FUNDS UPDATE

FPA FUNDS PERFORMANCE Total Investment Returns Net of Fees As of December 31, 2013
One Year* 22.85% 36.80 38.82 Three Years* 10.78% 16.28 15.67 Five Years* 21.04% 21.77 20.08 Ten Years* 8.85% 9.81 9.07

Manager Name w Manager Inception EQUITY FPA CAPITAL FUND, INC.6 Expense Ratio 0.83%1 Dennis Bryan/Arik Ahitov w 07/11/842,3 FPA CRESCENT FUND6
S&P 500 CPI BALANCED (60% S&P 500/
40% Barclays Aggregate )

One Month 2.10% 2.54 1.97

Three Months 5.25% 8.66 8.72

Yearto-Date 22.85% 36.80 38.82

Fifteen Years* 10.96% 9.67 8.42

Twenty Years* 13.10% 10.77 9.27

Twenty Five Since Years* Inception* 14.51% 11.62 10.20 14.90% 12.08 10.36

RUSSELL 2500 RUSSELL 2000

1.83 2.53 N/A 1.29

6.46 10.51 N/A 6.17

21.95 32.39 N/A 17.56

21.95 32.39 N/A 17.56

11.50 16.18 N/A 11.06

14.79 17.94 N/A 12.71

8.80 7.41 N/A 6.54

9.71 4.68 N/A 5.23

11.05 9.22 N/A 8.13

N/A N/A N/A N/A

11.21 9.18 N/A 8.11

Expense Ratio 1.26%1 Steven Romick/ Brian Selmo/ Mark Landeckerw 06/02/937 FPA INTERNATIONAL VALUE FUND6 Expense Ratio 1.32%1 Pierre Py w 12/01/11
RUSSELL 2500 MSCI ALL COUNTRY WORLD EX US
1.58 0.88 2.57 4.77 18.00 15.29 18.00 15.29 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 20.70 14.75

FPA PARAMOUNT FUND, INC.6 Expense Ratio 1.26%1 Gregory Herr/Pierre Py w 08/01/114 FPA PERENNIAL FUND, INC.6
RUSSELL 2500

2.44 2.54

5.32 8.66

27.75 36.80

27.75 36.80

12.58 16.28

20.79 21.77

8.77 9.81

7.98 9.67

6.83 10.77

8.50 11.62

11.16 N/A

2.11 2.54

7.43 8.66

30.46 36.80

30.46 36.80

13.00 16.28

21.18 21.77

9.03 9.81

11.27 9.67

11.68 10.77

11.91 11.62

12.21 11.86

Expense Ratio 1.02%1 Eric Ende/Steven Geist/Gregory Herr w 10/1/955 FIXED INCOME FPA NEW INCOME, INC.6
BARCLAYS CAPITAL U.S. AGGREGATE CPI + 100
-0.19 -0.57 N/A 0.19 -0.14 N/A 0.67 -2.02 N/A 0.67 -2.02 N/A 1.69 3.26 N/A 2.23 4.44 N/A 3.03 4.55 N/A 4.51 5.23 N/A 5.11 5.74 N/A 6.47 6.83 N/A 7.76 7.94 N/A

Expense Ratio 0.57%1 Thomas Atteberry/ Robert Rodriguez 07/11/843

*Annualized Returns. Since Inception means the inception of FPA Management7. (1) Expense ratio is calculated as of the date of the most recent prospectus. As it relates to FPA International Fund, gross expe nse ratio before reimbursement from advisor was 4.14%. Effective 2/1/13, FPA has contractually agreed to waive fees/certain fund expenses through 6/30/15 to ensure that the Total Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement will not exceed 1.32%. (2) Closed to new investors, effective July 9, 2004. (3) Inception for FPA Management was July 11, 1984. Return information for period July 1-July 10, 1984 reflects performance by a manager other than FPA. A benchmark comparison is not available based on the Fund's inception date therefore a comparison u sing July 1, 1984 is used. (4) Managed by FPA since July 1, 1978. Pierre Py became PM Sep 2013.(5) Managed by FPA since April 1, 1984.(6) A redemption fee of 2.00% will be imposed on redemptions of certain shares within 90 days. (7) 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 th e 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.
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 w hen 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, 1-800-9824372. The FPA Funds are distributed by UMB Distribution Services, LLC. 803 W. Michigan St, Milwaukee, WI 53233

FUNDS UPDATE
FUND STATISTICS As of December 31, 2013

FPA Capital Fund Classification Status Index Manager(s) Name Manager Inception Total Net Assets Ticker Symbol CUSIP Number Turnover (most recent shareholder report) # Issues Held in Portfolio NAV TTM Dividends Paid ($) (as of 12/31/13) SEC Yield (as of 12/31/13) Top Sectors % (as of 12/31/13) Equity Closed to New Investors 7/9/04 Russell 2500 / Russell 2000 Dennis Bryan/ Arik Ahitov/ Robert Rodriguez July 11, 1984 $1,261.34 million FPPTX 302539101 7% 27 $44.77 9.27 N/A Technology Oil Field Services Oil & Gas Exploration Business Services & Supplies Industrial Products Retailing Financials Basic Materials Health Care 23.11 16.96 9.30 6.93 4.60 4.19 1.27 1.26 0.65

