Large-Cap Growth Equity Portfolio Update

Large-Cap Growth Equity Q3 2017 Portfolio Update

INVESTOR PRESENTATION

1974 2017

Strictly Confidential. Not For Distribution. September 30, 2017 LATEEF PERFORMANCE

QTD YTD 3 yr 5 yr 7 yr 10 yr

Lateef Large-Cap Growth Equity* 2.38 12.87 5.59 8.42 10.09 5.17 S&P 500® 4.48 14.24 10.81 14.22 14.38 7.44

*Performance for Lateef Non-Taxable Large-Cap Growth Equity Composite (net of fees), as of September 30, 2017. See full Performance Report with disclosures, as of September 30, 2017, on page 12.

The S&P 500® Index is an unmanaged stock market index and is not available for direct investment. The S&P 500® Index is comprised of 500 common stocks which are generally representative of the U.S. stock market. The information presented on this slide supplements the Lateef Non-Taxable Large-Cap Growth Equity Composite provided in this presentation and is provided as supplemental information. Past performance does not guarantee future results. Performance is shown net of fees. 1974 2017 This document is not complete without the “Important Disclosures” pages. 1 | Strictly Confidential. Not for Distribution. Q3 2017 PORTFOLIO HIGHLIGHTS*

Leaders Total Mkt. Performance Laggards Total Mkt. Performance Return Contribution Return Contribution Facebook 13.2% 0.9% Newell Brands -20.0% -1.0%

Visa 12.4% 0.8% Advance Auto Parts1 -27.7% -0.9%

Autodesk 11.3% 0.7% Allergan -15.4% -0.8%

1Position sold in August 2017. Total Market Return represents Representative Account holding period return.

Note: The Total Market Return reflects the stock price performance, including dividend income, for Q3 2017.

The holdings identified above do not represent all of the securities purchased, sold, or recommended for advisory clients. To obtain the full contribution to return report for all of the Representative Account holdings for Q3 2017, along with the calculation methodology, please contact us at (415) 461-3800.

*For the Lateef Large-Cap Representative Account, an actual account in the Non-Taxable Large-Cap Growth Equity Composite.

The list of top 3 and bottom 3 holdings should not be considered a recommendation to purchase or sell a particular security, represents only a small percentage of the entire portfolio and the securities purchased for advisory clients, and may not remain in the portfolio at the time you receive this report. You should not assume that investments in the securities identified were or will be profitable or that decisions we make in the future will be profitable. Past performance does not guarantee future results. See Footnote Disclosure #1 on “Footnote Disclosures” pages. 1974 2017 This document is not complete without the “Important Disclosures” pages. 2 | Strictly Confidential. Not for Distribution. YTD 2017 – through September 30, 2017 PORTFOLIO HIGHLIGHTS*

Leaders Total Mkt. Performance Laggards Total Mkt. Performance Return Contribution Return Contribution Facebook 48.5% 3.1% Advance Auto Parts1 -50.3% -2.4%

Autodesk 51.7% 2.8% Schlumberger -15.1% -0.8%

Visa 35.6% 2.0% Sabre -26.0% -0.6%

1Position sold in August 2017. Total Market Return represents Representative Account holding period return.

Note: The Total Market Return reflects the stock price performance, including dividend income, year-to-date through September 30, 2017.

The holdings identified above do not represent all of the securities purchased, sold, or recommended for advisory clients. To obtain the full contribution to return report for all of the Representative Account holdings for the year through September 30, 2017, along with the calculation methodology, please contact us at (415) 461-3800.

*For the Lateef Large-Cap Representative Account, an actual account in the Non-Taxable Large-Cap Growth Equity Composite.

