Third Point LLC390 Park Avenue New York, NY  10022 Tel 212 715 3880

May1,2014

FirstQuarter2014InvestorLetterReviewandOutlookHarsh winter weather caused the economy and corporate earnings to falter in the firstquarter of this year, a seasonal phenomenon we expect will dissipate this spring. Thisweakness was exacerbated by new Fed Chair Janet Yellen’s statements shifting themarket’sexpectationsofthetimingoftheFed’sfirstratehike. Fourmonthsinto2014,itnowseemsevidentthatinvestmentperformancewillrequireacombinationofgoodstockselection,patience,anddefttrading.Looking back, perhaps our optimism at the beginning of the yearwasmisplaced. First,certain sectors were clearly exhibiting bubblelicious valuations. Looking at the biggerpicture,itisevidentinhindsightthatatleastforthefirstpartoftheyear,weweretoilingagainst somewhatofa “Lose/Lose”backdrop. Ononehand, if growthdidnotacceleratethenthemarketappearedfairlyvalued(atbest)given2013'ssignificantre‐rating.Ontheflipside,ifgrowthdidaccelerate,thetimingoftheFed'schangeinmonetarypolicywouldhangoverthemarket.Takingalookatthecurrentlandscape,thedeclineinoverinflatedsectors,thoughpainfulintheshort term, ishealthy inourview. Wehaveseenanequallypainful reversion to themeanonmanypopulartrades. Consensuspositionsenteringthisyear– long Japan, longmomentum, and short bonds – have all underperformed, while value and emergingmarkets have accelerated. This reversion has created a violent bout of deleveraging,particularly among hedge fund holders, creating chances to add to our portfolio atattractivelevels.Despiteitschallengingstart,itappearsaswebeginMaythattheU.S.economyisbeginningtoacceleratefromthelowlevelsofQ1. Asaresult,perhaps2014willbetheyearwhereoneshouldnot“SellinMayandgoaway”.Nevertheless,itisimportanttokeepinmindthatbythisFall,wewillhavehadnegativerealinterestratesintheU.S.foralongerconsecutiveperiod thanatanyother time–evenafter theGreatDepression. As taperingends,mostlikelyinOctober,andthediscussionshiftstoanimpendingfirstratehike(probablyaroundthe timewhenunemployment isapproaching6%and inflation is tickinghigher),wewillhavetobuckleourseatbeltsforaninevitablymorevolatileenvironment.

2

QuarterlyResultsSetforthbelowareourresultsthroughMarch31standfortheyear2014:

ThirdPoint

OffshoreFundLtd. S&P500

2014Year‐to‐DatePerformance* 3.3% 1.8%

AnnualizedReturnSinceInception* 17.9% 7.3%*ThroughMarch31,2014.** Returnfrominception,December1996forTPOffshoreFundLtd.andS&P500.Our performance in the first quarter was buoyed by corporate credit and mortgageinvestments,whichprovidedroughlyhalfofourreturnsdespitebeingonlyroughly25%ofourexposure.Thefundsarehardclosedtoallinvestorsandnotcurrentlyacceptingnewcapital.SelectPortfolioPositionsEquityPositionUpdate:TheDowChemicalCompany(“Dow”)SincewedisclosedourstakeinJanuary,Dow’smanagementhastakenseveralshareholder‐friendly actions including increasing the company’s dividend, approving a $4.5 billionbuyback to address the impending conversion of the Warren Buffett/KIA preferredsecurities, and committing to more portfolio divestitures. Management’s level ofshareholder engagement has also risen notably, demonstrating an admirable and strongcommitmenttoaddressinglong‐standingconcerns.Wealso applaudDow’s recently stated initiative to increase transparency. Shareholdershave long called for the company to increase disclosure, improve the clarity of theirreporting,andclearlyidentifyunderlyingbusinessdrivers.OnDow’sfirstquarterearningscall, management suggested it could simplify the portfolio reporting structure by re‐classifying(orremoving)theFeedstocks&Energysegment.Inourview,simplyjoiningtheFeedstocks & Energy and Performance Plastics segments would not effectively increasetransparency. Instead, the priority should be to implement a consistent, market‐basedtransfer pricingmethodology acrossandwithin all segments so shareholders can clearlyunderstandeachbusinessunit’sunderlyingprofitability.Further,tobeconsistentwithitspeers, all of Dow’s petrochemical capacities need to be disclosed in detail so thatshareholders can more easily benchmark performance versus competitors. Allshareholderseagerlyanticipateprogressontheseimportantinitiatives.Despite thepositivesteps taken,westillbelieveDowisunder‐earning itspotential in itspetrochemicalbusinesses,aconcernthatmanagementhasyettoadequatelyaddress. Toquantify the extent of under‐earning, we sought to compare Dow’s capacity and profits

