2024 Annual Document Annual Letter

B O S T O N

O MA H A

CORPORATION

2024 Annual Letter

To the Shareholders of Boston Omaha Corporation:

Calendar 2024 was a good year for our three business segments and the management teams at each deserve the credit.

• •Our Link Media ("Link") billboard business grew revenue organically by approximately 4%, net income by 21%, adjusted EBITDA1by 10% and free cash flow by double digits which excludes acquisitions or other growth investments.

  

• •Boston Omaha Broadband ("BOB") fiber passings grew by approximately 50% and fiber customers by approximately 63% but, more importantly, at a cost basis well below our view of the intrinsic value of each. Revenues grew by approximately 11%, net income declined by 6% and adjusted EBITDA grew by 99% - though it's worth noting that the adjusted EBITDA growth stems from a small base so I would not get too excited…yet. In addition, BOB has developed a backlog of advantaged fiber builds, providing a runway for additional incremental capital deployment at what we estimate as durable, attractive rates of return.

• •General Indemnity Group ("GIG") grew gross written premium through United Casualty and Surety Insurance Company ("UCS") by approximately 40%, earned premium by 42%, consolidated net income by 32% and adjusted EBITDA by 54%; all while maintaining an attractive loss ratio. In December of 2024, Boston Omaha Corporation ("BOC" or "Boston Omaha") added significant capital to our insurance subsidiary's surplus to support potential future growth, more on this in a moment.

Within our other business interests and minority investments the news in 2024 is also mostly good.

• •Sky Harbour Group Corporation ("SKYH" or "Sky Harbour") again added several new land leases to support new hangar locations, and raised important equity capital to continue their impressive growth

1In this letter, we use adjusted EBITDA as a non-GAAP measure. Our reasons for why we believe this non-GAAP measure is helpful to investors and the applicable adjustments to GAAP are spelled out in greater detail under "Non-GAAP Measures" starting on page 16. Adjusted EBITDA is defined as net income (loss) before income tax expense (benefit), noncontrolling interest in subsidiary income (loss), interest expense, interest and dividend income, depreciation, amortization, accretion, gain or loss on disposition of assets, and other investment income (loss).

in what we believe is a high retudurable asset. In our opinion, the newly planned locations are of higher economic value than many of the past locations, which is a tribute to management.

• •Our investments and general partner ("GP") ownership in real estate funds at Boston Omaha Asset Management ("BOAM") returned to us a good amount of capital in 2024 and we expect additional material sums over the next year or two. Our returns on capital in the aggregate have been in our view attractive to date and future returns appear similar as I write this letter, but future proceeds are of course also subject to changes in real estate pricing. More detail on our proceeds to date later in this letter.

• •Last year, we reported that Crescent Bank & Trust ("CB&T") had more mixed news due to expected losses on certain vintages of auto loans. As we stand today, those losses have come in better than was originally expected. The bank is on a much-improved path in 2025 and evolving with the competitive environment. Next year or even by our planned AGM, I should have much more to report. Remember, we in no way control CB&T as we are a passive, but important, minority shareholder.

Capital Allocation

When looking back at 2024, three areas stand out in terms of capital allocation. These are in no particular order:

In December, Boston Omaha moved $19.1mm of capital to our UCS insurance subsidiary in the form of Sky Harbour common stock, nearly doubling UCS' surplus and our ability to grow insurance premiums. We remain excited about SKYH's business and its management. Whether the stock is held at the BOC level or within our insurance subsidiary is of little significance to us from an investment standpoint. With the shares sitting at UCS, we can eaa potential future investment retuon SKYH just the same, while also using this capital contribution of these shares to allow UCS to increase its ability to write materially more premium. The challenge will be strategically growing insurance premiums written while maintaining a low loss ratio.

In 2024, BOB went through some major changes, including but not limited to: new leadership, continued operational integration of our four broadband subsidiaries, and capital allocation priorities. The team at BOB has done a great job over several years building a backlog of future fiber projects, both general overbuilding in less competitive areas but also within what we would call advantaged builds (HOA, manufactured home community, and government program contracts to name the largest categories). Our focus and capital within broadband, including a new term loan facility for certain BOB subsidiaries (which is guaranteed by BOB but not Boston Omaha), will be more focused pursuing these advantaged builds until we exhaust our opportunity set within these types of projects.

