January 30, 2015

Dear Partners,
Please find attached your year-end statement for 2014. Coho Capital returned 27.32% gross in 2014 and
21.35% net after fees and expenses. This compares to a return of 13.69% for the S&P 500 Index. According to
the Wall Street Journal, 2014 represented the worst year for portfolio managers since 1997 with just 12% of
managers outperforming the S&P 500.
Coho Capitals performance would have qualified it as the best mutual fund in the country last year according
to data published by the Wall Street Journal on diversified mutual funds. In relation to hedge funds, Coho
th
Capital would have been considered the 20 best performing hedge fund in the world according to an annual
list of the worlds top performing hedge funds (with at least $1 billion in assets) compiled by HSBC. This was a
fall from our performance in 2013 (+42.4% net), good enough for 5th place on the list, and 2012 (+38% net)
for 6th place on the list. Unlike many names on the hedge fund list we do not employ leverage. We are not
interested in short-term results but believe the last three years underscore the efficacy of our approach.
We established two new positions in the second half of 2014; Cott Corporation (COT) and Graham Holdings
(GHC).
Cott Corporation (COT)
COT is the dominant producer of private label (non-branded) beverages in the United States, providing over
500 off-label brands to mass merchandise chains, convenience stores and grocers. The company possesses a
60% share of the private label carbonated soft drink (CSD) market and a 50% share of the private label juice
market. In addition, COT engages in contract manufacturing and owns the international rights to RC Cola with
concentrate sales in over 50 countries. Anyone who has researched Coke understands how compelling the
economics of concentrate sales can be.
Despite being in a commodity like market with little pricing power, COT is a competitively advantaged
business. The company has one of the broadest distribution networks in the United States encompassing 120
distribution centers and 34 manufacturing facilities. The density and breadth of COTs distribution network
results in greater proximity to its customers, enabling the company to provide superior customer service and
lower freight costs than competitors. Further, COTs scale advantage leads to higher inventory turnover
allowing the company to more efficiently deploy its assets.
The economics of scale distribution can be compelling for markets where transport costs are significant.
Examples include Sysco in the restaurant servicing space and Cintas in the corporate uniform rental market.
Market leaders pass on a portion of their superior economics to their customer base which perpetuates and
amplifies their advantages relative to competitors. In COTs case, it is the only private label beverage company
capable of servicing national retailers and is the low cost provider by an order of magnitude.
To give one example of COTs competitively entrenched position, consider that when Walmart attempted to
dual source CSD from another supplier in 2009 it was unsuccessful. Most companies that distribute through

Walmart hold little to no bargaining power. However, due to its dominant distribution network within the
private label beverage space, COT has a seat at the bargaining table.
While COTs private label business is not poised for rapid growth, it is a stable business that is highly cash
generative. Further, deflation in raw material inputs and lower gas prices should provide a significant tailwind
for earnings over the next 12-18 months.
We have followed COT for years due to its stable free cash flows and competitively entrenched market
position. Despite the merits of its business model we hesitated to become share-holders due to the
companys reliance on carbonated soft drinks, an industry which we believe faces long-term challenges in
demand growth. Overall soft drink volumes have fallen for nine straight years. As consumers have grown
more health-conscious they have shifted their beverage preferences from soda to water, ready to drink teas,
and energy drinks.
To counter this trend, COT announced a transformational acquisition last November in which the company
paid $1.3 billion dollars to acquire DS Services. DS Services is a leading provider of office water delivery
services in the US with a 30% market share. Market dynamics are attractive with DS Services and its largest
competitor Nestle controlling 60% of the market. The rest of the market is made up of various mom and pop
outfits, which face increasingly poor economic returns due to a lack of scale in a consolidating market. This
provides DS Services a runway for future growth as it is well positioned to be a primary participant in the rollup of smaller players.
Similar to the private label beverage business, the office water delivery business is characterized by scale
economics with competitive moats accruing to those with the densest route portfolios. DS Services possesses
impressive reach with 2,100 routes capable of providing coverage to 90% of the US population. With its
distribution network largely in place, DS services can add volume with minimal incremental costs. This bodes
well for COT, which can use DS Services route portfolio to cross sell tangential products such as sparkling
water or ice tea. There is a compelling precedent for utilizing DS Services route network as a conduit for
broader product distribution; DS Services acquired Standard Coffee in 2012 and quickly leveraged its delivery
route network to become a top five player in the highly fragmented office coffee delivery market.
Unlike the CSD market and its reliance on national retailers, DS Services water delivery business caters to a
diverse customer base with DS Services top 20 customers responsible for only 4% of revenue. This provides
DS Services greater leverage in setting pricing terms than COT possesses in the private label beverage
business. Further, the majority of DS Services revenue is subscription based with 81% customer retention.
We expect COTs acquisition of DS Services to be transformational. On a combined basis, sales and EBITDA will
double, and unlike soda, coffee and water consumption is high and growing. The acquisition results in a
material decline in COTs exposure to carbonated soft drinks which will now represent 20% of sales and 12% of
EBITDA.
One of the most intriguing aspects of COTs acquisition of DS Services is the post deal capital structure. The
transaction will be almost entirely funded by debt, making COTs acquisition of DS Services akin to a publicly
traded leveraged buyout with post deal net debt to EBITDA at 4.5x. Given the recurring subscription revenue