The list of top 3 and bottom 3 holdings should not be considered a recommendation to purchase or sell a particular security, represents only a small percentage of the entire portfolio and the securities purchased for advisory clients, and may not remain in the portfolio at the time you receive this report. You should not assume that investments in the securities identified were or will be profitable or that decisions we make in the future will be profitable. Past performance does not guarantee future results. See Footnote Disclosure #1 on “Footnote Disclosures” pages. 1974 2017 This document is not complete without the “Important Disclosures” pages. 3 | Strictly Confidential. Not for Distribution. September 30, 2017 LARGE-CAP HOLDINGS

CONSUMER DISCRETIONARY ENERGY

FINANCIALS HEALTHCARE

INDUSTRIALS INFORMATION TECHNOLOGY

Current and future portfolio holdings are subject to change and risk. References to these companies are not a solicitation or a recommendation to buy, hold or sell any securities. See Footnote Disclosure #2 on “Footnote Disclosures” page. 1974 2017 This document is not complete without the “Important Disclosures” pages. 4 | Strictly Confidential. Not for Distribution. DXC Technology (DXC) – Position purchased August 2017 RECENT PURCHASE

DXC Technology was formed by a merger of Computer Science Services (CSC) and Hewlett Packard Enterprises’ Enterprise Services (HPES) segment. This merger was completed on April 3, 2017. DXC is now the third-largest provider of end-to-end IT services, leveraging technology and next generation solutions to drive business outcomes for clients. DXC should be able to accelerate their services toward digital solutions which enables their clients to increase revenue and reduce costs. DXC has over 170K employees, 6,000 customers, and over 200 Fortune 500 clients.

Investment Thesis We believe that the integration of CSC and HPES creates an opportunity for a proven management team to simplify business operations of a historically bloated enterprise while delivering next-generation IT solutions to its broad legacy customer base. Growth of these next- generation implementations, combined with 700 bps of margin expansion and disciplined capital allocation, should result in double-digit profit growth on industry-low earnings multiples.

Opportunities: . Core Services to Clients – DXC provides services that enable their clients’ businesses to operate more efficiently. DXC’s three segments: Global Business Services (GBS), Global Infrastructure Services (GIS), and United States Public Sector (USPS) each help enable clients’ use of technology to improve their businesses. DXC’s services include enabling digital services, infrastructure hosting and maintenance, mobility, and security services. . Simplification Roadmap – Our analysis concludes that DXC has an opportunity to simplify their offerings, reduce redundancy, and optimize their workforce and delivery processes. If DXC successfully implements these strategies, then we believe they can improve profitability by over 700 bps over the next three years. . Management Leadership – We have confidence in this management to unlock the potential value of DXC as CEO Mike Lawrie and CFO Paul Saleh executed a similar strategy at CSC by simplifying their offerings from 2,000+ custom offerings to 140 standard offers, reducing costs, and investing in digital platforms from 2012-2016. . Leverage Key Partnerships – DXC has strong preferred partnerships with Microsoft, Dell/EMC, ServiceNow, Amazon and Hewlett-Packard Enterprise, which should help DXC maintain and grow their services as well as leverage their combined R&D dollars. . Capital Allocation – We believe that management’s clear articulation of their capital allocation priorities will be rewarded over time. Management targets the following allocation of operating cash: Capital expenditures 35%, acquisitions 7%, business reinvestment 7%, restructuring 17%, debt service 4%, and shareholder return 30%. References to companies are not a solicitation or a recommendation to buy, hold or sell any securities. 1974 2017 This document is not complete without the “Important Disclosures” pages. 5 | Strictly Confidential. Not for Distribution. Alaska Air Group (ALK) – Position purchased August 2017 RECENT PURCHASE

Alaska Air Group, Inc. (ALK) operates flights to over 120 destinations with nearly 1,200 daily departures under the Alaska, Virgin America, and Horizon Air brands. Destinations are concentrated in the U.S. domestic market, particularly on the West Coast, but expands to Mexico, Canada, Costa Rica, and Cuba. Though Alaska’s primary hub is Seattle, WA, the December 2016 acquisition of Virgin America significantly expands Alaska Airlines’ reach to San Francisco, Los Angeles, and the East Coast. Via the company’s strategic plan rooted in operations efficiency, employee focus, brand development, customer loyalty, and low cost/lower fares, Alaska seeks to become the dominant airlines of the West Coast.

