Investor Presentaiton

Fiscal Health Indicators With the implementation in April 2008 of the "Act on Assurance of Sound Financial Status of Local Governments," the fiscal status of local governments are objectively represented, and as a measure to evaluate the fiscal health or need for restructuring, the following four fiscal indicators have been set forth as Fiscal Health Evaluation Ratios, and accordingly, all local governments are required each fiscal year to have their Fiscal Health Evaluation Ratios as based on figures for the previous fiscal year, examined by an evaluation committee, and then report those results to the local assembly and local residents. If even one of the Fiscal Health Evaluation Ratios exceeds the early warning limit standard, in addition to an external audit, a Fiscal Improvement Plan must be prepared and improvement efforts will be encouraged; if the 3 indicators excluding the Future Burden Ratio worsens and any one of the indicators exceeds the reconstruction limit, additional national government involvement including the partial limitation on the issuance of bonds may be effected. Real deficit ratio Consolidated real deficit ratio Real debt payment ratio Future burden ratio Amount of general account based real deficit as a proportion of standard fiscal scale, serving as an indicator of the deficit level, and the extent of deterioration of fiscal management. Amount of all account (including public corporation accounts) based real deficit or amount of fund shortage as a proportion of standard fiscal scale, serving as an indicator of the deficit level and the extent of deterioration of fiscal management by combining the deficits and surpluses of all accounts. Amount of redemption of principal and interest covered by general accounts as a proportion of fiscal scale, serving as an indicator of the amount payable for local government bonds and cash flow levels. Real debt, including investment entities engaging in local public corporations and loss compensation, to be covered by general accounts as a proportion of fiscal scale, serving as an indicator of the current balance of local government bonds and bonds likely to be paid in the future by general accounts, and the extent of pressure on future finances. <<Illustration>> Healthy stage (attention paid to maintain indicators and information disclosure) •Evaluation by evaluation committee, reporting to local assembly, public announcement Early-warning stage Fiscally Healthy Early warning limit (Fiscal improvement by voluntary effort) •Preparation of Fiscal Improvement Plan (approved by local assembly), public announcement •Mandatory external audit Reporting to local assembly of status of plan implementation, public announcement Reconstruction limit Fiscal reconstruction stage (reconstruction involving national government) •Preparation of Fiscal Reconstruction Plan (approved by local assembly), public announcement •Mandatory external audit •Discussion with and approval of Fiscal Reconstruction Plan by Minister for Internal Affairs and Communications • Reporting to local assembly of status of plan implementation, public announcement Fiscal Collapse 24

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