Southeastern Asset Management & Longleaf Partners Funds Intelligent Investing in an Uncertain Environment November 2016
Longleaf US Fund Disclosures Before investing in any Longleaf Partners fund, you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. For a current Prospectus and Summary Prospectus, which contain this and other important information, visit longleafpartners.com. Please read the Prospectus and Summary Prospectus carefully before investing. RISKS The Longleaf Partners Funds are subject to stock market risk, meaning stocks in the Funds may fluctuate in response to developments at individual companies or due to general market and economic conditions. Also, because the Funds generally invest in 15 to 25 companies, share values could fluctuate more than if a greater number of securities were held. Mid-cap stocks, held particularly in the Partners Fund, may be more volatile than those of larger companies. Smaller company stocks, held particularly in the Small-Cap Fund, may be more volatile than those of larger companies. Particularly for the International Fund and Global Fund, investing in non-U.S. securities may entail risk due to non-US economic and political developments, exposure to non-US currencies, and different accounting and financial standards. These risks may be higher when investing in emerging markets. Funds distributed by ALPS Distributors, Inc. The statements and opinions expressed are those of the author and are as of the date of this report . LLP000559 2 Expiring 1/31/17
Longleaf US Fund Disclosures Average annual total returns for the Funds and their benchmarks for the one, five, and 10-year and since inception periods ended September 30, 2016 are as follows: 1 Year 5 Year 10 Year Since Inception Partners Fund (04/08/87) 24.80% 11.39% 3.77% 10.44% S&P 500 15.43 16.37 7.27 9.48 Small-Cap Fund (02/21/89) 24.09% 16.49% 8.70% 11.05% Russell 2000 15.47 15.82 7.07 9.38 International Fund (10/26/98) 16.86% 6.65% 1.41% 7.17% MSCI EAFE 6.52 7.39 1.82 4.06 Global Fund (12/27/12) 25.74% na na 5.75% MSCI World 11.36 na na 9.23 Returns reflect reinvested capital gains and dividends but not the deduction of taxes an investor would pay on distributions or share redemptions. 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 Longleaf Partners Funds may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by visiting longleafpartners.com The total expense ratios for the Longleaf Partners Funds are: Longleaf Partners Fund 0.93%, Longleaf Small-Cap Fund 0.91%, Longleaf Partners International Fund 1.28%, Longleaf Partners Global 1.54%. The Partners and Small-Cap Funds’ expense ratios are subject to a fee waiver to the extent a Fund’s normal annual operating expenses exceed 1.5% of average annual net assets. The Longleaf International Fund’s expense ratio is subject to a fee waiver to the extent the Fund’s normal annual operating expenses exceed 1.75% of average annual net assets. The Longleaf Global Fund’s expense ratio is subject to a fee waiver to the extent the Fund’s normal annual operating expenses exceed 1.65% of average annual net assets. 3
Longleaf US Fund Disclosures Top 10 Holdings at 9/30/2016 Partners Fund Percent Small Cap Fund Percent International Fund Percent Global Fund Percent FedEx 8.6% Level 3 Communications 6.4% EXOR 8.3% Chesapeake Energy 11.7% CK Hutchison 6.6% ViaSat 6.2% LafargeHolcim 7.8% LafargeHolcim 6.7% Level 3 Communications 6.4% Liberty Media 6.0% CK Hutchison 7.3% FedEx 6.3% Wynn Resorts 6.3% Wynn Resorts 5.9% Melco International 6.8% CK Hutchison 6.3% Alphabet 6.2% CONSOL Energy 5.8% Great Eagle 6.0% Melco International 6.0% CONSOL Energy 6.2% Graham Holdings 5.0% Cheung Kong Property 5.2% Wynn Resorts 5.9% Chesapeake Energy 5.4% Hopewell 4.8% CEMEX (Bonds) 4.9% Level 3 Communications 5.5% LafargeHolcim 4.8% OCI 4.5% OCI 4.4% EXOR 4.8% Cheung Kong Property 4.8% Scripps Networks 4.4% Baidu 4.4% Cheung Kong Property 4.7% Scripps Networks 4.7% Rayonier 4.3% Sika 4.0% United Technologies 4.3% Fund holdings are subject to change and holding discussions are not recommendations to buy or sell any security. Current and future holdings are subject to