TI1.L Regulatory News (TI1)

15 September 2022

TRIAN INVESTORS 1 LIMITED(the "Company")

Interim Results

Interim Report and Unaudited Condensed Financial Statements for the period from 1 January 2022 to 30 June 2022

The Company announces its results for the six month period ended 30 June 2022

For further information, please contact:

Ocorian Administration (Guernsey) Limited(Administrator and Company Secretary)+44 (0)1481 742 742Patrick Ogier

Overview of the Company

Trian Investors 1 Limited (the "Company") is a Guernsey-domiciled limited company incorporated on 24 August 2018. The ordinary shares of the Company (the "Shares") were admitted to trading on the Specialist Fund Segment of the London Stock Exchange ("SFS") on 27 September 2018 ("Admission"). The Company registered with the Guernsey Financial Services Commission as a registered collective investment scheme on 16 June 2021.

The investment objective of the Company, through its investment in Trian Investors 1, L.P. (Incorporated) (the "Investment Partnership"), is to generate significant capital appreciation through the investment activity of Trian Investors Management, LLC (the "Investment Manager") and its parent, Trian Fund Management, L.P. (collectively, "Trian").

On 2 September 2022 the Board announced that the Company will, by no later than 30 June 2023, compulsorily redeem no less than 95 per cent. of each shareholder's holding in the Company. Once the Redemption has been completed the Board will commence a process to wind-up the Company with any residual net assets to be returned to shareholders through that process.

Chairman's Statement

For the period from 1 January 2022 to 30 June 2022

Dear Shareholder,

On behalf of the Board of Directors (the "Board") of Trian Investors 1 Limited (the "Company"), I am pleased to present the Company's Interim Report covering the period from 1 January 2022 to 30 June 2022 (the "Period").

Since the start of the Period, the Board has continued work to address the conflicting short- and long-term aspirations of different shareholder groups. On 2 September 2022 the Board announced the proposals detailed in the Investment Manager's Report to wind up the Company, commencing with a redemption of at least 95% of the Company's shares by 30 June 2023[1]. The announcement followed consultation with shareholders representing over 86% of the Company's issued share capital and I am delighted that all of those shareholders indicated their support for the proposals.

On 14 April 2022 the Board welcomed Anita Rival to the Board as an independent non-executive Director. On 5 August 2022 Chris Sherwell was replaced on the Board by Robert Legget, who was appointed as Audit Committee Chair and Senior Independent Director on 15 August 2022. Also on 15 August 2022, I was appointed Chairman of the Board.

On behalf of the Board, I would like to extend my thanks to Chris Sherwell for his leadership as Chairman of the Company since its initial public offering in 2018 and we wish him well for the future.

The first part of 2022 has been a difficult period for global equity markets, and although the Company's investments have demonstrated solid operational performance, the shares of its investee companies have been impacted by broader market conditions. In the six months to 30 June 2022, the net asset value ("NAV") per share of the Company declined by 21.4%, whereas the FTSE 100 total shareholder return ("TSR") was -1.0% during the same period. However, the increase in NAV per share of the Company from inception to 30 June 2022 was 56.4%, significantly outperforming the FTSE 100 TSR of 9.0% over this longer period. In addition, following the Company's recent announcement of the winding up proposals, the Company's share price has risen and as at 13 September 2022 has increased 8.7% since 31 December 2021 (reflecting a cumulative increase of 55.5% since the Company's inception).

The Company continues to hold its investment in Ferguson, which has generated attractive returns since the Company first acquired shares of the company in 2019. As explained in more detail in the Investment Manager's report, the share price of Ferguson declined in the Period due to challenging macroeconomic conditions and technical headwinds. However, the Board is encouraged by the Investment Manager's view on the prospects for the Ferguson investment over the coming months.

On 31 May 2022, the Board announced that the Company made a new investment of approximately $50 million (£37.7 million) in Unilever. This investment had risen in value by 4.7% through 30 June 2022 and by 10.4% through 31 August 2022. This investment was financed by drawings on the $100m credit facility which was announced on 29 March 2022.

In light of the winding up proposals the Board confirms the Company will make no investments in new target companies.

The Board is grateful for your continued support and will announce further details of the winding up process in due course.

Yours sincerely,

Mark Thompson

Chairman

14 September 2022

Investment Manager's Report

For the period from 1 January 2022 to 30 June 2022

Dear Shareholder,

We first invested in Ferguson plc ("Ferguson") in May 2019 and Unilever plc ("Unilever") in March 2022 on behalf of Trian Investors 1 Limited (the "Company"), and each investment has significantly outperformed the FTSE 100 during the Company's holding period. As a result of the attractive returns generated by these investments, the Company has grown its net asset value ("NAV") since its initial public offering through 30 June 2022 by 56.4%, a return significantly greater than the total shareholder return generated by the FTSE 100 (+9%) over the same time period.

Although we are pleased with the results of the Ferguson and Unilever investments to date, we believe that there is still significant value potentially to be achieved through the Company's holdings in these companies. However, we acknowledge that a significant portion of the current shareholder base would like the opportunity to exit their shareholding at or around NAV. As a result, following the Extraordinary General Meeting held on 5 August 2022, in conjunction with the Company's Board of Directors (the "Board"), we worked with the Company's advisers to formulate proposals to achieve the objectives of shareholders as a whole. Following consultation with major shareholders, the Company announced that it will, by no later than 30 June 2023, compulsorily redeem no less than 95% of each shareholder's holding in the Company, such redemption to be satisfied by a distribution of the underlying assets of Trian Investors 1, L.P. (the "Investment Partnership") (including an in specie distribution of shares) at a value equivalent to the Board's estimate of the then prevailing net asset value (the "Redemption").

