B O S T O N
O M A H A
CORPORATION
2022 Annual Letter
1
To Fellow Shareholders of Boston Omaha Corporation:
Since present management took over in early 2015, the market value of a share
of Boston Omaha stock has grown from $10.00 to $26.50, as of December 31, 2022, a
compounded annual increase of approximately 14%. That is a return of over 165% on a
cumulative basis.
In prior annual letters, we have discussed book value as a rough approximation
for changes in intrinsic value. However, accounting reporting requirements such as the
reporting of unrealized gains/losses in earnings, lease accounting,
depreciation/amortization schedules, required consolidations of cash that can never be
ours (e.g. Yellowstone Acquisition Company last year), value of investments, etc. have
succeeded in distorting approximating changes in book value to changes in intrinsic
value. Therefore, we now simply report the annual changes in market price, as we
believe over time that will more appropriately reflect the value to you, the shareholder.
Most importantly, we use this letter to report our perspective on how each of our
four businesses performed over the past year.
believe intrinsic value increased, and if the opposite is true, we will report that as well.
Remember, we don’t report a precise number, but in our opinion, overall intrinsic value
increases when the productive cash flow of the underlying businesses we control or
have investments in increases.
If they did well, we will indicate we
As this year’s annual meeting is at the Durham Museum, located in Omaha’s
Union Station, it makes sense to think of Boston Omaha as a “Train” powered by our
four distinct locomotives, billboards, broadband, insurance and asset management.
This train runs on cash flow and the good news is the first three operating businesses
produce a steady and growing pile of it. At present, billboards, broadband and
insurance produce around $25m of cash flow a year (after deducting losses from Fiber
Fast Homes, more on this later).
In addition to that cash flow, Boston Omaha is also powered by a less
predictable, yet no less important locomotive, its investments within Boston Omaha
Asset Management (“BOAM”) whose revenue and cash flow are mostly not reported in
our financials but have material value. Though it is lumpy and unpredictable, BOAM
has produced over $90m in profit to the company to date, realized earnings that we
have used to fuel the growth of other businesses.
We expect our present revenue and cash flow run-rate to continue to grow
organically, and equally important, to do so without the demand for large capital
investment. When you combine this growing excess cash generation, plus our cash
and investments already held, we have reasonable capacity to continue reinvesting in
our existing businesses or new opportunities.
2
Your Co-CEO’s are the conductors, and it is our job to take this excess capital
and use it to fuel the engines of those businesses we believe have the potential to
produce the highest long-term returns for shareholders. Thankfully, what we own to
date has attractive unit economics and an expanding opportunity to deploy large sums
of capital at what we believe to be good, and in some cases even great, long-term
returns.
In previous letters we have gone into great detail on the unit economics of each
business and we are happy to report that those observations have aged well, and still
hold true. So rather than taking up valuable time and annual letter real estate repeating
ourselves, we have compiled a collection of our previous detailed discussions on the
economics of billboards, broadband and surety and have included those as an appendix
for reference alongside this letter.
As for Boston Omaha Asset Management, we continue to hold a number of
minority investments, some of which are public and others private. We will focus our
discussions in this letter on the building of our asset management business, where we
invest Boston Omaha balance sheet capital alongside outside investors in new
investment ideas. These ideas are often best suited for a fund structure because they
may require substantial capital or specific corporate structures to maximize value.
With that, let’s dive into the travels of the Boston Omaha Train in 2022.
3
Operating Businesses at Boston Omaha Corporation
Below is a break out of the net1 assets of our operating businesses. This table
includes everything except the investments at BOAM, which we break out separately.
($ in millions)
2022
2021
2020
2019
2018
2017
2016
2015
Cash2
$52.5
$152.4
$69.5
$84.5
$94.0
$86.2
$24.7
$13.2
Billboards3
176.5
165.9
139.2
147.3
167.5
Insurance4
32.9
Broadband3
121.4
36.1
51.3
34.0
43.5
29.5
27.5
-
-
31.6
19.6
-
21.3
15.4
-
9.7
-
-
Total
$383.3
$405.7
$286.2
$261.3
$289.0
$137.4
$61.4
$22.9
In terms of debt obligations, there are still none at the parent company and a
small amount at our billboard business, which is non-recourse to Boston Omaha. We
keep the majority of our businesses’ excess cash at headquarters, almost always in the
form of rolling short-term Treasury securities locked, loaded and ready to deploy, and in
the last year, deploy we did. 2022 saw substantial investment in broadband and
investments held in BOAM.