of the DS Services water delivery business, and the consistent cash flow generation of the private label
beverage business, we believe the debt is manageable. COT Management clearly believes so as well as
indicated by the companys commitment to maintain its 3% dividend yield while deleveraging its balance
sheet to 3.0x net debt to EBITDA by the end of 2018.
We believe COT can deliver $1.50+ of free cash flow per share by 2018. We think the reduced financial
leverage coupled with the inherent stability of the water delivery business should result in a multiple of at
least 12x free cash flow resulting in a share price of $18.00+ compared to a current price of $7.92.
Some of our readers may be familiar with Liberty Media Chairman John Malone who built a cable empire
through debt fueled acquisitions. As CEO of Tele-Communications Inc. Mr. Malone generated compound
annual returns for shareholders of over 30%. Like cable, water delivery is a business where scale players gain
an almost insurmountable advantage. The utilization of debt enables quicker scale while shielding tax
payments. We think COTs purchase of DS Services is straight out of the John Malone playbook and believe
investors will be similarly rewarded.
Graham Holdings (GHC)
We often find opportunities in companies undergoing transitions see above. Graham Holdings (GHC), a
consortium comprising education, cable TV, broadcast television and social media marketing is one such
company. Until 2013 GHC was known as the Washington Post, a giant in the world of journalism. In 2013, the
CEO of the company, Donald Graham, decided to sell its flagship newspaper to Jeff Bezos and thereafter the
company became known as Graham Holdings.
The sale of the Washington Post was a watershed event for GHC. Despite the newspapers uneven
profitability and challenging long-term trends it demanded a disproportionate share of managements
attention. After the sale, Mr. Graham began to remake GHC in the image of his long-term friend and role
model, Warren Buffett, who previously served on GHCs board of directors. Mr. Graham has continued to
reshape GHCs business through shedding non-core assets. In aggregate, GHC has raised over $1 billion dollars
by selling real estate, stakes in online ventures, and cable wireless spectrum licenses.
One of Mr. Grahams most significant transactions was a deal with Berkshire Hathaway in June of 2014 in
which GHC retired 22% of its shares through acquiring Berkshires GHC holdings in exchange for cash,
Berkshire stock and the Miami television station WPLG. We never want to be on the other side of a Warren
Buffett transaction but given Buffetts friendship with Graham, as well as Buffetts long-term involvement with
the Graham family, both professionally and personally, we view this exchange as a rare win-win deal. We
should also note that GHC saved shareholders $250 million in federal and state taxes through the transaction.
GHCs cable and broadcast television segments compose the bulk of the companys value, but its education
segment and social media marketing division could represent important components of value in the future.
Each segment is described in detail below:

