The Manual of Ideas: The Superinvestor Issue, February 2010

PORTFOLIO MANAGER’S REVIEW

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A Monthly Publication of BeyondProxy LLC www.manualofideas.com [email protected] February 18, 2010

When asked how he became so successful, Buffett answered: “we read hundreds and hundreds of annual reports every year.”

Edited by the

Manual of Ideas Research Team

“If our efforts can further the goals of our members by giving them a discernible edge over other market participants, we have succeeded.”

Top Five Ideas In This Report

Fair Isaac (NYSE: FICO) ………………… p. 46 Hyatt Hotels (NYSE: H) …………………….. p. 50 Investors Title Company (Nasdaq: ITIC) ………………… p. 54 Republic Aiways (Nasdaq: RJET) ………………. p. 56 Vodafone (Nasdaq: VOD, London: VOD) p. 60

Also Inside

Editor’s Commentary …………….. p. 4 Portfolios with Signal Value™ … p. 6 Interview: Aaron Edelheit ……… p. 28 Interview: Ori Eyal …………….. p. 33 Interview: Marko Vucemilovic … p. 41 100 Superinvestor Stocks …….. p. 122

About Portfolio Manager’s Review

Our goal is to bring you investment ideas that are compelling on the basis of value versus price. In our quest for value, we analyze the top holdings of top fund managers. We also use a proprietary methodology to identify stocks that are not widely followed by institutional investors. Our managing editor John Mihaljevic is a member of Value Investors Club, an exclusive community of money managers, and has won the Club’s prize for best investment idea. John is a trained capital allocator, having studied under Yale chief investment officer David Swensen and served as research assistant to Nobel laureate James Tobin. John holds a BA in Economics, summa cum laude, from Yale and is a CFA charterholder.

THE SUPERINVESTOR ISSUE

► Snapshot of 100 companies owned by superinvestors

► Latest holdings of 20+ top investors ► 20+ companies profiled by MOI research team

► Proprietary selection of Top 5 candidates for investment ► Plus: Exclusive Interview with Aaron Edelheit

► Plus: Exclusive Interview with Ori Eyal ► Plus: Exclusive Interview with Marko Vucemilovic

Superinvestor companies mentioned in this issue include Accenture, Air Transport Services Group, Alleghany, Alliance One,

AllianceBernstein, ATP Oil & Gas, Audiovox, Automatic Data Processing, AutoNation, BIDZ.com, Biogen Idec, Blockbuster, Boston Scientific, BreitBurn Energy, Brown & Brown, CapitalSource, Cardinal Health,

CareFusion, Chesapeake Energy, Chipotle Mexican Grill, CIT Group, Citigroup, Coca-Cola, Contango Oil & Gas, Corrections Corp. of America,

Cresud, DDi Corp., Dell, Dillard's, DineEquity, DIRECTV, EMC, Energizer Holdings, Enzon Pharma, Exxon Mobil, Fair Isaac,

Fairfax Financial, Fidelity National, Gastar Exploration, General Electric, Hallmark Financial, Home Depot, Horsehead, HSN, Hyatt Hotels, Intelligent Systems, Interactive Intelligence, International Assets,

International Coal, Investors Title, ITC Holdings, Johnson & Johnson, The Knot, Kraft Foods, Lab Corp. of America, Leucadia National, Level 3 Communications, Lions Gate Entertainment, McDonald's,

Molson Coors Brewing, Monsanto, Multimedia Games, MVC Capital, Northrop Grumman, Osteotech, Overstock.com, Patterson Companies, Paychex, Potash, Redwood Trust, Republic Airways, Republic Services,

RSC Holdings, SandRidge Energy, Seabridge Gold, Seahawk Drilling, Silicon Storage Technology, Stamps.com, Steak n Shake, Stratasys,

Strayer Education, Take-Two, Tandy Leather Factory, Teck Cominco, Terex, Texas Industries, Theravance, TransDigm Group, tw telecom, USG, ViaSat,

VistaPrint, Vodafone, Walgreen Company, Wal-Mart, Weight Watchers, Winmark, Winthrop Realty, Yum! Brands, Zenith National, and more.

(profiled companies are underlined)

© 2009-2010 by BeyondProxy LLC. All rights reserved. www.manualofideas.com February 18, 2010 – of 144

Table of Contents EDITOR’S COMMENTARY .............................................................................4 PORTFOLIOS WITH “SIGNAL VALUE” ........................................................6

BILL ACKMAN, PERSHING SQUARE ........................................................................................... 7 ZEKE ASHTON, CENTAUR ......................................................................................................... 8 BRIAN BARES, BARES CAPITAL ................................................................................................ 9 BRUCE BERKOWITZ, FAIRHOLME ............................................................................................ 10 RICHARD BREEDEN, BREEDEN CAPITAL .................................................................................. 11 WARREN BUFFETT, BERKSHIRE HATHAWAY ............................................................................ 12 IAN CUMMING & JOE STEINBERG, LEUCADIA ........................................................................... 13 DAVID EINHORN, GREENLIGHT ............................................................................................... 14 TOM GAYNER, MARKEL GAYNER ............................................................................................ 15 GLENN GREENBERG, BRAVE WARRIOR (FORMERLY CHIEFTAIN) ............................................... 16 MASON HAWKINS, SOUTHEASTERN ........................................................................................ 17 CHRIS HOHN, CHILDREN’S INVESTMENT .................................................................................. 18 CARL ICAHN, ICAHN PARTNERS .............................................................................................. 19 SETH KLARMAN, BAUPOST .................................................................................................... 20 EDDIE LAMPERT, RBS PARTNERS .......................................................................................... 21 DAN LOEB, THIRD POINT ....................................................................................................... 22 STEVE MANDEL, LONE PINE ................................................................................................... 23 MOHNISH PABRAI, PABRAI FUNDS .......................................................................................... 24 BRYANT RILEY, RILEY INVESTMENT ........................................................................................ 25 PREM WATSA, FAIRFAX ......................................................................................................... 26 WALLY WEITZ, WEITZ FUNDS ................................................................................................. 27

EXCLUSIVE INTERVIEW WITH AARON EDELHEIT ................................. 28 EXCLUSIVE INTERVIEW WITH ORI EYAL ................................................ 33 EXCLUSIVE INTERVIEW WITH MARKO VUCEMILOVIC ......................... 41 TOP FIVE SUPERINVESTOR SELECTIONS .............................................. 46

FAIR ISAAC (FICO) – SOUTHEASTERN ................................................................................ 46 HYATT HOTELS (H) – PERSHING SQUARE ......................................................................... 50 INVESTORS TITLE (ITIC) – MARKEL GAYNER ....................................................................... 54 REPUBLIC AIRWAYS (RJET) – GREENLIGHT ....................................................................... 56 VODAFONE (VOD) – GREENLIGHT .................................................................................... 60

NEW OR INCREASED SUPERINVESTOR HOLDINGS ............................. 66 BROWN & BROWN (BRO) – WEITZ ..................................................................................... 66 INTERNATIONAL COAL GROUP (ICO) – FAIRFAX .................................................................. 70 OSTEOTECH (OSTE) – SPENCER ..................................................................................... 74 REPUBLIC SERVICES (RSG) – BERKSHIRE HATHAWAY ......................................................... 78 RSC HOLDINGS (RRR) – FAIRHOLME ................................................................................. 80

UNCHANGED (OR OFFSETTING) SUPERINVESTOR HOLDINGS .......... 84 AUTONATION (AN) – ESL INVESTMENTS ............................................................................ 84 CORRECTIONS CORP. OF AMERICA (CXW) – PERSHING SQUARE ......................................... 88 GASTAR EXPLORATION (GST) – SPENCER ............................................................................. 92 JOHNSON & JOHNSON (JNJ) – BERKSHIRE HATHAWAY , FAIRFAX ..................................... 96 MOLSON COORS BREWING (TAP) – CHILDREN’S , THIRD POINT .................................... 100 MONSANTO (MON) – LONE PINE , WEITZ ..................................................................... 102 OVERSTOCK.COM (OSTK) – CHOU , FAIRFAX ............................................................... 106 POTASH CORP. (POT) – CHILDREN’S , PABRAI ............................................................. 110 TRANSDIGM (TDG) – THIRD POINT ................................................................................... 114

REDUCED OR ELIMINATED SUPERINVESTOR HOLDINGS ................. 116 HSN (HSNI) – WEITZ ...................................................................................................... 116 VISTAPRINT (VPRT) – LONE PINE .................................................................................... 119

SNAPSHOT OF 100 SUPERINVESTOR HOLDINGS ............................... 122 IN ALPHABETICAL ORDER ..................................................................................................... 122 BY MARKET VALUE .............................................................................................................. 124 BY SECTOR ......................................................................................................................... 126 STOCK PRICE PERFORMANCE .............................................................................................. 128 FREE CASH FLOW ............................................................................................................... 130 P/E MULTIPLES ................................................................................................................... 132 LATEST QUARTERLY EPS SURPRISES ................................................................................... 134 REVENUE AND EPS GROWTH ............................................................................................... 136 PERCENTILE RANK WITHIN INDUSTRY .................................................................................... 138 INSIDER BUYING AND OWNERSHIP ........................................................................................ 140

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Editor’s Commentary Welcome to another superinvestor issue of Portfolio Manager’s Review. Some

of the most highly regarded value-oriented investment managers have filed their quarterly 13F-HR forms, and we are pleased to bring you their top ideas. As we have done each quarter, we list the top holdings of selected investors, both ranked by position size as well as by what we call Signal Rank™. The latter draws on our proprietary methodology for identifying the current top ideas of the superinvestors we track. Look inside for more information on Signal Rank™.

We highlight the following five ideas as worthy of further investigation:

Fair Isaac (FICO) is 20%-owned by Mason Hawkins’ Southeastern Asset Management, which has added to its stake in recent months. Fair Isaac has leveraged the success of the industry-leading FICO credit score brand to create products in related areas and non-financial verticals. These diversification efforts as well as a variable cost structure have dampened the impact of lower demand for high-margin credit scores. FICO continues to be a fundamentally attractive business with low capital intensity, good normalized margins, and a strong competitive position. Longer term, it remains to be seen how successful the FICO score will be in terms of beating back challenges from rival products. We suspect that the brief window of opportunity that opened up for competing products as a result of the credit cisis may be shut before competitors are able to challenge the supremacy of the FICO brand. In any case, with FICO shares trading at a 10+% FCF yield in a still below-normal operating environment, we believe the shares are too cheap to ignore.

Hyatt Hotels (H), the owner and operator of hotel properties worldwide, was taken public last November by the controlling Pritzker family. Hyatt owns, leases, manages or franchises 120,000 rooms in 415 hotels. Despite investment bankers clamoring for the deal, the IPO appears to have exhibited some of the characteristics of undersold offerings. Recent GAAP financials neither reflect the company’s true earning power nor the intrinsic value of the hospitality assets. The investment case for Hyatt is distinguished by the high asset backing, a net cash position, and an interested and active owner in the Pritzkers. The company should be able to create long-term value by franchising and growing the Hyatt brand in global markets. Bill Ackman’s Pershing Square Capital Management purchased a 6% ownership stake following the IPO. Whether Ackman will seek to convince the Pritzkers of the virtues of splitting Hyatt into a real estate-owning entity and a hotel-operating-and-franchising entity remains to be seen. At a valuation of 1.1x tangible book value stated at historical cost, we find the shares quite compelling.

Investors Title Company (ITIC) is 10%-owned by Tom Gayner of Markel. ITIC is a title insurer providing a non-discretionary service for real estate industry participants, primarily along the U.S. East Coast. As residential and commercial real estate transactions drive demand for title insurance, business has suffered in the real estate downturn. Despite the challenges facing the company, tangible book value per share would be up 50% since yearend 2004 if dividends were added back. While this may point to a potential issue surrounding loss reserve adequacy, management has strengthened provisions materially in the past three years. At 0.8x tangible book value, Investors Title shares appear undervalued based on prospects for an eventual recovery in real estate transaction volumes and/or pricing. The thesis for Investors Title is quite similar to our thesis for Stewart Information Services (STC), which we outlined in the January issue of Portfolio Manager’s Review.



Republic Airways (RJET) is 10%-owned by David Einhorn’s Greenlight Capital. Republic has undergone a transformation over the past twelve months, acquiring two established but distressed branded airlines who were also Republic customers—Frontier in Dallas and Midwest in Milwaukee. The purchases add a branded, risk-based model to the traditional business of flying for major network carriers under their brands. The latter model eliminated Republic’s exposure to fuel prices, fares and load factors, giving it a stable pre-tax profit margin. While Republic retains the fixed-fee business, growth is likely to be driven by branded operations. The new business mix may have prompted some holders to sell, as Republic’s shareholder base had been conditioned to view the company more as a fixed-margin service business than an airline business. The turnover in the shareholder base provides an opportunity to buy a well-run, profitable and cash-generative business at an unreasonably cheap price. We note that only $85 million of $2.7 billion in debt on Republic’s balance sheet is recourse to the company. Unrestricted cash amounts to roughly $5 per share, approaching the recent market price.

British mobile telephony giant Vodafone (VOD) is a new holding of David Einhorn’s Greenlight Capital. Vodafone shares offer a 6% dividend yield, supported by the company’s free cash flow even before Vodafone’s 45% stake in Verizon Wireless is considered. The minority interest in Verizon Wireless, the number-one U.S. mobile operator, may be Vodafone’s single most valuable asset. However, as Vodafone’s operating cash flow does not include a contribution from Verizon Wireless—because no cash dividend is being paid to Vodafone—the market may be ignoring this valuable asset when valuing Vodafone on the basis of reported FCF. Revaluation of Vodafone shares could occur following a potential resumption of cash distributions from Verizon Wireless some time this year. Regardless of how Verizon Wireless and other unconsolidated assets are monetized, a sum-of-the-parts analysis suggests that the market may be valuing Vodafone at 4x trailing EBITDA. This strikes us as too low given the company’s strong share in key mobile markets, growth prospects in emerging markets, and margin improvement potential.

In addition to the above five investment ideas and scores of others, we are also pleased to bring you three interviews in this issue of Portfolio Manager’s Review—with Ori Eyal, Aaron Edelheit, and Marko Vucemilovic. We were able to glean some truly unique insights from these value-oriented investors who manage funds that are somewhat smaller in size than those of the superinvestors we track. As a result, these three investors are in a position to uncover value opportunistically across the market capitalization spectrum. I believe you’ll enjoy their insights.

Sincerely,

John Mihaljevic, CFA and The Manual of Ideas research team



Portfolios With “Signal Value” Revealing the Top Ideas of Top Investors “Signal value” as opposed to “noise.” We present the

holdings of some of the world’s top investors. We look for

investors who have amassed impressive track records over

long periods of time. We choose these investors carefully

to avoid the noise inherent in most 13F-HR filings.

Top investors included in this section:

• William Ackman, Pershing Square • Zeke Ashton, Centaur • Brian Bares, Bares Capital • Bruce Berkowitz, Fairholme • Richard Breeden, Breeden Capital • Warren Buffett, Berkshire Hathaway • Ian Cumming & Joe Steinberg, Leucadia • David Einhorn, Greenlight • Glenn Greenberg, Brave Warrior • Tom Gayner, Markel Gayner • Mason Hawkins, Southeastern • Chris Hohn, Children’s Investment Fund • Carl Icahn, Icahn • Seth Klarman, Baupost • Eddie Lampert, RBS (ESL) • Dan Loeb, Third Point • Steve Mandel, Lone Pine • Mohnish Pabrai, Pabrai Funds • Bryant Riley, Riley Investment • Prem Watsa, Fairfax • Wally Weitz, Weitz Funds

Missing your favorite superinvestor? Let us know at [email protected].

MOI Signal Rank answers the question, “What are this

investor’s top ten ideas right now?” Rather than simply

presenting each investor’s largest holdings as of the recently

filed quarter end, the MOI’s proprietary methodology ranks

the companies in each investor’s portfolio based on the

investor’s current level of conviction in each holding, as

judged by the MOI.

Our proprietary methodology takes into account

a number of variables, including the size of a position in an

investor’s portfolio, the size of a position relative to the

market value of the corresponding company, the most recent

quarterly change in the number of shares owned, and the

change in the stock price of a position since the most recent

quarterly filing date.

For example, an investor might have the most

conviction in a position that is only the tenth-largest

position in such investor’s portfolio. This might be the case

if an investor invests in a small company, resulting in a

holding that is simply too small to rank highly based on size

alone. On the other hand, such a holding might represent

19.9% of the shares outstanding of the subject company,

suggesting a high level of conviction. Our estimate of the

conviction level would rise further if the subject company

has a 20% poison-pill threshold, thereby suggesting that the

investor has bought as much of the subject company as is

practically feasible.



Bill Ackman, Pershing Square Bill Ackman, managing member of Pershing Square Capital, is a value-oriented activist investor. He runs a concentrated portfolio with the largest ten equity investments accounting for the vast majority of his long book. Before the credit crunch developed into a full-blown economic crisis, Ackman made a strong case for why MBIA (MBI) and AMBAC (ABK) were overvalued and fundamentally more distressed than the market had judged at the time. On the long side, Ackman has approached large companies, including McDonald’s (MCD) and Target (TGT), with proposals for unlocking value. MOI Signal Rank™ – Top Current Ideas of Pershing Square

Market Price ($) Shares Owned Holdings

Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Hyatt Hotels H 5,098 29.34 29.81 -2% 2,766,958 new position 6% 3% 2 Kraft Foods KFT 43,034 29.09 27.18 7% 32,784,113 new position 2% 38% 3 Corrections Corp. of America CXW 2,260 19.57 24.55 -20% 10,936,672 no change 9% 11% 4 Landry’s Restaurants LNY 311 19.28 21.29 -9% 1,554,255 no change 10% 1% 5 Borders Group BGP 74 1.23 1.18 4% 10,597,980 no change 18% 1% 6 Greenlight Capital Re GLRE 846 23.30 23.59 -1% 250,000 no change 1% 0% 7 Target TGT 36,592 48.64 48.37 1% 20,790,815 -20% 3% 43% 8 Automatic Data Processing ADP 20,491 40.59 42.82 -5% 114,482 -98% 0% 0%

Top Holdings of Pershing Square – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Target TGT 36,592 48.64 48.37 1% 20,790,815 -20% 3% 43% 2 Kraft Foods KFT 43,034 29.09 27.18 7% 32,784,113 new position 2% 38% 3 Corrections Corp. of America CXW 2,260 19.57 24.55 -20% 10,936,672 no change 9% 11% 4 Hyatt Hotels H 5,098 29.34 29.81 -2% 2,766,958 new position 6% 3% 5 Landry’s Restaurants LNY 311 19.28 21.29 -9% 1,554,255 no change 10% 1% 6 Borders Group BGP 74 1.23 1.18 4% 10,597,980 no change 18% 1% 7 Greenlight Capital Re GLRE 846 23.30 23.59 -1% 250,000 no change 1% 0% 8 Automatic Data Processing ADP 20,491 40.59 42.82 -5% 114,482 -98% 0% 0%

New Positions Sold Out Positions Hyatt Hotels (H) Kraft Foods (KFT)

EMC (EMC) McDonald’s (MCD)

Portfolio Metrics Sector Weightings

Portfolio size $2 billion

Top 10 as % of portfolio 100%

Median market value $2 billion

Average market value $9 billion

Median price to earnings 16x

Median price to book 1.6x

0%

19%

80%

Financial

Consumer, Non-cyclical

Consumer, Cyclical



Zeke Ashton, Centaur Zeke Ashton is founder and managing partner of Centaur Capital, a Dallas-based investment firm. Centaur Capital serves as advisor to the Centaur family of private partnerships using a value-oriented long/short equity strategy. Centaur is also the sub-advisor to the Tilson Dividend Fund, a mutual fund utilizing an income-oriented value investing strategy. MOI Signal Rank™ – Top Current Ideas of Centaur


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Alleghany Y 2,341 263.36 276.00 -5% 15,300 12% 0% 5% 2 MVC Capital MVC 278 11.45 11.80 -3% 312,500 3% 1% 5% 3 Fidelity National Financial FNF 3,180 13.80 13.46 3% 228,200 new position 0% 4% 4 Lab Corp of America LH 7,621 71.76 74.84 -4% 77,900 no change 0% 7% 5 SPDR Gold GLD 38,866 107.04 107.31 0% 34,200 no change 0% 5% 6 Northrop Grumman NOC 17,830 58.89 55.85 5% 71,300 no change 0% 5% 7 Exxon Mobil XOM 307,624 64.80 68.19 -5% 52,600 16% 0% 5% 8 Fairfax Financial FRFHF 6,936 355.54 389.96 -9% 5,200 new position 0% 3% 9 Mass Financial MFCAF 141 9.24 9.30 -1% 15,242 new position 0% 0% 10 Chipotle Mexican Grill CMG 3,308 104.87 88.16 19% 41,000 n/m* 0% 5%

* On December 21, 2009, Chipotle shareholders approved a conversion into a single class of common stock. This resulted in Centaur owning Chipotle common stock rather than Class B common stock. Top Holdings of Centaur – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Lab Corp of America LH 7,621 71.76 74.84 -4% 77,900 no change 0% 7% 2 Alleghany Y 2,341 263.36 276.00 -5% 15,300 12% 0% 5% 3 Northrop Grumman NOC 17,830 58.89 55.85 5% 71,300 no change 0% 5% 4 MVC Capital MVC 278 11.45 11.80 -3% 312,500 3% 1% 5% 5 SPDR Gold GLD 38,866 107.04 107.31 0% 34,200 no change 0% 5% 6 Chipotle Mexican Grill CMG 3,308 104.87 88.16 19% 41,000 new position 0% 5% 7 Exxon Mobil XOM 307,624 64.80 68.19 -5% 52,600 16% 0% 5% 8 Fidelity National Financial FNF 3,180 13.80 13.46 3% 228,200 new position 0% 4% 9 AllianceBernstein AB 2,461 26.53 28.10 -6% 102,500 no change 0% 4% 10 Seabridge Gold SA 933 24.82 24.27 2% 89,900 -15% 0% 3%

New Positions Sold Out Positions AG Growth (AGGZF) Duoyuan Printing (DYP) Fairfax Financial (FRFHF)

Fidelity National Financial (FNF) Mass Financial (MFCAF) Steak N Shake (SNS)

Barnes & Noble (BKS) Berkshire Hathaway (BRK/B) Chesapeake Energy (CHK)

Crawford (CRD/A) Diamond Hill Investment (DHIL) Pico Holdings (PICO)


Portfolio size $79 million






2%

3%5%5%

6%8%

9%12%

25%26%

TechnologyBasic Materials

EnergyFunds

CommunicationsIndustrial

Consumer, Non-…Consumer, Cyclical

FinancialCash



Brian Bares, Bares Capital Brian Bares started his investment firm, Bares Capital Management, in 2000, focusing initially on micro-cap public companies. The firm launched a small-cap institutional strategy in 2001 and now manages assets in two value-oriented strategies. Bares Capital Management is quite unique in the institutional asset management world, as it has adhered to a disciplined business strategy, limiting the growth of assets under management to benefit investment performance. Both of Bares’s institutional strategies have beaten their respective benchmark indices by wide margins since inception. MOI Signal Rank™ – Top Current Ideas of Bares Capital Management


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Walgreen WAG 32,993 33.49 36.72 -9% 850,068 >100% 0% 14% 2 Interactive Intelligence ININ 297 17.21 18.45 -7% 2,485,345 2% 14% 20% 3 Winmark Corp WINA 108 20.70 21.49 -4% 834,500 3% 16% 8% 4 International Assets Holding IAAC 268 15.28 14.54 5% 1,494,206 13% 9% 10% 5 Tandy Leather Factory TLF 34 3.70 3.91 -5% 1,640,372 no change 18% 3% 6 Hallmark Financial HALL 153 7.63 7.96 -4% 1,382,567 >100% 7% 5% 7 Stratasys SSYS 519 25.65 17.24 49% 1,444,819 1% 7% 11% 8 Bidz.com BIDZ 43 1.94 2.00 -3% 1,483,192 1% 7% 1% 9 Weight Watchers WTW 2,227 28.92 29.16 -1% 89,560 new position 0% 1% 10 Stamps.com STMP 145 9.19 9.00 2% 1,023,161 5% 6% 4%

Top Holdings of Bares Capital Management – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Interactive Intelligence ININ 297 17.21 18.45 -7% 2,485,345 2% 14% 20% 2 Walgreen WAG 32,993 33.49 36.72 -9% 850,068 >100% 0% 14% 3 Stratasys SSYS 519 25.65 17.24 49% 1,444,819 1% 7% 11% 4 International Assets Holding IAAC 268 15.28 14.54 5% 1,494,206 13% 9% 10% 5 Winmark Corp WINA 108 20.70 21.49 -4% 834,500 3% 16% 8% 6 American Dental Partners ADPI 205 13.09 12.89 2% 1,004,139 -12% 6% 6% 7 Hallmark Financial HALL 153 7.63 7.96 -4% 1,382,567 >100% 7% 5% 8 Utah Medical Products UTMD 96 26.68 29.32 -9% 326,857 no change 9% 4% 9 Stamps.com STMP 145 9.19 9.00 2% 1,023,161 5% 6% 4% 10 Rentrak RENT 198 18.70 17.67 6% 492,704 -4% 5% 4%

New Positions Sold Out Positions Female Health (FHCO) Lockheed Martin (LMT) Weight Watchers (WTW) Winthrop Realty (FUR)

White Mountains (WTM)




Median market value $1.4 billion




0%0%

1%1%

3%6%

17%19%19%

33%

DiversifiedUtilities

FundsEnergy

IndustrialCommunications

Consumer, CyclicalFinancial

Consumer, Non-…Technology



Bruce Berkowitz, Fairholme Bruce Berkowitz, manager of The Fairholme Fund, has been one of the most successful value-oriented investors of the past decade. From inception on December 29, 1999 through December 31, 2009, The Fairholme Fund delivered a cumulative return, net of expenses, of 253%, versus a return of -9%, before expenses, for the S&P 500 Index. This translates into annualized performance of 13.4% and -0.9% for The Fairholme Fund and the S&P 500 Index, respectively. MOI Signal Rank™ – Top Current Ideas of Fairholme


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Citigroup C 90,577 3.18 3.31 -4% 214,698,274 new position 1% 7% 2 RSC Holdings RRR 706 6.83 7.04 -3% 10,813,600 77% 10% 1% 3 Winthrop Realty FUR 244 11.69 10.86 8% 4,297,670 >100% 21% 0% 4 Hertz HTZ 4,261 10.40 11.92 -13% 59,138,966 1% 14% 7% 5 Berkshire Hathaway BRK/B 177,566 76.90 65.72 17% 12,075,350 39% 2% 8% 6 St. Joe JOE 2,664 28.84 28.89 0% 26,833,468 1% 29% 8% 7 CIT Group CIT 6,450 32.25 27.61 17% 14,321,338 new position 7% 4% 8 Leucadia National LUK 5,305 21.82 23.79 -8% 20,247,644 10% 8% 5% 9 Comcast CMCSK 43,145 14.52 16.01 -9% 14,520,900 new position 2% 2%

Comcast CMCSA 43,145 15.34 16.86 -9% 9,031,600 new position 0% 2% Top Holdings of Fairholme – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Sears SHLD 10,456 90.47 83.45 8% 14,951,639 -2% 13% 13% 2 Berkshire Hathaway BRK/B 177,566 76.90 65.72 17% 12,075,350 39% 2% 8% 3 St. Joe JOE 2,664 28.84 28.89 0% 26,833,468 1% 29% 8% 4 Citigroup C 90,577 3.18 3.31 -4% 214,698,274 new position 1% 7% 5 Hertz HTZ 4,261 10.40 11.92 -13% 59,138,966 1% 14% 7% 6 Humana HUM 7,804 45.95 43.89 5% 15,879,600 6% 9% 7% 7 AmeriCredit ACF 2,965 22.15 19.04 16% 31,536,670 -2% 24% 6% 8 Spirit Aerosystems SPR 2,530 17.94 19.86 -10% 27,435,154 0% 26% 5% 9 Leucadia National LUK 5,305 21.82 23.79 -8% 20,247,644 10% 8% 5% 10 WellPoint WLP 27,194 59.33 58.29 2% 7,592,794 14% 2% 4%

New Positions Sold Out Positions CIT Group (CIT) Citigroup (C) Comcast (CMCSA)

Comcast (CMCSK) Marshall & Ilsley (MI) Regions Financial (RF)

Cardinal Health (CAH) Northrop Grumman (NOC)








0%

4%

5%

11%

13%

27%

40%

Energy

Communications

Diversified

Industrial

Consumer, Cyclical

Consumer, Non-…

Financial



Richard Breeden, Breeden Capital Richard C. Breeden, born in 1949, is a former Chairman of the U.S. Securities and Exchange Commission. Breeden founded Breeden Capital Management in 2006. The fund applies a concentrated, activist investment approach. MOI Signal Rank™ – Top Current Ideas of Breeden


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Pharma Product Development PPDI 2,558 21.65 23.44 -8% 3,467,301 >100% 3% 7% 2 Zale ZLC 61 1.89 2.72 -31% 9,070,839 no change 28% 2% 3 Hillenbrand HI 1,214 19.50 18.84 4% 4,684,375 18% 8% 8% 4 Bally Technologies BYI 2,186 39.59 41.29 -4% 1,251,602 new position 2% 5% 5 H&R Block HRB 6,996 20.85 22.62 -8% 13,292,143 no change 4% 27% 6 Helmerich & Payne HP 4,402 41.64 39.88 4% 4,128,186 no change 4% 15% 7 STERIS STE 1,809 30.59 27.97 9% 5,067,321 no change 9% 13% 8 Raytheon RTN 20,464 53.40 51.52 4% 1,073,513 >100% 0% 5% 9 Burger King Holdings BKC 2,464 18.22 18.82 -3% 4,000,320 16% 3% 7% 10 Dun & Bradstreet DNB 3,658 70.39 84.37 -17% 677,456 no change 1% 5%

Top Holdings of Breeden – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 H&R Block HRB 6,996 20.85 22.62 -8% 13,292,143 no change 4% 27% 2 Helmerich & Payne HP 4,402 41.64 39.88 4% 4,128,186 no change 4% 15% 3 STERIS STE 1,809 30.59 27.97 9% 5,067,321 no change 9% 13% 4 Hillenbrand HI 1,214 19.50 18.84 4% 4,684,375 18% 8% 8% 5 Pharma Product Development PPDI 2,558 21.65 23.44 -8% 3,467,301 >100% 3% 7% 6 Burger King Holdings BKC 2,464 18.22 18.82 -3% 4,000,320 16% 3% 7% 7 Dun & Bradstreet DNB 3,658 70.39 84.37 -17% 677,456 no change 1% 5% 8 Raytheon RTN 20,464 53.40 51.52 4% 1,073,513 >100% 0% 5% 9 Bally Technologies BYI 2,186 39.59 41.29 -4% 1,251,602 new position 2% 5% 10 Hewitt Associates HEW 3,547 37.73 42.26 -11% 1,021,268 -16% 1% 4%

New Positions Sold Out Positions Bally Technologies (BYI) FLIR Systems (FLIR)

PetSmart (PETM)




Median market value $3 million




5%

5%

14%

15%

62%

Technology

Industrial

Consumer, Cyclical

Energy




Warren Buffett, Berkshire Hathaway Warren Buffett has built an unparalleled investment track record over several decades, becoming widely regarded as the best investor of all time. Buffett has embraced a long term-oriented investment approach with an emphasis on investing in companies with durable competitive advantage, high returns on capital employed, and shareholder-friendly management. MOI Signal Rank™ – Top Current Ideas of Berkshire Hathaway


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Wells Fargo WFC 139,151 26.88 26.99 0% 320,088,385 2% 6% 15% 2 Washington Post WPO 3,840 408.56 439.60 -7% 1,727,765 no change 21% 1% 3 USG Corp USG 1,312 13.21 14.05 -6% 17,072,192 no change 17% 0% 4 Coca-Cola KO 125,081 53.98 57.00 -5% 200,000,000 no change 9% 20% 5 American Express AXP 45,797 38.42 40.52 -5% 151,610,700 no change 13% 11% 6 Wesco Financial WSC 2,516 353.40 343.00 3% 5,703,087 no change 80% 3% 7 Kraft Foods KFT 43,034 29.09 27.18 7% 138,272,500 no change 9% 6% 8 Republic Services RSG 9,895 26.03 28.31 -8% 8,290,500 >100% 2% 0% 9 Iron Mountain IRM 4,415 21.71 22.76 -5% 7,000,000 >100% 3% 0% 10 Wal-Mart Stores WMT 201,558 52.90 53.45 -1% 39,037,142 3% 1% 4%

Top Holdings of Berkshire Hathaway – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Coca-Cola KO 125,081 53.98 57.00 -5% 200,000,000 no change 9% 20% 2 Wells Fargo WFC 139,151 26.88 26.99 0% 320,088,385 2% 6% 15% 3 American Express AXP 45,797 38.42 40.52 -5% 151,610,700 no change 13% 11% 4 Procter & Gamble PG 179,388 61.76 60.63 2% 87,503,411 -9% 3% 9% 5 Kraft Foods KFT 43,034 29.09 27.18 7% 138,272,500 no change 9% 6% 6 Wal-Mart Stores WMT 201,558 52.90 53.45 -1% 39,037,142 3% 1% 4% 7 Wesco Financial WSC 2,516 353.40 343.00 3% 5,703,087 no change 80% 3% 8 ConocoPhillips COP 72,211 48.67 51.07 -5% 37,711,330 -34% 3% 3% 9 Johnson & Johnson JNJ 173,051 62.72 64.41 -3% 27,132,467 -26% 1% 3% 10 US Bancorp USB 44,483 23.26 22.51 3% 69,039,426 no change 4% 3%

New Positions Sold Out Positions None Norfolk Southern (NSC)

Union Pacific (UNP)








Not meaningful, as a significant portion of Berkshire Hathaway’s asset value may be attributed to holdings in companies that are not publicly traded and are therefore not included in the table above.



Ian Cumming & Joe Steinberg, Leucadia Chairman Cumming and President Steinberg describe their approach to managing a public investment vehicle in their 2008 letter: “We tend to be buyers of assets and companies that are troubled or out of favor and as a result are selling substantially below the values, which we believe, are there. From time to time, we sell parts of these operations when prices available in the market reach what we believe to be advantageous levels. While we are not perfect in executing this strategy, we are proud of our long-term track record. We are not income statement driven and do not run your company with an undue emphasis on either quarterly or annual earnings. We believe we are conservative in our accounting practices and policies and that our balance sheet is conservatively stated.” MOI Signal Rank™ – Top Current Ideas of Leucadia


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 AmeriCredit ACF 2,965 22.15 19.04 16% 33,600,440 1% 25% 35% 2 TravelCenters of America TA 76 4.58 4.42 4% 275,308 no change 2% 0% 3 International Assets Holding IAAC 268 15.28 14.54 5% 1,384,985 no change 8% 1% 4 Capital Southwest CSWC 311 82.99 78.80 5% 19,776 no change 1% 0% 5 Jefferies Group JEF 4,356 25.90 23.73 9% 48,585,385 no change 29% 64%

Top Holdings of Leucadia – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Jefferies Group JEF 4,356 25.90 23.73 9% 48,585,385 no change 29% 64% 2 AmeriCredit ACF 2,965 22.15 19.04 16% 33,600,440 1% 25% 35% 3 International Assets Holding IAAC 268 15.28 14.54 5% 1,384,985 no change 8% 1% 4 Capital Southwest CSWC 311 82.99 78.80 5% 19,776 no change 1% 0% 5 TravelCenters of America TA 76 4.58 4.42 4% 275,308 no change 2% 0%

New Positions Sold Out Positions None None Portfolio Metrics Sector Weightings







Not meaningful, as a significant portion of Leucadia’s asset value may be attributed to holdings in companies that are not publicly traded and are therefore not included in the table above.



David Einhorn, Greenlight David Einhorn is the founder of Greenlight Capital, a value-oriented, research-driven investment firm with a market-beating long-term track record. From inception in May 1996 through yearend 2009, Greenlight Capital has returned, net of fees and expenses, 1,397% cumulatively or 22% annualized. He is also author of Fooling Some of the People All of the Time. MOI Signal Rank™ – Top Current Ideas of Greenlight


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Boston Scientific BSX 11,162 7.39 9.00 -18% 32,668,000 new position 2% 10% 2 CIT Group CIT 6,450 32.25 27.61 17% 6,320,922 new position 3% 6% 3 Pfizer PFE 143,638 17.80 18.19 -2% 14,804,098 24% 0% 9% 4 MI Developments MIM 573 12.28 12.28 0% 5,655,235 no change 12% 2% 5 CareFusion CFN 5,572 25.17 25.01 1% 8,718,724 no change 4% 7% 6 BioFuel Energy BIOF 99 2.76 2.71 2% 7,542,104 no change 29% 1% 7 Einstein Noah Restaurant BAGL 191 11.67 9.83 19% 10,733,469 no change 66% 4% 8 Republic Airways RJET 183 5.31 7.38 -28% 3,442,800 no change 10% 1% 9 Employers Holdings EIG 553 12.57 15.34 -18% 2,325,000 no change 5% 1% 10 Foster Wheeler FWLT 3,421 26.93 29.44 -9% 724,833 93% 1% 1%

Top Holdings of Greenlight – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Boston Scientific BSX 11,162 7.39 9.00 -18% 32,668,000 new position 2% 10% 2 Pfizer PFE 143,638 17.80 18.19 -2% 14,804,098 24% 0% 9% 3 CareFusion CFN 5,572 25.17 25.01 1% 8,718,724 no change 4% 7% 4 Cardinal Health CAH 12,066 33.38 32.24 4% 6,550,500 -2% 2% 7% 5 CIT Group CIT 6,450 32.25 27.61 17% 6,320,922 new position 3% 6% 6 URS URS 3,859 45.99 44.52 3% 3,608,167 5% 4% 5% 7 Gold Miners ETF GDX 5,337 43.94 46.21 -5% 3,200,000 no change 3% 5% 8 EMC Corp EMC 34,922 17.12 17.47 -2% 7,152,600 -1% 0% 4% 9 Travelers TRV 26,249 50.45 49.86 1% 2,132,272 no change 0% 4% 10 Einstein Noah Restaurant BAGL 191 11.67 9.83 19% 10,733,469 no change 66% 4%

New Positions Sold Out Positions Becton Dickinson (BDX) Boston Scientific (BSX) CIT Group (CIT)

Energy Partners (EPL) Ralcorp Holdings (RAH) Vodafone (VOD)

AerCap Holdings (AER) Aircastle (AYR) Amkor Technology (AMKR) Anixter International (AXE) Belden (BDC) Colonial Properties (CLP) Crosstex Energy (XTXI) Danaos (DAC)

Duke Realty (DRE) EchoStar (SATS) General Cable (BGC) Liberty Media Interactive (LINTA) Novatel Wireless (NVTL) Oshkosh (OSK) Smithfield Foods (SFD) Teekay (TK)








0%

1%

4%

4%

5%

9%

10%

22%

44%

Communications

Basic Materials

Energy

Consumer, Cyclical

Funds

Industrial

Technology

Financial



http://www.amazon.com/gp/product/0470073942?ie=UTF8&tag=permanentvalu-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0470073942�


Tom Gayner, Markel Gayner Tom Gayner has been President of Markel Gayner Asset Management since 1990 and Executive Vice President and Chief Investment Officer of Markel, a Richmond, Virginia-based international property and casualty insurance holding company, since 2004. Tom has been a disciplined steward of capital on behalf of Markel shareholders, and his long-term investment track record is one of the best in the business. For more information, visit www.markelcorp.com. MOI Signal Rank™ – Top Current Ideas of Markel Gayner


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Fairfax Financial FRFHF 6,936 356 390 -9% 279,459 no change 1% 8% 2 Investors Title ITIC 81 35.41 30.90 15% 228,850 no change 10% 0% 3 Berkshire Hathaway BRK/B 177,566 76.90 65.72 17% 1,570,900 no change 0% 7% 4 Paychex PAYX 10,672 29.53 30.64 -4% 50,900 >100% 0% 0% 5 Wal-Mart Stores WMT 201,558 52.90 53.45 -1% 868,130 1% 0% 3% 6 Home Depot HD 49,312 29.00 28.93 0% 969,739 >100% 0% 2% 7 ITC Holdings ITC 2,675 52.70 52.09 1% 103,200 >100% 0% 0% 8 McDonald’s MCD 68,625 63.59 62.44 2% 122,601 >100% 0% 1% 9 Patterson PDCO 3,522 28.76 27.98 3% 89,800 >100% 0% 0% 10 Union First Market Bankshares * UBSH 242 13.14 12.39 6% 3,504,920 new position 19% 3%

* Markel acquired UBSH shares in connection with a merger of a Markel subsidiary with First Market Bank, a private company in which Markel was a shareholder. Top Holdings of Markel Gayner – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 CarMax KMX 275 21.00 24.25 -13% 5,321,399 0% 41% 9% 2 Fairfax Financial FRFHF 6,936 355.54 389.96 -9% 279,459 no change 1% 8% 3 Berkshire Hathaway BRK/B 177,566 76.90 65.72 17% 1,570,900 no change 0% 7%

Berkshire Hathaway BRK/A 177,566 114,000 99,200 15% 897 0% 0% 6% 5 Diageo DEO 40,346 64.44 69.41 -7% 1,256,560 0% 0% 6% 6 Brookfield Asset Management BAM 12,545 21.71 22.18 -2% 3,100,114 0% 1% 5% 7 General Electric GE 165,569 15.55 15.13 3% 3,644,200 0% 0% 4% 8 Walt Disney DIS 58,321 30.07 32.25 -7% 1,490,683 0% 0% 3% 9 Wal-Mart Stores WMT 201,558 52.90 53.45 -1% 868,130 1% 0% 3% 10 Union First Market Bankshares * UBSH 242 13.14 12.39 6% 3,504,920 new position 19% 3%

* Markel acquired UBSH shares in connection with a merger of a Markel subsidiary with First Market Bank, a private company in which Markel was a shareholder. New Positions Sold Out Positions Novo Nordisk (NVO) Union First Market Bank (UBSH)

Bank of America (BAC)


Portfolio size $1.4 billion






0%

1%

1%

1%

4%

6%

11%

15%

20%

41%

Utilities

Diversified

Basic Materials

Technology

Energy

Communications

Industrial

Consumer, Non-…

Consumer, Cyclical

Financial



Glenn Greenberg, Brave Warrior (formerly Chieftain) Brave Warrior, formerly called Chieftain Capital Management, was founded in 1984 by Glenn Greenberg and John Shapiro. The firm runs a concentrated portfolio focused on companies with high returns on capital and sustainable competitive advantage. Brave Warrior’s long-term performance record is believed to feature mid teens annualized investment returns. MOI Signal Rank™ – Top Current Ideas of Brave Warrior


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Comcast CMCSK 43,145 14.52 16.01 -9% 16,966,476 -32% 2% 16% 2 Dell DELL 27,080 13.84 14.36 -4% 8,027,811 -32% 0% 7% 3 Lab Corp of America LH 7,621 71.76 74.84 -4% 3,026,932 -33% 3% 13% 4 Ryanair Holdings RYAAY 7,938 26.86 26.81 0% 8,572,012 -31% 3% 13% 5 Lockheed Martin LMT 28,780 75.58 75.35 0% 3,829,724 -32% 1% 17% 6 US Bancorp USB 44,483 23.26 22.51 3% 10,645,764 -31% 1% 14% 7 Crosstex Energy XTEX 466 9.38 8.60 9% 2,153,150 -27% 4% 1% 8 Waters WAT 5,517 58.26 61.96 -6% 1,063,320 -57% 1% 4% 9 Varian Medical Systems VAR 5,897 47.58 46.85 2% 3,584,538 -47% 3% 10% 10 Precision Castparts PCP 15,450 109.05 110.35 -1% 790,141 -66% 1% 5%

Top Holdings of Brave Warrior – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Lockheed Martin LMT 28,780 75.58 75.35 0% 3,829,724 -32% 1% 17% 2 Comcast CMCSK 43,145 14.52 16.01 -9% 16,966,476 -32% 2% 16% 3 US Bancorp USB 44,483 23.26 22.51 3% 10,645,764 -31% 1% 14% 4 Ryanair Holdings RYAAY 7,938 26.86 26.81 0% 8,572,012 -31% 3% 13% 5 Lab Corp of America LH 7,621 71.76 74.84 -4% 3,026,932 -33% 3% 13% 6 Varian Medical Systems VAR 5,897 47.58 46.85 2% 3,584,538 -47% 3% 10% 7 Dell DELL 27,080 13.84 14.36 -4% 8,027,811 -32% 0% 7% 8 Precision Castparts PCP 15,450 109.05 110.35 -1% 790,141 -66% 1% 5% 9 Waters WAT 5,517 58.26 61.96 -6% 1,063,320 -57% 1% 4% 10 Crosstex Energy XTXI 350 7.53 6.05 24% 4,526,099 -21% 10% 2%








3%

7%

13%

14%

16%

23%

25%

Energy

Technology

Consumer, Cyclical

Financial

Communications


Industrial



Mason Hawkins, Southeastern Mason Hawkins is chairman and CEO of Southeastern Asset Management, a firm he founded in 1975. Southeastern serves as investment adviser to the Longleaf Partners Funds, a family of value-oriented mutual funds. The firm has $22 billion of assets under management, including $13 billion in separately managed accounts. MOI Signal Rank™ – Top Current Ideas of Southeastern


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 tw telecom TWTC 2,258 15.04 17.15 -12% 24,341,622 5% 16% 2% 2 DIRECTV DTV 29,366 30.69 33.35 -8% 85,628,178 13% 9% 13% 3 Fair Isaac FICO 979 21.06 21.31 -1% 9,491,578 20% 20% 1% 4 Level 3 Communications LVLT 2,263 1.38 1.53 -10% 430,914,071 0% 26% 3% 5 Texas Industries TXI 959 34.56 34.99 -1% 2,993,651 17% 11% 0% 6 Yum! Brands YUM 15,603 33.36 34.97 -5% 48,055,553 1% 10% 8% 7 Chesapeake Energy CHK 16,167 24.96 25.88 -4% 76,534,039 1% 12% 9% 8 Dell DELL 27,080 13.84 14.36 -4% 137,458,334 1% 7% 9% 9 Dillard’s DDS 1,212 16.42 18.45 -11% 9,202,748 no change 13% 1% 10 DineEquity DIN 489 27.80 24.29 14% 3,217,500 no change 18% 0%

Top Holdings of Southeastern – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 DIRECTV DTV 29,366 30.69 33.35 -8% 85,628,178 13% 9% 13% 2 Chesapeake Energy CHK 16,167 24.96 25.88 -4% 76,534,039 1% 12% 9% 3 Dell DELL 27,080 13.84 14.36 -4% 137,458,334 1% 7% 9% 4 Walt Disney DIS 58,321 30.07 32.25 -7% 56,001,551 -3% 3% 8% 5 Yum! Brands YUM 15,603 33.36 34.97 -5% 48,055,553 1% 10% 8% 6 Cemex CX 9,138 9.52 11.82 -19% 103,939,301 -2% 11% 6% 7 Pioneer Natural Resources PXD 5,432 47.10 48.17 -2% 22,526,175 -1% 20% 5% 8 Liberty Media Interactive LINTA 6,479 10.87 10.84 0% 85,401,302 -15% 15% 4% 9 Philips Electronics PHG 28,207 29.02 29.44 -1% 30,096,075 -11% 3% 4% 10 Level 3 Communications LVLT 2,263 1.38 1.53 -10% 430,914,071 0% 26% 3%

New Positions Sold Out Positions Bank of New York Mellon (BK) EnCana (ECA)

Fairfax Financial (FFH) Liberty Media (LMDIA)








2%

10%

12%

13%

13%

14%

36%


Technology

Consumer, Cyclical

Financial

Industrial

Energy

Communications



Chris Hohn, Children’s Investment Chris Hohn is the founder of London-based The Children’s Investment Fund Management. TCI runs a concentrated portfolio that has historically been heavily weighted in industrials. Hohn has acquired a reputation as an aggressive shareholder activist, most notably forcing the resignation of the CEO of Deutsche Boerse after he refused to abandon a proposed takeover of the London Stock Exchange. Hohn also agitated for a sale of ABN Amro, ultimately pushing it into the hands of RBS. MOI Signal Rank™ – Top Current Ideas of Children’s Investment Fund


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Union Pacific UNP 32,040 63.41 63.90 -1% 7,870,775 new position 2% 13% 2 Oracle ORCL 117,313 23.41 24.53 -5% 17,216,616 >100% 0% 11% 3 Visa V 62,714 84.78 87.46 -3% 15,768,809 50% 3% 36% 4 Lockheed Martin LMT 28,780 75.58 75.35 0% 4,782,436 5% 1% 9% 5 WellPoint WLP 27,194 59.33 58.29 2% 1,418,801 new position 0% 2% 6 AmBev ABV 52,619 92.35 101.09 -9% 459,191 47% 0% 1% 7 Molson Coors Brewing TAP 7,183 38.90 45.16 -14% 5,406,250 13% 3% 6% 8 Virgin Media VMED 4,677 14.21 16.83 -16% 111,695 new position 0% 0% 9 Philip Morris PM 93,882 49.29 48.19 2% 2,005,832 34% 0% 3% 10 MasterCard MA 29,257 225.48 255.98 -12% 5,446 new position 0% 0%

Top Holdings of Children’s Investment Fund – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Visa V 62,714 84.78 87.46 -3% 15,768,809 50% 3% 36% 2 Coca-Cola KO 125,081 53.98 57.00 -5% 10,400,249 -12% 0% 15% 3 Union Pacific UNP 32,040 63.41 63.90 -1% 7,870,775 new position 2% 13% 4 Oracle ORCL 117,313 23.41 24.53 -5% 17,216,616 >100% 0% 11% 5 Lockheed Martin LMT 28,780 75.58 75.35 0% 4,782,436 5% 1% 9% 6 Molson Coors Brewing TAP 7,183 38.90 45.16 -14% 5,406,250 13% 3% 6% 7 Philip Morris PM 93,882 49.29 48.19 2% 2,005,832 34% 0% 3% 8 WellPoint WLP 27,194 59.33 58.29 2% 1,418,801 new position 0% 2% 9 PepsiCo PEP 95,062 60.92 60.80 0% 1,355,006 -10% 0% 2% 10 AmBev ABV 52,619 92.35 101.09 -9% 459,191 47% 0% 1%

New Positions Sold Out Positions MasterCard (MA) Union Pacific (UNP) Virgin Media (VMED) WellPoint (WLP)

H&R Block (HRB) Potash Corp. (POT)








0%

0%

12%

22%

66%

Communications

Basic Materials

Technology

Industrial




Carl Icahn, Icahn Partners Carl Icahn is an activist investor with a long track record of success agitating for change at underperforming companies. Carl publishes an activist investing blog entitled The Icahn Report at www.icahnreport.com. MOI Signal Rank™ – Top Current Ideas of Icahn Partners


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 CIT Group CIT 6,450 32.25 27.61 17% 2,426,335 new position 1% 1% 2 American Railcar Industries ARII 192 9.02 11.02 -18% 11,564,154 0% 54% 3% 3 Take-Two Interactive Software TTWO 803 9.65 10.05 -4% 2,174,605 new position 3% 0% 4 Biogen Idec BIIB 14,885 55.21 53.50 3% 3,215,052 0% 1% 4% 5 Federal Mogul FDML 1,678 16.88 17.30 -2% 75,241,924 no change 76% 29% 6 Icahn Enterprises IEP 3,437 45.96 39.95 15% 74,792,659 9% 92% 67% 7 Blockbuster BBI/B 20 0.28 0.59 -53% 1,113,236 0% 2% 0%

Blockbuster BBI 67 0.38 0.67 -43% 2,630,970 0% 2% 0% 9 Enzon Pharmaceuticals ENZN 415 9.13 10.53 -13% 704,215 0% 2% 0% 10 Lions Gate Entertainment LGF 616 5.23 5.81 -10% 4,232,487 2% 4% 1%

Top Holdings of Icahn Partners – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Icahn Enterprises IEP 3,437 45.96 39.95 15% 74,792,659 9% 92% 67% 2 Federal Mogul FDML 1,678 16.88 17.30 -2% 75,241,924 no change 76% 29% 3 Biogen Idec BIIB 14,885 55.21 53.50 3% 3,215,052 0% 1% 4% 4 American Railcar Industries ARII 192 9.02 11.02 -18% 11,564,154 0% 54% 3% 5 CIT Group CIT 6,450 32.25 27.61 17% 2,426,335 New 1% 1% 6 Lions Gate Entertainment LGF 616 5.23 5.81 -10% 4,232,487 2% 4% 1% 7 Take-Two Interactive Software TTWO 803 9.65 10.05 -4% 2,174,605 New 3% 0% 8 Enzon Pharmaceuticals ENZN 415 9.13 10.53 -13% 704,215 0% 2% 0% 9 Blockbuster BBI 67 0.38 0.67 -43% 2,630,970 0% 2% 0%

Blockbuster BBI/B 20 0.28 0.59 -53% 1,113,236 0% 2% 0% New Positions Sold Out Positions CIT Group (CIT) Take-Two Interactive (TTWO)

Yahoo! (YHOO)





Average market value $2.6 billion



0%

2%

3%

4%

30%

62%

Technology

Financial

Industrial


Consumer, Cyclical

Diversified



Seth Klarman, Baupost Seth Klarman, founder and president of The Baupost Group, is the author of Margin of Safety and one of the most widely respected value-oriented investors. From inception in February 1983 through December 2008, The Baupost Group has delivered an annual compounded return of approximately 20%. MOI Signal Rank™ – Top Current Ideas of Baupost


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Theravance THRX 617 9.70 13.07 -26% 10,100,000 12% 19% 8% 2 Enzon Pharmaceuticals ENZN 415 9.13 10.53 -13% 8,082,400 30% 18% 5% 3 ViaSat VSAT 1,055 29.05 31.78 -9% 4,915,901 6% 15% 10% 4 DIRECTV DTV 29,366 30.69 33.35 -8% 1,617,471 new position 0% 3% 5 Facet Biotech FACT 414 16.53 17.55 -6% 3,506,875 no change 14% 4% 6 CIT Group CIT 6,450 32.25 27.61 17% 2,582,186 new position 1% 4% 7 BreitBurn Energy BBEP 803 15.22 10.59 44% 8,495,939 no change 16% 6% 8 Multimedia Games MGAM 134 4.91 6.01 -18% 2,600,000 no change 10% 1% 9 Audiovox VOXX 157 6.86 7.09 -3% 1,797,286 no change 9% 1% 10 Alliance One AOI 449 5.04 4.88 3% 8,800,000 no change 10% 3%

Top Holdings of Baupost – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 News Corp. NWSA 36,243 13.11 13.69 -4% 24,450,000 -1% 1% 21% 2 Domtar UFS 2,211 50.40 55.41 -9% 2,900,000 -10% 7% 10% 3 ViaSat VSAT 1,055 29.05 31.78 -9% 4,915,901 6% 15% 10% 4 Theravance THRX 617 9.70 13.07 -26% 10,100,000 12% 19% 8% 5 BreitBurn Energy BBEP 803 15.22 10.59 44% 8,495,939 no change 16% 6% 6 Enzon Pharmaceuticals ENZN 415 9.13 10.53 -13% 8,082,400 30% 18% 5% 7 CapitalSource CSE 1,619 5.01 3.97 26% 20,278,400 15% 6% 5% 8 CIT Group CIT 6,450 32.25 27.61 17% 2,582,186 new position 1% 4% 9 Facet Biotech FACT 414 16.53 17.55 -6% 3,506,875 no change 14% 4% 10 DIRECTV DTV 29,366 30.69 33.35 -8% 1,617,471 new position 0% 3%