Billboard Operations at Link Media Holdings
From our first acquisition in 2015 to today, Link has grown to be the 6th largest
owner of billboard faces in the country. 2022 at Link witnessed organic revenue growth
of approximately 6.7% and we expanded to 7,600 advertising faces, resulting in record
revenue and profitability under the steady management of Scott LaFoy and his team.
Link continues to chug along, and below we provide our annual chart of its
progress.
($ in millions)
2022
2021
2020
2019
2018
2017
2016
2015
Revenue
$39.2
$31.5
$28.3
$28.4
$14.1
$5.3
$3.2
$0.7
Land Cost %5
19.7% 20.5% 21.7% 21.9% 21.3% 26.7% 17.3% 16.1%
1 Assets (excl. cash balances mentioned below in note 2) less liabilities.
2 Includes short-term U.S. Treasury securities but excludes cash balances held within UCS, our wholly-owned underwriting
business, and at Yellowstone, a SPAC sponsored by a subsidiary of Boston Omaha.
3 Excludes cash balances held within billboard and broadband operations as they are captured in “Cash” as shown above.
4 Includes cash balances held within UCS, our wholly-owned underwriting business.
5 Land lease expense on billboards where we do not own the land as a percentage of revenue.
4
Overhead %6
6.6%
8.5%
9.3%
9.6% 14.9% 16.7% 17.4% 15.1%
Net Working Capital7
$1.0
$1.2
$3.2
$2.8
$3.1
$0.8
$0.6
$0.2
Tangible PP&E, Net
$49.4
$45.4
$35.1
$36.7
$41.6
$9.1
$5.6
$4.2
In 2022 Link continued investing to drive down land costs and acquired a few
attractive tuck-in billboard assets adjacent to its existing markets. Last year Link closed
four acquisitions totaling around $17m in capital invested for our additional face
inventory. While we have witnessed several buy, lever, and flip billboard operators, Link
is proud that when billboards come on board, they have found a permanent home.
Link is generating an over 30% cash flow return on tangible capital, and given its
continued organic operational and adjacent asset base growth, coupled with
permanently lower land costs, we believe intrinsic value grew in 2022.
Insurance Operations at General Indemnity Group
General Indemnity Group (GIG) is our insurance subsidiary that writes one line of
business, surety bonds, coast to coast across the country. We were attracted to surety
insurance due to its generally low loss ratios and opportunity to take market share
through lowering production costs as a percentage of premium.
Here is GIG’s track record of total surety produced each year (Gross Written
Premium) and the amount that is produced entirely by our own companies (Controlled
Premium).
($ in millions)
Gross Written Premium
Controlled Premium
2022
$13.8
$7.5
2021
2020
$9.3
$5.5
$8.3
$4.3
2019
$14.6
$4.9
2018
2017
$7.3
$2.8
$2.3
$1.5
We focus on controlled premium because that’s the business where we have
visibility on total costs, from start to finish.
In 2022, controlled premium grew 36%.
6 Overhead is Link Media expenses related to corporate employees, office and software as a percentage of revenue.
7 Adjusted for current portion of lease liabilities related to ASC 842 implementation and assumes a certain maximum level of cash in
business for operational purposes.
5
At the same time, we wrote to a combined ratio of 97.2%8.
2022
2021
2020
2019
2018
2017
Expense Ratio9
82.8%
88.6%
67.2%
74.2%
102.4%
89.1%
Loss Ratio
14.4%
11.2%
24.9%
16.3%
11.8%
0.7%
It has taken seven years, six acquisitions and the persistent daily effort of Dave
Herman and his team to finally get GIG airborne. There is still a lot to do and all manner
of execution risks, market risks, and increasing competition lay before us, but we now
have the platform built that we believe can continue to execute on scaling our profitable
insurance business at a much lower expense ratio. For that reason, we can confidently
report we believe intrinsic value grew at our insurance subsidiary last year and possibly
in a big way.