Cable TV Segment
GHCs cable business, Cable ONE, is a collection of small market cable systems focused on less competitive
rural areas in the South and the West. Cable ONE accounts for 23% of GHCs sales and 46% of its profits.
Cable ONE is competitively entrenched in its markets having established local economies of scale. Since Cable
ONE has already constructed its infrastructure it can price services at a high enough level to earn an attractive
return on capital yet low enough to keep competitors at bay kind of sounds similar to the competitive
dynamics in COTs business.
Cable ONE has lost video subscribers to satellite but its broadband Internet service has served as a bulwark to
help protect against subscriber losses. Even if you elect to cut your cable cord you still need an Internet
connection to make your streaming service work. At present, Cable One installs 75% more new Internet
customers each month than video customers. Without programming expenses, Internet customers have
proven to be far more lucrative.
Unlike most cable operators Cable ONE has let returns on capital guide its decision making. By deferring the
implementation of the latest equipment upgrades, Cable ONE has earned higher returns on capital than peers
and has managed to generate positive cash flow in every year of existence except one.
Last November, GHC announced plans to spin off Cable ONE in 2015. As a bit player in a consolidating
industry characterized by scale economics in account servicing and content costs, it makes no sense for Cable
ONE to remain an independent entity. Given its home within GHCs conglomerate structure, Cable ONE has
always traded for a discount to its proper value. We expect this discount to close once the company trades
independently later this year and would not be surprised to see Cable One scooped up by a larger competitor
such as Charter Communications. An acquisition would yield significant cost synergies.
Broadcast TV Segment
GHCs broadcast television unit consists of five major market television stations. The group is well run, has
industry leading margins, and four of the stations are market leaders in local news. GHCs broadcast television
networks have a competitive moat given the FCC licenses and content partnerships with major networks
required to operate. This provides GHCs stations an oligopolistic position in their local markets, which is
illustrated by the groups lush 49% EBITDA margins. Broadcast television is responsible for 46% of GHCs
profits despite accounting for only 11% of company revenues.
Recent performance within the broadcast television segment has been impressive with revenue and operating
income up 17% and 32% respectively through the first nine months of 2014. Revenues spiked last year due to
the winter Olympics, increased political advertising and retransmission fees (the money TV stations receive
from satellite and cable providers for the right to carry the companys signal).
Broadcast television faces long-term challenges in viewership with increased competition for viewers from the
Internet and streaming services. That said broadcast television has been resilient throughout the tectonic
shift in the media landscape with local news, sports and political coverage playing important roles in viewing

habits. Despite some erosion in viewer numbers, GHCs broadcast television stations should continue to
throw off tremendous cash flow with growth in retransmission fees providing a tailwind.
Education Segment
GHCs Kaplan education division is its largest revenue producer responsible for 62% of the firms sales in 2013
and 14% of its profits. The division has been struggling for some time with more stringent regulations for
online education providers weighing heavily on enrollment trends and profit margins. Many online education
companies have been exposed under the new requirements and are no longer financially viable. We view
Kaplan as one of the good actors in the online education space (a Senate report on the for-profit education
space stated Kaplan has also implemented the most significant reforms of any company examined.) The
industry shakeout should be healthy for both the business as well as potential students who will be able to
choose from more reputable survivors. Perhaps paradoxically, an enhanced regulatory environment can
sometimes result in structurally higher industry margins with tightened regulations serving as a barrier to
entry for potential competitors.
Approximately 40% of Kaplan Educations revenue is earned from abroad and consists of 20 businesses, with
the largest revenue producers based in the U.K., Singapore and Australia. International growth has been
robust with 9% sales growth through the first nine months of 2014. There is tremendous operating leverage
within the business with 9% topline growth driving a 71% increase in profits through the first nine months of
the year.
Kaplan Test Prep represents 13% of GHCs Education division and is best known for its SAT classes. Apart from
SAT prep, Kaplan Test Prep offers classes on graduate admissions tests as well as professional licensing exams.
Kaplan Test Prep has an outstanding brand name within test prep providing the company some degree of
pricing power. Pricing power has been eroding in recent years, however, due to stepped up competition from
online providers.
At present, Kaplan is priced for permanent enrollment declines and depressed margins. EBITDA margins have
nosedived 15% since 2010. We dont expect a return to prior margins but expect some normalization to occur
once industry headwinds subside. A recovery in growth and stabilization of margins could lead to significant
upside in Kaplans valuation given the markets dour assessment of for-profit education.
SocialCode Segment
SocialCode is a social media advertising and data analytics firm. Social media is reshaping the advertising
industry with Facebook and Twitter reaching over 100 million people daily. SocialCode designs advertising
campaigns to connect social media users with company brands. The companys roster of clients includes 150
Fortune 500 firms. SocialCode has experienced explosive growth as of late with gross billings tripling through
the first nine months of 2014.
GHC has not broken out SocialCode numbers separately but a recent article in the Washington Post helps
highlight the potential value of the division. The article cites a venture capitalist who noted SocialCode and