We believe that the Redemption will provide the Company's shareholders with a number of benefits, including :

• The Redemption represents a significant return of capital to shareholders. For illustrative purposes only, if the Redemption had occurred on 31 July 2022, based on the NAV per share as at close of business on 31 July 2022, and specifically the closing prices of Ferguson and Unilever shares on such date, it is estimated that the Redemption would have returned approximately £420 million of value to shareholders;

• The current discount of holding Ferguson and Unilever shares through the Company will be eliminated in respect of those assets that are distributed in-specie to shareholders;

• The Redemption will allow each shareholder to determine the most opportune time to realise their exposure to Unilever and/or Ferguson (and, in the case of Ferguson, taking into consideration its potential eligibility for inclusion in various U.S. stock indices, including the S&P 500 Index); and

• The traded market in Ferguson and Unilever shares is significantly more liquid when compared to trading in the Company's shares.

We intend to continue to closely monitor the Company's positions in Ferguson and Unilever over the next few months and, acting in conjunction with the Board, intend to seek to effect the Redemption in a manner that will enhance value return for Company shareholders.

Ferguson

Recent Developments

On 10 March 2022, Ferguson announced that the special resolution to enable a U.S. primary listing on the New York Stock Exchange ("NYSE") was passed with 95.49% support from the votes cast, which enabled Ferguson to achieve a primary listing move to the NYSE on 12 May 2022. Prior to 12 May 2022, Ferguson was primarily traded on the London Stock Exchange, despite the fact that 100% of Ferguson's business is based in North America.

On 14 June 2022, Ferguson reported strong results for its fiscal third quarter (the three-month period ending 30 April 2022). Ferguson reported strong year-over-year sales growth of 23.1% (exceeding year-over-year inflation of approximately 20%, which implies low-single digit volume growth) on top of a tough prior year comparable. In addition, Ferguson's operating margin of 9.8% expanded by 100 basis points year-over-year, driven by disciplined cost control. Ferguson generated adjusted earnings per share of $2.50 during the quarter, representing approximately 40% year-over-year growth. Finally, during the quarter, Ferguson completed four bolt-on acquisitions (representing annualised revenue of approximately $450 million) and share repurchases of $501 million, with $918 million of its $2.0 billion buy-back program completed during the first nine months of the year.

Overall, Ferguson's operational performance during the quarter was impressive and the company significantly beat Wall Street consensus revenue and earnings estimates leading into the announcement. Kevin Murphy, Ferguson's Chief Executive Officer, noted that near term market demand remains supportive, as Ferguson continued to see strength across both residential and non-residential end markets. Residential revenue grew by 20% and non-residential revenue grew by 29% in the quarter. The company increased its full year expectations for adjusted operating profits to $2.85-$2.95 billion.

Trian's Perspective on Ferguson's Investment Prospects

Ferguson, despite its strong financial and operating performance throughout 2022 thus far, has seen its stock trade down approximately 38.2% for the six months ending 30 June 2022. We believe concerns and uncertainty over macroeconomic conditions and the potential impact of these conditions on the US housing market are partly responsible. However, we suspect equally as (or potentially more) impactful on the Ferguson's share price has been the transition of the company's primary listing to the NYSE.

As noted above, until 12 May, Ferguson primarily traded on the London Stock Exchange, despite the fact that 100% of Ferguson's business is based in North America. Many of Ferguson's legacy institutional shareholders were required to sell Ferguson shares as they are restricted from owning U.S. listed securities. In addition, Ferguson was removed from major UK-based indexes (e.g., FTSE 100), resulting in significant sell pressure from UK index funds. While these trends have resulted in a technical headwind year-to-date, we believe that technical conditions will provide a substantial tailwind over the next 6 -12 months. In particular, we believe that Ferguson could be added to key North American stock indices during the next 6-12 months, which could result in a number of North American index funds (and other funds which follow these indices as benchmarks) purchasing a significant number of Ferguson shares during that time period.

While Ferguson's stock price is down this year, we continue to believe that its shares are materially undervalued (particularly in light of the fact that its shares continue to trade at a significant discount to U.S.-based specialty distribution peers and home improvement retailers). Ferguson remains a scale leader-it is the #1 player in a highly fragmented market, and we believe its scale advantages manifest in vendor rebates, private label, route density, distribution center product availability and its role as an industry consolidator. It has also shown durability through economic cycles (partly as a result of its heavy exposure to repair, maintenance and remodelling activity, which is less cyclical) and has consistently outgrown its underlying end markets by 300 to 400 basis points over the last few years. Finally, Ferguson maintains a strong liquidity position and balance sheet-the company's net debt to adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) stood at 0.8x as of April 30, 2022.

We believe that near term market demand remains supportive-Ferguson increased their full year expectations for adjusted operating profit to $2.85 - $2.95 billion. While Ferguson faces certain macroeconomic headwinds, we believe that its balanced business mix, agile business model and strong balance sheet position them well for the future.

Unilever

Recent Developments

Despite the challenges of high inflation and slower global growth, Unilever delivered a first half performance which builds on its momentum of 2021. Underlying sales growth of 8.1% was driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume. Underlying operating margin was on track at 17% for the first half and management increased its sales guidance for the year.

Unilever made further progress towards its strategic priorities. Unilever continues to maintain strong investment in its brands, supporting 9.4% underlying sales growth in its billion+ Euro brands. eCommerce sales now represent 14% of turnover, up from 6% in 2019.  Of Unilever's three priority markets, the USA and India again grew strongly, while sales in China were affected by lockdowns occurring in the second quarter. Unilever continues to reshape its portfolio, completing the sale of its global tea business, ekaterra, and the acquisition of Nutrafol, a leading provider of hair wellness products. Prestige Beauty and Health & Wellbeing, now 4% of company turnover, again grew by double-digits.

Unilever's simpler, more category-focused organisation structure came into effect as planned on 1 July 2022. This major change to Unilever's operating model is an important further step that the company believes will underpin the delivery of consistent growth, which remains its first priority.

Trian's Perspective on Unilever's Investment Prospects

Trian believes that Unilever is one of the best-positioned consumer companies in the world, with a portfolio of iconic brands that enjoy leading market positions in attractive consumer categories. The company is advantaged by an unrivalled global distribution network, with sites in approximately 190 countries, reaching approximately 2.5 billion consumers every day. Through this distribution network, the company can sell its brands throughout much of the world. Moreover, we believe that with 60% of its sales in emerging markets, the company has a coveted geographic footprint and exposure to many of the world's fastest growing economies, permitting opportunities for future growth and expansion.