New Positions Sold Out Positions CIT Group (CIT) DIRECTV (DTV)

RHI Entertainment (RHIE)





Average market value $5.2 billion



1%

2%

6%

10%

22%

23%

36%

Industrial

Consumer, Cyclical

Energy

Basic Materials

Financial


Communications



Eddie Lampert, RBS Partners Eddie Lampert, founder and managing member of ESL Investments, is a value investor who started out working under Bob Rubin at the arbitrage desk of Goldman Sachs. When he left Goldman to start ESL in 1988, he received the support of Texas investor Richard Rainwater. Lampert compounded ESL’s capital at rates of more than 25% per annum for many years. His largest investment was the much-publicized taking control of Kmart during Kmart’s bankruptcy process in 2002. Lampert engineered the merger of Kmart and Sears in 2004. He is currently chairman and chief capital allocator of the combined firm, Sears Holdings (SHLD). He also still manages his investment partnership, which holds a concentrated investment portfolio. MOI Signal Rank™ – Top Current Ideas of RBS Partners


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 CIT Group CIT 6,450 32.25 27.61 17% 4,527,973 new position 2% 1% 2 Wells Fargo WFC 139,151 26.88 26.99 0% 1,500,000 new position 0% 0% 3 Citigroup C 90,577 3.18 3.31 -4% 31,250,000 67% 0% 1% 4 Bank of America BAC 125,128 14.45 15.06 -4% 453,512 new position 0% 0% 5 Genworth Financial GNW 7,123 14.58 11.35 28% 8,775,684 no change 2% 1% 6 Capital One Financial COF 15,810 35.14 38.34 -8% 9,615,000 -2% 2% 3% 7 AutoNation AN 3,043 17.72 19.15 -7% 76,989,622 -3%* 44% 13% 8 AutoZone AZO 7,961 160.85 158.07 2% 19,291,196 -4%* 39% 28%

* Represents share transfers between various affiliated entities rather than outright sales of securities. Top Holdings of RBS Partners – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Sears Holdings SHLD 10,456 90.47 83.45 8% 62,046,884 -6%* 54% 47% 2 AutoZone AZO 7,961 160.85 158.07 2% 19,291,196 -4%* 39% 28% 3 AutoNation AN 3,043 17.72 19.15 -7% 76,989,622 -3%* 44% 13% 4 Capital One Financial COF 15,810 35.14 38.34 -8% 9,615,000 -2% 2% 3% 5 CIT Group CIT 6,450 32.25 27.61 17% 4,527,973 new position 2% 1% 6 Citigroup C 90,577 3.18 3.31 -4% 31,250,000 67% 0% 1% 7 Genworth Financial GNW 7,123 14.58 11.35 28% 8,775,684 no change 2% 1% 8 Wells Fargo WFC 139,151 26.88 26.99 0% 1,500,000 new position 0% 0%

* Represents share transfers between various affiliated entities rather than outright sales of securities. New Positions Sold Out Positions Bank of America (BAC) CIT Group (CIT) Wells Fargo (WFC)

None








0%

7%

93%

Technology

Financial

Consumer, Cyclical



Dan Loeb, Third Point Dan Loeb is the founder and managing member of long/short hedge fund Third Point. He is a well-known shareholder activist who has accumulated a respectable long-term investment track record. MOI Signal Rank™ – Top Current Ideas of Third Point


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Citigroup C 90,577 3.18 3.31 -4% 25,000,000 new position 0% 8% 2 TransDigm Group TDG 2,355 48.03 47.49 1% 1,800,000 80% 4% 8% 3 WellPoint WLP 27,194 59.33 58.29 2% 1,100,000 38% 0% 6% 4 Aspen Technology AZPN 831 9.05 9.80 -8% 5,021,000 new position 5% 5% 5 Depomed DEPO 152 2.93 3.35 -13% 6,790,000 no change 13% 2% 6 Affiliated Computer Services ACS 5,826 59.64 59.69 0% 800,000 new position 1% 4% 7 Mead Johnson Nutrition MJN 9,213 45.05 43.70 3% 1,000,000 new position 0% 4% 8 Xerox XRX 11,852 8.77 8.46 4% 4,000,000 new position 0% 3% 9 PHH PHH 971 17.73 16.11 10% 4,780,000 7% 9% 7%

Top Holdings of Third Point – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 TransDigm Group TDG 2,355 48.03 47.49 1% 1,800,000 80% 4% 8% 2 Citigroup C 90,577 3.18 3.31 -4% 25,000,000 new position 0% 8% 3 PHH PHH 971 17.73 16.11 10% 4,780,000 7% 9% 7% 4 Health Net HNT 2,381 22.91 23.29 -2% 3,000,000 no change 3% 7% 5 WellPoint WLP 27,194 59.33 58.29 2% 1,100,000 38% 0% 6% 6 Aspen Technology AZPN 831 9.05 9.80 -8% 5,021,000 new position 5% 5% 7 CIT Group CIT 6,450 32.25 27.61 17% 1,750,000 new position 1% 5% 8 Affiliated Computer Services ACS 5,826 59.64 59.69 0% 800,000 new position 1% 4% 9 Mead Johnson Nutrition MJN 9,213 45.05 43.70 3% 1,000,000 new position 0% 4% 10 Xerox XRX 11,852 8.77 8.46 4% 4,000,000 new position 0% 3%

New Positions Sold Out Positions Abraxas Petroleum (AXAS) Advanced Micro Devices (AMD) Affiliated Computer Svcs (ACS) Aspen Technology (AZPN) CIT Group (CIT) Citigroup (C) DIRECTV (DTV) Energy Partners (EPL)

Liberty Media Starz (LSTZA) Life Partners Holdings (LPHI) Mead Johnson Nutrition (MJN) Pain Therapeutics (PTIE) TCW Strategic Income (TSI) Velocity Express (VEXPQ) Xerox (XRX) Yahoo! (YHOO)

Alkermes (ALKS) Allergan (AGN) Anadarko Petroleum (APC) Apple (AAPL) Bank of America (BAC) Blockbuster (BBI, BBI/B) CareFusion (CFN) CF Industries (CF) First American (FAF) Liberty Acquisition (LIA)

Liberty Entertainment (LMDIA) Lions Gate Entertainment (LGF) Loral Space (LORL) Merck (MRK) Molson Coors Brewing (TAP) Oracle (ORCL) Pfizer (PFE) Resolute Energy (REN) Synaptics (SYNA) Trian Acquisition (TUX)








1%

2%

5%

8%

9%

15%

26%

35%

Utilities

Consumer, Cyclical

Energy

Industrial

Communications

Technology

Financial

Consumer, Non-…



Steve Mandel, Lone Pine Steve Mandel founded long/short hedge fund Lone Pine Capital in 1997. He previously worked for Julian Robertson’s Tiger Management, Goldman, Sachs and Mars and Company. MOI Signal Rank™ – Top Current Ideas of Lone Pine


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Baxter International BAX 33,712 55.92 58.68 -5% 10,441,630 new position 2% 6% 2 Qualcomm QCOM 65,275 38.84 46.26 -16% 12,240,777 4% 1% 5% 3 HSBC Holdings HBC 177,741 51.01 57.09 -11% 6,676,242 new position 0% 4% 4 JPMorgan Chase JPM 153,541 38.95 41.67 -7% 17,486,108 7% 0% 7% 5 Accenture ACN 29,599 40.49 41.50 -2% 8,708,237 new position 1% 3% 6 New Oriental Education & Tech EDU 2,636 69.97 75.61 -7% 2,479,109 >100% 7% 2% 7 Visa V 62,714 84.78 87.46 -3% 5,465,874 24% 1% 5% 8 McDonald’s MCD 68,625 63.59 62.44 2% 7,620,201 20% 1% 5% 9 eBay EBAY 28,148 21.77 23.53 -7% 8,042,649 new position 1% 2% 10 Walt Disney DIS 58,321 30.07 32.25 -7% 7,441,464 new position 0% 2%

Top Holdings of Lone Pine – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 JPMorgan Chase JPM 153,541 38.95 41.67 -7% 17,486,108 7% 0% 7% 2 Monsanto MON 41,373 75.82 81.75 -7% 8,185,449 -2% 2% 6% 3 Baxter International BAX 33,712 55.92 58.68 -5% 10,441,630 new position 2% 6% 4 Qualcomm QCOM 65,275 38.84 46.26 -16% 12,240,777 4% 1% 5% 5 Apple AAPL 181,704 200.38 210.73 -5% 2,525,541 -18% 0% 5% 6 Visa V 62,714 84.78 87.46 -3% 5,465,874 24% 1% 5% 7 McDonald’s MCD 68,625 63.59 62.44 2% 7,620,201 20% 1% 5% 8 Hewlett-Packard HPQ 114,568 48.46 51.51 -6% 8,529,811 -13% 0% 4% 9 HSBC Holdings HBC 177,741 51.01 57.09 -11% 6,676,242 new position 0% 4% 10 Accenture ACN 29,599 40.49 41.50 -2% 8,708,237 new position 1% 3%

New Positions Sold Out Positions Accenture (ACN) Autodesk (ADSK) Bank of America (BAC) Baxter International (BAX) Cninsure (CISG) CVS Caremark (CVS) eBay (EBAY)

HSBC Holdings (HBC) Mead Johnson Nutrition (MJN) Sears Holdings (SHLD) Staples (SPLS) Walt Disney (DIS) Wells Fargo (WFC) Yum! Brands (YUM)

America Movil (AMX) Cemex (CX) Coach (COH) Coca-Cola (KO) Fomento Economico (FMX) Huntington Bancshares (HBAN)

Liberty Entertainment (LMDIA) MasterCard (MA) Philip Morris (PM) priceline.com (PCLN) Walter Energy (WLT)








1%

2%

6%

7%

12%

14%

17%

18%

Energy

Funds

Basic Materials

Industrial

Communications

Consumer, Cyclical

Financial

Technology



Mohnish Pabrai, Pabrai Funds Mohnish Pabrai is founder and managing partner of Pabrai Investment Funds, a family of value-oriented investment partnerships with a fee structure similar to that of the Buffett Partnerships of the 1950s and ‘60s, i.e. no management fee and 25% performance fee above 6% annual hurdle rate. Pabrai Funds have a long-term track record vastly superior to that of the S&P 500 Index. Pabrai follows an investment strategy built upon the principles of Graham, Buffett and Greenblatt. MOI Signal Rank™ – Top Current Ideas of Pabrai Funds


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Fairfax Financial FRFHF 6,936 355.54 389.96 -9% 80,611 17% 0% 10% 2 Potash Corp of Saskatchewan POT 33,031 111.60 108.50 3% 338,473 4% 0% 11% 3 Teck Resources TCK 21,249 35.88 34.97 3% 1,006,501 no change 0% 11% 4 Cresud CRESY 672 12.72 14.41 -12% 1,719,377 5% 3% 8% 5 Air Transport Services ATSG 149 2.35 2.64 -11% 5,393,962 no change 8% 4% 6 CapitalSource CSE 1,619 5.01 3.97 26% 2,818,141 new position 1% 3% 7 Horsehead Holding ZINC 454 10.47 12.75 -18% 1,358,498 0% 3% 5% 8 Leucadia National LUK 5,305 21.82 23.79 -8% 791,074 0% 0% 6% 9 Terex TEX 2,030 18.78 19.81 -5% 530,776 no change 0% 3% 10 Interactive Brokers IBKR 698 16.93 17.72 -4% 94,104 -1% 0% 1%

Top Holdings of Pabrai Funds – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Potash Corp of Saskatchewan POT 33,031 111.60 108.50 3% 338,473 4% 0% 11% 2 Teck Resources TCK 21,249 35.88 34.97 3% 1,006,501 no change 0% 11% 3 Fairfax Financial FRFHF 6,936 355.54 389.96 -9% 80,611 17% 0% 10% 4 Harvest Natural Resources HNR 170 5.11 5.29 -3% 5,596,529 -1% 17% 9% 5 Brookfield Properties BPO 6,483 12.93 12.12 7% 2,359,267 0% 0% 9% 6 Cresud CRESY 672 12.72 14.41 -12% 1,719,377 5% 3% 8% 7 Berkshire Hathaway BRK/B 177,566 76.90 65.72 17% 319,900 -2% 0% 7% 8 Leucadia National LUK 5,305 21.82 23.79 -8% 791,074 0% 0% 6% 9 Horsehead Holding ZINC 454 10.47 12.75 -18% 1,358,498 0% 3% 5% 10 Pinnacle Airlines PNCL 157 8.58 6.88 25% 2,076,702 -2% 11% 4%

New Positions Sold Out Positions CapitalSource (CSE) Ternium (TX) Portfolio Metrics Sector Weightings







4%

6%

8%

8%

9%

28%

37%

Consumer, Cyclical

Diversified

Industrial

Consumer, Non-…

Energy

Basic Materials

Financial



Bryant Riley, Riley Investment Riley Investment Management is a private investment firm founded by Bryant Riley in 2000. The firm takes an active, value-oriented approach to investing in small- and microcap public companies, often seeking to effect change at the Board level. The firm appears to favor investments with large asset value and liquid balance sheets. MOI Signal Rank™ – Top Current Ideas of Riley Investment Management


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 DDI DDIC 86 4.33 4.89 -11% 1,838,554 no change 9% 25% 2 Zilog ZILG 62 3.58 3.54 1% 846,472 no change 5% 8% 3 Regent Communications RGCI 5 0.13 0.26 -50% 2,895,782 no change 7% 2% 4 Trans World Entertainment TWMC 42 1.34 1.51 -11% 1,453,230 -14% 5% 6% 5 Aldila ALDA 21 4.00 3.47 15% 34,370 no change 1% 0% 6 Magnetek MAG 45 1.45 1.54 -6% 1,209,053 -47% 4% 5% 7 Iteris ITI 48 1.39 1.50 -7% 1,439,569 -60% 4% 6% 8 Transwitch TXCC 32 1.60 2.10 -24% 9,187 -97% 0% 0% 9 Silicon Storage Technology SSTI 272 2.84 2.56 11% 2,715,489 -33% 3% 19% 10 Integrated Silicon Solution ISSI 192 7.65 5.65 35% 60,000 -6% 0% 1%

Top Holdings of Riley Investment Management – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 DDI DDIC 86 4.33 4.89 -11% 1,838,554 no change 9% 25% 2 Silicon Storage Technology SSTI 272 2.84 2.56 11% 2,715,489 -33% 3% 19% 3 Zilog ZILG 62 3.58 3.54 1% 846,472 no change 5% 8% 4 Trans World Entertainment TWMC 42 1.34 1.51 -11% 1,453,230 -14% 5% 6% 5 Iteris ITI 48 1.39 1.50 -7% 1,439,569 -60% 4% 6% 6 Magnetek MAG 45 1.45 1.54 -6% 1,209,053 -47% 4% 5% 7 LeCroy LCRY 50 3.97 3.65 9% 281,441 -75% 2% 3% 8 Regent Communications RGCI 5 0.13 0.26 -50% 2,895,782 no change 7% 2% 9 Management Network TMNGD 14 2.03 2.15 -6% 290,820 -89% 4% 2% 10 Integrated Silicon Solution ISSI 192 7.65 5.65 35% 60,000 -6% 0% 1%





Average market value $72 million



2%

3%

6%

32%

57%

Communications


Consumer, Cyclical

Technology

Industrial



Prem Watsa, Fairfax Prem Watsa is the founder, chairman and CEO of Fairfax (FFH), a Canadian property/casualty insurance and reinsurance firm. While managing Fairfax’s investment portfolio over the past couple of decades, Watsa has built a reputation as an astute value investor. Some have called him “Warren Buffett of Canada.” In recent years, Watsa’s firm successfully defended itself against short sellers who allegedly conspired to drive down the price of Fairfax stock and hurt the company’s business. MOI Signal Rank™ – Top Current Ideas of Fairfax


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 SandRidge Energy SD 1,741 8.47 9.43 -10% 25,096,592 >100% 12% 6% 2 Level 3 Communications LVLT 2,263 1.38 1.53 -10% 266,032,816 91% 16% 10% 3 USG USG 1,312 13.21 14.05 -6% 16,083,430 >100% 16% 6% 4 International Coal ICO 695 3.88 3.86 1% 45,155,588 24% 29% 4% 5 Overstock.com OSTK 269 11.80 13.56 -13% 3,388,774 no change 15% 1% 6 Wells Fargo WFC 139,151 26.88 26.99 0% 20,043,700 0% 0% 14% 7 Dell DELL 27,080 13.84 14.36 -4% 34,763,489 no change 2% 13% 8 Johnson & Johnson JNJ 173,051 62.72 64.41 -3% 6,884,300 no change 0% 11% 9 General Electric GE 165,569 15.55 15.13 3% 26,597,770 no change 0% 10% 10 Zenith National Insurance ZNT 1,066 28.14 29.76 -5% 3,118,441 >100% 8% 2%

Top Holdings of Fairfax – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Wells Fargo WFC 139,151 26.88 26.99 0% 20,043,700 0% 0% 14% 2 Dell DELL 27,080 13.84 14.36 -4% 34,763,489 no change 2% 13% 3 Johnson & Johnson JNJ 173,051 62.72 64.41 -3% 6,884,300 no change 0% 11% 4 Level 3 Communications LVLT 2,263 1.38 1.53 -10% 266,032,816 91% 16% 10% 5 General Electric GE 165,569 15.55 15.13 3% 26,597,770 no change 0% 10% 6 US Bancorp USB 44,483 23.26 22.51 3% 15,857,400 0% 1% 9% 7 Kraft Foods KFT 43,034 29.09 27.18 7% 9,949,871 no change 1% 7% 8 Magna International MGA 6,409 56.75 50.58 12% 4,798,976 -9% 4% 6% 9 SandRidge Energy SD 1,741 8.47 9.43 -10% 25,096,592 >100% 12% 6% 10 USG USG 1,312 13.21 14.05 -6% 16,083,430 >100% 16% 6%

New Positions Sold Out Positions Sun Microsystems (JAVA) Gannett (GCI)

Intel (INTC)

Office Depot (ODP) Viacom (VIA/B)








0%

0%

6%

7%

13%

13%

17%

20%

25%

Basic Materials

Diversified

Energy

Consumer, Cyclical

Technology

Industrial

Communications


Financial



Wally Weitz, Weitz Funds Wally Weitz, sometimes called “The Other Oracle of Omaha,” founded Wallace R. Weitz & Co. in 1983 with $10 million under management. The firm has since grown into a $2 billion asset manager best known for the Weitz Value Fund. MOI Signal Rank™ – Top Current Ideas of Weitz


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Dell DELL 27,080 13.84 14.36 -4% 5,641,469 14% 0% 5% 2 Redwood Trust RWT 1,054 13.57 14.46 -6% 6,669,148 7% 9% 6% 3 Liberty Global LBTYK 6,361 24.02 21.86 10% 4,031,770 3% 3% 5% 4 Intelligent Systems INS 10 1.09 0.94 16% 2,269,600 0% 25% 0% 5 Energizer Holdings ENR 3,826 54.79 61.28 -11% 20,000 100% 0% 0% 6 DIRECTV DTV 29,366 30.69 33.35 -8% 500,000 >100% 0% 1% 7 Monsanto MON 41,373 75.82 81.75 -7% 119,215 new position 0% 1% 8 Knot KNOT 328 9.74 10.07 -3% 115,574 >100% 0% 0% 9 Strayer Education STRA 2,879 206.26 212.52 -3% 27,000 >100% 0% 0% 10 Accenture ACN 29,599 40.49 41.50 -2% 142,500 new position 0% 0%

Top Holdings of Weitz – By Dollar Value


Value Latest Filing ∆ Since Latest ∆ Since as % of Company Ticker ($mn) Date Date Filing Filing 9/30/09 Co. Fund 1 Berkshire Hathaway BRK/B 177,566 76.90 65.72 17% 2,765,250 -4% 0% 11% 2 Redwood Trust RWT 1,054 13.57 14.46 -6% 6,669,148 7% 9% 6% 3 Liberty Media Interactive LINTA 6,479 10.87 10.84 0% 8,559,200 -3% 2% 6% 4 Liberty Global LBTYK 6,361 24.02 21.86 10% 4,031,770 3% 3% 5% 5 Dell DELL 27,080 13.84 14.36 -4% 5,641,469 14% 0% 5% 6 Microsoft MSFT 244,959 27.93 30.48 -8% 2,378,800 -7% 0% 4% 7 Liberty Media Capital LCAPA 2,650 27.24 23.88 14% 2,903,600 5% 3% 4% 8 Telephone & Data Systems TDS/S 3,185 28.04 30.20 -7% 2,251,900 -11% 4% 4% 9 Comcast CMCSK 43,145 14.52 16.01 -9% 4,229,000 -6% 1% 4% 10 Omnicare OCR 3,038 25.46 24.18 5% 2,485,860 9% 2% 4%

New Positions Sold Out Positions Accenture (ACN) AutoZone (AZO) Buckle (BKE) Compass Minerals (CMP)

ITT Educational Services (ESI) Liberty Global (LBTYA) Monsanto (MON)

American Express (AXP) USG (USG) Wells Fargo (WFC)








2%

3%

7%

10%

11%

17%

21%

29%

Basic Materials

Energy

Consumer, Cyclical

Technology

Industrial

Consumer, Non-…

Financial

Communications



Exclusive Interview with Aaron Edelheit

We recently had the pleasure of interviewing Aaron Edelheit of Sabre Value Asset Management, a value-oriented investment firm founded in 1998. The firm manages the Sabre Value Fund and two distressed real estate funds. Edelheit graduated with a B.B.A. in finance from the University of Georgia in 1996. He is a philanthropist and serves on the board of directors of the Moishe House Foundation. Edelheit maintains an online blog at aaronedelheit.com, which we have found educational and thought-provoking. Since June 1998, Edelheit has reported a compounded annual net return in excess of 12%.

The Manual of Ideas: Value investors come in many different stripes. How does your approach differ from some other value-oriented strategies?

Aaron Edelheit: I focus on small to medium sized companies that most investors have never heard of. My goal is to find companies that are very attractive, but aren’t being followed closely due to their size, lack of analyst coverage or neglect. I look for change inside of those companies that investors are not seeing and that will make the company much more valuable. Specifically, I’m looking for spin-offs, companies restructuring, turnarounds and special situations, such as a company with two divisions, in which the poor division is masking the other division that is very attractive. And I take very concentrated positions, am patient and do not use leverage.

MOI: You have at times put in writing your thesis on your favorite ideas, both long and short. Let’s take a look at some of what you’ve written and extract lessons that may help us become better investors. In April 2009, when Sprott Resource (Toronto: SCP), an investment firm controlled by respected Canadian investor Eric Sprott, traded at C$2.65 per share, you wrote, “What if I told you there was a company out there that was predominantly sitting in cash, gold and silver bullion with no debt, whose tangible book value is approximately C$3.50 per share, with little expenses, that was selling for C$2.65 per share? Better yet, what if I told you that it is run by one of the best resource investors around, who has a proven record for making investors money and has increased book value from $1.50 to over $3.50 in two years?” Many investors reading your argument might have said, “Yes, I see that SCP is undervalued on a sum-of-the-parts basis, but what is the catalyst to unlocking value? Can’t the discount persist indefinitely?” Eight months later, SCP traded at more than C$4 per share, with additional upside looking likely due to value creation in the interim. When dealing with investment vehicles such as SCP, how do you decide what discount to net asset value is sufficiently compelling, and how do you avoid the entities that do trade at wide discounts to NAV for a long time?

Aaron Edelheit Sabre Value

“I’m looking for spin-offs, companies restructuring, turnarounds and special

situations, such as a company with two divisions, in which the poor division is masking the other division that is very

attractive.”


http://www.aaronedelheit.com/�


Edelheit: Sprott was a compelling investment because it was trading at $2.65 per share, had $3 per share of cash and gold bullion and another $0.50 per share of investments with no debt. Insiders were buying like mad and the company was buying back stock as aggressively as it could. The key to this not being a value trap is that the company was buying back 10% of its stock a year (still is) and there were no losses taking away that value. The catalyst was the buybacks and further investments that Sprott had made increasing the book value past $3.50, which they have done.

MOI: You also wrote the following about Sprott Resource in April 2009: “While the market may not be buying, insiders sure are. The Chairman, Eric Sprott, has bought 631,200 shares in the last four months and the CEO, Kevin Bambrough, has bought 412,000 shares. And they have done this buying despite already owning large stakes.” How important is the existence of insider buying to your stock selection process? Do you use it primarily as “confirmatory evidence” or do you also screen for new ideas based on who’s buying their own stock?

Edelheit: Insider buying is very important. But it is critical when you see insider buying is happening as the stock goes up. Every time I see insider buying on the way up, the stock has always followed. I do both, use it as a confirmatory piece of evidence and use it to generate ideas.

MOI: You provided the following update on your valuation analysis of Sprott Resource (Toronto: SCP) in January 2010:

$/CAD # of units $ per unit Total value Cash $41,364,405 Gold (oz) 1.06 73,971 $1,100 $86,250,186 Public Equities $25,989,024 Minority stakes in private firms $18,978,480 Waseca 73,640,000 $0.60 $44,184,000 Stonegate Agricom 63,600,000 $0.50 $31,800,000 One Earth Farms 30,000,000 $1.00 $30,000,000 Orion Oil & Gas (OIP) 229,000,000 $1.50 $343,500,000 Cash From Warrants 16,594,284 $4.25 $70,525,707 Fully Diluted S/O 113,953,284 $6.08 per share If Orion Oil & Gas (OIP) is at… $0.50 per share $4.07 per share $1.00 per share $5.07 per share $1.50 per share $6.08 per share $2.00 per share $7.08 per share $1.75 per share $6.58 per share

Obviously, as the table shows, the stake in Orion Oil & Gas (Toronto: OIP) accounts for a large portion of SCP’s intrinsic value. How do you think about the fair value of Orion—does the recent market price of C$1.50 per share accurately reflect intrinsic value?

Edelheit: I think it does reflect intrinsic value. Orion is a fast growing exploration and production, energy company focused on Alberta, Canada and has 2,650 boe/d of production on its way to 7,000 boe/d of production by year’s end. Orion has 18 million barrels of oil equivalent (MBoe) in proven and probable reserves and is about 45% light oil and 55% natural gas.

“Every time I see insider buying on the way up, the

stock has always followed.”



There are number of ways to try and value OIP, which is important since it is the biggest piece of the valuation of Sprott. The two I am focused on is on a multiple of debt-adjusted cash flow for 2010 and on an enterprise value to reserves.

Orion currently trades for around 7 times cash flow for 2010. On a multiple of cash flow it appears a bit expensive compared to many other Canadian juniors, which trade for 4-5 times multiples to cash flow, but Orion, is growing really fast, much faster than comps. It should grow its production this year 180% from beginning of the year to year-end. Further, it has little or no debt and it has a well-capitalized partner in Sprott that removes financing risk.

On an enterprise valuation to reserves it comes out cheaper than comps with a valuation of about US$19 per barrel. Most comps trade on average for over $20 per barrel equivalent.

Here is the bottom line for investors in Sprott: OIP has to trade below $0.50 per share versus its current price of around $1.50 for Sprott to be worth less than its current stock price.

MOI: You have successfully invested in companies undergoing a business model change. In particular, you have highlighted companies adding a new recurring revenue stream while a legacy revenue stream might be declining. What is attractive about these kinds of companies, both in terms of the fundamental shift as well as the market’s inability to value them properly?

Edelheit: Wall Street and investors love recurring revenue models and rightfully so. When a business has a high degree of predictability, investors give it a higher multiple. When a company can shift or enter into a business that allows it to go from selling products to selling products and a service it can become very powerful, as investors are sometimes slow to appreciate it. You can have years of great returns from one stock based on such a change.

MOI: What parallels do you see between the opportunity in KVH Industries (Nasdaq: KVHI) and your experience with CAM Commerce?

Edelheit: My experience with CADA (used to be CAM Commerce’s symbol, was bought out in 2008) is what made me so excited about KVHI. CADA sold glorified cash registers, or point of sale systems. This was a crappy low margin hardware business that the company struggled in. They had about 10,000 of these systems installed in mom and pop retailers, when they developed a payment processing system to process credit card and check transactions. They went to their mom and pop retailers and said use us and we will group all of you together and save you 20% on your payment processing cost as if you were a big retailer. To the mom and pop retailer, this was a no brainer, you just save money. To CADA, they got 50 basis points, or 0.5 cents of every $1 that got transacted. Suddenly, CADA had a cash cow of a business growing at leaps and bounds. When I first discovered CADA, the old hardware business was disguising the new payment processing business. The stock went from $12 to $40, where it was bought out three years later.

“When a company can shift or enter into a business that allows it to go from selling products to selling products and a service it can become very powerful, as investors

are sometimes slow to appreciate it. You can have years of great returns from one stock based on such a

change.”



Fast forward to today and KVHI, which historically made antennas for leisure marine boats and RVs to get satellite TV. You can imagine how good the RV and leisure marine boat business was in 2008 and 2009—terrible. Those businesses were down 50% to 77%! This tremendous decline was masking that KVH had developed antennae to get broadband internet in the middle of the ocean for a fraction of the cost of existing alternatives. Further, KVH was now offering not only the antennae, but the monthly service of providing the Internet to shipping companies, the Coast Guard and oil service boats as well. Suddenly, KVH has a recurring revenue business.

KVH also has a defense business providing fiber optic gyroscopes to the military so that soldiers can operate guns from inside of Humvees and not be exposed to sniper fire or explosive devices. At one point last year this business grew 767%! There are only three companies in the world that offer these kinds of devices.

Both this defense business and the satellite broadband internet business are about to bust out into the forefront as the old line businesses have troughed and the size of the new businesses outweighs any old legacy products. Despite KVH’s excellent performance last year, CADA shows me it is just the beginning.

MOI: Stepping back to your core investment approach, are you generally more attracted to companies that might be described as Greenblatt-style “good” and “cheap” businesses or to Graham-style balance sheet bargains?

Edelheit: I am very flexible. I will invest in good and cheap and balance sheet. It just depends on the opportunity.

MOI: How do you generate investment ideas?

Edelheit: Insider buying, spin-offs, turnarounds, restructurings and reading what other really smart money managers are doing.

MOI: The art of portfolio management often takes a backseat to the art of security selection, but the former is just as important. Can you shed light on your approach to portfolio management, touching on portfolio concentration, leverage, and short selling?

Edelheit: I don’t use any leverage. I’m mostly long. I do some short selling, though it is currently only 20% of the portfolio. I have very concentrated portfolios and focus my investment research and know my companies well.

MOI: Late 2008 and early 2009 presented many challenges for value investors but also threw up some of the best bargains in a long time. How did the volatility affect your investment process, and have you tweaked your approach in any way as a result of last year’s experience?

Edelheit: I learned a lot from 2008 and 2009. I made a couple of mistakes that really hurt. First, thinking that just because you don’t invest in levered companies and you yourself don’t use leverage, doesn’t make you immune to the stupidity and craziness of what other people are doing. Second, buying on the way down was a terrible practice that I just won’t repeat going forward. I bought too early and too aggressively. Third, when a company disappoints move on, do not linger. I lingered with one investment and it hurt a lot.

“First, thinking that just because you don’t invest in levered companies and you yourself don’t use leverage, doesn’t make you immune to the stupidity and craziness of what other people are doing. Second, buying on the way

down was a terrible practice that I just won’t repeat going forward. I bought too early and too aggressively. Third, when a company disappoints

move on, do not linger. I lingered with one investment

and it hurt a lot.”



MOI: What is the single biggest mistake that keeps investors from reaching their goals?

Edelheit: Themselves. For investors, the combination of emotion, fear of loss, greed for gain, how your brain works are all so important and few pay attention to it. I think knowing yourself—what are your weaknesses and your strengths—is critical to being a good investor. I work on it every day.

MOI: Are there any “off-the-beaten path” books that have made you a better investor?

Edelheit: I just read a fantastic book called “The First Tycoon,” by T.J. Stiles, about Cornelius Vanderbilt. There were many lessons and ideas I drew from the book about what made him so successful, and I think there is a lot to learn about history as well.

MOI: You maintain a blog at aaronedelheit.com, in which you “explore the stock market, faith, Tikkun Olam and humor in no particular order.” For those unfamiliar with the phrase Tikkun Olam, could you explain its meaning and significance to you?

Edelheit: Tikkun Olam is the Jewish belief of repairing the world. The idea is it is each one of our jobs to help in our own way to help heal a broken world. For me this means being a better person, volunteering and doing acts of charity with money and time. It is very important to me and helps drive me in how hard I work on a daily basis. This way there is more for me to give back to others.

MOI: Aaron, thank you very much for your time.

“I just read a fantastic book called “The First Tycoon,” by

T.J. Stiles, about Cornelius Vanderbilt.”


http://www.amazon.com/gp/product/0375415424?ie=UTF8&tag=moi0e-20&linkCode=xm2&camp=1789&creativeASIN=0375415424�



Exclusive Interview with Ori Eyal

We recently interviewed up-and-coming investment manager Ori Eyal, founder of Emerging Value Capital Management. Eyal has spent the past eight years in the practice of global value investing, including at Deutsche Bank Asset Management, Deephaven Capital Management, and Guy Spier’s Aquamarine Fund. Eyal founded Emerging Value Capital Management in October 2008 and posted a net return of 6% as the S&P 500 fell 10% in late 2008. In 2009, Eyal’s fund posted a 37% net return, once again edging out the S&P 500 index return of 24%.

The Manual of Ideas: How did you get interested in investing? What prompted you to start your own investment firm, Emerging Value Capital Management, in 2008?

Ori Eyal: While I started out in Computer Science, I was always interested in finance and economics. Around the year 2000 I read “The Essays of Warren Buffett” and became a value investing addict. The basic tenets of value investing make intuitive sense to me: buying something for less than its worth, investing within your circle of competence, demanding a large margin of safety, and the power of compounding over time.

Ever since, I have been on a journey to learn from the masters of value investing and to develop my global value investing framework. I earned my MBA at the University of Chicago’s Booth School of Business in 2006. I worked for Deutsche Bank as an analyst at one of their global investing funds. I also interned for several hedge funds, including Deephaven and Aquamarine.

In 2008, after a decade of developing and practicing my global value investing framework, I finally felt ready to launch my own fund, Emerging Value Capital Management (EVCM). EVCM is a long-biased global value fund. At EVCM, I strive to integrate my global value investing framework with the best practices and ideas from the value investors I have studied. My life savings are invested in EVCM fund so I “eat my own cooking.”

MOI: What are the key insights you’ve gleaned from Guy Spier, either in terms of running a fund or selecting investments? Do you share Guy’s views regarding the importance of checklists?

Eyal: I was very fortunate to work for Guy Spier at Aquamarine Fund while studying for my MBA. Guy Spier is an extremely talented and thoughtful investor who looks at the world as one global integrated market. Using his deep insights into how the world operates, and his latticework of mental models, Guy has been able to successfully identify and invest in some of the world’s greatest businesses.

Ori Eyal Emerging Value Capital Management

“The basic tenets of value investing make intuitive sense to me: buying something for less than its worth, investing

within your circle of competence, demanding a large margin of safety, and the power of compounding

over time.”





At one point, Guy and I traveled to Israel together and we went to visit and research about 15 undiscovered companies in Israel. In some cases I think we were the first international investors that had ever visited them. Watching Guy interact with the management teams of these companies was a key learning event for me. He has the ability to quickly develop rapport with everyone in the room and get to the main business issues that each company faces. By the time the meeting is over, Guy has a better understanding of the business than the company management team does. Furthermore, Guy intuitively understands the people running the company, their motives, and their likely future behavior.

Working for Guy helped me develop my global value investing framework. He taught me how to analyze great businesses and how to approach and interact with company management teams. He has been a great mentor, role model, and friend over the years. When I launched EVCM fund, Guy Spier was my biggest supporter and my first investor.

MOI: You state that one of the main tenets of your investment strategy is “global value investing.” Can you elaborate on how this approach guides the construction of the EVCM portfolio?

Eyal: Even today, most value investing takes place in the U.S. and is applied to U.S. stocks. Having an international background, I became convinced that value investing can and should be applied to global markets. Therefore, one of the main tenets of my investment strategy is global value investing. I invest in various countries based on where I find the best investment opportunities. When I invest outside the U.S., I look for investment opportunities that are so attractive that they more than compensate me for bearing additional geo-political and macroeconomic risks.

Portfolio construction is a bottom-up process driven by where I find the best investment opportunities at any given time. I don’t have a target allocation for any specific country. Rather, I keep my “idea radar” open for opportunities around the world in both developed and emerging countries. I search the world for the best investment opportunities and use them to construct the portfolio.

MOI: What are the main benefits of your global value investing approach? How do you weigh these against the risks of investing in non-U.S. markets?

Eyal: There are a few key benefits that EVCM fund expects to gain from global investing. These are currency diversification, exposure to emerging markets consumers, a larger investment opportunity set (more stocks and bonds to choose from) and less efficient asset prices (more mispriced assets to invest in).

The Euro, the U.S. Dollar, the British Pound, and the Japanese Yen all face severe problems, making it difficult to determine which developed market currency is “the worst.” In general, I think that emerging market and commodity based currencies are likely to appreciate over time versus developed market currencies. Global investing allows me to diversify EVCM fund’s exposures between developed market currencies and, when possible, to shift our exposure from developed to emerging market currencies. In the best of cases, I can find investments in emerging markets where I expect to make a strong return both from the asset itself and from the local currency appreciating over time.

“The Euro, the U.S. Dollar, the British Pound, and the

Japanese Yen all face severe problems, making it difficult

to determine which developed market currency is ‘the

worst.’”



The growth in the number and in the wealth of emerging market consumers is one of the most powerful secular investment themes of which I am aware. As the emerging markets population urbanizes, it rapidly embraces capitalism, creates wealth for itself, and increases its purchasing power. To profit from this trend I seek to invest in businesses that sell to emerging market consumers. Companies that I own that sell to emerging market consumers include Willi Food (Nasdaq: WILC), Plaza Centers (London: PLAZ), China Marine (Amex: CMFO), Zhongpin (Nasdaq: HOGS), ChinaCast Education (Nasdaq: CAST), Fuqi International (Nasdaq: FUQI), Hilan Tech (Tel Aviv: HLTC), Nestle (OTC: NSRGY), and Philip Morris (NYSE: PM).

I carefully weigh many qualitative and quantitative factors when choosing in which countries EVCM fund should invest. It is of critical importance that we invest in stable countries with regimes that respect foreign investors and the rule of law. I also prefer to invest in countries that have embraced capitalism and have relatively free markets. I think the U.S., China, Brazil, Australia, Canada, Mexico, Israel, South Korea, Europe (West and East), Taiwan, Singapore, and Hong Kong are fairly attractive investment destinations. Japan faces structural and cultural obstacles that make me reluctant to invest there.

I view the lumping of the BRIC (Brazil, Russia, India, and China) countries into a single group as misleading. I like China and Brazil. While not perfect, they are making progress towards a more capitalist economy and offer reasonable investor protections. On the other hand, Russia needs to improve its respect for the rule of law, and therefore EVCM fund is not likely to invest there. I have not invested in India even though it is a potentially attractive investment destination. This is mostly because India has erected regulatory barriers that make direct investment difficult and (unlike China) few Indian companies are traded on U.S. exchanges.

MOI: How do you generate investment ideas?

Eyal: The short answer is I read everything and talk to everyone.

I subscribe to about 20 different publications: Forbes, Fortune, Barron’s, The Economist, Value Investor Insight, Downside Protection Report, Capital and Crisis, Complete Growth Investor, etc. I also surf the leading investing websites: Value Investors Club, SumZero, Market Folly, etc. I attend great investing conferences: The Value Investor Congress, IRA Sohn Investment Conference, The Rodman & Renshaw Global Investment Conference, etc. And perhaps most importantly, I regularly talk with other smart fund managers and discuss ideas.

Once I find an investment idea that looks interesting I do independent in-depth research and analysis. Every idea must pass four tests (or filters) before it can be added to the portfolio. Is it within my circle of competence, is it a good business with permanent competitive advantages, is management capable, honest, and shareholder friendly, and is it extraordinarily cheap?

Circle of competence: Do I understand the business and industry? Can I reasonably predict its future prospects and cash flows?

“I view the lumping of the BRIC countries into a single group as misleading. I like

China and Brazil. While not perfect, they are making progress towards a more

capitalist economy and offer reasonable investor

protections. On the other hand, Russia needs to

improve its respect for the rule of law, and therefore EVCM fund is not likely to

invest there.”



Quality of business: What are the competitive advantages of the business? What are the expected long-term ROE and ROA? Can the business grow profitably without requiring too much capital? Is the balance sheet strong? What are the industry dynamics? What is the long-term outlook for the industry and the business? Is the business recession resistant?

Management: Are they competent, shareholder friendly, and good capital allocators? Have they created shareholder value in the past?

Price: How cheap is the business? Is there a large margin of safety? How much can I lose? Favorable risk/reward?

MOI: Since your fund is based in New York, what is your process for getting to know non-U.S. companies? Do you try to visit their operations on the ground?

Eyal: New York is the business capital of the world, and most management teams visit New York at least once or twice a year. Having my office in New York allows me to meet with them when they get here.

I consider visiting companies on a case-by-case basis. Large companies (both U.S.-based and international) tend to be well researched by many analysts and it is often a waste of time to be the 100th analyst that visits them just to hear the same story they told everyone else. On the other hand, small companies (both U.S.-based and international) are often unknown or not well researched. It makes a lot of sense for me to visit them and to interact with the management team in order to evaluate how well the company is managed, what the future strategy is, and how competent and shareholder-friendly management is.

Researching international companies is not fundamentally different than researching U.S. companies. You have to look at the business, the financial statements, the industry, the competition, the management team, the valuation, etc. and combine all of these into a conservative estimate of the quality of the business and what it’s worth.

MOI: Can you share a few investments that best reflect your approach?

Eyal: In October of 2008 EVCM fund invested in Plaza Centers (London: PLAZ). I also wrote my investors about Plaza Centers in my monthly letter (see EVCM October 2008 letter to investors)1

At the time I made the investment, real estate, Eastern Europe, India, and shopping malls were all out of favor and no investor wanted any part of them. So you can image how much the market disliked a company that was exposed to all four of these factors. Contrary to the popular wisdom at that time, I believed that Eastern Europe and India would continue their long-term emergence and growth. They both have ever larger and wealthier middle classes that use and will continue to demand the high-end western-style shopping and entertainment centers developed by Plaza Centers.

. Plaza Centers is a leading developer of western-style (mid to high end) retail centers (shopping and entertainment) in Central and Eastern Europe (CEE), including Romania, Poland, Czech Republic, Hungary, Serbia, Latvia, Bulgaria, Greece, and also in India. Plaza Centers has a strong 12-year track record of profitably developing shopping and entertainment centers in these regions.

1 To download the letter, visit http://bit.ly/a9fFzs

“You have to look at the business, the financial

statements, the industry, the competition, the management team, the valuation, etc. and combine all of these into a

conservative estimate of the quality of the business and

what it’s worth.”


http://www.manualofideas.com/files/content/evcm_ori_eyal_letter_october_2008.pdf�

http://bit.ly/a9fFzs�


Plaza is run by a skilled and experienced management team with a long history of creating shareholder value. Plaza’s competitive advantages include a well regarded brand name, an extensive network of business partners (including leading retailers that rent stores in its shopping malls), strong project execution skills, country specific experience, and good access to capital. Unlike many competing real-estate developers that entered 2008 highly leveraged and unable to finance their project pipe-lines, Plaza Centers has plenty of cash and little company-level debt. Plaza Centers launches each new project as a separate company, using non-recourse project debt, and it seeks to pre-let its properties prior to completion.

While most real estate developers choose to record “mark-to-market” profits on their real-estate development projects based on third party value assessments (which almost always prove to be too optimistic), Plaza Centers has conservatively chosen to record all of its real estate development projects at historical purchase cost. This means that book value for Plaza Centers is a real number giving us a conservative estimate of the true value of their real estate development projects.

When EVCM fund invested, Plaza Centers was trading at about 1/3 of book value, with book value conservatively calculated using historical purchase costs. A conservative estimate for the company’s intrinsic value would be at least book value, probably much more. The stock is up about 150% since EVCM fund invested, yet I still own the shares since even today Plaza trades at only about 75% of book value.

My second example is a Chinese company that trades in the U.S. In January of 2009, EVCM fund invested in Fuqi International (Nasdaq: FUQI). I also wrote my investors about FUQI in my monthly letter (see EVCM January 2009 letter to investors)2

Products consist of a range of unique styles and designs made from precious metals such as platinum and gold as well as diamonds and other gemstones. Fuqi’s in-house design team creates about 300 new designs every month, with designs especially tailored to meet the different local tastes in each Chinese province. Products are distributed via a nationwide distribution network to over 100 retailers and 700 direct sales distributors. Among other awards, Fuqi received designations as a “China Top Brand,” “Famous Brand of Guangdong,” and “Well-known Brand of China Jewelry Industry.” In China, jewelry is viewed more as a necessity than as a “luxury good.” Demand for jewelry is embedded in the Chinese culture and it is considered customary to bring jewelry gifts to events such as weddings and childbirths.

. Fuqi designs, manufactures and sells a broad range of jewelry products to middle-class consumers in China.

We have all heard about frauds and misbehaviors in some Chinese companies so it is important to note that Fuqi is a well managed company. It is listed in the U.S. and is subject to SEC oversight and reporting requirements. Fuqi’s auditor is Stonefield Josephson, an internationally recognized accounting firm based in California with a satellite office in Hong Kong. Stonefield Josephson was listed by Bowman’s Accounting Report as one of “America’s Top 25 Auditors” of 2005, 2006 and 2007. I met with Fuqi’s management team several times and was favorably impressed.

2 To download the letter, visit http://bit.ly/alKxsY

“While most real estate developers choose to record ‘mark-to-market’ profits on

their real-estate development projects based on third party

value assessments (which almost always prove to be

too optimistic), Plaza Centers has conservatively chosen to record all of its real estate

development projects at historical purchase cost.”


http://www.manualofideas.com/files/content/evcm200901.pdf�

http://www.manualofideas.com/files/content/evcm200901.pdf�

http://bit.ly/alKxsY�


When EVCM fund first invested in Fuqi, its market cap was about $90 million. At the time, it had $34 million of net cash, $50 million of inventory (mostly gold), $50 million of accounts receivable (average collection period is 45 days), and no debt. It was trading for much less than its working capital! The stock then went up about 500% and I sold our position. Recently the shares have declined under $17 and EVCM fund is slowly buying again. Today, Fuqi trades for less than 10x 2009 net income and still has a fortress balance sheet and amazing growth prospects in China.

My third example is an Israeli company that trades on the Tel-Aviv stock exchange. Hilan Tech (Tel Aviv: HLTC) is Israel’s leading payroll processing and reporting service provider. U.S. investors might think of it as the “ADP of Israel.” The company provides an array of solutions for organizations: payroll, human resources, time and attendance, and pension administration.

Hilan Tech possesses the most advanced and comprehensive system of its kind in Israel, providing services to 700 organizations and companies, which together employ over 500,000 employees.

Payroll processing and HR services is the core of Hilan Tech’s business. It comprises about 60% of company revenues and 85% of operating profits. Customers in this business segment are very “sticky” since it would require a lot of time, effort, and expense to switch service providers. It is a predictable, slow growth business which generates a lot of recurring free cash flow, requires minimal capital investments, is recession resistant, and provides a high return on capital invested.

The financial crisis of 2008 has slowed down business somewhat since payroll processing is sensitive to the unemployment level and since corporate customers are more reluctant to spend money. Despite this slowdown, I believe that in 2009 Hilan Tech will earn over 50 million ILS in operating profits from revenue of over 230 million ILS. This implies over 20% operating margins and an almost 60% pre-tax return on equity.

Current market cap is 280 million ILS. Enterprise value is about 300 million ILS. So we are paying about 6x enterprise value to operating income. That is a cheap price for such a high-quality cash flow generative business. Keep in mind that capital expenditure requirements are minimal. Dividend yield is about 6.5%. I think it is reasonable to expect dividend growth of 10%+ per year for the foreseeable future. I also like the underlying exposure to the Israeli Shekel, as I think it has strong fundamentals and is likely to appreciate over time versus the major developed market currencies.

MOI: What is your reasoning behind holding a large cash position? Tell us more about your risk management framework, including the use of cash, short positions or other hedges.

Eyal: Risk management and capital preservation are my number one job. Making money is only my night job. Capital preservation does not mean that everything I buy always goes up right away (I wish that it did). Rather, it means that I make a great effort to avoid permanent losses of capital. It also means that I construct my investment portfolio in such a way that minimizes the risk that multiple investment positions will all experience a permanent loss of capital due to one event, misfortune, or mistake.

“…think of [Hilan Tech] as the ‘ADP of Israel.’ …we are

paying about 6x enterprise value to operating income.

That is a cheap price for such a high-quality cash flow

generative business.”



A permanent loss of capital occurs when I make an investment and after its stock declines I discover that the intrinsic business value of the investment is actually worth less than I first thought. Permanent losses of capital are extremely painful to me and I do everything I can to avoid them. In contrast, a temporary loss of capital occurs when a stock that I own declines even though the intrinsic value of the underlying business remains unchanged. While also painful, temporary losses of capital often allow me to buy more of a stock that I like for an even cheaper price.

At the individual position level I limit risk and avoid permanent losses of capital by conducting in-depth research on each investment; sizing each position based on its risk/reward profile; demanding a large margin of safety for each investment; investing only within my circle of competence; seeking to invest in good businesses with durable competitive advantages; preferring experienced and shareholder friendly management teams; and periodically reviewing and re-assessing the investment thesis for each of my investments.

At the portfolio level I limit risk and avoid permanent loss of capital by holding cash or other placeholders when there are few good investment ideas; occasionally selling short stocks or stock indexes (or using put options); using little or no leverage; seeking to reasonably diversify our investments across four dimensions: investment types (cheap growth, special situation, great business, global macro), industry exposure, country/currency exposure, and market caps; and limiting the possible damage from any single event or mistake.

I do not have a target cash position. Rather, I search for individually compelling investments, both long and short. If I don’t find enough great investments, I patiently hold cash and keep looking. On October 17, 2008, The New York Times published an article by Warren Buffett entitled “Buy American. I am.”3

MOI: Shifting gears a bit, what would you say is the single biggest mistake that keeps investors from reaching their goals?

In the article, Mr. Buffett said he was buying American stocks for his personal account in which until recently he had owned nothing but U.S. government bonds. Mr. Buffett held 100% U.S. government bonds in his personal account for a long time not because he was timing the market, but (almost certainly) because he was having difficulty finding compelling investment opportunities.

Eyal: The key to long-term wealth creation is not earning high returns. Rather, it is earning good returns while avoiding (or minimizing) the blow-ups. The biggest mistake that investors make is not investing in a conservative enough manner.

The world is a dangerous place for capital. Inflation, expropriation, revolution, currency devaluation, industry declines, wars, natural disasters, depressions, market meltdowns, black swans, theft, fraud, and taxes all pose a constant and lurking threat to growing (or even just maintaining) wealth over time. In any given year, the probability of disaster is small. But over many years and decades anything that can go wrong eventually will.

3 To read the op-ed, visit http://nyti.ms/1legil

“The key to long-term wealth creation is not earning high returns. Rather, it is earning good returns while avoiding

(or minimizing) the blow-ups. The biggest mistake that

investors make is not investing in a conservative

enough manner.”


http://www.nytimes.com/2008/10/17/opinion/17buffett.html�

http://nyti.ms/1legil�


As long as we can stay in the game, the long-term power of compounding will work in our favor. A 10% real annual return will multiply our money over 117 times in 50 years. But having even one single year with catastrophic losses undoes years of great performance. Simply put, the key to amassing wealth over time is avoiding catastrophic losses and never having to start over from scratch. When things go wrong, we can avoid catastrophic losses only by investing conservatively and without leverage. Conservative investing is like insurance—it seems like a waste of money until something bad happens and then you are glad to have it.

I see funds that use leverage (either at the portfolio level or by investing in highly levered companies), and I see funds that are too concentrated. Over the long run, leverage and excessive concentration usually end badly. I think that eventually most investors agree that having about 20 long positions is the correct compromise between over-concentration and over-diversification. Some investors just take longer than others to reach that conclusion.

MOI: Are there any books on value investing, particularly globally oriented investing, that you have found valuable but investors may not be broadly familiar with?

Eyal: Reading voraciously is a characteristic that all great investors share in common. There is simply no better way to gain wisdom and learn about the world than to read great books.

For international investing, Jim Rogers’s earlier books, Investment Biker, Adventure Capitalist, and Hot Commodities are good. The Economist is a great weekly magazine to read and learn about the world. I also think Mohnish Pabrai’s The Dhandho Investor and Joel Greenblatt’s You Can Be a Stock Market Genius are great investing books.

Economics is a key investing skill so I think everyone should read Milton Friedman, especially his books Capitalism and Freedom and Free to Choose.

Trying to forecast what the future will look like is an important investing skill. To this end I recommend books by Ray Kurzweil, Fantastic Voyage and The Singularity Is Near. Bill Gates has called Ray Kurzweil “the best person I know at predicting the future of artificial intelligence.”

To broaden your latticework of mental models, I highly recommend books by Richard Dawkins, Jared Diamond, Richard Feynman, Michael Pollan and John Brockman. I also think Buzzmarketing by Mark Hughes and Influence by Robert Cialdini are must read books.

Finally, I highly recommend the fantastic publications by The Manual of Ideas: Downside Protection Report, Portfolio Manager’s Review, etc. I also think that Value Investor Insight is great.

MOI: Ori, thank you very much for your time and insights.

“Reading voraciously is a characteristic that all great investors share in common.

There is simply no better way to gain wisdom and learn

about the world than to read great books.”






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Exclusive Interview with Marko Vucemilovic

We recently had the pleasure of interviewing hedge fund manager Marko Vucemilovic, founder of Alkar Global, a value-oriented investment firm that invests in both emerging and developed markets. Vucemilovic has been investing internationally for about a decade and is frequently on the road, visiting emerging market economies worldwide. Born in Croatia and educated at Harvard and Wharton, he manages Alkar Global out of New York City. Prior to founding Alkar in early 2009, Vucemilovic was an analyst and portfolio manager at Tiedemann Investment Group.

The Manual of Ideas: Tell us a little about your background and the genesis of your firm.

Marko Vucemilovic: Prior to founding Alkar Global, I spent about five years with Tiedemann Emerging Markets, a New York long/short hedge fund where I got my footing in global equity investing, learned what worked or didn’t work and eventually got to manage a portion of the book. My investment banking and venture capital background helped me climb up the learning curve. The emerging markets experience gave me the opportunity to learn about these markets first hand, which I believe is crucial for investing in them. One needs to hit the pavement, so to speak, and rack up countless frequent flier miles to countries with colorful bazaars, one-lane highways lined with large Samsung billboards and hundreds of construction cranes in plain sight before one can separate quality investments from the overall market. I very much enjoyed this process. My affinity for emerging markets came from taking a big picture view of global equities and contemplating where one could logically expect the biggest upside in the coming decades. That was about ten years ago, exactly at the time when emerging markets seemed to have hit an inflection point, clearly very fortuitous timing, although the pace at which these countries have evolved since then has exceeded my expectations.