Shift (competitor) are getting interest at very high multiples. SocialCode is considered one of the two premier
partners for large, Fortune 500 companies looking for a social media strategy.
Most important, the article shares some financial metrics that have heretofore not appeared in public,
including SocialCodes revenue at over $300 million and gross margins of 25%.
We think SocialCode could be a spinoff candidate with its dominant position and explosive growth sure to
fetch a higher multiple as an independent entity than as a unit within a conglomerate structure.
Portfolio Holdings
GHCs remaining assets include small manufacturing operations in combustion systems and screws as well as
home healthcare management. The home healthcare segment in particular represents GHCs historical
preference for stable profit growers and is indicative of how we envision Mr. Graham deploying excess capital.
Like Warren Buffett, Mr. Graham has focused his business purchases on competitively advantaged companies
that can be held for the long-term. Similar to Buffett, Graham has shown a preference for decentralized
management by leaving existing business leadership of acquired companies intact.
Balance Sheet
Many of GHCs disposals of non-core assets were recent and thus do not yet appear on its balance sheet.
Once fourth quarter results are released the balance sheet will show an additional $393 million in cash as a
result of recently closed asset sales. GHC still has other real estate assets it can convert into cash, including
seven acres of land along the Potomac River in the central business district of Alexandria, a six story office
building in midtown Manhattan and a number of properties in Phoenix.
One of GHCs most important stores of hidden value is its pension plan, which is overfunded by $1.2 billion
dollars. This provides GHC unique currency in subsidizing future business ventures to grow book value.
Management
Apart from Mr. Graham who owns 20% of company shares, GHC is presided over by an all-star board of
directors including Markel Chief Investment Officer Tom Gayner, Ronald Olson from the California law firm,
Munger, Tolles and Olson LLP, IAC/Interactive Chairman Barry Diller, and Davis Select Advisors Chairman Chris
Davis.
Valuation
To value GHC we use a sum of the parts approach.
For GHCs broadcast television assets we apply a 12.1x multiple, in-line with industry peers, to a blend of 2015
and 2016 EBITDA. We utilize a blended EBITDA number to smooth out the revenue spike associated with the
2016 Olympics and election year advertising revenue. It is relevant to include this spike as elections and the
Olympics provide a bump to revenue every two years. This equates to a valuation of $2.42 billion.

