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FPA Crescent
Fund
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FPACX*
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*Charles Schwab Ticker: FPC1Z

Webcast Presentation

Presented by: Contrarian Value Team

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Philosophy

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We endeavor to provide, over the long-term, an equity-like return with less risk
than the stock market while avoiding permanent impairment of capital.

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We seek to identify absolute value opportunities across the capital structure.

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These investments typically include common and preferred stock, convertible

securities, corporate, high yield, and government debt. Targeted short selling is
used reduce specific risk, and as a source of return.

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Fund overview - Hypothetical growth of $10,000

June 2, 1993 through September 30, 2014
FPA Crescent

S&P 500

Annualized returns*

11.00%

9.25%

Standard deviation

10.24%

14.85%

0.59

0.29

Sharpe ratio
$100,000
$90,000
$80,000
$70,000

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$60,000
$50,000

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$40,000
$30,000
$20,000

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$10,000

$0
1993

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1996

1999

2002

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2005

2008

2011

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FPACX
$92,722

S&P 500
$66,010

2014

Average Annual Total Returns as of September 30, 2014 for FPA Crescent
1 Year, 10.74%
5 Years, 11.20%
10 Years, 8.57%
* Source: Morningstar. Source: Morningstar. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. The return
shown is at net asset value (NAV) and does not reflect the deduction of the sales charge, which if reflected, would reduce the performance shown. Please refer to the back of the
presentation for full disclosure information. Total return calculations are based on a $10,000 investment. This data represents past performance and investors should understand that
investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. Current month-end performance data may be
obtained by calling toll-free, 1-800-982-4372. Expense ratio as of most recent prospectus is 1.26%. A redemption fee of 2% may apply. The Fund commenced investment operations on
June 2, 1993. The performance shown for periods prior to March 1, 1996 reflects the historical performance of a predecessor fund. FPA assumed control of the predecessor fund on March
1, 1996. The FPA Crescent Fund's objectives, policies, guidelines and restrictions are, in all material respects, equivalent to those of the predecessor fund. Calculated using Morningstar Direct.

Performance statistics as of September 30, 2014

FPA Crescent
Q3 2014

15.02%

22.99%

11.20%

15.70%

3 Years - Trailing

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5 Years - Trailing

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10 Years - Trailing

8.57%

8.11%

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15 Years - Trailing

10.24%

4.87%

From Inception*

11.00%

9.25%

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4.02%

1 Year -Trailing

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10.74%

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-0.96%

Calendar YTD 2014

S&P 500
1.13%

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8.34%

19.73%

*Inception date is June 2, 1993. Returns 1 year or greater are annualized. Returns are calculated at net asset value after all fees and expenses. As of the most recent prospectus, the
expense ratio is 1.23%. A redemption fee of 2% may apply.
Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance and
investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original
cost. Current month-end performance data may be obtained by calling toll-free, 1-800-982-4372. The Fund commenced investment operations on June 2, 1993. The performance
shown for periods prior to March 1, 1996 reflects the historical performance of a predecessor fund. FPA assumed control of the predecessor fund on March 1, 1996. The FPA Crescent
Fund's objectives, policies, guidelines and restrictions are, in all material respects, equivalent to those of the predecessor fund.

FPA Crescent winners and losers for Q3 2014

Winners
Microsoft
Tencent Holdings**

Pct. of Portfolio

Performance
Contribution

3.44%

0.37%

-1.86%

0.17%

CVS Health Corp.

2.83%

0.16%

Citigroup

1.72%

0.16%

Alcoa

1.61%

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0.12%

Owens Illinois

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Naspers*

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Pct. of Portfolio

Performance
Contribution

0.79%

-0.26%

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Losers

1.73%

-0.22%

Canadian Natural
Resources

1.05%

-0.18%

Walgreen

0.67%

-0.16%

Oracle

2.89%

-0.16%

Based on weighted contribution to quarterly performance of the Fund.

