(o)(s)(x) Service & Equipment 10.0% PIK (10.0% Max PIK) 6/15/25 53,007 53,007 53,007
ARB Midstream Operating Company, LLC
(s) Midstream L+825 1.0% 11/6/21 1,807 1,804 1,698
Bioenergy Infrastructure Holdings Limited
(k)(s) Power L+725 1.0% 12/22/22 429 429 395
Birch Permian LLC
(s) Upstream L+800 1.5% 4/12/23 49,865 49,598 49,372
Brazos Delaware II LLC
Midstream L+400 5/21/25 40,111 38,155 35,140
Cimarron Energy Inc.
(s) Service & Equipment L+900 1.0% 6/30/21 7,500 7,500 6,797
Cox Oil Offshore, LLC, Volumetric Production Payments
(i)(o)(s)(v) Upstream 0.0% 12/31/23 100,000 37,527 31,670
EIF Van Hook Holdings, LLC
(h) Midstream L+525 9/5/24 33,392 32,769 21,601
FR BR Holdings LLC
(f)(h)(s) Midstream L+650 12/14/23 85,700 82,258 82,966
FR XIII PAA Holdings HoldCo, LLC
(s) Midstream L+725 0.5% 10/15/26 29,925 29,343 29,955
Luxe Drillship Operating, LLC
(s) Upstream 8.0% 10/30/24 16,976 16,088 15,779
MECO IV LLC
(s) Upstream L+925 1.5% 9/14/21 33,250 32,951 23,275
MRP CalPeak Holdings, LLC
(h)(s) Power L+525 1.5% 1/27/25 14,328 14,328 14,122
MRP West Power Holdings II, LLC
(h)(s) Power L+525 1.5% 1/27/25 14,586 14,586 14,378
Navitas Midstream Midland Basin LLC
(h) Midstream L+450 1.0% 12/13/24 29,650 28,861 29,298
Navitas Midstream Midland Basin LLC (Mirror Tranche)
Midstream L+450 1.0% 12/13/24 39,400 38,041 38,931
NNE Holding LLC
(h)(s) Upstream L+475, 4.5% PIK (4.5% Max PIK) 3/2/22 40,455 40,419 38,432
Permian Production Holdings, LLC
(f)(s)(w) Upstream 7.0%, 2.0% PIK (2.0% Max PIK) 11/23/25 14,075 11,498 11,446
Plainfield Renewable Energy Holdings LLC
(o)(s) Power 10.0% (10.0% Max PIK) 8/22/25 2,998 2,998 —
Plainfield Renewable Energy Holdings LLC, Letter of Credit
(e)(s) Power 10.0% 8/22/23 2,709 2,709 —
Plainfield Renewable Energy Holdings LLC
(s) Power 15.5% (9.5% Max PIK) 8/22/25 10,801 10,801 10,602
Swift Worldwide Resources US Holdings Corp.
(h)(s) Service & Equipment L+1000, 1.0% PIK (1.0% Max PIK) 1.0% 7/20/21 60,877 60,877 60,877
Warren Resources, Inc.
(s)(w) Upstream L+900, 1.0% PIK (1.0% Max PIK) 1.0% 5/21/21 27,788 27,788 27,788

Total Senior Secured Loans—First Lien
667,606 625,236
Unfunded Loan Commitments
(17,898 ) (17,898 )

Net Senior Secured Loans—First Lien
649,708 607,338

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor Maturity
Principal
Amount(c)
Amortized
Cost
Fair
Value(d)
Senior Secured Loans—First Liens—50.7%
AIRRO (Mauritius) Holdings II (k)(p)(s) Power L+350, 3.5% PIK (3.5% Max PIK) 1.5% 7/24/25 $ 22,067 $ 19,415 $ 19,229
AIRRO (Mauritius) Holdings II (e)(k)(p)(s) Power L+350, 3.5% PIK (3.5% Max PIK) 1.5% 7/24/25 14,602 14,602 12,724
Allied Downhole Technologies, LLC (f)(s)(x) Service & Equipment 8.0% PIK (8.0% Max PIK) 9/30/22 7,782 7,782 7,782
Allied Downhole Technologies, LLC (e)(s)(x) Service & Equipment 8.0% PIK (8.0% Max PIK) 9/30/22 2,500 2,500 2,500
Allied Wireline Services, LLC (f)(s)(x) Service & Equipment 10.0% PIK (10.0% Max PIK) 6/15/25 58,080 58,080 46,339
ARB Midstream Operating Company, LLC (s) Midstream L+825 1.0% 5/6/22 625 624 625
Bioenergy Infrastructure Holdings Limited (k)(s) Power L+725 1.0% 12/22/22 413 413 403
Birch Permian LLC (s) Upstream L+800 1.5% 4/12/23 42,781 42,642 43,209
Brazos Delaware II LLC Midstream L+400 5/21/25 39,685 38,112 38,738
Cimarron Energy Inc. (f)(m)(o)(s) Service & Equipment L+900 1.0% 12/31/24 7,500 7,311 3,600
Cox Oil Offshore, LLC, Volumetric Production Payments (i)(o)(s)(v) Upstream 0.0% 12/31/23 100,000 23,342 28,987
CPV Maryland, LLC Power L+400 1.0% 5/11/28 15,353 15,182 15,276
CPV Shore Holdings LLC Power L+375 12/29/25 23,601 22,525 22,682
EIF Van Hook Holdings, LLC Midstream L+525 9/5/24 30,332 29,889 29,081
FR BR Holdings LLC (f)(s) Midstream L+650 12/14/23 82,610 80,293 83,436
FR XIII PAA Holdings HoldCo, LLC (s) Midstream L+725 0.5% 10/15/26 29,141 28,650 30,307
GasLog Ltd. (e)(k)(o)(s) Midstream L+775 3/21/29 15,113 15,113 15,000
Generation Bridge LLC Power L+500 0.8% 12/1/28 7,837 7,681 7,876
Generation Bridge LLC Power L+500 0.8% 12/1/28 163 160 164
GIP II Blue Holding LP Midstream L+450 1.0% 9/29/28 7,481 7,372 7,477
Limetree Bay Energy, LLC (f)(o)(s)(w) Midstream 0.0% 10/31/21 26,444 14,343 3,166
Lucid Energy Group II Borrower LLC Midstream L+425 0.8% 11/22/28 25,000 24,752 24,737
MECO IV Holdco, LLC (s)(x) Upstream 8.0% 9/14/25 22,745 22,745 22,745
Medallion Midland Acquisition LP Midstream L+375 0.8% 10/18/28 7,980 7,941 7,954
MRP CalPeak Holdings, LLC (s) Power L+500 1.5% 1/27/25 12,842 12,842 12,842
MRP West Power Holdings II, LLC (s) Power L+500 1.5% 1/27/25 13,887 13,887 13,887
Navitas Midstream Midland Basin LLC (f) Midstream L+400 1.0% 12/13/24 68,341 66,690 68,359
NNE Holding LLC (s) Upstream L+475, 4.5% PIK (4.5% Max PIK) 12/31/23 42,333 42,302 41,696
OE2 North, LLC (s) Midstream L+525 1.0% 5/21/26 11,627 11,527 11,688
OE2 North, LLC (e)(s) Midstream L+525 1.0% 5/21/26 18,373 18,373 18,468
Oryx Midstream Services Permian Basin LLC (f) Midstream L+325 0.5% 10/5/28 36,000 35,825 35,817
Parkway Generation LLC (h) Power L+475 0.8% 11/5/28 6,140 6,079 6,117
Parkway Generation LLC (h) Power L+475 0.8% 11/5/28 43,860 43,421 43,654
Permian Production Holdings, LLC (f)(s)(w) Upstream 7.0%, 2.0% PIK (2.0% Max PIK) 11/23/25 7,889 6,692 7,889
Pinnacle Midland Gas Holdco LLC (s) Midstream L+675 1.0% 12/2/26 5,385 5,306 5,305
Pinnacle Midland Gas Holdco LLC (e)(s) Midstream L+675 1.0% 12/2/26 6,462 6,462 6,365
Plainfield Renewable Energy Holdings LLC (f)(s) Power 6.7%, 8.8% PIK (9.5% Max PIK) 8/22/25 11,804 11,804 11,954

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of December 31, ~~2020~~

2021

(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—19.3%

Aethon III BR LLC (s) Upstream L+750 1.5% 1/10/25 $ 20,000 $ 19,740 $ 20,000
Aethon United BR LP
(f)(h)(s) Upstream L+675 1.0% 9/8/23 148,150 146,950 147,365
Chisholm Energy Holdings, LLC
(f)(s) Upstream L+625 1.5% 5/15/26 21,429 21,353 20,792
Encino Acquisition Partners Holdings LLC
(f) Upstream L+675 1.0% 10/29/25 41,828 36,014 38,561
Peak Exploration & Production, LLC
(f)(s)
Upstream
L+675 1.5% 11/16/23 13,545 13,497 13,334
Peak Exploration & Production, LLC
(e)(s) Upstream L+675 1.5% 11/16/23 1,505 1,505 1,482
Penn Virginia Holdings Corp.
(f)(h)(k)(s) Upstream L+700 1.0% 9/29/22 20,950 20,587 19,563
SilverBow Resources, Inc.
(f)(h)(k)(s) Upstream L+750 1.0% 12/15/24 19,000 18,877 16,720

Total Senior Secured Loans—Second Lien
278,523 277,817
Unfunded Loan Commitments
(1,505 ) (1,505 )

Net Senior Secured Loans—Second Lien 277,018 276,312

Senior Secured Bonds—23.8%

Black Swan Energy Ltd.
(k)(s) Upstream 9.0% 1/20/24 90,000 90,000 89,100
Limetree Bay Ventures, LLC
(f)(m)(o)(s)(w) Midstream 20.0% PIK (20.0% Max PIK) 1/4/21 25,538 25,562 25,538
Limetree Bay Ventures, LLC
(f)(m)(o)(s)(w) Midstream 20.0% PIK (20.0% Max PIK) 1/4/21 36,308 34,139 36,308
Limetree Bay Ventures, LLC
(f)(m)(o)(s)(w) Midstream 20.0% PIK (20.0% Max PIK) 1/4/21 89,968 16,381 89,968
Velvet Energy Ltd.
(f)(k)(s) Upstream 9.0% 10/5/23 120,000 120,000 99,128

Total Senior Secured Bonds
286,082 340,042

Unsecured Debt—9.5%

Global Jet Capital Holdings, LP
(f)(o)(s) Industrials 15.0% PIK (15.0% Max PIK) 1/30/25 1,330 1,178 1,172
Global Jet Capital Holdings, LP
(f)(o)(s) Industrials 15.0% PIK (15.0% Max PIK) 4/30/25 8,450 7,484 7,447
Global Jet Capital Holdings, LP
(f)(o)(s) Industrials 15.0% PIK (15.0% Max PIK) 9/3/25 1,746 1,547 1,539
Global Jet Capital Holdings, LP
(f)(o)(s) Industrials 15.0% PIK (15.0% Max PIK) 9/29/25 1,644 1,456 1,449
Global Jet Capital Holdings, LP
(f)(o)(s) Industrials 15.0% PIK (15.0% Max PIK) 12/2/26 1,446 1,280 1,274
Great Western Petroleum, LLC
(f)(s) Upstream 8.5% 4/15/25 13,636 13,183 12,954
Great Western Petroleum, LLC
(f) Upstream 9.0% 9/30/21 35,830 35,827 21,140
Hammerhead Resources Inc.
(f)(k)(o)(s) Upstream 12.0% PIK (12.0% Max PIK) 7/15/24 55,607 55,144 55,607
Limetree Bay Ventures, LLC
(f)(m)(o)(s)(w) Midstream 15.0% PIK (15.0% Max PIK) 3/3/21 37,778 37,814 —
Limetree Bay Ventures, LLC
(f)(m)(o)(s)(w) Midstream 20.0% PIK (20.0% Max PIK) 2/1/21 9,882 9,892 —
Moss Creek Resources, LLC
(f) Upstream 7.5% 1/15/26 6,693 5,075 5,103
Tenrgys, LLC
(f)(m)(n)(o)(s) Upstream L+900 2.5% 12/23/18 75,000 75,300 26,875

Total Unsecured Debt 245,180 134,560

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor Maturity
Principal
Amount(c)
Amortized
Cost
Fair
Value(d)
Plainfield Renewable Energy Holdings LLC (f)(s) Power 10.0% PIK (10.0% Max PIK) 8/22/25 $ 3,304 $ 3,304 $ —
Plainfield Renewable Energy Holdings LLC, Letter of Credit (e)(o)(s) Power 10.0% 8/22/25 2,709 2,709 —
Potomac Energy Center, LLC Power L+600 0.5% 11/10/26 59,000 57,848 58,705
Traverse Midstream Partners LLC Midstream SF+425 1.0% 9/27/24 31,702 31,788 31,623
Warren Resources, Inc. (s)(x) Upstream L+900, 1.0% PIK (1.0% Max PIK) 1.0% 5/22/24 23,688 23,688 23,688
Total Senior Secured Loans—First Lien 892,016 872,094
Unfunded Loan Commitments (59,759) (59,759)
Net Senior Secured Loans—First Lien 832,257 812,335
Senior Secured Loans—Second Lien—5.2%
Aethon III BR LLC (f)(s) Upstream L+750 1.5% 1/10/25 20,000 19,792 20,200
Chisholm Energy Holdings, LLC (f)(s) Upstream L+625 1.5% 5/15/26 17,143 17,091 17,314
Olympus Energy, LLC (f)(s) Upstream L+750 1.0% 7/23/26 18,750 18,750 18,750
Olympus Energy, LLC (e)(s) Upstream L+750 1.0% 7/23/26 11,250 11,250 11,250
Peak Exploration & Production, LLC (f)(s) Upstream L+675 1.5% 11/16/23 13,545 13,512 13,438
Peak Exploration & Production, LLC (e)(s) Upstream L+675 1.5% 11/16/23 1,505 1,505 1,493
SilverBow Resources, Inc. (f)(k)(s) Upstream L+750 1.0% 12/15/26 14,250 14,177 14,393
Total Senior Secured Loans—Second Lien 96,077 96,838
Unfunded Loan Commitments (12,755) (12,755)
Net Senior Secured Loans—Second Lien 83,322 84,083
Senior Secured Bonds—5.1%
Great Western Petroleum, LLC (f)(w) Upstream 12.0% 9/1/25 55,096 53,913 58,055
SM Energy Co. (k) Upstream 10.0% 1/15/25 12,000 13,337 13,220
ST EIP Holdings Inc. (s) Midstream 6.1% 1/10/30 10,526 10,016 10,371
Total Senior Secured Bonds 77,266 81,646
Unsecured Debt—24.8%
Aethon United BR LP (f) Upstream 8.3% 2/15/26 40,500 40,500 43,552
Archrock Partners, L.P. (f)(k) Midstream 6.3% 4/1/28 22,239 23,141 23,221
Cheniere Energy Partners LP Holdings, LLC (f)(k) Midstream 4.5% 10/1/29 13,500 14,531 14,333
Colgate Energy Partners III LLC (f) Upstream 5.9% 7/1/29 8,000 8,110 8,251
Colgate Energy Partners III LLC Upstream 7.8% 2/15/26 23,365 24,737 25,312
Endeavor Energy Resources, L.P. Upstream 5.8% 1/30/28 31,299 33,030 33,412
EnLink Midstream, LLC (k) Midstream 5.4% 6/1/29 6,000 6,271 6,145
EnLink Midstream, LLC (f)(k) Midstream 5.6% 1/15/28 5,881 6,334 6,125

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of December 31, ~~2020~~

2021

(in thousands, except share amounts)

Portfolio Company(a)

Footnotes

Industry

Rate^(b)
   Maturity    Number of
Shares    Amortized
Cost    Fair
Value^(d)
Preferred Equity—33.0%^(l)

Abaco Energy Technologies LLC, Preferred Equity
(o)(s) Service & Equipment          28,942,003    $ 1,447    $ 5,354
Altus Midstream LP, Series A Preferred Units
(j)(s) Midstream    11.0%    6/28/26    52,856    56,228    54,177
Global Jet Capital Holdings, LP, Preferred Equity
(f)(o)(s) Industrials          27,856    2,786    —
Great Western Petroleum, LLC, Preferred Equity
(f)(h)(r)(s) Upstream    15.5%    12/31/27    36,364    47,372    18,182
Limetree Bay Ventures, LLC, Preferred Equity
(f)(m)(o)(s)(w) Midstream    13.5%    11/30/24    95,821,000    86,729    —
Limetree Bay Ventures, LLC, Preferred Equity
(f)(m)(o)(s)(w) Midstream    13.5%    11/27/23    59,819,000    53,548    —
NGL Energy Partners, LP, Preferred Equity
(k)(s) Midstream    14.2%    7/2/27    156,250    168,049    109,375
NuStar, Preferred Equity
(f)(h)(k)(s) Midstream    12.8%    6/29/28    3,910,165    102,744    118,048
Segreto Power Holdings, LLC, Preferred Equity
(f)(g)(s) Power    13.1%    6/30/25    70,297    92,750    79,546
USA Compression Partners, LP, Preferred Equity
(h)(k)(s) Midstream    9.8%    4/3/28    79,336    77,600    86,395




Total Preferred Equity             689,253    471,077




         Number of
Shares    Cost    Fair
Value^(d)
Sustainable Infrastructure Investments, LLC—4.3%

Sustainable Infrastructure Investments, LLC
(k)(s)(x) Power          60,603    $ 60,603    $ 61,816




Total Sustainable Infrastructure Investments, LLC
            60,603    61,816




         Number of
Shares    Amortized
Cost    Fair
Value^(d)
Equity/Other—20.3%^(l)

Abaco Energy Technologies LLC, Common Equity
(f)(o)(s) Service & Equipment

      6,944,444    $ 6,944    $ 896
AIRRO (Mauritius) Holdings II, Warrants
(f)(k)(o)(p)(s) Power          35    2,652    2,504
Allied Wireline Services, LLC, Common Equity
(f)(n)(o)(s)(x) Service & Equipment          48,400    1,527    1,904
Allied Wireline Services, LLC, Warrants
(f)(n)(o)(s)(x) Service & Equipment          22,000    —      —
Arena Energy, LP, Contingent Value Rights
(f)(o)(s) Upstream          126,632,117    351    418
Ascent Resources Utica Holdings, LLC, Common Equity
(f)(o)(q)(s) Upstream          148,692,908    44,700    33,084
Chisholm Oil and Gas, LLC, Series A Units
(g)(o)(s) Upstream          14,700,000    14,700    —
Cimarron Energy Holdco Inc., Common Equity
(f)(o)(s) Service & Equipment          4,302,293    3,950    30

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor Maturity
Principal
Amount(c)
Amortized
Cost
Fair
Value(d)
Hammerhead Resources Inc. (f)(k)(s) Upstream 12.0% PIK (12.0% Max PIK) 7/15/24 $ 64,046 $ 63,569 $ 64,046
Moss Creek Resources, LLC (f) Upstream 7.5% 1/15/26 11,693 10,027 10,945
NRG Energy, Inc. (k) Power 3.9% 2/15/32 11,625 11,619 11,411
Penn Virginia Escrow LLC (k) Upstream 9.3% 8/15/26 29,772 29,603 30,926
Range Resources Corp. (k) Upstream 8.3% 1/15/29 5,000 5,643 5,584
Range Resources Corp. (k) Upstream 9.3% 2/1/26 3,000 3,256 3,237
SM Energy Co. (k) Upstream 5.6% 6/1/25 8,000 8,041 8,079
Southwestern Energy Co. Upstream 5.4% 2/1/29 18,928 19,731 20,043
Suburban Propane Partners LP (f)(k) Midstream 5.0% 6/1/31 17,690 18,359 17,919
Tallgrass Energy Partners, LP (f) Midstream 7.5% 10/1/25 13,424 14,499 14,545
Tallgrass Energy Partners, LP (f) Midstream 6.0% 3/1/27 9,000 9,414 9,369
Tenrgys, LLC (f)(m)(n)(o)(s) Upstream L+900 2.5% 12/23/18 75,000 75,300 40,613
Total Unsecured Debt 425,715 397,068

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor Maturity Number of
Shares Amortized
Cost
Fair
Value(d)
Preferred Equity—31.0%(l)
Abaco Energy Technologies LLC, Preferred Equity (f)(o)(s) Service & Equipment 28,942,003 $ 1,447 $ 3,965
Altus Midstream LP, Series A Preferred Units (j)(s) Midstream 11.0% 6/28/26 52,856 58,725 61,379
Global Jet Capital Holdings, LP, Preferred Equity (f)(s) Industrials 9.0% PIK (9.0% Max PIK) 10/1/28 167,176 12,305 12,204
Global Jet Capital Holdings, LP, Preferred Equity (f)(o)(s) Industrials 27,856 2,786 —
NGL Energy Partners, LP, Preferred Equity (f)(k)(m)(o)(s) Midstream 14.2% 7/2/27 156,250 157,633 125,000
NuStar, Preferred Equity (f)(k)(s) Midstream 12.8% 6/29/28 3,910,165 105,291 124,050
Segreto Power Holdings, LLC, Preferred Equity (f)(g)(m)(o)(s) Power 13.1% 6/30/25 70,297 99,761 80,772
USA Compression Partners, LP, Preferred Equity (k)(s) Midstream 9.8% 4/3/28 79,336 77,763 89,918
Total Preferred Equity 515,711 497,288
Principal Amount(c)
Cost
Fair
Value(d)
Sustainable Infrastructure Investments, LLC—3.2%
Sustainable Infrastructure Investments, LLC (k)(s)(x) Power $ 60,603 $ 54,514 $ 50,770
Total Sustainable Infrastructure Investments, LLC 54,514 50,770

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of December 31, ~~2020~~

2021

(in thousands, except share amounts)

Portfolio Company(a)

Footnotes

Industry
         Number of
Shares    Amortized
Cost    Fair
Value^(d)
Cimarron Energy Holdco Inc., Participation Option
(f)(o)(s) Service & Equipment          25,000,000    $ 1,289    $ 175
Denbury Inc., Common Equity
(f)(k)(o) Upstream          1,265,510    22,906    32,511
Harvest Oil & Gas Corp., Common Equity
(f)(o)(w) Upstream          135,062    17,558    2,794
Limetree Bay Ventures, LLC, Common Equity
(f)(o)(s)(w) Midstream          128,645    3,406    —
Lonestar Resources US Inc., Common Equity
(f)(o)(w) Upstream          864,000    2,376    2,592
Luxe Drillship Operating, LLC, Overriding Royalty Interest
(f)(o)(s) Upstream          N/A    1,354    773
Maverick Natural Resources, LLC, Common Equity
(f)(g)(n)(o)(s) Upstream          503,176    138,208    152,860
MB Precision Investment Holdings LLC, Class A-2 Units
(f)(n)(o)(s) Industrials          1,426,110    $ 490    $ —
NGL Energy Partners, LP, Warrants (Par)
(f)(k)(o)(s) Midstream                                                                         2,187,500    3,083    88
NGL Energy Partners, LP, Warrants (Premium)
(f)(k)(o)(s) Midstream          3,125,000    2,623    81
NGL Energy Partners, LP, Warrants (Premium)
(f)(k)(o)(s) Midstream          781,250    576    21
NGL Energy Partners, LP, Warrants (Par)
(f)(k)(o)(s) Midstream          546,880    630    22
Permian Production Holdings, LLC, Common Equity
(f)(n)(o)(s)(w) Upstream          1,951,667    —      —
Ridgeback Resources Inc., Common Equity
(f)(k)(o)(s)(t)(w) Upstream          9,599,928    58,985    38,385
Rosehill Operating Company, LLC, Common Equity
(f)(n)(o)(s) Upstream          13,973    2,182    2,377
Swift Worldwide Resources Holdco Limited, Common Equity
(f)(k)(o)(s)(u) Service & Equipment          3,750,000    6,029    2,531
UP Energy, LLC, Common Equity
(f)(o)(s) Upstream          367,237    9,019    8,160
USA Compression Partners, LP, Warrants (Market)
(f)(h)(k)(o)(s) Midstream          793,359    555    1,412
USA Compression Partners, LP, Warrants (Premium)
(f)(h)(k)(o)(s) Midstream          1,586,719    714    2,253
Warren Resources, Inc., Common Equity
(f)(o)(s)(w) Upstream          4,415,749    20,754    4,460




Total Equity/Other
            367,561    290,331




TOTAL INVESTMENTS—152.7%
            $ 2,575,405    2,181,476



LIABILITIES IN EXCESS OF OTHER ASSETS—(52.7%)
               (752,899 )


NET ASSETS—100.0%
               $ 1,428,577

~~(a)~~

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

~~(b)~~

Portfolio Company(a)
Footnotes Industry
Rate(b)
Floor Maturity Number of
Shares Amortized
Cost
Fair
Value(d)
Equity/Other—29.5%(l)
Abaco Energy Technologies LLC, Common Equity (f)(o)(s) Service & Equipment 6,944,444 $ 6,944 $ 642
AIRRO (Mauritius) Holdings II, Warrants (f)(k)(o)(p)(s) Power 35 2,652 2,125
Allied Wireline Services, LLC, Common Equity (f)(n)(o)(s)(x) Service & Equipment 48,400 1,527 —
Allied Wireline Services, LLC, Warrants (f)(n)(o)(s)(x) Service & Equipment 22,000 — —
Arena Energy, LP, Contingent Value Rights (f)(o)(s) Upstream 126,632,117 351 1,070
Ascent Resources Utica Holdings, LLC, Common Equity (f)(o)(q)(s) Upstream 148,692,909 44,700 34,051
Cimarron Energy Holdco Inc., Common Equity (f)(o)(s) Service & Equipment 4,302,293 3,950 —
Cimarron Energy Holdco Inc., Participation Option (f)(o)(s) Service & Equipment 25,000,000 1,289 —
Great Western Petroleum, LLC, Common Equity (f)(o)(r)(s)(w) Upstream 105,785 30,790 40,731
Harvest Oil & Gas Corp., Common Equity (f)(o)(w) Upstream 135,062 15,802 2,836
Limetree Bay Energy, LLC, Class A Units (f)(o)(s)(w) Midstream 50,494,585 19,663 6,046
Maverick Natural Resources, LLC, Common Equity (f)(g)(n)(o)(s) Upstream 503,176 138,208 278,760
MB Precision Investment Holdings LLC, Class A-2 Units (f)(n)(o)(s) Industrials 1,426,110 490 —
MECO IV Holdco, LLC, Class A-1 Units (f)(n)(o)(s)(x) Upstream 1,225,000 2,161 4,181
NGL Energy Partners, LP, Warrants (Par) (f)(k)(o)(s) Midstream 2,187,500 3,083 265
NGL Energy Partners, LP, Warrants (Premium) (f)(k)(o)(s) Midstream 3,125,000 2,623 280
NGL Energy Partners, LP, Warrants (Premium) (f)(k)(o)(s) Midstream 781,250 576 69
NGL Energy Partners, LP, Warrants (Par) (f)(k)(o)(s) Midstream 546,880 630 63
Permian Production Holdings, LLC, Common Equity (f)(n)(o)(s)(w) Upstream 1,961,896 1 8,829
Ranger Oil Corp., Common Equity (f)(o) Upstream 332,863 1,795 8,961
Ridgeback Resources Inc., Common Equity (f)(k)(o)(s)(t)(w) Upstream 9,599,928 58,985 48,356
Swift Worldwide Resources Holdco Limited, Common Equity (f)(k)(o)(s)(u) Service & Equipment 3,750,000 6,029 3,206
USA Compression Partners, LP, Warrants (Market) (f)(k)(o)(s) Midstream 793,359 555 2,209
USA Compression Partners, LP, Warrants (Premium) (f)(k)(o)(s) Midstream 1,586,719 714 3,499
Warren Resources, Inc., Common Equity (f)(o)(s)(x) Upstream 4,415,749 20,754 25,854
Total Equity/Other 364,272 472,033
TOTAL INVESTMENTS—149.5% $ 2,353,075 $ 2,395,223
LIABILITIES IN EXCESS OF OTHER ASSETS—(49.5%) (792,900)
NET ASSETS—100.0% $ 1,602,323

__________________

(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 December 31, 2021, the three-month London Interbank Offered Rate, or LIBOR, or L, was 0.21% and the Secured Overnight Financing Rate, or SOFR, or SF, was 0.05%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment.

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

(d) Fair value determined by the Company’s board of trustees (see Note 8).

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of December 31, ~~2020~~

2021

(in thousands, except share amounts)

~~Offered Rate, or LIBOR, was 0.24% and the U.S. Prime Lending Rate, or Prime, was 3.25%. PIK means~~ ~~paid-in-kind.~~ ~~PIK income accruals may be adjusted based on the fair value of the underlying investment.~~

~~(c)~~

~~Denominated in U.S. dollars, unless otherwise noted.~~

~~(d)~~

~~Fair value determined by the Company’s board of trustees (see Note 8).~~

~~(e)~~

~~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.~~

~~(f)~~

~~Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured Notes with JPMorgan Chase Bank, N.A. (see Note 9).~~

~~(g)~~

~~Security held within FS Energy Investments, LLC, a wholly-owned subsidiary of the Company.~~

~~(h)~~

~~Security or portion thereof held within Gladwyne Funding LLC, a wholly-owned subsidiary of the Company.~~

~~(i)~~

~~Security held within EP Northern Investments, LLC, a wholly-owned subsidiary of the Company.~~

~~(j)~~

~~Security held within FS Power Investments, LLC, a wholly-owned subsidiary of the Company.~~

~~(k)~~

The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. As of December 31, 2020, 67.6% of the Company’s total assets represented qualifying assets. Therefore, the Company may not make investments other than in qualifying assets until qualifying assets represent at least 70% of the Company’s total assets.

~~(l)~~

~~Listed investments may be treated as debt for U.S. generally accepted accounting principles, or GAAP, or tax purposes.~~

~~(m)~~

~~Security was on~~ ~~non-accrual~~ ~~status as of December 31, 2020.~~

~~(n)~~

~~Security held within FSEP Investments, Inc., a wholly-owned subsidiary of the Company.~~

~~(o)~~

~~Security is~~ ~~non-income~~ ~~producing.~~

~~(p)~~

~~Security or portion thereof held within FS Power Investments II, LLC, a wholly-owned subsidiary of the Company.~~

~~(q)~~

~~Security held within EP American Energy Investments, Inc., a wholly-owned subsidiary of the Company.~~

~~(r)~~

~~Security held within EP Synergy Investments, Inc., a wholly-owned subsidiary of Gladwyne Funding LLC.~~

~~(s)~~

~~Security is classified as Level 3 in the Company’s fair value hierarchy (See Note 8).~~

~~(t)~~

~~Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of December 31, 2020.~~

~~(u)~~

~~Investment denominated in British pounds. Amortized cost and fair value are converted into U.S. dollars as of December 31, 2020.~~

~~(v)~~

~~Investment is a real property interest and is included with Senior Secured Loans—First Lien to facilitate comparison with other investments.~~

~~(w)~~

Under the 1940 Act, 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 December 31, 2020, 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 year ended December 31, 2020:

(e) 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.

(f) Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured Notes with JPMorgan Chase Bank, N.A. (see Note 9).

(g)Security held within FS Energy Investments, LLC, a wholly-owned subsidiary of the Company.

(h) Position or portion thereof unsettled as of December 31, 2021.

(i)Security held within EP Northern Investments, LLC, a wholly-owned subsidiary of the Company.