FPA Crescent Equity Re-Opened 10/20/08 Balanced (60% S&P500 /40% Barc Agg) Steven Romick/Brian Selmo/ Mark Landecker June 2, 1993 $15,903.87 million FPACX 30254T759 24% 114 $32.11 1.29 -0.29% Technology Financial Services Health Care Retailing Energy Industrial Products Advertising Consumer Non-Durable Goods Telecommunications Mortgage-Backed Excludes U.S. and Foreign Gov. Securities Microsoft Oracle CVS Caremark Aon Thermo Fisher Occidental Petroleum Covidien Google AIG 14.59 7.90 7.74 6.90 4.82 4.49 2.60 2.15 2.10 0.67

FPA International Value Fund Equity Open MSCI All Country World Ex US Pierre Py December 1, 2011 $288.19 million FPIVX 30254T726 52% 23 $14.45 0.32

FPA Paramount Equity Open Russell 2500 Pierre Py/Greg Herr August 1, 2011 $297.87 million FPRAX 302546106 19% 33 $23.55 3.43

FPA Perennial Equity Open Russell 2500 Eric Ende/Steven Geist October 1, 1995 $310.92 million FPPFX 302548102 10% 32 $49.53 3.536 27.22 21.86 18.40 7.14 6.34 5.87 5.73

FPA New Income Fixed Income Open Barclays Capital US Aggregate Bond Thomas Atteberry/Robert Rodriguez July 11, 1984 $5,175.65 million FPNIX 302544101 84% 380 $10.27 0.32 2.67% Mortgage-Backed Mortgage Pass-Through U.S. Treasuries^ Asset-Backed Stripped Mortgage-Backed Commercial Mortgage-Backed Corporates Cash & Equivalents 29.77 4.47 18.22 15.17 10.64 5.95 8.77 7.01

N/A N/A N/A Business Services 25.18 Bus. Svcs/Supplies 23.01 Producer Durables Technology 10.62 Technology 20.87 Retailing Consumer Non-Durables 6.36 Consumer Non-Durables 13.88 Bus. Svcs/Supplies Basic Materials 6.35 Producer Durables 6.24 Transportation Industrial Products 6.33 Basic Materials 6.23 Energy Trading & Distribution 5.70 Healthcare 6.07 Health Care Human Resources 2.38 Retailing 5.06 Technology Consumer Durables 0.38 Human Resources 1.71 Trading & Distribution 0.56

Top Ten Holdings % (as of 12/31/13)

Arrow Electronics Avnet Rowan Companies Western Digital Rosetta Apollo Group Ensco plc Devry Atwood Total: Arris

6.52 6.20 5.79 4.31 4.03 3.86 3.31 3.07 3.05

3.53 3.20 3.06 3.04 2.59 2.16 2.08 1.80 1.77

Aggreko Incitec ATEA Fugro SAP Danone G.U.D. G4S Taiwan Semiconductor

6.78 6.35 5.70 5.48 4.72 4.65 4.60 4.06 3.84

Aggreko Incitec Fugro Danone SAP Taiwan Semiconductor G4S Cisco Brambles

7.45 6.23 5.72 5.21 4.93 4.00 3.54 3.52 2.88

O'Reilly Automotive Signet Jewelers Wabco Carmax ScanSource Copart Graco Zebra Technologies Idex

7.55 6.92 6.70 6.60 5.87 4.73 4.29 3.88 3.79

Top Five Holdings % Credit Suisse Mortgage Trust 2013-6 1A1 2013-66 CL JA CARDS II TR 2012-4A A 2012-117 CL AD 2013-112 CL WA Excludes U.S. Treasuries Quality***

1.73% 1.52% 1.45% 1.35% 1.14% 7.19%

2.79 Cisco 42.93

1.46 Brambles 24.69

3.02 Laboratory Corp 49.20

2.59 Heartland Express 46.07

Asset Allocation %

Excludes U.S. Gov. Securities Excludes U.S. Gov. Securities Equities 68.27 Common Stocks 53.93 Equities 63.30 Equities U.S. Government & Agencies^ 17.52 Common Stocks (short) -2.05 Derivatives/Futures -0.30 Cash & Equiv. Cash & Equiv. 14.21 Other Securities 1.42 Cash & Equiv 37.00 Corporate Bonds 0.67 Mortgage Backed 0.67 U.S. Government & Agencies^ 31.83 Foreign Government & Agencies 2.92 Cash & Equiv. 10.61 Liquidity* 31.73 Liquidity** 41.26 Liquidity* 37.00 Liquidity* * Liquidity: defined as cash plus high quality, liquid, limited term securities ** Liquidity: defined as cash plus high quality, liquid, limited term securities (net of shorts and collateral) *** The bond quality ratings indicated are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness. The Barclays Capital Family of Indices ratings rules use the median if more than two ratings are available. Lower of the two is used if only two ratings are available. ^U.S. Treasuries with maturities less than 12 months at the time of issuance is added to Cash & Equivalents.