For Cable ONE, we assume the company will be valued at 8x 2016 EBITDA upon its spinoff, similar to recent
transactions within the cable space. This equates to a value of $2.65 billion.
GHCs education division is the trickiest segment to value. The higher education division has no doubt been
impaired by the new regulatory environment but we believe Kaplans international and test prep divisions will
remain strong competitors within their segments. For the higher education division, we assume EBITDA
recovers to $65 million in 2016 and accord the company a 6x multiple, similar to peers, resulting in a valuation
of $390 million. This assumes growth prospects and margins will recover somewhat but remain well below
prior peaks. These are very draconian assumptions leaving plenty of upside in our model should results be
more pleasing.
For Kaplan International, we assume a 2x 2014 price to sales multiple, relative to publicly traded comps in the
international education space at 3.1x. This results in a value of $1.74 billion.
We believe Kaplan Test Prep will have to continue to offer price concessions to compete with online
competitors. However, the company is the largest player and best known brand name in the space and its
hybrid classroom/online offerings should help it maintain market share. At a conservative 6x EBITDA multiple
we arrive at a value of $110 million.
Given SocialCodes growth and leading position in one of the worlds most important and untapped
advertising markets, we think a multiple of 15x gross profits is more than reasonable. Going off the revenues
outlined in the recent Washington Post article and assuming top-line growth of 33% by 2016 equates to a
value of $1.5 billion dollars.
For the balance sheet we add post tax cash receipts from recently completed transactions and assume
anticipated real estate sales at below market assessed value designations. Next, we add expected cash
flows for the fourth quarter and 2015 and net out existing debt and corporate overhead. This gives us a 2015
year end net cash balance of $1.36 billion.
Last, we think GHC will be able to utilize its overfunded pension for acquisition currency. There are no
guarantees, however, so we apply a 40% discount for a value of $720 million.
Our sum of the parts analysis says GHC should be valued at $1,742 per share, 87% higher that GHCs currently
quoted price of $933.
Why is it cheap?
GHC is poorly understood for a variety of reasons. The company does not spend time on investor outreach
and as a result has zero analyst coverage. The optics of the balance sheet screen poorly as a number of cash
transactions have yet to hit the balance sheet and the overfunded pension is a hidden asset. In addition, GHC
has a high stock price at $933 and thin trading liquidity with average daily volume of only 24 thousand. Most
important, GHC is poorly understood. Up until the end of 2013 the company was primarily known for its
flagship Washington Post newspaper and after its sale was primarily known for its education division. In

reality, the companys cable and television assets generate the majority of its profits, yet it is still valued like a
newspaper.
Conclusion
GHC is a collection of structurally profitable assets managed by a shareholder focused management team
intent on value creation through capital allocation. The company has a balance sheet loaded with cash and
additional flexibility through its overfunded pension plan. GHCs upcoming spinoff of Cable ONE should unlock
value in the shares while significant optionality still exists through SocialCode and Kaplan Education. It is not
often we can obtain a collection of safe assets, led by a shareholder friendly management team at a
meaningful discount, but when we can we jump at the opportunity. Were proud to make Graham Holdings
part of Cohos holdings.
Sales
We sold a number of positions in the second half of 2014, including the following:
Hartford Insurance Warrants (HIG-WT) We had originally invested in Hartford based upon the premise that
the market was giving the company insufficient credit for its transformation from an insurance conglomerate
into a property casualty focused entity. Former CEO Liam McGee did an admirable job of managing the
company during the credit crisis and de-risked the companys balance sheet. Those efforts have been
rewarded by the Market. We made 58% on our purchase of Hartford Warrants.
UCP, Inc. (UCP) We purchased the homebuilder UCP based upon its discount to book value, which itself was
recorded at a material discount to the market value of its assets. We posited UCP would be reasonably
successful in converting its collection of west coast residential lots into cash. We were wrong. UCPs
management team has failed miserably and in fact has destroyed shareholder value by failing to achieve
profitability. We have no interest in an enterprise that cannot be run profitably. We lost 13% on our position.
GenCorp (GY) We acquired shares in GY because we were attracted to its stable cash flows, strong market
position and hidden assets in both real estate and pension value. Management has been slow in converting its
assets into cash. More troubling has been the deterioration in the competitive dynamics within GYs market
niche of propulsion engines. GY has historically relied upon ULA, a Boeing and Lockheed Martin joint venture,
to supply rocket engines. The problem is those engines are manufactured by Russia. Given recent events,
reliance upon Russian engines for US launch vehicles is troubling. ULA will work around this issue over time
but our understanding is the fix will be quite complex and require a number of years to remedy. In the
meantime, Elon Musks Space X has become a much more formidable competitor. Given the deterioration in
competitive dynamics, as well as the long time frame to resolve ULA supplied rockets, we decided the
opportunity cost of holding on to GY shares was too great. We made 5% on our purchase.
AMERCO (UHAL) We acquired UHAL shares because we thought market prices were not reflective of the
companys business quality and competitive moat. The market closed the gap between pricing and intrinsic
value so we sold our shares. We gained 43% on our purchase.

