Due Diligence 101: How to Conduct Effective Due Diligence on Co- Investments

Lynn Baranski, Managing Director BlackRock Private Equity Partners SOURCING & INVESTMENT PROCESS

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 2 Extensive relationships lead to a large-scale sourcing network

Direct from GP’s

BlackRock Advisors Resources & Relationships

PEP’s Sourcing Network Strategic Fund-less Partners Sponsors

Team Relationships Investment / Calling Banks Program

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 3 See a lot, select a few: 6% direct co-investment selection rate*

Opportunities Origination 2,034 Investments (100%) Early screening of proactive and reactive deal-flow

Under Consideration 619 Investments (30%) Presentation to Private Equity Partners

Detailed Due Diligence 499 Investments (25%) In depth due diligence and reference checking

Invested 114 Investments (6%) 6% Investment Negotiation of terms and conditions with GPs and legal counsel Rate

Investments

*Period from 1 January 2000 to 31 December 2014. Includes direct co-investments only. Actual number of investment opportunities may vary. It should not be assumed that PEP will continue to receive investment opportunities or that the investment rate shown above will be the same in the future. Please note that the above data excludes legacy SRPEP investment opportunities reviewed prior to the closing of BlackRock’s acquisition of SRPEP on 4 September 2012. JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 4 Early involvement is key

SYNDICATION PRE-BID LEAD/CO-SPONSOR

Benefits: Benefits: Benefits:

1. Higher certainty of deal close 1. Early involvement and deeper due 1. Full control diligence 2. Expedited due diligence process 2. Control exit 2. Stronger influence on result 3. Available to smaller investors 3. Better terms and scalable allocation

Challenges: Challenges: Challenges:

1. Short lead time to respond 1. Direct GP skillset required 1. Lower hit rate due to highly competitive marketplace 2. Allocation is more likely to get cut back 2. Capacity to make meaningful investment required 2. Direct relationships required with 3rd 3. Higher fees party due diligence sources

CONVENTIONAL DIFFERENTIATED

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 5 Have a view: finding value in today’s co-investment market

Growth Companies Energy Corporate Carve-outs

 Alibaba Group  Caiman Energy  Global Business Travel

 B&M Retail  Venari Resources Financial Services  ING Life Insurance (Korea)

 Cheniere Energy Healthcare  Envision Healthcare

The examples presented above provide additional information on certain direct co-investments made by PEP on behalf of prior BlackRock Programs, a complete list of which can be found in Appendix herein. These examples were selected to illustrate recent direct co-investments closed (as of 3 November 2014) in each of the above noted sectors which were identified by PEP as key areas of opportunity according to our knowledge and experience in private equity investing. They are non-representative of all direct co-investments made by PEP on behalf of prior BlackRock Programs and it should not be assumed that PEP will invest in comparable investments, or that any future direct co-investments made by any prospective Fund will be successful. To the extent that these direct co-investments prove to be profitable, it should not be assumed that any prospective Fund’s investments will be profitable or will be as profitable. JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 6 A disciplined, consistent investment process is the foundation of a successful co-investment platform

“In-Box” Monday Meeting Initial Analysis Due Diligence Screening (continues through process) Committee

 Deal Summary presented   Prepare proprietary analysis  Deal Team presents  Proactive generation of Review GP-provided to Investment Team and investment case investment opportunities information  Additional reference calls discussed   Committee challenges team  Benefit of global network GP meeting in offices or  On-site visits; meet with  If Investment Team onsite management teams with open issues  Active management approves, a Deal Team is   May potentially need follow- investment pipeline Conduct reference calls  Distribute information to assigned for further due up due diligence based on  Deal Team plus other Investment Team  Investment opportunity diligence Committee’s feedback entered in Deal Log and relevant professionals  Focused discussion on key assigned to an investment analyze the merits of the issues/questions team member for investment  Follow-up on-site meeting preliminary review  Deal team determines with GP  GP contacted for additional recommendation  Deal team decides whether information (if necessary) to proceed

Internal Investment Investment Decision Closing External Investment Committee (EIC) Committee (IIC) Memorandum (IDM)

 Final legal review and   Consists of senior executives: Memorandum documenting negotiation with GP on economic  Deal Team presents IDM and diligence findings terms and governance investment thesis to IIC • Key issues  IIC votes - majority approval • Financial analyses including  IIC determines commitment scenario sensitivities amount • Reference calls  IIC-approved deal presented to • Forwarded to Internal External Investment Committee Investment Committee (IIC) (EIC)

Please note that the above investment process applies to all investments managed by PEP, including all strategies discussed herein.

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 7 Detailed deal summaries presented to full investment team for initial recommendation

• General Information • Industry • Sponsor • Pre-close or Post-close • Type • Size • Transaction Overview • Highlights • Process Update • Deal Team • Recommendation

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 8 Weekly deal log

Co-Investments Under Review

New Co-Investments Received

Approved Not Funded

• Team • Size • Sponsor • Source • Date Received • Target Close Date • Brief Comments

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 9 Approval process: Screening packs prepared and submitted to Screening Committee

• Outstanding Due Diligence Items • Transaction Overview • Scorecard • Account Allocations • Key Attractions • Key Risks & Mitigants • Key Diligence Items I. Company II. Industry Dynamics III. Transaction Structure IV. Investment Thesis/Strategy V. Management VI. Sponsor VII. Financials & Returns

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 10 Approval process: Investment Decision Memorandum (IDM) submitted to Internal and External Investment Committees

Executive Summary

• Company & Transaction Overview • Transaction Structure • Industry Overview • Proposed Account Allocations • Valuation & Return Projections • Investment Highlights • Investment Risks & Mitigants • Recommendation

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 11 Two-step approval process with senior executive involvement

Internal External Investment Investment Committee Committee

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 12 DUE DILIGENCE

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 13 Direct co-investment selection: Disciplined, repeatable and scalable

Sourcing Due Diligence Implementation

Multiple Portfolio Initial Screening, Investment sources of Preliminary construction fundamental further risk Committee investment review and active analysis assessment Review opportunities monitoring

 Active GP calling  Preliminary write-  Deal Team  Following deeper  Deal Team  Sizing and program up and analyzes due diligence (on- documents and placement in  Strategic Partners presentation to investment merits site visits, presents diligence client portfolios Investment Team reference calls, findings to Internal consistent with  Global  Deal Team either at Monday etc.) Deal Team Investment diversification and relationships rejects deal based meeting on initial findings, presents Committee (IIC) risk return  Inbound from  If Investment or pursues deeper investment case in an Investment parameters GPs, placement Team approves due diligence to the Screening Decision  Quarterly agents and other additional Committee (SC) Memorandum. reporting through sell-side players analysis, a Deal  SC will challenge  Upon IIC monitoring Team is assigned Deal Team with approval, process for further due open issues and investment (Quarterly diligence may request presented to Portfolio Review) further analysis External Investment Committee for final approval

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 14 Selecting direct co-investments: Rigorous due diligence with clear underwriting criteria

