©2021 Smead Capital Management, All Rights Reserved FOR INSTITUTIONAL INVESTOR USE ONLY ©2021 Smead Capital Management, All Rights Reserved Smead Capital Appreciation Strategy U.S Large Cap Equity As of September 30, 2021 www.smeadcap.com Opinions expressed are those of Smead Capital Management, are subject to change, are not guaranteed, and should Opinions expressed are those of Smead Capital Management, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security not be considered recommendations to buy or sell any security FOR INSTITUTIONAL INVESTOR USE ONLY ©2021 Smead Capital Management, All Rights Reserved Smead Capital Appreciation Strategy U.S Large Cap Equity As of September 30, 2021 www.smeadcap.com Opinions expressed are those of Smead Capital Management, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security Who we are We advise investors that fear stock market failure through a low-turnover, differentiated value discipline seeking wonderful companies to build wealth At Smead Capital Management, we’re stock market investors Our investors are individuals, advisors, family offices and institutions globally who invest with the firm through its mutual funds, separate accounts and other investment vehicles QUICK FACTS Founded in 2007 The Smead Capital Appreciation strategy invests in U.S large capitalization companies through concentrated positions The strategy is managed by Lead Portfolio Manager Bill Smead and Co-Portfolio Managers Tony Scherrer, CFA and Cole Smead, CFA Headquartered in Phoenix, AZ with offices in West Conshohocken, PA and London, UK Assets under management as of September 30, 2021: $3.1 billion Past performance is no guarantee of future results Investment Team Chief Investment Officer Whitman College, B.A Economics William Smead William is the founder of Smead Capital Management, where he oversees the firm As Chief Investment Officer he is responsible for all investment and portfolio decisions and reviewing the implementation of those decisions Prior to starting Smead Capital Management he was Portfolio Manager of the Smead Investment Group of Wachovia Securities He has over 38 years of experience in the investment industry President & Portfolio Manager Whitman College, B.A Economics/History Cole Smead, CFA Cole is a member of the investment committee that oversees the management of the firm’s separate accounts and mutual funds He has been with the firm since its founding in 2007 Prior to joining Smead Capital Management in 2007, Cole was a Financial Advisor with Wachovia Securities in Scottsdale, AZ Director of Research & Portfolio Manager Seattle Pacific University, B.A Finance Tony Scherrer, CFA Tony brings more than 24 years of professional investment experience in the financial services industry Tony administrates the investment process from the investment committee’s idea creation to the forensic note taking for strategy research Prior to joining Smead Capital Management in 2008, Tony was a Vice President and Senior Portfolio Manager at U.S Trust and Harris Private Bank He has been involved with this strategy since joining the firm in 2008 CFA® is a registered trademark owned by the CFA Institute OUR EIGHT CRITERIA We advise investors Required over entire holding period • Meets an economic need • Strong competitive advantage (wide moats or barriers to entry) • Long history of profitability and strong operating metrics • Generates high levels of free cash flow • Available at a low price in relation to intrinsic value Favored, but not required • Management’s history of shareholder friendliness • Strong balance sheet • Strong insider ownership (preferably with recent purchases) Every company we own must satisfy the required criteria For companies that not also meet the favored criteria, we believe these short-term conditions will be ultimately corrected or overwhelmed by the required criteria PORTFOLIO TRAITS We advise investors SELL DISCIPLINE • Generally U.S domiciled Risk Management • Typically 25-30 securities • trimmed if weighting becomes • Typically 40-50% of portfolio in top ten holdings • Portfolio weightings driven by: > Our Eight Investment Criteria > Stock performance • Low turnover (~15-25%) • Buy criteria assumes a three-to fiveyear holding