WCAS believes that the most proven method for increasing equity value is operational growth of companies. Since 1998, over 90% of our investment returns in our two target industries were generated by portfolio company operational growth. WCAS believes that operating growth not only drives value creation in private equity but also provides the flexibility to be opportunistic in exiting investments and mitigates the risks in challenging economic periods. 

All WCAS portfolio companies follow a standard operating cycle, which facilitates a consistent monitoring of portfolio company performance. In addition, Value Maximization Plans ("VMPs") are developed for each new investment by our Investment Professionals, Resources Group and portfolio company management teams. These VMPs are unique for each portfolio company and encompass a wide range of strategic initiatives, including revenue enhancement and cost management strategies; corporate governance; key management team members and incentives; financial reporting dashboards as well as potential acquisitions and integration timelines.

WCAS capitalizes our portfolio companies to pursue growth initiatives by providing financial flexibility through relatively lower leverage levels. As of December 31, 2012, the debt to EBITDA ratio for the WCAS portfolio of companies is 4.0 times. Thus, our portfolio companies are well capitalized for growth and can weather various economic environments.

WCAS is also actively involved in the corporate development acquisition programs of our portfolio companies. The WCAS network of relationships generates significant deal flow for our portfolio companies, and our expertise in negotiating and financing these acquisitions adds value to our investments.

WCAS's strategy of providing value-added operational focus to our portfolio companies, supplemented by strategic acquisition programs, has served as the catalyst for superior value creation for our investors.