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TABLE OF CONTENTS

Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



FORM 10-Q



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

 

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017

o

 

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
(State or other jurisdiction of
incorporation or organization)
  27-6822130
(I.R.S. Employer
Identification No.)

201 Rouse Boulevard
Philadelphia, Pennsylvania

(Address of principal executive office)

 


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 ý    No o.

        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 o    No o.

        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 o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

Emerging growth company o

        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. o

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

        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 441,636,540 common shares of beneficial interest outstanding as of November 13, 2017.

   


Table of Contents


TABLE OF CONTENTS

 
   
  Page  

PART I—FINANCIAL INFORMATION

       

ITEM 1.

 

FINANCIAL STATEMENTS

       

 

Consolidated Balance Sheets as of September 30, 2017 (Unaudited) and December 31, 2016

    1  

 

Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016

    2  

 

Unaudited Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2017 and 2016

    3  

 

Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016

    4  

 

Consolidated Schedules of Investments as of September 30, 2017 (Unaudited) and December 31, 2016

    5  

 

Notes to Unaudited Consolidated Financial Statements

    21  

ITEM 2.

 

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

    52  

ITEM 3.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    69  

ITEM 4.

 

CONTROLS AND PROCEDURES

    70  

PART II—OTHER INFORMATION

   
 
 

ITEM 1.

 

LEGAL PROCEEDINGS

    71  

ITEM 1A.

 

RISK FACTORS

    71  

ITEM 2.

 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

    71  

ITEM 3.

 

DEFAULTS UPON SENIOR SECURITIES

    71  

ITEM 4.

 

MINE SAFETY DISCLOSURES

    71  

ITEM 5.

 

OTHER INFORMATION

    71  

ITEM 6.

 

EXHIBITS

    72  

 

SIGNATURES

    78  

Table of Contents


PART I—FINANCIAL INFORMATION

Item 1.    Financial Statements.

FS Energy and Power Fund

Consolidated Balance Sheets
(in thousands, except share and per share amounts)


 
  September 30, 2017
(Unaudited)
  December 31,
2016
 

Assets

             

Investments, at fair value

             

Non-controlled/unaffiliated investments (amortized cost—$3,552,508 and $2,959,314, respectively)

  $ 3,384,392   $ 2,838,377  

Non-controlled/affiliated investments (amortized cost—$883,774 and $977,010, respectively)

    857,892     1,071,032  

Controlled/affiliated investments (amortized cost—$27,164 and $26,664, respectively)

        1,031  

Total investments, at fair value (amortized cost—$4,463,446 and $3,962,988, respectively)

    4,242,284     3,910,440  

Cash

    97,565     317,520  

Receivable for investments sold and repaid

    18,288     22  

Income receivable

    63,730     37,857  

Deferred financing costs

    1,032     2,443  

Reimbursement due from sponsor(1)

    7,095      

Prepaid expenses and other assets

    117     15  

Total assets

  $ 4,430,111   $ 4,268,297  

Liabilities

             

Payable for investments purchased

  $ 21,240   $ 6,046  

Credit facilities payable (net of deferred financing costs of $1,988 and $1,045, respectively)(2)

    1,218,012     547,620  

Repurchase agreement payable (net of deferred financing costs of $0 and $91, respectively)(2)

        324,909  

Shareholder distributions payable

    10,875     9,474  

Management fees payable

    22,031     20,855  

Administrative services expense payable

    1,054     1,477  

Interest payable

    4,723     4,328  

Trustees' fees payable

    244     250  

Other accrued expenses and liabilities

    4,026     4,444  

Total liabilities

    1,282,205     919,403  

Commitments and contingencies ($22,457 and $0, respectively)(3)

             

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, 447,166,265 and 440,162,095 shares issued and outstanding, respectively

    447     440  

Capital in excess of par value(4)

    3,854,106     3,802,263  

Accumulated undistributed net realized gains (losses) on investments and gain/loss on foreign currency(4)

    (457,695 )   (387,452 )

Accumulated undistributed (distributions in excess of) net investment income(4)

    (27,770 )   (13,738 )

Net unrealized appreciation (depreciation) on investments and unrealized gain/loss on foreign currency

    (221,182 )   (52,619 )

Total shareholders' equity

    3,147,906     3,348,894  

Total liabilities and shareholders' equity

  $ 4,430,111   $ 4,268,297  

Net asset value per common share at period end

  $ 7.04   $ 7.61  

(1)
See Note 4 for a discussion of expense reimbursements payable to the Company by its investment adviser and affiliates and recoupment of such amounts paid by the Company to its investment adviser and affiliates.

(2)
See Note 8 for a discussion of the Company's financing arrangements.

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

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

   

See notes to unaudited consolidated financial statements.

1


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,
 
 
  2017   2016   2017   2016  

Investment income

                         

From non-controlled/unaffiliated investments:

                         

Interest income

  $ 56,016   $ 66,628   $ 201,939   $ 207,825  

Paid-in-kind interest income

    5,704     8,665     16,461     18,119  

Fee income

    7,056     2,624     37,419     5,251  

From non-controlled/affiliated investments:

                         

Interest income

    28,660     9,727     53,525     30,872  

Paid-in-kind interest income

    3,635     1,738     9,957     6,195  

Fee income

            656     7,356  

Total investment income

    101,071     89,382     319,957     275,618  

Operating expenses

                         

Management fees

    22,031     20,086     67,104     55,725  

Subordinated income incentive fees(1)

            10,499     5,774  

Administrative services expenses

    611     1,118     2,218     2,885  

Share transfer agent fees

    658     750     2,066     2,134  

Accounting and administrative fees

    384     384     1,216     994  

Interest expense(2)

    13,648     8,921     35,454     27,200  

Trustees' fees

    244     245     744     757  

Offering costs

        755         1,378  

Other general and administrative expenses

    563     1,392     2,672     3,624  

Total operating expenses

    38,139     33,651     121,973     100,471  

Less: Expense reimbursement from sponsor(3)

    (7,095 )       (25,315 )    

Add: Expense recoupment to sponsor(3)

            2,858      

Net expenses

    31,044     33,651     99,516     100,471  

Net investment income

    70,027     55,731     220,441     175,147  

Realized and unrealized gain/loss

                         

Net realized gain (loss) on investments:

                         

Non-controlled/unaffiliated

    7,271     (118,187 )   (70,244 )   (196,536 )

Non-controlled/affiliated

    (1,060 )   (1,699 )       572  

Net realized gain (loss) on foreign currency

            1      

Net change in unrealized appreciation (depreciation) on investments:

                         

Non-controlled/unaffiliated

    13,176     194,873     (47,179 )   454,465  

Non-controlled/affiliated

    (20,439 )   19,447     (119,904 )   147,788  

Controlled/affiliated

        (3,837 )   (1,531 )   (17,037 )

Net change in unrealized gain (loss) on foreign currency

    (1 )   (2 )   51     12  

Total net realized and unrealized gain (loss)

    (1,053 )   90,595     (238,806 )   389,264  

Net increase (decrease) in net assets resulting from operations

  $ 68,974   $ 146,326   $ (18,365 ) $ 564,411  

Per share information—basic and diluted

                         

Net increase (decrease) in net assets resulting from operations (Earnings per Share)

  $ 0.16   $ 0.35   $ (0.04 ) $ 1.41  

Weighted average shares outstanding

    443,940,981     421,515,796     442,503,872     400,151,400  

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

(2)
See Note 8 for a discussion of the Company's financing arrangements.

