LAMAR ADVERTISING CONEW

Previous wording

The following is a discussion of the consolidated financial condition and results of operations of the Company for the three months ended March 31, 2024 and 2023. This discussion should be read in conjunction with the condensed consolidated financial statements of the Company and the related notes thereto.

Current wording

The following is a discussion of the consolidated financial condition and results of operations of the Company for the three and six months ended June 30, 2024 and 2023. This discussion should be read in conjunction with the condensed consolidated financial statements of the Company and the related notes thereto.

Previous wording

During the three months ended March 31, 2024, the Company completed multiple acquisitions for a total cash purchase price of approximately $18.3 million. See Uses of Cash – Acquisitions for more information. The Company’s business requires expenditures for maintenance and capitalized costs associated with the construction of new billboard displays, the entrance into and renewal of logo sign and transit contracts, and the purchase of real estate and operating equipment. The following table presents a breakdown of capitalized expenditures for the three months ended March 31, 2024 and 2023:

Current wording

During the six months ended June 30, 2024, the Company completed multiple acquisitions for a total cash purchase price of approximately $28.2 million. See Uses of Cash – Acquisitions for more information. The Company’s business requires expenditures for maintenance and capitalized costs associated with the construction of new billboard displays, the entrance into and renewal of logo sign and transit contracts, and the purchase of real estate and operating equipment. The following table presents a breakdown of capitalized expenditures for the three and six months ended June 30, 2024 and 2023:

Previous wording

Equity in loss (earnings) of investee was $0.6 million and $(0.2) million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Equity in loss (earnings) of investee was a loss of $0.6 million and earnings of $0.6 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

As a result of the above factors, the Company recognized net income for the three months ended March 31, 2024 of $78.5 million, as compared to net income of $76.2 million for the same period in 2023.

Current wording

As a result of the above factors, the Company recognized net income for the three months ended June 30, 2024 of $137.6 million, as compared to net income of $130.9 million for the same period in 2023.

Previous wording

Adjusted EBITDA for the three months ended March 31, 2024 increased 7.1% to $211.9 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $18.7 million, offset by an increase in total general and administrative and corporate expenses of $4.8 million, excluding the impact of stock-based compensation expense.

Current wording

Adjusted EBITDA for the three months ended June 30, 2024 increased 6.9% to $271.6 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $13.2 million, as well as a decrease in total general and administrative and corporate expenses of $4.4 million, excluding the impact of stock-based compensation expense.

Previous wording

Total Liquidity. As of March 31, 2024 we had $634.8 million of total liquidity, which is comprised of $36.4 million in cash and cash equivalents and $598.4 million of availability under the revolving portion of Lamar Media’s senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months. We are currently in compliance with the maintenance covenant included in the senior credit facility and we would remain in compliance after giving effect to borrowing the full amount available to us under the revolving portion of the senior credit facility.

Current wording

Total Liquidity. As of June 30, 2024 we had $744.3 million of total liquidity, which is comprised of $77.9 million in cash and cash equivalents and $666.4 million of availability under the revolving portion of Lamar Media’s senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months. We are currently in compliance with the maintenance covenant included in the senior credit facility and we would remain in compliance after giving effect to borrowing the full amount available to us under the revolving portion of the senior credit facility.

Previous wording

As of March 31, 2024 and December 31, 2023, the Company had a working capital deficit of $616.5 million and $340.7 million, respectively. The increase in working capital deficit of $275.8 million is primarily due to an increase in current maturities of long term debt.

Current wording

As of June 30, 2024 and December 31, 2023, the Company had a working capital deficit of $623.8 million and $340.7 million, respectively. The increase in working capital deficit of $283.1 million is primarily due to an increase in current maturities of long term debt.

Previous wording

Cash Generated by Operations. For the three months ended March 31, 2024 and 2023, our cash provided by operating activities was $110.6 million and $108.7 million, respectively. The increase in cash provided by operating activities for the three months ended March 31, 2024 over the same period in 2023 primarily relates to an increase in revenue of $26.8 million, offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets, and depreciation and amortization) of $12.0 million and an increase in interest expense of $3.0 million. We expect to generate cash flows from operations during 2024 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. We believe we have sufficient liquidity available under our revolving credit facility to meet our operating cash needs for the next twelve months.