As I continued to hone my investment skill I became increasingly interested in analyzing stocks in developed markets. I felt it was inefficient to constrain one’s field of operation since the same time-tested investment principles applied across different asset classes. As a result, I launched Alkar Global. The firm is based in New York and runs a value-based global long/short equities strategy on behalf of U.S. and European clients. Typically, about half of our capital is invested in emerging markets and the other half in the U.S. and Europe.

MOI: You grew up in Croatia at a time when it was part of communist Yugoslavia and lived through significant political and economic upheavals. How has that experience shaped you as an investor?

Marko Vucemilovic Alkar Global

“One needs to hit the pavement, so to speak, and rack up countless frequent flier miles to countries with colorful bazaars, one-lane highways lined with large Samsung billboards and hundreds of construction

cranes in plain sight before one can separate quality

investments from the overall market.”



Vucemilovic: In several ways. Quite simply, a rapidly changing surrounding tends to sharpen one’s survival instincts. Growing up in what could be described as an unstable geography taught me that a lot if not most of what we take for granted is actually quite brittle and constantly evolving. Dogmas are like market momentum; with time they start to seem absolute and everlasting, until they exhaust themselves and are rapidly replaced by some entirely different framework which then goes through the same cycle. The more frequent and profound the experience of this process, the more pragmatic and less reliant on accepted, conventional wisdom one becomes. I think this is quite useful in global investing. At Alkar we observe the macro or industry picture and try to be cognizant of the direction and the magnitude of prevalent market biases because they are bound to be cyclical.

Another result of my early experiences is that I am quite comfortable investing pretty much anywhere where I see a good opportunity. For example, to a skeptic, the perceived risk of emerging markets investing can seem daunting. The ebbs and flows of their economies appear utterly chaotic and unreliable. However, there is certain logic and structure to every society and every sector has value-creating businesses that are able to navigate through it. Knowing what it was like to live in one such ‘emerging market’ helps me observe global markets with a more discerning eye. When I read about investors putting their money in some frontier market, or how some large western city has a higher murder rate than Baghdad, I can easily understand why that might be the case.

MOI: Tell us about your global approach to investing. How do you go about identifying investment opportunities?

Vucemilovic: Alkar is primarily a value fund. In the end, it all comes down to individual company fundamentals and valuation. However, considering the size of global equity markets, a thematic approach helps us narrow our research effort on areas with the optimal risk/reward. Our approach is also based on a belief that the market is a lot more efficient at valuing individual companies than sectors or asset classes. We therefore tend to spend a good portion of our research effort on ‘the big picture,’ or sectors and geographies and their long-term value drivers. What drives long-term value creation? From top to bottom, some of the key drivers are demographics, government, technology, resources, consumer preferences, and company management/business model. We do not necessarily look for a perfect combination. However, what we do care about a great deal is how they are trending and the market bias regarding their future prospects. Looking at the total market capitalization of a sector on a per capita basis or the overall market penetration can be very useful. That way long-term growth potential or the prevailing market bias tends to become more apparent. For example, this is why in 2009 we allocated capital to a bank in India, a medical imagining business in China, and a mobile telecom in Russia.

The bottom up portion of our research is based on a company’s free cash flow, return on invested capital, growth rate, price to earnings, net asset value, quality of the management, etc. All these variables are considered and ranked until we find the optimal vehicle for whatever theme we are researching. Basically, we try to pick stocks at the intersection of value and positive value drivers. We gravitate towards larger, quality companies, leaders in their

“Alkar is primarily a value fund. In the end, it all comes down to individual company fundamentals and valuation.

However, considering the size of global equity markets, a thematic approach helps us

narrow our research effort on areas with the optimal

risk/reward.”



industries, and companies we have known and followed for a number of years. Top 80% of our portfolio tends to be filled with such names, and the remaining 20% with more speculative smaller names with a steeper risk/reward profile. In either case, every investment we add to our portfolio has to satisfy our macro as well as our fundamental value criteria. The beauty of investing globally is that the scope is so large that we can always find interesting opportunities.

MOI: You are part of a somewhat rare breed of value-oriented investor who places perhaps as much weight on top-down analysis as you do on analyzing the fundamentals of specific companies. How do you identify the key themes that will create or destroy value across industries or geographies?

Vucemilovic: Yes, we definitely combine top down with company fundamentals. In my view they are two different but inseparable aspects of an investment. This approach also helps us in finding new ideas because it turns research into a reiterative process. A cheap stock standing apart from the rest of its sector is rare. Usually, whatever is influencing its price is also acting on the whole sector. We simply want to know what is driving value creation/destruction in a sector and compare it to the level of market bias so that we can determine whether it makes sense to expect that circumstances could change in the foreseeable future.

In terms of identifying key themes, we read as widely as possible. Annual reports, industry journals, etc. We also maintain an extensive and growing database of stocks grouped by sector and geography, ranging from the U.S. to the BRICs, and regularly update it and analyze for relative changes in valuation. We pay particular attention to ROIC, P/E, and price to asset value metrics. This leads us to outliers in price performance and valuation. Every now and then I also read those large 100+ page sell-side industry reports in order to get up to speed on the main issues concerning a sector. Very bearish reports tend to be the most interesting read.

Success really depends on the ability to link seemingly disconnected set of events and figures and place each new piece of information in its proper context. The best ideas often tend to be the simplest ones, in part because we focus on easy-to-understand businesses. For example, we read about capacity closures in one sector and shortages in another, or we notice that despite improving fundamentals a sector or a country continues to trade at the same level or at a discount to others, etc.

MOI: Your approach seems to incorporate elements of Joel Greenblatt’s “magic formula” approach, including a focus on returns on capital. Once you identify a business that is “cheap” and “good” based on the Greenblatt criteria, how do you decide whether it is a good investment?

Vucemilovic: When I began my investment career I was obsessed with EVA [economic value added] and the book called “The Quest for Value.” Greenblatt’s “magic formula” screen took EVA concepts and simplified them, similar to what Graham did with his statistical approach to stock selection based on asset values. I have read Greenblatt’s books and greatly admire his work and track record. In our work we do similar screens, but with a bit more focus on sustainably high ROICs. Otherwise we would have a portfolio full of cyclical or dying businesses.

“I have read Greenblatt’s books and greatly admire his work and track record. In our work we do similar screens, but with a bit more focus on

sustainably high ROICs. Otherwise we would have a portfolio full of cyclical or

dying businesses.”



Deciding whether something is a good investment often comes down to imagining how I would feel holding it in my portfolio for many years. I call this the Buffett test. In the end, we are betting that a company’s fundamentals are not properly valued by the market. I can do various screens, due diligence, valuation rituals, etc., but at the end of the day I have to believe in the company’s business model, the strength of their franchise, or sustainability of any of the value drivers that have led it up to the point of our analysis. This is why we like to own leading companies abroad and why we allocate a good portion of our capital to quality U.S. names. Such stocks tend to have the best long-term track record of creating risk-adjusted value for their shareholders.

MOI: To what extent do you employ short selling in your fund? What are the key attributes you look for in a short sale candidate?

Vucemilovic: We run a long/short fund. Our ideal net exposure is around 30-50%. In short selling we employ a lot of the same concepts as on the long side, but we do use a different strategy. For example, about half of our shorts are ETFs we believe are overextended, in sectors with inferior fundamentals and without any apparent catalysts that could propel them higher. The rest are stocks that share those same characteristics. While on the long side we tend to be quite concentrated, with top ten positions carrying about two-thirds of the book, on the short side we rarely assume a big position. Our big picture style of investing lends itself well to sector or country shorting, as opposed to making a bearish bet on a single company, so we often pick a few related names and short them together in small increments. It’s a difficult process that makes our work quite a bit more complicated, but we have found it extremely valuable.

MOI: In investing, good ideas are only one piece of the success equation. Skilled portfolio management is indispensable. What are the biggest challenges you face as a portfolio manager? How do you manage risk?

Vucemilovic: I believe that the biggest challenge for any portfolio manager is to develop a viable investment strategy and to have the discipline to stick to it. Investing is a highly personal activity, a form of self-expression with very exact results. It is highly unlikely that two people could share the same exact investment style, risk tolerance, or way of thinking about stocks, which makes it so important to find your own approach, perfect it and follow it. Otherwise, you can easily get whipsawed by the market as you chase from one point of view to another. For me personally, that translates to saying no to 90+% of stocks I come across that seem cheap on some metrics but do not inherently fit my investment style. It took me a while to learn to focus my time on drilling down on the companies I know are good, and letting them perform, rather than diluting my research effort, time and capital on marginal businesses for which I lack conviction. Finding what you are good at and pressing that to the maximum yields much better results than being decent at many things. However, finding that one thing takes time and passion for investing.

In terms of risk management, I use a few simple rules such as keeping my net exposures within a set range, not increasing the size of my positions above 15% on the long side and 5% on the short side, and reducing risk taking when drawdowns exceed certain pre-set limits. These and other simple rules have served me well.

“It took me a while to learn to focus my time on drilling

down on the companies I know are good, and letting them perform, rather than

diluting my research effort, time and capital on marginal businesses for which I lack

conviction. Finding what you are good at and pressing that to the maximum yields much

better results than being decent at many things.”



MOI: What books have you read in recent years that have stood out as valuable additions to your investment library?

Vucemilovic: In the last twelve months or so, I have focused on macroeconomic classics in an attempt to make some sense of the macro picture. I found Skidelsky’s biography of Keynes and Minsky’s Stabilizing an Unstable Economy particularly helpful. I also liked The Origin of Wealth by Beinhockerer—a very interesting book that is less about investing per se and more about economy as an evolutionary system.

However, my all-time favorite list would have to include: The Quest for Value by Stewart, The Intelligent Investor by Graham, Alchemy of Finance by Soros, Business Cycles by Tvede, Trading Risk by Grant, and the entire Market Wizards series by Schwager.

MOI: Marko, thank you very much for your time.

“I found Skidelsky’s biography of Keynes and Minsky’s ‘Stabilizing an

Unstable Economy’ particularly helpful. I also

liked ‘The Origin of Wealth’ by Beinhockerer—a very

interesting book that is less about investing per se and more about economy as an

evolutionary system.”


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Top Five Superinvestor Selections

Fair Isaac (FICO) – Southeastern Minneapolis, MN, 612-758-5200

Technology: Software & Programming, Member of S&P MidCap 400 www.fico.com

Trading Data Consensus EPS Estimates Valuation

Price: $21.06 (as of 2/12/10)

Month # of P/E FYE 9/30/09 16x 52-week range: $9.76 - $24.49 Latest Ago Ests P/E FYE 9/30/10 14x Market value: $979 million This quarter $0.37 $0.35 4 P/E FYE 9/30/11 13x Enterprise value: $1.2 billion Next quarter 0.37 0.37 5 P/E FYE 9/29/12 12x Shares out: 46.5 million FYE 9/30/10 1.48 1.45 6 EV / LTM revenue 2.0x

Ownership Data FYE 9/30/11 1.58 1.56 6 EV / LTM EBITDA 9x Insider ownership: 0% FYE 9/29/12 1.75 1.70 1 EV / LTM EBIT 9x Insider buys (last six months): 2 LT EPS growth 7.5% 7.5% 2 P / tangible book n/m Insider sales (last six months): 5 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 95% Date Actual Estimate LTM EBIT yield 11% # of institutional owners: 424 1/27/10 $0.37 $0.35 LTM pre-tax ROC >100%

Operating Performance and Financial Position ($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 9/30/03 9/30/04 9/30/05 9/30/06 9/30/07 9/30/08 9/30/09 12/31/09 12/31/08 12/31/09 Revenue 629 706 799 783 784 745 631 619 164 152 Gross profit 383 454 524 536 525 470 424 429 105 109 EBIT 174 180 193 154 160 122 117 128 20 32 Net income 107 103 135 104 105 84 65 71 12 18 Diluted EPS 1.41 1.31 1.86 1.60 1.94 1.64 1.34 1.46 0.25 0.37 Cash from ops 175 199 214 199 179 159 152 146 37 31 Capex 18 23 16 31 23 23 14 13 6 5 Free cash flow 156 176 198 168 157 136 138 133 31 27 Cash & investments 505 299 229 227 221 187 318 337 212 337 Total current assets 668 466 413 413 423 352 443 460 350 460 Intangible assets 552 825 803 786 740 739 706 704 711 704 Total assets 1,495 1,445 1,351 1,321 1,276 1,275 1,304 1,289 1,248 1,289 Short-term debt 0 0 0 400 391 0 0 0 0 0 Total current liabilities 98 120 138 537 526 123 115 114 106 114 Long-term debt 541 400 400 0 170 570 570 570 570 570 Total liabilities 646 528 546 551 710 713 704 702 698 702 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 850 917 805 770 566 562 600 587 550 587 EBIT/capital employed >100% >100% >100% >100% >100% >100% >100% >100% n/m n/m

Ten-Year Stock Price Performance and Trading Volume Dynamics

$0

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BUSINESS OVERVIEW FICO provides companies with products and services mainly to manage consumer credit risk. It has three segments: Applications: Preconfigured decision management products such as for client, fraud and insurance claims management. Scores: Includes FICO credit scores, which are distributed via credit reporting agencies and directly to individuals. Tools: Includes Blaze Advisor and Xpress Optimization software that clients use for custom decision management. INVESTMENT HIGHLIGHTS

• Provides industry-standard FICO credit score, a measure of an individual’s credit risk. 91 of the 100 largest U.S. financial institutions and 50+ of the largest 100 banks worldwide use FICO scores for decisions on credit cards, mortgages and other debt.*

• Exploiting other business opportunities/verticals. FICO sells products for credit card fraud detection and insurance claims management, among others. Clients include over 400 insurers, 200 retailers, 100 public agencies, and 150 healthcare companies.

• 60% of costs are staff-related. The variable cost structure has enabled FICO to keep EBIT margin relatively stable despite ongoing revenue pressure. Headcount is down 26% since yearend 2007.

• Owns 86 patents. While FICO’s scoring model relies on third-party consumer credit data, it creates the credit score based on patented algorithms.

• Repurchased 1.7 million shares for $33 million in 1Q10. Share count is down by a third since 2004.

• Guiding for “high single-digit percentage” growth in FY10 GAAP EPS (FY09 EPS: $1.34).

• 12% FCF yield based on annualized F1Q10 FCF. INVESTMENT RISKS & CONCERNS

• Is competitive moat narrowing? While FICO scores are widely used, their predictive power is debatable. U.S. consumer credit problems may highlight the brand’s shortcomings and invite rivals.

• 76% of revenue derived from transactional or unit-based pricing during fiscal 2009. As lending is curtailed worldwide, FICO’s revenue declines because it is largely dependent on lending volumes such as credit card usage and loan originations.

• Various sources of competition including lenders’ in-house analytics, rival credit scores (such as from Equifax, Experian and TransUnion), and software and consulting firms more generally (e.g. IBM).

* Source: FICO 2009 10-K. For more information on FICO scores, see http://www.myfico.com/CreditEducation/CreditScores.aspx

SELECTED OPERATING DATA 1

FYE September 30 2005 2006 2007 2008 2009 YTD

12/31/09 ∆ revenue 13% 3% -5% -5% -15% -7% ∆ ending headcount -9% -2% 3% -12% -16% -11% Revenue ($mn) 799 825 784 745 631 151 % of revenue by segment: Applications 56% 55% 52% 52% 54% 61% Scores 21% 21% 23% 21% 21% 27% Tools 6% 6% 7% 7% 8% 11% Professional Services 17% 18% 19% 20% 18% 0% Revenue growth by segment: 2 Applications 5% 1% -11% -4% -13% -2% Scores 17% 6% 2% -13% -16% -13% Tools 23% -5% 12% 1% -6% -18% Professional Services 39% 11% -1% 0% -25% n/m EBIT margin by segment: 3 Applications 14% 19% 18% 16% 21% 15% Scores 60% 63% 64% 58% 58% 53% Tools 27% 6% 2% 15% 16% 4% Professional Services 14% 9% 5% 0% -5% n/m Total EBIT margin 27% 24% 23% 20% 22% 23% % of revenue by geography: U.S. 75% 72% 69% 67% 68% n/a International 25% 28% 31% 33% 32% n/a Selected items as % of revenue: Gross profit 66% 66% 67% 63% 67% 72% R&D 10% 10% 9% 10% 12% 13% Net income 17% 13% 14% 11% 10% 12% D&A 6% 6% 6% 5% 6% 5% Capex 2% 4% 3% 3% 2% 3% ∆ shares out (avg) -5% -4% -12% -13% -1% -2%

1 Effective October 1, 2009, FICO consolidated reporting from four segments to three, with the Professional Services segment now combined with one of the three segments to which the services relate and the myFICO B2C service now included within the Scores segment (within Applications previously). 2 YTD revenue change is based on new reporting segment structure. 3 Segment margins include intangible amortization and exclude share-based compensation. Total margin excludes intangible amortization and includes share-based compensation. Both exclude restructuring expenses and gain/loss on assets sales. YTD margins are estimated to conform to historical reporting (YTD corp. overhead of $16.5 million allocated to segments based on revenue).

• Relies on third-party distributors such as credit reporting agencies. Equifax, TransUnion and Experian accounted for 19% of fiscal 2009 revenue.

• $570 million of debt and $382 million of cash including marketable securities.

MAJOR HOLDERS CEO Greene <1% | Other insiders 3% | Southeastern 20% | BlackRock 7% | Barclays 7% | Royce 6% | Sandell 5%

RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year?

THE BOTTOM LINE FICO has leveraged the success of its industry-leading credit score brand to create products in related areas and non-financial verticals. These diversification efforts, and a variable cost structure, have dampened the impact of lower demand for high-margin credit scores following a decline in worldwide lending volumes. Longer term, it remains to be seen if the FICO score can withstand shortcomings associated with its predictive power and challenges from rival products. With shares trading on a 10%+ free cash flow yield, the market may be too pessimistic regarding the durability of FICO’s competitive moat.


http://www.myfico.com/CreditEducation/CreditScores.aspx�


…additional insight into Fair Isaac: SLIDES FROM COMPANY PRESENTATION, JANUARY 2010



…additional insight into FICO scores:

Source: Board of Governors of the Federal Reserve System: “Report to the Congress on Credit Scoring and Its Effects on the Availability and Affordability of Credit,” submitted to the Congress pursuant to section 215 of the Fair and Accurate Credit Transactions Act of 2003, August 2007, page 133.



Hyatt Hotels (H) – Pershing Square Chicago, IL

Services: Business Services www.hyatt.com


Price: $29.34 (as of 2/12/10)

Month # of P/E FYE 12/31/08 67x 52-week range: $25.75 - $32.24 Latest Ago Ests P/E FYE 12/31/09 n/m Market value: $4.9 billion This quarter -$0.06 -$0.06 11 P/E FYE 12/31/10 n/m Enterprise value: $4.6 billion Next quarter -0.06 -0.07 7 P/E FYE 12/31/11 122x Shares out: 168.0 million FYE 12/31/09 -0.22 -0.21 10 EV / LTM revenue 1.3x

Ownership Data FYE 12/31/10 -0.01 0.00 12 EV / LTM EBITDA 13x Insider ownership: 77% FYE 12/31/11 0.24 0.26 11 EV / LTM EBIT n/m Insider buys (last six months): 8 LT EPS growth 8.5% 8.5% 2 P / tangible book 1.1x Insider sales (last six months): 2 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 2% Date Actual Estimate LTM EBIT yield -1% # of institutional owners: 50 11/14/09 $0.05 n/a LTM pre-tax ROC -2%

Operating Performance and Financial Position

($ millions, except Fiscal Years Ended LTME

FQE per share data)

12/31/06 12/31/07 12/31/08 6/30/09

6/30/09

Revenue

3,471 3,738 3,837 3,465

1,637 Gross profit

794 891 903 686

296

EBIT

352 324 278 (29)

(57) Net income

315 270 168 132

(36)

Diluted EPS

1.15 0.98 0.44 (0.37)

(0.14) Cash from ops

358 386 291 61

(230)

Capex

326 377 258 104

(154) Free cash flow

32 9 33 (43)

(76)

Cash & investments

409 428 968

968 Total current assets

1,065 1,057 1,529

1,529

Intangible assets

607 436 463

463 Total assets

6,248 6,119 6,739

6,739

Short-term debt

26 38 17

17 Total current liabilities

697 653 574

574

Long-term debt

1,288 1,209 595

595 Total liabilities

2,814 2,555 1,865

1,865

Preferred stock

0 0 0

0 Common equity

3,434 3,564 4,874

4,874

EBIT/capital employed

19% 8% -2%

n/m


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BUSINESS OVERVIEW Hyatt owns, leases, manages, or franchises ~120,000 rooms in 415 hotels globally. Jay Pritzker founded Hyatt in 1957. The controlling Pritzker family sold 44 million Class A shares at $25 per share in an IPO in November 2009. INVESTMENT HIGHLIGHTS

• Owner/manager business model. Hyatt owns and/or manages over 85% of total Hyatt-branded properties as measured by number of rooms.

• Competes mainly in upper upscale segment. * Hyatt Regency and Hyatt brands account for 59% of total rooms, with Grand Hyatt representing another 17%. Other major segments include upscale (Hyatt Place: 15% of rooms) and luxury (Park Hyatt: 4%).

• Owns 96 properties or 23% of total, and 22% of rooms. Net PP&E is $3.6 billion— fair value may be materially higher. H also manages 27 properties owned or leased by unconsolidated ventures.

• Opportunities in franchising/global expansion. Hyatt derives only 13% of revenue from franchising and 20% of revenue from outside the U.S. World-recognizable brands represent a growth platform.

• Nine million Hyatt Gold Passport members. YTD through September 2009, new enrollment in Hyatt’s loyalty club grew 20% year-on-year. Members represented 23% of total room nights in the period.

• Strong balance sheet with $567 million of pro-forma net cash at September 30, 2009 (including $127 million from sale of 5.7 million IPO shares).

• Shares trade at 1.1x tangible book. INVESTMENT RISKS & CONCERNS

• High capital intensity. Hyatt’s owner/manager business model ties up significant capital and exposes it more to the cyclicality of the lodging industry relative to franchise-focused models.

• 22% RevPAR decline at owned/leased hotels YTD through September 2009 reflects ongoing weak economy and reduced travel worldwide.

• Pritzker family has 78% voting control. Thomas Pritzker (59) is executive chairman since 2004.

* Based on branded hotel categorization per http://www.strglobal.com COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

MAR 9,590 12,120 1.1x n/m 30x 24x HOT 6,900 9,770 2.1x n/m 56x 36x IHG 4,130 5,290 3.4x n/m 16x 21x H 4,930 4,570 1.3x 1.1x n/m n/m

SELECTED OPERATING DATA

FYE December 31 2006 2007 2008 YTD

9/30/09 ∆ revenue 10% 8% 3% -17% Revenue ($bn) 3.5 3.7 3.8 2.4 % of revenue by segment: Owned/leased hotels 54% 55% 56% 54% Management/franchising – North America 38% 37% 36% 40% Management/franchising – International 5% 6% 5% 4% Corporate 4% 3% 3% 2% EBITDA margin by segment: Owned/leased hotels 23% 25% 24% 17% Management/franchising – North America 13% 12% 12% 9% Management/franchising – International 58% 53% 50% 36% Corporate -2% -2% -3% -2% Total EBITDA margin 18% 19% 18% 12% % of revenue by geography: U.S. 82% 81% 80% n/a International 18% 19% 20% n/a % of total rooms/units by type: Owned/leased 1 25% 25% 24% 24% Managed 2 66% 65% 64% 61% Franchised 7% 8% 10% 13% Other 3 2% 2% 2% 2% Selected items as % of revenue: EBIT 4 12% 13% 11% 4% Net income 9% 7% 4% -1% D&A 6% 6% 6% 8% Capex 9% 10% 7% 6% Owned/leased hotels’ operating metrics: Average Daily Rate (ADR) $155 $173 $175 $154 Occupancy 67% 68% 70% 66% Revenue Per Available Room (RevPAR) 5 $103 $117 $122 $101 Δ RevPAR n/a 13% 4% -22% ∆ shares out (avg) 19% -2% -5% 13%

1 Hyatt owns 90% of owned/leased rooms at 9/30/09; all are managed by Hyatt. 2 Includes properties owned or leased by unconsolidated hospitality ventures. 3 Includes vacation ownership properties and residences, all of which are managed by Hyatt (some are owned by Hyatt). 4 Excludes gains on sales of real estate, asset impairments and discontinued operations and changes in accounting principles, net of tax. Includes Hyatt's share of operating income generated by unconsolidated hospitality ventures. 5 RevPAR is the product of ADR (excludes non-room revenue) and occupancy. MAJOR HOLDERS Shares outstanding: 43.7 million class A shares (H; one vote per share) and 130.0 million class B shares (ten votes). The Pritzker family owns 104.9 million class B shares, giving it 60% of total shares and 78% of voting power. Economic stake: Pritzker family 60% | Other insiders <1% | GS 7% | Madrone 6% | Abu Dhabi 3% | Singapore gov’t 2% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year?

THE BOTTOM LINE Hyatt distinguishes itself from other global hotel chains through its high asset backing, net cash position, and an interested and active owner in the Pritzker family. Based on the power of the Hyatt brand, the company can create shareholder value by following a strategy of franchising and international expansion. As this would reduce capital intensity and improve earnings quality, it should enable significant return of capital to shareholders. On this basis, shares are undervalued. Change may be slow, however, given weak lodging industry prospects, tight credit markets, and voting control by the Pritzker family.


http://www.strglobal.com/�


…additional insight into Hyatt: OVERVIEW OF HOSPITALITY BRANDS



…additional insight into Hyatt: U.S. Lodging Industry RevPAR Growth (1988-2008)

Source: Smith Travel Research (per Hyatt IPO prospectus). Global Lodging Industry — Percentage Change in ADR, Occupancy and RevPAR (YTD September 2009 vs. YTD September 2008)

Source: Smith Travel Research (per Hyatt IPO prospectus).



Investors Title (ITIC) – Markel Gayner Chapel Hill, NC, 919-968-2200

Financial: Insurance (Property & Casualty)

Trading Data Consensus EPS Estimates Valuation Price: $35.41 (as of 2/12/10)

Month # of P/E FYE 12/31/08 n/m

52-week range: $17.14 - $35.86 Latest Ago Ests P/E FYE 12/31/09 15x Market value: $81 million This quarter $0.34 $0.34 1 P/E FYE 12/31/10 19x Enterprise value: $72 million Next quarter n/a n/a n/a P/E FYE 12/31/11 n/a Shares out: 2.3 million FYE 12/31/09 2.31 2.31 1 EV / LTM revenue 1.0x

Ownership Data FYE 12/31/10 1.90 1.90 1 EV / LTM EBITDA n/m Insider ownership: 24% FYE 12/31/11 n/a n/a n/a EV / LTM EBIT 80x Insider buys (last six months): 0 LT EPS growth 4.0% 4.0% 1 P / tangible book 0.8x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 30% Date Actual Estimate LTM EBIT yield 1% # of institutional owners: 44 10/30/09 $0.42 $0.73 LTM pre-tax ROC n/m


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 73 91 80 88 85 85 71 69 18 16 Gross profit 34 42 43 49 51 46 28 17 9 8 EBIT 12 16 16 19 17 12 (3) 1 1 1 Net income 8 11 11 13 13 8 (1) 2 1 1 Diluted EPS 3.12 4.18 4.09 5.10 5.14 3.35 (0.50) 0.24 0.39 0.42 Cash from ops 13 17 15 17 19 10 1 2 4 4 Capex 1 1 2 2 2 1 1 1 0 0 Free cash flow 12 16 13 16 17 10 1 1 4 4 Cash & investments 4 5 5 15 4 3 5 9 6 9 Total current assets 0 0 0 0 0 0 0 0 0 0 Intangible assets 0 0 0 0 0 0 0 0 0 0 Total assets 85 101 113 129 144 150 140 146 142 146 Short-term debt 0 0 0 0 0 0 0 0 0 0 Total current liabilities 0 0 0 0 0 0 0 0 0 0 Long-term debt 0 0 0 0 0 0 0 0 0 0 Total liabilities 32 37 41 44 48 50 50 48 48 48 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 53 63 73 84 95 99 90 98 93 98 EBIT/capital employed >100% n/m n/m n/m n/m >100% -427% n/m n/m n/m


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BUSINESS OVERVIEW Investors Title primarily provides title insurance in the U.S. INVESTMENT HIGHLIGHTS

• Regional U.S. title insurer. Investors Title has less than 1% share of total industry premiums written.* National firms such as Fidelity National (44%) and First American (27%) dominate the industry, with regional firms having less than 10% market share.

• Title insurance protects real estate owners and lenders against property loss due to defects in the title to the property. Customers include developers, home buyers/sellers, and real estate lenders/brokers.

• Provides a non-discretionary service. U.S. lenders generally require title insurance before making a property loan to assure them of their lien position.

• Grew tangible book value per share 50% since yearend 2004 (with dividends added back), despite challenges due to the real estate market decline.

• 4Q09 net premiums written rose 1% reversing the 7% y-y decline recorded in the third quarter. The company was slightly profitable in the 4Q.

• $124 million of investments at yearend 2009. About 60% is invested in government debt, 15% in corporate debt and rest in equity and short-term investments (based on breakdown as of 9/30/09).

• $9 million of cash and no debt at yearend 2009. • Shares trade on 0.8x tangible book (12/31/09).

INVESTMENT RISKS & CONCERNS

• “Expect downward pressure on future premiums.” Based on management comments in the 4Q09 earnings release, the recent “elevated pace of mortgage refinance activity will likely recede,” absent further declines in interest rates and as government stimulus programs come to an end.

• Are provisions for title losses adequate? Claims provision as a percentage of net premiums written was 14% in 2009, down from 24% in 2008. Known title claims represented only 17% of total claims reserve of $39 million as of September 30, 2009.

• North Carolina represents 44% of net premiums based on premiums written in 2009. South Carolina and Virginia contributed another 9% and 8%. The company is vulnerable to the regional economy.

• Adequate scale? While Investors Title benefits from local focus, it may have difficulty competing against larger scale, national rivals over time.

* Source: American Land Title Association (http://www.alta.org)

SELECTED OPERATING DATA FYE December 31 2005 2006 2007 2008 2009 ∆ tangible equity per share 1 14% 15% 9% -4% 9% ∆ net premiums written 7% -8% 0% -9% -2% ∆ revenue 10% -4% 0% -16% 0% Revenue ($mn) 88 85 85 71 71 Selected items as % of revenue: Pre-tax income 21% 20% 14% -5% 8% Net income 15% 16% 10% -2% 7% Selected items as % of total assets: Investments 74% 85% 86% 83% 84% Cash and equivalents 11% 2% 2% 4% 6% Claims reserves 27% 26% 25% 28% 27% Shareholders’ equity 66% 66% 66% 64% 66% % of revenue by segment: Title insurance services 93% 90% 90% 93% n/a Exchange services 5% 7% 5% 2% n/a Other and eliminations 2% 3% 5% 5% n/a Pre-tax income margin by segment: Title insurance services 18% 16% 10% -5% n/a Exchange services 79% 76% 65% -1% n/a Other and eliminations 0% 0% 2% 0% n/a Selected title insurance metrics: Claims provision 2 11% 11% 15% 24% 14% Net premiums written ($mn) 77 70 70 64 62 % of net premiums written by sales channel: Branch 45% 46% 43% 38% 35% Agency 55% 54% 57% 62% 65% Return on tang. equity (avg) 17% 15% 9% -1% 5% Tang. equity to assets (avg) 65% 66% 66% 65% 65% ∆ shares out (avg) 3% -1% -2% -5% -3%

1 With dividends added back. 2 As a percentage of net premiums written. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

FNF 3,180 3,750 .6x 3.0x 14x 11x FAF 2,980 2,790 .5x 98.3x 15x 16x ORI 2,470 2,790 .8x .6x 66x 11x STC 200 400 .3x 1.0x n/m 31x ITIC 80 70 1.0x .8x 15x 19x

MAJOR HOLDERS Fine family insiders 20 % | Other insiders 4% | Markel 10% | DFA 6% | London Co. 5% | Bridgeway 2% | Vanguard 1% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? 1 MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year? 1 While the company has no debt, it is difficult to assess reserve adequacy.

THE BOTTOM LINE Investors Title is a U.S. title insurer providing a non-discretionary service for real estate industry participants, primarily along the East Coast. As residential and commercial real estate transactions drive demand for title insurance, business has suffered in the real estate downturn. Despite unprecedented challenges facing the company, tangible book value per share is up 50% since yearend 2004 (with dividends added back). While this may raise the question of the adequacy of loss reserves, management has strengthened claims provisions in the past three years. Trading at 0.8x tangible book, shares appear undervalued based on prospects for a potential recovery in transaction volume and/or pricing in the U.S. real estate market.


http://www.alta.org/�


Republic Airways (RJET) – Greenlight Indianapolis, IN, 317-484-6000

Transportation: Airline www.rjet.com


Price: $5.31 (as of 2/12/10)

Month # of P/E FYE 12/31/08 2x 52-week range: $4.10 - $10.64 Latest Ago Ests P/E FYE 12/31/09 5x Market value: $183 million This quarter $0.06 $0.08 5 P/E FYE 12/31/10 7x Enterprise value: $2.3 billion Next quarter -0.01 0.13 2 P/E FYE 12/31/11 2x Shares out: 34.4 million FYE 12/31/09 0.99 1.01 5 EV / LTM revenue 1.7x

Ownership Data FYE 12/31/10 0.75 1.38 5 EV / LTM EBITDA 6x Insider ownership: 1% FYE 12/31/11 2.74 2.74 1 EV / LTM EBIT 12x Insider buys (last six months): 0 LT EPS growth 10.0% 10.0% 1 P / tangible book 0.4x Insider sales (last six months): 2 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 86% Date Actual Estimate LTM EBIT yield 9% # of institutional owners: 256 11/4/09 $0.09 $0.29 LTM pre-tax ROC 7%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 356 492 646 905 1,143 1,293 1,480 1,344 385 360 Gross profit 162 239 300 442 576 687 789 801 193 208 EBIT 30 83 91 159 213 230 255 198 60 37 Net income 7 36 39 61 80 83 85 41 17 3 Diluted EPS 0.35 1.73 1.63 1.66 1.82 2.02 2.42 1.12 0.50 0.09 Cash from ops 43 92 117 171 229 281 242 186 63 34 Capex 26 37 64 179 89 100 128 71 31 7 Free cash flow 17 55 52 (8) 140 181 115 115 31 27 Cash & investments 3 23 46 162 196 164 130 86 134 86 Total current assets 33 64 83 216 263 254 371 417 378 417 Intangible assets 13 13 13 13 13 13 13 84 13 84 Total assets 390 670 1,172 2,036 2,358 2,773 3,237 3,412 3,102 3,412 Short-term debt 55 48 47 74 87 132 196 157 208 157 Total current liabilities 94 102 117 159 203 277 356 436 376 436 Long-term debt 224 438 804 1,340 1,482 1,782 2,082 2,072 1,955 2,072 Total liabilities 355 597 997 1,611 1,850 2,347 2,761 2,915 2,646 2,915 Preferred stock 5 0 0 0 0 0 0 0 0 0 Common equity 30 72 175 425 509 426 476 496 456 496 EBIT/capital employed 10% 20% 12% 12% 12% 11% 10% 7% n/m n/m


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BUSINESS OVERVIEW Republic is a U.S. domestic airline, established in 1974. The company flies for five legacy carriers under their brands, and since 2009 owns the branded carriers Frontier and Midwest. Republic operates 286 aircraft and 1,600 daily flights. INVESTMENT HIGHLIGHTS

• Long term, fixed-fee contractual relationships with five major carriers. The deals eliminate Republic’s exposure to fuel price fluctuations, fare competition and passenger volumes (pre-tax margin guidance of 7.5-8.5% in 2010E). The average remaining term of the deals is eight years. 60% of Republic’s fleet is dedicated to fixed-fee operations.

• Acquired two well- branded carriers in 2009. Frontier has $1.3 billion in revenue and ranks #2 in Denver, while Midwest has $400 million in revenue and ranks #1 in Milwaukee and #3 in Kansas City.

• Relatively diversified carrier customer base, with roughly one-quarter of revenue from Delta, United, US Airways, and others (Continental, American).

• Growth could come from (1) trend toward larger, higher-margin aircraft (70+ seats vs. 35-50 seats); (2) share gains due to low cost structure;* and (3) potential move from hub model to point-to-point.

• Bryan Bedford (47) became CEO in 1999. He has 20+ years of regional airline experience, having previously served as CEO of Mesaba Holdings.

• ~$5 per share in unrestricted cash. Only $85 million of $2.7 billion of total debt is recourse debt.

• Trades at .4x tangible book and 7x 2010E consensus EPS (guidance is $0.42-0.90 for FY10).


• Acquisitions of Frontier and Midwest change business model, adding exposure to fuel prices, fare competition and passenger volumes. While RJET may have purchased Frontier and Midwest cheaply, the purchases can also be seen as defensive, as both companies were Republic customers. Bankrupt Frontier had rejected its airline services agreement, resulting in an unsecured claim of $150 million.

• Vulnerable to weak financial position of network partners. If any of the company’s carrier partners file for bankruptcy, fixed-fee codeshare agreements can be terminated or renegotiated at lower margins. Republic has loaned money to its customers in the past, including $35 million to US Airways.

• Fixed-fee ops “stable but shrinking over time,” reflecting a “low to no growth market” (Republic).

SELECTED OPERATING DATA – excl. FRONTIER/MIDWEST

FYE December 31 2005 2006 2007 2008 YTD

9/30/09 Number of aircraft in operation: Owned 90 109 131 149 } 192 Leased 52 62 88 79 % of revenue by network carrier: US Airways 21% 24% 22% 25% n/a United 32% 30% 24% 21% n/a Delta 34% 35% 33% 29% n/a Continental 0% 0% 10% 12% n/a American 13% 11% 9% 10% n/a Frontier, Midwest, etc. 0% 0% 2% 3% n/a Selected growth metrics: Revenue 40% 26% 13% 14% -1% Headcount 33% 21% 26% -3% n/a Passengers carried 34% 39% 29% 16% 0% Rev passenger miles1 47% 47% 29% 13% 0% Available seat miles2 42% 40% 26% 15% 0% Pass. load factor3 4% 6% 3% -2% 0% Rev. per seat mile4 -1% -9% -10% 0% -1% Avg trip length (miles) 10% 6% 0% -3% -3% Selected items as a % of total revenue: EBIT6 18% 19% 18% 17% 18% Net income6 7% 7% 6% 6% 4% D&A 7% 8% 8% 9% 11% Capex5 14% 8% 8% 9% 3% ∆ shares out 54% 18% -4% -14% -2%

1 Passengers carried multiplied by miles flown. 2 Passenger seats available multiplied by miles flown. 3 Revenue passenger miles divided by available seat miles. 4 Total airline operating revenues divided by available seat miles. 5 Higher capex in ’05 due to purchase of commuter slots and 35 Embraer jets. 6 YTD 2009 EBIT and net margin exclude impairment of goodwill. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

SKYW 780 1,820 .7x .6x 8x 7x PNCL 160 670 .8x 2.5x 7x 6x XJT 60 20 .0x .4x n/a n/a RJET 180 2,320 1.7x .4x 5x 7x

MAJOR HOLDERS CEO Bedford 3% | Other insiders 2% | Greenlight 10% | DFA 10% | TPG 7% | Royal 6% | Kleinheinz 3%

RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year? * CASM of 7.61¢ versus 9.00¢ at SKYW and 9.25¢ at PNCL. CASM is calculated as operating expense and interest expense (less fuel) divided by available seat miles. Data shown is for CQ3 2009, based on public filings.

THE BOTTOM LINE Republic Airways has undergone a transformation over the past twelve months, acquiring two well-established but distressed branded airlines, Frontier and Midwest, which have been Republic customers. The purchases add a branded, risk-based model to Republic’s traditional business of flying for major network carriers under their brands. The latter model eliminated Republic’s exposure to fuel prices, fares and load factors, giving it a stable pre-tax profit margin. While Republic retains the fixed-fee business, growth is likely to be driven by branded operations. We note that only $85 million of Republic’s $2.7 billion in debt is recourse to the company; unrestricted cash amounts to ~$5 per share. The risk-reward seems compelling.



…additional insight into Republic Airways: SLIDES FROM COMPANY PRESENTATION, FEBRUARY 2010



…additional insight into Republic Airways:

PRO FORMA BALANCE SHEET – includes Republic, Midwest Airlines and Frontier Airlines (as of September 30, 2009)

(In thousands) Historical Combined Combined

ASSETS Republic &

Midwest Frontier Historical

Pro Forma

Pro Forma

Bal. Sheet Adjustments Bal. Sheet Cash and cash equivalents $ 85,525 $ 53,918 $ 139,443 $ (28,750) (B) $ 110,693 Restricted cash 63,188 165,849 229,037 - 229,037 Receivables—net 36,777 35,587 72,364 - 72,364 Inventories—net 64,059 13,156 77,215 (1,257) (C) 75,958 Prepaid expenses and other current assets 22,090 18,947 41,037 (4,907) (A) (D) 36,130 Notes receivable—net of allowance 78,636 - 78,636 (43,104) (E) 35,532 Assets held for sale 31,624 - 31,624 528 (A) (F) 32,152 Deferred income taxes 35,212 - 35,212 6,829 (G) 42,041 Total current assets 417,111 287,457 704,568 (70,661) 633,907 Aircraft and other equipment—net 2,705,376 559,832 3,265,208 (61,233) (H) 3,203,975 Security and other deposits - 27,960 27,960 (27,960) (A) - Prepaid maintenance payments - 137,452 137,452 (137,452) (A) - Aircraft pre-delivery payments - 5,489 5,489 (5,489) (A) - Restricted cash - 2,987 2,987 (2,987) (A) - Deferred loan fees and other assets - 7,816 7,816 (7,816) (A) (K) - Intangible and other assets 205,008 - 205,008 (205,008) (I) - Intangible assets—net - - - 172,464 (I) (J) 172,464 Other assets - - - 289,354 (A) (I) 289,354 Goodwill 84,143 - 84,143 - 84,143 Total assets $ 3,411,638 $ 1,028,993 $ 4,440,631 $ (56,788) $ 4,383,843 LIABILITIES AND STOCKHOLDERS’ EQUITY Current portion of long-term debt $ 157,133 $ 25,053 $ 182,186 $ 14,115 (A) $ 196,301 Accounts payable 39,338 65,210 104,548 - 104,548 Air traffic liability 41,950 138,245 180,195 (26,262) (A) (L) 153,933 Short term borrowings - 14,115 14,115 (14,115) (A) - Debtor-in-Possession loan - 40,000 40,000 (40,000) (M) - Deferred frequent flyer revenue 15,117 - 15,117 31,252 (A) (N) 46,369 Other deferred revenue - 12,863 12,863 (12,863) (A) - Deferred income taxes - 24,005 24,005 (24,005) (G) - Accrued liabilities 181,929 55,785 237,714 3,095 (A) (O) 240,809 Total current liabilities 435,467 375,276 810,743 (68,783) 741,960 Long-term debt—less current portion 2,071,998 303,226 2,375,224 (11,067) (A) (P) 2,364,157 Deferred frequent flyer revenue 47,745 - 47,745 64,424 (A) (N) 112,169 Deferred credits and other noncurrent liabilities 101,630 16,763 118,393 (16,763) (Q) 101,630 Other note payable - 3,000 3,000 (3,000) (A) - Deferred income taxes 258,377 26,401 284,778 179,093 (G) 463,871 Total liabilities not subject to compromise 2,915,217 724,666 3,639,883 143,904 3,783,787 Liabilities subject to compromise - 28,750 28,750 (28,750) (B) - Total liabilities 2,915,217 753,416 3,668,633 115,154 3,783,787 Common stock 44 37 81 (37) (R) 44 Additional paid-in capital 298,017 236,131 534,148 (236,131) (R) 298,017 Treasury stock (181,820) - (181,820) - (181,820) Accumulated other comprehensive loss (2,284) - (2,284) - (2,284) Accumulated earnings/(deficit) 382,464 39,409 421,873 64,226 (R) (S) 486,099 Total equity 496,421 275,577 771,998 (171,942) 600,056 Total $ 3,411,638 $ 1,028,993 $ 4,440,631 $ (56,788) $ 4,383,843

(A) Reflects a reclassification of certain Frontier assets and liabilities reported under the Frontier financial statement classifications to Republic’s classifications. (B) Represents adjustment of $28,750 to reduce cash reflecting the settlement of Frontier’s liabilities subject to compromise as set out in Plan of Reorganization. (C) Adjustment reflects a decrease of $1,257 to report Frontier's inventories at their preliminary estimated fair value. (D) Adjustment reflects a reduction of $4,321 to report prepaid expenses for Frontier at the preliminary estimated fair value. (E) Reflects the repayment and elimination of Republic’s $43,104 debtor-in-possession (DIP) loan due from Frontier ($40,000 in principal and $3,104 in interest). (F) Adjustment reflects a reduction of $58 to record Frontier’s assets held for sale at the preliminary estimated fair value. (G) Adjustment reflects an increase in the Company’s preliminary estimate of the deferred taxes as of the acquisition date. (H) Adjustment reflects the decrease of $61,233 to Frontier's aircraft and other equipment to record the assets at the preliminary estimated fair value. (I) Republic’s intangibles and other assets were adjusted to separate the identifiable intangible assets from other long term assets. (J) An increase of intangible assets of $79,400 reflects the increase in the preliminary estimated value of slots, trademarks, and credit card agreements at Frontier. (K) Adjustment reflects a reduction of $4,294 to write off Frontier's deferred financing costs as a result of the application of accounting for business combinations. (L) Adjustment reflects the preliminary estimate of the fair value of Frontier’s air traffic liability in the amount of $21,866. (M) Reflects the repayment and elimination of the principal balance of the $40,000 debtor-in-possession (DIP) loan payable to Republic. (N) Reflects an adjustment of $91,280 to record the frequent flyer liability to the preliminary estimate of fair value. $31,252 is classified as current. (O) Adjustment reflects elimination of accrued interest expense from DIP loan, elimination of co-branded credit card deferred revenue and other deferred revenue. (P) Adjustment reflects decrease of $14,067 to long-term debt to adjust the balance to the preliminary estimate of fair value. (Q) Adjustment reflects removal of $11,633 related to deferred rents, elimination of co-branded card deferred revenue and reclassification of deferred revenue. (R) Adjustment reflects elimination of Frontier’s shareholders’ deficit. (S) Adjustment reflects the amount that the fair values of assets acquired exceeds the assumed liability and purchase price by $166,964 less the tax impact.



Vodafone (VOD) – Greenlight Berkshire, EN, United Kingdom, 44-016-353-325

Services: Communications Services www.vodafone.com


Price: $21.91 (as of 2/12/10)

Month # of P/E FYE 3/31/09 24x 52-week range: $15.46 - $24.04 Latest Ago Ests P/E FYE 3/31/10 9x Market value: $115.3 billion This quarter n/a n/a n/a P/E FYE 3/31/11 9x Enterprise value: $171.0 billion Next quarter n/a n/a n/a P/E FYE 3/30/12 8x Shares out: 5,261.6 million FYE 3/31/10 2.38 2.48 3 EV / LTM revenue 2.6x

Ownership Data FYE 3/31/11 2.48 2.42 3 EV / LTM EBITDA 34x Insider ownership: 0% FYE 3/30/12 2.62 2.73 1 EV / LTM EBIT 34x Insider buys (last six months): 0 LT EPS growth 4.6% 3.0% 2 P / tangible book 7.4x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 9% Date Actual Estimate LTM EBIT yield 3% # of institutional owners: 820 n/a n/a n/a LTM pre-tax ROC 41%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 3/31/03 3/31/04 3/31/05 3/31/06 3/31/07 3/31/08 3/31/09 9/30/09 9/30/07 9/30/09 Revenue 47,412 52,382 33,356 45,812 48,550 55,377 64,023 67,067 26,526 33,967 Gross profit 19,478 22,005 (10,041) 19,168 19,322 21,209 23,687 23,933 10,586 11,935 EBIT (9,039) (6,612) (15,940) (21,984) (2,441) 15,682 9,142 5,057 8,129 9,471 Net income (14,134) (12,685) (21,465) (34,209) (8,352) 10,396 4,804 17,588 5,135 7,524 Diluted EPS (2.37) (2.13) (2.15) (4.32) (1.40) 1.95 0.91 1.71 0.97 1.43 Cash from ops 16,311 20,123 17,137 18,483 16,121 16,349 19,063 2,917 (8,535) (8,560) Capex 8,410 7,069 7,770 8,071 7,074 7,333 10,876 2,407 (3,606) (5,001) Free cash flow 7,901 13,054 9,367 10,411 9,047 9,016 8,187 510 (4,929) (3,559) Cash & investments 1,196 9,038 5,952 4,477 11,802 2,747 8,003 5,835 4,528 5,835 Total current assets 13,410 20,524 14,690 11,757 20,000 13,617 20,337 19,733 14,160 19,733 Intangible assets 168,709 146,134 151,637 107,886 87,834 109,779 116,970 121,225 99,964 121,225 Total assets 254,798 229,652 229,758 197,824 171,100 198,655 238,346 241,663 182,952 241,663 Short-term debt 2,232 3,206 3,127 5,382 7,519 7,653 15,080 11,189 8,855 11,189 Total current liabilities 22,310 23,454 22,816 24,213 29,573 34,297 43,622 40,152 32,451 40,152 Long-term debt 20,565 19,080 20,588 26,145 27,781 35,643 50,178 50,393 31,697 50,393 Total liabilities 54,021 54,951 52,129 64,485 66,416 76,838 103,857 104,936 71,497 104,936 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 200,777 174,701 177,629 133,339 104,684 121,817 134,489 136,728 111,455 136,728 EBIT/capital employed -40% -31% -89% -169% -29% >100% 76% 41% n/m n/m


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BUSINESS OVERVIEW Vodafone provides wireless communications services to more than 300 million customers worldwide. REVENUE (LEFT) AND CUSTOMERS (RIGHT) BY SEGMENT 1

1 Based on April-December 2009 revenue and 314 million customers at 12/31/09 (both figures exclude contribution from associates and investments). INVESTMENT HIGHLIGHTS

• 314 million mobile customers worldwide on a consolidated basis at yearend 2009. Excluding 59 million customers attributable to minority interests

and including 78 million unconsolidated customers Vodafone has 333 million proportionate customers.*

• Owns 45% of Verizon Wireless, the #1 wireless operator in the U.S. with 91 million customers. Vodafone does not consolidate the stake and receives only pass-through tax distributions from it.

• 50%+ of customers in emerging markets, with potential for growth and/or margin improvement (25-30% EBITDA margins versus 38% in Europe). Vodafone has a presence in Eastern Europe, South Africa, Egypt, India, and China, among others.

• 6% dividend yield supported by operations excluding Verizon Wireless and other associates. We estimate Vodafone’s consolidated operations generate a 7%+ free cash flow yield on a modestly levered balance sheet (net debt/EBITDA of <2.0x).

• Verizon Wireless stake may be worth ~50% of Vodafone market cap based on 6.0x trailing EBITDA and net debt of $28.4 billion at 9/30/09. Verizon (VZ), which owns 55%, is likely to approve distributions beyond tax pass-throughs, leading to significant dividends to 45% partner Vodafone. **

• One of David Einhorn’s six largest positions. * Minorities are mainly attributable to India-based Essar and South Africa-based Vodacom. Unconsolidated customers are mainly at Verizon Wireless. ** This may happen by mid-2010 as Verizon Wireless pays off an $8 billion loan to VZ by then. As VZ requires ongoing cash to upgrade its wireline networks, it may resume Verizon Wireless distributions in future.

MAJOR HOLDERS Insiders <1% | BlackRock 7% | Axa 5% | Greenlight <1%

SELECTED OPERATING DATA – EXCL. VERIZON WIRELESS 1

FYE March 31 2005 2006 2007 2008 2009 YTD 2

12/31/09 ∆ revenue 2% 10% 6% 14% 16% 10% ∆ service revenue 3 5% 8% 5% 4% 0% -2% Revenue (£bn) 26.7 29.4 31.1 35.5 41.0 33.3 Selected items as % of revenue: Gross profit 41% 42% 40% 38% 37% 35% EBIT 4 24% 24% 22% 20% 19% 16% D&A 21% 20% 16% 17% 17% 18% Capex 5 19% 18% 15% 13% 17% 17% Free cash flow (£bn) 6 5.6 6.3 5.3 4.7 4.1 4.0 ∆ shares out (avg) -3% -5% -12% -4% -1% -1%

1 Based on Vodafone’s consolidated financials (excluding Vodafone’s 45% stake in Verizon Wireless and contribution from other associates/investments). 2 Only revenue figures have been reported through 12/31/09. Other figures are estimated based on year-to-date through 9/30/09 reported actuals. 3 On organic basis. Service accounts for 90%+ of revenue (rest is equipment). 4 Excludes impairments. 5 Includes purchases of intangibles. 6 YTD free cash flow is an estimate (excludes Verizon Wireless contribution)

SELECTED OPERATING DATA – VERIZON WIRELESS 1 FYE December 31 2005 2006 2007 2008 2009 ∆ revenue 17% 18% 15% 33% 6% ∆ period-end customers 17% 15% 11% 30% 7% Revenue ($bn) 32.3 38.0 43.9 58.6 62.1 EBIT 23% 25% 27% 28% 28% D&A 15% 13% 12% 11% 11% Capex 2 20% 17% 15% 11% 11% Selected operational metrics: Total customers (mn) 51.3 59.1 65.7 85.3 91.2 EBITDA margin on service revenue 43% 44% 45% 46% 46%

1 Based on consolidated figures. 2008 and 2009 figures are pro-forma for Alltel acquisition. Net debt was $28.4 billion at 9/30/09 (1.2x 2009 EBITDA). 2 Excludes purchases of licenses (2008/09 capex percentages are estimates). INVESTMENT RISKS & CONCERNS

• Europe organic service revenue down 3% y-y in December quarter. Competition and economic weakness are affecting Vodafone’s mature markets, which contribute ~75% of consolidated EBITDA.

• 69% of proportionate customers are pre-paid, implying low switching costs. Prepaid as percentage of total customers ranges from just 8% at Verizon Wireless to 94% in India and 100% in Ghana.

• Capex requirements may increase as a result of ongoing technological innovation and competition.

• $32 billion consolidated net debt at yearend 2009.


THE BOTTOM LINE Vodafone shares offer a 6% dividend yield, which is well-supported by the company’s free cash flow generation excluding Verizon Wireless. As Vodafone’s 45% stake in the number one U.S. mobile operator is the company’s most valuable single asset, the market’s ignorance of its value to Vodafone provides a compelling investment opportunity. An upward re-rating of Vodafone shares could come following a likely resumption of cash distributions from Verizon Wireless beyond the current level of tax pass-throughs. Regardless of how Verizon Wireless and other unconsolidated assets are monetized, Vodafone’s sum-of-the-parts valuation implies the consolidated business trades at around 4x trailing EBITDA. This is too low given Vodafone’s strong European market share, growth prospects in emerging markets, and margin improvement potential.



