LAMAR ADVERTISING CO/NEW (Form: 10-K, Received: 02/20/2020 17:14:24)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

☐	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 1-36756

Lamar Advertising Company

Commission File Number 1-12407

Lamar Media Corp.

(Exact names of registrants as specified in their charters)

Delaware

72-1449411

72-1205791

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

5321 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:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.001 par value	LAMR	The NASDAQ Stock Market, LLC

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:

None

SECURITIES OF LAMAR MEDIA CORP.

REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

Indicate by check mark if Lamar Advertising Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if Lamar Advertising Company is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark if Lamar Media Corp. is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if Lamar Media Corp. is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☒ No ☐

Indicate by check mark whether each 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 ☒ No ☐

Indicate by check mark whether each registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether Lamar Advertising Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if Lamar Advertising Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether Lamar Media Corp. is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if Lamar Media Corp. has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark if either registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting stock held by nonaffiliates of Lamar Advertising Company was $6,880,025,403 based on $80.71 per share as reported at the close of trading on the NASDAQ Global Select Market on June 28, 2019, the last business day of the registrant’s most recently completed second fiscal quarter.

As of June 28, 2019, the aggregate market value of the voting stock held by nonaffiliates of Lamar Media Corp. was $0.

Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.

Class		Outstanding at February 1, 2020
Lamar Advertising Company Class A common stock, $0.001 par value per share		86,095,000 shares
Lamar Advertising Company Class B common stock, $0.001 par value per share		14,420,085 shares
Lamar Media Corp. common stock, $0.001 par value per share		100 shares

DOCUMENTS INCORPORATED BY REFERENCE

Document		Parts into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders scheduled to be held on May 28, 2020 (Proxy Statement)		Part III

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.

TABLE OF CONTENTS

PART I
Special Note Regarding Forward-Looking Statements
ITEM 1.	Business	5
	General	5
	Corporate History	5
	Operating Strategies	6
	Capital Allocation Strategy	6
	Company Operations	7
	Competition	9
	Geographic Diversification	10
	Taxable REIT Subsidiaries	11
	Advertising Tenants	11
	Regulation	11
	Legal Proceedings	12
	Real Estate Portfolio	12
	Contract Expirations	13
	Employees	13
	Inflation	13
	Seasonality	13
	Available Information	14
ITEM 1A.	Risk Factors	14
ITEM 1B.	Unresolved Staff Comments	21
ITEM 2.	Properties	21
ITEM 3.	Legal Proceedings	21
ITEM 4.	Mine Safety Disclosures	21

PART II

ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22
ITEM 6.	Selected Financial Data	23
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Lamar Advertising Company	24
	Overview	24
	Non-GAAP Financial Measures	24
	Results of Operations: Years Ended December 31, 2019 and 2018	26
	Results of Operations: Years Ended December 31, 2018 and 2017	28
	Liquidity and Capital Resources	31
	Critical Accounting Estimates	37
	Accounting Standards and Regulatory Update	38
	Lamar Media	39
	Results of Operations: Years Ended December 31, 2019 and 2018	39
	Results of Operations: Years Ended December 31, 2018 and 2017	42
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	44
ITEM 8.	Financial Statements	45
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	104
ITEM 9A.	Controls and Procedures	104
ITEM 9B.	Other Information	104

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	105
ITEM 11.	Executive Compensation	105
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	105
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	105
ITEM 14.	Principal Accounting Fees and Services	105

PART IV

ITEM 15.	Exhibits, Financial Statement Schedules	105
ITEM 16.	Form 10-K Summary	105

Index to Exhibits		106
Signatures		117

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this report is forward-looking in nature within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. This report uses terminology such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue” and similar expressions to identify forward-looking statements. Examples of forward-looking statements in this report include statements about: (i) our future financial performance and condition; (ii) our business plans, objectives, prospects, growth and operating strategies; (iii) our future capital expenditures and level of acquisition activity; (iv) our ability to integrate acquired assets and realize operating efficiency from acquisitions; (v) market opportunities and competitive positions; (vi) our future cash flows and expected cash requirements; (vii) expected timing and amount of distributions to our stockholders; (viii) estimated risks; (ix) our ability to maintain compliance with applicable covenants and restrictions included in Lamar Media Corp’s (“Lamar Media”) senior credit facility and the indentures relating to its outstanding notes; (x) stock price; and (xi) our ability to remain qualified as a real estate investment trust (“REIT”).

Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors, including but not limited to the following, any of which may cause our actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements: (i) the state of the economy and financial markets generally and their effects on the markets in which we operate and the broader demand for advertising; (ii) the levels of expenditures on advertising in general and outdoor advertising in particular; (iii) risks and uncertainties relating to our significant indebtedness; (iv) the demand for outdoor advertising and its continued popularity as an advertising medium; (v) our need for, and ability to obtain, additional funding for acquisitions, operations and debt refinancing; (vi) increased competition within the outdoor advertising industry; (vii) the regulation of the outdoor advertising industry by federal, state and local governments; (viii) our ability to renew expiring contracts at favorable rates; (ix) the integration of businesses that we acquire and our ability to recognize cost savings and operating efficiencies as a result of these acquisitions; (x) our ability to successfully implement our digital deployment strategy; (xi) the market for our Class A common stock; (xii) changes in accounting principles, policies or guidelines; (xiii) our ability to effectively mitigate the threat of and damages caused by hurricanes and other kinds of severe weather; (xiv) our ability to maintain our status as a REIT; and (xv) changes in tax laws applicable to REITs or in the interpretation of those laws.

The forward-looking statements in this report are based on our current good faith beliefs; however, actual results may differ due to inaccurate assumptions, the factors listed above or other foreseeable or unforeseeable factors. Consequently, we cannot guarantee that any of the forward-looking statements will prove to be accurate. The forward-looking statements in this report speak only as of the date of this report, and Lamar Advertising Company and Lamar Media Corp. expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained in this report, except as required by law.

INDUSTRY AND MARKET DATA

The industry and market data presented throughout this report are based on the experience and estimates of our management and the data in reports issued by third-parties, including the Outdoor Advertising Association of America (OAAA). In each case, we believe this industry and market data is reasonable. We have not, however, independently verified the industry and market data derived from third-party sources, and no independent source has verified the industry and market data derived from management’s experience and estimates.

PART I

ITEM 1.

BUSINESS

GENERAL

Lamar Advertising Company is one of the largest outdoor advertising companies in the United States based on number of displays and has operated under the Lamar name since 1902. We operate in a single operating and reporting segment, advertising. We lease space for advertising on billboards, buses, shelters, benches, logo plates and in airport terminals. We offer our customers a fully integrated service, satisfying all aspects of their billboard display requirements from ad copy production to placement and maintenance.

We operate three types of outdoor advertising displays: billboards, logo signs and transit advertising displays.

Billboards. As of December 31, 2019, we owned and operated approximately 157,800 billboard advertising displays in 45 states and Canada. We lease most of our advertising space on two types of billboards: bulletins and posters.

•

Bulletins are generally large, illuminated advertising structures that are located on major highways and target vehicular traffic.

•

Posters are generally smaller advertising structures that are located on major traffic arteries and city streets and target vehicular and pedestrian traffic.

In addition to traditional billboards, we also lease space on digital billboards, which are generally located on major traffic arteries and city streets. As of December 31, 2019, we owned and operated over 3,500 digital billboard advertising displays in 43 states and Canada.

Logo signs. We lease advertising space on logo signs located near highway exits.

•

Logo signs generally advertise nearby gas, food, camping, lodging and other attractions.

We are the largest provider of logo signs in the United States, operating 24 of the 26 privatized state logo sign contracts. As of December 31, 2019, we operated over 151,200 logo sign advertising displays in 24 states and Canada.