Broadband Operations at Boston Omaha Broadband
The marketing department (i.e. Adam and Alex) at Boston Omaha had to put its
stamp on something this year, so they got to work rebranding our broadband
operations, changing the name from Fiber is Fast (“FIF”) to Boston Omaha Broadband
(“BOB”).
Rest assured, no one will be purchasing BOB internet directly, but rather through
one of our four majority-owned broadband businesses: Utah Broadband, AireBeam,
Fiber Fast Homes (“FFH”), and InfoWest.
BOB ended the year with approximately 40,000 high speed data subscribers,
nearly 5,000 of whom enjoy fiber to the home. Additionally, our fiber passes another
~10,000 homes we hope to turn into subscribers as well. There are over 290 BOB
employees working to build “last mile” fiber internet connections to homes throughout 13
states and our growth is accelerating.
Though they each retain their own management teams, brands, and operational
autonomy in their markets, internally BOB companies increasingly work as a cohesive
enterprise, benefitting from shared resources, procurement, and planning, increasing
build opportunities and critically, capital. Capital allocation remains the job of your
co-CEOs who continue to review each project presented in detail to ensure it meets our
risk and return hurdles.
8 Combined ratio is the sum of the expense ratio and loss ratio.
9 Expense ratio includes acquisition and non-acquisition expenses.
6
As BOB scales, insight from local markets as to competition, build costs, and
growth opportunities provides critical market intelligence and informs our plans. There
are some unique attributes to each of our BOB businesses, whether building in rural
geographies to working with developers and homebuilders, that we believe provide our
businesses advantages and opportunities over the competition.
Below is a BOB level report on our progress to date since entering the
broadband business in 2020.
($ in millions)
Revenue
Net Income (Loss)
EBITDA10
Subscribers
Fiber Subscribers
2022
$28.6
$(2.7)
$4.4
39.6k
4.9k
2021
$15.2
$0.0
$3.2
18.2k
1.8k
2020
$3.8
$0.3
$1.0
17.7k
n/a
Here EBITDA is used as a rough figure for cash flow. Your Co-CEO’s would add
back to the above EBITDA the investments we are making in our FFH segment that are
presently being expensed, because those dollars produce mostly contracted fiber
subscribers with high certainty yet produce no revenue or cash flow at present. This
amounted to $3.6m in 2022. We would then also add back some excess expenses that
we would not incur without our plans for substantial growth but then subtract an
estimate of maintenance capital expenditure needed to maintain, or even slightly grow,
the customer base to arrive at pre-tax free cash flow. In addition, similarly to our
billboard business, depreciation and amortization are generally higher than the true
maintenance capital expenditures to maintain the broadband business at a steady state.
However, using EBITDA here grossly understates the capital expenditures made
to grow the network, as we invested over $25m in 2022 not counting the acquisition
costs for the individual businesses themselves. We anticipate this investment to
increase significantly in 2023. A benefit of our Boston Omaha structure is that we can
generally deploy cash from headquarters as well as cash flow from other operating
subsidiaries, efficiently, to wherever we believe to be the highest return.
10 EBITDA is defined as net income before income tax expense (benefit), noncontrolling interest in subsidiary income (loss), interest
expense (income), depreciation, amortization, accretion and gain or loss on disposition of assets.
7
The goal over time is to increase the number of fiber high speed data
subscribers, and there is a reason those are more valuable in our opinion than other
types of subscribers. This is why we added fiber subscribers to the chart above this
year and reported fiber passings as that is what we are focused on building.
One additional, but very important, asset missing is our backlog of contracted
fiber subscribers. For a host of competitive reasons, we will keep those numbers
internal for now. The master services agreements we negotiate with homebuilders and
developers generally provide us a right of first refusal to build fiber to the home in entire
neighborhoods to be developed, some of which are quite large phased developments.
These neighborhoods are located in numerous states across the country and we
believe that to be an extremely valuable asset not represented on our balance sheet.
The three rural fixed wireless broadband businesses that BOB acquired outright
or acquired a majority stake in were actively converting their fixed wireless customer
footprint to fiber to the home. For those unfamiliar with broadband internet, there are
good reasons why these operators keyed in on this opportunity and decided to start it
with their own capital, and they are happy to have us as a partner to grow their fiber
businesses.
