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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
-----------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-30242
Lamar Advertising Company
Commission File Number 1-12407
Lamar Media Corp.
(Exact name of registrants as specified in its charter)
Delaware 72-1449411
Delaware 72-1205791
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5551 Corporate Blvd., Baton Rouge, LA 70808
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (225) 926-1000
SECURITIES OF LAMAR ADVERTISING COMPANY
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each Exchange
Title of Each Class: On Which Registered:
- ------------------- ----------------------
Class A common stock, Nasdaq National Market
$.001 par value
SECURITIES OF LAMAR ADVERTISING COMPANY
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
SECURITIES OF LAMAR MEDIA CORP.
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each Exchange
Title of Each Class: On Which Registered:
- ------------------- --------------------
None N/A
SECURITIES OF LAMAR MEDIA CORP.
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
9 5/8% Senior Subordinated Notes due 2006
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of the voting stock held by nonaffiliates of Lamar
Advertising Company as of March 8, 2000: $1,962,907,848
The number of shares of Lamar Advertising Company's Class A common stock
outstanding as of March 8, 2000: 71,555,810
The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of March 8, 2000: 17,000,000
This combined Form 10-K is separately filed by (i) Lamar Advertising Company and
(ii) Lamar Media Corp. (which is a wholly-owned subsidiary of Lamar Advertising
Company). Lamar Media Corp. meets the conditions set forth in general
instruction I(1) (A) and (B) of Form 10-K and is, therefore, filing this form
with the reduced disclosure format permitted by such instruction.
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On July 20, 1999, Lamar Advertising Company completed a corporate reorganization
to create a new holding company structure. The reorganization was accomplished
through a merger under section 251(g) of the Delaware General Corporation Law.
At the effective time of the merger, all stockholders of Lamar Advertising
Company became stockholders in a new holding company and Lamar Advertising
Company became a wholly-owned subsidiary of the new holding company. The new
holding company took the Lamar Advertising Company name and the old Lamar
Advertising Company was renamed Lamar Media Corp. In the merger, all outstanding
shares of old Lamar Advertising Company's capital stock were converted into
shares of the new holding company with the same voting powers, designations,
preferences and rights, and the same qualifications, restrictions and
limitations, as the shares of old Lamar Advertising Company. Following the
restructuring, the Class A common stock of the new holding company trades under
the symbol "LAMR" on the Nasdaq National Market with the same CUSIP number as
the old Lamar Advertising Company's Class A common stock.
In this annual report, "Lamar," the "Company," "we," "us" and "our" refer to
Lamar Advertising Company and its consolidated subsidiaries with respect to
periods following the reorganization and to old Lamar Advertising Company with
respect to periods prior to the reorganization, except where we make it clear
that we are only referring to Lamar Media Corp. or a particular subsidiary.
In addition, "Lamar Media" and "Media" refer to Lamar Media Corp. and its
consolidated subsidiaries with respect to periods following the reorganization
and to old Lamar Advertising Company with respect to periods prior to the
reorganization, except where we make it clear that we are only referring to
Lamar Media Corp. or a particular subsidiary.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Lamar Advertising Company's proxy statement for the Annual Meeting
of Stockholders to be held on May 25, 2000 are incorporated by reference into
Part III of this Form 10-K.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This combined Annual Report on Form 10-K of Lamar Advertising Company and Lamar
Media Corp. contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These are statements that relate to future periods and include
statements about the Company's, and Lamar Media's:
o expected operating results;
o market opportunities;
o acquisition opportunities;
o ability to compete; and
o stock price.
Generally, the words "anticipates," "believes," "expects," "intends,"
"estimates," "projects," "plans" and similar expressions identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could cause the
Company's actual results, performance or achievements or industry results, to
differ materially from any future results, performance or achievements expressed
or implied by these forward-looking statements. These risks, uncertainties and
other important factors include, among others: (1) risks and uncertainties
relating to the Company's significant indebtedness; (2) the need for additional
funds; (3) the integration of companies that the Company acquires and the
Company's ability to recognize cost savings or operating efficiencies as a
result of
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such acquisitions; (4) the continued popularity of outdoor advertising as an
advertising medium; (5) the regulation of the outdoor advertising industry and
(6) the risks and uncertainties described below under the caption "Factors
Affecting Future Operating Results" under Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations. The forward-looking
statements contained in this Annual Report on Form 10-K speak only as of the
date of this Annual Report. Lamar Advertising Company and Lamar Media expressly
disclaim any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained in this Annual Report to reflect any
change in their expectations with regard thereto or any change in events,
conditions or circumstances on which any forward-looking statement is based.
PART I
ITEM 1. BUSINESS
GENERAL
Lamar is one of the largest and most experienced owners and operators of outdoor
advertising structures in the United States. The Company conducts a business
that has operated under the Lamar name since 1902. As of December 31, 1999, the
Company operated approximately 116,800 outdoor advertising displays in 42
states. The Company also operates the largest logo sign business in the United
States. Logo signs are signs located near highway exits which deliver brand name
information on available gas, food, lodging and camping services. As of December
31, 1999, the Company maintained over 79,500 logo sign displays in 20 states.
The Company also operates transit advertising displays on bus shelters, bus
benches and buses in several markets.
BUSINESS STRATEGY
OUTDOOR ADVERTISING
The Company's overall business strategy is to be the leading provider of outdoor
advertising in the markets it serves. This strategy includes the following
elements:
OPERATING STRATEGY:
HIGH QUALITY LOCAL SALES AND SERVICE. Local advertising constituted
approximately 86% of the Company's net revenues in 1999, which management
believes is higher than the industry average. The Company attempts to identify
and closely monitor the needs of its customers and seeks to provide them with
quality advertising products at a lower cost than competitive media.
At December 31, 1999, the Company's 526-person sales force was supported by 126
full- service offices. Each salesperson is compensated under a performance-based
compensation system and supervised by a sales manager executing a coordinated
marketing plan. Art departments assist local customers in the development and
production of creative, effective advertisements.
CENTRALIZED CONTROL/DECENTRALIZED MANAGEMENT. Management believes that in 126 of
the 139 markets in which the Company operated at December 31, 1999, the Company
is the only outdoor advertising company offering a full complement of outdoor
advertising services coupled with local production facilities, management and
account executives. Local offices operate in defined geographic areas and
function essentially as independent business units, consistent with senior
management's philosophy that a decentralized organization is more responsive to
particular local market demands.
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The Company maintains centralized accounting and financial control over its
local operations, but local managers are responsible for the day-to-day
operations in each local market and are compensated according to that market's
financial performance. Each local manager reports to one of nine regional
managers who in turn report to the Company's Chief Executive Officer.
GROWTH STRATEGY:
INTERNAL GROWTH. Within its existing markets, the Company enhances revenue and
cash flow growth by employing highly targeted local marketing efforts to improve
display occupancy rates and by increasing advertising rates. This strategy is
facilitated through its local sales and service offices, which allow management
to respond quickly to the demands of its local customer base. In addition, the
Company routinely invests in upgrading its existing structures and constructing
new display faces in order to provide quality service to its current customers
and to attract new advertisers.
ACQUISITIONS. Aggressive internal growth is enhanced by focused strategic
acquisitions, resulting in increased operating efficiencies, greater geographic
diversification and increased market penetration. The Company has completed over
220 acquisitions of outdoor advertising businesses since 1983. In addition to
acquiring positions in new markets, the Company purchases smaller outdoor
advertising properties within existing or contiguous markets. Acquisitions offer
opportunities for inter-market cross-selling and the opportunity to centralize
and combine accounting and administrative functions, thereby achieving economies
of scale. In addition, the Company leverages its reputation for high quality
local sales and service by taking advantage of opportunities to acquire
high-profile bulletin displays that may become available in larger markets.
Although the acquisition market is becoming more competitive, the Company
believes that there will be future opportunities for implementing the Company's
acquisition strategy given the industry's fragmentation and current
consolidation trends.
During 1999, the Company increased the number of outdoor advertising displays it
operates by approximately 62% by acquiring outdoor advertising assets, including
the completion of 77 strategic acquisitions of outdoor advertising businesses as
well as isolated purchases of outdoor advertising displays. Certain of the
Company's principal acquisitions since January 1, 1999 are described below:
American Displays, Inc.
On January 5, 1999, the Company purchased all of the outdoor advertising assets
of American Displays, Inc. for a cash purchase price of approximately $14.5
million. The acquisition consisted of displays in Grand Rapids, Michigan.
KJS, LLC.
On February 1, 1999, the Company purchased all of the outdoor advertising assets
of KJS, LLC for a cash purchase price of $40.5 million. The approximately 1,400
displays were located in Lincoln and Omaha, Nebraska.
Frank Hardie, Inc.
On April 1, 1999, the Company purchased all of the assets of Frank Hardie, Inc.
for a cash purchase price of approximately $20.3 million. The acquisition
included approximately 900 displays in Dubuque and Waterloo, Iowa.
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Vivid, Inc.
On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a cash
purchase price of approximately $22.1 million. The approximately 1,000 displays
are located in Quad Cities, Illinois; Rockford, Illinois; and Rapid City, South
Dakota.
Chancellor Media Outdoor Corporation
On September 15, 1999, Lamar Media Corp. purchased the capital stock of
Chancellor Media Outdoor Corporation and Chancellor Media Whiteco Outdoor
Corporation, ("Chancellor Outdoor") for a combination of approximately $700
million in cash and 26,227,273 shares of the Company's Class A common stock
valued at approximately $947 million. The acquisition included approximately
36,000 outdoor advertising displays which gave the Company a presence in 8
additional states and established 31 new markets.
LOGO SIGNS
The Company entered the business of logo sign advertising in 1988. The Company
is now the largest provider of logo sign services in the United States,
operating 20 of the 25 privatized state logo sign contracts. The Company also
operates the tourism signing contracts in six states and the province of
Ontario, Canada.
The Company plans to pursue additional logo sign contracts, through both new
contract awards and, possibly, the acquisition of other logo sign operators.
Logo sign opportunities arise periodically, both from states initiating new logo
sign programs and states converting from government owned and operated programs
to privately owned and operated programs. Furthermore, the Company plans to
pursue additional tourism signing programs in Canada and is seeking to expand
into other state-authorized signage programs, such as those involving
directional signs providing tourist information.
TRANSIT AND OTHER
The Company has recently expanded into the transit advertising business through
the operation of displays on bus shelters, benches and buses in 22 of its
outdoor advertising markets, three markets in South Carolina, two markets in
Utah, one market in California, one market in Florida and one in Colorado. The
Company plans to continue pursuing transit advertising opportunities that arise
in its primary markets and to expand into other markets.
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MARKETS
As of December 31, 1999, the Company's 139 primary outdoor advertising markets
were:
<TABLE>
<S> <C> <C>
Birmingham, Alabama Paducah, Kentucky Oklahoma City, Oklahoma
Gadsden, Alabama Alexandria, Louisiana Allentown, Pennsylvania
Huntsville, Alabama Baton Rouge, Louisiana Altoona, Pennsylvania
Mobile, Alabama Hammond, Louisiana Erie, Pennsylvania
Montgomery, Alabama Houma, Louisiana Harrisburg, Pennsylvania
Shoals, Alabama Lafayette, Louisiana Pittsburgh, Pennsylvania
Tuscaloosa, Alabama Lake Charles, Louisiana Reading, Pennsylvania
Phoenix, Arizona Monroe, Louisiana Scranton, Pennsylvania
Yuma, Arizona New Orleans, Louisiana Williamsport, Pennsylvania
Bakersfield, California Shreveport, Louisiana York, Pennsylvania
Lancaster, California Slidell, Louisiana Providence, Rhode Island
Sacramento, California Detroit, Michigan Anderson, South Carolina
San Bernardino, California Escanaba, Michigan Columbia, South Carolina
Colorado Springs, Colorado Muskegon, Michigan Rapid City, South Dakota
Denver, Colorado Port Huron, Michigan Clarksville, Tennessee
Hartford, Connecticut Saginaw, Michigan Cookeville, Tennessee
Daytona Beach, Florida Traverse City, Michigan Jackson, Tennessee
Fort Myers, Florida Duluth, Minnesota Johnson City, Tennessee
Fort Walton, Florida St. Cloud, Minnesota Knoxville, Tennessee
Lakeland, Florida Columbus, Mississippi Murfreesboro, Tennessee
Ocala, Florida Corinth, Mississippi Nashville, Tennessee
Panama City, Florida Greenville, Mississippi Abilene, Texas
Pensacola, Florida Gulfport, Mississippi Amarillo, Texas
Tallahassee, Florida Hattiesburg, Mississippi Beaumont, Texas
Albany, Georgia Jackson, Mississippi Brownsville, Texas
Anderson, Georgia Meridian, Mississippi Corpus Christi, Texas
Athens, Georgia Bonne Terre, Missouri Dallas, Texas
Atlanta, Georgia Hannibal, Missouri Houston, Texas
Augusta, Georgia Joplin, Missouri Laredo, Texas
Brunswick, Georgia Kansas City, Missouri Lubbock, Texas
Macon, Georgia Osage Beach, Missouri Midland, Texas
Rome, Georgia Springfield, Missouri San Angelo, Texas
Savannah, Georgia Billings, Montana Tyler, Texas
Valdosta, Georgia Lincoln, Nebraska Wichita Falls, Texas
Boise, Idaho Omaha, Nebraska Richmond, Virginia
Decatur, Illinois Las Vegas, Nevada Roanoke, Virginia
Janesville, Illinois Laughlin/Bullhead, Nevada Spokane, Washington
Evansville, Indiana Albany, New York Tacoma, Washington
Gary, Indiana Buffalo, New York Bluefield, West Virginia
Terre Haute, Indiana Rochester, New York Bridgeport, West Virginia
Cedar Rapids, Iowa Syracuse, New York Huntington, West Virginia
Davenport/Quad Cities, Iowa Asheville, North Carolina Wheeling, West Virginia
Dubuque, Iowa Elizabethtown, N. Carolina Eau Claire, Wisconsin
Waterloo, Iowa Cincinnati, Ohio Milwaukee, Wisconsin
Topeka, Kansas Columbus, Ohio Casper, Wyoming
Lexington, Kentucky Dayton, Ohio
Louisville, Kentucky Youngstown, Ohio
</TABLE>
As of December 31, 1999, the Company operated the following logo sign contracts:
<TABLE>
<S> <C> <C> <C>
Colorado Kentucky Nebraska Oklahoma
Delaware Michigan Nevada South Carolina
Florida Minnesota New Jersey Texas
Georgia Mississippi New Mexico Utah
Kansas Missouri Ohio Virginia
Ontario
</TABLE>
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COMPANY OPERATIONS
OUTDOOR ADVERTISING
INVENTORY:
The Company operates the following types of outdoor advertising displays:
BULLETINS generally are 14 feet high and 48 feet wide (672 square feet) and
consist of panels on which advertising copy is displayed. The advertising copy
is either hand painted onto the panels at the Company's facilities in accordance
with design specifications supplied by the advertiser and attached to the
outdoor advertising structure, or printed with computer-generated graphics on a
single sheet of vinyl that is wrapped around the structure. On occasion, to
attract more attention, some of the panels may extend beyond the linear edges of
the display face and may include three-dimensional embellishments. Because of
their greater impact and higher cost, bulletins are usually located on major
highways.
STANDARDIZED POSTERS generally are 12 feet high by 25 feet wide (300 square
feet) and are the most common type of billboard. Advertising copy for these
posters consists of lithographed or silk-screened paper sheets supplied by the
advertiser that are pasted and applied like wallpaper to the face of the
display, or single sheets of vinyl with computer-generated advertising copy that
are wrapped around the structure. Standardized posters are concentrated on major
traffic arteries.
JUNIOR POSTERS usually are 6 feet high by 12 feet wide (72 square feet).
Displays are prepared and mounted in the same manner as standardized posters,
except that vinyl sheets are not typically used on junior posters. Most junior
posters, because of their smaller size, are concentrated on city streets and
target pedestrian traffic.
For the year ended December 31, 1999, approximately 65% of the Company's outdoor
advertising net revenues were derived from bulletin sales and 35% from poster
sales. The Company regularly donates unoccupied display space for use by
charitable and civic organizations.
The physical structures are owned by the Company and are built on locations the
Company either owns or leases. In each local office one employee typically
performs site leasing activities for the markets served by that office. See
Item 2. -- "Properties."
Bulletin space is generally sold as individually selected displays for the
duration of the advertising contract. Bulletins may also be sold as part of a
rotary plan where advertising copy is periodically rotated from one location to
another within a particular market. Poster space is generally sold in packages
called "showings," which comprise a given number of displays in a market area.
Posters provide advertisers with access either to a specified percentage of the
general population or to a specific targeted audience. Displays making up a
showing are placed in well-traveled areas and are distributed so as to reach a
wide audience in a particular market. Bulletin space is generally sold for 12
month periods. Poster space averages between 30 and 90 days.
PRODUCTION:
The Company's local production staffs in 126 of its markets perform the full
range of activities required to create and install outdoor advertising.
Production work includes creating the advertising copy design and layout,
painting the design or coordinating its printing and installing the designs on
displays. The Company provides its production services to local advertisers and
to advertisers that are not represented by advertising agencies, since national
advertisers represented by advertising agencies often use preprinted designs
that require only installation.
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The Company's creative and production personnel typically develop new designs or
adopt copy from other media for use on billboards. The Company's artists also
often assist in the development of marketing presentations, demonstrations and
strategies to attract new advertisers.
With the increased use of vinyl and pre-printed advertising copy furnished to
the outdoor advertising company by the advertiser or its agency, outdoor
advertising companies require less labor-intensive production work. In addition,
increased use of vinyl and preprinted copy is also attracting more customers to
the outdoor advertising medium. The Company believes that this trend over time
will reduce operating expenses associated with production activities.
CATEGORIES OF BUSINESS:
The following table sets forth the top ten categories of business from which the
Company derived its outdoor advertising revenues for 1999 and the respective
percentages of such revenue. These business categories accounted for
approximately 72% of the Company's total outdoor advertising net revenues in the
year ended December 31, 1999. No one advertiser accounted for more than 3.0% of
the Company's total outdoor advertising net revenues in that period.
<TABLE>
<CAPTION>
PERCENTAGE NET ADVERTISING
CATEGORIES REVENUES
<S> <C>
Restaurants 12%
Retailers 10%
Hotels and motels 9%
Automotive 9%
Miscellaneous 8%
Service 7%
Hospitals and medical care 5%
Gambling 4%
Amusement - entertainment and sport 4%
Media 4%
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Total 72%
====
</TABLE>
LOGO SIGNS
The Company is the largest provider of logo sign services in the United States
and operates over 24,800 logo sign structures containing over 79,500 logo
advertising displays. The Company has been awarded contracts to erect and
operate logo signs in the states of Colorado, Delaware, Florida, Georgia,
Michigan, Minnesota, Mississippi, Nebraska, New Jersey, New Mexico, Ohio,
Oklahoma, South Carolina, Texas, Utah and Virginia, the providence of Ontario,
Canada, and through a 66.7% owned partnership in the state of Missouri. In
addition, the Company has acquired the logo sign contracts in Kansas, Kentucky,
and Nevada. The Company also operates the tourism signing contracts for the
states of Colorado, Kentucky, Michigan, Nebraska, New Jersey and Ohio as well as
for the province of Ontario, Canada.
State logo sign contracts represent the contract right to erect and operate logo
signs within a state. The term of the contracts vary, but generally range from
ten to twenty years, including renewal terms. The logo sign contracts generally
provide for termination by the state prior to the end of the term of the
contract, in most cases with compensation to be paid to the Company. Typically,
at the end of the term of the contract, ownership of the structures is
transferred to the state without compensation to the Company. Of the Company's
logo sign contracts, one is due to terminate in December, 2000, and three are
subject to renewal over the next year, one in April, 2000, one in June, 2000 and
another in October, 2000.
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The Company also designs and produces logo sign plates for customers throughout
the country, including for use in states which have not yet privatized their
logo sign programs.
EMPLOYEES
The Company employed approximately 2,600 persons at December 31, 1999. Of these,
110 were engaged in overall management and general administration at the
Company's management headquarters and the remainder were employed in the
Company's operating offices. Of these, approximately 526 were direct sales and
marketing personnel.
The Company has 11 local offices covered by collective bargaining agreements,
consisting of painters, billposters and construction personnel. The Company
believes that its relations with its employees, including its 121 unionized
employees, are good, and the Company has never experienced a strike or other
labor dispute.
COMPETITION
OUTDOOR ADVERTISING
The Company competes in each of its markets with other outdoor advertisers as
well as other media, including broadcast and cable television, radio, print
media and direct mail marketers. In addition, the Company also competes with a
wide variety of out-of-home media, including advertising in shopping centers,
malls, airports, stadiums, movie theaters and supermarkets, as well as on taxis,
trains and buses. Advertisers compare relative costs of available media and
cost-per-thousand impressions, particularly when delivering a message to
customers with distinct demographic characteristics. In competing with other
media, outdoor advertising relies on its relative cost efficiency and its
ability to reach a broad segment of the population in a specific market or to
target a particular geographic area or population with a particular set of
demographic characteristics within that market.
The outdoor advertising industry is fragmented, consisting of several large
outdoor advertising and media companies with operations in multiple markets as
well as smaller and local companies operating a limited number of structures in
single or a few local markets. Although some consolidation has occurred over the
past few years, according to the Outdoor Advertising Association of America
("OAAA") there are approximately 600 companies in the outdoor advertising
industry operating approximately 465,000 billboard displays. In several of its
markets, the Company encounters direct competition from other major outdoor
media companies, including Infinity Broadcasting Corp. (formerly Outdoor
Systems, Inc.) and Clear Channel Communications, Inc. (formerly Eller Media)
both of which may have greater total resources than the Company. The Company
believes that its strong emphasis on sales and customer service and its position
as a major provider of advertising services in each of its primary markets
enables it to compete effectively with the other outdoor advertising companies,
as well as other media, within those markets.
LOGO SIGNS
The Company faces competition in obtaining new logo sign contracts and in
bidding for renewals of expiring contracts. The Company faces competition from
two other national providers of logo signs in seeking state-awarded logo service
contracts. In addition, local companies within each of the states that solicit
bids will compete against the Company in the open-bid process. Competition from
these sources is also encountered at the end of each contract period.
In marketing logo signs to advertisers, the Company competes with the other
forms of out-of-home advertising described above.
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REGULATION
Outdoor advertising is subject to governmental regulation at the federal, state
and local levels. Federal law, principally the Highway Beautification Act of
1965 (the "HBA") regulates outdoor advertising on federally aided primary and
interstate highways. The HBA requires, as a condition to federal highway
assistance, states to restrict billboards on such highways to commercial and
industrial areas, and requires certain additional size, spacing and other
limitations. All states have passed state billboard control statutes and
regulations at least as restrictive as the federal requirements, including
removal at the owner's expense and without compensation of any illegal signs on
such highways. The Company believes that the number of its billboards that may
be subject to removal as illegal is immaterial. No state in which the Company
operates has banned billboards, but some have adopted standards more restrictive
than the federal requirements. Municipal and county governments generally also
have sign controls as part of their zoning laws. Some local governments prohibit
construction of new billboards and some allow new construction only to replace
existing structures, although most allow construction of billboards subject to
restrictions on zones, size, spacing and height.