(j)Security held within FS Power Investments, LLC, a wholly-owned subsidiary of the Company.

(k) The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. As of December 31, 2021, 72.1% of the Company’s total assets represented qualifying assets.

(l)Listed investments may be treated as debt for U.S. generally accepted accounting principles, or GAAP, or tax purposes.

(m) Security was on non-accrual status as of December 31, 2021.

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

(o) Security is non-income producing.

(p) Security or portion thereof held within FS Power Investments II, LLC, a wholly-owned subsidiary of the Company.

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

(r) Security held within EP Synergy Investments, Inc., a wholly-owned subsidiary of the Company.

(s)Security is classified as Level 3 in the Company’s fair value hierarchy (see Note 8).

(t) Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of December 31, 2021.

(u) Investment denominated in British pounds. Amortized cost and fair value are converted into U.S. dollars as of December 31, 2021.

(v) Investment is a real property interest and is included with Senior Secured Loans—First Lien to facilitate comparison with other investments.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of December 31, ~~2020~~

2021

(in thousands, except share amounts)

Portfolio Company
Fair Value at
December 31,
2019 Purchases, Paid
-in-Kind Interest
and Transfers In Sales,
Repayments and
Transfers Out Accretion
of
Discount Net
Realized
Gain (Loss) Net Change in
Unrealized
Appreciation
(Depreciation) Fair Value at
December 31,
2020 Interest
Income⁽¹⁾ PIK
Income⁽¹⁾
Senior Secured Loans—First Lien

BL Sand Hills Unit, L.P.
$ 288 $ —   $ (223 ) $ —   $ (16,451 ) $ 16,386 $ —   $ —   $ —
MB Precision Holdings LLC
4,585 157 (3,949 ) 48 (748 ) (93 ) —   305 157
Permian Production Holdings, LLC
—   11,450 —   48 —   (52 ) 11,446 262 23
Warren Resources, Inc.
27,507 281 —   —   —   —   27,788 2,915 280
Senior Secured Loans—Second Lien

Titan Energy Operating, LLC
—   —   (600 ) —   (100,302 ) 100,902 —   —   —
Senior Secured Bonds

FourPoint Energy, LLC
223,369 —   (135,635 ) 636 (96,598 ) 8,228 —   5,647 —
Limetree Bay Ventures, LLC
—   25,562 —   —   —   (24 ) 25,538 —   2,700
Limetree Bay Ventures, LLC
—   33,813 —   326 —   2,169 36,308 326 1,790
Limetree Bay Ventures, LLC
—   16,381 —   —   —   73,587 89,968 —   —
Unsecured Debt

Limetree Bay Ventures, LLC
—   37,814 —   —   —   (37,814 ) —   —   3,068
Limetree Bay Ventures, LLC
—   9,892 —   —   —   (9,892 ) —   —   1,045
Preferred Equity

Limetree Bay Ventures, LLC, Preferred Equity
—   86,105 —   624 —   (86,729 ) —   689 1,950
Limetree Bay Ventures, LLC, Preferred Equity
—   53,548 —   —   —   (53,548 ) —   —   986
MB Precision Investment Holdings LLC, Class A Preferred Units
1,205 —   —   —   (1,880 ) 675 —   —   —
Equity/Other

BL Sand Hills Unit, L.P., Net Profits Interest
—   —   (60 ) —   (5,120 ) 5,180 —   —   —
BL Sand Hills Unit, L.P., Overriding Royalty Interest
—   —   (8 ) —   (732 ) 740 —   —   —
BL Sand Hills Unit, L.P., Series A Units
—   —   —   —   (24,019 ) 24,019 —   —   —
FourPoint Energy, LLC, Common Equity, Class C-II-A Units
6,906 —   (376 ) —   (65,624 ) 59,094 —   —   —
FourPoint Energy, LLC, Common Equity, Class D Units
1,307 —   (70 ) —   (8,106 ) 6,869 —   —   —
FourPoint Energy, LLC, Common Equity, Class E-II Units
15,793 —   (859 ) —   (36,875 ) 21,941 —   —   —
FourPoint Energy, LLC, Common Equity, Class E-III Units
23,306 —   (1,268 ) —   (54,420 ) 32,382 —   —   —
Harvest Oil & Gas Corp., Common Equity
8,644 —   (2,701 ) —   —   (3,149 ) 2,794 —   —
Limetree Bay Ventures, LLC, Common Equity
—   3,406 —   —   —   (3,406 ) —   —   —
Lonestar Resources US Inc., Common Equity
—   2,376 —   —   —   216 2,592 —   —
MB Precision Investment Holdings LLC, Class A-2 Units
—   —   (490 ) —   —   490 —   —   —
Permian Production Holdings, LLC, Common Equity
—   —   —   —   —   —   —   —   —
Ridgeback Resources Inc., Common Equity
$ 50,721 $ —   $ —   $ —   $ —   $ (12,336 ) $ 38,385 $ —   $ —
Titan Energy, LLC, Common Equity
16 —   —   —   (17,554 ) 17,538 —   —   —
Warren Resources, Inc., Common Equity
10,951 —   —   —   —   (6,491 ) 4,460 —   —

$ 374,598 $ 280,785 $ (146,239 ) $ 1,682 $ (428,429 ) $ 156,882 $ 239,279 $ 10,144 $ 11,999

~~(1)~~

~~Interest and PIK income presented for the year ended December 31, 2020.~~

(w)Under the 1940 Act, 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 December 31, 2021, 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 deemed to be an affiliated person as of December 31, 2021:

Portfolio Company Fair Value at December 31, 2020
Gross Additions(1)
Gross Reductions(2)
Net Realized Gain (Loss) Net Change in Unrealized Appreciation (Depreciation) Fair Value at December 31, 2021
Interest Income(3)
PIK Income(3)
Dividend Income(3)
Senior Secured Loans—First Lien
Limetree Bay Energy, LLC $ — $ 14,343 $ — $ — $ (11,177) $ 3,166 $ — $ — $ —
Permian Production Holdings, LLC 11,446 489 (6,401) 1,106 1,249 7,889 1,009 215 —
Warren Resources, Inc.(4)
27,788 69 (27,857) — — — — — —
Senior Secured Bonds
Great Western Petroleum, LLC — 53,913 — — 4,142 58,055 5,861 —
Limetree Bay Ventures, LLC 25,538 — (3,810) (21,752) 24 — — — —
Limetree Bay Ventures, LLC 36,308 19 (5,137) (29,021) (2,169) — 19 — —
Limetree Bay Ventures, LLC 89,968 43,291 (9,889) (49,783) (73,587) — — — —
Unsecured Debt
Limetree Bay Ventures, LLC — — (6,298) (31,516) 37,814 — — — —
Limetree Bay Ventures, LLC — — (1,648) (8,244) 9,892 — — — —
Preferred Equity
Limetree Bay Ventures, LLC, Preferred Equity — — — (53,548) 53,548 — — — —
Limetree Bay Ventures, LLC, Preferred Equity — — — (86,729) 86,729 — — — —
Equity/Other
Great Western Petroleum, LLC, Common Equity — 30,790 — — 9,941 40,731 — — —
Harvest Oil & Gas Corp., Common Equity 2,794 — (1,756) — 1,798 2,836 — — —
Limetree Bay Energy, LLC, Class A Units — 19,663 — — (13,617) 6,046 — — —
Limetree Bay Ventures, LLC, Common Equity — — — (3,406) 3,406 — — — —
Lonestar Resources US Inc., Common Equity 2,592 — (2,376) — (216) — — — —
Permian Production Holdings, LLC, Common Equity — 1 — — 8,828 8,829 — — 1,574
Ridgeback Resources Inc., Common Equity 38,385 — — — 9,971 48,356 — — —
Warren Resources, Inc., Common Equity(4)
4,460 — (20,754) — 16,294 — — — —
$ 239,279 $ 162,578 $ (85,926) $ (282,893) $ 142,870 $ 175,908 $ 6,889 $ 215 $ 1,574

__________________

(3) Interest, PIK and dividend income presented for the year ended December 31, 2021.

(4) The Company held this investment as of December 31, 2021 but it was deemed to “control” the portfolio company as of December 31, 2021. Transfers in or out have been presented at amortized cost.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments ~~(Continued)~~

(continued)

As of December 31, ~~2020~~

2021

(in thousands, except share amounts)

~~(x)~~

Under the 1940 Act, 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 December 31, 2020, the Company held investments in portfolio companies 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 companies for the year ended December 31, 2020:

Portfolio Company
Fair Value at
December 31, 2019 Purchases,
Paid-in-Kind
Interest and
Transfers In Sales,
Repayments
and Transfers
Out Accretion
of
Discount Net Realized
Gain (Loss) Net Change in
Unrealized
Appreciation
(Depreciation) Fair Value at
December 31,
2020 Interest Income⁽¹⁾
Senior Secured Loans—First Lien

Allied Wireline Services, LLC
$ —   $ 53,007 $ —   $ —   $ —   $ —   $ 53,007 $ 2,886
Lusk Operating LLC
—   —   —   —   (27,464 ) 27,464 —   —
Sustainable Infrastructure Investments, LLC

Sustainable Infrastructure Investments, LLC
—   60,603 —   —   —   1,213 61,816 —
Equity/Other

Allied Wireline Services, LLC, Common Equity
—   1,527 —   —   —   377 1,904 —
Allied Wireline Services, LLC, Warrants
—   —   —   —   —   —   —   —
Lusk Operating LLC, Common Equity
—   —   —   —   —   —   —   —

$ —   $ 115,137 $ —   $ —   $ (27,464 ) $ 29,054 $ 116,727 $ 2,886

~~(1)~~

~~Interest income presented for the year ended December 31, 2020.~~

(x)Under the 1940 Act, 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 December 31, 2021, the Company held investments in portfolio companies 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 and deemed to control as ofDecember 31, 2021:

__________________

(3) Interest, PIK, fee and dividend income presented for the year ended December 31, 2021.

(4) The Company held this investment as of December 31, 2020 but it was deemed to be an “affiliated person” of the portfolio company as of December 31, 2020. Transfers in or out have been presented at amortized cost.

See notes to unaudited consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements

(in thousands, except share and per share amounts)

Note 1. Principal Business and Organization

FS Energy and Power Fund, or the Company, was formed as a Delaware statutory trust under the Delaware Statutory Trust Act on September 16, 2010 and formally commenced investment operations on July 18, 2011. The Company is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, the Company has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a regulated investment company, or RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As of ~~September~~June 30, ~~2021,~~2022, the Company had various wholly-owned financing subsidiaries, including special-purpose financing subsidiaries and subsidiaries through which it holds or expects to hold interests in certain portfolio companies. The unaudited consolidated financial statements include both the Company’s accounts and the accounts of its wholly-owned subsidiaries as of ~~September~~June 30, ~~2021.~~2022. All significant intercompany transactions have been eliminated in consolidation. Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state income taxes.

The Company’s investment objective is to generate current income and long-term capital appreciation by investing primarily in privately-held U.S. companies in the energy and power industry. The Company’s investment policy is to invest, under normal circumstances, at least 80% of its total assets in securities of energy and power related, or Energy, companies. The Company considers Energy companies to be those companies that engage in the exploration, development, production, gathering, transportation, processing, storage, refining, distribution, mining, generation or marketing of natural gas, natural gas liquids, crude oil, refined products, coal or power, including those companies that provide equipment or services to companies engaged in any of the foregoing.

The Company is managed by FS/EIG Advisor, LLC, or FS/EIG Advisor, pursuant to an investment advisory and administrative services agreement, dated as of April 9, 2018, or the FS/EIG investment advisory agreement. FS/EIG Advisor oversees the management of the Company’s operations and is responsible for making investment decisions with respect to the Company’s portfolio. FS/EIG Advisor is jointly operated by an affiliate of Franklin Square Holdings, L.P. (which does business as FS Investments)~~, or FS Investments,~~ and EIG Asset Management, LLC, or EIG.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For a more complete discussion of significant accounting policies and certain other information, the Company’s interim unaudited consolidated financial statements should be read in conjunction with its audited consolidated financial statements as of and for the year ended December 31, ~~2020~~2021 included in the Company’s annual report on Form 10-K. Operating results for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022. The December 31, ~~2020~~2021 consolidated balance sheet and consolidated schedule of investments are derived from the ~~Company’s~~Company's audited consolidated financial statements as of and for the year ended December 31, ~~2020.~~2021. The Company is considered an investment company under GAAP and

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 2. Summary of Significant Accounting Policies (Continued)~~

follows the accounting and reporting guidance applicable to investment companies under Accounting Standards Codification Topic 946, Financial Services—Investment Companies. The Company has evaluated the impact of subsequent events through the date the unaudited consolidated financial statements were issued and filed with the Securities and Exchange Commission, or the SEC.

Use of Estimates: The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Many of the amounts have been rounded, and all amounts are in thousands, except share and per share amounts.

Capital Gains Incentive Fee: Pursuant to the terms of the FS/EIG investment advisory agreement, the incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of such agreement). Such fee equals 20.0% of the Company’s “incentive fee capital gains,” which are the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees on capital gains. The Company will accrue for the incentive fee on capital gains, which, if earned, will be paid annually. The Company will accrue the incentive fee on capital gains based on net realized and unrealized gains; however, the fee payable to FS/EIG Advisor will be based on realized gains and no such fee will be payable with respect to unrealized gains unless and until such gains are actually realized.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

Subordinated Income Incentive Fee:Pursuant to the terms of the FS/EIG investment advisory agreement, FS/EIG Advisor may also be entitled to receive a subordinated incentive fee on income. The subordinated incentive fee on income under the FS/EIG investment advisory agreement is calculated and payable quarterly in arrears and equals 20.0% of the Company’s ~~“pre-incentive~~“pre-incentive fee net investment income” for the immediately preceding quarter subject to a hurdle rate, expressed as a rate of return on adjusted capital, equal to 1.625% per quarter, or an annualized hurdle rate of 6.5%. As a result, FS/EIG Advisor will not earn this incentive fee for any quarter until the Company’s pre-incentive fee net investment income for such quarter exceeds the hurdle rate of 1.625%. For purposes of this fee, ~~‘‘adjusted capital’’~~“adjusted capital” means cumulative gross proceeds generated from sales of the Company’s common shares (including proceeds from its distribution reinvestment plan) reduced for distributions from non-liquidating dispositions of the Company’s investments paid to shareholders and amounts paid for share repurchases pursuant to the Company’s share repurchase program. Once the Company’s pre-incentive fee net investment income in any quarter exceeds the hurdle rate, FS/EIG Advisor will be entitled to a ~~“catch-up”~~“catch-up” fee equal to the amount of the Company’s pre-incentive fee net investment income in excess of the hurdle rate, until the Company’s pre-incentive fee net investment income for such quarter equals 2.031%, or 8.125% annually, of adjusted capital. This ~~“catch-up”~~“catch-up” feature will allow FS/EIG Advisor to recoup the fees foregone as a result of the existence of the hurdle rate. Thereafter, FS/EIG Advisor will be entitled to receive 20.0% of the Company’s pre-incentive fee net investment income.

Reclassifications: Certain amounts in the unaudited consolidated financial statements for the ~~nine~~three and six months ended ~~September~~June 30, ~~2020~~2021 may have been reclassified to conform to the classifications used to prepare the unaudited consolidated financial statements for the ~~nine~~three and six months ended ~~September~~June 30, ~~2021.~~

2022.

Revenue Recognition:Security transactions are accounted for on the trade date. The Company records interest income on an accrual basis to the extent that it expects to collect such amounts. The Company records

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 2. Summary of Significant Accounting Policies (Continued)~~

dividend income on the ex-dividend date. Distributions received from limited liability company, or LLC, and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. The Company does not accrue as a receivable interest or dividends on loans and securities if it has reason to doubt its ability to collect such income. The Company’s policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected. The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. If there is reasonable doubt that the Company will receive any previously accrued interest, then the accrued interest ~~income~~ will be written-off. Payments received on non-accrual investments may be recognized as income or applied to principal depending upon the collectability of the remaining principal and interest. Non-accrual investments may be restored to accrual status when principal and interest become current and are likely to remain current based on the Company’s judgment.

Loan origination fees, original issue discount and market discount are capitalized and the Company amortizes such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded as interest income. Structuring and other non-recurring upfront fees are recorded as fee income when earned. ~~For the nine months ended September 30, 2021 and 2020, the Company recognized $0 and $83, respectively, in structuring or other upfront fee revenue.~~ The Company records prepayment premiums on loans and securities as fee income when it earns such amounts.

For the six months ended June 30, 2022 and 2021, the Company did not recognize any structuring or other upfront fee revenue.

Net Realized Gains or Realized Losses on Extinguishment of Debt: Upon the repayment of debt obligations which are deemed to be extinguishments, the difference between the principal amount due at maturity and the amount repaid on the extinguishment of debt is recognized as a gain or loss.

Recent Accounting Pronouncements: In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848), or ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued Accounting Standards Update No. 2021-01, Reference Rate Reform (Topic 848), or ASU 2021-01, which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and ASU 2021-01 on its consolidated financial statements.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 3. Share Transactions

Below is a summary of transactions with respect to the Company’s common shares during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~

   Nine Months Ended September 30,
   2021    2020
   Shares    Amount    Shares    Amount
Reinvestment of Distributions
   4,608,920    $ 15,880    4,793,767    $ 20,871
Share Repurchase Program
   —      —      (4,877,069 )    (26,823 )








Net Proceeds from Share Transactions
   4,608,920    $ 15,880    (83,302 )    $ (5,952 )

2021:


	Six Months Ended June 30,
	2022			2021
	Shares	Amount		Shares	Amount
Reinvestment of Distributions	2,741,168	$	10,460	3,105,572	$	10,618

Proceeds from Share Transactions	2,741,168	$	10,460	3,105,572	$	10,618

During the period ~~from October~~from July 1, ~~2021~~2022 to ~~November 15, 2021,~~ August 11, 2022, the Company issued ~~1,460,227~~1,298,187 common shares pursuant to its distribution reinvestment plan for gross proceeds of ~~$5,257~~$5,193 at an average price per share of ~~$3.60.~~

$4.00.

On February 25, 2020, the Company received exemptive relief from the SEC permitting it to offer multiple classes of common shares. While the Company has no present intention to recommence a public offering of its common shares, the Company could do so in the future.

Share Repurchase Program

In March 2020, in light of difficult market conditions and in an effort to preserve liquidity in the Company, the Company’s board of trustees determined to suspend for an indefinite period of time the Company’s share

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 3. Share Transactions (Continued)~~

repurchase program and will reassess the Company’s ability to recommence such program in future periods. The Company’s board of trustees determined to terminate the Company’s previously announced quarterly tender offer pursuant to its share repurchase program, or Tender Offer, that it made pursuant to the Tender Offer Statement on Schedule TO originally filed with the SEC on February 24, 2020. As a result of this termination, no common shares were purchased in the Tender Offer and all common shares previously tendered and not withdrawn were promptly returned to tendering holders.

Prior to its suspension, the Company intended to conduct quarterly tender offers pursuant to its share repurchase program. The ~~Company’s~~Company's board of trustees will consider the following factors, among others, in making its determination regarding whether to cause the Company to offer to repurchase common shares and under what terms:

• the effect of such repurchases on the Company’s qualification as a RIC (including the consequences of any necessary asset sales);

• the liquidity of the ~~Company’s~~Company's assets (including fees and costs associated with disposing of assets);

• the Company’s investment plans and working capital requirements;

• the relative economies of scale with respect to the Company’s size;

• the Company’s history in repurchasing common shares or portions thereof; and

• the condition of the securities markets.

Historically, the Company limited the number of common shares to be repurchased during any calendar year to the lesser of (i) the number of common shares the Company can repurchase with the proceeds it receives from the issuance of common shares under the Company’s distribution reinvestment plan and (ii) 10% of the weighted average number of common shares outstanding in the prior calendar year, or 2.5% in each calendar quarter. On May 5, 2017, the board of trustees of the Company further amended the share repurchase program. As amended, the Company will limit the maximum number of common shares to be repurchased for any repurchase offer to the greater of (A) the number of common shares that the Company can repurchase with the proceeds it has received from the sale of common shares under its distribution reinvestment plan during the twelve-month period ending on the date the applicable repurchase offer expires (less the amount of proceeds used to repurchase common shares on each previous repurchase date for repurchase offers conducted during such twelve-month period) (this limitation is referred to as the twelve-month repurchase limitation) and (B) the number of common shares that the Company can repurchase with the proceeds the Company receives from the sale of common shares under its distribution reinvestment plan during the three-month period ending on the date the applicable repurchase offer expires (this limitation is referred to as the three-month repurchase limitation). In addition to this limitation, the maximum number of common shares to be repurchased for any repurchase offer will also be limited to 10% of the weighted average number of common shares outstanding in the prior calendar year, or 2.5% in each calendar quarter. As a result, the maximum number of common shares to be repurchased for any repurchase offer will not exceed the lesser of (i) 10% of the weighted average number of common shares outstanding in the prior calendar year, or 2.5% in each calendar quarter, and (ii) whichever is greater of the ~~twelve- month~~twelve-month repurchase limitation described in clause (A) above and the three-month repurchase limitation described in clause (B) above. Furthermore, the maximum number of common shares to be repurchased for any repurchase offer may further be limited by that certain Senior Secured Credit Agreement, dated August 16, 2018, by and among the Company, the lenders party thereto, JPMorgan Chase Bank, N.A., or JPMorgan, as administrative agent and collateral agent, and the other parties signatory thereto, as amended, or the JPMorgan Facility.

See Note 9 for a discussion of the JPMorgan Facility.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 3. Share Transactions ~~(Continued)~~

(continued)

If the Company recommences its share repurchase program, the Company intends to offer to repurchase common shares at a price equal to the price at which common shares are issued pursuant to the Company’s distribution reinvestment plan on the distribution date coinciding with the applicable share repurchase date. The price at which common shares are issued under the Company’s distribution reinvestment plan is determined by the Company’s board of trustees or a committee thereof, in its sole discretion, and will be (i) not less than the net asset value per common share as determined in good faith by the Company’s board of trustees or a committee thereof, in its sole discretion, immediately prior to the payment date of the distribution and (ii) not more than 2.5% greater than the net asset value per common share as of such date. The Company’s board of trustees may amend, suspend or terminate the share repurchase program at any time, upon 30 days’ notice.

The Company did not repurchase any shares pursuant to its share repurchase program during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021. ~~The following table provides information concerning the Company’s repurchases of common shares pursuant to its share repurchase program during the nine months ended September 30, 2020:~~

For the Three Months
Ended
Repurchase Date Shares
Repurchased Percentage
of Shares
Tendered
That Were
Repurchased Percentage of
Outstanding Shares
Repurchased as of the
Repurchase Date Repurchase
Price
Per Share Aggregate
Consideration
for Repurchased
Shares
Fiscal 2020

December 31, 2019
January 8, 2020 4,354,073 9 % 0.99 % $ 5.50 $ 23,947

In order to minimize the expense of supporting small accounts and provide additional liquidity to shareholders of the Company holding small accounts after completion of ~~the~~a regular quarterly share repurchase offer, the Company reserves the right to repurchase the shares of and liquidate any investor’s account if the balance of such account is less than the Company’s $5 minimum initial investment, unless the account balance has fallen below the minimum solely as a result of a decline in the Company’s net asset value per share. The Company will provide or will cause to be provided 30 days’ prior written notice to potentially affected investors, which notice may be included in ~~the~~ regular quarterly repurchase offer materials, of any such repurchase. Any such repurchases will be made at the Company’s most recent price at which the Company’s shares were issued pursuant to its distribution reinvestment plan.

There were no de minimis account liquidations during the ~~nine~~six months ended ~~September~~June 30, ~~2021. The following table summarizes the common shares repurchased by the Company relating to its de minimis account liquidations during the nine months ended September 30, 2020:~~

For the Three Months Ended
   Repurchase Date    Shares
Repurchased    Percentage of
Outstanding Shares
Repurchased as of the
Repurchase Date Repurchase
Price
Per Share    Aggregate
Consideration
for Repurchased
Shares
Fiscal 2020

December 31, 2019
   January 17, 2020    522,996    0.12 % $ 5.50    $ 2,876

~~FS Energy~~2022 and ~~Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

2021.

Note 4. Related Party Transactions

Compensation of the Investment Adviser

Pursuant to the FS/EIG investment advisory agreement, FS/EIG Advisor is entitled to an annual base management fee based on the average weekly value of the Company’s gross assets (gross assets equals total assets as set forth on the Company’s consolidated balance sheets) during the most recently completed calendar quarter and an incentive fee based on the Company’s performance. The base management fee is payable quarterly in arrears, and is calculated at an annual rate of 1.75% of the average weekly value of the Company’s gross assets. Pursuant to a letter dated May 13, 2020, or the May Letter, FS/EIG Advisor elected to defer the payment of 74.9% of the base management fee to which it was entitled for the investment advisory services provided during the quarterly period ended March 31, 2020 and thereafter until it notified the Company that it no longer intends to defer payments. Pursuant to the May Letter, FS/EIG Advisor agreed that it would take the deferred payment for any quarter upon the earlier of (1) the date provided by FS/EIG Advisor in a written notice to the Company and (2) the end of the third full calendar quarter following the quarter in which the provision of services to which such deferred payment relates. Pursuant to the May Letter, the deferred payment for any quarter would be deferred without interest and could be taken in such other quarter, in whole or in part, as FS/EIG Advisor determined. FS/EIG Advisor has received the deferred payments for the quarters ended March 31, 2020 and June 30, 2020 and elected not to defer the base management fee for the quarters ended September 30, 2020 and December 31, 2020. In addition, on February 26, 2021, FS/EIG Advisor notified the Company that it no longer intends to defer the payment of any portion of the management fee pursuant to the May Letter. See Note 2 for a discussion of the capital gains and subordinated income incentive fees that FS/EIG Advisor may be entitled to under the FS/EIG investment advisory agreement.

FS/EIG Advisor may receive structuring or other upfront fees from portfolio companies in which FS/EIG Advisor has caused the Company to invest. FS/EIG Advisor has agreed to offset the amount of any structuring, upfront or certain other ~~upfront~~ fees received by FS/EIG Advisor or its members against the management fees payable by the Company under the FS/EIG investment advisory agreement. During the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, $2,398 and ~~2020, $1,349 and $452,~~$323, respectively, of structuring, upfront or certain other ~~upfront~~ fees received by FS/EIG Advisor or its memberswere offset against management fees.

Pursuant to the FS/EIG investment advisory agreement, FS/EIG Advisor oversees the Company’s day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs activities and other administrative services. FS/EIG Advisor also performs, or oversees the performance of, the Company’s corporate operations and required administrative services, which includes being responsible for the financial records that the Company is required to maintain and preparing reports for the Company’s shareholders and reports filed with the SEC.

The Company reimburses FS/EIG Advisor for expenses necessary to perform services related to the Company’s administration and operations, including FS/EIG Advisor’s allocable portion of the compensation and/or related expenses of certain personnel of FS Investments and EIG providing administrative services to the Company on behalf of FS/EIG Advisor, and for transactional expenses for prospective investments, such as fees and expenses associated with performing due diligence reviews of investments that do not close, often referred to as “broken deal” costs. The Company reimburses FS/EIG Advisor no less than quarterly for expenses necessary to perform services related to the Company’s administration and operations. The amount of this reimbursement is set at the lesser of (1) FS/EIG Advisor’s actual costs incurred in providing such services and (2) the amount that the Company estimates it would be required to pay alternative service providers for comparable services in the same geographic location. FS/EIG Advisor allocates the cost of such services to the Company based on factors

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 4. Related Party Transactions (Continued)~~

such as time allocations and other reasonable metrics. The Company’s board of trustees reviews the methodology employed in determining how the expenses are allocated to the Company and assesses the reasonableness of such reimbursements for expenses allocated to the Company based on the breadth, depth and quality of such services as compared to the estimated cost to the Company of obtaining similar services from third-party providers known to be available. In addition, the Company’s board of trustees considers whether any single third-party service provider would be capable of providing all such services at comparable cost and quality. Finally, the Company’s board of trustees, among other things, compares the total amount paid to FS/EIG Advisor for such services as a percentage of the Company’s net assets to the same ratio as

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 4. Related Party Transactions (continued)

reported by other comparable ~~BDCs.~~BDCs. The Company does not reimburse FS/EIG Advisor for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of FS/EIG Advisor.

The following table describes the fees and expenses accrued under the FS/EIG investment advisory agreement during the ~~three and nine~~six months ended ~~September~~June 30, 2022 and 2021:


			Three Months Ended June 30,				Six Months Ended June 30,
Related Party	Source Agreement	Description	2022		2021		2022		2021
FS/EIG Advisor	FS/EIG investment advisory agreement	Base Management Fee(1)	$	9,576	$	9,957	$	19,613	$	20,605
FS/EIG Advisor	FS/EIG investment advisory agreement	Administrative Services Expenses(2)	$	1,490	$	1,442	$	2,910	$	3,023

_________________________

(1) During the six months ended June 30, 2022 and 2021, $20,503 and ~~2020:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
Related Party

Source Agreement

Description
2021 2020 2021    2020
FS/EIG Advisor
FS/EIG investment advisory agreement Base Management Fee⁽¹⁾ $ 9,051 $ 10,624 $ 29,656    $ 38,167
FS/EIG Advisor
FS/EIG investment advisory agreement Administrative Services Expenses⁽²⁾ $ 1,457 $ 2,628 $ 4,480    $ 4,937

~~(1)~~

During the nine months ended September 30, 2021 and 2020, $30,761 and $22,158, respectively, in base management fees were paid to FS/EIG Advisor. The base management fee amount shown in the table above is shown net of $1,026 and $2 in structuring or other upfront fees received by FS/EIG Advisor and offset against base management fees for the three months ended September 30, 2021 and 2020, and $1,349 and $452 in structuring or other upfront fees received by FS/EIG Advisor and offset against base management fees for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, $9,051 in base management fees were payable to FS/EIG Advisor. See above for a discussion of FS/EIG Advisor’s previous election to defer payment of a portion of the base management fee to which it was entitled.

~~(2)~~

During the nine months ended September 30, 2021 and 2020, $3,113 and $2,918, respectively, of the accrued administrative services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by FS/EIG Advisor and the remainder related to other reimbursable expenses. The Company paid $3,174 and $3,403 in administrative services expenses to FS/EIG Advisor, or its affiliates, during the nine months ended September 30, 2021 and 2020, respectively.

$20,804, respectively, in base management fees were paid to FS/EIG Advisor. The base management fee amount shown in the table above is shown net of $1,700 and $321 in structuring, upfront or certain other fees received by FS/EIG Advisor or its members and offset against base management fees for the three months ended June 30, 2022 and 2021, respectively, and $2,398 and $323 in structuring, upfront or certain other fees received by FS/EIG Advisor or its members and offset against base management fees for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, $9,576 in base management fees were payable to FS/EIG Advisor.

(2) During the six months ended June 30, 2022 and 2021, $1,372 and $2,002, respectively, of the accrued administrative services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by FS/EIG Advisor and the remainder related to other reimbursable expenses. The Company paid $2,234 and $2,197 in administrative services expenses to FS/EIG Advisor, or its affiliates, during the six months ended June 30, 2022 and 2021, respectively.