Seek to invest in companies that possess the following attributes:

• The right GP for the right deal

• Strong management teams with considerable equity at stake

• Robust industries with good growth prospects or fragmented industries with consolidation opportunities

• Market-leading companies with defensible competitive positions

• Realistic business plans with multiple value drivers

• Significant cash flow or visibility to positive cash flow

• Attractive risk/return profile

• Multiple viable exit alternatives

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 15 Develop an information advantage

INVESTMENT TEAM

GP NETWORK

FIRM-WIDE RESOURCES

SELL-SIDE RESEARCH

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 16 Reasons to pass

• Deal not in GP “strike zone” • Valuation too high • Continued dependence on strong capital markets to fund business • Limited or unclear drivers of value • No visibility to free cash flow • Threats of disintermediation • Dying industries: Dictaphone • New distribution channels: Digital textbooks • Business plans where everything has to go right • High variability in risk/return profile • Portfolio construction considerations • Industry, geography, and GP concentrations

Great companies do not always make great private equity deals

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 17 Process timeline

• Develop a consistent diligence process to accommodate short timelines without compromising depth and breadth of analysis • 4-8 weeks is typical

Process Timeline Date Process 02-Jan-11 Receipt of diligence material 04-Jan-11 Sponsor call 05-Jan-11 Screening committee 06-Jan-11 Initial non-binding indications due 10-Jan-11 Management meeting 11-Jan-11 Consultant call 17-Jan-11 Internal investment committee (subject to screening committee approval) 18-Jan-11 Soft commitment 24-Jan-11 External investment committee (subject to internal investment committee approval) 26-Jan-11 Final commitment 27-Jan-11 Legal documentation negotiations complete 28-Jan-11 Co-Investment closing 11-Feb-11 Funding

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 18 Summary of due diligence

• Reference calls across a range of internal and external experts provide important company- and industry-specific information

Summary of Due Diligence Conducted

Meeting/Call Nam e Fir m Date Company Management call John Smith, CEO Company A 17-Jan-13

Sponsor Calls Deal introduction call Deal Team Sponsor 19-Dec-12 Follow Up Call Deal Team Sponsor 18-Jan-13

Other Sponsor Calls Reference Call GP A Professional GP A 10-Jan-13 Reference Call GP B Professional GP B 08-Jan-13 Reference Call GP C Professional GP C 17-Jan-13 Reference Call GP D Professional GP D 10-Jan-13

BlackRock Research Analysts Research Call BlackRock Analyst BlackRock - Retail Equity Investment Manager 22-Jan-13 Research Call BlackRock Analyst BlackRock - Real Estate REIT Investment Manager 22-Jan-13 Research Call BlackRock Analyst BlackRock - Real Estate Investment Manager 22-Jan-13

External Research Analysts Research Call External Research Analyst Fir m A 20-Dec-12 Research Call External Research Analyst Fir m B 20-Dec-12

Expert Network Call Reference Call Industry Expert Former Industry Executive 22-Jan-13 Reference Call Industry Expert Former Industry Executive 24-Jan-13

3rd Party Due Diligence Calls Legal TBC TBC TBC Environmental TBC TBC TBC Market TBC TBC TBC Accounting/Tax TBC TBC TBC

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 19 Attractions & risks

• Summarize diligence and analysis in a concise, yet thorough, Key Attractions and Key Risks & Mitigants template

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 20 Financial & returns analysis

• Financial analysis identifies key financial drivers and sensitizes them to quantify both the downside protection and the realistic upside potential

Project Bounty - Historical Financial Information 0 1 2 3 4 5 6 £m Fiscal Year End CAGR / Vbps 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012E '07-'12E Store Count #Stores (EoP) 22 36 49 89 149 229 271 324 45.9% % Growth 0.0% 63.6% 36.1% 81.6% 67.4% 53.7% 18.3% 19.6% Annual Openings 0 14 13 40 60 80 42 53 302

Income Statement Summary Revenue 58.6 78.0 129.8 255.9 448.8 560.2 712.6 928.8 48.2% % Growth 33.1% 66.4% 97.2% 75.4% 24.8% 27.2% 30.3% Sponsor Base Case % LfL - n.a. n.a. 7.0% 15.0% 0.5% 1.4% 7.1% 6.1% IRR MOIC EBITDA R 8.0 14.5 26.4 Exit 65.4 EBITDA Multiple: 71.2 7.5x 93.5 8.5x 138.1 9.5x 56.8%10.5x 7.5x 8.5x 9.5x 10.5x % Margin 10.2% 11.2% 10.3% 14.6%2015 12.7% 26.6%13.1% 32.0% 14.9%36.9% 366bps41.3% 2.0x 2.3x 2.6x 2.8x 2016 26.0% 29.5% 32.7% 35.7% 2.5x 2.8x 3.1x 3.4x Rent - 3.3 5.4 9.9 19.4 24.4 31.1 37.9 47.6% % Sales 4.2% 4.2% 3.9% Exit Year 4.3%2017 4.4% 24.8% 4.4% 27.3% 4.1%29.7% (9bps)31.9% 3.0x 3.4x 3.7x 4.0x

EBITDA - 4.7 9.1 16.5 46.0 46.8 62.4 100.2 PEP Base61.4% Case % Margin 6.0% 7.0% 6.4% 10.2% 8.4% 8.8% IRR 10.8% 375bps MOIC % Growth 94.9% 80.5% Exit178.8% EBITDA Multiple:1.7% 7.5x 33.3% 8.5x 60.6%9.5x 10.5x 7.5x 8.5x 9.5x 10.5x D&A - 1.4 1.4 1.4 2015 1.4 1.4 13.4% 1.4 19.3% 24.7%1.4 29.6%0.0% 1.5x 1.7x 1.9x 2.2x % Sales 1.8% 1.1% 0.5% 0.3%2016 0.2% 14.8% 0.2%18.8% 0.1%22.4% (92bps)25.7% 1.7x 2.0x 2.2x 2.5x

Exit Year 2017 14.9% 17.8% 20.4% 22.6% 2.0x 2.3x 2.5x 2.8x EBIT - 3.3 7.4 12.9 42.3 42.2 55.5 93.3 65.8% % Margin 4.2% 5.7% 5.0% 9.4% 7.5% 7.8% 10.0% PEP Downside431bps Case IRR MOIC Exit EBITDA Multiple: 7.5x 8.5x 9.5x 10.5x 7.5x 8.5x 9.5x 10.5x 2015 10.0% 16.1% 21.5% 26.4% 1.3x 1.6x 1.8x 2.0x 2016 11.8% 15.8% 19.5% 22.8% 1.6x 1.8x 2.0x 2.3x

Exit Year 2017 12.4% 15.3% 18.0% 20.3% 1.8x 2.0x 2.3x 2.5x

PEP Break Case IRR MOIC Exit EBITDA Multiple: 7.5x 8.5x 9.5x 10.5x 7.5x 8.5x 9.5x 10.5x 2015 2.5% 9.4% 15.0% 19.9% 1.1x 1.3x 1.5x 1.7x 2016 4.9% 9.7% 13.6% 17.0% 1.2x 1.4x 1.7x 1.9x