Update on Current Positions

A debate rages, at least amongst auto company investors, as to whether or not we are at the peak of the cycle
for car purchases. The answer is of some consequence for Coho as two of our top holdings are auto
manufacturers. Proponents of the peak argue that 2014 auto sales of 16.5 million are dangerously close to
the previous peak of 16.6 million reached in 2006. This seems sensible but the flaw with this logic is the
assumption that auto sales travel a straight line to their peak and then a straight line down at the depths of a
recession. The reality is more nuanced with years of below trend sales resulting in years of pent-up demand.
From 2007-2012 auto sales were millions below trend reaching a dearth of seven million below trend in 2008
and six million below trend in 2009. Auto sales returned to trend in 2013. It stands to reason that it will take
more than two years of trend line growth to make up for the lost sales of 2007-2012.
Peter Lynch referred to this phenomenon in his book, Beating the Street, After four or five years when sales
are under the trend, it takes another four or five years of sales above the trend before the car market can
catch up to itself. If you didnt know this, you might sell your auto stocks too soon.
Other signs point to continued strength in auto sales. The age of the average car on the road is at a record
11.4 years and pickup trucks are on average 13 years old. Falling gas prices should be a boon for SUV and
truck sales. Last, new technology such as iPad like dash consoles, blue tooth connectivity and revolutionary
safety features should prompt a more sustained upgrade cycle.
General Motors B Warrants (GM-WTB) - Our investment in GM Warrants took it on the chin last year
declining 26%. An ignition recall crisis engulfed the company in negative headlines throughout the year.
Apathy toward the stock is reflected in GMs current valuation of 7.5x earnings, less than half the PE multiple
of the S&P 500. Factoring in the value of GMs balance sheet the company trades for 2.5x EV/EBITDA, below
prior trough valuations and one of the cheapest valuations we have ever seen for any stock. Stock investors
are rewarded with a 3.6% dividend yield. We feel our downside is well protected at these price levels.
We think the eventual litigation penalty for faulty ignition switches will be less than investors fear and GMs
brand equity will be more resilient then current valuation multiples imply. Based upon the year GM has had it
is hard to argue that its franchise value has been impaired. GMs sales volumes increased 19% year over year
in 2014 with sales growth of 33% at Buick, 23% at GMC and 21% at Chevrolet. Cadillac was the laggard with
sales dipping 11%.
With continued strong sales growth we think GMs margins will inflect higher due to rising volumes and a
reduction in vehicle platforms. Pent up demand and low gas prices should stimulate high margin truck and
SUV sales. Last, we expect to see GMs captive finance arm be a more meaningful contributor to earnings
growth. Last year, GMs finance arm provided 10% of all new GM car loans whereas a typical captive finance
arm would service 60% of company auto loans.
As the clouds clear on GMs faulty ignition recall we expect to see mean reversion in the companys valuation
multiples. We added to our warrants during the fourth quarter and are happy to go along for the ride.