…additional insight into Vodafone: ESTIMATE OF INTRINSIC VALUE BASED ON SUM-OF-THE-PARTS VALUATION ANALYSIS

Verizon Wireless valuation: Assumed EBITDA multiple ($ millions, unless stated otherwise) 5.0x 6.0x 7.0x Calendar 2009 actual EBITDA $24,535 $24,535 $24,535 Implied enterprise value 122,675 147,210 171,745 less net debt (as of 9/30/09) -28,446 -28,446 -28,446 Equity value (100%) 94,229 118,764 143,299 Value of Vodafone's 45% equity stake ($) $42,403 $53,444 $64,485 Estimated £ value of Vodafone's 45% stake in Verizon Wireless £27,138 £34,204 £41,270 per Vodafone share £0.52 £0.65 £0.78 Vodafone valuation INCLUDING Verizon Wireless: Estimated value of Vodafone's 45% stake in Verizon Wireless £0.52 £0.65 £0.78 Estimated equity value of rest of Vodafone (=recent stock price) £1.39 £1.39 £1.39 Vodafone total equity value estimate per share £1.91 £2.04 £2.18 Vodafone valuation EXCLUDING Verizon Wireless: £ millions Recent stock price 1 £1.39 Financials excl. Verizon Wireless Shares outstanding 52,608 and other associates/investments: Market capitalization £73,230 EBITDA 7 £14,910 Plus: Net debt (as of 9/30/09) 30,705 Free cash flow 8 5,384 Plus: Essar $5 billion put option (in £) 2 3,200 Plus: Estimated value of remaining 35% of Vodacom 3 3,733 Implied valuation ratios: Less: Investments 4 (7,450) FCF yield 7.4% Less: 44% stake in SFR 5 (3,825) dividend yield 5.6% Adjusted enterprise value 6 £99,593 pro-forma net debt / EBITDA 9 1.8x

1 Based on ordinary shares traded on the London Stock Exchange. Corresponds to $22.07 per ADS as of 2/5/10 (1 ADS=10 ordinary shares). 2 Essar can put its 33% stake in Vodafone Essar to Vodafone for $5 billion. 3 Implied value based on Vodafone paying £1.6 billion to increase its stake from 50% to 65% in April 2009. 4 Per balance sheet value as reported by Vodafone at 9/30/09 (includes, among others, stakes in China Mobile and Bharti Airtel). 5 Estimate. 6 Enterprise value calculation ignores certain other minority interests and associates (their inclusion does not materially change our investment case). 7 Based on annualizing Vodafone’s reported EBITDA in the first half of fiscal 2010 (six months ended 9/30/09). 8 FY10 FCF estimate. Calculated as net cash from operations less capex (including purchased intangibles), excluding dividends related to associates/investments/ minorities. Vodafone's FY10 FCF guidance is £6.5-7.0 billion, but this includes contribution from associates and investments and payments to minorities. 9 Pro-forma net debt includes estimated payments for Essar and Vodacom minorities offset by investments and SFR stake.

IMPLIED VODAFONE VALUATION DEPENDING ON DIFFERENT VALUES FOR ITS STAKE IN VERIZON WIRELESS £ millions Recent stock price £1.39 Assumed Verizon Wireless EBITDA multiple Shares outstanding 52,608 5.0x 6.0x 7.0x Market capitalization £73,230 £73,230 £73,230 £73,230

Less: 45% Verizon Wireless stake 0 -£27,138 (34,204) (41,270) Less: Investments (7,450) (7,450) (7,450) (7,450) Less: 44% SFR stake (3,825) (3,825) (3,825) (3,825) Plus: Net debt (as of 9/30/09) 30,705 30,705 30,705 30,705 Plus: Essar $5 billion put option (in £) 3,200 3,200 3,200 3,200 Plus: Estimated value of remaining 35% of Vodacom 3,733 3,733 3,733 3,733 Adjusted enterprise value £99,593 £72,455 £65,389 £58,323

Implied EV to consolidated EBITDA 6.7x 4.9x 4.4x 3.9x net debt/(cash) to EBITDA 1.8x -0.1x -0.5x -1.0x



…additional insight into Vodafone:

SUBSCRIBER BREAKDOWN BY GEOGRAPHY



…additional insight into Vodafone: SLIDES FROM COMPANY PRESENTATION, FEBRUARY 2010



…additional insight into Vodafone: VERIZON SLIDES ON VERIZON WIRELESS, JANUARY 2010



New or Increased Superinvestor Holdings

Brown & Brown (BRO) – Weitz Daytona Beach, FL, 386-252-9601

Financial: Insurance (Miscellaneous), Member of S&P MidCap 400 www.bbinsurance.com


Price: $17.70 (as of 2/12/10)

Month # of P/E FYE 12/31/08 15x 52-week range: $14.95 - $20.30 Latest Ago Ests P/E FYE 12/31/09 16x Market value: $2.5 billion This quarter $0.22 $0.22 13 P/E FYE 12/31/10 15x Enterprise value: $2.6 billion Next quarter 0.34 0.34 7 P/E FYE 12/31/11 14x Shares out: 142.0 million FYE 12/31/09 1.14 1.14 13 EV / LTM revenue 2.6x

Ownership Data FYE 12/31/10 1.16 1.17 12 EV / LTM EBITDA 8x Insider ownership: 18% FYE 12/31/11 1.25 1.25 7 EV / LTM EBIT 9x Insider buys (last six months): 1 LT EPS growth 9.5% 11.3% 2 P / tangible book n/m Insider sales (last six months): 7 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 72% Date Actual Estimate LTM EBIT yield 11% # of institutional owners: 497 10/19/09 $0.29 $0.29 LTM pre-tax ROC n/m

Operating Performance and Financial Position ($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 456 551 647 786 878 960 978 986 247 244 Gross profit 0 0 0 0 0 0 0 0 0 0 EBIT 135 176 207 244 280 312 273 282 67 68 Net income 83 110 129 151 172 191 166 163 41 41 Diluted EPS 0.61 0.80 0.93 1.08 1.22 1.35 1.17 1.16 0.30 0.30 Cash from ops 70 143 170 215 225 215 342 327 42 4 Capex 7 16 10 13 15 31 14 12 3 3 Free cash flow 63 127 160 202 210 185 328 315 39 2 Cash & investments 68 57 188 101 89 38 79 186 0 186 Total current assets 0 0 0 0 0 0 0 0 0 0 Intangible assets 380 471 654 927 1,081 1,290 1,519 1,541 1,490 1,541 Total assets 754 866 1,250 1,609 1,808 1,961 2,120 2,238 2,107 2,238 Short-term debt 27 19 16 56 18 12 6 12 8 12 Total current liabilities 0 0 0 0 0 0 0 0 0 0 Long-term debt 58 41 227 214 226 228 254 251 254 251 Total liabilities 363 368 625 844 879 863 878 883 891 883 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 392 498 624 764 929 1,098 1,242 1,355 1,217 1,355 EBIT/capital employed n/m n/m n/m n/m n/m >100% >100% n/m n/m n/m


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BUSINESS OVERVIEW Brown & Brown is an independent insurance intermediary, with 219 offices in 37 U.S. states and one office in the U.K. INVESTMENT HIGHLIGHTS

• Sixth-largest U.S. insurance broker/agent based on 2008 commission and fee revenue generated by U.S.-based clients. * As a broker or agent, the company does not assume underwriting risk.

• Derives revenue mainly from commissions paid by insurance companies. The commission is usually a percentage of the premium paid by the insured. Commission rates generally vary by insurance type, and the nature of services provided by the company.

• Commercial retail business accounts for 50%+ of revenue. Property and casualty insurance is one of the main insurance types sold. The company is also active in employee benefit lines. It has a relatively small presence in personal lines and reinsurance.

• Diverse customer base. The largest insurance company customer contributed only 5% of revenue in 2008. The percentage is similar for prior years.

• Beneficiary of potential financial sector reform? Potential changes to the Gramm-Leach-Bliley Act of 1999 may lead to less competition from banks such as Wells Fargo who offer insurance broking.

• May benefit from a rise in “insurable exposure units” if the economy improves. Units such as property values or sales/payroll levels partly drive premiums and, hence, commissions received.


• Organic commissions/fees declined 5% in 2009, excluding profit-sharing contingent commissions. This was the third consecutive annual decline and reflects ongoing pressure on insurance rates and insurable exposure units in a weak economy.

• Price-taker facing cost inflation. Brown & Brown has little control over commission levels, which are subject to downward pressure over time. Employee costs are about half of revenue and likely to rise.

• $183 million of acquisition contingency payments based on maximum liability as of September 30, 2009. Acquisition-led growth raises execution risk.

• Powell Brown (41) replaced his father Hyatt Brown (71) as CEO in 2009. Transition risk should be mitigated as the elder Hyatt remains chairman.

• $62 million of net debt at yearend 2009. * Source: As reported by the company based on Business Insurance rankings. A broker differs from an agent in that a broker sells products of a number of insurers and is expected to act in the interest of the insured, not the insurer.

SELECTED OPERATING DATA FYE December 31 2005 2006 2007 2008 2009 ∆ organic core commissions/fees 1 3% 4% -3% -6% -5% ∆ revenue 21% 12% 9% 2% -1% ∆ revenue per avg employee 7% 2% 4% -5% n/a Revenue ($mn) 786 878 960 978 968 Commissions/fees as % of revenue 99% 98% 95% 99% 100% % of commissions and fees by segment: Retail 2 63% 60% 60% 61% 60%6 Wholesale Brokerage 3 16% 18% 19% 17% 17%6 National Programs 4 17% 18% 17% 18% 20%6 Services 5 3% 4% 4% 3% 3%6 Commissions and fees growth by segment: Retail 7% 5% 6% 7% 1%6 Wholesale Brokerage 202% 27% 10% -4% -7%6 National Programs 19% 18% 0% 13% 16%6 EBIT margin by segment: Retail 31% 32% 33% 29% 28%6 Wholesale Brokerage 32% 29% 27% 21% 23%6 National Programs 37% 38% 36% 40% 42%6 Services 26% 26% 26% 25% 24%6 Total EBIT margin 33% 33% 34% 29% 28% Selected items as % of revenue: Net income 19% 20% 20% 17% 16% D&A 6% 5% 6% 6% 7% Capex 2% 2% 3% 1% 1%6 Revenue per avg employee ($000s) 185 189 196 187 n/a ∆ shares out (avg) 1% 1% 1% 0% 1%

1 “Core” commissions and fees exclude profit-sharing contingent commissions and divested business. “Organic” additionally excludes impact of acquisitions. 2 Sells various types of insurance including property and casualty insurance mainly on an agency basis. Revenue is commission-based. 3 Sells excess/surplus commercial insurance to agencies (including its own retail offices), and reinsurance. Revenue is commission-based. 4 Two units: Professional Programs sells liability products for pros via agents; Special Programs sells niches products. Revenue is commission-based. 5 Provides insurance-related services such as third-party claims administration, Revenue is fee-based (not affected by insurance premium levels). 6 Figures based on YTD to 9/30/09, as 2009 data is not yet available. COMPARABLE PUBLIC COMPANY ANALYSIS

Price ($)

Market Value ($mn)

Price to Tangible

Book

This FY P/E

Next FY P/E

FY End Date

MMC 22.10 11,690 n/m 13x 11x Dec-31 AON 39.80 10,900 n/m 12x 11x Dec-31 WSH 27.80 4,670 n/m 10x 9x Dec-31 AJG 23.00 2,360 n/m 16x 14x Dec-31 BRO 17.70 2,514 n/m 16x 15x Dec-31

MAJOR HOLDERS Chairman 15% | Other insiders 5% | Artisan 4% | Royce 4%


THE BOTTOM LINE As an insurance intermediary, Brown & Brown benefits from a capital-light, commission-based business model. Organic commission growth, however, has declined for the third consecutive year in 2009. This largely reflects the impact of a weak economy on insurance rates and insurable exposure units (e.g. property values), which drive commission levels. Structural or company-specific factors may also be at play. In this context, we worry management’s acquisition-led growth strategy raises risk without providing commensurate return. With shares trading on a 7% trailing earnings yield, risk-reward is not enticing.


http://bbinsurance.com/uploads/businessIns_20July2009.pdf�


…additional insight into Brown & Brown: TOP 100 BROKERS OF U.S. INSURANCE BUSINESS (Ranked by 2008 brokerage revenue generated by U.S.-based clients)

Source: Business Insurance, July 20, 2009, Brown & Brown. Visit www.businessinsurance.com/directories for more information (subscription required).


http://www.businessinsurance.com/directories�


…additional insight into Brown & Brown: TOP 10 INSURANCE BROKERS WORLDWIDE (Ranked by 2008 brokerage revenue)

Source: Business Insurance, July 20, 2009, Brown & Brown. Visit www.businessinsurance.com/directories for more information (subscription required).


http://www.businessinsurance.com/directories�


International Coal Group (ICO) – Fairfax Scott Depot, WV, 304-760-2400

Energy: Coal www.intlcoal.com


Price: $3.88 (as of 2/12/10)

Month # of P/E FYE 12/31/09 28x 52-week range: $1.09 - $5.35 Latest Ago Ests P/E FYE 12/31/10 19x Market value: $695 million This quarter $0.02 $0.02 6 P/E FYE 12/31/11 9x Enterprise value: $989 million Next quarter 0.05 0.05 6 P/E FYE 12/30/12 3x Shares out: 179.0 million FYE 12/31/10 0.20 0.17 6 EV / LTM revenue 0.9x

Ownership Data FYE 12/31/11 0.41 0.55 6 EV / LTM EBITDA 5x Insider ownership: 27% FYE 12/30/12 1.23 2.23 2 EV / LTM EBIT 12x Insider buys (last six months): 0 LT EPS growth n/a n/a n/a P / tangible book 1.1x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 68% Date Actual Estimate LTM EBIT yield 8% # of institutional owners: 253 1/28/10 $0.00 $0.00 LTM pre-tax ROC 8%

Operating Performance and Financial Position ($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/09 12/31/08 12/31/09 Revenue 137 651 892 849 1,097 1,125 1,125 258 246 Gross profit 22 132 103 53 133 231 231 24 48 EBIT 10 60 (2) (198) (6) 82 82 (50) 0 Net income 4 32 (9) (148) (26) 21 22 (37) (11) Diluted EPS 0.04 0.29 (0.06) (0.97) (0.17) 0.14 0.14 (0.24) (0.07) Cash from ops 30 77 56 23 79 116 116 34 25 Capex 6 108 166 161 132 66 66 39 18 Free cash flow 25 (31) (110) (138) (54) 50 49 (4) 7 Cash & investments 24 9 19 107 64 93 93 64 93 Total current assets 94 119 168 265 248 289 289 248 289 Intangible assets 184 344 197 30 0 0 0 0 0 Total assets 460 1,051 1,317 1,303 1,351 1,368 1,368 1,351 1,368 Short-term debt 6 6 22 4 20 20 20 20 20 Total current liabilities 66 103 136 147 198 172 172 198 172 Long-term debt 173 44 178 387 418 367 367 418 367 Total liabilities 306 385 659 772 842 759 759 842 759 Preferred stock 0 0 0 0 0 0 0 0 0 Common equity 154 667 658 532 509 609 609 509 609 EBIT/capital employed 6% 16% 0% -20% -1% 8% 8% n/m n/m


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BUSINESS OVERVIEW International Coal Group (ICG) produces coal in Northern and Central Appalachia and the Illinois Basin in the U.S. INVESTMENT HIGHLIGHTS

• Controls 1.1 billion tons of proven and probable coal reserves, mainly in Illinois, Kentucky, West Virginia, Virginia and Maryland. * ICG controls an additional 431 million tons of non-reserve deposits.

• 70% of reserves are thermal coal, also known as steam coal, used mainly by utilities to generate electricity. Remaining reserves are metallurgical coal, aka coking coal, used mainly in steel making.

• 65+ years of reserve life based on 2009 production. ICG has 13 active mining complexes. Roughly 90% of reserves are underground. 2009 production split, however, was 53% surface and 47% underground.

• 91% and 49% of 2010 and 2011 planned coal sales are committed at average prices of $61.50 and $55.50 per ton, excluding freight and handling. Key customers are electric utilities in eastern U.S.

• Maintenance capex per ton may reduce as old equipment inherited from Horizon and Anker bankruptcies in 2005 is upgraded. Maintenance capex per ton of production is down from $6.55 in 2005 to $5.24 in 2009 and may reduce further.

• Margin per ton sold increased to $12.11 in 4Q09, compared to $4.51 for the same period in 2008. Among Appalachian peers, ICG’s cost per ton has been higher than at Consol and Massey, but lower than at Patriot, Alpha and James River since 2007.

• Fairfax and WL Ross are largest shareholders. Wilbur Ross, Jr. (71) has been chairman since 2005.

• Guiding for adj. EBITDA of $170-200 million in 2010 (2009: $202 million) on 16.7-17.3 million tons of coal sold at average price of $62.0-64.0 per ton and cost of $49.5-51.5 per ton (excludes SG&A). Capital expenditures are forecast at $85-95 million.

• Shares trade at 1.0x tangible book and offer a high-single digit free cash flow yield on 2009 FCF.


• Commodity producer exposed to cyclicality. Profitability is at the mercy of economic activity, price of coal, regulation, and the weather.

• Competing energy sources. Coal generates one-half of U.S. electricity, but growth may be impeded by use of gas, nuclear, and alternative energy. Environmental considerations may reduce coal use.

* 66% of reserves are owned and 34% are leased from 3rd-party landowners. ~30% of reserves are “assigned” (can be extracted via existing mine shafts).

SELECTED OPERATING DATA FYE December 31 2005 2006 2007 2008 2009 ∆ revenue 27% 37% -5% 29% 3% ∆ coal volume sold 5% 31% -5% 3% -11% ∆ coal revenue per ton 23% 3% -2% 26% 13% ∆ coal cost per ton 16% -4% 4% 17% 6% Revenue ($mn) 650 892 849 1,097 1,125 Selected items as % of revenue: EBIT 1 9% 0% -23% -1% 8% Net income 5% -1% -17% -2% 2% DD&A 7% 8% 10% 9% 9% Capex 17% 19% 19% 12% 6% Selected operating metrics: Tons of coal sold (mn) 2 14.8 19.4 18.3 18.9 16.8 % of coal tons sold by source: Central Appalachian 66% 56% 62% 61% 59% Northern Appalachian 2% 17% 18% 21% 23% Illinois Basin 16% 10% 11% 12% 13% Ancillary 3 16% 16% 9% 5% 5% Per ton metrics in $: Coal sales revenue 4 $42 $43 $42 $53 $60 Cost of coal sales 4 40 38 40 47 49 Coal margin per ton $2 $5 $2 $6 $10 Return on tangible equity 22% -2% -31% -5% 4% Tangible equity to assets 30% 43% 40% 38% 41% ∆ shares out (avg) 5 4% 37% 0% 0% 1%

1 Includes impairment loss of $37 million in 2008 and $170 million in 2007. 2 94% of 2009 volume was steam coal. 3 Coal purchased for resale. 4 Excludes freight and handling. Costs also exclude DD&A and SG&A. 5 2005/06 share growth reflects Anker/CoalQuest acquisitions and IPO in 2005.

• Potential dilution. ICG has filed a shelf registration effective January to raise up to $600 million.

• $365 million of debt and 93 million of cash. Debt includes $140 million of convertible notes.

COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

CNX 8,940 9,820 2.1x 5.0x 15x 11x ANR 5,300 5,590 2.2x 2.4x 15x 10x MEE 3,600 4,240 1.6x 2.9x 16x 9x ACI 3,520 5,250 2.0x 1.8x 27x 12x PCX 1,450 1,630 .8x 1.5x n/m 179x ICO 690 980 .9x 1.1x 19x 9x

MAJOR HOLDERS Non-WL Ross insiders 1% | WL Ross 14% | Fairfax 26% | Steelhead 5% | Andreeff 3% | Vanguard 3% | DFA 3%


THE BOTTOM LINE ICG has a strong operating presence in three of the four largest U.S. coal-producing regions: Central Appalachia, Northern Appalachia and the Illinois Basin. In an industry where the key competitive advantage is being a low-cost producer, ICG ranks average compared to Appalachian peers. Positives include long-lived reserves, contracted sales and a focus on cash generation after years of investment. Large ownership by Fairfax and WL Ross bodes well for shareholder value creation.



…additional insight into International Coal Group: SLIDES FROM COMPANY PRESENTATION, DECEMBER 2009



…additional insight into International Coal Group: PEER GROUP COST COMPARISON



Osteotech (OSTE) – Spencer Eatontown, NJ, 732-542-2800

Health Care: Medical Equipment & Supplies, Member of S&P SmallCap 600 www.osteotech.com


Price: $3.40 (as of 2/12/10)

Month # of P/E FYE 12/31/08 28x 52-week range: $2.43 - $5.04 Latest Ago Ests P/E FYE 12/31/09 n/m Market value: $61 million This quarter $0.06 -$0.06 1 P/E FYE 12/31/10 n/m Enterprise value: $64 million Next quarter -0.05 -0.05 1 P/E FYE 12/31/11 68x Shares out: 18.0 million FYE 12/31/09 -0.22 -0.34 1 EV / LTM revenue 0.7x

Ownership Data FYE 12/31/10 -0.04 -0.04 1 EV / LTM EBITDA n/m Insider ownership: 1% FYE 12/31/11 0.05 0.05 1 EV / LTM EBIT n/m Insider buys (last six months): 2 LT EPS growth n/a n/a n/a P / tangible book 0.8x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 42% Date Actual Estimate LTM EBIT yield -7% # of institutional owners: 116 11/5/09 -$0.11 -$0.02 LTM pre-tax ROC -6%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 83 94 89 93 99 104 104 95 24 23 Gross profit 37 52 36 32 48 54 55 47 13 11 EBIT (7) 18 (7) (20) 2 3 3 (5) 1 (2) Net income (1) 11 (5) (21) 2 3 2 (5) 0 (2) Diluted EPS (0.08) 0.62 (0.31) (1.23) 0.11 0.15 0.12 (0.30) 0.00 (0.11) Cash from ops (2) 5 3 (2) 7 8 3 (5) 3 (1) Capex 5 2 2 2 2 3 6 2 2 0 Free cash flow (7) 3 1 (4) 5 5 (3) (7) 1 (1) Cash & investments 14 15 13 14 18 23 19 11 19 11 Total current assets 56 71 71 62 69 78 80 80 78 80 Intangible assets 2 2 2 2 2 2 2 0 0 0 Total assets 115 127 116 111 113 120 127 119 126 119 Short-term debt 3 3 3 1 1 1 1 1 1 1 Total current liabilities 13 14 14 17 17 20 25 21 23 21 Long-term debt 16 13 10 16 15 14 13 12 13 12 Total liabilities 31 31 25 40 39 41 44 40 43 40 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 84 96 91 71 74 79 83 79 83 79 EBIT/capital employed -8% 21% -8% -26% 3% 5% 4% -6% n/m n/m


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BUSINESS OVERVIEW Osteotech provides processed human bone and connective tissue for transplantation in musculoskeletal surgery. INVESTMENT HIGHLIGHTS

• World’s largest processor of allograft bone tissue yielding 4.5+ million grafts since company founding in 1986. * Based on American Association of Tissue Banks (AATB), over two million allografts are now distributed in the U.S. annually (1995: <0.5 million).

• Derives revenue mainly from service fees related to graft processing, storage, and distribution. Osteotech receives unprocessed donor tissue from its supplier CTS, a U.S. tissue bank. Before tissue can be transplanted by surgeons, it needs processing (i.e. screening and testing for safety, among others).

• Entry barriers include 377 patents (including pending applications) for processing technology. Plants in France/Bulgaria are approved tissue banks, while New Jersey plant is approved by FDA/AATB.

• Heartland, Spencer, and Boston Avenue filed a joint 13-D in January, with the goal of changing board composition. Osteotech has a poison pill.

• CEO Sam Owusu-Akyaw (56) held positions at Medtronic, J&J, and Bristol-Myers Squibb prior to joining in 2004. Chairman Kenneth Fallon, III (70) is an associate with 6%-shareholder Kairos Partners.

• $11 million of cash. Osteotech has $13 million of capital leases and an unused $10 million credit line.

• EV-to-trailing revenue is less than 0.7x. INVESTMENT RISKS & CONCERNS

• Viability as standalone entity? Despite proven products and a 48% gross margin, Osteotech is loss-making. While poor execution may be one reason, lack of scale in distribution and R&D are others.

• Various sources of competition. Osteotech’s rivals include divisions of Medtronic and J&J as well as pure-play, smaller companies. Other transplant methods and technologies pose substitution risk.

• Operates in regulated industry. Reimbursement changes, product liability, and ongoing certification are risks. Osteotech was cited for deficiencies at its Bulgarian tissue bank in 2008 (now resolved).

* Allograft means bone or tissue transplanted from one person to another. For more info, visit http://orthoinfo.aaos.org/topic.cfm?topic=a00115

MAJOR HOLDERS CEO O.-Akyaw 2% | Other insiders 2% ** | Heartland 18% | DFA 8% | Kairos 6%* | RenTech 4% | Spencer 3% | BAC 3% ** Excludes Kairos Partners. Chairman Fallon is an associate with Kairos.


FYE December 31 2004 2005 2006 2007 2008 YTD

9/30/09 ∆ revenue -6% 5% 6% 5% 0% -11% Revenue ($mn) 89 93 99 104 104 70 % of revenue by segment: 2 DBM 52% 56% 58% 63% 60% 62% Traditional tissue 7% 13% 17% 17% 20% 22% Spinal allografts 23% 18% 14% 10% 8% 8% Hybrid/Synthetics 0% 0% 1% 2% 3% 3% Client services 15% 12% 9% 7% 8% 3% Other 3% 1% 1% 1% 2% 2% Revenue growth of selected segments: 2 DBM 0% 14% 9% 14% -6% -9% Traditional tissue n/a 89% 45% 4% 15% 1% Spinal allografts n/a -15% -19% -22% -21% -12% EBIT margin of major segments: 2 DBM 29% 29% 28% 31% 31% 28% Traditional tissue -18% 2% 35% 14% 18% 5% Spinal allografts 5% -47% 13% 18% 3% 15% Total EBIT margin -7% -22% 2% 3% 2% -6% % of revenue by geography: U.S. 87% 86% 83% 82% 79% n/a International 13% 14% 17% 18% 21% n/a Selected items as % of revenue: Gross profit 41% 34% 48% 52% 53% 48% R&D 5% 5% 5% 5% 7% 7% Net income -6% -23% 2% 3% 2% -7% D&A 9% 6% 6% 5% 5% 7% Capex 2% 2% 2% 3% 6% 2% Return on tang. equity 3 -9% -47% 5% 6% 6% -14% Tangible equity/assets 3 68% 58% 49% 51% 48% 46% ∆ shares out (avg) 1% 0% 1% 1% 2% 1%

1 Osteotech reported in a January press release that 4Q09 revenue was $26.3 million versus $24.6 million in 4Q08. 4Q09 revenue included $1.0 million from newly-launched products and $3.3 million from a one-time licensing agreement. 2 All segments process and/or market bone tissue for transplantation purposes. Segments vary mainly by tissue type used (DBM=Demineralized Bone Matrix). 3 “Donor tissue” is excluded from tangible book. Osteotech carried $48 million of donor tissue on its balance sheet at 9/30/09 (52% of which is unprocessed). COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

MDT 46,880 52,830 3.5x 15.6x 13x 12x IART 1,090 1,380 2.0x n/m 18x 16x WMGI 680 720 1.5x 1.9x 29x 24x VITA 290 300 3.4x 8.8x n/m 91x RTIX 180 180 1.1x 1.2x 19x 14x OSTE 60 60 .6x .8x n/m n/m


THE BOTTOM LINE Osteotech is no newcomer to the growing market for regenerative bone tissue. With proven tissue processing technology going back to the early 1990s, the company has remained competitive despite high regulatory requirements and competition from larger rivals such as Medtronic and J&J. While management has not been able to generate adequate returns on capital, a range of patent-protected technologies, long-standing industry accreditations, and nearly $50 million of donor tissue in inventory may be attractive for a potential acquirer. Recently adopted “poison pill”, however, may thwart a change in control.


http://www.aatb.org/content.asp?contentid=453�

http://orthoinfo.aaos.org/topic.cfm?topic=a00115�


…additional insight into Osteotech: SELECTED INFORMATION FROM AMERICAN ACADEMY OF ORTHOPAEDIC SURGEONS (AAOS) (paraphrased or quoted from selected AAOS publications) The use of musculoskeletal allograft tissue in reconstructive orthopedic procedures has markedly increased over the last decade. Musculoskeletal Allograft Distribution

Source: American Academy of Orthopaedic Surgeons (AAOS), http://www.aaos.org 500,000+ bone-grafting procedures are performed annually in the U.S., with half of these procedures related to spine fusion. These numbers easily double on a global basis and indicate a shortage of musculoskeletal donor tissue traditionally used in these reconstructions. U.S. Trends in Musculoskeletal Tissue Donors

Source: American Academy of Orthopaedic Surgeons (AAOS), http://www.aaos.org; AATB Annual Survey.


http://www.aaos.org/�



The above reality has stimulated corporate interest in supplying what is seen as a growing market in bone replacement materials. These graft alternatives are subjected to varying degrees of regulatory scrutiny, and thus their true effectiveness in patients may not be known prior to their use by orthopedic surgeons. U.S. Sales of Bone Graft and Bone-Graft Substitutes

Source: American Academy of Orthopaedic Surgeons (AAOS), http://www.aaos.org; Orthopedic Network News. Comparative Properties of Bone Grafts

Source: American Academy of Orthopaedic Surgeons (AAOS), http://www.aaos.org Comparison of Commercially Available Bone-Graft Substitutes, by Provider

To view this comparison of competing offerings, including those by Osteotech and its competitors, visit http://www.aatb.org/files/bonegraftsubstitutestable.pdf




http://www.aatb.org/files/bonegraftsubstitutestable.pdf�


Republic Services (RSG) – Berkshire Hathaway Phoenix, AZ, 480-627-2700

Services: Waste Management Services, Member of S&P 500 www.republicservices.com


Price: $26.03 (as of 2/12/10)


Ownership Data FYE 12/31/11 2.01 2.00 6 EV / LTM EBITDA 7x Insider ownership: 6% FYE 12/30/12 2.60 2.60 1 EV / LTM EBIT 12x Insider buys (last six months): 1 LT EPS growth 16.2% 16.2% 2 P / tangible book n/m Insider sales (last six months): 6 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 79% Date Actual Estimate LTM EBIT yield 9% # of institutional owners: 951 2/11/10 $0.33 $0.33 LTM pre-tax ROC 24%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/09 12/31/08 12/31/09 Revenue 2,518 2,708 2,864 3,071 3,176 3,685 8,199 8,199 1,244 1,999 Gross profit 912 994 1,060 1,146 1,172 1,268 3,355 3,355 381 798 EBIT 413 452 477 520 536 283 1,456 1,456 (112) 227 Net income 178 238 254 280 290 74 495 495 (132) 36 Diluted EPS 0.89 1.02 1.17 1.39 1.51 0.37 1.30 1.30 (0.55) 0.09 Cash from ops 601 666 748 511 661 512 1,397 1,397 38 384 Capex 273 284 309 327 293 387 826 826 123 284 Free cash flow 327 383 439 185 369 125 570 570 (85) 100 Cash & investments 119 142 132 29 22 69 48 48 69 48 Total current assets 556 497 482 393 414 1,326 1,265 1,265 1,326 1,265 Intangible assets 1,583 1,593 1,591 1,594 1,582 11,086 11,167 11,167 11,086 11,167 Total assets 4,554 4,465 4,551 4,429 4,468 19,921 19,540 19,540 19,921 19,540 Short-term debt 231 2 3 3 68 737 788 788 737 788 Total current liabilities 672 447 667 602 629 2,566 2,549 2,549 2,566 2,549 Long-term debt 1,289 1,352 1,472 1,545 1,566 7,199 6,420 6,420 7,199 6,420 Total liabilities 2,650 2,592 2,945 3,007 3,164 12,640 11,976 11,976 12,640 11,976 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 1,905 1,873 1,606 1,422 1,304 7,281 7,565 7,565 7,281 7,565 EBIT/capital employed 21% 24% 26% 28% 27% 7% 24% 24% n/m n/m


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BUSINESS OVERVIEW Republic provides waste management services, including collection and disposal of non-hazardous solid waste. INVESTMENT HIGHLIGHTS

• #2 garbage hauler in the U.S. with ~18% market share of the $52 billion non-hazardous solid waste services industry. * Leader Waste Management has about 26% share. Municipal authorities and private firms control about 26% and 16% of the market.

• Vertically integrated model. Republic owns or operates 239 transfer stations, 199 active landfills, and 79 recycling facilities. 80% of landfill sites have forecast lives of 10+ years. Commercial, residential, and industrial customers accounted for 40%, 35%, and 25% of 2009 collection revenue.

• Non-discretionary: Garbage needs to be collected in good and bad times. Population growth and business formation are two key drivers of volume.

• $15-25 million of remaining Allied synergies targeted for 2010. The company acquired Allied Waste in December 2008 and has achieved related synergies of $150 million through yearend 2009.

• CEO James O’Connor (59) joined in 1998 from Waste Management (WM), where he was SVP.

• Guiding for adjusted EPS of $1.63-1.67 in 2010 (up 10-13% y-y) on revenue down 0.5-2.0% driven by 3-4% volume decline partly offset by price rises.

• Shares trade on 7% FCF yield based on 2010 FCF guidance of $700-725 million, excluding $125 million of tax settlement and $10 million of merger-related payments (2009 adj. FCF: $746 million).


• Low-growth business. Volume growth is in the low-single digits in normal economic times. The company has pricing power to offset cost rises.

• Commercial and industrial volume negatively affected by weak economy. Total company volume growth has been negative each year since 2007.

• Limited margin improvement potential. EBITDA margins of the combined company are similar to levels of industry leader Waste Management.

• $7.0 billion of net debt at year-end 2009 (excludes $241 million restricted cash/marketable securities). Net debt to 2009 adjusted EBITDA is 2.8x.

• $1.6 billion of environmental liabilities. Republic has responsibility for about 125 closed landfills.

* Source: Republic Services 2008 10-K. Based on 2008 estimated industry size. Republic’s market share is pro forma for Allied Waste acquisition.

SELECTED OPERATING DATA 1 FYE December 31 2005 2006 2007 2008 2009 ∆ revenue 6% 7% 3% 16% 122% …due to price 4% 5% 6% 6% -1% …due to volume 2% 2% -2% -4% -10% …due to net acquisitions 0% 0% -1% 13% 133% Revenue ($bn) 2.9 3.1 3.2 3.7 8.2 % of revenue by segment: Eastern 19% 19% 18% 16% n/a Central 20% 21% 20% 18% n/a Southern 26% 26% 26% 23% n/a Western 35% 35% 35% 31% n/a Allied Waste Industries 0% 0% 0% 13% n/a EBIT margin by segment: Eastern 17% 16% 11% -17% n/a Central 18% 18% 19% 18% n/a Southern 17% 19% 22% 21% n/a Western 21% 21% 21% 18% n/a Allied Waste Industries n/m n/m n/m 6% n/a Corporate -2% -2% -2% -4% n/a Total EBIT margin 17% 17% 17% 8% n/a % of revenue by type: Collection 75% 76% 76% 78% 77% Transfer and disposal 19% 19% 18% 18% 19% Other 6% 5% 6% 4% 4% Revenue growth by type: Collection 6% 8% 4% 19% 120% Transfer and disposal 7% 8% -2% 14% 135% Other -4% -10% 16% -11% 109% Selected items as % of revenue: Gross profit 37% 37% 37% 34% 41% Net income 9% 9% 9% 2% 6% DD&A 10% 10% 10% 10% 11% Capex 11% 11% 9% 10% 10% Tangible equity to assets 5% -3% -8% -35% -43% ∆ shares out (avg) -5% -4% -4% 3% 93%

1 The company acquired Allied Waste Industries effective December 2008. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

WM 15,590 23,220 2.0x 35.8x 16x 15x CWST 120 690 1.4x n/m n/m n/m RSG 9,910 17,070 2.1x n/m 16x 13x

MAJOR HOLDERS Insiders <1% * | Cascade 15% | Blackstone 6% | T. Rowe 4% Barclays 4% | FMR 4% | Capital World 3% | Vanguard 3% * Excludes shares held by director Foley as Blackstone’s board member.


THE BOTTOM LINE Republic Services has become the second-largest waste management company in the U.S. following the acquisition of Allied Waste in late 2008. The combined company benefits from a consolidated industry structure, high barriers to entry, and a non-discretionary nature of services provided. Negatives include a low-growth business, limited margin improvement potential, and no tangible asset backing. With shares trading on a 7% trailing free cash flow yield, shares are modestly undervalued.



RSC Holdings (RRR) – Fairholme Scottsdale, AZ, 480-905-3300

Services: Rental & Leasing www.rscrental.com


Price: $6.83 (as of 2/12/10)

Month # of P/E FYE 12/31/08 6x 52-week range: $4.00 - $9.03 Latest Ago Ests P/E FYE 12/31/09 n/m Market value: $706 million This quarter -$0.25 -$0.25 10 P/E FYE 12/31/10 n/m Enterprise value: $2.9 billion Next quarter -0.22 -0.22 7 P/E FYE 12/31/11 17x Shares out: 103.4 million FYE 12/31/09 -0.63 -0.63 7 EV / LTM revenue 2.1x

Ownership Data FYE 12/31/10 -0.20 -0.20 10 EV / LTM EBITDA 14x Insider ownership: 11% FYE 12/31/11 0.41 0.41 7 EV / LTM EBIT 18x Insider buys (last six months): 0 LT EPS growth 12.0% 12.0% 1 P / tangible book n/m Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 40% Date Actual Estimate LTM EBIT yield 6% # of institutional owners: 205 10/29/09 -$0.13 -$0.13 LTM pre-tax ROC 9%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 1,218 1,329 1,461 1,653 1,769 1,765 1,421 467 316 Gross profit 288 374 478 601 676 615 352 169 68 EBIT 127 223 322 421 455 398 163 110 38 Net income 42 95 148 179 123 123 (13) 42 (6) Diluted EPS 0.13 0.29 0.45 0.58 1.24 1.18 (0.13) 0.41 (0.06) Cash from ops n/a 436 559 436 505 363 298 131 107 Capex n/a 453 697 750 601 274 67 68 16 Free cash flow n/a (17) (138) (314) (96) 89 231 64 91 Cash & investments 1 5 7 46 10 14 19 0 19 Total current assets 0 0 0 0 0 0 0 0 0 Intangible assets 926 926 926 926 926 939 940 939 940 Total assets 2,330 2,422 2,764 3,326 3,460 3,271 2,869 3,383 2,869 Short-term debt 0 0 0 0 0 0 0 0 0 Total current liabilities 0 0 0 0 0 0 0 0 0 Long-term debt 1,429 1,277 1,247 3,006 2,736 2,569 2,248 2,630 2,248 Total liabilities 1,766 1,759 1,951 3,761 3,504 3,227 2,840 3,320 2,840 Preferred stock 350 350 350 0 0 0 0 0 0 Common equity 214 313 464 (435) (44) 43 29 63 29 EBIT/capital employed 11% 19% 23% 25% 23% 20% 9% n/m n/m


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BUSINESS OVERVIEW RSC provides rental equipment mainly for industrial and non-residential construction markets via a network of 457 branches across 40 U.S. states and three provinces in Canada. Private equity firms Oak Hill and Ripplewood bought 85% of RSC from Atlas Copco in a 2006 leveraged buyout. RSC sold 13 million new shares at $22 per share in a 2007 IPO. INVESTMENT HIGHLIGHTS

• #2 U.S. equipment rental provider with 4% share of a highly fragmented market. Top ten firms have 25% share of the $32 billion U.S. equipment rental industry, which grew revenue at a 9% CAGR 2003-08. Industry revenue fell about 10% in 2009.

• Rental penetration is a potential growth driver. Rental as a percentage of all equipment in use is currently 40% in the U.S. (up from ~25% in 2000). Penetration in the U.K. is 80% and in Japan 60%.

• Owns equipment at original cost of $2.3 billion at yearend 2009 ($1.4 billion net of depreciation). In terms of cost, 44% of equipment is aerial work platforms, 23% forklifts, and rest earthmoving and other units. Average rental term is seven to ten days.

• 40-month average equipment age at yearend 2009 (industry average: ~47 months). Equipment is depreciated over one to ten years to a salvage value of zero to ten percent of cost (useful lives are likely longer). Equipment maintenance costs are expensed.

• Cash-generative due to ability to “age” equipment. The young fleet age allows RSC to reduce capex while serving clients effectively. 2009 FCF of $390 million (incl. $171 million of used equipment sales) enabled RSC to cut debt by $397 million in 2009.

• Less cyclical non-construction markets are 58% of rental revenue. These markets tend to be driven by maintenance/repair budgets. Construction (mostly non-residential) accounts for the remainder.

• Higher share float since August 2009 following Ripplewood’s distribution of 27 million RSC shares to its limited partners. Ripplewood retained a stake, but no board seats. Denis Nayden (55), a managing partner of Oak Hill, has been chairman since 2006.

• Fairholme is one of the largest shareholders. The share register also includes private equity firms and Atlas Copco, an industrial conglomerate.

MAJOR HOLDERS Insiders <1% | Oak Hill 34% | Fairholme 10% | Atlas Copco 10% | Ripplewood 8% | BofA 6% | Wellington 2% | GS 2%

SELECTED OPERATING DATA FYE December 31 2004 2005 2006 2007 2008 2009 ∆ total revenue 9% 10% 13% 7% 0% -27% ∆ rental revenue 9% 16% 20% 13% 2% -32% ∆ s-s rental revenue 12% 18% 19% 11% 2% -29% ∆ period-end employees -5% 3% 5% 6% -9% -17% Revenue ($bn) 1.3 1.5 1.7 1.8 1.8 1.3 % of revenue by type: Rental sales 74% 78% 83% 87% 89% 84% Used equipment sales 14% 15% 12% 8% 7% 12% Merchandise sales 12% 7% 6% 5% 4% 4% % of revenue by geography: U.S. 97% 97% 96% 95% 95% 95% Canada 3% 3% 4% 5% 6% 5% Selected items as % of revenue: Gross profit 28% 32% 36% 38% 35% 21% EBIT 17% 22% 25% 26% 23% 6% Net income 8% 11% 11% 7% 7% -5% D&A 17% 17% 18% 19% 21% 26% Capex 1 18% 32% 33% 25% 8% -9% Equipment utilization 2 68% 71% 72% 73% 70% 58% Tangible equity/assets -22% -11% -35% -47% -38% -44% ∆ shares out (avg) 3 0% 0% -7% -68% 5% 0%

1 Includes proceeds from equipment sales, which led to negative figure in 2009. 2 Average dollar value of equipment rented in the period divided by the aggregate dollar value of all equipment, both based on original equipment cost. 3 Shares outstanding were materially reduced in 2007 due to a recapitalization. INVESTMENT RISKS & CONCERNS

• EV 23% above original equipment cost. EV may be too high, as rental equipment is a depreciating asset, equipment prices have fallen, barriers are low, and a $100 billion used equipment market exists.

• “Rental rates will likely remain under pressure.” Rental revenue decreased 34% y-y in 4Q09 on volume down 25% and price down 10% due to weakness in construction and low industrial activity.

• $2.2 billion of net debt (93% of rental fleet at cost). 90% of debt is fixed at ~8% average interest rate.


Price ($)

Market Value ($mn)

Price to Tangible

Book

This FY P/E

Next FY P/E

FY End Date

URI 7.10 430 n/m n/m 12x Dec-31 HEES 10.50 370 1.5x n/m >99x Dec-31 RRR 6.80 706 n/m n/m n/m Dec-31


THE BOTTOM LINE A key feature of the RSC business model is the ability to “age” its 3-4 year-old equipment rental fleet by reducing capex. This boosts free cash flow as the fleet’s revenue-generating capacity remains unimpaired (useful fleet life is up to ten years or longer). Our key concern is that RSC owns depreciating assets in an industry with low barriers to entry. With enterprise value at a 20%+ premium to the original equipment cost, it may be cheaper to re-create the business from scratch or via roll-up. This is especially true if credit availability improves and equipment prices stay low due to weak construction and industrial activity. Plans by RSC management to increase capex in 2010 indicate that potentially attractive market opportunities exist.



…additional insight into RSC Holdings: SLIDES FROM COMPANY PRESENTATION, FEBRUARY 2010



…additional insight into RSC Holdings (source: Company presentation, February 2010) OVERVIEW OF LONG-TERM INDUSTRY DYNAMICS

INDUSTRIAL REVENUE “CONSIDERABLY LESS CYCLICAL” THAN CONSTRUCTION-RELATED REVENUE



Unchanged (or offsetting) Superinvestor Holdings AutoNation (AN) – ESL Investments

Ft. Lauderdale, FL, 954-769-6000 Services: Retail (Specialty Non-Apparel), Member of S&P 500 www.autonation.com


Price: $17.72 (as of 2/12/10)



Operating Performance and Financial Position ($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/09 12/31/08 12/31/09 Revenue 18,280 18,401 18,310 18,219 17,347 13,376 10,758 10,758 2,597 2,815 Gross profit 2,844 2,868 2,915 2,921 2,793 2,251 1,929 1,929 456 477 EBIT 730 755 794 783 701 (1,228) 423 410 68 95 Net income 479 434 497 317 279 (1,243) 198 233 67 62 Diluted EPS 1.81 1.44 1.46 1.43 1.44 (6.82) 1.32 1.32 0.42 0.36 Cash from ops 619 481 562 580 300 207 685 n/a 119 n/a Capex 163 122 132 131 169 157 97 n/a 21 n/a Free cash flow 456 359 430 449 130 50 588 n/a 98 n/a Cash & investments 176 173 108 246 53 33 111 205 61 205 Total current assets 3,629 4,038 3,748 3,940 3,448 3,305 2,554 1,921 2,696 1,921 Intangible assets 2,894 2,877 2,947 2,945 3,085 3,054 1,327 1,300 1,325 1,300 Total assets 8,503 8,823 8,699 8,825 8,601 8,480 6,014 5,094 6,238 5,094 Short-term debt 2,311 2,758 15 41 14 24 33 8 56 8 Total current liabilities 2,981 3,809 3,411 3,412 3,015 2,903 2,456 1,562 2,615 1,562 Long-term debt 643 809 798 484 1,558 1,752 1,226 1,107 1,358 1,107 Total liabilities 4,593 4,873 4,436 4,155 4,889 5,006 3,816 2,783 4,110 2,783 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 3,910 3,950 4,263 4,670 3,713 3,474 2,198 2,311 2,128 2,311 EBIT/capital employed 16% 17% 24% 38% 32% -53% 20% 21% n/m n/m


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BUSINESS OVERVIEW AutoNation sells new and used vehicles and parts. It operates 246 new vehicle franchises in 15 U.S. states. INVESTMENT HIGHLIGHTS

• #1 U.S. automotive retailer in a highly fragmented industry. * AutoNation sold 183,000 new vehicles in 2009 versus industry vehicle sales of 10.6 million. It also retailed 135,000 used vehicles in 2009.

• Imports represent over half of new vehicles sold. Key imported brands are Toyota (20% of 2009 new vehicles sold), Honda (14%) and Nissan (13%).

• Focused on building local market brands that are "must-shop" choices for consumers. Stores under local retail brands contribute roughly two thirds of revenue. Parts/services are 20% of 2009 revenue.

• Value investor Lampert owns nearly half of the company via investment firm ESL. Lampert, who bought an initial 24% stake in 2001, is also a large shareholder of car parts retailer AutoZone (AZO).

• “Planning assumption for 2010 industry new unit sales is 11.5 million units [up 8% y-y] with a gradual increase in the selling rate over the course of the year.” 4Q09 same-store revenue growth was 9% driven by an 8% rise in new vehicle unit sales.

• Reduced days of new inventory supply from 83 at yearend 2008 to 54 at yearend ‘09. Inventory was $1.4 billion at yearend 2009 v. $1.8 billion year ago.

• Repurchased 7.7 million shares for $136 million in 2009 (average price of $18 per share).


• Competitive market. The U.S. auto retail industry comprises ~19,000 franchised auto dealerships and ~39,000 independent used vehicle dealers.

• Vehicle manufacturer franchise and framework agreements limit operational flexibility and make it difficult to develop a competitive advantage.

• $900 million of net debt and $1.4 billion of floorplan financing at yearend 2009. Most of the debt carries interest at variable rates.


MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

KMX 4,680 4,810 .7x 2.5x 18x 18x PAG 1,370 3,400 .4x n/m 18x 14x GPI 640 1,620 .4x 10.3x 11x 9x SAH 490 1,760 .3x n/m 14x 9x AN 3,040 3,950 .4x 3.0x 13x 11x

SELECTED OPERATING DATA 1 FYE December 31 2005 2006 2007 2008 2009 ∆ revenue 2% -3% -5% -23% -20% ∆ total retail vehicles sold -1% -7% -8% -21% -23% ∆ new retail vehicles sold -2% -7% -9% -24% -25% ∆ used retail vehicles sold 1% -7% -6% -16% -20% Revenue ($bn) 18.7 18.2 17.3 13.4 10.8 % of revenue by segment: New vehicle 60% 59% 58% 55% 53% Used vehicle 23% 24% 24% 24% 23% Parts and service 13% 14% 15% 17% 20% Finance and insurance, net 3% 3% 3% 3% 3% Revenue growth by segment: New vehicle 0% -4% -7% -26% -23% Used vehicle 5% 0% -4% -24% -20% Parts and service 6% -1% 3% -9% -7% Gross margin by segment: New vehicle 7% 7% 7% 7% 7% Used vehicle 10% 9% 9% 8% 9% Parts and service 44% 44% 44% 44% 44% Total gross margin 16% 16% 16% 17% 18% Selected items as % of revenue: EBIT 2 4% 4% 4% 3% 4% Net income 2% 2% 2% -9% 2% D&A 0% 0% 1% 1% 1% Capex 1% 1% 1% 1% 1% New vehicle retail units sold by brand mix: Domestic 3 42% 39% 35% 29% 29% Import 4 38% 48% 50% 54% 54% Premium Luxury 5 20% 14% 15% 16% 17% Retail vehicle unit sales by type (000s): New 381 355 323 244 183 Used 229 213 201 169 135 Revenue per vehicle retailed ($000s): New 29.5 30.3 31.0 30.4 31.2 Used 15.3 16.1 16.4 15.7 16.3 New inventory supply (days) 55 52 52 83 54 Used inventory supply (days) 42 42 44 30 41 Return on tangible equity 26% 28% 57% n/m 25% Tangible equity to assets 26% 20% 9% 13% 20% ∆ shares out (avg) -1% -14% -12% -10% 0%

1 2005-08 comparability impaired by discontinued operations. 2008-09 data is largely comparable. 2 Excludes impairment of goodwill and franchise rights. 3 Includes Ford (2009:15%), GM (11%), and Chrysler (3%) brands. 4 Includes mainly Toyota (2009:20%), Honda (14%) and Nissan (13%) brands. 5 Includes mainly Mercedes (2009: 8%), BMW (5%) and Lexus (3%) brands. MAJOR HOLDERS CEO Jackson 1% | Other insiders 4% | ESL 46% | Cascade 13% | Axa 4% | Barclays 4% | State Street 3% | Vanguard 3% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year? * Source: AutoNation 2008 10-K.

THE BOTTOM LINE In the fourth quarter of 2009, AutoNation achieved its first annual increase in new vehicle sales since 2005. With total U.S. new vehicle sales expected to grow in 2010, the industry may have hit a bottom in 2009 (at less than 11 million new vehicles sold). This represents a 39% drop from the over 17 million new vehicles sold in 2005. As the largest auto retailer in the U.S., AutoNation stands to benefit from a potential economic recovery as well as the industry-wide shakeout of weaker rivals. At a 6-7% trailing earnings yield, however, valuation is not sufficiently compelling even assuming a substantial earnings recovery.



…additional insight into AutoNation: KEY CREDIT AGREEMENT COVENANT COMPLIANCE CALCULATIONS, as of December 31, 2009

Selected Income Statement Data, January 1, 2009 – December 31, 2009

Net income (loss) from continuing operations $234.2

Floorplan and other interest expense 78.7

Income tax provision (benefit) 116.8

Depreciation and amortization 77.5

Stock-based compensation expense (SFAS No. 123R) 13.5

Impairment charges (including goodwill, franchise rights, and long-lived assets) 3.3

EBITDA 524.0

Floorplan interest expense (36.1)

Adjusted EBITDA $487.9

Selected Data, as of December 31, 2009

Funded indebtedness (current and long-term debt and letters of credit) $1,177.8

Vehicle secured indebtedness (floorplan payables) 1,388.0

Funded indebtedness including floorplan 2,565.8

Shareholders’ equity 2,303.2

Total capitalization including floorplan $4,869.0

Ratio of funded indebtedness to adjusted EBITDA 2.41

Covenant less than 2.75

Ratio of funded debt to total capitalization (including floorplan) 52.7%

Covenant less than 65.0%

Source: Company press release dated February 11, 2010.



…additional insight into AutoNation: U.S. CAR AND TRUCK UNIT SALES, 1964-2009

Source: Ward’s Automotive Group, Manual of Ideas analysis.

Source: Ward’s Automotive Group, Manual of Ideas analysis. To download data on car and truck unit sales from 1931-2009, visit http://bit.ly/9avkQZ

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2009200419991994198919841979197419691964

Trucks Sold per Year

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2009200419991994198919841979197419691964

Annual Change in Trucks Sold

Annual Change in Cars Sold


http://bit.ly/9avkQZ�


Corrections Corp. of America (CXW) – Pershing Square Nashville, TN, 615-263-3000

Services: Business Services, Member of S&P MidCap 400 www.correctionscorp.com


Price: $19.57 (as of 2/12/10)




($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/09 12/31/08 12/31/09 Revenue 1,008 1,126 1,186 1,303 1,456 1,584 1,670 1,670 411 427 Gross profit 260 276 293 356 420 472 501 501 127 132 EBIT 166 173 176 225 267 301 314 314 83 85 Net income 127 61 50 105 133 151 155 190 41 43 Diluted EPS 1.14 0.51 0.41 0.85 1.06 1.19 1.33 1.33 0.32 0.36 Cash from ops 101 203 126 153 172 251 274 n/a 51 n/a Capex 17 92 128 110 163 343 516 n/a 69 n/a Free cash flow 84 111 (2) 43 9 (92) (242) n/a (18) n/a Cash & investments 84 60 84 112 58 34 46 46 34 46 Total current assets 293 302 320 391 341 338 325 325 338 325 Intangible assets 16 16 16 16 14 14 14 14 14 14 Total assets 1,959 2,023 2,086 2,251 2,486 2,871 2,906 2,906 2,871 2,906 Short-term debt 1 3 12 0 0 0 0 0 0 0 Total current liabilities 160 172 156 164 215 192 195 195 192 195 Long-term debt 1,002 999 964 976 976 1,193 1,149 1,149 1,193 1,149 Total liabilities 1,184 1,207 1,170 1,201 1,264 1,491 1,463 1,463 1,491 1,463 Preferred stock 31 0 0 0 0 0 0 0 0 0 Common equity 745 816 917 1,050 1,222 1,380 1,443 1,443 1,380 1,443 EBIT/capital employed 10% 10% 10% 12% 13% 13% 12% 12% n/m n/m


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BUSINESS OVERVIEW CCA operates 65 correctional and detention facilities with a design capacity of 87,000 beds in 19 states and D.C. INVESTMENT HIGHLIGHTS

• #1 operator of private prisons in the U.S. CCA manages 46% of all private prison beds. Private and public facilities have 8% and 92% share of the $65 billion U.S. corrections market, respectively.