Exit Year 2017 5.9% 9.5% 12.5% 15.0% 1.3x 1.6x 1.8x 2.0x

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 21 Valuation analysis

• Valuation analysis (comparable companies, precedent transaction, DCF) is used to validate both the entry price and exit price assumptions

Project Bounty - Public comparable companies as of 16-Jan-13: UK Retailers GBP(m) at of 16-Jan-13

TEV/ Filing LTM Market Net Revenue % EBITDA % Y/Y Gross EBITDA TEV/ EBITDA- Net Debt/ Normalized Company Country Exchange: Currency Date Cap TEV Debt Revenue Y/Y Growth EBITDA Growth Capex Margin Margin EBITDA Capex EBITDA P/E IQ_COMPANY_NAME _COUNTRY_NAMQ_EXCHANGLING_CURREPERIODDAT_MARKETC IQ_TEV Q_NET_DEBQ_TOTAL_REV IQ_EBITDA IQ_CAPEXGROSS_MARBITDA_MAR_TEV_EBITDA IQ_PE_NORMALIZ Debenhams plc United Kingdom LSE GBP 01-Sep-12 1,325.5 1,702.5 377.0 2,229.8 2.2% 259.4 (3.8%) (101.4) 13.6% 11.6% 6.6x 10.8x 1.5x 13.7x

Home Retail Group plc United Kingdom LSE GBP 01-Sep-12 981.4 665.0 (316.4) 5,546.4 (2.7%) 244.3 (16.6%) (67.6) 31.9% 4.4% 2.7x 3.8x NM 14.2x

WH Smith plc United Kingdom LSE GBP 31-Aug-12 748.8 712.8 (36.0) 1,243.0 (2.4%) 138.0 7.8% (38.0) 53.4% 11.1% 5.2x 7.1x NM 12.8x

Dunelm Group plc United Kingdom LSE GBP 30-Jun-12 1,463.7 1,398.5 (65.2) 603.7 14.7% 112.4 20.3% (37.0) 48.3% 18.6% 12.4x 18.5x NM 24.4x

Dixons Retail plc United Kingdom LSE GBP 13-Oct-12 984.0 994.5 9.9 8,182.9 (1.6%) 201.9 (21.3%) (81.5) 6.3% 2.5% 4.9x 8.2x 0.0x 30.9x

Halfords Group plc United Kingdom LSE GBP 28-Sep-12 648.4 756.3 107.9 864.7 (0.4%) 111.1 (24.6%) (16.7) 54.7% 12.8% 6.8x 8.0x 1.0x 13.2x

Mothercare plc United Kingdom LSE GBP 13-Oct-12 275.9 305.7 29.8 788.2 (2.6%) 22.6 (51.5%) (17.6) 14.1% 2.9% 14.7x 66.4x 1.3x 275.9x PEP Base Case Carphone Warehouse Group PubUnited Kingdom LSE GBP 30-Sep-12 1,038.5 957.5 (81.0) 9.0 60.7% £m (15.4) (1300.0%) (0.1) 100.0% (171.1%) NM NM 5.3x0 Months 2.2x Fiscal Year End 2012E 2013E 2014E 2015E 2016E 2017E 2018E Laura Ashley Holdings plc United Kingdom LSE GBP 28-Jul-12 195.8 168.0 (27.8) 296.0 3.8% EBITDA 23.9 (5.2%) (8.5) 42.9% 8.1% 6.8x 10.6x NM -- 15.9x 119.2 133.4 150.5 161.6 170.2 Depreciation & Amortisation -- (13.9) (16.8) (18.7) (20.7) (23.0) Kingfisher plc United Kingdom LSE GBP 28-Jul-12 6,745.0 6,788.0 36.0 10,647.0 0.9% EBIT 944.0 3.3% (359.0) 37.6% 8.9% 7.0x 11.3x 0.0x -- 14.9x 105.3 116.6 131.8 140.8 147.2 -- Tax Rate 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% Marks & Spencer Group plc United Kingdom LSE GBP 29-Sep-12 5,834.9 7,905.1 2,088.8 9,954.0 1.6% Unlevered 1,217.5 Cash Tax(3.5%) (640.8) 36.9% 12.2% 6.5x 13.7x 1.7x -- 13.2x (31.6) (35.0) (39.5) (42.3) (44.2) -- Earnings Before Interest, After Tax -- 73.7 81.6 92.3 98.6 103.1 -- Sports Direct International Plc United Kingdom LSE GBP 28-Oct-12 2,425.6 2,585.5 160.3 2,036.1 22.1% Depreciation 241.9 & Amortisation22.7% (139.7) 40.5% 11.9% 10.6x 25.1x 0.7x -- 22.7x 13.9 16.8 18.7 20.7 23.0 -- Decrease/ (Increase) in Net Working Capital -- (11.4) (8.5) (7.5) (7.4) (6.8) -- MEAN 8.0% (114.4%) 40.0% (5.5%) 7.7x 16.7x 1.4x 37.8x Capital Expenditures -- (19.3) (21.3) (16.4) (16.7) (17.2) MEDIAN 1.3% Unlevered Free(4.5%) Cash Flow 39.1% 10.0% 6.8x 10.8x 1.1x -- 14.5x 56.9 68.6 87.1 95.2 102.0 -- Terminal Adjusted Free Cash Flow -- 62.3 73.1 84.8 91.2 96.2 -- MIN (2.7%) Unlevered Free(1300.0%) Cash Flow/EBITDA 6.3% (171.1%) 2.7x 3.8x 0.0x 2.2x 47.7% 51.5% 57.9% 58.9% 59.9% #DIV/0!

MAX 60.7% Annual UFCF Yield22.7% % In-Price 100.0% 18.6% 14.7x 66.4x 5.3x 275.9x 5.5% 6.6% 8.4% 9.2% 9.9% 0.0% Blended UFCF Yield % 6.6%