Transit advertising displays. We also lease advertising space on the exterior and interior of public transportation vehicles, in airport terminals, and on transit shelters and benches in over 80 markets. As of December 31, 2019, we operated over 52,800 transit advertising displays in 22 states and Canada.

CORPORATE HISTORY

We have operated under the Lamar name since our founding in 1902 and have been publicly traded on NASDAQ under the symbol “LAMR” since 1996. We completed a reorganization on July 20, 1999 that created a holding company structure. At that time, the operating company (then called Lamar Advertising Company) was renamed Lamar Media Corp., and all of the operating company’s stockholders became stockholders of a new holding company. The new holding company then took the Lamar Advertising Company name, and Lamar Media Corp. became a wholly owned subsidiary of Lamar Advertising Company.

During 2014, we completed a reorganization in order to qualify as a real estate investment trust (a “REIT”) for federal income tax purposes. As part of the plan to reorganize our business operations so that we could elect to qualify as a REIT for the taxable year ended December 31, 2014, we completed a merger with our predecessor that was approved by our stockholders on November 17, 2014. At the time of the merger each outstanding share of our predecessor’s Class A common stock, Class B common stock and Series AA preferred stock was converted into the right to receive an equal number of shares of Class A common stock, Class B common stock and Series AA preferred stock of the surviving corporation, respectively. Accordingly, references herein to our Class A common stock, Class B common stock and Series AA preferred stock refer to our capital stock and the capital stock of our predecessor, as applicable. We hold and operate certain assets through one or more taxable REIT subsidiaries (“TRSs”). The non-REIT qualified businesses that we hold through TRSs include most of our transit and foreign operations.

We may, from time to time, change the election of previously designated TRSs to be treated as qualified REIT subsidiaries or other disregarded entities (“QRSs”), and may reorganize and transfer certain assets or operations from our TRSs to other subsidiaries, including QRSs.

In this Annual Report, unless the context otherwise requires, we refer to Lamar Advertising Company and its consolidated subsidiaries (and its predecessor and its consolidated subsidiaries), as applicable, as the “Company”, “Lamar Advertising” or “we”, we refer to Lamar Advertising’s wholly owned subsidiary Lamar Media Corp. as “Lamar Media.”

OPERATING STRATEGIES

We strive to be a leading provider of outdoor advertising services in each of the markets that we serve, and our operating strategies for achieving that goal include:

Continuing to provide high quality local sales and service. We seek to identify and closely monitor the needs of our tenants and to provide them with a full complement of high quality advertising services. Local advertising constituted approximately 76% of our net revenues for the year ended December 31, 2019, which management believes is higher than the industry average. We believe that the experience of our regional, territory and local managers has contributed greatly to our success. For example, our regional managers have been with us for an average of 34 years. In an effort to provide high quality sales and service at the local level, we employed approximately 1,060 local account executives as of December 31, 2019. Local account executives are typically supported by additional local staff and have the ability to draw upon the resources of our central office, as well as our offices in other markets, in the event business opportunities or customers’ needs support such an allocation of resources.

Continuing a centralized control and decentralized management structure. Our management believes that, for our particular business, centralized control and a decentralized organization provide for greater economies of scale and are more responsive to local market demands. Therefore, we maintain centralized accounting and financial control over our local operations, but our local managers are responsible for the day-to-day operations in each local market and are compensated according to that market’s financial performance.

Continuing to focus on internal growth. Within our existing markets we seek to increase our revenue and improve cash flow by employing highly-targeted local marketing efforts to improve our display occupancy rates and by increasing advertising rates where and when demand can absorb rate increases. Our local offices spearhead this effort and respond to local customer demands quickly.

In addition, we routinely invest in upgrading our existing displays and constructing new displays. Since January 1, 2009, we invested approximately $1.1 billion in capitalized expenditures, which include improvements to our existing real estate portfolio and the construction of new locations. Our regular improvement and expansion of our advertising display inventory allows us to provide high quality service to our current tenants and to attract new tenants.

Continuing to pursue other outdoor advertising opportunities. We plan to renew existing logo sign contracts and pursue additional logo sign contracts. 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, we plan to pursue additional tourist oriented directional sign programs in both the United States and Canada and also other motorist information signing programs as opportunities present themselves. In addition, in an effort to maintain market share, we continue to pursue attractive transit advertising opportunities as they become available.

Reinvesting in capital expenditures including digital technology. We have a history of investing in capital expenditures, particularly in our digital platform. We spent approximately $141.0 million in total capital expenditures in fiscal year 2019, of which approximately $57.5 million was spent on digital technology. We expect our 2020 capitalized expenditures to approximate our spending in 2019.

CAPITAL ALLOCATION STRATEGY

The objective of our capital allocation strategy is to simultaneously increase adjusted funds from operations and our return on invested capital. To maintain our REIT status we are required to distribute to our stockholders annually an amount equal to at least 90% of our REIT taxable income, excluding net capital gains. After complying with our REIT distribution requirements, we plan to continue to allocate our available capital among investment alternatives that meet our return on investment criteria. During 2019, we generated $630.7 million of cash from operating activities, which was used to fund capital expenditures, dividends to our shareholders and partially fund acquisitions.

•

Capital expenditures program. We will continue to reinvest in our existing assets and expand our outdoor advertising display portfolio through new construction. This includes maintenance and growth capital expenditures associated with the construction of new billboard displays, the entrance into and renewal of logo sign and transit contracts, and the purchase of real estate and operating equipment.

•

Acquisitions. We will seek to pursue strategic acquisitions of outdoor advertising businesses and assets. This includes acquisitions in our existing markets and in new markets where we can meet our return on investment criteria. When evaluating investments in new markets, our return on investment criteria reflects the additional risks inherent to the particular geographic area.

COMPANY OPERATIONS

Billboard Advertising

We lease most of our advertising space on two types of billboard advertising displays: bulletins and posters. As of December 31, 2019, we owned and operated approximately 157,800 billboard advertising displays in 45 states and Canada. In 2019, we derived approximately 75% of our billboard advertising net revenues from bulletin rentals and 25% from poster rentals.

Bulletins are large, advertising structures (the most common size is fourteen feet high by forty-eight feet wide, or 672 square feet) consisting of panels on which advertising copy is displayed. We wrap advertising copy printed with computer-generated graphics on a single sheet of vinyl around the structure. 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 and target vehicular traffic. At December 31, 2019, we operated approximately 76,150 bulletin displays.

We generally lease individually-selected bulletin space to advertisers for the duration of the contract (ranging from 4 to 52 weeks). We also lease bulletins as part of a rotary plan under which we rotate the advertising copy from one bulletin location to another within a particular market at stated intervals (usually every sixty to ninety days) to achieve greater reach within that market.

Posters are smaller advertising structures (the most common size is eleven feet high by twenty-three feet wide, or 250 square feet; we also operate junior posters, which are five feet high by eleven feet wide, or 55 square feet). Poster panels utilize a single flexible sheet of polyethylene material that inserts onto the face of the panel. Posters are concentrated on major traffic arteries and target vehicular traffic, and junior posters are concentrated on city streets and target hard-to-reach pedestrian traffic and nearby residents. At December 31, 2019, we operated approximately 81,650 poster displays.

We generally lease poster space for 4 to 26 weeks; determined by the advertiser’s campaign needs. Posters are sold in packages of Target Rating Point (“TRP”) levels, which determine the percentage of a target audience an advertiser needs to reach. A package may include a combination of poster locations in order to meet reach and frequency campaign goals.