Despite all of these advantages, we see numerous opportunities to drive improved performance at Unilever and, having helped drive operational and strategic initiatives at other large consumer products companies (P&G, Mondelēz, H.J. Heinz, and others), we think we are well positioned to help drive value creation at Unilever.

Nelson Peltz officially joined the board of directors of Unilever on 20 July 2022 and we look forward to providing further updates as our engagement with Unilever progresses.

Concluding Thoughts

We are proud of the attractive returns which the Company has generated for its shareholders to date. Over the next few months, we will closely monitor the performance of Unilever and Ferguson and, acting in conjunction with the Board, will seek to effect the Redemption in a manner that will enhance value return for Company shareholders.  We appreciate your ongoing support and will continue to work diligently towards the Company's objectives.

Yours sincerely,

Trian Investors Management, LLC

14 September 2022

Directors' Responsibility Statement

Responsibility Statement

The Directors are responsible for preparing the Interim Report and Unaudited Condensed Interim Financial Statements in accordance with applicable law and regulations. The Board confirms that to the best of their knowledge:

• The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

 • The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and their impact on the condensed financial statements and description of principal risks and uncertainties for the remaining six months of the year);

 • The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties transactions and changes therein); and

 • The condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer as required by DTR 4.2.4R.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy, at any time, the financial position of the Company and which enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008 and the Protection of Investors (Bailiwick of Guernsey) Law, 2020. They are also responsible for the maintenance and integrity of the corporate and financial information included on the Company's website (www.trianinvestors1.com). Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Going Concern

The condensed interim financial statements have been prepared on a basis other than going concern as the Board of Directors, after consulting with Company shareholders, announced that the Company will redeem no less than 95% of each shareholder's holding in the Company by no later than 30 June 2023, with such redemption to be satisfied by a distribution of the Investment Partnership's underlying assets (including an in specie distribution of shares) at a value equivalent to the Board's estimate of the then prevailing net asset value. Once the redemption has been completed the Board will commence a process to wind-up the Company with any residual net assets to be returned to shareholders through that process.

The Company has sufficient funds to meet its liabilities as they fall due for the next 12 months from the date of approval of these financial statements. The Directors believe there are no material differences than had the financial statements been prepared on a going concern basis as the fair value of assets and liabilities held equate to their net realisable value.

Based on these sources of information and their own judgement, the Directors believe it is appropriate to prepare the condensed interim financial statements of the Company on a basis other than going concern.

Principal Risks and Uncertainties

The principal risks and uncertainties of the Company are described in the Report of the Directors within the Annual Report and Audited Financial Statements of the Company for the year ended 31 December 2021. There have been no changes in the principal risks and uncertainties of the Company for the period to 30 June 2022. The Directors will continue to assess the principal risks and uncertainties relating to the Company for the remaining six months of the current fiscal year in light of the Company's compulsory share redemption, performance of its investments, the COVID-19 pandemic and the Ukraine conflict, but currently expects them to remain substantially the same.

On behalf of the Board

Mark Thompson

Chairman

14 September 2022

INDEPENDENT REVIEW REPORT TO TRIAN INVESTORS 1 LIMITED

Conclusion

We have been engaged by the Company to review the condensed interim financial statements in the half-yearly financial report for the six months ended 30 June 2022 which comprises the Unaudited Condensed Statement of Financial Position, Unaudited Condensed Statement of Comprehensive Income, Unaudited Condensed Statement of Changes in Equity, Unaudited Condensed Statement of Cash Flows and related notes 1 to 17.

Based on our review, nothing has come to our attention that causes us to believe that the condensed interim financial statements in the half-yearly financial report for the six months ended 30 June 2022 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in Note 2, the annual financial statements of the company are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (IASB). The condensed interim financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

Emphasis of the matter-financial statements prepared on a basis other than going concern.

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, we draw attention to note 2 of the condensed interim financial statements which indicates that the condensed interim financial statements have been prepared on a basis other than that of a going concern. Our report is not modified in respect of this matter.

This Conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410.

Responsibilities of the directors

The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly financial report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our Conclusion, including our Conclusion Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the Company in accordance with ISRE (UK) 2410. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Deloitte LLP

Statutory Auditor

St Peter Port, Guernsey

14 September 2022

Unaudited Condensed Statement of Financial Position

As at 30 June 2022

The notes form an integral part of these financial statements.

The Unaudited Condensed Interim Financial Statements were approved by the Board and authorised for issue on 14 September 2022.

Mark Thompson Robert Legget

Director Director

Unaudited Condensed Statement of Comprehensive Income

For the period from 1 January 2022 to 30 June 2022

The year ended 30 June 2022 has been presented on a basis other than going concern. No operations were acquired or discontinued during the year.

The notes form an integral part of these financial statements.

Unaudited Condensed Statement of Changes in Equity

For the period from 1 January 2022 to 30 June 2022

For the period from 1 January 2021 to 30 June 2021

For the year from 1 January 2021 to 31 December 2021

The notes form an integral part of these financial statements.

Unaudited Condensed Statement of Cash Flows

For the period from 1 January 2022 to 30 June 2022

The notes form an integral part of these financial statements.

Notes to the Unaudited Condensed Interim Financial Statements

For the period from 1 January 2022 to 30 June 2022

1. Corporate information

Trian Investors 1 Limited (the "Company") is incorporated in and controlled from Guernsey as a company limited by shares with registered number 65419. The ordinary shares of no par value of the Company (the "Shares") are admitted to the Specialist Fund Segment of the London Stock Exchange (the "SFS"). 

The Company is registered with the Guernsey Financial Services Commission as a registered collective investment scheme and is regulated under the Protection of Investors (Bailiwick of Guernsey) Law 2020.

2. Accounting policies

The principal accounting policies applied in the preparation of these Unaudited Condensed Interim Financial Statements are set out below and are consistent with those used in the Company's annual financial statements as of 31 December 2021 other than being prepared on a basis other than going concern.