Project Bounty UK GBP 31-Dec-12 558.0 1,052.0 494.0 928.8 30.3% Pre-Tax 100.2 Unlevered60.6% FCF 18.6 34.1% 10.8% 10.5x 12.9x 4.9x - N/A 88.45 103.59 126.63 137.46 146.15 - Pre-Tax Unlevered FCF Yield % - 8.5% 10.0% 12.2% 13.3% 14.1% - Blended Pre-Tax Unlevered FCF Yield % 9.7% Description Net Cash Interest Expense (31.2) (29.2) (27.4) (25.5) (23.3) Debenhams plc Debenhams plc operates a range of department stores in the United Kingdom, Ireland, and Denmark. Cash Taxes (17.9) (13.8) (16.5) (19.7) (21.5) After-Tax Levered FCF -- 39.3 60.5 82.8 92.2 101.4 -- Home Retail Group plc Home Retail Group plc operates as a home and general merchandise retailer in the United Kingdom and the Republic of Ireland. % of Initial Equity - 7.0% 10.9% 14.8% 16.5% 18.2% - WH Smith plc WH Smith PLC operates retail stores primarily in the United Kingdom. Cumulative After-Tax Levered FCF -- 39.3 99.8 182.6 274.8 376.3 376.3 Dunelm Group plc Dunelm Group plc engages in the retail of homewares and soft furnishings in the United Kingdom. % of Initial Equity - 7.0% 17.9% 32.7% 49.3% 67.4% 67.4% Dixons Retail plc Dixons Retail plc, an electrical retailer and services company, sells consumer electronics, personal computers, domestic appliances, photographic equipment, communication products, and related services. Halfords Group plc Halfords Group plc, through its subsidiaries, engages in the retail of automotive, leisure, and cycling products. WACC Calculation Terminal EBITDA Multiple Range Mothercare plc Mothercare plc operates as a specialist multi-channel retailer, franchisor, and wholesaler of products for mothers-to-be, babies, and children under the Mothercare and Early Learning Centre brands. 6.5x 7.0x 7.5x 8.0x 8.5x Carphone Warehouse Group PubCarphone Warehouse Group plc operates as an independent telecommunications retailer in Europe; and a mobile virtual Costnetwork of equity operator in France. 18.5% Laura Ashley Holdings plc Laura Ashley Holdings plc, together with its subsidiaries, engages in the design, sourcing, manufacture, distribution, and saleCost of debtclothing, - Pre-tax accessories, and home furnishings7.9% in the United Kingdom and internationally. Terminal Value Cost of debt - Post-tax 5.6% 1,106.2 1,191.3 1,276.4 1,361.5 1,446.6 Kingfisher plc Kingfisher plc, through its subsidiaries, operates as a home improvement retailer. Value of the firm's equity 558.0 Sports Direct International Plc Sports Direct International plc, together with its subsidiaries, engages in the retail of sports and leisure clothing, footwear, accessories, and equipment in the United Kingdom and internationally. Value of the firm's debt 476.6 WACC Enterprise Value as of 2012 EV 1,034.6 9.8% 1,011.5 1,064.8 1,118.1 1,171.5 1,224.8 Percentage of financing that is equity 53.9% 10.8% 973.4 1,024.3 1,075.3 1,126.2 1,177.2 Percentage of financing that is debt 46.1% 11.8% 937.1 985.9 1,034.6 1,083.3 1,132.0 Corporate tax rate 28.7% FY11 Effective Tax Rate 12.8% 902.7 949.3 995.9 1,042.5 1,089.1 13.8% 870.0 914.5 959.1 1,003.7 1,048.3 WACC 11.80%

Cost of Debt W. Av. Cost WACC Implied Perpetuity Growth Rate New Revolver - Drawn L+5.00% 16.6 1.0% 9.8% 1.0% 1.6% 2.1% 2.6% 3.0% New Term Loan A L+5.00% 125.0 2.2% 10.8% 1.9% 2.5% 3.0% 3.5% 3.9% New Term Loan B L+5.50% 335.0 4.7% 11.8% 2.9% 3.4% 4.0% 4.4% 4.8% Total Senior Debt 476.6 12.8% 3.8% 4.4% 4.9% 5.4% 5.8% Mezzanine Debt - -- - 13.8% 4.7% 5.3% 5.8% 6.3% 6.7% Total Debt 476.6 New Equity 558.0 Total Sources 1,034.6 7.9% Implied Cost of Equity Implied Perpetuity Growth Rate Libor 0.51% 3 month 1 CD&R Investment Case at 9.5x Exit Multiple 38.05% 15.5% 3-yr Swap Rate 0.85% UK 4 PEP Base Case at 7.5x Exit Multiple 18.5% 4.0% 5 PEP Downside Case at 7.5x Exit Multiple 14.8% 2.3% PV of cashflows during ownership as of 2012 PV of Terminal Value as of 2012 2017 Terminal Multiple 2017 Terminal Multiple 1 CD&R Investment Case at 9.5x Exit Multiple 26.07% 73.9% 4 PEP Base Case at 7.5x Exit Multiple 29.37% 70.6%

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 22 Direct co-investment scorecard

Key Diligence Items Criteria Comments

Transaction Structure Purchase Price [ Less than 7.5x at close ] Full valuation at X.Xx PF 2010 EBITDA / 11.0x EBITDA - Capex Value vs. Comparables [ <5 year average trading range ] Sum-of-parts analysis indicates value of 10x-11x for outsourced ED. 8x-9x for med transport 3.5 Leverage Multiple [ Less than 5x ] High amount of leverage with pro forma multiple of X.Xx Equity % [ > 35% ] Proposed ~30% of the total capital structure Covenant Structure [ 25% headroom in Base Case ] Favorable covenant-light debt structure with no maintenance covenants Governance / LP Agreement [ GP controls board, management & exit ]No historical issues with Sponsor on governance 5 = clear

Market Dynamics strength High barriers to entry; larger players like Company A have incumbency, scale advantages; sticky contracts with Barriers to Entry [ High ] 90%+ retention rate Market Growth Prospects [ Industry growth rates > 5% ] Highly fragmented market allows consolidation for leading players; Company A market leader in both segments 4.5 Competitors [ Low ] 4 = moderate Business 1 / Business 2 markets expected to demonstrate steady, robust growth; ED volumes growth of 3%-4% Company strength Market Share / Position [ #1 or #2 ] #1 market share in Business 1 and Business 2 in fragmented markets; clear opportunity to gain share from competitors Business Diversification [ Diversified ] Broad spread-of-risk model with geographic, customer, and contract diversification Customer Concentration [ No one customer > 10% revenues ] Minimal customer concentration. No single account is more than 10% of revenue. 4.0 3 = neutral Supplier Concentration [ No one supplier > 20% ] No supplier concentration Geographic Diversification [ Substantial geographic diversity ] Very regionally diversified across US. Slight geographic concentration in Business 1 with Texas at 28% of sales. FX/Commodity Risk [ Low ] Hardly any FX/Commodity Risk 2 = moderate Recurring Revenue [ >70% of revenues are recurring ] Highly recurring, contracted revenue streams with strong retention rates (90%+ in both divisions) weakness Management Prior Experience / Track Record[ Successful track record ] CEO & management very strong; have led company though strong organic/inorganic growth Bench Strength / Roster Holes [ Built out deep management team ] Management is perceived as strong operators; one potential weakness is President of Business 2 4.5 1 = clear Key Man Risk [ ] No one appears irreplaceable. Sponsor is bringing in Johns Smith and John Smith as operating partners to further strengthen the bench "Skin in Game" [ Significant management incentives ] Existing mgt rolling $25 million in deal; Sponsor has noted this is among largest in Firm's history. weakness Bringing new Chairman (John Smith); Sponsor has proven ability to enhance productivity .