Fiat Chrysler Automobiles (FCAU) - Our investment in FCAU gained 49% last year. It was a remarkable year in
which the planets aligned for Fiat. Speaking at the Detroit Auto Show last January, CEO Sergio Marchionne
threw out a wildly ambitious target of one million Jeep sales in 2014. The comment was met with ridicule:
All the planets would have to perfectly align, even those we dont yet know about, to hit the target in 2014,
so we just dont see that happening. Jeep will hit one million sales by 2020 but not this year Jeff Schuster,
Senior VP of Forecasting (hmmm) at LMC Automotive
It appears we can add astronomy to Mr. Marchionnes many talents with Jeep sales surpassing the one million
mark in annual sales for the first time last year. Perhaps even more surprising than Jeeps record year was the
fact that Fiat earned a profit in Europe last quarter after sustaining 30 consecutive quarters of losses. Overall,
Fiat saw a 12% rise in sales and a 41% jump in operating profit.
Fiat raised $4 billion in fresh capital last quarter through an equity issuance and sale of a convertible bond.
While not a fan of dilution, new capital was needed to close the funding gap between Fiats new model
introductions and existing capital resources. Fiat will also be using the funds raised to help pay down
expensive debt, helping to offset some of the dilution impact.
The biggest surprise of the year was Fiats decision to spin off Ferrari. The company recognizes Ferrari will
fetch a much higher multiple on a stand-alone basis than it would remaining within Fiats confines. We expect
the Ferrari listing to create at least $4.00 per share in value for Fiat shareholders. This suggests that post
spinoff, FCAU shares will be trading for 11x 2015 earnings and 7.5x 2016 earnings.
Despite Fiats rise last year, we think the stock is still widely misunderstood. Apart from the Spin-off of Ferrari,
a number of catalysts remain on the horizon. Fiats cadence of new automobile introductions will ramp up
considerably with 20 new models to be introduced by the end of 2016. Jeep has untapped growth potential
within emerging markets, which could yield unexpected growth. Last, a resurgent US Dollar should aid 2015
results due to favorable exchange rates.
Yahoo (YHOO) - Our investment in YHOO rose 25% in 2014 but we still believe shares are undervalued. YHOO
recently detailed plans for a tax free spin-off of its Alibaba (BABA) shares to take place in the fourth quarter.
For the spin-off to be a success YHOO must obtain a clean tax ruling from the IRS. We think YHOO will be
successful in obtaining a tax waiver given the precedent set by Liberty Ventures tax free spin-off of its stake in
TripAdvisor last August. The transaction should enable YHOO to save $16 billion in taxes, a not insignificant
sum for a company with a market cap of $43 billion. Based upon YHOOs stakes in Yahoo Japan and Alibaba,
along with its net cash, we think YHOO is undervalued by 30%.
Softbank (SFTBY) - Our shares in Softbank declined 16% from our purchase price during 2014, making shares
even more compelling at current prices. We recently added to our position. We wrote about Softbank in our
last letter so we wont rehash our entire thesis. In short, we estimate that Softbank trades at a 40% discount
to its net asset value. Historically, Softbank has traded at a premium to its net asset value. Softbanks assets
are growing in value and presided over by one of the worlds great capital allocators, CEO Masayoshi Son.

The Howard Hughes Corporation (HHC) HHC rose 9% in 2014. HHCs management team continues to do an
exceptional job of developing the companys real estate assets into net income producing properties. After
years of development efforts, HHC properties are throwing off annualized net operating income of $72 million,
which we expect to grow to over $200 million by the end of this year. Once HHC has exhausted its use of net
operating losses (NOLs) as a tax shield, we think the company will drop down its income producing properties
into a REIT structure providing a lift in valuation. Looking at HHCs current development pipeline we think
shares are worth just over $200 compared to a current price of $129.00. We are happy to have 13%
shareholder William Ackman playing an owner/operator role as Chairman. We added to our position in HHC
earlier this month.
As an emerging fund, we are always looking for new investors. If you are happy with your experience at Coho
Capital please consider sharing your opinion of Coho with others. We encourage you to pass along our letters
to those whom you believe would be interested in Cohos approach toward capital management. We believe
our process of investing with conviction in companies that have solid downside support offers a pathway to
superior risk-adjusted returns. We thank you for joining us on the journey.
Respectfully yours,

Jake Rosser
Managing Partner
Coho Capital Management