Basis of preparation

The annual financial statements will be prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), the Companies (Guernsey) Law, 2008 and the Protection of Investors (Bailiwick of Guernsey) Law, 2020. The financial statements will be prepared on a historical cost basis as amended from time to time by the fair valuing of certain financial assets and liabilities. These condensed interim financial statements cover the period ended 30 June 2022.

These condensed interim financial statements included in this half-yearly report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting". The same accounting policies and methods of computation are followed in the interim financial statements as compared with the annual financial statements. These condensed interim financial statements do not include all information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements as of 31 December 2021.

These condensed interim financial statements have been prepared on a basis other than going concern. All assets have been measured at their net realisable value and all liabilities have been measured at their expected settlement value. These values equate to the fair value for all assets and liabilities and therefore does not produce a material variance. All assets and liabilities have been classified as current.

Going concern

The condensed interim financial statements have been prepared on a basis other than going concern as the Board of Directors, after consulting with Company shareholders, announced that the Company will redeem no less than 95% of each shareholder's holding in the Company by no later than 30 June 2023, with such redemption to be satisfied by a distribution of the Investment Partnership's underlying assets (including an in specie distribution of shares) at a value equivalent to the Board's estimate of the then prevailing net asset value. Once the redemption has been completed the Board will commence a process to wind-up the Company with any residual net assets to be returned to shareholders through that process.

The Company has sufficient funds to meet its liabilities as they fall due for the next 12 months from the date of approval of these financial statements. The Directors believe there are no material differences than had the financial statements been prepared on a going concern basis as the fair value of assets and liabilities held equate to their net realisable value.

Based on these sources of information and their own judgement, the Directors believe it is appropriate to prepare the condensed interim financial statements of the Company on a basis other than going concern.

New and amended standards and interpretations applied

The following accounting standards and updates were applicable in the reporting period but did not have a material impact on the Company:

- Amendments to IFRS 1 and IFRS 9 Annual Improvements to IFRS 2018-2020

- Amendments to IFRS 3: Business Combinations

- Amendments to IAS 16: Property, Plant and Equipment

- Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets

New and amended standards and interpretations not applied

The following new and amended standards and interpretations in issue are applicable to the Company but are not yet effective and therefore, have not been adopted by the Company:

- IFRS 17: Insurance Contracts (effective 1 January 2023)

- Amendments to IAS 17: Insurance Contracts (effective 1 January 2023)

- Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 1 January 2023)

- Amendments to IAS 12: Income Taxes (effective 1 January 2023)

- Amendments to IAS 1: Presentation of Financial Statements (effective 1 January 2023)

The Company has considered the IFRS's in issue but not yet effective and do not consider any to have a material impact on the Company.

Segment reporting

The Directors are of the opinion that the Company is currently engaged in a single segment of business, being the investment through Trian Investors 1 Midco Limited ("Midco") into Trian Investors 1, L.P. (Incorporated) (the "Investment Partnership").

3. Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires the Directors to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenue and expenses during the period. The nature of the estimation means that actual outcomes could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. 

The Directors also need to make judgements (other than those involving estimates) that have a significant impact on the application of accounting standards. The following critical judgements apply to the Company's investments.

i) Investment entity exemption:

The Directors have considered whether the Company meets the definition of an investment entity as stipulated in the provisions of IFRS 10. Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries, other than those that provide investment services to the Company and do not themselves meet the definition of an investment entity, at fair value through profit or loss rather than consolidate them.

The Company's purpose is to make investments through the Investment Partnership for capital appreciation and it will measure performance of its investments on a fair value basis. The Company holds 99.83 per cent of the commitment in the Investment Partnership through its wholly owned subsidiary, Midco. Midco was incorporated in Guernsey and its principal place of business is Guernsey. The Board has assessed whether the Company has all the elements of control as prescribed by IFRS 10 in relation to the Company's investment in the Investment Partnership and has concluded that the Company does have control of the Investment Partnership. Midco and the Investment Partnership are therefore both classified as subsidiaries of the Company. The Board has also assessed that the Company meets the criteria of an investment entity and therefore the subsidiaries are recorded at fair value through profit and loss rather than being consolidated. The Board's determination that the Company is classified as an investment entity involves a degree of judgement due to the complexity of the wider structure encompassing the Company, Midco and the Investment Partnership.

ii) Use of last sales price published by the exchange: 

The Directors believe that a key judgement relates to the valuation of the investments in Ferguson plc ("Ferguson") and Unilever plc ("Unilever") held through the Investment Partnership. The ordinary shares of Ferguson have a primary listing on the New York Stock Exchange, and the ordinary shares of Unilever have a primary listing on the Main Market of the London Stock Exchange. In each case, the Directors must determine whether the market is sufficiently liquid for the last sales price published by the exchange to be a fair value in accordance with IFRS principles. The Directors have assessed that there is a sufficiently liquid market in the exchanges for the investments held through the Investment Partnerships and accordingly they consider the quoted share price to be the appropriate basis for the valuation of the investments.

There are no key sources of estimation uncertainty.

4. Income tax

The Company is exempt from taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 2008 and is charged an annual exemption fee of £1,200.

5. Investment at fair value through profit or loss

The Company owns 100 per cent of the share capital of its subsidiary Midco. Midco holds 99.83 per cent of the commitment in the Investment Partnership and has no other assets or liabilities. This investment is valued based on its share of the net assets of the Investment Partnership.

Movements in the cost and carrying value of this investment in Midco during the year were:

As explained in Note 3 the investment in Midco and its interest in the Investment Partnership is shown in the Company's balance sheet as a single investment carried at fair value because the Company is defined as an investment company under the provisions of IFRS 10. The following tables provide an analysis of the assets and liabilities and the income statement of the Investment Partnership.

Summary financial information of the Investment Partnership

The financial statements for the Investment Partnership are prepared under IFRS. 

Foreign exchange options

For the period between March 2020 and February 2022 the Investment Partnership entered into a currency call options to offset a portion of the Investment Partnership's U.S. Dollar exposure arising from its investment in Ferguson, which receives the vast majority of its revenues in U.S. Dollars. In light of the approval of the Company's revised Investment Policy in July 2021 and the expectation at the time that the Company would have a longer duration than originally anticipated, the Investment Manager determined that it was no longer necessary to continue hedging currency exposure when the last option expired in February 2022. 