Potential Conflicts of Interest

The members of the senior management and investment teams of FS/EIG Advisor serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Company does, or of investment vehicles managed by the same personnel. The officers, managers and other personnel of FS/EIG Advisor may serve in similar or other capacities for the investment advisers to future investment vehicles affiliated with FS Investments or EIG. In serving in these multiple and other capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the Company’s best interests or in the best interest of the Company’s shareholders. The Company’s investment objectives may

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 4. Related Party Transactions (Continued)~~

overlap with the investment objectives of such investment funds, accounts or other investment vehicles. For additional information regarding potential conflicts of interest, see the Company’s annual report on Form 10-K for the year ended December 31, ~~2020.~~

2021.

Exemptive Relief

As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term. In an order dated June 4, 2013, or the Order, the SEC granted exemptive relief permitting the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of its former investment adviser, including FS KKR Capital Corp., or collectively the Company’s co-investment affiliates. Effective April 9, 2018, or the JV Effective Date, and in connection with the transition of advisory services to a joint advisory relationship with EIG, the Company’s board of trustees authorized and directed that the Company (i) withdraw from the Order, except with respect to any transaction in which the Company participated in reliance on the Order prior to the JV Effective Date, and (ii) rely on an exemptive relief order dated April 10, 2018, granted to EIG and its affiliates which permits the Company to participate in co-investment transactions with certain other EIG advised funds, or the EIG Order.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 5. Distributions

The following table reflects the cash distributions per share that the Company declared on its common shares during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~

   Distribution
For the Three Months Ended
   Per Share    Amount
Fiscal 2020

March 31, 2020
   $ 0.0833    $ 36,207
June 30, 2020
   0.0300    13,098
September 30, 2020
   0.0300    13,163




Total
   $ 0.1433    $ 62,468




Fiscal 2021

March 31, 2021
   $ 0.0300    $ 13,249
June 30, 2021
   0.0300    13,294
September 30, 2021
   0.0300    13,339




Total
   $ 0.0900    $ 39,882

2021:
Distribution
For the Three Months Ended Per Share Amount
Fiscal 2021
March 31, 2021 $ 0.03 $ 13,249
June 30, 2021 0.03 13,294
Total $ 0.06 $ 26,543
Fiscal 2022
March 31, 2022 $ 0.03 $ 13,426
June 30, 2022 0.03 13,465
Total $ 0.06 $ 26,891

Although the ~~Company’s~~Company's board of trustees has not declared or resumed regular cash distributions to shareholders for any period after March 31, 2020, the ~~Company’s~~Company's board of trustees has since declared three cash distributions in 2020, ~~and three~~four cash distributions in 2021 and two cash distributions in 2022, each in the amount of $0.03 per share. FS/EIG Advisor and the Company’s board of trustees expect that future regular cash distributions to shareholders will beremain suspended until such time that the Company’s board of trustees and FS/EIG Advisor believe that market conditions and the financial condition of the Company support the resumption of such distributions. The ~~Company’s~~Company's board of trustees has and will continue to evaluate the ~~Company’s~~Company's ability to pay any distributions in the future. There can be no assurance that the Company will be able to pay distributions in the future. The timing and amount of any future

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 5. Distributions (Continued)~~

distributions to shareholders are subject to applicable legal restrictions and the sole discretion of the Company’s board of trustees. Furthermore, the JPMorgan Facility restricts the ability of the Company to make certain discretionary cash dividends and distributions and other restricted payments. See Note 9 for a discussion of the JPMorgan Facility.

The Company has adopted an “opt in” distribution reinvestment plan for its shareholders. As a result, if the Company makes a cash distribution, its shareholders will receive distributions in cash unless they specifically “opt in” to the distribution reinvestment plan so as to have their cash distributions reinvested in additional common shares. However, certain state authorities or regulators may impose restrictions from time to time that may prevent or limit a ~~shareholder’s~~shareholder's ability to participate in the distribution reinvestment plan.

Under the distribution reinvestment plan, cash distributions to participating shareholders will be reinvested in additional common shares at a purchase price determined by the Company’s board of trustees, or a committee thereof, in its sole discretion, that is (i) not less than the net asset value per common share as determined in good faith by the Company’s board of trustees or a committee thereof, in its sole discretion, immediately prior to the payment of the distribution and (ii) not more than 2.5% greater than the net asset value per common share as of such date. Any distributions reinvested under the plan will remain taxable to a U.S. shareholder.

The Company may fund its cash distributions to shareholders from any sources of funds legally available to it, including proceeds from the sale of the Company’s common shares, borrowings, net investment income from operations, capital gains proceeds from the sale of assets and non-capital gains proceeds from the sale of assets, dividends or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies. The Company has not established limits on the amount of funds it may use from available sources to make distributions. The ~~Company’s~~Company's distribution proceeds have exceeded and in the future may exceed its earnings. Therefore, portions of the distributions that the Company has made represented, and may make in the future may represent, a return of capital to shareholders, which lowers their tax basis in their common shares. A return of capital generally is a return of a shareholder’s investment rather than a return of earnings or gains derived from the Company’s investment activities. Each year a statement on Form 1099-DIV identifying the sources of the distributions (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to the Company’s shareholders. There can be no assurance that the Company will be able to pay distributions at a specific rate or at all.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 5. Distributions (continued)

The following table reflects the sources of the cash distributions on a tax basis that the Company ~~paid~~declared on its common shares during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021:


	Six Months Ended June 30,
	2022				2021
Source of Distribution	Distribution Amount		Percentage		Distribution Amount		Percentage
Net investment income(1)	$	26,891	100	%	$	26,543	100	%
Short-term capital gains proceeds from the sale of assets	—		—		—		—
Long-term capital gains proceeds from the sale of assets	—		—		—		—
Total	$	26,891	100	%	$	26,543	100	%

_________________________

(1) During the six months ended June 30, 2022 and 2021, 80.3% and ~~2020:~~

   Nine Months Ended September 30,
   2021 2020
Source of Distribution
   Distribution
Amount    Percentage Distribution
Amount    Percentage
Net investment income⁽¹⁾
   $ 39,882    100 % $ 62,468    100 %
Short-term capital gains proceeds from the sale of assets
   —      —   —      —
Long-term capital gains proceeds from the sale of assets
   —      —   —      —






Total
   $ 39,882    100 % $ 62,468    100 %

~~(1)~~

~~During~~69.1%, respectively, of the Company's gross investment income was attributable to cash income earned, 15.0% and 23.1%, respectively, was attributable to paid-in-kind, or PIK, interest and 4.7% and 7.8%, respectively, was attributable to non-cash accretion of discount.

In the past, the nine months ended September 30, 2021 and 2020, 70.7% and 72.5%, respectively, of the Company’s gross investment income was attributable to cash income earned, 23.0% and 13.2%, respectively, was attributable to ~~paid-in-kind,~~ ~~or PIK, interest and 6.3% and 14.3%, respectively, was attributable to~~ ~~non-cash~~ ~~accretion of discount.~~

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 5. Distributions (Continued)~~

~~The~~ Company has ~~in the past~~experienced restructurings and defaults and may experience ~~additional restructurings or defaults~~such events again in the future. Any restructuring or default may have an impact on the level of income received by the Company.

The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s fiscal year based upon the Company’s taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of the ~~Company’s~~Company's distributions for a full year. The actual tax characteristics of distributions to shareholders are reported to shareholders annually on Form 1099-DIV.

Net capital losses may be carried forward indefinitely, and their character is retained as short-term or long-term. As of ~~September~~June 30, ~~2021,~~2022, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of ~~$89,716~~$91,276 and ~~$1,191,137,~~$1,167,050, respectively.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, for federal income tax purposes, the gross unrealized appreciation on the Company’s investments, swap contracts and unrealized gain on foreign currency was ~~$235,849~~$389,433 and ~~$179,295,~~$288,368, respectively, and the gross unrealized depreciation on the Company’s investments, swap contracts and unrealized loss on foreign currency was ~~$509,937~~$530,100 and ~~$586,690,~~$552,882, respectively.

The aggregate cost of the Company’s investments for federal income tax purposes totaled ~~$2,579,793~~$2,568,415 and ~~$2,588,883~~$2,659,737 as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The aggregate net unrealized appreciation (depreciation) on a tax basis was ~~$(274,088)~~$(137,079) and ~~$(407,395)~~$(264,514) as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had deferred tax assets of ~~$157,157~~$163,822 and ~~$197,748,~~$155,160, respectively, resulting from net operating losses and capital losses of the ~~Company’s~~Company's wholly-owned taxable subsidiaries. As of ~~September~~June 30, ~~2021~~2022, the Company had a deferred tax liability of $49,847 resulting from unrealized appreciation on investments held by the Company's wholly-owned taxable subsidiaries and no deferred tax liability as of December 31, 2021. As of June 30, 2022 and December 31, ~~2020,~~2021, certain wholly-owned taxable subsidiaries anticipated that they would be unable to fully utilize their deferred tax assets, therefore the deferred tax assets were offset by valuation allowances of ~~$157,157~~$113,975 and ~~$197,748,~~$155,160, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and the year ended December 31, ~~2020,~~2021, the Company did not record a provision for taxes related to its wholly-owned taxable subsidiaries.

Note 6. Financial Instruments

The Company may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2022, the Company utilized swap contracts to economically hedge certain risks against natural gas and crude oil price exposure related to certain investments in the ~~Company’s~~Company's portfolio. While the use of these derivative instruments limits the downside risk of adverse price movements, their use also limits future revenues from upward price movements.

The ~~Company’s~~Company's fixed price swaps ~~were~~are settled monthly based on differences between the fixed price specified in the contract and the referenced settlement price. When the referenced settlement price ~~was~~is less than the price specified in the contract, the Company ~~received~~receives an amount from the counterparty based on the price difference multiplied by the volume. Similarly, when the referenced settlement price ~~exceeded~~exceeds the price specified in the contract, the Company ~~paid~~pays the counterparty an amount based on the price difference multiplied by the volume. The prices contained in these fixed price swaps are based on the NYMEX Henry Hub for natural gas and

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 6. Financial Instruments (Continued)~~

the ~~NYMEX West Texas Intermediate, or NYMEX WTI,~~ICE Brent for oil. Gas volumes are measured in one million British thermal units, or MMBtus, and oil volumes are measured in barrels, or Bbls.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 6. Financial Instruments (continued)

Below is a summary of the Company's open fixed price swap positions as of June 30, 2022. The hedged volumes reflected below represent an aggregation of multiple derivative contracts that have varying durations and may not be realized on a ratable basis over a calendar year.

Swap Contracts—Crude Oil


Year	Location	Bbls	Weighted Average Price ($/Bbls)
2022	ICE Brent	87,447	$87.22
2023	ICE Brent	168,511	$80.00

Swap Contracts—Natural Gas


Year	Location	MMBtu	Weighted Average Price ($/MMBtu)
2022	NYMEX Henry Hub	149,132	$4.58
2023	NYMEX Henry Hub	343,702	$3.80

As of ~~September~~December 31, 2021, the Company did not have any swap contracts. The fair value of swap contracts (which are not considered to be hedging instruments for accounting disclosure purposes) as of June 30, 2022 was as follows:


Instrument	Asset(1)		Liability(2)
Swap Contracts—Crude Oil	$	—	$	(3,156)
Swap Contracts—Natural Gas	—		(432)
Total	$	—	$	(3,588)

______________

(1) Reflected on the Company's consolidated balance sheets as: Unrealized appreciation on swap contracts.

(2) Reflected on the Company's consolidated balance sheets as: Unrealized depreciation on swap contracts.

During the six months ended June 30, 2021, the Company did not have any ~~fixed price~~ swap ~~positions.~~

In addition, the Company entered into oil basis swap positions, which settled on the pricing index to basis differential of Argus Light Louisiana Sweet Crude Oil, or Argus LLS, to NYMEX WTI. As of September 30, 2021, the Company did not have any oil basis swap positions for Argus LLS.

contracts. The effect of swap contracts (which are not considered to be hedging instruments for accounting disclosure purposes) on the ~~Company’s~~Company's statements of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2020 were~~2022 was as follows:

Instrument
Realized Gain (Loss)
on Derivatives
Recognized in
Income⁽¹⁾ Net Change in Unrealized
Appreciation (Depreciation) on
Derivatives Recognized in
Income⁽²⁾
Swap Contracts—Crude Oil
$ 19,313 $ (5,982 )
Swap Contracts—Natural Gas
937 (569 )

Total
$ 20,250 $ (6,551 )


Instrument	Realized Gain (Loss) on Derivatives Recognized in Income(1)		Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2)
Swap Contracts—Crude Oil	$	(1,502)	$	(3,156)
Swap Contracts—Natural Gas	(306)		(432)
Total	$	(1,808)	$	(3,588)

______________

(1) Reflected on the Company's consolidated statements of operations as: Net realized gain (loss) on swap contracts.

(2) Reflected on the Company's consolidated statements of operations as: Net change in unrealized appreciation (depreciation) on swap contracts.

Offsetting of Derivative Instruments

The Company has derivative instruments that are subject to master netting agreements. These agreements include provisions to offset positions with the same counterparty in the event of default by one of the parties. The Company’s unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the consolidated balance sheets. The following table presents the Company’s derivative assets and liabilities by counterparty, net of amounts available for offset under a master netting agreement as of June 30, 2022:


Counterparty	Derivative Assets	Derivative Liabilities		Net Value of Derivatives		Non-Cash Collateral (Received) Pledged(1)	Cash Collateral (Received) Pledged(1)	Net Amount of Derivative Assets (Liabilities)(2)
BP Energy Co.	—	$	(3,588)	$	(3,588)	—	—	$	(3,588)

______________

(1) In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization.

(2) Net amount of derivative assets and liabilities represents the net amount due from the counterparty to the Company and the net amount due from the Company to the counterparty, respectively, in the event of default.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

~~(1)~~

~~Reflected on the Company’s consolidated statements of operations as: Net realized gain (loss) on swap contracts.~~

~~(2)~~

~~Reflected on the Company’s consolidated statements of operations as: Net change in unrealized appreciation (depreciation) on swap contracts.~~

Note 7. Investment Portfolio

The following table summarizes the composition of the Company’s investment portfolio at cost and fair value as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

September 30, 2021
(Unaudited) December 31, 2020
Amortized
Cost⁽¹⁾ Fair Value Percentage
of Portfolio Amortized
Cost⁽¹⁾ Fair Value Percentage
of Portfolio
Senior Secured Loans—First Lien
$ 741,484 $ 723,390 32 % $ 649,708 $ 607,338 28 %
Senior Secured Loans—Second Lien
99,056 100,085 4 % 277,018 276,312 13 %
Senior Secured Bonds
75,059 77,232 3 % 286,082 340,042 16 %
Unsecured Debt
438,003 404,315 18 % 245,180 134,560 6 %
Preferred Equity
500,056 486,138 21 % 689,253 471,077 22 %
Sustainable Infrastructure Investments, LLC
54,514 54,430 2 % 60,603 61,816 3 %
Equity/Other
382,490 460,116 20 % 367,561 290,331 12 %

Total
$ 2,290,662 $ 2,305,706 100 % $ 2,575,405 $ 2,181,476 100 %

~~(1)~~

~~Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.~~

2021:
June 30, 2022
(Unaudited) December 31, 2021
Amortized
Cost(1)
Fair Value Percentage
of Portfolio
Amortized
Cost(1)
Fair Value Percentage
of Portfolio
Senior Secured Loans—First Lien $ 770,769 $ 762,753 31 % $ 832,257 $ 812,335 34 %
Senior Secured Loans—Second Lien 176,003 177,184 7 % 83,322 84,083 3 %
Senior Secured Bonds 10,040 10,356 0 % 77,266 81,646 3 %
Unsecured Debt 389,039 359,450 15 % 425,715 397,068 17 %
Preferred Equity 497,019 475,077 20 % 515,711 497,288 21 %
Sustainable Infrastructure Investments, LLC 54,514 52,131 2 % 54,514 50,770 2 %
Equity/Other 340,584 594,385 25 % 364,272 472,033 20 %
Total $ 2,237,968 $ 2,431,336 100 % $ 2,353,057 $ 2,395,223 100 %
______________

(1) Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.

In general, under the 1940 Act, the Company would be presumed to “control” a portfolio company if it owned more than 25% of its voting securities or it had the power to exercise control over the management or

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 7. Investment Portfolio (Continued)~~

policies of a portfolio company, and would be an “affiliated person” of a portfolio company if it owned 5% or more of its voting securities.

As of ~~September~~June 30, ~~2021, the Company held investments in four portfolio companies that it is deemed to “control.” As of September 30, 2021,~~2022, the Company held investments in six portfolio companies of which it is deemed to be an “affiliated person” but is not deemed to “control.” As of June 30, 2022, the Company held investments in three portfolio companies of which it is deemed to “control.” For additional information with respect to such portfolio companies, see footnotes ~~(w)~~(y) and ~~(x)~~(z) to the unaudited consolidated schedule of investments as of ~~September~~June 30, ~~2021~~2022 in this quarterly report on Form 10-Q.

As of December 31, ~~2020,~~2021, the Company held investments in ~~two portfolio companies of which it is deemed to “control.” As of December 31, 2020, the Company held investments in six~~five portfolio companies of which it is deemed to be an “affiliated person” but is not deemed to “control.” As of December 31, 2021, the Company held investments in four portfolio companies of which it is deemed to “control.” For additional information with respect to such portfolio companies, see footnotes (w) and (x) to the consolidated schedule of investments as of December 31, ~~2020.~~

2021 in this quarterly report on Form 10-Q.

The Company’s investment portfolio may contain loans or bonds that are in the form of lines of credit or revolving credit facilities, or other investments, pursuant to which the Company may be required to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. As of ~~September~~June 30, ~~2021,~~2022, the Company had ~~six~~eight senior secured loan investments with aggregate unfunded commitments of ~~$67,595~~$60,599 and unfunded commitments of $7,625 in U.S. dollars and $858 in Canadian dollars to contribute capital to Sustainable Infrastructure Investments, LLC. As of December 31, ~~2020,~~2021, the Company had ~~three~~eight senior secured loan investments with aggregate unfunded commitments of ~~$19,403~~$72,514 and an unfunded ~~commitment~~commitments of ~~$2,234~~$7,625 in U.S dollars and $858 in Canadian dollars to contribute capital to Sustainable Infrastructure Investments, LLC. The Company maintains sufficient cash on hand, available borrowings ~~and~~and/or liquid securities to fund such unfunded commitments should the need arise.

During the nine months ended September 30, 2021, the Company’s debt and equity investments in Limetree Bay Ventures, LLC and Limetree Energy, LLC, or collectively Limetree, resulted in realized and unrealized losses of approximately $192,110. The losses are a result of a write-down of such investments due to the shut-down of Limetree’s refinery operations as a result of regulatory, operational and financial challenges. In July 2021, Limetree filed for bankruptcy. There is a substantial risk that no new cash flows will accrue to our investments in Limetree.

The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets in such industries as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

September 30, 2021
(Unaudited) December 31, 2020
Industry Classification
Fair Value Percentage
of Portfolio Fair Value Percentage
of Portfolio
Upstream
$ 1,093,030 47 % $ 1,080,577 50 %
Midstream
899,641 39 % 763,275 34 %
Power
177,751 8 % 131,356 6 %
Service & Equipment
67,740 3 % 131,571 6 %
Industrials
13,114 1 % 12,881 1 %
Sustainable Infrastructure Investments, LLC⁽¹⁾
54,430 2 % 61,816 3 %

Total
$ 2,305,706 100 % $ 2,181,476 100 %

~~(1)~~

~~Sustainable Infrastructure Investments, LLC is generally comprised of midstream, renewables and power assets.~~

2021:


	June 30, 2022 (Unaudited)				December 31, 2021
Industry Classification	Fair Value		Percentage of Portfolio		Fair Value		Percentage of Portfolio
Upstream	$	1,109,498	46	%	$	1,071,201	44	%
Midstream	803,565		33	%	893,004		37	%
Power	380,644		16	%	302,510		13	%
Service & Equipment	76,045		3	%	65,534		3	%
Industrials	9,453		0	%	12,204		1	%
Sustainable Infrastructure Investments, LLC(1)	52,131		2	%	50,770		2	%
Total	$	2,431,336	100	%	$	2,395,223	100	%

_____________________

(1) Sustainable Infrastructure Investments, LLC is generally comprised of midstream, renewables and power assets.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 7. Investment Portfolio ~~(Continued)~~

(continued)

Sustainable Infrastructure Investments, LLC

Sustainable Infrastructure Investments, LLC, or SIIJV, is a joint venture between the Company and Imperial Sustainable Infrastructure Investments, LLC, or Imperial, a subsidiary of Imperial Capital Asset Management, LLC, or ICAM. The joint venture is governed pursuant to the terms of an amended and restated limited liability company agreement of SIIJV, dated as of January 2, 2020, between the Company and Imperial, or the SIIJV Agreement. The SIIJV Agreement requires the Company and Imperial to provide capital to SIIJV of up to $67,629 in U.S. dollars and $5,430 in Canadian dollars in the aggregate where the Company and Imperial would provide 87.5% and 12.5%, respectively, of the committed capital. Pursuant to the terms of the SIIJV Agreement, the Company and Imperial each have 50% voting control of SIIJV and are required to agree on all investment decisions as well as all other significant actions for SIIJV. SIIJV invests in senior secured loans (both first lien and second lien) to middle market companies, broadly syndicated loans and other midstream, renewables and power assets. As administrative agent of SIIJV, the Company performs certain day-to-day management responsibilities on behalf of SIIJV and is entitled to a fee in the annual amount of 0.25% of SIIJV’s net assets under administration, calculated and payable quarterly in arrears. As of ~~September~~June 30, ~~2021,~~2022, the Company and Imperial funded approximately ~~$69,276~~$62,300 to SIIJV, of which ~~$60,603~~$54,514 was from the Company. The Company does not consolidate SIIJV in its consolidated financial statements.

On January 2, 2020, Seine Funding, LLC, or Seine Funding, a wholly-owned subsidiary of SIIJV, entered into a credit facility, as amended, or the Seine Funding Facility, with certain financial institutions as lender, agent, collateral agent, collateral administrator, and collateral custodian, and SIIJV, as collateral manager. The Seine Funding Facility provides for borrowings in U.S. dollars and certain agreed upon foreign currencies in an aggregate principal amount of up to $634,103 on a committed basis, which may be increased under certain circumstances at the request of Seine Funding and with the consent of the lender and agent. The end of the reinvestment period for the Seine Funding Facility was December 31, 2020. The maturity date for the Seine Funding Facility is the earlier of (i) the latest maturity date among the assets securing the facility and (ii) the first date, after the end of the reinvestment period, on which all assets securing the facility are paid in full. Under the Seine Funding Facility, borrowings bear interest at the rate of three-month LIBOR (or the relevant reference rate for any foreign currency borrowings) (subject to a 0% floor) plus 1.20% per annum. Borrowings under the Seine Funding Facility are secured by a first priority security interest in substantially all of the assets of Seine Funding. As of ~~September~~June 30, ~~2021,~~2022, total outstanding borrowings under the Seine Funding Facility were ~~$329,018.~~

$252,351.

Below is a summary of ~~SIIJV’s~~SIIJV's portfolio, followed by a listing of the individual loans in ~~SIIJV’s~~SIIJV's portfolio as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

   September 30, 2021
(Unaudited) December 31, 2020
Total investments⁽¹⁾
   $ 380,089 $ 442,916
Weighted average current interest rate on debt investments⁽²⁾
   2.12 % 2.24 %
Number of portfolio assets in SIIJV
   12 14
Largest investment in a single portfolio company⁽¹⁾
   $ 82,228 $ 84,914

~~(1)~~

~~At cost.~~

~~(2)~~

~~Computed as the (a) annual stated interest rate on accruing debt, divided by (b) total debt at par amount.~~

2021:

June 30, 2022
(Unaudited) December 31, 2021
Total investments(1)
$ 293,718 $ 316,422
Weighted average current interest rate on debt investments(2)
4.57 % 3.34 %
Number of portfolio assets in SIIJV 10 11
Largest investment in a single portfolio company(1)
$ 76,689 $ 79,521

_____________________

(1) At cost.

(2) Computed as the (a) annual stated interest rate on accruing debt, divided by (b) total debt at par amount.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 7. Investment Portfolio ~~(Continued)~~

(continued)

Sustainable Infrastructure Investments, LLC Portfolio

As of ~~September~~June 30, 2022

(Unaudited)


Portfolio Company(a)(f)	Footnotes	Industry	Rate(b)	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Senior Secured Loans—First Lien—100%
AES DE Holdings V, LLC		Renewables	L+175	6/13/26	$	12,702	$	12,702	$	12,490
Alianca Transportadora de Gas Participacoes S.A.		Midstream	L+260	5/23/27	76,689		76,689		76,864
Blue Heron Intermediate Holdco I, LLC		Midstream	L+188	4/22/24	32,359		32,359		32,407
Cedar Creek II LLC		Renewables	L+188	11/18/23	9,083		9,083		9,133
Copper Mountain Solar 3, LLC		Renewables	L+175	5/29/25	18,499		18,499		18,684
FLNG Liquefaction 2, LLC		Midstream	L+150	12/31/26	28,951		28,951		28,965
Meikle Wind Energy, LP	(e)	Renewables	C+150	5/12/24	C$	16,266	12,514		12,748
NES Hercules Class B Member, LLC		Renewables	L+150	1/31/28	$	24,624	24,624		25,006
ST EIP Holdco LLC		Midstream	L+250	11/5/24	59,400		59,400		58,651
Top of the World Wind Energy LLC		Renewables	L+188	12/2/28	18,897		18,897		19,093
Total Senior Secured Loans—First Lien							293,718		294,041




TOTAL INVESTMENTS—100%							$	293,718	$	294,041

Sustainable Infrastructure Investments, LLC Portfolio

As of December 31, 2021

~~(Unaudited)~~

Portfolio Company^(a)(f)
Footnotes Industry Rate^(b) Maturity Principal
Amount^(c) Amortized
Cost Fair
Value^(d)
Senior Secured Loans—First
Lien—96.4%

AES DE Holdings V, LLC
Renewables L+175 6/13/26 $ 14,945 $ 14,945 $ 14,242
Alianca Transportadora de Gas Participacoes S.A.
Midstream L+260 5/23/27 82,228 82,228 82,797
Astoria Energy II LLC
Power L+150 8/31/24 56,426 56,426 57,079
Blue Heron Intermediate Holdco I, LLC
Midstream L+175 4/22/24 33,136 33,136 33,362
Cedar Creek II LLC
Renewables L+188 11/18/23 9,894 9,894 10,016
Copper Mountain Solar 3, LLC
Renewables L+175 5/29/25 19,868 19,868 20,107
FLNG Liquefaction 2, LLC
Midstream L+150 12/31/26 30,175 30,175 30,386
Meikle Wind Energy, LP
(e) Renewables C+150 5/29/24 C$ 16,945 13,036 13,751
NES Hercules Class B Member, LLC
Renewables L+150 12/15/27 $ 24,777 24,777 25,490
ST EIP Holdco LLC
Midstream L+250 11/5/24 60,000 60,000 60,144
Top of the World Wind Energy LLC
Renewables L+188 12/2/28 21,987 21,987 22,165

Total Senior Secured Loans—First Lien
366,472 369,539

Unsecured Debt—3.6%

Sociedad Minera Cerro Verde S.A.A.
Power L+190 6/19/22 13,617 13,617 13,637

Total Unsecured Debt
13,617 13,637

TOTAL INVESTMENTS—100.0%
$ 380,089 $ 383,176


Portfolio Company(a)(f)	Footnotes	Industry	Rate(b)	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Senior Secured Loans—First Lien—95.7%
AES DE Holdings V, LLC		Renewables	L+175	6/13/26	$	12,720	$	12,720	$	12,166
Alianca Transportadora de Gas Participacoes S.A.		Midstream	L+260	5/23/27	79,521		79,521		80,498
Blue Heron Intermediate Holdco I, LLC		Midstream	L+175	4/22/24	32,894		32,894		33,034
Cedar Creek II LLC		Renewables	L+188	11/18/23	9,574		9,574		9,633
Copper Mountain Solar 3, LLC		Renewables	L+175	5/29/25	19,189		19,189		19,315
FLNG Liquefaction 2, LLC		Midstream	L+150	12/31/26	29,753		29,753		29,893
Meikle Wind Energy, LP	(e)	Renewables	C+150	5/12/24	C$	16,777	12,907		13,567
NES Hercules Class B Member, LLC		Renewables	L+150	1/31/28	$	24,777	24,777		25,573
ST EIP Holdco LLC		Midstream	L+250	11/5/24	60,000		60,000		60,018
Top of the World Wind Energy LLC		Renewables	L+188	12/2/28	21,470		21,470		21,604
Total Senior Secured Loans—First Lien							302,805		305,301
Unsecured Debt—4.3%
Sociedad Minera Cerro Verde S.A.A.		Power	L+190	6/19/22	13,617		13,617		13,665
Total Unsecured Debt							13,617		13,665
TOTAL INVESTMENTS—100.0%							$	316,422	$	318,966

_____________________

Percentages are shown as a percentage of total investments.

~~(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, 2021, three-month LIBOR was 0.13% and Canadian Dollar Offer Rate, or CDOR, or “C”, was 0.45%. PIK means ~~paid-in-kind.~~ ~~PIK income accruals may be adjusted based on the fair value of the underlying investment.~~

~~(c)~~

~~Denominated in U.S. dollars unless otherwise noted.~~

~~(d)~~

~~Security is classified as Level 3.~~

~~(e)~~

~~Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of September 30, 2021.~~

~~(f)~~

~~Security or portion thereof is held within Seine Funding and is pledged as collateral supporting the amounts outstanding under the Seine Funding Facility.~~

(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, 2022 and December 31, 2021, the three-month LIBOR, or L, was 2.29% and 0.21%, respectively, and Canadian Dollar Offer Rate, or C, was 2.76% and 0.52%, respectively.

(d) Security is classified as Level 3.

(e) Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of June 30, 2022 and December 31, 2021.