• Privatized beds have grown at 16% CAGR from 11,000 beds in 1990 to 188,000 in 2010, driven by prison overcrowding and perceived cost benefits.

• $0.45 incremental EPS opportunity based on filling existing bed inventory and beds under development (limited capex), according to CCA.

• Announced $250 million buyback in February. CCA has been an active and opportunistic purchaser of own shares. It bought back 11 million shares in 2009 at an average price of under $12 per share.

• Guiding for 2010 adjusted FCF per share of $1.83-1.99 (down 10-2%). Guidance excludes impact from share repurchase and is based on $53-58 million of maintenance capex (total capex: $144-169 million). Maintenance capex is below D&A.

• Shares trade at 9-10% FCF based on 2010 FCF guidance including maintenance capex only.


• Relies on government contracts. State, federal and local/other authorities represented 52%, 40% and 8% of 2009 revenue. Changes in contract terms due to budget or political pressure may slow growth and/or reduce profitability of private prisons.

• “Blackwater” risk. Like private military firms, private prison companies have been prone to reports of inmate abuses, lawsuits, and public controversy. Events of 1999-2000 exemplify this industry risk.

• Long-time CEO Ferguson (63) retired in 2009. He was replaced by Damon Hininger (39), who joined CCA in 1992. Ferguson will continue as chairman, which mitigates potential continuity risk.

• $1.1 billion of net debt at yearend 2009. 85% of total debt is fixed at a 6.6% effective interest rate. Average maturity of fixed debt is five years.


MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

GEO 990 1,510 1.4x 1.6x 14x 13x CRN 290 590 1.4x 1.2x 12x 11x CXW 2,270 3,370 2.0x 1.6x 16x 15x

SELECTED OPERATING DATA FYE December 31 2005 2006 2007 2008 2009 ∆ revenue 6% 12% 12% 9% 5% ∆ compensated man days 1 3% 7% 6% 4% 4% ∆ revenue/compensated man day 2 3% 4% 4% 5% 2% ∆ expense/compensated man day 3 3% 1% 1% 3% 2% Revenue ($bn) 1.2 1.3 1.5 1.6 1.7 Management revenue as % of total 4 98% 99% 99% 99% 100% % of management revenue by facility type: Owned and managed 72% 74% 76% 78% 79% Managed-only 28% 26% 24% 22% 21% Contribution margin per compensated man day by facility type: 5 Owned and managed 29% 32% 34% 35% 35% Managed-only 16% 15% 14% 15% 13% Total margin per comp. man day 25% 27% 29% 31% 31% Selected items as % of revenue: EBIT 15% 17% 18% 19% 19% Net income 4% 8% 9% 10% 9% D&A 5% 5% 5% 6% 6% Capex 6 9% 13% 24% 33% 3% Selected operating metrics: Average available beds (000s) 69.4 71.4 73.3 78.5 86.2 Average compensated occupancy 91% 95% 98% 96% 91% Compensated man days p.a. (mn) 23.2 24.8 26.3 27.4 28.5 …per compensated man day in $: Revenue 51 53 55 57 58 Fixed expenses 29 28 29 30 31 Variable expenses 9 10 10 10 10 Contribution 13 14 16 18 18 % of period-end beds by facility type: Owned and managed 64% 64% 66% 70% 70% Managed-only 36% 36% 34% 30% 30% Facilities by type: Owned and managed 39 40 41 43 44 Managed-only 24 25 24 22 21 Total facilities 63 65 65 65 65 Return on tangible equity 6% 11% 12% 12% 11% Tangible equity to assets 42% 45% 48% 48% 49% ∆ shares out (avg) 10% 4% 2% 2% -7%

1 Measure of volume (average available beds multiplied by average compensated occupancy multiplied by number of days in the period). 2 Based on management revenue (excludes transportation and other revenue). 3 Based on facility management expenses (excludes D&A, SG&A). 4 Excludes transportation, rental and other small revenue sources. 5 Excludes D&A and SG&A expenses. 6 Includes expansion capex for all years except for 2009, which is based on maintenance and technology capex only ($49 million based on company data). MAJOR HOLDERS CEO Hininger <1% | Other insiders 5% | Pershing Sq. 10% | Lazard 7% | Wellington 5% | Barclays 4% | Vanguard 4% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year?

THE BOTTOM LINE As the largest operator of private prisons in the U.S., CCA has benefited from steady inmate growth, an overcrowded public prison system and constraints on new public prison development. Homeland security initiatives have also helped as the proportion of revenue from U.S. Immigration and Customs has nearly doubled to 12% since 2002. This backdrop has enabled returns on tangible equity in the low-teens over the last several years. Earnings-based measures may underestimate the high cash generation ability of the business. Shares are cheap trading on a 9-10% maintenance FCF yield based on 2010 guidance.



…additional insight into Corrections Corp. of America: SLIDES FROM COMPANY PRESENTATION, NOVEMBER 2009



…additional insight into Corrections Corp. of America: SLIDES BY BILL ACKMAN’S PERSHING SQUARE, OCTOBER 2009



Gastar Exploration (GST) – Spencer Houston, TX, 713-739-1800

Energy: Oil & Gas Operations www.gastar.com


Price: $4.56 (as of 2/12/10)

Month # of P/E FYE 12/31/08 n/m 52-week range: $1.80 - $5.18 Latest Ago Ests P/E FYE 12/31/09 n/a Market value: $228 million This quarter n/a n/a n/a P/E FYE 12/31/10 n/a Enterprise value: $166 million Next quarter n/a n/a n/a P/E FYE 12/31/11 n/a Shares out: 50.0 million FYE 1/0/00 n/a n/a n/a EV / LTM revenue 4.0x

Ownership Data FYE 12/30/00 n/a n/a n/a EV / LTM EBITDA n/m Insider ownership: 17% FYE 12/30/01 n/a n/a n/a EV / LTM EBIT n/m Insider buys (last six months): 0 LT EPS growth n/a n/a n/a P / tangible book 1.5x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 37% Date Actual Estimate LTM EBIT yield -61% # of institutional owners: 54 n/a n/a n/a LTM pre-tax ROC -64%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 1 2 6 27 27 35 63 42 16 4 Gross profit 0 0 0 0 0 0 0 0 0 0 EBIT (5) (5) (10) (12) (71) (58) (1) (101) 4 (22) Net income (5) (5) (13) (26) (85) (31) (5) 30 3 112 Diluted EPS (0.23) (0.24) (0.57) (0.99) (2.50) (0.75) (0.13) 0.30 0.07 2.29 Cash from ops (1) (2) (1) 3 (1) 7 40 12 17 (3) Capex 8 5 34 84 53 65 131 62 43 8 Free cash flow (9) (7) (35) (80) (54) (58) (91) (51) (26) (11) Cash & investments

1 16 61 41 86 16 82 18 82

Total current assets

1 18 70 55 93 25 87 25 87 Intangible assets

0 0 0 0 0 0 0 0 0

Total assets

39 84 240 229 262 288 266 284 266 Short-term debt

2 0 0 0 1 153 20 3 20

Total current liabilities

5 2 14 32 29 182 106 38 106 Long-term debt

7 58 91 94 133 0 0 130 0

Total liabilities

15 62 119 131 167 187 114 173 114 Preferred stock

0 0 0 0 0 0 0 0 0

Common equity

24 22 121 98 95 102 152 111 152 EBIT/capital employed

-15% -21% -11% -47% -42% -1% -64% n/m n/m


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BUSINESS OVERVIEW Gastar is a Canadian natural gas firm with assets in the U.S. INVESTMENT HIGHLIGHTS

• Onshore U.S. natural gas producer with 64 Bcfe of proved reserves at yearend 2008.* 50% of reserves, which are almost 100% natural gas, are producing. Proved reserve life is about seven years.

• 1,300-1,900 Bcfe of net resource potential, based on management. Gastar is exploring unconventional shale and sands **at Marcellus in West Virginia and Pennsylvania, and the Bossier sands of East Texas.

• Relatively low cash costs of ~$2.50 per Mcfe based on YTD to September 2009 lease operating and G&A cost (down nearly by half since 2006).

• Operates 100% of core assets. Gastar also has high working interests of 95-100% in West Virginia and Pennsylvania and 50-67% in East Texas.

• Split chairman and CEO role in January after call for change from 9% holder Palo Alto. The latter believes Gastar has “tremendous upside in its core assets in East Texas and the Marcellus shale play.”

• Chesapeake (CHK) is largest shareholder. The investment by one of the largest U.S. producers of natural gas may be viewed as an indication of value.

• Received additional $12 million in February due to 2009 asset sale. In July 2009, Gastar sold a gas project in Australia for $181 million, a cash-on-cash return of over 3x. It paid down debt with proceeds.

• $60 million of net cash as of September 30, 2009. Adjusting for $12 million Australian proceeds and $22 million from sale of Texas assets in November 2009, Gastar is debt-free and has $90+ million cash.


• Dependent on exploration. Maximum after-tax net present value of proved reserves was only $132 million at yearend 2007. Gastar depends on risky exploration in order to create shareholder value.

• Need for additional capital. Gastar generated only $12 million of trailing net cash from operations. It expects to spend $54 million on capex in 2010. As cash on hand is depleted, ongoing exploration and development will require additional capital.

• About 40% of proved reserves are undeveloped, indicating need for capex to raise production.

• Existence of hedges may limit potential upside if natural gas prices rebound significantly.


FYE December 31 2005 2006 2007 2008 YTD

9/30/09 ∆ revenue 353% -2% 29% 83% -46% ∆ production 242% 23% 40% 29% 14% ∆ proved reserves 54% -5% 75% 16% n/a Proved reserves (period-end): Natural gas (MMcf) 33,023 31,157 54,822 63,685 n/a Oil (‘000 barrels) 1 30 9 12 n/a Total (MMcfe) 33,029 31,335 54,875 63,755 n/a Producing as % of proved 21% 36% 40% 50% n/a After-tax NPV ($mn) 2 91 40 132 110 n/a Selected production data: Natural gas (MMcf) 3,810 4,646 6,576 8,482 7,155 Oil (‘000 barrels) 2 12 8 5 3 Total (MMcfe) 3,822 4,716 6,621 8,510 7,175 Average sales prices ($ per ...): 3 Natural gas (…Mcf) 7.18 5.60 5.18 6.63 4.58 Oil (…barrel) 50.85 64.66 66.17 98.39 51.29 Selected expenses ($ per Mcfe): Lease operations 4 1.81 1.82 1.31 1.28 0.89 G&A 2.28 2.87 2.55 1.68 1.62 DD&A 3.64 3.46 3.24 2.87 1.99 Total 7.73 8.16 7.11 5.83 4.50 Revenue (US$mn) 5 27 27 35 63 25 Selected items as % of revenue: EBIT 6 -8% -44% -36% 21% -29% Net income 7 -94% -317% -88% -8% 158% D&A 51% 61% 62% 39% 57% Capex 8 177% 241% 202% 218% 191% Return on tangible equity -36% -77% -32% -5% 30% Tangible equity to assets 44% 47% 39% 36% 48% ∆ shares out (avg) 16% 31% 19% 2% 9%

1 MMcf(e) = millions of cubic feet (equivalents); Mcf(e) = thousands of cf(e). 2 After-tax net present value of future cash flows discounted at 10% (computed from production of proved reserves with period-end prices held constant). 3 Including impact of realized hedging activities. 4 Includes production taxes and transportation and treating costs. 5 After unrealized natural gas hedge gain/loss. 6 Excludes natural gas/oil properties’ impairment, accretion of asset retirement obligation, litigation expense and mineral resource properties expense. 7 YTD net income includes proceeds from Australian asset sale. 8 Includes drilling advances. MAJOR HOLDERS CEO Porter 2% | Other insiders 1% | Chesapeake Energy 14% | Palo Alto 9% | River Road 4% | Rima 2% | DLS 1% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year? * Bcfe=Billion cubic feet equivalent. ** Considered unconventional because prior to advances in drilling, fracturing and completion technologies, production was not successful, or uneconomic.

THE BOTTOM LINE Gastar’s strategy is to explore unconventional natural gas resources in the U.S., including sands, shale and coal bed methane. Management estimates the ~75,000 acres under exploration may hold a net resource potential that is 20-30x the size of proved reserves. While such claims are not uncommon among exploration companies, Gastar is notable for two reasons: 1) U.S. natural gas giant Chesapeake Energy (CHK) owns 14%; and 2) recent Australia asset sale demonstrates management can deliver value from existing assets. With a cleaned-up balance sheet, improved corporate governance, and potential for high reserve and production growth, Gastar may represent a worthwhile option to speculate on a rise in natural gas prices.



…additional insight into Gastar Exploration: COMPARATIVE RESERVE AND VALUATION DATA

Company Gastar Exploration

ATP Oil & Gas

Breitburn Energy

Partners Compton Petroleum

Contango Oil & Gas

Delta Petroleum

Harvest Natural

Resources

Ticker GST ATPG BBEP CMZ MCF DPTR HNR

Recent stock price $4.56 $16.38 $15.22 CAD 0.93 $52.15 $1.19 $5.11

Shares out (mn) 50.0 56.9 55.7 263.8 16.1 276.7 33.2

Market value (mn) $228 $932 $848 CAD 245 $842 $329 $170

Net debt/(cash) (mn) -60 996 583 589 (70) 315 (49)

Enterprise value (mn) $168 $1,928 $1,431 CAD 834 $772 $644 $121

Proved developed reserves (MMboe) 7 19 94 78 58 30 16

proved reserves (MMboe) 11 119 102 100 - 147 48

2P reserves (MMboe) - 197 - 212 - 433 84

3P reserves (MMboe) 215+ - - - - 850 211

EV / proved developed Boe $25 $101 $15 CAD 11 $13 $21 $7

EV / proved Boe 16 16 14 8 - 4 3

EV / 2P Boe - 10 - 4 - 1 1

EV / 3P Boe 1 - - - - 1 1

Main location of proved reserves

Continental U.S. (WV, PA, TX)

GOM/ North Sea

Continental U.S. (MI, CA, WY)

Alberta (Canada)

Shallow GOM

U.S. Rocky Mountains Venezuela

Reserve split (oil/natural gas) in % 0/100 55/45 25/75 10/90 20/80 6/94 80/20

Risk of additional capital raise Low High Low High Low High Medium *

* HNR announced in February 2010 it raised $30 million from a 8.25% convertible note offering due 2013 (conversion price of ~$5.71 per share). It also indicated the possibility of another financing transaction. However, the latter may add value to HNR shareholders, as it would likely not be dilutive on a per-share basis. Notes: 1) MMboe=millions of barrels of oil equivalent; Mcf=thousands cubic feet equivalent; 2P=proved+probable; 3P=proved+probable+possible; GOM=Gulf of Mexico. 2) MCF reserves are as of 9/30/09, HNR reserves are as of 8/31/09, and GST, CMZ, ATPG, DPTR, BBEP reserves are as of 12/31/08. 3) ATPG shares include convertible preferred shares; CMZ shares exclude 138 million warrants, each exercisable at C$1.55/share through October 2011. 4) All net debt/cash figures are as of 9/30/09 except for MCF which is as of 1/4/10. CMZ net debt is pro forma for recent net proceeds from equity raise and sale of 5.0% of production. DPTR net debt includes $50 million litigation award in December 2009 and excludes restricted deposits and non-recourse DHS debt.



…additional insight into Gastar Exploration: SLIDES FROM COMPANY PRESENTATION, JANUARY 2010



Johnson & Johnson (JNJ) – Berkshire Hathaway , Fairfax New Brunswick, NJ, 732-524-0400

Health Care: Major Drugs, Member of S&P 500 www.jnj.com


Price: $62.72 (as of 2/12/10)

Month # of P/E FYE 12/27/09 14x 52-week range: $46.25 - $65.95 Latest Ago Ests P/E FYE 12/31/10 13x Market value: $173.1 billion This quarter $1.28 $1.28 16 P/E FYE 12/31/11 12x Enterprise value: $170.3 billion Next quarter 1.27 1.26 13 P/E FYE 12/30/12 11x Shares out: 2,759.1 million FYE 12/31/10 4.93 4.94 22 EV / LTM revenue 2.8x

Ownership Data FYE 12/31/11 5.36 5.38 16 EV / LTM EBITDA n/m Insider ownership: 1% FYE 12/30/12 5.85 5.92 12 EV / LTM EBIT 11x Insider buys (last six months): 0 LT EPS growth 7.0% 7.5% 6 P / tangible book 9.2x Insider sales (last six months): 8 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 63% Date Actual Estimate LTM EBIT yield 9% # of institutional owners: 3135 1/26/10 $1.02 $0.97 LTM pre-tax ROC 81%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/28/03 1/2/05 1/1/06 12/31/06 12/30/07 12/28/08 12/27/09 12/27/09 12/28/08 12/27/09 Revenue 41,862 47,348 50,514 53,324 61,095 63,747 61,897 61,897 15,182 16,551 Gross profit 29,686 33,874 36,504 38,267 43,344 45,236 43,450 43,450 10,810 11,239 EBIT 10,308 12,331 13,116 14,587 13,283 16,929 15,755 16,116 3,517 2,604 Net income 7,197 8,180 10,060 11,053 10,576 12,949 12,266 12,266 2,714 2,206 Diluted EPS 2.40 2.74 3.35 3.73 3.63 4.57 4.40 4.40 0.97 0.79 Cash from ops 8,176 10,595 11,089 11,799 14,248 15,022 14,972 n/a 4,001 n/a Capex 2,099 2,262 2,175 2,632 2,666 2,942 3,066 n/a 1,128 n/a Free cash flow 6,077 8,333 8,914 9,167 11,582 12,080 11,906 n/a 2,873 n/a Cash & investments 7,475 9,523 12,884 16,138 4,084 9,315 12,809 14,337 14,799 14,337 Total current assets 19,266 22,995 27,320 31,480 22,975 29,945 34,377 35,602 36,590 35,602 Intangible assets 9,246 11,539 11,842 12,175 28,688 28,763 27,695 31,653 28,571 31,653 Total assets 40,556 48,263 53,317 58,864 70,556 80,954 84,912 91,558 87,724 91,558 Short-term debt 2,117 1,139 280 668 4,579 2,463 3,732 3,341 6,245 3,341 Total current liabilities 11,449 13,448 13,927 12,635 19,161 19,837 20,852 19,245 22,730 19,245 Long-term debt 2,022 2,955 2,565 2,017 2,014 7,074 8,120 8,259 8,395 8,259 Total liabilities 17,859 21,394 21,504 20,154 31,238 37,635 42,401 41,174 41,990 41,174 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 22,697 26,869 31,813 38,710 39,318 43,319 42,511 50,384 45,734 50,384 EBIT/capital employed 92% >100% >100% >100% 84% 97% 87% 81% n/m n/m


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BUSINESS OVERVIEW Johnson & Johnson provides healthcare products worldwide. INVESTMENT HIGHLIGHTS

• About 70% of revenue attributable to products or businesses with #1 or #2 global market share. Seven of the company’s pharmaceuticals had over $1 billion each of worldwide revenue in 2009.*

• Largest global medical device business. Brands including Ethicon (surgical), DePuy (orthopedic), and Cordis (vascular) contributed 14%, 9%, and 4%, respectively, to 2009 company revenue.

• 7th largest global pharmaceutical franchise. Two of J&J’s largest drugs, Remicade (autoimmune disease treatment) and Procrit/Eprex (anemia treatment), contributed 7% and 4% to 2009 revenue. J&J markets over 100 drugs, of which ~25 have more than $100 million of annual revenue each.

• Over-the-counter pharmaceuticals/nutritionals make up nearly 40% of Consumer segment sales. Brands include household drugs such as Tylenol, Sudafed, Zyrtec and sweetener Splenda. Other key consumer franchises are Neutrogena and Aveeno (skin care), Johnson’s (baby care), Carefree (women’s’ health) and Listerine (oral care).

• Guiding for EPS of $4.80-4.90 (up 4-6% y-y) in 2010 ** assuming constant exchange rates. Revenue guidance is $63-64 billion (up 2-3% y-y).

• Strong balance sheet with $2.7 billion of net cash at September 30, 2009. 4Q09 estimated FCF is $4+ billion. J&J also received $1 billion in February, from a Boston Scientific (BSX) patent settlement.

* These pharmaceuticals include Aciphex/Pariet (-2% y-y revenue growth at constant currency), Concerta (+9%), Levaquin/Floxin (-2%), Procrit/Eprex (-6%), Remicade (+15%), Risperdal Consta (+14%), and Topamax (-57%). ** 2010 EPS guidance is $4.85-4.95 based on mid-January exchange rates. INVESTMENT RISKS & CONCERNS

• Pharma revenue fell 6% in ‘09 assuming constant exchange rates. Patent expirations are the main reason, with revenue falling 57% for Topamax and Risperdal. Next major patent expiry is anti-infective Levaquin in December 2010 (3% of 2009 revenue).

• EPS growth a challenge given revenue pressures and margins at five-year highs across the business. Given ample cash, potential M&A is a concern.

MAJOR HOLDERS Insiders <1% | State Street 5% | BlackRock 5% | Barclays 4% Vanguard 4% | FMR 2% | BNY Mellon 2% | Berkshire 1%

SELECTED OPERATING DATA 1 FYE December 31 2004 2005 2006 2007 2008 2009 ∆ revenue 13% 7% 6% 15% 4% -3% ∆ due to volume 9% 5% 4% 10% 1% } 0% ∆ due to price 1% 1% 2% 1% 1% ∆ due to currency 3% 1% 0% 3% 2% -3% Revenue ($bn) 47.3 50.5 53.3 61.1 63.7 61.9 % of revenue by segment: Pharmaceutical 47% 44% 44% 41% 39% 36% Medical Devices 36% 38% 38% 36% 36% 38% Consumer 18% 18% 18% 24% 25% 26% Revenue growth by segment: Pharmaceutical 13% 1% 4% 7% -1% -8% Medical Devices 13% 13% 6% 7% 6% 2% Consumer 12% 9% 7% 48% 11% -2% EBIT margin by segment: 2 Pharmaceutical 34% 29% 30% 26% 31% 31% Medical Devices 24% 27% 30% 22% 31% 32% Consumer 18% 18% 14% 16% 17% 18% Corporate -2% -1% -1% -1% -1% -1%3 Total EBIT margin 26% 25% 26% 21% 27% 28% % of revenue by geography: U.S. 59% 56% 56% 53% 51% 50% International 4 41% 44% 44% 47% 49% 50% Revenue growth by geography: U.S. 10% 2% 5% 9% 0% -4% International 18% 13% 6% 22% 10% -1% Int’l at constant forex 10% 11% 6% 15% 5% 4% Selected items as % of revenue: Gross profit 72% 72% 72% 71% 71% 70% R&D 5 11% 13% 13% 13% 12% 11% Net income 17% 20% 21% 17% 20% 20% D&A 4% 4% 4% 5% 4% 4%3 Capex 5% 5% 5% 5% 5% 3%3 Equity to assets (tang.) 45% 53% 42% 27% 27% 30%3 ∆ shares out (avg) 0% 0% -1% -2% -3% -2%

1 J&J acquired Pfizer’s consumer healthcare business for $16.6 billion in 12/06. 2 Corporate includes minority interest. 2009 EBIT excludes restructuring costs. 3 Figures based on YTD to 9/30/09 (or at 9/30/09), as 2009 not yet available. 4 Europe was 51% of 2009 international revenue. 5 Excludes in-process R&D.


MV ($mn)

EV ($mn)

EV / Rev.

P / Tang. Book

This FY P/E

Next FY P/E

PFE 143,640 129,800 2.6x 5.1x 8x 8x NVS 122,160 118,700 2.6x 3.5x 12x 11x MRK 112,770 99,590 4.3x 5.4x 11x 11x ABT 83,420 90,380 2.9x 28.9x 13x 11x JNJ 173,050 170,310 2.8x 9.2x 13x 12x


THE BOTTOM LINE J&J has world-leading franchises in medical devices, branded pharmaceuticals and consumer healthcare products. As roughly 25% of revenue derives from products introduced in the last five years, innovation remains critical to value creation. While we commend management in its restructuring efforts, it appears that the planned cuts of 5%+ of the workforce signal slower growth ahead. An additional concern is a potential switch to acquisition versus organic-led growth, which would heighten execution risk. Balancing our concerns is the quality of the J&J franchise with durable, highly profitable brands. Assuming slower organic revenue growth in future, shares appear fairly valued at an 8% earnings yield based on 2010 EPS guidance.



…additional insight into Johnson & Johnson: SLIDES FROM COMPANY PRESENTATION, JANUARY 2010



…additional insight into Johnson & Johnson: PHARMACEUTICAL PIPELINE



Molson Coors Brewing (TAP) – Children’s , Third Point Denver, CO, 303-279-6565

Consumer Non-Cyclical: Beverages (Alcoholic), Member of S&P 500 www.molsoncoors.com


Price: $38.90 (as of 2/12/10)


Ownership Data FYE 12/31/11 3.78 4.08 8 EV / LTM EBITDA n/m Insider ownership: 15% FYE 12/30/12 4.12 4.69 4 EV / LTM EBIT 22x Insider buys (last six months): 0 LT EPS growth 12.0% 12.0% 1 P / tangible book 6.7x Insider sales (last six months): 10 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 72% Date Actual Estimate LTM EBIT yield 5% # of institutional owners: 874 2/9/10 $1.02 $1.10 LTM pre-tax ROC 33%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/28/03 12/26/04 12/25/05 12/31/06 12/30/07 12/28/08 12/26/09 12/26/09 12/28/08 12/26/09 Revenue 4,000 4,306 5,507 5,845 6,191 4,774 3,032 3,032 739 821 Gross profit 1,413 1,564 2,200 2,364 2,488 1,934 1,306 1,306 291 345 EBIT 307 348 421 590 615 610 754 372 146 136 Net income 175 197 135 361 497 379 720 699 94 222 Diluted EPS 2.39 2.59 1.44 2.16 2.84 2.11 3.92 3.92 0.47 1.17 Cash from ops 529 500 422 833 616 412 824 824 16 157 Capex 241 212 406 446 428 231 125 125 54 53 Free cash flow 288 288 16 387 188 181 700 700 (38) 104 Cash & investments 19 123 39 182 377 216 734 734 216 734 Total current assets 1,079 1,268 1,468 1,458 1,777 1,107 1,763 1,763 1,107 1,763 Intangible assets 1,349 1,472 7,295 7,364 8,386 5,221 6,010 6,010 5,221 6,010 Total assets 4,445 4,658 11,799 11,603 13,452 10,387 12,021 12,021 10,387 12,021 Short-term debt 91 39 348 4 4 0 300 300 0 300 Total current liabilities 1,134 1,177 2,237 1,800 1,736 986 1,581 1,581 986 1,581 Long-term debt 1,160 894 2,137 2,130 2,261 1,752 1,413 1,413 1,752 1,413 Total liabilities 3,177 3,056 6,475 5,786 6,302 4,331 4,942 4,942 4,331 4,942 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 1,267 1,601 5,325 5,817 7,149 6,055 7,080 7,080 6,055 7,080 EBIT/capital employed 21% 24% 26% 31% 29% 34% 67% 33% n/m n/m


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BUSINESS OVERVIEW Molson Coors Brewing Company (MCBC) produces beer for sale in Canada, the U.S., and the U.K. MCBC was formed in 2005 following the merger of Adolph Coors and Molson. INVESTMENT HIGHLIGHTS

• #2 Canadian brewer by volume with 41% market share in 2008. Key owned brands include Coors Light (13% share) and Canadian (8%), which are second- and third-best selling beers in Canada. A-B InBev-owned company Labatt has 44% share.

• Owns 42% of MillerCoors, a JV with SABMiller, which was established in 2008. MCBC accounts for the JV using the equity method and reported $382 million of related equity income in 2009.

• MillerCoors is the #2 U.S. brewer by volume with 29% market share in 2008. Key owned brands are Coors Light, Miller Lite, Blue Moon and Miller Genuine Draft. Leader A-B InBev has 49% share.

• #2 U.K. brewer by volume with 20% market share in 2008. The Carling brand represents over 75% of volume sold. Main rivals are Heineken/Carlsberg-owned Scottish & Newcastle (25% market share), A-B InBev (18%), and Carlsberg (13%).

• Generated $824 million net cash from operations in 2009 (including $401 million distribution from MillerCoors). 2009 tax rate, however, was near zero versus an expected long-term rate of 22-26%.

• Shares trade on 6-7% estimated FCF yield based on 2009 FCF and estimated normalized taxes.


• Operates in mature beer markets. 2008 total market beer volume growth was 0.7% in the U.S., 1.1% in Canada, and -5.5% in the U.K. MCBC has little exposure to faster growing emerging markets.

• MCBC worldwide volume fell 3% y-y in 2009 to 50.0 million hectoliters, adjusted for MillerCoors. MCBC said in February to “expect volume to remain challenging, especially in the first half.”

• Limited margin improvement potential? The near $500 million of merger synergies have been realized through 2009. While additional savings are targeted at MCBC and at MillerCoors, it remains to be seen how much will flow through to the bottom line.

• Depends on a few brands. Coors Light, Canadian, Miller Lite, and Carling are key profit drivers.

• Controlled by Molson and Coors families via combined majority ownership of class A shares.

• $1.0 billion of net debt at yearend 2009. Liquidity is high, however, and leverage could be increased.

SELECTED OPERATING DATA 1 FYE December 31 2005 2006 2007 2008 2009 ∆ worldwide beer volume 2 24% 1% 1% 24% -3% ∆ revenue 2 28% 6% 6% -23% -36% Revenue (US$bn) 3 5.5 5.8 6.2 4.8 3.0 % of revenue by segment: Canada 29% 31% 31% 39% 57% U.S. 44% 45% 44% 32% 0% U.K. 27% 24% 24% 28% 40% International and Corporate 0% 1% 1% 1% 2% Revenue growth by segment: Canada n/m 10% 7% -3% -7% U.S. 4% 5% 6% n/m n/m U.K. -19% -8% 6% -8% -9% EBIT margin by segment: Canada 23% 26% 21% 24% 24% U.S. 6% 6% 10% n/m n/m U.K. 5% 5% 5% 6% 7% International and Corporate -3% -2% -2% -4% -4% Total EBIT margin 4 8% 10% 10% 13% 25% Selected items as % of revenue: Gross profit 40% 40% 40% 40% 43% Net income 2% 6% 8% 8% 24% D&A 7% 8% 6% 6% 6% Capex 5 7% 8% 7% 5% 4% Tangible equity to assets -24% -40% -30% -4% 17% ∆ shares out (avg) 6 114% 8% 4% 2% 1%

1 Effective July 1, 2008, the company and SABMiller combined the U.S. and Puerto Rico operations of their respective subsidiaries in the MillerCoors JV. The results of U.S. operations, which had historically comprised substantially all of the company’s U.S. segment were deconsolidated. The company has a 42% economic stake in the JV and has accounted for it using the equity method. 2 Beer volume includes proportionate share of volume from equity investments. 2005 data reflect Molson-Coors merger, 2008/09 data impact from MillerCoors. 3 After excise taxes. 4 Includes equity income in MillerCoors in 2008 and 2009. 5 Includes MillerCoors investment in 2008-09. 6 2005 increase due to M&A. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

HINKY 22,930 35,910 1.7x n/m 16x 14x TAP 7,200 8,180 2.7x 6.7x 11x 10x

MAJOR HOLDERS Shares out: 5.8 million Class A shares incl. exchangeable shares (not listed; voting) and 179.3 million Class B shares incl. exchangeable shares (NYSE: TAP; limited voting). The Molson and Coors families control voting via Class A shares. Economic stake: Coors family 14% | Molson family 4% | Other insiders <1% | Cap Re 10% | FMR 5% | Children’s 3% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year?

THE BOTTOM LINE Molson Coors has a strong presence in three of the world’s largest beer markets including the U.S. (via the MillerCoors JV), Canada, and the U.K. While these markets are attractive because of a highly consolidated industry structure and high cash generation, they offer little growth potential. In addition, margin improvements may be harder to achieve going forward as the merger-related synergies are largely realized by now. At a mid-to-high single digit FCF yield, shares appear fairly valued.



Monsanto (MON) – Lone Pine , Weitz St. Louis, MO, 314-694-1000

Basic Materials: Chemical Manufacturing, Member of S&P 500 www.monsanto.com


Price: $75.82 (as of 2/12/10)


Ownership Data FYE 8/31/11 4.44 4.44 17 EV / LTM EBITDA 19x Insider ownership: 0% FYE 8/30/12 5.52 5.63 7 EV / LTM EBIT 19x Insider buys (last six months): 0 LT EPS growth 15.0% 15.0% 1 P / tangible book 7.3x Insider sales (last six months): 11 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 79% Date Actual Estimate LTM EBIT yield 5% # of institutional owners: 1869 1/6/10 -$0.02 $0.00 LTM pre-tax ROC 35%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 8/31/03 8/31/04 8/31/05 8/31/06 8/31/07 8/31/08 8/31/09 11/30/09 11/30/08 11/30/09 Revenue 3,378 5,423 6,275 7,065 8,349 11,365 11,724 10,772 2,649 1,697 Gross profit 1,552 2,527 2,995 3,443 4,230 6,177 6,762 5,951 1,550 739 EBIT 87 545 469 1,110 1,369 2,908 3,103 2,317 748 (38) Net income (23) 267 255 689 993 2,024 2,109 1,534 556 (19) Diluted EPS 0.00 0.49 0.35 1.22 1.65 3.59 3.78 2.75 0.98 (0.04) Cash from ops (214) 1,261 1,737 1,674 1,854 2,799 2,236 708 114 (1,414) Capex 114 210 281 370 509 918 916 844 264 192 Free cash flow (328) 1,051 1,456 1,304 1,345 1,881 1,320 (136) (150) (1,606) Cash & investments 511 1,337 675 1,460 866 1,613 1,956 471 1,342 471 Total current assets 4,939 4,931 4,644 5,461 5,084 7,609 7,883 7,431 7,489 7,431 Intangible assets 1,339 1,174 2,401 2,751 4,040 4,663 4,589 4,642 4,427 4,642 Total assets 9,536 9,164 10,579 11,728 12,983 17,991 17,877 17,606 16,909 17,606 Short-term debt 269 433 126 28 270 24 79 281 70 281 Total current liabilities 2,019 1,894 2,159 2,279 3,075 4,439 3,756 3,354 3,918 3,354 Long-term debt 1,258 1,075 1,458 1,639 1,150 1,792 1,724 1,724 1,755 1,724 Total liabilities 4,380 3,906 4,966 5,203 5,480 8,617 7,821 7,320 7,827 7,320 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 5,156 5,258 5,613 6,525 7,503 9,374 10,056 10,286 9,082 10,286 EBIT/capital employed 2% 12% 11% 26% 33% 65% 58% 35% n/m n/m


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BUSINESS OVERVIEW Monsanto provides agricultural products via two segments: Seeds and Genomics: Produces natural and genetically modified crop and vegetable seeds. Modified seeds result from artificial insertion of “traits” (e.g. insect-resistant trait). Agricultural Productivity: Includes mainly the branded herbicide Roundup. Herbicides are used for controlling weed. INVESTMENT HIGHLIGHTS

• Competes in $66+ billion global crop protection and seeds market.* Crop protection grew from $28 billion in 2000 to $40+ billion in 2008. Since 2000, the seed market has grown 60% to $26 billion in 2008 and is forecast to exceed $40 billion by 2020.

• Strategy is focused on genetically modified seeds to increase farmers’ crop yield. The average yield per corn acre, for example, is 157 bushels in the U.S. versus 105 in the EU, 59 in Brazil and 35 in India. ** While yield gaps are due to many factors, genetic modification of seeds is pushing the frontier.

• Corn seed/traits represented 39% of gross profit in FY09. Monsanto has 36% corn market share in the U.S., 60% in Mexico, 49% in Argentina, 41% in Brazil, 37% in India and 14% in the EU. Other key seeds/traits sold are soybean, cotton, and vegetables.

• Owns world’s best-selling herbicide Roundup. Roundup and other glyphosate-based herbicides contributed 27% of company gross profit in FY09.

• Extensive intellectual property includes crop- and functional-specific trait patents as well as licenses to genomics sequences (often perpetual in nature).

• R&D pipeline represents $8 billion gross revenue opportunity by 2020, based on management. Split between modified/natural-hybrid seeds is ~50/50.

• Guiding for 28% gross profit increase from $6.8 billion in FY09 to $8.7 billion in FY12. $2.9 billion incremental gross profit from seeds and traits (~70% corn-related) is to offset $0.9 billion decline in agricultural segment (due to decline in Roundup).


• Challenges to genetically modified food including public rejection and regulation. Health concerns and potential for “adventitious presence” (contamination of natural seeds with traits) can slow market growth.

• Industry growth may not equal value creation. As the decline in Roundup revenue shows, generic competition and negative supply-demand dynamics can quickly erode product brands that are off-patent.


FYE August 31 2005 2006 2007 2008 2009 YTD 1

11/30/09 ∆ revenue 16% 16% 18% 36% 3% -36% ...due to volume 5% 6% 11% 8% -11% -12% ...due to price 1% 2% 2% 20% 17% -24% ...due to currency 3% 1% 2% 5% -4% 0% ...due to acquisitions 7% 7% 2% 3% 1% 0% Revenue ($bn) 6.1 7.1 8.3 11.4 11.7 1.7 % of revenue by segment: Seeds and genomics 52% 55% 59% 56% 62% 61% Agricultural productivity 48% 45% 41% 44% 38% 39% Revenue growth by segment: Seeds and fenomics 39% 23% 28% 28% 15% -6% Agricultural productivity -2% 9% 6% 48% -11% -57% EBIT margin by segment: Seeds and genomics 12% 20% 18% 19% 23% -6% Agricultural productivity -1% 9% 14% 34% 31% 5% Total EBIT margin 7% 15% 16% 25% 26% -2% % of revenue by major geography (based on country of origin): U.S. 52% 57% 56% 50% 55% n/a Latin America 20% 18% 18% 21% 20% n/a Europe and Africa 16% 15% 15% 17% 15% n/a Selected items as % of revenue: Gross profit 48% 49% 51% 54% 58% 44% R&D 10% 10% 9% 9% 9% 16% Net income 4% 10% 12% 18% 18% -1% D&A 8% 7% 6% 5% 5% 8% Capex 5% 5% 6% 8% 8% 11% ∆ shares out (avg) 1% 1% 1% 1% 0% -1%

1 Monsanto’s business is seasonal: F1Q is historically around break-even.

• Competitors include Syngenta, agri-divisions of DuPont, Dow Chemical, BASF and Bayer, as well as academic/other research centers. More broadly, rivals are crop yield enhancers (e.g. fertilizers).

• 4% FCF yield on midpoint of 2012 FCF guidance.


MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

SYT 24,120 26,380 2.4x 6.0x 12x n/a MON 41,370 42,900 4.0x 7.3x 23x 17x

MAJOR HOLDERS Insiders <1% | BlackRock 5% | Capital World 4% | Barclays 4% | State Street 4% | Vanguard 4% | Lone Pine 2%

RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year? * Based on Phillips McDougall data per Syngenta industry handbook. Genetically-modified seeds were ~30% of total seeds industry in 2008. ** Based on 2007-09 average yields. For additional information click here.

THE BOTTOM LINE Monsanto has led development of genetically modified seeds ever since pioneering gene modification of plant cells in 1982. The growth opportunity is clear: Population and GDP growth increase demand for food. With limited farmland, production from existing fields has to rise. While there are many ways to achieve this (e.g. better field management via use of fertilizer and hybrid seeds), Monsanto’s biotech traits are pushing the last frontier in crop yield maximization. Global industry growth coupled with the company’s patent-protected products is a strong combination. However, given that enterprise value is nearly two thirds of global crop protection and seeds industry revenue, investors may be paying too much for expected future profit.


http://www.syngenta.com/en/investor_relations/pdf/Industry_Handbook_Our_Business.pdf�

http://www.monsanto.com/pdf/investors/supplemental_toolkit.pdf�


…additional insight into Monsanto:

SLIDES FROM COMPANY PRESENTATION, JANUARY 2010



Overstock.com (OSTK) – Chou , Fairfax Salt Lake City, UT, 801-947-3100

Services: Retail (Catalog & Mail Order) www.overstock.com


Price: $11.80 (as of 2/12/10)

Month # of P/E FYE 12/31/08 n/m 52-week range: $6.71 - $17.99 Latest Ago Ests P/E FYE 12/31/09 49x Market value: $270 million This quarter $0.45 $0.46 2 P/E FYE 12/31/10 25x Enterprise value: $252 million Next quarter 0.01 0.02 2 P/E FYE 12/31/11 16x Shares out: 22.9 million FYE 12/31/09 0.24 0.29 3 EV / LTM revenue 0.3x

Ownership Data FYE 12/31/10 0.48 0.50 3 EV / LTM EBITDA 97x Insider ownership: 45% FYE 12/31/11 0.74 0.61 1 EV / LTM EBIT 97x Insider buys (last six months): 0 LT EPS growth 25.0% 25.0% 2 P / tangible book n/m Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 55% Date Actual Estimate LTM EBIT yield 1% # of institutional owners: 192 11/3/09 -$0.03 -$0.03 LTM pre-tax ROC n/m


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 92 239 495 795 780 766 834 815 187 195 Gross profit 19 26 66 117 90 125 143 155 32 38 EBIT (4) (12) (5) (17) (99) (45) (11) 3 (4) (0) Net income (11) (12) (5) (25) (107) (48) (13) (2) (2) (1) Diluted EPS (0.86) (0.73) (0.26) (1.17) (4.92) (1.86) (0.55) (0.07) (0.07) (0.03) Cash from ops 3 (10) 25 (6) (26) 10 2 23 (0) 12 Capex 2 7 9 45 23 3 19 9 9 3 Free cash flow 1 (17) 16 (51) (49) 7 (17) 13 (9) 10 Cash & investments 33 40 288 112 127 147 110 79 70 79 Total current assets 56 86 356 235 188 197 146 119 114 119 Intangible assets 3 3 3 4 3 3 3 3 3 3 Total assets 64 99 378 326 265 231 172 144 146 144 Short-term debt 0 0 1 7 5 4 0 1 0 1 Total current liabilities 20 40 88 155 129 134 106 85 80 85 Long-term debt 0 0 117 78 79 76 67 60 67 60 Total liabilities 20 40 205 233 208 213 175 148 149 148 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 44 59 173 93 56 18 (3) (3) (4) (3) EBIT/capital employed -48% -104% -78% -102% -663% n/m n/m n/m n/m n/m


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BUSINESS OVERVIEW Overstock.com is an online retailer offering brand-name products at discount prices mainly to U.S.-based customers. INVESTMENT HIGHLIGHTS

• Internet-based “closeout” retailer. Overstock.com sells branded products at off-prices including home and garden merchandise (50% of gross bookings in 2008), clothing and accessories (24%), electronics and entertainment media (18%) and other goods.

• 1.4 million unique customers in 3Q09 (+18% y-y) of which 52% were repeat customers (+14% y-y). Average order size was $114 in 3Q09 (-12% y-y).

• Offers alternative sales channel for liquidating manufacturers’ inventory. Manufacturers benefit as they can sell excess inventory without disrupting sales via their traditional, full-price channels.

• GSI Commerce bought rival Retail Convergence (RC) for up to 2.6x trailing revenue in December 2009. While valuation was driven by fast-growing private sales firm Rue La La (58% of revenue), RC also owns direct competitor SmartBargains.com.

• Chairman and CEO Byrne (46) owns 30%. Byrne, who founded the company in 1997, has often been transparent in shareholder communication and wrote an “Owners’ Guide” on key business metrics.

• “About to report its first annual profit” based on CEO Byrne comment on January 12, 2010.* Trailing net income is negative $1million for 12 months to September 2009. Trailing EBITDA is $17 million.

• $18 million of net cash as of September 30 after $60 million face value of 3.75% convertible notes due in 2011 (convertible at $76 per share). Current assets minus current liabilities totaled $34 million.


• Competitors: liquidators (SmartBargains.com), online general retailers (Amazon.com, Buy.com), eBay, online specialty retailers (BlueNile.com), and traditional retailers (Walmart, Ross Stores, TJX).

• Low barriers to entry. New competitors can establish websites, logistical infrastructure, and manufacturer relationships at relatively low cost.

• Negative $94 million of FCF in 2004-08. Trailing FCF, however, is positive $13 million. Revenue has mostly stagnated but gross margins have improved.

• Reporting deficiencies. Issues include an SEC comment letter and restatement of ‘08-09 financials.

• Litigation a distraction? CEO Byrne has fought parties such as short sellers and prime brokers.**

* As quoted in The New York Observer and reported in a related 8-K filing.


FYE December 31 2004 2005 2006 2007 2008 YTD

9/30/09 ∆ revenue 105% 62% -2% -2% 9% -3% ∆ gross bookings 2 82% 62% -1% -1% 7% -3% ∆ B2C orders 90% 46% -5% -10% 3% 18% ∆ new B2C customers 51% 41% -18% -14% 5% 23% ∆ avg acquisition cost 3 31% 33% 18% -9% -2% -19% Revenue ($mn) 491 795 780 766 834 559 % of revenue by segment: 4 Direct 43% 40% 39% 26% 21% 17% Fulfillment partner 57% 60% 61% 74% 79% 83% Revenue growth by segment: Direct 54% 52% -7% -35% -12% -23% Fulfillment partner 179% 70% 0% 19% 16% 2% Gross margin by segment: Direct 13% 13% 6% 15% 11% 14% Fulfillment partner 13% 16% 15% 17% 19% 21% Total gross margin 13% 15% 12% 16% 17% 20% Selected items as % of revenue: EBIT -1% -3% -13% -6% -1% -1% Net income -1% -3% -13% -6% -2% 0% D&A 1% 2% 4% 4% 3% 2% Capex 2% 6% 3% 0% 2% 1% Free cash flow ($mn) 16 -51 -50 7 -17 -26 Selected operating metrics: Gross bookings ($mn) 536 868 863 853 916 609 B2C orders (mn) 5.8 8.4 8.0 7.2 7.4 1.8 New B2C clients (mn) 2.5 3.5 2.9 2.5 2.6 0.7 Avg acquisition cost ($) 16 21 25 23 22 20 ∆ shares out (avg) 10% 9% 5% 17% -3% -1%

1 YTD figures include an unaudited 3Q09. YTD and 2008 figures are pending restatement. 99%+ of YTD revenue is attributable to customers in the U.S. 2 Gross bookings differ from GAAP revenue in that gross bookings represent the gross sales price of goods sold before returns and sales discounts. 3 Sales and marketing expenses divided by new customers for the period. 4 Direct revenue is from sales fulfilled from own warehouses as opposed to fulfillment partner revenue (from sales shipped from partner warehouses). COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

AMZN 53,190 46,930 1.9x 13.2x 41x 32x EBAY 28,150 23,210 2.7x 4.1x 13x 12x OSTK 270 250 .3x n/m 49x 25x

MAJOR HOLDERS CEO Byrne 30% | Other insiders 1% | Fairfax 15% | Chou Associates 10% | Axa 6% | Barclays 3% | Lee, Danner 3% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year? ** The company got a recent $5 million favorable verdict in the Rocker case.

THE BOTTOM LINE CEO Byrne recognized the potential of liquidating manufacturers’ inventory of consumer goods through the Internet when he founded Overstock.com in 1997. While revenue grew rapidly until 2005, growth has been stagnant and cash flow negative since then. 2009 could mark a turning point as the company should be profitable. With revenue of $800+ million, the valuation likely ignores Overstock’s earning power. Given the mixed track record, however, this does not come as a surprise.


http://www.observer.com/2010/media/shooting-naked-messengers�

http://www.sec.gov/Archives/edgar/data/1130713/000110465910001555/a10-1835_18k.htm�

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1363528&highlight=�


…additional insight into Overstock: SLIDES FROM COMPANY PRESENTATION, NOVEMBER 2009



“OWNER’S GUIDE,” BY OVERSTOCK.COM FOUNDER, CEO AND CHAIRMAN PATRICK BYRNE The following “Owner’s Guide” is also available at http://bit.ly/dhWNYk Dear Owner, I wish to set a gold standard in communicating with candor your firm's results. As teenagers my brothers and I ran a Christmas tree lot. We cared about reality, not cosmetics, and wanted an accounting system to help us understand and run our business. We devised a system we called, "cigar-box accounting," because at day's end, standing by the trashcan fire, we counted the bills in the cigar box and knew what we had made or lost. It was simple, foolproof, and we made good decisions using it. Now, as the CEO of Overstock, I want shareholders to understand the economics of their business and the metrics we use to most effectively manage it. Our internal method of accounting is quite straightforward and follows generally accepted accounting principles ("GAAP"), with a few exceptions. In our public SEC filings we chose principles at the conservative edge of GAAP, but I will continue to present and discuss our results as I see them using the internal terms we have grown up with. For your reference, our GAAP and our internal accounting methods are described below with particular attention paid to the similarities and differences between the two. GAAP METRICS - see SEC filings for greater detail Revenue is comprised of direct revenue, and fulfillment partner revenue. All revenue amounts are net of returns, chargebacks and fraud, and sales discounts, primarily coupons. Direct revenue consists of merchandise sales made to individual consumers and businesses, which are fulfilled from our warehouses in Utah. Fulfillment partner revenue is generated when we sell the merchandise of other retailers, catalogues or manufacturers through our Website. We do not own or physically handle the merchandise for these transactions unless the product is returned. The entities with which we have a third party fulfillment relationship ship the products directly to the end customer. Revenue generated from our auctions and cars tabs is reported on a net basis and is included in fulfillment partner revenue. Cost of Goods Sold consists primarily of the costs of merchandise sold to customers, fixed warehouse costs, warehouse handling costs, inbound and outbound shipping costs, credit card fees and customer service costs. Sales and Marketing consist primarily of online and offline advertising, public relations and promotional expenditures, as well as payroll and related expenses for personnel engaged in marketing and selling activities. General and Administrative consist of wages and benefits for executive, accounting, and administrative personnel, rents and utilities, travel and entertainment, depreciation and amortization and other general corporate expenses. Technology Expense consist of wages and benefits for technology related personnel, rents and utilities, and depreciation and amortization related to software and computer equipment. MANAGEMENT METRICS Gross Merchandise Sales (Gross Bookings for Auctions) One place where we are internally less conservative than GAAP is in how we think of sales. GAAP recognizes as revenue the full value of goods shipped from our warehouses or our partner's warehouses, less discounts and returns, whereas gross merchandise sales ("GMS") is simply the gross amount of goods shipped. The only difference is that GAAP revenue is reduced by returns and marketing coupons: in our management accounting system these show up in our COGS and marketing expenses respectively, as explained below. Prior to July 1, 2003, the differences were more significant as we were accounting for partner revenue on a net, or commission, basis. From that time, however, we have taken all customer returns at our own facility, which requires us to account for fulfillment partner transactions in the same manner as we would a direct transaction. Revenue for the auctions and cars businesses is accounted for on a net rather than a gross basis. Core versus Direct, Partner versus Fulfillment Partner Core sales are those shipped from our warehouses. Partner sales are those that are generated by Overstock, our marketing and merchandising team, and our website, but are those in which goods are drop-shipped directly from our partner to our customer. From the customer's perspective, packages all appear to come from Overstock.com. The SEC and our auditors objected to our internal term, "partner," because it has the connotation (they say) of a legally bound entity, whereas these relationships are quite dynamic. For this reason, in our GAAP terminology we call our core and partner channels "direct" and "fulfillment partner," respectively. Cost of Goods Sold Core COGS - Our accounting for core COGS is in-line with GAAP with one exception. Inbound freight, outbound freight, customer service, credit card fees, charge-backs, fraud, and warehouse handling and fixed expenses are all included in our management COGS. Unlike GAAP, however, which nets returns from revenue, we include the cost of returns in our COGS calculation, an explanation of which is below. Economic Cost of Returns - In our early history returns costs were huge, and fluctuated widely. Stuffing them into a contra against sales both introduced too much noise into many metrics we wished to track as a percent of sales (for example, outbound freight), and tended to camouflage them so that they did not get managed with discipline. As an

antidote to this we started thinking in terms of the "economic cost of returns." This calculation, which varies by product, is a fairly complex function of the percentage of units sold that are returned, the percentage of these that are restocked and resold, the percent that are damaged and so cannot be resold but for which we are reimbursed by either the vendor (for selling us damaged product) or the freight company (for damaging it in shipping), handling fees, restocking fees charged, etc. The payoff is that we arrive at a "handicap" for each product with which to burden its COGS. Partner COGS - As of July 1, 2003, partner COGS include the cost we pay the partner for each product, which is what the partner bills us to cover the cost of the product, as well as their warehousing, handling and fulfillment costs. Additionally, we incur credit card fees and chargebacks for selling the product on the website, as well as customer service costs. As all partner returns are now sent back to our warehouse, partner returns costs are now accounted for by management the same way that we account for core returns costs, as an element of COGS. Juice Gross sales less COGS defined as above leaves us the "juice," that is, our marginal gain for making that one additional sale. Juice is comparable to gross profit if you were to subtract coupons and sales discounts. Marketing and Customer Acquisition Our customer acquisition numbers capture all marketing expenses, from on-line advertising to our off-line branding campaigns to the salaries and benefits of the people in the marketing department. Marketing Coupons - There was a day when an Internet company would repeatedly give the same customer $5 coupons to buy $15 bags of dog food, and then book the $15 as revenue. Eventually the Financial Accounting Standards Board ("FASB") stopped this practice, opining that a firm could only book as revenue the amount the customer actually paid ($10 in the above example). I agree that the FASB's decision was a step forward, that if I give a $5 discount coupon to the same customer over and over to make such purchases, then she is not really "spending" $15 each time she comes. Yet there is a different way to look at some coupons: we are sending a check to Yahoo! this month so that they will generate new customers for us, we are sending checks to MSN and Google this month so that they will generate new customers for us, and we are sending a check (in the form of a $5 discount coupon) this month to someone in Peoria in order to be a new customer for us. I agree that if I send the same "check" over and over to the same woman in Peoria to get repeat business from her then this "check" (i.e., discount coupon) is just revenue I did not collect. But in considering only the underlying economics of first buys, I think I should treat such cases as marketing checks, just like the checks going to Yahoo!, MSN, and Google, and then calculate the efficacy of such checks, doubling up on winners and cutting losers. And since our marketing department uses essentially all its coupons in customer acquisition, and rarely gives a coupon to someone who has already bought from us, our management accounting therefore does not net them against gross bookings, but instead, treats them as an element of marketing spending. Nectar "Juice" less marketing expenses leaves us the "nectar", or the amount of gross profit left to cover our fixed costs, or "nut" (see below). On a GAAP basis, this is commonly referred to as contribution, or contribution margin when thinking in terms of percentages. Nut Another term from my Christmas tree days was "nut", as in, "Did we cover our nut today?" This includes all employee compensation and benefits (excluding warehouse and marketing staff), warehouse rent and management expenses, corporate and technology expenses, and depreciation and amortization charges. (it baffles me that the "pro forma" accounting of some Internet firms excludes depreciation as an expense: either it was an expense the day you bought it, or over the years that you use it up: at some point you have to admit the cash is gone! "Nut" is akin to G&A under GAAP. Management Operating Income With good gross bookings and COGS, and disciplined sales and marketing spend, what is left (nectar) can cover our nut. Anything left after that is management's operating profit. By subtracting any non-cash or other charges from the management operating profit, one gets, as I view it, to GAAP net income. Conclusion “Labels are the guests of reality.” - Zhuang-ze What matters in accounting is not always how it is being done, but that the rules by which it is being done are made explicit. As required by law I present our financial results according to GAAP. Beyond that, however, I wish to open our cigar box to you in order to communicate with unprecedented candidness the economics of the business you bought. The system explained above is designed to that end. Respectfully submitted, Patrick M. Byrne


http://bit.ly/dhWNYk�


Potash Corp. (POT) – Children’s , Pabrai Saskatoon, SK, Canada, 306-933-8500

Basic Materials: Non-Metallic Mining www.potashcorp.com


Price: $111.60 (as of 2/12/10)

Month # of P/E FYE 12/31/08 10x 52-week range: $63.65 - $126.47 Latest Ago Ests P/E FYE 12/31/09 n/a Market value: $33.0 billion This quarter n/a n/a n/a P/E FYE 12/31/10 n/a Enterprise value: $36.7 billion Next quarter n/a n/a n/a P/E FYE 12/31/11 n/a Shares out: 296.0 million FYE 1/0/00 n/a n/a n/a EV / LTM revenue 7.7x

Ownership Data FYE 12/30/00 n/a n/a n/a EV / LTM EBITDA 26x Insider ownership: 1% FYE 12/30/01 n/a n/a n/a EV / LTM EBIT 26x Insider buys (last six months): 0 LT EPS growth n/a n/a n/a P / tangible book 5.8x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 67% Date Actual Estimate LTM EBIT yield 4% # of institutional owners: 924 n/a n/a n/a LTM pre-tax ROC 23%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09 Revenue 2,224 2,799 3,244 3,847 3,767 5,234 9,447 4,748 3,064 1,099 Gross profit 307 380 681 1,125 1,002 1,881 4,907 1,620 1,741 346 EBIT 167 (56) 514 893 876 1,589 4,635 1,416 1,715 358 Net income 60 (84) 291 533 626 1,062 3,395 1,485 1,212 251 Diluted EPS 0.19 (0.27) 0.87 1.60 1.96 3.27 10.70 4.83 3.86 0.83 Cash from ops 316 386 658 865 697 1,689 3,013 1,119 913 321 Capex 212 151 221 383 509 607 1,198 1,618 336 425 Free cash flow 104 235 438 482 188 1,082 1,815 (499) 577 (104) Cash & investments 25 5 459 94 326 720 277 391 500 391 Total current assets 832 734 1,244 1,111 1,310 1,811 2,267 2,331 2,690 2,331 Intangible assets 97 130 134 132 126 122 119 117 119 117 Total assets 4,686 4,567 5,127 5,358 6,217 9,717 10,249 12,004 11,228 12,004 Short-term debt 476 178 104 253 558 90 1,432 548 1,677 548 Total current liabilities 823 558 704 1,096 1,104 1,002 2,616 1,252 3,145 1,252 Long-term debt 1,020 1,269 1,259 1,258 1,357 1,339 1,740 3,499 1,339 3,499 Total liabilities 2,593 2,594 2,741 3,225 3,437 3,698 5,660 6,150 5,911 6,150 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 2,093 1,974 2,386 2,133 2,780 6,019 4,589 5,854 5,317 5,854 EBIT/capital employed 4% -2% 15% 27% 24% 40% 96% 23% n/m n/m


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BUSINESS OVERVIEW Potash provides crop nutrients: potash, phosphate, nitrogen. INVESTMENT HIGHLIGHTS

• #1 potash producer with 20% of global capacity. POT also has 5% of phosphate and 2% of nitrogen capacity, making it the #3 player in each market.*

• Population and GDP growth are driving food demand. Potash’s products are essential plant nutrients applied to crops to increase yield. 90+% of global potash consumption is used in fertilizers.