Investment Thesis Alaska Airlines has traditionally enjoyed dominant share and customer loyalty in the Pacific Northwest out of its Seattle and Portland hubs. The December 2016 acquisition of Virgin America has expanded Alaska’s reach throughout the West Coast, and has given the company valuable real estate in California hubs like San Francisco and Los Angeles. Customer relevance (the ability to reach an intended destination in a single flight) in San Francisco has increased to 70% from 9% pre-merger. We believe that through the expansion, Alaska will take share in both the West Coast and transcontinental routes to the East Coast from legacy networks. We further believe that ALK will benefit from the comparatively high GDP growth of the Western U.S.

Opportunities: . Leverage to the West Coast Economy: We believe Alaska’s new territory in California creates the most extensive airline for travel on the West Coast, which is currently leading the nation in GDP growth. In 2016, the total GDP of the West Coast was $3.3 trillion, with California at $2.6 trillion, Oregon at $227 billion, and Washington at $470 billion. The distance between cities on the West Coast also creates natural demand for air travel, as demand for air travel increases at 1.4x the rate of GDP (IATA data). . Share Gains in California and Transcontinental: California represents an opportunity 3x the size of the Pacific Northwest. ALK’s customer relevance in SFO has increased from 9% pre-merger to 70% post-merger, giving the airline significant opportunity to take share from legacy network carriers like United, Delta, and Southwest for west coast and transcontinental flights. . Customer Loyalty Program: 25% of the Pacific Northwest (PNW) population are members of the Alaska Airlines Mileage Plan, and 10% of the population carry the rewards credit card (issued by Bank of America). California has 3x the population of the PNW, with only 5% loyalty program penetration and negligible credit card penetration. As ALK increases dominance in California, the airline stands to increase loyalty program penetration and concomitant revenues. . Industry Consolidation: Over the past 10 years the airline industry has shrunk from eight major carriers to four major carriers, resulting in an industry oligopoly. ALK’s acquisition of Virgin removed the last major irrational player from the market. Our research indicates that fewer airlines will lead to rational pricing and capacity decisions, putting an end to decades of balance sheet wars to gain market share through deep fare discounting. . Leader in Capital Allocation: Prior to industry consolidation, airline companies refrained from return capital to shareholders in order to compete in an irrational industry. Since 2012, ALK has returned $1.2 billion to shareholders via buybacks and $334 million in dividends. References to companies are not a solicitation or a recommendation to buy, hold or sell any securities. 1974 2017 This document is not complete without the “Important Disclosures” pages. 6 | Strictly Confidential. Not for Distribution. Advance Auto Parts (AAP) – Position sold in August 2017 RECENT SALE Initial Purchase: June 2016

Company Overview Advance Auto Parts, Inc. (AAP) is an automotive aftermarket parts provider operating in the United States, Canada, Puerto Rico, and the Virgin Islands. The company sells to both professional customers and DIY customers through its store base of 5,189 locations under the Advance Auto Parts, Carquest, Worldpac, and Autopart International brands.

What was our Thesis? When we initially purchased AAP, we believed that the company’s top market share position in the industry would allow for a rebound in revenue growth and operating profitability towards that of its two closest competitors. We anticipated that a newly- instituted management team with considerable supply-chain management experience could implement improvements to unlock 400bps of operating margin improvements. We further believed that this improvement, or promise of improvement, would narrow the valuation gap between AAP and its peers.

What Changed? . Decline in Industry Growth: Though auto part retailers have historically grown 3-5% annually driven by growth in the car park and miles driven, recent trends have caused growth to disappoint. Parts retailers point to multiple headwinds including weather and a lack of consumer certainty, despite increases in both car park and miles driven. The industry may not be completely defensible against online retailing as we previously believed. . Longer Turnaround than Anticipated: AAP management reduced FY17 operating margin guidance from a 15-35 basis point improvement to a 200-300 basis point reduction on the Q2:17 earnings call. Inventory reductions are taking longer than anticipated, and the investments required to close the competitive gap between peers are larger than anticipated. . 2H:17 Execution Challenges: AAP will be implementing a new catalog for the Professional parts salesforce and a new B2B platform for Professional customers in Q4:17, when AAP has the most difficult comparable stemming from a particularly strong December 2016. We believe implementation risk in a high-stakes quarter creates opportunity for error. . Valuation: After a reduction in full-year guidance, AAP continues to trade at a premium to its long-term average multiple. At current levels, we believe there are better opportunities for our portfolio. . High Conviction in Other Ideas: We have higher conviction in other portfolio investments and our pipeline of ideas.