(f) Security or portion thereof is held within Seine Funding and is pledged as collateral supporting the amounts outstanding under the Seine Funding Facility.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 7. Investment Portfolio ~~(Continued)~~

~~Sustainable Infrastructure Investments, LLC Portfolio~~

~~As of December 31, 2020~~

Portfolio Company^(a)(g)
Footnotes Industry Rate^(b) Maturity Principal
Amount^(c) Amortized
Cost Fair
Value^(d)
Senior Secured Loans—First
Lien—95.0%

AES DE Holdings V, LLC
Renewables L+175 6/13/26 $ 15,442 $ 15,442 $ 14,971
Alianca Transportadora de Gas Participacoes S.A.
Midstream L+230 5/23/27 84,914 84,914 83,790
Astoria Energy II LLC
Power L+150 8/31/24 58,789 58,789 59,178
Blue Heron Intermediate Holdco I, LLC
Midstream L+175 4/22/24 33,884 33,884 33,872
Cedar Creek II LLC
Renewables L+188 11/18/23 10,580 10,580 10,633
Copper Mountain Solar 3, LLC
(f) Renewables L+175 5/29/25 20,539 20,539 20,698
CPV Maryland, LLC
(f) Power L+425 3/31/22 12,386 12,386 12,353
Flex Intermediate Holdco, LLC
(f) Midstream L+250 5/15/23 30,151 30,151 29,921
FLNG Liquefaction 2, LLC
Midstream L+150 12/31/26 31,330 31,330 31,165
Meikle Wind Energy, LP
(e)(f) Renewables C+150 5/29/24 C$ 17,397 13,382 13,870
NES Hercules Class B Member, LLC
(f) Renewables L+125 12/15/27 $ 24,906 24,906 24,412
ST EIP Holdco LLC
Midstream L+250 11/5/24 60,000 60,000 59,779
Top of the World Wind Energy LLC
Renewables L+188 12/2/28 24,617 24,617 24,556

Total Senior Secured Loans—First Lien
420,920 419,198

Unsecured Debt—5.0%

Sociedad Minera Cerro Verde S.A.A.
Power L+190 6/19/22 21,996 21,996 21,934

Total Unsecured Debt
21,996 21,934

TOTAL INVESTMENTS—100.0%
$ 442,916 $ 441,132

~~Percentages are shown as a percentage of total investments.~~

~~(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 December 31, 2020, the three-month LIBOR was 0.24% and Canadian Dollar Offer Rate, or CDOR, or “C”, was 0.48%. PIK means ~~paid-in-kind.~~ ~~PIK income accruals may be adjusted based on the fair value of the underlying investment.~~

~~(c)~~

~~Denominated in U.S. dollars unless otherwise noted.~~

~~(d)~~

~~Security is classified as Level 3.~~

~~(e)~~

~~Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of December 31, 2020.~~

~~(f)~~

~~Position or portion thereof unsettled as of December 31, 2020.~~

~~(g)~~

~~Security or portion thereof is held within Seine Funding and is pledged as collateral supporting the amounts outstanding under the Seine Funding Facility.~~

(continued)

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 7. Investment Portfolio (Continued)~~

Below is selected balance sheet information for SIIJV as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

   September 30, 2021
(Unaudited)    December 31, 2020
Selected Balance Sheet Information

Total investments, at fair value
   $ 383,176    $ 441,132
Cash and other assets
   13,818    71,809




Total assets
   $ 396,994    $ 512,941




Debt
   $ 329,018    $ 439,533
Other liabilities
   1,179    1,527




Total liabilities
   330,197    441,060




Member’s equity
   $ 66,797    $ 71,881

2021:


	June 30, 2022 (Unaudited)		December 31, 2021
Selected Balance Sheet Information
Total investments, at fair value	$	294,041	$	318,966
Cash and other assets	24,833		67,611
Total assets	$	318,874	$	386,577
Debt	$	252,351	$	318,894
Other liabilities	1,474		1,464
Total liabilities	253,825		320,358
Member's equity	$	65,049	$	66,219

Below is selected statement of operations information for SIIJV for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~

   Three Months Ended
September 30,    Nine Months Ended
September 30,
   2021    2020    2021    2020
Selected Statement of Operations Information

Total investment income
   $ 2,124    $ 3,539    $ 6,940    $ 15,493
Expenses

Interest expense
   1,157    2,272    3,814    10,821
Custodian and accounting fees
   34    39    122    124
Administrative services
   43    39    133    100
Professional services
   46    56    116    967
Other
   3    11    23    31








Total expenses
   1,283    2,417    4,208    12,043








Net investment income
   841    1,122    2,732    3,450
Net realized and unrealized gain (loss)
   1,217    11,160    4,829    (4,330 )








Net increase (decrease) in net assets resulting from operations
   $ 2,058    $ 12,282    $ 7,561    $ (880 )








2021:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Selected Statement of Operations Information
Total investment income	$	2,243	$	2,312	$	4,073	$	4,816
Expenses
Interest expense	1,178		1,299		2,151		2,657
Administrative services	40		45		81		90
Custodian and accounting fees	57		42		104		88
Professional services	26		36		51		70
Other	—		10		—		20
Total expenses	1,301		1,432		2,387		2,925
Net investment income	942		880		1,686		1,891
Net realized and unrealized gain (loss)	(1,316)		2,485		(2,016)		3,612
Net increase (decrease) in net assets resulting from operations	$	(374)	$	3,365	$	(330)	$	5,503

Note 8. Fair Value of Financial Instruments

Under existing accounting guidance, fair value is defined as the price that the Company would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes valuation techniques that maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market participants

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 8. Fair Value of Financial Instruments (Continued)~~

would use in pricing an asset or liability developed based on the best information available in the circumstances. The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current accounting guidance:

Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs that are quoted prices for similar assets or liabilities in active markets.

Level 3: Inputs that are unobservable for an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 8. Fair Value of Financial Instruments (continued)

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s investments were categorized as follows in the fair value hierarchy:

Valuation Inputs
September 30, 2021
(Unaudited) December 31, 2020
Level 1—Price quotations in active markets
$ 14,390 $ 35,305
Level 2—Significant other observable inputs
660,798 192,366
Level 3—Significant unobservable inputs
1,630,518 1,953,805

Total
$ 2,305,706 $ 2,181,476


Valuation Inputs	June 30, 2022 (Unaudited)		December 31, 2021
Level 1—Price quotations in active markets	$	2,228	$	11,797
Level 2—Significant other observable inputs	582,156		761,944
Level 3—Significant unobservable inputs	1,846,952		1,621,482
Total	$	2,431,336	$	2,395,223

As of December 31, 2021, the Company did not hold any swap contracts. As of June 30, 2022, the Company’s swap contracts were categorized as follows in the fair value hierarchy:


Valuation Inputs	Assets		Liabilities
Level 1—Price quotations in active markets	$	—	$	—
Level 2—Significant other observable inputs	—		3,588
Level 3—Significant unobservable inputs	—		—
Total	$	—	$	3,588

The Company’s investments consist primarily of investments that were acquired directly from the issuer. Debt investments, for which broker quotes are not generally available, are valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, the borrower’s ability to adequately service its debt, prevailing interest rates for like investments, call features, anticipated prepayments and other relevant terms of the investments. Except as described below, the ~~Company’s~~Company's investment in SIIJV and all of the Company’s preferred equity and equity/other investments are also valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such investments, as well as various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value, PV-10 multiples or liquidation value. An investment that is newly issued and purchased near the date of the financial statements is valued at cost if the Company’s board of trustees determines that the cost of such investment is the best indication of its fair value. Such investments described above are typically classified as Level 3 within the fair value hierarchy. Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements and are classified as Level 1 within the fair value hierarchy. In determining the fair values of swap contracts, the Company utilized an industry-standard pricing model that considers various inputs including quoted forward prices for commodities, time value and current market and contractual prices for the underlying instruments. These assumptions are observable in the marketplace or can be corroborated by active markets or broker quotes and are typically classified as Level 2 within the fair value ~~hierarchy.~~ hierarchy. Except as described above, the Company values its other investments by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which are provided by an independent third-party pricing service and screened for validity by such service and are typically classified as Level 2 within the fair value hierarchy.

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 8. Fair Value of Financial Instruments (Continued)~~

The Company periodically benchmarks the bid and ask prices it receives from the third-party pricing service and/or dealers and independent valuation firms, as applicable, against the actual prices at which the Company purchases and sells its investments. Based on the results of the benchmark analysis and the experience of the Company’s management in purchasing and selling these investments, the Company believes that these prices are reliable indicators of fair value. The valuation committee of the board of trustees, or the valuation committee, and the board of trustees reviewed and approved the valuation determinations made with respect to these investments in a manner consistent with the Company’s valuation policy.

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 8. Fair Value of Financial Instruments (continued)

The following is a reconciliation for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:

For the Nine Months Ended September 30, 2021
Senior
Secured
Loans—
First
Lien Senior
Secured
Loans—
Second Lien Senior
Secured
Bonds Unsecured
Debt Preferred
Equity Sustainable
Infrastructure
Investments,
LLC Equity/
Other Total
Fair value at beginning of period
$ 482,368 $ 237,751 $ 340,042 $ 108,317 $ 471,077 $ 61,816 $ 252,434 $ 1,953,805
Accretion of discount (amortization of premium)
2,219 1,338 23 76 1,962 —   455 6,073
Net realized gain (loss)
(8,197 ) 448 (100,555 ) (39,319 ) (156,872 ) —   162 (304,333 )
Net change in unrealized appreciation (depreciation)
9,552 4,282 (53,965 ) 57,706 204,258 (1,297 ) 155,052 375,588
Purchases
54,953 15,000 53,291 832 13 —   52,021 176,110
Paid-in-kind interest
11,174 —   —   8,373 6,907 —   —   26,454
Sales and repayments
(132,333 ) (158,734 ) (228,836 ) (21,582 ) (41,207 ) (6,089 ) (14,398 ) (603,179 )
Net transfers in or out of Level 3
—   —   —   —   —   —   —   —

Fair value at end of period
$ 419,736 $ 100,085 $ 10,000 $ 114,403 $ 486,138 $ 54,430 $ 445,726 $ 1,630,518

The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date
$ (433 ) $ 4,697 $ (5 ) $ 9,771 $ 34,791 $ (1,297 ) $ 150,206 $ 197,730

For the Nine Months Ended September 30, 2020
Senior
Secured
Loans—
First
Lien Senior
Secured
Loans—
Second Lien Senior
Secured
Bonds Unsecured
Debt Preferred
Equity Sustainable
Infrastructure
Investments,
LLC Equity/
Other Total
Fair value at beginning of period
$ 569,778 $ 533,234 $ 437,761 $ 149,300 $ 721,842 $ —   $ 167,270 $ 2,579,185
Accretion of discount (amortization of premium)
1,191 339 961 380 16,652 —   —   19,523
Net realized gain (loss)
(93,897 ) (288,366 ) (96,598 ) (29,277 ) (3,249 ) —   (208,453 ) (719,840 )
Net change in unrealized appreciation (depreciation)
12,914 (15,821 ) 293 (11,365 ) (169,067 ) 303 131,109 (51,634 )
Purchases
146,433 8,571 54,832 112,848 22,717 60,603 150,956 556,960
Paid-in-kind interest
2,834 —   2,315 5,037 12,350 —   —   22,536
Sales and repayments
(177,187 ) (11,386 ) (135,635 ) (69,300 ) (64,008 ) —   (4,141 ) (461,657 )
Net transfers in or out of Level 3
—   —   —   —   —   —   —   —

Fair value at end of period
$ 462,066 $ 226,571 $ 263,929 $ 157,623 $ 537,237 $ 60,906 $ 236,741 $ 1,945,073

The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date
$ (44,442 ) $ (151,941 ) $ (7,935 ) $ (13,016 ) $ (165,752 ) $ 303 $ (979 ) $ (383,762 )


	For the Six Months Ended June 30, 2022
	Senior Secured Loans—First Lien		Senior Secured Loans—Second Lien		Senior Secured Bonds		Unsecured Debt		Preferred Equity		Sustainable Infrastructure Investments, LLC		Equity/Other		Total
Fair value at beginning of period	$	414,075	$	84,083	$	10,371	$	104,659	$	497,288	$	50,770	$	460,236	$	1,621,482
Accretion of discount (amortization of premium)	1,085		125		24		80		2,662		—		—		3,976
Net realized gain (loss)	(12,192)		446		—		(27,729)		270		—		60,903		21,698
Net change in unrealized appreciation (depreciation)	20,588		420		(39)		34,607		(3,519)		1,361		154,688		208,106
Purchases	99,677		110,150		—		—		—		—		45,835		255,662
Paid-in-kind interest	7,901		537		—		3,843		188		—		—		12,469
Sales and repayments	(117,681)		(18,577)		—		(47,571)		(21,812)		—		(129,505)		(335,146)
Transfers into Level 3	58,705		—		—		—		—		—		—		58,705
Transfers out of Level 3	—		—		—		—		—		—		—		—
Fair value at end of period	$	472,158	$	177,184	$	10,356	$	67,889	$	475,077	$	52,131	$	592,157	$	1,846,952
The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date	$	10,826	$	643	$	(39)	$	(80)	$	(3,519)	$	1,361	$	168,303	$	177,495


	For the Six Months Ended June 30, 2021
	Senior Secured Loans—First Lien		Senior Secured Loans—Second Lien		Senior Secured Bonds		Unsecured Debt		Preferred Equity		Sustainable Infrastructure Investments, LLC		Equity/Other		Total
Fair value at beginning of period	$	482,368	$	237,751	$	340,042	$	108,317	$	471,077	$	61,816	$	252,434	$	1,953,805
Accretion of discount (amortization of premium)	3,047		159		19		64		1,335		—		455		5,079
Net realized gain (loss)	(9,505)		1,185		(100,556)		(39,319)		(156,872)		—		(3,993)		(309,060)
Net change in unrealized appreciation (depreciation)	19,864		3,234		(67,273)		48,831		208,874		(242)		120,349		333,637
Purchases	49,805		—		43,292		—		13		—		52,021		145,131
Paid-in-kind interest	8,788		—		—		4,449		4,604		—		—		17,841
Sales and repayments	(121,084)		(158,102)		(18,836)		(21,581)		(41,207)		(6,089)		(1,221)		(368,120)
Net transfers in or out of Level 3	—		—		—		—		—		—		—		—
Fair value at end of period	$	433,283	$	84,227	$	196,688	$	100,761	$	487,824	$	55,485	$	420,045	$	1,778,313
The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date	$	13,720	$	4,065	$	8,460	$	875	$	5,625	$	(1,970)	$	118,760	$	149,535

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 8. Fair Value of Financial Instruments ~~(Continued)~~

(continued)

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 were as follows:

Type of Investment
Fair Value at
September 30, 2021
(Unaudited)
Valuation Technique⁽¹⁾

Unobservable Input
Range Weighted
Average
Senior Secured Loans—First Lien
$ 385,357 Market Comparables Market Yield (%) 6.3%-16.5% 9.0 %
EBITDA Multiples (x) 3.5x-6.2x 4.4x
31,325 Discounted Cash Flow Discount Rate (%) 10.5%-15.5% 13.0 %
3,054 Other⁽²⁾ Other⁽²⁾ N/A N/A
Senior Secured Loans—Second Lien
100,085 Market Comparables Market Yield (%) 7.0%-10.5% 8.8 %
Senior Secured Bonds
10,000 Market Comparables Market Yield (%) 7.0%-7.5% 7.3 %
Unsecured Debt
77,003 Market Comparables Market Yield (%) 9.1%-10.1% 9.6 %
Net Aircraft Book Value Multiple (x) 1.0x-1.0x 1.0x
37,400 Other⁽²⁾ Other⁽²⁾ N/A N/A
Preferred Equity
403,235 Market Comparables Market Yield (%) 7.3%-24.0% 14.9 %
EBITDA Multiples (x) 9.0x-10.0x 9.5x
82,903 Discounted Cash Flow Discount Rate (%) 10.0%-11.0% 10.5 %
Sustainable Infrastructure Investments, LLC
54,430 Discounted Cash Flow Discount Rate (%) 11.5%-12.5% 12.0 %
Equity/Other
428,996 Market Comparables EBITDA Multiples (x) 2.4x-10.5x 5.1x
Production Multiples (Mboe/d) $32,500.0-$37,500.0 $ 35,000.0
Proved Reserves Multiples (Mmboe) 10.8x-12.3x 11.5x
Production Multiples (MMcfe/d) $3,050.0-$3,550.0 $ 3,300.0
Proved Reserves Multiples (Bcfe) 0.7x-0.8x 0.7x
PV-10 Multiples (x) 1.2x-4.9x 3.0x
3,013 Discounted Cash Flow Discount Rate (%) 7.1%-31.0% 22.4 %
7,671 Option Valuation Model Volatility (%) 52.5%-65.0% 58.0 %
6,046 Other⁽²⁾ Other⁽²⁾ N/A N/A

Total
$ 1,630,518


Type of Investment	Fair Value at June 30, 2022 (Unaudited)		Valuation Technique(1)	Unobservable Input	Range	Weighted Average
Senior Secured Loans—First Lien	$	369,751	Market Comparables	Market Yield (%)	8.3%-19.0%	11.3%
				EBITDA Multiples (x)	4.1x-8.3x	5.4x
	40,409		Discounted Cash Flow	Discount Rate (%)	11.0%-17.5%	14.4%
	61,998		Cost
Senior Secured Loans—Second Lien	137,784		Market Comparables	Market Yield (%)	9.3%-12.8%	10.6%
	39,400		Cost
Senior Secured Bonds	10,356		Market Comparables	Market Yield (%)	6.7%-7.7%	7.2%
Unsecured Debt	67,889		Market Comparables	Market Yield (%)	8.5%-9.5%	9.0%
Preferred Equity	384,253		Market Comparables	Market Yield (%)	10.3%-26.5%	16.4%
				EBITDA Multiples (x)	7.8x-8.8x	8.3x
				Net Aircraft Book Value Multiple (x)	1.0x-1.0x	1.0x
	90,824		Discounted Cash Flow	Discount Rate (%)	10.8%-11.3%	11.0%
Sustainable Infrastructure Investments, LLC	52,131		Discounted Cash Flow	Discount Rate (%)	13.0%-13.5%	13.3%
Equity/Other	579,848		Market Comparables	Market Yield (%)	9.3%-9.8%	9.6%
				EBITDA Multiples (x)	2.0x-8.8x	5.2x
				Production Multiples (Mboe/d)	$38,000.0-$43,000.0	$40,500.0
				Proved Reserves Multiples (Mmboe)	10.0x-11.5x	10.8x
				Production Multiples (MMcfe/d)	$3,850.0-$4,150.0	$4,000.0
				Proved Reserves Multiples (Bcfe)	0.8x-0.9x	0.8x
				PV-10 Multiples (x)	0.6x-0.9x	0.8x
	3,625		Discounted Cash Flow	Discount Rate (%)	8.0%-33.0%	21.2%
	4,068		Option Valuation Model	Volatility (%)	37.5%-65.0%	46.2%
	4,616		Other(2)
Total	$	1,846,952

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 8. Fair Value of Financial Instruments ~~(Continued)~~

Type of Investment
Fair Value at
December 31, 2020
Valuation Technique⁽¹⁾

Unobservable Input
Range Weighted
Average
Senior Secured Loans—First Lien
$ 450,698 Market Comparables Market Yield (%) 6.8%-26.3% 10.4 %
EBITDA Multiples (x) 2.3x-6.7x 4.1x
31,670 Discounted Cash Flow Discount Rate (%) 10.0%-12.5% 11.3 %
Senior Secured Loans—Second Lien
237,751 Market Comparables Market Yield (%) 8.0%-15.3% 9.7 %
Senior Secured Bonds
340,042 Market Comparables Market Yield (%) 8.7%-15.8% 12.6 %
EBITDA Multiples (x) 6.0x-8.0x 7.0x
Unsecured Debt
81,442 Market Comparables Market Yield (%) 9.8%-11.5% 10.8 %
Net Aircraft Book Value Multiple (x) 1.0x-1.0x 1.0x
26,875 Other⁽²⁾ Other⁽²⁾ N/A N/A
Preferred Equity
5,354 Market Comparables EBITDA Multiples (x) 6.0x-10.5x 10.0x
465,723 Discounted Cash Flow Discount Rate (%) 7.5%-50.3% 18.8 %
Sustainable Infrastructure Investments, LLC
61,816 Discounted Cash Flow Discount Rate (%) 10.8%-11.3% 11.0 %
Equity/Other
92,002 Market Comparables EBITDA Multiples (x) 2.3x-10.5x 4.6x
Production Multiples (Mboe/d) $26,500.0-$31,500.0 $ 29,000.0
Proved Reserves Multiples (Mmboe) 7.6x-9.1x 8.4x
Production Multiples (MMcfe/d) $1,650.0-$3,400.0 $ 2,923.6
Proved Reserves Multiples (Bcfe) 0.4x-0.7x 0.6x
PV-10 Multiples (x) 0.5x-1.6x 1.0x
3,695 Discounted Cash Flow Discount Rate (%) 8.0%-32.0% 24.0 %
3,877 Option Valuation Model Volatility (%) 55.0%-65.0% 60.0 %
152,860 Other⁽²⁾ Other⁽²⁾ N/A N/A

Total
$ 1,953,805

~~(1)~~

(continued)


Type of Investment	Fair Value at December 31, 2021		Valuation Technique(1)	Unobservable Input	Range	Weighted Average
Senior Secured Loans—First Lien	$	376,827	Market Comparables	Market Yield (%)	6.3%-15.8%	9.1%
				EBITDA Multiples (x)	3.5x-6.7x	4.6x
	34,195		Discounted Cash Flow	Discount Rate (%)	8.5%-13.5%	10.8%
	3,053		Other(2)
Senior Secured Loans—Second Lien	84,083		Market Comparables	Market Yield (%)	7.0%-10.5%	8.8%
Senior Secured Bonds	10,371		Market Comparables	Market Yield (%)	6.5%-7.0%	6.8%
Unsecured Debt	64,046		Market Comparables	Market Yield (%)	8.9%-9.9%	9.4%
	40,613		Other(2)
Preferred Equity	416,516		Market Comparables	Market Yield (%)	7.5%-24.5%	14.9%
				EBITDA Multiples (x)	9.0x-10.0x	9.5x
				Net Aircraft Book Value Multiple (x)	1.0x-1.0x	1.0x
	80,772		Discounted Cash Flow	Discount Rate (%)	9.5%-10.0%	9.8%
Sustainable Infrastructure Investments, LLC	50,770		Discounted Cash Flow	Discount Rate (%)	11.8%-12.3%	12.0%
Equity/Other	444,610		Market Comparables	EBITDA Multiples (x)	2.8x-10.5x	4.7x
				Production Multiples (Mboe/d)	$30,000.0-$35,000.0	$32,500.0
				Proved Reserves Multiples (Mmboe)	10.0x-11.5x	10.8x
				Production Multiples (MMcfe/d)	$2,900.0-$3,200.0	$3,050.0
				Proved Reserves Multiples (Bcfe)	0.7x-0.7x	0.7x
				PV-10 Multiples (x)	1.2x-4.8x	2.8x
	3,195		Discounted Cash Flow	Discount Rate (%)	8.0%-32.0%	23.3%
	6,385		Option Valuation Model	Volatility (%)	52.0%-65.0%	63.6%
	6,046		Other(2)
Total	$	1,621,482

______________

(1) Investments using a market quotes valuation technique were valued by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which were provided by an independent third-party pricing service and screened for validity by such service. For investments utilizing a market comparables valuation technique, a significant increase (decrease) in the market yield, in isolation, would result in a significantly lower (higher) fair value measurement, and a significant increase (decrease) in any of the valuation multiples, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. For investments utilizing an option valuation model valuation technique, a significant increase (decrease) in the volatility, in isolation, would result in a significantly higher (lower) fair value measurement.

~~(2)~~

~~Fair valued based on expected outcome of proposed corporate transactions, the expected value of the liquidation preference of the investment or other factors.~~

~~FS Energy~~ and ~~Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

(ask prices from dealers on the date of the relevant period end, which were provided by an independent third-party pricing service and screened for validity by such service. For investments utilizing a market comparables valuation technique, a significant increase (decrease) in ~~thousands, except share~~the market yield, in isolation, would result in a significantly lower (higher) fair value measurement, and ~~per share amounts)~~

a significant increase (decrease) in any of the valuation multiples, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. For investments utilizing an option valuation model valuation technique, a significant increase (decrease) in the volatility, in isolation, would result in a significantly higher (lower) fair value measurement.

(2) Fair valued based on expected outcome of proposed corporate transactions, the expected value of the liquidation preference of the investment or other factors.

Note 9. Financing Arrangements

The following tables present a summary of information with respect to the Company’s outstanding financing arrangements as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. For additional information regarding these financing arrangements, see the notes to the Company’s audited consolidated financial statements contained in its annual report on Form 10-K for the year ended December 31, ~~2020.~~2021. Any significant changes to the ~~Company’s~~Company's financing arrangements during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are discussed below.

   As of September 30, 2021
   (Unaudited)
Arrangement⁽¹⁾
   Type of
Arrangement    Rate⁽²⁾ Amount
Outstanding    Amount
Available
Maturity Date
JPMorgan Facility
   Revolving/Term    L+3.00% $ 231,667    $ 140,000    February 16, 2023
Senior Secured Notes⁽³⁾
   Bond    7.50% 489,000    —      August 15, 2023





Total
      $ 720,667    $ 140,000

   As of December 31, 2020
Arrangement⁽¹⁾
   Type of
Arrangement    Rate⁽²⁾ Amount
Outstanding    Amount
Available
Maturity Date
JPMorgan Facility
   Revolving/Term    L+3.00% $ 416,667    $ —      February 16, 2023
Senior Secured Notes⁽³⁾
   Bond    7.50% 489,000    —      August 15, 2023





Total
      $ 905,667    $ —


	As of June 30, 2022 (Unaudited)
Arrangement(1)	Type of Arrangement	Rate(2)	Amount Outstanding		Amount Available		Maturity Date
JPMorgan Facility	Revolving/Term	L+3.00%	$	305,676	$	—	February 16, 2023
Senior Secured Notes(3)	Bond	7.50%	457,075		—		August 15, 2023
Total			$	762,751	$	—

Table of Contents

FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

~~(1)~~

~~The carrying amount outstanding under the facility approximates its fair value, unless otherwise noted.~~

~~(2)~~

~~LIBOR is subject to a 0.00% floor.~~

~~(3)~~

As of September 30, 2021 and December 31, 2020, the fair value of the Senior Secured Notes was approximately $509,783 and $473,166, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.

Note 9. Financing Arrangements (continued)


	As of December 31, 2021
Arrangement(1)	Type of Arrangement	Rate(2)	Amount Outstanding		Amount Available		Maturity Date
JPMorgan Facility	Revolving/Term	L+3.00%	$	286,667	$	85,000	February 16, 2023
Senior Secured Notes(3)	Bond	7.50%	489,000		—		August 15, 2023
Total			$	775,667	$	85,000

______________________

(1) The carrying amount outstanding under the facility approximates its fair value, unless otherwise noted.

(2) LIBOR is subject to a 0.00% floor.

(3) As of June 30, 2022andDecember 31, 2021, the fair value of the Senior Secured Notes was approximately $459,091 and $510,511, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.

For the ~~three and nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the components of total interest expense for the ~~Company’s~~Company's financing arrangements were as follows:

   Three Months Ended September 30,
   2021    2020
Arrangement⁽¹⁾
   Direct
Interest
Expense⁽²⁾    Amortization of
Deferred
Financing Costs
and Discount    Total
Interest
Expense    Direct
Interest
Expense⁽²⁾    Amortization of
Deferred
Financing Costs
and Discount    Total
Interest
Expense
Goldman Facility⁽³⁾
   $ —      $ —      $ —      $ 3,510    $ 637    $ 4,147
JPMorgan Facility
   2,030    565    2,595    4,845    665    5,510
Senior Secured Notes
   9,168    1,020    10,188    9,169    1,008    10,177












Total
   $ 11,198    $ 1,585    $ 12,783    $ 17,524    $ 2,310    $ 19,834

~~FS Energy~~
Six Months Ended June 30,
2022 2021
Arrangement(1)
Direct Interest Expense(2)
Amortization of Deferred Financing Costs and Discount Total Interest Expense
Direct Interest Expense(2)
Amortization of Deferred Financing Costs and Discount Total Interest Expense
JPMorgan Facility $ 5,364 $ 1,365 $ 6,729 $ 5,243 $ 2,649 $ 7,892
Senior Secured Notes 17,808 2,353 20,161 18,338 2,004 20,342
Total $ 23,172 $ 3,718 $ 26,890 $ 23,581 $ 4,653 $ 28,234

___________________

(1) Borrowings of each of the Company's wholly-owned special-purpose financing subsidiaries are considered borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.

(2) Direct interest expense includes the effect of non-usage fees, administration fees and ~~Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 9. Financing Arrangements (Continued)~~

   Nine Months Ended September 30,
   2021    2020
Arrangement⁽¹⁾
   Direct
Interest
Expense⁽²⁾    Amortization of
Deferred
Financing Costs
and Discount    Total
Interest
Expense    Direct
Interest
Expense⁽²⁾    Amortization of
Deferred
Financing Costs
and Discount    Total
Interest
Expense
Goldman Facility⁽³⁾
   $ —      $ —      $ —      $ 13,534    $ 773    $ 14,307
JPMorgan Facility
   7,273    3,214    10,487    12,985    1,694    14,679
Senior Secured Notes
   27,506    3,024    30,530    27,840    3,326    31,166












Total
   $ 34,779    $ 6,238    $ 41,017    $ 54,359    $ 5,793    $ 60,152

~~(1)~~

Borrowings of each of the Company’s wholly-owned special-purpose financing subsidiaries are considered borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.

~~(2)~~

~~Direct interest expense includes the effect of~~ ~~non-usage~~ ~~fees, administration fees and make-whole fees, if any.~~

~~(3)~~

On July 8, 2020, Gladwyne Funding LLC, or Gladwyne Funding, the Company’s wholly-owned subsidiary, repaid and terminated the committed credit facility which Gladwyne Funding originally entered into on April 19, 2017, with Goldman Sachs Bank U.S.A., as sole lead arranger, sole lender, and administrative agent, and Wells Fargo Bank, National Association, as collateral agent and collateral administrator, or the Goldman Facility.

make-whole fees, if any.

The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 were ~~$779,623~~$774,853 and ~~6.94%~~6.90%, respectively. As of ~~September~~June 30, ~~2021,~~2022, the Company’s effective interest rate on borrowings was ~~6.26%~~6.34%.

The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$1,115,141~~$809,589 and ~~7.09%~~6.94%, respectively. As of ~~September~~June 30, ~~2020,~~2021, the Company’s effective interest rate on borrowings was ~~5.52%~~6.26%.

~~Recent events such as the~~

~~COVID-19~~ pandemic, global lockdowns and ongoing negotiations regarding production levels between oil producing countries, have at times resulted in lower demand for crude oil and, as a result, lower commodity prices. Although the energy markets have had a notable recovery in the nine months ended September 30, 2021, volatility in the energy markets may persist or worsen. The impact of these events on the U.S. and global economies (including energy markets), has negatively impacted, and could continue to negatively impact, the business operations of some of our portfolio companies. The Company cannot at this time fully predict the continued impact of the above events on its business or the business of its portfolio companies, their duration or magnitude or the extent to which they will negatively impact the Company’s portfolio companies’ operating results or the Company’s own results of operations or financial condition. The Company expects that certain of its portfolio companies may continue to experience economic distress for the foreseeable future and may become insolvent or otherwise significantly limit business operations if subjected to prolonged economic distress, including as a result of a depressed price of oil or other declines in the energy markets. These developments could result in a further decrease in the value of the Company’s investments. The potential impact to the Company’s results going forward will depend to a large extent on future developments and new information that may emerge regarding the duration and severity of ~~COVID-19~~ ~~and the actions taken by authorities and other entities to contain the coronavirus or treat its impact, all of which are beyond the Company’s control.~~

~~FS Energy and Power Fund~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(in thousands, except share and per share amounts)~~

~~Note 9. Financing Arrangements (Continued)~~

These events have already had adverse effects on the Company’s investment income and the Company expects that such adverse effects may continue for some time. These adverse effects have required the Company to restructure certain of its investments, which could result in further reductions to the Company’s investment income or in impairments on the Company’s investments. In addition, disruptions in the capital markets have resulted in illiquidity in certain market areas at times. These market disruptions and illiquidity are likely to have an adverse effect on the Company’s business, financial condition, results of operations and cash flows. Unfavorable economic conditions caused by these events can also be expected to increase the Company’s funding costs and limit its access to the capital markets. These events have limited the Company’s investment originations, which is likely to continue for the immediate future, and have also had a material negative impact on the Company’s operating results. In addition, depressed ~~mark-to-market~~ valuations of many of the Company’s portfolio companies have materially reduced the value of collateral available to secure the Company’s financing arrangements, and consequently have adversely impacted the Company’s liquidity and may continue to do so in the future.

Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar financing arrangements. As a result of the events described above, the Company sold certain investments to satisfy certain margin obligations, and if such market conditions recur or worsen, the Company may need to sell additional investments at similarly or even more disadvantageous prices, or enter into other transactions on terms that are disadvantageous to the Company, to satisfy obligations under its financing arrangements. The Company did not comply with covenants under certain of its financing arrangements relating to the Company’s level of shareholder equity as of March 31, 2020. Accordingly, in early April 2020, the Company obtained waivers from the other parties to the applicable financing arrangements to satisfy those covenants. The Company was otherwise in compliance with all covenants required by its financing arrangements as of March 31, 2020. The Company was in compliance with all covenants required by its financing arrangements as of ~~September~~June 30, 2022 and December 31, 2021.

On March 29, 2021, the Company made a $185,000 prepayment of outstanding borrowings under the JPMorgan Facility. Per the terms of the JPMorgan Facility, the first $45,000 of such prepayment was applied to permanently reduce the outstanding commitments under the JPMorgan Facility. The remaining $140,000 of such prepayment reduced outstanding borrowings, but such amount remains available to be ~~re-drawn~~ ~~at any time, at the option of the Company, in accordance with the terms of the JPMorgan Facility.~~

Note 10. Commitments and Contingencies

The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. FS/EIG Advisor has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its financial condition or results of operations.

See Note 4 for a discussion of the Company’s commitments to FS/EIG Advisor and its affiliates (including FS Investments) and Note 7 for a discussion of the Company’s unfunded commitments.

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FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 11. Financial Highlights

The following is a schedule of financial highlights of the Company for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and the year ended December 31, ~~2020:~~

   Nine Months Ended
September 30, 2021
(Unaudited) Year Ended
December 31, 2020
Per Share Data:⁽¹⁾

Net asset value, beginning of period
   $ 3.25 $ 5.43
Results of operations⁽²⁾

Net investment income
   0.08 0.19
Net realized gain (loss) and unrealized appreciation (depreciation)
   0.33 (2.20 )


Net increase (decrease) in net assets resulting from operations
   0.41 (2.01 )


Shareholder distributions⁽³⁾

Distributions from net investment income
   (0.09 ) (0.14 )
Distributions representing tax return of capital
   —   (0.03 )


Net decrease in net assets resulting from shareholder distributions
   (0.09 ) (0.17 )


Capital share transactions

Issuance of common shares⁽⁴⁾
   —   —
Repurchases of common shares⁽⁵⁾
   —   —


Net increase (decrease) in net assets resulting from capital share transactions
   —   —


Net asset value, end of period
   $ 3.57 $ 3.25


Shares outstanding, end of period
   444,629,043 440,020,123


Total return⁽⁶⁾
   12.65 % (37.68 )%


Total return (without assuming reinvestment of distributions)⁽⁶⁾
   12.62 % (37.02 )%


Ratio/Supplemental Data:

Net assets, end of period
   $ 1,587,154 $ 1,428,577
Ratio of net investment income to average net assets⁽⁷⁾
   2.94 % 4.82 %
Ratio of total operating expenses to average net assets⁽⁷⁾
   7.03 % 8.20 %
Portfolio turnover⁽⁸⁾
   33.61 % 26.54 %
Total amount of senior securities outstanding, exclusive of treasury securities
   $ 720,667 $ 905,667
Asset coverage per unit⁽⁹⁾
   3.20 2.58

~~(1)~~

~~Per share data may be rounded in order to recompute the ending net asset value per share.~~

~~(2)~~

~~The per share data was derived by using the weighted average shares outstanding during the applicable period.~~

2021:


	Six Months Ended June 30, 2022 (Unaudited)			Year Ended December 31, 2021
Per Share Data:(1)
Net asset value, beginning of period	$	3.59		$	3.25
Results of operations(2)
Net investment income	0.06			0.09
Net realized gain (loss) and unrealized appreciation (depreciation)	0.40			0.37
Net increase (decrease) in net assets resulting from operations	0.46			0.46
Shareholder distributions(3)
Distributions from net investment income	(0.06)			(0.12)

Net decrease in net assets resulting from shareholder distributions	(0.06)			(0.12)
Capital share transactions
Issuance of common shares(4)	—			—

Net increase (decrease) in net assets resulting from capital share transactions	—			—
Net asset value, end of period	$	3.99		$	3.59
Shares outstanding, end of period	448,830,667			446,089,499
Total return(5)	12.81		%	14.22		%
Total return (without assuming reinvestment of distributions)(5)	12.81		%	14.15		%
Ratio/Supplemental Data:
Net assets, end of period	$	1,791,255		$	1,602,323
Ratio of net investment income to average net assets(6)(7)	3.31		%	2.77		%
Ratio of total operating expenses to average net assets(6)	6.70		%	6.96		%
Ratio of management fee offset to average net assets(6)	(0.14)		%	(0.09)		%
Ratio of net operating expenses to average net assets(6)	6.56		%	6.87		%
Ratio of interest expense to average net assets(6)	3.20		%	3.46		%
Portfolio turnover(8)	14.41		%	44.25		%
Total amount of senior securities outstanding, exclusive of treasury securities	$	762,751		$	775,667
Asset coverage per unit(9)	3.35			3.07

_________________________

(1) Per share data may be rounded in order to recompute the ending net asset value per share.

(2) The per share data was derived by using the weighted average shares outstanding during the applicable period.

(3) The per share data for distributions reflects the actual amount of distributions paid per share during the applicable period.

(4) The issuance of common shares on a per share basis reflects the incremental net asset value changes as a result of the issuance of common shares pursuant to the Company’s distribution reinvestment plan. The issuance of common shares at a price that is greater than the net asset value per share results in an increase in net asset value per share.

(5) The total return for each period presented was calculated based on the change in net asset value during the applicable period, including the impact of distributions reinvested in accordance with the Company’s distribution reinvestment plan. The total return (without assuming reinvestment of distributions) for each period presented was calculated by taking the net asset value per share as of the end of the applicable period, adding the cash distributions per share which were declared during the applicable period and dividing the total by the net asset value per share at the beginning of the applicable period. The total returns do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of the Company’s common shares. The total returns include the effect of the issuance of common shares at a net offering price that is greater than net asset value per share, which causes an increase in net asset value per share. The historical calculations of total returns in the table should not be considered representations of the Company’s future total returns, which may be greater or less than the returns shown in the table due to a number of factors, including the Company’s ability or inability to make investments in companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Company’s expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. The total return calculations set forth above represent the total returns on the Company’s investment portfolio during the applicable period and do not represent actual returns to shareholders.

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FS Energy and Power Fund

Notes to Unaudited Consolidated Financial Statements ~~(Continued)~~

(continued)

(in thousands, except share and per share amounts)

Note 11. Financial Highlights ~~(Continued)~~

~~(3)~~

~~The per share data for distributions reflects the actual amount of distributions paid per share during the applicable period.~~

~~(4)~~

The issuance of common shares on a per share basis reflects the incremental net asset value changes as a result of the issuance of common shares pursuant to the Company’s distribution reinvestment plan. The issuance of common shares at a price that is greater than the net asset value per share results in an increase in net asset value per share.

~~(5)~~

~~The per share impact of the Company’s repurchases of common shares was a reduction to net asset value of less than $0.01 per share during each period.~~

~~(6)~~

The total return for each period presented was calculated based on the change in net asset value during the applicable period, including the impact of distributions reinvested in accordance with the Company’s distribution reinvestment plan. The total return (without assuming reinvestment of distributions) for each period presented was calculated by taking the net asset value per share as of the end of the applicable period, adding the cash distributions per share which were declared during the applicable period and dividing the total by the net asset value per share at the beginning of the applicable period. The total returns do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of the Company’s common shares. The total returns include the effect of the issuance of common shares at a net offering price that is greater than net asset value per share, which causes an increase in net asset value per share. The historical calculations of total returns in the table should not be considered representations of the Company’s future total returns, which may be greater or less than the returns shown in the table due to a number of factors, including the Company’s ability or inability to make investments in companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Company’s expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. The total return calculations set forth above represent the total returns on the Company’s investment portfolio during the applicable period and do not represent actual returns to shareholders.

~~(7)~~

Weighted average net assets during the applicable period are used for this calculation. Ratios for the nine months ended September 30, 2021 are annualized. Annualized ratios for the nine months ended September 30, 2021 are not necessarily indicative of the ratios that may be expected for the year ending December 31, 2021. The following is a schedule of supplemental ratios for the nine months ended September 30, 2021 and the year ended December 31, 2020:

Nine Months Ended
September 30, 2021
(Unaudited) Year Ended
December 31, 2020
Ratio of interest expense to average net assets
3.52 % 4.39 %

~~(8)~~

~~Portfolio turnover for the nine months ended September 30, 2021 is not annualized.~~

~~(9)~~

Asset coverage per unit is the ratio of the carrying value of the Company’s total consolidated assets, less liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness.

(continued)

(6) Weighted average net assets during the applicable period are used for this calculation. Ratios for the six months ended June 30, 2022 are annualized. Annualized ratios for the six months ended June 30, 2022 are not necessarily indicative of the ratios that may be expected for the year ending December 31, 2022.

(7) If FS/EIG Advisorhad not agreed to offset the amount of any structuring, upfront or certain other fees it or its members received against the management fee payable by the Company, the ratio of net investment income to average net assets would have been 3.17% and 2.68% for the six months ended June 30, 2022 and the year ended December 31, 2022, respectively. See Note 4 for a discussion of the management fee offset with FS/EIG Advisor.

(8) Portfolio turnover for the six months ended June 30, 2022 is not annualized.

(9) Asset coverage per unit is the ratio of the carrying value of the Company’s total consolidated assets, less liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness.

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~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~

~~(in thousands, except share and per share amounts)~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(in thousands, except share and per share amounts)

The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto included elsewhere in this quarterly report on Form 10-Q. In this report, ~~“we,” “us”~~"we," "us" and ~~“our”~~"our" refer to FS Energy and Power Fund and ~~“FS/~~"FS/EIG ~~Advisor”~~Advisor" refers to FS/EIG Advisor, LLC.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:

•our future operating results;

• our business prospects and the prospects of the companies in which we may invest, including our and their ability to achieve our respective objectives as a result of the current COVID-19 pandemic;

• the impact of the investments that we expect to make;

• the ability of our portfolio companies to achieve their objectives;

• our current and expected financing arrangements and investments;

•changes in the general interest rate environment;

• the adequacy of our cash resources, financing sources and working capital;

• the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;

• our contractual arrangements and relationships with third parties;

• actual and potential conflicts of interest with FS/EIG Advisor, FS Investments, EIG, or any of their respective affiliates;

• the dependence of our future success on the general economy and its effect on the industries in which we may invest;

• general economic and political trends and other external factors, including the current COVID-19 pandemic and related disruptions caused thereby;

• our use of financial leverage;

• the ability of FS/EIG Advisor to locate suitable investments for us and to monitor and administer our investments;

• the ability of FS/EIG Advisor or its affiliates to attract and retain highly talented professionals;

• our ability to maintain our qualification as a RIC and as a BDC;

• the impact on our business of the Dodd-Frank Act, as amended, and the rules and regulations issued thereunder;

• the effect of changes to tax legislation and our tax position; and

• the tax status of the enterprises in which we may invest.

In addition, words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason. Factors that could cause actual results to differ materially include:

• changes in the economy;

• geo-political risks;

• risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters or pandemics; and

• future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report on Form 10-Q. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Shareholders are advised to consult any additional disclosures that we may make directly to shareholders or through reports that we may file in the future with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The forward-looking statements and projections contained in this quarterly report on Form 10-Q are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Table of Contents

Overview

We were formed as a Delaware statutory trust under the Delaware Statutory Trust Act on September 16, 2010 and formally commenced investment operations on July 18, 2011. We are an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a RIC under Subchapter M of the Code. In November 2016, we closed our continuous public offering of common shares to new investors.

Our investment activities are managed by FS/EIG Advisor and supervised by our board of trustees, a majority of whom are independent. Under the FS/EIG investment advisory agreement, we have agreed to pay FS/EIG Advisor an annual base management fee based on the average weekly value of our gross assets and an incentive fee based on our performance.

Our investment policy is to invest, under normal circumstances, at least 80% of our total assets in securities of Energy companies. This investment policy may not be changed without at least 60 days’ prior notice to holders of our common shares of any such change.

Our investment objective is to generate current income and long-term capital appreciation. We pursue our investment objective by focusing on the following seven investment themes: (i) basin-on-basin competition in U.S. shale, (ii) globalization of natural gas, (iii) coal retirements and the evolving energy generation mix, (iv) renewables focused on power grid parity, (v) export infrastructure for emerging U.S. producers, (vi) market liberalization opening new markets and (vii) midstream infrastructure connecting new supplies. However, we may pursue other investment opportunities if we believe it is in our best interests and consistent with our investment objectives.

Within the above investment themes, we intend to focus on the following investment categories in an effort to generate returns for our investors with an acceptable level of risk.

Direct Originations: Through FS/EIG Advisor, we intend to directly source investment opportunities across the Energy industry. Such investments are typically originated and structured through a negotiated process in which we directly participate and are not generally available to the broader market. These investments may include both debt and equity components. We believe directly originated investments may offer higher returns and more favorable protections than broadly syndicated transactions.

Broadly Syndicated Loan and Bond ~~Transactions:~~Transactions:Although our primary focus is to invest in directly originated transactions, in certain circumstances we will also invest in the broadly syndicated loan and high yield bond markets. Broadly syndicated loans and bonds are generally more liquid than our directly originated investments and provide a complement to our less liquid strategies.

In the case of broadly syndicated investments, we generally intend to capitalize on market inefficiencies by investing in loans, bonds, and other asset classes where the market price of such investment reflects a lower value than we believe is warranted based on our fundamental analysis, providing us with an opportunity to earn an attractive return on our investment.

The majority of our portfolio is comprised of income-oriented securities, which principally refers to debt securities and income-oriented preferred and common equity interests, of privately-held Energy companies within the United States. Generally, wewe expect to invest primarily in directly originated investments and primary market transactions, as this will provide us with the ability to tailor investments to best match a project’s or company’s needs with our investment objectives. We intend to weight our portfolio towards senior secured debt and directly originated preferred equity investments, which we believe offer opportunities for superior risk-adjusted returns and income generation. Our debt investments may take the form of corporate or project loans or bonds, may be secured or unsecured and may, in some cases, be accompanied by yield enhancements. These yield enhancements are typically expected to include royalty interests in mineral, oil and gas properties, warrants, options, net profits interests, cash flow participations or other forms of equity participation that can provide additional consideration or “upside” in a transaction. Our preferred equity investments are mostly directly originated and may take the form of perpetual or redeemable securities, typically with a current income component and minimum base returns. In addition, certain income-oriented preferred or common equity interests may include interests in master limited partnerships and a portion of our portfolio may be comprised of derivatives, including the use of total return swaps, credit default swaps and other commodity swap contracts. In connection with certain of our debt investments or any restructuring of these debt investments, we may on occasion receive equity interests, including warrants or options, as additional consideration or otherwise in connection with a restructuring. FS/EIG Advisor will seek to tailor our investment focus as market conditions evolve.

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Revenues

The principal measure of our financial performance is net increase or decrease in net assets resulting from operations, which includes net investment income, net realized gain or loss on investments, foreign currency, swap contracts and debt extinguishment, net change in unrealized appreciation or depreciation on investments, net change in unrealized gain or loss on foreign currency and net change in unrealized appreciation or depreciation on swap contracts. Net investment income is the difference between our income from interest, dividends, fees and other investment income and our operating and other expenses. Net realized gain or loss on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized gain or loss on foreign currency for those foreign denominated investment transactions. Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations. Net realized gain or loss on swap contracts is the portion of realized gain or loss attributable to the difference between the fixed price specified in the contract and the referenced settlement price. Net change in unrealized appreciation or depreciation on investments is the net change in the fair value of our investment portfolio, including the respective unrealized gain or loss on foreign currency for those foreign denominated investments. Net change in unrealized gain or loss on foreign currency is the net change in the value of receivables or accruals due to the impact of foreign currency fluctuations. Net change in unrealized appreciation or depreciation on swap contracts is the net change in the value of receivables or accruals due to the impact of the difference between the fixed price specified in the contract and the referenced settlement price.

We principally generate revenues in the form of interest income on the debt investments we hold. We also generate revenues in the form of dividends and other distributions on the equity or other securities we may hold. In addition, we may generate revenues in the form of non-recurring commitment, closing, origination, structuring or diligence fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees.

Expenses

~~Our~~

Our primary operating expenses include the payment of management and incentive fees and other expenses under the FS/EIG investment advisory agreement, interest expense from financing arrangements and other indebtedness, and other expenses necessary for our operations. The management and incentive fees compensate FS/EIG Advisor for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments.

FS/EIG Advisor oversees our day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs activities, and other administrative services. FS/EIG Advisor also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsible for the financial records that we are required to maintain and preparing reports for our shareholders and reports filed with the SEC. In addition, FS/EIG Advisor assists us in calculating our net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to our shareholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.

We reimburse FS/EIG Advisor for expenses necessary to perform services related to our administration and operations, including FS/EIG Advisor’s allocable portion of the compensation and related expenses of certain personnel of FS Investments and EIG providing administrative services to us on behalf of FS/EIG Advisor, and for transactional expenses for prospective investments, such as fees and expenses associated with performing due diligence reviews of investments that do not close, often referred to as ~~“broken deal”~~"broken deal" costs. We reimburse FS/EIG Advisor no less than quarterly for all costs and expenses incurred by FS/EIG Advisor in performing its obligations and providing personnel under the FS/EIG investment advisory agreement. The amount of this reimbursement is set at the lesser of (1) FS/EIG Advisor’s actual costs incurred in providing such services and (2) the amount that we estimate would be required to pay alternative service providers for comparable services in the same geographic location. FS/EIG Advisor allocates the cost of such services to us based on factors such as time allocations and other reasonable metrics. Our board of trustees reviews the methodology employed in determining how the expenses are allocated to us and assesses the reasonableness of such reimbursements for expenses allocated to us based on the breadth, depth and quality of such services as compared to the estimated cost to us of obtaining similar services from third-party service providers known to be available. In addition, our board of trustees considers whether any single third-party service provider would be capable of providing all such services at comparable cost and quality. Finally, our board of trustees compares the total amount paid to FS/EIG Advisor for such services as a percentage of our net assets to the same ratio as reported by other comparable BDCs. We do not reimburse FS/EIG Advisor for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of FS/EIG Advisor.

We bear all other expenses of our operations and transactions, including all other expenses incurred by FS/EIG Advisor in performing services for us and administrative personnel paid by FS/EIG Advisor, to the extent they are not controlling persons of FS/EIG Advisor or any of its affiliates, subject to the limitations included in the FS/EIG investment advisory ~~agreement.~~

agreement.

In addition, we have contracted with State Street to provide various accounting and administrative services, including, but not limited to, preparing preliminary financial information for review by FS/EIG Advisor, preparing and monitoring expense budgets,

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maintaining accounting and corporate books and records, processing trade information provided by us and performing testing with respect to RIC compliance.

For information regarding the fee offset with FS/EIG Advisor, see Note 4 to our unaudited consolidated financial statements included herein.

COVID-19 and Energy Market Developments

Recent events such as the rapid spread of the COVID-19 pandemic, global lockdowns and ongoing negotiations regarding production levels between oil producing countries, have at times resulted in lower demand for crude oil and, as a result, lower commodity prices. Although the energy markets have had a notable recovery in ~~the nine months ended September 30, 2021,~~recent quarters, volatility in the energy markets may persist, recur or ~~worsen.~~worsen, including as a result of other macroeconomic events, such as the current conflict in Ukraine and sanctions imposed on Russia in response thereto. The impact of these events on the U.S. and global economies (including energy markets), has negatively impacted, and could continue to negatively impact, the business operations of some of our portfolio companies. We cannot at this time fully predict the continued or future impact of the above events on our business or the business of our portfolio companies, their duration or magnitude or the extent to which they will negatively impact our portfolio companies’ operating results or our own results of operations or financial condition. We expect that certain of our portfolio companies may continue to experience economic distress for the foreseeable future and may become insolvent or otherwise significantly limit business operations if subjected to prolonged economic distress, including as a result of a depressed ~~price of oil~~commodity prices or other declines in the energy markets. These developments could result in a further decrease in the value of our investments. ~~The potential impact to our results going forward will depend to a large extent on future developments and new information that may emerge regarding the duration and severity of~~ ~~COVID-19~~ ~~and the actions taken by authorities and other entities to contain the coronavirus or treat its impact, all of which are beyond our control.~~

These events have ~~already~~previously had adverse effects on our investment income and we expect that such adverse effects may continue for some time. These adverse effects have required and may again require us to restructure certain of our investments, which could result in further reductions to our investment income or in impairments on our investments. In addition, disruptions in the capital markets have resulted in illiquidity in certain market areas at times. These market disruptions and illiquidity have had and ~~are likely~~may continue to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions caused by these events ~~can also be expected to~~may increase our funding costs and limit our access to the capital markets. These events have previously limited our investment originations, which ~~is likely to~~may continue for the immediate future, and have also previously had a material negative impact on our operating ~~results.~~results for a period of time. In addition, ~~depressed~~ ~~mark-to-market~~ ~~valuations~~the growth of ~~many~~non-income producing equity investments as a percentage of ~~our~~the portfolio ~~companies have~~has materially reduced the value of collateral available to secure our financing arrangements. Consequently, this has adversely impacted our liquidity, may cause us to fall out of compliance with certain portfolio requirements under the 1940 Act that are tied to the value of our investments and, in each case, may continue to do so in the future.

In particular, as a result of these events during 2020 and the early part of 2021, we ~~have~~ needed to sell certain investments to satisfy certain margin obligations, and if such market conditions ~~persist~~recur or worsen, we may need to sell additional investments at similarly or even more disadvantageous prices, or enter into other transactions on terms that are disadvantageous to us, to satisfy obligations under our financing arrangements.

In light of such difficult market conditions and in an effort to preserve our liquidity, ~~we previously~~our board of trustees determined to suspend for an indefinite period of time our share repurchase program and will reassess our ability to recommence such program in future periods. Moreover, our board of trustees has not declared or resumed regular cash distributions to shareholders for any period after March 31, 2020, and we expect that future regular cash distributions to shareholders will be suspended until such time that we believe that market conditions and our financial condition support the resumption of such distributions. Although our board of trustees has not resumed regular cash distributions, our board of trustees has since declared three cash distributions in 2020 and three cash distributions in 2021, each in the amount of $0.03 per share. Our board of trustees has and will continue to evaluate our ability to pay any distributions in the future. Accordingly, there can be no assurance that we will be able to pay distributions in the future.

~~We will continue to carefully monitor the impact of both the~~ ~~COVID-19~~ pandemic and disruptions in the energy markets on our business and the business of our portfolio companies. Because the full effects of these events are not capable of being known at this time, we cannot estimate the impacts on our future financial condition, results of operations or cash flows. We do, however, expect that these events may continue to have a negative impact on our business and the financial condition of certain of our portfolio companies.

~~Portfolio Investment Activity for the Three and Nine Months Ended September 30, 2021 and for the Year Ended December 31, 2020~~

~~Total Portfolio Activity~~

~~The following tables present certain selected information regarding our portfolio investment activity for the three and nine months ended September 30, 2021:~~

Net Investment Activity
   For the Three
Months
Ended
September 30,
2021    For the Nine
Months
Ended
September 30,
2021
Purchases
   $ 339,278    $ 749,566
Sales and Repayments
   (295,338 )    (807,152 )




Net Portfolio Activity
   $ 43,940    $ (57,586 )

   For the Three Months
Ended September 30,
2021 For the Nine Months
Ended September 30,
2021
New Investment Activity by Asset
Class
   Purchases    Percentage Purchases    Percentage
Senior Secured Loans—First Lien
   $ 116,869    35 % $ 221,509    30 %
Senior Secured Loans—Second Lien
   15,000    4 % 15,000    2 %
Senior Secured Bonds
   21,199    6 % 167,058    22 %
Unsecured Debt
   186,210    55 % 293,965    39 %
Preferred Equity
   —      —   13    0 %
Equity/Other
   —      —   52,021    7 %






Total
   $ 339,278            100 % $ 749,566            100 %

~~The following table summarizes the composition of our investment portfolio at cost and fair value as of September 30, 2021 and December 31, 2020:~~

   September 30, 2021
(Unaudited)

   December 31, 2020
   Amortized
Cost⁽¹⁾    Fair Value    Percentage
of Portfolio Amortized
Cost⁽¹⁾    Fair Value    Percentage
of Portfolio
Senior Secured Loans—First Lien
   $ 741,484    $ 723,390    32 % $ 649,708    $ 607,338    28 %
Senior Secured Loans—Second Lien
   99,056    100,085    4 % 277,018    276,312    13 %
Senior Secured Bonds
   75,059    77,232    3 % 286,082    340,042    16 %
Unsecured Debt
   438,003    404,315    18 % 245,180    134,560    6 %
Preferred Equity
   500,056    486,138    21 % 689,253    471,077    22 %
Sustainable Infrastructure Investments, LLC
   54,514    54,430    2 % 60,603    61,816    3 %
Equity/Other
   382,490    460,116    20 % 367,561    290,331    12 %










Total
   $ 2,290,662    $ 2,305,706            100 % $ 2,575,405    $ 2,181,476            100 %

~~(1)~~

~~Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.~~

~~The following table presents certain selected information regarding the composition of our investment portfolio as of September 30, 2021 and December 31, 2020:~~

   September 30, 2021 December 31, 2020
Number of Portfolio Companies
   73 54
% Variable Rate (based on fair value)
                 33.0 %               37.7 %
% Fixed Rate (based on fair value)
   23.6 % 24.6 %
% Income Producing Preferred Equity and Equity/Other Investments (based on fair value)
   17.9 % 24.2 %
% Non-Income Producing Preferred Equity and Equity/Other Investments (based on fair value)
   25.5 % 13.5 %
Weighted Average Purchase Price of Debt Investments (as a % of par value)
   98.5 % 93.6 %
% of Investments on Non-Accrual (based on fair value)
   7.0 % 8.2 %
Gross Portfolio Yield Prior to Leverage (based on amortized cost)
   6.0 % 7.0 %
Gross Portfolio Yield Prior to Leverage (based on amortized cost)—Excluding Non-Income Producing Assets
   8.2 % 9.7 %

Although our board of trustees has not declared or resumed regular cash distributions to shareholders for any period after March 31, 2020, our board of trustees has since declared three cash distributions in 2020, ~~and three~~ four cash distributions in 2021 and two cash distributions in 2022, each in the amount of $0.03 per share. FS/EIG Advisor and our board of trustees expect that future regular cash distributions to shareholders will beremain suspended until such time that our board of trustees and FS/EIG Advisor believe that market conditions and our financial condition support the resumption of such distributions. Our board of trustees has and will continue to evaluate our ability to pay any distributions in the future. There can be no assurance that we will be able to pay distributions in the ~~future and any annualized distribution rate provided in this report may not be representative~~future.

We will continue to carefully monitor the impact of the ~~actual distribution rate~~COVID-19 pandemic; the current conflict in Ukraine and government responses thereto; and other disruptions in the energy markets on our business and the business of our portfolio companies. Because the full effects of these events are not capable of being known at this time, we cannot estimate the impacts on our future financial condition, results of operations or cash flows. We do, however, expect that these events may have a negative impact on our business and the financial condition of certain of our portfolio companies.

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Portfolio Investment Activity for the Three and Six Months Ended June 30, 2022 and for the Year Ended December 31, 2021

Total Portfolio Activity

The following tables present certain selected information regarding our portfolio investment activity for the three and six months ended June 30, 2022:


Net Investment Activity	For the Three Months Ended June 30, 2022				For the Six Months Ended June 30, 2022
Purchases	$	220,408			$	344,498
Sales and Repayments	(267,067)				(507,402)
Net Portfolio Activity	$	(46,659)			$	(162,904)

	For the Three Months Ended June 30, 2022				For the Six Months Ended June 30, 2022
New Investment Activity by Asset Class	Purchases		Percentage		Purchases		Percentage
Senior Secured Loans—First Lien	$	115,986	53	%	$	133,628	39	%
Senior Secured Loans—Second Lien	46,900		21	%	110,150		32	%

Unsecured Debt	19,228		9	%	53,269		15	%


Equity/Other	38,294		17	%	47,451		14	%
Total	$	220,408	100	%	$	344,498	100	%

The following table summarizes the composition of our investment portfolio at cost and fair value as of June 30, 2022 and December 31, 2021:


	June 30, 2022 (Unaudited)						December 31, 2021
	Amortized Cost(1)		Fair Value		Percentage of Portfolio		Amortized Cost(1)		Fair Value		Percentage of Portfolio
Senior Secured Loans—First Lien	$	770,769	$	762,753	31	%	$	832,257	$	812,335	34	%
Senior Secured Loans—Second Lien	176,003		177,184		7	%	83,322		84,083		3	%
Senior Secured Bonds	10,040		10,356		0	%	77,266		81,646		3	%
Unsecured Debt	389,039		359,450		15	%	425,715		397,068		17	%
Preferred Equity	497,019		475,077		20	%	515,711		497,288		21	%
Sustainable Infrastructure Investments, LLC	54,514		52,131		2	%	54,514		50,770		2	%
Equity/Other	340,584		594,385		25	%	364,272		472,033		20	%
Total	$	2,237,968	$	2,431,336	100	%	$	2,353,057	$	2,395,223	100	%

_________________________

(1) Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.

The following table presents certain selected information regarding the composition of our investment portfolio as of June 30, 2022 and December 31, 2021:


	June 30, 2022	December 31, 2021
Number of Portfolio Companies	71	71
% Variable Rate (based on fair value)	34.4%	35.1%
% Fixed Rate (based on fair value)	19.5%	22.3%
% Income Producing Preferred Equity and Equity/Other Investments (based on fair value)	14.3%	14.1%
% Non-Income Producing Preferred Equity and Equity/Other Investments (based on fair value)	31.8%	28.5%
Weighted Average Purchase Price of Debt Investments (as a % of par value)	99.3%	98.5%
% of Investments on Non-Accrual (based on fair value)	9.5%	10.4%
Gross Portfolio Yield Prior to Leverage (based on amortized cost)	6.3%	5.5%
Gross Portfolio Yield Prior to Leverage (based on amortized cost)—Excluding Non-Income Producing Assets	8.4%	7.8%

Although our board of trustees has not declared or resumed regular cash distributions to shareholders for any ~~period. Based on the distributions declared during 2020 of $0.1733 per share, and the price at which we issued shares pursuant to our distribution reinvestment plan of $3.30 per share as of December~~period after March 31, 2020, our board of trustees has since declared three cash distributions in 2020, four cash distributions in 2021 and two cash distributions in 2022, each in the ~~annualized distribution rate~~amount of $0.03 per share. FS/EIG Advisor and our board of trustees expect that future regular cash distributions to shareholders aswill remain suspended until such time that our board of ~~December 31, 2020 was 5.25%.~~trustees and FS/EIG Advisor believe that market conditions and our financial condition support the resumption of such distributions. Our board of trustees has and will continue to

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evaluate our ability to pay any distributions in the future. There can be no assurance that we will be able to pay distributions in the future. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and the year ended December 31, ~~2020,~~2021, our total return was ~~12.65%~~12.81% and ~~(37.68)%~~14.22%, respectively, and our total return without assuming reinvestment of distributions was ~~12.62%~~12.81% and ~~(37.02)%~~14.15%, respectively.