• Potash represents ~60% of gross profit based on 2005-09 gross profit (2009: 71%). 50%+ potash gross margin versus lower/more volatile margins in phosphate and nitrogen reflect more concentrated industry structure and low-cost position in potash.

• No known substitutes for potash. While animal manure and other fertilizer sources may provide similar nutrients, these are of no large-scale threat.

• Owns long-lived potash and phosphate reserves. The company’s six Canadian-based potash mines have reserve lives from about 60 to 100 years and its two U.S.-based phosphate mines about 90 years.

• Entry barriers in potash production include consolidation and 7+ years lead time for new mines. 80%+ of reserves are in Canada, Russia and Belarus. The world’s last greenfield mine was built in 1985.

• ~$25 per share in public equity investments. POT owns stakes in companies with similar businesses: 32% of SQM (Chile), 28% of APC (Jordan), 22% of Sinofert (Hong Kong), 14% of ICL (Israel).


• Are 50%+ potash gross margins sustainable? Capacity expansion may lead to potash oversupply. Potash Corp. plans to raise operational capacity from 11.5 million tonnes in 2010 to 17+ million by 2015. It plans to ship only 7-8 million tonnes in ‘10.

• Potash not immune from cyclicality. Despite favorable long-term demand trends and industry structure, near-term volatility can be severe. The company’s potash volume sold fell 65% in 2009.

• 4-5% earnings yield based on 2010 EPS guidance of $4.00-$5.00. Yield rises to a still modest 11% based on peak earnings in 2008, which equaled earnings during 2004-07 and 2009 combined.

• $3.7 billion of net debt. Liquidity is high, however. * Source: Potash February 10, 2010 presentation. For more background, read 68-page overview of Potash Corp and its industry.

SELECTED OPERATING DATA FYE December 31 2005 2006 2007 2008 2009 ∆ revenue 19% -2% 39% 80% -58% ∆ potash tonnes sold -1% -12% 31% -9% -65% ∆ phosphate tonnes sold 5% 3% 5% -20% -8% ∆ nitrogen tonnes sold 2% -3% 23% -12% -1% ∆ potash avg price per tonne sold 38% 2% 15% 169% -10% Revenue (US$bn) 3.8 3.8 5.2 9.4 4.0 % of revenue by segment: Potash 35% 33% 34% 43% 33% Phosphate 30% 33% 31% 30% 35% Nitrogen 36% 34% 34% 26% 32% Revenue growth by segment: Potash 27% -8% 46% 126% -68% Phosphate 16% 10% 30% 76% -52% Nitrogen 13% -6% 40% 39% -48% Gross margin by segment: Potash 53% 46% 51% 75% 56% Phosphate 9% 10% 26% 39% 8% Nitrogen 23% 25% 30% 30% 15% Total gross margin 29% 27% 36% 52% 26% % of revenue by country of origin: U.S. 48% 51% 50% 45% n/a Canada 35% 33% 34% 43% n/a Trinidad 16% 16% 15% 12% n/a % of revenue by selected country of destination: U.S. 67% 68% 67% 56% n/a Canada 5% 4% 4% 4% n/a Selected items as % of revenue: EBIT 1 23% 23% 30% 49% 30% Net income 14% 17% 21% 37% 25% D&A 6% 6% 6% 3% 8% Capex 10% 14% 11% 13% 46% Net cash from operations (US$bn) 2 $0.9 $0.9 $1.5 $3.8 $1.4 Return on tangible equity (avg) 26% 27% 26% 67% 18% Tangible equity to assets (avg) 42% 41% 55% 53% 47% ∆ shares out (avg) 1% -4% 1% -3% -4%

1 Includes equity investee contribution. 2 Before working capital changes. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

MOS 26,190 24,950 4.1x 4.0x 27x 15x AGU 10,100 11,600 1.2x 4.7x n/a n/a POT 33,030 36,690 7.7x 5.8x n/a n/a

MAJOR HOLDERS CEO Doyle 1% | Other insiders 1% | Cap World 5% | Barclays 4% | Primecap 3% | Jarislowsky 3% | Pabrai <1%


THE BOTTOM LINE Potash Corp. has enjoyed rapid business expansion since 2003 when global demand for potash started outstripping supply. By 2007, demand was at available capacity, which led to a near tripling of the company’s average potash price in 2008. The market, however, proved to be not immune from cyclicality as economic weakness led to a decline in global fertilizer demand since mid-2008. Despite the slowdown, long-term drivers of the business – growth in global population and GDP leading to greater demand for food – remain intact. Our main concern is whether industry growth will translate into shareholder value creation to the extent implied by the stock’s 4-5% earnings yield on 2010 EPS guidance. The margin of safety appears low.


http://www.potashcorp.com/media/pdf/investor_relations/speeches/POT_2010_GSAF_Conference.pdf�

http://www.potashcorp.com/media/pdf/investor_relations/industry_overview/2009/POT_OverviewBook_09.pdf�


…additional insight into Potash: SLIDES FROM COMPANY PRESENTATION, FEBRUARY 2010



MARKET PRICES OF SELECTED COMMODITIES, monthly averages, updated February 2010



TransDigm (TDG) – Third Point Cleveland, OH, 216-706-2939

Capital Goods: Aerospace and Defense www.transdigm.com


Price: $48.03 (as of 2/12/10)


Ownership Data FYE 9/30/11 3.38 3.43 9 EV / LTM EBITDA 12x Insider ownership: 0% FYE 9/29/12 3.69 3.86 3 EV / LTM EBIT 12x Insider buys (last six months): 0 LT EPS growth 12.8% 12.8% 4 P / tangible book n/m Insider sales (last six months): 18 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 91% Date Actual Estimate LTM EBIT yield 8% # of institutional owners: 409 2/10/10 $0.67 $0.71 LTM pre-tax ROC >100%


($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 9/30/03 9/30/04 9/30/05 9/30/06 9/30/07 9/30/08 9/30/09 1/2/10 12/27/08 1/2/10 Revenue 52 301 374 435 593 714 762 765 181 184 Gross profit 12 137 184 221 309 386 429 428 104 103 EBIT 5 95 138 118 234 299 335 329 83 77 Net income (6) 14 35 25 89 133 163 124 40 1 Diluted EPS (0.13) 0.29 0.75 0.53 1.83 2.56 3.10 2.36 0.75 0.01 Cash from ops 17 111 81 3 112 190 197 191 66 60 Capex 1 5 8 8 10 11 13 15 2 4 Free cash flow 16 106 73 (5) 102 179 184 176 65 56 Cash & investments

99 104 61 106 159 190 162 149 162



1,041 1,086 1,104 1,583 1,711 1,835 1,908 1,771 1,908

Total assets

1,346 1,428 1,417 2,061 2,256 2,454 2,505 2,320 2,505 Short-term debt

4 3 0 0 0 0 0 0 0


41 140 43 67 89 100 101 119 101 Long-term debt

890 887 925 1,358 1,357 1,357 1,770 1,357 1,770

Total liabilities

1,049 1,095 1,054 1,574 1,602 1,635 2,064 1,644 2,064 Preferred stock

0 0 0 0 0 0 0 0 0

Common equity

297 333 363 488 654 819 441 676 441 EBIT/capital employed

65% >100% 86% 99% >100% >100% >100% n/m n/m


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BUSINESS OVERVIEW TransDigm makes commercial/military aircraft components. INVESTMENT HIGHLIGHTS

• Niche supplier of aircraft components in a highly fragmented industry. Based on Frost & Sullivan, * the industry has ~1,600 businesses, of which nearly 90% have less than $100 million of revenue.

• Claims to be sole-source supplier of products representing 80% of revenue based on fiscal 2009 revenue, pro-forma for acquisitions. Management also estimates 95% of revenue is from proprietary products for which TransDigm owns the design.

• Aftermarket contributes 60% of revenue and a “much higher” percentage of EBITDA, based on the higher-margin profile of aftermarket sales versus sales to original equipment manufacturers (OEM).

• 65% of revenue is from commercial customers (40% aftermarket/25% OEM) and 32% from military customers (19% aftermarket/13% OEM).

• Low exposure to old aircraft platforms. Less than 5% of revenue is attributable to platforms such as B737/747 Classics, A300/310, and MD11/80/90.

• 50% gross margin reflects highly-engineered products and strong competitive position. Nearly all of the products are manufactured in the U.S.

• Cash-generative business due to low capital intensity (capex ~2% of revenue). Fiscal 2009 FCF was $184 million (F1Q10 FCF: $56 million).

• Shares trade on 7% trailing FCF yield. INVESTMENT RISKS & CONCERNS

• $1.6 billion of net debt as of January 2, 2010. TransDigm took on an incremental $425 million of debt to pay a special dividend in October 2009. Post-dividend net debt to trailing EBITDA is 4.5x.

• Organic revenue fell 7% y-y in fiscal 1Q10 due to “lower commercial OEM and aftermarket demand partially offset by higher defense sales.” The acceleration of organic revenue decline (from -2% y-y in fiscal 2009) may point to lag effects of the economic slowdown on aerospace markets.

• Acquisition-led growth increases execution risk. TransDigm has acquired 27 businesses since its founding in 1993, including 12 since 2006. Revenue grew at a 19% CAGR 1993-2009 and EBITDA margin rose from ~20% in 2003 to ~50% in 2009.

• Concentrated customer base. Boeing, Airbus and the U.S. Department of Defense are key customers.

* As reported on page 19 in the January 2010 TransDigm presentation.


FYE September 30 2005 2006 2007 2008 2009 YTD

1/2/10 ∆ revenue 24% 16% 36% 20% 7% 2% ∆ revenue (organic) n/a 11% 14% 9% -2% -7% Revenue ($mn) 374 435 593 714 762 184 Revenue by product offering: Actuators and controls 13% 11% 12% 14% 16% n/a Ignition systems 19% 16% 13% 12% 13% n/a Gear pumps 13% 12% 11% 9% 9% n/a Power conditioning devices 7% 9% 7% 7% 8% n/a Specialized valves 6% 7% 8% 7% 7% n/a AC/DC electric motors 4% 7% 6% 6% 7% n/a Engineered connectors 10% 10% 8% 7% 6% n/a Other products 27% 28% 35% 38% 34% n/a % of revenue by geography: 1 U.S. 78% 76% 76% 80% 80% n/a International 22% 24% 24% 20% 20% n/a Revenue growth by geography: 1 U.S. 27% 14% 35% 27% 7% n/a International 17% 26% 39% 1% 4% n/a Selected items as % of revenue: Gross profit 49% 51% 52% 54% 56% 56% EBIT 2 37% 38% 39% 42% 44% 41% Net income 9% 6% 15% 19% 21% 17% D&A 5% 4% 4% 4% 4% 4% Capex 2% 2% 2% 2% 2% 2% ∆ shares out (avg) 0% 0% 3% 5% 1% 0%

1 “International” is assumed to equal “export sales” as reported by TransDigm. 2 2006 EBIT excludes refinancing costs.

• Backlog represents 50+% of FY09 revenue, making new orders critical. The backlog of $427 million as of January 2, 2010 is roughly flat y-y.

• EV-to-revenue is over 5x based on fiscal 2010 revenue guidance of $800-831 million (up 5-9% y-y). Shares trade on 15-17x adjusted EPS guidance of $2.95-3.15 (down 4-10% y-y) in fiscal 2010.


MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

HON 28,890 33,700 1.1x n/m 16x 13x GR 7,880 9,080 1.4x 11.2x 14x 13x TDG 2,350 3,960 5.2x n/m 16x 14x

MAJOR HOLDERS CEO Howley 2% | Other insiders 3% | Berkshire Partners 9% Pennant 8% | Tiger 6% | William Blair 5% | Times Sq. 5%


THE BOTTOM LINE TransDigm differentiates itself from other aircraft component suppliers through above-average revenue predictability and gross margins. This is due to large aftermarket exposure and high entry barriers as a result of proprietary component designs. The high-margin, low capital-intensity business model remains cash-generative despite revenue pressure from weakening commercial aerospace markets. Our key concern is high financial leverage, with net debt at 4.5x trailing EBITDA after a $400+ million special dividend payment in late 2009. The 7% trailing FCF yield is not sufficient to compensate for this risk.


http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzY3MTE1fENoaWxkSUQ9MzYyMzU0fFR5cGU9MQ==&t=1�


Reduced or Eliminated Superinvestor Holdings

HSN (HSNI) – Weitz St Petersburg, FL, 727-872-1000

Services: Retail (Catalog & Mail Order), Member of S&P SmallCap 600 www.hsni.com


Price: $19.57 (as of 2/12/10)

Month # of P/E FYE 12/31/08 n/m 52-week range: $3.33 - $21.21 Latest Ago Ests P/E FYE 12/31/09 19x Market value: $1.1 billion This quarter $0.46 $0.46 2 P/E FYE 12/31/10 17x Enterprise value: $1.2 billion Next quarter 0.25 0.21 1 P/E FYE 12/31/11 13x Shares out: 56.4 million FYE 12/31/09 1.04 1.05 2 EV / LTM revenue 0.5x

Ownership Data FYE 12/31/10 1.16 1.20 2 EV / LTM EBITDA n/m Insider ownership: 34% FYE 12/31/11 1.51 1.51 1 EV / LTM EBIT n/m Insider buys (last six months): 0 LT EPS growth n/a n/a n/a P / tangible book 27.9x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: 62% Date Actual Estimate LTM EBIT yield -223% # of institutional owners: 375 11/12/09 $0.29 $0.18 LTM pre-tax ROC -906%

Operating Performance and Financial Position ($ millions, except Fiscal Years Ended LTME FQE FQE per share data)

12/31/05 12/31/06 12/31/07 12/31/08 9/30/09 9/30/08 9/30/09

Revenue

2,671 2,878 2,908 2,824 2,690 672 641 Gross profit

1,023 1,113 1,088 985 946 236 237

EBIT

195 213 170 (3,102) (2,771) 12 36 Net income

223 123 165 (2,391) (2,119) 2 17

Diluted EPS

2.28 2.36 1.86 (42.48) (37.71) 0.09 0.29 Cash from ops

203 140 129 137 237 13 43

Capex

36 36 49 40 38 11 6 Free cash flow

167 104 80 97 199 1 37

Cash & investments

53 6 178 239 56 239 Total current assets

829 596 711 724 624 724

Intangible assets

3,468 3,456 262 261 3,150 261 Total assets

4,458 4,221 1,153 1,155 3,950 1,155

Short-term debt

0 0 15 21 11 21 Total current liabilities

488 449 404 407 369 407

Long-term debt

0 0 394 357 377 357 Total liabilities

1,335 1,278 894 854 1,550 854

Preferred stock

0 0 0 0 0 0 Common equity

3,124 2,943 258 301 2,400 301

EBIT/capital employed

50% 47% -1037% -906% n/m n/m Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW HSN sells third-party and private-label merchandise directly to consumers in the U.S. via the HSN television network, HSN.com and other websites, and Cornerstone catalogs. HSN was spun-off from IAC/InterActiveCorp in 2008. INVESTMENT HIGHLIGHTS

• Multi-channel retailer with 37% of revenue from the Internet, based on YTD through September 2009 revenue (up from 29% in 2006). TV and print account for 52% and 12% of YTD total revenue.

• U.S. online retail sales to grow at a 10% CAGR from $141 billion in 2008 to $229 billion in 2013. * Internet retailing should gain further share versus brick-and-mortar (2008: $2.9 trillion). Catalog and TV markets were $114 billion and $7 billion in ‘08.

• Strong direct-to-consumer franchises. HSN TV reaches 93 million homes and has 4.6 million active customers (80%+ are female). HSN.com is one of the top 10 trafficked e-commerce sites, and has over a quarter million unique users per day. Cornerstone distributes over 200 million catalogs annually.

• Owns #2 U.S. TV home shopping network behind QVC (owned by Liberty Media Interactive) and ahead of ShopNBC (owned by ValueVision Media). HSN TV sold 28 million units YTD through 9/30/09 versus QVC’s 74 million and ShopNBC’s 3 million.

• Shares trade at 10% FCF yield based on average annual free cash flow during 2006-YTD 9/30/09.


• 50%+ of revenue is from products for the home. The weak housing market is a headwind for sales of big-ticket, discretionary home furnishings and other home products. Cornerstone and HSN segments derive 66% and ~50% of revenue from home items.

• Internet revenue is down 3% YTD through September 2009. The company depends on the online channel for growth as print and TV channels are likely to face growth challenges longer-term.

• Channel transitioning represents challenges. HSN has a ~25% share of the U.S. TV shopping market but a much smaller share on the Internet, where it is exposed to more intense competition.

• Liberty Media owns 32%. The interests of Liberty founder John Malone may conflict with those of HSN shareholders, as Liberty owns rival QVC.

• $377 million of debt and $239 million of cash. * Source: Forrester Research. Excluded from Internet retailing are auto-sales, travel and prescription drugs. TV market based on QVC, HSN ShopNBC. Additional sources: Shop.org, E-Stats, U.S. Retail Trade Census, and TNS.


FYE December 31 2006 2007 2008 YTD

9/30/09 ∆ revenue 8% 1% -3% -7% ∆ Internet revenue n/a 15% 5% -3% Revenue ($bn) 2.9 2.9 2.8 1.9 % of revenue from Internet 29% 33% 36% 37% % of revenue by segment: HSN 2 65% 65% 69% 73% Cornerstone 3 35% 35% 31% 27% Revenue growth by segment: HSN 0% 0% 3% -1% Cornerstone 4 27% 2% -15% -19% EBITDA margin by segment: 5 HSN 12% 9% 8% 9% Cornerstone 7% 6% 0% 0% Total EBITDA margin 10% 8% 6% 6% Selected items as % of revenue: Gross profit 39% 37% 35% 36% EBIT 6 7% 6% 3% 4% Net income 6 5% 4% -85% 2% D&A 7 4% 2% 2% 2% Capex 1% 2% 1% 1% HSN product mix by revenue: Home & other 49% 50% 52% 53% Health & beauty 20% 19% 19% 19% Jewelry 18% 18% 16% 16% Fashion (apparel & accessories) 13% 13% 13% 12% ∆ shares out (avg) n/m n/m 0% 0%

1 Figures are on combined basis through the spin-off from IAC/InterActiveCorp in August 2008 and on a consolidated basis thereafter. 2 Includes TV home shopping and HSN.com (29% of YTD segment revenue). 3 Includes catalogs and related websites (56% of YTD segment revenue). 4 2006 revenue growth at Cornerstone reflects its acquisition in April 2005. 5 Based on adjusted EBITDA (excluding non-cash comp, asset dispositions, intangibles impairments, pro forma M&A adjustments, and one-time items). 6 EBIT/Net income excludes/includes asset impairments of $3.2 billion in 2008. 7 Includes amortization of intangibles and cable and satellite distribution fees. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / T. Book

This FY P/E

Next FY P/E

AMZN 53,190 46,930 1.9x 13.2x 41x 32x EBAY 28,150 23,210 2.7x 4.1x 13x 12x LINTA 6,480 12,470 1.6x n/m 32x 16x SNI 6,400 6,230 4.0x 10.5x 18x 16x VVTV 120 110 .2x 1.8x n/a n/a HSNI 1,100 1,240 .5x 27.8x 19x 17x

MAJOR HOLDERS Insiders <1% | Liberty Media 32% | Lord Abbett 7% | Barclays 5% | BlackRock 5% | T Rowe 4% | Acadian 4%


THE BOTTOM LINE QVC is the second-largest TV home shopping network in the U.S. and has built up a material presence in Internet retailing, with $1 billion of Internet-related revenue (37% of total revenue). Growth remains pressured due to the weak economy and a declining catalog business. Despite these challenges and stiff online competition, HSN continues to generate significant FCF. With shares trading at 10% of average annual FCF since 2006, the valuation is interesting but not compelling.



…additional insight into HSN:

SLIDES FROM COMPANY PRESENTATION, JANUARY 2010 Access the full presentation at http://bit.ly/b0ABQ1


http://bit.ly/b0ABQ1�


VistaPrint (VPRT) – Lone Pine Hamilton, Bermuda, 441-295-2244

Services: Printing Services www.vistaprint.com


Price: $54.91 (as of 2/12/10)

Month # of P/E FYE 6/30/09 44x 52-week range: $22.18 - $59.92 Latest Ago Ests P/E FYE 6/30/10 n/a Market value: $2.4 billion This quarter n/a n/a n/a P/E FYE 6/30/11 n/a Enterprise value: $2.2 billion Next quarter n/a n/a n/a P/E FYE 6/30/12 n/a Shares out: 43.4 million FYE 1/0/00 n/a n/a n/a EV / LTM revenue 3.7x

Ownership Data FYE 12/30/00 n/a n/a n/a EV / LTM EBITDA n/m Insider ownership: 5% FYE 12/30/01 n/a n/a n/a EV / LTM EBIT 29x Insider buys (last six months): 0 LT EPS growth n/a n/a n/a P / tangible book 7.0x Insider sales (last six months): 0 Latest Quarterly EPS Surprise Greenblatt Criteria Institutional ownership: n/a Date Actual Estimate LTM EBIT yield 3% # of institutional owners: n/a n/a n/a n/a LTM pre-tax ROC 50%

Operating Performance and Financial Position ($ millions, except Fiscal Years Ended LTME FQE FQE per share data) 6/30/03 6/30/04 6/30/05 6/30/06 6/30/07 6/30/08 6/30/09 12/31/09 12/31/08 12/31/09 Revenue 35 59 91 152 256 401 516 602 139 195 Gross profit 20 35 54 102 166 247 324 385 88 127 EBIT 1 3 (16) 19 27 41 62 76 21 31 Net income 0 0 (21) 17 27 40 56 69 19 27 Diluted EPS 0.00 0.03 (1.85) 0.45 0.60 0.87 1.25 1.55 0.42 0.59 Cash from ops 4 9 (7) 35 54 88 120 138 44 58 Capex 5 18 21 28 67 70 84 93 29 32 Free cash flow (1) (9) (27) 7 (13) 18 37 45 15 26 Cash & investments

20 26 108 108 130 134 159 111 159



5 4 4 5 5 7 7 6 7

Total assets

42 66 171 235 316 370 443 321 443 Short-term debt

0 1 3 3 3 8 6 9 6


9 17 24 36 49 67 89 72 89 Long-term debt

6 16 23 22 20 11 0 11 0

Total liabilities

15 33 47 59 74 84 97 89 97 Preferred stock

44 71 0 0 0 0 0 0 0

Common equity

(17) (38) 124 176 243 286 347 231 347 EBIT/capital employed

47% -123% 71% 46% 40% 44% 50% n/m n/m


$0

$10

$20

$30

$40

$50

$60

$70

Jan 10Jan 09Jan 08Jan 07Jan 06



BUSINESS OVERVIEW Vistaprint provides marketing products and services to small businesses and individuals. It has 2,000 employees and operates 20 websites serving customers in 120+ countries. INVESTMENT HIGHLIGHTS

• Targets ~$25 billion market opportunity based on 50 million small offices/home offices (SOHOs) in Europe and North America and average SOHO marketing spend of roughly $500 per annum.

• Generates revenue from customized manufactured products, such as business cards, brochures, promotional merchandise, and digital services, including web design/hosting and email marketing.

• Online/offline model. Vistaprint owns 20 websites and markets online. Products are mainly produced internally at two facilities in Canada and Holland, which cost a combined $200 million to build.

• Competitive advantages include lower customer acquisition costs versus storefront print and design firms, scale (5+ times larger than next online rival), and technology (owns 40 patents related to design software and online order processing/aggregation).

• Growth drivers: 1) increase average order value via additional products (business cards represent less than 40% of FY09 revenue, down from 60%+ in FY04); 2) international expansion and 3) further penetration of home market (consumers accounted for 15% of FY09 revenue, up from 7% in FY04).

• Two-thirds of orders are from repeat customers. Vistaprint averaged 57,000 daily orders in the quarter ended 12/31/09. It had 8.0 million unique customers in FY09, of which 5.6 million were new.

• Strong balance sheet with $153 million net cash. INVESTMENT RISKS & CONCERNS

• Competition from Internet businesses (Overnight Prints, Shutterfly, Web.com), wholesale printers (Taylor), office superstores (Staples, OfficeMax), and traditional storefront printing companies.

• Valuation assumes continued high growth. EV-to-revenue is 3.5x and P/E is 38x based on midpoint of FY10 revenue and GAAP EPS guidance of $675-685 million (+31-33%) and $1.44-1.52 (+15-22%).

• Adopted “poison pill” in 2009. Vistaprint moved its incorporation from Bermuda to Holland to protect itself from “unsolicited takeover bids.”

• Recent selling by CEO Keane (46) who founded Vistaprint in 1995 and remains a large holder.


FYE June 30 2005 2006 2007 2008 2009 YTD

12/31/09 ∆ revenue 55% 67% 68% 57% 29% 34% ∆ period-end staff 35% 74% 60% 45% 14% 27% Revenue ($mn) 91 152 256 401 516 340 % of revenue by geography: 1 U.S. 73% 71% 68% 62% 61% 53% International 27% 29% 32% 38% 39% 47% Revenue growth by geography: U.S. 46% 64% 60% 44% 26% 20% International 86% 76% 89% 84% 33% 55% Selected items as % of revenue: Gross profit 60% 67% 65% 62% 63% 64% R&D 12% 10% 11% 11% 12% 11% EBIT 2 6% 12% 11% 10% 12% 13% Net income -18% 13% 11% 10% 11% 12% D&A 6% 5% 6% 6% 7% 6% Capex 3 23% 18% 26% 17% 16% 16% Selected operating metrics: Web sessions (mn) 4 65 100 131 193 236 146 Change (y-y) 39% 56% 31% 47% 22% 35% Conversion rate 5 4.7% 4.7% 5.5% 5.9% 6.4% 6.5% Avg order value ($) 6 29 30 33 33 33 36 Change (y-y) 10% 4% 9% 1% -2% 6% Repeat client bookings 57% 62% 63% 64% 66% 66% Return on tang. equity n/m 49% 19% 20% 22% 14% Tangible equity/assets -63% 34% 73% 76% 77% 75% ∆ shares out (avg) 7 3% 192% 28% 3% -1% -2%

1 Based on country-specific website through which client order is transacted. 2 2005 excludes $21 million loss on contract termination (incl. in net income). 3 Includes capitalization of software and website development costs. 4 A session is measured each time a computer user visits a Vistaprint website. 5 Number of client orders divided by total number of sessions during a period. 6 Dollar bookings divided by total number of customer orders for a given period. 7 2006/07 share increases reflect conversion of preferred into common shares. COMPARABLE PUBLIC COMPANY ANALYSIS

MV ($mn)

EV ($mn)

EV / Rev.

P / Tang. Book

This FY P/E

Next FY P/E

CTCT 530 420 3.3x 5.0x 51x 28x WWWW 120 80 .8x 3.2x 8x 7x VPRT 2,380 2,230 3.7x 7.0x n/a n/a

MAJOR HOLDERS CEO Keane 7% | Other insiders 2% | FMR 12% | Janus 10% | Lone Pine 6% | Axa 5% | William Blair 5% | Wells Fargo 4% RATINGS VALUE Intrinsic value materially higher than market value? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? EXPLOSIVENESS 5%+ probability of 5x upside in one year?

THE BOTTOM LINE Vistaprint has automated the entire graphic design and print process via an integrated online/offline model. By combining online order processing and aggregation with high-volume printing facilities, the company has materially reduced the costs of traditional short-run printing. This value proposition has allowed Vistaprint to penetrate the large and fragmented market for small business and consumer marketing products and services. It has grown revenue organically from $6 million in fiscal 2001 to over $600 million in the last twelve months, making it one of the largest online providers of small business marketing services. As the valuation already assumes continued rapid growth and execution, we are not compelled to own the shares.



…additional insight into Vistaprint: SNAPSHOT OF VALUE PROPOSITION

According to Vistaprint, the company has “brought long-run, low-cost economics to short-run production jobs for the small business marketing market, a market opportunity of over $25 billion.”

SELECTED QUARTERLY OPERATING METRICS, Q3 FY06 – Q2 FY10

% of Revenue Web

Average

Repeat

Revenue Non-US Sessions Conversion Order New Customer

($mn) Markets (mn) Rate Value Customers Bookings

FY06 Q3 42 30% 25 5.2% $30.16 528,000 63%

FY06 Q4 45 29% 27 5.2% $29.85 564,000 63%

FY07 Q1 50 30% 27 5.6% $31.30 603,000 64%

FY07 Q2 64 34% 34 4.9% $35.94 687,000 64%

FY07 Q3 69 32% 35 5.6% $33.02 800,000 63%

FY07 Q4 72 32% 35 5.9% $32.33 850,000 63%

FY08 Q1 79 34% 44 5.4% $31.71 975,000 64%

FY08 Q2 105 39% 53 5.4% $35.50 1,100,000 63%

FY08 Q3 106 38% 48 6.4% $32.54 1,200,000 64%

FY08 Q4 110 39% 48 6.4% $34.00 1,200,000 65%

FY09 Q1 114 38% 47 6.9% $33.79 1,200,000 66%

FY09 Q2 139 42% 61 6.5% $33.57 1,500,000 65%

FY09 Q3 127 38% 66 6.0% $31.06 1,500,000 66%

FY09 Q4 135 39% 62 6.4% $33.31 1,400,000 67%

FY10 Q1 145 41% 65 6.4% $34.23 1,400,000 67%

FY10 Q2 195 51% 80 6.6% $36.63 1,800,000 66%

Source: Company data.



Snapshot of 100 Superinvestor Holdings In Alphabetical Order

Recent YTD Market Enter. Price Price Value Value Company / Ticker Industry Notable Shareholders ($) ∆ ($mn) ($mn) Website Accenture / ACN Business Services Cap Re, Weitz 40.49 -2% 28,903 24,901 www.accenture.com

Air Transport / ATSG Air Courier Acadian, Pabrai, RenTech 2.35 -11% 149 465 www.atsginc.com

Alleghany / Y Conglomerates Centaur, Eagle, Royce 263.36 -5% 2,341 2,278 www.alleghany.com

Alliance One / AOI Tobacco Baupost, RenTech 5.04 3% 449 1,450 www.aointl.com

AllianceBernstein / AB Investment Services Perkins, Royce 26.53 -6% 2,689 2,689 alliancebernstein.com

ATP Oil & Gas / ATPG Oil & Gas Operations Aletheia, Greenlight, Soros 16.38 -10% 829 1,965 www.atpog.com

Audiovox / VOXX Comms Equipment Baupost, Kahn, Smith 6.86 -3% 157 118 www.audiovox.com

Automatic Data / ADP Business Services Cap Re 40.59 -5% 20,491 18,751 www.adp.com

AutoNation / AN Retail (specialty) Cascade, ESL, Weitz 17.72 -7% 3,043 3,952 www.autonation.com

BIDZ.com / BIDZ Retail (online) Bares, Munder 1.94 -3% 43 44 www.bidz.com

Biogen Idec / BIIB Biotechnology & Drugs Icahn, Primecap 55.21 3% 14,885 14,721 www.biogenidec.com.

Blockbuster / BBI Recreational Activities Icahn, Prentice, Third Point 0.38 -43% 74 1,041 www.blockbuster.com

Boston Scientific / BSX Medical Equipment Greenlight, Paulson 7.39 -18% 11,165 16,219 www.bostonscientific.com

BreitBurn Energy / BBEP Oil & Gas - Integrated Acadian, Baupost 15.22 44% 803 1,432 www.breitburn.com

Brown & Brown / BRO Insurance (miscellaneous) Royce, Ruane Cunniff 17.70 -2% 2,514 2,590 www.bbinsurance.com

CapitalSource / CSE Regional Banks Baupost, Farallon, Pabrai 5.01 26% 1,619 nm www.capitalsource.com

Cardinal Health / CAH Biotechnology & Drugs Greenlight, Pzena 33.38 4% 12,066 12,431 www.cardinal.com

CareFusion / CFN Medical Equipment Greenlight, Pzena 25.17 1% 5,572 5,782 www.carefusion.com

Chesapeake Energy / CHK Oil & Gas Operations Southeastern 24.96 -4% 16,167 28,186 www.chk.com

Chipotle / CMG Restaurants Cap World, Centaur 104.87 19% 3,324 3,058 www.chipotle.com

CIT Group / CIT Regional Banks Baupost, Icahn 32.25 17% 6,450 nm www.cit.com

Citigroup / C Money Center Banks Fairholme, Paulson 3.18 -4% 90,577 nm www.citigroup.com

Coca-Cola Company / KO Beverages (non-alcoholic) Berkshire, Cap Re 53.98 -5% 124,316 126,962 thecoca-colacompany.com

Contango Oil & Gas / MCF Oil & Gas Operations Dreman, Sellers 52.15 11% 827 738 www.contango.com

Corrections Corp. / CXW Business Services Kalmar, Pershing Square 19.57 -20% 2,269 3,373 correctionscorp.com

Cresud / CRESY Crops Pabrai 12.72 -12% 634 907 www.cresud.com.ar

DDi Corp. / DDIC Electronic Instruments Miller, RenTech, Riley 4.33 -11% 86 61 www.ddiglobal.com

Dell / DELL Computer Hardware Fairfax, Southeastern, Weitz 13.84 -4% 27,080 17,747 www.dell.com

Dillard's / DDS Retail (dep't & discount) Acadian, Southeastern 16.42 -11% 1,212 2,113 www.dillards.com

DineEquity / DIN Restaurants MSD, Southeastern 27.80 14% 489 2,811 www.dineequity.com

DIRECTV / DTV Broadcasting & Cable Baupost, Southeastern 30.69 -8% 29,366 33,236 www.directv.com

EMC / EMC Computer Storage Pershing Square, Primecap 17.12 -2% 35,138 31,543 www.emc.com

Energizer Holdings / ENR Electronic Instruments Weitz 54.79 -11% 3,826 5,979 www.energizer.com

Enzon Pharma / ENZN Biotechnology & Drugs Baupost, Icahn, RenTech 9.13 -13% 415 555 www.enzon.com

Exxon Mobil / XOM Oil & Gas Operations Centaur, T Rowe 64.80 -5% 306,310 303,290 www.exxonmobil.com

Fair Isaac / FICO Business Services Southeastern 21.06 -1% 979 1,212 www.fairisaac.com

Fairfax Financial / FRFHF Property & Casualty Centaur, Markel, Pabrai 355.54 -9% 7,501 7,468 www.fairfax.ca

Fidelity National / FNF Property & Casualty Artisan, Centaur, Pennant 13.80 3% 3,180 3,749 www.fnf.com

Gastar Exploration / GST Oil & Gas - Integrated Palo Alto, Weiss 4.56 -5% 228 166 www.gastar.com

General Electric / GE Conglomerates Dodge & Cox, Fairfax 15.55 3% 165,569 551,569 www.ge.com

Hallmark Financial / HALL Property & Casualty Bares, Newcastle 7.63 -4% 154 129 www.hallmarkgrp.com

Home Depot / HD Retail (home improvement) Dodge & Cox, Markel 29.00 0% 49,312 57,012 homedepot.com

Horsehead / ZINC Metal Mining Driehaus, Pabrai, Royce 10.47 -18% 454 309 www.horsehead.net

HSN / HSNI Retail (online) Acadian 19.57 -3% 1,104 1,243 www.hsn.com

Hyatt Hotels / H Hotels & Motels Pershing Square, Singapore 29.34 -2% 4,930 4,574 www.hyatt.com

Intelligent Systems / INS Software & Programming Weitz 1.09 16% 10 7 www.intelsys.com

Interactive Intell. / ININ Software & Programming Bares, Essex 17.21 -7% 297 232 www.inin.com

International Assets / IAAC Investment Services Bares, Leucadia, Steinberg 15.28 5% 268 374 www.intlassets.com

International Coal / ICO Coal Chou, Fairfax, Steelhead 3.88 1% 695 989 www.intlcoal.com

Investors Title / ITIC Property & Casualty Bridgeway, Markel 35.41 15% 81 72 www.invtitle.com



In Alphabetical Order (continued)

Recent YTD Market Enter. Price Price Value Value Company / Ticker Industry Notable Shareholders ($) ∆ ($mn) ($mn) Website ITC Holdings / ITC Electric Utilities Bamco, Markel 52.70 1% 2,675 5,026 www.itc-holdings.com

Johnson & Johnson / JNJ Major Drugs Berkshire, Fairfax 62.72 -3% 173,051 170,314 www.jnj.com

Kraft Foods / KFT Food Processing Berkshire, Pershing Square 29.09 7% 42,932 60,661 kraftfoodscompany.com

Lab Corp. of America / LH Healthcare Facilities Brave Warrior, Centaur, Harris 71.76 -4% 7,621 8,866 /www.labcorp.com

Leucadia National / LUK Conglomerates Advisory, Fairholme 21.82 -8% 5,305 6,771 www.leucadia.com

Level 3 Comms / LVLT Communications Services Fairfax, Southeastern 1.38 -10% 2,263 7,991 www.level3.com

Lions Gate / LGF Motion Pictures Icahn, MHR, Third Point 5.23 -10% 616 949 www.lionsgate.com

McDonald's / MCD Restaurants Cap World, Markel 63.59 2% 68,626 77,507 www.mcdonalds.com

Molson Coors / TAP Beverages (alcoholic) Cap Re, Children's 38.90 -14% 7,198 8,177 www.molsoncoors.com

Monsanto / MON Chemical Manufacturing Lone Pine, Weitz 75.82 -7% 41,373 42,907 www.monsanto.com

Multimedia Games / MGAM Casinos & Gaming Baupost, Par, Royce 4.91 -18% 134 189 multimediagames.com

MVC Capital / MVC Misc. Financial Services Cannell, Centaur, Royce 11.45 -3% 278 340 www.mvccapital.com

Northrop Grumman / NOC Aerospace and Defense Centaur, Fairholme, Pzena 58.89 5% 17,830 18,849 northropgrumman.com

Osteotech / OSTE Medical Equipment Heartland, RenTech 3.40 6% 61 64 www.osteotech.com

Overstock.com / OSTK Retail (online) Chou, Fairfax 11.80 -13% 270 252 www.overstock.com

Patterson Companies / PDCO Medical Equipment Markel, Select Equity 28.76 3% 3,522 3,877 pattersoncompanies.com

Paychex / PAYX Business Services Cap World, Markel 29.53 -4% 10,672 10,385 www.paychex.com

Potash Corp. / POT Non-Metallic Mining Cap World, Pabrai 111.60 3% 33,031 36,687 www.potashcorp.com

Redwood Trust / RWT Real Estate Operations Cap Re, NWQ, Weitz 13.57 -6% 1,054 5,098 www.redwoodtrust.com

Republic Airways / RJET Airline Greenlight, Kleinheinz 5.31 -28% 183 2,327 republicairways.com

Republic Services / RSG Waste Management Blackstone, Cap World 26.03 -8% 9,912 17,072 republicservices.com

RSC Holdings / RRR Rental & Leasing Fairholme, GS, Jennison 6.83 -3% 706 2,935 www.rscrental.com

SandRidge Energy / SD Oil & Gas Operations Ares, Fairfax, Jennison 8.47 -10% 1,554 3,579 sandridgeenergy.com

Seabridge Gold / SA Gold & Silver Jennison, Royce 24.82 2% 933 919 www.seabridgegold.net

Seahawk Drilling / HAWK Oil Well Services Chilton, MHR, Pennant 21.82 -3% 254 248 seahawkdrilling.com

Silicon Storage / SSTI Semiconductors Miller, RenTech, Riley 2.84 11% 272 149 www.sst.com

Stamps.com / STMP Retail (online) Bares, RenTech 9.19 2% 145 100 www.stamps.com

Steak n Shake / SNS Restaurants Centaur, Eagle, Lion 345.00 6% 496 576 www.steaknshake.com

Stratasys / SSYS Computer Peripherals Bares, Riverbridge 25.65 49% 520 468 www.stratasys.com

Strayer Education / STRA Schools Lone Pine, Maverick, Weitz 206.26 -3% 2,890 2,796 strayereducation.com

Take-Two / TTWO Software & Programming Glenview, Icahn, Legg 9.65 -4% 803 839 www.take2games.com

Tandy Leather / TLF Apparel/Accessories Bares 3.70 -5% 38 32 tandyleatherfactory.com

Teck Cominco / TCK Metal Mining Pabrai 35.88 3% 21,124 28,050 www.teck.com

Terex / TEX Misc. Capital Goods Eton Park, Pabrai 18.78 -5% 2,030 3,000 www.terex.com

Texas Industries / TXI Construction Materials Shamrock, Southeastern 34.56 -1% 959 1,446 www.txi.com

The Knot / KNOT Computer Services T Rowe, Weitz 9.74 -3% 329 200 www.theknot.com

Theravance / THRX Biotechnology & Drugs Baupost, Iridian, Litespeed 9.70 -26% 617 634 www.theravance.com

TransDigm / TDG Aerospace and Defense Pennant, Tiger 48.03 1% 2,355 3,963 www.transdigm.com

tw telecom / TWTC Communications Services Cap Re, Southeastern 15.04 -12% 2,258 3,095 www.twtelecom.com

USG / USG Construction Materials Berkshire, Fairfax, T Rowe 13.21 -6% 1,312 2,584 www.usg.com

ViaSat / VSAT Comms Equipment Baupost, Times Square 29.05 -9% 1,055 1,400 www.viasat.com

VistaPrint / VPRT Business Services Alydar, Lone Pine 54.91 -3% 2,384 2,231 www.vistaprint.co.uk

Vodafone / VOD Communications Services Dodge & Cox, Greenlight 21.91 -5% 115,283 171,030 www.vodafone.com

Walgreen / WAG Retail (drugs) Bares, Cap Re 33.49 -9% 32,994 32,221 www.walgreens.com

Wal-Mart / WMT Retail (dep't & discount) Barkshire, GMO, Markel 52.90 -1% 201,558 242,908 walmartstores.com

Weight Watchers / WTW Personal Services Bares, Cap World 28.92 -1% 2,228 3,690 weightwatchers.com

Winmark / WINA Misc. Financial Services Bares, Bremer 20.70 -4% 108 110 winmarkcorporation.com

Winthrop Realty / FUR Real Estate Operations Fairholme, Pamet, Raffles 11.69 8% 186 412 www.winthropreit.com

Yum! Brands / YUM Restaurants Cap Re, Southeastern 33.36 -5% 15,646 18,559 www.yum.com

Zenith National / ZNT Property & Casualty Artisan, Eagle, Royce 28.14 -5% 1,066 1,110 www.thezenith.com



By Market Value Market Enter. LTM LTM Recent ∆ to 52-Wk Value Value EBIT / EBIT / Price Low High Company / Ticker ($mn) ($mn) EV Capital Industry Notable Shareholders ($) ($) ($) Exxon Mobil / XOM 306,310 303,290 12% 25-50% Oil & Gas Operations Centaur, T Rowe 64.80 -5% 18% Wal-Mart / WMT 201,558 242,908 9% 0-25% Retail (dep't & discount) Barkshire, GMO, Markel 52.90 -12% 4% Johnson & Johnson / JNJ 173,051 170,314 9% 50-99% Major Drugs Berkshire, Fairfax 62.72 -26% 5% General Electric / GE 165,569 551,569 2% 0-25% Conglomerates Dodge & Cox, Fairfax 15.55 -63% 13% Coca-Cola Company / KO 124,316 126,962 6% 50-99% Beverages (non-alcoholic) Berkshire, Cap Re 53.98 -31% 10% Vodafone / VOD 115,283 171,030 3% 25-50% Communications Services Dodge & Cox, Greenlight 21.91 -29% 10% Citigroup / C 90,577 nm nm 0-25% Money Center Banks Fairholme, Paulson 3.18 -69% 71% McDonald's / MCD 68,626 77,507 9% 25-50% Restaurants Cap World, Markel 63.59 -21% 3% Home Depot / HD 49,312 57,012 8% 0-25% Retail (home improvement) Dodge & Cox, Markel 29.00 -40% 2% Kraft Foods / KFT 42,932 60,661 7% 25-50% Food Processing Berkshire, Pershing Square 29.09 -28% 3% Monsanto / MON 41,373 42,907 5% 25-50% Chemical Manufacturing Lone Pine, Weitz 75.82 -12% 23% EMC / EMC 35,138 31,543 5% 50-99% Computer Storage Pershing Square, Primecap 17.12 -44% 8% Potash Corp. / POT 33,031 36,687 4% 0-25% Non-Metallic Mining Cap World, Pabrai 111.60 -43% 13% Walgreen / WAG 32,994 32,221 10% 0-25% Retail (drugs) Bares, Cap Re 33.49 -36% 21% DIRECTV / DTV 29,366 33,236 7% 25-50% Broadcasting & Cable Baupost, Southeastern 30.69 -39% 12% Accenture / ACN 28,903 24,901 10% >99% Business Services Cap Re, Weitz 40.49 -35% 8% Dell / DELL 27,080 17,747 12% >99% Computer Hardware Fairfax, Southeastern, Weitz 13.84 -43% 25% Teck Cominco / TCK 21,124 28,050 5% 0-25% Metal Mining Pabrai 35.88 -93% 16% Automatic Data / ADP 20,491 18,751 10% >99% Business Services Cap Re 40.59 -21% 10% Northrop Grumman / NOC 17,830 18,849 13% 50-99% Aerospace and Defense Centaur, Fairholme, Pzena 58.89 -43% 3% Chesapeake Energy / CHK 16,167 28,186 nm nm Oil & Gas Operations Southeastern 24.96 -47% 20% Yum! Brands / YUM 15,646 18,559 8% 50-99% Restaurants Cap Re, Southeastern 33.36 -30% 11% Biogen Idec / BIIB 14,885 14,721 10% 50-99% Biotechnology & Drugs Icahn, Primecap 55.21 -24% 1% Cardinal Health / CAH 12,066 12,431 15% 25-50% Biotechnology & Drugs Greenlight, Pzena 33.38 -40% 3% Boston Scientific / BSX 11,165 16,219 nm nm Medical Equipment Greenlight, Paulson 7.39 -18% 59% Paychex / PAYX 10,672 10,385 7% >99% Business Services Cap World, Markel 29.53 -31% 11% Republic Services / RSG 9,912 17,072 9% 0-25% Waste Management Blackstone, Cap World 26.03 -42% 15% Lab Corp. of America / LH 7,621 8,866 11% 50-99% Healthcare Facilities Brave Warrior, Centaur, Harris 71.76 -26% 7% Fairfax Financial / FRFHF 7,501 7,468 24% >99% Property & Casualty Centaur, Markel, Pabrai 355.54 -9% 12% Molson Coors / TAP 7,198 8,177 5% 25-50% Beverages (alcoholic) Cap Re, Children's 38.90 -21% 32% CIT Group / CIT 6,450 nm nm nm Regional Banks Baupost, Icahn 32.25 -23% 9% CareFusion / CFN 5,572 5,782 15% >99% Medical Equipment Greenlight, Pzena 25.17 -31% 13% Leucadia National / LUK 5,305 6,771 nm nm Conglomerates Advisory, Fairholme 21.82 -53% 21% Hyatt Hotels / H 4,930 4,574 nm nm Hotels & Motels Pershing Square, Singapore 29.34 -12% 10% Energizer Holdings / ENR 3,826 5,979 11% 25-50% Electronic Instruments Weitz 54.79 -31% 26% Patterson Companies / PDCO 3,522 3,877 9% 50-99% Medical Equipment Markel, Select Equity 28.76 -44% 8% Chipotle / CMG 3,324 3,058 7% 25-50% Restaurants Cap World, Centaur 104.87 -54% 0% Fidelity National / FNF 3,180 3,749 9% >99% Property & Casualty Artisan, Centaur, Pennant 13.80 -13% 66% AutoNation / AN 3,043 3,952 10% 0-25% Retail (specialty) Cascade, ESL, Weitz 17.72 -48% 22% Strayer Education / STRA 2,890 2,796 6% >99% Schools Lone Pine, Maverick, Weitz 206.26 -30% 12% AllianceBernstein / AB 2,689 2,689 7% >99% Investment Services Perkins, Royce 26.53 -62% 13% ITC Holdings / ITC 2,675 5,026 6% >99% Electric Utilities Bamco, Markel 52.70 -39% 3% Brown & Brown / BRO 2,514 2,590 11% >99% Insurance (miscellaneous) Royce, Ruane Cunniff 17.70 -16% 15% VistaPrint / VPRT 2,384 2,231 3% 25-50% Business Services Alydar, Lone Pine 54.91 -60% 9% TransDigm / TDG 2,355 3,963 8% >99% Aerospace and Defense Pennant, Tiger 48.03 -38% 8% Alleghany / Y 2,341 2,278 6% >99% Conglomerates Centaur, Eagle, Royce 263.36 -16% 10% Corrections Corp. / CXW 2,269 3,373 9% 0-25% Business Services Kalmar, Pershing Square 19.57 -51% 34% Level 3 Comms / LVLT 2,263 7,991 2% 0-25% Communications Services Fairfax, Southeastern 1.38 -57% 28% tw telecom / TWTC 2,258 3,095 4% 0-25% Communications Services Cap Re, Southeastern 15.04 -57% 17% Weight Watchers / WTW 2,228 3,690 11% >99% Personal Services Bares, Cap World 28.92 -43% 4%



By Market Value (continued)

