Smead Value Fund 2nd Quarter 2017 Webcast This material is provided for informational purposes only and should not be construed as investment advice. Forecasts and opinions reflect the personal judgments of the presenter and may not reflect those of Smead Capital Management. Statements and opinions are subject to change. www.smeadcap.com © 2017 Smead Capital Management (SCM), All Rights Reserved. Opinions are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security. Today’s Agenda Performance, Characteristics and Top 10 Holdings Cole Smead, CFA, Portfolio Manager Featured Stock: Walgreens Boots Alliance Tony A. Scherrer, CFA, Portfolio Manager What Doesn't Kill You Makes You Stronger! Bill Smead, Lead Portfolio Manager 2 Quarter-End Performance Average Annualized Total Returns (%) as of June 30, 2017 Since Qtr YTD 1 Year 3 Year 5 Year Inception Smead Value Fund Investor Class (SMVLX) 2.97% 10.33% 18.72% 7.77% 15.51% 7.91% Smead Value Fund A Share w/ load (SVFAX) -2.93% 3.99% 11.96% 5.66% 14.05% 7.07% Smead Value Fund A Share w/o load (SVFAX) 2.98% 10.34% 18.79% 7.77% 15.41% 7.74% Smead Value Fund I1 Share Class (SVFFX)* 3.04% 10.47% 19.04% 8.06% 15.81% 8.13% Russell 1000 Value Index 1.34% 4.66% 15.53% 7.36% 13.94% 6.56% S&P 500 Index 3.09% 9.34% 17.90% 9.61% 14.63% 7.73% *Institutional Shares were renamed I1 shares on 11/21/2014 with a new ticker SVFFX Investor Shares Gross Expense Ratio 1.26% A Shares Gross Expense Ratio 1.22% I1 Shares Gross Expense Ratio 1.00% Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 877- 807-4122. Performance for SVFAX (w/load) reflects maximum sales charge of 5.75%. Performance for SVFAX does not reflect maximum sales charge of 5.75%. If reflected, the load would reduce the performance amount quoted. SVFAX applies a maximum Deferred Sales Charge on Class A shares only to purchases of $1,000,000 or more that are redeemed within 18 months of purchase. Performance data does not reflect the redemption fee. If it had, returns would be reduced. Investor Class shares of the Fund commenced operations on January 2, 2008. I1 Class shares of the Fund commenced operations on December 18, 2009. Performance shown for I1 Class shares prior to its inception reflects the performance of Investor Class shares. Class A shares of the Fund commenced operations on January 24, 2014. Performance shown for Class A shares prior to its inception reflects the performance of Investor Class shares, adjusted to reflect Class A expenses. 3 Smead Value Fund Key Facts and Characteristics as of June 30, 2017 4 Past performance does not guarantee future results. Smead Value Fund Top Ten Holdings as of June 30, 2017 Percentage of Fund Amgen Inc. 5.87% NVR Inc. 5.86% Berkshire Hathaway Inc. B 5.49% JPMorgan Chase & Co. 5.46% American Express Co. 5.29% Bank of America Corporation 5.23% eBay Inc. 5.09% PayPal Holdings Inc. 5.01% Aflac Inc. 4.84% Lennar Corp. 4.67% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 5 Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Portfolio Additions / Deletions Second Quarter 2017 > Buys: – Target Corporation (TGT) > Sells: – Express Scripts (ESRX) > Adds to position weightings: – AmerisourceBergen Corp. (ABC) – Nordstrom (JWN) – Lennar (LEN) – Scripps Networks Interactive, Inc. (SNI) – Walgreens Boots Alliance (WBA) > Trims to position weightings: – NVR Inc. (NVR) 6 Current and future holdings are subject to change at any time and are not recommendations to buy or sell any security. Today’s Agenda Performance, Characteristics and Top 10 Holdings Cole Smead, CFA, Portfolio Manager Featured Stock: Walgreens Boots Alliance Tony A. Scherrer, CFA, Portfolio Manager What Doesn't Kill You Makes You Stronger! Bill Smead, Lead Portfolio Manager 7 CFA is a registered trademark owned by the CFA Institute. Featured Stock: Walgreens Boots Alliance Our Eight Criteria Required over entire holding period 1. Meets an economic need 2. Strong competitive advantage (wide moats or barriers to entry) 3. Long history of profitability and strong operating metrics 4. Generates high levels of free cash flow (FCF) 5. Available at a low price in relation to intrinsic value Favored, but not required 6. Management’s history of shareholder friendliness For companies that don’t meet one of these, we believe our required criteria will ultimately correct or 7. Strong balance sheet overwhelm. 8. Strong insider ownership May also relate to timing/portfolio weighting (preferably with recent purchases) Past performance is no guarantee of future results. Current and future holdings are subject to change at any time and are not 8 recommendations to buy or sell any security. Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: Meets an Economic Need Past performance is no guarantee of future results. Source: Walgreens Boots Alliance press release “Walgreens and Alliance Boots 9 to Combine” on August 6, 2014. Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: Strong Competitive Advantage 10 Past performance is no guarantee of future results. Source: Transcript, Q3 Earnings Conference Call, 2017 Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: Long History of Profitability & Operating Metrics 11 Past performance is no guarantee of future results. Source: Jefferies report, October 17, 2016 Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: High Levels of Free Cash Flow Past performance is no guarantee of future results. Source: Bloomberg as of 6/30/2017. EBIDTA: Earnings before interest, tax, depreciation 12 and amortization, OCF: Operating Cash Flow, CapEx: Capital Expenditure, FCF: Free Cash Flow, FCF per Share: Free Cash Flow per Share, EPS: Earnings Per Share, FCF Sales: Free Cash Flow to Sales, FCF Yield: Free Cash Flow Yield. See definitions at the end of this presentation. 13 Featured Stock: Walgreens Boots Boots Alliance Stock: Walgreens Featured Walgreens Boots Alliance: Low Price in Relation to Intrinsic Value Intrinsic to Relation in Price Low Alliance: Boots Walgreens Past performanceis no guarantee of future results. Forward Price-to-Sales (P/S) Forward Price-to-Earnings (P/E) Source: ThomsonReuters Baseline ThomsonReuters Source: Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: History of Shareholder Friendliness 14 Past performance is no guarantee of future results. Source: Bloomberg as of 12/31/2016. Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: Strong Balance Sheet 15 Past performance is no guarantee of future results. Source: Bloomberg as of 2/28/2017. Featured Stock: Walgreens Boots Alliance Walgreens Boots Alliance: Insider Ownership 16 Past performance is no guarantee of future results. Source: The Washington Service as of 6/30/2017. Today’s Agenda Performance, Characteristics and Top 10 Holdings Cole Smead, CFA, Portfolio Manager Featured Stock: Walgreens Boots Alliance Tony A. Scherrer, CFA, Portfolio Manager What Doesn't Kill You Makes You Stronger! Bill Smead, Lead Portfolio Manager 17 What Doesn't Kill You Makes You Stronger! Presented by: Lead Portfolio Manager Bill Smead www.smeadcap.com © 2017 Smead Capital Management (SCM), All Rights Reserved. Opinions are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security. Today’s Agenda What is Killing Investor Enthusiasm? How Does This Make Us Stronger? Today's Circumstances Where Are The Bargains? 19 What Doesn't Kill You Makes You Stronger! What is Killing Investor Enthusiasm? Indexing Past performance is no guarantee of future results. Source: http://www.marketwatch.com/story/how-can-active-fund- 20 management-be-dead-if-indexing-represents-only-5-of-all-assets-2017-01-13. Data for the time period 1/1/2007-11/30/2016. What Doesn't Kill You Makes You Stronger! What is Killing Investor Enthusiasm? FANG S&P Past performance is no guarantee of future results. Source: Stifel, June 1, 2017. Data for the time period 12/31/2014 – 5/30/2017. 21 FANG stocks include Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOGL). What Doesn't Kill You Makes You Stronger! What is Killing Investor Enthusiasm? Polarized Politics 22 Past performance is no guarantee of future results. What Doesn't Kill You Makes You Stronger! What is Killing Investor Enthusiasm? Anemic Economic Growth Past performance is no guarantee of future results. Source: JP Morgan Guide to the Markets Q1 2017. Data for the time period 23 7/1/2009 – 3/31/2017. GDP: Gross Domestic Product. What Doesn't Kill You Makes You Stronger! Expensive Stocks & No Stock Splits 24 Past performance is no guarantee of future results. Data for the time period 1/1/1980 – 12/31/2012. Today’s Agenda What is Killing Investor Enthusiasm? How Does This Make Us Stronger? Today's Circumstances Where Are The Bargains? 25 What Doesn't Kill You Makes You Stronger! How Does This Make Us Stronger? Bargains Past performance is no guarantee of future results. Source: https://seekingalpha.com/article/4054803-s-and-p-500-sector-weights-lot- 26 changed-8-years?page=2. Data for the time period 3/9/2009 – 3/9/2017. What Doesn't Kill You Makes You Stronger! How Does This Make Us Stronger? Mania Avoidance S&P 500 Consumer Staples Staples (price) Sector S&P 500 Consumer Staples Sector (breadth) 27 Past performance is no guarantee of future results.