(3)
See Note 4 for a discussion of expense reimbursements payable to the Company by its investment adviser and affiliates and recoupment of such amounts paid by the Company to its investment adviser and affiliates.

   

See notes to unaudited consolidated financial statements.

2


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Statements of Changes in Net Assets

(in thousands)


 
  Nine Months Ended
September 30,
 
 
  2017   2016  

Operations

             

Net investment income

  $ 220,441   $ 175,147  

Net realized gain (loss) on investments and foreign currency

    (70,243 )   (195,964 )

Net change in unrealized appreciation (depreciation) on investments

    (168,614 )   585,216  

Net change in unrealized gain (loss) on foreign currency

    51     12  

Net increase (decrease) in net assets resulting from operations

    (18,365 )   564,411  

Shareholder distributions(1)

             

Distributions from net investment income

    (234,473 )   (211,989 )

Net decrease in net assets resulting from shareholder distributions

    (234,473 )   (211,989 )

Capital share transactions(2)

             

Issuance of common shares

        313,739  

Reinvestment of shareholder distributions

    140,580     132,928  

Repurchases of common shares

    (88,730 )   (45,151 )

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

    51,850     401,516  

Total increase (decrease) in net assets

    (200,988 )   753,938  

Net assets at beginning of period

    3,348,894     2,417,861  

Net assets at end of period

  $ 3,147,906   $ 3,171,799  

Accumulated undistributed (distributions in excess of) net investment income(1)

  $ (27,770 ) $ (22,818 )

(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.

3


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Statements of Cash Flows
(in thousands)


 
  Nine Months Ended
September 30,
 
 
  2017   2016  

Cash flows from operating activities

             

Net increase (decrease) in net assets resulting from operations

  $ (18,365 ) $ 564,411  

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

             

Purchases of investments

    (1,591,008 )   (679,004 )

Paid-in-kind interest

    (26,418 )   (24,314 )

Proceeds from sales and repayments of investments

    1,064,392     425,906  

Net realized (gain) loss on investments

    70,244     195,964  

Net change in unrealized (appreciation) depreciation on investments

    168,614     (585,216 )

Accretion of discount

    (17,668 )   (11,514 )

Amortization of deferred financing costs

    3,160     2,355  

Amortization of deferred offering costs

        1,378  

(Increase) decrease in receivable for investments sold and repaid

    (18,266 )   13,497  

(Increase) decrease in income receivable

    (25,873 )   (14,060 )

(Increase) decrease in expense reimbursement due from sponsor(1)

    (7,095 )    

(Increase) decrease in prepaid expenses and other assets

    (102 )   180  

Increase (decrease) in payable for investments purchased

    15,194     8,075  

Increase (decrease) in management fees payable

    1,176     1,748  

Increase (decrease) in subordinated income incentive fees payable

        (12,048 )

Increase (decrease) in administrative services expense payable

    (423 )   (316 )

Increase (decrease) in interest payable(2)

    395     778  

Increase (decrease) in trustees' fees payable

    (6 )   (9 )

Increase (decrease) in other accrued expenses and liabilities

    (418 )   (954 )

Net cash provided by (used in) operating activities

    (382,467 )   (113,143 )

Cash flows from financing activities

             

Issuance of common shares

        320,654  

Reinvestment of shareholder distributions

    140,580     132,928  

Repurchases of common shares

    (88,730 )   (45,151 )

Offering costs incurred

        (3,600 )

Shareholder distributions

    (233,072 )   (212,009 )

Borrowings under credit facilities(2)

    858,263      

Borrowings under repurchase agreement(2)

        16  

Repayments of credit facilities(2)

    (186,928 )   (175,638 )

Repayments of repurchase facility(2)

    (325,000 )    

Deferred financing costs paid

    (2,601 )   (1,607 )

Net cash provided by (used in) financing activities

    162,512     15,593  

Total increase (decrease) in cash

    (219,955 )   (97,550 )

Cash at beginning of period

    317,520     368,867  

Cash at end of period

  $ 97,565   $ 271,317  

Supplemental disclosure

             

State taxes paid

  $ 5   $ 109  

Non-cash purchase of investments

  $ (16,957 ) $ (309,593 )

Non-cash sales of investments

  $ 16,957   $ 309,593  

(1)
See Note 4 for a discussion of expense reimbursements payable to the Company by its investment adviser and affiliates and recoupment of such amounts paid by the Company to its investment adviser and affiliates.

(2)
See Note 8 for a discussion of the Company's financing arrangements. During the nine months ended September 30, 2017 and 2016, the Company paid $26,945 and $15,751, respectively, in interest expense on the credit facilities and $4,954 and $8,316, respectively, in interest expense pursuant to the repurchase agreement.

   

See notes to unaudited consolidated financial statements.

4


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments
As of September 30, 2017
(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—30.0%

                                         

Abaco Energy Technologies LLC

  (g)(j)   Service & Equipment   L+700, 2.5% PIK (2.5% Max PIK)     1.0 % 11/20/20   $ 86,850   $ 83,074   $ 85,112  

Allied Wireline Services, LLC

  (k)(l)   Service & Equipment   L+400, 5.5% PIK (5.5% Max PIK)     1.5 % 2/28/19     113,526     112,957     111,681  

Altus Power America, Inc. 

  (j)(p)   Power   L+750     1.5 % 9/30/21     77,378     77,378     78,442  

Altus Power America, Inc. 

  (e)(p)   Power   L+750     1.5 % 9/30/21     23,872     23,872     24,200  

BL Sand Hills Unit, L.P. 

  (l)   Upstream   Prime+650     3.5 % 12/17/17     40,807     35,439     30,809  

BL Sand Hills Unit, L.P. 

  (e)   Upstream   Prime+650     3.5 % 12/17/17     15,000     13,027     11,325  

Cactus Wellhead, LLC

  (f)(j)   Service & Equipment   L+600     1.0 % 7/31/20     64,867     63,143     63,678  

Cimarron Energy Inc. 

      Service & Equipment   L+1150 (11.5% Max PIK)     1.0 % 12/15/19     24,811     24,811     21,710  

CITGO Holding, Inc. 