period, with desired holding periods of more than five years Successful investments likely to be outsized (in the 8-10% range) Change in Thesis • Company fundamentals violate our Eight Investment Criteria • Maniacal pricing Downside Protection • When a security falls 15-20% from our purchase price or relative to a peer group, the portfolio managers execute a formal, intensified review Portfolio Holdings As of September 30, 2021 Ticker Weighting % Continental Resources Inc CLR 8.53 Energy American Express Co AXP 5.97 Financials Target Corp TGT 5.81 Consumer Discretionary Lennar Corp LEN 5.20 Consumer Discretionary NVR Inc NVR 4.91 Consumer Discretionary Simon Property Group Inc SPG 4.71 Real Estate Macerich Co MAC 4.67 Real Estate ConocoPhillips COP 4.59 Energy eBay Inc EBAY 4.55 Consumer Discretionary JPMorgan Chase & Co JPM 4.46 Financials Merck & Co Inc MRK 4.33 Health Care AMGN 4.28 Health Care Bank of America Corp BAC 4.24 Financials D.R Horton Inc DHI 3.94 Consumer Discretionary Chevron Corp CVX 3.24 Energy The Home Depot Inc HD 3.05 Consumer Discretionary Occidental Petroleum Corp OXY 2.92 Energy CMCSA 2.76 Communication Services UHAL 2.54 Industrials Berkshire Hathaway Inc Class B BRK.B 2.47 Financials Discovery Inc C DISCK 2.34 Communication Services Amgen Inc Comcast Corp Class A Amerco Inc S&P GICS Sector PFE 2.12 Health Care CACC 2.05 Financials Qualcomm Inc QCOM 1.97 Information Technology Discovery Inc Registered Shs Series -A- DISCA 1.31 Communication Services OGN 0.19 Health Care Pfizer Inc Credit Acceptance Corp Organon & Co Ordinary Shares Cash 2.84 Past performance is no guarantee of future results The securities identified above are the holdings of a representative account for the strategy and not represent all of the securities purchased or recommended for our clients and it should not be assumed that investing in these securities was or will be profitable Sector Weighting and Asset Allocation Sector Weightings Asset Allocation Russell 1000 Value TR Index Utilities Consumer Staples Basic Materials Information Technology Industrials Communication Services Real Estate Healthcare Financials Energy Consumer Discretionary 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Smead Capital Appreciation As of September 30, 2021 Stock 97.2% Cash 2.8% S&P 500 TR Index Past performance is no guarantee of future results Source: Smead Capital Management A representative portfolio from the Capital Appreciation Composite was used to generate information for the sector weightings and asset allocation The above information is for illustrative purposes only and should not be construed as investment advice Frank Russell Company is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto This is a presentation of Smead Capital Management The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited Frank Russell Company is not responsible for the formatting or configuration of this material or for any inaccuracy in Smead Capital Management's presentation thereof Trailing Returns (%) As of September 30, 2021 60% 49.13 48.06 50% 40% 32.26 31.56 35.01 30.01 30% 20% 16.14 15.92 16.10 15.12 10.07 10% 0% -10% 15.99 0.76 0.57 17.13 16.08 16.90 10.94 18.3317.38 16.63 13.51 12.54 11.72 11.31 8.40 0.58 Q3 2021 -0.78 YTD Smead Capital Appreciation - Gross of Fees Year Year Capital Appreciation Composite - Net of Fees Year 10 Year Russell 1000 Value TR Index Since Inception (3/1/2008) S&P 500 TR Index Past performance is no guarantee of future results Past performance is no guarantee of future results Source: Smead Capital Management Capital Appreciation Composite Gross & Net of Fees performance numbers for all time periods are preliminary The Capital Appreciation Composite includes all fully discretionary accounts invested in equities of U.S companies and American Depository Receipts (ADRs) whose objective is long-term capital appreciation with a relatively concentrated portfolio which may typically own 25 to 30 different securities The top 10 holdings may constitute greater than 50% of portfolio assets These accounts are primarily concerned with appreciation, not high dividend yield This composite was created in March 2008 A complete list of composite descriptions is available upon request Valuations