In addition to the traditional static displays, we also rent digital billboards. Digital billboards are large electronic light emitting diode (“LED”) displays (the most common sizes are fourteen feet high by forty-eight feet wide, or 672 square feet; ten and a half feet high by thirty six feet wide, or 378 square feet; and ten feet high by twenty-one feet wide, or 210 square feet) that are generally located on major traffic arteries and city streets. Digital billboards are capable of generating over one billion colors and vary in brightness based on ambient conditions. They display completely digital advertising copy from various advertisers in a slide show fashion, rotating each advertisement approximately every 6 to 8 seconds. At December 31, 2019, our inventory included over 3,500 digital display billboards in various markets. These 3,500 digital billboards generated approximately 25% of billboard advertising net revenue.

We own the physical structures on which the advertising copy is displayed. We build the structures on locations we either own or lease. In each local office, one employee typically performs site leasing activities for the markets served by that office. See Item 2. — “Properties.”

In the majority of our markets, our local production staffs perform the full range of activities required to create and install billboard advertising displays. Production work includes creating the advertising copy design and layout, coordinating its printing and installing the designs on the displays. Our talented design staff uses state-of-the-art technology to prepare creative, eye-catching displays for our tenants. We can also help with the strategic placement of advertisements throughout an advertiser’s market by using software that allows us to analyze the target audience and its demographics. Our artists also assist in developing marketing presentations, demonstrations and strategies to attract new tenant advertisers.

In marketing billboard displays to advertisers, we compete with other forms of out-of-home advertising and other media. When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers, which are described in the section entitled — “Competition” below.

Logo Sign Advertising

We entered the logo sign advertising business in 1988 and have become the largest provider of logo sign services in the United States, operating 24 of the 26 privatized state logo contracts. We erect logo signs, which generally advertise nearby gas, food, camping, lodging and other attractions, and directional signs, which direct vehicle traffic to nearby services and tourist attractions, near highway exits. As of December 31, 2019, we operated approximately 46,170 logo sign structures containing over 151,200 logo advertising displays in the United States and Canada.

We operate the logo sign contracts in the province of Ontario, Canada and in the following states:

Colorado

Georgia

Louisiana

Mississippi

Nebraska

New Mexico

Tennessee

Delaware

Kansas

Michigan

Missouri⁽¹⁾

Nevada

Ohio

Utah

Florida

Kentucky

Minnesota

Montana

New Hampshire

Oklahoma

Virginia

New Jersey

South Carolina

Wisconsin

⁽¹⁾	The logo sign contract in Missouri is operated by a 66 2/3% owned partnership.

We also operate the tourist oriented directional signing (“TODS”) programs for the states of Colorado, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, Ohio, South Carolina, Utah, Virginia and the province of Ontario, Canada, providing approximately 29,650 advertising displays.

Our logo and TODS operations are decentralized. Generally, each office is staffed with an experienced local general manager, local sales and office staff and a local signing sub-contractor. This decentralization allows the management staff of Interstate Logos, L.L.C. (the subsidiary that operates all of the logo and directional sign-related businesses) to travel extensively to the various operations and serve in a technical and management advisory capacity and monitor regulatory and contract compliance. We also run a silk screening operation in Baton Rouge, Louisiana and a display construction company in Atlanta, Georgia.

State logo sign contracts represent the exclusive right to erect and operate logo signs within a state for a period of time. The terms of the contracts vary, but generally range from five to ten years, with additional renewal terms. Each logo sign contract generally allows the state to terminate the contract prior to its expiration and, in most cases, with compensation for the termination to be paid to the Company. When a logo sign contract expires, we transfer ownership of the advertising structures to the state. Depending on the contract, we may or may not be entitled to compensation at that time. Of our 25 logo sign contracts in place, in the United States and Canada, at December 31, 2019, four are subject to renewal or expiration in 2020.

States usually award new logo sign contracts and renew expiring logo sign contracts through an open proposal process. In bidding for new and renewal contracts, we compete against other logo sign providers, as well as local companies based in the state soliciting proposals.

In marketing logo signs to advertisers, we compete with other forms of out-of-home advertising and other media. When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers which are described in the section entitled — “Competition” below.

Transit Advertising

We entered into the transit advertising business in 1993 as a way to complement our existing business and maintain market share in certain markets. Transit contracts are generally with the local municipalities and airport authorities and allow us the exclusive right to rent advertising space to customers, in airports and on buses, benches or shelters. The terms of the contracts vary but generally range between 3-15 years, many with renewable options for contract extension. We rent transit advertising displays in airport terminals and on bus shelters, benches and buses in over 80 transit markets, and our production staff provides a full range of creative and installation services to our transit advertising tenants. As of December 31, 2019, we operated over 52,800 transit advertising displays in 22 states and Canada.

Municipalities usually award new transit advertising contracts and renew expiring transit advertising contracts through an open bidding process. In bidding for new and renewal contracts, we compete against national outdoor advertising providers and local, on-premise sign providers and sign construction companies. Transit advertising operators incur significant start-up costs to build and install the advertising structures (such as transit shelters) upon being awarded contracts.

In marketing transit advertising displays to advertisers, we compete with other forms of out-of-home advertising and other media. When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers which are described in the section entitled — “Competition” below.

COMPETITION

Although the outdoor advertising industry has encountered a wave of consolidation, the industry remains fragmented. The industry is comprised of several large outdoor advertising and media companies with operations in multiple markets, as well as smaller, local companies operating a limited number of structures in one or a few local markets.

Although we primarily focus on small to mid-size markets where we can attain a strong market share, in each of our markets, we compete against other providers of outdoor advertising and other types of media, including:

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Larger outdoor advertising providers, such as (i) Clear Channel Outdoor Holdings, Inc., which operates billboards, street furniture displays, transit displays and other out-of-home advertising displays and (ii) Outfront Media, Inc. (formerly CBS Outdoor), which operates traditional outdoor, street furniture and transit advertising properties.

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Broadcast and cable television, radio, print media, direct mail marketing, the internet, social media and applications used in conjunction with wireless devices.

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An increasing variety of out-of-home advertising media, such as advertising displays in shopping centers, malls, airports, stadiums, movie theaters, supermarkets and advertising displays on taxis, trains and buses.

In selecting the form of media through which to advertise, advertisers evaluate their ability to target audiences having a specific demographic profile, lifestyle, brand or media consumption or purchasing behavior or audiences located in, or traveling through, a particular geography. Advertisers also compare the relative costs of available media, evaluating the number of impressions (potential viewings), exposure (the opportunity for advertising to be seen) and circulation (traffic volume in a market), as well as potential effectiveness, quality of related services (such as advertising copy design and layout) and customer service. In competing with other media, we believe that outdoor advertising is relatively more cost-efficient than other media, allowing advertisers to reach broader audiences and target specific geographic areas or demographic groups within markets.

We believe that our strong emphasis on sales and customer service and our position as a major provider of advertising services in each of our primary markets enables us to compete effectively with the other outdoor advertising companies, as well as with other media, within those markets.

GEOGRAPHIC DIVERSIFICATION

Our advertising displays are geographically diversified across the United States and Canada. The following table sets forth information regarding the geographic diversification of our advertising displays, which are listed in order of contributions to total revenue. Markets with less than 1% of total displays are grouped in the category “all other United States.”

