The GM Building, 767 Fifth Avenue, 18th

Floor, New York, NY 10153

Whitney R. Tilson and Glenn H. Tongue phone: 212 386 7160

Managing Partners fax: 240 368 0299

www.T2PartnersLLC.com

December 1, 2011

Dear Partner,

Our fund fell 0.6% in November vs. -0.2% for the S&P 500, +1.2% for the Dow and -2.3% for

the Nasdaq. Year to date, it’s down 25.0% vs. +1.1% for the S&P 500, +6.7% for the Dow and

-0.5% for the Nasdaq.

On the long side, our three winners of note were Grupo Prisa (B shares) (18.9%), Iridium (stock

11.8% and warrants 4.0%), and AB InBev (8.2%). These gains were more than offset by Netflix

(-21.4%), Sears Canada (-16.7%), Citigroup (-13.0%), Goldman Sachs (-12.5%), and dELiA*s

(-10.7%).

Our short book did well during the month and is now in the black on the year (meaning that all of

our losses are on the long side). Our biggest winners in November were Career Education

(-56.2%), Green Mountain Coffee Roasters (-19.4%), Nokia (-14.0%), Lululemon (-12.0%), ITT

Educational Services (-11.3%), and Salesforce.com (-11.1%). Our only loser of note was

InterOil (+15.1%).

Tax Estimates

Tax estimates through the end of October will soon be available, so if you would like to receive

yours please email or call Kelli at KAlires@T2PartnersLLC.com or (212) 386-7160.

Iridium

Iridium’s stock jumped after the company reported very strong earnings on November 8th

. The

company soundly beat analysts’ estimates and its own guidance for revenue, margins, EBITDA,

and subscriber growth, with particular strength in both the machine-to-machine and legacy

commercial voice product lines. Operational EBITDA margin hit a new high of 53.5% and

management raised its 2011 outlook for subscriber growth (up 25% year over year) and

operational EBITDA (up 20% year-over-year to ~$190 million). As an added bonus, the

company said it would pay “negligible cash taxes from 2011 to approximately 2020.”

We think this earnings report should assuage the concerns we’ve heard from investors and

analysts, and are optimistic that it will prove to be a turning point for the stock, which we believe

is deeply undervalued.

Grupo Prisa

Grupo Prisa received a boost in November when Mexican billionaire Carlos Slim acquired a

3.2% stake (see article in Appendix A). We think the stock will receive another boost in the next

few weeks when the company announces that it has successfully refinanced its debt.

-2-

As background, this is what we wrote in our September letter:

Spain and Portugal are going through a crisis similar to the one the U.S. went through in late

2008, so it’s not surprising that the stock of a company with 77% of its revenues in these two

countries is suffering. It’s also not surprising that the company’s operating performance has been

affected by the deep recession in its primary markets, though the company is holding up

remarkably well in light of this: in the first half of 2011, revenues were down only 1.2%, adjusted

EBITDA rose 3.6%, and the company’s restructuring and cost-cutting is on track.

Prisa, however, needs to refinance its debt to give it breathing room to get through the current

crisis. Our discussion with management and others – plus our own experience – leads us to have

a high degree of confidence that Prisa will be able to do so successfully, but the uncertainty is

weighing heavily on the stock.

Netflix and Green Mountain Coffee Roasters

A couple of weeks ago we sent you an article we published entitled “Why We’re Long Netflix

and Short Green Mountain Coffee Roasters,” which is attached in Appendix B. Since then, both

stocks have moved against us, making them even more attractive in our opinion.

InterOil

Though we haven’t discussed it in some time, InterOil remains one of our largest short positions.

Our bearish thesis is being validated as the company continues to miss deadlines on its

unrealistic promises, which will likely never be fulfilled, yet the company still has a $2.6 billion

market cap. We believe intrinsic value is zero.