are computed and performance is reported in U.S dollars Past performance is not indicative of future results As with any investment vehicle there is always the potential for gains as well as the possibility of losses On December 31, 2008, 48% of the composite is composed of non-fee-paying portfolios As a result of the verification, certain previously reported composite information has been changed to reflect changes in composite membership Gross-of-fees returns are presented before management and custodial fees but after all trading expenses Composite and benchmark returns are presented net of non-reclaimable withholding taxes and reflect the reinvestment of dividends and other earnings Net-of-fees returns are calculated by deducting the actual management fees paid each quarter The standard advisory fee is 0.85% on the market value Fees may be negotiated in lieu of the standard fee schedule Please see important disclosures at the back of this presentation Attribution Analysis – Selection Effects Recent Quarter 7/1/2021 to 9/30/2021 Past performance is no guarantee of future results The returns listed above are annualized and gross of fees The quarter end holdings of the Capital Appreciation Strategy’s representative account were provided to Morningstar to generate the information listed above This information is for illustrative purposes only and should not be construed as investment advice Residual is the Reported Total - Attribution Total Please see important disclosures at the back of this presentation Attribution vs Russell 1000 Value (3 Year) Portfolio Benchmark 12.53 8.33 Consumer Discretionary 29.24 Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Cash Attribution Total Total Reported Total Residual (Reported - Attribution Total) Benchmark Weights Weights Rescaled Portfolio Benchmark Portfolio Benchmark Allocation Selection Effect Return 12.53 8.32 20.53 42.34 3.70 3.37 1.22 -1.60 -0.38 6.25 29.24 6.25 105.50 42.35 25.62 3.16 3.77 14.62 18.39 2.91 8.17 2.91 8.18 -40.10 39.81 -2.59 2.72 0.58 -4.66 -4.08 5.34 6.90 5.34 6.90 -25.08 -19.29 8.01 -2.60 6.44 2.83 9.26 23.32 21.53 23.32 21.54 41.30 40.44 8.74 7.88 -0.67 0.27 -0.40 13.59 14.35 13.59 14.33 11.27 40.30 1.39 5.04 -0.01 -3.78 -3.79 1.25 10.52 1.25 10.51 128.89 36.67 2.19 4.94 -0.53 1.07 0.55 5.43 8.63 5.43 8.63 107.84 48.45 4.70 3.81 0.59 3.44 4.03 0.00 4.31 0.00 4.31 33.74 0.00 1.64 -0.18 0.00 -0.18 3.66 4.89 3.66 4.89 32.93 4.45 1.53 -0.06 1.25 1.18 0.00 6.12 0.00 6.13 31.66 0.00 1.63 -0.19 0.00 -0.19 2.73 0.00 2.73 0.00 3.57 0.09 0.00 -1.22 0.00 -1.22 100.00 99.99 100.00 100.00 56.30 56.30 33.12 9.74 13.44 23.17 100.00 100.00 56.30 33.12 Weights Communication Services Portfolio Weights Rescaled Attribution Analysis 10/1/2018 to 9/30/2021 Return -44.28 Return 33.12 Contribution Contribution Effect Active 33.36 0.23 Past performance is no guarantee of future results The returns listed above are annualized and gross of fees The quarter end holdings of the Capital Appreciation Strategy’s representative account were provided to Morningstar to generate the information listed above This information is for illustrative purposes only and should not be construed as investment advice Residual is the Reported Total - Attribution Total Please see important disclosures at the back of this presentation 10 Attribution vs Russell 1000 Value (5 Year) Portfolio Benchmark 12.32 6.99 Consumer Discretionary 27.60 Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Cash Attribution Total Excluded Total Reported Total Residual (Reported - Attribution Total) Benchmark Weights Weights Rescaled Portfolio Benchmark Portfolio Benchmark Allocation Selection Effect Return 12.32 6.99 66.33 68.10 11.59 5.37 1.00 2.80 3.79 5.75 27.60 5.74 205.60 69.10 49.65 4.94 2.34 31.30 33.65 3.73 8.08 3.73 8.09 -39.34 43.85 -3.13 3.75 2.15 -5.72 -3.57 3.26 8.69 3.26 8.65 -25.08 -3.04 11.75 -0.86 10.41 3.91 14.33 26.07 23.25 26.07 23.28 121.35 100.32 29.18 20.08 0.40 5.92 6.32 14.69 13.87 14.69 13.88 50.79 92.06 8.44 11.21 0.63 -5.84 -5.22 1.26 9.96 1.26 9.97 110.69 67.43 3.08 8.54 -0.29 0.87 0.58 5.81 8.65 5.81 8.66 281.73 118.76 12.04 8.78 0.19 7.84 8.03 0.00 3.80 0.00 3.81 79.82 0.00 3.06 -0.40 0.00 -0.40 2.23 4.81 2.23 4.82 44.81 6.53 2.41 1.45 1.71 3.16 0.00 6.10 