  (f)   Downstream   L+850     1.0 % 5/12/18     26,081     26,281     26,375  

Crestwood Holdings LLC

  (f)   Midstream   L+800     1.0 % 6/19/19     29,273     29,341     29,237  

Eagle Midstream Canada Finance Inc. 

  (m)   Midstream   8.5%         9/27/20     175,000     175,000     175,000  

Gulf Finance, LLC

  (f)   Midstream   L+525     1.0 % 8/25/23     18,531     18,056     17,593  

Industrial Group Intermediate Holdings, LLC

      Service & Equipment   L+800     1.3 % 5/31/20     23,040     23,040     23,155  

JSS Holdings, Inc. 

  (l)   Service & Equipment   L+800, 0.0% PIK (2.5% Max PIK)     1.0 % 3/31/23     14,970     14,831     14,979  

JSS Holdings, Inc. 

  (e)   Service & Equipment   L+800, 0.0% PIK (2.5% Max PIK)     1.0 % 3/31/23     2,727     2,727     2,729  

Lusk Operating LLC

  (r)(z)(aa)   Upstream   Prime+500 PIK (8.8% Max PIK)     3.3 % 10/31/17     28,997     27,164      

MB Precision Holdings LLC

      Service & Equipment   L+725, 2.25% PIK (2.25% Max PIK)     1.3 % 1/23/21     13,569     13,569     12,552  

Moxie Liberty LLC

  (j)   Power   L+650     1.0 % 8/21/20     14,457     14,524     12,930  

Panda Temple Power, LLC

  (j)(r)(z)   Power   L+625     1.0 % 3/6/22     9,923     9,782     6,930  

Panda Temple Power, LLC

      Power   L+900     1.0 % 4/28/18     377     377     377  

Power Distribution, Inc. 

      Power   L+725     1.3 % 1/25/23     30,004     30,004     30,304  

Strike, LLC

      Midstream   L+800     1.0 % 5/30/19     7,000     7,000     7,175  

Strike, LLC

  (e)   Midstream   L+800     1.0 % 5/30/19     28,000     27,546     28,700  

Strike, LLC

  (j)   Midstream   L+800     1.0 % 11/30/22     39,218     38,195     39,806  

Swift Worldwide Resources US Holdings Corp. 

  (j)   Service & Equipment   L+1000, 1.0% PIK (1.0% Max PIK)     1.0 % 7/20/21     58,466     58,466     58,612  

UTEX Industries, Inc. 

  (f)   Service & Equipment   L+400     1.0 % 5/21/21     24,272     21,932     21,997  

Warren Resources, Inc. 

  (j)(l)(p)   Upstream   L+900, 1.0% PIK (1.0% Max PIK)     1.0 % 5/22/20     79,034     79,034     77,453  

Warren Resources, Inc. 

  (e)(p)   Upstream   L+900, 1.0% PIK (1.0% Max PIK)     1.0 % 5/22/20     5,590     5,590     5,478  

Total Senior Secured Loans—First Lien

                                1,056,160     1,018,339  

Unfunded Loan Commitments

                                (72,762 )   (72,762 )

Net Senior Secured Loans—First Lien

                                983,398     945,577  

See notes to unaudited consolidated financial statements.

5


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)
As of September 30, 2017
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Senior Secured Loans—Second Lien—27.7%

                                         

Aethon United BR LP

      Upstream   L+675     1.0 % 9/8/23   $ 85,938   $ 84,651   $ 84,898  

Aethon United BR LP

  (e)   Upstream   L+675     1.0 % 9/8/23     39,063     39,063     38,590  

Arena Energy, LP

  (j)(k)   Upstream   L+900, 4.0% PIK (4.0% Max PIK)     1.0 % 1/24/21     106,579     106,579     104,010  

Ascent Resources—Marcellus, LLC

  (r)(z)   Upstream   L+750     1.0 % 8/4/21     10,000     9,874     725  

Brock Holdings III, Inc. 

  (j)(z)   Service & Equipment   Prime+725         3/16/18     29,605     29,646     15,617  

Chief Exploration & Development LLC

  (f)(j)   Upstream   L+650     1.0 % 5/16/21     32,656     31,813     32,034  

Chisholm Oil and Gas Operating, LLC

  (j)(k)(l)   Upstream   L+800     1.0 % 3/21/24     196,000     196,000     196,608  

Emerald Performance Materials, LLC

  (f)   Downstream   L+775     1.0 % 8/1/22     11,819     11,761     11,838  

Fieldwood Energy LLC

  (f)(j)   Upstream   L+713     1.3 % 9/30/20     33,591     34,107     16,124  

Granite Acquisition, Inc. 

  (f)   Power   L+725     1.0 % 12/19/22     18,694     18,315     18,764  

Gruden Acquisition, Inc. 

  (j)   Service & Equipment   L+850     1.0 % 8/18/23     15,000     14,440     14,281  

Horn Intermediate Holdings, Inc. 

  (j)   Service & Equipment   L+775     1.3 % 10/2/18     50,250     50,250     49,999  

Jonah Energy LLC

      Upstream   L+650     1.0 % 5/12/21     36,523     35,555     36,535  

P2 Upstream Acquisition Co. 

  (f)(j)   Service & Equipment   L+800     1.0 % 4/30/21     42,399     42,025     40,703  

Penn Virginia Holding Corp. 

  (m)   Upstream   L+700     1.0 % 9/29/22     50,000     50,000     50,000  

Talos Production LLC

  (k)(l)   Upstream   11.0%         4/3/22     43,250     40,364     40,925  

Titan Energy Operating, LLC

  (k)(p)   Upstream   2.0%, L+1100 PIK (L+1100 Max PIK)     1.0 % 2/23/20     113,409     99,256     81,167  

UTEX Industries, Inc. 

  (f)(j)   Service & Equipment   L+725     1.0 % 5/20/22     85,192     79,022     76,864  

Total Senior Secured Loans—Second Lien

                                972,721     909,682  

Unfunded Loan Commitment

                                (39,063 )   (39,063 )

Net Senior Secured Loans—Second Lien

                                933,658     870,619  

See notes to unaudited consolidated financial statements.

6


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)
As of September 30, 2017
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Senior Secured Bonds—17.7%

                                         

Black Swan Energy Ltd. 

  (j)(m)   Upstream   9.0%         1/20/24   $ 90,000   $ 90,000   $ 88,875  

CITGO Holding, Inc. 

  (f)   Downstream   10.8%         2/15/20     9,000     9,053     9,765  

CSVC Acquisition Corp. 