Market Enter. LTM LTM Recent ∆ to 52-Wk Value Value EBIT / EBIT / Price Low High Company / Ticker ($mn) ($mn) EV Capital Industry Notable Shareholders ($) ($) ($) Terex / TEX 2,030 3,000 nm nm Misc. Capital Goods Eton Park, Pabrai 18.78 -61% 36% CapitalSource / CSE 1,619 nm nm nm Regional Banks Baupost, Farallon, Pabrai 5.01 -82% 4% SandRidge Energy / SD 1,554 3,579 nm nm Oil & Gas Operations Ares, Fairfax, Jennison 8.47 -47% 77% USG / USG 1,312 2,584 nm nm Construction Materials Berkshire, Fairfax, T Rowe 13.21 -69% 50% Dillard's / DDS 1,212 2,113 nm nm Retail (dep't & discount) Acadian, Southeastern 16.42 -82% 23% HSN / HSNI 1,104 1,243 nm nm Retail (online) Acadian 19.57 -83% 8% Zenith National / ZNT 1,066 1,110 5% >99% Property & Casualty Artisan, Eagle, Royce 28.14 -34% 15% ViaSat / VSAT 1,055 1,400 3% 0-25% Comms Equipment Baupost, Times Square 29.05 -45% 13% Redwood Trust / RWT 1,054 5,098 nm nm Real Estate Operations Cap Re, NWQ, Weitz 13.57 -16% 43% Fair Isaac / FICO 979 1,212 11% 50-99% Business Services Southeastern 21.06 -54% 16% Texas Industries / TXI 959 1,446 nm nm Construction Materials Shamrock, Southeastern 34.56 -64% 37% Seabridge Gold / SA 933 919 2% 0-25% Gold & Silver Jennison, Royce 24.82 -40% 34% ATP Oil & Gas / ATPG 829 1,965 1% 0-25% Oil & Gas Operations Aletheia, Greenlight, Soros 16.38 -83% 40% Contango Oil & Gas / MCF 827 738 8% 0-25% Oil & Gas Operations Dreman, Sellers 52.15 -39% 5% BreitBurn Energy / BBEP 803 1,432 16% 0-25% Oil & Gas - Integrated Acadian, Baupost 15.22 -64% 0% Take-Two / TTWO 803 839 nm nm Software & Programming Glenview, Icahn, Legg 9.65 -42% 30% RSC Holdings / RRR 706 2,935 6% 0-25% Rental & Leasing Fairholme, GS, Jennison 6.83 -41% 32% International Coal / ICO 695 989 8% 0-25% Coal Chou, Fairfax, Steelhead 3.88 -72% 38% Cresud / CRESY 634 907 10% 0-25% Crops Pabrai 12.72 -54% 26% Theravance / THRX 617 634 nm nm Biotechnology & Drugs Baupost, Iridian, Litespeed 9.70 -1% 91% Lions Gate / LGF 616 949 3% >99% Motion Pictures Icahn, MHR, Third Point 5.23 -25% 39% Stratasys / SSYS 520 468 1% 0-25% Computer Peripherals Bares, Riverbridge 25.65 -70% 9% Steak n Shake / SNS 496 576 6% 0-25% Restaurants Centaur, Eagle, Lion 345.00 -71% 1% DineEquity / DIN 489 2,811 7% 0-25% Restaurants MSD, Southeastern 27.80 -81% 25% Horsehead / ZINC 454 309 nm nm Metal Mining Driehaus, Pabrai, Royce 10.47 -70% 33% Alliance One / AOI 449 1,450 12% 0-25% Tobacco Baupost, RenTech 5.04 -47% 18% Enzon Pharma / ENZN 415 555 0% 0-25% Biotechnology & Drugs Baupost, Icahn, RenTech 9.13 -49% 26% The Knot / KNOT 329 200 0% nm Computer Services T Rowe, Weitz 9.74 -43% 23% Interactive Intell. / ININ 297 232 6% >99% Software & Programming Bares, Essex 17.21 -57% 39% MVC Capital / MVC 278 340 3% >99% Misc. Financial Services Cannell, Centaur, Royce 11.45 -46% 8% Silicon Storage / SSTI 272 149 nm nm Semiconductors Miller, RenTech, Riley 2.84 -54% 1% Overstock.com / OSTK 270 252 1% >99% Retail (online) Chou, Fairfax 11.80 -43% 52% International Assets / IAAC 268 374 3% 0-25% Investment Services Bares, Leucadia, Steinberg 15.28 -54% 31% Seahawk Drilling / HAWK 254 248 nm nm Oil Well Services Chilton, MHR, Pennant 21.82 -12% 64% Gastar Exploration / GST 228 166 nm nm Oil & Gas - Integrated Palo Alto, Weiss 4.56 -61% 14% Winthrop Realty / FUR 186 412 7% 0-25% Real Estate Operations Fairholme, Pamet, Raffles 11.69 -50% 13% Republic Airways / RJET 183 2,327 9% 0-25% Airline Greenlight, Kleinheinz 5.31 -23% 100% Audiovox / VOXX 157 118 nm nm Comms Equipment Baupost, Kahn, Smith 6.86 -69% 18% Hallmark Financial / HALL 154 129 16% >99% Property & Casualty Bares, Newcastle 7.63 -22% 15% Air Transport / ATSG 149 465 0% nm Air Courier Acadian, Pabrai, RenTech 2.35 -93% 73% Stamps.com / STMP 145 100 5% 50-99% Retail (online) Bares, RenTech 9.19 -15% 13% Multimedia Games / MGAM 134 189 nm nm Casinos & Gaming Baupost, Par, Royce 4.91 -67% 32% Winmark / WINA 108 110 6% 25-50% Misc. Financial Services Bares, Bremer 20.70 -60% 11% DDi Corp. / DDIC 86 61 nm nm Electronic Instruments Miller, RenTech, Riley 4.33 -36% 19% Investors Title / ITIC 81 72 1% >99% Property & Casualty Bridgeway, Markel 35.41 -52% 1% Blockbuster / BBI 74 1,041 nm nm Recreational Activities Icahn, Prentice, Third Point 0.38 -66% 311% Osteotech / OSTE 61 64 nm nm Medical Equipment Heartland, RenTech 3.40 -29% 48% BIDZ.com / BIDZ 43 44 19% 25-50% Retail (online) Bares, Munder 1.94 -3% 149% Tandy Leather / TLF 38 32 15% 0-25% Apparel/Accessories Bares 3.70 -58% 10% Intelligent Systems / INS 10 7 nm nm Software & Programming Weitz 1.09 -50% 119%



By Sector Market Enter. P/E (Est.) Value Value This Next Sector Industry Company / Ticker Notable Shareholders ($mn) ($mn) FY FY Basic Materials Chemical Manufacturing Monsanto / MON Lone Pine, Weitz 41,373 42,907 23x 17x Basic Materials Non-Metallic Mining Potash Corp. / POT Cap World, Pabrai 33,031 36,687 na na Basic Materials Metal Mining Teck Cominco / TCK Pabrai 21,124 28,050 na na Basic Materials Gold & Silver Seabridge Gold / SA Jennison, Royce 933 919 na na Basic Materials Metal Mining Horsehead / ZINC Driehaus, Pabrai, Royce 454 309 nm 18x Capital Goods Aerospace and Defense Northrop Grumman / NOC Centaur, Fairholme, Pzena 17,830 18,849 10x 9x Capital Goods Aerospace and Defense TransDigm / TDG Pennant, Tiger 2,355 3,963 16x 14x Capital Goods Misc. Capital Goods Terex / TEX Eton Park, Pabrai 2,030 3,000 nm nm Capital Goods Construction Materials USG / USG Berkshire, Fairfax, T Rowe 1,312 2,584 nm nm Capital Goods Construction Materials Texas Industries / TXI Shamrock, Southeastern 959 1,446 nm >99x Conglomerates Conglomerates General Electric / GE Dodge & Cox, Fairfax 165,569 551,569 16x 13x Conglomerates Conglomerates Leucadia National / LUK Advisory, Fairholme 5,305 6,771 na na Conglomerates Conglomerates Alleghany / Y Centaur, Eagle, Royce 2,341 2,278 25x 15x Consumer Cyclical Apparel/Accessories Tandy Leather / TLF Bares 38 32 na na Consumer Non-Cyclical Beverages (non-alcoholic) Coca-Cola Company / KO Berkshire, Cap Re 124,316 126,962 16x 14x Consumer Non-Cyclical Food Processing Kraft Foods / KFT Berkshire, Pershing Square 42,932 60,661 14x 14x Consumer Non-Cyclical Beverages (alcoholic) Molson Coors / TAP Cap Re, Children's 7,198 8,177 11x 10x Consumer Non-Cyclical Crops Cresud / CRESY Pabrai 634 907 22x 27x Consumer Non-Cyclical Tobacco Alliance One / AOI Baupost, RenTech 449 1,450 6x na Energy Oil & Gas Operations Exxon Mobil / XOM Centaur, T Rowe 306,310 303,290 11x 9x Energy Oil & Gas Operations Chesapeake Energy / CHK Southeastern 16,167 28,186 10x 10x Energy Oil & Gas Operations SandRidge Energy / SD Ares, Fairfax, Jennison 1,554 3,579 10x 10x Energy Oil & Gas Operations ATP Oil & Gas / ATPG Aletheia, Greenlight, Soros 829 1,965 nm 12x Energy Oil & Gas Operations Contango Oil & Gas / MCF Dreman, Sellers 827 738 12x 9x Energy Oil & Gas - Integrated BreitBurn Energy / BBEP Acadian, Baupost 803 1,432 19x 10x Energy Coal International Coal / ICO Chou, Fairfax, Steelhead 695 989 19x 9x Energy Oil Well Services Seahawk Drilling / HAWK Chilton, MHR, Pennant 254 248 nm nm Energy Oil & Gas - Integrated Gastar Exploration / GST Palo Alto, Weiss 228 166 na na Financial Money Center Banks Citigroup / C Fairholme, Paulson 90,577 nm 80x 9x Financial Property & Casualty Fairfax Financial / FRFHF Centaur, Markel, Pabrai 7,501 7,468 na na Financial Regional Banks CIT Group / CIT Baupost, Icahn 6,450 nm nm 9x Financial Property & Casualty Fidelity National / FNF Artisan, Centaur, Pennant 3,180 3,749 14x 11x Financial Investment Services AllianceBernstein / AB Perkins, Royce 2,689 2,689 13x 11x Financial Insurance (miscellaneous) Brown & Brown / BRO Royce, Ruane Cunniff 2,514 2,590 16x 15x Financial Regional Banks CapitalSource / CSE Baupost, Farallon, Pabrai 1,619 nm nm nm Financial Property & Casualty Zenith National / ZNT Artisan, Eagle, Royce 1,066 1,110 65x 34x Financial Misc. Financial Services MVC Capital / MVC Cannell, Centaur, Royce 278 340 25x 28x Financial Investment Services International Assets / IAAC Bares, Leucadia, Steinberg 268 374 15x 29x Financial Property & Casualty Hallmark Financial / HALL Bares, Newcastle 154 129 8x 9x Financial Misc. Financial Services Winmark / WINA Bares, Bremer 108 110 20x 18x Financial Property & Casualty Investors Title / ITIC Bridgeway, Markel 81 72 15x 19x Health Care Major Drugs Johnson & Johnson / JNJ Berkshire, Fairfax 173,051 170,314 13x 12x Health Care Biotechnology & Drugs Biogen Idec / BIIB Icahn, Primecap 14,885 14,721 12x 11x Health Care Biotechnology & Drugs Cardinal Health / CAH Greenlight, Pzena 12,066 12,431 15x 14x Health Care Medical Equipment Boston Scientific / BSX Greenlight, Paulson 11,165 16,219 13x 11x Health Care Healthcare Facilities Lab Corp. of America / LH Brave Warrior, Centaur, Harris 7,621 8,866 13x 12x Health Care Medical Equipment CareFusion / CFN Greenlight, Pzena 5,572 5,782 17x 15x Health Care Medical Equipment Patterson Companies / PDCO Markel, Select Equity 3,522 3,877 16x 15x Health Care Biotechnology & Drugs Theravance / THRX Baupost, Iridian, Litespeed 617 634 nm nm Health Care Biotechnology & Drugs Enzon Pharma / ENZN Baupost, Icahn, RenTech 415 555 nm nm



By Sector (continued)

Market Enter. P/E (Est.) Value Value This Next Sector Industry Company / Ticker Notable Shareholders ($mn) ($mn) FY FY Health Care Medical Equipment Osteotech / OSTE Heartland, RenTech 61 64 nm nm Services Retail (dep't & discount) Wal-Mart / WMT Barkshire, GMO, Markel 201,558 242,908 15x 13x Services Communications Services Vodafone / VOD Dodge & Cox, Greenlight 115,283 171,030 9x 9x Services Restaurants McDonald's / MCD Cap World, Markel 68,626 77,507 14x 13x Services Retail (home improvement) Home Depot / HD Dodge & Cox, Markel 49,312 57,012 19x 17x Services Retail (drugs) Walgreen / WAG Bares, Cap Re 32,994 32,221 14x 12x Services Broadcasting & Cable DIRECTV / DTV Baupost, Southeastern 29,366 33,236 22x 14x Services Business Services Accenture / ACN Cap Re, Weitz 28,903 24,901 15x 13x Services Business Services Automatic Data / ADP Cap Re 20,491 18,751 17x 16x Services Restaurants Yum! Brands / YUM Cap Re, Southeastern 15,646 18,559 14x 12x Services Business Services Paychex / PAYX Cap World, Markel 10,672 10,385 22x 21x Services Waste Management Republic Services / RSG Blackstone, Cap World 9,912 17,072 16x 13x Services Hotels & Motels Hyatt Hotels / H Pershing Square, Singapore 4,930 4,574 nm nm Services Restaurants Chipotle / CMG Cap World, Centaur 3,324 3,058 25x 21x Services Retail (specialty) AutoNation / AN Cascade, ESL, Weitz 3,043 3,952 13x 11x Services Schools Strayer Education / STRA Lone Pine, Maverick, Weitz 2,890 2,796 22x 18x Services Business Services VistaPrint / VPRT Alydar, Lone Pine 2,384 2,231 na na Services Business Services Corrections Corp. / CXW Kalmar, Pershing Square 2,269 3,373 16x 15x Services Communications Services Level 3 Comms / LVLT Fairfax, Southeastern 2,263 7,991 nm nm Services Communications Services tw telecom / TWTC Cap Re, Southeastern 2,258 3,095 46x 29x Services Personal Services Weight Watchers / WTW Bares, Cap World 2,228 3,690 11x 10x Services Retail (dep't & discount) Dillard's / DDS Acadian, Southeastern 1,212 2,113 21x 22x Services Retail (online) HSN / HSNI Acadian 1,104 1,243 19x 17x Services Real Estate Operations Redwood Trust / RWT Cap Re, NWQ, Weitz 1,054 5,098 45x 8x Services Business Services Fair Isaac / FICO Southeastern 979 1,212 14x 13x Services Rental & Leasing RSC Holdings / RRR Fairholme, GS, Jennison 706 2,935 nm nm Services Motion Pictures Lions Gate / LGF Icahn, MHR, Third Point 616 949 na na Services Restaurants Steak n Shake / SNS Centaur, Eagle, Lion 496 576 22x 19x Services Restaurants DineEquity / DIN MSD, Southeastern 489 2,811 13x 15x Services Retail (online) Overstock.com / OSTK Chou, Fairfax 270 252 49x 25x Services Real Estate Operations Winthrop Realty / FUR Fairholme, Pamet, Raffles 186 412 nm 24x Services Retail (online) Stamps.com / STMP Bares, RenTech 145 100 15x na Services Casinos & Gaming Multimedia Games / MGAM Baupost, Par, Royce 134 189 nm 41x Services Recreational Activities Blockbuster / BBI Icahn, Prentice, Third Point 74 1,041 nm nm Services Retail (online) BIDZ.com / BIDZ Bares, Munder 43 44 18x 10x Technology Computer Storage EMC / EMC Pershing Square, Primecap 35,138 31,543 15x 13x Technology Computer Hardware Dell / DELL Fairfax, Southeastern, Weitz 27,080 17,747 13x 11x Technology Electronic Instruments Energizer Holdings / ENR Weitz 3,826 5,979 10x 9x Technology Comms Equipment ViaSat / VSAT Baupost, Times Square 1,055 1,400 19x 15x Technology Software & Programming Take-Two / TTWO Glenview, Icahn, Legg 803 839 nm 7x Technology Computer Peripherals Stratasys / SSYS Bares, Riverbridge 520 468 >99x 52x Technology Computer Services The Knot / KNOT T Rowe, Weitz 329 200 >99x >99x Technology Software & Programming Interactive Intell. / ININ Bares, Essex 297 232 16x 15x Technology Semiconductors Silicon Storage / SSTI Miller, RenTech, Riley 272 149 na na Technology Comms Equipment Audiovox / VOXX Baupost, Kahn, Smith 157 118 43x 20x Technology Electronic Instruments DDi Corp. / DDIC Miller, RenTech, Riley 86 61 54x 48x Technology Software & Programming Intelligent Systems / INS Weitz 10 7 na na Transportation Airline Republic Airways / RJET Greenlight, Kleinheinz 183 2,327 5x 7x Transportation Air Courier Air Transport / ATSG Acadian, Pabrai, RenTech 149 465 4x 4x Utilities Electric Utilities ITC Holdings / ITC Bamco, Markel 2,675 5,026 21x 20x



Stock Price Performance (sorted by price decline since December 31, 2007)

Recent ∆ to Market Enter. Price Performance Price/ P/E Price 52-Week Value Value Since Since Since Tang. Next Company / Ticker ($) Low High ($mn) ($mn) 12/31/09 12/31/07 12/30/05 Book FY Notable Shareholders Blockbuster / BBI 0.38 -66% 311% 74 1,041 -43% -90% -90% nm nm Icahn, Prentice, Third Point Citigroup / C 3.18 -69% 71% 90,577 nm -4% -89% -93% 0.8x 9x Fairholme, Paulson BIDZ.com / BIDZ 1.94 -3% 149% 43 44 -3% -78% na 1.3x 10x Bares, Munder SandRidge Energy / SD 8.47 -47% 77% 1,554 3,579 -10% -76% na nm 10x Ares, Fairfax, Jennison Republic Airways / RJET 5.31 -23% 100% 183 2,327 -28% -73% -65% 0.4x 7x Greenlight, Kleinheinz CapitalSource / CSE 5.01 -82% 4% 1,619 nm 26% -72% -78% 0.7x nm Baupost, Farallon, Pabrai Terex / TEX 18.78 -61% 36% 2,030 3,000 -5% -71% -37% 1.6x nm Eton Park, Pabrai ATP Oil & Gas / ATPG 16.38 -83% 40% 829 1,965 -10% -68% -56% 1.7x 12x Aletheia, Greenlight, Soros Intelligent Systems / INS 1.09 -50% 119% 10 7 16% -67% -49% 2.1x na Weitz AllianceBernstein / AB 26.53 -62% 13% 2,689 2,689 -6% -65% -53% 1.4x 11x Perkins, Royce USG / USG 13.21 -69% 50% 1,312 2,584 -6% -63% -80% 1.4x nm Berkshire, Fairfax, T Rowe Redwood Trust / RWT 13.57 -16% 43% 1,054 5,098 -6% -60% -67% 1.2x 8x Cap Re, NWQ, Weitz General Electric / GE 15.55 -63% 13% 165,569 551,569 3% -58% -56% 4.2x 13x Dodge & Cox, Fairfax Osteotech / OSTE 3.40 -29% 48% 61 64 6% -57% -32% 0.8x nm Heartland, RenTech Winthrop Realty / FUR 11.69 -50% 13% 186 412 8% -56% -59% 1.2x 24x Fairholme, Pamet, Raffles Level 3 Comms / LVLT 1.38 -57% 28% 2,263 7,991 -10% -55% -52% nm nm Fairfax, Southeastern Leucadia National / LUK 21.82 -53% 21% 5,305 6,771 -8% -54% -8% 1.3x na Advisory, Fairholme Hallmark Financial / HALL 7.63 -22% 15% 154 129 -4% -52% -6% 1.1x 9x Bares, Newcastle Energizer Holdings / ENR 54.79 -31% 26% 3,826 5,979 -11% -51% 10% nm 9x Weitz Texas Industries / TXI 34.56 -64% 37% 959 1,446 -1% -51% -31% 1.2x >99x Shamrock, Southeastern Theravance / THRX 9.70 -1% 91% 617 634 -26% -50% -57% nm nm Baupost, Iridian, Litespeed Take-Two / TTWO 9.65 -42% 30% 803 839 -4% -48% -45% 4.3x 7x Glenview, Icahn, Legg BreitBurn Energy / BBEP 15.22 -64% 0% 803 1,432 44% -47% na 0.6x 10x Acadian, Baupost RSC Holdings / RRR 6.83 -41% 32% 706 2,935 -3% -46% na nm nm Fairholme, GS, Jennison Audiovox / VOXX 6.86 -69% 18% 157 118 -3% -45% -51% 0.6x 20x Baupost, Kahn, Smith Lions Gate / LGF 5.23 -25% 39% 616 949 -10% -44% -32% nm na Icahn, MHR, Third Point Air Transport / ATSG 2.35 -93% 73% 149 465 -11% -44% -70% 1.9x 4x Acadian, Pabrai, RenTech Dell / DELL 13.84 -43% 25% 27,080 17,747 -4% -44% -54% 10.1x 11x Fairfax, Southeastern, Weitz International Assets / IAAC 15.28 -54% 31% 268 374 5% -43% 68% 1.2x 29x Bares, Leucadia, Steinberg Vodafone / VOD 21.91 -29% 10% 115,283 171,030 -5% -41% -11% 7.4x 9x Dodge & Cox, Greenlight Multimedia Games / MGAM 4.91 -67% 32% 134 189 -18% -41% -47% 1.8x 41x Baupost, Par, Royce The Knot / KNOT 9.74 -43% 23% 329 200 -3% -39% -15% 2.3x >99x T Rowe, Weitz Horsehead / ZINC 10.47 -70% 33% 454 309 -18% -38% na 1.4x 18x Driehaus, Pabrai, Royce Zenith National / ZNT 28.14 -34% 15% 1,066 1,110 -5% -37% -39% 1.0x 34x Artisan, Eagle, Royce Boston Scientific / BSX 7.39 -18% 59% 11,165 16,219 -18% -36% -70% nm 11x Greenlight, Paulson Chesapeake Energy / CHK 24.96 -47% 20% 16,167 28,186 -4% -36% -21% 1.4x 10x Southeastern Weight Watchers / WTW 28.92 -43% 4% 2,228 3,690 -1% -36% -41% nm 10x Bares, Cap World Interactive Intell. / ININ 17.21 -57% 39% 297 232 -7% -35% 237% 4.4x 15x Bares, Essex Fair Isaac / FICO 21.06 -54% 16% 979 1,212 -1% -34% -52% nm 13x Southeastern Corrections Corp. / CXW 19.57 -51% 34% 2,269 3,373 -20% -34% 31% 1.6x 15x Kalmar, Pershing Square Cresud / CRESY 12.72 -54% 26% 634 907 -12% -33% 23% nm 27x Pabrai Monsanto / MON 75.82 -12% 23% 41,373 42,907 -7% -32% 96% 7.3x 17x Lone Pine, Weitz Alleghany / Y 263.36 -16% 10% 2,341 2,278 -5% -32% 0% 0.9x 15x Centaur, Eagle, Royce Exxon Mobil / XOM 64.80 -5% 18% 306,310 303,290 -5% -31% 15% 2.9x 9x Centaur, T Rowe MVC Capital / MVC 11.45 -46% 8% 278 340 -3% -29% 7% 0.7x 28x Cannell, Centaur, Royce Chipotle / CMG 104.87 -54% 0% 3,324 3,058 19% -29% na 4.9x 21x Cap World, Centaur International Coal / ICO 3.88 -72% 38% 695 989 1% -28% -59% 1.1x 9x Chou, Fairfax, Steelhead Gastar Exploration / GST 4.56 -61% 14% 228 166 -5% -27% -75% 1.5x na Palo Alto, Weiss tw telecom / TWTC 15.04 -57% 17% 2,258 3,095 -12% -26% 53% 3.1x 29x Cap Re, Southeastern Northrop Grumman / NOC 58.89 -43% 3% 17,830 18,849 5% -25% -2% nm 9x Centaur, Fairholme, Pzena



Stock Price Performance (sorted by price decline since December 31, 2007) (continued)

Recent ∆ to Market Enter. Price Performance Price/ P/E Price 52-Week Value Value Since Since Since Tang. Next Company / Ticker ($) Low High ($mn) ($mn) 12/31/09 12/31/07 12/30/05 Book FY Notable Shareholders Brown & Brown / BRO 17.70 -16% 15% 2,514 2,590 -2% -25% -42% nm 15x Royce, Ruane Cunniff Molson Coors / TAP 38.90 -21% 32% 7,198 8,177 -14% -25% 16% 6.7x 10x Cap Re, Children's Stamps.com / STMP 9.19 -15% 13% 145 100 2% -25% -60% 2.0x na Bares, RenTech Overstock.com / OSTK 11.80 -43% 52% 270 252 -13% -24% -58% nm 25x Chou, Fairfax DineEquity / DIN 27.80 -81% 25% 489 2,811 14% -24% -41% nm 15x MSD, Southeastern DDi Corp. / DDIC 4.33 -36% 19% 86 61 -11% -23% -35% 1.3x 48x Miller, RenTech, Riley Potash Corp. / POT 111.60 -43% 13% 33,031 36,687 3% -22% 317% 5.8x na Cap World, Pabrai Cardinal Health / CAH 33.38 -40% 3% 12,066 12,431 4% -20% -32% 4.1x 14x Greenlight, Pzena Paychex / PAYX 29.53 -31% 11% 10,672 10,385 -4% -18% -23% 11.9x 21x Cap World, Markel Republic Services / RSG 26.03 -42% 15% 9,912 17,072 -8% -17% 4% nm 13x Blackstone, Cap World Seabridge Gold / SA 24.82 -40% 34% 933 919 2% -16% 164% 9.9x na Jennison, Royce ViaSat / VSAT 29.05 -45% 13% 1,055 1,400 -9% -16% 9% 2.3x 15x Baupost, Times Square Patterson Companies / PDCO 28.76 -44% 8% 3,522 3,877 3% -15% -14% 10.9x 15x Markel, Select Equity Yum! Brands / YUM 33.36 -30% 11% 15,646 18,559 -5% -13% 42% nm 12x Cap Re, Southeastern Dillard's / DDS 16.42 -82% 23% 1,212 2,113 -11% -13% -34% 0.5x 22x Acadian, Southeastern Walgreen / WAG 33.49 -36% 21% 32,994 32,221 -9% -12% -24% 2.5x 12x Bares, Cap Re Coca-Cola Company / KO 53.98 -31% 10% 124,316 126,962 -5% -12% 34% 10.4x 14x Berkshire, Cap Re Kraft Foods / KFT 29.09 -28% 3% 42,932 60,661 7% -11% 3% nm 14x Berkshire, Pershing Square Automatic Data / ADP 40.59 -21% 10% 20,491 18,751 -5% -9% -2% 7.4x 16x Cap Re Investors Title / ITIC 35.41 -52% 1% 81 72 15% -8% -16% 0.8x 19x Bridgeway, Markel EMC / EMC 17.12 -44% 8% 35,138 31,543 -2% -8% 26% 6.8x 13x Pershing Square, Primecap ITC Holdings / ITC 52.70 -39% 3% 2,675 5,026 1% -7% 88% nm 20x Bamco, Markel Johnson & Johnson / JNJ 62.72 -26% 5% 173,051 170,314 -3% -6% 4% 9.2x 12x Berkshire, Fairfax Fidelity National / FNF 13.80 -13% 66% 3,180 3,749 3% -6% -43% 3.0x 11x Artisan, Centaur, Pennant Silicon Storage / SSTI 2.84 -54% 1% 272 149 11% -5% -44% 1.1x na Miller, RenTech, Riley Lab Corp. of America / LH 71.76 -26% 7% 7,621 8,866 -4% -5% 33% nm 12x Brave Warrior, Centaur Enzon Pharma / ENZN 9.13 -49% 26% 415 555 -13% -4% 23% 461.1x nm Baupost, Icahn, RenTech Biogen Idec / BIIB 55.21 -24% 1% 14,885 14,721 3% -3% 22% 4.6x 11x Icahn, Primecap Winmark / WINA 20.70 -60% 11% 108 110 -4% -1% -1% 6.6x 18x Bares, Bremer Stratasys / SSYS 25.65 -70% 9% 520 468 49% -1% 105% 4.4x 52x Bares, Riverbridge Teck Cominco / TCK 35.88 -93% 16% 21,124 28,050 3% 0% 32% 1.8x na Pabrai Contango Oil & Gas / MCF 52.15 -39% 5% 827 738 11% 2% 356% 2.2x 9x Dreman, Sellers TransDigm / TDG 48.03 -38% 8% 2,355 3,963 1% 6% na nm 14x Pennant, Tiger Home Depot / HD 29.00 -40% 2% 49,312 57,012 0% 8% -28% 2.7x 17x Dodge & Cox, Markel McDonald's / MCD 63.59 -21% 3% 68,626 77,507 2% 8% 89% 6.4x 13x Cap World, Markel Wal-Mart / WMT 52.90 -12% 4% 201,558 242,908 -1% 11% 13% 3.9x 13x Barkshire, GMO, Markel Accenture / ACN 40.49 -35% 8% 28,903 24,901 -2% 12% 40% 14.7x 13x Cap Re, Weitz Tandy Leather / TLF 3.70 -58% 10% 38 32 -5% 13% -46% 1.2x na Bares AutoNation / AN 17.72 -48% 22% 3,043 3,952 -7% 13% -18% 3.0x 11x Cascade, ESL, Weitz Strayer Education / STRA 206.26 -30% 12% 2,890 2,796 -3% 21% 120% 16.5x 18x Lone Pine, Maverick, Weitz Alliance One / AOI 5.04 -47% 18% 449 1,450 3% 24% 29% 1.3x na Baupost, RenTech VistaPrint / VPRT 54.91 -60% 9% 2,384 2,231 -3% 28% 141% 7.0x na Alydar, Lone Pine DIRECTV / DTV 30.69 -39% 12% 29,366 33,236 -8% 33% 117% nm 14x Baupost, Southeastern Steak n Shake / SNS 345.00 -71% 1% 496 576 6% 58% 2% 1.8x 19x Centaur, Eagle, Lion Seahawk Drilling / HAWK 21.82 -12% 64% 254 248 -3% na na 0.5x nm Chilton, MHR, Pennant Fairfax Financial / FRFHF* 355.54 -9% 12% 7,501 7,468 -9% na* na* 1.0x na Centaur, Markel, Pabrai CIT Group / CIT 32.25 -23% 9% 6,450 nm 17% na na 3.3x 9x Baupost, Icahn CareFusion / CFN 25.17 -31% 13% 5,572 5,782 1% na na 6.5x 15x Greenlight, Pzena Hyatt Hotels / H 29.34 -12% 10% 4,930 4,574 -2% na na 1.1x nm Pershing Square, Singapore HSN / HSNI 19.57 -83% 8% 1,104 1,243 -3% na na 27.9x 17x Acadian

* The ticker symbol of Fairfax changed from FFH to FRFHF in December 2009. Fairfax shares are up 24% since yearend 2007 and 148% since yearend 2005.



Free Cash Flow (sorted by LTM free cash flow yield)

LTM Recent ∆ to Market Enter. EV / P/E P/E (Est.) Price/ FCF Price 52-Week Value Value LTM Last This Next In Div. Tang. Insider Company / Ticker Yield ($) Low High ($mn) ($mn) Rev. FY FY FY 2 Yrs Yield Book Own. CapitalSource / CSE 113% 5.01 -82% 4% 1,619 nm nm nm nm nm 13x 0.8% 0.7x 24% Blockbuster / BBI 90% 0.38 -66% 311% 74 1,041 .2x nm nm nm nm - nm 44% Republic Airways / RJET 63% 5.31 -23% 100% 183 2,327 1.6x 2x 5x 7x 2x - 0.4x 1% Dillard's / DDS 41% 16.42 -82% 23% 1,212 2,113 .3x nm 21x 22x 8x 1.0% 0.5x 30% Redwood Trust / RWT 36% 13.57 -16% 43% 1,054 5,098 9.0x nm 45x 8x 5x 7.4% 1.2x 2% Hallmark Financial / HALL 35% 7.63 -22% 15% 154 129 .5x 12x 8x 9x 8x - 1.1x 11% RSC Holdings / RRR 33% 6.83 -41% 32% 706 2,935 1.7x 6x nm nm 17x - nm 11% Audiovox / VOXX 31% 6.86 -69% 18% 157 118 .2x nm 43x 20x na - 0.6x 19% DineEquity / DIN 28% 27.80 -81% 25% 489 2,811 1.7x nm 13x 15x 15x - nm 4% Air Transport / ATSG 21% 2.35 -93% 73% 149 465 .3x nm 4x 4x na - 1.9x 7% BreitBurn Energy / BBEP 20% 15.22 -64% 0% 803 1,432 1.8x 2x 19x 10x 12x - 0.6x 42% HSN / HSNI 18% 19.57 -83% 8% 1,104 1,243 .4x nm 19x 17x 13x - 27.9x 34% Multimedia Games / MGAM 16% 4.91 -67% 32% 134 189 1.5x nm nm 41x na - 1.8x 2% Alliance One / AOI 16% 5.04 -47% 18% 449 1,450 .6x 3x 6x na na - 1.3x 5% Cardinal Health / CAH 15% 33.38 -40% 3% 12,066 12,431 .1x 11x 15x 14x 13x 2.1% 4.1x 0% Fair Isaac / FICO 14% 21.06 -54% 16% 979 1,212 1.9x 16x 14x 13x 12x 0.4% nm 0% Brown & Brown / BRO 13% 17.70 -16% 15% 2,514 2,590 2.6x 15x 16x 15x 14x 1.8% nm 18% Winmark / WINA 12% 20.70 -60% 11% 108 110 3.1x 99x 20x 18x 16x - 6.6x 31% Teck Cominco / TCK 12% 35.88 -93% 16% 21,124 28,050 4.3x 30x na na na - 1.8x 2% Dell / DELL 11% 13.84 -43% 25% 27,080 17,747 .3x 11x 13x 11x 9x - 10.1x 14% Seahawk Drilling / HAWK 11% 21.82 -12% 64% 254 248 nm nm nm nm nm - 0.5x 10% Lab Corp. of America / LH 11% 71.76 -26% 7% 7,621 8,866 1.9x 14x 13x 12x na - nm 0% Energizer Holdings / ENR 11% 54.79 -31% 26% 3,826 5,979 1.5x 12x 10x 9x 9x - nm 7% Walgreen / WAG 10% 33.49 -36% 21% 32,994 32,221 .5x 17x 14x 12x 10x 1.6% 2.5x 1% DDi Corp. / DDIC 10% 4.33 -36% 19% 86 61 .3x nm 54x 48x 27x - 1.3x 9% Steak n Shake / SNS 10% 345.00 -71% 1% 496 576 .9x 82x 22x 19x na - 1.8x 8% Weight Watchers / WTW 10% 28.92 -43% 4% 2,228 3,690 2.4x 11x 11x 10x 10x 2.4% nm 56% Molson Coors / TAP 10% 38.90 -21% 32% 7,198 8,177 2.7x 10x 11x 10x 9x 2.5% 6.7x 15% Accenture / ACN 9% 40.49 -35% 8% 28,903 24,901 1.1x 17x 15x 13x 12x - 14.7x 0% Home Depot / HD 9% 29.00 -40% 2% 49,312 57,012 .8x 21x 19x 17x 14x 3.1% 2.7x 1% Kraft Foods / KFT 9% 29.09 -28% 3% 42,932 60,661 1.4x 24x 14x 14x 12x 4.0% nm 1% Northrop Grumman / NOC 8% 58.89 -43% 3% 17,830 18,849 .6x 12x 10x 9x 8x 2.9% nm 1% TransDigm / TDG 7% 48.03 -38% 8% 2,355 3,963 5.2x 15x 16x 14x 13x - nm 0% EMC / EMC 7% 17.12 -44% 8% 35,138 31,543 2.2x 31x 15x 13x 12x - 6.8x 1% International Coal / ICO 7% 3.88 -72% 38% 695 989 .9x 28x 19x 9x 3x - 1.1x 27% DIRECTV / DTV 7% 30.69 -39% 12% 29,366 33,236 1.7x 23x 22x 14x 11x - nm 54% Tandy Leather / TLF 7% 3.70 -58% 10% 38 32 .6x 15x na na na - 1.2x 18% Stamps.com / STMP 7% 9.19 -15% 13% 145 100 1.2x 17x 15x na na - 2.0x 27% Terex / TEX 6% 18.78 -61% 36% 2,030 3,000 .3x 26x nm nm 16x - 1.6x 4% Wal-Mart / WMT 6% 52.90 -12% 4% 201,558 242,908 .6x 16x 15x 13x 12x 2.1% 3.9x 45% Alleghany / Y 6% 263.36 -16% 10% 2,341 2,278 2.3x 96x 25x 15x na - 0.9x 12% Automatic Data / ADP 6% 40.59 -21% 10% 20,491 18,751 2.1x 15x 17x 16x 15x 3.4% 7.4x 0% Biogen Idec / BIIB 6% 55.21 -24% 1% 14,885 14,721 3.4x 16x 12x 11x 11x - 4.6x 1% Winthrop Realty / FUR 6% 11.69 -50% 13% 186 412 9.0x nm nm 24x 21x 5.6% 1.2x 18% Republic Services / RSG 6% 26.03 -42% 15% 9,912 17,072 2.1x 20x 16x 13x 10x 2.9% nm 6% Paychex / PAYX 6% 29.53 -31% 11% 10,672 10,385 5.0x 20x 22x 21x 19x 4.2% 11.9x 11% tw telecom / TWTC 5% 15.04 -57% 17% 2,258 3,095 2.6x 84x 46x 29x 20x - 3.1x 5% Coca-Cola Company / KO 5% 53.98 -31% 10% 124,316 126,962 4.1x 18x 16x 14x 13x 3.0% 10.4x 5% Overstock.com / OSTK 5% 11.80 -43% 52% 270 252 .3x nm 49x 25x 16x - nm 45% Chipotle / CMG 4% 104.87 -54% 0% 3,324 3,058 2.0x 27x 25x 21x na - 4.9x 3%



Free Cash Flow (sorted by LTM free cash flow yield) (continued)

LTM Recent ∆ to Market Enter. EV / P/E P/E (Est.) Price/ FCF Price 52-Week Value Value LTM Last This Next In Div. Tang. Insider Company / Ticker Yield ($) Low High ($mn) ($mn) Rev. FY FY FY 2 Yrs Yield Book Own. Contango Oil & Gas / MCF 4% 52.15 -39% 5% 827 738 3.9x 16x 12x 9x 6x - 2.2x 21% Yum! Brands / YUM 4% 33.36 -30% 11% 15,646 18,559 1.7x 15x 14x 12x 11x 2.5% nm 1% Interactive Intell. / ININ 4% 17.21 -57% 39% 297 232 1.8x 37x 16x 15x na - 4.4x 33% The Knot / KNOT 4% 9.74 -43% 23% 329 200 1.9x 75x >99x >99x 75x - 2.3x 15% Stratasys / SSYS 3% 25.65 -70% 9% 520 468 3.8x 39x >99x 52x 36x - 4.4x 7% Level 3 Comms / LVLT 3% 1.38 -57% 28% 2,263 7,991 1.9x nm nm nm nm - nm 34% Strayer Education / STRA 3% 206.26 -30% 12% 2,890 2,796 7.1x 36x 22x 18x 15x 1.5% 16.5x 2% Patterson Companies / PDCO 3% 28.76 -44% 8% 3,522 3,877 1.3x 17x 16x 15x 14x - 10.9x 24% Enzon Pharma / ENZN 2% 9.13 -49% 26% 415 555 2.8x nm nm nm nm - 461.1x 1% MVC Capital / MVC 2% 11.45 -46% 8% 278 340 13.0x 19x 25x 28x na 4.2% 0.7x 5% VistaPrint / VPRT 2% 54.91 -60% 9% 2,384 2,231 4.3x 44x na na na - 7.0x 5% Investors Title / ITIC 2% 35.41 -52% 1% 81 72 1.0x nm 15x 19x na 0.8% 0.8x 24% Horsehead / ZINC 1% 10.47 -70% 33% 454 309 .7x 9x nm 18x 10x - 1.4x 1% Cresud / CRESY 1% 12.72 -54% 26% 634 907 2.4x 22x 22x 27x 22x 2.5% nm 40% Vodafone / VOD 0% 21.91 -29% 10% 115,283 171,030 2.7x 24x 9x 9x 8x 3.9% 7.4x 0% Monsanto / MON 0% 75.82 -12% 23% 41,373 42,907 3.7x 20x 23x 17x 14x 1.4% 7.3x 0% Hyatt Hotels / H -1% 29.34 -12% 10% 4,930 4,574 1.2x 67x nm nm >99x - 1.1x 77% AllianceBernstein / AB -1% 26.53 -62% 13% 2,689 2,689 14.0x 15x 13x 11x na 10.1% 1.4x 3% Texas Industries / TXI -1% 34.56 -64% 37% 959 1,446 1.7x nm nm >99x 30x 0.9% 1.2x 17% Potash Corp. / POT -2% 111.60 -43% 13% 33,031 36,687 3.9x 10x na na na 0.4% 5.8x 1% Leucadia National / LUK -2% 21.82 -53% 21% 5,305 6,771 6.3x nm na na na - 1.3x 23% Zenith National / ZNT -3% 28.14 -34% 15% 1,066 1,110 1.9x 31x 65x 34x 23x 7.1% 1.0x 12% ViaSat / VSAT -4% 29.05 -45% 13% 1,055 1,400 2.2x 24x 19x 15x 14x - 2.3x 12% Seabridge Gold / SA -4% 24.82 -40% 34% 933 919 nm nm na na na - 9.9x 33% BIDZ.com / BIDZ -7% 1.94 -3% 149% 43 44 .2x 3x 18x 10x na - 1.3x 52% ITC Holdings / ITC -7% 52.70 -39% 3% 2,675 5,026 8.1x 24x 21x 20x 16x 2.4% nm 1% International Assets / IAAC -8% 15.28 -54% 31% 268 374 .0x 15x 15x 29x 31x - 1.2x 31% Osteotech / OSTE -11% 3.40 -29% 48% 61 64 .6x 28x nm nm 68x - 0.8x 1% CIT Group / CIT -12% 32.25 -23% 9% 6,450 nm nm nm nm 9x 15x - 3.3x 0% Fairfax Financial / FRFHF -14% 355.54 -9% 12% 7,501 7,468 .9x 4x na na na 2.8% 1.0x 8% Intelligent Systems / INS -16% 1.09 -50% 119% 10 7 .4x nm na na na - 2.1x 36% Chesapeake Energy / CHK -17% 24.96 -47% 20% 16,167 28,186 2.4x 22x 10x 10x 9x 1.2% 1.4x 0% Gastar Exploration / GST -22% 4.56 -61% 14% 228 166 2.6x nm na na na - 1.5x 17% Lions Gate / LGF -23% 5.23 -25% 39% 616 949 .6x nm na na na - nm 3% Take-Two / TTWO -28% 9.65 -42% 30% 803 839 .9x nm nm 7x 16x - 4.3x 3% SandRidge Energy / SD -49% 8.47 -47% 77% 1,554 3,579 3.0x nm 10x 10x 9x - nm 20% ATP Oil & Gas / ATPG -51% 16.38 -83% 40% 829 1,965 3.2x 5x nm 12x 3x - 1.7x 15% Exxon Mobil / XOM na 64.80 -5% 18% 306,310 303,290 1.0x 16x 11x 9x 7x 2.6% 2.9x 1% Citigroup / C na 3.18 -69% 71% 90,577 nm nm nm 80x 9x 6x - 0.8x 1% Boston Scientific / BSX na 7.39 -18% 59% 11,165 16,219 2.0x nm 13x 11x 9x - nm 4% Fidelity National / FNF na 13.80 -13% 66% 3,180 3,749 .6x 14x 14x 11x 9x 4.3% 3.0x 5% AutoNation / AN na 17.72 -48% 22% 3,043 3,952 .4x 13x 13x 11x 12x - 3.0x 45% Johnson & Johnson / JNJ na 62.72 -26% 5% 173,051 170,314 2.8x 14x 13x 12x 11x 3.1% 9.2x 1% General Electric / GE na 15.55 -63% 13% 165,569 551,569 3.5x 15x 16x 13x 11x 2.6% 4.2x 1% McDonald's / MCD na 63.59 -21% 3% 68,626 77,507 3.4x 15x 14x 13x 12x 3.5% 6.4x 0% Corrections Corp. / CXW na 19.57 -51% 34% 2,269 3,373 2.0x 15x 16x 15x 12x - 1.6x 4% CareFusion / CFN na 25.17 -31% 13% 5,572 5,782 1.6x 19x 17x 15x 13x - 6.5x 19% Silicon Storage / SSTI na 2.84 -54% 1% 272 149 .6x nm na na na - 1.1x 21% USG / USG na 13.21 -69% 50% 1,312 2,584 .8x nm nm nm >99x - 1.4x 23% Theravance / THRX na 9.70 -1% 91% 617 634 26.0x nm nm nm nm - nm 34%



P/E Multiples (sorted by P/E based on estimated EPS for next fiscal year)

Recent Market Enter. P/E P/E (Est.) FY Price/ Price Value Value Last This Next In End LTGR* Tang. Div. Company / Ticker ($) ($mn) ($mn) FY FY FY 2 Yrs Date (Est.) Book Yield Notable Holders Air Transport / ATSG 2.35 149 465 nm 4x 4x na 12/31/09 na 1.9x - Pabrai, RenTech Republic Airways / RJET 5.31 183 2,327 2x 5x 7x 2x 12/31/09 10% 0.4x - Greenlight, Kleinheinz Take-Two / TTWO 9.65 803 839 nm nm 7x 16x 10/31/10 8% 4.3x - Glenview, Icahn, Legg Redwood Trust / RWT 13.57 1,054 5,098 nm 45x 8x 5x 12/31/09 5% 1.2x 7.4% Cap Re, NWQ, Weitz Hallmark Financial / HALL 7.63 154 129 12x 8x 9x 8x 12/31/09 15% 1.1x - Bares, Newcastle Northrop Grumman / NOC 58.89 17,830 18,849 12x 10x 9x 8x 12/31/10 11% nm 2.9% Centaur, Fairholme Vodafone / VOD 21.91 115,283 171,030 24x 9x 9x 8x 3/31/10 5% 7.4x 3.9% Greenlight Exxon Mobil / XOM 64.80 306,310 303,290 16x 11x 9x 7x 12/31/10 14% 2.9x 2.6% Centaur, T Rowe CIT Group / CIT 32.25 6,450 nm nm nm 9x 15x 12/31/09 na 3.3x - Baupost, Icahn Contango Oil & Gas / MCF 52.15 827 738 16x 12x 9x 6x 6/30/10 na 2.2x - Dreman, Sellers Citigroup / C 3.18 90,577 nm nm 80x 9x 6x 12/31/10 -8% 0.8x - Fairholme, Paulson Energizer Holdings / ENR 54.79 3,826 5,979 12x 10x 9x 9x 9/30/10 10% nm - Weitz International Coal / ICO 3.88 695 989 28x 19x 9x 3x 12/31/10 na 1.1x - Chou, Fairfax SandRidge Energy / SD 8.47 1,554 3,579 nm 10x 10x 9x 12/31/09 10% nm - Ares, Fairfax, Jennison Chesapeake Energy / CHK 24.96 16,167 28,186 22x 10x 10x 9x 12/31/09 6% 1.4x 1.2% Southeastern BIDZ.com / BIDZ 1.94 43 44 3x 18x 10x na 12/31/09 30% 1.3x - Bares, Munder Molson Coors / TAP 38.90 7,198 8,177 10x 11x 10x 9x 12/31/10 12% 6.7x 2.5% Cap Re, Children's Weight Watchers / WTW 28.92 2,228 3,690 11x 11x 10x 10x 12/31/09 na nm 2.4% Bares, Cap World BreitBurn Energy / BBEP 15.22 803 1,432 2x 19x 10x 12x 12/31/09 na 0.6x - Acadian, Baupost Boston Scientific / BSX 7.39 11,165 16,219 nm 13x 11x 9x 12/31/10 12% nm - Greenlight, Paulson Fidelity National / FNF 13.80 3,180 3,749 14x 14x 11x 9x 12/31/10 12% 3.0x 4.3% Artisan, Centaur, Pennant Dell / DELL 13.84 27,080 17,747 11x 13x 11x 9x 1/31/10 11% 10.1x - Fairfax, Southeastern AutoNation / AN 17.72 3,043 3,952 13x 13x 11x 12x 12/31/10 14% 3.0x - Cascade, ESL, Weitz AllianceBernstein / AB 26.53 2,689 2,689 15x 13x 11x na 12/31/10 9% 1.4x 10.1% Perkins, Royce Biogen Idec / BIIB 55.21 14,885 14,721 16x 12x 11x 11x 12/31/10 8% 4.6x - Icahn, Primecap Johnson & Johnson / JNJ 62.72 173,051 170,314 14x 13x 12x 11x 12/31/10 7% 9.2x 3.1% Berkshire, Fairfax ATP Oil & Gas / ATPG 16.38 829 1,965 5x nm 12x 3x 12/31/09 na 1.7x - Greenlight, Soros Lab Corp. of America / LH 71.76 7,621 8,866 14x 13x 12x na 12/31/10 12% nm - Brave Warrior, Centaur Walgreen / WAG 33.49 32,994 32,221 17x 14x 12x 10x 8/31/10 14% 2.5x 1.6% Bares, Cap Re Yum! Brands / YUM 33.36 15,646 18,559 15x 14x 12x 11x 12/31/10 12% nm 2.5% Cap Re, Southeastern Republic Services / RSG 26.03 9,912 17,072 20x 16x 13x 10x 12/31/10 16% nm 2.9% Blackstone, Cap World General Electric / GE 15.55 165,569 551,569 15x 16x 13x 11x 12/31/10 9% 4.2x 2.6% Dodge & Cox, Fairfax EMC / EMC 17.12 35,138 31,543 31x 15x 13x 12x 12/31/10 14% 6.8x - Pershing Square McDonald's / MCD 63.59 68,626 77,507 15x 14x 13x 12x 12/31/10 9% 6.4x 3.5% Cap World, Markel Accenture / ACN 40.49 28,903 24,901 17x 15x 13x 12x 8/31/10 14% 14.7x - Cap Re, Weitz Wal-Mart / WMT 52.90 201,558 242,908 16x 15x 13x 12x 1/31/10 12% 3.9x 2.1% Barkshire, GMO, Markel Fair Isaac / FICO 21.06 979 1,212 16x 14x 13x 12x 9/30/10 8% nm 0.4% Southeastern Kraft Foods / KFT 29.09 42,932 60,661 24x 14x 14x 12x 12/31/09 6% nm 4.0% Berkshire, Pershing Sq. DIRECTV / DTV 30.69 29,366 33,236 23x 22x 14x 11x 12/31/09 21% nm - Baupost, Southeastern Cardinal Health / CAH 33.38 12,066 12,431 11x 15x 14x 13x 6/30/10 12% 4.1x 2.1% Greenlight, Pzena TransDigm / TDG 48.03 2,355 3,963 15x 16x 14x 13x 9/30/10 13% nm - Pennant, Tiger Coca-Cola Company / KO 53.98 124,316 126,962 18x 16x 14x 13x 12/31/10 9% 10.4x 3.0% Berkshire, Cap Re DineEquity / DIN 27.80 489 2,811 nm 13x 15x 15x 12/31/09 na nm - MSD, Southeastern Patterson / PDCO 28.76 3,522 3,877 17x 16x 15x 14x 4/30/10 14% 10.9x - Markel, Select Equity Corrections Corp. / CXW 19.57 2,269 3,373 15x 16x 15x 12x 12/31/10 12% 1.6x - Pershing Square Alleghany / Y 263.36 2,341 2,278 96x 25x 15x na 12/31/09 na 0.9x - Centaur, Eagle, Royce ViaSat / VSAT 29.05 1,055 1,400 24x 19x 15x 14x 3/31/10 13% 2.3x - Baupost, Times Square CareFusion / CFN 25.17 5,572 5,782 19x 17x 15x 13x 6/30/10 11% 6.5x - Greenlight, Pzena Interactive Intell. / ININ 17.21 297 232 37x 16x 15x na 12/31/10 21% 4.4x - Bares, Essex Brown & Brown / BRO 17.70 2,514 2,590 15x 16x 15x 14x 12/31/09 10% nm 1.8% Royce, Ruane Cunniff

* LTGR = Analysts’ consensus estimate of long-term EPS growth.



P/E Multiples (sorted by P/E based on estimated EPS for next fiscal year) (continued)

Recent Market Enter. P/E P/E (Est.) FY Price/ Price Value Value Last This Next In End LTGR* Tang. Div. Company / Ticker ($) ($mn) ($mn) FY FY FY 2 Yrs Date (Est.) Book Yield Notable Shareholders Automatic Data / ADP 40.59 20,491 18,751 15x 17x 16x 15x 6/30/10 11% 7.4x 3.4% Cap Re HSN / HSNI 19.57 1,104 1,243 nm 19x 17x 13x 12/31/09 na 27.9x - Acadian Home Depot / HD 29.00 49,312 57,012 21x 19x 17x 14x 1/31/10 11% 2.7x 3.1% Dodge & Cox, Markel Monsanto / MON 75.82 41,373 42,907 20x 23x 17x 14x 8/31/10 15% 7.3x 1.4% Lone Pine, Weitz Winmark / WINA 20.70 108 110 99x 20x 18x 16x 12/31/09 na 6.6x - Bares, Bremer Strayer Education / STRA 206.26 2,890 2,796 36x 22x 18x 15x 12/31/10 21% 16.5x 1.5% Lone Pine, Maverick, Weitz Horsehead / ZINC 10.47 454 309 9x nm 18x 10x 12/31/09 na 1.4x - Driehaus, Pabrai, Royce Investors Title / ITIC 35.41 81 72 nm 15x 19x na 12/31/09 4% 0.8x 0.8% Bridgeway, Markel Steak n Shake / SNS 345.00 496 576 82x 22x 19x na 9/30/10 na 1.8x - Centaur, Eagle, Lion Audiovox / VOXX 6.86 157 118 nm 43x 20x na 2/28/10 na 0.6x - Baupost, Kahn, Smith ITC Holdings / ITC 52.70 2,675 5,026 24x 21x 20x 16x 12/31/09 17% nm 2.4% Bamco, Markel Paychex / PAYX 29.53 10,672 10,385 20x 22x 21x 19x 5/31/10 12% 11.9x 4.2% Cap World, Markel Chipotle / CMG 104.87 3,324 3,058 27x 25x 21x na 12/31/10 20% 4.9x - Cap World, Centaur Dillard's / DDS 16.42 1,212 2,113 nm 21x 22x 8x 1/31/10 6% 0.5x 1.0% Acadian, Southeastern Winthrop Realty / FUR 11.69 186 412 nm nm 24x 21x 12/31/09 na 1.2x 5.6% Fairholme, Pamet, Raffles Overstock.com / OSTK 11.80 270 252 nm 49x 25x 16x 12/31/09 25% nm - Chou, Fairfax Cresud / CRESY 12.72 634 907 22x 22x 27x 22x 6/30/10 na nm 2.5% Pabrai MVC Capital / MVC 11.45 278 340 19x 25x 28x na 10/31/10 13% 0.7x 4.2% Cannell, Centaur, Royce International Assets / IAAC 15.28 268 374 15x 15x 29x 31x 9/30/10 na 1.2x - Bares, Leucadia, Steinberg tw telecom / TWTC 15.04 2,258 3,095 84x 46x 29x 20x 12/31/10 25% 3.1x - Cap Re, Southeastern Zenith National / ZNT 28.14 1,066 1,110 31x 65x 34x 23x 12/31/10 2% 1.0x 7.1% Artisan, Eagle, Royce Multimedia Games / MGAM 4.91 134 189 nm nm 41x na 9/30/10 30% 1.8x - Baupost, Par, Royce DDi Corp. / DDIC 4.33 86 61 nm 54x 48x 27x 12/31/09 na 1.3x - Miller, RenTech, Riley Stratasys / SSYS 25.65 520 468 39x >99x 52x 36x 12/31/09 16% 4.4x - Bares, Riverbridge Texas Industries / TXI 34.56 959 1,446 nm nm >99x 30x 5/31/10 7% 1.2x 0.9% Shamrock, Southeastern The Knot / KNOT 9.74 329 200 75x >99x >99x 75x 12/31/09 20% 2.3x - T Rowe, Weitz Intelligent Systems / INS 1.09 10 7 nm na na na 12/31/09 na 2.1x - Weitz Leucadia National / LUK 21.82 5,305 6,771 nm na na na 12/31/09 na 1.3x - Advisory, Fairholme Lions Gate / LGF 5.23 616 949 nm na na na 3/31/10 na nm - Icahn, MHR, Third Point Gastar Exploration / GST 4.56 228 166 nm na na na 12/31/10 na 1.5x - Palo Alto, Weiss Stamps.com / STMP 9.19 145 100 17x 15x na na 12/31/10 na 2.0x - Bares, RenTech Potash Corp. / POT 111.60 33,031 36,687 10x na na na 12/31/09 na 5.8x 0.4% Cap World, Pabrai Seabridge Gold / SA 24.82 933 919 nm na na na 12/31/09 na 9.9x - Jennison, Royce Silicon Storage / SSTI 2.84 272 149 nm na na na 12/31/10 na 1.1x - Miller, RenTech, Riley Teck Cominco / TCK 35.88 21,124 28,050 30x na na na 12/31/09 na 1.8x - Pabrai Tandy Leather / TLF 3.70 38 32 15x na na na 12/31/09 na 1.2x - Bares Alliance One / AOI 5.04 449 1,450 3x 6x na na 3/31/10 na 1.3x - Baupost, RenTech VistaPrint / VPRT 54.91 2,384 2,231 44x na na na 6/30/10 na 7.0x - Alydar, Lone Pine Fairfax Financial / FRFHF 355.54 7,501 7,468 4x na na na 12/31/10 na 1.0x 2.8% Centaur, Markel, Pabrai Blockbuster / BBI 0.38 74 1,041 nm nm nm nm 12/31/09 13% nm - Icahn, Prentice, Third Point CapitalSource / CSE 5.01 1,619 nm nm nm nm 13x 12/31/09 11% 0.7x 0.8% Baupost, Farallon, Pabrai Terex / TEX 18.78 2,030 3,000 26x nm nm 16x 12/31/09 6% 1.6x - Eton Park, Pabrai USG / USG 13.21 1,312 2,584 nm nm nm >99x 12/31/10 na 1.4x - Berkshire, Fairfax, T Rowe Osteotech / OSTE 3.40 61 64 28x nm nm 68x 12/31/09 na 0.8x - Heartland, RenTech Level 3 Comms / LVLT 1.38 2,263 7,991 nm nm nm nm 12/31/10 -2% nm - Fairfax, Southeastern Theravance / THRX 9.70 617 634 nm nm nm nm 12/31/10 na nm - Baupost, Iridian, Litespeed RSC Holdings / RRR 6.83 706 2,935 6x nm nm 17x 12/31/09 12% nm - Fairholme, GS, Jennison Enzon Pharma / ENZN 9.13 415 555 nm nm nm nm 12/31/09 na 461.1x - Baupost, Icahn, RenTech Seahawk Drilling / HAWK 21.82 254 248 nm nm nm nm 12/31/09 na 0.5x - Chilton, MHR, Pennant Hyatt Hotels / H 29.34 4,930 4,574 67x nm nm >99x 12/31/09 9% 1.1x - Pershing Square, Singapore

* LTGR = Analysts’ consensus estimate of long-term EPS growth.