Lastly, we authorized a share repurchase program, which went into effect last August and allows us to repurchase up to $20 million shares of our Class A common stock. Our approach will be opportunistic and disciplined: we will only buy back shares when we believe they trade significantly below our conservative estimate of intrinsic value, and when doing so makes more economic sense than deploying capital into our existing businesses or potential acquisitions. Repurchases are also dependent on our excess cash availability at any given time.

Shareholders should expect any repurchases to be lumpy in their timing because of the above factors, but also subject to volume and other restrictions on such a program imposed under federal securities laws and our limitations on repurchasing shares during blackout periods. To date, we have purchased approximately 7.5% of the amounts authorized to be repurchased.

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Since inception to year-end 2024, management and our board of directors believe the intrinsic value of Boston Omaha has grown at a reasonable rate of retuon a per share basis, the primary metric we focus on. Scaling our three primary businesses took time and capital, which led to lower immediate returns, but held the prospect for superior returns in the future as incremental capital is invested and each business achieves economy of scale. Simultaneously to building scale in our controlled businesses, we were fortunate to be able to invest excess capital at much higher returns opportunistically such as with Dream Finders Homes, Sky Harbour (which to date we have sold only a small percentage of our ownership), various common stocks, and commercial real estate.

Looking forward, under present conditions, I believe the returns we can now obtain internally via incremental capital within our controlled businessesprovide attractive optionality that we believe can often beat, on a risk/retubasis, one-off investment ideas. Our board and I agree that having this internal option on a regular basis can prove valuable over the long term without some of the risks inherent in investments in companies which we do not control.

When it comes to the performance of our stock price since inception, that is another matter and the news to date has not been great. However, this is not abnormal in our experience. Stocks at times sell for very high prices relative to intrinsic value and at other times large discounts, neither of which we can control. If we are fortunate enough to have excess cash on hand during periods of negativity, we have a wonderful additional option for capital in repurchasing our shares from willing sellers at an attractive price. Over time, that option could add significant value to the long-term owner as we expect our aggregate earnings power to continue to grow.

Operating Businesses at Boston Omaha Corporation

Below is a breakout of thenet2assets of our operating businesses at the end of each fiscal year. This table includes everything except the investments at BOAM, which we break out separately.

• 2Assets (excl. cash balances mentioned below in note 2) less liabilities.

• 3Includes short-term U.S. Treasury securities but excludes cash balances held within UCS, our wholly owned underwriting business, and at Yellowstone (during 2020 and 2021), a SPAC previously sponsored by a subsidiary of Boston Omaha.

• 4Excludes cash balances held within billboard and broadband operations as they are captured in "Cash" as shown above.

• 5Includes cash balances held within UCS, our wholly owned underwriting business.

In terms of debt obligations, there are still none at the parent company and a modest amount (primarily term debt) at both our billboard business and broadband business, which is non-recourse to Boston Omaha.

Billboard Operations at Link Media Holdings

In 2024, Link grew revenue organically just over 4% and lowered land costs to 18.3% of revenue. The result was another year of record performance by Scott LaFoy and his team.

Below we provide our annual chart of Link's progress.

During the year, Link also converted 6 static faces to digital, purchased 3 easements, and built 5 new structures which added 12 faces within our markets. All three of these items we view as growth investments which will generate anywhere from good (in the case of easement purchases) to great (digital conversions and new builds) returns on invested capital.

On the acquisition front, we have been far less active over the past two years. One reason is simply fewer tuck-in opportunities have been for sale, which are the most accretive acquisitions we could make providing the highest

• 6Land lease expense on billboards where we do not own the land as a percentage of revenue.

• 7Overhead is Link Media expenses related to corporate employees, office and software as a percentage of revenue.

• 8Adjusted for current portion of lease liabilities related to ASC 842 implementation and assumes a certain maximum level of cash in business for operational purposes.

year one free cash flow yield. A second reason is the opportunity within our broadband business where we believe we can eaa higher retuon capital over a 5-year period through advantaged fiber builds. Over time, we will never be able to control when tuck-in acquisitions are available at reasonable prices. However, advantaged fiber builds sit squarely in front of us and the window for these builds is limited. Once fiber reaches a home or business, that location is no longer available to serve and predicting the number of new appealing deals we can secure over time can be challenging.

We continue to be big fans of the billboard business and especially our roadside asset base coupled with a great management team. Our days of adding to our billboard business via acquisition are not over.