Current wording

Cash Generated by Operations. For the six months ended June 30, 2024 and 2023, our cash provided by operating activities was $366.9 million and $306.9 million, respectively. The increase in cash provided by operating activities for the six months ended June 30, 2024 over the same period in 2023 primarily relates to an increase in revenue of $50.9 million, offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets, and depreciation and amortization) of $19.0 million and an increase in interest expense of $3.7 million. We expect to generate cash flows from operations during 2024 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. We believe we have sufficient liquidity available under our revolving credit facility to meet our operating cash needs for the next twelve months.

Previous wording

As of March 31, 2024, there was $235.7 million in outstanding aggregate borrowings under the Accounts Receivable Securitization Program. Lamar Media had no additional availability under the Accounts Receivable Securitization Program as of March 31, 2024. The Accounts Receivable Securitization Program will mature on July 21, 2025.

Current wording

As of June 30, 2024, there was $250.0 million in outstanding aggregate borrowings under the Accounts Receivable Securitization Program. Lamar Media had no additional availability under the Accounts Receivable Securitization Program as of June 30, 2024. The Accounts Receivable Securitization Program will mature on July 21, 2025.

Previous wording

“At-the-Market” Offering Program. On June 21, 2021, the Company entered into an equity distribution agreement (the "2021 Sales Agreement"), with J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Truist Securities, Inc., SMBC Nikko Securities America, Inc. and Scotia Capital (USA) Inc. as our sales agents (each a "Sales Agent", and collectively, the "Sales Agents"), which replaced the prior Sales Agreement with substantially similar terms. Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals. Sales of the Class A common stock, if any, may be made in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A common stock under the 2021 Sales Agreement and may at any time suspend solicitations and offers under the 2021 Sales Agreement. The Company intends to use the net proceeds, if any, from the sale of the Class A common stock pursuant to the 2021 Sales Agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital, capital expenditures, acquisition of outdoor advertising assets and businesses and other related investments. The Company did not issue any shares under this program from its inception through March 31, 2024.

Current wording

“At-the-Market” Offering Program. On June 21, 2021, the Company entered into an equity distribution agreement, or At-the-Market Offering agreement, (the "2021 Sales Agreement"), with J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Truist Securities, Inc., SMBC Nikko Securities America, Inc. and Scotia Capital (USA) Inc. as our sales agents (each a "Sales Agent", and collectively, the "Sales Agents"), which replaced the prior Sales Agreement with substantially similar terms. Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals. Sales of the Class A common stock, if any, may be made in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A common stock under the 2021 Sales Agreement and may at any time suspend solicitations and offers under the 2021 Sales Agreement. The Company intends to use the net proceeds, if any, from the sale of the Class A common stock pursuant to the 2021 Sales Agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital, capital expenditures, acquisition of outdoor advertising assets and businesses and other related investments. The Company did not issue any shares under this program from its inception through June 30, 2024. The 2021 Sales Agreement expired by its terms on June 21, 2024.

Previous wording

Shelf Registration Statement. On June 21, 2021, the Company filed a new automatically effective shelf registration statement that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its Class A common stock. During the three months ended March 31, 2024 and the year ended December 31, 2023, the Company did not issue any shares under the shelf registration statement.

Current wording

Shelf Registration Statement. On June 21, 2021, the Company filed a new automatically effective shelf registration statement that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its Class A common stock. During the six months ended June 30, 2024 and the year ended December 31, 2023, the Company did not issue any shares under the shelf registration statement. The shelf registration statement expired on June 21, 2024.

Previous wording

The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on July 31, 2028, subject to certain conditions (see description of Amendment No. 4 below) (the “revolving credit facility”), (ii) a $600.0 million senior secured Term B loan facility (the “Term B loans”) which will mature on February 6, 2027, (iii) a $350.0 million senior secured Term A loan facility (the "Term A loans") which will mature on February 6, 2025, and (iv) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under“Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions including lender approval. Lamar Media borrowed all $600.0 million in Term B loans on February 6, 2020. The entire amount of the Term B loans will be payable at maturity.

Current wording

As of June 30, 2024, the senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consisted of (i) a $750.0 million senior secured revolving credit facility which will mature on July 31, 2028, subject to certain conditions (see description of Amendment No. 4 below) (the “revolving credit facility”), (ii) a $600.0 million senior secured Term B loan facility (the “Term B loans”) which will mature on February 6, 2027, (iii) a $350.0 million senior secured Term A loan facility (the "Term A loans") which were set to mature on February 6, 2025, and (iv) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under“Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions including lender approval. Lamar Media borrowed all $600.0 million in Term B loans on February 6, 2020. The entire amount of the Term B loans will be payable at maturity.