3

relative to peers and industry averagemargins. The result of this carefully researchedanalysisledustoconcludethatDow’sintegratedstrategydoesnotmaximizeprofits.PetrochemicalUnder‐EarningDow’smanagementhasyettoaddressthecruxofThirdPoint’scaseforincreasingvalue:curingunder‐earning in thePetrochemicalbusinesses. Thisunder‐earning is clearwhenone compares Dow to its largest North American petchem peer, LyondellBasell(“Lyondell”). Dowhas~30%moreNorthAmerican ethylene capacity, triple theMiddleEastern ethylene capacity, andmoreNorthAmerican derivatives capacity than Lyondell,yet the two companies generate the same amount of EBITDA in their respectivepetrochemicalbusinesses.1Additionally,DowengagesinmultipledownstreambusinessesinitsPerformanceMaterialssegmentthatLyondelldoesnot.

Figure1:2

Thisdiscrepancyisdifficultforthemarkettoidentify,becauseDowdoesnotdiscloseanyof its capacities. Therefore, to identify themagnitudeofunder‐earning,wedidourownbottom‐upanalysis examining: i) the capacities for thepetrochemicalsDowproduces, ii)average2013industrymarginsforthosecapacities,andiii)theactual2013feedslatemixesbyplant(whereapplicable).Theresultofthisbottom‐upanalysisshowsameaningfulgapbetween what Dow’s capacities indicate potential EBITDA should be and the amount ofEBITDAactuallygenerated:

1 Dow’s petrochemical business includes the Feedstocks & Energy, Performance Plastics, and Performance Materials segments. LYB’spetrochemicalbusinessincludesallsegmentsexceptRefiningandTechnology.2Dow’sPetchemEBITDAincludesallFeedstocks&Energy,PerformancePlastics,andPerformanceMaterials.WeallocatecorporateexpensetoDow’s2013segmentEBITDAbasedonanestimateofDow’sPetchem%oftotalemployees.LYBPetchemEBITDAincludesallsegmentsexceptRefiningandTechnology.LYBallocatescorporateexpensetosegmentEBITDA.BothDowandLYB2013EBITDAhasbeenadjustedtoincludeanestimateofJVEBITDAinexcessofequityincome.Source:Companyfilings,ThirdPointestimates.Capacitydata:IHS,companyfilings,ThirdPoint.

4

Figure2:3,4

Weestimate theunder‐earning tobeat least$2.5billion,whichwebelieve is theresult of a strategy focused more on selling downstream products than onmaximizingprofits.In this analysis, we have incorporated Dow‐specific adjustments where using industryaveragemarginoreffectivecapacitymaybeoverlyoptimistic.Theseadjustmentsincludeassuming a significant discount to spot pricing for Europeanmerchant ethylene volume,and low capacity utilization in both Argentine ethylene and Canadian polyethylene.Additionally,while thePerformanceMaterialssegment(wherecapacitiesandspreadsdonotexist)reported$1.5billionofEBITDAin2013,wehaveonlyassumed~$800millioninour estimate. Since Dowmoves numerous self‐sourced inputs at cost, a portion of thissegment’s EBITDA is transferred from upstream assets in the form of a raw materialsubsidy.ThelackofdisclosureandinconsistenttransferpricingmakeitdifficulttoisolatetheportionofPerformanceMaterialsEBITDA that is actually generatedbyassetswithinthesegment.The~$800millionestimaterepresentsour“bestguess”astowhatsegmentEBITDAwouldhavebeenwithoutanyupstreamsubsidizationintoproductslikepropyleneoxide,polyurethanes,epoxies,chlorinatedorganics,andoxygenatedsolvents.At the top of the Dow “bottom‐up” bar graph,we have also highlighted $700million ofunder‐earningrelatedtochlor‐alkali.Weshowitseparatelytoaccountfortwosignificantstructuraldeficiencies inDow’s footprint: i) the suboptimal useof ethylene that is beingcombinedwith chlorine in the production of EDC, and ii) Dow’s chlorohydrin propylene