Insurance Operations at General Indemnity Group

GIG is our insurance subsidiary that writes one line of business, surety bonds, coast to coast. We are attracted to surety insurance due to its generally low loss ratios, short loss exposure durations, and opportunity to grow market share through technology, automation, and providing agents and customers with a seamless way to book small transactional commercial bonds (which positions us to write the larger contract bonds and vice versa).

Here is GIG's operating performance for the past four years.

Calendar 2024 was a record year for GIG across all metrics. The team exceeded the $25mm mark for gross written premium and did so whilecontinuing to grow Operating Income and adjusted EBITDA. The credit for GIG's success goes entirely to our hard charging management team. Dave Herman and Bob Thomas have done an exceptional job scaling the business to profitability while making prudent decisions about the types of business we write.

Think of GIG as a three-legged stool - it required time to grow and stabilize, but has now reached scale:

UCS (carrier): Over the past four years, UCS written premium has grown from $9.3mm to $26.4mm, while averaging a loss ratio of 14.6%. In December of 2024, BOC contributed $19.1mm of capital via

SKYH common stock, which along with net income approximately doubled UCS' surplus to $40.7mm. This additional surplus may lift

UCS's T-Listing and financial strength rating, which in tushould help to fuel more growth at the company. The team continues to grow relationships and develop new sources of premium, and we look forward to seeing what they will achieve with the improved capital strength and continued momentum.

BOSS Bonds® (agency): In June of 2024, we consolidated the five GIG agencies into one entity, which we renamed BOSS Bonds Insurance

Agency ("BOSS Bonds"). BOSS Bonds has been drawing significant attention in the surety marketplace, growing its production by 23% in

2024. As a surety-only agency and with over 25+ product markets to place business for customers, BOSS Bonds has seen growing demand from insurance agents across the country to place their surety business.

With one agency to manage, the focus and momentum for growth has never been stronger.

SuretyBonds.Market (technology): Although not a standalone business, SuretyBonds.Market (SBM) has emerged as what we believe is one of the best technology portal platforms for booking surety bonds in the marketplace and has helped to facilitate growth throughout GIG.

Initially used by BOSS Bonds to help thousands of agents book surety, we expanded the capabilities at the end of 2024 to allow UCS to have its own commercial bond portal as well.

Broadband Operations at Boston Omaha Broadband

BOB is the parent company of four wholly owned broadband businesses: Utah Broadband ("UBB"), AireBeam ("AB"), InfoWest ("IW"), and Fiber Fast Homes ("FFH"). In 2024, we began providing shareholders with a financial supplemental that includes breaking out our broadband businesses into two segments: UBB/AB/IW and then FFH separately.

Management believes it is useful to break out our financials in this way because FFH is a start-up broadband business solely focused to date on laying fiber in newly constructed neighborhoods. FFH's fiber builds are completed with an HOA contract in place with the neighborhood or in a joint-venture structure with a developer. As a result, this segment consumes capital and incurs operating costs in a major way upfront during the build out phase, only showing the fruits of those investments over time as homes are constructed and customers move in.

Our other three broadband businesses were purchased with an existing customer base and already generating cash flow. All three pursue similar contracts as FFH within their geographies, however the bulk of their business is retaining and growing their broadband customer footprint while also pursuing growth opportunities to expand their fiber networks. Opportunities that we find most attractive are often through deals with existing manufactured home communities, developer joint ventures, government program awards to build in underserved areas, and/or building within adjacent communities that may have inferior broadband technology options to fiber.

Below is an update on progress at UBB/AB/IW:

Important to note, is the 19.4k fiber passings that are not yet customers. Although we would love for every passing to become a customer, it is unlikely in this segment of our broadband business. At the same time, we do expect a material amount of new customers in addition to the 12.4k that we currently have on our already built and paid for fiber, an important fact for shareholders to understand as current cash flows may not reflect eventual steady state cash flow on our investment.

Last year, I mentioned a mistake we may have made in our fixed wireless business where we invested capital to improve our network (less than $3mm) yet it was not clear to me that we would get an adequate return. The jury is still out on that and it may be several years before we have a definitive answer. In my opinion, our largest risk in this segment is not the new fiber being laid in advantaged builds, but instead a certain portion of our fixed wireless customers that reside in areas that could be open to government funded programs to switch their service. We fully intend to pursue these types of government programs within our geographies using both fiber and fixed wireless solutions but there is no guarantee we will be selected.

Below is an update on progress at FFH:

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Boston Omaha Corporation published this content on March 28, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on March 28, 2025 at 20:14 UTC .