EFTA01378227.pdf

SRLR102 Alpha Group Capital Footnotes to Historical Investment Performance Slides (cont.) `Gross IRR': is the compound annualized gross internal rate of return based on the actual capital inflows and outflows from portfolio investments on the dates such Inflows and outflows occurred, and includes Unrealized Value as a terminal value as of June 30, 2018. Unless otherwise noted, all IRRs are presented on a 'gross" basis and do not reflect the deduction of management fees. partnership expenses, carried interest and other expenses borne by investors at the Fund level. The deduction of these amounts would have a significant effect on the investment results presented "Net IRK" for Skis II (fund only) and Siris III (fund only) is the compound annualized internal rate of return based on the actual capital inflows and outflows from investors on the dates such inflows and outflows occurred, and includes Unrealized Value as a terminal value as of June 30, 2018 and is calculated alter payment of applicable management fees, partnership expenses, carried interest and other applicable expenses bome by investors at the Fund level. An individual investors Net IRR may vary based on the applicable management fee rate and carried interest percentage, as well as differences in the timing and amount of individual capital contributions and distributions. For information regarding the pro forma Net IRR for Sins II • Co-invest and Sins III • co-invest, please refer to note 9 below -Gross MOIC-: (i.e.. the total value divided by the equity invested) represents the total value as a multiple of cash invested, on a gross basis, and does not reflect the deduction of management fees, partnership expenses, carried interest and other expenses borne at the Fund level by investors. The deduction of these amounts would have a significant effect on the investment results presented. "Net MOIC' for the Sins II (fund only) and Sins III (fund only) represents the total value as a multiple of cash invested. on a net basis, and reflects the deduction of management fees. partnership expenses, carried interest and other expenses borne at the Fund level by investors. An individual investor's Net MOIC may vary based on the applicable management fee rate and carried interest percentage, as well as differences in the amount of individual capital contributions and distributions. For information regarding the pro forma Net MOIC for Sins II + Co-invest and Sids III + Co-invest, please refer to note 9 below. Exact Net MOIC for individual investments cannot be calculated due to the lack of a mechanism to accurately allocate tees, expenses and carried interest to each investment and, for that reason, net performance for individual investments has not been included. "Pro forma Net 'RR' and "pm forma Net MOIC': (collectively, "pro forma Net Retums') for Sids II • Co-invest and Sins III • Co-invest are estimated and hypothetical return calculations as co-investment amounts are not typically subject to management fees, carried interest or certain other expenses typically borne by fund investors as part of a traditional fund structure. Such pro forma Net Retums (as of June 30, 2018) for Siris II • Co-invest and Sins III • Co-Invest are calculated in the same manner as Net IRR and Net MOIC and apply the same ratio of Net Returns versus cash int out Gross Returns experienced by Sins II (fund only) or Sins III (fund only), as of June 30, 2018 as applicable, to the cash in/ out Gross Returns for Siris II + Co-invest or Sins III • Co-invest. No single Sins investor received these net returns for Sias II • Co-Invest or Skis III + Co-Invest. Net IRR and Net MOIC shown for Sins II (fund only) and Siris III (fund only) are based on the total capital inflows and outflows of partners that bore management fees and carried interest and assume management fees and carried interest at fee base rates of 2.0% and 20.0%, respectively, with all investors treated as if they were partners from the first closing date. Because certain investors received a discount on fees andror carried interest, actual net returns to Sins II and Sins III partners who did receive such a discount would have been higher. Net Returns are not presented for Siris I as Sids I did not have a traditional fund structure as it was not subject to fund-level management fees, carried interest or expenses. The deduction of management fees, carried interest and fund-level expenses would have a significant effect on the investment results presented. The actual realized return of such unrealized investments may differ materially from the returns indicated herein. Total RG initial equity investment of $547.3 million composed of $296.1 million of primary equity and $100 million bridge financing provided by Sins II and Sins III, and $151.2 million of co- investment by certain Sins limited partners (approximately $1.2 million of total co-Invest was allocated to Sins II limited partners). Accordingly, Sins II's pnmary equity Investment is $96.1 million and bridge financings were $32.5 million. and Sins primary equity investment is $200 million and bridge financings were $67.5 million. Siris partially refinanced the bridge financing provided by Sids II and Siris III in April 2016 and subsequently fully financed the remaining bridge financing in November 2016. 11 Realized Value for TNS reflects the proceeds from a dividend recapitalization completed in February 2014, the sale of the Gateway "Call Option' division to MasterCard In December 2014, the sale of a legacy -Bond" telecom directory division to Neustar in December 2015, and a second dividend recapitalization completed in January 2016. The sale of Tekelec to Oracle closed during June 2013. In connection with the sale, a portion of the sale proceeds was withheld from the initial distribution subject to an escrow agreement for a period of 24 months pending claims for breaches of representations and warranties and to serve as an expense reserve until the escrow is released. Due to the structure of the investment. Total Value includes approximately $15 million and $10 million for Sins II + Co-Invest and Sins II, respectively. of fees received by Sirs on the sale. Such $10 million portion of such fees that are allocable to Sins II benefits its partners in the form of management fee offsets. No such benefit was received by Sins co-investors. During January 2014, Sins dosed the sale of its investment in ADI to DTI. a strategic acquirer. Realized Value includes approximately $3 million of fees received by Skis based on a modified economic agreement with the minority equity holder and creditor of ADI. The portion of such fees that are allocable to Sins II benefit its partners in the form of management fee offsets. SIR'S 65 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0075389 CONFIDENTIAL SDNY_GM_00221573 EFTA01378227