There are a number of ways to get the internet to and from your house. Fixed
wireless uses radios and antennas to send and receive data through the air,
broadcasting radio waves from towers to devices on a home that can deliver internet,
usually through Wi-Fi routers in the house.
Fixed wireless has advantages when it comes to speed and cost to stand up a
market of high speed data subscribers, but it also has disadvantages for the long-term,
in higher maintenance costs and limited ability to increase bandwidth to meet users
demand.
Cable and DSL (copper) are still widely used, and like fixed wireless, they use a
form of radio wave to send data from one point to another, only over metal instead of
through the air. With lots of equipment and routine maintenance and upgrades, cable
and copper can get faster over time, but despite what purveyors of this technology tell
you, physics limits its abilities relative to fiber to the home.
Fiber to the home uses light instead of radio waves and therefore carries data at
much higher frequencies than cable, providing it with more than tens of thousands of
times more bandwidth. Just as important in our view, a fiber network enjoys far less
relative maintenance capital expenditures over the long-term. This means that as
consumer demand for data grows, and industry participants report it is growing over
30% per year, fiber to the home providers can meet that demand and provide their
customers more value for their money.
8
BOB has the staff, equipment, markets and partnerships capable of deploying
multiples of the capital available at present at Boston Omaha into new fiber builds. Our
management is working to build, sell, improve and scale our operation. Thankfully,
there are a number of prospective options available from which we may choose how to
pursue this large opportunity.
Overall we believe our broadband business increased materially in intrinsic value
in 2022. Our logic is simple;
● We ramped up our investment in assets such as fiber and the teams to lay
it. We believe this will lead to even more fiber customers, faster, and at a
good cost basis.
● Our backlog of contracted fiber customers grew substantially and shows
no signs of slowing down.
● And, we gained new fiber customers and additional passings during the
year, at what we consider attractive costs relative to the cash these high
speed data customers will produce over time.
With all of these inputs, and in our humble opinion, the intrinsic value of BOB is
growing above our expectations.
9
Investment Operations at Boston Omaha Asset Management
Boston Omaha Asset Management (“BOAM”) continued laying the groundwork
for what we believe will continue to be a powerful return generator for Boston Omaha for
years to come.
24th Street was BOAM’s first vehicle for investing in a fund structure alongside
outside investors. Fund One: Boston Omaha Build for Rent was the second. Both offer
three potential earnings streams for Boston Omaha: first, the capital investment Boston
Omaha makes in the fund; second, the management fee on capital partnered with ours;
and third, the opportunity to earn various amounts of incentive compensation for certain
performance.
The asset management business goes back to the roots of your Co-Chairmen,
who both appreciate the differences between capital raising in private versus public
markets.
It takes time to develop the relationships needed to grow an asset
management business. We believe it is time well spent, as relationships developed at
the early stages can become enduring partnerships over the years if the performance is
acceptable.
In the last year we have made several important additions to the BOAM team
which we consider to be necessary investments in this business to scale over time.
Relative to billboards, broadband and insurance, these are investments in personnel
and do not come with heavy up front capital expenditures in property, plant, equipment,
or regulatory capital. Though modest compared to the dollars spent in our other
operations, these investments are necessary for the foundation of an asset
management business.
The most significant addition to the BOAM team was sourced in-house. We
successfully brought on board Brendan Keating as Co-Managing Partner alongside your
two Co-CEO’s who will share the same title with Brendan at BOAM. Shareholders will
recognize Brendan as founder and now Chairman of Logic Commercial Real Estate,
Co-Manager of 24th Street Asset Management, and a board member of Boston Omaha.
Brendan’s role in Boston Omaha has evolved alongside the company in tandem
with our increasing opportunity set. We could not be more pleased than to be able to
benefit from his perspective, experience and energy.
Let us address the obvious challenge with three Co-Managing Partners, namely,
how will 6 adults and 11 kids all vacation together at Disney World? We agree that it will
be difficult, for example, 17 people will nearly fill up an entire train on Toy Story Land
Slinky Dog Roller Coaster. But we pride ourselves on finding a way through
complicated scenarios and this is no different.
10
Before discussing the fund for which partnership capital is being raised today,
let’s review BOAM’s current investments.
