1. Definitions

Net Asset Value (NAV) per share:
Shareholder’s equity/(shares outstanding-treasury shares)

Shareholder’s equity: any of the following measures

• Japanese GAAP shareholder’s equity + after-tax catastrophe and price fluctuation reserves + estimate of deferred policy acquisition costs (10% of net premiums excluding savings and compulsory automotive premiums)
• IFRS shareholder equity
• US GAAP shareholder equity

NAV/share example using NipponKoa’s March, 2008 balance sheet:
(536,700+ 170,805+(586,000*10%))/(762m shares)= 1004 yen/share*

Growth in net asset value per share:
((NAV per share Year 2+dividends paid Year 2)- ((NAV/share Year 1+dividends paid year 1)/(NAV/share year 1+dividends paid year 1)

Target growth rate: based on 6%, Southeastern’s hurdle rate for Japanese equities, taking into account Japan’s current bond yield and an equity risk premium of approximately 5%

CAGR: “compound annual growth rate” assuming that dividends are reinvested in the shares at the share price on the day dividends are paid.

*Southeastern’s appraisal significantly exceeds NipponKoa’s March, 2008 net asset value per share, even after taking into account recent declines in Japan’s equity market. NipponKoa possesses substantial non-core real estate as well as franchise value over and above liquidation value.

2. Calculations