Federal law does not require removal of existing lawful billboards, but does
require payment of compensation if a state or political subdivision compels the
removal of a lawful billboard along a federally aided primary or interstate
highway. State governments have purchased and removed legal billboards for
beautification in the past, using federal funding for transportation enhancement
programs, and may do so in the future. Governmental authorities from time to
time use the power of eminent domain to remove billboards. Thus far, the Company
has been able to obtain satisfactory compensation for any of its billboards
purchased or removed as a result of governmental action, although there is no
assurance that this will continue to be the case in the future. Local
governments do not generally purchase billboards for beautification, but some
have attempted to force removal of legal but nonconforming billboards
(billboards which conformed with applicable zoning regulations when built but
which do not conform to current zoning regulations) after a period of years
under a concept called "amortization," by which the governmental body asserts
that just compensation is earned by continued operation over time. Although
there is some question as to the legality of amortization under federal and many
state laws, amortization has been upheld in some instances. The Company
generally has been successful in negotiating settlements with municipalities for
billboards required to be removed. Restrictive regulations also limit the
Company's ability to rebuild or replace nonconforming billboards. The outdoor
advertising industry is heavily regulated and at various times and in various
markets can be expected to be subject to varying degrees of regulatory pressure
affecting the operation of advertising displays. Accordingly, although the
Company's experience to date is that the regulatory environment can be managed,
no assurance can be given that existing or future laws or regulations will not
materially and adversely affect the Company.
A new national tobacco settlement eliminated outdoor advertising of tobacco
products in the U.S. in November, 1998. As of April 1, 1999, the Company removed
all of its outdoor advertising of tobacco products. Our tobacco revenues as a
percentage of consolidated net revenues were 7% for the year ended December 31,
1998 and 3% for the year ended December 31, 1999. The Company expects to have no
tobacco revenues in fiscal 2000.
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ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT
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<CAPTION>
Name Age Title
- ---- --- -----
<S> <C> <C>
Kevin P. Reilly, Jr. 45 Chairman, President and Chief Executive Officer
Keith A. Istre 47 Chief Financial Officer and Treasurer
Sean E. Reilly 38 Director of Mergers and Acquisitions and
President of the Real Estate Division
</TABLE>
Each officer's term of office extends until the meeting of the Board of
Directors following the next annual meeting of stockholders and until a
successor is elected and qualified or until his or her earlier resignation or
removal.
Kevin P. Reilly, Jr. has served as the Company's President and Chief Executive
Officer since February 1989 and as a director of the Company since February
1984. Mr. Reilly served as President of the Company's Outdoor Division from 1984
to 1989. Mr. Reilly, an employee of the Company since 1978, has also served as
Assistant and General Manager of the Company's Baton Rouge Region and Vice
President and General Manager of the Louisiana region. Mr. Reilly received a
B.A. from Harvard University in 1977.
Keith A. Istre has been Chief Financial Officer of the Company since February
1989 and a director of the Company since February 1991. Mr. Istre joined the
Company as Controller in 1978. Prior to joining the Company, Mr. Istre was
employed by a public accounting firm in Baton Rouge from 1975 to 1978. Mr. Istre
graduated from the University of Southwestern Louisiana in 1974 with a B.S. in
accounting.
Sean E. Reilly is Director of Mergers and Acquisitions and President of the
Company's real estate division, TLC Properties, Inc. He began working with the
Company as Vice President of Mergers and Acquisitions in 1987 and served in that
capacity until 1994. He served as a director of the Company from 1989 to 1996.
Mr. Reilly was the Chief Executive Officer of Wireless One, Inc., a wireless
cable television company, from 1994 to 1997. Mr. Reilly received a B.A. from
Harvard University in 1984 and a J.D. from Harvard Law School in 1989.
ITEM 2. PROPERTIES
The Company's 53,500 square foot management headquarters is located in suburban
Baton Rouge, Louisiana. The Company occupies approximately 67% of the space in
this facility and leases the remaining space. The Company owns 66 local
operating facilities with front office administration and sales office space
connected to back-shop poster and bulletin production space. In addition, the
Company leases an additional 106 operating facilities at an aggregate lease
expense for 1999 of approximately $2,125,000.
The Company owns approximately 2,128 parcels of property beneath outdoor
structures. As of December 31, 1999, the Company had approximately 62,755 active
outdoor site leases accounting for a total annual lease expense of $61.1
million. This amount represented 14% of total outdoor advertising net revenues
for that period, which is consistent with the Company's historical lease expense
experience. The Company's leases are for varying terms ranging from
month-to-month to in some cases a term of over ten years, and many provide the
Company with renewal options. There is no significant concentration of displays
under any one lease or subject to negotiation with any one landlord. The Company
believes that an important part of its management activity is to manage its
lease portfolio and negotiate suitable lease renewals and extensions.
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<PAGE> 12
ITEM 3. LEGAL PROCEEDINGS
The Company from time to time is involved in litigation in the ordinary course
of business, including disputes involving advertising contracts, site leases,
employment claims and construction matters. The Company is also involved in
routine administrative and judicial proceedings regarding billboard permits,
fees and compensation for condemnations. The Company is not a party to any
lawsuit or proceeding which, in the opinion of management, is likely to have a
material adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
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<PAGE> 13
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Since August 2, 1996, the Company's Class A common stock has traded on the
over-the-counter market and prices have been quoted on the Nasdaq National
Market under the symbol "LAMR." Prior to August 2, 1996, the day on which the
Class A common stock was first publicly traded, there was no public market for
the Class A common stock. On December 31, 1997, the Company declared a 3-for-2
stock split of shares of Class A common stock, which was paid in the form of a
50% stock dividend on February 27, 1998. All share and per share amounts
included herein have been restated to reflect this split. As of March 14, 2000,
the Class A common stock was held by 202 shareholders of record. The Company
believes, however, that the actual number of beneficial holders of the Class A
common stock may be substantially greater than the stated number of holders of
record because a substantial portion of the Class A common stock is held in
"street name."
The following table sets forth, for the periods indicated, the high and low bid
prices for the Class A common stock as reported on the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal year ended December 31, 1998:
First Quarter $38.50 $24.42
Second Quarter 36.75 29.25
Third Quarter 41.50 24.50
Fourth Quarter 39.25 19.25
Fiscal year ended December 31, 1999:
First Quarter $41.63 $32.25
Second Quarter 43.00 27.75
Third Quarter 50.69 35.25
Fourth Quarter 64.50 44.63
</TABLE>
The Company's Class B common stock is not publicly traded and is held of record
by one entity.
The Company does not anticipate paying dividends on either class of its common
stock in the foreseeable future. The Company's Series AA preferred stock is
entitled to preferential dividends, in an annual aggregate amount of $364,903,
before any dividends may be paid on the common stock. In addition, the Company's
bank credit facilities and other indebtedness have terms restricting the payment
of dividends. Any future determination as to the payment of dividends will be
subject to such limitations, will be at the discretion of the Company's Board of
Directors and will depend on the Company's results of operations, financial
condition, capital requirements and other factors deemed relevant by the Board
of Directors.
ITEM 6. SELECTED FINANCIAL DATA
LAMAR ADVERTISING COMPANY
The selected consolidated statement of operations and balance sheet data
presented below are derived from the audited consolidated financial statements
of the Company. Effective January 1, 1997, the Company changed its fiscal year
from a twelve-month period ending October 31 to a twelve-month period ending
December 31. The year end change was made to conform to the predominant fiscal
year end for companies within the outdoor advertising industry. The results of
operations for the two-month transition period ended December 31, 1996 are
presented in the audited consolidated financial statements as filed previously
on Form 10-K. The data presented below should be read in conjunction with the
audited consolidated financial statements, related notes and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included herein.
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<PAGE> 14
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
For the Years Ended
(Dollars in thousands) December 31, October 31,
------------------------------------------- ---------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues $ 444,135 $ 288,588 201,062 120,602 102,408
Operating expenses:
Direct advertising expenses 143,090 92,849 63,390 41,184 34,386
General & administrative expenses 94,372 60,935 45,368 29,466 27,057
Depreciation & amortization 177,138 88,791 48,317 16,712 15,597
----------- ----------- ----------- ----------- -----------
Total operating expenses 414,600 242,575 157,075 87,362 77,040
----------- ----------- ----------- ----------- -----------
Operating income 29,535 46,013 43,987 33,240 25,368
----------- ----------- ----------- ----------- -----------
Other expense (income):
Interest income (1,421) (762) (1,723) (240) (199)
Interest expense 89,619 60,008 38,230 15,441 15,783
Loss (gain) on disposition of assets (5,481) (1,152) (15) 91 1,476
----------- ----------- ----------- ----------- -----------
Total other expense 82,717 58,094 36,492 15,292 17,060
----------- ----------- ----------- ----------- -----------
Earnings (loss) before income taxes,
extraordinary item and cumulative effect
of an accounting change (53,182) (12,081) 7,495 17,948 8,308
Income tax expense (benefit) (9,596) (191) 4,654 7,099 (2,390)
----------- ----------- ----------- ----------- -----------
Earnings (loss) before extraordinary item
and cumulative effect of an accounting change (43,586) (11,890) 2,841 10,849 10,698
Extraordinary loss on debt extinguishment (182) -- -- -- --
----------- ----------- ----------- ----------- -----------
Earnings (loss) before cumulative effect
of an accounting change (43,768) (11,890) 2,841 10,849 10,698
Cumulative effect of an accounting change (767) -- -- -- --
----------- ----------- ----------- ----------- -----------
Net earnings (loss) (44,535) (11,890) 2,841 10,849 10,698
Preferred stock dividends (365) (365) (365) (365) --
----------- ----------- ----------- ----------- -----------
Net earnings (loss) applicable to common stock $ (44,900) $ (12,255) $ 2,476 $ 10,484 $ 10,698
=========== =========== =========== =========== ===========
Earnings (loss) per common share - basic
and diluted:
Earnings (loss) before extraordinary item
and accounting change (1) $ (.64) $ (.24) $ 0.05 $ 0.25 $ 0.21
Extraordinary loss on debt extinguishment (1) -- -- -- -- --
Cumulative effect of a change in accounting
principle (1) $ (.01) $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
Net earnings (loss) (1) $ (.65) $ (.24) $ 0.05 $ 0.25 $ 0.21
=========== =========== =========== =========== ===========
Other Data:
EBITDA (2) $ 206,673 $ 134,804 92,304 49,952 40,965
EBITDA margin 47% 47% 46% 41% 40%
Cash flows from operating activities (3) $ 110,551 $ 72,498 45,783 32,493 25,065
Cash flows from investing activities (3) $ (950,650) $ (535,217) (370,228) (48,124) (17,817)
Cash flows from financing activities (3) $ 719,903 $ 584,070 250,684 18,175 (9,378)
BALANCE SHEET DATA (4):
Cash & cash equivalents $ 8,401 $ 128,597 7,246 8,430 5,886
Working capital 40,787 94,221 18,662 1,540 1,737
Total assets 3,206,945 1,413,377 651,336 173,189 133,885
Total debt (including current maturities) 1,615,781 876,532 539,200 131,955 146,051
Total long-term obligations 1,730,710 857,760 551,865 130,211 143,944
Stockholders' equity (deficit) 1,391,529 466,779 68,713 19,041 (28,154)
</TABLE>
(1) After giving effect to the three-for-two split of the Company's Class A
and Class B common stock effected in February 1998.
(2) "EBITDA" is defined as operating income before depreciation and
amortization. It represents a measure which management believes is
customarily used to evaluate the financial performance of companies in
the media industry. However, EBITDA is not a measure of financial
performance under generally accepted accounting principles and should
not be considered an alternative to operating income or net earnings as
an indicator of the Company's operating performance or to net cash
provided by operating activities as a measure of its liquidity.
(3) Cash flows from operating, investing, and financing activities are
obtained from the Company's consolidated statements of cash flows
prepared in accordance with generally accepted accounting principles.
(4) As of the end of the period.
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<PAGE> 15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LAMAR ADVERTISING COMPANY
The following is a discussion of the consolidated financial condition and
results of operations of the Company for the years ended December 31, 1999, 1998
and 1997. This discussion should be read in conjunction with the consolidated
financial statements of the Company and the related notes.
OVERVIEW
The Company's net revenues, which represent gross revenues less commissions paid
to advertising agencies that contract for the use of advertising displays on
behalf of advertisers, are derived primarily from the sale of advertising on
outdoor advertising displays owned and operated by the Company. In recent years,
the Company's logo sign business has expanded rapidly and may in the future have
an increasing impact on the Company's revenues and operating income.
The Company has grown significantly during the last three years, primarily as
the result of (i) internal growth in its existing outdoor advertising business
resulting from construction of additional outdoor advertising displays,
operating efficiency and increases in advertising rates, (ii) acquisitions of
outdoor advertising businesses and structures, and (iii) the rapid expansion of
the Company's logo sign business. The Company's net advertising revenues
increased by $243.0 million from $201.1 million for the fiscal year ended
December 31, 1997 to $444.1 million for the fiscal year ended December 31, 1999,
representing a compound annual growth rate of approximately 49%. During the same
period, EBITDA increased $114.4 million from $92.3 million for the fiscal year
ended December 31, 1997 to $206.7 million for the fiscal year ended December 31,
1999, representing a compound annual growth rate of approximately 50%.
The Company plans to continue a strategy of expanding through both internal
growth and acquisitions. As a result of acquisitions, the operating performance
of individual markets and of the Company as a whole are not necessarily
comparable on a year-to-year basis. All recent acquisitions have been accounted
for using the purchase method of accounting and, consequently, operating results
from acquired operations are included from the respective dates of those
acquisitions.
Since December 31, 1998, the Company has increased the number of outdoor
advertising displays it operates by approximately 62% by completing 77 strategic
acquisitions of outdoor advertising and transit assets for an aggregate cash
purchase price of approximately $889 million and the issuance of 26,407,650
shares of Class A common stock valued at approximately $955 million. The Company
has financed its recent acquisitions and intends to finance its acquisition
activity from available cash and borrowings under the New Bank Credit Agreement
(as defined below) which the Company entered into in August, 1999. See
"Liquidity and Capital Resources" below.
The Company relies on sales of advertising space for its revenues, and its
operating results are therefore affected by general economic conditions, as well
as trends in the advertising industry.
A national tobacco settlement eliminated outdoor advertising of tobacco products
in the U.S. in November, 1998. As of April 1, 1999, the Company has eliminated
all of its outdoor advertising of tobacco products. As a result the Company's
tobacco revenues, as a percentage of billboard advertising net revenues,
declined from 17% in fiscal 1991 to 3% in fiscal 1999.
The Company expects to have no tobacco revenues in fiscal 2000, but the Company
has been successful in replacing the tobacco advertising removed with substitute
advertising at comparable rates.
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<PAGE> 16
Growth of the Company's business requires capital expenditures for maintenance
and capitalized costs associated with new billboard displays and new logo sign
contracts. The Company expended $36.7 million in fiscal 1997, $55.2 million in
fiscal 1998 and $77.2 million in fiscal 1999. Of these amounts,$10.4 million,
$10.6 million and $11.3 million, respectively, were attributable to the logo
sign business. See "Liquidity and Capital Resources."
The following table presents certain items in the Consolidated Statements of
Operations as a percentage of net revenues for the years ended December 31,
1999, 1998 and 1997:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net revenues 100.0% 100.0% 100.0%
Operating expenses:
Direct advertising expenses 32.2 32.2 31.5
General & administrative expenses 21.2 21.1 22.6
EBITDA (1) 46.5 46.7 45.9
Depreciation and amortization 39.8 30.8 24.0
Operating income 6.7 15.9 21.9
Interest expense 20.2 20.8 19.0
Other expense 18.6 20.1 18.2
Net earnings (loss) (10.0) (4.1) 1.4
</TABLE>
(1) "EBITDA" is defined as operating income before depreciation and
amortization. It represents a measure which management believes is
customarily used to evaluate the financial performance of companies in
the media industry. However, EBITDA is not a measure of financial
performance under generally accepted accounting principles and should
not be considered an alternative to operating income or net earnings as
an indicator of the Company's operating performance or to net cash
provided by operating activities as a measure of its liquidity.
-16-
<PAGE> 17
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
Total revenues increased $155.5 million or 53.9% to $444.1 million for the year
ended December 31, 1999 from $288.6 million for the same period in 1998. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $150.5 million or 57.5%, which was attributable to the Company's
acquisitions during 1999 and 1998 and internal growth within the Company's
previously existing markets, and (ii) a $4.0 million increase in logo sign
revenue, which represents a 16.6% increase over the prior year. The increase in
logo sign revenue was due to the completion of development of the new logo sign
contracts awarded in 1999 and 1998 and the continued expansion of the Company's
existing logo sign contracts.
Operating expenses, exclusive of depreciation and amortization, increased $83.7
million or 54.4% to $237.5 million for the year ended December 31, 1999 from
$153.8 million for the same period in 1998. This increase was the result of (i)
an increase in personnel costs, sign site rent and other costs related to the
increase in revenue and (ii) additional operating expenses related to the
Company's recent acquisitions and the continued development of the logo sign
business.
Depreciation and amortization expense increased $88.3 million or 99.4% from
$88.8 million for the year ended December 31, 1998 to $177.1 million for the
year ended December 31, 1999 as a result of an increase in capital assets
resulting from the Company's recent acquisition activity.
Due to the above factors, operating income decreased $16.5 million or 35.8% from
$46.0 million for the year ended December 31, 1998 to $29.5 million for the year
ended December 31, 1999.
Interest income increased $.7 million as a result of an increase in excess cash
investments made during the period. Interest expense increased $29.6 million
from $60.0 million for the year ended December 31, 1998 to $89.6 million for the
year ended December 31, 1999 as a result of interest expense on the Company's 5
1/4% Convertible Notes due 2006 and greater amounts outstanding under the New
Bank Credit Agreement to finance recent acquisitions.
The decrease in operating income and the increase in interest expense described
above resulted in a $41.1 million decrease in earnings before income taxes,
extraordinary item and cumulative effect of a change in accounting principle.
The decrease in earnings before income taxes, resulted in an increase in the
income tax benefit of $9.4 million for the year ended December 31, 1999 over the
same period in 1998.
An extraordinary loss on debt extinguishment of $.2 million net of income tax
benefit of $.1 million, was incurred during the year ended December 31, 1999, as
a result of the extinguishment of a portion of the Company's 9 1/4% Senior
Subordinated Notes due 2007 in connection with a change of control tender offer
in July, 1999.
Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, the Company recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle. This expense is a one
time adjustment to recognize start-up activities and organization costs that
were capitalized in prior periods.
As a result of the foregoing factors, the Company recognized a net loss for the
year ended December 31, 1999 of $44.5 million, as compared to a net loss of
$11.9 million for the same period in 1998.
-17-
<PAGE> 18
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
Total revenues increased $87.5 million or 43.5% to $288.6 million for the year
ended December 31, 1998 from $201.1 million for the same period in 1997. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $84.5 million or 47.6%, which was attributable to the Company's
acquisitions during 1997 and 1998 and internal growth within the Company's
previously existing markets, and (ii) a $3.5 million increase in logo sign
revenue, which represents a 16.8% increase over the prior year. The increase in
logo sign revenue was due to the completion of development of the new logo sign
contracts awarded in 1997 and 1998 and the continued expansion of the Company's
existing logo sign contracts.
Operating expenses, exclusive of depreciation and amortization, increased $45.0
million or 41.4% to $153.8 million for the year ended December 31, 1998 from
$108.8 million for the same period in 1997. This increase was the result of (i)
an increase in personnel costs, sign site rent and other costs related to the
increase in revenue and (ii) additional operating expenses related to the
Company's recent acquisitions and the continued development of the logo sign
business.
Depreciation and amortization expense increased $40.5 million or 83.9% from
$48.3 million for the year ended December 31, 1997 to $88.8 million for the year
ended December 31, 1998 as a result of an increase in capital assets resulting
from the Company's recent acquisition activity.
Due to the above factors, operating income increased $2.0 million or 4.5% from
$44.0 million for the year ended December 31, 1997 to $46.0 million for the
twelve months ended December 31, 1998.
Interest income decreased $1.0 million as a result of a decrease in excess cash
investments made during the period. Interest expense increased $21.8 million
from $38.2 million for the year ended December 31, 1997 to $60.0 million for the
year ended December 31, 1998 as a result of interest expense on the Company's 8
5/8% Senior Subordinated Notes due 2007 (the "1997 Notes") and greater amounts
outstanding under the Senior Credit Facility (as defined below) and the New Bank
Credit Agreement to finance recent acquisitions.
The increase in operating income was offset by the increase in interest expense
described above resulting in a $19.6 million decrease in earnings before income
taxes.
Due to the decrease in earnings before income taxes, income tax expense for the
twelve months ended December 31, 1998 decreased $4.8 million over the same
period in 1997.
As a result of the foregoing factors, the Company recognized a net loss for the
year ended December 31, 1998 of $11.9 million, as compared to net earnings of
$2.8 million for the same period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically satisfied its working capital requirements with
cash from operations, offerings of its Class A common stock and debt securities
and borrowings under its bank credit facilities. The Company's acquisitions have
been financed primarily with funds borrowed under its bank credit facilities and
issuance of its Class A common stock.
The Company's net cash provided by operating activities increased to $110.6
million in fiscal 1999 due primarily to an increase in noncash items of $79.9
million, which includes an increase in depreciation and amortization of $88.3
million offset by a
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<PAGE> 19
decrease in deferred tax expense of $6.0 million and an increase in gain on
disposition of assets of $4.3 million. There was also a decrease in net earnings
of $32.6 million, an increase in receivables of $16.6 million, an increase in
other assets of $2.2 million, an increase in trade accounts payable of $3.2
million, an increase in accrued expenses of $14.3 million, and a decrease in
deferred income of $9.3 million. Net cash used in investing activities increased
$415.5 million from $535.2 million in fiscal 1998 to $950.7 million in fiscal
1999. This increase was due to a $395.6 million increase in purchase of outdoor
advertising assets and a $22.0 million increase in capital expenditures offset
by an increase in proceeds from the sale of property and equipment of $2.1
million. Net cash provided by financing activities increased $135.8 million in
fiscal 1999 due to a $279.5 million increase in proceeds from issuance of
long-term debt due to the net proceeds from the August, 1999 offering of 5 1/4%
Convertible Notes due 2006 of $279.6 million, and a $335.0 million increase in
principal borrowings under credit agreements, offset by a $395.2 million
decrease in proceeds from issuance of common stock.
During the year ended December 31, 1999, the Company financed its acquisition
activity of approximately $1.9 billion with remaining proceeds from the
December, 1998 equity offering, borrowings under the Company's bank credit
facility and the issuance of approximately 26.4 million shares of common stock.
At December 31, 1999, following these acquisitions, the Company had $223 million
available under the revolving bank credit facility.
On August 13, 1999, the Company replaced the 1998 bank credit facility with a
new bank credit facility under which The Chase Manhattan Bank serves as
administrative agent. The new $1 billion bank credit facility consists of (1) a
$350 million revolving bank credit facility and (2) a $650 million term facility
with two tranches, a $450 million Term A facility and a $200 million Term B
facility. As a result of the holding company reorganization completed on July
20, 1999, the existing bank credit facility and the new bank credit facility are
obligations of Lamar Media Corp., a wholly owned subsidiary, of Lamar
Advertising Company. As of December 31, 1999, Lamar Media had borrowings under
this agreement of $776 million.
On August 10, 1999, the Company completed an offering of $287.5 million 5 1/4%
Convertible Notes due 2006. The net proceeds of approximately $279.6 million of
the convertible notes were used to pay down existing bank debt. The convertible
notes are convertible into Lamar Advertising Company Class A common stock at an
initial conversion price of $46.25 per share.
In connection with the reorganization of Lamar Advertising Company into a new
holding company structure, Lamar Media Corp. (formerly known as Lamar
Advertising Company) made a change of control tender offer to the holders of its
9 1/4% Senior Subordinated Notes due 2007 in aggregate principal amount of
approximately $103.9 million. Pursuant to the change of control tender offer and
in accordance with the Indenture, Lamar Media Corp. offered to repurchase the
Notes for 101% of the principal amount plus accrued interest. A total of $29.9
million aggregate principal amount of Notes were tendered for payment on August
19, 1999, and the related 1% prepayment penalty is reflected as an extraordinary
item in the Company's income statement, net of tax.