Incentive allocation

The Investment Partnership's investments in Ferguson and Unilever were treated as a "Stake Building Investment" as at 30 June 2022.

If the investment in Ferguson continues to be a "Stake Building Investment" until realisation, the incentive allocation ("Incentive Allocation") will be equal to 20 per cent of net returns on the investment, payable after the Investment Partnership has distributed to its partners an amount equal to the aggregate capital contributions made in respect of the investment (excluding any capital contributions attributable to management fees).

The Investment Partnership's investment in Ferguson, unless otherwise agreed with the Company, will cease to be considered a "Stake Building Investment", and will instead be considered an "Engaged Investment", if and when Trian Investors Management, LLC (the "Investment Manager") obtains representation on Ferguson's board of directors, through one or more partners of Trian Fund Management, L.P. ("Trian Management"). If the investment becomes an "Engaged Investment", the Incentive Allocation will be equal to 10 per cent to 25 per cent of the Investment Partnership's net returns on the investment (excluding any capital contributions attributable to management fees) following disposal of a target company, as set forth in greater detail in the Investment Partnership's Amended and Restated Limited Partnership Agreement (the "LPA").

The Investment Partnership's investment in Unilever was treated as a "Stake Building Investment" until the appointment of Nelson Peltz, a partner of Trian Management, to the Unilever board of directors on 20 July 2022, upon which it began to be treated as an "Engaged Investment".

As at 30 June 2022, there was an incentive allocation accrual of £41,552,000 (30 June 2021: £49,085,000; 31 December 2021: £78,950,000) which, under the terms of the LPA, Trian Investors 1 SLP, L.P., the special limited partner of the Investment Partnership ("Trian SLP") will be entitled to receive. The incentive allocation will be solely borne by the Company through Midco and is treated as fair value movement through profit and loss in the Statement of Comprehensive Income.

Management fee

The Investment Manager is entitled to management fees in consideration of its work equal to one twelfth of 1 per cent of the adjusted net asset value of the Investment Partnership, calculated as of the last business day of the preceding month. The management fee is solely borne by the Company through Midco and is treated as fair value movement through profit and loss in the Statement of Comprehensive Income. For the period ended 30 June 2022 management fees of £2,607,000 were paid to the Investment Manager by the Investment Partnership (period ended 30 June 2021: £2,107,000; year ended 31 December 2021: £4,606,000).

6. Fair value

IFRS 13 "Fair value measurement" requires the Group to establish a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The only financial instruments carried at fair value is the investment in Midco which is fair valued at each reporting date.

The Company's investment in Midco has been classified as Level 2 as its valuation has been derived from the value of the assets and liabilities in the Investment Partnership. A reconciliation of the movement in Level 2 investments is set out in the table in Note 5. Due to the nature of the investments, they are always expected to be classified under Level 2. There were no transfers between levels during the six month periods to 30 June 2022 and 30 June 2021 or the year to 31 December 2021.

In the accounts of the Investment Partnership the financial instruments carried at fair value are:

Valuation techniques

The value of the Company's investment in Midco is based on the value of Midco's limited partner capital account within the Investment Partnership. This is based on the assets and liabilities of the Investment Partnership, principally the value of the underlying investments, the loan, the currency options and cash. Any fluctuation in the value of the underlying investments will directly impact on the value of Midco's investment in the Investment Partnership while taking into account the impact of the Incentive Allocation.

Valuations are determined in accordance with a pricing policy agreed between the Directors and the Investment Manager from time to time. Calculations will be made in accordance with IFRS principles or as otherwise determined by the Board.

In accordance with the LPA, for the purposes of calculating the Net Asset Value ("NAV") of the Investment Partnership, its assets are valued on the following basis:

· Listed investments are valued at the last sales price published by the principal exchange on which they are listed.

· The valuation of the currency options was performed by utilising an external data source which used proprietary software and a valuation model to perform the fair value calculation. The valuation model used is the Black-Scholes model.

The Board approves the valuations performed by the Investment Manager and monitors the range of reasonably possible changes in significant observable inputs at each reporting date.

7. Receivables and prepayments

8. Trade and other payables

The carrying value of trade payables and other payables approximates their fair value.

9. Share capital and capital management

Capital risk management

The Company's objective for capital risk management is to realise returns through a compulsory redemption to take place by 30 June 2023 and then to proceed with a winding-up. The Company considers its capital to consist of the Shares issued and retained earnings.

The Board reviews the Company's NAV monthly, as calculated in accordance with IFRS, and the Company's Share price (as well as its discount or premium to NAV per Share) in the context of market conditions, with input from the Investment Manager and its Corporate Brokers. As shown in the tables below, the Company has repurchased a total of 19,566,913 Shares at a discount to NAV in the period from February 2020. Share repurchases are subject to the Company's discretion based on market and economic conditions, the price and trading volume of the Shares and other factors.

No dividend was declared or paid in the period to 30 June 2022.

The Company has the ability to hold its own Shares in treasury. All Shares repurchased by the Company are currently being held in treasury, and the Company may use this ability again from time to time in the future. The Company's Articles of Incorporation, the Companies Law and the Protection of Investors Law do not limit the number of Shares held in treasury provided that at least one share of any class is held by a person other than the Company. The Company is not subject to any externally imposed capital restrictions.

Ordinary shares of no par value

As detailed further in Note 15, the LPA provides that Trian SLP will receive part of its incentive allocations in the form of Shares in the Company. The amount of the incentive allocation which will be settled in Shares under this agreement is subject to limits on the number of Shares which can be issued to Trian SLP without triggering a mandatory offer for the Company under the U.K. Takeover Code. Had the incentive allocation crystallised at 30 June 2022 it is estimated that a maximum of £7,876,440 could have been settled by the issue of 5,049,000 Shares (31 December 2021: maximum of £11,197,720 could have been settled by the issue of 5,165,000 Shares; 30 June 2021: not applicable). As discussed in Note 17 below, as part of the Redemption and related proposals, and conditional on their successful implementation, it has been agreed with Trian SLP that its Incentive Allocation may (at Trian SLP's election) be settled through an in-specie distribution of the Investment Partnership's underlying assets rather than in cash or through a further issue of Shares.