3 SeeFootnote2 forPetchemEBITDA composition.We estimate that non‐service cost relatedpension expenses included in reportedEBITDAamountto~$400millionforDowand$20millionforLYBin2013;pensionadjustmentshavenotbeenincluded.Source:Companyfilings,ThirdPointestimates.4Bottom‐upEBITDAcalculatedusing2013industryavgmargin,withadjustmentsforbothDowandLYBwhererelevant.Actual2013feedslatemixesusedforNAMethyleneand100%naphthaforRoW(ex‐ME).Source:ThirdPointestimates,IHS,TheHodsonReport,companydata.

5

oxideproductionprocess,whichconsumescausticandconsequentlycausesDowtoloseameaningful portion of its merchant caustic potential. We do not believe this lost ECUmargin is clawed back further downstream where propylene oxide is consumed inproducts such as polyurethanes. In both cases, Dow is hamstrung by excess chlorinecapacity and its desire to supply downstream derivative products with subsidized rawmaterials.Importantly, when we replicate the same bottom‐up analysis for Lyondell (i.e. whatLyondell could earn vs.what it actually earns), the difference between our estimate andLyondell’s actual EBITDA is negligible. This result reflects a management team that isfocusedonbeingthelowestcostcommoditypetrochemicalproducerandaclearstrategythatisdrivenbyupstreamprofitmaximization.In Figure3,we see thatDowhas~20%greater sales thanLyondell,which is consistentwithDow’s largerupstreamcapacityandpresence indownstreamderivatives. However,thedownstreambusinessesrequiresignificantheadcount,facilities,R&D,andSG&A.Dow’sheadcountis~2.5timesmorethanLyondell’s,whichisnotareflectionofpoorefficiency,butratherthatDowisengagedinnumerousdownstreamderivativesthatLyondellisnot.Yet, the incrementalsalesandheadcountdonotgenerateadditionalprofitsas illustratedbelow:

Figure3:5,6

This is the underlying problem with Dow’s strategy: many upstream petrochemicalmoleculesdonotgainincrementalEBITDAastheymovedownstream,oftenthrough3or4business units, before they are sold to the end‐customer. In fact, our under‐earninganalysis suggests that Dow’s commitment to the downstream integrated strategy hasactuallycreatedasignificantdragonupstreamprofitability.

5 LYB headcount excludes ~500 employees assumed for the Refining segment. Dow headcount excludes ~12,000 employees in Electronic &FunctionalMaterialsandCoatings&Infrastructure,and~8,000inAgriculturalSciences.Source:Companyfilings,pressreleases,ThirdPoint.6 See Footnote 2 for segments contributing to EBITDA. Figure 3 EBITDA excludes JVs in order to be consistentwith associated revenue andheadcount.

6

UnconvincingIntegratedStrategyFigure4 is thevisual representationofwhatDow’smanagementdescribesas taking lowcost inputsandusingvalue‐add innovation tomakedifferentiateddownstreamproducts.This, in our opinion, is the essence ofwhyDow’s strategy is flawed – none of ethylene,propylene,orchlorineprovidesanyproductdifferentiationorspecializationinpackaging,coatings,orfood&nutritionproducts:Figure4:7

OntheQ4earningscall,CEOAndrewLiverisclaimedthat“morethanhalftheprofitsthatare coming out of [the petchem] chain come from innovation, not from low‐costfeedstocks”.Werespectfullydisagree.ThefactthatDow’spetchembusinessesunder‐earntheircapacities(seeFigure2)suggeststhatthisclaimisimpossible.Downeedstoprovideinvestors analytical or numerical evidence about the value derived from integration andinnovationifthemarketistobelievetheseclaims.GivenDow’sdecisiontoexitchlor‐alkali,itappearsthatDowbelievesthatitsAgChemicalsand Ag Biology businesses do not derive value‐add differentiation from chlorineintegration. We take this logic one step further and question whether Dow’s specialtysegments need ethylene or propylene integration.8 Within petrochemicals, there areupstream and downstream products in which we see few identifiable niches whereincremental value from integration exists (notwithstanding the value derived from rawmaterialsbeingtransferredatcostratherthanmarketprice).Rather,aswestatedabove,

7Source:DowStrategicUpdate,SlidePresentation3/19/2014.8SpecialtysegmentsincludeAgriculturalSciences,Coatings&Infrastructure,andElectronic&FunctionalMaterials.