The government of Papua New Guinea appears to finally be waking up to this gigantic

promotion because it’s demanded that InterOil find an “internationally-recognized LNG

[liquefied natural gas] operating partner,” which is highly unlikely ever to occur, for

reasons that are well articulated in this article, and will certainly not happen anytime in

the near future. InterOil bulls are hoping for a partnership similar to the one between Oil

Search and Exxon Mobil, but this deal took five years to reach final investment decision

(FID). Real energy companies do not quickly make multi-billion dollar commitments in

one of the world’s poorest, most corrupt countries, so even if InterOil has discovered a

major natural gas field (which we highly doubt), it will take years to sign a deal with an

“internationally-recognized LNG operating partner,” yet InterOil has promised this in the

very near future.

Here is a laundry list of what InterOil has promised by year-end:

- Secure FID with Mitsui for condensate stripping plant (CSP)

- Secure FEED [front-end engineering design] and FID with Energy World Corp.

for modular LNG plant

- Secure FEED and FID with Flex LNG on floating LNG plant

- Sign definitive agreement with Noble Group for offtake of 1MTPA [million tons

per annum]

- Secure “internationally-recognized LNG operating partner”

- Sign additional Heads of Agreement for 1-2MTPA offtake

-3-

With less than a month to go in the year, the only one of these that IOC has delivered on is the

last one, announcing recently that it had signed “a Heads of Agreement (HOA) with Gunvor

Singapore Pte. Ltd., for the supply of one million tonnes per annum (mtpa) of liquefied natural

gas (LNG).” However, Gunvor, according to Wikipedia, has unsavory ties:

Following the major Wikileaks release of US State Department cables in November

2010, it was reported by the London Daily Telegraph[17]

that the wealth of Russian Prime

Minister Vladimir Putin is linked to a "secretive Swiss-based oil trading firm" called

Gunvor. It said that John Beyrle, the United States Ambassador to the Russian Federation

stated that close connections exist between Gunvor and the Russian Government and that

he reported: "its secretive ownership is rumoured to include prime minister Putin."

The whole point of an offtake agreement is so lenders will provide the billions of dollars that this

project would cost – but we question whether anyone would lend such a large amount of money

against an agreement with a firm like Gunvor.

For the most in-depth expose of InterOil, see this article, which links to 12 pages starting here.

For a more recent take, see this article.

Conclusion Thank you for your continued confidence in us and the fund. As always, we welcome your

comments or questions, so please don’t hesitate to call us at (212) 386-7160.

Sincerely yours,

Whitney Tilson and Glenn Tongue

The unaudited return for the T2 Accredited Fund versus major benchmarks (including reinvested

dividends) is:

November Year-to-Date Since Inception

T2 Accredited Fund – net -0.6% -25.0% 113.9%

S&P 500 -0.2% 1.1% 27.9%

Dow 1.2% 6.7% 76.8%

NASDAQ -2.3% -0.5% 24.2% Past performance is not indicative of future results. Please refer to the disclosure section at the end of this letter. The T2

Accredited Fund was launched on 7/1/04.

-4-

T2 Accredited Fund Performance (Net) Since Inception

T2 Accredited Fund Monthly Performance (Net) Since Inception

Note: Returns in 2001, 2003, and 2009 reflect the benefit of the high-water mark, assuming an investor at inception.

-40

-20

0

20

40

60

80

100

120

140

160

180

200

Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

(%)

T2 Accredited Fund S&P 500

T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P T2 S&P

AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500 AF 500

January 7.8 4.1 -6.3 -5.0 4.4 3.6 -1.8 -1.5 -5.5 -2.6 4.7 1.8 1.1 -2.4 1.9 2.7 2.4 1.7 1.9 -5.9 -3.6 -8.4 -1.6 -3.6 -2.8 2.4

February -2.9 -3.1 6.2 -1.9 -0.6 -9.2 -1.1 -2.0 2.9 -1.6 7.0 1.5 2.1 2.0 -3.1 0.2 -3.3 -2.1 -6.9 -3.3 -8.9 -10.8 7.3 3.1 4.1 3.4