*Position opened during the period. **Short position.
As of September 30, 2014. Portfolio composition will change due to ongoing management of the Fund. References to specific securities or sectors should not be construed as recommendations by
the Fund, its Advisor or Distributor. The discussions of Fund investments represent the views of the Fund's managers at the time of each report and are subject to change without notice. These views
may not be relied upon as investment advice or as an indication of trading intent on behalf of any First Pacific Advisors portfolio. Security examples featured are samples for presentation purposes
and are intended to illustrate our investment philosophy and its application. It should not be assumed that most recommendations made in the future will be profitable or will equal the performance of
the securities.
Past performance is not a guarantee of future results. Please refer to the back of the presentation for full disclosure information.

FPA Crescent portfolio characteristics

FPACX Average

S&P 500

$95,341

$25,440

$131,210

Market Capitalization (in millions)1

Price/Earnings2
Price/Book3

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Return on Equity5

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18.7

Debt/Capital4

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September 30, 2014

16.6

19.1

1.8

1.7

2.7

-12.4%

9.6%

48.7%

12.9%

12.8%

18.3%

Source: FPA and Mellon

1 For Crescent Fund since 9/30/1996, based one earliest data. Market capitalization is the value of a corporation as determined by the market price of its issued and outstanding
common stock. It is calculated by multiplying the number of outstanding shares by the current market price of a share.
2 P/E and average P/E reflect the trailing 12 months, since 3/31/1999, based on earliest data. Price/Earnings ratio (P/E) is the price of a stock divided by its earnings per share.
3 Average since 9/30/1996 ,based on earliest data.
4 Average since 12/31/1997, based on earliest data. Debt/Total Capital for a fund's underlying stock holdings is calculated by dividing each security's long-term debt by its total
capitalization (the sum of common equity plus preferred equity and long-term debt) and is a measure of the company's financial leverage.
5 Average since 3/31/1999, based on earliest data. Return on Equity is the amount of profit computed by dividing net income before taxes less preferred dividends by the value
of stockholders equity.
Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance and
investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original
cost. Current month-end performance data may be obtained via http://www.fpafunds.com/crescent or by calling toll-free, 1-800-982-4372.

FPA Crescent allocations*

Risk Asset

September 30, 2013

Common stock, long

54.2%

Common stock, short

-3.2%

Corporate debt, long

Corporate debt, short

-0.1%

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Mortgages (whole loans)

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Other

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Exposure, Net

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1.1%

No. of Equity Positions

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September 30, 2014

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55.2%

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-4.6%
1.1%
0.0%

0.6%

0.3%

1.4%

1.1%

54.0%

54.6%

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*Portfolio composition will change due to ongoing management of the Fund. References to specific securities or sectors should not be construed as recommendations by the Fund, its Advisor or
Distributor. The discussions of Fund investments represent the views of the Fund's managers at the time of each report and are subject to change without notice. These views may not be relied upon
as investment advice or as an indication of trading intent on behalf of any First Pacific Advisors portfolio. Security examples featured are samples for presentation purposes and are intended to
illustrate our investment philosophy and its application. It should not be assumed that most recommendations made in the future will be profitable or will equal the performance of the securities.

Historic P/E ratio using 10-year average earnings

50
45
40

Price-Earnings Ratio

P/E

10-Year UST

Current

24.9

2.2%

Since 1881

16.5

4.6%

Since 1930

17.5

5.1%

Since 1950

18.9

5.9%

Since 1970

19.4

6.8%

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30
25

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20

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15
10
5
0
1881

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1901

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1921

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16
14
12
10
8
6

10-Year US Treasury Notes

35

Oct. 19, 2014

18

4
2
0

1941
CAPE Price E10 Ratio

1961

1981

2001

Interest Rate

Source: Shiller, Robert J. Online Data Robert Shiller, econ.yale.edu/~shiller/data.htm, and Bloomberg. Data as of October 19, 2014. P/E or price-to-earnings is
a valuation ratio of a companys current share price compared to its per-share earnings.
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Why follow the beer industry

Consolidated Industry/Regional Duopolies

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Economies of scale
High ROIC
Moats around your throats
Low private label penetration