	Percentage of Revenues for the year ended, December 31, 2019															Number of Displays for the year ended, December 31, 2019
Market	Static Billboard Displays			Digital Billboard Displays			Transit Displays			Logo Displays			Total Displays			Static Billboard Displays		Digital Billboard Displays		Transit Displays		Logo Displays		Total Displays		Percentage of Total Displays
Las Vegas, NV		1.8	%		2.6	%		15.0	%		—			3.0	%		837		64		1,498		—		2,399		0.6	%
New York, NY		3.2	%		1.7	%		—			—			2.5	%		1,054		37		—		—		1,091		0.3	%
Pittsburgh, PA		2.2	%		3.6	%		0.4	%		—			2.3	%		3,003		56		341		—		3,400		0.9	%
Seattle, WA		2.2	%		1.1	%		2.1	%		—			1.9	%		1,736		18		2,194		—		3,948		1.0	%
Cleveland, OH		1.7	%		2.7	%		1.6	%		—			1.8	%		2,390		58		2,542		—		4,990		1.3	%
Gary, IN		1.6	%		2.6	%		—			—			1.6	%		1,711		118		—		—		1,829		0.5	%
San Bernardino, CA		1.6	%		1.9	%		1.1	%		—			1.5	%		782		33		1,273		—		2,088		0.5	%
Dallas, TX		1.8	%		1.0	%		1.9	%		—			1.5	%		1,374		21		459		—		1,854		0.5	%
Nashville, TN		1.4	%		2.2	%		—			—			1.4	%		1,735		61		—		—		1,796		0.5	%
Vancouver, Canada		—			—			16.7	%		—			1.4	%		—		—		6,118		—		6,118		1.6	%
Atlanta, GA		1.2	%		2.5	%		—			—			1.3	%		771		56		—		—		827		0.2	%
Reading, PA		1.1	%		2.1	%		—			—			1.2	%		1,244		101		—		—		1,345		0.3	%
Hartford, CT		1.1	%		2.2	%		0.1	%		—			1.2	%		919		50		100		—		1,069		0.3	%
Richmond, VA		1.3	%		1.7	%		—			—			1.2	%		1,319		38		—		—		1,357		0.3	%
Phoenix, AZ		0.2	%		2.5	%		5.5	%		—			1.2	%		142		47		3,481		—		3,670		0.9	%
Oklahoma City, OK		1.4	%		1.4	%		—			—			1.2	%		2,209		33		—		—		2,242		0.6	%
Knoxville, TN		1.6	%		0.7	%		—			—			1.2	%		2,226		30		—		—		2,256		0.6	%
Birmingham, AL		1.2	%		1.2	%		0.3	%		—			1.1	%		1,581		32		318		—		1,931		0.6	%
Raleigh, NC		1.4	%		0.9	%		—			—			1.1	%		2,889		41		—		—		2,930		0.8	%
Austin, TX		1.5	%		0.4	%		—			—			1.0	%		952		5		—		—		957		0.2	%
Cincinnati, OH		1.0	%		1.8	%		—			—			1.0	%		1,176		31		—		—		1,207		0.3	%
Columbus, OH		1.0	%		1.6	%		—			—			1.0	%		1,771		60		—		—		1,831		0.5	%
Providence, RI		1.0	%		1.7	%		—			—			1.0	%		582		31		—		—		613		0.2	%
Baton Rouge, LA		1.1	%		1.2	%		—			—			1.0	%		1,483		39		—		—		1,522		0.4	%
Buffalo, NY		0.9	%		1.1	%		2.4	%		—			1.0	%		933		28		1,690		—		2,651		0.7	%
Indianapolis, IN		1.2	%		0.9	%		—			—			1.0	%		2,395		20		—		—		2,415		0.6	%
Greenville-Spartanburg, SC		1.1	%		1.2	%		—			—			1.0	%		1,958		45		—		—		2,003		0.5	%
All US Logo Programs*		—			—			—			93.4	%		4.9	%		—		—		—		165,103		165,103		42.1	%
All Other United States		63.1	%		55.5	%		43.1	%		—			56.3	%		114,961		2,366		28,334		—		145,661		37.1	%
All Other Canada*		0.1	%		—			9.8	%		6.6	%		1.2	%		136		2		4,453		15,762		20,353		5.1	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		154,269		3,521		52,801		180,865		391,456		100.0	%
Total Revenue (in millions)	$	1,145.4		$	392.1		$	131.9		$	84.2		$	1,753.6
* Logo displays at December 31, 2019 include 29,649 displays related to the tourist oriented direction signing ("TODS") programs.

TAXABLE REIT SUBSIDIARIES

We hold and operate certain of our assets that cannot be held and operated directly by a REIT through taxable REIT subsidiaries, or TRSs. A TRS is a subsidiary of a REIT that pays corporate taxes on its taxable income. The assets held in our TRSs primarily consist of our transit advertising business, advertising services business and our foreign operations. Our TRS assets and operations will continue to be subject, as applicable, to U.S. federal and state corporate income taxes. Furthermore, our assets and operations outside the United States will continue to be subject to foreign taxes in the jurisdictions in which those assets and operations are located. Net income from our TRSs will either be retained by our TRSs and used to fund their operations, or distributed to us, where it will be reinvested in our business or be available for distribution to Lamar Advertising’s stockholders. As of December 31, 2019, the annual revenue generated by our TRSs in the aggregate was approximately $323.7 million.

ADVERTISING TENANTS

Our tenant base is diverse. The table below sets forth the ten industries from which we derived most of our billboard advertising revenues for the year ended December 31, 2019, as well as the percentage of billboard advertising revenues attributable to the advertisers in those industries. The individual advertisers in these industries accounted for approximately 76% of our billboard advertising net revenues in the year ended December 31, 2019. No individual tenant accounted for more than 2.0% of our billboard advertising net revenues in that period.

Categories	Percentage of Net Billboard Advertising Revenues
Service		14	%
Health Care		11	%
Restaurants		11	%
Retailers		9	%
Amusement — Entertainment/Sports		7	%
Automotive		5	%
Financial — Banks, Credit Unions		4	%
Gaming		4	%
Education		4	%
Insurance		4	%
Real Estate		3	%
		76	%

REGULATION

Outdoor advertising is subject to governmental regulation at the federal, state and local levels. Regulations generally restrict the size, spacing, lighting and other aspects of advertising structures and pose a significant barrier to entry and expansion in many markets. Federal law, principally the Highway Beautification Act of 1965 (the “HBA”), regulates outdoor advertising on Federal — Aid Primary, Interstate and National Highway Systems roads. The HBA requires states, through the adoption of individual Federal/State agreements, to “effectively control” outdoor advertising along these roads, and mandates a state compliance program and state standards regarding size, spacing and lighting. These state standards, or their local and municipal equivalents, may be modified over time in response to legal challenges or otherwise, which may have an adverse effect on our business. The HBA requires any state or political subdivision that compels the removal of a lawful billboard along a Federal — Aid Primary or Interstate highway to pay just compensation to the billboard owner.

All states have passed billboard control statutes and regulations at least as restrictive as the federal requirements, including laws requiring the removal of illegal signs at the owner’s expense (and without compensation from the state). Although we believe that the number of our billboards that may be subject to removal as illegal is immaterial, and no state in which we operate has banned billboards entirely, from time to time governments have required us to remove signs and billboards legally erected in accordance with federal, state and local permit requirements and laws. Municipal and county governments generally also have sign controls as part of their zoning laws and building codes. We contest laws and regulations that we believe unlawfully restrict our constitutional or other legal rights and may adversely impact the growth of our outdoor advertising business.

Using federal funding for transportation enhancement programs, state governments have purchased and removed billboards for beautification, and may do so again in the future. Under the power of eminent domain, state or municipal governments have laid claim to property and forced the removal of billboards. Under a concept called amortization by which a governmental body asserts that a billboard operator has earned compensation by continued operation over time, local governments have attempted to force removal of legal but nonconforming billboards (i.e., billboards that conformed with applicable zoning regulations when built but which do not conform to current zoning regulations). Although the legality of amortization is questionable, it has been upheld in some instances. Often, municipal and county governments also have sign controls as part of their zoning laws, with some local governments prohibiting construction of new billboards or allowing new construction only to replace existing structures. Although we have generally been able to obtain satisfactory compensation for those of our billboards purchased or removed as a result of governmental action, there is no assurance that this will continue to be the case in the future.