3.76 AAA 54.09 AA A BBB BB & Below Not Rated 92.56 Bonds & Notes 7.44 Cash & Equiv.

83.63 Equities 16.37 Cash & Equiv.

72.38 7.33 1.90 3.16 7.55 7.68 100.00 92.98 7.01

16.37 Liquidity*

7.44 Liquidity* Eff. Duration Avg. Life

26.96 1.63 2.07

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. 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. Certain funds 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. Groups of stocks, such as value and growth, go in and out of favor which may cause certain funds to underperform other equity funds. Short-selling involves increased riskd and transaction costs. You risk paying more for a security than you received from its sale. The return of principal in a bond fund is not guaranteed. Mutual funds have the same issuer, interest rate, inflation and credit risks that are associated with underlying bonds owned by the fund. Lower rated bonds, convertible securities and other types of debt obligations involve greater risks than higher rated bonds. Mortgage securities and collateralized mortgage obligations (CMOs) are subject to prepayment risk and the risk of default on the underlying mortgages or other assets; such derivatives may increase volatility. Certain funds may purchase high yield securities, senior loans, private placements, or restricted securities that may carry liquidity risks. A fund may experience increased costs, losses and delays in liquidating underlying securities should the seller of a repurchase agreement declare bankruptcy or default. A non-diversified fund may hold fewer securities than a diversified fund because it is permitted to invest a greater percentage of its assets in a smaller number of securities. Holding fewer securities increases the risk that the value of the fund could go down because of the poor performance of a single investment. Please consult your tax advisor regarding higher capital gains distributions due to change in portfolio strategy. The above are principal risks of investing in the Funds. Each specific Fund carries unique risks. You should review the Prospectus (http://www.fpafunds.com/literature) carefully to obtain a comprehensive explanation of risks for each Fund and risks that are not mentioned here. 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 that most recommendations made in the future will be profitable or will equal the performance of the securities. Portfolio composition will change due to ongoing management of the funds. References to individual securities are for informational purposes only and should not be construed as recommendations by the Funds, Advisor or Distributor. As required by Reg. 275.206(4)-1 under the Investment Advisers Act of 1940 , First Pacific Advisors, LLC will make available a list of all securities purchased within at least the immediately preceding period of one year upon the date of written request, including the name of each security, the date of each purchase and/or sale, the market price at the time, and the market price of each such security as of the most recent practicable date.S&P 500 Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The index focuses on the large-cap segment of the market, with over 80% coverage of U.S. equities, but is also considered a proxy for the total market. Portfolio composition will change due to ongoing management of the funds. References to individual securities are for informational purposes only and should not be construed as recommendations by the Funds, Advisor or Distributor. The Russell 2000 Index consists of the 2,000 smallest companies in the Russell 3000 total capitalization universe and is considered a measure of small capitalization stock performance. The Russell 2500 Index consists of the 2,500 smallest companies in the Russell 3000 total capitalization universe. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization. This index is considered a measure of small to medium capitalization stock performance. This index does not reflect any commissions or fees which would be incurred by an investor purchasing the stocks it represents. The MSCI ACWI ex-USA Index is a float-adjusted market capitalization index that is designed to measure the combined equity market performance of developed and emerging market countries excluding the United States. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of the following 24 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. The Consumer Price Index (CPI) is an unmanaged index representing the rate of the inflation of the U.S. consumer prices as determined by the U.S. Department of Labor Statistics. There can be no guarantee that the CPI of other indexes will reflect the exact level of inflation at any given time. The CPI shown here is used to illustrate the Funds purchasing power against changes in the prices of goods as opposed to a benchmark which is used to compare Funds performance. The CPI +100 Basis Points benchmark is created by adding 1% to the annual percentage change in the Consumer Price Index (CPI). This index reflects non-seasonably adjusted returns. The Consumer Price Index is an unmanaged index representing the rate of the inflation of the U.S. consumer prices as determined by the U.S. Department of Labor Statistics. There can be no guarantee that the CPI of other indexes will reflect the exact level of inflation at any given time.

Barclays Aggregate Index provides a measure of the performance of the U.S. investment grade bonds market, which includes investment grade U.S. Government bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed securities that are publicly offered for sale in the United States. The securities in the Index must have at least 1 year remaining in maturity. In addition, the securities must be denominated in U.S. dollars and must be fixed rate, nonconvertible, and taxable. 60% S&P500/ 40% Barclays Aggregate Index is a hypothetical combination of unmanaged indices comprised of 60% S&P 500 Index and 40% Barclays Aggregate Index, representing the Fund's neutral mix of 60% stocks and 40% bonds. Performance returns for the indices assume dividends were reinvested for the entire period. Returns for periods greater than one year are compounded average annual rates of return. One cannot invest directly in an index.