7

thereappearstobenegativevaluefromconvertingupstreampetrochemicalmoleculesintodownstreamproducts.PoorReturns,PoorCapitalAllocation,MisleadingBenchmarkingDowrecentlysharedabenchmarkinganalysiscomparingtheReturn‐On‐Assets(“ROA”)ofitsPerformancePlasticssegmentwithaself‐selectedchemicalsuniverse.9Thecomparisonisnotapples‐to‐applesbecausethePerformancePlasticssegmentisDow’smostprofitabledivisionandisalmostexclusivelyapolyethylenebusiness,whereasthechemicalsuniverseiscomprisedofentirecompanies,manyofwhichareinverydifferentbusinesses.Figure5:10

ThePerformancePlasticssegmentalsoreceivestheentiretyof itsethyleneinputsatcostfromtheFeedstocks&Energysegment.Again,duetoinadequatedisclosure,itisnotclearwhether the numerator or the denominator in Performance Plastics’ ROA is an accuratereflectionof trueprofitabilityorassets. Webelieveamore fair assessmentwouldbe toexaminetheROAofFeedstocks&Energy,PerformancePlastics,andPerformanceMaterialstogether,whichencompassesallofDow’supstream‐downstreamintegratedpetrochemicalreturns and assets. To be consistent, we have used Dow’s own ROA calculation andconstructedatablewithallofthesegmentROAs:

9ChemicalsuniverseconsistsofAxiall,BASF,Bemis,Celanese,CFIndustries,Dupont,Eastman,FMC,Huntsman,LyondellBasell,Mosaic,Potash,PPG,SealedAir,andWestlake.Source:DowStrategicUpdate,SlidePresentation3/19/2014. 10Source:DowStrategicUpdate,SlidePresentation3/19/2014.

8

Figure6:11

Whenlookedatinaggregate,weestimatetotalDowpetchemROAtobe8.6%.Thisisnotasurprise to us – we have highlighted that: i) Dow under‐earns its capacity due to itsmisaligneddownstreamstrategy,andii)inconsistenttransferpricingmakesitimpossibletobenchmarkanyof the individualpetchemsegments. UnderlyingPerformancePlasticsROA is likely lower than 16.5% and similarly, underlying Feedstocks & Energy ROA isprobablyhigherthan4.6%,butwhatshouldmattertoshareholdersisthatDow’soverallpetchemROAof8.6% is certainlynotbest‐in‐classamong the comparisonuniverse.Furthermore,Dow’scompany‐wideROAof5.8%wouldplaceitnearthebottomquartileofDow’s selected universe, which is consistent with how the market views Dow’s trackrecord.Managementneedstofocusonwhatisdrivingthisunderperformanceandhowtocureit.Improving petchem ROA should come from underlying operational improvement andbetter capital allocation rather than from flattering returns with equity income fromSadara. We view Sadara as another example of Dow embellishing returns and capitalallocation:

11AssumesDow2013consolidatedtaxrateof29%forallsegments.CorporateallocationforPerformancePlasticsbasedonDow’sassumptionofa20%allocation.Othersegmentsbasedonestimateofemployeecountbydivision.Source:Companyfilings,ThirdPointestimates.