We have also introduced and intend to continue to expand the deployment of digital billboards that display static digital advertising copy from various advertisers that change every 6 to 8 seconds. We have encountered some existing regulations that restrict or prohibit these types of digital displays but it has not yet materially impacted our digital deployment. Since digital billboards have been developed and introduced relatively recently into the market on a large scale, existing regulations that currently do not apply to them by their terms could be revised or new regulations could be enacted to impose greater restrictions. These regulations may impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety.

Relatively few large scale studies have been conducted to date regarding driver safety issues, if any, related to digital billboards. On December 30, 2013, the results of a study conducted by U.S. Department of Transportation and the Federal Highway Administration that looked at the effect of digital billboards and conventional billboards on driver visual behavior were issued. The conclusions of the report indicated that the presence of digital billboards did not appear to be related to a decrease in looking toward the road ahead and were generally within acceptable thresholds. The report cautioned, however, that it adds to the knowledge base but does not present definitive answers to the research questions investigated. Accordingly, the results of future studies may result in regulations at the federal or state level that impose greater restrictions on digital billboards. Any new restrictions on digital billboards could have a material adverse effect on both our existing inventory of digital billboards and our plans to expand our digital deployment, which could have a material adverse effect on our business, results of operations and financial condition.

LEGAL PROCEEDINGS

From time to time, we are involved in litigation in the ordinary course of business, including disputes involving advertising contracts, site leases, employment claims and construction matters. We are also involved in routine administrative and judicial proceedings regarding billboard permits, fees and compensation for condemnations. We are not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us.

REAL ESTATE PORTFOLIO

Our management headquarters is located in Baton Rouge, Louisiana. We also own 126 local operating facilities with front office administration and sales office space connected to back-shop poster and bulletin production space. In addition, we lease an additional 130 operating facilities at an aggregate lease expense for 2019 of approximately $8.3 million.

We own over 8,900 parcels of property beneath our advertising displays. As of December 31, 2019, we leased over 74,300 outdoor sites, accounting for an annualized lease expense of approximately $287.6 million. This amount represented approximately 19% of billboard advertising net revenues for that period. These leases are for varying terms ranging from month-to-month to a term of over ten years, and many provide us with renewal options. Our lease agreements generally permit us to use the land for the construction, repair and relocation of outdoor advertising displays, including all rights necessary to access and maintain the site. Approximately 69% of our leases will expire or be subject to renewal in the next 5 years, 20% will expire or be subject to renewal in 6 to 10 years and 11% thereafter. There is no significant concentration of displays under any one lease or subject to negotiation with any one landlord. An important part of our management activity is to manage our lease portfolio and negotiate suitable lease renewals and extensions.

The following table illustrates the number of leased and owned sites by state as of December 31, 2019, which is sorted from greatest to least in number and percentage of leased sites. States in which we lease less than 2% of our portfolio are grouped in the category “All Other States”.

State	# of billboard leased sites		% of total			# of owned billboard sites		% of total
Texas		5,669		7.6	%		962		10.7	%
Pennsylvania		5,264		7.1	%		1,459		16.3	%
California		4,564		6.1	%		130		1.5	%
Ohio		4,511		6.1	%		533		6.0	%
North Carolina		4,261		5.7	%		249		2.8	%
Tennessee		3,252		4.4	%		415		4.6	%
Louisiana		3,164		4.3	%		481		5.4	%
Alabama		3,067		4.1	%		433		4.8	%
Wisconsin		2,807		3.8	%		291		3.3	%
Georgia		2,751		3.7	%		249		2.8	%
Florida		2,652		3.6	%		376		4.2	%
South Carolina		2,513		3.4	%		131		1.5	%
New York		2,331		3.1	%		188		2.1	%
Missouri		2,242		3.0	%		213		2.4	%
Michigan		2,000		2.7	%		264		2.9	%
Mississippi		1,949		2.6	%		358		4.0	%
Indiana		1,859		2.5	%		266		3.0	%
Oklahoma		1,827		2.5	%		129		1.4	%
Virginia		1,651		2.2	%		160		1.8	%
Illinois		1,560		2.1	%		311		3.5	%
All Other States		14,470		19.4	%		1,355		15.0	%
		74,364		100.0	%		8,953		100.0	%

CONTRACT EXPIRATIONS

We derive revenues primarily from renting advertising space to customers on our advertising displays. Our contracts with customers generally cover periods ranging from one week to one year and are generally billed every four weeks. Since contract terms are short-term in nature, we do not consider revenues by year of contract expiration to be meaningful.

EMPLOYEES

We employed approximately 3,600 people as of December 31, 2019. Approximately 250 employees were engaged in overall management and general administration at our management headquarters in Baton Rouge, Louisiana, and the remainder, including approximately 1,060 local account executives were employed in our operating offices.

Fifteen of our local offices employ billposters and construction personnel who are covered by collective bargaining agreements. We believe that our relationship with our employees, including our approximately 120 unionized employees, is good, and we have never experienced a strike or work stoppage.

INFLATION

In the last three years, inflation has not had a significant impact on us.

SEASONALITY

Our revenues and operating results are subject to seasonality. Typically, we experience our strongest financial performance in the summer and fall, and our weakest financial performance in the first quarter of the calendar year, partly because retailers cut back their advertising spending immediately following the holiday shopping season. We expect this trend to continue in the future. Because a significant portion of our expenses is fixed, a reduction in revenues in any quarter is likely to result in a period-to-period decline in operating performance and net earnings.

AVAILABLE INFORMATION

We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports available free of charge through our website, www.lamar.com, as soon as reasonably practicable after filing them with, or furnishing them to, the Securities and Exchange Commission. Information contained on the website is not part of this Annual Report.

ITEM 1A.

RISK FACTORS

The Company’s substantial debt may adversely affect its business, financial condition and financial results.

The Company has borrowed substantially in the past and will continue to borrow in the future. At December 31, 2019, Lamar Advertising Company’s wholly owned subsidiary, Lamar Media, had approximately $2.980 billion of total debt outstanding, net of deferred financing costs, consisting of approximately $1.118 billion in bank debt outstanding under Lamar Media’s senior credit facility, $531.8 million in senior subordinated notes, $1.153 billion in various series of senior notes, $174.2 million under the Accounts Receivable Securitization Program and $3.1 million in other seller notes. Despite the level of debt presently outstanding, the terms of the indentures governing Lamar Media’s notes and the terms of the senior credit facility allow Lamar Media to incur substantially more debt, including approximately $387.3 million available for borrowing as of December 31, 2019 under the revolving senior credit facility. Furthermore, on February 6, 2020, Lamar Media completed a comprehensive refinancing transaction, which included an amendment and restatement of its credit facility that, among other things, increased the borrowing capacity under the revolving portion of its credit facility by $200.0 million.

The Company’s substantial debt and its use of cash flow from operations to make principal and interest payments on its debt may, among other things:

•

make it more difficult for the Company to comply with the financial covenants in its senior credit facility and in its Accounts Receivable Securitization Program, which could result in a default and an acceleration of all amounts outstanding under the facility or under the Accounts Receivable Securitization Program;

•

limit the cash flow available to fund the Company’s working capital, capital expenditures, acquisitions or other general corporate requirements;

•

limit the Company’s ability to obtain additional financing to fund future dividend distributions, working capital, capital expenditures or other general corporate requirements;

•

place the Company at a competitive disadvantage relative to those of its competitors that have less debt;

•

force the Company to seek and obtain alternate or additional sources of funding, which may be unavailable, or may be on less favorable terms, or may require the Company to obtain the consent of lenders under its senior credit facility or the holders of its other debt;

•

limit the Company’s flexibility in planning for, or reacting to, changes in its business and industry; and

•

increase the Company’s vulnerability to general adverse economic and industry conditions.