GAAP asset values as of December 31, 2022:
($ in millions)
Sky Harbour Group
Boston Omaha Build for Rent
CB&T Holding Corporation
24th Street Asset Management
Logic Commercial Real Estate
Breezeway
Total BOAM Assets
2022
$108.4
$21.8
$19.1
$6.7
$0.5
$0.3
$156.8
Again, with this letter and going forward, we generally won’t be providing specific
commentary on the passive minority holdings in BOAM unless there is something new
or of note to report material to Boston Omaha shareholders.
As we mentioned at the start of the letter, investments we aggregate under
BOAM have produced profit to BOC in an amount that is more than twice the cash flow
of all of our operating businesses to date combined; however, we have little control on
the timing of any future realization events and returns in the investment portfolio are
more unpredictable.
With that said, we believe that the overall intrinsic value of the investments listed
above is higher than our current carrying value. Now we will discuss in greater detail
the progress of our funds partnered with outside capital.
24th Street Asset Management
24th Street Asset Management raised its first fund in 2020 and today manages
two separate funds and a few joint ventures. At the time of 24th Street’s launch, Boston
Omaha owned just under half of the Management Company and made investments into
its funds.
11
Below is a table listing Boston Omaha’s investment in these funds, total assets,
and performance to date.
($ in millions)
24th Street Fund I
24th Street Fund II
Joint Venture Partners
Total Assets Under Management
BOAM Invested
Capital
Total Fund
Assets11
Fund IRR (net)12
$3.0
$3.0
$34.5
$48.5
$39.6
$122.6
~29%
~32%
A recent important event is Boston Omaha’s acquisition of the other half of the
24th Street Management Company, which was announced in early May. As a result,
BOAM has now consolidated 100% ownership of 24th Street Asset Management.
That piece of the Management Company was mostly owned by Brendan
personally. After he came on board as co-managing partner, we ran a process whereby
Boston Omaha and the outside directors of our Audit Committee carefully reviewed and
approved the purchase based on year-end appraisals of the properties in both funds,
with a holdback which is contingent on ultimate realized value down the road.
BOAM’s upside is in additional carried interest we can earn on these funds,
future commercial real estate funds housed in BOAM, management fee income, and
Brendan Keating dedicated to BOAM for all of eternity (we have high commitment
expectations and no mandatory retirement age at Boston Omaha).
If those funds turn out to perform better than expected, Brendan has the
opportunity to earn slightly more for the interest in the management company he sold.
And if the ultimate realized gains are less than we underwrote, we have some margin of
safety in the price paid.
11 As of December 31, 2022.
12 Past performance is not indicative of future results. Returns are net of expenses, asset management fees, and carried interest and
are audited through 2021. The 2022 audit is still in process. Performance reflects the return since inception and is based on the
actual management fees and expenses paid by fund investors as a whole. Performance for individual investors will vary (in some
cases materially) from the performance stated herein as a result of the management fees or other fees paid or not paid by certain
investors; the timing of their investment; their individual participation in investments and/or carry rates.
12
The bigger point, in our opinion, and consistent with our framework for running
the business, is we are always looking to align incentives whenever possible.
We have been in business with Brendan Keating since the day present
management took over as a minority partner with him in Logic Commercial Real Estate
in 2015. Adam has been a partner with Brendan in other ventures for over a decade.
That evolved into being a (nearly) 50/50 partner with him at 24th Street Asset
Management. Now he is a full-time partner at BOAM and we could not be more
pleased to have him all the way on board.
For more evidence of Brendan’s value, below is another historical track record of
Brendan and Adam’s in commercial real estate investing, net of fees13.
Closed Funds14:
The Aligned Group Fund I (2013-2019) = 20% per annum
The Aligned Group Fund II (2014-2019) = 26% per annum
When analyzing performance, we believe it’s important to highlight the risk taken
to achieve returns. One variable in commercial real estate investing that reported
returns often understate is the risk of using too much leverage.
The average debt used to achieve the above returns in “Closed Funds” equaled
37% of the capital stack, while the average debt on the current 24th Street Funds as of
12/31/22 was 30%15, both of which are levels well below market for commercial real
estate asset managers.