0.00 6.11 52.18 0.00 3.10 0.95 0.00 0.95 3.03 0.00 3.03 0.00 6.21 0.24 0.00 -2.64 0.00 -2.64 100.00 99.96 100.00 100.00 129.37 129.37 70.39 16.19 42.79 58.98 0.00 0.04 100.00 100.00 129.37 70.39 Weights Communication Services Portfolio Weights Rescaled Attribution Analysis 10/1/2016 to 9/30/2021 Return -44.28 Return 70.39 Contribution Contribution Effect Active 70.67 0.28 Past performance is no guarantee of future results The returns listed above are annualized and gross of fees The quarter end holdings of the Capital Appreciation Strategy’s representative account were provided to Morningstar to generate the information listed above This information is for illustrative purposes only and should not be construed as investment advice Residual is the Reported Total - Attribution Total Please see important disclosures at the back of this presentation 11 Attribution vs S&P 500 (3 Year) Portfolio Benchmark 12.53 10.59 Consumer Discretionary 29.24 Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Cash Attribution Total Excluded Total Reported Total Residual (Reported - Attribution Total) Benchmark Weights Weights Rescaled Portfolio Benchmark Portfolio Benchmark Allocation Selection Effect Return 12.53 10.62 20.53 72.48 3.70 7.44 0.22 -4.55 -4.33 10.85 29.24 10.88 105.50 56.97 25.62 6.18 1.29 11.97 13.25 2.91 6.93 2.91 6.95 -40.10 40.20 -2.59 2.70 2.04 -5.01 -2.97 5.34 3.73 5.34 3.74 -25.08 -18.66 8.01 -1.21 3.43 3.21 6.64 23.32 11.86 23.32 11.90 41.30 45.60 8.74 5.69 -2.62 -1.24 -3.86 13.59 14.13 13.59 14.13 11.27 41.60 1.39 6.03 -0.17 -4.08 -4.25 1.25 8.82 1.25 8.84 128.89 32.22 2.19 3.06 2.32 1.39 3.72 5.43 24.44 5.43 24.50 107.84 106.22 4.70 22.40 -7.90 0.48 -7.42 0.00 2.52 0.00 2.52 46.81 0.00 1.29 0.26 0.00 0.26 3.66 2.82 3.66 2.83 50.18 4.45 1.35 -0.57 1.31 0.74 0.00 3.08 0.00 3.09 34.66 0.00 1.00 0.60 0.00 0.60 2.73 0.00 2.73 0.00 3.57 0.09 0.00 -2.03 0.00 -2.03 100.00 99.77 100.00 100.00 56.30 56.30 55.93 -3.12 3.48 0.36 0.00 0.22 100.00 100.00 56.30 55.93 Weights Communication Services Portfolio Weights Rescaled Attribution Analysis 10/1/2018 to 9/30/2021 Return -44.28 Return 55.93 Contribution Contribution Effect Active 56.07 0.14 Past performance is no guarantee of future results The returns listed above are annualized and gross of fees The quarter end holdings of the Capital Appreciation Strategy’s representative account were provided to Morningstar to generate the information listed above This information is for illustrative purposes only and should not be construed as investment advice Residual is the Reported Total - Attribution Total Please see important disclosures at the back of this presentation 12 Attribution vs S&P 500 (5 Year) Portfolio Benchmark 12.39 10.27 Consumer Discretionary 27.53 Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Cash Attribution Total Excluded Total Reported Total Residual (Reported - Attribution Total) Benchmark Weights Weights Rescaled Portfolio Benchmark Portfolio Benchmark Allocation Selection Effect Return 12.39 10.34 46.88 126.26 9.18 13.57 0.07 -7.21 -7.15 10.34 27.53 10.40 190.77 144.00 46.59 13.89 5.67 11.56 17.23 3.71 7.38 3.71 7.42 -37.76 51.72 -2.94 4.55 4.57 -6.83 -2.26 3.21 4.77 3.21 4.78 -25.08 -6.81 11.29 -0.63 7.73 4.51 12.24 26.10 12.84 26.10 12.92 125.98 116.01 28.63 14.16 -1.14 3.17 2.03 14.75 14.20 14.75 14.26 37.48 91.79 6.52 13.92 -0.39 -9.28 -9.67 1.26 9.33 1.26 9.39 131.03 79.71 3.11 7.91 3.91 1.35 5.26 5.84 21.94 5.84 22.06 279.28 268.38 11.52 44.45 -17.95 1.39 -16.56 0.00 2.50 0.00 2.50 89.41 0.00 2.60 0.67 0.00 0.67 2.19 2.82 2.19 2.84 61.03 6.27 2.14 0.88 1.84 2.73 0.00 3.08 0.00 3.10 55.31 0.00 1.91 2.15 0.00 2.15 3.01 0.00 3.01 0.00 6.26 0.24 0.00 -4.73 0.00 -4.73 100.00 99.47 100.00 100.00 120.41 120.41 118.47 1.44 0.49 1.94 0.00 0.53 100.00 100.00 120.41 118.47 Weights Communication Services Portfolio Weights Rescaled Attribution Analysis 10/1/2016 to 9/30/2021 Return -44.28 Return 118.47 Contribution Contribution Effect Active 118.26 -0.21 Past performance is no guarantee of future results The returns listed above are annualized and gross of fees The quarter end holdings of the Capital Appreciation Strategy’s representative account were provided to Morningstar to generate the information listed above This