  (f)   Service & Equipment   7.8%         6/15/25     30,608     30,608     30,034  

EP Energy LLC

  (f)(h)(m)   Upstream   8.0%         2/15/25     54,880     52,791     42,806  

FourPoint Energy, LLC

  (j)(k)(l)(p)   Upstream   9.0%         12/31/21     235,125     228,910     239,534  

Mirant Mid-Atlantic Trust

  (f)(h)   Power   10.1%         12/30/28     31,752     33,747     30,304  

Ridgeback Resources Inc. 

  (k)(m)(p)   Upstream   12.0%         12/29/20     3,887     3,821     3,887  

Sunnova Energy Corp. 

  (j)(p)   Power   6.0%, 6.0% PIK (6.0% Max PIK)         10/24/18     33,173     33,173     33,173  

Velvet Energy Ltd. 

  (j)(l)(m)   Upstream   9.0%         10/5/23     80,000     80,000     79,416  

Total Senior Secured Bonds

                                562,103     557,794  

Subordinated Debt—42.8%

                                         

Alta Mesa Holdings, LP

  (f)(h)(o)   Upstream   7.9%         12/15/24     20,425     20,425     22,072  

Archrock Partners, L.P. 

  (h)(m)(o)   Midstream   6.0%         4/1/21     8,555     7,661     8,427  

Archrock Partners, L.P. 

  (h)(m)   Midstream   6.0%         10/1/22     14,283     12,595     14,015  

Ascent Resources Utica Holdings, LLC

  (f)(h)(j)   Upstream   10.0%         4/1/22     225,000     225,000     242,719  

Bellatrix Exploration Ltd. 

  (f)(h)(m)(o)   Upstream   8.5%         5/15/20     60,120     59,159     56,269  

Brand Energy & Infrastructure Services, Inc. 

  (f)(h)   Service & Equipment   8.5%         7/15/25     44,759     44,759     48,508  

Canadian International Oil Corp. 

  (m)   Upstream   9.0%         7/10/22     100,000     97,082     98,500  

Canbriam Energy Inc. 

  (f)(h)(j)(m)(o)   Upstream   9.8%         11/15/19     115,200     112,990     118,440  

Compressco Partners, LP

  (f)(h)(o)   Service & Equipment   7.3%         8/15/22     20,050     19,923     18,534  

Covey Park Energy LLC

  (h)(o)   Upstream   7.5%         5/15/25     8,333     8,333     8,723  

Dynegy Finance I/II Inc. 

  (h)(m)(o)   Power   7.6%         11/1/24     24,542     23,825     25,462  

Eclipse Resources Corp. 

  (f)(h)(m)(o)   Upstream   8.9%         7/15/23     62,745     57,307     64,296  

EP Energy LLC

  (h)(m)(o)   Upstream   9.4%         5/1/20     48,970     44,786     40,974  

EP Energy LLC

  (h)(m)   Upstream   6.4%         6/15/23     27,095     20,263     16,797  

EV Energy Partners, L.P. 

  (f)(h)(o)   Upstream   8.0%         4/15/19     48,814     39,274     17,756  

Extraction Oil & Gas Holdings, LLC

  (h)(o)   Upstream   7.9%         7/15/21     37,500     37,500     39,609  

Genesis Energy, L.P. 

  (f)(m)   Midstream   6.8%         8/1/22     23,540     23,012     24,092  

See notes to unaudited consolidated financial statements.

7


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)
As of September 30, 2017
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Genesis Energy, L.P. 

  (f)(m)   Midstream   6.0%         5/15/23   $ 15,280   $ 14,226   $ 15,204  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         1/30/25     818     818     832  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         4/30/25     5,199     5,199     5,289  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         9/3/25     1,074     1,074     1,093  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         9/29/25     1,011     1,011     1,029  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         12/2/26     889     889     905  

Global Partners L.P. 

  (f)(h)(m)(o)   Midstream   6.3%         7/15/22     69,435     69,282     70,650  

Global Partners L.P. 

  (f)(m)   Midstream   7.0%         6/15/23     2,824     2,453     2,862  

Great Western Petroleum, LLC

  (f)(h)(o)   Upstream   9.0%         9/30/21     35,830     35,710     36,385  

Gulfport Energy Corporation

  (h)(m)   Upstream   6.0%         10/15/24     10,000     10,000     10,099  

Jupiter Resources Inc. 

  (h)(m)   Upstream   8.5%         10/1/22     76,125     72,252     54,671  

Lonestar Resources America Inc. 

  (f)(h)   Upstream   8.8%         4/15/19     24,200     24,033     23,625  

Martin Midstream Partners L.P. 

  (f)(h)(m)(o)   Midstream   7.3%         2/15/21     24,660     24,018     25,210  

Moss Creek Resources, LLC

  (l)   Upstream   L+800     1.5 % 4/7/22     65,000     65,000     65,796  

ONEOK, Inc. 

  (f)(m)   Midstream   7.5%         9/1/23     12,600     11,763     15,124  

SRC Energy Inc. 

  (j)(m)   Upstream   9.0%         6/14/21     40,000     40,000     41,700  

Tenrgys, LLC

  (j)(k)   Upstream   L+900     2.5 % 12/23/18     75,000     75,000     55,688  

Whiting Petroleum Corp. 

  (h)(m)(o)   Upstream   5.0%         3/15/19     11,685     10,909     11,732  

Whiting Petroleum Corp. 

  (f)(m)   Upstream   5.8%         3/15/21     7,000     6,444     6,882  

WildHorse Resource Development Corporation

  (h)(m)(o)   Upstream   6.9%         2/1/25     10,000     9,928     9,992  

Zachry Holdings, Inc. 

  (f)   Service & Equipment   7.5%         2/1/20     23,925     23,930     24,707  

Total Subordinated Debt

                                1,357,833     1,344,668  

See notes to unaudited consolidated financial statements.

8


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)
As of September 30, 2017
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry    
   
   
  Number of
Shares
  Amortized
Cost
  Fair
Value(d)
 

Equity/Other—16.6%(n)

                                         