Investment Thesis 0 = red flag Growth Strategy [ Organic, acquisitive, etc. ] Growth via organic (modest pricing, share gains from regional competitors) and acquisitions (purchases at 5x-7x) Cost Cutting Initiatives [ Significant opportunities ] Strong potential in Business 2 (est. $55 million); margin gap of 400 basis points to next competitor (2.6x smaller in size).4.5 Divestitures / Rationalization [ Where appropriate ] Potential to rationalize business through break-up / select divestitures Value Drivers [ >2 equally impactful drivers ] Improve overall operations, margin improvement at Business 2, share gains from local & regional competitors, & tuck-in acquisitions Exit Alternatives [ >2 viable exit alternatives ] Likely IPO and/or possible break-up of business by division

Financials & Returns Strong cash conversion due to low capex (3% of sales), strong w/c management; Cash Flow Conversion [ Over 60% FCF conversion ] Business 1 historical conversion of 100%+. Ability to De-lever [ Delevers to <3.0x; >75% repayment ] Very strong, highly cash generative. De-levers to 3.3x leverage by year 5 (2015). 4.0 Return Profile [ >25% IRR & 3.0x MOIC ] Sponsor / PEP Base Case generates a X.XX% IRR and a X.Xx MOIC

Sponsor Sponsor lacks physician management expertise, but specializes in multi-location services businesses like Company A. Deal in GP "Sweet Spot" [ GP industry silo ] GP Angle/Edge on Deal [ Proprietary angle ] Sponsor has successfully invested in healthcare related businesses (e.g. Competitor + Competitor) 4.0 PEP View of GP Value-Add [ GP resources for the investment ] Right GP for implementing margin improvement at Business 2 and managing ED services business

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 23 I. Transaction Structure

Key Diligence Items Criteria Comments

Transaction Structure Purchase Price [ Less than 7.5x at close ] Value vs. Comparables [ <5 year average trading range ] 3.5 Leverage Multiple [ Less than 5x ] Equity % [ > 35% ] Covenant Structure [ 25% headroom in Base Case ] Governance / LP Agreement [ GP controls board, management & exit ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 24 II. Market Dynamics

Key Diligence Items Criteria Comments

Market Dynamics Barriers to Entry [ High ] Market Grow th Prospects [ Industry grow th rates > 5% ] 4.5 Competitors [ Low ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 25 III. Company

Key Diligence Items Criteria Comments Company Market Share / Position [ #1 or #2 ] 3.5 Business Diversification [ Diversified ] 4.0 Customer Concentration [ No one customer > 10% revenues ] Supplier Concentration [ No one supplier > 20% ] Geographic Diversification [ Substantial geographic diversity ] FX/Commodity Risk [ Low ] Recurring Revenue [ >70% of revenues are recurring ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 26 IV. Management

Key Diligence Items Criteria Comments Management Prior Experience / Track Record [ Successful track record ] 3.5 Bench Strength / Roster Holes [ Built out deep management team ] 4.5 Key Man Risk [ ] "Skin in Game" [ Significant management incentives ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 27 V. Investment Thesis / Model Assumptions

Key Diligence Items Criteria Comments Investment Thesis / Model Assumptions Grow th Strategy [ Organic, acquisitive, etc. ] Cost Cutting Initiatives [ Significant opportunities ] 4.5 Divestitures / Rationalization [ Where appropriate ] Value Drivers [ >2 equally impactful drivers ] Exit Alternatives [ >2 viable exit alternatives ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 28 VI. Financials & Returns

Key Diligence Items Criteria Comments Financials & Returns Cash Flow Conversion [ Over 60% FCF conversion ] 3.5 Ability to De-lever [ Delevers to <3.0x; >75% repayment ] 4.0 Return Profile [ >20% IRR & 2.0x MOIC ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 29 VII. Sponsor

Key Diligence Items Criteria Comments Sponsor Deal in GP "Sw eet Spot" [ GP industry silo ] GP Angle/Edge on Deal [ Proprietary angle ] 4.0 View of GP Value-Add [ GP resources for the investment ]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 30 Negotiation of legal documentation

Senior investment managers will attempt to actively negotiate the best terms and conditions possible for each private equity fund and direct co-investment to which we commit; key areas of focus include:  Management capital commitment and promote structure  Tag-along, drag-along, and registration rights  Information rights and/or Board Director or observation rights  Compliance with OFAC, BHCA, HSR, FCPA, and other legal/regulatory requirements

Leverage both internal and external legal counsel to review each investment opportunity  Internal legal team includes five additional attorneys and one paralegal  Ropes & Gray LLP is our primary external legal counsel

Works with internal legal team on matters regarding fund formation, negotiation, management and operation and on structuring and documentation

Legal checklists completed by investment team, internal legal counsel, external legal counsel, and internal operations team to ensure consistency and compliance with legal and structural requirements

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 31 MONITORING

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 32 Extensive investment monitoring and risk management

 Investment team meets with General Partners 3 to 4 times or more per year

Proactive GP Meeting Program  Senior leaders seek to serve on the boards of  Comprehensive quarterly review Active of progress of deals underlying funds and direct co-investments to participation ensure accountability and alignment with fund  Performance reviewed and Quarterly on General strategies compared to original expectations Portfolio Partner Review Advisory and Company Boards

Investment Risk   Access to thought leaders, Management Valuation of direct co-investments subject matter experts and is produced by an independent Relationships, and third party research research and Monitoring Quarterly market Valuations intelligence

 Helps to determine and understand underlying  Ongoing monitoring of both potential and existing fund investments, quartile rankings and how funds PE database deals for both funds and direct co-investments compare to industry benchmarks management Benchmarking system

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 33 Co-investment Quarterly Portfolio Review (QPR)

• Review company background, thesis, and transaction highlights • Provide update for the quarter • Financial snapshot • Performance update • Actual vs. Plan • Equity Bridge • Debt & Liquidity analysis

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 34 Valuation policy

Direct co-investments are reviewed quarterly alongside third party valuation firms, based on review of financial information provided by the GPs and other factors including:

 Current and or revised business plans  Comparable public company multiples  Recent financing round  Recent transactions in the same or similar securities  Available market prices  Type of security held  Purchase price  Marketability  Restrictions on disposition  Original purchase price multiple  Current financial position and operating results

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 35 Questions?

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 36 Lynn Baranski

Lynn is a member of PEP's Management Committee, Investment Committee, Valuation Committee and Investment Operating Committee.

Ms. Baranski's service with the firm dates back to 1997, including her years with Merrill Lynch Investment Managers (MLIM), which merged with BlackRock in 2006. Before joining PEP in 2001, she worked for four years as a high yield portfolio manager and research analyst in the fixed income division. She joined MLIM from Bank of America Securities, Inc. (formerly NationsBank), where she was a founding member of the Private Equity Sponsor Advisory group. In this position, she advised clients on optimal capital structures for leveraged-buyouts and reviewed a number of private equity fund investments.