Any of these problems could adversely affect the Company’s business, financial condition and financial results.

Restrictions in the Company’s and Lamar Media’s debt agreements reduce operating flexibility and contain covenants and restrictions that create the potential for defaults, which could adversely affect the Company’s business, financial condition and financial results.

The terms of Lamar Media’s senior credit facility and the indentures relating to Lamar Media’s outstanding notes restrict the ability of the Company and Lamar Media to, among other things:

•

incur or repay debt;

•

dispose of assets;

•

create liens;

•

make investments;

•

enter into affiliate transactions; and

•

pay dividends and make inter-company distributions.

At December 31, 2019, the terms of Lamar Media’s senior credit facility and of our Accounts Receivable Securitization Program also restrict the Company from exceeding a specified secured debt ratio. Lamar Media is also subject to certain other financial covenants relating to the incurrence of additional debt. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for a description of the specific financial ratio requirements under the senior credit facility.

The Company’s ability to comply with the financial covenants in the senior credit facility, Accounts Receivable Securitization Program and the indentures governing Lamar Media’s outstanding notes (and to comply with similar covenants in any future agreements) depends on its operating performance, which in turn depends significantly on prevailing economic, financial and business conditions and other factors that are beyond the Company’s control. Therefore, despite its best efforts and execution of its strategic plan, the Company may be unable to comply with these financial covenants in the future.

The Company is currently in compliance with all financial covenants. However, if in the future there are economic declines the Company can make no assurance that these declines will not negatively impact the Company’s financial results and, in turn, its ability to meet these financial covenant requirements. If Lamar Media fails to comply with its financial covenants, the lenders under the senior credit facility and the Accounts Receivable Securitization Program could accelerate all of the debt outstanding, which would create serious financial problems and could lead to a default under the indentures governing Lamar Media’s outstanding notes. Any of these events could adversely affect the Company’s business, financial condition and financial results.

In addition, these restrictions reduce the Company’s operating flexibility and could prevent the Company from exploiting investment, acquisition, marketing, or other time-sensitive business opportunities.

The Company’s revenues are sensitive to the state of the economy and the financial markets generally and other external events beyond the Company’s control.

The Company rents advertising space on outdoor structures to generate revenues. Advertising spending is particularly sensitive to changes in economic conditions.

Additionally, the occurrence of any of the following external events could further depress the Company’s revenues:

•

a widespread reallocation of advertising expenditures to other available media by significant renters of the Company’s displays; and

•

a decline in the amount spent on advertising in general or outdoor advertising in particular.

The Company’s growth through acquisitions may be difficult, which could adversely affect our future financial performance. In addition, if we are unable to successfully integrate any completed acquisitions, our financial performance would also be adversely affected.

The Company has historically grown through acquisitions. During the year ended December 31, 2019, we completed acquisitions for a total cash purchase price of approximately $226.3 million. We intend to continue to evaluate strategic acquisition opportunities as they arise.

The future success of our acquisition strategy could be adversely affected by many factors, including the following:

•

the pool of suitable acquisition candidates is dwindling, and we may have a more difficult time negotiating acquisitions on favorable terms;

•

we may face increased competition for acquisition candidates from other outdoor advertising companies, some of which have greater financial resources than we do, which may result in higher prices for those businesses and assets;

•

we may not have access to the capital needed to finance potential acquisitions and may be unable to obtain any required consents from our current lenders to obtain alternate financing;

•

compliance with REIT requirements may hinder our ability to make certain investments and may limit our acquisition opportunities;

•

we may be unable to integrate acquired businesses and assets effectively with our existing operations and systems as a result of unforeseen difficulties that could divert significant time, attention and effort from management that could otherwise be directed at developing existing business;

•

we may be unable to retain key personnel of acquired businesses;

•

we may not realize the benefits and cost savings anticipated in our acquisitions; and

•

as the industry consolidates further, larger mergers and acquisitions may face substantial scrutiny under antitrust laws.

These obstacles to our opportunistic acquisition strategy may have an adverse effect on our future financial results.

The Company could suffer losses due to asset impairment charges for goodwill and other intangible assets.

The Company tested goodwill for impairment on December 31, 2019. Based on the Company’s review at December 31, 2019, no impairment charge was required. The Company continues to assess whether factors or indicators become apparent that would require an interim impairment test between our annual impairment test dates. For instance, if our market capitalization is below our equity book value for a period of time without recovery, we believe there is a strong presumption that would indicate a triggering event has occurred and it is more likely than not that the fair value of one or both of our reporting units are below their carrying amount. This would require us to test the reporting units for impairment of goodwill. If this presumption cannot be overcome a reporting unit could be impaired under ASC 350 “Goodwill and Other Intangible Assets” and a non-cash charge would be required. Any such charge could have a material adverse effect on the Company’s net earnings.

The Company faces competition from larger and more diversified outdoor advertisers and other forms of advertising that could hurt its performance.

While the Company enjoys a significant market share in many of its small and medium-sized markets, the Company faces competition from other outdoor advertisers and other media in all of its markets. Although the Company is one of the largest companies focusing exclusively on outdoor advertising in a relatively fragmented industry, it competes against larger companies with diversified operations, such as television, radio and other broadcast media. These diversified competitors have the advantage of cross-selling complementary advertising products to advertisers.

The Company also competes against an increasing variety of out-of-home advertising media, such as advertising displays in shopping centers, malls, airports, stadiums, movie theaters and supermarkets, and on taxis, trains and buses. To a lesser extent, the Company also faces competition from other forms of media, including radio, newspapers, direct mail advertising, telephone directories and the Internet. The industry competes for advertising revenue along the following dimensions: exposure (the number of “impressions” an advertisement makes), advertising rates (generally measured in cost-per-thousand impressions), ability to target specific demographic groups or geographies, effectiveness, quality of related services (such as advertising copy design and layout) and customer service. The Company may be unable to compete successfully along these dimensions in the future, and the competitive pressures that the Company faces could adversely affect its profitability or financial performance.

Federal, state and local regulation impact the Company’s operations, financial condition and financial results.

Outdoor advertising is subject to governmental regulation at the federal, state and local levels. Regulations generally restrict the size, spacing, lighting and other aspects of advertising structures and pose a significant barrier to entry and expansion in many markets. Federal law, principally the Highway Beautification Act of 1965, or the HBA, regulates outdoor advertising on Federal — Aid Primary, Interstate and National Highway Systems roads. The HBA requires states, through the adoption of individual Federal/State Agreements, to “effectively control” outdoor advertising along these roads, and mandates a state compliance program and state standards regarding size, spacing and lighting. These state standards, or their local and municipal equivalents, may be modified over time in response to legal challenges or otherwise, which may have an adverse effect on our business. The HBA requires any state or political subdivision that compels the removal of a lawful billboard along a Federal — Aid Primary or Interstate highway to pay just compensation to the billboard owner.

All states have passed billboard control statutes and regulations at least as restrictive as the federal requirements, including laws requiring the removal of illegal signs at the owner’s expense (and without compensation from the state). Although the Company believes that the number of our billboards that may be subject to removal as illegal is immaterial, and no state in which we operate has banned billboards entirely, from time to time governments have required us to remove signs and billboards legally erected in accordance with federal, state and local permit requirements and laws. Municipal and county governments generally also have sign controls as part of their zoning laws and building codes. We contest laws and regulations that we believe unlawfully restrict our constitutional or other legal rights and may adversely impact the growth of our outdoor advertising business.

