Eminence C A P I TA L , L L C

May 4, 2010

Dear Limited Partner:

Eminence Partners advanced 1.7% gross and net1 in the first quarter 2010. The first quarter and
the month of April in particular have been a struggle for us. Cheap money and signs of life in
the domestic economy have combined with a stock market environment where trading
momentum seems obsessed with current data points vs. long term value. This has led to an
accelerated widening in the performance and valuations between low quality vs. high quality,
small capitalization vs. large capitalization and cyclical vs. consistent growth. As “investors”,
our portfolio is generally positioned opposite these recent trends as we seek value and quality on
the long side and low quality and over-valued on the short side.

We have been less surprised with the strength of the recovery and first quarter earnings than we
have been with the market’s reaction to those data points. The stock market has become
enamored with companies that “beat and raise” near term earnings expectations regardless of
valuation or long term business prospects. We have been of the belief that many low quality,
small capitalization and cyclical businesses are more than fully priced for several years’ worth of
very strong earnings growth, an outcome we don’t think is likely based on both structural issues
muting economic growth and structural issues facing numerous businesses that fit those criteria.
It has been quite a bifurcated market recently where stocks that only meet expectations or
slightly temper expectations are being sold regardless of valuation, business quality or their long
term prospects while companies that beat estimates and raise guidance are going up without
regard to valuation, business quality or long term earnings sustainability. Experience has taught
us that markets like these are not sustainable, but we respect that predicting when it will end or
how far it will carry is difficult.

Below we present our 3 and 5 year CAGR in addition to the respective inception to date
performance information:

2010 CAGR
3 year 5 year Since inception
Q1 returns returns (January 1999)
Eminence Partners gross 2 1.7% 6.3% 9.5% 18.7%
Eminence Partners net1 1.7% 4.8% 7.5% 15.1%

S&P 5003 5.4% (4.2%) 1.9% 1.3%

Russell 20003 8.9% (4.0%) 3.4% 5.7%
Avg. US Stock Fund4 6.2% (3.9%) 2.3% 2.7%

Note: Past performance is not indicative of future results

See last page for all note descriptions

65 East 55th Street, 25th Floor ● New York, New York 10022
Telephone: 212-418-2100 ● Facsimile: 212-418-2150
 3 year Since inception
Q1 returns (July 2005)
Eminence Leveraged Long Alpha gross 2 2.6% 1.9% 6.8%
Eminence Leveraged Long Alpha net 1 2.6% 0.8% 5.0%

S&P 5003 5.4% (4.2%) 1.7%

Russell 20003 8.9% (4.0%) 2.6%
Avg. US Stock Fund4 6.2% (3.9%) 1.9%

Note: Past performance is not indicative of future results

See last page for all note descriptions

Performance Review
Our average long position did fine in the first quarter, advancing about 7% which is above all the
indices except the small cap index. Our average short position, on the other hand, advanced
between 9% and 10%, generating negative alpha to both the market and our longs.

Contribution to Return5
Average
Eminence Partners Q1 Exposure
Long Investments 10.2% 151%
Short Investments (8.0%) 85%
Management Fees & Operating Expenses (0.5%)
Portfolio Return & Avg. Net Exposure2 1.7% 66%

Average
Eminence Leveraged Long Alpha Q1 Exposure
Long Investments 15.2% 226%
Short Investments (12.0%) 127%
Management Fees & Operating Expenses (0.6%)
Portfolio Return & Avg. Net Exposure2 2.6% 99%
(Figures may not add due to rounding)
See last page for all note descriptions.

Winners on the long side (and their respective contribution) included Nintendo (90bps), Hasbro
(60bps), Carnival (60bps), US Bancorp (50bps) and Ross Stores (50bps). No long position hurt
the fund by more than 20bps.

The short side unfortunately had only a handful of winners and an abundance of losers. Our
biggest losses outside of indices were a printing company, an aerospace and defense company,
an apparel manufacturer and a media distribution company.

Portfolio Update

Throughout the first quarter, gross exposure averaged 235%, net exposure averaged 66% net
long and our long / short ratio averaged 1.8x. Currently, gross exposure is 260%, net exposure is
60% net long and our long / short ratio is 1.6x. We have used the strength in the market in Q1
and April to reduce longs that have less favorable risk / rewards and add to or initiate short
positions in low quality companies that seem priced for more than perfection.
Increasingly, we have been positioning the portfolio for an eventual rotation to higher quality,
larger capitalization and more defensive growth companies. The intrinsic value gap between
businesses with these characteristics and those with the opposite is increasingly wide. The
strength of near term business conditions has caused the market to buy the cyclical, lower quality
companies that get a bigger bang from this strength without regard for valuation. As first quarter
earnings seasons comes to a close we are hopeful that the lack of catalysts will cause investors to
shift from “beat and raise” to “what is it worth?”

We have been cognizant that the broad advance in stocks combined with the decline in our
equity in April has caused an increase to gross exposure. We plan to manage gross exposure
limits at or near current levels. Further, we continue to manage position sizes on the short side
such that no stock specific short position exceeds 2% of capital.