Ms. Baranski currently serves on the advisory boards of Black Diamond Opportunity Fund II, Tailwind Capital Partners I and II, Weston Presidio Fund V, and Z Capital Partners Fund II. Additionally, she is on the Board of Directors of Juweel Holdings and is an observer to the Board of Directors of TowerCo 2013 and Canbriam Energy Inc. She previously served on the Board of Directors of Evenflo and was an observer to the Board of Directors of TowerCo II.

Ms. Baranski earned a BA degree in history and art history from Wake Forest University and an MBA degree in finance from Vanderbilt University.

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 37 Thank You!

Contact Information

Lynn Baranski, Managing Director (609) 282-3612 [email protected]

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 38 Appendix A SAMPLE QPR

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 39 Sample QPR: Company A QPR

COMPANY BACKGROUND TRANSACTION HIGHLIGHTS  Company A is the leading U.S. provider of facility-based outsourced physician  Type: Leveraged Buyout services for emergency rooms (“Business 1”) and medical transportation services  Sponsor: Sponsor (“Business 2”)  Date of Investment: Q2 2011  In Feb-10, Sponsor won the bid for Company A at a purchase price of $XX/share  Program: in a public-to-private transaction  Transaction Value: $X.X billion (incl. fees & expenses)  Previous PE Owner purchased Company A from Laidlaw International in Feb-05  Entry EBITDA Multiple: X.Xx PF EBITDA (incl. recent acquisitions) and took the Company public in Dec-05  PEP Investment: $XX million  Company A maintains a diversified portfolio of long-term customer relationships  Total Value1: $XXX million with high contract retention rates (98% Business 2; 90% Business 1) with an  Realized Proceeds: $XX million average age of 34 and 14 years at Business 2 and Business 1, respectively, for  FYE 31 December top 10 customers  Status: Unrealized  ~25k employees (17k Business 2 employees; 8k Business 1 employees); mostly  MOIC2 / IRR3: X.Xx / XX% IRR physicians, paramedics and medical technicians

INVESTMENT THESIS INVESTMENT UPDATE  Leading multi-location and recession resistant services business in a highly  The business is 5.4% ahead of plan for EBITDA as at Q4 2012 at $411m fragmented market; Business 1 & Business 2 hold #1 market shares  In October 2012, Company A completed a dividend recapitalization via a $450  Strong recurring cash flowing business with minimal capex needs million HoldCo PIK Toggle offering, returning approximately 46% of original equity invested  Proven, experienced management team (with significant rollover equity & “skin in the game”) and strong Board oversight from Sponsor Operating Partner (John  Business 1 Q4 2012 Adjusted EBITDA was up 23.5% versus prior year due to Smith) and John Smith (Chairman) strong sales growth and a reduction in year-over-year insurance expense  Strong secular volume trends (fueled by aging baby boomers) support demand  for value-added services provided by Company A Business 2 Q4 2012 Adjusted EBITDA was up 65.0% versus prior year primarily driven by Business 2 cost and productivity initiatives  Benign reimbursement environment in Emergency Department & Ambulance services; Emergency nature of services with only 20-25% of revenues generated  News reports suggest that that company is planning an IPO and is looking to by medicare/medicaid payers mitigates risk of pricing pressure appoint underwriters in the near future. Sponsor feels that the market would welcome an IPO of this size and the comps are trading well (Comp.: 15x+) vs.  Strong sponsorship in Sponsor provides opportunity for operational improvement, Sponsor’s base case exit of 8.5x EV/EBITDA particularly in underperforming Business 2 segment; Business 2 is ~2.5x larger than Competitor, but ~400 bps behind in EBITDA margin  2013 EBITDA is expected to be $450 - $480m

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 40 Company A: Q4 2012 Update QPR Business 1 Update  Of Business 1's net revenue for the year ended December 31, 2012, approximately 77% was derived from our hospital contracts for emergency department staffing, 12% from contracts related to anesthesiology services, 5% from our hospitalist/inpatient services, 3% from our radiology/teleradiology services, 1% from surgery services and 2% from other hospital management services. Approximately 82% of Business 1's net revenue was generated from billings to third party payors and patients  Business 1 Q4 2012 net revenue was up 19.2% versus prior year driven by strong growth in net new contracts and continued same store contract growth  Business 1 Q4 2012 Adjusted EBITDA was up 23.5% versus prior year due to strong sales growth and a reduction in year-over-year insurance expense  Business 1 Service Line Integration: strong performance on initiative to provide single customer contact point for all Business 1 services (98 facilities, or 19% of Business 1 facilities now have 2 or more services vs. 10% in 2010); continued opportunities to cross-sell to existing clients and develop new relationships Business 2 Update  Approximately 85% of Business 2's net revenue for the year ended December 31, 2012 was transport revenue derived from the treatment and transportation of patients, including fixed-wing air ambulance services, based on billings to third party payors, healthcare facilities and patients. The balance of Business 2's net revenue is derived from direct billings to communities and government agencies, including FEMA, for the provision of training, dispatch center and other services  Excluding FEMA revenue related to Hurricane Sandy, Business 2 Q4 2012 net revenue declined 7.4% versus prior year as a modest increase in same market revenue was more than offset by certain exited markets and contracts; including FEMA, Business 2 net revenue increased 3.2% year-over-year in Q4  Business 2 Q4 2012 Adjusted EBITDA was up 65.0% versus prior year primarily driven by Business 2 cost and productivity initiatives  Business 2 Margin Improvement: significant initiative with well-defined timing and cost opportunities associated with contract rationalization, organizational restructuring, field operations optimization, support function efficiencies, infrastructure consolidation and technology efficiencies; Business 2 margins were up 160 bps in 2012; continued margin improvements expected in 2013 and beyond as next stages of initiatives are phased in Other strategic initiatives  Continuum of Care Platform Expansion: launched new operating segment, Business 3, which provides physician-led, post-discharge transitional care services into the “medical home” for chronic disease patients; completed platform acquisitions of Acquisition 1 (August 2012) and Acquisition 2 (December 2012)  Selected Acquisitions: acquisition spend of $192mm in 2012 primarily related to Business 3 platform investments, as well as 3 small tuck-in acquisitions in Business 1 segment; highly fragmented markets provide ample supply of future tuck-in acquisition opportunities across all three segments Dividend Recapitalization  In October 2012, Company A completed a dividend recapitalization via a $450 million HoldCo PIK Toggle (due 2017) offering, returning approximately 46% of original equity invested. Including this, the effective total leverage post refinancing at an aggregated hold-co level will be 6.7x – in line with the initial acquisition leverage multiple Other updates  News reports suggest that the company is planning an IPO and is looking to appoint underwriters in the near future. Sponsor feels that the market would welcome an IPO of this size and the comps are trading well (Comp.: 15x+) vs. Sponsor’s base case exit of 8.5x EV/EBITDA

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 41 QPR Company A: Quarterly Snapshot At acq. At acq. 25-May-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 25-May-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12