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Modest volume growth on global basis

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Cash generative and able to support reasonable leverage

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ROIC is return on invested capital, or a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments.
The return on invested capital measure gives a sense of how well a company is using its money to generate returns.
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Beer Big 4

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Beer market share volume 2013

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Other

Source: Nomura, Company data. Note numbers presented may not add to 100% due to rounding.
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Big 4 dominate profit pool 2013

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39%
9%

9%

9%

9%

7%

9%

24%

31%

33%

12%

30%

11%

10%

9%

24%

20%

19%
11%

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33%

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Tangible ROIC

12%
18%

14%
18%

14%
17%

Total ROIC

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36%

Big 4 Brewers Average Total / Tangible ROIC

49%

Beverages industry ROIC

CY00 CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13

Source: Company data, Bernstein. Tangible ROIC is return on invested capital, or a calculation used to assess a company's efficiency at allocating the
capital under its control to profitable investments. The return on invested capital measure gives a sense of how well a company is using its money to
generate returns. CY is current year.
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Industry consolidation

Big 4 Global Market Share

60.0%
50.0%
40.0%

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30.0%

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20.0%
10.0%

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2001

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2009

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2013

Source: Euromonitor
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EBIT margin in highly concentrated markets......

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Source: Merrill Lynch, company data. EBIT is earnings before interest and taxes.
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.......and in Duopolistic/large scale markets

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Source: Merrill Lynch, company data.

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......Even in weak markets 10.0% EBIT margin

Margin

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Moats for your throat

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Private label penetration (%)

Low private label penetration

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Networking capital % of revenues

15.0%

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10.0%

5.0%

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0.0%

2008

-5.0%

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-10.0%

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P
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ABI

2010

SABMiller

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2011

Heineken

2012

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2013

Carlsberg

Source: BofA Merrill Lynch Global Research estimates.

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Modest Capex Developed/Emerging markets

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Note FY is fiscal year and CY is current year.

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Volume growth on global basis

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Western Europe Volumes down/value up

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Note m. hl. Represents million hectoliters. Right bar graph uses the Index amount of 2000 to represent 100 and depict growth of subsequent periods. CAGR
is compound annualized growth rate, or the year-over-year growth rate of an investment over a specified period of time.
22

Western Europe EBIT margin comparison

25.0%
22.1%

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20.0%

15.0%

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13.9%

11.5%

10.0%

9.7%

5.0%

0.0%

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8.3%

ri s

8.0%

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ABI

Heineken
2005

Carlsberg

2013

Source: S&P Capital IQ

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Beer Please sir may I have another

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AB Inbev best in class for terms of management team and bought for
Crescent in early 2010
Greatest economies of scale/highest margins % ROIC

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Leader in worlds three largest profit pools of US (48% m/s), Brazil (69% m/s), Mexico
(58% m/s)
Source Merrill Lynch, Canadean, IRI, company data

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Best CEO*

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Best capital allocation*

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And then theres Carlsberg.....recent purchase for the Fund that is less
qualitatively attractive compared to AB Inbev, but demonstrably cheaper.

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ROIC is return on invested capital, or a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments.
The return on invested capital measure gives a sense of how well a company is using its money to generate returns.
Note m/s represents market share.*Based on FPAs opinion.
24

,
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Q&A

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For Institutional Use Only/Not for Public Use

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Flexible approach cash for FPA Crescent Fund

50%

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40%
35%

30%
25%

20%
15%
10%

5%

0%
-5%
1996

L1997

1998

1999

2000

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Avg. Liquidity at Peaks (H)

Avg. Liquidity at Troughs (L)
Avg. Liquidity

2002

2003

2004

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2005

2006

2007

34.40%
9.20%
26.80%

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H

45%

2008

2009

2010

2011

2012

2013

2014

FPACX CAGR Next 2 Years

5.80%
15.00%

As of September 30, 2014. Source: Morningstar Direct.