LAMAR MEDIA CORP.
On July 20, 1999, Lamar Advertising Company completed a corporate reorganization
to create a new holding company structure. The reorganization was accomplished
through a merger under section 251(g) of the Delaware General Corporation Law.
At the effective time of the merger, all stockholders of Lamar Advertising
Company became stockholders in a new holding company and Lamar Advertising
Company became a wholly-owned subsidiary of the new holding company. The new
holding company took the Lamar Advertising Company
-19-
<PAGE> 20
name and the old Lamar Advertising Company was renamed Lamar Media Corp. In the
merger, all outstanding shares of old Lamar Advertising Company's capital stock
were converted into shares of the new holding company with the same voting
powers, designations, preferences and rights, and the same qualifications,
restrictions and limitations, as the shares of old Lamar Advertising Company.
The following is a discussion of the consolidated financial condition and
results of operations of Lamar Media for the years ended December 31, 1999 and
1998. This discussion should be read in conjunction with the consolidated
financial statements of Lamar Media and the related notes.
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
Total revenues increased $155.5 million or 53.9% to $444.1 million for the year
ended December 31, 1999 from $288.6 million for the same period in 1998. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $150.5 million or 57.5%, which was attributable to Lamar Media's
acquisitions during 1999 and 1998 and internal growth within Lamar Media's
previously existing markets, and (ii) a $4.0 million increase in logo sign
revenue, which represents a 16.6% increase over the prior year. The increase in
logo sign revenue was due to the completion of development of the new logo sign
contracts awarded in 1999 and 1998 and the continued expansion of Lamar Media's
existing logo sign contracts.
Operating expenses, exclusive of depreciation and amortization, increased $83.6
million or 54.3% to $237.4 million for the year ended December 31, 1999 from
$153.8 million for the same period in 1998. This increase was the result of (i)
an increase in personnel costs, sign site rent and other costs related to the
increase in revenue and (ii) additional operating expenses related to Lamar
Media's recent acquisitions and the continued development of the logo sign
business.
Depreciation and amortization expense increased $87.4 million or 98.5% from
$88.8 million for the year ended December 31, 1998 to $176.2 million for the
year ended December 31, 1999 as a result of an increase in capital assets
resulting from Lamar Media's recent acquisition activity.
Due to the above factors, operating income decreased $15.5 million or 33.6% from
$46.0 million for the year ended December 31, 1998 to $30.5 million for the year
ended December 31, 1999.
Interest income increased $.7 million as a result of an increase in excess cash
investments made during the period. Interest expense increased $29.6 million
from $60.0 million for the year ended December 31, 1998 to $89.6 million for the
year ended December 31, 1999 as a result of interest expense on Lamar Media's
obligation to Lamar Advertising Company and greater amounts outstanding under
the New Bank Credit Agreement to finance recent acquisitions.
The decrease in operating income and the increase in interest expense described
above resulted in a $40.1 million decrease in earnings before income taxes,
extraordinary item and cumulative effect of a change in accounting principle.
The decrease in earnings before income taxes, resulted in an increase in the
income tax benefit of $9.0 million for the year ended December 31, 1999 over the
same period in 1998.
An extraordinary loss on debt extinguishment of $.2 million net of income tax
benefit of $.1 million, was incurred during the year ended December 31, 1999, as
a result of the extinguishment of a portion of Lamar Media's 9 1/4% Senior
Subordinated Notes due 2007 in connection with a change of control tender offer
in July, 1999.
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<PAGE> 21
Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, Lamar Media recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle. This expense is a one
time adjustment to recognize start-up activities and organization costs that
were capitalized in prior periods.
As a result of the foregoing factors, Lamar Media recognized a net loss for the
year ended December 31, 1999 of $43.9 million, as compared to a net loss of
$11.9 million for the same period in 1998.
FACTORS AFFECTING FUTURE OPERATING RESULTS
THE SIGNIFICANT FIXED PAYMENTS ON THE COMPANY'S DEBT INCREASES UNCERTAINTY AND
REDUCES FLEXIBILITY IN ITS OPERATIONS.
The Company has borrowed substantial amounts of money in the past and may borrow
more money in the future. At December 31, 1999, the Company had approximately
$1.6 billion of debt outstanding consisting of approximately $776 million in
bank debt, $528 million in various series of senior subordinated notes, $287.5
million in convertible notes and $24 million in various other short-term and
long-term debt.
A large part of the Company's cash flow from operations must be used to make
principal and interest payments on its debt. If the Company's operations make
less money in the future, it may need to borrow to make these payments. In
addition, the Company finances most of its acquisitions through borrowings under
Lamar Media's bank credit facility which has a total committed amount of $1.0
billion in term and revolving credit loans. As of December 31, 1999, the Company
had approximately $223 million available to borrow under this credit facility.
Since its borrowing capacity under its credit facility is limited, the Company
may not be able to continue to finance future acquisitions at its historical
rate with borrowings under its credit facility. The Company may need to borrow
additional amounts or seek other sources of financing to fund future
acquisitions. The Company cannot guarantee that such additional financing will
be available on favorable terms. The Company may need the consent of the banks
under its credit facility, or the holders of other indebtedness, to borrow
additional money.
RESTRICTIONS IN THE COMPANY'S, AND ITS WHOLLY-OWNED, DIRECT SUBSIDIARY LAMAR
MEDIA'S DEBT AGREEMENTS REDUCE OPERATING FLEXIBILITY AND CONTAIN COVENANTS AND
RESTRICTIONS THAT CREATE THE POTENTIAL FOR DEFAULTS.
The terms of the indenture relating to Lamar Advertising's outstanding notes,
Lamar Media's bank credit facility and the indentures relating to Lamar Media's
outstanding notes restrict, among other things, the ability of Lamar Advertising
and Lamar Media to:
o dispose of assets;
o incur or repay debt;
o create liens;
o make investments; and
o pay dividends.
Lamar Media's ability to make distributions to Lamar Advertising is also
restricted under the terms of these agreements.
Under the Lamar Media's credit facility the Company must maintain specified
financial ratios and levels including:
o cash interest coverage;
o fixed charge coverage;
o senior debt ratios; and
o total debt ratios.
-21-
<PAGE> 22
Failure to comply with these tests may cause all amounts outstanding under the
credit facility to become immediately due. If this were to occur, it would
create serious financial problems for the Company. The Company's ability to
comply with these restrictions, and any similar restrictions in future
agreements, depends on its operating performance. Because its performance is
subject to prevailing economic, financial and business conditions and other
factors that are beyond the Company's control, it may be unable to comply with
these restrictions in the future.
NEGATIVE TRENDS IN ADVERTISING EXPENDITURES COULD HURT THE COMPANY'S BUSINESS.
The Company sells advertising space to generate revenues. A decrease in demand
for advertising space could adversely affect the Company's business. General
economic conditions and trends in the advertising industry affect the amount of
advertising space purchased. A reduction in money spent on its displays could
result from:
o a general decline in economic conditions;
o a decline in economic conditions in particular markets where
the Company conducts business;
o a reallocation of advertising expenditures to other available
media by significant users of the Company's displays; or
o a decline in the amount spent on advertising in general.
THE REGULATION OF OUTDOOR ADVERTISING IMPACTS THE COMPANY'S OPERATIONS.
The Company's operations are significantly impacted by federal, state and local
government regulation of the outdoor advertising business.
The federal government conditions federal highway assistance on states imposing
location restrictions on the placement of billboards on primary and interstate
highways. Federal laws also impose size, spacing and other limitations on
billboards. Some states have adopted standards more restrictive than the federal
requirements. Local governments generally control billboards as part of their
zoning regulations. Some local governments have enacted ordinances which require
removal of billboards by a future date. Others prohibit the construction of new
billboards and the reconstruction of significantly damaged billboards, or allow
new construction only to replace existing structures.
Local laws which mandate removal of billboards at a future date often do not
provide for payment to the owner for the loss of structures that are required to
be removed. Certain federal and state laws require payment of compensation in
such circumstances. Local laws that require the removal of a billboard without
compensation have been challenged in state and federal courts with conflicting
results. Accordingly, the Company may not be successful in negotiating
acceptable arrangements when the Company's displays have been subject to removal
under these types of local laws.
Additional regulations may be imposed on outdoor advertising in the future.
Legislation regulating the content of billboard advertisements has been
introduced in Congress from time to time in the past. Additional regulations or
changes in the current laws regulating and affecting outdoor advertising at the
federal, state or local level may have a material adverse effect on the
Company's results of operations.
-22-
<PAGE> 23
CONTINUING THE COMPANY'S GROWTH BY ACQUISITIONS MAY BECOME MORE DIFFICULT AND
INVOLVES COSTS AND UNCERTAINTIES.
The Company has substantially increased its inventory of advertising displays
through acquisitions. The Company's operating strategy involves making purchases
in markets where it currently competes as well as in new markets. However, the
following factors may affect the Company's ability to continue to pursue this
strategy effectively.
o The outdoor advertising market has been consolidating, and
this may adversely affect the Company's ability to find
suitable candidates for purchase.
o The Company is also likely to face increased competition from
other outdoor advertising companies for the companies or
assets it wishes to purchase. Increased competition may lead
to higher prices for outdoor advertising companies and assets
and decrease those it is able to purchase.
o The Company does not know if it will have sufficient capital
resources to make purchases, obtain any required consents from
the Company's lenders, or find acquisition opportunities with
acceptable terms.
o From January 1, 1999 to December 31, 1999, the Company
completed 77 transactions involving the purchase of
complementary outdoor advertising businesses, the most
significant of which was the acquisition on September 15,
1999, of Chancellor Outdoor for $1.6 billion. The Company has
integrated these acquired assets and businesses into its
existing operations, but cannot be certain that the benefits
and cost savings that it anticipates from these purchases will
develop.
COMPETITION FROM LARGER OUTDOOR ADVERTISERS AND OTHER FORMS OF ADVERTISING COULD
HURT THE COMPANY'S PERFORMANCE.
The Company cannot be sure that in the future it will compete successfully
against the current and future sources of outdoor advertising competition and
competition from other media. The competitive pressure that it faces could
adversely affect the Company's profitability or financial performance. The
Company faces competition from other outdoor advertising companies, some of
which may be larger and better financed than it is, as well as from other forms
of media, including television, radio, newspapers and direct mail advertising.
It must also compete with an increasing variety of other out-of-home advertising
media that include advertising displays in shopping centers, malls, airports,
stadiums, movie theaters and supermarkets, and on taxis, trains and buses.
In the Company's logo sign business, it currently faces competition for
state-awarded service contracts from two other logo sign providers as well as
local companies. Initially, the Company competed for state-awarded service
contracts as they are privatized. Because these contracts expire after a limited
time, the Company must compete to keep its existing contracts each time they are
up for renewal.
POTENTIAL LOSSES RESULTING FROM THE FAILURE OF THE COMPANY'S CONTINGENCY PLANS
RELATING TO HURRICANES COULD HURT THE COMPANY'S BUSINESS.
Although the Company has developed contingency plans designed to deal with the
threat posed to advertising structures by hurricanes, it cannot guarantee that
these plans will work. If these plans fail, significant losses could result.
A significant portion of its structures are located in the Mid-Atlantic and Gulf
Coast regions of the United States. These areas are highly susceptible to
hurricanes during the late summer and early fall. In the past, the Company has
incurred significant losses
-23-
<PAGE> 24
due to severe storms. These losses resulted from structural damage, overtime
compensation, loss of billboards that could not be replaced under applicable
laws and reduced occupancy because billboards were out of service.
The Company has determined that it is not economical to obtain insurance against
losses from hurricanes and other storms. Instead, contingency plans have been
developed to deal with the threat of hurricanes. For example, an attempt is made
to remove the advertising faces on billboards at the onset of a storm, when
possible, which permits the structures to better withstand high winds during a
storm. These advertising faces are then replaced after the storm has passed.
However, these plans may not be effective in the future and, if they are not,
significant losses may result.
NEW LOGO SIGN CONTRACTS ARE SUBJECT TO STATE AWARD AND MAY NOT BE AWARDED TO THE
COMPANY; EXISTING CONTRACTS ARE SUBJECT TO RENEWAL AND MAY NOT BE RENEWED.
A portion of the Company's revenues and operating income come from our
state-awarded service contracts for logo signs. The Company cannot predict what
remaining states, if any, will start logo sign programs or convert state-run
logo sign programs to privately operated program. The Company competes with
other parties for new state-awarded service contracts for logo signs. Even when
it is awarded such a contract, the award may be challenged under state contract
bidding requirements. If an award is challenged, the Company may incur delays
and litigation costs.
Generally, state-awarded logo sign contracts have a term, including renewal
options, of ten to twenty years. States may terminate a contract early, but in
most cases must pay compensation to the logo sign provider for early
termination. Typically, at the end of the term of the contract, ownership of the
structures is transferred to the state without compensation to the logo sign
provider. Of our 20 logo sign contracts in place at December 31, 1999, three are
subject to renewal in April, June and October, 2000 and one is due to terminate
in December, 2000. There is no guarantee that the Company will be able to obtain
new logo sign contracts or renew its existing contracts. In addition, after a
new state-awarded logo contract is received, the Company generally incurs
significant start-up costs. The Company cannot guarantee that it will continue
to have access to the capital necessary to finance those costs.
THE LOSS OF KEY EXECUTIVES COULD AFFECT THE COMPANY'S OPERATIONS.
The Company's success depends to a significant extent upon the continued
services of its executive officers and other key management and sales personnel.
Kevin P. Reilly, Jr., the Chief Executive Officer, the nine regional managers
and the manager of the logo sign business, in particular, are essential to the
Company's continued success. Although incentive and compensation programs have
been designed to retain key employees, there are no employment contracts with
any employees and none of the executive officers have signed non-compete
agreements. The Company does not maintain key man insurance on its executives.
If any of the executive officers or other key management and sales personnel
stopped working with the Company in the future, it could have an adverse effect
on its business.
INFLATION
In the last three years, inflation has not had a significant impact on the
Company.
SEASONALITY
The Company's revenues and operating results have exhibited some degree of
seasonality in past periods. Typically, the Company experiences its strongest
financial performance in the summer and its lowest in the winter. The Company
expects this trend to continue in the future. Because a significant portion of
the Company's expenses are fixed, a
-24-
<PAGE> 25
reduction in revenues in any quarter is likely to result in a period to period
decline in operating performance and net earnings.
IMPACT OF YEAR 2000
The Company has not experienced significant disruptions to its financial or
operating activities caused by failure of its computerized systems resulting
from Year 2000 issues. All missions critical systems and links with key
suppliers and vendors operated as expected and execution of contingency plans
was not required.
-25-
<PAGE> 26
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
LAMAR ADVERTISING COMPANY AND LAMAR MEDIA CORP.
Lamar Advertising Company is exposed to interest rate risk in connection with
variable rate debt instruments issued by its wholly-owned subsidiary Lamar Media
Corp. The Company does not enter into market risk sensitive instruments for
trading purposes. The information below summarizes the Company's interest rate
risk associated with its principal variable rate debt instruments outstanding at
December 31, 1999, and should be read in conjunction with Note 8 of the Notes to
the Company's Consolidated Financial Statements.
Loans under Lamar Media Corp.'s New Bank Credit Agreement bear interest at
variable rates equal to the Chase Prime Rate or LIBOR plus the applicable
margin. Because the Chase Prime Rate or LIBOR may increase or decrease at any
time, the Company is exposed to market risk as a result of the impact that
changes in these base rates may have on the interest rate applicable to
borrowings under the New Bank Credit Agreement. Increases in the interest rates
applicable to borrowings under the New Bank Credit Agreement would result in
increased interest expense and a reduction in the Company's net income and after
tax cash flow.
At December 31, 1999, there was approximately $776 million of aggregate
indebtedness outstanding under the New Bank Credit Agreement, or approximately
48.0% of the Company's outstanding long-term debt on that date, bearing interest
at variable rates. The aggregate interest expense for 1999 with respect to
borrowings under the New Bank Credit Agreement and Senior Credit Facility was
$30.5 million, and the weighted average interest rate applicable to borrowings
under these credit facilities during 1999 was 7.3%. Assuming that the weighted
average interest rate was 200-basis points higher (that is 9.3% rather than
7.3%), then the Company's 1999 interest expense would have been approximately
$8.2 million higher resulting in a $5.0 million decrease in the Company's 1999
net income and after tax cash flow.
The Company attempts to mitigate the interest rate risk resulting from its
variable interest rate long-term debt instruments by also issuing fixed rate
long-term debt instruments and maintaining a balance over time between the
amount of the Company's variable rate and fixed rate indebtedness. In addition,
the Company has the capability under the New Bank Credit Agreement to fix the
interest rates applicable to its borrowings at an amount equal to LIBOR plus the
applicable margin for periods of up to twelve months, which would allow the
Company to mitigate the impact of short-term fluctuations in market interest
rates. In the event of an increase in interest rates, the Company may take
further actions to mitigate its exposure. The Company cannot guarantee, however,
that the actions that it may take to mitigate this risk will be feasible or
that, if these actions are taken, that they will be effective.
ITEM 8. FINANCIAL STATEMENTS (FOLLOWING ON NEXT PAGE)
-26-
<PAGE> 27
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
<TABLE>
<S> <C>
Independent Auditors' Report.............................................. 28
Consolidated Balance Sheets as of December 31, 1999 and 1998 ............. 29
Consolidated Statements of Operations for the years ended December 31,
1999, 1998 and 1997................................................. 30
Consolidated Statements of Comprehensive Income for the years ended
December 31, 1999, 1998 and 1997..................................... 31
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1999, 1998 and 1997..................................... 32
Consolidated Statements of Cash Flows for the years ended December 31,
1999, 1998 and 1997................................................. 33
Notes to Consolidated Financial Statements ...............................34-54
</TABLE>
-27-
<PAGE> 28
Independent Auditors' Report
Board of Directors
Lamar Advertising Company:
We have audited the accompanying consolidated balance sheets of Lamar
Advertising Company and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, comprehensive income,
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lamar Advertising
Company and subsidiaries as of December 31, 1999 and 1998, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.
As discussed in Note 17 to the consolidated financial statements, the Company
changed its method of accounting for the costs of start-up activities in
1999.
KPMG LLP
New Orleans, Louisiana
March 17, 2000
-28-
<PAGE> 29
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)
December 31, 1999 and 1998
<TABLE>
<CAPTION>
Assets 1999 1998
- ------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,401 $ 128,597
Receivables, net 81,226 40,380
Prepaid expenses 21,524 12,346
Other current assets 14,342 1,736
----------- -----------
Total current assets 125,493 183,059
----------- -----------
Property, plant and equipment (note 4) 1,412,605 661,324
Less accumulated depreciation and amortization (218,893) (153,972)
----------- -----------
Net property plant and equipment 1,193,712 507,352
----------- -----------
Intangible assets (note 5) 1,874,177 705,934
Other assets - non-current 13,563 17,032
----------- -----------
Total assets $ 3,206,945 $ 1,413,377
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 11,492 $ 4,258
Current maturities of long-term debt (note 8) 4,318 49,079
Accrued expenses (note 7) 57,653 25,912
Deferred income 11,243 9,589
----------- -----------
Total current liabilities 84,706 88,838
Long-term debt (note 8) 1,611,463 827,453
Deferred income taxes (note 9) 112,412 25,613
Deferred income 1,222 1,293
Other liabilities 5,613 3,401
----------- -----------
Total liabilities 1,815,416 946,598
----------- -----------
Stockholders' equity (note 11):
Series AA preferred stock, par value $.001, $63.80 cumulative
dividends, authorized $1,000,000 shares; 5,719.49 shares and
no shares issued and outstanding at 1999 and 1998,
respectively -- --
Class A preferred stock, par value $638, $63.80 cumulative
dividends, 10,000 shares authorized, 0 shares and 5,719
shares issued and outstanding at 1999 and 1998 respectively -- 3,649
Class A common stock, par value $.001, 125,000,000 shares
authorized, 70,576,251 and 43,392,876 shares issued and
outstanding at 1999 and 1998, respectively 71 43
Class B common stock, par value $.001, 37,500,000 shares
authorized, 17,449,997 and 17,699,997 shares issued and
outstanding at 1999 and 1998, respectively 17 18
Additional paid-in capital 1,478,916 505,644
Accumulated deficit (87,475) (42,575)
----------- -----------
Stockholders' equity 1,391,529 466,779
----------- -----------
Total liabilities and stockholders' equity $ 3,206,945 $ 1,413,377
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-29-
<PAGE> 30
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Net revenues $ 444,135 $ 288,588 $ 201,062
------------ ------------ ------------
Operating expenses:
Direct advertising expenses 143,090 92,849 63,390
General and administrative expenses 94,372 60,935 45,368
Depreciation and amortization 177,138 88,791 48,317
------------ ------------ ------------
414,600 242,575 157,075
------------ ------------ ------------
Operating income 29,535 46,013 43,987
------------ ------------ ------------
Other expense (income):
Interest income (1,421) (762) (1,723)
Interest expense 89,619 60,008 38,230
Gain on disposition of assets (5,481) (1,152) (15)
------------ ------------ ------------
82,717 58,094 36,492
------------ ------------ ------------
Earnings (loss) before income taxes, extraordinary
item and cumulative effect of a change in accounting principle (53,182) (12,081) 7,495
Income tax expense (benefit) (note 9) (9,596) (191) 4,654
------------ ------------ ------------
Earnings (loss) before extraordinary item and cumulative
effect of a change in accounting principle (43,586) (11,890) 2,841
Extraordinary loss on debt extinguishment net of
income tax benefit of $117 (182) -- --
------------ ------------ ------------
Earnings (loss) before cumulative effect of a change in
accounting principle (43,768) (11,890) 2,841
Cumulative effect of a change in accounting principle (767) -- --
------------ ------------ ------------
Net earnings (loss) (44,535) (11,890) 2,841
Preferred stock dividends (365) (365) (365)
------------ ------------ ------------
Net earnings (loss) applicable to common stock $ (44,900) $ (12,255) $ 2,476
============ ============ ============
Earnings (loss) per common share - basic and diluted:
Earnings (loss) before extraordinary item and
accounting change $ (.64) $ (.24) $ .05
Extraordinary loss on debt extinguishment -- -- --
Cumulative effect of a change in accounting principle (.01) -- --
------------ ------------ ------------
Net earnings (loss) $ (.65) $ (.24) $ .05
============ ============ ============
Weighted average common shares outstanding 69,115,764 51,361,522 47,037,497
Incremental common shares from dilutive stock options -- -- 363,483
Incremental common shares from convertible debt -- -- --
------------ ------------ ------------
Weighted average common shares assuming dilution 69,115,764 51,361,522 47,400,980
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-30-
<PAGE> 31
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(In Thousands)
Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net earnings (loss) applicable
to common stock $(44,900) $(12,255) $ 2,476
Other comprehensive income -
change in unrealized gain
(loss) on investment securities
(net of deferred tax expense
(benefit) of $0, $217 and $(596)
for the years ended December 31,
1999, 1998 and 1997 -- 354 (974)
-------- -------- --------
Comprehensive income (loss) $(44,900) $(11,901) $ 1,502
======== ======== ========
</TABLE>
-31-
<PAGE> 32
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(In thousands, except share and per share data)
Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Series Unrealized
AA Class A Class A Class B Additional Gain (Loss)
Preferred Preferred Common Common Paid-in Accumulated On Investment
Stock Stock Stock Stock Capital Deficit Securities Total
--------- --------- ------- ------- ----------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ -- 3,649 18 14 92,258 (32,796) 620 63,763
Exercise of stock options -- -- -- -- 3,448 -- -- 3,448
Conversion of 1,811,552
shares of Class B common
stock to Class A common
stock -- -- 1 (1) -- -- -- --
Net earnings -- -- -- -- -- 2,841 -- 2,841
Dividends ($63.80 per
preferred share) -- -- -- -- -- (365) -- (365)
Unrealized loss on investment
securities, net of deferred
taxes of $596 -- -- -- -- -- -- (974) (974)
Three-for-two stock split
(Note 11) -- -- 9 6 (15) -- -- --
------- ------- ------ ----- --------- -------- -------- ---------
Balance, December 31, 1997 -- 3,649 28 19 95,691 (30,320) (354) 68,713
------- ------- ------ ----- --------- -------- -------- ---------
Issuance of 13,338,005 shares
of common stock -- -- 13 -- 399,288 -- -- 399,301
Exercise of stock options -- -- 1 -- 10,665 -- -- 10,666
Conversion of 1,062,912
shares of Class B common
stock to Class A common
stock -- -- 1 (1) -- -- -- --
Net loss -- -- -- -- -- (11,890) -- (11,890)
Dividends ($63.80 per
preferred share) -- -- -- -- -- (365) -- (365)
Realized loss on investment
securities, net of tax -- -- -- -- -- - 354 354
------- ------- ------ ----- --------- -------- -------- ---------
Balance December 31, 1998 -- 3,649 43 18 505,644 (42,575) -- 466,779
------- ------- ------ ----- --------- -------- -------- ---------
Issuance of 26,407,650 shares
of common stock in
acquisitions -- -- 26 -- 954,946 -- -- 954,972
Exercise of stock options -- -- 1 -- 14,677 -- -- 14,678
Conversion of 250,000 shares
of Class B common stock to
Class A common stock -- -- 1 (1) -- -- -- --
Conversion of Class A
preferred stock into Series
AA preferred stock -- (3,649) -- -- 3,649 -- -- --
Net loss -- -- -- -- -- (44,535) -- (44,535)
Dividends ($63.80 per
preferred share) -- -- -- -- -- (365) -- (365)
------- ------- ------ ----- --------- -------- -------- ---------
Balance December 31, 1999 $ -- -- 71 17 1,478,916 (87,475) -- 1,391,529
======= ======= ====== ===== ========= ======== ======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
-32-
<PAGE> 33
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (44,535) (11,890) 2,841
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Depreciation and amortization 177,138 88,791 48,317
Gain on disposition of assets (5,481) (1,152) (15)
Cumulative effect of accounting change 767 -- --
Deferred tax expense (benefit) (13,579) (7,537) (2,839)
Provision for doubtful accounts 4,065 2,883 2,098
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (19,091) (2,464) (7,646)
Prepaid expenses 782 (521) (367)
Other assets (4,337) (2,148) (251)
Increase (decrease) in:
Trade accounts payable 3,438 250 (1,951)
Accrued expenses 18,597 4,326 6,063
Deferred income (7,184) 2,132 (425)
Other liabilities (29) (172) (42)
--------- --------- ---------
Net cash provided by operating activities 110,551 72,498 45,783
--------- --------- ---------
Cash flows from investing activities:
Capital expenditures (77,186) (55,196) (36,654)
Purchase of new markets (881,067) (485,514) (386,842)
Proceeds from sale of property and equipment 7,603 5,493 53,268
--------- --------- ---------
Net cash used in investing activities (950,650) (535,217) (370,228)
--------- --------- ---------
Cash flows from financing activities:
Net proceeds from issuance of common stock 7,418 402,629 2,403
Proceeds from issuance of long-term debt 279,594 70 193,926
Principal payments on long-term debt (79,667) (6,229) --
Debt issuance costs (13,077) (3,035) --
Net borrowing (payments) under credit agreements 526,000 191,000 54,720
Dividends (365) (365) (365)
--------- --------- ---------
Net cash provided by financing activities 719,903 584,070 250,684
--------- --------- ---------
Net increase (decrease) in cash and
cash equivalents (120,196) 121,351 (73,761)
Cash and cash equivalents at beginning
of period 128,597 7,246 81,007
--------- --------- ---------
Cash and cash equivalents at end of period $ 8,401 128,597 7,246
========= ========= =========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 83,837 56,960 33,284
========= ========= =========
Cash paid for income taxes $ 6,919 1,107 8,792
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
-33-
<PAGE> 34
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(1) Significant Accounting Policies
(a) Nature of Business Lamar
Advertising Company ("LAC" or the "Company") is engaged in the
outdoor advertising business operating approximately 116,800
outdoor advertising displays in 42 states. The Company's
operating strategy is to be the leading provider of outdoor
advertising services in most of the markets it serves.