Abaco Energy Technologies LLC, Common Equity

  (r)   Service & Equipment                   6,944,444   $ 6,944   $ 521  

Abaco Energy Technologies LLC, Preferred Equity

  (r)   Service & Equipment                   28,942,003     1,447     2,894  

Allied Downhole Technologies, LLC, Common Equity

  (k)(q)(r)   Service & Equipment                   7,431,113     7,223     2,229  

Allied Downhole Technologies, LLC, Warrants, 2/28/2019

  (k)(q)(r)   Service & Equipment                   5,344,680     1,865     1,603  

Altus Power America Holdings, LLC, Common Equity

  (k)(p)(r)   Power                   12,474,205     12,474     11,850  

Altus Power America Holdings, LLC, Preferred Equity

  (k)(p)(s)   Power                   25,792,683     25,793     25,825  

AP Exhaust Holdings, LLC, Class A1 Common Units

  (k)(q)(r)   Service & Equipment                   8          

AP Exhaust Holdings, LLC, Class A1 Preferred Units

  (k)(q)(r)   Service & Equipment                   803     895     895  

Ascent Resources Utica Holdings, LLC, Common Equity

  (r)(t)   Upstream                   148,692,909     44,700     37,173  

BL Sand Hills Unit, L.P., Net Profits Interest

  (r)(v)   Upstream                   N/A     5,180      

BL Sand Hills Unit, L.P., Overriding Royalty Interest

  (v)   Upstream                   N/A     740     35  

Chisholm Oil and Gas, LLC, Series A Units

  (i)(r)   Upstream                   11,472,461     11,472     11,243  

Cimarron Energy Holdco Inc., Common Equity

  (r)   Service & Equipment                   3,675,487     3,323      

Extraction Oil & Gas, Inc., Common Equity

  (k)(r)   Upstream                   1,140,637     11,250     17,554  

FourPoint Energy, LLC, Common Equity, Class C-II-A Units

  (k)(p)(q)(r)   Upstream                   66,000     66,000     22,770  

FourPoint Energy, LLC, Common Equity, Class D Units

  (k)(p)(q)(r)   Upstream                   12,374     8,176     4,300  

FourPoint Energy, LLC, Common Equity, Class E-II Units

  (i)(p)(r)   Upstream                   274,688     68,672     92,020  

FourPoint Energy, LLC, Common Equity, Class E-III Units

  (i)(k)(p)(q)(r)   Upstream                   222,750     55,688     76,292  

Global Jet Capital Holdings, LP, Preferred Equity

  (r)   Service & Equipment                   2,785,562     2,786     3,203  

Industrial Group Intermediate Holdings, LLC, Common Equity

  (k)(q)(r)   Service & Equipment                   472,755     473     733  

JSS Holdco, LLC, Net Profits Interest

  (r)   Service & Equipment                   N/A         67  

Lusk Operating LLC, Common Equity

  (r)(u)(aa)   Upstream                   2,000          

MB Precision Investment Holdings LLC, Class A-2 Units

  (k)(q)(r)   Service & Equipment                   490,213     490      

PDI Parent LLC, Common Equity

  (r)   Power                   1,384,615     1,385     1,454  

Ridgeback Resources Inc., Common Equity

  (k)(l)(m)(p)(r)(w)   Upstream                   9,599,928     58,985     55,635  

SandRidge Energy, Inc., Common Equity

  (h)(l)(m)(o)(r)   Upstream                   1,009,878     22,542     20,288  

Sunnova Energy Corp., Common Equity

  (p)(r)   Power                   6,667,368     25,026     34,737  

Sunnova Energy Corp., Preferred Equity

  (p)(r)   Power                   578,468     3,080     3,077  

Swift Worldwide Resources Holdco Limited, Common Equity

  (m)(r)(x)   Service & Equipment                   3,750,000     6,029     1,875  

Synergy Offshore LLC, Preferred Equity

  (k)(r)(y)(z)   Upstream                   71,131     93,009     48,654  

TE Holdings, LLC, Common Equity

  (i)(r)   Upstream                   2,225,950     18,921     6,678  

TE Holdings, LLC, Preferred Equity

  (l)(r)   Upstream                   1,475,531     14,734     14,018  

Titan Energy, LLC, Common Equity

  (k)(p)(r)   Upstream                   555,496     17,554     2,500  

Total Safety Holdings, LLC, Common Equity

  (j)(r)   Service & Equipment                   12,897     4,707     4,595  

Warren Resources, Inc., Common Equity

  (l)(p)(r)   Upstream                   4,415,749     20,754     15,014  

White Star Petroleum Holdings, LLC, Common Equity

  (i)(r)   Upstream                   4,867,084     4,137     3,894  

Total Equity/Other

                                626,454     523,626  

TOTAL INVESTMENTS—134.8%

                              $ 4,463,446     4,242,284  

LIABILITIES IN EXCESS OF OTHER ASSETS—(34.8%)

                                      (1,094,378 )

NET ASSETS—100.0%

                                    $ 3,147,906  

See notes to unaudited consolidated financial statements.

9


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)

As of September 30, 2017
(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, 2017, the three-month London Interbank Offered Rate, or LIBOR or 'L,' was 1.33% and the U.S. Prime Lending Rate, or Prime, was 4.25%. PIK means paid-in-kind.
(c)
Denominated in U.S. dollars, unless otherwise noted.
(d)
Fair value determined by the Company's board of trustees (see Note 7).
(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 held within FSEP Term Funding, LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Deutsche Bank AG, New York Branch (see Note 8).
(g)
Position or portion thereof unsettled as of September 30, 2017.
(h)
Security or portion thereof held within Berwyn Funding LLC and is pledged as collateral supporting the amounts outstanding under the prime brokerage facility with BNP Paribas Prime Brokerage, Inc., or BNP. Securities held within Berwyn Funding LLC may be rehypothecated from time to time as permitted under Rule 15c-1(a)(1) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNP (see Note 8).
(i)
Security held within FS Energy Investments, LLC, a wholly-owned subsidiary of the Company.
(j)
Security or portion thereof held within Gladwyne Funding LLC and is pledged as collateral supporting the obligations outstanding under the term loan facility with Goldman Sachs Bank USA (see Note 8).
(k)
Security or portion thereof held within Foxfields Funding LLC and is pledged as collateral supporting the obligations outstanding under the term loan facility with Fortress Credit Co LLC (see Note 8).
(l)
Security or portion thereof held within Bryn Mawr Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Barclays Bank PLC (see Note 8).
(m)
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, 2017, 71.7% of the Company's total assets represented qualifying assets.
(n)
Listed investments may be treated as debt for U.S. generally accepted accounting principles, or GAAP, or tax purposes.
(o)
Security or portion thereof held within Berwyn Funding LLC has been rehypothecated under Rule 15c-1(a)(1) of the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNP (see Note 8). As of September 30, 2017, the fair value of securities rehypothecated by BNP was $241,320.
(p)
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, 2017, 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, 2017:

See notes to unaudited consolidated financial statements.

10


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)
As of September 30, 2017
(in thousands, except share amounts)


 
 
Portfolio Company   Fair Value at
December 31,
2016
  Purchases,
Paid-in-Kind
Interest and
Other
  Sales,
Repayments
and Other
  Accretion of
Discount
  Net Change
in Unrealized
Appreciation
(Depreciation)
  Fair Value at
September 30,
2017
  Interest
Income(3)
  Fee
Income(3)
 

Senior Secured LoansFirst Lien

                                                 

Altus Power America, Inc.(1)

  $ 73,294   $ 5,433   $   $   $ 43   $ 78,770   $ 5,326   $  

Sunnova Asset Portfolio 5 Holdings, LLC

    151,148         (149,652 )   2,217     (3,713 )       6,992      

Warren Resources, Inc.(2)

    78,437     597             (1,693 )   77,341     6,651      

Senior Secured LoansSecond Lien

                                                 

Titan Energy Operating, LLC

    85,427     9,000     (332 )   3,454     (16,382 )   81,167     23,114      

Senior Secured Bonds

                                                 

FourPoint Energy, LLC

    240,709             1,051     (2,226 )   239,534     16,294      

Ridgeback Resources Inc. 