10. Net Asset Value per Share

The IFRS NAV per Share is arrived at by dividing the IFRS Net Assets by the number of Shares in issue net of treasury Shares.

11. (Loss)/earnings per share

There were no dilutive potential Shares in issue as at 30 June 2022, 30 June 2021 or 31 December 2021.

12. Financial risk management

Financial risk management objectives

The Company's activities expose it to various types of financial risk, principally market risk and credit risk. The Company has minimal exposure to liquidity risk. The Board has overall responsibility for the Company's risk management and sets policies to manage those risks at an acceptable level.

Financial risk factors

The Company's investment objective is to realise capital growth from its investment in one or more target companies with the aim of generating significant capital return for shareholders. At 30 June 2022 the Company's only significant financial assets are those held through the Investment Partnership, via Midco, consisting of listed equity investments and cash and cash equivalents held at both levels.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company manages its credit risk by scrutinising the financial standing of counterparties with which it enters into transactions, using external credit ratings where available. Credit risk is reviewed periodically to identify balances that may have become impaired or uncollectable.

An event of default is a pre-specified condition or threshold that, if met, allows the lender or creditor to demand immediate and full repayment of a debt or obligation. The Company is exposed to credit risk through its balances with banks. The credit risk on receivables is considered to be minimal. The table below shows the Company's credit exposures:

The table below shows the Investment Partnership's credit exposures:

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of market price changes. The Company is exposed to market price risk, currency risk and interest rate risk.

Market price risk

Market price risk arises as a result of the Company's exposure to the future values of its listed investments. By way of example, if the price of its listed investments moved by 15 per cent as at 30 June 2022, the effect on the NAV of the Company would be an increase or decrease of £56,384,000 (30 June 2021: £113,906,000 based on 30 per cent movement; 31 December 2021: £74,266,000 based on 15 per cent movement). A change of 15 per cent reflected a reasonable change in the share price of the listed investments based upon the period ended 30 June 2022. Please see Note 17 for post year-end information.

Currency Risk

As at 30 June 2022, the Company had exposure to currency risk as a result of its investment in Ferguson through the Investment Partnership, which has its primary listing in New York and its price quoted in U.S. Dollars. The Company also had exposure to currency risk as a result of its investment in Unilever through the Investment Partnership, which is a global company operating in numerous markets and in several currencies. The Investment Partnership has drawn down US$50 million of the US$100 million revolving credit facility detailed in note 15, which exposes the Company to fluctuations in the exchange rate between U.S. Dollars and Pounds Sterling. As at 30 June 2022, the Investment Partnership holds assets of £431,271,000 (US$523,736,000) and liabilities of £41,577,000 (US$50,491,000) denominated in U.S. Dollars. The Board consider that a 5% movement in market currency rates is reasonably possible, based on historic market analysis and current market conditions. Had the exchange rate between Pound Sterling and U.S. Dollar strengthened/weakened by 5 per cent with all other variables held constant, the increase/decrease in the net assets of the Investment Partnership would amount to approximately £19,485,000 (US$23,662,000). Any foreign exchange gain/loss on the investment in Ferguson is disclosed as investment gain/loss whereas any foreign exchange gain/loss on the credit facility is disclosed as foreign exchange gain/loss in the summary financial information of the Limited Partnership in Note 5. As at 31 December 2021 and 30 June 2021 the Company through the Investment Partnership held an option, which expired for nil proceeds in February 2022, to purchase £125,000,000 for US$181,250,000. In light of the approval of the Company's revised Investment Policy in July 2021 and the expectation at the time that the Company would have a longer duration than originally anticipated, the Investment Manager determined that it was no longer necessary to continue hedging currency exposure when the last option expired. 

Interest rate risk

The Company, through the Investment Partnership, has entered into a credit facility with Bank of America, N.A., London Branch ("Bank of America") allowing an aggregate amount of up to $100 million to be borrowed at an interest rate equal to 1.35% per annum plus the federal funds rate and is therefore subject to interest rate movements set by the U.S. Federal Reserve interest rate policies. As at 30 June 2022 the federal fund rate was 1.58% while at 31 December 2021 the rate was 0.08%. Such a movement of 1.5% would equate to an increase/decrease in the interest payable of £618,000 (US$750,000) over the course of a year at Investment Partnership level. Both the Company and the Investment Partnership earn immaterial amounts of interest income on cash and cash equivalents held.

13. Financial Instruments

14. Related parties

Key management personnel

The Directors are considered to be the Key Management Personnel of the Company. They are all non-executive and receive an annual fee denominated in Pounds Sterling.

The Chairman receives an annual fee of £55,000, the Chairman of the Audit Committee receives £45,000, and the other two non-executive Directors receive £40,000. 

Directors' fees and expenses for the period to 30 June 2022 amounted to £78,000 (six month period to 30 June 2021: £70,000; year to 31 December 2021: £185,000), of which £8,000 was outstanding at the period end (six month period to 30 June 2021: £8,000; year to 31 December 2021: £nil).

The Directors did not receive dividends on their Shares during the period to 30 June 2022, period to 30 June 2021 or year to 31 December 2021.

Trian Subscriber

Trian Subscriber, a company owned by the Investment Manager's partners and certain of their affiliates, held voting power over 28.95% of the Company's outstanding Shares as at 30 June 2022 (30 June 2021: 17.19%; 31 December 2021: 28.55%).

Management Fee

Under the management agreement between the Investment Partnership and the Investment Manager, the Investment Manager is entitled to management fees in consideration of its work equal to one twelfth of 1 per cent of the adjusted net asset value of the Investment Partnership. This is detailed in notes 5 and 15.

Incentive Allocation

Under the terms of the LPA, Trian SLP, the special limited partner of the Investment Partnership, is entitled to receive an incentive allocation based on the investment performance of the Investment Partnership. This is detailed in notes 5 and 15.