ROA Calculations($ in mil l ions ) Total Dow Total

PP F&E PM Petchem C&I EF&M AG CompanySegment Adj. EBITDA $4,092 $837 $1,459 $6,388 $892 $1,040 $969 $9,289Segment D&A (707) (128) (666) (1,501) (466) (425) (189) (2,581)Segment EBIT $3,385 $709 $793 $4,887 $426 $615 $780 $6,708Segment Tax (at Effective Rate) (989) (207) (232) (1,428) (124) (180) (228) (1,960)Segment NOPAT $2,396 $502 $561 $3,459 $302 $435 $552 $4,748Share of Corp Adjustment (145) (129) (178) (453) (82) (82) (110) (727)Adj. NOPAT $2,251 $373 $383 $3,006 $219 $353 $442 $4,021Reported Segment Assets $10,920 $5,772 $9,850 $26,542 $11,438 $11,067 $7,058 $56,105Adj. For Share of Corp. Assets 2,679 2,376 3,286 8,341 1,517 1,517 2,022 13,396Total Assets $13,599 $8,148 $13,136 $34,883 $12,955 $12,584 $9,080 $69,501Adjusted ROA 16.5% 4.6% 2.9% 8.6% 1.7% 2.8% 4.9% 5.8%Unadjusted (Ex-Corp) ROA 21.9% 8.7% 5.7% 13.0% 2.6% 3.9% 7.8% 8.5%

9

Figure7:12

Whentakingintoaccountgrosscapitalinvested(bothequityanddebtfinanced)andDow’slatest guidance, we estimate that the ROA of the Sadara project (the company’s largestinvestment since Rohm & Haas) will be 5% ‐ 10%. Only in Dow’s bull case would thereturnsfromSadaraexceedDow’sown9%costofcapital.13LookingForward:Harnessing the full potential of Dow’s petrochemical assets will take time as it couldrequireacombinationofclosures,modifications,brownfieldinvestments,anddivestitures.Our suggestion to management is to recognize that Dow is involved in numerouscommoditizingderivativeproductsandtomakeamoreclear‐cutdelineationbetweenlow‐cost feedstock and downstream value‐add related profitability. We have urgedmanagement toembrace the fact that it is runningoneof theworld’s largest commoditypetrochemical businesses, which historically has been a challenge.14 Conducting anoperational review (with market price based raw material transfers) will undoubtedlyresultinincreasedscrutinyastothespecialtynatureofsomeofDow’spetchembusinessunits.Thisacknowledgementandthesubsequentreviewarecrucialtobecomingabest‐in‐class,low‐costpetrochemicaloperator.Afteradecadeofunderperformance,shareholdersdeservegreater transparencyanda comprehensive reassessmentofDow’s strategy. Weappreciate management’s engagement with all of its shareholders, and look forward tofurthering discussions regarding strategy and capital allocation in the pursuit ofmaximizingDow’sgreatpotential.

12Companyguidance.Source:SadaraSpotlight:SiteandEnterpriseReadiness, SlidePresentation,3/20/14.SadaraSpotlight, SlidePresentation9/26/13.TaxrateassumedtobeSaudiArabia’scorporatetaxrate.13WeightedAverageCostofCapitalof9.2%.Source:Bloomberg,4/29/14.14 “It ishonestly impossible to thinkofDowasapetrochemicalcompanyanymore.”–CEOAndrewLiveris,FourthQuarter2013earningscall.“Lotsof theK‐Dowscope isnowsold. We’veactuallydonethedivestmentofwhatmighthavebeencalledapetchembusiness, thetraditionalcommoditybusiness.”–CEOAndrewLiveris,FourthQuarter2013earningscall.

Sadara JV Return on Assets($ in millions)

Low Mid HighDow Revenue Guidance $6,000 $7,000 $8,000Dow EBITDA Margin Guidance 30.0% 35.0% 40.0%Implied EBITDA $1,800 $2,450 $3,200Estimated DD&A (30-Year Life) (643) (643) (643)EBIT $1,157 $1,807 $2,557Taxes at 20% (231) (361) (511)Gross NOPAT $925 $1,445 $2,045