Operational Metrics Current Expectations of MOIC LTM Revenue 2,859.3 3,107.6 3,153.1 3,173.7 3,206.4 3,300.1 Low 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x LTM EBITDA 331.0 343.7 353.6 378.6 391.4 411.0 Base 2.90x 2.90x 2.90x 2.90x 2.90x 2.90x Total Debt 2,392.0 2,372.3 2,369.6 2,202.2 2,149.7 2,222.2 High 3.60x 3.60x 3.60x 3.60x 3.60x 3.60x Total Debt / EBITDA 7.23x 6.90x 6.70x 5.82x 5.49x 5.41x Net Debt 2,265.0 2,238.3 2,140.2 2,078.0 2,021.3 2,164.7 Valuation Methodology Net Debt / EBITDA 6.84x 6.51x 6.05x 5.49x 5.16x 5.27x Valuation Policy 1 1 6 6 6 1-Yr Liquidity Ratio* – 4.09x 5.17x 3.81x 3.95x 2.94x Sum. of Val. Change EI with ME EI with ME EI with ME EI with ME EI with ME 3-Yr Liquidity Ratio** – 3.30x 3.01x 2.47x 2.57x 2.35x Performance Category 5 5 5 5 5 Deleveraging? – Yes Yes Yes Yes Yes Valuation Metrics Debt Maturities Total Invested Capital 85.0 85.0 85.0 85.0 85.0 85.0 2012 – – – – – – PEP Followon Invst. – – – – – – 2013 – – – – – – EV / EBITDA Multiple 9.54x 8.00x 8.57x 9.50x 10.00x 9.80x 2014 – – – – – – Enterprise Value 3,156.5 3,129.8 3,031.7 3,343.1 3,568.5 3,727.4 2015 – – – – – – Total Equity Value 891.5 891.5 891.5 1,194.1 1,475.5 1,653.2 2016 – 350.0 88.6 129.2 129.5 255.2 PEP Equity Value 85.0 85.0 85.0 99.4 122.8 142.7 2017 – – – – – – PEP Equity Ownership 9.5% 9.5% 9.5% 8.3% 8.3% 8.3% 2018 – 1,421.1 1,417.9 1,265.6 1,213.1 1,160.6 Total Equity Dist. – – – – – 412.0 2019 – 950.6 951.1 951.1 951.1 951.1 Cum. Total Equity Dist. – – – – – 412.0 2020 – – – – – – PEP Equity Dist. – – – – – 39.4 Available Liquidity 477.0 134.0 490.8 345.0 348.9 152.4 Cum. PEP Equity Dist. – – – – – 39.4 MOIC 1.00x 1.00x 1.00x 1.17x 1.44x 1.68x Follow-on & Reserve Analysis Follow-on Invst. Outstandng – – – – – – Base Case Exit Mult. 8.50x Capital Deployed to Date 85.0 85.0 85.0 85.0 85.0 85.0 Additional Follow-on – – – – – – Note: Valuation from third-party firm based on prior quarter's financial data. Prob. of Follow-on 0% 0% 0% 0% 0% 0% IC Approved? No No No No No Comments

Legend Valuation Policy Performance Category Reason for Valuation Movement 1 Held at Cost 1 Underperforming with covenant tightness EBITDA increase (EI) 2 New valuation set by 3rd Party 2 Underperforming with no covenant issues EBITDA decrease (ED) 3 Quoted Stock Price 3 Performing with significant multiple contraction Multiple Contraction (MC) 4 Realization 4 Performing with limited or no multiple contraction Multiple Expansion (ME) 5 Recent Transaction Multiples 5 Performing with multiple expansion EI with MC 6 Recent Market Multiples ED with MC 7 Recent Market and Transaction Multiples ED with ME 8 Recent Market and DCF

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 42 Company A: Performance QPR

Summary Financials Equity Bridge (in $ millions) 25-May-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 1,800

Revenue 2,859.3 3,107.6 3,153.1 3,173.7 3,206.4 3,300.1 1,600 156 YoY growth – 1.4% 1.5% 0.7% 1.0% 2.9% 412 1,400

EBITDA 331.0 343.7 353.6 378.6 391.4 411.0 1,200 100 162 YoY growth – 4.1% 2.9% 7.1% 3.4% 5.0% 1,000 % of revenue 0.1 0.1 0.1 0.1 0.1 0.1 87 800 1,497 Interest -- 112.6 151.2 171.7 169.3 171.1 600

Capex -- 64.8 62.3 68.6 72.0 60.2 400 892

Net Debt 2,265.0 2,238.3 2,140.2 2,078.0 2,021.3 2,164.7 200 Net Debt / EBITDA 6.8x 5.7x 6.1x 5.5x 5.2x 5.3x 0 EBITDA / Interest - 3.5x 2.3x 2.2x 2.3x 2.4x (EBITDA-Capex) / Interest - 2.9x 1.9x 1.8x 1.9x 2.0x 1Ownership is diluted by equity incentive awards granted to management

Actual vs. Plan

Revenue EBITDA EBITDA Margin 4,400 550 14% 3,900 500 13% 450 3,400 13% 400 2,900 350 12% 2,400 300 12% 1,900 250 11% 1,400 200 900 150 11% 400 100 10%

Revenue Plan Revenue EBITDA Plan EBITDA EBITDA Margin Plan Margin

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 43 QPR Company A: Debt & Liquidity Analysis

Debt Structure Covenant Cushion At acq. (in $ millions) Interest Rate 25-May-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12

ABL Revolver L+375 – 88.6 129.2 129.5 255.2 of which - Letter of Credit 88.6 129.2 129.5 130.2 of which - Drawn facility – – – 125.0 Covenant Lite Transaction Term Loan L+375 1,440.0 1,417.9 1,265.6 1,213.1 1,160.6 Senior Unsecured Notes 8.13% 950.0 951.1 951.1 951.1 951.1 Capital Lease Obligations – 0.6 0.5 0.5 0.4 Other 2.0 – (15.0) (15.0) (15.0) Total Debt 2,392.0 2,369.6 2,202.2 2,149.7 2,222.2

Credit Analysis

Debt Maturity Schedule Debt Ratios Liquidity Ratios 1,400 600.0 4.5x 8.0x 3.5x 4.1x 3.9x 3.8x 4.0x 7.0x 2.9x 1,200 3.0x 500.0 3.3x 3.5x 6.0x 350.0 2.5x 1,000 400.0 3.0x 2.5x 2.6x 5.0x 1.9x 1.8x 2.0x 2.5x 800 220.8 220.5 4.0x 300.0 2.0x 6.8x 1.5x 3.0x 600 5.7x 200.0 1.5x 5.5x 5.2x 1.0x 2.0x -- 1.0x 400 100.0 0.5x 1.0x 127 134 124 128 0.5x 200 - - -- 0.0x At acq. 31-Dec-11 30-Jun-12 30-Sep-12 At acq. 31-Dec-11 30-Jun-12 30-Sep-12 Cash Undrawn Revolver – Net Debt / EBITDA 2012 2013 2014 2015 2016 2017 2018 2019 (EBITDA-Capex) / Interest 1-Yr Liquidity Ratio 3-Yr Liquidity Ratio