Our estimated gross portfolio yield ~~and annualized distribution rate to shareholders do~~does not represent actual investment returns to shareholders. Our gross annual portfolio yield ~~and distribution rate to shareholders are~~is subject to change and in the future may be greater or less than the rates set forth above. See the sections entitled “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 and in our other periodic reports filed with the SEC for a discussion of the uncertainties, risks and assumptions associated with these statements.

Direct Originations

We define Direct Originations as any investment where FS/EIG Advisor or its affiliates negotiates the terms of the transaction beyond just the price, which, for example, may include negotiating financial covenants, maturity dates or interest rate terms. These Direct Originations include participation in other originated transactions where there may be third parties involved, or a bank acting as an intermediary, for a closely held club, or similar transactions. The following table presents certain selected information regarding our ~~direct originations~~Direct Originations as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

Characteristics of All Direct Originations held in
Portfolio
   September 30, 2021 December 31, 2020
Number of Portfolio Companies
   45 46
% of Investments on Non-Accrual (based on fair value)
   10.0 % 9.1 %
Total Cost of Direct Originations
   $ 1,618,948 $ 2,317,824
Total Fair Value of Direct Originations
   $ 1,630,518 $ 1,953,804
% of Total Investments, at Fair Value
   70.7 % 89.6 %
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Funded Direct Originations
   6.0 % 7.1 %
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Funded Direct Originations—Excluding Non-Income Producing Assets
   9.5 % 10.0 %

2021:
Characteristics of All Direct Originations held in Portfolio June 30, 2022 December 31, 2021
Number of Portfolio Companies 44 43
% of Investments on Non-Accrual (based on fair value) 12.9% 15.4%
Total Cost of Direct Originations $1,546,521 $1,586,099
Total Fair Value of Direct Originations $1,790,041 $1,621,482
% of Total Investments, at Fair Value 73.6% 67.7%
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Funded Direct Originations 6.2% 5.1%
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Funded Direct Originations—Excluding Non-Income Producing Assets 9.7% 8.4%

Portfolio Composition by Strategy

The table below summarizes the composition of our investment portfolio by strategy and enumerates the percentage, by fair value, of the total portfolio assets in such strategies as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

   September 30, 2021 December 31, 2020
Portfolio Composition by Strategy
   Fair Value    Percentage of
Portfolio Fair Value    Percentage
of Portfolio
Direct Originations
   $ 1,630,518    71 % $ 1,953,804    90 %
Broadly Syndicated/Other
   675,188    29 % 227,672    10 %






Total
   $ 2,305,706            100 % $ 2,181,476            100 %

2021:


	June 30, 2022				December 31, 2021
Portfolio Composition by Strategy	Fair Value		Percentage of Portfolio		Fair Value		Percentage of Portfolio
Direct Originations	$	1,790,041	74	%	$	1,621,482	68	%
Broadly Syndicated/Other	641,295		26	%	773,741		32	%
Total	$	2,431,336	100	%	$	2,395,223	100	%

See Note 7 to our unaudited consolidated financial statements included herein for additional information regarding our investment portfolio.

Portfolio Asset Quality

In addition to various risk management and monitoring tools, FS/EIG Advisor uses an investment rating system to characterize and monitor the expected level of returns on each investment in our portfolio. FS/EIG Advisor uses an investment rating scale of 1 to 5. The following is a description of the conditions associated with each investment rating:


Investment Rating		Summary Description

1		Investment exceeding expectations and/or capital gain expected.

2	Performing investment generally executing in accordance with the portfolio company’s business plan—full return of principal and interest expected.

3	Performing investment requiring closer monitoring.

4	Underperforming investment—some loss of interest or dividend possible, but still expecting a positive return on investment.

5	Underperforming investment with expected loss of interest and some principal.

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The following table shows the distribution of our investments on the 1 to 5 investment rating scale at fair value as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

   September 30, 2021 December 31, 2020
Investment Rating
   Fair Value    Percentage
of Portfolio Fair Value    Percentage
of Portfolio
1
   $ —      —   $ —      —
2
   1,726,767    75 % 966,968    44 %
3
   302,593    13 % 888,656    41 %
4
   170,899    7 % 162,251    7 %
5
   105,447    5 % 163,601    8 %






Total
   $ 2,305,706            100 % $ 2,181,476            100 %

2021:


	June 30, 2022				December 31, 2021
Investment Rating	Fair Value		Percentage of Portfolio		Fair Value		Percentage of Portfolio
1	$	—	—		$	—	—
2	1,878,180		77	%	1,771,346		74	%
3	164,034		7	%	232,319		10	%
4	314,885		13	%	284,055		12	%
5	74,237		3	%	107,503		4	%
Total	$	2,431,336	100	%	$	2,395,223	100	%

The amount of the portfolio in each grading category may vary substantially from period to period resulting primarily from changes in the composition of the portfolio as a result of new investment, repayment and exit activities. In addition, changes in the grade of investments may be made to reflect our expectation of performance and changes in investment values.

Results of Operations

Comparison of the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~

2021

Revenues

Our investment income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 was as follows:

   Three Months Ended September 30, Nine Months Ended September 30,
   2021 2020 2021 2020
   Amount    Percentage
of Total
Income Amount    Percentage
of Total
Income Amount    Percentage
of Total
Income Amount    Percentage
of Total
Income
Interest income
   $ 24,200    64 % $ 35,715    77 % $ 80,707    70 % $ 147,461    86 %
Paid-in-kind interest income
   8,614    23 % 10,052    22 % 26,455    23 % 22,536    13 %
Fee income
   117    0 % 352    1 % 1,312    1 % 862    1 %
Dividend income
   4,960    13 % —      —   6,534    6 % 66    0 %










Total investment income⁽¹⁾
   $ 37,891            100 % $ 46,119            100 % $ 115,008            100 % $ 170,925            100 %

~~(1)~~

~~Such revenues represent $27,991 and $30,440 of cash income earned as well as $9,900 and $15,679 in~~ ~~non-cash~~ portions relating to accretion of discount and PIK interest for the three months ended September 30, 2021 and 2020, respectively, and represent $81,284 and $123,998 of cash income earned as well as $33,724 and $46,927 in ~~non-cash~~ ~~portions relating to accretion of discount and PIK interest for the nine months ended September 30, 2021 and 2020, respectively. Cash flows related to such~~ ~~non-cash~~ ~~revenues may not occur for a number of reporting periods or years after such revenues are recognized.~~

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Amount Percentage of Total Income Amount Percentage of Total Income Amount Percentage of Total Income Amount Percentage of Total Income
Interest income $ 26,815 57 % $ 27,342 70 % $ 53,902 65 % $ 56,507 73 %
Paid-in-kind interest income 7,341 15 % 9,361 24 % 12,469 15 % 17,841 23 %
Fee income 9,226 20 % 679 2 % 10,459 13 % 1,195 2 %
Dividend income 3,691 8 % 1,574 4 % 6,152 7 % 1,574 2 %
Total investment income(1)
$ 47,073 100 % $ 38,956 100 % $ 82,982 100 % $ 77,117 100 %
_____________________________

(1) Such revenues represent $37,875 and $27,139 of cash income earned as well as $9,198 and $11,817 in non-cash portions relating to accretion of discount and PIK interest for the three months ended June 30, 2022 and 2021, respectively, and represent $66,627 and $53,293 of cash income earned as well as $16,355 and $23,824 in non-cash portions relating to accretion of discount and PIK interest for the six months ended June 30, 2022 and 2021, respectively. Cash flows related to such non-cash revenues may not occur for a number of reporting periods or years after such revenues are recognized.

The level of interest income we receive is generally related to the balance of income-producing investments multiplied by the weighted average yield of our investments. We may experience volatility in the amount of interest income that we earn as the accrual status of existing portfolio investments may fluctuate due to ongoing restructuring activity in the portfolio. The decrease in the amount of interest income and PIK income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was primarily due to ~~a combination of factors including certain investments being placed on~~ ~~non-accrual~~ ~~and~~ an increase in ~~the portfolio’s allocation to~~ ~~non-income~~ ~~producing~~repayments on higher-yielding debt investments which were reinvested into assets ~~as a result of restructurings.~~

with lower yields.

Fee income is transaction based, and typically consists of prepayment fees and structuring fees. As such, future fee income is generally dependent on new direct origination investments and the occurrence of events at existing portfolio companies resulting in such fees.

The increase in the amount of fee income for the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021 was primarily due to an increase in prepayment fees.

The increase in the amount of dividend income for the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021 was primarily due to the increase in dividends paid with respect to our investments in certain common equity and Sustainable Infrastructure Investments, LLC.

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Expenses

Our operating expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

   Three Months Ended
September 30,    Nine Months Ended
September 30,
   2021    2020    2021    2020
Management fees
   $ 10,077    $ 10,626    $ 31,005    $ 38,619
Administrative services expenses
   1,457    2,628    4,480    4,937
Share transfer agent fees
   736    738    2,182    1,953
Accounting and administrative fees
   169    172    516    611
Interest expense
   12,783    19,834    41,017    60,152
Trustees’ fees
   189    190    587    597
Expenses associated with our independent audit and related fees
   113    114    336    338
Legal fees
   15    661    18    1,581
Printing fees
   89    164    399    522
Other
   515    297    1,311    1,974








Total operating expenses
   26,143    35,424    81,851    111,284
Less: Management fee offset
   (1,026 )    (2 )    (1,349 )    (452 )








Net operating expenses
   $ 25,117    $ 35,422    $ 80,502    $ 110,832


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Management fees	$	11,276	$	10,278	$	22,011	$	20,928
Administrative services expenses	1,490		1,442		2,910		3,023
Share transfer agent fees	728		728		1,448		1,446
Accounting and administrative fees	189		161		366		347
Interest expense	13,196		12,744		26,890		28,234
Trustees' fees	190		191		417		398
Expenses associated with our independent audit and related fees	112		112		223		223
Legal fees	150		—		150		3
Printing fees	76		123		409		310
Other	530		425		1,530		796
Total operating expenses	27,937		26,204		56,354		55,708
Less: Management fee offset	(1,700)		(321)		(2,398)		(323)
Net operating expenses	$	26,237	$	25,883	$	53,956	$	55,385

The following table reflects selected expense ratios as a percent of average net assets for the three and ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020:~~

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2021 2020 2021 2020
Ratio of operating expenses to average net assets
       1.72 %     2.42 %     5.28 %     6.21 %
Ratio of management fee offset to average net assets
   (0.07 )% —   (0.09 )% (0.03 )%


Ratio of net operating expenses to average net assets
   1.65 % 2.42 % 5.19 % 6.18 %
Ratio of interest expense to average net assets
   (0.84 )% (1.35 )% (2.64 )% (3.36 )%


Ratio of net operating expenses, excluding interest expense, to average net assets
   0.81 % 1.07 % 2.55 % 2.82 %

(not annualized):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Ratio of operating expenses to average net assets	1.59	%	1.63	%	3.35	%	3.56	%
Ratio of management fee offset to average net assets	(0.10)	%	(0.02)	%	(0.14)	%	(0.02)	%
Ratio of net operating expenses to average net assets	1.49	%	1.61	%	3.21	%	3.54	%
Ratio of interest expense to average net assets	(0.75)	%	(0.79)	%	(1.60)	%	(1.80)	%
Ratio of net operating expenses, excluding interest expense, to average net assets	0.74	%	0.82	%	1.61	%	1.74	%

Interest expense may increase or decrease our expense ratios relative to comparative periods depending on changes in benchmark interest rates such as LIBOR, utilization rates and the terms of our financing arrangements, among other factors.

Management Fee Offset

Structuring, upfront or certain other ~~upfront~~ fees received by FS/EIG Advisor or its members which were offset against management fees due to FS/EIG Advisor from us were ~~$1,026~~$1,700 and $2$321 for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$1,349~~$2,398 and ~~$452~~$323 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. See Note 4 to our unaudited consolidated financial statements contained in this quarterly report on Form 10-Q for a discussion of the management fee offset for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~

2021.

Net Investment Income

Our net investment income totaled ~~$12,774~~$20,836 ($~~0.03~~0.05 per share) and ~~$10,697~~$13,073 ($~~0.02~~0.03 per share) for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$34,506~~$29,026 ($~~0.08~~0.06 per share) and ~~$60,093~~$21,732 ($~~0.14~~0.05 per share) for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

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Net Realized Gains or Losses

Our net realized gains (losses) on investments, foreign currency, swap contracts and debt extinguishment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, were as follows:

   Three Months Ended
September 30,    Nine Months Ended
September 30,
   2021    2020    2021    2020
Net realized gain (loss) on investments⁽¹⁾
   $ 1,625    $ (485,788 )    $ (260,881 )    $ (958,164 )
Net realized gain (loss) on foreign currency
   —      —      (6 )    —
Net realized gain (loss) on swap contracts
   —      —      —      20,250
Net realized gain (loss) on debt extinguishment
   —      —      —      2,591








Total net realized gain (loss)
   $ 1,625    $ (485,788 )    $ (260,887 )    $ (935,323 )

~~(1)~~

We sold investments and received principal repayments of $168,333 and $127,005, respectively, during the three months ended September 30, 2021 and $221,802 and $6,122, respectively, during the three months ended September 30, 2020. We sold investments and received principal repayments of $376,878 and $430,274, respectively, during the nine months ended September 30, 2021 and $899,670 and $75,067, respectively, during the nine months ended September 30, 2020.

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net realized gain (loss) on investments(1)
$ 60,504 $ (262,066) $ 31,460 $ (262,506)
Net realized gain (loss) on foreign currency — (6) — (6)
Net realized gain (loss) on swap contracts (1,392) — (1,808) —
Net realized gain (loss) on debt extinguishment (183) — (929) —
Total net realized gain (loss) $ 58,929 $ (262,072) $ 28,723 $ (262,512)

_________________________

(1) We sold investments and received principal repayments of $201,929 and $65,138, respectively, during the three months ended June 30, 2022 and $97,177 and $129,908, respectively, during the three months ended June 30, 2021. We sold investments and received principal repayments of $270,691 and $236,711, respectively, during the six months ended June 30, 2022 and $208,545 and $303,269, respectively, during the six months ended June 30, 2021.

Net Change in Unrealized Appreciation (Depreciation) on Investments and Swap Contracts and Unrealized Gain (Loss) on Foreign Currency

Our net change in unrealized appreciation (depreciation) on investments and swap contracts and unrealized gain (loss) on foreign currency for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

   Three Months Ended
September 30,    Nine Months Ended
September 30,
   2021    2020    2021    2020
Net change in unrealized appreciation (depreciation) on investments
   $ 48,994    $ 468,628    $ 408,973    $ 7,220
Net change in unrealized appreciation (depreciation) on swap contracts
   —      —      —      (6,551 )
Net change in unrealized appreciation (depreciation) on foreign currency
   (21 )    6    (13 )    (9 )








Total net change in unrealized appreciation (depreciation)
   $ 48,973    $ 468,634    $ 408,960    $ 660


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net change in unrealized appreciation (depreciation) on investments	$	(64,079)	$	228,416	$	151,202	$	359,979
Net change in unrealized appreciation (depreciation) on swap contracts	(106)		—		(3,588)		—
Net change in unrealized gain (loss) on foreign currency	—		4		—		8
Total net change in unrealized appreciation (depreciation) and unrealized gain (loss)	$	(64,185)	$	228,420	$	147,614	$	359,987

During the three and six months ended ~~September~~June 30, ~~2021,~~2022, the net change in unrealized appreciation (depreciation) on our investments was primarily driven by the performance of our directly originated assets and certain of our upstream equity/other ~~investments.~~investments and the conversion of unrealized depreciation to realized losses. During the ~~nine~~three and six months ended ~~September~~June 30, 2021, the net change in unrealized appreciation (depreciation) on our investments was primarily driven by the performance of our directly originated assets and the conversion of unrealized depreciation to realized losses. During the three months ended September 30, 2020, the net change in unrealized appreciation (depreciation) on our investments was primarily driven by the conversion of unrealized depreciation to realized losses. During the nine months ended September 30, 2020, the net change in unrealized appreciation (depreciation) on our investments was primarily driven by the performance of our investments due to, among other things, the adverse economic effects of the ~~COVID-19~~ ~~pandemic, the~~

continuing uncertainty surrounding its long-term impact, the failure of Saudi Arabia, Russia and other oil producing countries to reach an agreement around crude oil production and the conversion of unrealized depreciation to realized losses.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the three months ended ~~September~~June 30, ~~2021~~2022 and 2020, the net increase (decrease) in net assets resulting from operations was $63,372 ($0.14 per share) and $(6,457) ($(0.01) per share), respectively. For the nine months ended September 30, 2021 and 2020, the net increase (decrease) in net assets resulting from operations was $182,579 ($0.41 per share) and $(874,570) ($(2.00) per share), respectively. During the three months ended September 30, 2021, the net increase (decrease) in net assets resulting from operations was ~~primarily~~$15,580 ($0.03 per share) and $(20,579) ($(0.05) per share), respectively. For the ~~result of the performance of certain upstream equity/other investments. During the nine~~six months ended ~~September~~June 30, 2022 and 2021, the net increase (decrease) in net assets resulting from operations was ~~primarily the result of unrealized appreciation on numerous investments which was partially offset by a restructuring~~$205,363 ($0.46 per share) and subsequent write-down of the fair value of our debt and equity investments in Limetree Bay Ventures, LLC and Limetree Energy, LLC, or collectively, Limetree, of approximately $192,110. The write-down arose from the shut-down of Limetree’s refinery operations as a result of regulatory, operational and financial challenges. In July 2021, Limetree filed for bankruptcy. There is a substantial risk that no new cash flows will accrue to our investments in Limetree.

$119,207 ($0.27 per share), respectively.

This “Results of Operations” section should be read in conjunction with ~~“COVID-19~~“COVID-19 and Energy Market Developments” above.

Financial Condition, Liquidity and Capital Resources

Overview

As of ~~September~~June 30, ~~2021,~~2022, we had ~~$71,573~~$131,334 in cash, which we held in custodial ~~accounts and $140,000 in borrowings available under the JPMorgan Facility.~~accounts. As of ~~September~~June 30, ~~2021,~~2022, we also had broadly syndicated investments that could be sold to create additional liquidity. As of ~~September~~June 30, ~~2021,~~2022, we had ~~six~~eight senior secured loan investments with aggregate unfunded commitments of ~~$67,595~~$60,599 and unfunded commitments of $7,625 in U.S. dollars and $858 in Canadian dollars to contribute capital to Sustainable Infrastructure Investments, LLC. We maintain sufficient cash on hand, available borrowings ~~and~~and/or liquid securities to fund such unfunded commitments should the need arise.

We generate cash primarily from the issuance of shares under our distribution reinvestment plan and from cash flows from fees, interest and dividends earned from our investments as well as principal repayments and proceeds from sales of our investments. To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of FS/EIG Advisor, but unless and until we elect otherwise, as permitted by the 1940 Act, in no event will leverage employed exceed 50% of the value of our assets, as required by the 1940 Act. See “—Financing Arrangements.”

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Prior to investing in securities of portfolio companies, we invest the net proceeds from the issuance of shares under our distribution reinvestment plan as well as from sales and paydowns of existing investments primarily in cash, cash equivalents, including money market funds, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, consistent with our BDC election and our election to be taxed as a RIC.

In light of difficult market conditions, we took several steps in 2020 to seek to enhance our liquidity by, among other things, suspending our share repurchase program, suspending regular cash distributions and reducing leverage by paying down borrowings. In addition, FS/EIG Advisor deferred the payment of a portion of the management fee to which it was entitled for investment advisory services provided during the quarterly periods ended March 31, 2020The share repurchase program and ~~June 30, 2020, though FS/EIG Advisor has since received the deferred fees. We believe the net result of such measures resulted in an improved liquidity position for us.~~

regular cash distributions currently remain suspended.

This “Financial Condition, Liquidity and Capital Resources” section should be read in conjunction with ~~“COVID-19~~“COVID-19 and Energy Market Developments” above and “—Financing Arrangements” below.

Financing Arrangements

The following table presents a summary of information with respect to our outstanding financing arrangements as of ~~September~~June 30, ~~2021:~~

Arrangement⁽¹⁾

Type of
Arrangement
   Rate⁽²⁾ Amount
Outstanding    Amount
Available    Maturity Date
JPMorgan Facility
   Revolving/Term    L+3.00% $ 231,667    $ 140,000    February 16, 2023
Senior Secured Notes⁽³⁾
   Bond    7.50% 489,000    —      August 15, 2023





Total
      $ 720,667    $ 140,000

~~(1)~~

~~The carrying amount outstanding under the facility approximates its fair value, unless otherwise noted.~~

~~(2)~~

~~LIBOR is subject to a 0.00% floor.~~

~~(3)~~

~~As of September 30, 2021, the fair value of the Senior Secured Notes was approximately $509,783.~~

2022:
Arrangement(1)
Type of
Arrangement
Rate(2)
Amount
Outstanding Amount
Available Maturity Date
JPMorgan Facility Revolving/Term L+3.00% $ 305,676 $ — February 16, 2023
Senior Secured Notes(3)
Bond 7.50% 457,075 — August 15, 2023
Total $ 762,751 $ —

________________________

(1) The carrying amount outstanding under the facility approximates its fair value, unless otherwise noted.

(2) LIBOR is subject to a 0.00% floor.

(3) As of June 30, 2022, the fair value of the Senior Secured Notes was approximately $459,091.

The JPMorgan Facility matures on February 16, 2023 and the Senior Secured Notes mature on August 15, 2023. For additional information regarding our financing arrangements, see Note 9 to our unaudited consolidated financial statements included herein.

RIC Tax Treatment and Distributions

We have elected to be treated for U.S. federal income tax purposes, and intend to qualify annually, as a RIC under Subchapter M of the Code. As a RIC, we generally do not have to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that we distribute as dividends to our shareholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our shareholders, for each tax year, dividends generally of an amount at least equal to 90% of our “investment company taxable income,” which is generally the sum of our net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses, determined without regard to any deduction for dividends paid. In addition, we may, in certain cases, satisfy the Annual Distribution Requirement by distributing dividends relating to a tax year after the close of such tax year under the “spillover dividend” provisions of Subchapter M of the Code. If we distribute a spillover dividend, such dividend will be included in a shareholder’s gross income for the tax year in which the spillover distribution is paid. We intend to make sufficient distributions to our shareholders to maintain our RIC tax treatment each tax year. We will also be subject to nondeductible U.S. federal excise taxes on certain undistributed income unless we distribute in a timely manner to our shareholders of an amount at least equal to the sum of (1) 98% of our net ordinary taxable income (taking into account certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income, which is the excess of capital gains over capital losses (adjusted for certain ordinary losses), for the one-year period ending October 31 of that calendar year and (3) 100% of any ordinary income and capital gain net income recognized for the preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. Any distribution declared by us during October, November or December of any calendar year, payable to our shareholders of record on a specified date in such a month and actually paid during January of the following calendar year, will be treated as if it had been paid by us, as well as received by our U.S. shareholders, on December 31 of the calendar year in which the distribution was declared.

In general, when we pay regular cash distributions, we intend to declare them on a quarterly or monthly basis and pay them on a monthly basis. We will calculate each shareholder’s specific distribution amount for the period using record and declaration dates and each shareholder’s distributions will begin to accrue on the date that common shares are issued to such shareholder. From time to time, we may also pay special interim

distributions in the form of cash or common shares at the discretion of our board of trustees. The timing and amount of any future distributions to shareholders are subject to applicable legal restrictions and the sole discretion of our board of trustees.

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Our distribution proceeds have exceeded and in the future may exceed our earnings. Therefore, portions of the distributions that we have made represented, and may make in the future may represent, a return of capital to shareholders, which lowers their tax basis in their common shares. A return of capital generally is a return of an investor’s investment rather than a return of earnings or gains derived from our investment activities and will be made after deducting the fees and expenses payable in connection with

our continuous public offering, including any fees payable to FS/EIG Advisor. Moreover, a return of capital will generally not be taxable, but will reduce each shareholder’s cost basis in our common shares, and will result in a higher reported capital gain or lower reported capital loss when the common shares on which such return of capital was received are sold. Each year a statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our shareholders.

We intend to make any regular distributions in the form of cash, out of assets legally available for distribution, unless shareholders elect to receive their cash distributions in additional common shares under our distribution reinvestment plan. Any distributions reinvested under the plan will nevertheless remain taxable to a U.S. shareholder.

Although our board of trustees has not declared or resumed regular cash distributions to shareholders for any period after March 31, 2020, our board of trustees has since declared three cash distributions in 2020, ~~and three~~four cash distributions in 2021 and two cash distributions in 2022, each in the amount of $0.03 per share. FS/EIG Advisor and our board of trustees expect that future regular cash distributions to shareholders will beremain suspended until such time that our board of trustees and FS/EIG Advisor believe that market conditions and our financial condition support the resumption of such distributions. Our board of trustees has and will continue to evaluate our ability to pay any distributions in the future. There can be no assurance that we will be able to pay distributions in the future. The timing and amount of any future distributions to shareholders are subject to applicable legal restrictions and the sole discretion of our board of trustees. Furthermore, the JPMorgan Facility restricts our ability to make certain discretionary cash dividends and distributions and other restricted payments.

The following table reflects the cash distributions per share that we have declared on our common shares during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~

See Note 5 to our unaudited consolidated financial statements included herein for additional information regarding our distributions.

Critical Accounting Policies

and Estimates

Our financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. Understanding our accounting policies and the extent to which we use management judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in Note 2 to our unaudited consolidated financial statements included herein. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update them as necessary based on changing conditions. We have identified one of our accounting policies, valuation of portfolio investments, ~~specifically the valuation of Level 3 investments,~~ as critical because it involves significant judgments and assumptions about highly complex and inherently uncertain matters, and the use of reasonably different estimates and assumptions could have a material impact on our reported results of operations or financial condition. As we execute our operating plans, we will describe additional critical accounting policies in the notes to our future financial statements in addition to those discussed below.

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Valuation of Portfolio Investments

We determine the fair value of our investment portfolio each quarter. Securities are valued at fair value as determined in good faith by our board of trustees. In connection with that determination, FS/EIG Advisor provides our board of trustees with portfolio company valuations which are based on relevant inputs, including, but not limited to, indicative dealer quotes, values of like securities, recent portfolio company financial statements and forecasts, and valuations prepared by independent third-party valuation services.

Accounting Standards Codification Topic 820,Fair Value Measurements and Disclosure, or ASC Topic 820, issued by the Financial Accounting Standards Board, or the FASB, clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities where there is little or no activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

With respect to investments for which market quotations are not readily available, we undertake a multi-step valuation process each quarter, as described below:

•our quarterly fair valuation process begins with FS/EIG Advisor reviewing and documenting preliminary valuations of each portfolio company or investment;

•such preliminary valuations for each portfolio ~~company~~company or investment are compared to a valuation range that is obtained from an independent third-party valuation service;

•FS/EIG Advisor then provides the valuation committee of our board of trustees, or the valuation committee, its valuation recommendation for each portfolio company or investment, along with supporting materials;

•preliminary valuations are then discussed with the valuation committee;

•the valuation committee reviews the preliminary valuations and FS/EIG Advisor, together with our independent third-party valuation services, if applicable, supplements the preliminary valuations to reflect any comments provided by the valuation ~~committee;~~

committee;

•following its review, the valuation committee will recommend that our board of trustees approve our fair valuations; and

•our board of trustees discusses the valuations and determines the fair value of each such investment in our portfolio in good faith based on various statistical and other factors, including the input and recommendation of FS/EIG Advisor, the valuation committee and any independent third-party valuation services, if ~~applicable.~~

applicable.

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations and any change in such valuations on our consolidated financial statements. In making its determination of fair value, our board of trustees may use any approved independent third-party pricing or valuation services. However, our board of trustees is not required to determine fair value in accordance with the valuation provided by any single source, and may use any relevant data, including information obtained from FS/EIG Advisor or any approved independent third-party valuation or pricing service that our board of trustees deems to be reliable in determining fair value under the circumstances. Below is a description of factors that FS/EIG Advisor, any approved independent third-party valuation services and our board of trustees may consider when determining the fair value of our investments.

Valuation of fixed income investments, such as loans and debt securities, depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, call features, put features and other relevant terms of the debt. For investments without readily available market prices, we may incorporate these factors into discounted cash flow models to arrive at fair value. Other factors that may be considered include the borrower’s ability to adequately service its debt, the fair market value of the portfolio company in relation to the face amount of its outstanding debt and the quality of collateral securing our debt investments.

For convertible debt securities, fair value generally approximates the fair value of the debt plus the fair value of an option to purchase the underlying security (i.e., the security into which the debt may convert) at the conversion price. To value such an option, a standard option pricing model may be used.

Our equity interests in portfolio companies for which there is no liquid public market are valued at fair value. Our board of trustees, in its determination of fair value, may consider various factors, such as multiples of EBITDA, cash flows, net income, revenues or, in limited instances, book value, PV-10 multiples or liquidation value. All of these factors may be subject to adjustments

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based upon the particular circumstances of a portfolio company or our actual investment position. For example, adjustments to EBITDA may take into account compensation to previous owners or acquisition, recapitalization, restructuring or other related items.

FS/EIG Advisor, any approved independent third-party valuation services and our board of trustees may also consider private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. FS/EIG Advisor, any approved independent third-party valuation services and our board of trustees may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, and may apply discounts or premiums, where and as appropriate, due to the higher (or lower) financial risk and/or the smaller size of portfolio companies relative to comparable firms, as well as such other factors as our board of trustees, in consultation with FS/EIG Advisor and any approved independent third-party valuation services, if applicable, may consider relevant in assessing fair value. Generally, the value of our equity

interests in public companies for which market quotations are readily available is based upon the most recent closing public market price. Portfolio securities that carry certain restrictions on sale are typically valued at a discount from the public market value of the security.

When we receive warrants or other equity securities at nominal or no additional cost in connection with an investment in a debt security, the cost basis in the investment will be allocated between the debt securities and any such warrants or other equity securities received at the time of origination. Our board of trustees subsequently values these warrants or other equity securities received at their fair value.

Swap contracts typically ~~will be~~are valued at their daily prices obtained from an independent third party. The aggregate settlement values and notional amounts of the swap contracts ~~will~~are not be recorded in the statements of assets and liabilities. Fluctuations in the value of the swap contracts ~~will be~~are recorded in the statements of assets and liabilities as gross assets and gross liabilities and in the statements of operations as unrealized appreciation (depreciation) until closed, when they will be recorded as net realized gain (loss).

The fair values of our investments are determined in good faith by our board of trustees. Our board of trustees is solely responsible for the valuation of our portfolio investments at fair value as determined in good faith pursuant to our valuation policy and consistently applied valuation process. Our board of trustees has delegated day-to-day responsibility for implementing our valuation policy to FS/EIG Advisor, and has authorized FS/EIG Advisor to utilize independent third-party valuation and pricing services that have been approved by our board of trustees. The valuation committee is responsible for overseeing FS/EIG Advisor’s implementation of the valuation process.

See Note 8 to our unaudited consolidated financial statements included herein for additional information regarding the fair value of our financial instruments.