March 4.1 4.0 10.3 9.8 -2.6 -6.4 3.0 3.7 1.4 0.9 3.9 -1.5 3.9 -1.7 3.9 1.3 -0.8 1.1 -2.3 -0.5 2.9 9.0 4.6 6.0 -4.1 0.0

April 2.1 3.7 -5.1 -3.0 5.1 7.8 -0.2 -6.0 10.5 8.2 2.4 -1.5 0.6 -1.9 2.2 1.4 4.4 4.6 -0.9 4.9 20.1 9.6 -2.1 1.6 1.9 3.0

May -5.7 -2.5 -2.8 -2.0 1.8 0.6 0.0 -0.8 6.6 5.3 -1.4 1.4 -2.6 3.2 1.8 -2.9 2.5 3.3 7.9 1.2 8.1 5.5 -2.6 -8.0 -1.9 -1.1

June 2.2 5.8 4.1 2.4 4.6 -2.4 -7.3 -7.1 2.9 1.3 0.1 1.9 -3.1 0.1 -0.2 0.2 -3.0 -1.5 -1.2 -8.4 -5.0 0.2 4.5 -5.2 -2.4 -1.7

July -0.7 -3.2 -3.6 -1.6 -1.1 -1.0 -5.0 -7.9 2.3 1.7 4.6 -3.4 0.5 3.7 -0.9 0.7 -5.4 -3.0 -2.5 -0.9 6.8 7.6 3.5 7.0 -4.6 -2.0

August 4.1 -0.4 5.4 6.1 2.5 -6.3 -4.3 0.5 0.4 1.9 -0.9 0.4 -3.2 -1.0 2.9 2.3 1.7 1.5 -3.3 1.3 6.3 3.6 -1.5 -4.5 -13.9 -5.4

September -3.3 -2.7 -7.2 -5.3 -6.1 -8.1 -5.4 -10.9 1.7 -1.0 -1.6 1.1 -1.5 0.8 5.0 2.6 -1.1 3.6 15.9 -9.1 5.9 3.7 1.7 8.9 -9.3 -7.0

October 8.1 6.4 -4.5 -0.3 -0.8 1.9 2.8 8.8 6.2 5.6 -0.4 1.5 3.5 -1.6 6.3 3.5 8.2 1.7 -12.5 -16.8 -1.9 -1.8 -1.7 3.8 7.0 10.9

November 2.8 2.0 -1.5 -7.9 2.3 7.6 4.1 5.8 2.2 0.8 0.8 4.0 3.1 3.7 1.9 1.7 -3.6 -4.2 -8.9 -7.1 -1.2 6.0 -1.9 0.0 -0.6 -0.2

December 9.8 5.9 2.3 0.5 6.5 0.9 -7.4 -5.8 -0.4 5.3 -0.2 3.4 -1.3 0.0 1.4 1.4 -4.3 -0.7 -4.0 1.1 5.5 1.9 0.5 6.7

YTD

TOTAL31.0 21.0 -4.5 -9.1 16.5 -11.9 -22.2 -22.1 35.1 28.6 20.6 10.9 2.6 4.9 25.2 15.8 -3.2 5.5 -18.1 -37.0 37.1 26.5 10.5 15.1 -25.0 1.1

20112005 2006 2007 2008 2009 20101999 2000 2001 2002 2003 2004

-5-

Appendix A

WSJ, DEALS & DEAL MAKERS NOVEMBER 18, 2011, 9:50 A.M. ET

Slim Buys Stake in Spain's El Pais

By DAVID ROMAN And ANA GARCIA

MADRID—A company owned by Mexican billionaire Carlos Slim has acquired a 3.2% stake in

Spain's media group Promotora de Informaciones SA, in an unexpected move into one of the

economies at the forefront of the euro zone's debt crisis.

Mr. Slim, one of the world's richest men, bought the stake through Inmobiliaria Carso SA de CV,

a firm which he controls, according to regulatory filings released Friday. Mr. Slim has also used

Carso to build up a 8.1% stake in New York Times Co., the publisher of the New York-based

daily.