Intergroup balances

As at 30 June 2022 the Company owed £231,000 to the Investment Partnership (30 June 2021: £nil; 31 December 2021: £358,000) which has been repaid subsequent to 30 June 2022.

15. Significant Agreements

Trademark fees

Trian Management has granted to the Company, Midco and the Investment Partnership a non-exclusive licence to use the name, logo and graphic identity "Trian" in the UK and the Channel Islands in the corporate name of these entities and in connection with the conduct of their business affairs, and the Company is using the name, logo and graphic identity "Trian" within the Annual Report and these Interim Financial Statements pursuant to such licence. Trian Management receives a fee of £70,000 per annum split between the Company, Midco and the Investment Partnership for the use of the licensed name, logo and graphic identity. For the six month period ended 30 June 2022, fees of £23,000 were paid by the Company in relation to the licence (six month period ending 30 June 2021: £23,000; year ending 31 December 2021: £47,000).

Administration Agreement

On 19 September 2018, the Company and Ocorian Administration (Guernsey) Limited ("Ocorian") entered into an administration agreement. Under the terms of the agreement the Company (alongside the Investment Partnership) is charged a fixed administration fee of £97,000 per annum from 27 September 2018 payable monthly in arrears, administration fees for Midco of £5,000 per annum, NAV preparation fees of £10,000 per annum, compliance officer services of £6,000 per annum, MLRO services of £3,000 per annum and data protection officer services of £2,000 per annum. Fees are adjusted annually to rise in line with the Guernsey Retail Price Index. For the six month period ended 30 June 2022, aggregate fees of £78,000 were paid to Ocorian (six month period ended 30 June 2021: £76,000; year to 31 December 2021: £143,000).

Management Agreement

The management agreement between the Investment Partnership and the Investment Manager was amended and restated on 19 July 2021 and made effective as of 14 June 2021, in order to reflect the revised investment policy and revised policies and guidelines on recycling sale proceeds and return of capital which are each described in Note 1 above. No revisions were made to the manner in which management fees are calculated.

The Investment Manager is entitled to management fees in consideration of its work equal to one twelfth of 1 per cent of the adjusted NAV of the Investment Partnership, calculated as of the last business day of the preceding month. The management fee is payable in advance to the Investment Manager on the first business day of each calendar month. The management fee is solely borne by the Company through Midco. For the six month period ended 30 June 2022, management fees of £2,607,000 were paid to the Investment Manager (six month period ended 30 June 2021: £2,107,000; year ended 31 December 2021: £4,606,000). See Note 17 for details of changes agreed to the Management Fee subsequent to the period end.

LPA and Calculation of Incentive Allocation

Under the terms of the LPA, Trian SLP is entitled to receive an incentive allocation based on the investment performance of the Investment Partnership. The LPA was amended and restated on 19 July 2021 to provide that Trian SLP will receive future incentive allocations (net of amounts required to cover certain tax liabilities) in the form of Shares, to be valued at NAV at the time of issuance and, on the issue of the Shares, the Company's investment in the Investment Partnership (through Midco) will increase by the value of the Shares issued. The amount of the incentive allocation which will be settled in Shares under this agreement is subject to limits on the number of Shares which can be issued to Trian SLP without triggering a mandatory offer for the Company under the Takeover Code. As discussed in Note 17 below, as part of the Redemption and related proposals, and conditional on their successful implementation, it has been agreed with Trian SLP that its Incentive Allocation may (at Trian SLP's election) be settled through an in-specie distribution of the Investment Partnership's underlying assets rather than in cash or through a further issue of Shares.

The Incentive Allocation may be between 0 to 25 per cent of the net returns of the Investment Partnership. The calculation of the incentive allocation is described in more detail in Note 5 above. As at 30 June 2022, there was an incentive allocation accrual of £41,552,000 (as at 30 June 2021: £49,085,000; as at 31 December 2021: £78,950,000). See Note 17 for details of changes agreed to the Incentive Allocation subsequent to the period end.

Credit Facilities

In March 2021, the Investment Partnership entered into a revolving credit facility (the "UBS Credit Facility") with UBS Bank USA ("UBS"), which permitted the Investment Partnership to borrow an aggregate amount of up to US$70 million at an interest rate equal to one month LIBOR plus 1.75%. There were no commitment or closing fees associated with the facility. No borrowings under the UBS Credit Facility were made.

On 29 March 2022 the UBS Credit Facility was terminated and replaced with a US$100 million revolving credit facility with Bank of America (the "BoA Credit Facility") having a three year term, which permits the Investment Partnership to borrow an aggregate amount of up to US$100 million at an interest rate equal to a fixed rate plus 1.35% per annum. The portion of the US$100 million BoA Credit Facility commitment which is not drawn will be subject to a commitment fee of 0.40% per annum. In connection with establishing the facility, the Investment Partnership pledged listed investments (valued at £431,271,000 at 30 June 2022) as collateral under the new facility. As at 30 June 2022 total outstanding borrowing under this credit facility amounted to £41,173,000 (US$ 50,000,000) (30 June 2021: £nil; 31 December 2021: £nil). 

16. Auditor remuneration

The auditor's remuneration relating to services to the Company for the period was:

In addition, the fee for the audit of the Investment Partnership of £8,000 (period to 30 June 2021: £7,000; year to 31 December 2021: £15,000) is payable by the Investment Partnership.

17. Subsequent events

The Company's NAV as at 31 August 2022 is £424,301,000, or 169.03 pence per Share, which is a 8.0% increase compared to 30 June 2022.

The Investment Partnership's investment in Unilever was treated as a "Stake Building Investment" until the appointment of Nelson Peltz, a partner of Trian Management, to the Unilever board of directors on 20 July 2022, upon which it was treated as an "Engaged Investment" as detailed in Note 5. Had Unilever been treated as an "Engaged Investment" as at 30 June 2022, the impact on the incentive allocation accrual would be immaterial.

On 5 August 2022, Chris Sherwell was replaced on the Board by Robert Legget who was appointed as Audit Committee Chair and Senior Independent Director on 15 August 2022.