In addition, the Company operates a logo sign business in 20
states throughout the United States and in 1 province of
Canada. Logo signs are erected pursuant to state-awarded
service contracts on public rights-of-way near highway exits
and deliver brand name information on available gas, food,
lodging and camping services. Included i the Company's logo
sign business are tourism signing contracts.
(b) Principles of Consolidation
The accompanying consolidated financial statements include
Lamar Advertising Company, its wholly-owned subsidiary, Lamar
Media Corp. ("Lamar Media"), and its majority-owned
subsidiaries. All intercompany transactions and balances have
been eliminated in consolidation.
(c) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation
is calculated using accelerated and straight-line methods over
the estimated useful lives of the assets.
(d) Intangible Assets
Intangible assets, consisting primarily of goodwill, site
locations, customer lists and contracts, and non-competition
agreements are amortized using the straight-line method over
the assets estimated useful lives, generally from 5 to 15
years.
(Continued)
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<PAGE> 35
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Debt issuance costs are deferred and amortized over the terms
of the related credit facilities using the interest method.
(e) Investment Securities
Investment securities at December 31, 1997 consisted of the
Company's investment in approximately 340,000 shares of common
stock of Wireless One, Inc., a publicly-held company in the
wireless cable business.
The Wireless One, Inc. shares were classified as
available-for-sale at December 31, 1997 and were carried at
fair value with the unrealized gain or loss, net of the
related tax effect, reported as a separate component of
stockholders' equity. These shares were sold in May, 1998,
resulting in a realized loss of $875.
(f) Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of
The Company accounts for long-lived assets in accordance with
the provisions of Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long Lived Assets to be Disposed of." SFAS No. 121
requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or
changes in circumstances indicated that the carrying amount of
an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying
amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or fair value
less costs to sell.
The Company assesses the recoverability of enterprise level
goodwill by determining whether the unamortized goodwill
balance can be recovered through undiscounted future results
of the Company's operations. The amount of enterprise-level
goodwill impairment, if any, is measured based on projected
discounted future results using a discount rate reflecting the
Company's average cost of funds.
(g) Deferred Income
Deferred income consists principally of advertising revenue
received in advance and gains resulting from the sale of
certain assets to related parties. Deferred advertising
revenue is recognized in income as services are provided over
the term of the contract. Deferred gains are recognized in
income in the consolidated financial statements at the time
the assets are sold to an unrelated party or otherwise
disposed of.
(h) Revenue Recognition
The Company recognizes revenue from outdoor and logo sign
advertising contracts, net of agency commissions, on an
accrual basis ratably over the term of the contracts, as
advertising services are provided.
(i) Income Taxes
The Company uses the asset and liability method of accounting
for income taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax
assets
(Continued)
-35-
<PAGE> 36
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
and liabilities are measured using tax rates expected to apply
to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes
the enactment date.
(j) Earnings Per Share
Earnings per share are computed in accordance with SFAS No.
128, "Earnings Per Share." The calculation of basic earnings
per share excludes any dilutive effect of stock options and
convertible debt, while diluted earnings per share includes
the dilutive effect of stock options and convertible debt.
(k) Stock Option Plan
The Company accounts for its stock option plan in accordance
with the provisions of Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees",
and related interpretations. As such, compensation expense is
recorded on the date of grant only if the current market price
of the underlying stock exceeds the exercise price. SFAS No.
123, "Accounting for Stock-Based Compensation", permits
entities to recognize as expense over the vesting period the
fair value of all stock- based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue
to apply the provisions of APB Opinion No. 25 and provide pro
forma net income and pro forma earnings per share disclosures
for employee stock option grants made in 1995 and future years
as if the fair-value-based method defined in SFAS No. 123 has
been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma
disclosure provisions of SFAS No. 123.
(l) Cash and Cash Equivalents
The Company considers all highly-liquid investments with
original maturities of three months or less to be cash
equivalents.
(m) Reclassification of Prior Year Amounts
Certain amounts in the prior years' consolidated financial
statements have been reclassified to conform to the current
year presentation. These reclassifications had no effect on
previously reported net earnings.
(n) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
-36-
<PAGE> 37
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(2) Acquisitions
Year ended December 31, 1997
Effective April 1, 1997, the Company acquired all of the outstanding
capital stock of Penn Advertising, Inc. for a cash purchase price of
approximately $167,000. The Company subsequently sold approximately 16%
of the outdoor displays acquired to Universal Outdoor, Inc. for a cash
purchase price of $46,500.
On June 3, 1997, the Company purchased substantially all of the assets
of Headrick Outdoor, Inc. for a cash purchase price of approximately
$76,600. Simultaneous with the acquisition, the Company sold
approximately 9% of the outdoor displays acquired for a total purchase
price of $6,000.
On August 15, 1997, the Company purchased from Outdoor Systems, Inc.
("OSI") for a cash purchase price of approximately $116,000 (excluding
approximately $2,000 in capitalized costs), certain outdoor advertising
assets that OSI had acquired from National Advertising Company, a
division of Minnesota Mining and Manufacturing Company.
During the year ended December 31, 1997, the Company completed 21
additional acquisitions of outdoor advertising assets, none of which
were individually significant, for an aggregate cash purchase price of
approximately $21,000.
Each of these acquisitions were accounted for under the purchase method
of accounting, and, accordingly, the accompanying financial statements
include the results of operations of each acquired entity from the date
of acquisition. The acquisition costs have been allocated to assets
acquired and liabilities assumed based on fair market value at the
dates of acquisition. The following is a summary of the allocation of
the acquisition costs in the above transactions.
<TABLE>
<CAPTION>
Property
Current Plant & Other Current Long-term
Assets Equipment Goodwill Intangibles Liabilities Liabilities
-------- --------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Penn Advertising, Inc. $ 4,645 47,745 72,435 19,200 (1,144) (22,208)
Headrick Outdoor, Inc. 825 46,553 1,640 22,585 -- --
Outdoor Systems, Inc. 6,243 27,091 63,148 23,611 (2,640) --
Other 370 17,106 5,132 3,378 (132) (5,127)
$ 12,083 138,495 142,355 68,774 (3,916) (27,335)
======== ======= ======= ====== ====== =======
</TABLE>
(Continued)
-37-
<PAGE> 38
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Year Ended December 31, 1998
On January 2, 1998, the Company purchased all the outdoor advertising
assets of Ragan Outdoor Advertising Company, Ragan Outdoor Advertising
Company of Cedar Rapids, and Ragan Outdoor Advertising Company of
Rockford, L.L.C. for a cash purchase price of $25,000.
On January 30, 1998, the Company acquired all of the outdoor
advertising assets of three related outdoor advertising companies
(Pioneer Advertising Company, Superior Outdoor Advertising Company and
Overland Outdoor Advertising Company, Inc.) located in Missouri and
Arkansas for a cash purchase price of $19,200.
On April 30, 1998, the Company purchased all the outdoor advertising
assets of Northwest Outdoor Advertising, L.L.C. for a cash purchase
price of approximately $70,000. The acquired displays are located in
the states of Washington, Montana, Oregon, Idaho, Wyoming, Nebraska,
Nevada and Utah.
On May 15, 1998, the Company purchased the assets of Odegard Outdoor
Advertising, L.L.C., for a cash purchase price of approximately $8,500.
This acquisition increases the Company's presence in the Kansas City,
Missouri market.
On May 29, 1998, the Company entered into an agreement to purchase from
Rainier Evergreen, Inc. or through its affiliates (i) all of the issued
and outstanding common stock of American Signs, Inc., (ii) the assets
of the Sun Media division and (iii) the assets of Sun Media of the
Rockies, Inc. The asset purchases were closed on that date; while the
stock purchase was delayed due to lease transfer issues involving the
Bureau of Interior Affairs. The stock purchase was completed in
September, 1998. The total purchase price was $26,550.
On September 1, 1998, the Company entered into an agreement to purchase
all of the outdoor advertising assets of Nichols & Vann Advertising.
The Company paid a cash purchase price of $11,000 of which $6,100 is
held on deposit as of December 31, 1998, and is included in other
assets in the accompanying balance sheet at December 31, 1998.
On October 1, 1998, the Company purchased all of the outstanding stock
of OCI for a purchase price of $385,000. The purchase price included
approximately $235,000 in cash, the assumption of OCI debt of
approximately $105,000 and the issuance of notes in the aggregate
amount of $45,000 to certain principal stockholders of OCI. Pursuant to
this acquisition, the Company acquired approximately 14,700 displays in
12 states. Funds for this acquisition were provided from borrowings
under the New Revolving Credit Facility and the Term Facility.
During the year ended December 31, 1998, the Company completed 60
additional acquisitions of outdoor advertising assets, none of which
were individually significant, for an aggregate cash purchase price of
approximately $89 million and issuance of 63,005 shares of Class A
common stock valued at approximately $2,400.
(Continued)
-38-
<PAGE> 39
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Each of these acquisitions were accounted for under the purchase method
of accounting, and accordingly, the accompanying financial statements
include the results of operations of each acquired entity from the date
of acquisition. The acquisition costs have been allocated to assets
acquired and liabilities assumed based on fair market value at the
dates of acquisition. The following is a summary of the allocation of
the acquisition costs in the above transactions.
<TABLE>
<CAPTION>
Property
Current Plant & Other Other Current Long-term
Assets Equipment Goodwill Intangibles Assets Liabilities Liabilities
------- --------- -------- ----------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ragan Companies $ 694 9,634 13,275 1,573 -- (176) --
Pioneer and related companies 307 15,062 264 4,046 -- (479) --
Northwest Outdoor Advertising, LLC 2,176 23,667 36,199 8,861 -- (697) (273)
Odegard Outdoor Advertising, LLC 285 1,633 5,959 1,095 -- (272) (300)
Rainier Evergreen, Inc. 359 3,205 21,681 1,855 -- (550) (50)
Nichols & Vann Advertising -- 300 3,944 575 6,181 -- --
Outdoor Communications, Inc. 9,957 97,058 266,856 37,334 291 (54,112) (121,296)
Other 1,036 33,227 46,756 14,405 2,010 (3,506) (2,549)
-------- ------- ------- ------ ----- ------- --------
$ 14,814 183,786 394,934 69,744 8,482 (59,792) (124,468)
======== ======= ======= ====== ===== ======= ========
</TABLE>
Year Ended December 31, 1999
On January 5, 1999, the Company purchased all of the outdoor
advertising assets of American Displays, Inc. for a cash purchase price
of approximately $14,500.
On February 1, 1999, the Company purchased all of the outdoor
advertising assets of KJS, LLC for a cash purchase price of $40,500.
On April 1, 1999, the Company purchased all of the assets of Frank
Hardie, Inc. for a cash purchase price of approximately $20,300.
On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a
cash purchase price of approximately $22,100.
On September 15, 1999, Lamar Media Corp. purchased the capital stock of
Chancellor Media Outdoor Corporation and Chancellor Media Whiteco
Outdoor Corporation, ("Chancellor Outdoor") for a combination of
approximately $703,000 in cash and 26,227,273 shares of Class A common
stock valued at approximately $947,000. The stock purchase agreement
also contains a post-closing adjustment in the event that the net
working capital of Chancellor Outdoor as shown on the closing balance
sheet is greater or less than $12,000. As of December 31, 1999, the
working capital adjustment to be paid by the Company is $15,750, and is
included in accrued expenses in the accompanying balance sheet.
(Continued)
-39-
<PAGE> 40
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
During the year ended December 31, 1999, the Company completed 72
additional acquisitions of outdoor advertising and transit assets for
an aggregate cash purchase price of approximately $93,873 and the
issuance of 180,377 shares of Class A common stock valued at
approximately $7,981.
Each of these acquisitions were accounted for under the purchase method
of accounting, and, accordingly, the accompanying financial statements
include the results of operations of each acquired entity from the date
of acquisition. The purchase price has been allocated to assets
acquired and liabilities assumed based on fair market value at the
dates of acquisition. The following is a summary of the allocation of
the purchase price in the above transactions.
<TABLE>
<CAPTION>
Property
Current Plant & Other Other Current Long-term
Assets Equipment Goodwill Intangibles Assets Liabilities Liabilities
------- --------- -------- ----------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
American Displays $ 87 899 10,532 3,277 -- (284) --
KJS, LLC 20 9,468 30,543 4,489 -- (2,079) (1,921)
Frank Hardie 187 6,582 10,464 3,630 -- (525) --
Vivid, Inc. 357 9,706 8,526 4,085 -- (593)
Chancellor 39,242 645,151 298,486 779,775(a) 169 (6,014) (106,102)
Other 310 22,411 74,976 8,678 -- (1,301) (3,218)
-------- ------- ------- ------ --- ------- --------
$ 40,203 694,217 433,527 803,934 169 (10,796) (111,241)
======== ======= ======= ======= === ======= ========
</TABLE>
(a) Includes $615,946 of site locations.
The following unaudited pro forma financial information for the Company
gives effect to the 1999 and 1998 acquisitions as if they had occurred
on January 1, 1998. These pro forma results do not purport to be
indicative of the results of operations which actually would have
resulted had the acquisitions occurred on such date or to project the
Company's results of operations for any future period.
<TABLE>
<CAPTION>
1999 1998
--------- --------
<S> <C> <C>
Net revenues $ 601,584 576,838
========= ========
Loss before extraordinary items $ (92,969) (93,822)
========= ========
Net loss applicable to
common stock $ (94,283) (94,187)
========= =========
Net loss per common share $ (1.00) (1.83)
(basic and diluted) ========= =========
</TABLE>
(Continued)
-40-
<PAGE> 41
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(3) Noncash Financing and Investing Activities
A summary of significant noncash financing and investing activities for
the years ended December 31, 1999, 1998 and 1997 follows:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------ ------
<S> <C> <C> <C>
Disposition of assets $ 5,387 30 1,300
Acquisitions of assets 954,972 2,706 --
Issuance of Series AA preferred stock
in exchange for Class A preferred stock 3,649 -- --
Conversion of note receivable to equity
investment -- -- 500
Debt issuance costs 7,906 -- 4,750
</TABLE>
(4) Property, Plant and Equipment
Major categories of property, plant and equipment at December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
Estimated life
(years) 1999 1998
-------------- ---------- ----------
<S> <C> <C> <C>
Land -- $ 48,024 $ 25,543
Building and improvements 10-39 42,292 28,924
Advertising structures 15 1,240,020 576,676
Automotive and other equipment 3-7 82,269 30,181
---------- ----------
$1,412,605 $ 661,324
========== ==========
</TABLE>
(5) Intangible Assets
The following is a summary of intangible assets at December 31, 1999
and 1998:
<TABLE>
<CAPTION>
Estimated life
(years) 1999 1998
-------------- ---------- ----------
<S> <C> <C> <C>
Debt issuance costs and fees 7-10 $ 40,945 $ 19,962
Customer lists and contracts 7-10 286,301 108,903
Non-compete agreements 7-15 50,277 19,318
Goodwill 15 1,037,385 554,685
Site locations and other 5-15 630,585 3,066
---------- ----------
$2,045,493 $ 705,934
========== ==========
Cost 2,045,493 778,655
Accumulated amortization (171,316) (72,721)
$1,874,177 $ 705,934
========== ==========
</TABLE>
(Continued)
-41-
<PAGE> 42
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(6) Leases
The Company is party to various operating leases for production
facilities and sites upon which advertising structures are built. The
leases expire at various dates, generally during the next five years,
and have varying options to renew and to cancel. The following is a
summary of minimum annual rental payments required under those
operating leases that have original or remaining lease terms in excess
of one year as of December 31:
<TABLE>
<S> <C>
2000 $ 73,410
2001 57,634
2002 51,121
2003 44,528
2004 37,834
Thereafter 211,178
</TABLE>
Rental expense related to the Company's operating leases were $63,193,
$43,440 and $31,411 for the years ended December 31, 1999, 1998 and
1997, respectively.
(7) Accrued Expenses
The following is a summary of accrued expenses at December 31, 1999 and
1998:
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Payroll $ 7,406 $ 4,863
Interest 17,411 11,629
Insurance benefits 4,460 3,715
Purchase price payable (note 2) 15,750 --
Other 12,626 5,705
------- -------
$57,653 $25,912
======= =======
</TABLE>
(8) Long-term Debt
Long-term debt consists of the following at December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
5-1/4% Convertible notes $ 287,500 $ --
9-5/8% Senior subordinated notes (1996 Notes) 255,000 255,000
8-5/8% Senior subordinated notes (1997 Notes) 198,882 198,785
Bank Credit Agreement 776,000 250,000
9-1/4% Senior subordinated notes 74,073 103,949
8% unsecured subordinated notes (see note 12) 13,333 15,333
Other notes with various rates and terms 10,993 53,465
----------- -----------
1,615,781 876,532
Less current maturities (4,318) (49,079)
----------- -----------
Long-term debt, excluding current
maturities $ 1,611,463 $ 827,453
=========== ===========
</TABLE>
(Continued)
-42-
<PAGE> 43
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Long-term debt matures as follows:
<TABLE>
<S> <C>
2000 $ 4,318
2001 50,200
2002 49,950
2003 99,125
2004 116,772
Later years 1,295,416
</TABLE>
In November 1996, the Company issued $255,000 in principal amount of
9 5/8% Senior Subordinated Notes due 2006 (the "1996 Notes"), with
interest payable semi-annually on June 1 and December 1 of each year.
The 1996 Notes are senior subordinated unsecured obligations of the
Company and are subordinated in right of payment to all senior
indebtedness of the Company, pari passu with the 1997 Notes (as defined
below), and are senior to all existing and future subordinated
indebtedness of the Company.
In September 1997, the Company issued $200,000 in principal amount of
8 5/8% Senior Subordinated Notes due 2007 (the "1997 Notes") with
interest payable semi-annually on March 15 and September 15 of each
year, commencing March 15, 1998. The 1997 Notes were issued at a
discount for $198,676. The Company is using the effective interest
method to recognize the discount over the life of the 1997 Notes. The
1997 Notes are senior subordinated unsecured obligations of the
Company, subordinated in right of payment to all senior indebtedness of
the Company, pari passu with the 1996 Notes and are senior to all
existing and future subordinated indebtedness of the Company.
The 1996 and 1997 Notes are redeemable at the Company's option at any
time on or after December 31, 2001 and September 15, 2002,
respectively, at redemption prices specified by the indentures, and are
required to be repurchased earlier in the event of a change of control
of the Company. The indentures covering the 1996 and 1997 Notes include
certain restrictive covenants which limit the Company's ability to
incur additional debt, pay dividends and make other restricted
payments, consummate certain transactions and other matters.
In July, 1998, the Company replaced its previous credit agreement with
a new Bank Credit Agreement (the "1998 Bank Credit Agreement") which
consists of a committed $250,000 revolving credit facility (the "1998
Revolving Credit Facility"), a $150,000 term facility (the "Term
Facility") and a $100,000 incremental facility (The 1998 "Incremental
Facility") funded at the discretion of the lenders. As of December 31,
1998, the Company had borrowings outstanding of $150 million under the
1998 Term Facility, $100 million under the 1998 Incremental Facility,
and $0 under the 1998 Revolving Credit Facility. The Incremental
Facility and the Term Facility bear interest at a variable rate of
interest based on the applicable margin over LIBOR or the prime rate.