Inmobiliaria Carso didn't disclose how much it paid for the stake. At current market prices, it is

worth €12.5 million (about $17 million). The shares of Prisa, as the Spanish company is known,

jumped on the news of Mr. Slim's purchase, and they last traded up 13% at €0.85, valuing the

entire company at €383.2 million.

For Madrid-based Prisa, the country's largest media group, Mr. Slim's move is a much-needed

show of backing. The company, owner of Spain's best-selling newspaper El Pais, has been

restructuring and shedding assets in recent years as it seeks to reduce its heavy debt load.

As in the case of the New York Times Co., Prisa's share price has struggled recently. El Pais has

suffered a dip in sales, as well as a revenue squeeze owing to lower advertising. El Pais sells

around 370,000 newspapers a day.

Late last year, Prisa announced a plan to lay off 2,500 staff through the first quarter of 2012. This

came after U.S. investment fund Liberty Acquisition Holdings Corp. bought a majority stake in

the firm for some €650 million.

This is Mr. Slim's first foray in Spain's media sector, which until recently was flushed with cash

owing to the country's long-running property bubble. The sector is now in dire straits because

large corporate and government advertisers have cut down on investments sharply, just as

Internet competition and a drop in spending by highly indebted households has lowered demand

for newspapers.

Prisa, haunted by a series of bad investments, has been Spain's largest media company for

decades. Besides El Pais, it also owns Cadena Ser, Spain's largest radio network by audience,

and the profitable publisher Santillana, which has a large foothold in Latin America.

DISCLAIMER: THIS LETTER IS FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY AND SHALL NOT BE CONSTRUED

TO CONSTITUTE INVESTMENT ADVICE. NOTHING CONTAINED HEREIN SHALL CONSTITUTE A SOLICITATION,

RECOMMENDATION OR ENDORSEMENT TO BUY OR SELL ANY SECURITY OR PRIVATE FUND MANAGED BY T2 PARTNERS.

SUCH AN OFFER WILL BE MADE ONLY BY AN OFFERING MEMORANDUM, A COPY OF WHICH IS AVAILABLE TO QUALIFYING

POTENTIAL INVESTORS UPON REQUEST. AN INVESTMENT IN A PRIVATE FUND IS NOT APPROPRIATE OR SUITABLE FOR ALL

INVESTORS AND INVOLVES THE RISK OF LOSS.

INVESTMENT FUNDS MANAGED BY T2 PARTNERS OWN CALLS AND ARE LONG THE STOCK OF NETFLIX AND OWN PUTS AND

ARE SHORT THE STOCK OF GREEN MOUNTAIN COFFEE ROASTERS.

WE MAKE NO REPRESENTATION OR WARRANTIES AS TO THE ACCURACY, COMPLETENESS OR TIMELINESS OF THE INFORMATION, TEXT, GRAPHICS OR OTHER ITEMS CONTAINED IN THIS PRESENTATION. WE EXPRESSLY DISCLAIM ALL

LIABILITY FOR ERRORS OR OMISSIONS IN, OR THE MISUSE OR MISINTERPRETATION OF, ANY INFORMATION CONTAINED IN

THIS PRESENTATION.

T2 PARTNERS MANAGEMENT LP IS A REGISTERED INVESTMENT ADVISOR. A COPY OF T2’S DISCLOSURE STATEMENT (PART II

OF FORM ADV), WHICH CONTAINS MORE INFORMATION ABOUT THE ADVISOR, INCLUDING ITS INVESTMENT STRATEGIES

AND OBJECTIVES, CAN BE OBTAINED BY CALLING (212) 386-7160.