Previous wording

On July 29, 2022, Lamar Media entered into Amendment No. 2 ("Amendment No. 2") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto. Amendment No. 2 established the Term A loans as a new class of incremental term loans. The Term A loans will mature on February 6, 2025 and bear interest based on Term SOFR ("Term SOFR Term A loans") or the Adjusted Base Rate ("Base Rate Term A loans"), at Lamar Media's option. Term SOFR Term A loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% (or the Adjusted Term SOFR Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1). Base Rate Term A loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50% (or the Adjusted Base Rate plus 0.25% at any time the total debt ratio is less than or equal to 3.25 to 1). The covenants, events of default and other terms of the senior credit facility apply to the Term A loans. Lamar Media borrowed all $350.0 million in Term A loans on July 29, 2022. Proceeds from the Term A loans were used to repay outstanding balances on the revolving credit facility and a portion of the outstanding balance on our Accounts Receivable Securitization Program.

Current wording

On July 29, 2022, Lamar Media entered into Amendment No. 2 ("Amendment No. 2") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto. Amendment No. 2 established the Term A loans as a new class of incremental term loans. The Term A loans were set to mature on February 6, 2025 and bore interest based on Term SOFR ("Term SOFR Term A loans") or the Adjusted Base Rate ("Base Rate Term A loans"), at Lamar Media's option. Term SOFR Term A loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% (or the Adjusted Term SOFR Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1). Base Rate Term A loans bore interest at a rate per annum equal to the Adjusted Base Rate plus 0.50% (or the Adjusted Base Rate plus 0.25% at any time the total debt ratio is less than or equal to 3.25 to 1). The covenants, events of default and other terms of the senior credit facility apply to the Term A loans. Lamar Media borrowed all $350.0 million in Term A loans on July 29, 2022. Proceeds from the Term A loans were used to repay outstanding balances on the revolving credit facility and a portion of the outstanding balance on our Accounts Receivable Securitization Program. The Term A loans were susequently repaid in full on July 31, 2024.

Previous wording

As of March 31, 2024 the aggregate balance outstanding under the senior credit facility was $1.09 billion, consisting of $600.0 million in Term B loans aggregate principal balance, $350.0 million in Term A loans aggregate principal balance and $143.0 million outstanding borrowings under our revolving credit facility. Lamar Media had approximately $598.4 million of unused capacity under the revolving credit facility.

Current wording

As of June 30, 2024 the aggregate balance outstanding under the senior credit facility was $1.03 billion, consisting of $600.0 million in Term B loans aggregate principal balance, $350.0 million in Term A loans aggregate principal balance and $75.0 million outstanding borrowings under our revolving credit facility. Lamar Media had approximately $666.4 million of unused capacity under the revolving credit facility.

Previous wording

Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $29.5 million for the three months ended March 31, 2024. We anticipate our 2024 total capital expenditures will be approximately $125.0 million.

Current wording

Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $52.1 million for the six months ended June 30, 2024. We anticipate our 2024 total capital expenditures will be approximately $125.0 million.

Previous wording

Acquisitions. During the three months ended March 31, 2024, the Company completed acquisitions for an aggregate purchase price of approximately $18.3 million, which were financed using available cash on hand and borrowings on the senior credit facility.

Current wording

Acquisitions. During the six months ended June 30, 2024, the Company completed acquisitions for an aggregate purchase price of approximately $28.2 million, which were financed using available cash on hand and borrowings on the senior credit facility.

Previous wording

Dividends. On February 22, 2024, the Company's Board of Directors declared a quarterly cash dividend of $1.30 per share, paid on March 28, 2024 to its stockholders of record of its Class A common stock and Class B common stock on March 15, 2024. Subject to approval of the Company's Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2024 will be at least $5.20 per share of common stock, including the dividend paid on March 28, 2024.

Current wording

Dividends. On February 22, 2024, the Company's Board of Directors declared a quarterly cash dividend of $1.30 per share, paid on March 28, 2024 to its stockholders of record of its Class A common stock and Class B common stock on March 15, 2024. On May 16, 2024, the Company's Board of Directors declared a quarterly cash dividend of $1.30 per share, paid on June 28, 2024 to its stockholders of record of its Class A common stock and Class B common stock on June 17, 2024. Subject to approval of the Company's Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2024 will be at least $5.40 per share of common stock, including the dividends paid on March 28, 2024 and June 28, 2024.