Gross Capital Invested $19,300 $19,300 $19,300Implied ROA 4.8% 7.5% 10.6%

Dow WACC 9.2% 9.2% 9.2%EVA (4.4%) (1.7%) 1.4%

Capex Multiple of EBITDA 10.7x 7.9x 6.0x

10

EquityPosition:IHICorporation(“IHI”)IHI is a mid‐cap Japanese conglomerate exposed to three big themes: commercialaerospace,automotivefuelefficiency,andAbenomics‐ledrealestatereflationinTokyo.Overthepast fewyears,ThirdPointhassuccessfully investedinnumerouscompanies inthe commercial aerospace sector. While air travel has grown historically at ~2x GDP,increasingfuelcosts–whichaccountforroughly40%ofcashoperatingcostsforairlines–are driving the decision to upgrade to new, more fuel‐efficient planes. A substantialincreaseinairtravelbynewfliersinemergingmarketsisalsoexpectedtodrivedemandfornewaircraftincomingdecades. Today,emergingmarket‐focusedairlinesaccountformorethan2/3ofglobalaircraftorderswhilerepresentingonly1/4oftheglobalfleet.As the leading Japanese jetenginemanufacturer, IHIpartnerswithengineOEMs likeGE,Pratt & Whitney, and Rolls Royce to design engine platforms to power best‐sellingairplanes like theA320,A320neo,B787,B777,andB777X. IHI’s focusonquality, safety,and on‐time delivery has resulted in it consistently increasing its share of key engineprograms in new airliners. We believe we are investing in IHI at an attractive pricebecausethemarketassignsanundeservedconglomeratediscounttoit.Inoneofitstwokeysegments–aerospaceanddefense–IHI’smarginswillexpandasitscommercialinstalledenginebasegrows,drivenbysparepartssaleswhichwillprovidethecompanywitha long‐tailed,high‐quality,dollar‐denominatedannuitystream. WeexpectIHI’s sparepartsbusiness togrowvolumesbyover10%annually for thenext fewyearswhileachievingaverageannualpriceincreasesof5%indollartermsonapredominantlyyen‐denominatedcostbase.Withsparepartsincrementalmarginsofwellover50%,IHI’sjet engines business’ earnings are set to grow dramatically despite significant R&Dinvestmentsinnewplatforms.The second key business in IHI’s portfolio that offers both growth and high returns isvehicular turbochargers. In this business, IHI is a global #3 (after Borgwarner andHoneywell). IHI’s superior engineering capabilities and willingness to develop bespokesolutionsforautoOEMshasledittooutgrowtheindustryandgainmarketshare. Astheinternalcombustionenginefacesincreasinglystringentgovernmentmandatesforreducedfuel consumption and CO2 emissions, we expect widespread turbocharger adoption,enablingIHItogrowtoplineinthehighteenswhileclosingsomeofthemargingaptoitsmaincompetitors.WealsoexpectgrowthemanatingfromChinesedemandthankstoIHI’sstrong relationships with European OEMs like Volkswagen, Fiat, and Daimler.Whilethesetwosegmentsaccountfortwo‐thirdsofIHI’searnings,thecompanyisinvolvedinmanyotherengineeringbusinesses–fromthemanufacturingofboilersandturbinesto

11

LNG terminals and tanks – which impact its market perception disproportionately.Throughout the years, the results from these many small businesses have ranged fromacceptable tohorrible, thusexplaining the conglomeratediscountappliedby themarket.IHI isalso regardedwarilyby investorsbecausemanagement shocked investors in2007with an announcement of large cost overruns in its energy division. Nearly half of thecompany’s market cap was wiped out. This prompted management change and anincreased focus on project risk management and capital allocation, includingdeconsolidating itsshipbuildingoperation. Wethinkthechangeshavebeenpositiveandthecompanyshouldnolongerbepunishedfor2007’smistakes.Finally, IHI has another significant asset – valuable non‐core real estate. The companyownsalargelandbankinToyosu,acentraldistrictofTokyolocatedinthevicinityofthe2020 Tokyo Olympic village. The company also owns large office buildings and retailfacilitiesbuiltonthelandandisintheprocessoffurtherdevelopmentwork.IHIlistedthebookvalueofitsrealestatetobe¥252billionasofMarch2013.ThirdPointcommissionedtwoindependentappraisalsofthelandbankandbuildingsandconcludedthevaluetobecloserto¥350billion,orover50%ofIHI’scurrentmarketcapitalization.Shouldmanagement decide to spin off the property into a separate company that couldachieve substantial financial leverage for redevelopment purposes (hotels, condos, andofficebuildings inToyosuandamodern logisticpark inKotoward), thecompanywouldrealize enormous value for shareholders. As property values rise and rental incomeincreases,IHIwillbeabletoreduceitsparticipationinthelistedrealestatecompanyandreinvestinitsjetenginesandturbochargerssegments.WeseetheintrinsicvalueofIHIatmorethan¥1000pershare,wellabovewherethestocktradestoday.IHI’spathtovaluecouldbesubstantiallystreamlinedifmanagementweretochoosetoincreaseitsfocusonitshighreturnsegmentsandcontinueitsmoveawayfromthesuboptimalconglomeratestructureofthepast.SoftBankCorp.(“SoftBank”)UpdateFollowing its strongrallyatyear‐end,SoftBanksharespulledback15%duringQ12014.WebelievethispullbackwasduetotechnicaltradingandthatSoftBank’sfundamentalsarestrongerthanwhenweinitiatedthepositionduringthefourthquarterof2013.SoftBankhascontinuedtodemonstratesignificantvaluegrowthinkeydriversacrosseachof its underlying businesses. The Japanesewireless segment successfully navigated thetemporary impact of NTT’s iPhone offering and seasonal promotional activity in March2014,whileconsensusvaluationsforAlibabaGrouphavegrownfrom$120billionto$171