-6-

Appendix B

Why We’re Long Netflix and Short

Green Mountain Coffee Roasters

November 13, 2011

T2 Partners LLC

The GM Building

767 Fifth Avenue, 18th Floor

New York, NY 10153

(212) 386-7160

Info@T2PartnersLLC.com

-7-

Netflix and Green Mountain Coffee Roasters are former market darlings whose stocks have

collapsed in recent months, wiping out a combined $23.2 billion in market capitalization from their

peaks ($11.7 and $11.5 billion, respectively). By many metrics, both stocks appear cheap and the

terrible headlines are attractive to value investors like us, who like to buy when others are selling in

a panic. For example, BP was one of our biggest winners in 2010 (click here to read our analysis at

the time). The company, its CEO and the stock were all universally hated, with endless negative

headlines (similar to Netflix today), which provided a wonderful opportunity to buy the stock far

below its intrinsic value. We love situations like this – as long as we’re convinced that there’s a

good company and a cheap stock once one cuts through all of the noise.

So are Netflix and Green Mountain similar opportunities today? Yes and no. We’ve analyzed both

companies carefully and concluded that Netflix is an attractive investment at today’s price, so funds

we manage own the stock, but Green Mountain isn’t, we remain short it. Allow us to explain why.

Similarities

The stocks of both Netflix and Green Mountain over the past three months have suffered similar

declines, as this chart shows:

In addition, the companies are remarkably similar in revenues and profitability over the past 12

months:

Yet here the similarities end. Let’s take a look at both companies.

NFLX GMCR

Revenues $2,925 $2,651

Operating Income $393 $369

Net Income $238 $201

Operating Margin 13.4% 13.9%

Net Margin 8.1% 7.6%

All figures are in millions, over the trailing 12 months

-8-

Netflix

When Netflix fell 35% in one day last month to under $80, we purchased it aggressively, not as a

short-term trade, but with a multi-year horizon. Over the next few quarters, the company will likely

lose money as it invests in international growth and struggles to overcomes its missteps over the

past few months. Ultimately, however, we think Netflix is an excellent company and that the

market has overreacted to all of the recent negative news, thereby providing us the chance to own it

at a cheap price, for reasons we discussed in our October letter to investors.

Green Mountain

In contrast, we are not only still short Green Mountain’s stock, but it remains our largest short

position, even after last Thursday’s 40% decline. Our reasons are superbly articulated in the 110-

slide presentation that Greenlight Capital’s David Einhorn gave on the company at the Value

Investing Congress last month. Even if you don’t have a position in the stock, it’s worth studying

as a brilliant piece of analytical work – and it’s a must-read if you have a position. Although we

were already short Green Mountain, after seeing Einhorn’s presentation we concluded that it was an

even better short than we realized and increased the size of our investment, which has paid off

handsomely.

There’s a saying that pigs get fed and hogs get slaughtered, so why don’t we cover our short and

take our profits? After all, the stock, at $43.71, is now trading at “only” 16.8x the midpoint of the

company’s guidance for next year, and at 12.5x Einhorn’s estimate of the company’s long-term

earnings power of $3.50 (see page 66 of his presentation).

The answer is that we think only the first shoe has dropped and there are more to come.

Netflix vs. Green Mountain Here is a summary of our concerns about Green Mountain, with a comparison to Netflix:

Green Mountain gave strong guidance for next quarter and year, which we think, in light of the

company’s performance last quarter, is too high and will need to be reset downward. Analysts

remain bullish. In contrast, Netflix has given very poor – and, we believe, conservative – guidance

that we think the company can exceed, and analysts are significantly more bearish.

Though it has similar revenues and profits, Green Mountain’s market cap, at $7.0 billion, is nearly

50% higher than Netflix’s $4.7 billion, which means there’s more downside and less likelihood of an

acquisition.

Green Mountain’s business is highly dependent on two key patents, both of which expire on

September 16, 2012. Contrary to the company’s and bullish analysts’ views, we believe that soon

after these patents expire, there will be significant competitive pressures that will meaningfully

impact Green Mountain’s profitability and growth. Netflix faces no patent risk though it, too, faces

many competitive threats.

There is an ongoing SEC investigation at Green Mountain and we think Einhorn’s presentation

provides a detailed roadmap that will, in our opinion, likely lead the SEC to uncover various

accounting shenanigans. Netflix faces no such risk.