information is for illustrative purposes only and should not be construed as investment advice Residual is the Reported Total - Attribution Total Please see important disclosures at the back of this presentation 13 Capital Appreciation Composite Presentation Year Standard Deviation Benchmark # of Portfolios End of Period Total Composite Assets End of Period (Millions) Total Firm Assets End of Period (Millions) Total Return Gross of Fees Total Return Net of Fees Russell 1000 Value Index Internal Dispersion Year Standard Deviation Composite 2011 5.74% 5.16% 0.39% 0.32% 18.64% 20.69% 91 119 170 2012 29.16% 28.20% 17.51% 0.62% 15.24% 15.51% 107 221 272 2013 39.18% 38.10% 32.53% 0.56% 12.96% 12.70% 95 700 762 2014 15.72% 14.93% 13.45% 0.20% 10.23% 9.20% 35 1,045 1,150 2015 2.58% 1.85% -3.83% 0.16% 11.80% 10.68% 26 1,658 2,257 2016 4.52% 3.70% 17.34% 0.20% 11.63% 10.77% 25 1,467 2,014 2017 26.36% 25.10% 13.66% 0.17% 11.63% 10.20% 29 1,669 2,265 2018 -3.62% -4.53% -8.27% 0.18% 11.71% 10.83% 33 1,512 1,964 2019 27.60% 26.43% 26.54% 0.30% 11.77% 11.85% 31 1,873 2,302 2020 2.69% 1.84% 2.80% 0.22% 22.74% 19.62% 47 1,620 1,771 Firm: Smead Capital Management (“SCM”) is an independently owned investment advisor that is not affiliated with any parent organization Policies for valuing portfolios, calculating performance and preparing compliant presentations are available upon request Basis of Presentation: SCM claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards SCM has been independently verified for the periods July 1, 2007 to December 31, 2020 Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards The Capital Appreciation Composite has been examined for the periods March 1, 2008 to December 31, 2020 The verification and examination reports are available upon request Composite Criteria: The Capital Appreciation Composite includes all fully discretionary accounts invested in equities of U.S companies and American Depository Receipts (ADRs) whose objective is long-term capital appreciation with a relatively concentrated portfolio, which may typically own 25 to 30 different securities The top 10 holdings may constitute greater than 50% of portfolio assets These accounts are primarily concerned with appreciation, not high dividend yield Accounts managed to the strategy will invest in companies with market capitalization within the range of the Russell 1000®Value Index Composite Creation: This composite was created in March 2008 A complete list of composite descriptions is available upon request Valuations are computed and performance is reported in U.S dollars Past performance is not indicative of future results As with any investment vehicle there is always the potential for gains as well as the possibility of losses On December 31, 2008, 48% of the composite is composed of non-fee paying portfolios Comparison with Market Index: The benchmark is the Russell 1000 Value Index The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S equity universe It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values The Russell1000 Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment The returns for the index not include any transaction costs, management fees or other costs Benchmark returns are not covered by the report of independent verifiers Fees Calculation: Gross-of-fees returns are presented before management and custodial fees but after all trading expenses Composite and benchmark returns are presented net of nonreclaimable withholding taxes and reflect the reinvestment of dividends and other earnings Net-of-fees returns are calculated by deducting the actual management fees paid each quarter The standard advisory fee is 0.85% on the market value Fees may be negotiated in lieu of the standard fee schedule Internal Dispersion: Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were included in the composite for the entire year For years where less than six portfolios were included in the composite for the full year, the measure is not statistically representative and is not presented.” Standard Deviation: The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period It is not required to be presented for annual periods prior to 2011 or when a full three years of performance is not yet available