    3,887             12     (12 )   3,887     353      

Sunnova Energy Corp. 

        33,173                 33,173     2,089     656  

Equity/Other

                                                 

Altus Power America Holdings, LLC, Common Equity

    12,474                 (624 )   11,850          

Altus Power America Holdings, LLC, Preferred Equity

    23,982     1,811             32     25,825     2,663      

FourPoint Energy, LLC, Common Equity, Class C-II-A Units

    31,845                 (9,075 )   22,770          

FourPoint Energy, LLC, Common Equity, Class D Units

    6,032                 (1,732 )   4,300          

FourPoint Energy, LLC, Common Equity, Class E-II Units

    125,670                 (33,650 )   92,020          

FourPoint Energy, LLC, Common Equity, Class E-III Units

    107,477                 (31,185 )   76,292          

Ridgeback Resources Inc., Common Equity

    58,985                 (3,350 )   55,635          

Sunnova Energy Corp., Common Equity

    36,204                 (1,467 )   34,737          

Sunnova Energy Corp., Preferred Equity

    3,141                 (64 )   3,077          

Titan Energy, LLC, Common Equity

    13,332                 (10,832 )   2,500          

Warren Resources, Inc., Common Equity

    18,988                 (3,974 )   15,014          

Total

  $ 1,071,032   $ 50,014   $ (149,984 ) $ 6,734   $ (119,904 ) $ 857,892   $ 63,482   $ 656  

            

    (1)
    Security includes a partially unfunded commitment with an amortized cost of $23,872 and a fair value of $24,200.
    (2)
    Security includes a partially unfunded commitment with an amortized cost of $5,590 and a fair value of $5,478.
    (3)
    Interest and fee income presented for the full nine months ended September 30, 2017.

See notes to unaudited consolidated financial statements.

11


Table of Contents

FS Energy and Power Fund

Unaudited Consolidated Schedule of Investments (Continued)
As of September 30, 2017
(in thousands, except share amounts)


 
 
(q)
Security held within FSEP Investments, Inc., a wholly-owned subsidiary of Foxfields Funding LLC.
(r)
Security is non-income producing.
(s)
Security is held within EP Altus Investments, LLC, a wholly-owned subsidiary of Foxfields Funding LLC.
(t)
Security held within EP American Energy Investments, Inc., a wholly-owned subsidiary of the Company.
(u)
Security held within FSEP-BBH, Inc., a wholly-owned subsidiary of the Company.
(v)
Security held within EP Burnett Investments, Inc., a wholly-owned subsidiary of the Company.
(w)
Investment denominated in Canadian dollars. Amortized cost and fair value are converted into U.S. dollars as of September 30, 2017.
(x)
Investment denominated in British pounds. Amortized cost and fair value are converted into U.S. dollars as of September 30, 2017.
(y)
Security held within EP Synergy Investments, Inc., a wholly-owned subsidiary of Foxfields Funding LLC.
(z)
Security was on non-accrual status as of September 30, 2017.
(aa)
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, 2017, the Company held an investment in one portfolio company of which it is deemed to be an "affiliated person" of and deemed to "control". The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an "affiliated person" of and deemed to "control" for the nine months ended September 30, 2017:
Portfolio Company   Fair Value at
December 31,
2016
  Purchases,
Paid-in-Kind
Interest and
Other
  Sales,
Repayments
and Other
  Accretion of
Discount
  Net
Realized
Gain (Loss)
  Net Change
in Unrealized
Appreciation
(Depreciation)
  Fair Value at
September 30,
2017
   
   
 

Senior Secured Loans—First Lien

                                                       

Lusk Operating LLC

  $ 1,031   $ 1,500   $           $ (2,531 )                

Equity/Other

                                                       

Lusk Operating LLC, Common Equity

            (1,000 )           1,000                  

Total

  $ 1,031   $ 1,500   $ (1,000 )         $ (1,531 )                

See notes to unaudited consolidated financial statements.

12


Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments
As of December 31, 2016
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Senior Secured Loans—First Lien—27.2%

                                         

Abaco Energy Technologies LLC

  (g)(i)(j)   Service & Equipment   L+700, 2.5% PIK (2.5% Max PIK)     1.0 % 11/20/20   $ 60,455   $ 58,038   $ 45,795  

Allied Wireline Services, LLC

  (g)(i)(k)(l)   Service & Equipment   L+400, 5.5% PIK (5.5% Max PIK)     1.5 % 2/28/19     108,920     108,099     106,877  

Alon USA Partners, L.P. 

  (g)(i)(j)(m)   Downstream   L+800     1.3 % 11/26/18     11,063     11,199     11,035  

Altus Power America, Inc. 

  (j)(p)   Power   L+750     1.5 % 9/30/21     71,945     71,945     73,294  

Altus Power America, Inc. 

  (e)(p)   Power   L+750     1.5 % 9/30/21     29,305     29,305     29,854  

AP Exhaust Acquisition, LLC

  (g)(l)   Service & Equipment   L+775     1.5 % 1/16/21     15,811     15,811     14,309  

BL Sand Hills Unit, L.P. 

  (l)   Upstream   Prime+650     3.5 % 12/17/17     40,821     35,451     38,321  

BL Sand Hills Unit, L.P. 

  (e)   Upstream   Prime+650     3.5 % 12/17/17     15,000     13,027     14,081  

Cactus Wellhead, LLC

  (g)(i)(j)   Service & Equipment   L+600     1.0 % 7/31/20     56,392     54,715     51,458  

Cimarron Energy Inc. 

  (g)   Service & Equipment   L+775, 3.8% PIK (3.8% Max PIK)     1.0 % 12/15/19     23,664     23,664     24,019  

CITGO Holding, Inc. 

  (f)   Downstream   L+850     1.0 % 5/12/18     16,822     16,947     17,109  

Crestwood Holdings LLC

  (f)(g)   Midstream   L+800     1.0 % 6/19/19     29,703     29,794     29,146  

EnergySolutions, LLC

  (i)(j)   Service & Equipment   L+575     1.0 % 5/29/20     18,193     17,965     18,375  

Gulf Finance, LLC

  (f)(i)   Midstream   L+525     1.0 % 8/25/23     18,953     18,407     19,095  

Industrial Group Intermediate Holdings, LLC

  (i)   Service & Equipment   L+800     1.3 % 5/31/20     22,240     22,240     22,573  

Lusk Operating LLC

  (r)(z)(aa)   Upstream   Prime+500 PIK (8.8% Max PIK)     3.3 % 1/31/17     27,497     25,664     1,031  

MB Precision Holdings LLC

  (g)   Service & Equipment   L+725, 1.5% PIK (1.5% Max PIK)     1.3 % 1/23/20     12,853     12,853     12,355  

Moxie Liberty LLC

  (g)(j)   Power   L+650     1.0 % 8/21/20     32,155     32,241     31,794  

P2 Upstream Acquisition Co. 