Green Mountain has spent $1.4 billion in cash on three richly-priced acquisitions over the past two

years, which raises questions about organic growth and earnings quality. Einhorn notes: “The very

-9-

high allocations to Goodwill raise suspicion about subsequent earnings quality.” (See page 53 of his

presentation.) In contrast, Netflix has made no acquisitions in recent years.

Green Mountain inventories and cap ex have been growing much faster revenues: last year, on a 95%

revenue increase, inventories rose 156% from $262 million to $672 million, while cap ex rose 125%

from $126 million to $283 million. The result has been severely negative free cash flow and a

significant worsening of the balance sheet over the past two years, which raises questions about how

the company will fund its cap ex plans for next year. The trends at Netflix are precisely the opposite.

Netflix vs. Green Mountain: A Comparison of Balance Sheets and Cash Flows

The last bullet point warrants further discussion because, while the two companies have similar

income statements, their balance sheets and cash flows diverge massively. Netflix has a healthy net

cash position of $166 million, while Green Mountain has $561 million in net debt. And Netflix has

healthy operating cash flow, which substantially exceeds both net income and cap ex, resulting in

free cash flow of $201 million, whereas Green Mountain is the reverse, with free cash flow of minus

$282 million. This chart shows the data for both companies over the past 12 months:

The balance sheet and cash flow numbers are critical because both companies are making large

investments to grow their businesses: in Netflix’s case, signing deals for streaming content and

growing internationally and, in Green Mountain’s case, primarily to “increase our portion pack

packaging” and “expand our physical plants.” Both companies (and stocks) are at risk if they run

into trouble financing these investments.

Given Netflix’s strong balance sheet and free cash flow, we think it’s highly likely that the company

will be able to fund its growth, even if it loses more subscribers than the company (and we) expect

(within reason). In contrast, Green Mountain is at much higher risk, both because of higher planned

expenses and also a far weaker balance sheet and cash flow statement.

As noted above, in last week’s earnings release, Green Mountain said “For fiscal 2012, we currently

expect to invest between $630.0 million to $700.0 million in capital expenditures to support the

Company’s future growth.” That’s a huge amount of money for a company that only had $201

million of net income last year and less than $1 million of operating cash flow.

Our question is, where are they going to get the money? They’ve guided to $2.55-$2.65 in EPS in

the next 12 months, but we are highly skeptical that the company will meet this guidance, and it

also excludes some very real cash expenses like “acquisition-related transaction expenses; legal and

NFLX GMCR

Cash & Cash Equiv* $366 $13

Debt $200 $574

Net Cash (Debt) $166 ($561)

Operating Cash Flow $349 $1

Cap Ex** $148 $283

Free Cash Flow $201 ($282)

* For GMCR, excludes $28M of restricted cash

** For NFLX, cap ex includes "Acquisitions of DVD content library"

All figures are in millions, over the trailing 12 months

-10-

accounting expenses related to the SEC inquiry and the Company’s pending litigation.” In addition,

the company’s balance sheet is consuming huge amounts of cash: due mainly to the rise in

inventories and, to a lesser extent, accounts receivable, operating cash flow over the last 12 months

was a mere $785,000 – basically zero. Nor was this an exception: in the prior year, the company

had $80 million in net income yet operating cash flow of minus $3 million. On top of this are

numerous richly priced acquisitions, which consumed $908 million in cash last year and $459

million the year before.

To summarize, over the last two years, Green Mountain has generated $281 million of net income,

yet lost $2 million of operating cash flow, plus spent $410 million on cap ex and another $1,367

million on acquisitions – a total cash burn of $1.8 billion! This chart shows the company’s

accelerating cash burn over the past three years:

So how has Green Mountain funded these huge cash flow deficits? By using cash, taking on debt,

and issuing stock. Over the past two years, the company has seen its net cash position go from

+$164 million to -$561 million, a swing of $725 million, plus it’s raised $990 million by selling

stock, as this chart shows:

In summary, we question how Green Mountain will fund its $630-$700 million cap ex plan over the

next 12 months. Even if one believes the midpoint of the company’s guidance of $2.60/share, this

only translates into $414 million of net income, plus the balance sheet is likely to continue

consuming cash. We think investors will not look kindly on more debt, nor issuing stock at

depressed prices, yet the company almost certainly will have to do one or the other.