The weighted average interest rate on borrowings under the Bank Credit
Agreement at December 31, 1998, was 7.37%
(Continued)
-43-
<PAGE> 44
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
In August 1999, the Company replaced the 1998 Bank Credit Agreement
with a new bank credit facility under which The Chase Manhattan Bank
serves as administrative agent. The new $1,000,000 bank credit facility
consists of (1) a $350,000 revolving bank credit facility and (2) a
$650,000 term facility with two tranches, a $450,000 Term A facility
and a $200,000 Term B facility. As a result of the holding company
reorganization completed on July 20, 1999 and explained in footnote 12,
the existing bank credit facility and the new bank credit facility are
obligations of Lamar Media Corp., a wholly owned subsidiary of Lamar
Advertising Company. As of December 31, 1999, the Company had
borrowings under this agreement of $776,000.
Availability of the line under the New Revolving Credit Facility is
reduced quarterly beginning with the quarter ended March 31, 2002, in
the following amounts:
<TABLE>
<S> <C> <C> <C>
March 31, 2002 - December 31, 2003 $ 8,750
March 31, 2004 - December 31, 2004 26,250
March 31, 2005 - December 31, 2005 30,625
March 31, 2006 52,500
</TABLE>
The Tranch A Term Facility will begin to amortize quarterly beginning
September 30, 2001 in the following quarterly amounts:
<TABLE>
<S> <C> <C> <C>
September 30, 2001 - December 31, 2001 $ 22,500
March 31, 2002 - December 31, 2002 11,250
March 31, 2003 - December 31, 2003 22,500
March 31, 2004 - December 31, 2004 28,125
March 31, 2005 - December 31, 2005 31,500
March 31, 2006 - December 31, 2006 31,500
</TABLE>
The Tranch B Term facility will begin to amortize quarterly beginning
with the quarter ended September 30, 2001, in the following quarterly
amounts:
<TABLE>
<S> <C> <C> <C>
September 30, 2001 - December 31, 2001 $ 500
March 31, 2002 - December 31, 2002 500
March 31, 2003 - December 31, 2003 500
March 31, 2004 - December 31, 2004 500
March 31, 2005 - December 31, 2005 500
March 31, 2006 - June 30, 2006 500
August 1, 2006 190,000
</TABLE>
(Continued)
-44-
<PAGE> 45
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Revolving credit loans may be requested under the New Revolving Credit
Facility at any time prior to maturity. The loans bear interest, at the
Company's option, at the LIBOR Rate or Chase Prime Rate plus applicable
margins, such margins being set from time to time based on the
Company's ratio of debt to trailing twelve month EBITDA, as defined in
the agreement. The terms of the indenture relating to Lamar
Advertising's outstanding notes, Lamar Media's bank credit facility and
the indentures relating to Lamar Media's outstanding notes restrict,
among other things, the ability of Lamar Advertising and Lamar Media
to:
o dispose of assets;
o incur or repay debt;
o create liens;
o make investments; and
o pay dividends.
Lamar Media's ability to make distributions to Lamar Advertising is
also restricted under the terms of these agreements.
Under Lamar Media's credit facility the Company must maintain specified
financial ratios and levels including:
o cash interest coverage;
o fixed charge coverage;
o senior debt ratios; and
o total debt ratios.
On August 10, 1999, Lamar Advertising Company, the new holding company,
completed an offering of $287,500 5 1/4% Convertible Notes due 2006.
The net proceeds of approximately $279,594 of the convertible notes
were used to pay down existing bank debt.
In connection with the reorganization of Lamar Advertising Company into
a new holding company structure, Lamar Media Corp. (formerly known as
Lamar Advertising Company) made a change of control tender offer to the
holders of its 9 1/4% Senior Subordinated Notes due 2007 in aggregate
principal amount of approximately $103,900. Pursuant to the change of
control tender offer and in accordance with the Indenture, Lamar Media
Corp. offered to repurchase the Notes for 101% of the principal amount
plus accrued interest. A total of $29,876 aggregate principal amount of
Notes were tendered for payment on August 19, 1999, and the related 1%
prepayment penalty is reflected as an extraordinary item in the
Company's statement of operations for the year ended December 31, 1999.
The Company's obligations with respect to its publicly issued notes are
not guaranteed by the Company's direct or indirect wholly-owned
subsidiaries. Certain obligations of the Company's wholly-owned
subsidiary, Lamar Media Corp. are guaranteed by its subsidiaries.
(Continued)
-45-
<PAGE> 46
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(9) Income Taxes
Income tax expense (benefit) for the years ended December 31, 1999,
1998 and 1997, consists of:
<TABLE>
<CAPTION>
Current Deferred Total
-------- -------- --------
<S> <C> <C> <C>
Year ended December 31, 1999:
U.S. federal $ 3,083 (11,838) (8,755)
State and local 900 (1,741) (841)
-------- -------- --------
3,983 (13,579) (9,596)
======== ======== ========
Year ended December 31, 1998:
U.S. federal $ 6,269 (6,074) 195
State and local 1,077 (1,463) (386)
-------- -------- --------
7,346 (7,537) (191)
Change in deferred tax attributable
to unrealized losses on investment
securities, included in stockholders'
equity -- 217 217
-------- -------- --------
$ 7,346 (7,320) 26
======== ======== ========
Year ended December 31, 1997:
U.S. federal $ 6,108 (2,475) 3,633
State and local 1,385 (364) 1,021
-------- -------- --------
7,493 (2,839) 4,654
Change in deferred tax attributable
to unrealized losses on investment
securities, included in stockholders'
equity -- (596) (596)
-------- -------- --------
$ 7,493 (3,435) 4,058
======== ======== ========
</TABLE>
Income tax expense (benefit) attributable to continuing operations for
the years ended December 31, 1999, 1998 and 1997, differs from the
amounts computed by applying the U.S. federal income tax rate of 34
percent to earnings before income taxes as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Computed "expected" tax expense (benefit) $(18,081) (4,108) 2,548
Increase (reduction) in income taxes
resulting from:
Book expenses not deductible for tax
purposes 121 450 92
Amortization of non-deductible goodwill 8,841 3,752 1,730
State and local income taxes, net
of federal income tax benefit (555) (255) 674
Other differences, net 78 (30) (390)
-------- -------- --------
$ (9,596) (191) 4,654
======== ======== ========
</TABLE>
(Continued)
-46-
<PAGE> 47
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1999 and 1998 are presented below:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Deferred tax liabilities:
Plant and equipment, principally
due to differences in depreciation $ (3,942) $ (4,915)
Plant and equipment, due to basis
differences on acquisitions (134,323) (28,556)
Employee benefit plans (1,058) --
--------- ---------
Deferred tax liabilities (139,323) (33,471)
Deferred tax assets:
Intangibles, due to differences
in amortizable lives 3,796 (5,058)
Receivables, principally due to
allowance for doubtful accounts 1,514 1,151
Plant and equipment, due to basis
differences on acquisitions and costs
capitalized for tax purposes 4,614 4,530
Investment in affiliates and plant and
equipment, due to gains recognized for
tax purposes and deferred for financial
reporting purposes 941 941
Accrued liabilities not deducted for tax
purposes 3,121 2,125
Net operating loss carryforward 11,844 3,563
Minimum tax credit 357
Other, net 724 606
--------- ---------
Deferred tax assets 26,911 7,858
--------- ---------
Net deferred tax liability $(112,412) $ (25,613)
========= =========
</TABLE>
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible.
Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning
strategies in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income
over the periods in which the deferred tax assets are deductible,
management believes it is more likely than not the Company will realize
the benefits of these deductible differences. The amount of the
deferred tax assets considered realizable, however, could be reduced in
the near term if estimates of future taxable income during the
carryforward period are reduced.
(Continued)
-47-
<PAGE> 48
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(10) Related Party Transactions
Affiliates, as used within these statements, are persons or entities
that are affiliated with Lamar Advertising Company or its subsidiaries
through common ownership and directorate control.
As of December 31, 1999 and 1998, debentures and ten year subordinated
notes totaling $14,318 and $16,749, respectively, are owned by
shareholders, directors and employees. Interest expense under the
debentures and ten year subordinated notes during the years ended
December 31, 1999, 1998, and 1997 was $1,290, $1,497, and $1,719
respectively.
In addition, the Company had receivables from affiliates, related
parties and employees of $833 and $378 at December 31, 1999 and 1998,
respectively.
During 1999, the Company purchased a sign easement for approximately
$94 from Jennifred Holdings, LLC, of which Kevin Reilly and Sean Reilly
each hold a 50% interest.
The Company purchased approximately $1,951, $1,810 and $3,462 of
highway signs used in its logo sign business from Interstate Highway
Signs Corp., ("IHS") during the years ended December 31, 1999, 1998 and
1997, respectively. IHS is a wholly-owned subsidiary of Sign
Acquisition Corp. Kevin R. Reilly, Jr. has voting control over a
majority of the outstanding shares of Sign Acquisition Corp. through a
voting trust.
(11) Stockholders' Equity
On December 31, 1997, the Board of Directors approved a three-for-two
split of its Class A and Class B common stock subject to the approval
by the shareholders of an increase in the authorized number of shares
of Class A and Class B common stock. On February 26, 1998, the
shareholders approved an increase in the authorized number of shares of
Class A common stock to 75,000,000 and Class B common stock to
37,500,000. The stock split, which was effected by means of a 50% stock
dividend, was paid to shareholders on February 27, 1998. Par value of
the common stock remained unchanged at $.001. Common stock and
additional paid in capital were adjusted to reflect the split as of
December 31, 1997. All references to share and per share information in
the consolidated financial statements and related footnotes have been
restated to reflect the effect of the split for all periods presented.
During 1995 and 1996, the Company repurchased 3.6% and 12.9%,
respectively, of its then outstanding common stock (1,830,750 and
5,427,305 shares, respectively) from certain of its existing
stockholders for an aggregate purchase price of approximately $4
million. The terms of such repurchases entitled the selling
stockholders to receive additional consideration from the Company in
the event that the Company consummated a public offering of its common
stock at a higher price within 24 months of the repurchase. In
satisfaction of that obligation, upon completion of the Company's
initial public equity offering in August 1996, the Company paid the
selling stockholders an aggregate of $5.0 million in cash
(Continued)
-48-
<PAGE> 49
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
and issued to them ten-year subordinated notes in the aggregate
principal amount of $20,000. The notes bear interest at 8% (1% above
the ten-year treasury note rate when issued) and are payable in monthly
installments of $167, plus interest. The balance outstanding under
these notes at December 31, 1999 and 1998, was $13,333 and $15,333,
respectively.
In June, 1998, the Company completed a public offering of 6,375,000
shares of Class A common stock at $29.00 per share. Net proceeds to the
Company after underwriting discounts from the equity offering were
$177.5 million. These proceeds were used to pay down outstanding bank
debt of approximately $173.0 million with the remainder used for
operations.
In December, 1998, the Company completed a public offering of 6,900,000
shares of Class A common stock at $35 per share. Net proceeds to the
Company after underwriting discounts from the equity offering were
$219.8 million. These proceeds were used to pay down outstanding bank
debt of approximately $99.0 million with the remainder used for debt
reduction and acquisitions in 1999.
On July 16, 1999, the Board of Directors amended the preferred stock of
the Company by designating 5,720 shares of the 1,000,000 shares of
previously undesignated preferred stock, par value $.001 as "Series AA
preferred stock". The previously issued Class A preferred stock par
value $638 was exchanged for the new Series AA preferred stock. The new
Series AA preferred stock have the same liquidation preferences,
dividends and other rights as the previously issued Class A preferred
stock. Series AA preferred stock has a liquidation preference over
Class A & B common stock. Liquidation value of the Series AA preferred
stock at December 31, 1999 was $3,649. The new shares of Series AA
preferred stock, however, are entitled to one vote per share.
The rights of the Class A and Class B common stock are equal in all
respects, except holders of Class B common stock have ten votes per
share on all matters in which the holders of common stock are entitled
to vote and holders of Class A common stock have one vote per share on
such matters. The Class B common stock will convert automatically into
Class A common stock upon the sale or transfer to persons other than
permitted transferees (as defined in the Company's certificate of
incorporation, as amended).
On July 20, 1999, Lamar Advertising Company completed a corporate
reorganization to create a new holding company structure. The
reorganization was accomplished through a merger under section 251(g)
of the Delaware General Corporation Law. At the effective time of the
merger, all stockholders of Lamar Advertising Company became
stockholders in a new holding company and Lamar Advertising Company
became a wholly-owned subsidiary of the new holding company. The new
holding company took the Lamar Advertising Company name and the old
Lamar Advertising Company was renamed Lamar Media Corp. In the merger,
all outstanding shares of old Lamar Advertising Company's capital stock
were converted into shares of the new holding company with the same
voting powers, designations, preferences and rights, and the same
qualifications, restrictions and limitations, as the shares of old
Lamar Advertising Company. Following the restructuring, the Class A
common stock of the new holding company trades under the symbol "LAMR"
on the Nasdaq National Market with the same CUSIP number as the old
Lamar Advertising Company's Class A common stock.
(Continued)
-49-
<PAGE> 50
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(12) Stock Option Plan
In 1996, the Company adopted the 1996 Equity Incentive Plan (the "1996
Plan"). The purpose of the 1996 Plan is to attract and retain key
employees and consultants of the Company. The 1996 Plan authorizes the
grant of stock options, stock appreciation rights and restricted stock
to employees and consultants of the Company capable of contributing to
the Company's performance. Options granted under the 1996 Plan
generally become exercisable over a five-year period and expire 10
years from the date of grant. The Company initially reserved an
aggregate of 3,000,000 shares of Class A common stock (as adjusted for
the Company's February 1998 three-for-two stock split) for awards under
the 1996 Plan. In September, 1998, the Board of Directors of the
Company voted to increase the number of shares reserved for issuance
under the 1996 Plan by 1,000,000 shares to 4,000,000 shares.
In August, 1999, the Board of Directors voted subject to stockholder
approval, to increase the number of shares of Class A common stock
reserved for issuance under the 1996 plan by 1,000,000 shares to
5,000,000 shares.
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation cost has been recognized
for the stock option grants. Had compensation cost for the Company's
stock option plan been determined based on the fair value at the grant
date consistent with the provisions of SFAS No. 123, the Company's net
earnings (loss) and earnings (loss) per share would have been reduced
to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- --------
<S> <C> <C> <C>
Net earnings (loss) applicable
to common stock - as reported $(44,900) (12,255) 2,476
======== ======= ========
Net earnings (loss) applicable
to common stock - pro forma $(50,073) (15,145) (603)
======== ======= ========
Net earnings (loss) per common share -
as reported (basic and diluted) $ (.65) (.24) .05
======== ======= ========
Net earnings (loss) per common share -
pro forma (basic and diluted) $ (.73) (.29) (.01)
======== ======= ========
</TABLE>
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following
weighted-average assumptions used:
<TABLE>
<CAPTION>
Grant Dividend Expected Risk Free Expected
Year Yield Volatility Interest Rate Lives
----- -------- ---------- ------------- -------
<S> <C> <C> <C> <C>
1999 0% 54% 6% 4
1998 0% 59% 5% 4
1997 0% 40% 6% 3
</TABLE>
(Continued)
-50-
<PAGE> 51
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Information regarding the 1996 Plan for the years ended December 31,
1999, 1998 and 1997, is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------------------- -------------------- ------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------ ----- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning of year 2,240,567 $19.25 1,868,804 $11.60 1,774,896 $10.85
Granted 1,115,000 37.94 950,500 29.88 399,000 15.20
Exercised (525,725) 15.16 (538,154) 10.84 (225,256) 10.67
Canceled (71,888) 30.84 (40,583) 18.24 (79,836) 10.96
--------- ------ --------- ------ --------- ------
Outstanding, end of year 2,757,954 $27.14 2,240,567 $19.25 1,868,804 $11.60
========= ====== ========= ====== ========= ======
Price for exercised shares $ 15.16 $ 10.84 $ 10.67
Shares available for grant, end of
year 920,570 963,682 873,599
Weighted average fair value of
options granted during the year $ 23.19 $ 13.09 $ 7.18
</TABLE>
The following table summarizes information about fixed-price stock
options outstanding at December 31, 1999:
<TABLE>
<CAPTION>
Weighted
Range Number Average Weighted Number Weighted
Of Outstanding Remaining Average Exercisable Average
Exercise At Contractual Exercise At Exercise
Prices December 31, 1999 Life Price December 31, 1999 Price
--------------- ----------------- ----------- -------- ----------------- --------
<S> <C> <C> <C> <C> <C>
$ 10.67 583,704 6.62 $10.67 276,204 $10.67
10.67 - 30.34 556,900 7.95 21.24 30,875 24.26
30.34 545,000 8.42 30.34 133,700 30.34
33.38 651,550 9.41 33.38 105,550 33.38
34.16 - 47.75 420,800 9.57 43.99 1,800 47.75
</TABLE>
No stock appreciation rights or restricted stock authorized by the 1996
Plan have been granted.
(13) Commitments and Other Contingencies
The Company sponsors a partially self-insured group health insurance
program. The Company is obligated to pay all claims under the program,
which are in excess of premiums, up to program limits of $150 per
employee, per claim, per year. The Company is also self-insured with
respect to its income disability benefits and against casualty losses
on advertising structures. Amounts for expected losses, including a
provision for losses incurred but not reported, is included in accrued
expenses in the accompanying consolidated financial statements. The
Company maintains a $500 letter of credit with a bank to meet
requirements of the Company's worker's compensation insurance carrier.
(Continued)
-51-
<PAGE> 52
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
The Company sponsors The Lamar Corporation Savings and Profit Sharing
Plan covering employees who have completed one year of service and are
at least 21 years of age. The Company matches 50% of employees'
contributions up to 5% of related compensation. Employees can
contribute up to 15% of compensation. Full vesting on the Company's
matched contributions occurs after five years. Annually, at the
Company's discretion, an additional profit sharing contribution may be
made on behalf of each eligible employee. In total, for the years ended
December 31, 1999, 1998 and 1997 the Company contributed $2,403, $1,608
and $1,192, respectively.
The Company sponsors a Deferred Compensation Plan for the benefit of
certain of its senior management who meet specific age and years of
service criteria. Employees who have attained the age of 30 and have a
minimum of 10 years of service are eligible for annual contributions to
the Plan generally ranging from $3 to $8, depending on the employee's
length of service. LAC's contributions to the Plan are maintained in a
"rabbi" trust and, accordingly, the assets and liabilities of the Plan
are reflected in the balance sheet of LAC. Upon termination, death or
disability, participating employees are eligible to receive an amount
equal to the fair market value of the assets in the employee's deferred
compensation account. The Company has contributed $448, $406 and $190
to the Plan during the years ended December 31, 1999, 1998 and 1997,
respectively. Contributions to the Deferred Compensation Plan are
discretionary and are determined by the Board of Directors.
The Company is the subject of litigation arising during the normal
course of business. In the opinion of management and the general
counsel of the Company, those claims will not have a material impact on
the financial position, results of operations or liquidity of the
Company.
(14) Summarized Financial Information of Subsidiaries
Except as set forth below, separate financial statements of each of the
Company's direct or indirect subsidiaries that have guaranteed the
Company's obligations under the 1996 Notes and the 1997 Notes
(collectively, the "Guarantors") are not included herein because the
Guarantors are jointly and severally liable under the guarantees, and
the aggregate assets, liabilities, earnings and equity of the
Guarantors are substantially equivalent to the assets, liabilities,
earnings and equity of the Company on a consolidated basis.
Summarized financial information for Missouri Logos, a Partnership, a
66-2/3% owned subsidiary of the Company and the only subsidiary of the
Company that is not a Guarantor, is set forth below:
<TABLE>
<CAPTION>
Balance Sheet Information: 1999 1998
------ -----
<S> <C> <C>
Current assets $ 288 $ 248
Total assets 333 297
Current liabilities 6 7
Total liabilities 6 7
Venturers' equity 327 290
</TABLE>
<TABLE>
<CAPTION>
Income Statement Information: 1999 1998 1997
------ ----- ----
<S> <C> <C> <C>
Revenues $1,152 1,038 991
Net income 671 523 540
</TABLE>
(Continued)
-52-
<PAGE> 53
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(15) Disclosures About Fair Value of Financial Instruments
The following table presents the carrying amounts and estimated fair
values of the Company's financial instruments at December 31, 1999 and
1998. The fair value of the financial instrument is defined as the
amount at which the instrument could be exchanged in a current
transaction between willing parties.
<TABLE>
<CAPTION>
1999 1998
---------------------- ----------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Long-term debt $1,611,463 $1,613,209 $ 827,453 $ 874,091
</TABLE>
The estimated fair value amounts have been determined by the Company
using available market information and appropriate valuation
methodologies as follows:
o The carrying amounts of cash and cash equivalents, receivables,
trade accounts payable, accrued expenses, and deferred income
approximate fair value because of the short term nature of these
items.
o The fair value of long-term debt is based upon market quotes
obtained from dealers where available and by discounting future
cash flows at rates currently available to the Company for similar
instruments when quoted market rates are not available.
Fair value estimates are subject to inherent limitations. Estimates of
fair values are made at a specific point in time, based on relevant
market information and information about the financial instrument. The
estimated fair values of financial instruments presented above are not
necessarily indicative of amounts the Company might realize in actual
market transactions. Estimates of fair value are subjective in nature
and involve uncertainties and matters of significant judgement and
therefore cannot be determined with precision. Changes in assumptions
could significantly affect the estimates.
(16) Quarterly Financial Data (Unaudited)
<TABLE>
<CAPTION>
Fiscal Year 1999 Quarters
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Net revenues $ 85,766 97,809 111,039 149,521
Net revenues less direct
advertising expenses 56,002 67,328 77,803 99,912
Net earnings (loss)
applicable to common stock (10,797) (5,161) (3,575) (25,367)
Net earnings (loss) per common
share (basic and diluted) (.18) (.08) (.05) (.29)
</TABLE>
(Continued)
-53-
<PAGE> 54
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
Fiscal Year 1998 Quarters
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Net revenues $ 58,397 69,675 73,528 86,988
Net revenues less direct
advertising expenses 37,567 48,066 51,271 58,835
Net earnings (loss)
applicable to common stock (4,682) (1,253) 1,538 (7,858)
Net earnings (loss) per common
share (basic and diluted) (.10) (.02) .03 (.15)
</TABLE>
(17) New Accounting Pronouncements
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 98-5, Reporting on the Costs of
Start-Up Activities. SOP 98-5 is effective for financial statements for
fiscal years beginning after December 15, 1998, and requires that the
costs of start-up activities, including organizational costs, be
expensed as incurred.
The effect of SOP 98-5 was recorded in the first quarter of fiscal 1999
as the cumulative effect of a change in accounting principle in the
amount of $(767), net of tax, as described in Accounting Principles
Board Opinion No. 20 "Accounting Changes".
-54-
<PAGE> 55
SCHEDULE 2
Lamar Advertising Company
Valuation and Qualifying Accounts
The Years Ended December 31, 1999, 1998 and 1997
(in 000's)
<TABLE>
<CAPTION>
Balance at Charged to
Beginning Costs and Balance at
Description of Period Expenses Deductions End of Period
----------- --------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Deducted in balance sheet from trade accounts
receivable: Allowance for doubtful accounts $ 2,722 4,065 2,859 3,928
Deducted in balance sheet from intangible
assets: Amortization of intangible assets $72,721 100,019 824 171,316
Year ended December 31, 1998
Deducted in balance sheet from trade accounts
receivable: Allowance for doubtful accounts $ 1,311 2,883 1,472 2,722
Deducted in balance sheet from intangible
assets: Amortization of intangible assets $29,698 43,023 -- 72,721
Year ended December 31, 1997
Deducted in balance sheet from trade accounts
receivable: Allowance for doubtful accounts $ 814 2,098 1,601 1,311
Deducted in balance sheet from intangible
assets: Amortization of intangible assets $ 9,273 20,425 -- 29,698
</TABLE>
-55-
<PAGE> 56
LAMAR MEDIA CORP.