Latest Quarterly EPS Surprises (sorted by magnitude of EPS surprise)

Recent Market Date of Latest EPS Surprise EPS (Actual) EPS (Estimated) FY Price Value Latest Date EPS EPS % 2 Yrs Last This Next In End Company / Ticker ($) ($mn) Quarter (Act.) (Est.) Diff. Ago FY FY FY 2 Yrs Date Steak n Shake / SNS 345.00 496 12/31 2/1/10 3.82 0.93 >99% (16.27) 4.20 15.82 18.33 na 9/30/10 Winthrop Realty / FUR 11.69 186 9/30 11/5/09 0.90 0.06 >99% 0.11 (4.72) (4.92) 0.49 0.55 12/31/09 MVC Capital / MVC 11.45 278 10/31 12/22/09 1.13 0.05 >99% 2.63 0.59 0.46 0.41 na 10/31/10 Enzon Pharma / ENZN 9.13 415 9/30 11/3/09 0.00 (0.10) nm 1.29 (0.06) (0.14) (0.05) (0.21) 12/31/09 Dillard's / DDS 16.42 1,212 10/31 11/17/09 (0.03) (0.51) nm 0.68 (3.25) 0.80 0.74 2.01 1/31/10 DineEquity / DIN 27.80 489 9/30 10/27/09 0.55 0.30 83% (0.13) (10.09) 2.20 1.90 1.82 12/31/09 Seahawk Drilling / HAWK 21.82 254 9/30 11/12/09 (0.58) (1.65) nm 0.00 0.00 (2.76) (5.06) (1.66) 12/31/09 HSN / HSNI 19.57 1,104 9/30 11/12/09 0.29 0.18 61% 1.86 (42.48) 1.04 1.16 1.51 12/31/09 tw telecom / TWTC 15.04 2,258 12/31 2/8/10 0.07 0.05 40% (0.05) 0.18 0.33 0.52 0.75 12/31/10 Fidelity National / FNF 13.80 3,180 12/31 2/3/10 0.30 0.22 36% (0.80) 0.98 1.01 1.26 1.60 12/31/10 Redwood Trust / RWT 13.57 1,054 9/30 11/4/09 0.35 0.27 30% (39.70) (13.46) 0.30 1.78 2.85 12/31/09 Stratasys / SSYS 25.65 520 9/30 10/29/09 0.09 0.07 29% 0.66 0.65 0.24 0.49 0.72 12/31/09 Stamps.com / STMP 9.19 145 12/31 2/11/10 0.18 0.14 29% 0.50 0.53 0.60 na na 12/31/10 Cardinal Health / CAH 33.38 12,066 12/31 1/28/10 0.57 0.46 24% 3.56 3.16 2.18 2.39 2.63 6/30/10 ITC Holdings / ITC 52.70 2,675 9/30 10/28/09 0.74 0.60 23% 1.68 2.19 2.56 2.68 3.35 12/31/09 Winmark / WINA 20.70 108 9/30 10/14/09 0.33 0.27 22% 0.54 0.21 1.02 1.18 1.32 12/31/09 Chipotle / CMG 104.87 3,324 12/31 2/11/10 0.99 0.81 22% 2.36 3.95 4.20 4.89 na 12/31/10 Energizer Holdings / ENR 54.79 3,826 12/31 1/26/10 2.21 1.84 20% 5.59 4.72 5.24 5.79 6.41 9/30/10 Zenith National / ZNT 28.14 1,066 12/31 1/28/10 0.12 0.10 20% 2.55 0.91 0.43 0.83 1.20 12/31/10 AllianceBernstein / AB 26.53 2,689 12/31 2/11/10 0.62 0.53 17% 2.79 1.80 2.05 2.32 na 12/31/10 Kraft Foods / KFT 29.09 42,932 9/30 11/3/09 0.55 0.48 15% 1.48 1.22 2.01 2.12 2.33 12/31/09 Biogen Idec / BIIB 55.21 14,885 12/31 2/9/10 1.20 1.05 14% 2.65 3.35 4.58 4.82 5.09 12/31/10 Home Depot / HD 29.00 49,312 10/31 11/17/09 0.41 0.36 14% 2.27 1.37 1.56 1.71 2.09 1/31/10 Take-Two / TTWO 9.65 803 10/31 12/17/09 0.09 0.08 13% 1.28 (1.80) (0.54) 1.33 0.59 10/31/10 Contango Oil & Gas / MCF 52.15 827 12/31 2/9/10 1.18 1.06 11% 4.82 3.35 4.20 5.76 8.08 6/30/10 EMC / EMC 17.12 35,138 12/31 1/26/10 0.33 0.30 10% 0.61 0.55 1.14 1.30 1.45 12/31/10 General Electric / GE 15.55 165,569 12/31 1/22/10 0.28 0.26 8% 1.78 1.03 0.99 1.20 1.48 12/31/10 Chesapeake Energy / CHK 24.96 16,167 9/30 11/2/09 0.70 0.65 8% 2.62 1.14 2.47 2.55 2.79 12/31/09 AutoNation / AN 17.72 3,043 12/31 2/11/10 0.29 0.27 7% (6.82) 1.32 1.38 1.59 1.45 12/31/10 Exxon Mobil / XOM 64.80 306,310 12/31 2/1/10 1.27 1.19 7% 8.69 3.98 5.77 7.33 8.88 12/31/10 Weight Watchers / WTW 28.92 2,228 9/30 11/10/09 0.68 0.64 6% 2.48 2.60 2.62 2.80 2.89 12/31/09 Paychex / PAYX 29.53 10,672 11/30 12/16/09 0.35 0.33 6% 1.56 1.48 1.33 1.43 1.55 5/31/10 Corrections Corp. / CXW 19.57 2,269 12/31 2/9/10 0.36 0.34 6% 1.19 1.33 1.23 1.31 1.68 12/31/10 Fair Isaac / FICO 21.06 979 12/31 1/27/10 0.37 0.35 6% 1.64 1.34 1.48 1.58 1.75 9/30/10 Johnson & Johnson / JNJ 62.72 173,051 12/31 1/26/10 1.02 0.97 5% 4.57 4.40 4.93 5.36 5.85 12/31/10 Yum! Brands / YUM 33.36 15,646 12/31 2/3/10 0.50 0.48 4% 1.96 2.22 2.40 2.69 3.06 12/31/10 Northrop Grumman / NOC 58.89 17,830 12/31 2/4/10 1.31 1.26 4% (4.12) 4.87 5.83 6.70 7.18 12/31/10 Wal-Mart / WMT 52.90 201,558 10/31 11/12/09 0.84 0.81 4% 3.16 3.35 3.61 3.97 4.38 1/31/10 Automatic Data / ADP 40.59 20,491 12/31 2/2/10 0.60 0.58 3% 2.20 2.63 2.40 2.53 2.74 6/30/10 Accenture / ACN 40.49 28,903 11/30 12/17/09 0.67 0.65 3% 2.65 2.44 2.73 3.05 3.50 8/31/10 CareFusion / CFN 25.17 5,572 12/31 2/9/10 0.39 0.38 3% 1.48 1.33 1.47 1.67 1.88 6/30/10 Walgreen / WAG 33.49 32,994 11/30 12/21/09 0.49 0.48 2% 2.17 2.02 2.32 2.71 3.22 8/31/10 McDonald's / MCD 63.59 68,626 12/31 1/22/10 1.03 1.02 1% 3.76 4.11 4.43 4.82 5.25 12/31/10 Lab Corp. of America / LH 71.76 7,621 12/31 2/11/10 1.16 1.15 1% 4.15 4.98 5.43 6.00 na 12/31/10 Strayer Education / STRA 206.26 2,890 12/31 2/11/10 2.32 2.30 1% 4.47 5.67 9.51 11.63 14.06 12/31/10 Boston Scientific / BSX 7.39 11,165 12/31 2/10/10 0.13 0.13 0% (1.36) (0.68) 0.56 0.68 0.82 12/31/10 Republic Services / RSG 26.03 9,912 12/31 2/11/10 0.33 0.33 0% 0.37 1.30 1.67 2.01 2.60 12/31/10 Patterson Companies / PDCO 28.76 3,522 10/31 11/19/09 0.41 0.41 0% 1.69 1.69 1.76 1.94 2.11 4/30/10 ViaSat / VSAT 29.05 1,055 12/31 2/8/10 0.39 0.39 0% 1.04 1.20 1.56 1.93 2.15 3/31/10 Interactive Intell. / ININ 17.21 297 12/31 1/28/10 0.27 0.27 0% 0.23 0.47 1.11 1.14 na 12/31/10



Latest Quarterly EPS Surprises (sorted by magnitude of EPS surprise) (continued)

Recent Market Date of Latest EPS Surprise EPS (Actual) EPS (Estimated) FY Price Value Latest Date EPS EPS % 2 Yrs Last This Next In End Company / Ticker ($) ($mn) Quarter (Act.) (Est.) Diff. Ago FY FY FY 2 Yrs Date Brown & Brown / BRO 17.70 2,514 9/30 10/19/09 0.29 0.29 0% 1.35 1.17 1.14 1.16 1.25 12/31/09 Citigroup / C 3.18 90,577 12/31 1/19/10 (0.33) (0.33) nm (6.35) (0.76) 0.04 0.34 0.50 12/31/10 Overstock.com / OSTK 11.80 270 9/30 11/3/09 (0.03) (0.03) nm (1.86) (0.55) 0.24 0.48 0.74 12/31/09 RSC Holdings / RRR 6.83 706 9/30 10/29/09 (0.13) (0.13) nm 1.24 1.18 (0.63) (0.20) 0.41 12/31/09 International Coal / ICO 3.88 695 12/31 1/28/10 0.00 0.00 nm (0.17) 0.14 0.20 0.41 1.23 12/31/10 Coca-Cola Company / KO 53.98 124,316 12/31 2/9/10 0.66 0.67 -1% 2.49 2.93 3.42 3.74 4.06 12/31/10 DIRECTV / DTV 30.69 29,366 9/30 11/5/09 0.37 0.39 -5% 1.19 1.36 1.39 2.22 2.82 12/31/09 TransDigm / TDG 48.03 2,355 12/31 2/10/10 0.67 0.71 -6% 2.56 3.10 3.08 3.38 3.69 9/30/10 Theravance / THRX 9.70 617 12/31 2/11/10 (0.35) (0.33) nm (1.53) (1.35) (1.14) (1.14) (0.63) 12/31/10 Molson Coors / TAP 38.90 7,198 12/31 2/9/10 1.02 1.10 -7% 2.11 3.92 3.55 3.78 4.12 12/31/10 Level 3 Comms / LVLT 1.38 2,263 12/31 2/10/10 (0.11) (0.10) nm (0.73) (0.19) (0.40) (0.34) (0.30) 12/31/10 SandRidge Energy / SD 8.47 1,554 9/30 11/5/09 0.14 0.16 -13% 0.09 (9.37) 0.85 0.87 0.90 12/31/09 Dell / DELL 13.84 27,080 10/31 11/19/09 0.23 0.28 -18% 1.31 1.25 1.03 1.25 1.47 1/31/10 Hallmark Financial / HALL 7.63 154 9/30 11/12/09 0.18 0.25 -28% 1.34 0.62 0.91 0.88 0.95 12/31/09 The Knot / KNOT 9.74 329 9/30 11/5/09 0.02 0.03 -33% 0.36 0.13 0.03 0.08 0.13 12/31/09 BreitBurn Energy / BBEP 15.22 803 9/30 11/6/09 0.12 0.19 -37% (1.83) 6.28 0.81 1.46 1.32 12/31/09 Investors Title / ITIC 35.41 81 12/31 10/30/09 0.42 0.73 -42% 3.35 (0.50) 2.31 1.90 na 12/31/09 Horsehead / ZINC 10.47 454 9/30 11/5/09 (0.10) (0.07) nm 2.85 1.12 (0.72) 0.57 1.10 12/31/09 Texas Industries / TXI 34.56 959 11/30 1/7/10 (0.21) (0.14) nm 3.15 (0.64) (0.89) 0.02 1.17 5/31/10 DDi Corp. / DDIC 4.33 86 9/30 10/28/09 0.01 0.02 -50% 0.03 (1.60) 0.08 0.09 0.16 12/31/09 Alleghany / Y 263.36 2,341 9/30 11/5/09 1.56 3.50 -55% 30.24 2.75 10.70 17.60 na 12/31/09 Audiovox / VOXX 6.86 157 2/28 1/11/10 0.11 0.26 -58% 0.29 (3.11) 0.16 0.35 na 2/28/10 Air Transport / ATSG 2.35 149 12/31 11/12/09 0.05 0.13 -62% 0.33 (0.90) 0.55 0.59 na 12/31/09 Republic Airways / RJET 5.31 183 9/30 11/4/09 0.09 0.29 -69% 2.02 2.42 0.99 0.75 2.74 12/31/09 Multimedia Games / MGAM 4.91 134 12/31 2/9/10 (0.15) (0.08) nm 0.01 (1.67) (0.39) 0.12 na 9/30/10 BIDZ.com / BIDZ 1.94 43 9/30 11/9/09 0.00 0.01 <-99% 0.69 0.57 0.11 0.19 na 12/31/09 USG / USG 13.21 1,312 12/31 1/27/10 (1.17) (0.53) nm (4.67) (7.93) (2.84) (1.68) 0.12 12/31/10 Terex / TEX 18.78 2,030 9/30 10/21/09 (0.77) (0.34) nm 5.85 0.72 (2.16) (0.28) 1.18 12/31/09 ATP Oil & Gas / ATPG 16.38 829 9/30 11/5/09 (0.20) (0.08) nm 1.55 3.39 (0.32) 1.39 5.27 12/31/09 CapitalSource / CSE 5.01 1,619 9/30 11/2/09 (0.87) (0.26) nm 0.91 (0.89) (2.34) (0.22) 0.40 12/31/09 Blockbuster / BBI 0.38 74 9/30 11/12/09 (0.60) (0.11) nm (0.45) (2.01) (0.68) (0.25) (0.60) 12/31/09 Osteotech / OSTE 3.40 61 9/30 11/5/09 (0.11) (0.02) nm 0.15 0.12 (0.22) (0.04) 0.05 12/31/09 International Assets / IAAC 15.28 268 9/30 12/14/09 (0.20) 0.37 <-99% 2.94 1.05 1.04 0.53 0.50 9/30/10 Monsanto / MON 75.82 41,373 11/30 1/6/10 (0.02) 0.00 nm 3.59 3.78 3.28 4.44 5.52 8/31/10 Hyatt Hotels / H 29.34 4,930 9/30 11/14/09 0.05 na nm 0.98 0.44 (0.22) (0.01) 0.24 12/31/09 CIT Group / CIT 32.25 6,450 9/30 na na na nm 3.93 (2.69) (11.26) 3.59 2.20 12/31/09 Alliance One / AOI 5.04 449 12/31 na na na nm 0.10 1.48 0.90 na na 3/31/10 Cresud / CRESY 12.72 634 9/30 na na na nm 0.15 0.57 0.59 0.48 0.59 6/30/10 Intelligent Systems / INS 1.09 10 9/30 na na na nm (0.66) (0.71) na na na 12/31/09 Leucadia National / LUK 21.82 5,305 9/30 na na na nm 2.09 (11.19) na na na 12/31/09 Lions Gate / LGF 5.23 616 12/31 na na na nm (0.62) (1.40) na na na 3/31/10 Gastar Exploration / GST 4.56 228 21/31 na na na nm (0.75) (0.13) na na na 12/31/10 Potash Corp. / POT 111.60 33,031 9/30 na na na nm 3.27 10.70 na na na 12/31/09 Seabridge Gold / SA 24.82 933 9/30 na na na nm (0.40) (0.02) na na na 12/31/09 Silicon Storage / SSTI 2.84 272 12/31 na na na nm (0.40) (0.11) na na na 12/31/10 Teck Cominco / TCK 35.88 21,124 9/30 na na na nm 3.66 1.21 na na na 12/31/09 Tandy Leather / TLF 3.70 38 9/30 na na na nm 0.28 0.24 na na na 12/31/09 VistaPrint / VPRT 54.91 2,384 9/30 na na na nm 0.87 1.25 na na na 6/30/10 Fairfax Financial / FRFHF 355.54 7,501 12/31 na na na nm 58.54 80.71 na na na 12/31/10 Vodafone / VOD 21.91 115,283 12/31 na na na nm 1.95 0.91 2.38 2.48 2.62 3/31/10



Revenue and EPS Growth (sorted by estimated EPS growth for next fiscal year)

Revenue Growth EPS Growth P/E (E) Net Price/ 5-Year Last FY LTM Last FY This FY Next FY LT This Next Debt/ Tang. Div. Insider Company / Ticker CAGR (Actual) (Est.) (Est.) (Est.) FY FY Equity Book Yield Own. Redwood Trust / RWT 11% -35% -40% nm nm >99% 5% 45x 8x >99% 1.2x 7.4% 2% Stratasys / SSYS 20% 11% -15% -2% -63% >99% 16% >99x 52x nm 4.4x - 7% Citigroup / C 4% -28% -28% nm nm >99% -8% 80x 9x nm 0.8x - 1% Overstock.com / OSTK 28% 9% -7% nm nm >99% 25% 49x 25x nm nm - 45% International Coal / ICO 52% 3% 3% nm 43% >99% na 19x 9x 48% 1.1x - 27% The Knot / KNOT 23% 5% 2% -64% -77% >99% 20% >99x >99x nm 2.3x - 15% Audiovox / VOXX 1% 2% -17% nm nm >99% na 43x 20x nm 0.6x - 19% Zenith National / ZNT -11% -14% -14% -64% -53% 93% 2% 65x 34x 4% 1.0x 7.1% 12% BreitBurn Energy / BBEP 80% >99% 65% nm -87% 80% na 19x 10x 50% 0.6x - 42% BIDZ.com / BIDZ 34% 11% -50% -17% -81% 73% 30% 18x 10x 4% 1.3x - 52% Alleghany / Y 9% -19% -20% -91% >99% 64% na 25x 15x nm 0.9x - 12% DIRECTV / DTV 16% 14% 9% 14% 2% 60% 21% 22x 14x 95% nm - 54% tw telecom / TWTC 13% 5% 5% nm 83% 58% 25% 46x 29x >99% 3.1x - 5% Contango Oil & Gas / MCF >99% 64% -26% -30% 25% 37% na 12x 9x nm 2.2x - 21% Monsanto / MON 17% 3% -10% 5% -13% 35% 15% 23x 17x 15% 7.3x 1.4% 0% Exxon Mobil / XOM 1% -35% -35% -54% 45% 27% 14% 11x 9x nm 2.9x 2.6% 1% Fidelity National / FNF -7% 37% 37% nm 3% 25% 12% 14x 11x 18% 3.0x 4.3% 5% ViaSat / VSAT 18% 9% 5% 15% 30% 24% 13% 19x 15x 54% 2.3x - 12% Strayer Education / STRA 22% 25% 29% 27% 68% 22% 21% 22x 18x nm 16.5x 1.5% 2% Boston Scientific / BSX 8% 2% 2% nm nm 21% 12% 13x 11x 41% nm - 4% Dell / DELL 8% 0% -19% -5% -18% 21% 11% 13x 11x nm 10.1x - 14% General Electric / GE 3% -14% -14% -42% -4% 21% 9% 16x 13x >99% 4.2x 2.6% 1% Republic Services / RSG 25% >99% >99% >99% 28% 20% 16% 16x 13x 95% nm 2.9% 6% Walgreen / WAG 11% 7% 8% -7% 15% 17% 14% 14x 12x nm 2.5x 1.6% 1% Chipotle / CMG 26% 14% 14% 67% 6% 16% 20% 25x 21x nm 4.9x - 3% Steak n Shake / SNS 3% 3% 6% nm >99% 16% na 22x 19x 27% 1.8x - 8% Winmark / WINA 3% 13% 5% -61% >99% 16% na 20x 18x 10% 6.6x - 31% AutoNation / AN -10% -20% -20% nm 5% 15% 14% 13x 11x 39% 3.0x - 45% Northrop Grumman / NOC 3% 4% 0% nm 20% 15% 11% 10x 9x 8% nm 2.9% 1% EMC / EMC 11% -6% -6% -10% >99% 14% 14% 15x 13x nm 6.8x - 1% CareFusion / CFN nm -2% 10% -10% 11% 14% 11% 17x 15x 5% 6.5x - 19% AllianceBernstein / AB -3% -31% -31% -35% 14% 13% 9% 13x 11x 0% 1.4x 10.1% 3% DDi Corp. / DDIC 4% 5% -18% nm nm 13% na 54x 48x nm 1.3x - 9% Yum! Brands / YUM 4% -4% -4% 13% 8% 12% 12% 14x 12x >99% nm 2.5% 1% Accenture / ACN 9% -8% -13% -8% 12% 12% 14% 15x 13x nm 14.7x - 0% HSN / HSNI nm -3% -8% nm nm 12% na 19x 17x 46% 27.9x - 34% Lab Corp. of America / LH 9% 4% 4% 20% 9% 10% 12% 13x 12x 59% nm - 0% Energizer Holdings / ENR 7% -8% -1% -16% 11% 10% 10% 10x 9x >99% nm - 7% Patterson Companies / PDCO 9% 3% 5% 0% 4% 10% 14% 16x 15x 27% 10.9x - 24% Wal-Mart / WMT 9% 7% 0% 6% 8% 10% 12% 15x 13x 61% 3.9x 2.1% 45% TransDigm / TDG 20% 7% 5% 21% -1% 10% 13% 16x 14x >99% nm - 0% Cardinal Health / CAH 9% 9% 9% -11% -31% 10% 12% 15x 14x 7% 4.1x 2.1% 0% Home Depot / HD 2% -8% -11% -40% 14% 10% 11% 19x 17x 40% 2.7x 3.1% 1% Coca-Cola Company / KO 7% -3% -3% 18% 17% 9% 9% 16x 14x 11% 10.4x 3.0% 5% McDonald's / MCD 4% -3% -3% 9% 8% 9% 9% 14x 13x 67% 6.4x 3.5% 0% Johnson & Johnson / JNJ 6% -3% -3% -4% 12% 9% 7% 13x 12x nm 9.2x 3.1% 1% Paychex / PAYX 10% 1% -4% -5% -10% 8% 12% 22x 21x nm 11.9x 4.2% 11% Air Transport / ATSG 7% 37% 0% nm nm 7% na 4x 4x >99% 1.9x - 7% Weight Watchers / WTW 10% 5% -7% 5% 1% 7% na 11x 10x nm nm 2.4% 56% Fair Isaac / FICO -2% -15% -14% -18% 10% 7% 8% 14x 13x 40% nm 0.4% 0%



Revenue and EPS Growth (sorted by estimated EPS growth for next FY; if unavailable, then by LTM revenue growth) (continued)

Revenue Growth EPS Growth P/E (E) Net Price/ 5-Year Last FY LTM Last FY This FY Next FY LT This Next Debt/ Tang. Div. Insider Company / Ticker CAGR (Actual) (Est.) (Est.) (Est.) FY FY Equity Book Yield Own. Corrections Corp. / CXW 8% 5% 5% 12% -8% 7% 12% 16x 15x 76% 1.6x - 4% Molson Coors / TAP -7% -36% -37% 86% -9% 6% 12% 11x 10x 14% 6.7x 2.5% 15% Kraft Foods / KFT 7% 17% -3% -18% 65% 5% 6% 14x 14x 71% nm 4.0% 1% Automatic Data / ADP 4% 1% -3% 20% -9% 5% 11% 17x 16x nm 7.4x 3.4% 0% Biogen Idec / BIIB 15% 7% 7% 26% 37% 5% 8% 12x 11x nm 4.6x - 1% ITC Holdings / ITC 43% 45% 7% 30% 17% 5% 17% 21x 20x >99% nm 2.4% 1% Vodafone / VOD 4% 16% -32% -53% >99% 4% 5% 9x 9x 41% 7.4x 3.9% 0% Chesapeake Energy / CHK 47% 49% -21% -56% >99% 3% 6% 10x 10x >99% 1.4x 1.2% 0% Interactive Intell. / ININ 19% 8% 8% >99% >99% 3% 21% 16x 15x nm 4.4x - 33% SandRidge Energy / SD 50% 74% -48% nm nm 2% 10% 10x 10x nm nm - 20% Brown & Brown / BRO 12% 2% 2% -13% -3% 2% 10% 16x 15x 6% nm 1.8% 18% Hallmark Financial / HALL 31% -2% -2% -54% 47% -3% 15% 8x 9x nm 1.1x - 11% Dillard's / DDS -2% -5% -10% nm nm -8% 6% 21x 22x 40% 0.5x 1.0% 30% MVC Capital / MVC 46% -13% -13% -78% -22% -11% 13% 25x 28x 14% 0.7x 4.2% 5% DineEquity / DIN 32% >99% -4% nm nm -14% na 13x 15x >99% nm - 4% Investors Title / ITIC -5% -16% -12% nm nm -18% 4% 15x 19x nm 0.8x 0.8% 24% Cresud / CRESY 83% >99% >99% >99% 4% -19% na 22x 27x 55% nm 2.5% 40% Republic Airways / RJET 25% 14% -10% 20% -59% -24% 10% 5x 7x >99% 0.4x - 1% International Assets / IAAC >99% >99% >99% -64% -1% -49% na 15x 29x 45% 1.2x - 31% VistaPrint / VPRT 54% 29% 28% 44% nm nm na na na nm 7.0x - 5% Winthrop Realty / FUR 80% -11% 15% nm nm nm na nm 24x >99% 1.2x 5.6% 18% Teck Cominco / TCK 25% 8% 9% -67% nm nm na na na 53% 1.8x - 2% Lions Gate / LGF 31% 8% 7% nm nm nm na na na >99% nm - 3% Theravance / THRX 22% 6% 6% nm nm nm na nm nm nm nm - 34% Alliance One / AOI 23% 12% 5% >99% -39% nm na 6x na >99% 1.3x - 5% Seahawk Drilling / HAWK nm na 0% nm nm nm na nm nm nm 0.5x - 10% Hyatt Hotels / H nm 3% 0% -55% nm nm 9% nm nm nm 1.1x - 77% Seabridge Gold / SA nm na 0% nm nm nm na na na nm 9.9x - 33% Tandy Leather / TLF 5% -4% -2% -14% nm nm na na na nm 1.2x - 18% Multimedia Games / MGAM -4% -3% -4% nm nm nm 30% nm 41x 52% 1.8x - 2% Enzon Pharma / ENZN 3% 6% -4% nm nm nm na nm nm >99% 461.1x - 1% Stamps.com / STMP 32% -1% -5% 6% 13% nm na 15x na nm 2.0x - 27% Fairfax Financial / FRFHF 7% 7% -9% 38% nm nm na na na nm 1.0x 2.8% 8% Osteotech / OSTE 2% 0% -11% -20% nm nm na nm nm 4% 0.8x - 1% Level 3 Comms / LVLT 2% 1% -11% nm nm nm -2% nm nm >99% nm - 34% Intelligent Systems / INS 4% 3% -13% nm nm nm na na na nm 2.1x - 36% Leucadia National / LUK 28% -6% -18% nm nm nm na na na 34% 1.3x - 23% Blockbuster / BBI -2% -5% -18% nm nm nm 13% nm nm nm nm - 44% Silicon Storage / SSTI -11% -20% -20% nm nm nm na na na nm 1.1x - 21% RSC Holdings / RRR 8% 0% -21% -5% nm nm 12% nm nm >99% nm - 11% CapitalSource / CSE 45% -13% -25% nm nm nm 11% nm nm >99% 0.7x 0.8% 24% Gastar Exploration / GST >99% 83% -26% nm nm nm na na na nm 1.5x - 17% Texas Industries / TXI 2% -18% -30% nm nm nm 7% nm >99x 61% 1.2x 0.9% 17% USG / USG -6% -30% -30% nm nm nm na nm nm >99% 1.4x - 23% CIT Group / CIT 6% -22% -34% nm nm nm na nm 9x >99% 3.3x - 0% Take-Two / TTWO -3% -37% -37% nm nm nm 8% nm 7x 7% 4.3x - 3% Terex / TEX 20% 8% -43% -88% nm nm 6% nm nm 53% 1.6x - 4% Potash Corp. / POT 28% 80% -47% >99% nm nm na na na 62% 5.8x 0.4% 1% Horsehead / ZINC 19% -18% -49% -61% nm nm na nm 18x nm 1.4x - 1% ATP Oil & Gas / ATPG 55% 2% -58% >99% nm nm na nm 12x >99% 1.7x - 15%



Percentile Rank within Industry (sorted by LTM EBIT margin rank)

Percentile Rank within Industry P/E (E) Rev. Growth EPS Growth LTM EBIT This Next Insider Company / Ticker Industry 5-Yr LTM LTM Est. Margin FY FY Own. Notable Shareholders AllianceBernstein / AB Investment Services 15 17 38 30 100 13x 11x 3% Perkins, Royce TransDigm / TDG Aerospace and Defense 73 68 46 55 90 16x 14x 0% Pennant, Tiger Contango Oil & Gas / MCF Oil & Gas Operations 100 21 27 na 89 12x 9x 21% Dreman, Sellers BreitBurn Energy / BBEP Oil & Gas - Integrated 96 92 74 na 88 19x 10x 42% Acadian, Baupost Paychex / PAYX Business Services 52 53 47 52 88 22x 21x 11% Cap World, Markel ITC Holdings / ITC Electric Utilities 89 72 65 75 88 21x 20x 1% Bamco, Markel Potash Corp. / POT Non-Metallic Mining 80 7 35 na 88 na na 1% Cap World, Pabrai Strayer Education / STRA Schools 74 85 70 87 87 22x 18x 2% Lone Pine, Maverick, Weitz McDonald's / MCD Restaurants 32 55 61 32 86 14x 13x 0% Cap World, Markel Weight Watchers / WTW Personal Services 52 49 61 na 85 11x 10x 56% Bares, Cap World Coca-Cola Company / KO Beverages (non-alcoholic) 43 55 65 30 84 16x 14x 5% Berkshire, Cap Re Johnson & Johnson / JNJ Major Drugs 37 55 50 21 84 13x 12x 1% Berkshire, Fairfax Brown & Brown / BRO Insurance (miscellaneous) 57 65 51 33 84 16x 15x 18% Royce, Ruane Cunniff Automatic Data / ADP Business Services 32 56 63 43 82 17x 16x 0% Cap Re MVC Capital / MVC Misc. Financial Services 90 38 27 53 82 25x 28x 5% Cannell, Centaur, Royce Monsanto / MON Chemical Manufacturing 67 43 39 64 81 23x 17x 0% Lone Pine, Weitz Fair Isaac / FICO Business Services 16 36 49 23 81 14x 13x 0% Southeastern Winmark / WINA Misc. Financial Services 27 69 37 na 80 20x 18x 31% Bares, Bremer Lab Corp. of America / LH Healthcare Facilities 48 68 65 48 80 13x 12x 0% Brave Warrior, Centaur, Harris Republic Services / RSG Waste Management 78 96 94 73 79 16x 13x 6% Blackstone, Cap World Yum! Brands / YUM Restaurants 31 53 63 49 76 14x 12x 1% Cap Re, Southeastern Citigroup / C Money Center Banks 31 19 88 2 74 80x 9x 1% Fairholme, Paulson Chipotle / CMG Restaurants 79 78 81 83 74 25x 21x 3% Cap World, Centaur CareFusion / CFN Medical Equipment na 75 49 45 73 17x 15x 19% Greenlight, Pzena Biogen Idec / BIIB Biotechnology & Drugs 63 71 78 25 73 12x 11x 1% Icahn, Primecap VistaPrint / VPRT Business Services 92 85 74 na 73 na na 5% Alydar, Lone Pine DIRECTV / DTV Broadcasting & Cable 65 73 50 87 72 22x 14x 54% Baupost, Southeastern Accenture / ACN Business Services 48 38 46 59 72 15x 13x 0% Cap Re, Weitz Energizer Holdings / ENR Electronic Instruments 43 59 44 34 72 10x 9x 7% Weitz Kraft Foods / KFT Food Processing 41 55 43 19 72 14x 14x 1% Berkshire, Pershing Square RSC Holdings / RRR Rental & Leasing 44 26 22 49 72 nm nm 11% Fairholme, GS, Jennison Exxon Mobil / XOM Oil & Gas Operations 22 14 33 60 71 11x 9x 1% Centaur, T Rowe Patterson Companies / PDCO Medical Equipment 50 68 51 61 71 16x 15x 24% Markel, Select Equity Interactive Intell. / ININ Software & Programming 71 73 89 88 71 16x 15x 33% Bares, Essex EMC / EMC Computer Storage 55 50 48 63 70 15x 13x 1% Pershing Square, Primecap tw telecom / TWTC Communications Services 60 68 99 93 69 46x 29x 5% Cap Re, Southeastern Zenith National / ZNT Property & Casualty 7 35 30 7 68 65x 34x 12% Artisan, Eagle, Royce Tandy Leather / TLF Apparel/Accessories 35 58 61 na 67 na na 18% Bares Hallmark Financial / HALL Property & Casualty 83 58 36 64 66 8x 9x 11% Bares, Newcastle Alliance One / AOI Tobacco 76 69 67 na 66 6x na 5% Baupost, RenTech International Coal / ICO Coal 92 66 96 na 65 19x 9x 27% Chou, Fairfax, Steelhead BIDZ.com / BIDZ Retail (online) 85 7 28 94 65 18x 10x 52% Bares, Munder Northrop Grumman / NOC Aerospace and Defense 29 60 97 43 65 10x 9x 1% Centaur, Fairholme, Pzena Molson Coors / TAP Beverages (alcoholic) 10 13 85 49 65 11x 10x 15% Cap Re, Children's Home Depot / HD Retail (home improvement) 25 41 42 43 64 19x 17x 1% Dodge & Cox, Markel Fairfax Financial / FRFHF Property & Casualty 41 44 33 na 64 na na 8% Centaur, Markel, Pabrai Stratasys / SSYS Computer Peripherals 71 34 28 73 63 >99x 52x 7% Bares, Riverbridge Stamps.com / STMP Retail (online) 84 52 37 na 63 15x na 27% Bares, RenTech Wal-Mart / WMT Retail (dep't & discount) 50 62 52 48 62 15x 13x 45% Barkshire, GMO, Markel Walgreen / WAG Retail (drugs) 54 72 51 62 61 14x 12x 1% Bares, Cap Re



Percentile Rank within Industry (sorted by LTM EBIT margin rank) (continued)

Percentile Rank within Industry P/E (E) Rev. Growth EPS Growth LTM EBIT This Next Insider Company / Ticker Industry 5-Yr LTM LTM Est. Margin FY FY Own. Notable Shareholders Dell / DELL Computer Hardware 46 29 35 43 59 13x 11x 14% Fairfax, Southeastern, Weitz Level 3 Comms / LVLT Communications Services 24 42 66 3 59 nm nm 34% Fairfax, Southeastern Steak n Shake / SNS Restaurants 27 71 95 na 58 22x 19x 8% Centaur, Eagle, Lion Teck Cominco / TCK Metal Mining 78 73 37 na 56 na na 2% Pabrai Cardinal Health / CAH Biotechnology & Drugs 49 74 32 48 55 15x 14x 0% Greenlight, Pzena Lions Gate / LGF Motion Pictures 83 71 84 na 55 na na 3% Icahn, MHR, Third Point Overstock.com / OSTK Retail (online) 81 49 88 91 53 49x 25x 45% Chou, Fairfax Enzon Pharma / ENZN Biotechnology & Drugs 28 53 94 na 53 nm nm 1% Baupost, Icahn, RenTech The Knot / KNOT Computer Services 76 65 23 87 50 >99x >99x 15% T Rowe, Weitz Corrections Corp. / CXW Business Services 46 69 62 53 50 16x 15x 4% Kalmar, Pershing Square Dillard's / DDS Retail (dep't & discount) 16 44 10 16 47 21x 22x 30% Acadian, Southeastern Cresud / CRESY Crops 96 100 na na 47 22x 27x 40% Pabrai Osteotech / OSTE Medical Equipment 25 42 11 na 46 nm nm 1% Heartland, RenTech USG / USG Construction Materials 11 17 29 na 45 nm nm 23% Berkshire, Fairfax, T Rowe Alleghany / Y Conglomerates 49 28 45 na 44 25x 15x 12% Centaur, Eagle, Royce Republic Airways / RJET Airline 77 43 33 34 44 5x 7x 1% Greenlight, Kleinheinz Texas Industries / TXI Construction Materials 25 18 19 21 43 nm >99x 17% Shamrock, Southeastern Audiovox / VOXX Comms Equipment 23 33 na na 41 43x 20x 19% Baupost, Kahn, Smith Intelligent Systems / INS Software & Programming 30 38 66 na 41 na na 36% Weitz Take-Two / TTWO Software & Programming 15 13 12 28 38 nm 7x 3% Glenview, Icahn, Legg Horsehead / ZINC Metal Mining 71 7 18 na 38 nm 18x 1% Driehaus, Pabrai, Royce General Electric / GE Conglomerates 29 36 42 31 36 16x 13x 1% Dodge & Cox, Fairfax Fidelity National / FNF Property & Casualty 10 88 97 47 35 14x 11x 5% Artisan, Centaur, Pennant ViaSat / VSAT Comms Equipment 68 69 49 56 35 19x 15x 12% Baupost, Times Square AutoNation / AN Retail (specialty) 8 28 93 61 35 13x 11x 45% Cascade, ESL, Weitz Seahawk Drilling / HAWK Oil Well Services na na na na 35 nm nm 10% Chilton, MHR, Pennant ATP Oil & Gas / ATPG Oil & Gas Operations 93 4 34 na 32 nm 12x 15% Aletheia, Greenlight, Soros DDi Corp. / DDIC Electronic Instruments 30 31 na na 31 54x 48x 9% Miller, RenTech, Riley International Assets / IAAC Investment Services 100 96 41 na 31 15x 29x 31% Bares, Leucadia, Steinberg Air Transport / ATSG Air Courier 41 60 11 na 30 4x 4x 7% Acadian, Pabrai, RenTech DineEquity / DIN Restaurants 83 54 42 na 30 13x 15x 4% MSD, Southeastern Investors Title / ITIC Property & Casualty 12 40 30 10 30 15x 19x 24% Bridgeway, Markel Blockbuster / BBI Recreational Activities 16 30 0 53 27 nm nm 44% Icahn, Prentice, Third Point Terex / TEX Misc. Capital Goods 73 9 13 17 26 nm nm 4% Eton Park, Pabrai Leucadia National / LUK Conglomerates 81 31 5 na 23 na na 23% Advisory, Fairholme Vodafone / VOD Communications Services 32 16 97 12 21 9x 9x 0% Dodge & Cox, Greenlight Hyatt Hotels / H Hotels & Motels na na na 28 21 nm nm 77% Pershing Square, Singapore Multimedia Games / MGAM Casinos & Gaming 14 54 2 94 21 nm 41x 2% Baupost, Par, Royce Silicon Storage / SSTI Semiconductors 7 27 69 na 21 na na 21% Miller, RenTech, Riley Boston Scientific / BSX Medical Equipment 45 64 74 49 20 13x 11x 4% Greenlight, Paulson Redwood Trust / RWT Real Estate Operations 55 11 87 12 19 45x 8x 2% Cap Re, NWQ, Weitz CapitalSource / CSE Regional Banks 90 23 na 43 16 nm nm 24% Baupost, Farallon, Pabrai HSN / HSNI Retail (online) na 46 na na 13 19x 17x 34% Acadian Chesapeake Energy / CHK Oil & Gas Operations 91 26 5 16 12 10x 10x 0% Southeastern CIT Group / CIT Regional Banks 38 14 70 na 12 nm 9x 0% Baupost, Icahn Winthrop Realty / FUR Real Estate Operations 96 78 15 na 6 nm 24x 18% Fairholme, Pamet, Raffles Gastar Exploration / GST Oil & Gas - Integrated 98 21 96 na 6 na na 17% Palo Alto, Weiss Theravance / THRX Biotechnology & Drugs 75 70 62 na 4 nm nm 34% Baupost, Iridian, Litespeed SandRidge Energy / SD Oil & Gas Operations 92 7 na 34 3 10x 10x 20% Ares, Fairfax, Jennison Seabridge Gold / SA Gold & Silver na na 98 na na na na 33% Jennison, Royce



Insider Buying and Ownership (sorted by number of buys minus sells in past six months, then by insider ownership)

Recent Last Six Months Market Enter. EV / P/E (E) Price/ Price Insider Insider Insider Value Value LTM This Next Tang. Company / Ticker ($) Buys Sales Own. ($mn) ($mn) Rev. FY FY Book Notable Shareholders Terex / TEX 18.78 63 2 4% 2,030 3,000 .3x nm nm 1.6x Eton Park, Pabrai Silicon Storage / SSTI 2.84 24 - 21% 272 149 .6x na na 1.1x Miller, RenTech, Riley DDi Corp. / DDIC 4.33 20 1 9% 86 61 .3x 54x 48x 1.3x Miller, RenTech, Riley Hallmark Financial / HALL 7.63 11 - 11% 154 129 .5x 8x 9x 1.1x Bares, Newcastle International Assets / IAAC 15.28 11 3 31% 268 374 .0x 15x 29x 1.2x Bares, Leucadia, Steinberg Hyatt Hotels / H 29.34 8 2 77% 4,930 4,574 1.2x nm nm 1.1x Pershing Square, Singapore Take-Two / TTWO 9.65 9 3 3% 803 839 .9x nm 7x 4.3x Glenview, Icahn, Legg Texas Industries / TXI 34.56 5 - 17% 959 1,446 1.7x nm >99x 1.2x Shamrock, Southeastern Strayer Education / STRA 206.26 5 - 2% 2,890 2,796 7.1x 22x 18x 16.5x Lone Pine, Maverick, Weitz Redwood Trust / RWT 13.57 5 - 2% 1,054 5,098 9.0x 45x 8x 1.2x Cap Re, NWQ, Weitz AutoNation / AN 17.72 3 - 45% 3,043 3,952 .4x 13x 11x 3.0x Cascade, ESL, Weitz SandRidge Energy / SD 8.47 7 4 20% 1,554 3,579 3.0x 10x 10x nm Ares, Fairfax, Jennison Steak n Shake / SNS 345.00 5 2 8% 496 576 .9x 22x 19x 1.8x Centaur, Eagle, Lion CapitalSource / CSE 5.01 2 - 24% 1,619 nm nm nm nm 0.7x Baupost, Farallon, Pabrai MVC Capital / MVC 11.45 4 2 5% 278 340 13.0x 25x 28x 0.7x Cannell, Centaur, Royce Osteotech / OSTE 3.40 2 - 1% 61 64 .6x nm nm 0.8x Heartland, RenTech USG / USG 13.21 1 - 23% 1,312 2,584 .8x nm nm 1.4x Berkshire, Fairfax, T Rowe Air Transport / ATSG 2.35 4 3 7% 149 465 .3x 4x 4x 1.9x Acadian, Pabrai, RenTech Multimedia Games / MGAM 4.91 1 - 2% 134 189 1.5x nm 41x 1.8x Baupost, Par, Royce General Electric / GE 15.55 1 - 1% 165,569 551,569 3.5x 16x 13x 4.2x Dodge & Cox, Fairfax Citigroup / C 3.18 2 1 1% 90,577 nm nm 80x 9x 0.8x Fairholme, Paulson Weight Watchers / WTW 28.92 - - 56% 2,228 3,690 2.4x 11x 10x nm Bares, Cap World Overstock.com / OSTK 11.80 - - 45% 270 252 .3x 49x 25x nm Chou, Fairfax BreitBurn Energy / BBEP 15.22 - - 42% 803 1,432 1.8x 19x 10x 0.6x Acadian, Baupost Cresud / CRESY 12.72 - - 40% 634 907 2.4x 22x 27x nm Pabrai Intelligent Systems / INS 1.09 - - 36% 10 7 .4x na na 2.1x Weitz HSN / HSNI 19.57 - - 34% 1,104 1,243 .4x 19x 17x 27.9x Acadian Seabridge Gold / SA 24.82 - - 33% 933 919 nm na na 9.9x Jennison, Royce Dillard's / DDS 16.42 - - 30% 1,212 2,113 .3x 21x 22x 0.5x Acadian, Southeastern International Coal / ICO 3.88 - - 27% 695 989 .9x 19x 9x 1.1x Chou, Fairfax, Steelhead Investors Title / ITIC 35.41 - - 24% 81 72 1.0x 15x 19x 0.8x Bridgeway, Markel Audiovox / VOXX 6.86 - - 19% 157 118 .2x 43x 20x 0.6x Baupost, Kahn, Smith Winthrop Realty / FUR 11.69 - - 18% 186 412 9.0x nm 24x 1.2x Fairholme, Pamet, Raffles Gastar Exploration / GST 4.56 - - 17% 228 166 2.6x na na 1.5x Palo Alto, Weiss Zenith National / ZNT 28.14 - - 12% 1,066 1,110 1.9x 65x 34x 1.0x Artisan, Eagle, Royce Paychex / PAYX 29.53 - - 11% 10,672 10,385 5.0x 22x 21x 11.9x Cap World, Markel RSC Holdings / RRR 6.83 - - 11% 706 2,935 1.7x nm nm nm Fairholme, GS, Jennison Fairfax Financial / FRFHF 355.54 - - 8% 7,501 7,468 .9x na na 1.0x Centaur, Markel, Pabrai Stratasys / SSYS 25.65 - - 7% 520 468 3.8x >99x 52x 4.4x Bares, Riverbridge VistaPrint / VPRT 54.91 - - 5% 2,384 2,231 4.3x na na 7.0x Alydar, Lone Pine Alliance One / AOI 5.04 - - 5% 449 1,450 .6x 6x na 1.3x Baupost, RenTech Teck Cominco / TCK 35.88 - - 2% 21,124 28,050 4.3x na na 1.8x Pabrai Enzon Pharma / ENZN 9.13 - - 1% 415 555 2.8x nm nm 461.1x Baupost, Icahn, RenTech Kraft Foods / KFT 29.09 - - 1% 42,932 60,661 1.4x 14x 14x nm Berkshire, Pershing Square Potash Corp. / POT 111.60 - - 1% 33,031 36,687 3.9x na na 5.8x Cap World, Pabrai Horsehead / ZINC 10.47 - - 1% 454 309 .7x nm 18x 1.4x Driehaus, Pabrai, Royce Home Depot / HD 29.00 - - 1% 49,312 57,012 .8x 19x 17x 2.7x Dodge & Cox, Markel Accenture / ACN 40.49 - - 0% 28,903 24,901 1.1x 15x 13x 14.7x Cap Re, Weitz Vodafone / VOD 21.91 - - 0% 115,283 171,030 2.7x 9x 9x 7.4x Dodge & Cox, Greenlight CIT Group / CIT 32.25 - - 0% 6,450 nm nm nm 9x 3.3x Baupost, Icahn



Insider Buying and Ownership (sorted by number of buys minus number of sells in past six months) (continued)

Recent Last Six Months Market Enter. EV / P/E (E) Price/ Price Insider Insider Insider Value Value LTM This Next Tang. Company / Ticker ($) Buys Sales Own. ($mn) ($mn) Rev. FY FY Book Notable Shareholders Interactive Intell. / ININ 17.21 3 4 33% 297 232 1.8x 16x 15x 4.4x Bares, Essex The Knot / KNOT 9.74 - 1 15% 329 200 1.9x >99x >99x 2.3x T Rowe, Weitz DineEquity / DIN 27.80 - 1 4% 489 2,811 1.7x 13x 15x nm MSD, Southeastern AllianceBernstein / AB 26.53 - 1 3% 2,689 2,689 14.0x 13x 11x 1.4x Perkins, Royce ITC Holdings / ITC 52.70 - 1 1% 2,675 5,026 8.1x 21x 20x nm Bamco, Markel Automatic Data / ADP 40.59 - 1 0% 20,491 18,751 2.1x 17x 16x 7.4x Cap Re Wal-Mart / WMT 52.90 4 6 45% 201,558 242,908 .6x 15x 13x 3.9x Barkshire, GMO, Markel Theravance / THRX 9.70 - 2 34% 617 634 26.0x nm nm nm Baupost, Iridian, Litespeed Tandy Leather / TLF 3.70 - 2 18% 38 32 .6x na na 1.2x Bares Alleghany / Y 263.36 - 2 12% 2,341 2,278 2.3x 25x 15x 0.9x Centaur, Eagle, Royce Republic Airways / RJET 5.31 - 2 1% 183 2,327 1.6x 5x 7x 0.4x Greenlight, Kleinheinz Blockbuster / BBI 0.38 - 3 44% 74 1,041 .2x nm nm nm Icahn, Prentice, Third Point Winmark / WINA 20.70 9 12 31% 108 110 3.1x 20x 18x 6.6x Bares, Bremer Dell / DELL 13.84 - 3 14% 27,080 17,747 .3x 13x 11x 10.1x Fairfax, Southeastern, Weitz Lions Gate / LGF 5.23 2 5 3% 616 949 .6x na na nm Icahn, MHR, Third Point Fair Isaac / FICO 21.06 2 5 0% 979 1,212 1.9x 14x 13x nm Southeastern Cardinal Health / CAH 33.38 - 3 0% 12,066 12,431 .1x 15x 14x 4.1x Greenlight, Pzena DIRECTV / DTV 30.69 - 4 54% 29,366 33,236 1.7x 22x 14x nm Baupost, Southeastern Coca-Cola Company / KO 53.98 2 6 5% 124,316 126,962 4.1x 16x 14x 10.4x Berkshire, Cap Re Northrop Grumman / NOC 58.89 - 4 1% 17,830 18,849 .6x 10x 9x nm Centaur, Fairholme, Pzena Energizer Holdings / ENR 54.79 - 5 7% 3,826 5,979 1.5x 10x 9x nm Weitz Republic Services / RSG 26.03 1 6 6% 9,912 17,072 2.1x 16x 13x nm Blackstone, Cap World Biogen Idec / BIIB 55.21 - 5 1% 14,885 14,721 3.4x 12x 11x 4.6x Icahn, Primecap Brown & Brown / BRO 17.70 1 7 18% 2,514 2,590 2.6x 16x 15x nm Royce, Ruane Cunniff Fidelity National / FNF 13.80 1 7 5% 3,180 3,749 .6x 14x 11x 3.0x Artisan, Centaur, Pennant Contango Oil & Gas / MCF 52.15 - 8 21% 827 738 3.9x 12x 9x 2.2x Dreman, Sellers Johnson & Johnson / JNJ 62.72 - 8 1% 173,051 170,314 2.8x 13x 12x 9.2x Berkshire, Fairfax Chesapeake Energy / CHK 24.96 - 8 0% 16,167 28,186 2.4x 10x 10x 1.4x Southeastern Lab Corp. of America / LH 71.76 - 8 0% 7,621 8,866 1.9x 13x 12x nm Brave Warrior, Centaur, Harris tw telecom / TWTC 15.04 - 9 5% 2,258 3,095 2.6x 46x 29x 3.1x Cap Re, Southeastern Patterson Companies / PDCO 28.76 - 10 24% 3,522 3,877 1.3x 16x 15x 10.9x Markel, Select Equity Molson Coors / TAP 38.90 - 10 15% 7,198 8,177 2.7x 11x 10x 6.7x Cap Re, Children's ATP Oil & Gas / ATPG 16.38 - 10 15% 829 1,965 3.2x nm 12x 1.7x Aletheia, Greenlight, Soros Walgreen / WAG 33.49 - 10 1% 32,994 32,221 .5x 14x 12x 2.5x Bares, Cap Re CareFusion / CFN 25.17 2 13 19% 5,572 5,782 1.6x 17x 15x 6.5x Greenlight, Pzena Monsanto / MON 75.82 - 11 0% 41,373 42,907 3.7x 23x 17x 7.3x Lone Pine, Weitz Level 3 Comms / LVLT 1.38 - 12 34% 2,263 7,991 1.9x nm nm nm Fairfax, Southeastern ViaSat / VSAT 29.05 - 12 12% 1,055 1,400 2.2x 19x 15x 2.3x Baupost, Times Square Seahawk Drilling / HAWK 21.82 - 12 10% 254 248 nm nm nm 0.5x Chilton, MHR, Pennant Corrections Corp. / CXW 19.57 - 12 4% 2,269 3,373 2.0x 16x 15x 1.6x Kalmar, Pershing Square Chipotle / CMG 104.87 - 12 3% 3,324 3,058 2.0x 25x 21x 4.9x Cap World, Centaur McDonald's / MCD 63.59 - 12 0% 68,626 77,507 3.4x 14x 13x 6.4x Cap World, Markel Leucadia National / LUK 21.82 - 15 23% 5,305 6,771 6.3x na na 1.3x Advisory, Fairholme Yum! Brands / YUM 33.36 - 17 1% 15,646 18,559 1.7x 14x 12x nm Cap Re, Southeastern TransDigm / TDG 48.03 - 18 0% 2,355 3,963 5.2x 16x 14x nm Pennant, Tiger Exxon Mobil / XOM 64.80 - 21 1% 306,310 303,290 1.0x 11x 9x 2.9x Centaur, T Rowe EMC / EMC 17.12 - 27 1% 35,138 31,543 2.2x 15x 13x 6.8x Pershing Square, Primecap Boston Scientific / BSX 7.39 1 42 4% 11,165 16,219 2.0x 13x 11x nm Greenlight, Paulson Stamps.com / STMP 9.19 - 53 27% 145 100 1.2x 15x na 2.0x Bares, RenTech BIDZ.com / BIDZ 1.94 - 79 52% 43 44 .2x 18x 10x 1.3x Bares, Munder



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The Manual of Ideas: The Superinvestor Issue, February 2010

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