CAGR is the Compound Annual Growth Rate as of 2 years following the peak and trough. Peaks include average liquidity at March 31, 1997, March 31, 1998,
March 31, 2002, March 31, 2006 and September 30, 2008. The 2013 peak was not included in the CAGR calculation for the next 2 years. Troughs include
average liquidity at June 30, 1996, June 30, 1999 ,September 30, 2001, March 31, 2003 and September 30, 2010.
Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data
represents past performance and investors should understand that investment returns and principal values fluctuate, so that when you redeem
your investment it may be worth more or less than its original cost. Current month-end performance data may be obtained by calling toll-free, 1800-982-4372.
Performance shown is net of fees. The total annual operating expense ratio as of the most recent prospectus was 1.23%.
26

Disclaimer
These slides are intended as supplemental material to the 3rd Quarter 2014 FPA Crescent audio presentation that is posted on our website fpafunds.com.

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We do want to make sure you understand that the views expressed on these slides and in the accompanying audio presentation are as of today, October 29,
2014 and are subject to change based on market and other conditions. These views may differ from other portfolio managers and analysts of the firm as a
whole, and are not intended to be a forecast of future events, a guarantee of future results or investment advice. Any mention of individual securities or sectors
should not be construed as a recommendation to purchase or sell such securities, and any information provided is not a sufficient basis upon which to make
an investment decision. The information provided does not constitute, and should not be construed as, an offer or solicitation with respect to any securities,
products or services discussed.

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Past performance is not a guarantee of future results. This data represents past performance and investors should understand that investment
returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. Performance
has been calculated on a total return basis, which combines principal and dividend income changes for the periods shown. Principal changes are
based on the difference between the beginning and closing net asset values for the period and assume reinvestment of all dividends and
distributions paid. All applicable expenses such as advisory fees have been included in calculating performance. It should not be assumed that
recommendations made in the future will be profitable or will equal the performance of the security examples discussed. Current month-end
performance data may be obtained by calling toll-free, 1-800-982-4372.
You should consider the Funds investment objectives, risks, and charges and expenses carefully before you invest. The Prospectus details the
Fund's objective and policies and other matters of interest to the prospective investor. Please read this Prospectus carefully before investing. The
Prospectus may be obtained by visiting the website at www.fpafunds.com, by email at crm@fpafunds.com, toll-free by calling 1-800-982-4372 or by
contacting the Fund in writing.

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Statistics have been obtained from sources believed to be reliable, but the accuracy and completeness cannot be guaranteed. The Standard & Poor's 500
Stock Index (S&P 500) is a capitalization-weighted index which covers industrial, utility, transportation and financial service companies, and represents
approximately 75% of the New York Stock Exchange (NYSE) capitalization and 30% of NYSE issues. This index is considered a measure of large
capitalization stock performance. The index does not reflect any commissions or fees which would be incurred by an investor purchasing the stocks it
represents.

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Investments in mutual funds carry risks and investors may lose principal value. Stock markets are volatile and can decline significantly in response to adverse
issuer, political, regulatory, market, or economic developments. The Fund may purchase foreign securities, including American Depository Receipts (ADRs)
and other depository receipts, which are subject to interest rate, currency exchange rate, economic and political risks; this may be enhanced when investing in
emerging markets. Small and mid cap stocks involve greater risks and they can fluctuate in price more than larger company stocks. Short-selling involves
increased risks and transaction costs. You risk paying more for a security than you received from its sale.
The return of principal in a bond investment is not guaranteed. Bonds have issuer, interest rate, inflation and credit risks. Lower rated bonds, callable bonds
and other types of debt obligations involve greater risks. Mortgage-backed securities and asset-backed securities are subject to prepayment risk and the risk
of default on the underlying mortgages or other assets.
The portfolio holdings as the most recent quarter end may be obtained at fpafunds.com/docs/funf-holdings/crescent-9-1475CA359EE77D.pdf?sfvrsn=2.
The FPA Funds are distributed by UMB Distribution Services, LLC, 235 W. Galena Street, Milwaukee, WI, 53212.

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