<TABLE>
<S> <C>
Independent Auditors' Report ......................................................... 57
Consolidated Balance Sheets as of December 31, 1999 and 1998 ......................... 58
Consolidated Statements of Operations for the years ended December 31, 1999,
1998 and 1997 ................................................................... 59
Consolidated Statements of Comprehensive Income for the years ended
December 31, 1999, 1998 and 1997 ................................................ 60
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1997, 1998 and 1999 ................................................ 61
Consolidated Statements of Cash Flows for the years ended December 31,
1999, 1998 and 1997 ............................................................. 62
Notes to Consolidated Financial Statements ...........................................63-68
</TABLE>
-56-
<PAGE> 57
Independent Auditors' Report
Board of Directors
Lamar Media Corp.:
We have audited the accompanying consolidated balance sheets of Lamar Media
Corp. and subsidiaries as of December 31, 1999, and 1998, and the related
consolidated statements of operations, comprehensive income, stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lamar Media Corp.
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1999, in conformity with generally accepted accounting
principles.
As discussed in note 17 to the consolidated financial statements of Lamar
Advertising Company, the Company changed its method of accounting for the costs
of start-up activities in 1999.
KPMG LLP
New Orleans, Louisiana
March 17, 2000
-57-
<PAGE> 58
LAMAR MEDIA CORP.
Consolidated Balance Sheets
December 31, 1999 and 1998
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
Assets 1999 1998
- ------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,401 $ 128,597
Receivables, net 80,671 40,380
Prepaid expenses 21,524 12,346
Other current assets 25,193 1,736
----------- -----------
Total current assets 135,789 183,059
----------- -----------
Property, plant and equipment 1,412,605 661,324
Less accumulated depreciation and amortization (218,893) (153,972)
----------- -----------
Net property plant and equipment 1,193,712 507,352
----------- -----------
Intangible assets (note 3) 1,851,965 705,934
Other assets - non-current 13,563 17,032
----------- -----------
Total assets $ 3,195,029 $ 1,413,377
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 11,492 $ 4,258
Current maturities of long-term debt (note 5) 4,318 49,079
Accrued expenses (note 4) 54,031 25,912
Deferred income 11,243 9,589
----------- -----------
Total current liabilities 81,084 88,838
Long-term debt (note 5) 1,611,463 827,453
Deferred income taxes (note 6) 112,776 25,613
Deferred income 1,222 1,293
Other liabilities 5,613 3,401
----------- -----------
Total liabilities 1,812,158 946,598
----------- -----------
Stockholders' equity:
Common stock, $.01 par value, authorized 3000 shares; issued
and outstanding 100 shares at December 31, 1999 -- --
Class A preferred stock, par value $638, $63.80 cumulative
dividends, 10,000 shares authorized, 5,719 shares issued
and outstanding at December 31, 1998 -- 3,649
Class A common stock, par value $.001, 125,000,000 shares
authorized, 43,392,876 shares issued and outstanding at
December 31, 1998 -- 43
Class B common stock, par value $.001, 37,500,000 shares
authorized, 17,699,997 shares at December 31, 1998 -- 18
Additional paid-in capital 1,469,606 505,644
Accumulated deficit (86,735) (42,575)
----------- -----------
Stockholders' equity 1,382,871 466,779
----------- -----------
Total liabilities and stockholders' equity $ 3,195,029 $ 1,413,377
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-58-
<PAGE> 59
LAMAR MEDIA CORP.
Consolidated Statements of Operations
Years ended December 31, 1999, 1998 and 1997
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Net revenues $ 444,135 $ 288,588 $ 201,062
--------- --------- ---------
Operating expenses:
Direct advertising expenses 143,090 92,849 63,390
General and administrative expenses 94,264 60,935 45,368
Depreciation and amortization 176,233 88,791 48,317
--------- --------- ---------
413,587 242,575 157,075
--------- --------- ---------
Operating income 30,548 46,013 43,987
--------- --------- ---------
Other expense (income):
Interest income (1,421) (762) (1,723)
Interest expense 89,619 60,008 38,230
Gain on disposition of assets (5,481) (1,152) (15)
--------- --------- ---------
82,717 58,094 36,492
--------- --------- ---------
Earnings (loss) before income taxes, extraordinary
item and cumulative effect of a change in accounting principle (52,169) (12,081) 7,495
Income tax expense (benefit) (note 6) (9,232) (191) 4,654
--------- --------- ---------
Earnings (loss) before extraordinary item and cumulative
effect of a change in accounting principle (42,937) (11,890) 2,841
Extraordinary loss on debt extinguishment net of income tax
benefit of $117 (182) -- --
--------- --------- ---------
Earnings (loss) before cumulative effect of a change in
accounting principle (43,119) (11,890) 2,841
Cumulative effect of a change in accounting principle (767) -- --
--------- --------- ---------
Net earnings (loss) (43,886) (11,890) 2,841
Preferred stock dividends (274) (365) (365)
--------- --------- ---------
Net earnings (loss) applicable to common stock $ (44,160) $ (12,255) $ 2,476
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
-59-
<PAGE> 60
LAMAR MEDIA CORP.
Consolidated Statements of Comprehensive Income
Years ended December 31, 1999, 1998 and 1997
(In Thousands)
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net earnings (loss) applicable
to common stock $(44,160) $(12,255) $ 2,476
Other comprehensive income -
change in unrealized gain
(loss) on investment securities
(net of deferred tax expense
(benefit) of $0, $217, and
$(596), for the years ended
December 31, 1999, 1998 and 1997 -- 354 (974)
-------- -------- --------
Comprehensive income (loss) $(44,160) (11,901) 1,502
======== ======== ========
</TABLE>
-60-
<PAGE> 61
LAMAR MEDIA CORP.
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1999, 1998 and 1997
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
Unrealized
Class A Class A Class B Additional Gain (Loss)
Common Preferred Common Common Paid-in Accumulated On Investment
Stock Stock Stock Stock Capital Deficit Securities Total
------ --------- ------- ------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ -- 3,649 18 14 92,258 (32,796) 620 63,763
Exercise of stock options -- -- -- -- 3,448 -- -- 3,448
Conversion of 1,811,552
shares of Class B common
stock to Class A common
stock -- -- 1 (1) -- -- -- --
Net earnings -- -- -- -- -- 2,841 -- 2,841
Dividends ($63.80 per
preferred share) -- -- -- -- -- (365) -- (365)
Unrealized loss on investment
securities, net of deferred
taxes of $596 -- -- -- -- -- -- (974) (974)
Three-for-two stock split -- -- 9 6 (15) -- -- --
----- ------ ----- ------ --------- ------- -------- --------
Balance, December 31, 1997 -- 3,649 28 19 95,691 (30,320) (354) 68,713
----- ------ ----- ------ --------- ------- -------- --------
Issuance of 13,338,005 shares
of common stock -- -- 13 -- 399,288 -- -- 399,301
Exercise of stock options -- -- 1 -- 10,665 -- -- 10,666
Conversion of 1,062,912
shares of Class B common
stock to Class A common
stock -- -- 1 (1) -- -- -- --
Net loss -- -- -- -- -- (11,890) -- (11,890)
Dividends ($63.80 per
preferred share) -- -- -- -- -- (365) -- (365)
Realized loss on investment
securities, net of tax -- -- -- -- -- -- 354 354
----- ------ ----- ------ --------- -------- -------- --------
Balance December 31, 1998 -- 3,649 43 18 505,644 (42,575) -- 466,779
----- ------ ----- ------ --------- ------- -------- --------
Issuance of 13,023 shares
of common stock in
acquisitions -- -- -- -- 475 -- -- 475
Exercise of stock options -- -- -- -- 3,833 -- -- 3,833
Effect of Corporate
restructuring -- (3,649) (43) (18) 3,710 -- -- --
Contributions from parent -- -- -- -- 955,944 -- -- 955,944
Net loss -- -- -- -- -- (43,886) -- (43,886)
Dividends ($63.80 per
preferred share) -- -- -- -- -- (274) -- (274)
----- ------ ----- ------ --------- ------- -------- ---------
Balance December 31, 1999 $ -- -- -- -- 1,469,606 (86,735) -- 1,382,871
===== ====== ===== ====== ========= ======= ======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
-61-
<PAGE> 62
LAMAR MEDIA CORP.
Consolidated Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
(In thousands)
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (43,886) (11,890) 2,841
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Depreciation and amortization 176,233 88,791 48,317
Loss (gain) on disposition of assets (5,481) (1,152) (15)
Cumulative effect of accounting change 767 -- --
Deferred tax expense (benefit) (13,215) (7,537) (2,839)
Provision for doubtful accounts 4,065 2,883 2,098
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (19,091) (2,464) (7,646)
Prepaid expenses 782 (521) (367)
Other assets (10,937) (2,148) (251)
Increase (decrease) in:
Trade accounts payable 3,438 250 (1,951)
Accrued expenses 14,974 4,326 6,063
Deferred income (7,184) 2,132 (425)
Other liabilities (29) (172) (42)
--------- --------- ---------
Net cash provided by operating activities 100,436 72,498 45,783
--------- --------- ---------
Cash flows from investing activities:
Capital expenditures (77,186) (55,196) (36,654)
Purchase of new markets (878,933) (485,514) (386,842)
Proceeds from sale of property and equipment 7,603 5,493 53,268
--------- --------- ---------
Net cash used in investing activities (948,516) (535,217) (370,228)
--------- --------- ---------
Cash flows from financing activities:
Net proceeds from issuance of common stock 2,231 402,629 2,403
Proceeds from issuance of long-term debt 279,594 70 193,926
Principal payments on long-term debt (79,667) (6,229) --
Debt issuance costs -- (3,035) --
Net borrowing (payments) under credit agreements 526,000 191,000 54,720
Dividends (274) (365) (365)
--------- --------- ---------
Net cash provided by financing activities 727,884 584,070 250,684
--------- --------- ---------
Net increase (decrease) in cash and
cash equivalents (120,196) 121,351 (73,761)
Cash and cash equivalents at beginning
of period 128,597 7,246 81,007
--------- --------- ---------
Cash and cash equivalents at end of period $ 8,401 128,597 7,246
========= ========= =========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 83,837 56,960 33,284
========= ========= =========
Cash paid for income taxes $ 6,919 1,107 8,792
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
-62-
<PAGE> 63
LAMAR MEDIA CORP.
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(1) Significant Accounting Policies
(a) Nature of Business
On July 20, 1999, Lamar Advertising Company reorganized into a
new holding company structure. As a result of this
reorganization (1) the former Lamar Advertising Company became
a wholly owned subsidiary of a newly formed holding company,
(2) the name of the former Lamar Advertising Company was
changed to Lamar Media Corp., (3) the name of the new holding
company became Lamar Advertising Company, (4) the outstanding
shares of capital stock of the former Lamar Advertising
Company, including the Class A common stock, were
automatically converted, on a share for share basis, into
identical shares of capital stock of the new holding company
and (5) the Class A common stock of the new holding company
commenced trading on the Nasdaq National Market under the
symbol "LAMR" instead of the Class A common stock of the
former Lamar Advertising Company. In addition, following the
holding company reorganization, substantially all of the
former Lamar Advertising Company's debt obligations, including
the bank credit facility and other long-term debt remained the
obligations of Lamar Media. Under Delaware law, the
reorganization did not require the approval of the
stockholders of the former Lamar Advertising Company. The
purpose of the reorganization was to provide Lamar Advertising
Company with a more flexible capital structure and to enhance
its financing options. The business operations of the former
Lamar Advertising Company and its subsidiaries, including the
Company, has not changed as a result of the reorganization.
Lamar Media Corp. is engaged in the outdoor advertising
business operating approximately 116,800 outdoor advertising
displays in 42 states. Lamar Media's operating strategy is to
be the leading provider of outdoor advertising services in
most of the markets it serves.
In addition, Lamar Media operates a logo sign business in 20
states throughout the United States and in 1 province of
Canada. Logo signs are erected pursuant to state-awarded
service contracts on public rights-of-way near highway exits
and deliver brand name information on available gas, food,
lodging and camping services. Included in the Company's logo
sign business are tourism signing contracts.
Certain footnotes are not provided for the accompanying
financial statements as the information in notes 2, 4, 6, 11
through 15, 17 and portions of notes 1, 8 and 10 to the
consolidated financial statements of Lamar Advertising Company
included elsewhere in this Report is substantially equivalent
to that required for the consolidated financial statements of
Lamar Media Corp. Earnings per share data is not provided for
the operating results of Lamar Media Corp. as it is a wholly
owned subsidiary of Lamar Advertising Company.
(Continued)
-63-
<PAGE> 64
LAMAR MEDIA CORP.
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(2) Noncash Financing and Investing Activities
A summary of significant noncash financing and investing activities for
the years ended December 31, 1999, 1998 and 1997 follows:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Disposition of assets $5,387 30 1,300
Acquisitions of assets 475 2,706 --
Recapitalization related to corporate
restructure (note 1) 3,710 -- --
Conversion of note receivable
to equity investment -- -- 500
Debt issuance costs -- -- 4,750
</TABLE>
(3) Intangible Assets
The following is a summary of intangible assets at December 31, 1999
and 1998:
<TABLE>
<CAPTION>
Estimated life
(years) 1999 1998
--------------- ----------- -----------
<S> <C> <C> <C>
Debt issuance costs and fees 7-10 $ 24,059 $ 20,081
Customer lists and contracts 7-10 286,301 108,903
Non-compete agreements 7-15 50,277 19,318
Goodwill 15 1,033,287 554,685
Site locations and other 5-15 628,451 2,947
----------- -----------
$ 2,022,375 $ 705,934
=========== ===========
Cost 2,022,375 778,655
Accumulated amortization (170,410) (72,721)
----------- -----------
$ 1,851,965 $ 705,934
=========== ===========
</TABLE>
(Continued)
-64-
<PAGE> 65
LAMAR MEDIA CORP.
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
(4) Accrued Expenses
The following is a summary of accrued expenses at December 31, 1999 and
1998:
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Payroll $ 7,406 $ 4,863
Interest 17,411 11,629
Insurance benefits 838 3,715
Purchase price payable (note 2) 15,750 --
Other 12,626 5,705
------- -------
$54,031 $25,912
======= =======
</TABLE>
(5) Long-term Debt
Long-term debt consists of the following at December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
5-1/4% Note to Lamar Advertising Company $ 287,500 $ --
9-5/8% Senior subordinated notes (1996 Notes) 255,000 255,000
8-5/8% Senior subordinated notes (1997 Notes) 198,882 198,785
Bank Credit Agreement 776,000 250,000
9-1/4% Senior subordinated notes 74,073 103,949
8% unsecured subordinated notes (see Note 12) 13,333 15,333
Other notes with various rates and terms 10,993 53,465
----------- -----------
1,615,781 876,532
Less current maturities (4,318) (49,079)
----------- -----------
Long-term debt, excluding current maturities $ 1,611,463 $ 827,453
=========== ===========
</TABLE>
Long-term debt matures as follows:
<TABLE>
<S> <C>
2000 $ 4,318
2001 50,200
2002 49,950
2003 99,125
2004 116,772
Later years 1,295,416
</TABLE>
(Continued)
-65-
<PAGE> 66
On August 10, 1999, Lamar Media Corp. borrowed from Lamar Advertising
Company, its parent, $287,500 in exchange for a note payable bearing
interest at 5 1/4% due 2006. The proceeds were used to pay down
existing bank debt of the Company.
(6) Income Taxes
Income tax expense (benefit) for the years ended December 31, 1999,
1998 and 1997, consists of:
<TABLE>
<CAPTION>
Current Deferred Total
-------- -------- --------
<S> <C> <C> <C>
Year ended December 31, 1999:
U.S. federal $ 3,083 (11,521) (8,438)
State and local 900 (1,694) (794)
-------- -------- --------
$ 3,983 (13,215) (9,232)
======== ======== ========
Year ended December 31, 1998:
U.S. federal $ 6,269 (6,074) 195
State and local 1,077 (1,463) (386)
-------- -------- --------
7,346 (7,537) (191)
Change in deferred tax attributable
to unrealized losses on investment
securities, included in stockholders'
equity -- 217 217
-------- -------- --------
$ 7,346 (7,320) 26
======== ======== ========
Year ended December 31, 1997:
U.S. federal $ 6,108 (2,475) 3,633
State and local 1,385 (364) 1,021
-------- -------- --------
7,493 (2,839) 4,654
Change in deferred tax attributable
to unrealized losses on investment
securities, included in stockholders'
equity -- (596) (596)
-------- -------- --------
$ 7,493 (3,435) 4,058
======== ======== ========
</TABLE>
(Continued)
-66-
<PAGE> 67
LAMAR MEDIA CORP.
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
Income tax expense (benefit) attributable to continuing operations for
the years ended December 31, 1999, 1998 and 1997, differs from the
amounts computed by applying the U.S. federal income tax rate of 34
percent to earnings before income taxes as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Computed "expected" tax expense (benefit) $(17,737) (4,108) 2,548
Increase (reduction) in income taxes
resulting from:
Book expenses not deductible for tax
purposes 122 450 92
Amortization of non-deductible goodwill 8,814 3,752 1,730
State and local income taxes, net
of federal income tax benefit (534) (255) 674
Other differences, net 103 (30) (390)
-------- -------- --------
$ (9,232) (191) 4,654
======== ======== ========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1999 and 1998 are presented below:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Deferred tax liabilities:
Plant and equipment, principally
due to differences in depreciation $ (3,942) $ (4,915)
Plant and equipment, due to basis
differences on acquisitions (134,323) (28,556)
Employee benefit plans (1,058) --
--------- ---------
Deferred tax liabilities (139,323) (33,471)
Deferred tax assets:
Intangibles, due to differences
in amortizable lives 3,935 (5,058)
Receivables, principally due to
allowance for doubtful accounts 1,514 1,151
Plant and equipment, due to basis
differences on acquisitions and costs
capitalized for tax purposes 4,614 4,530
Investment in affiliates and plant and
equipment, due to gains recognized for
tax purposes and deferred for financial
reporting purposes 941 941
Accrued liabilities not deducted for tax
purposes 3,121 2,125
Net operating loss carryforward 11,340 3,563
Minimum tax credit 357 --
Other, net 725 606
--------- ---------
Deferred tax assets 26,547 7,858
--------- ---------
Net deferred tax liability $(112,776) $ (25,613)
========= =========
</TABLE>
(Continued)
-67-
<PAGE> 68
LAMAR MEDIA CORP.
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share data)
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible.
Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning
strategies in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income
over the periods in which the deferred tax assets are deductible,
management believes it is more likely than not the Company will realize
the benefits of these deductible differences. The amount of the
deferred tax assets considered realizable, however, could be reduced in
the near term if estimates of future taxable income during the
carryforward period are reduced.
(7) Related Party Transactions
Affiliates, as used within these statements, are persons or entities
that are affiliated with Lamar Media Corp. or its subsidiaries through
common ownership and directorate control.
As of December 31, 1999, there was a receivable from Lamar Advertising
Company, its parent, in the amount of $10,851.
(8) Quarterly Financial Data (Unaudited)
<TABLE>
<CAPTION>
Fiscal Year 1999 Quarters
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Net revenues $ 85,766 97,809 111,039 149,521
Net revenues less direct
advertising expenses 56,002 67,328 77,803 99,912
Net earnings (loss)
applicable to common stock (10,797) (5,161) (3,221) (24,981)
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year 1998 Quarters
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Net revenues $ 58,397 69,675 73,528 86,988
Net revenues less direct
advertising expenses 37,567 48,066 51,271 58,835
Net earnings (loss)
applicable to common stock (4,682) (1,253) 1,538 (7,858)
</TABLE>
-68-
<PAGE> 69
SCHEDULE 2
Lamar Media Corp.
Valuation and Qualifying Accounts
The Years Ended December 31, 1999, 1998 and 1997
(in 000's)
<TABLE>
<CAPTION>
Balance at Charged to
Beginning Costs and Balance at
Description of Period Expenses Deductions End of Period
----------- --------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Deducted in balance sheet from trade accounts
receivable: Allowance for doubtful accounts $ 2,722 4,065 2,859 3,928
Deducted in balance sheet from intangible
assets: Amortization of intangible assets $72,721 99,113 824 170,410
Year ended December 31, 1998
Deducted in balance sheet from trade accounts
receivable: Allowance for doubtful accounts $ 1,311 2,883 1,472 2,722
Deducted in balance sheet from intangible
assets: Amortization of intangible assets $29,698 43,023 -- 72,721
Year ended December 31, 1997
Deducted in balance sheet from trade accounts
receivable: Allowance for doubtful accounts $ 814 2,098 1,601 1,311
Deducted in balance sheet from intangible
assets: Amortization of intangible assets $ 9,273 20,425 -- 29,698
</TABLE>
-69-
<PAGE> 70
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Lamar Advertising Company
None
Lamar Media Corp.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The response to this item is contained in part under the caption "Executive
Officers of the Registrant" in Part I, Item 1A hereof and the remainder is
incorporated herein by reference from the discussion responsive thereto under
the captions "Election of Directors" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Company's Proxy Statement relating to the 2000
Annual Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION
The response to this item is incorporated herein by reference from the
discussion responsive thereto under the following captions in the Company's
Proxy Statement relating to the 2000 Annual Meeting of Stockholders: "Election
of Directors - Director Compensation," "Executive Compensation" and
"Compensation Committee Interlocks and Insider Participation."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The response to this item is incorporated herein by reference from the
discussion responsive thereto under the caption "Share Ownership" in the
Company's Proxy Statement relating to the 2000 Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The response to this item is incorporated herein by reference from the
discussion responsive thereto under the caption "Certain Relationships and
Related Transactions" in the Company's Proxy Statement relating to the 2000
Annual Meeting of Stockholders.
-70-
<PAGE> 71
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The financial statements are listed under Part II, Item 8 of this
Report.
2. FINANCIAL STATEMENT SCHEDULES
The financial statement schedules are included under Part II, Item 8 of
this Report.
3. EXHIBITS
The exhibits are listed below under Part IV, Item 14(c) of this Report.
(B) REPORTS ON FORM 8-K
Reports on Form 8-K were filed with the Commission during the fourth
quarter of 1999 to report the following items as of the dates
indicated:
On November 23, 1999, the Company and Lamar Media each filed a
report on Form 8-K to announce the acquisition of all of the
outstanding capital stock of Chancellor Media Outdoor
Corporation and Chancellor Media Whiteco Outdoor Corporation
for consideration consisting of approximately $700 million of
cash and 26,227,273 shares of Lamar Advertising Company Class
A common stock. In addition, the report presented under Item 7
the historical financial statements and related notes for
Chancellor Outdoor as well as included pro forma financial
information of the Company giving effect to the acquisition.
-71-
<PAGE> 72
(C) EXHIBITS
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- ------------
<S> <C>
2.1 Agreement and Plan of Merger dated as of July 20, 1999 among
Lamar Media Corp., Lamar New Holding Co., and Lamar Holdings
Merge Co. Previously filed as exhibit 2.1 to the Company's
Current Report on Form 8-K filed on July 22, 1999 (File No.
0-30242) and incorporated herein by reference.
3.1 Certificate of Incorporation of Lamar New Holding Co.
Previously filed as exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1999 (File
No. 0-20833) filed on August 16, 1999 and incorporated herein
by reference.
3.2 Certificate of Amendment of Certificate of Incorporation of
Lamar New Holding Co. (whereby the name of Lamar New Holding
Co. was changed to Lamar Advertising Company). Previously
filed as exhibit 3.2 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by reference.
3.3 Amended and Restated Bylaws of the Company. Previously filed
as exhibit 3.3 to the Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1999 (File No. 0-20833) filed on
August 16, 1999 and incorporated herein by reference.