Using federal funding for transportation enhancement programs, state governments have purchased and removed billboards for beautification, and may do so again in the future. Under the power of eminent domain, state or municipal governments have laid claim to property and forced the removal of billboards. Under a concept called amortization by which a governmental body asserts that a billboard operator has earned compensation by continued operation over time, local governments have attempted to force removal of legal but nonconforming billboards (i.e., billboards that conformed to applicable zoning regulations when built but which do not conform to current zoning regulations). Although the legality of amortization is questionable, it has been upheld in some instances. Often, municipal and county governments also have sign controls as part of their zoning laws, with some local governments prohibiting construction of new billboards or allowing new construction only to replace existing structures. Although we have generally been able to obtain satisfactory compensation for those of our billboards purchased or removed as a result of governmental action, there is no assurance that this will continue to be the case in the future.

We have also introduced and intend to expand the deployment of digital billboards that display static digital advertising copy from various advertisers that change every 6 to 8 seconds. We have encountered some existing regulations that restrict or prohibit these types of digital displays but it has not yet materially impacted our digital deployment. Since digital billboards have been developed and introduced relatively recently into the market on a large scale, however, existing regulations that currently do not apply to them by their terms could be revised or new regulations could be enacted to impose greater restrictions. These regulations may impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety.

Relatively few large scale studies have been conducted to date regarding driver safety issues, if any, related to digital billboards. On December 30, 2013, the results of a study conducted by the U.S. Department of Transportation and the Federal Highway Administration that looked at the effect of digital billboards and conventional billboards on driver visual behavior were issued. The conclusions of the report indicated that the presence of digital billboards did not appear to be related to a decrease in looking toward the road ahead and were generally within acceptable thresholds. The report cautioned, however, that it adds to the knowledge base but does not present definitive answers to the research questions investigated. Accordingly, the results of future studies may result in regulations at the federal or state level that impose greater restrictions on digital billboards. Any new restrictions on digital billboards could have a material adverse effect on both our existing inventory of digital billboards and our plans to expand our digital deployment, which could have a material adverse effect on our business, results of operations and financial condition.

The Company’s logo sign contracts are subject to state award and renewal.

In 2019, the Company generated approximately 5% of its revenues from state-awarded logo sign contracts. In bidding for these contracts, the Company competes against other national logo sign providers as well as numerous smaller local logo sign providers. A logo sign provider incurs significant start-up costs upon being awarded a new contract. These contracts generally have a term of five to ten years, with additional renewal periods. Some states reserve the right to terminate a contract early, and most contracts require the state to pay compensation to the logo sign provider for early termination. At the end of the contract term, the logo sign provider transfers ownership of the logo sign structures to the state. Depending on the contract, the logo provider may or may not be entitled to compensation for the structures at the end of the contract term.

Of the Company’s 25 logo sign contracts in place at December 31, 2019, four are subject to renewal or expiration in 2020. The Company may be unable to renew its expiring contracts. The Company may also lose the bidding on new contracts.

The Company is controlled by significant stockholders who have the power to determine the outcome of all matters submitted to the stockholders for approval and whose interest in the Company may be different than yours.

As of December 31, 2019, members of the Reilly family, including Kevin P. Reilly, Jr., the Company’s Chairman and President, and Sean Reilly, the Company’s Chief Executive Officer, and their affiliates, owned in the aggregate approximately 15% of the Company’s outstanding common stock, assuming the conversion of all Class B common stock to Class A common stock. As of that date, their combined holdings represented approximately 63% of the voting power of Lamar Advertising’s outstanding capital stock, which would give the Reilly family and their affiliates the power to:

•

elect the Company’s entire board of directors;

•

control the Company’s management and policies; and

•

determine the outcome of any corporate transaction or other matter requiring stockholder approval, including charter amendments, mergers, consolidations, financings and asset sales.

The Reilly family may have interests that are different than yours in making these decisions.

If the Company’s contingency plans relating to hurricanes and other natural disasters fail, the resulting losses could hurt the Company’s business.

The Company has determined that it is uneconomical to insure against losses resulting from hurricanes and other natural disasters. Although the Company has developed contingency plans designed to mitigate the threat posed by hurricanes and other forms of inclement weather to its real estate portfolio (e.g., removing advertising faces at the onset of a storm, when possible, which better permits the structures to withstand high winds during the storm), these plans could fail and significant losses could result.

If Lamar Advertising fails to remain qualified as a REIT, both Lamar Advertising and Lamar Media would be taxed as regular C corporations and would not be able to deduct distributions to the stockholders of Lamar Advertising when computing their taxable income.

Lamar Advertising elected to qualify as a REIT for U.S. federal income tax purposes starting with its taxable year ended December 31, 2014 and for each subsequent taxable year thereafter. REIT qualification involves the application of highly technical and complex provisions of the U.S. Internal Revenue Code of 1986, as amended, (the “Code”) to Lamar Advertising’s assets and operations as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of these provisions. Although Lamar Advertising plans to operate in a manner consistent with the REIT qualification rules, the Company cannot assure you that it will so qualify or remain so qualified. Lamar Media is treated as a qualified REIT subsidiary of Lamar Advertising that is disregarded as separate from its parent REIT for U.S. federal income tax purposes.

If, in any taxable year, Lamar Advertising fails to qualify for taxation as a REIT, and is not entitled to relief under the Code:

•

it will not be allowed a deduction for distributions to its stockholders in computing its taxable income;

•

it and its subsidiaries, including Lamar Media, will be subject to applicable federal and state income tax, including any applicable state-level alternative minimum tax, on its taxable income at regular corporate rates; and

•

it would be disqualified from REIT tax treatment for the four taxable years following the year during which it was so disqualified.

Any such corporate tax liability could be substantial and would reduce the amount of cash available for distributions to Lamar Advertising’s stockholders, may require it to borrow funds (under Lamar Media’s senior credit facility or otherwise) or liquidate some investments to pay any such additional tax liability. This adverse impact could last for five or more years because, unless it is entitled to relief under certain statutory provisions, it will be taxable as a corporation, beginning in the year in which the failure occurs, and it will not be allowed to re-elect to be taxed as a REIT for the following four years.

Even if it qualifies as a REIT, certain of Lamar Advertising’s and its subsidiaries’ business activities will be subject to U.S. and foreign taxes which will continue to reduce its cash flows, and it will have potential deferred and contingent tax liabilities.

Even if it qualifies as a REIT, Lamar Advertising may be subject to certain U.S. federal, state and local taxes and foreign taxes on its income and assets, including any applicable state-level alternative minimum taxes, taxes on any undistributed income, and state, local or foreign income, franchise, property and transfer taxes. In addition, the Company could in certain circumstances be required to pay an excise or penalty tax, which could be significant in amount, in order to utilize one or more relief provisions under the Code to maintain qualification for taxation as a REIT.

In order to maintain its qualification as a REIT, the Company holds certain of its non-qualifying REIT assets and receives certain non-qualifying items of income through one or more TRSs. These non-qualifying REIT assets consist principally of the Company’s advertising services business and its transit advertising business. Those TRS assets and operations will continue to be subject, as applicable, to U.S. federal and state corporate income taxes. Furthermore, the Company’s assets and operations outside the United States are subject to foreign taxes in the jurisdictions in which those assets and operations are located. In addition, the Company may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm’s-length basis. Any of these taxes would decrease the Company’s earnings and its cash available for distributions to stockholders.