12

billionyear‐to‐date.Thesetrendsplayintothefour‐prongedequityvalueexpansionstoryforSoftBankshares:

1) SoftBankMobilevalueexpansionof¥230pershareannually(EBITDAgrowth,constantmultiple)

2) SoftBankdeleveragingof¥400pershareannually(Capexcliffin2013)3) Alibabavalueexpansionof¥500pershare($20billionperannumAlibaba

appreciation)4) NarrowingoftheNAVgap(currently23%versusconsensus)

From a cash and deleveraging perspective, the recently announced sale of the eAccessbusinesstoYahoo!JapanwillfurtherbolstertheseatSoftBankMobile,asitoffloadsnearly$1 billion in annual Capex and transfers $4 billion of net cash from Yahoo! Japan toSoftBank.WebelievetheYahoo!Japantransactionwillunlock~¥400persharevalueforSoftBank, offset by a~¥120 de‐rating of SoftBank’s Yahoo! Japan equity stake, for a net¥280benefittoNAV.Most significantly, SoftBank’s market cap has grown by only $9 billion since July 2013whileconsensusvaluationsofAlibababyU.S.sell‐sideanalystshavenearlydoubledfrom$86billionto$171billiontoday,implyinga$31billionincreaseinthevalueofSoftBank’s37% stake. Likewise, SoftBank’s stake in Sprint has also appreciatedby $4billion. Thegrowth in the underlying asset values, enhanced by the accretive nature of the Yahoo!Japan transaction have only served to increase the relative attractiveness of SoftBanksharessinceOctober,despitethemarket’shesitation.SoftBank is witnessing substantial growth in underlying asset value, de‐levering via theYahoo!Japantransaction,andpoisedtodrivefurtherde‐leveringandfreecashflowgrowthinSoftBankMobile. Itcurrentlytradesata23%NAVdiscounttoconsensusestimatesofvalue.Alternatively,valuingSoftBankMobileonaP/FCFmethodologysuggestsSoftBankis trading at a 45%NAV discount. The discrepancy lies in the fact that the EV/EBITDAapproach understates SoftBankMobile’s high free cash flow conversion and low cost ofcapital.Thesediscountsareclearlyunwarranted.WeanticipateSoftBank’sNAVwillpostcontinuedgrowth and shrink this discount asmanagement’s strategy comes into furtherfocusandtransparencyaroundunderlyingassets(particularlyAlibaba)improves.StructuredCreditUpdateMortgagesledtheportfolioduringthefirstquarter,returning14.2%onaverageexposureandcontributingoverhalfof thequarter’s returns. Realizedprofitsweredue tosales inour Alt‐A Re‐Remic book, which we began assembling in 2009 and continued to build