Contractual Obligations

We have entered into an agreement with FS/EIG Advisor to provide us with investment advisory and administrative services. Payments for investment advisory services under the FS/EIG investment advisory agreement are equal to 1.75% of the average weekly value of our gross assets and an incentive fee based on our performance. Base management fees are generally paid on a quarterly basis in arrears. FS/EIG Advisor is reimbursed for administrative services expenses incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein for a discussion of this agreement and for the amount of fees and expenses accrued under ~~these agreements~~this agreement during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021.

Recently Issued Accounting Standards

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), or ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), or ASU 2021-01, which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ~~2020~~ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for ~~FS/EIG Advisor’s previous election to defer payment~~hedging transactions as of ~~a portion~~December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the ~~base management fee to which it was entitled.~~

~~A summary~~hedging relationship. We are currently evaluating the impact of the adoption of ASU 2020-04 and ASU 2021-01 on our ~~significant contractual payment obligations for the repayment of outstanding indebtedness at September 30, 2021 is as follows:~~

      Payments Due By Period
   Maturity Date⁽¹⁾    Total    Less than
1 year    1-3 years    3-5 years    More than
5 years
JPMorgan Facility⁽²⁾
   February 16, 2023    $ 231,667    —      $ 231,667    —      —
Senior Secured Notes⁽³⁾
   August 15, 2023    $ 489,000    —      $ 489,000    —      —

~~(1)~~

~~Amounts outstanding under the financing arrangements will mature, and all accrued and unpaid interest thereunder will be due and payable, on the maturity date.~~

~~(2)~~

~~At September 30, 2021, $140,000 remained unused under the financing arrangements.~~

~~(3)~~

~~At September 30, 2021, no amounts remained unused under the financing arrangements.~~

~~Off-Balance~~consolidated financial statements. ~~Sheet Arrangements~~

~~We currently have no~~ ~~off-balance~~ ~~sheet arrangements, including any risk management of commodity pricing or other hedging practices.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in interest rates. As of ~~September~~June 30, ~~2021, 33.0%~~2022, 34.4% of our portfolio investments (based on fair value) paid variable interest rates, ~~23.6%~~19.5% paid fixed interest rates, ~~17.9%~~14.3% were income producing preferred equity and equity/other investments and the remaining ~~25.5%~~31.8% consisted of non-income producing preferred equity and equity/other investments. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to the variable rate

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investments we hold and to declines in the value of any fixed rate investments we hold. However, many of our variable rate investments provide for an interest rate floor, which may prevent our interest income from increasing until benchmark interest rates increase beyond a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the subordinated incentive fee on income and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to FS/EIG Advisor with respect to our increased pre-incentive fee net investment income. ~~In 2020, the U.S. Federal Reserve and other central banks reduced certain interest rates in response to the~~

~~COVID-19~~P ~~pandemic and market conditions. A prolonged reduction in interest rates may reduce our net investment income.~~

~~Pursuant~~ursuant to the terms of the JPMorgan Facility, we borrow at a floating rate based on a benchmark interest rate. Under the indenture governing the Senior Secured Notes, we pay interest to the holders of such notes at a fixed rate. To the extent that any present or future credit facilities or other financing arrangements that we or any of our subsidiaries enter into are based on a floating interest rate, we will be subject to risks relating to changes in market interest rates. In periods of rising interest rates when we or our subsidiaries have such debt outstanding or financing arrangements in effect, our interest expense would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.

The following table shows the effect over a twelve-month period of changes in interest rates on our interest income, interest expense and net interest income, assuming no changes in the composition of our investment portfolio, including the accrual status of our investments, and our borrowing arrangements in effect as of ~~September~~June 30, ~~2021~~2022 (dollar amounts are presented in thousands):

Basis Point Change in Interest Rates
   Increase
(Decrease)
in Interest
Income    Increase
(Decrease)
in Interest
Expense    Increase
(Decrease) in
Net Interest
Income    Percentage
Change in
Net Interest
Income
Down 13 basis points
   $ (230 )    $ (218 )    $ (12 )    (0.0 )%
No change
   —      —      —      —
Up 100 basis points
   $ 3,011    $ 2,176    $ 835    0.9 %
Up 300 basis points
   $ 15,435    $ 6,528    $ 8,907    9.7 %
Up 500 basis points
   $ 28,461    $ 10,880    $ 17,581    19.1 %

Basis Point Change in Interest Rates
Increase
(Decrease)
in Interest
Income
Increase
(Decrease)
in Interest
Expense Increase
(Decrease) in
Net Interest
Income Percentage
Change in
Net Interest
Income
Down 229 basis points $ (13,211) $ (5,943) $ (7,268) (7.6) %
No change — — — —
Up 100 basis points $ 8,138 $ 2,641 $ 5,497 5.7 %
Up 300 basis points $ 24,415 $ 7,924 $ 16,491 17.2 %
Up 500 basis points $ 30,112 $ 9,773 $ 20,339 21.2 %

We expect that our long-term investments will be financed primarily with equity and debt. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we did not engage in interest rate hedging activities.

In addition, we may have risks regarding portfolio valuation and the potential inability of counterparties to meet the terms of their contracts. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting ~~Policies—~~Policies and Estimates—Valuation of Portfolio Investments.”

Item 4. Controls and Procedures.

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~September~~June 30, ~~2021.~~2022. Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations.

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) that occurred during the three month period ended ~~September~~June 30, ~~2021~~2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently subject to any material legal proceedings and, to our knowledge, no material legal proceedings are threatened against us. From time to time, we may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, we do not expect that any such proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K. There are no material changes from the risk factors included within our most recent Annual Report on Form ~~10-K.~~

10-K, as supplemented by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, other than the risk described below.

If our portfolio is concentrated in a single or limited number of investments at any given time, our performance may be significantly adversely affected by the unfavorable performance of a small number of such investments or a substantial write-down of the value of any one investment.

We may from time to time hold securities of a single portfolio company that comprise more than 5% of our total assets and/or more than 10% of the outstanding voting securities of the portfolio company. For that reason, we are classified as a non-diversified management investment company under the 1940 Act. As of June 30, 2022, we had an investment in a single portfolio company, which represented approximately 16.9% of our total investment portfolio, by fair value. A consequence of the concentration of a small number of investments at any given time is that the aggregate income and returns we realize may be significantly adversely affected by the unfavorable performance of a single or small number of such investments or a substantial write-down of the value of any one investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable. See Note 3 to our unaudited consolidated financial statements contained in this quarterly report on Form 10-Q for a more detailed discussion of the terms of our share repurchase program and de minimis account liquidation.

Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

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Item 6. Exhibits.


~~3.1~~		~~Third Amended and Restated Declaration of Trust of FS Energy and Power Fund. (Incorporated by reference to Exhibit 3.1 to FS Energy and Power Fund’s Quarterly Report on Form~~ ~~10-Q~~ ~~filed on August 10, 2017.)~~

~~3.2~~		~~Amendment No. 1 to the Third Amended and Restated Declaration of Trust of FS Energy and Power Fund. (Incorporated by reference to Exhibit 3.2 to FS Energy and Power Fund’s Quarterly Report on Form~~ ~~10-Q~~ ~~filed on August 10, 2017.)~~

~~3.3~~		~~Second Amended and Restated Bylaws of FS Energy and Power Fund. (Incorporated by reference to Exhibit 3.1 to FS Energy and Power Fund’s Current Report on Form~~ ~~8-K~~ ~~filed on June 1, 2017.)~~

~~4.1~~		~~Second Amended and Restated Distribution Reinvestment Plan of FS Energy and Power Fund. (Incorporated by reference to Exhibit 4.1 to FS Energy and Power Fund’s Current Report on Form~~ ~~8-K~~ ~~filed on October 17, 2016.)~~

~~10.1~~		Investment Advisory and Administrative Services Agreement, dated as of April 9, 2018, by and between FS Energy and Power Fund and FS/EIG Advisor, LLC. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~ ~~filed on April 9, 2018.)~~

~~10.2~~		Custodian Agreement, dated as of November 14, 2011, by and between State Street Bank and Trust Company and FS Energy and Power Fund. (Incorporated by reference to Exhibit 10.6 to FS Energy and Power Fund’s Quarterly Report on Form ~~10-Q~~ ~~filed on November 14, 2011.)~~

~~10.3~~		Escrow Agreement, dated as of March 29, 2011, by and between FS Energy and Power Fund and UMB Bank, N.A. (Incorporated by reference to Exhibit (k) filed with Amendment No. 3 to FS Energy and Power Fund’s registration statement on Form ~~N-2~~ ~~(File~~ ~~No. 333-169679)~~ ~~filed on May 6, 2011.)~~

~~10.4~~		Expense Support and Conditional Reimbursement Agreement, dated as of April 9, 2018, by and between FS Energy and Power Fund and FS/EIG Advisor, LLC. (Incorporated by reference to Exhibit 10.24 to FS Energy and Power Fund’s Form ~~10-Q~~ ~~filed on May 14, 2018.)~~

~~10.5~~		Indenture, dated August 16, 2018, by and between FS Energy and Power Fund, U.S. Bank National Association, as trustee, and the guarantors named therein. (Incorporated by reference to Exhibit 4.1 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~ ~~filed on August 22, 2018.)~~

~~10.6~~		Senior Secured Credit Agreement, dated August 16, 2018, by and among FS Energy and Power Fund, the Lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the other parties signatory thereto. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~ ~~filed on August 22, 2018.)~~

~~10.7~~		Amendment No. 1 and Waiver, dated as of April 9, 2020, among FS Energy and Power Fund, each of the subsidiary guarantors party thereto, each of the lenders and conduit support providers party thereto, and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~ ~~filed on April 9, 2020.)~~

~~10.8~~		Amendment No. 2, dated as of July 6, 2020, among FS Energy and Power Fund, each of the subsidiary guarantors party thereto, each of the lenders and conduit support providers party thereto, and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~ ~~filed on July 21, 2020.)~~

~~10.9~~		Guarantee and Security Agreement, dated August 16, 2018, made by FS Energy and Power Fund and certain of FS Energy and Power Fund’s subsidiaries in favor of JPMorgan Chase Bank, N.A. as collateral agent. (Incorporated by reference to Exhibit 10.2 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~ ~~filed on August 22, 2018.)~~


~~10.10~~		Collateral Agency and Intercreditor Agreement, dated August 16, 2018, by and among FS Energy and Power Fund, FS Energy and Power Fund’s subsidiaries parties thereto, JPMorgan Chase Bank, N.A., as the initial credit facility representative, U.S. Bank National Association as the initial secured notes representative and JPMorgan Chase Bank, N.A., as collateral agent. (Incorporated by reference to Exhibit 10.3 to FS Energy and Power Fund’s Current Report on Form ~~8-K~~3.1 Third Amended and Restated Declaration of Trust of FS Energy and Power Fund. (Incorporated by reference to Exhibit 3.1 to FS Energy and Power Fund’s Quarterly Report on Form 10-Q filed on August 10, 2017.) ~~filed on August 22, 2018.)~~

31.1*		~~Certification of Chief Executive Officer pursuant to Rule~~ ~~13a-14~~ ~~of the Securities Exchange Act of 1934, as amended.~~

31.2*		~~Certification of Chief Financial Officer pursuant to Rule~~ ~~13a-14~~ ~~of the Securities Exchange Act of 1934, as amended.~~

32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	~~Filed herewith.~~

3.2 Amendment No. 1 to the Third Amended and Restated Declaration of Trust of FS Energy and Power Fund. (Incorporated by reference to Exhibit 3.2 to FS Energy and Power Fund’s Quarterly Report on Form 10-Q filed on August 10, 2017.)

3.3 Second Amended and Restated Bylaws of FS Energy and Power Fund. (Incorporated by reference to Exhibit 3.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on June 1, 2017.)

4.1 Second Amended and Restated Distribution Reinvestment Plan of FS Energy and Power Fund. (Incorporated by reference to Exhibit 4.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on October 17, 2016.)

4.2 Indenture, dated August 16, 2018, by and between FS Energy and Power Fund, U.S. Bank National Association, as trustee, and the guarantors named therein. (Incorporated by reference to Exhibit 4.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on August 22, 2018.)

4.3 Form of 7.500% Senior Secured Notes due 2023 (included as Exhibit A to Exhibit 4.1 hereto) (Incorporated by reference to Exhibit 4.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on August 22, 2018.)

10.1 Investment Advisory and Administrative Services Agreement, dated as of April 9, 2018, by and between FS Energy and Power Fund and FS/EIG Advisor, LLC. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on April 9, 2018.)

10.2 Custodian Agreement, dated as of November 14, 2011, by and between State Street Bank and Trust Company and FS Energy and Power Fund. (Incorporated by reference to Exhibit 10.6 to FS Energy and Power Fund’s Quarterly Report on Form 10-Q filed on November 14, 2011.)

10.3 Senior Secured Credit Agreement, dated August 16, 2018, by and among FS Energy and Power Fund, the Lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the other parties signatory thereto. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on August 22, 2018.)

10.4 Amendment No. 1 and Waiver, dated as of April 9, 2020, among FS Energy and Power Fund, each of the subsidiary guarantors party thereto, each of the lenders and conduit support providers party thereto, and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on April 9, 2020.)

10.5 Amendment No. 2, dated as of July 6, 2020, among FS Energy and Power Fund, each of the subsidiary guarantors party thereto, each of the lenders and conduit support providers party thereto, and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to FS Energy and Power Fund’s Current Report on Form 8-K filed on July 21, 2020.)

10.6 Guarantee and Security Agreement, dated August 16, 2018, made by FS Energy and Power Fund and certain of FS Energy and Power Fund’s subsidiaries in favor of JPMorgan Chase Bank, N.A. as collateral agent. (Incorporated by reference to Exhibit 10.2 to FS Energy and Power Fund’s Current Report on Form 8-K filed on August 22, 2018.)

10.7 Collateral Agency and Intercreditor Agreement, dated August 16, 2018, by and among FS Energy and Power Fund, FS Energy and Power Fund’s subsidiaries parties thereto, JPMorgan Chase Bank, N.A., as the initial credit facility representative, U.S. Bank National Association as the initial secured notes representative and JPMorgan Chase Bank, N.A., as collateral agent. (Incorporated by reference to Exhibit 10.3 to FS Energy and Power Fund’s Current Report on Form 8-K filed on August 22, 2018.)

31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as amended.

31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as amended.

32.1* Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

_______________

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on ~~November 15, 2021.~~

August 11, 2022.


		FS Energy and Power Fund

By:			/s/ MICHAEL C. FORMAN
	~~Michael C. Forman~~ ~~Chief Executive Officer~~ ~~(Principal Executive Officer)~~

~~By:~~			~~/s/ EDWARD~~ ~~T. GALLIVAN, J~~R. Michael C. Forman Chief Executive Officer (Principal Executive Officer)

		By:		/s/ EDWARD T. GALLIVAN, JR.
				Edward T. Gallivan, Jr. Chief Financial Officer (Principal Financial and Accounting Officer)


	September 30, 2021 (Unaudited)			December 31, 2020
Assets
Investments, at fair value
Non-controlled/unaffiliated investments (amortized cost—$1,899,827 and $2,053,838, respectively)	$	1,936,736		$	1,825,470
Non-controlled/affiliated investments (amortized cost—$202,741 and $406,430, respectively)		181,013			239,279
Controlled/affiliated investments (amortized cost—$188,094 and $115,137, respectively)		187,957			116,727

Total investments, at fair value (amortized cost—$2,290,662 and $2,575,405, respectively)		2,305,706			2,181,476
Cash		71,573			142,536
Receivable for investments sold and repaid		13,176			7,691
Interest receivable		17,902			26,705
Prepaid expenses and other assets		200			234

Total assets	$	2,408,557		$	2,358,642

Liabilities
Payable for investments purchased	$	80,184		$	—
Credit facilities payable (net of deferred financing costs of $2,602 and $5,816, respectively)⁽¹⁾		229,065			410,851
Secured note payable (net of deferred financing costs of $3,870 and $5,284, respectively)⁽¹⁾		481,417			478,521
Shareholder distributions payable		13,339			13,188
Management fees payable		9,051			10,156
Administrative services expense payable		1,843			949
Interest payable		4,769			14,236
Trustees’ fees payable		189			192
Other accrued expenses and liabilities		1,546			1,972

Total liabilities		821,403			930,065

Commitments and contingencies⁽²⁾
Shareholders’ equity
Preferred shares, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding		—			—
Common shares, $0.001 par value, 700,000,000 shares authorized, 444,629,043 and 440,020,123 shares issued and outstanding, respectively		445			440
Capital in excess of par value		3,168,360			3,152,485
Accumulated earnings (deficit)		(1,581,651	)		(1,724,348	)

Total shareholders’ equity		1,587,154			1,428,577

Total liabilities and shareholders’ equity	$	2,408,557		$	2,358,642

Net asset value per common share at period end	$	3.57		$	3.25


	June 30, 2022 (Unaudited)		December 31, 2021
Assets
Investments, at fair value
Non-controlled/unaffiliated investments (amortized cost—$1,964,688 and $1,961,617, respectively)	$	2,177,314	$	2,037,956
Non-controlled/affiliated investments (amortized cost—$101,032 and $200,189, respectively)	78,880		175,908
Controlled/affiliated investments (amortized cost—$172,248 and $191,251, respectively)	175,142		181,359
Total investments, at fair value (amortized cost—$2,237,968 and $2,353,057, respectively)	2,431,336		2,395,223
Cash	131,334		33,879
Receivable for investments sold and repaid	7,291		4,975
Interest receivable	19,432		26,242
Dividends receivable	3,691		—
Prepaid expenses and other assets	58		156
Total assets	$	2,593,142	$	2,460,475
Liabilities
Payable for investments purchased	$	447	$	49,500
Credit facilities payable (net of deferred financing costs of $671 and $2,036, respectively)(1)	305,005		284,631
Secured note payable (net of deferred financing costs of $2,257 and $3,350, respectively)(1)	452,733		482,437
Unrealized depreciation on swap contracts	3,588		—
Swap income payable	453		—
Shareholder distributions payable	13,465		13,388
Management fees payable	9,576		10,466
Administrative services expense payable	1,677		1,324
Interest payable	13,232		14,170
Trustees' fees payable	190		200
Other accrued expenses and liabilities	1,521		2,036
Total liabilities	801,887		858,152
Commitments and contingencies(2)
Shareholders' equity
Preferred shares, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding	—		—
Common shares, $0.001 par value, 700,000,000 shares authorized, 448,830,667 and 446,089,499 shares issued and outstanding, respectively	449		446
Capital in excess of par value	3,139,709		3,129,252
Accumulated earnings (deficit)	(1,348,903)		(1,527,375)
Total shareholders' equity	1,791,255		1,602,323
Total liabilities and shareholders' equity	$	2,593,142	$	2,460,475
Net asset value per common share at period end	$	3.99	$	3.59


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Investment income
From non-controlled/unaffiliated investments:
Interest income	$	20,066		$	28,644		$	69,393		$	125,230
Paid-in-kind interest income		7,926			4,131			20,163			13,383
Fee income		117			352			1,312			862
Dividend income		—			—			—			66
From non-controlled/affiliated investments:
Interest income		1,961			5,510			5,072			20,670
Paid-in-kind interest income		43			5,921			175			9,153
Dividend income		—			—			1,574			—
From controlled/affiliated investments:
Interest income		2,173			1,561			6,242			1,561
Paid-in-kind interest income		645			—			6,117			—
Dividend income		4,960			—			4,960			—

Total investment income		37,891			46,119			115,008			170,925

Operating expenses
Management fees		10,077			10,626			31,005			38,619
Administrative services expenses		1,457			2,628			4,480			4,937
Share transfer agent fees		736			738			2,182			1,953
Accounting and administrative fees		169			172			516			611
Interest expense⁽¹⁾		12,783			19,834			41,017			60,152
Trustees’ fees		189			190			587			597
Other general and administrative expenses		732			1,236			2,064			4,415

Total operating expenses		26,143			35,424			81,851			111,284
Less: Management fee offset⁽²⁾		(1,026	)		(2	)		(1,349	)		(452	)

Net expenses		25,117			35,422			80,502			110,832

Net investment income		12,774			10,697			34,506			60,093

Realized and unrealized gain/loss
Net realized gain (loss) on investments:
Non-controlled/unaffiliated		1,509			(176,011	)		22,012			(503,067	)
Non-controlled/affiliated		116			(309,777	)		(282,893	)		(427,633	)
Controlled/affiliated		—			—			—			(27,464	)
Net realized gain (loss) on foreign currency		—			—			(6	)		—
Net realized gain (loss) on swap contracts		—			—			—			20,250
Net realized gain (loss) on debt extinguishment		—			—			—			2,591
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/unaffiliated		57,390			145,014			265,277			(203,544	)
Non-controlled/affiliated		(11,500	)		323,167			145,423			183,156
Controlled/affiliated		3,104			447			(1,727	)		27,608
Net change in unrealized appreciation (depreciation) on swap contracts		—			—			—			(6,551	)
Net change in unrealized gain (loss) on foreign currency		(21	)		6			(13	)		(9	)

Total net realized and unrealized gain (loss)		50,598			(17,154	)		148,073			(934,663	)

Net increase (decrease) in net assets resulting from operations	$	63,372		$	(6,457	)	$	182,579		$	(874,570	)

Per share information—basic and diluted
Net increase (decrease) in net assets resulting from operations (Earnings per Share)	$	0.14		$	(0.01	)	$	0.41		$	(2.00	)

Weighted average shares outstanding		444,498,317			438,305,464			443,021,423			436,850,956


	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	182,579		$	(874,570	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments		(668,351	)		(299,218	)
Paid-in-kind interest		(26,455	)		(22,536	)
Proceeds from sales and repayments of investments		725,937			677,114
Net realized (gain) loss on investments		260,881			958,164
Net change in unrealized (appreciation) depreciation on investments		(408,973	)		(7,220	)
Net change in unrealized (appreciation) depreciation on swap contracts		—			6,551
Accretion of discount		(7,269	)		(24,391	)
Amortization of deferred financing costs and discount		6,238			5,793
(Increase) decrease in receivable for investments sold and repaid		(5,485	)		115
(Increase) decrease in interest receivable		8,803			14,443
(Increase) decrease in swap income receivable		—			395
(Increase) decrease in prepaid expenses and other assets		34			79
Increase (decrease) in payable for investments purchased		80,184			(28,518	)
Increase (decrease) in management fees payable		(1,105	)		16,009
Increase (decrease) in administrative services expense payable		894			830
Increase (decrease) in interest payable⁽¹⁾		(9,467	)		(11,522	)
Increase (decrease) in trustees’ fees payable		(3	)		(2	)
Increase (decrease) in other accrued expenses and liabilities		(426	)		(3,356	)

Net cash provided by (used in) operating activities		138,016			408,160

Cash flows from financing activities
Repurchases of common shares		—			(26,823	)
Shareholder distributions paid		(23,851	)		(38,673	)
Borrowings under credit facilities⁽¹⁾		—			160,000
Repayments of credit facilities⁽¹⁾		(185,000	)		(480,000	)
Repayments under senior secured notes⁽¹⁾		—			(11,000	)
Deferred financing costs paid		(128	)		(2,513	)

Net cash provided by (used in) financing activities		(208,979	)		(399,009	)

Total increase (decrease) in cash		(70,963	)		9,151
Cash at beginning of period		142,536			150,419

Cash at end of period	$	71,573		$	159,570

Supplemental disclosure
Reinvestment of shareholder distributions	$	15,880		$	20,871

Non-cash purchases of investments	$	(81,215	)	$	(297,623	)

Non-cash sales of investments	$	81,215		$	297,623


Portfolio Company^(a)	Footnotes	Industry	Rate^(b)	Floor	Maturity	Principal Amount^(c)		Amortized Cost		Fair Value^(d)
Senior Secured Loans—First Lien—45.6%
AIRRO (Mauritius) Holdings II	(k)(p)(s)	Power	L+350, 3.5% PIK (3.5% Max PIK)	1.5%	7/24/25	$	21,876	$	19,224	$	18,542
AIRRO (Mauritius) Holdings II	(e)(k)(p)(s)	Power	L+350, 3.5% PIK (3.5% Max PIK)	1.5%	7/24/25		14,601		14,601		12,375
Allied Downhole Technologies, LLC	(f)(s)(x)	Service & Equipment	8.0% PIK (8.0% Max PIK)		3/31/22		5,137		5,137		5,138
Allied Wireline Services, LLC	(f)(s)(x)	Service & Equipment	10.0% PIK (10.0% Max PIK)		6/15/25		58,080		58,080		51,293
ARB Midstream Operating Company, LLC	(s)	Midstream	L+825	1.0%	5/6/22		898		897		897
Bioenergy Infrastructure Holdings Limited	(k)(s)	Power	L+725	1.0%	12/22/22		413		413		403
Birch Permian LLC	(s)	Upstream	L+800	1.5%	4/12/23		49,865		49,671		50,208
Brazos Delaware II LLC		Midstream	L+400		5/21/25		39,791		38,120		39,269
Cimarron Energy Inc.	(s)	Service & Equipment	L+900	1.0%	12/31/22		7,500		7,500		3,713
Cox Oil Offshore, LLC, Volumetric Production Payments	(i)(o)(s)(v)	Upstream	0.0%		12/31/23		100,000		26,702		31,325
CPV Maryland, LLC		Power	L+400	1.0%	5/10/28		15,820		15,640		15,425
CPV Shore Holdings LLC	(h)	Power	L+375		12/29/25		6,274		5,964		6,081
EIF Van Hook Holdings, LLC		Midstream	L+525		9/5/24		31,234		30,745		29,087
FR BR Holdings LLC	(f)(s)	Midstream	L+650		12/14/23		82,873		80,287		83,701
FR XIII PAA Holdings HoldCo, LLC	(s)	Midstream	L+725	0.5%	10/15/26		29,326		28,812		29,912
GasLog Ltd.	(e)(k)(o)(s)	Midstream	L+775		3/21/29		15,113		15,113		15,000
Generation Bridge LLC	(h)	Power	L+500	0.8%	8/6/28		7,837		7,680		7,876
Generation Bridge LLC	(h)	Power	L+500	0.8%	8/6/28		163		160		164
GIP II Blue Holding LP		Midstream	L+450	1.0%	9/29/28		7,500		7,387		7,509
Limetree Bay Energy, LLC	(f)(o)(s)(w)	Midstream	0.0%		10/31/21		26,444		13,910		3,167
Lower Cadence Holdings LLC		Midstream	L+400		5/22/26		50,803		50,746		50,831
MECO IV Holdco, LLC	(s)(x)	Upstream	8.0%		9/14/25		22,294		22,294		22,294
MRP CalPeak Holdings, LLC	(s)	Power	L+500	1.5%	1/27/25		14,085		14,085		14,237
MRP West Power Holdings II, LLC	(s)	Power	L+500	1.5%	1/27/25		13,924		13,924		14,044
Navitas Midstream Midland Basin LLC	(f)	Midstream	L+400	1.0%	12/13/24		68,519		66,741		68,562
NNE Holding LLC	(s)	Upstream	L+475, 4.5% PIK (4.5% Max PIK)		12/31/23		41,856		41,823		40,820
OE2 North, LLC	(s)	Midstream	L+525	1.0%	5/21/26		11,333		11,228		11,404
OE2 North, LLC	(e)(s)	Midstream	L+525	1.0%	5/21/26		18,667		18,667		18,495
Oryx Midstream Services Permian Basin LLC	(f)(h)	Midstream	L+325	0.5%	10/5/28		50,000		49,750		50,039
Permian Production Holdings, LLC	(f)(s)(w)	Upstream	7.0%, 2.0% PIK (2.0% Max PIK)		11/23/25		7,849		6,598		7,849
Plainfield Renewable Energy Holdings LLC	(f)(s)	Power	6.7%, 8.8% PIK (9.5% Max PIK)		8/22/25		12,182		12,182		12,328
Plainfield Renewable Energy Holdings LLC	(f)(s)	Power	10.0% PIK (10.0% Max PIK)		8/22/25		3,304		3,304		—
Plainfield Renewable Energy Holdings LLC, Letter of Credit	(e)(o)(s)	Power	10.0%		8/22/25		2,709		2,709		54


Portfolio Company(a)	Footnotes	Industry	Rate(b)	Floor(b)	Maturity	Principal Amount(c)		Amortized Cost		Fair Value(d)
Senior Secured Loans—First Lien—42.6%
AIRRO (Mauritius) Holdings II	(k)(p)(s)	Power	L+350, 3.5% PIK (3.5% Max PIK)	1.5%	7/24/25	$	22,390	$	19,799	$	19,627
AIRRO (Mauritius) Holdings II	(e)(k)(p)(s)	Power	L+350, 3.5% PIK (3.5% Max PIK)	1.5%	7/24/25	14,602		14,602		12,800
Allied Downhole Technologies, LLC	(f)(s)(z)	Service & Equipment	8.0% PIK (8.0% Max PIK)		9/30/23	8,101		8,101		8,101
Allied Downhole Technologies, LLC	(e)(s)(z)	Service & Equipment	8.0% PIK (8.0% Max PIK)		9/30/23	2,500		2,500		2,500
Allied Wireline Services, LLC	(f)(s)(z)	Service & Equipment	10.0% PIK (10.0% Max PIK)		6/15/25	63,888		63,888		53,669
Brazos Delaware II LLC		Midstream	L+400		5/21/25	39,472		38,098		38,120
Cimarron Energy Inc.	(f)(m)(o)(s)	Service & Equipment	L+900	1.0%	12/31/24	7,500		6,939		5,522
Compass Power Generation LLC		Power	L+425	1.0%	4/7/29	34,175		33,168		32,808
Cox Oil Offshore, LLC, Volumetric Production Payments	(i)(s)(v)	Upstream	10.5%		12/31/23	100,000		17,847		33,459
CPV Maryland, LLC		Power	L+400	1.0%	5/11/28	15,215		15,057		14,727
CPV Shore Holdings LLC		Power	L+375		12/29/25	23,601		22,642		21,837
EIF Van Hook Holdings, LLC		Midstream	L+525		9/5/24	29,249		28,888		28,176
FR BR Holdings LLC	(f)(s)	Midstream	L+650		12/14/23	82,126		80,355		82,061
FR XIII PAA Holdings HoldCo, LLC	(s)	Midstream	L+725	0.5%	10/15/26	17,497		17,226		17,442
GasLog Ltd.	(k)(s)	Midstream	L+775		3/31/29	14,648		14,550		14,371
Generation Bridge LLC		Power	L+500	0.8%	12/1/28	7,817		7,652		7,642
Generation Bridge LLC		Power	L+500	0.8%	12/1/28	144		160		160
GIP II Blue Holding LP		Midstream	L+450	1.0%	9/29/28	6,033		5,951		5,870
Goodnight Water Solutions, LLC	(s)	Midstream	L+775	0.5%	6/3/27	15,000		14,777		14,775
Hamilton Intermediate Holdings, LLC	(s)	Power	16.5% (16.5% Max PIK)		6/17/25	28,000		28,791		28,800
Lucid Energy Group II Borrower LLC		Midstream	L+425	0.8%	11/22/28	24,875		24,643		24,622
Medallion Midland Acquisition LP		Midstream	L+375	0.8%	10/18/28	7,960		7,924		7,657
NNE Holding LLC	(s)	Upstream	L+475, 4.5% PIK (4.5% Max PIK)		12/31/23	42,333		42,309		42,098
OE2 North, LLC	(s)	Midstream	L+525	1.0%	5/21/26	18,025		17,731		18,148
OE2 North, LLC	(e)(s)	Midstream	L+525	1.0%	5/21/26	12,179		12,179		12,262
Oryx Midstream Services Permian Basin LLC	(f)	Midstream	L+325	0.5%	10/5/28	32,835		32,686		31,330
Parkway Generation LLC		Power	L+475	0.8%	2/18/29	6,140		6,081		5,915
Parkway Generation LLC		Power	L+475	0.8%	2/18/29	43,750		43,330		42,274
Permian Production Holdings, LLC	(f)(h)(s)(y)	Upstream	7.0%, 2.0% PIK (2.0% Max PIK)		11/23/25	4,718		4,156		4,719
Pinnacle Midland Gas Holdco LLC	(s)	Midstream	L+675	1.0%	12/9/26	7,001		6,928		6,971
Pinnacle Midland Gas Holdco LLC	(e)(s)	Midstream	L+675	1.0%	12/9/26	4,847		4,847		4,826
Plainfield Renewable Energy Holdings LLC	(f)(s)	Power	6.4%, 9.1% PIK (9.5% Max PIK)		8/22/25	12,400		12,400		11,853