  (f)   Service & Equipment   L+400     1.0 % 10/30/20     5,101     4,801     4,865  

Panda Temple Power, LLC

  (j)   Power   L+625     1.0 % 3/6/22     9,825     9,677     8,744  

Panda Temple Power II, LLC

  (g)(j)   Power   L+600     1.3 % 4/3/19     27,531     27,761     25,604  

ProPetro Services, Inc. 

  (i)   Service & Equipment   L+625     1.0 % 9/30/19     10,839     10,833     9,837  

Strike, LLC

  (e)   Midstream   L+800     1.0 % 5/30/19     35,000     34,482     34,475  

Strike, LLC

  (i)(j)(bb)   Midstream   L+800     1.0 % 11/30/22     52,500     50,937     51,975  

Sunnova Asset Portfolio 5 Holdings, LLC

  (j)(l)(p)   Power   12.0%, 0.0% PIK (12.0% Max PIK)         11/14/21     149,652     147,435     151,148  

Swift Worldwide Resources US Holdings Corp. 

  (g)(j)   Service & Equipment   L+1100     1.0 % 7/20/21     58,614     58,614     58,614  

UTEX Industries, Inc. 

  (f)   Service & Equipment   L+400     1.0 % 5/21/21     5,432     4,275     5,085  

Warren Resources, Inc. 

  (k)(p)   Upstream   L+900, 1.0% PIK (1.0% Max PIK)     1.0 % 5/22/20     78,437     78,437     78,437  

Warren Resources, Inc. 

  (e)(p)   Upstream   L+900, 1.0% PIK (1.0% Max PIK)     1.0 % 5/22/20     5,590     5,590     5,590  

Total Senior Secured Loans—First Lien

                                1,030,207     994,895  

Unfunded Loan Commitments

                                (82,404 )   (82,404 )

Net Senior Secured Loans—First Lien

                                947,803     912,491  

See notes to unaudited consolidated financial statements.

13


Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments (Continued)
As of December 31, 2016
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Senior Secured Loans—Second Lien—26.1%

                                         

Alison US LLC

  (f)(j)(m)   Service & Equipment   L+850     1.0 % 8/29/22   $ 23,722   $ 22,591   $ 23,011  

Ameriforge Group Inc. 

  (g)   Service & Equipment   L+750     1.3 % 12/21/20     35,950     36,352     5,707  

AP Exhaust Acquisition, LLC

      Service & Equipment   12.0% PIK (12.0% Max PIK)         9/28/21     3,763     3,763     3,279  

Arena Energy, LP

  (i)(k)   Upstream   L+900, 4.0% PIK (4.0% Max PIK)     1.0 % 1/24/21     103,410     103,410     103,927  

Ascent Resources—Marcellus, LLC

      Upstream   L +750     1.0 % 8/4/21     10,000     9,874     1,325  

Ascent Resources—Utica, LLC

  (g)(j)(k)(l)   Upstream   L+950     1.5 % 9/30/18     285,257     284,490     287,753  

Brock Holdings III, Inc. 

  (g)(j)   Service & Equipment   L+825     1.8 % 3/16/18     29,605     29,699     28,273  

Chief Exploration & Development LLC

  (f)(i)   Upstream   L+650     1.3 % 5/16/21     36,576     35,139     35,935  

Emerald Performance Materials, LLC

  (f)   Downstream   L+775     1.0 % 8/1/22     11,819     11,754     11,834  

EP Energy, LLC

  (f)(m)   Upstream   L+875     1.0 % 6/30/21     17,209     17,379     18,047  

Fieldwood Energy LLC

      Upstream   L+713     1.3 % 9/30/20     41,047     41,788     29,246  

Granite Acquisition, Inc. 

  (f)   Power   L+725     1.0 % 12/19/22     20,150     19,718     19,445  

Gruden Acquisition, Inc. 

  (j)   Service & Equipment   L+850     1.0 % 8/18/23     15,000     14,372     11,875  

Horn Intermediate Holdings, Inc. 

  (g)(j)   Service & Equipment   L+775     1.3 % 10/2/18     50,250     50,250     50,250  

Jonah Energy LLC

  (f)(i)   Upstream   L+650     1.0 % 5/12/21     34,293     33,325     32,579  

Neff Rental LLC

  (f)(j)   Service & Equipment   L+625     1.0 % 6/9/21     33,789     33,089     33,657  

Oxbow Carbon LLC

  (g)   Midstream   L+700     1.0 % 1/17/20     15,000     14,927     14,738  

P2 Upstream Acquisition Co. 

  (f)(g)(j)   Service & Equipment   L+800     1.0 % 4/30/21     34,099     34,144     31,243  

Titan Energy Operating, LLC

  (k)(p)   Upstream   2.0%, L+900 PIK (L+900 Max PIK)     1.0 % 2/23/20     104,409     87,134     85,427  

UTEX Industries, Inc. 

  (f)(j)   Service & Equipment   L+725     1.0 % 5/20/22     36,192     36,227     25,696  

W3 Co. 

  (g)(j)   Service & Equipment   L+800     1.3 % 9/13/20     14,795     14,943     6,695  

WP CPP Holdings, LLC

  (g)(j)   Service & Equipment   L+775     1.0 % 4/30/21     14,680     14,394     13,927  

Total Senior Secured Loans—Second Lien

                                948,762     873,869  

See notes to unaudited consolidated financial statements.

14


Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments (Continued)
As of December 31, 2016
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Senior Secured Bonds—11.9%

                                         

Calpine Corp. 

  (f)(m)   Power   5.3%         6/1/26   $ 19,800   $ 19,809   $ 19,508  

Cheniere Corpus Christi Holdings, LLC

  (f)   Midstream   7.0%         6/30/24     4,000     4,134     4,357  

CITGO Holding, Inc. 

  (f)   Downstream   10.8%         2/15/20     9,000     9,063     9,645  

EP Energy LLC

  (h)(m)   Upstream   8.0%         11/29/24     10,000     10,000     10,780  

FourPoint Energy, LLC

  (j)(k)(l)(p)   Upstream   9.0%         12/31/21     235,125     227,859     240,709  

Mirant Mid-Atlantic Trust

  (f)(h)   Power   10.1%         12/30/28     31,752     33,838     26,936  

Ridgeback Resources Inc. 