risk. Price / Earnings (P/E) is the ratio of a company’s share price compared to its earnings per share Price / Book (P/B) is the ratio of a company’s share price compared to its book value per share Price to Sales (P/S) ratio that compares a company's stock price to its revenues Dividend Yield (DY) is ratio that indicates how much a company pays out in dividends each year relative to its share price Earnings Yield (EY) is earnings per share divided by the share price -- It is the reciprocal of the P/E ratio The S&P 500 Index is an index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P is designed to be a leading indicating of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe. An index cannot be invested in directly. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3,000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. An index cannot be invested in directly. MSCI EAFE Index (Europe, Australasia, Far East) is a broad based, unmanaged equity market index designed to measure the equity market performance of 22 developed markets, excluding the US & Canada. MSCI World Index is a broad-based, unmanaged equity market index designed to measure the equity market performance of 24 developed markets, including the United States. An index cannot be invested in directly. MSCI World Index is a broad-based, unmanaged equity market index designed to measure the equity market performance of 24 developed 4 markets, including the United States. An index cannot be invested in directly.
Our Global Research Team Memphis, TN London Singapore Mason Hawkins, CFA Scott Cobb Ken Siazon Staley Cates, CFA Manish Sharma, CFA Josh Shores, CFA Ross Glotzbach, CFA Yaowen Zhang John Woodman Jim Thompson, CFA David Vyravipillai Lowry Howell, CFA Naser Bashir, CFA Brandon Arrindell, CFA 5
Agenda Introduction Gwin Myerberg Southeastern Progress Report Mason Hawkins U.S. Investment Highlights Ross Glotzbach Asian Investment Highlights Ken Siazon European Investment Highlights Josh Shores Q & A Global Research Team 6
Capital Gains Distribution Distributed on November 16, 2016 Per Share % Long-Term Partners Fund $0.5312 100% Small-Cap Fund 4.855 97 International Fund -- -- Global Fund -- -- 7
Southeastern Progress Report Mason Hawkins
Southeastern Asset Management, Inc. We are long-term, concentrated, engaged, intelligent, partnership investors Long-Term Investing A 5 year expected investment time horizon Concentrated Investing 20 or fewer holdings Collaborate with our boards and managements to build Engaged Investing long-term value per share growth Intelligent Investing Investments must qualify quantitatively and qualitatively Collectively our associates and affiliates are the largest Partnership Investing shareholder group in funds advised by Southeastern 9
Our Global Research Team Memphis, TN London Singapore Mason Hawkins, CFA Scott Cobb Ken Siazon Staley Cates, CFA Manish Sharma, CFA Josh Shores, CFA Ross Glotzbach, CFA Yaowen Zhang John Woodman Jim Thompson, CFA David Vyravipillai Lowry Howell, CFA Naser Bashir, CFA Brandon Arrindell, CFA 10
Year-To-Date Performance Longleaf Partners Funds and Indices (1/1/16 to 10/31/16) *Inflation +10% is based on CPI (not seasonally adjusted) as of 9/30/16 Returns reflect reinvested capital gains and dividends but not the deduction of taxes an investor would pay on distributions or share redemptions. 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 funds may be lower or higher than the 11 performance quoted. Performance data current to the most recent month end may be obtained by visiting longleafpartners.com.
U.S. Investment Highlights Ross Glotzbach
U.S. Investment Highlights • Record low interest rates resulting in flight to income and perceived stability (This could be changing as we speak) • Stock picking out of favor, but positive company-specific results driving our strong YTD returns • Finding new opportunities difficult in current environment – Cash levels above average – On-deck list short but solid The statements and opinions expressed are those of the author and are as of the date of this report 13
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