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 44 Appendix B DEFINITIONS AND DISCLOSURES

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 45 General Disclosures These materials have been provided to you on a confidential basis for information purposes only, are subject to modification, change or supplement without prior notice to you (including without limitation any information pertaining to strategies used), and do not constitute investment advice or recommendation and should not be relied upon by you in evaluating the merits of investing in any securities referred to herein. The information presented herein is provided solely as reference material with respect to PEP and its activities. It does not constitute an offer to sell or a solicitation of an offer to buy any interests in any PEP fund (each, a “PEP Fund” and, collectively, the “PEP Funds”). Any such offering will occur only at such time that a private placement memorandum (“PPM”) of a PEP Fund is made available and only in accordance with the terms and conditions set forth in the PPM. Prospective investors are strongly urged to review the PPM when available for more complete information (including the risk factors described therein). All information provided herein is qualified by reference to the PPM. There can be no assurance that a PEP Fund’s investment objectives will be achieved and investment results may vary substantially over time. Investment in a PEP Fund is not intended to be a complete investment program for any investor. PEP is not making any recommendation or soliciting any action based upon the information contained herein. This information is furnished to you with the express understanding that it does not constitute: (i) an offer, solicitation or recommendation to invest in a particular investment in any jurisdiction; (ii) a means by which any such investment may be offered or sold; or (iii) advice or an expression of PEP’s view as to whether a particular investment is appropriate for you and meets your financial objectives. The information contained in these materials has been compiled as of March 2015, unless otherwise stated herein. Where the information is from third party sources, the information is from sources believed to be reliable, but none of the PEP Funds, their placement agent, BlackRock, Inc., PEP, PEP Funds’ advisers or any of their respective affiliates, or the partners, officers or employees (as the case may be) of any of them, has independently verified any of the information contained herein or assumes any liability for it. Additionally, none of these parties is required to provide recipients of this document with updates, modifications, or amendments to the information, opinions, estimates, or forecasts described herein should BlackRock, its affiliates, or any third party sources determine that such currently set forth communication becomes inaccurate. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of BlackRock as a whole or any part thereof and no assurances are made as to their accuracy. Past performance is not indicative of future results. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuations may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. All investments risk the loss of capital. No guarantee or representation is made that any private equity investment or fund offered or sponsored by PEP will achieve its investment objective. In addition, there are risks associated with investing in private equity that are not applicable to typical investments in the public equity markets. These risks include, but are not limited to, the following: private equity investments are speculative and involve a high degree of risk; an investor could lose all or a substantial amount of his or her investment; interests in private equity investments are illiquid and there is no secondary market nor is one expected to develop for interests in such investments or any fund offered or sponsored by PEP; there are significant restrictions on transferring private equity investments; private equity investments experience volatile performance; private equity funds are often concentrated and lack diversification and regulatory oversight; private equity funds have high fees and expenses (including “carried interest”) that will reduce such investments’ returns and a private equity investment or a fund offered or sponsored PEP may invest in other funds which themselves charge management fees and carried interest (typically, 20% of the net profits generated by the fund and paid to the manager); a private equity investor has an ongoing financial commitment to make contributions to such funds, is subject to severe consequences in cases of default and may have to recontribute distributions to private equity investments; and funds offered or sponsored by PEP can be subject to various conflicts of interest arising from the fact that many private equity sponsors, including BlackRock, are global financial services firms which provide a broad array of financial services and are, in some cases, related to other large financial services firms. Private equity funds may make a limited number of investments. These investments may be in start-up ventures with little or no operating histories or in companies that may utilize significant leverage and will involve a high degree of risk. In addition, a PEP Fund may make minority equity investments where such PEP Fund may not be able to protect its investment or control or influence effectively the business or affairs of such entities. The performance of a PEP Fund may be substantially adversely affected by a single investment. A PEP Fund may obtain rights to substantially influence the conduct of the management of companies in which it invests, including its members serving on the board of directors. This or other measures could expose the assets of a PEP Fund to claims by a portfolio company, its security holders, its creditors and others. Also, private equity investments may be highly leveraged, which increases the risk of investment losses. For a more extensive discussion of the risks associated with an investment in such funds, you should carefully review the “Certain Risk Factors” and “Potential Conflicts of Interest” sections of the respective PEP Fund’s PPM.

JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 46 Please note that, generally, an investor in a PEP Fund may not transfer, assign, or otherwise dispose of his/her/its interests in such PEP Fund (the “Interests”), except with the prior written consent of the general partner of the relevant PEP Fund, which has sole discretion regarding the granting of such consent. In addition, investors who do not fund their capital commitments when due will be subject to severe penalties, including forfeiture of their Interests. Investors should carefully review the relevant PEP Fund’s PPM, when it becomes available, and, specifically, the “Certain Risk Factors” section. Interests have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other U.S. or non-U.S. securities laws, will not be offered or sold in the United States or to U.S. persons unless the securities are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available, and will be offered and sold for investment pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any other applicable U.S. and non-U.S. securities laws. The Interests may not be transferred or resold except as permitted under the Securities Act and any applicable U.S. or non-U.S. securities laws. The Interests have not been recommended by any U.S. federal, other U.S. or non-U.S. securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of these materials. Any representation to the contrary is a criminal offense. Interests are not insured by the U.S. Federal Deposit Insurance Company or any government agency, are not guaranteed by any bank and are subject to investment risks, including the loss of the principal amount invested. Investors should be aware that they may be required to bear the financial risks of an investment in the Interests for an indefinite period of time because the Interests (i) cannot be sold unless they are subsequently registered under all applicable securities laws or an exemption from registration exists and (ii) are subject to the restrictions on transfer contained in the limited partnership agreement of the relevant PEP Fund. Private equity investments are less transparent than public investments and private equity investors are afforded less regulatory protection than investors in registered public securities. Private equity funds are sold in private placements and may be offered only to individuals who are both “qualified purchasers” (as defined in U.S. Investment Company Act of 1940, as amended) and “accredited investors” (as defined in the Securities Act) and for whom the investment is otherwise suitable. There can be no assurance that a PEP’s investment objectives will be achieved and investment results may vary substantially over time. Investment in a PEP Fund is not intended to be a complete investment program for any investor. Opinions and estimates offered herein constitute the judgment of BlackRock and are subject to change. All opinions and estimates are based on assumptions, all of which are difficult to predict and many of which are beyond the control of BlackRock. In addition, any calculations used to generate the estimates were not prepared with a view towards public disclosure or compliance with any published guidelines. In preparing this document, BlackRock has relied upon and assumed, without independent verification, the accuracy and completeness of information provided by third parties. BlackRock believes that the information provided herein is reliable; however, it does not warrant its accuracy or completeness. The information contained herein is proprietary and confidential and may contain commercial or financial information, trade secrets and/or intellectual property of BlackRock. 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JUNE 2 – 4, 2015 ILPA MEMBERS-ONLY CONFERENCE PASADENA, CA 47