3.4 Amended and Restated Bylaws of Lamar Media Corp. Previously
filed as exhibit 3.1 to Lamar Media's Quarterly Report on Form
10-Q for the period ended September 30, 1999 (File No.
1-12407) filed on November 12, 1999 and incorporated herein by
reference.
4.1 Specimen certificate for the shares of Class A common stock of
the Company. Previously filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (File No. 333-05479), and
incorporated herein by reference.
4.2 Senior Secured Note dated May 19, 1993. Previously filed as
Exhibit 4.1 to the Company's Registration Statement on Form
S-1 (File No. 33-59624), and incorporated herein by reference.
4.3 Indenture dated May 15, 1993 relating to the Company's 11%
Senior Secured Notes due May 15, 2003. Previously filed as
Exhibit 4.3 to the Company's Registration Statement on Form
S-1 (File No. 33-59624), and incorporated herein by reference.
4.4 First Supplemental Indenture dated July 30, 1996 relating to
the Company's 11% Senior Secured Notes due May 15, 2003.
Previously filed as Exhibit 4.5 to the Company's Registration
Statement on Form S-1 (File No. 333-05479), and incorporated
herein by reference.
4.5 Form of Second Supplemental Indenture in the form of an
Amended and Restated Indenture dated November 8, 1996 relating
to the Company's 11% Senior Secured Notes due May 15, 2003.
Previously filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K filed on November 15, 1996 (File No.
1-12407), and incorporated herein by reference.
</TABLE>
-72-
<PAGE> 73
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.6 Notice of Trustee dated November 8, 1996 with respect to the
release of the security interest in the Trustee on behalf of
the holders of the Company's 11% Senior Secured Notes due May
15, 2003. Previously filed as Exhibit 4.2 to the Company's
Current Report on Form 8-K filed on November 15, 1996 (File
No. 1-12407), and incorporated herein by reference.
4.7 Form of Subordinated Note. Previously filed as Exhibit 4.8 to
the Company's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.
4.8 Indenture dated as of November 15, 1996 between the Company,
certain of its subsidiaries and State Street Bank and Trust
Company, as trustee, relating to the Company's 9 5/8% Senior
Subordinated Notes due 2006. Previously filed as Exhibit 4.11
to the Company's Registration Statement on Form S-3 (File No.
333-14789), and incorporated herein by reference.
4.9 Form of 9 5/8% Senior Subordinated Note due 2006. Previously
filed as Exhibit 4.12 to the Company's Registration Statement
on Form S-3 (File No. 333-14789), and incorporated herein by
reference.
4.10 Form of 8 5/8% Senior Subordinated Note due 2007. Previously
filed as Exhibit 4.10 to the Company's Annual Report on Form
10-K for fiscal year ended December 31, 1997, (File No.
1-12407), and incorporated herein by reference.
4.11 Indenture dated as of September 25, 1997 between the Company,
certain of its subsidiaries, and State Street Bank and Trust
Company, as trustee, relating to the Company's 8 5/8% Senior
Subordinated Notes due 2007. Previously filed as Exhibit 4.2
to the Company's Current Report on Form 8-K filed on September
30, 1997 (File No. 1-12407), and incorporated herein by
reference.
4.12 Indenture dated August 15, 1997, relating to Outdoor
Communications, Inc. 9 1/4% Senior Subordinated Notes.
Previously filed as Exhibit 4.1 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1998,
(File No. 1-12407) and incorporated herein by reference.
4.13 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank as Trustee, dated
October 1, 1998. Previously filed as Exhibit 4.2 to the
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1998, (File No. 1-12407) and incorporated herein
by reference.
4.14 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
October 23, 1998. Previously filed as Exhibit 4.3 to the
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1998, (File No. 1-12407) and incorporated herein
by reference.
4.15 Supplemental Indenture to the Indenture dated November 15,
1996 among the Company, certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee, dated October 23,
1998. Previously filed as Exhibit 4.4 to the Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1998, (File No. 1-12407) and incorporated herein by
reference.
</TABLE>
-73-
<PAGE> 74
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.16 Supplemental Indenture to the Indenture dated September 25,
1997 among the Company, certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee, dated October 23,
1998. Previously filed as Exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1998, (File No. 1-12407) and incorporated herein by
reference.
4.17 Indenture dated as of August 10, 1999 between the Company and
State Street Bank and Trust Company, as Trustee. Previously
filed as Exhibit 4.1 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by reference.
4.18 First Supplemental Indenture dated as of August 10, 1999
between the Company and State Street Bank and Trust Company,
as Trustee. Previously filed as Exhibit 4.2 to the Company's
Quarterly Report on Form 10-Q for the period ended June 30,
1999 (File No. 0-20833) filed on August 16, 1999 and
incorporated herein by reference.
4.19 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated July
20, 1999. Previously filed as Exhibit 4.1 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-30242) filed on November 12,
1999 and incorporated herein by reference.
4.20 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
September 15, 1999. Previously filed as Exhibit 4.2 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
4.21 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
September 15, 1999. Previously filed as Exhibit 4.3 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
4.22 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated July
20, 1999. Previously filed as Exhibit 4.4 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-30242) filed on November 12,
1999 and incorporated herein by reference.
4.23 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
July 20, 1999. Previously filed as Exhibit 4.5 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
</TABLE>
-74-
<PAGE> 75
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.24 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
September 15, 1999. Previously filed as Exhibit 4.6 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
4.25 Supplemental Indentures to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee. Previously
filed as Exhibit 4.7 to Lamar Advertising Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1999
(File No. 0-30242) filed on November 12, 1999 and incorporated
herein by reference.
4.26 Supplemental Indentures to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee. Previously
filed as Exhibit 4.8 to Lamar Advertising Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1999
(File No. 0-30242) filed on November 12, 1999 and incorporated
herein by reference.
4.27 Supplemental Indentures to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee.
Previously filed as Exhibit 4.9 to Lamar Advertising Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1999 (File No. 0-30242) filed on November 12, 1999 and
incorporated herein by reference.
4.28 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
December 23, 1999. Filed herewith.
4.29 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
December 23, 1999. Filed herewith.
4.30 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
December 23, 1999. Filed herewith.
10.1 Consulting Agreement dated July 1, 1996 between the Lamar
Texas Limited Partnership and the Reilly Consulting Company,
L.L.C., of which Kevin P. Reilly, Sr. is the manager.
Previously filed as Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (File No. 33-05479), and incorporated
herein by reference.
10.2 Indenture dated as of September 24, 1986 relating to the
Company's 8% Unsecured Subordinated Debentures. Previously
filed as Exhibit 10.3 to the Company's Registration Statement
on Form S-1 (File No. 33-59624), and incorporated herein by
reference.
10.3* The Lamar Savings and Profit Sharing Plan Trust. Previously
filed as Exhibit 10.4 to the Company's Registration Statement
on Form S-1 (File No. 33-59624), and incorporated herein by
reference.
</TABLE>
-75-
<PAGE> 76
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.4 Trust under The Lamar Corporation, its Affiliates and
Subsidiaries Deferred Compensation Plan dated October 3, 1993.
Previously filed as Exhibit 10.11 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1995
(File No. 33-59624), and incorporated herein by reference.
10.5* 1996 Equity Incentive Plan. Previously filed as Exhibit 10.14
to the Company's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.
10.6 Bank Credit Agreement dated December 18, 1996 between the
Company, certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative agent.
Previously filed as Exhibit 10.18 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1996
(File No. 1-12407), and incorporated herein by reference.
10.7 Amendment No. 1 to the Bank Credit Agreement dated as of March
31, 1997 between the Company, the Subsidiary Guarantors party
thereto, the Lenders party thereto and the Chase Manhattan
Bank, as administrative agent. Previously filed as Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the
period ended March 31, 1997 (File No. 1-12407), and
incorporated herein by reference.
10.8 Amendment No. 2 to the Bank Credit Agreement dated as of
September 12, 1997 between the Company, certain of its
subsidiaries, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent. Previously filed as
Exhibit 10.2 to the Company's Current Report on Form 8-K filed
on September 30, 1997 (File No. 1-12407), and incorporated
herein by reference.
10.9 Amendment No. 3 to the Bank Credit Agreement dated as of
December 31, 1997 between the Company, certain of its
subsidiaries, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent. Previously filed as
Exhibit 10.9 to the Company's Annual Report on Form 10-K for
fiscal year ended December 31, 1997, (File No. 1-12407), and
incorporated herein by reference.
10.10 Contract to Sell and Purchase, dated as of October 9, 1996,
between the Company and Outdoor East L.P. Previously filed as
Exhibit 10.16 to the Company's Registration Statement on Form
S-3 (File No. 333-14677), and incorporated herein by
reference.
10.11 Stock Purchase Agreement, dated as of September 25, 1996,
between the Company and the shareholders of FKM Advertising,
Co., Inc. Previously filed as Exhibit 10.17 to the Company's
Registration Statement on Form S-3 (File No. 333-14677), and
incorporated herein by reference.
10.12 Stock Purchase Agreement dated as of February 7, 1997 between
the Company and the stockholders of Penn Advertising, Inc.
named therein. Previously filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed on April 14, 1997
(File No. 1-12407), and incorporated herein by reference.
10.13 Asset Purchase Agreement dated as of August 15, 1997 between
The Lamar Corporation and Outdoor Systems, Inc. Previously
filed as Exhibit 2.1 to the Company's Current Report on Form
8-K filed on August 27, 1997 (File No. 1-12407), and
incorporated herein by reference.
</TABLE>
-76-
<PAGE> 77
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.14 Bank Credit Agreement dated July 16, 1998, between the
Company, certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative agent.
Previously filed as Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1998, (File
No. 0-020833), and incorporated herein by reference.
10.15 Amendment No. 1 to the Amended and Restated Bank Credit
Agreement dated September 15, 1998, between the Company,
certain of its subsidiaries, the lenders party thereto and The
Chase Manhattan Bank, as administrative agent. Previously
filed as Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1998 (File No.
0-20833) and incorporated herein by reference.
10.16 Stock Purchase Agreement dated as of October 1, 1998, between
the Company and the stockholders of Outdoor Communications,
Inc. named therein. Previously filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed on October 15, 1998
(File No. 0-20833), and incorporated herein by reference.
10.17 Amendment No. 4 to Credit Agreement dated as of March 31,
1998, between Lamar Advertising Company, certain of its
subsidiaries, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent. Previously filed as
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the period ended March 31, 1998 (File No. 1-12407), and
incorporated herein by reference.
10.18 Second Amended and Restated Stock Purchase Agreement dated as
of August 11, 1999 among the Company, Lamar Media Corp.,
Chancellor Media Corporation of Los Angeles and Chancellor
Mezzanine Holdings Corporation. Previously filed as Appendix A
to the Company's Schedule 14C Information Statement filed on
August 13, 1999 and incorporated herein by reference. Pursuant
to Item 601(b)(2) of Regulation S-K, the Schedules and Annexes
A and B referred to in the Second Amended and Restated Stock
Purchase Agreement are omitted. The Company hereby undertakes
to furnish supplementary a copy of any omitted Schedule or
Annex to the Commission upon request.
10.19 Bank Credit Agreement dated August 13, 1999, between Lamar
Media Corp., certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative agent.
Previously filed as Exhibit 10.1 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-30242) filed on November 12,
1999 and incorporated herein by reference.
10.20 Stockholders Agreement dated as of September 15, 1999 by and
among Lamar Advertising Company, Chancellor Media Corporation
of Los Angeles, Chancellor Mezzanine Holdings Corporation and
the Reilly Family Limited Partnership. Previously filed as
Exhibit 10.2 to Lamar Advertising Company's Quarterly Report
on Form 10-Q for the period ended September 30, 1999 (File No.
0-030242) filed on November 12, 1999 and incorporated herein
by reference.
10.21 Registration Rights Agreement dated as of September 15, 1999
among Lamar Advertising Company, Chancellor Media Corporation
of Los Angeles and Chancellor Mezzanine Holdings Corporation.
Previously filed as Exhibit 10.3 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-030242) filed on November 12,
1999 and incorporated herein by reference.
</TABLE>
-77-
<PAGE> 78
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.22 Assumption Agreement dated as of July 20, 1999 is by and among
Lamar Advertising Company, Lamar Media Corp., and the direct
and indirect subsidiaries of such corporations. Previously
filed as Exhibit 10.4 to Lamar Advertising Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1999
(File No. 0-030242) filed on November 12, 1999 and
incorporated herein by reference.
10.23 Joinder Agreement to the Lamar Media Corp. Credit Agreement
dated August 13, 1999 by Lamar Florida, Inc. in favor of The
Chase Manhattan Bank, as Administrative Agent dated December
23, 1999. Filed herewith.
11.1 Statement regarding computation of per share earnings. Filed
herewith.
21.1 Subsidiaries of the Company. Filed herewith.
23.1 Consent of KPMG LLP. Filed herewith.
27.1 Financial Data Schedule for the Company. Filed herewith.
27.2 Financial Data Schedule for Lamar Media Corp. Filed herewith.
</TABLE>
- --------------
* Management contract or compensatory plan or arrangement in which the
executive officers or directors of the Company participate.
-78-
<PAGE> 79
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LAMAR ADVERTISING COMPANY
March 27, 2000 By: /s/ Kevin P. Reilly, Jr.
------------------------
Kevin P. Reilly, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Kevin P. Reilly, Jr. Chief Executive Officer and Director March 27,2000
- --------------------------
Kevin P. Reilly, Jr.
/s/ Keith A. Istre Chief Financial and Accounting Officer and
- -------------------------- Director March 27,2000
Keith A. Istre
/s/ Charles W. Lamar, III Director March 27,2000
- --------------------------
Charles W. Lamar, III
/s/ Gerald H. Marchand Director March 27,2000
- --------------------------
Gerald H. Marchand
/s/ T. Everett Stewart, Jr. Director March 27,2000
- --------------------------
T. Everett Stewart, Jr.
/s/ Sean E. Reilly Director March 27,2000
- --------------------------
Sean E. Reilly
/s/ Wendell Reilly Director March 27,2000
- --------------------------
Wendell Reilly
Director March __,2000
- --------------------------
Stephen P. Mumblow
Director March __,2000
- --------------------------
Thomas O. Hicks
Director March __,2000
- --------------------------
R. Steven Hicks
</TABLE>
-79-
<PAGE> 80
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LAMAR MEDIA CORP.
March 27, 2000 By: /s/ Kevin P. Reilly, Jr.
------------------------
Kevin P. Reilly, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Kevin P. Reilly, Jr. Chief Executive Officer and Director March 27,2000
- --------------------------
Kevin P. Reilly, Jr.
/s/ Keith A. Istre Chief Financial and Accounting Officer and
- -------------------------- Director March 27,2000
Keith A. Istre
/s/ Charles W. Lamar, III Director March 27,2000
- --------------------------
Charles W. Lamar, III
/s/ Gerald H. Marchand Director March 27,2000
- --------------------------
Gerald H. Marchand
/s/ T. Everett Stewart, Jr. Director March 27,2000
- --------------------------
T. Everett Stewart, Jr.
/s/ Sean E. Reilly Director March 27,2000
- --------------------------
Sean E. Reilly
/s/ Wendell Reilly Director March 27,2000
- --------------------------
Wendell Reilly
Director March __,2000
- --------------------------
Stephen P. Mumblow
</TABLE>
-80-
<PAGE> 81
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger dated as of July 20, 1999 among
Lamar Media Corp., Lamar New Holding Co., and Lamar Holdings
Merge Co. Previously filed as exhibit 2.1 to the Company's
Current Report on Form 8-K filed on July 22, 1999 (File No.
0-30242) and incorporated herein by reference.
3.1 Certificate of Incorporation of Lamar New Holding Co.
Previously filed as exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1999 (File
No. 0-20833) filed on August 16, 1999 and incorporated herein
by reference.
3.2 Certificate of Amendment of Certificate of Incorporation of
Lamar New Holding Co. (whereby the name of Lamar New Holding
Co. was changed to Lamar Advertising Company). Previously
filed as exhibit 3.2 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by reference.
3.3 Amended and Restated Bylaws of the Company. Previously filed
as exhibit 3.3 to the Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1999 (File No. 0-20833) filed on
August 16, 1999 and incorporated herein by reference.
3.4 Amended and Restated Bylaws of Lamar Media Corp. Previously
filed as exhibit 3.1 to Lamar Media's Quarterly Report on Form
10-Q for the period ended September 30, 1999 (File No.
1-12407) filed on November 12, 1999 and incorporated herein by
reference.
4.1 Specimen certificate for the shares of Class A common stock of
the Company. Previously filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (File No. 333-05479), and
incorporated herein by reference.
4.2 Senior Secured Note dated May 19, 1993. Previously filed as
Exhibit 4.1 to the Company's Registration Statement on Form
S-1 (File No. 33-59624), and incorporated herein by reference.
4.3 Indenture dated May 15, 1993 relating to the Company's 11%
Senior Secured Notes due May 15, 2003. Previously filed as
Exhibit 4.3 to the Company's Registration Statement on Form
S-1 (File No. 33-59624), and incorporated herein by reference.
4.4 First Supplemental Indenture dated July 30, 1996 relating to
the Company's 11% Senior Secured Notes due May 15, 2003.
Previously filed as Exhibit 4.5 to the Company's Registration
Statement on Form S-1 (File No. 333-05479), and incorporated
herein by reference.
4.5 Form of Second Supplemental Indenture in the form of an
Amended and Restated Indenture dated November 8, 1996 relating
to the Company's 11% Senior Secured Notes due May 15, 2003.
Previously filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K filed on November 15, 1996 (File No.
1-12407), and incorporated herein by reference.
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.6 Notice of Trustee dated November 8, 1996 with respect to the
release of the security interest in the Trustee on behalf of
the holders of the Company's 11% Senior Secured Notes due May
15, 2003. Previously filed as Exhibit 4.2 to the Company's
Current Report on Form 8-K filed on November 15, 1996 (File
No. 1-12407), and incorporated herein by reference.
4.7 Form of Subordinated Note. Previously filed as Exhibit 4.8 to
the Company's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.
4.8 Indenture dated as of November 15, 1996 between the Company,
certain of its subsidiaries and State Street Bank and Trust
Company, as trustee, relating to the Company's 9 5/8% Senior
Subordinated Notes due 2006. Previously filed as Exhibit 4.11
to the Company's Registration Statement on Form S-3 (File No.
333-14789), and incorporated herein by reference.
4.9 Form of 9 5/8% Senior Subordinated Note due 2006. Previously
filed as Exhibit 4.12 to the Company's Registration Statement
on Form S-3 (File No. 333-14789), and incorporated herein by
reference.
4.10 Form of 8 5/8% Senior Subordinated Note due 2007. Previously
filed as Exhibit 4.10 to the Company's Annual Report on Form
10-K for fiscal year ended December 31, 1997, (File No.
1-12407), and incorporated herein by reference.
4.11 Indenture dated as of September 25, 1997 between the Company,
certain of its subsidiaries, and State Street Bank and Trust
Company, as trustee, relating to the Company's 8 5/8% Senior
Subordinated Notes due 2007. Previously filed as Exhibit 4.2
to the Company's Current Report on Form 8-K filed on September
30, 1997 (File No. 1-12407), and incorporated herein by
reference.
4.12 Indenture dated August 15, 1997, relating to Outdoor
Communications, Inc. 9 1/4% Senior Subordinated Notes.
Previously filed as Exhibit 4.1 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1998,
(File No. 1-12407) and incorporated herein by reference.
4.13 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank as Trustee, dated
October 1, 1998. Previously filed as Exhibit 4.2 to the
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1998, (File No. 1-12407) and incorporated herein
by reference.
4.14 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
October 23, 1998. Previously filed as Exhibit 4.3 to the
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1998, (File No. 1-12407) and incorporated herein
by reference.
4.15 Supplemental Indenture to the Indenture dated November 15,
1996 among the Company, certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee, dated October 23,
1998. Previously filed as Exhibit 4.4 to the Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1998, (File No. 1-12407) and incorporated herein by
reference.
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.16 Supplemental Indenture to the Indenture dated September 25,
1997 among the Company, certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee, dated October 23,
1998. Previously filed as Exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1998, (File No. 1-12407) and incorporated herein by
reference.
4.17 Indenture dated as of August 10, 1999 between the Company and
State Street Bank and Trust Company, as Trustee. Previously
filed as Exhibit 4.1 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by reference.
4.18 First Supplemental Indenture dated as of August 10, 1999
between the Company and State Street Bank and Trust Company,
as Trustee. Previously filed as Exhibit 4.2 to the Company's
Quarterly Report on Form 10-Q for the period ended June 30,
1999 (File No. 0-20833) filed on August 16, 1999 and
incorporated herein by reference.
4.19 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated July
20, 1999. Previously filed as Exhibit 4.1 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-30242) filed on November 12,
1999 and incorporated herein by reference.
4.20 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
September 15, 1999. Previously filed as Exhibit 4.2 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
4.21 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
September 15, 1999. Previously filed as Exhibit 4.3 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
4.22 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated July
20, 1999. Previously filed as Exhibit 4.4 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-30242) filed on November 12,
1999 and incorporated herein by reference.
4.23 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
July 20, 1999. Previously filed as Exhibit 4.5 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.24 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
September 15, 1999. Previously filed as Exhibit 4.6 to Lamar
Advertising Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 0-30242) filed on
November 12, 1999 and incorporated herein by reference.
4.25 Supplemental Indentures to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee. Previously
filed as Exhibit 4.7 to Lamar Advertising Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1999
(File No. 0-30242) filed on November 12, 1999 and incorporated
herein by reference.
4.26 Supplemental Indentures to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee. Previously
filed as Exhibit 4.8 to Lamar Advertising Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1999
(File No. 0-30242) filed on November 12, 1999 and incorporated
herein by reference.
4.27 Supplemental Indentures to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee.
Previously filed as Exhibit 4.9 to Lamar Advertising Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1999 (File No. 0-30242) filed on November 12, 1999 and
incorporated herein by reference.
4.28 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
December 23, 1999. Filed herewith.
4.29 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
December 23, 1999. Filed herewith.
4.30 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
December 23, 1999. Filed herewith.
10.1 Consulting Agreement dated July 1, 1996 between the Lamar
Texas Limited Partnership and the Reilly Consulting Company,
L.L.C., of which Kevin P. Reilly, Sr. is the manager.
Previously filed as Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (File No. 33-05479), and incorporated
herein by reference.
10.2 Indenture dated as of September 24, 1986 relating to the
Company's 8% Unsecured Subordinated Debentures. Previously
filed as Exhibit 10.3 to the Company's Registration Statement
on Form S-1 (File No. 33-59624), and incorporated herein by
reference.
10.3* The Lamar Savings and Profit Sharing Plan Trust. Previously
filed as Exhibit 10.4 to the Company's Registration Statement
on Form S-1 (File No. 33-59624), and incorporated herein by
reference.
</TABLE>
<PAGE> 85
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.4 Trust under The Lamar Corporation, its Affiliates and
Subsidiaries Deferred Compensation Plan dated October 3, 1993.
Previously filed as Exhibit 10.11 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1995
(File No. 33-59624), and incorporated herein by reference.
10.5* 1996 Equity Incentive Plan. Previously filed as Exhibit 10.14
to the Company's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.
10.6 Bank Credit Agreement dated December 18, 1996 between the
Company, certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative agent.
Previously filed as Exhibit 10.18 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1996
(File No. 1-12407), and incorporated herein by reference.
10.7 Amendment No. 1 to the Bank Credit Agreement dated as of March
31, 1997 between the Company, the Subsidiary Guarantors party
thereto, the Lenders party thereto and the Chase Manhattan
Bank, as administrative agent. Previously filed as Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the
period ended March 31, 1997 (File No. 1-12407), and
incorporated herein by reference.