Since our last letter, we added new long positions in Aon, Coca-Cola Enterprises, Raytheon,
Monsanto, TD Ameritrade, Research in Motion, Avon Products, Dollar Tree Stores, American
Eagle Outfitters and Beckman Coulter. We added to existing long positions in JP Morgan,
Google, Charles Schwab and Fidelity National Information Services.

We exited long positions in Nestle, General Mills and Northrup Grumman and reduced position
sizes in Nintendo, Hasbro, Abbott, Carnival, Ross Stores, CSX and Reed Elsevier.

Aon is the largest commercial insurance broker in the world with global operations in over 40
countries. Commercial insurance brokers help corporate clients manage risk and obtain fair
pricing amongst a wide market of insurers in areas such as workers comp, property and general
liability insurance. Aon is a high quality business that generates a high return on equity,
produces strong and consistent cash flow and requires little capital to grow. Aon’s stock price
and its earnings have been under pressure as the commercial insurance market has been going
through a period of declining, or “soft” pricing for the past few years. There are a number of
factors contributing to this including the lack of catastrophic events and the global economic
downturn. This soft market impairs both the dollar amount of commissions earned and the
number of transactions. The current low interest rate environment has also hurt the industry as
the brokers derive short term investment income on cash they hold on behalf of their clients.

Aon has been executing a series of restructuring programs to help streamline their business and
bring margins to best in class under the leadership of CEO Greg Case. Greg was a partner at
McKinsey and is known throughout the industry as one of the brightest minds in the business.
Despite a difficult industry backdrop, Greg has been delivering on the improvements to Aon’s
business. The combination of continued execution by management including increased share
repurchases, an eventual “harder” pricing cycle, rising short term yields and the recent lift of the
ban of contingent commissions all provide tremendous upside for Aon’s earnings. We purchased
Aon for 10x normalized earnings and believe we could see 50% upside in the stock over the next
2 years.

Coca Cola Enterprises (CCE) owns the rights to bottle and distribute Coca Cola (KO) products
and other non alcoholic beverages in a number of US markets as well as several European
countries. In late February, the company and KO announced a transaction whereby KO would
buy the US bottling assets from CCE. Following the closing of this transaction in Q4, CCE
shareholders will receive a $10 dividend and maintain an investment in the European bottling
assets.
We think that the European assets have been a hidden gem inside of CCE. While the US assets
being sold were at best a mediocre business, the retained European assets are substantially better
and quite good in absolute terms. There are several key reasons for this including much greater
regional concentration among bottlers (bottling and distribution are scale businesses), much
higher market shares for KO product (Pepsi is a weak competitor in Europe) and lower per capita
consumption of carbonated soft drinks (greater potential to grow volume). As a result, new CCE
has higher margins, higher returns on capital, greater free cash flow conversion, faster volume
growth and greater pricing power. Further, the proforma valuation of new CCE is very attractive
both in absolute terms and relative to the price paid for inferior US assets and the market’s
valuation of old CCE prior to the transaction. At today’s price we are creating an investment in
new CCE at 11x 2011 earnings and 9x 2012 earnings, a price that severely discounts the value
and growth prospects of this business.

Our current top ten positions represent 40% of equity and are:

Oracle
JP Morgan
US Bancorp
Thermo Fisher Scientific
Fiserv
Ebay
Aon
Walmart
Google
Reed Elsevier

Organizational Update
As previewed in our last letter, we have returned the fund to a “soft” closed status and plan to
limit investor subscriptions to a level that roughly matches redemptions. At the end of the
quarter, capital under management was approximately $5.4 billion.

During the quarter, we had several new additions to the team at Eminence and no departures.
Peter Goodson joined Eminence as an Analyst following nearly eight years of experience in
private equity and investment banking at Fortress Group, Carlyle and Deutsche Bank. Bobby
Moss became the third person we hired on our field research team. Bobby previously worked
with Glenview Capital as a primary research analyst in their London office. Prior to Glenview,
Bobby was a strategy consultant for Deloitte Consulting. We also hired Jordan Rubin as a
Research Associate. He joins us following 18-months on the sell side research team at
Oppenheimer & Co. Outside of the research team, we hired Mike Vasiliou in IT. In total, we
now have 40 employees including 20 on the research team.

As always, feel free to call with any questions or comments. Thank you for your interest.

Sincerely,

Ricky Sandler
Managing Member
End Notes:

1. Net returns represent the account of a Day One investor in the fund, net of operating expenses, management fee and incentive
allocation. New investors from January 1, 2009 and forward may not be subject to a high-water mark depending on the timing of their
investment and therefore may be subject to an incentive allocation. For those investors not subject to a high-water mark, the net return
likely will be less than that presented.

2. Numbers are net of management fees, gross of incentive allocation.

3. Performance reflects the monthly reinvestment of dividends earned by the index.

4. Source: Lipper (diversified funds only)

5. Returns and exposure are presented net for stub investments.