  (k)(m)(p)   Upstream   12.0%         12/29/20     3,887     3,809     3,887  

Velvet Energy Ltd. 

  (j)(l)(m)   Upstream   9.0%         10/5/23     80,000     80,000     81,792  

Total Senior Secured Bonds

                                388,512     397,614  

Subordinated Debt—31.2%

                                         

Alta Mesa Holdings, LP

  (h)   Upstream   7.9%         12/15/24     20,425     20,425     21,242  

Archrock Partners, L.P. 

  (h)(m)   Midstream   6.0%         4/1/21     8,555     7,505     8,384  

Archrock Partners, L.P. 

  (h)(m)   Midstream   6.0%         10/1/22     14,283     12,400     13,881  

Bellatrix Exploration Ltd. 

  (f)(h)(m)   Upstream   8.5%         5/15/20     53,590     52,560     52,753  

Brand Energy & Infrastructure Services, Inc. 

  (f)(h)   Service & Equipment   8.5%         12/1/21     43,311     42,479     44,502  

Calpine Corp. 

  (f)(m)   Power   5.8%         1/15/25     5,100     5,093     4,941  

Canbriam Energy Inc. 

  (f)(h)(j)(m)   Upstream   9.8%         11/15/19     115,200     112,341     121,536  

Compressco Partners, LP

  (f)(h)(m)   Service & Equipment   7.3%         8/15/22     20,050     19,908     18,972  

Crestwood Equity Partners L.P. 

  (f)(m)   Midstream   6.1%         3/1/22     5,500     5,500     5,641  

Dynegy Finance I/II Inc. 

  (f)(m)   Power   7.6%         11/1/24     22,542     21,968     20,894  

Dynegy Finance I/II Inc. 

  (f)(m)   Power   8.0%         1/15/25     12,000     11,995     11,243  

Eclipse Resources Corp. 

  (f)(h)(m)(o)   Upstream   8.9%         7/15/23     59,745     53,883     62,334  

EP Energy LLC

  (h)(m)   Upstream   9.4%         5/1/20     19,970     16,006     18,440  

EV Energy Partners, L.P. 

  (h)(m)   Upstream   8.0%         4/15/19     48,814     36,060     34,609  

Extraction Oil & Gas Holdings, LLC

  (h)(o)   Upstream   7.9%         7/15/21     37,500     37,500     40,313  

Genesis Energy, L.P. 

  (f)(m)   Midstream   6.8%         8/1/22     23,540     22,949     24,473  

See notes to unaudited consolidated financial statements.

15


Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments (Continued)
As of December 31, 2016
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry   Rate(b)   Floor   Maturity   Principal
Amount(c)
  Amortized
Cost
  Fair
Value(d)
 

Genesis Energy, L.P. 

  (f)(m)   Midstream   6.0%         5/15/23   $ 15,280   $ 14,116   $ 15,599  

GenOn Energy, Inc. 

  (h)   Power   7.9%         6/15/17     4,000     3,945     2,868  

GenOn Energy, Inc. 

  (h)   Power   9.9%         10/15/20     32,698     34,010     22,419  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         1/30/25     732     732     727  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         4/30/25     4,649     4,649     4,620  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         9/3/25     961     961     955  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         9/29/25     904     904     899  

Global Jet Capital Inc. 

      Service & Equipment   15.0% PIK (15.0% Max PIK)         12/2/26     795     795     795  

Global Partners L.P. 

  (f)(h)(m)(o)   Midstream   6.3%         7/15/22     69,435     69,264     66,831  

Global Partners L.P. 

  (h)(m)(o)   Midstream   7.0%         6/15/23     2,824     2,419     2,744  

Great Western Petroleum, LLC

  (f)(h)   Upstream   9.0%         9/30/21     23,830     23,692     24,932  

Gulfport Energy Corp. 

  (f)(m)   Upstream   6.0%         10/15/24     10,000     10,000     10,205  

Jupiter Resources Inc. 

  (h)(m)   Upstream   8.5%         10/1/22     71,125     67,772     61,760  

Laredo Petroleum, Inc. 

  (f)(m)   Upstream   7.4%         5/1/22     25,384     25,093     26,375  

Lonestar Resources America Inc. 

  (h)   Upstream   8.8%         4/15/19     21,500     21,566     19,780  

Martin Midstream Partners L.P. 

  (f)(h)(m)   Midstream   7.3%         2/15/21     29,660     29,102     29,438  

NRG Energy, Inc. 

  (f)(m)   Power   7.3%         5/15/26     28,000     27,823     27,965  

ONEOK, Inc. 

  (f)(h)(m)   Midstream   7.5%         9/1/23     28,000     26,887     31,910  

SandRidge Energy, Inc. 

  (l)(m)(r)   Upstream   0.0%         10/4/20     10,550     14,060     13,245  

Synergy Resources Corp. 

  (j)(m)   Upstream   9.0%         6/14/21     40,000     40,000     41,700  

Talos Production LLC

  (h)   Upstream   9.8%         2/15/18     43,250     43,249     24,004  

Tenrgys, LLC

  (j)   Upstream   L+900     2.5 % 12/23/18     75,000     75,000     73,125  

Whiting Petroleum Corp. 

  (h)(m)   Upstream   5.0%         3/15/19     11,685     10,552     11,739  

Zachry Holdings, Inc. 

  (f)   Service & Equipment   7.5%         2/1/20     23,925     23,934     24,374  

Total Subordinated Debt

                                1,049,097     1,043,167  

See notes to unaudited consolidated financial statements.

16


Table of Contents

FS Energy and Power Fund

Consolidated Schedule of Investments (Continued)
As of December 31, 2016
(in thousands, except share amounts)


 
 
Portfolio Company(a)   Footnotes   Industry    
   
   
  Number of
Shares
  Amortized
Cost
  Fair
Value(d)
 

Equity/Other—20.4%(n)

                                         

Abaco Energy Technologies LLC, Common Equity

  (r)   Service & Equipment                   6,944,444   $ 6,944   $ 347  

Abaco Energy Technologies LLC, Preferred Equity

  (r)   Service & Equipment                   28,942,003     1,447     1,447  

Allied Downhole Technologies, LLC, Common Equity

  (k)(q)(r)   Service & Equipment                   7,431,113     7,223     5,945  

Allied Downhole Technologies, LLC, Warrants, 2/28/2019

  (k)(q)(r)   Service & Equipment                   5,344,680     1,865     4,276  

Altus Power America Holdings, LLC, Common Equity

  (p)(r)   Power                   12,474,205     12,474     12,474  

Altus Power America Holdings, LLC, Preferred Equity

  (p)(s)   Power                   23,981,707     23,982     23,982  

AP Exhaust Holdings, LLC, Common Equity

  (k)(q)(r)   Service & Equipment