Of course, past performance is no guarantee of future results and getting
everyone sitting on the same side of the table can take time, but it's time well spent and
we are excited to see 24th Street continue to seek good returns for BOAM and its
partners.
13 Past performance is not indicative of future results. Returns are net of expenses, asset management fees, and carried interest.
The returns of The Aligned Group Fund I and The Aligned Group Fund II were achieved by another entity for which Adam and
Brendan were managing partners (i.e., these returns were not achieved by 24th Street Asset Management). However, the funds
currently managed by 24th Street Asset Management are similar to The Aligned Group Fund I and The Aligned Group Fund II in that
they invest primarily in commercial real estate assets.
14 Audited returns.
15 Audited through 2021. The 2022 audit is still in process, actual figures may differ from those reported.
13
Look out for a name change, something really really creative, like Boston Omaha
Commercial Real Estate.
Fund One : Boston Omaha Build for Rent
Fund One: Boston Omaha Build for Rent, (“BOBFR”) was started in 2021 as the
first fund seeded by Boston Omaha capital, with outside investors, managed 100% by
BOAM16.
As of March 31, 2023, BOBFR had approximately $26m in existing assets with
around $3m of additional callable committed capital. Of the total assets, roughly $15m
is in land and the rest in cash or committed capital. The fund is small to maximize value
for our partners. Although we had our initial closing at year end, it remains open for
subsequent closings and may get slightly larger.
One of our goals is to use the fund to seed joint ventures to purchase a
significant amount of housing units and also maximize the value of our existing assets.
We can then share some of our economics as the General Partner of joint ventures as
an additional cash stream for Limited Partners in our seed fund.
With the material rise in interest rates over the past year, we have seen more
inventory from public and private home builders become available for purchase at
increasingly attractive prices. We are currently doing our diligence underwriting over
9,400 homes from various home builders, comprising a variety of potential structures
from joint ventures to outright purchases. While there remains a spread between the
prices we are willing to pay for finished product and the asking prices of the sellers, that
spread is continuing to narrow and could become more attractive in an economic
downturn while housing demand remains high.
Being patient and keeping all options open has served BOBFR well as the
market has been forced to adapt to a rapidly changing interest rate environment and
general economic conditions, which dramatically shifted since the beginning of 2022.
16 Boston Omaha Asset Management is the business/trade name for certain asset managers that are owned and controlled by
Boston Omaha Asset Management, LLC, a wholly owned subsidiary of Boston Omaha Corporation. These managers currently
include 24th Street Asset Management, LLC ("24th Street") and BOAM FUND ONE: IM LLC. BOAM FUND ONE: IM LLC manages
Fund One: Boston Omaha Build for Rent (“BOBFR”). The information contained herein is not an offer to sell, or a solicitation of an
offer to purchase BOBFR. Such an offer will be made only by an Offering Memorandum, a copy of which is available to qualifying
potential investors upon request.
14
As for our current land holdings, the average of our required annual two
appraisals came in at ~19% above our land costs at the end of 2022. However, just
because they appraised higher, we do not mark our book value up to appraised value
on each asset.
We have also seen a softening in construction pricing which is helpful as our plan
is to continue to advance entitlements on all land we own to be permit ready, and
evaluate the market rents, construction costs, and debt markets when the asset is ready
for development. As we invest capital into our land, we are adding value as it becomes
quicker to develop and allows the Fund better optionality. It is difficult to project what
the market will look like when the parcels are ready; however, we like the location of our
assets and our cost basis.
In the last year, the team at BOAM has grown as we focus on building the funds
in which we invest capital alongside outside investors. Though starting an asset
management business is not expensive, it is complicated and well worth the effort. Both
of your co-CEOs started and ran similar businesses for decades, and for shareholders
familiar with Boston Omaha’s origin story, it was through those investment partnerships
that Boston Omaha got its start.
We believe BOAM offers a path to develop investment opportunities in which the
company has specific expertise and where those opportunities exceed our capital. With
investment from Boston Omaha alongside outside partners with similar investment
interests, BOAM is excited to continue to grow its commercial real estate investments
and build for rent businesses as the market increasingly presents options to deploy
capital into these areas with the potential to earn acceptable returns.