13

through the beginning of 2013. Despite the recent bout of market volatility, we arecontinuingtoreceiveattractivebidsforthesebonds.Much like in our equity book, we believe that our performance will be generated byindividualbondselectionversusdiscoveringsizeable,displacedassetsegments. Wehavebeenevaluatingeachopportunityweuncoverandaddingdiverseexposuretotheportfolio.Webenefittedfromparticipatinginsomelargerone‐offsituations–abenefitofoursize–andbyopportunisticallyaddingtooursubprimeportfolio. WehavealsoaddedexposureoutsideoftheU.S.inthepastsixmonths,particularlyinEurope,andexpandedourCMBSportfolio.WeareactivelyseekingtopurchaseassetsfromEuropeanbanks.Sincerely,ThirdPointLLC_____________________ThirdPointLLC (“ThirdPoint”or “InvestmentManager”) is anSEC‐registered investmentadviserheadquartered inNewYork. ThirdPoint isprimarilyengagedinprovidingdiscretionaryinvestmentadvisoryservicestoitsproprietaryprivateinvestmentfunds(eacha“Fund”collectively,the“Funds”).ThirdPoint’sFundscurrentlyconsistofThirdPointOffshoreFund,Ltd.(“TPOffshore”),ThirdPointUltraLtd., (“TPUltraLtd.”),ThirdPointPartnersL.P. (“TPPartnersLP”)andThirdPointPartnersQualifiedL.P. ThirdPointalsocurrentlymanagesthreeseparateaccounts. TheFundsandanyseparateaccountsmanagedbyThirdPointaregenerallymanagedasasinglestrategywhileTPUltraLtd.hastheabilitytoleveragethemarketexposureofTPOffshore.AllP&LandperformanceresultsarebasedontheNAVoffeepayinginvestorsonlyandarepresentednetofmanagementfees,brokeragecommissions,administrative expenses, and accrued performance allocation, if any, and include the reinvestment of all dividends, interest, and capital gains. Whileperformanceallocationsareaccruedmonthly,theyaredeductedfrominvestorbalancesonlyannually(quarterlyforThirdPointUltra)oruponwithdrawal.The performance results represent fund‐level returns, and are not an estimate of any specific investor’s actual performance, whichmay bemateriallydifferentfromsuchperformancedependingonnumerousfactors.Allperformanceresultsareestimatesandshouldnotberegardedasfinaluntilauditedfinancialstatementsareissued.The performance data presented represents that of Third Point Partners L.P and Third Point Ultra Ltd. Exposure data represents that of Third PointOffshoreMasterFundL.P.WhiletheperformancesoftheFundshavebeencomparedherewiththeperformanceofawell‐knownandwidelyrecognizedindex,theindexhasnotbeenselectedtorepresentanappropriatebenchmarkfortheFundswhoseholdings,performanceandvolatilitymaydiffersignificantlyfromthesecuritiesthatcomprisetheindex.Investorscannotinvestdirectlyinanindex(althoughonecaninvestinanindexfunddesignedtocloselytracksuchindex).Past performance is not necessarily indicative of future results. All information provided herein is for informational purposes only and should not bedeemedasarecommendationtobuyorsellsecurities.Allinvestmentsinvolveriskincludingthelossofprincipal.ThistransmissionisconfidentialandmaynotberedistributedwithouttheexpresswrittenconsentofThirdPointLLCanddoesnotconstituteanoffertosellorthesolicitationofanoffertopurchaseany security or investment product. Any such offer or solicitation may only be made by means of delivery of an approved confidential offeringmemorandum.Specific companies or securities shown in this presentation are meant to demonstrate Third Point’s investment style and the types of industries andinstrumentsinwhichweinvestandarenotselectedbasedonpastperformance.TheanalysesandconclusionsofThirdPointcontainedinthispresentationincludecertainstatements,assumptions,estimatesandprojectionsthatreflectvariousassumptionsbyThirdPointconcerninganticipatedresultsthatareinherentlysubjecttosignificanteconomic,competitive,andotheruncertaintiesandcontingenciesandhavebeenincludedsolelyforillustrativepurposes.No representations, express or implied, aremade as to the accuracyor completeness of such statements, assumptions, estimates orprojectionsorwithrespecttoanyothermaterialsherein.ThirdPointmaybuy,sell, coverorotherwisechangethenature, formoramountof its investments, includinganyinvestmentsidentifiedinthisletter,withoutfurthernoticeandinThirdPoint’ssolediscretionandforanyreason.ThirdPointherebydisclaimsanydutytoupdateanyinformationinthisletter.Informationprovidedherein,orotherwiseprovidedwithrespecttoapotentialinvestmentintheFunds,mayconstitutenon‐publicinformationregardingThirdPointOffshoreInvestorsLimited,afeederfundlistedontheLondonStockExchange,aswellasThirdPointReinsuranceLtd.,aNYSElistedcompany,andthereforedealingortradinginthesharesofeitheronthebasisofsuchinformationmayviolatesecuritieslawsintheUnitedKingdom,UnitedStatesorelsewhere._____________________