Conclusion

We’re long Netflix because we think the bad news is out, we like the company’s balance sheet and

cash flows, and see few red flags. In contrast, with Green Mountain, we think there is much more

bad news to come, are very concerned about the company’s balance sheet and cash flows, and see

many red flags.

GMCR ('09) GMCR ('10) GMCR ('11)

Operating Cash Flow $38 ($3) $1

Cap Ex $48 $126 $283

Free Cash Flow ($10) ($129) ($282)

Acquisitions $41 $459 $908

FCF Minus Acquisitions ($51) ($588) ($1,190)

GMCR ('09) GMCR ('10) GMCR ('11)

Cash & Cash Equiv* $242 $4 $13

Debt $78 $354 $574

Net Cash (Debt) $164 ($350) ($561)

Issuance of Common Stock $395 $9 $981

* Excludes restricted cash

-11-

T2 Accredited Fund, LP (the “Fund”) commenced operations on January 1, 1999. The Fund’s

investment objective is to achieve long-term after-tax capital appreciation commensurate with

moderate risk, primarily by investing with a long-term perspective in a concentrated portfolio of

U.S. stocks. In carrying out the Partnership’s investment objective, the Investment Manager, T2

Partners Management, LLC, seeks to buy stocks at a steep discount to intrinsic value such that

there is low risk of capital loss and significant upside potential. The primary focus of the

Investment Manager is on the long-term fortunes of the companies in the Partnership’s portfolio

or which are otherwise followed by the Investment Manager, relative to the prices of their stocks.

There is no assurance that any securities discussed herein will remain in the Fund’s portfolio at

the time you receive this report or that securities sold have not been repurchased. The securities

discussed may not represent the Fund’s entire portfolio and in the aggregate may represent only a

small percentage of an account’s portfolio holdings. It should not be assumed that any of the

securities transactions, holdings or sectors discussed were or will prove to be profitable, or that

the investment recommendations or decisions we make in the future will be profitable or will

equal the investment performance of the securities discussed herein. All recommendations within

the preceding 12 months or applicable period are available upon request.

Performance results shown are for the T2 Accredited Fund, LP and are presented net of

management fees, brokerage commissions, administrative expenses, other operating expenses of

the Fund, and accrued performance allocation or incentive fees, if any. Net performance

includes the reinvestment of all dividends, interest, and capital gains. Performance for the most

recent month is an estimate.

The fee schedule for the Investment Manager includes a 1.5% annual management fee and a 20%

incentive fee allocation. For periods prior to June 1, 2004, the Investment Manager’s fee

schedule included a 1% annual management fee and a 20% incentive fee allocation, subject to a

10% “hurdle” rate. In practice, the incentive fee is “earned” on an annual, not monthly, basis or

upon a withdrawal from the Fund. Because some investors may have different fee arrangements

and depending on the timing of a specific investment, net performance for an individual investor

may vary from the net performance as stated herein.

The return of the S&P 500 and other indices are included in the presentation. The volatility of

these indices may be materially different from the volatility in the Fund. In addition, the Fund’s

holdings differ significantly from the securities that comprise the indices. The indices have not

been selected to represent appropriate benchmarks to compare an investor’s performance, but

rather are disclosed to allow for comparison of the investor’s performance to that of certain well-

known and widely recognized indices. You cannot invest directly in these indices.

Past results are no guarantee of future results and no representation is made that an investor will

or is likely to achieve results similar to those shown. All investments involve risk including the

loss of principal. This document is confidential and may not be distributed without the consent

of the Investment Manager and does not constitute an offer to sell or the solicitation of an offer

to purchase any security or investment product. Any such offer or solicitation may only be made

by means of delivery of an approved confidential offering memorandum.