15
A Review of Our Framework for The Road Ahead
Unfortunately, if you are looking for quarterly or annual earnings forecasts you’ll
have to ask ChatGPT, as we don’t provide anything of the sort. But rather than attempt
predictions, what we will provide is a consistent framework for how we manage the
company and make decisions. This framework can be summed up in five simple bullet
points.
● Always work to align incentives
● Decentralize whenever possible
● Think long-term
● Focus on cash flow
● Act like a partner
Annual Meeting and Closing Remarks
Our annual meetings recently have been August or later, a trend we hope to buck
this year with our eighth annual meeting on May 8th in Omaha at the Durham Museum.
This year’s meeting is also unique as it's on a Monday rather than Saturday. This
is entirely due to scheduling difficulties and wanting to move the meeting to earlier in the
year. With more businesses, more employees, more kids, and more travel required,
finding a single date to get everyone together is just one more challenge.
But one thing will never change, and that is how excited we are to meet
shareholders at the Durham where we will discuss all things Boston Omaha for as long
as there are questions.
All aboard at the Durham…choo choo!
Adam K. Peterson
Co-Chairman of the Board
Omaha, NE
Alex B. Rozek
Co-Chairman of the Board
Boston, MA
16
Safe Harbor Statement:
This Annual Letter contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and
21E of the Securities Exchange Act of 1934 regarding the future financial performance,
business prospects and growth of Boston Omaha Corporation. These statements are
only predictions based on current assumptions and expectations. Any statements that
are not statements of historical fact (including statements containing the words “will,”
“projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,”
“continues” and similar expressions) should be considered forward-looking statements.
Actual events or results may differ materially from those in the forward-looking
statements set forth herein. Among the important factors that could cause actual events
to differ materially from those in the forward-looking statements are the global economic
impact of the COVID-19 coronavirus pandemic, the conditions affecting the markets in
which Boston Omaha and our subsidiaries and companies in which we have invested
operate, including the fluctuations in spending by customers in the industries which
Boston Omaha, our subsidiaries and the companies in which we have invested,
operate, fluctuations in sales results, the ability of Boston Omaha to successfully
integrate operations and employees from recent acquisitions, Boston Omaha’s ability to
realize anticipated synergies and cost savings from acquisitions, competition from larger
or more established companies in the markets we, our subsidiaries and the companies
in which we have invested provide services, our ability to successfully grow the
businesses we have acquired, our ability to successfully grow our business, changes in
government regulations, potential fluctuations in our quarterly results, the impact in our
quarterly financial results due to changes in the stock prices of publicly-held securities
we own and the financial performance of certain companies in which we have invested
where we report their financial results in our statement of operations, acquisition and
strategy risks, volatility of our stock price, financial risk management, and the other
factors described in “Risk Factors” Part 1, Item 1A in our Annual Report on Form 10-K
for the year ended December 31, 2022 and in future SEC filings. Boston Omaha is
under no obligation to, and expressly disclaims any obligation to, update or alter these
forward-looking statements, whether as a result of new information, future events or
otherwise after the date of this report.
Disclosure
Boston Omaha Asset Management (“BOAM”) is the business/trade name for certain
asset managers that are owned and controlled by Boston Omaha Asset Management,
LLC, a wholly owned subsidiary of Boston Omaha Corporation. These managers
currently include 24th Street Asset Management, LLC ("24th Street") and BOAM FUND
ONE: IM LLC. BOAM FUND ONE: IM LLC manages Fund One: Boston Omaha Build
for Rent (“BOBFR”). The information contained herein is not an offer to sell, or a
solicitation of an offer to purchase any fund managed by these entities. Such an offer
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will be made only by an Offering Memorandum, a copy of which is available to qualifying
potential investors upon request.
The opinions expressed herein are based on the views and research of BOAM as of the
date of this letter and are subject to change. BOAM reserves the right to modify its
current investment strategies and techniques based on changing market dynamics. It
should not be assumed that any of the transactions or real estate assets discussed will
prove to be profitable, or that the decisions we make in the future will be profitable or
will equal the investment performance of the funds discussed herein. All fund returns,
unless otherwise notated, are net of expenses, asset management fees, and carried
interest. Inherent in any investment is the potential for a total loss of the investment.
There can be no assurance that any fund investor will receive return of their capital.
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