On 2 September 2022 the Board announced that the Company will, by no later than 30 June 2023, compulsorily redeem no less than 95 per cent of each shareholder's holding in the Company, such redemption to be satisfied by a distribution of the Investment Partnership's underlying assets (including an in specie distribution of shares) at a value equivalent to the Board's estimate of the then prevailing net asset value (the "Redemption"). Once the Redemption has been completed the Board will commence a process to wind-up the Company with any residual net assets to be returned to shareholders through that process.

It has further been agreed, conditional on the successful implementation of these proposals: (a) with the Investment Manager that on Redemption it will receive its final Management Fee payment in lieu of notice calculated, through to 31 December 2023; (b) with Trian SLP that it will continue to be entitled to receive the Incentive Allocation which will be determined based on the performance of the Investment Partnership at or about the time of Redemption (i.e., on or before 30 June 2023); and (c) with Trian SLP that its Incentive Allocation may (at Trian SLP's election) be settled through an in-specie distribution of the Investment Partnership's underlying assets rather than in cash or through a further issue of Shares.

In August 2022, the Investment Partnership sold 352,819 ordinary shares of Ferguson and received approximately $44 million of sale proceeds. The Investment Partnership intends to use these sale proceeds to repay outstanding borrowings of approximately $43 million as well as accrued interest and other fees due under the BoA Credit Facility. At the time that this borrowing is repaid, the Investment Partnership also intends to terminate the undrawn commitment under the BoA Credit Facility.

Investment Manager's Report Disclosure Statement and Disclosures

General Considerations

The Investment Manager's Report is for general informational purposes only and does not constitute any advice or recommendation to invest in Trian Investors 1 Limited (the "Company"), Ferguson plc ("Ferguson") or Unilever plc ("Unilever") or enter into or conclude any other transaction. The Investment Manager's Report should not be construed as legal, tax, investment, financial or other advice. It does not have regard to the specific investment objective, financial situation, suitability, or the particular need of any specific person who may receive the Investment Manager's Report and should not be taken as advice on the merits of any investment decision. The views expressed in the Investment Manager's Report represent the opinions of Trian Investors Management, LLC (the "Investment Manager") and its parent, Trian Fund Management, L.P. (collectively, "Trian") and are based on publicly available information with respect to Ferguson, Unilever and the other companies referred to therein. Trian recognises that there may be confidential information in the possession of Ferguson, Unilever and the other companies discussed in the Investment Manager's Report that could lead such companies to disagree with Trian's conclusions. Trian does not endorse third-party estimates or research which are used in the Investment Manager's Report solely for illustrative purposes.

Select figures presented in the Investment Manager's Report, including investment values, have not been calculated using generally accepted accounting principles ("GAAP") or International Financing Reporting Standards ("IFRS") and have not been audited by independent accountants. Such figures may vary from GAAP or IFRS accounting in material respects and there can be no assurance that the unrealised values reflected in the Investment Manager's Report will be realised. Nothing in the Investment Manager's Report is intended to be a prediction of the future trading price or market value of securities of Ferguson, Unilever or the Company. There is no assurance or guarantee with respect to the prices at which any securities of Ferguson, Unilever or the Company will trade, and such securities may not trade at prices that may be implied in the Investment Manager's Report. The estimates, projections, pro forma information and potential impact of Trian's analyses set forth in the Investment Manager's Report are based on assumptions that Trian believes to be reasonable as of the date of the Investment Manager's Report, but there can be no assurance or guarantee that actual results or performance of Ferguson, Unilever or the Company will not differ, and such differences may be material. The Investment Manager's Report does not recommend the purchase or sale of any security.

The Investment Manager's Report is based upon information reasonably available to Trian as of the date of the Report. Furthermore, the information, which includes information and data used and derived or obtained from filings made with regulatory authorities and from other public filings and third party reports, has been obtained from sources that Trian believes to be reliable; however, these sources cannot be guaranteed as to their accuracy or completeness. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information contained in the Investment Manager's Report, by Trian or any of its affiliates or its or their respective partners, members, or employees, and no liability is accepted by such persons for the accuracy or completeness of any such information. Trian reserves the right to change any of its opinions expressed in the Investment Manager's Report at any time as it deems appropriate. Trian disclaims any obligation to update the data, information or opinions contained in the Investment Manager's Report.

Forward Looking Statements

The Investment Manager's Report contains forward-looking statements. All statements contained in the Investment Manager's Report that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan" and similar expressions are generally intended to identify forward-looking statements. The statements contained in the Investment Manager's Report that are not historical facts are based on current expectations, speak only as of the date of the Investment Manager's Report and involve risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such statements. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Trian. Although Trian believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in the Investment Manager's Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included in the Investment Manager's Report, the inclusion of such information should not be regarded as a representation as to future results or that the objectives and plans expressed or implied by such forward-looking statements will be achieved. Trian will not undertake and specifically declines any obligation to disclose the results of any revisions that may be made to any forward-looking statements in the Investment Manager's Report to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Not an Offer to Sell or a Solicitation of an Offer to Buy

Under no circumstances is the Investment Manager's Report intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy any security. The funds managed by Trian are in the business of trading -- buying and selling -- securities. It is possible that there will be developments in the future that cause one or more of such funds from time to time to either purchase or sell shares of Ferguson or Unilever in open market transactions or otherwise or trade in options, puts, calls, contracts for difference or other derivative instruments relating to such shares. Consequently, Trian's beneficial ownership of Ferguson's and Unilever's shares may vary over time depending on various factors, with or without regard to Trian's views of Ferguson's and Unilever's business, prospects or valuation (including the market price of Ferguson's and Unilever's ordinary shares), including without limitation, other investment opportunities available to Trian, concentration of positions in the portfolios managed by Trian, conditions in the securities markets and general economic and industry conditions. Trian also reserves the right to take any actions with respect to any investments in Ferguson and Unilever as it may deem appropriate, including, but not limited to, communicating with the management of Ferguson and Unilever, the board of directors of Ferguson and Unilever, other investors and shareholders, members, stakeholders, industry participants, and/or interested or relevant parties about Ferguson and Unilever or seeking representation on the board of directors of Ferguson and Unilever, and to change its intentions with respect to any investments made in Ferguson and Unilever at any time.

General Information