Counterparty	Type	Location	Period	Bbls	Weighted Average Price ($/Bbls)	Unrealized Appreciation(w)		Unrealized Depreciation(w)
BP Energy Co.	Fixed	ICE Brent	July 1, 2022 – December 31, 2023	255,958	$82.47	$	—	$	3,156
Total Swap Contracts—Crude Oil						$	—	$	3,156


Portfolio Company	Fair Value at December 31, 2020		Purchases, Paid- in-Kind Interest and Transfers In		Sales, Repayments and Transfers Out			Accretion of Discount		Net Realized Gain (Loss)			Net Change in Unrealized Appreciation (Depreciation)			Fair Value at September 30, 2021		Interest Income⁽¹⁾		PIK Income⁽¹⁾		Dividend Income⁽¹⁾
Senior Secured Loans—First Lien
Limetree Bay Energy, LLC	$	—	$	13,910	$	—		$	—	$	—		$	(10,743	)	$	3,167	$	—	$	—	$	—
Permian Production Holdings, LLC		11,446		175		(6,401	)		220		1,106			1,303			7,849		898		175		—
Warren Resources, Inc.⁽²⁾		27,788		69		(27,857	)		—		—			—			—		—		—		—
Senior Secured Bonds
Great Western Petroleum, LLC		—		53,727		—			133		—			2,202			56,062		4,155		—		—
Limetree Bay Ventures, LLC		25,538		—		(3,810	)		—		(21,752	)		24			—		—		—		—
Limetree Bay Ventures, LLC		36,308		—		(5,137	)		19		(29,021	)		(2,169	)		—		19		—		—
Limetree Bay Ventures, LLC		89,968		43,291		(9,889	)		—		(49,783	)		(73,587	)		—		—		—		—
Unsecured Debt
Limetree Bay Ventures, LLC		—		—		(6,298	)		—		(31,516	)		37,814			—		—		—		—
Limetree Bay Ventures, LLC		—		—		(1,648	)		—		(8,244	)		9,892			—		—		—		—
Preferred Equity
Limetree Bay Ventures, LLC, Preferred Equity		—		—		—			—		(53,548	)		53,548			—		—		—		—
Limetree Bay Ventures, LLC, Preferred Equity		—		—		—			—		(86,729	)		86,729			—		—		—		—
Equity/Other
Great Western Petroleum, LLC, Common Equity		—		30,790		—			—		—			5,446			36,236		—		—		—
Harvest Oil & Gas Corp., Common Equity		2,794		—		(405	)		—		—			449			2,838		—		—		—
Limetree Bay Energy, LLC, Class A Units		—		19,069		—			—		—			(13,023	)		6,046		—		—		—
Limetree Bay Ventures, LLC, Common Equity		—		—		—			—		(3,406	)		3,406			—		—		—		—
Lonestar Resources US Inc., Common Equity		2,592		—		—			—		—			8,960			11,552		—		—		—
Permian Production Holdings, LLC, Common Equity		—		—		—			—		—			8,392			8,392		—		—		1,574
Ridgeback Resources Inc., Common Equity		38,385		—		—			—		—			10,486			48,871		—		—		—
Warren Resources, Inc., Common Equity⁽²⁾		4,460		—		(20,754	)		—		—			16,294			—		—		—		—

	$	239,279	$	161,031	$	(82,199	)	$	372	$	(282,893	)	$	145,423		$	181,013	$	5,072	$	175	$	1,574


Portfolio Company	Fair Value at December 31, 2021		Gross Additions(1)		Gross Reductions(2)		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value at June 30, 2022		Interest Income(3)		PIK Income(3)		Dividend Income(3)
Senior Secured Loans—First Lien
Limetree Bay Energy, LLC	$	3,166	$	—	$	(1,587)	$	(12,756)	$	11,177	$	—	$	—	$	—	$	—
Permian Production Holdings, LLC	7,889		587		(3,674)		551		(634)		4,719		291		57		—
Senior Secured Bonds
Great Western Petroleum, LLC	58,055		96		(55,096)		1,087		(4,142)		—		2,649		—		—
Equity/Other
Great Western Petroleum, LLC, Common Equity	40,731		—		(82,883)		52,093		(9,941)		—		—		—		—
GWP Midstream Holdco, LLC, Common Equity	—		6,681		—		—		—		6,681		—		—		—
Harvest Oil & Gas Corp., Common Equity	2,836		—		(743)		—		(1,283)		810		—		—		—
Limetree Bay Energy, LLC, Class A Units	6,046		1,795		—		—		(3,225)		4,616		—		—		—
Permian Production Holdings, LLC, Common Equity	8,829		—		—		—		1,765		10,594		—		—		1,726
Ridgeback Resources Inc., Common Equity	48,356		—		(5,537)		229		8,412		51,460		—		—		3,691
Telpico, LLC, Common Equity	—		—		—		—		—		—		—		—		—
	$	175,908	$	9,159	$	(149,520)	$	41,204	$	2,129	$	78,880	$	2,940	$	57	$	5,417


Portfolio Company	Fair Value at December 31, 2020		Purchases, Paid- in-Kind Interest and Transfers In		Sales, Repayments and Transfers Out			Accretion of Discount		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)			Fair Value at September 30, 2021		Interest Income(1)		PIK Income(1)		Dividend Income(1)
Senior Secured Loans—First Lien
Allied Wireline Services, LLC	$	53,007	$	5,280	$	(207	)	$	—	$	—	$	(6,787	)	$	51,293	$	4,104	$	5,280	$	—
Allied Downhole Technologies, LLC		—		7,637		(2,500	)		—		—		1			5,138		139		137		—
MECO IV Holdco, LLC		—		22,294		—			—		—		—			22,294		2		500		—
Warren Resources, Inc.⁽²⁾		—		27,073		(3,446	)		—		—		—			23,627		1,997		200		—
Sustainable Infrastructure Investments, LLC
Sustainable Infrastructure Investments, LLC		61,816		—		(6,089	)		—		—		(1,297	)		54,430		—		—		4,960
Equity/Other
Allied Wireline Services, LLC, Common Equity		1,904		—		—			—		—		(1,904	)		—		—		—		—
Allied Wireline Services, LLC, Warrants		—		—		—			—		—		—			—		—		—		—
MECO IV Holdco, LLC, Class A-1 Units		—		2,161		—			—		—		2,299			4,460		—		—		—
Warren Resources, Inc., Common Equity⁽²⁾		—		20,754		—			—		—		5,961			26,715		—		—		—

	$	116,727	$	85,199	$	(12,242	)	$	—	$	—	$	(1,727	)	$	187,957	$	6,242	$	6,117	$	4,960


Portfolio Company	Fair Value at December 31, 2019		Purchases, Paid -in-Kind Interest and Transfers In		Sales, Repayments and Transfers Out			Accretion of Discount		Net Realized Gain (Loss)			Net Change in Unrealized Appreciation (Depreciation)			Fair Value at December 31, 2020		Interest Income⁽¹⁾		PIK Income⁽¹⁾
Senior Secured Loans—First Lien
BL Sand Hills Unit, L.P.	$	288	$	—	$	(223	)	$	—	$	(16,451	)	$	16,386		$	—	$	—	$	—
MB Precision Holdings LLC		4,585		157		(3,949	)		48		(748	)		(93	)		—		305		157
Permian Production Holdings, LLC		—		11,450		—			48		—			(52	)		11,446		262		23
Warren Resources, Inc.		27,507		281		—			—		—			—			27,788		2,915		280
Senior Secured Loans—Second Lien
Titan Energy Operating, LLC		—		—		(600	)		—		(100,302	)		100,902			—		—		—
Senior Secured Bonds
FourPoint Energy, LLC		223,369		—		(135,635	)		636		(96,598	)		8,228			—		5,647		—
Limetree Bay Ventures, LLC		—		25,562		—			—		—			(24	)		25,538		—		2,700
Limetree Bay Ventures, LLC		—		33,813		—			326		—			2,169			36,308		326		1,790
Limetree Bay Ventures, LLC		—		16,381		—			—		—			73,587			89,968		—		—
Unsecured Debt
Limetree Bay Ventures, LLC		—		37,814		—			—		—			(37,814	)		—		—		3,068
Limetree Bay Ventures, LLC		—		9,892		—			—		—			(9,892	)		—		—		1,045
Preferred Equity
Limetree Bay Ventures, LLC, Preferred Equity		—		86,105		—			624		—			(86,729	)		—		689		1,950
Limetree Bay Ventures, LLC, Preferred Equity		—		53,548		—			—		—			(53,548	)		—		—		986
MB Precision Investment Holdings LLC, Class A Preferred Units		1,205		—		—			—		(1,880	)		675			—		—		—
Equity/Other
BL Sand Hills Unit, L.P., Net Profits Interest		—		—		(60	)		—		(5,120	)		5,180			—		—		—
BL Sand Hills Unit, L.P., Overriding Royalty Interest		—		—		(8	)		—		(732	)		740			—		—		—
BL Sand Hills Unit, L.P., Series A Units		—		—		—			—		(24,019	)		24,019			—		—		—
FourPoint Energy, LLC, Common Equity, Class C-II-A Units		6,906		—		(376	)		—		(65,624	)		59,094			—		—		—
FourPoint Energy, LLC, Common Equity, Class D Units		1,307		—		(70	)		—		(8,106	)		6,869			—		—		—
FourPoint Energy, LLC, Common Equity, Class E-II Units		15,793		—		(859	)		—		(36,875	)		21,941			—		—		—
FourPoint Energy, LLC, Common Equity, Class E-III Units		23,306		—		(1,268	)		—		(54,420	)		32,382			—		—		—
Harvest Oil & Gas Corp., Common Equity		8,644		—		(2,701	)		—		—			(3,149	)		2,794		—		—
Limetree Bay Ventures, LLC, Common Equity		—		3,406		—			—		—			(3,406	)		—		—		—
Lonestar Resources US Inc., Common Equity		—		2,376		—			—		—			216			2,592		—		—
MB Precision Investment Holdings LLC, Class A-2 Units		—		—		(490	)		—		—			490			—		—		—
Permian Production Holdings, LLC, Common Equity		—		—		—			—		—			—			—		—		—
Ridgeback Resources Inc., Common Equity	$	50,721	$	—	$	—		$	—	$	—		$	(12,336	)	$	38,385	$	—	$	—
Titan Energy, LLC, Common Equity		16		—		—			—		(17,554	)		17,538			—		—		—
Warren Resources, Inc., Common Equity		10,951		—		—			—		—			(6,491	)		4,460		—		—

	$	374,598	$	280,785	$	(146,239	)	$	1,682	$	(428,429	)	$	156,882		$	239,279	$	10,144	$	11,999


Portfolio Company	Fair Value at December 31, 2020		Gross Additions(1)		Gross Reductions(2)		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value at December 31, 2021		Interest Income(3)		PIK Income(3)		Dividend Income(3)
Senior Secured Loans—First Lien
Limetree Bay Energy, LLC	$	—	$	14,343	$	—	$	—	$	(11,177)	$	3,166	$	—	$	—	$	—
Permian Production Holdings, LLC	11,446		489		(6,401)		1,106		1,249		7,889		1,009		215		—
Warren Resources, Inc.(4)	27,788		69		(27,857)		—		—		—		—		—		—
Senior Secured Bonds
Great Western Petroleum, LLC	—		53,913		—		—		4,142		58,055		5,861		—
Limetree Bay Ventures, LLC	25,538		—		(3,810)		(21,752)		24		—		—		—		—
Limetree Bay Ventures, LLC	36,308		19		(5,137)		(29,021)		(2,169)		—		19		—		—
Limetree Bay Ventures, LLC	89,968		43,291		(9,889)		(49,783)		(73,587)		—		—		—		—
Unsecured Debt
Limetree Bay Ventures, LLC	—		—		(6,298)		(31,516)		37,814		—		—		—		—
Limetree Bay Ventures, LLC	—		—		(1,648)		(8,244)		9,892		—		—		—		—
Preferred Equity
Limetree Bay Ventures, LLC, Preferred Equity	—		—		—		(53,548)		53,548		—		—		—		—
Limetree Bay Ventures, LLC, Preferred Equity	—		—		—		(86,729)		86,729		—		—		—		—
Equity/Other
Great Western Petroleum, LLC, Common Equity	—		30,790		—		—		9,941		40,731		—		—		—
Harvest Oil & Gas Corp., Common Equity	2,794		—		(1,756)		—		1,798		2,836		—		—		—
Limetree Bay Energy, LLC, Class A Units	—		19,663		—		—		(13,617)		6,046		—		—		—
Limetree Bay Ventures, LLC, Common Equity	—		—		—		(3,406)		3,406		—		—		—		—
Lonestar Resources US Inc., Common Equity	2,592		—		(2,376)		—		(216)		—		—		—		—
Permian Production Holdings, LLC, Common Equity	—		1		—		—		8,828		8,829		—		—		1,574
Ridgeback Resources Inc., Common Equity	38,385		—		—		—		9,971		48,356		—		—		—
Warren Resources, Inc., Common Equity(4)	4,460		—		(20,754)		—		16,294		—		—		—		—
	$	239,279	$	162,578	$	(85,926)	$	(282,893)	$	142,870	$	175,908	$	6,889	$	215	$	1,574


Portfolio Company	Fair Value at December 31, 2019		Purchases, Paid-in-Kind Interest and Transfers In		Sales, Repayments and Transfers Out		Accretion of Discount		Net Realized Gain (Loss)			Net Change in Unrealized Appreciation (Depreciation)		Fair Value at December 31, 2020		Interest Income⁽¹⁾
Senior Secured Loans—First Lien
Allied Wireline Services, LLC	$	—	$	53,007	$	—	$	—	$	—		$	—	$	53,007	$	2,886
Lusk Operating LLC		—		—		—		—		(27,464	)		27,464		—		—
Sustainable Infrastructure Investments, LLC
Sustainable Infrastructure Investments, LLC		—		60,603		—		—		—			1,213		61,816		—
Equity/Other
Allied Wireline Services, LLC, Common Equity		—		1,527		—		—		—			377		1,904		—
Allied Wireline Services, LLC, Warrants		—		—		—		—		—			—		—		—
Lusk Operating LLC, Common Equity		—		—		—		—		—			—		—		—

	$	—	$	115,137	$	—	$	—	$	(27,464	)	$	29,054	$	116,727	$	2,886


	Nine Months Ended September 30,
	2021				2020
	Shares		Amount		Shares			Amount
Reinvestment of Distributions		4,608,920	$	15,880		4,793,767		$	20,871
Share Repurchase Program		—		—		(4,877,069	)		(26,823	)

Net Proceeds from Share Transactions		4,608,920	$	15,880		(83,302	)	$	(5,952	)


For the Three Months Ended	Repurchase Date		Shares Repurchased		Percentage of Shares Tendered That Were Repurchased			Percentage of Outstanding Shares Repurchased as of the Repurchase Date			Repurchase Price Per Share		Aggregate Consideration for Repurchased Shares
Fiscal 2020
December 31, 2019		January 8, 2020		4,354,073		9	%		0.99	%	$	5.50	$	23,947


For the Three Months Ended	Repurchase Date		Shares Repurchased		Percentage of Outstanding Shares Repurchased as of the Repurchase Date			Repurchase Price Per Share		Aggregate Consideration for Repurchased Shares
Fiscal 2020
December 31, 2019		January 17, 2020		522,996		0.12	%	$	5.50	$	2,876


	Distribution
For the Three Months Ended	Per Share		Amount
Fiscal 2020
March 31, 2020	$	0.0833	$	36,207
June 30, 2020		0.0300		13,098
September 30, 2020		0.0300		13,163

Total	$	0.1433	$	62,468

Fiscal 2021
March 31, 2021	$	0.0300	$	13,249
June 30, 2021		0.0300		13,294
September 30, 2021		0.0300		13,339

Total	$	0.0900	$	39,882


Instrument	Realized Gain (Loss) on Derivatives Recognized in Income⁽¹⁾		Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income⁽²⁾
Swap Contracts—Crude Oil	$	19,313	$	(5,982	)
Swap Contracts—Natural Gas		937		(569	)

Total	$	20,250	$	(6,551	)


	September 30, 2021 (Unaudited)							December 31, 2020
	Amortized Cost⁽¹⁾		Fair Value		Percentage of Portfolio			Amortized Cost⁽¹⁾		Fair Value		Percentage of Portfolio
Senior Secured Loans—First Lien	$	741,484	$	723,390		32	%	$	649,708	$	607,338		28	%
Senior Secured Loans—Second Lien		99,056		100,085		4	%		277,018		276,312		13	%
Senior Secured Bonds		75,059		77,232		3	%		286,082		340,042		16	%
Unsecured Debt		438,003		404,315		18	%		245,180		134,560		6	%
Preferred Equity		500,056		486,138		21	%		689,253		471,077		22	%
Sustainable Infrastructure Investments, LLC		54,514		54,430		2	%		60,603		61,816		3	%
Equity/Other		382,490		460,116		20	%		367,561		290,331		12	%

Total	$	2,290,662	$	2,305,706		100	%	$	2,575,405	$	2,181,476		100	%


	September 30, 2021 (Unaudited)			December 31, 2020
Total investments⁽¹⁾	$	380,089		$	442,916
Weighted average current interest rate on debt investments⁽²⁾		2.12	%		2.24	%
Number of portfolio assets in SIIJV		12			14
Largest investment in a single portfolio company⁽¹⁾	$	82,228		$	84,914


	June 30, 2022 (Unaudited)			December 31, 2021
Total investments(1)	$	293,718		$	316,422
Weighted average current interest rate on debt investments(2)	4.57		%	3.34		%
Number of portfolio assets in SIIJV	10			11
Largest investment in a single portfolio company(1)	$	76,689		$	79,521


Portfolio Company^(a)(f)	Footnotes		Industry		Rate^(b)		Maturity		Principal Amount^(c)		Amortized Cost		Fair Value^(d)
Senior Secured Loans—First Lien—96.4%
AES DE Holdings V, LLC				Renewables		L+175		6/13/26	$	14,945	$	14,945	$	14,242
Alianca Transportadora de Gas Participacoes S.A.				Midstream		L+260		5/23/27		82,228		82,228		82,797
Astoria Energy II LLC				Power		L+150		8/31/24		56,426		56,426		57,079
Blue Heron Intermediate Holdco I, LLC				Midstream		L+175		4/22/24		33,136		33,136		33,362
Cedar Creek II LLC				Renewables		L+188		11/18/23		9,894		9,894		10,016
Copper Mountain Solar 3, LLC				Renewables		L+175		5/29/25		19,868		19,868		20,107
FLNG Liquefaction 2, LLC				Midstream		L+150		12/31/26		30,175		30,175		30,386
Meikle Wind Energy, LP		(e)		Renewables		C+150		5/29/24	C$	16,945		13,036		13,751
NES Hercules Class B Member, LLC				Renewables		L+150		12/15/27	$	24,777		24,777		25,490
ST EIP Holdco LLC				Midstream		L+250		11/5/24		60,000		60,000		60,144
Top of the World Wind Energy LLC				Renewables		L+188		12/2/28		21,987		21,987		22,165

Total Senior Secured Loans—First Lien												366,472		369,539

Unsecured Debt—3.6%
Sociedad Minera Cerro Verde S.A.A.				Power		L+190		6/19/22		13,617		13,617		13,637

Total Unsecured Debt												13,617		13,637

TOTAL INVESTMENTS—100.0%											$	380,089	$	383,176


Portfolio Company^(a)(g)	Footnotes		Industry		Rate^(b)		Maturity		Principal Amount^(c)		Amortized Cost		Fair Value^(d)
Senior Secured Loans—First Lien—95.0%
AES DE Holdings V, LLC				Renewables		L+175		6/13/26	$	15,442	$	15,442	$	14,971
Alianca Transportadora de Gas Participacoes S.A.				Midstream		L+230		5/23/27		84,914		84,914		83,790
Astoria Energy II LLC				Power		L+150		8/31/24		58,789		58,789		59,178
Blue Heron Intermediate Holdco I, LLC				Midstream		L+175		4/22/24		33,884		33,884		33,872
Cedar Creek II LLC				Renewables		L+188		11/18/23		10,580		10,580		10,633
Copper Mountain Solar 3, LLC		(f)		Renewables		L+175		5/29/25		20,539		20,539		20,698
CPV Maryland, LLC		(f)		Power		L+425		3/31/22		12,386		12,386		12,353
Flex Intermediate Holdco, LLC		(f)		Midstream		L+250		5/15/23		30,151		30,151		29,921
FLNG Liquefaction 2, LLC				Midstream		L+150		12/31/26		31,330		31,330		31,165
Meikle Wind Energy, LP		(e)(f)		Renewables		C+150		5/29/24	C$	17,397		13,382		13,870
NES Hercules Class B Member, LLC		(f)		Renewables		L+125		12/15/27	$	24,906		24,906		24,412
ST EIP Holdco LLC				Midstream		L+250		11/5/24		60,000		60,000		59,779
Top of the World Wind Energy LLC				Renewables		L+188		12/2/28		24,617		24,617		24,556

Total Senior Secured Loans—First Lien												420,920		419,198

Unsecured Debt—5.0%
Sociedad Minera Cerro Verde S.A.A.				Power		L+190		6/19/22		21,996		21,996		21,934

Total Unsecured Debt												21,996		21,934

TOTAL INVESTMENTS—100.0%											$	442,916	$	441,132


	For the Nine Months Ended September 30, 2021
	Senior Secured Loans— First Lien			Senior Secured Loans— Second Lien			Senior Secured Bonds			Unsecured Debt			Preferred Equity			Sustainable Infrastructure Investments, LLC			Equity/ Other			Total
Fair value at beginning of period	$	482,368		$	237,751		$	340,042		$	108,317		$	471,077		$	61,816		$	252,434		$	1,953,805
Accretion of discount (amortization of premium)		2,219			1,338			23			76			1,962			—			455			6,073
Net realized gain (loss)		(8,197	)		448			(100,555	)		(39,319	)		(156,872	)		—			162			(304,333	)
Net change in unrealized appreciation (depreciation)		9,552			4,282			(53,965	)		57,706			204,258			(1,297	)		155,052			375,588
Purchases		54,953			15,000			53,291			832			13			—			52,021			176,110
Paid-in-kind interest		11,174			—			—			8,373			6,907			—			—			26,454
Sales and repayments		(132,333	)		(158,734	)		(228,836	)		(21,582	)		(41,207	)		(6,089	)		(14,398	)		(603,179	)
Net transfers in or out of Level 3		—			—			—			—			—			—			—			—

Fair value at end of period	$	419,736		$	100,085		$	10,000		$	114,403		$	486,138		$	54,430		$	445,726		$	1,630,518

The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date	$	(433	)	$	4,697		$	(5	)	$	9,771		$	34,791		$	(1,297	)	$	150,206		$	197,730


Type of Investment	Fair Value at September 30, 2021 (Unaudited)		Valuation Technique⁽¹⁾	Unobservable Input	Range		Weighted Average
Senior Secured Loans—First Lien	$	385,357	Market Comparables	Market Yield (%)		6.3%-16.5%		9.0	%
				EBITDA Multiples (x)		3.5x-6.2x		4.4x
		31,325	Discounted Cash Flow	Discount Rate (%)		10.5%-15.5%		13.0	%
		3,054	Other⁽²⁾	Other⁽²⁾		N/A		N/A
Senior Secured Loans—Second Lien		100,085	Market Comparables	Market Yield (%)		7.0%-10.5%		8.8	%
Senior Secured Bonds		10,000	Market Comparables	Market Yield (%)		7.0%-7.5%		7.3	%
Unsecured Debt		77,003	Market Comparables	Market Yield (%)		9.1%-10.1%		9.6	%
				Net Aircraft Book Value Multiple (x)		1.0x-1.0x		1.0x
		37,400	Other⁽²⁾	Other⁽²⁾		N/A		N/A
Preferred Equity		403,235	Market Comparables	Market Yield (%)		7.3%-24.0%		14.9	%
				EBITDA Multiples (x)		9.0x-10.0x		9.5x
		82,903	Discounted Cash Flow	Discount Rate (%)		10.0%-11.0%		10.5	%
Sustainable Infrastructure Investments, LLC		54,430	Discounted Cash Flow	Discount Rate (%)		11.5%-12.5%		12.0	%
Equity/Other		428,996	Market Comparables	EBITDA Multiples (x)		2.4x-10.5x		5.1x
				Production Multiples (Mboe/d)		$32,500.0-$37,500.0	$	35,000.0
				Proved Reserves Multiples (Mmboe)		10.8x-12.3x		11.5x
				Production Multiples (MMcfe/d)		$3,050.0-$3,550.0	$	3,300.0
				Proved Reserves Multiples (Bcfe)		0.7x-0.8x		0.7x
				PV-10 Multiples (x)		1.2x-4.9x		3.0x
		3,013	Discounted Cash Flow	Discount Rate (%)		7.1%-31.0%		22.4	%
		7,671	Option Valuation Model	Volatility (%)		52.5%-65.0%		58.0	%
		6,046	Other⁽²⁾	Other⁽²⁾		N/A		N/A

Total	$	1,630,518


Type of Investment	Fair Value at December 31, 2020		Valuation Technique⁽¹⁾	Unobservable Input	Range		Weighted Average
Senior Secured Loans—First Lien	$	450,698	Market Comparables	Market Yield (%)		6.8%-26.3%		10.4	%
				EBITDA Multiples (x)		2.3x-6.7x		4.1x
		31,670	Discounted Cash Flow	Discount Rate (%)		10.0%-12.5%		11.3	%
Senior Secured Loans—Second Lien		237,751	Market Comparables	Market Yield (%)		8.0%-15.3%		9.7	%
Senior Secured Bonds		340,042	Market Comparables	Market Yield (%)		8.7%-15.8%		12.6	%
				EBITDA Multiples (x)		6.0x-8.0x		7.0x
Unsecured Debt		81,442	Market Comparables	Market Yield (%)		9.8%-11.5%		10.8	%
				Net Aircraft Book Value Multiple (x)		1.0x-1.0x		1.0x
		26,875	Other⁽²⁾	Other⁽²⁾		N/A		N/A
Preferred Equity		5,354	Market Comparables	EBITDA Multiples (x)		6.0x-10.5x		10.0x
		465,723	Discounted Cash Flow	Discount Rate (%)		7.5%-50.3%		18.8	%
Sustainable Infrastructure Investments, LLC		61,816	Discounted Cash Flow	Discount Rate (%)		10.8%-11.3%		11.0	%
Equity/Other		92,002	Market Comparables	EBITDA Multiples (x)		2.3x-10.5x		4.6x
				Production Multiples (Mboe/d)		$26,500.0-$31,500.0	$	29,000.0
				Proved Reserves Multiples (Mmboe)		7.6x-9.1x		8.4x
				Production Multiples (MMcfe/d)		$1,650.0-$3,400.0	$	2,923.6
				Proved Reserves Multiples (Bcfe)		0.4x-0.7x		0.6x
				PV-10 Multiples (x)		0.5x-1.6x		1.0x
		3,695	Discounted Cash Flow	Discount Rate (%)		8.0%-32.0%		24.0	%
		3,877	Option Valuation Model	Volatility (%)		55.0%-65.0%		60.0	%
		152,860	Other⁽²⁾	Other⁽²⁾		N/A		N/A

Total	$	1,953,805


	As of September 30, 2021
	(Unaudited)
Arrangement⁽¹⁾	Type of Arrangement		Rate⁽²⁾		Amount Outstanding		Amount Available		Maturity Date
JPMorgan Facility		Revolving/Term		L+3.00%	$	231,667	$	140,000	February 16, 2023
Senior Secured Notes⁽³⁾		Bond		7.50%		489,000		—	August 15, 2023

Total					$	720,667	$	140,000


	As of December 31, 2020
Arrangement⁽¹⁾	Type of Arrangement		Rate⁽²⁾		Amount Outstanding		Amount Available		Maturity Date
JPMorgan Facility		Revolving/Term		L+3.00%	$	416,667	$	—	February 16, 2023
Senior Secured Notes⁽³⁾		Bond		7.50%		489,000		—	August 15, 2023

Total					$	905,667	$	—


	Three Months Ended September 30,
	2021						2020
Arrangement⁽¹⁾	Direct Interest Expense⁽²⁾		Amortization of Deferred Financing Costs and Discount		Total Interest Expense		Direct Interest Expense⁽²⁾		Amortization of Deferred Financing Costs and Discount		Total Interest Expense
Goldman Facility⁽³⁾	$	—	$	—	$	—	$	3,510	$	637	$	4,147
JPMorgan Facility		2,030		565		2,595		4,845		665		5,510
Senior Secured Notes		9,168		1,020		10,188		9,169		1,008		10,177

Total	$	11,198	$	1,585	$	12,783	$	17,524	$	2,310	$	19,834


	Nine Months Ended September 30, 2021 (Unaudited)			Year Ended December 31, 2020
Per Share Data:⁽¹⁾
Net asset value, beginning of period	$	3.25		$	5.43
Results of operations⁽²⁾
Net investment income		0.08			0.19
Net realized gain (loss) and unrealized appreciation (depreciation)		0.33			(2.20	)

Net increase (decrease) in net assets resulting from operations		0.41			(2.01	)

Shareholder distributions⁽³⁾
Distributions from net investment income		(0.09	)		(0.14	)
Distributions representing tax return of capital		—			(0.03	)

Net decrease in net assets resulting from shareholder distributions		(0.09	)		(0.17	)

Capital share transactions
Issuance of common shares⁽⁴⁾		—			—
Repurchases of common shares⁽⁵⁾		—			—

Net increase (decrease) in net assets resulting from capital share transactions		—			—

Net asset value, end of period	$	3.57		$	3.25

Shares outstanding, end of period		444,629,043			440,020,123

Total return⁽⁶⁾		12.65	%		(37.68	)%

Total return (without assuming reinvestment of distributions)⁽⁶⁾		12.62	%		(37.02	)%

Ratio/Supplemental Data:
Net assets, end of period	$	1,587,154		$	1,428,577
Ratio of net investment income to average net assets⁽⁷⁾		2.94	%		4.82	%
Ratio of total operating expenses to average net assets⁽⁷⁾		7.03	%		8.20	%
Portfolio turnover⁽⁸⁾		33.61	%		26.54	%
Total amount of senior securities outstanding, exclusive of treasury securities	$	720,667		$	905,667
Asset coverage per unit⁽⁹⁾		3.20			2.58