Previous wording

Required Annual Distributions. As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). On February 22, 2024, the Company's Board of Directors declared a quarterly cash dividend of $1.30 per share, paid on March 28, 2024 to its stockholders of record of its Class A common stock and Class B common stock on March 15, 2024. Subject to approval of the Company's Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2024 will be at least $5.20 per share of common stock, including the dividend paid on March 28, 2024.

Current wording

Required Annual Distributions. As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). On February 22, 2024, the Company's Board of Directors declared a quarterly cash dividend of $1.30 per share, paid on March 28, 2024 to its stockholders of record of its Class A common stock and Class B common stock on March 15, 2024. On May 16, 2024, the Company's Board of Directors declared a quarterly cash dividend of $1.30 per share, paid on June 28, 2024 to its stockholders of record of its Class A common stock and Class B common stock on June 17, 2024. Subject to approval of the Company's Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2024 will be at least $5.40 per share of common stock, including the dividends paid on March 28, 2024 and June 28, 2024.

Previous wording

The Company's cash flows provided by operating activities increased $1.9 million from $108.7 million for the three months ended March 31, 2023 to $110.6 million for the three months ended March 31, 2024, primarily resulting from an increase in revenues of $26.8 million, offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets, and depreciation and amortization) of $12.0 million and an increase in interest expense of $3.0 million, as compared to the same period in 2023.

Current wording

The Company's cash flows provided by operating activities increased $60.0 million from $306.9 million for the six months ended June 30, 2023 to $366.9 million for the six months ended June 30, 2024, primarily resulting from an increase in revenues of $50.9 million, offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets, and depreciation and amortization) of $19.0 million and an increase in interest expense of $3.7 million, as compared to the same period in 2023.

Previous wording

Cash flows used in investing activities decreased $7.6 million from $52.7 million for the three months ended March 31, 2023 to $45.0 million for the three months ended March 31, 2024 primarily due to a net decrease in the amount of assets acquired through acquisitions, investments and capital expenditures of $8.2 million, as compared to the same period in 2023.

Current wording

Cash flows used in investing activities decreased $53.3 million from $130.0 million for the six months ended June 30, 2023 to $76.7 million for the six months ended June 30, 2024 primarily due to a net decrease in the amount of assets acquired through acquisitions, investments and capital expenditures of $54.8 million, as compared to the same period in 2023.

Previous wording

The Company's cash flows used in financing activities were $73.6 million for the three months ended March 31, 2024 as compared to $75.2 million for the three months ended March 31, 2023. The cash flows used in financing activities of $73.6 million for the three months ended March 31, 2024 is primarily due to cash paid for dividends and distributions offset by net borrowings on the senior credit facility.

Current wording

The Company's cash flows used in financing activities were $256.7 million for the six months ended June 30, 2024 as compared to $181.8 million for the six months ended June 30, 2023. The cash flows used in financing activities of $256.7 million for the six months ended June 30, 2024 is primarily due to cash paid for dividends and distributions offset by net borrowings on the senior credit facility.

Previous wording

The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the three months ended March 31, 2024 and 2023. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes thereto.

Current wording

The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the three and six months ended June 30, 2024 and 2023. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes thereto.

Previous wording

Equity in loss (earnings) of investee was $0.6 million and $(0.2) million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Equity in loss (earnings) of investee was a loss of $0.6 million and earnings of $0.6 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

For the three months ended March 31, 2024, Lamar Media recognized a gain on disposition of assets of $2.2 million, primarily resulting from transactions related to the sale of billboard locations and displays.

Current wording

For the three months ended June 30, 2024, Lamar Media recognized a gain on disposition of assets of $0.8 million, primarily resulting from transactions related to the sale of billboard locations and displays.

Previous wording

As a result of the above factors, Lamar Media recognized net income for the three months ended March 31, 2024 of $78.6 million, as compared to net income of $76.3 million for the same period in 2023.

Current wording

As a result of the above factors, Lamar Media recognized net income for the three months ended June 30, 2024 of $137.8 million, as compared to net income of $131.0 million for the same period in 2023.

Previous wording

Adjusted EBITDA for the three months ended March 31, 2024 increased 7.1% to $212.1 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $19.5 million, offset by an increase in total general and administrative and corporate expenses of $4.8 million, excluding the impact of stock-based compensation expense.

Current wording

Adjusted EBITDA for the three months ended June 30, 2024 increased 7.0% to $271.7 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $13.2 million, as well as a decrease in total general and administrative and corporate expenses of $4.5 million, excluding the impact of stock-based compensation expense.