References to companies are not a solicitation or a recommendation to buy, hold, or sell any securities. 1974 2017 This document is not complete without the “Important Disclosures” pages. 7 | Strictly Confidential. Not for Distribution. Willis Towers Watson (WLTW) – Position sold in August 2017 RECENT SALE

Initial Purchase: October 2013

Company Overview Willis Towers Watson Plc. (WLTW) is a professional services firm that specializes in benefits, talent management, rewards, and risk and capital management. The company offers consulting services in benefit and human capital management, advises insurance companies regarding risk management, and helps clients in all industries mitigate risk through insurance and capital market transactions. Its Exchange Solutions business currently operates the largest private Medicare insurance exchange in the U.S.

What was our Thesis? We initially purchased Towers Watson (TW) in 2013 before the Willis Group merger, whereupon the joint entity became Willis Towers Watson (WLTW). Towers Watson was a consistent GDP-plus grower in its niches of consulting for benefits, talent management, and risk and capital management. The merger of Towers Watson and Willis gave the combined company the opportunity to leverage the best assets of each company and reduce cost redundancies. Further, the rise of its Exchange Solutions business provided an opportunity to reinvest its cash flow in a fast-growing, high-return opportunity that was not present in the past.

What Changed? . Benefits of Merger Taking Longer Than Anticipated – Though Q1:17 margins surprised to the upside on disappointing revenue growth, Q2:17 saw a y/y decline in EBITDA1 margins. Discussions with WLTW indicate that the Willis Group business had operating inefficiencies that were not evident at the time of the merger. . Diluted Future Growth Profile – Our initial rationale for owning Towers Watson was the high revenue growth associated with the Healthcare Exchange business. Though this business continues to grow at a double-digit rate, its impact is now diluted by the low-single-digit growth of the Willis business segments.

1EBITDA refers to “Earnings before Interest, Taxes, Depreciation, and Amortization.” References to companies are not a solicitation or a recommendation to buy, hold, or sell any securities. 1974 2017 This document is not complete without the “Important Disclosures” pages. 8 | Strictly Confidential. Not for Distribution. September 30, 2017 ACTIVE SHARE

Active Share – A measure of the percentage of stock holdings in a manager’s portfolio that differ from the benchmark index. High active share and high tracking error managers (concentrated stock-pickers) earn the highest positive excess returns.1

1Cremers, Martin and Antti Petajisto, How Active Is Your Fund Manager? A New Measure That Predicts Performance. August 2006. Securities chosen represent current holdings and may not be representative of the Composite as a whole. See Footnote Disclosure #3 on “Footnote Disclosures” pages. 1974 2017 This document is not complete without the “Important Disclosures” pages. 9 | Strictly Confidential. Not for Distribution. Factor Analysis adds a Layer of Risk Management FACTOR ANALYSIS

. Factor Analysis helps inform Investment Team of individual stock’s characteristics relative to historic Lateef Habitat. . Risk Management Performance – Our style favors Growth factors, but being underexposed to Value factors like Dividend Yield and Value have hurt our recent performance. However, we acknowledge that volatility and earnings variability have been negative contributors to our overall performance. . As such, we’re using Factor Analysis to provide a layer of risk management going forward. As an example, we trimmed Wynn Resorts* and added Visa in the third quarter of 2016.

NOTE: The Russell 1000** is used as the benchmark instead of the S&P 500® because it casts a wider net and covers all our holdings. *Position sold during November 2016. **iShares Russell 1000 ETF (IWB). The Russell 1000® and S&P 500® are unmanaged stock market indices and are not available for direct investment. The S&P 500® Index is comprised of 500 common stocks which are generally representative of the U.S. stock market. See Footnote Disclosure #4 on “Footnote Disclosures” pages and “Bloomberg Style Factor Definitions” page. 1974 2017 This document is not complete without the “Important Disclosures” pages. 10 | Strictly Confidential. Not for Distribution. September 30, 2017 PORTFOLIO CHARACTERISTICS High Quality Growth Businesses – Our companies generated positive free cash flow, which we believe will increase over time1,2 – Weighted Average Market Cap of $118 Billion vs. $194 Billion for S&P 500®