10.8 Amendment No. 2 to the Bank Credit Agreement dated as of
September 12, 1997 between the Company, certain of its
subsidiaries, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent. Previously filed as
Exhibit 10.2 to the Company's Current Report on Form 8-K filed
on September 30, 1997 (File No. 1-12407), and incorporated
herein by reference.
10.9 Amendment No. 3 to the Bank Credit Agreement dated as of
December 31, 1997 between the Company, certain of its
subsidiaries, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent. Previously filed as
Exhibit 10.9 to the Company's Annual Report on Form 10-K for
fiscal year ended December 31, 1997, (File No. 1-12407), and
incorporated herein by reference.
10.10 Contract to Sell and Purchase, dated as of October 9, 1996,
between the Company and Outdoor East L.P. Previously filed as
Exhibit 10.16 to the Company's Registration Statement on Form
S-3 (File No. 333-14677), and incorporated herein by
reference.
10.11 Stock Purchase Agreement, dated as of September 25, 1996,
between the Company and the shareholders of FKM Advertising,
Co., Inc. Previously filed as Exhibit 10.17 to the Company's
Registration Statement on Form S-3 (File No. 333-14677), and
incorporated herein by reference.
10.12 Stock Purchase Agreement dated as of February 7, 1997 between
the Company and the stockholders of Penn Advertising, Inc.
named therein. Previously filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed on April 14, 1997
(File No. 1-12407), and incorporated herein by reference.
10.13 Asset Purchase Agreement dated as of August 15, 1997 between
The Lamar Corporation and Outdoor Systems, Inc. Previously
filed as Exhibit 2.1 to the Company's Current Report on Form
8-K filed on August 27, 1997 (File No. 1-12407), and
incorporated herein by reference.
</TABLE>
<PAGE> 86
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.14 Bank Credit Agreement dated July 16, 1998, between the
Company, certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative agent.
Previously filed as Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1998, (File
No. 0-020833), and incorporated herein by reference.
10.15 Amendment No. 1 to the Amended and Restated Bank Credit
Agreement dated September 15, 1998, between the Company,
certain of its subsidiaries, the lenders party thereto and The
Chase Manhattan Bank, as administrative agent. Previously
filed as Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1998 (File No.
0-20833) and incorporated herein by reference.
10.16 Stock Purchase Agreement dated as of October 1, 1998, between
the Company and the stockholders of Outdoor Communications,
Inc. named therein. Previously filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed on October 15, 1998
(File No. 0-20833), and incorporated herein by reference.
10.17 Amendment No. 4 to Credit Agreement dated as of March 31,
1998, between Lamar Advertising Company, certain of its
subsidiaries, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent. Previously filed as
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the period ended March 31, 1998 (File No. 1-12407), and
incorporated herein by reference.
10.18 Second Amended and Restated Stock Purchase Agreement dated as
of August 11, 1999 among the Company, Lamar Media Corp.,
Chancellor Media Corporation of Los Angeles and Chancellor
Mezzanine Holdings Corporation. Previously filed as Appendix A
to the Company's Schedule 14C Information Statement filed on
August 13, 1999 and incorporated herein by reference. Pursuant
to Item 601(b)(2) of Regulation S-K, the Schedules and Annexes
A and B referred to in the Second Amended and Restated Stock
Purchase Agreement are omitted. The Company hereby undertakes
to furnish supplementary a copy of any omitted Schedule or
Annex to the Commission upon request.
10.19 Bank Credit Agreement dated August 13, 1999, between Lamar
Media Corp., certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative agent.
Previously filed as Exhibit 10.1 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-30242) filed on November 12,
1999 and incorporated herein by reference.
10.20 Stockholders Agreement dated as of September 15, 1999 by and
among Lamar Advertising Company, Chancellor Media Corporation
of Los Angeles, Chancellor Mezzanine Holdings Corporation and
the Reilly Family Limited Partnership. Previously filed as
Exhibit 10.2 to Lamar Advertising Company's Quarterly Report
on Form 10-Q for the period ended September 30, 1999 (File No.
0-030242) filed on November 12, 1999 and incorporated herein
by reference.
10.21 Registration Rights Agreement dated as of September 15, 1999
among Lamar Advertising Company, Chancellor Media Corporation
of Los Angeles and Chancellor Mezzanine Holdings Corporation.
Previously filed as Exhibit 10.3 to Lamar Advertising
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 0-030242) filed on November 12,
1999 and incorporated herein by reference.
</TABLE>
<PAGE> 87
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.22 Assumption Agreement dated as of July 20, 1999 is by and among
Lamar Advertising Company, Lamar Media Corp., and the direct
and indirect subsidiaries of such corporations. Previously
filed as Exhibit 10.4 to Lamar Advertising Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1999
(File No. 0-030242) filed on November 12, 1999 and
incorporated herein by reference.
10.23 Joinder Agreement to the Lamar Media Corp. Credit Agreement
dated August 13, 1999 by Lamar Florida, Inc. in favor of The
Chase Manhattan Bank, as Administrative Agent dated December
23, 1999. Filed herewith.
11.1 Statement regarding computation of per share earnings. Filed
herewith.
21.1 Subsidiaries of the Company. Filed herewith.
23.1 Consent of KPMG LLP. Filed herewith.
27.1 Financial Data Schedule for the Company. Filed herewith.
27.2 Financial Data Schedule for Lamar Media Corp. Filed herewith.
</TABLE>
- --------------
* Management contract or compensatory plan or arrangement in which the
executive officers or directors of the Company participate.
<PAGE> 1
EXHIBIT 4.28
SUPPLEMENTAL INDENTURE
TO INDENTURE DATED AUGUST 15, 1997
THIS SUPPLEMENTAL INDENTURE dated as of December 23, 1999, is delivered
pursuant to Section 4.11 of the Indenture dated as of August 15, 1997 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "1997 Indenture") among OUTDOOR COMMUNICATIONS, INC., a Delaware
corporation, certain of its subsidiaries (the "Guarantors") and FIRST UNION
NATIONAL BANK, a national banking corporation, as Trustee (the "Trustee") (all
terms used herein without definition having the meanings ascribed to them in the
1997 Indenture).
The undersigned hereby agree that:
1. The undersigned is a Guarantor under the 1997 Indenture with all of
the rights and obligations of the Guarantors thereunder.
2. The undersigned have granted, ratified and confirmed, in the form
and substance of Exhibit B to the 1997 Indenture, the Guarantee provided for by
Article XI of the 1997 Indenture.
3. The undersigned hereby represents and warrants that the
representations and warranties set forth in the 1997 Indenture, to the extent
relating to the undersigned as Guarantor, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
1997 Indenture should be delivered to the undersigned at the following address:
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Lamar Media Corp. and its Subsidiaries
5551 Corporate Blvd.
Baton Rouge, LA 70808
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the 1997 Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantor:
LAMAR FLORIDA, INC.
a Florida corporation
By: /s/ Keith A. Istre
-------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Office
Attest:
By: /s/ James R. McIlwain
-------------------------------
James R. McIlwain, Secretary
Accepted:
FIRST UNION NATIONAL BANK, as Trustee
By: /s/ JAMES LONG
-------------------------------
Title: Corperate Trust Officer
----------------------------
<PAGE> 1
EXHIBIT 4.29
SUPPLEMENTAL INDENTURE
OF
GUARANTORS
THIS SUPPLEMENTAL INDENTURE dated as of December 23, 1999 is delivered
pursuant to Section 10.04 of the Indenture dated as of November 15, 1996 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "Indenture") among LAMAR MEDIA CORP., a Delaware corporation,
(formerly Lamar Advertising Company) certain of its subsidiaries ("Guarantors")
and STATE STREET BANK AND TRUST COMPANY, a Massachusetts banking corporation, as
Trustee ("Trustee") (all terms used herein without definition having the
meanings ascribed to them in the Indenture).
The undersigned hereby agree that:
1. The undersigned is a Guarantor under the Indenture with all of the
rights and obligations of a Guarantor thereunder.
2. The undersigned hereby grant, ratify and confirm the guarantee
provided for by Article Ten of the Indenture to guarantee unconditionally,
jointly and severally with the other Guarantors, to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Note when and as the same shall become due and payable.
3. The undersigned hereby represents and warrants that the
representations and warranties set forth in the Indenture, to the extent
relating to the undersigned as Guarantor, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
Indenture should be delivered to the undersigned at the address specified in
Section 12.02 of the Indenture.
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantor:
LAMAR FLORIDA, INC.
a Florida corporation
By: /s/ Keith A. Istre
-------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Office
Attest:
By: /s/ James R. McIlwain
-------------------------------
James R. McIlwain, Secretary
Accepted:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ ANDREW M. SINASKY
-------------------------------
Title: Assistant Vice President
-----------------------------
<PAGE> 1
EXHIBIT 4.30
SUPPLEMENTAL INDENTURE
OF
GUARANTOR
THIS SUPPLEMENTAL INDENTURE dated as of December 23, 1999, is delivered
pursuant to Section 10.04 of the Indenture dated as of September 25, 1997 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "Indenture") among LAMAR MEDIA CORP., a Delaware corporation, certain
of its subsidiaries ("Guarantors") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation, as Trustee ("Trustee") (all terms used herein
without definition having the meanings ascribed to them in the Indenture).
The undersigned hereby agree that:
1. The undersigned are Guarantors under the Indenture with all of the
rights and obligations of Guarantors thereunder.
2. The undersigned hereby grants, ratifies and confirms the guarantee
provided for by Article Ten of the Indenture to guarantee unconditionally,
jointly and severally with the other Guarantors, to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Note when and as the same shall become due and payable.
3. The undersigned hereby represents and warrants that the
representations and warranties set forth in the Indenture, to the extent
relating to the undersigned as Guarantor, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
Indenture should be delivered to the undersigned at the address specified in
Section 12.02 of the Indenture.
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantor:
Lamar Florida, Inc.
a Florida corporation
December 23, 1999 By: /s/ Keith A. Istre
------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Attest:
By: /s/ James R. McIlwain
--------------------------------
James R. McIlwain, Secretary
Accepted:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ ANDREW M. SINASKY
------------------------------
Title: Assistant Vice President
---------------------------
<PAGE> 1
EXHIBIT 10.23
JOINDER AGREEMENT
JOINDER AGREEMENT dated as of December 23, 1999, by the undersigned,
(the "Additional Subsidiary Guarantor"), in favor of The Chase Manhattan Bank,
as administrative agent for the Lenders party to the Credit Agreement referred
to below (in such capacity, together with its successors in such capacity, the
"Administrative Agent").
Lamar Media Corp. (formerly Lamar Advertising Company), a Delaware
corporation (the "Borrower"), and certain of its subsidiaries (collectively, the
"Existing Subsidiary Guarantors" and, together with the Borrower, the "Securing
Parties") are parties to a Credit Agreement dated August 13, 1999 (as modified
and supplemented and in effect from time to time, the "Credit Agreement",
providing, subject to the terms and conditions thereof, for extensions of credit
(by means of loans and letters of credit) to be made by the lenders therein
(collectively, together with any entity that becomes a "Lender" party to the
Credit Agreement after the date hereof as provided therein, the "Lenders" and,
together with Administrative Agent and any successors or assigns of any of the
foregoing, the "Secured Parties") to the Borrower in an aggregate principal or
face amount not exceeding $1,000,000,000 (which, in the circumstances
contemplated by Section 2.01(d) thereof, may be increased to $1,400,000,000). In
addition, the Borrower may from time to time be obligated to one or more of the
Lenders under the Credit Agreement in respect of Hedging Agreements under and as
defined in the Credit Agreement (collectively, the "Hedging Agreements").
In connection with the Credit Agreement, the Borrower, the Existing
Subsidiary Guarantors and the Administrative Agent are parties to the Pledge
Agreement dated September 15, 1999 (the "Pledge Agreement") pursuant to which
the Securing Parties have, inter alia, granted a security interest in the
Collateral (as defined in the Pledge Agreement) as collateral security for the
Secured Obligations (as so defined). Terms defined in the Pledge Agreement are
used herein as defined therein.
To induce the Secured Parties to enter into the Credit Agreement, and
to extend credit thereunder and to extend credit to the Borrower under Hedging
Agreements, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Additional Subsidiary
Guarantor has agreed to become a party to the Credit Agreement and the Pledge
Agreement as a "Subsidiary Guarantor" thereunder, and to pledge and grant a
security interest in the Collateral (as defined in the Pledge Agreement).
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement are used
herein as defined therein.
Section 2. Joinder to Agreements. Effective upon the execution and
delivery hereof, the Additional Subsidiary Guarantor hereby agrees that it shall
become "Subsidiary Guarantor" under and for all purposes of the Credit Agreement
and the Pledge Agreement with all the rights and obligations of a Subsidiary
Guarantor thereunder. Without limiting the generality of the foregoing, the
Additional Subsidiary Guarantor hereby:
<PAGE> 2
(i) jointly and severally with the other Subsidiary Guarantors
party to the Credit Agreement guarantees to each Secured Party and
their respective successors and assigns the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) of all
Guaranteed Obligations in the same manner and to the same extent as is
provided in Article III of the Credit Agreement;
(ii) pledges and grants the security interests in all right,
title and interest of the Additional Subsidiary Guarantor in all
Collateral (as defined in the Pledge Agreement) now owned or hereafter
acquired by the Additional Subsidiary Guarantor and whether now
existing or hereafter coming into existence provided for by Article III
of the Pledge Agreement as collateral security for the Secured
Obligations and agrees that Annex 1 thereof shall be supplemented as
provided in Appendix A hereto;
(iii) makes the representations and warranties set forth in
Article IV of the Credit Agreement and in Article II of the Pledge
Agreement, to the extent relating to the Additional Subsidiary
Guarantor or to the Pledged Equity evidenced by the certificates, if
any, identified in Appendix A hereto; and
(iv) submits to the jurisdiction of the courts, and waives
jury trial, as provided in Sections 10.09 and 10.10 of the Credit
Agreement.
The Additional Subsidiary Guarantor hereby instructs its counsel to
deliver the opinions referred to in Section 6.10(a)(iii) of the Credit Agreement
to the Secured Parties.
<PAGE> 3
IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused this
Joinder Agreement to be duly executed and delivered as of the day and year first
above written.
LAMAR FLORIDA, INC.
a Florida corporation
By: /s/ Keith A. Istre
------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Attested:
By: /s/ James R. McIlwain
-------------------------------
James R. McIlwain, Secretary
Accepted and agreed:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: /s/ WILLIAM E. ROTTINO
------------------------------
Title: Vice President
<PAGE> 4
The undersigned hereby respectively pledge and grant a security interest in the
stock and evidenced by the certificate listed in Appendix A hereto and agree
that Annex 1 of the above-referenced Amended and Restated Pledge Agreement is
hereby supplemented by adding thereto the information listed on Appendix A.
Lamar Advertising of Mobile, Inc., Issuee of Stock
By: /s/ Keith A. Istre Dated this day: December 23, 1999
------------------
Keith A. Istre
Title: Vice President-Finance
<PAGE> 5
Supplement to Annex 1
Appendix A to Joinder Agreement
<TABLE>
<CAPTION>
Pledgor Ownership Issuer No. Shares Cert. No. %
----------------- ------ ---------- --------- ---
<S> <C> <C> <C> <C>
Lamar Advertising of Mobile, Inc. Lamar Florida, Inc. 1000 2 100
</TABLE>
<PAGE> 1
EXHIBIT 11.1
Lamar Advertising Company and Subsidiaries
Earnings Per Share Computation Information
Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Net earnings (loss) applicable
to common stock $(44,900,000) $(12,255,000) $ 2,476,000
============ ============ ============
Weighted average common shares outstanding 69,115,764 51,361,522 47,037,497
Shares issuable upon exercise of stock
options -- -- 363,486
Incremental shares from convertible debt -- -- --
------------ ------------ ------------
Weighted average common shares and common
equivalents outstanding 69,115,764 51,361,522 47,400,980
============ ============ ============
Net earnings (loss) per common share
basic and diluted $ (0.65) $ (0.24) $ 0.05
============ ============ ============
</TABLE>
The above earnings per share (EPS) calculations are submitted in accordance with
Statement of Financial Accounting Standards No. 128. An EPS calculation in
accordance with Regulation S-K item 601 (b) (11) is not shown above for the
years ended December 31, 1999 and 1998 because it produces an antidilutive
result. The following information is disclosed for purposes of calculating
antidilutive EPS for that period.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Net earnings (loss) applicable
to common stock $(44,900,000) $(12,255,000) $ 2,476,000
Income impact of assumed conversions 3,581,974 -- --
------------ ------------ ------------
Earnings (loss) available to common
shareholders + assumed conversion (41,318,026) (12,255,000) 2,476,000
============ ============ ============
Weighted average common shares outstanding 69,115,764 51,361,522 47,037,497
Shares issuable upon exercise of stock
options 599,363 505,558 363,483
Incremental shares from convertible debt 2,418,361 -- --
------------ ------------ ------------
Weighted average common shares plus
dilutive potential common shares 72,133,488 51,867,080 47,400,980
============ ============ ============
Net earnings (loss) per common share -
diluted $ (0.57) $ (0.24) $ 0.05
============ ============ ============
</TABLE>
<PAGE> 1
EXHIBIT 21.1
Subsidiaries of Lamar Advertising Company
and Lamar Media Corp.
<TABLE>
<CAPTION>
State of Other Jurisdiction of
Name Incorporation or Organization
---- -------------------------------
<S> <C>
Lamar Media Corp. Delaware
The Lamar Company, LLC Louisiana
Lamar Whiteco Outdoor Corporation Delaware
Lamar Outdoor Corporation Delaware
Lamar Advertising of Louisiana, LLC Louisiana
Lamar Robinson, Inc. Missouri
Lamar Advertising of Roland, Inc. Tennessee
Lamar Advertising of Kentucky, Inc. Kentucky
Lamar Advertising of Joplin, Inc. Missouri
Ad Vantage Media Inc. Texas
Lamar Martin Corporation Delaware
Lamar Nevada Sign Corporation Delaware
Lamar MW Sign Corporation Delaware
Revolution Outdoor Advertising, Inc. Florida
Triumph Outdoor Holdings, LLC Delaware
Delaware Logos, LLC Delaware
New Mexico Logos, Inc. New Mexico
Colorado Logos, Inc. Colorado
Lamar Tennessee Limited Partnership II Tennessee
Lamar West, LP California
Interstate Logos, Inc. Delaware
Lamar Advertising of Colorado Springs, Inc. Colorado
Lamar Advertising of Jackson, Inc. Mississippi
Lamar Advertising of Mobile, Inc. Alabama
Lamar Advertising of South Georgia, Inc. Georgia
Lamar Advertising of South Mississippi, Inc. Mississippi
Lamar Advertising of Youngstown, Inc. Delaware
TLC Properties, Inc. Louisiana
Missouri Logos, Inc. Missouri
Missouri Logos, a Partnership Missouri
Nebraska Logos, Inc. Nebraska
Oklahoma Logo Signs, Inc. Oklahoma
Utah Logos, Inc. Utah
Ohio Logos, Inc. Ohio
Georgia Logos, Inc. Georgia
Kansas Logos, Inc. Kansas
Lamar Air, LLC Louisiana
Lamar Pensacola Transit, Inc. Florida
Lamar Tennessee, LLC Tennessee
Lamar Texas General Partner, Inc. Louisiana
Lamar Texas Limited Partnership Texas
Michigan Logos, Inc. Michigan
Minnesota Logos, Inc. Minnesota
Mississippi Logos, Inc. Mississippi
New Jersey Logos, Inc. New Jersey
South Carolina Logos, Inc. South Carolina
Tennessee Logos, Inc. Tennessee
Texas Logos, Inc. Texas
TLC Properties II, Inc. Texas
Virginia Logos, Inc. Virginia
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
State of Other Jurisdiction of
Name Incorporation or Organization
- ---- ------------------------------
<S> <C>
Lamar Advertising of Huntington-Bridgeport, Inc. West Virginia
Lamar Advertising of Penn, LLC Delaware
Lamar Advertising of Michigan, Inc. Michigan
Lamar Advertising of Missouri, Inc. Missouri
Canadian TODS Limited Nova Scotia Canada
Nevada Logos, Inc. Nevada
Kentucky Logos, Inc. Kentucky
Florida Logos, Inc. Florida
Lamar Electrical, Inc. Louisiana
Lamar Advertising of South Dakota, Inc. South Dakota
TLC Properties, L.L.C. Louisiana
Lamar OCI South Corporation Mississippi
Lamar OCI North Corporation Delaware
Lamar Advertising of Greenville, Inc. Mississippi
Lamar Advertising of West Virginia, Inc. West Virginia
Lamar Advertising of Ashland, Inc. Kentucky
American Signs, Inc. Washington
Dowling Company, Inc. Virginia
Parsons Development Company Florida
Hardin Development Corp. Florida
Scenic Outdoor Marketing and Consulting, Inc. California
Lindsay Outdoor Advertising, Inc. California
Lamar Florida, Inc. Florida
Outdoor Promotions West, LLC Delaware
Transit America Las Vegas, LLC Delaware
Triumph Outdoor Louisiana, LLC Delaware
Triumph Outdoor Rhode Island, LLC Delaware
Lamar Advan, Inc. Pennsylvania
Lamar Advertising of Iowa, Inc. Iowa
</TABLE>
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENT SCHEDULES AND CONSENT
The Board of Directors
Lamar Advertising Company:
The audits referred to in our reports dated March 17, 2000, included the related
financial statement schedules of (a) Lamar Advertising Company and subsidiaries,
and (b) Lamar Media Corp. and subsidiaries for each of the years in the
three-year period ended December 31, 1999. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules of (a) Lamar Advertising
Company and subsidiaries, and (b) Lamar Media Corp. and subsidiaries, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.
We consent to incorporation by reference in the Registration Statements of Lamar
Advertising Company on Form S-8 (Nos. 333-10337 and 333-79571), the Registration
Statements on Form S-3 (Nos. 333-52851, 333-66059 and 333-71929), and the
Registration Statements on Form S-4 (Nos. 333-60331 and 333-30012) of our
reports dated March 17, 2000, relating to (a) the consolidated balance sheets of
Lamar Advertising Company and subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of operations, comprehensive income,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1999, and (b) the consolidated balance sheets of Lamar
Media Corp. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, comprehensive income, shareholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1999, which reports appear in the December 31, 1999, annual report
on Form 10-K of Lamar Advertising Company.
Our reports refer to a change in the method of accounting for the costs of
start-up activities.
/s/ KPMG LLP
New Orleans, Louisiana
March 24, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001090425
<NAME> LAMAR ADVERTISING COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 8,401
<SECURITIES> 0
<RECEIVABLES> 85,154
<ALLOWANCES> 3,928
<INVENTORY> 0
<CURRENT-ASSETS> 125,493
<PP&E> 1,412,605
<DEPRECIATION> 218,893
<TOTAL-ASSETS> 3,206,945
<CURRENT-LIABILITIES> 84,706
<BONDS> 1,611,463
0
0
<COMMON> 88
<OTHER-SE> 1,391,441
<TOTAL-LIABILITY-AND-EQUITY> 3,206,945
<SALES> 444,135
<TOTAL-REVENUES> 444,135
<CGS> 0
<TOTAL-COSTS> 143,090
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,065
<INTEREST-EXPENSE> 89,619
<INCOME-PRETAX> (53,182)
<INCOME-TAX> (9,596)
<INCOME-CONTINUING> (43,586)
<DISCONTINUED> 0
<EXTRAORDINARY> (182)
<CHANGES> (767)
<NET-INCOME> (44,535)
<EPS-BASIC> (.65)
<EPS-DILUTED> (.65)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
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<NAME> LAMAR MEDIA CORP
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