Wash, Rinse, Repeat

From the 2016 Liberty Media Annual Report

Dear Fellow Shareholders,

The past twelve months have seen the continued structural evolution of Liberty Media. Most notably, in April of this year, we recapitalized Liberty Media Corporation into three tracking stock groups, Liberty SiriusXM, Liberty Braves Group and Liberty Media Group. It speaks to the unique nature of our organization that this restructuring was treated as business-as-usual at Liberty HQ. However, before we review the year in more detail, we’d like to take a brief moment to discuss the factors that have made Liberty Media such an effective compounder of wealth over a sustained period. Our operating philosophy is built on the core value drivers of:

• Patiently investing in great businesses where the margin of safety is compelling; identifying asymmetric upside, while ensuring our agility to protect against the unforeseen

• Obtaining meaningful governance rights when investing concentrated sums and assisting with strategy through Board level insight

• Identifying and backing strong operating company leaders and setting a productive ownership tone

• Allocating capital and setting efficient financial policy

• Structuring financings and transactions

• Ensuring tax efficient acquisition, operation and monetization of assets

While this may sound simple enough, few public companies have achieved the level of long-term, investor-friendly execution that has been the hallmark of Liberty for its twenty five year existence. The few that have generally trade at premium multiples; in contrast, the Liberty entities trade at meaningful discounts to net asset value. We believe these apparent market pricing inefficiencies create attractive opportunities for our investors. Looking forward, we will focus on the factors within our control, react to opportunities as they present themselves, and allow market “noise” to be just that. The core value drivers described above will continue to guide our decision making and we aim for our equities to compound intrinsic value at attractive rates.

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