Strong EPS Growth – 2014 EPS growth of 13% vs. 10% for S&P 500® – 2015 EPS growth of 12% vs. 5% for S&P 500® – 2016 EPS growth of 12%1 vs. 6% for S&P 500® – 2017E EPS growth of 13%1,3 vs. 8% for S&P 500® Attractive Valuation – 2017E P/E of 17.0x1 vs. 20.0x for S&P 500® – Approximately 16% upside to our estimate of intrinsic value – 2017E median free cash flow yield of 4.8%1,2

1Autodesk (ADSK) is not included in this metric. Following a business model transition, we expect ADSK to report significant improvement in its FCF, EPS growth, and P/E over the next several years. 2Northern Trust (NTRS), Progressive (PGR), Raymond James (RJF), SVB Financial Group (SIVB), and Synchrony Financial (SYF) are not included in this metric. FCF is not a useful metric for evaluating financial companies such as NTRS, PGR, RJF, SIVB, and SYF. 3DXC Technology (DXC) is not included in this metric, as the company did not exist in 2016 and was formed through a merger and spinoff. The S&P 500® Index is an unmanaged stock market index and is not available for direct investment. The S&P 500® Index is comprised of 500 common stocks which are generally representative of the U.S. stock market. The information presented on this slide supplements the Lateef Non-Taxable Large-Cap Growth Equity Composite provided in this presentation and is provided as supplemental information. See Footnote Disclosure #5 on “Footnote Disclosures” pages. 1974 2017 This document is not complete without the “Important Disclosures” pages. 11| Strictly Confidential. Not for Distribution. The S&P 500® Index is an unmanaged stock market index and is not available for direct investment. The S&P 500® Index is comprised of 500 common stocks which are generally representative of the U.S. stock market. Past performance does not guarantee future results. Performance is shown net of fees. This document is not complete without the “Important Disclosures” pages. 12 | Strictly Confidential. Not for Distribution. CONTACT INFORMATION

LATEEF INVESTMENT MANAGEMENT

300 Drakes Landing Road Suite 210 Greenbrae, CA 94904

Ph: (415) 461-3800

F: (415) 461-0436

[email protected]

1974 2017

This document is not complete without the “Important Disclosures” pages. 13 | Strictly Confidential. Not for Distribution. IMPORTANT DISCLOSURES

A. Lateef Investment Management, L.P. (Lateef) is an investment advisory firm established in 1974. Lateef is registered with the Securities and Exchange Commission (SEC) under the Investment Advisors Act of 1940. Lateef is headquartered in Greenbrae, California.

B. Past performance is not indicative of future results. The actual return and value of an account will fluctuate and at any point in time could be worth more or less than the amount initially invested.

C. The Standard & Poor’s 500® (S&P 500®) Index and Russell 3000® Index are unmanaged stock market indices and are not available for direct investment. The S&P 500® is a widely recognized, unmanaged index of 500 common stocks which are generally representative of the U.S. stock market as a whole. The Russell 3000® is an unmanaged index that measures the performance of 3,000 largest U.S. stocks, representing about 98% of the total capitalization of the entire U.S. stock market. The performance of unmanaged indices reflect the reinvestment of dividends on securities in the index and do not reflect the deductions for fees, expenses or taxes which would affect performance of actively managed assets.

D. The average market capitalization of portfolios in the composite may differ from the weighted average market capitalization of the index.

E. The volatility of the index may be greater or less than the volatility of the portfolios in the composite.

F. Results presented are time-weighted total rates of return expressed in U.S. Dollars. Performance results reflect all income, gains and losses and the reinvestment of interest and other income. All rates of return are reported "NET" of fees. Additional information regarding the policies for calculating and reporting returns is available upon request.

G. A complete listing and description of all Lateef composites and performance results is available upon request.

This presentation is provided for informational purposes only and is intended for Investment Professional use.1974 2017

This document is not complete without the “Important Disclosures” pages. 14 | Strictly Confidential. Not for Distribution. Footnote Disclosures IMPORTANT DISCLOSURES

1) The Leaders and Laggards are the top 3 and bottom 3 contributors to performance for our Large-Cap Growth Equity Representative Account (an actual account in the Non-Taxable Large-Cap Growth Equity Composite), out of a portfolio that typically has 15-25 holdings. The information was calculated by Thomson Reuters using the Representative Account’s portfolio holdings.

2) The holdings presented represent the largest aggregate positions held across all accounts included in the Lateef Non-Taxable Large-Cap Growth Equity Composite, and are classified using Global Industry Classification Standards (GICS).

3) The Active Share of 93.02% as of 9/30/17 is for the Lateef Large-Cap Growth Equity Representative Account’s (an actual account in the Non-Taxable Large-Cap Growth Equity Composite) holdings and position weights, excluding cash, compared to the respective weights in the iShares S&P 500 ETF (SPY) as of 9/30/17, and was calculated using Thomson Reuters.

4) These charts illustrate the Style Factor Characteristics of individual holdings (Wynn Resorts and Visa, Inc.) compared to the Lateef Universe’s typical characteristics relative to the iShares Russell 1000 ETF (IWB), for the period 3/31/2016 to 3/31/2017. The comparison was prepared using Bloomberg’s U.S. Equity Fundamental Factor Model. Please refer to Bloomberg Style Factor Definitions on the following page for additional information on these Factors.

5) Lateef Portfolio Characteristics were calculated internally using actual EPS figures and other financial metrics provided by SEC filings and Bloomberg. The characteristics are based on the security weights across the Large-Cap Growth Equity account holdings as of 9/30/17. The weighted average market capitalization of the Large-Cap product’s holdings and S&P 500® are as of 9/30/17, and were provided by Bloomberg on 10/2/17. The 2014, 2015, 2016, and 2017E EPS growth of the Large-Cap product and S&P 500® are median values as of 12/31/14, 12/31/15, 12/31/16, and 9/30/17, respectively, as provided by Bloomberg. The 2017E P/E ratio of the Large-Cap product and S&P 500® are median values and were calculated using each stock’s end of day prices as of 9/30/17 and 2017 Bloomberg consensus EPS estimates. The upside estimate is a position- weighted value calculated internally using Lateef’s proprietary intrinsic values and Bloomberg’s market prices as of 9/30/17. The portfolio’s 2017E free cash flow (FCF) yield is an equal-weighted median value as of 9/30/17, and was provided by Bloomberg on 10/2/17.

This presentation is provided for informational purposes only and is intended for Investment Professional use.1974 2017 This document is not complete without the “Important Disclosures” pages. 15 | Strictly Confidential. Not for Distribution. Bloomberg Style Factor Definitions IMPORTANT DISCLOSURES

. Size is a composite metric distinguishing between large and small stocks. . Value is a composite metric that differentiates “rich” and “cheap” stocks. . Dividend Yield is another dimension of value, but distinct enough to be a stand alone factor. . Leverage is a composite metric to gauge a firm’s level of leverage. . Volatility differentiates more volatile stocks and less volatile ones by quantifying “volatile” from several different angles. . Momentum separates stocks that have outperformed over the past year and those that have underperformed. . Trade Activity is a turnover based measure. Bloomberg focuses on turnover which is trading volume normalized by shares outstanding. . Earnings Variability gauges how consistent earnings, cash flows, and sales have been in recent years. . Profitability studies firms’ profit margins to differentiate between money makers and money losers. . Growth aims to capture the difference between high and low growers by using historical fundamental and forward-looking analyst data.

This publication reflects the opinion of the authors as of the date noted and is subject to change without notice, and is written to express our investment thesis. The information used in this publication has been developed externally and/or obtained from sources we believe to be reliable; however, Lateef does not guarantee the accuracy or completeness of such information. This publication is provided for informational purposes only and is not provided as a sales or advertising communication nor does it constitute investment advice or a recommendation for any particular investment product or strategy for any particular investor. Economic forecasts and estimated data reflect subjective judgments and assumptions and unexpected events may occur. Therefore, there can be no assurance that developments will transpire as may be forecasted in this publication.