The Company was subject to a U.S. federal income tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a sale of assets occurring within five years after the effective date of our REIT conversion, to the extent of the built-in gain based on the fair market value of those assets held by the Company on the effective date of REIT conversion in excess of the Company’s then tax basis in those assets. Such five-year period has expired with respect to the Company but certain tax years for which this rule applied remain open such that additional taxes could be assessed with respect to sales in those tax years. The same rules apply to any assets we acquire from a “C” corporation in a carry-over basis transaction with built-in gain at the time of the acquisition by us. Gain from a sale of an asset occurring after the specified period ends will not be subject to this corporate level tax.

Failure to make sufficient distributions would jeopardize Lamar Advertising’s qualification as a REIT and/or would subject it to U.S. federal income and excise taxes.

As a REIT, Lamar Advertising is required to distribute to its stockholders with respect to each taxable year at least 90% of its REIT taxable income (excluding capital gains and net of any available net operating loss carry forwards) in order to qualify as a REIT, and 100% of its REIT taxable income (excluding capital gains and net of any available net operating loss carry forwards) in order to avoid U.S. federal income and excise taxes. For these purposes, Lamar Advertising’s subsidiaries that are not TRSs, including Lamar Media, will be treated as part of the REIT and therefore Lamar Advertising also will be required to distribute out their taxable income.

Because the REIT distribution requirements will prevent us from retaining earnings, we may be required to refinance debt at maturity with additional debt or equity, which may not be available on acceptable terms, or at all.

Covenants specified in our existing and future debt instruments may limit Lamar Advertising’s ability to make required REIT distributions.

Lamar Media’s senior credit facility and the indentures relating to Lamar Media’s outstanding notes contain certain covenants that could limit Lamar Advertising’s distributions to its stockholders. If these limits prevent Lamar Advertising from satisfying its REIT distribution requirements, it could fail to qualify for taxation as a REIT. If these limits do not jeopardize its qualification for taxation as a REIT but do nevertheless prevent it from distributing 100% of its REIT taxable income, it will be subject to U.S. federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.

Lamar Advertising and its subsidiaries may be required to borrow funds, sell assets, or raise equity to satisfy its REIT distribution requirements or maintain the asset tests.

In order to meet the REIT distribution requirements and maintain its qualification and taxation as a REIT and avoid corporate income taxes, Lamar Advertising and/or its subsidiaries, including Lamar Media, may need to borrow funds, sell assets or raise equity, even if the then-prevailing market conditions are not favorable for these borrowings, sales or offerings. Any insufficiency of its cash flows to cover Lamar Advertising’s REIT distribution requirements could require it to raise short- and long-term debt, to sell assets, or to offer equity securities in order to fund distributions required to maintain its qualification and taxation as a REIT and avoid corporate income taxes. Furthermore, the REIT distribution requirements may increase the financing Lamar Advertising needs to fund capital expenditures, future growth and expansion initiatives. This would increase its total leverage.

In addition, if Lamar Advertising fails to comply with certain asset tests at the end of any calendar quarter, it must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing its REIT qualification. As a result, it may be required to liquidate otherwise attractive investments. These actions may reduce its income and amounts available for distribution to its stockholders.

Our cash distributions are not guaranteed and may fluctuate.

A REIT generally is required to distribute at least 90% of its REIT taxable income to its stockholders. The Company may have available NOLs that could reduce or substantially eliminate its REIT taxable income, and thus it may not be required to distribute material amounts of cash to qualify for taxation as a REIT. The Company expects that, for the foreseeable future, it may utilize available NOLs to reduce its REIT taxable income.

The board of directors of the Company, in its sole discretion, will determine on a quarterly basis the amount of cash to be distributed to its stockholders based on a number of factors including, but not limited to, the Company’s results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including debt covenant restrictions that may impose limitations on cash payments, future acquisitions and divestitures, any stock repurchase program, and general market demand for its advertising space available for lease. Consequently, the Company’s distribution levels may fluctuate.

Complying with REIT requirements may cause Lamar Advertising, its subsidiaries (other than TRSs) to forego otherwise attractive opportunities.

To qualify as a REIT for U.S. federal income tax purposes, Lamar Advertising must continually satisfy tests concerning, among other things, the sources of its income, the nature and diversification of its assets, the amounts it distributes to its stockholders and the ownership of Lamar Advertising common stock. For these purposes, Lamar Advertising is treated as owning the assets of and receiving or accruing the income of its subsidiaries (other than TRSs). Thus, compliance with these tests will require Lamar Advertising and its subsidiaries to refrain from certain activities and may hinder their ability to make certain attractive investments, including investments in the businesses to be conducted by TRSs, and to that extent limit their opportunities. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if Lamar Advertising needs or requires the target company to comply with certain REIT requirements prior to closing.

Ownership limitations contained in the Lamar Advertising charter may restrict stockholders from acquiring or transferring certain amounts of shares.

In order for Lamar Advertising to remain qualified as a REIT, no more than 50% of the value of the outstanding shares of its stock may be owned, directly or indirectly or through application of certain attribution rules, by five or fewer “individuals” (as defined in the Code) at any time during the last half of a taxable year (other than the first taxable year for which an election to be a REIT has been made). To preserve its REIT qualification, the Lamar Advertising charter generally prohibits any person or entity from owning actually and by virtue of the applicable constructive ownership provisions more than 5% of the outstanding shares of Lamar Advertising common stock. These ownership limitations could restrict stockholders from acquiring or transferring certain amounts of shares of its stock. The Lamar Advertising charter also provides a separate share ownership limitation for certain members of the Reilly family and their affiliates that allows them to own actually and by virtue of the applicable constructive ownership provisions no more than 19% of the outstanding shares of Lamar Advertising common stock and, during the second half of any taxable year other than its first taxable year as a REIT, no more than 33% in value of the aggregate of the outstanding shares of all classes and series of its stock, in each case excluding any shares of its stock that are not treated as outstanding for federal income tax purposes.

The Lamar Advertising charter, the Lamar Advertising bylaws and Delaware law may inhibit a takeover that stockholders consider favorable and could also limit the market price of Lamar Advertising stock.

Provisions of the Lamar Advertising charter, the Lamar Advertising bylaws and applicable provisions of Delaware law may make it more difficult for or prevent a third party from acquiring control of Lamar Advertising without the approval of the board of directors. These provisions:

•

impose restrictions on ownership and transfer of Lamar Advertising common stock that are intended to facilitate the Company’s compliance with certain REIT rules relating to share ownership;

•

limit who may call a special meeting of stockholders;

•

establish advance notice and informational requirements and time limitations on any director nomination or proposal that a stockholder wishes to make at a meeting of stockholders;

•

do not permit cumulative voting in the election of its directors, which would otherwise permit less than a majority of stockholders to elect directors; and

•

provide the board of directors the ability to issue additional classes and shares of preferred stock and to set voting rights, preferences and other terms of the preferred stock without stockholder approval.

In addition, Section 203 of the DGCL generally limits the Company’s ability to engage in any business combination with certain persons who own 15% or more of its outstanding voting stock or any of its associates or affiliates who at any time in the past three years have owned 15% or more of its outstanding voting stock.

These provisions may have the effect of entrenching the Company’s management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of Lamar Advertising common stock.

Changes to the Code, such as the Tax Cuts and Jobs Act, could have a negative effect on Lamar Advertising and its subsidiaries including Lamar’s ability to deduct the full amount of its significant interest expense.

On December 22, 2017, President Trump signed into law H.R. 1, informally titled the Tax Cuts and Jobs Act (the “TCJA”). The TCJA makes major changes to the Code, including a number of provisions of the Code that affect the taxation of REITs and their stockholders. Among the changes made by the TCJA are permanently reducing the generally applicable corporate tax rate, generally reducing the tax rate applicable to individuals and other non-corporate taxpayers for tax years beginning after December 31, 2017 and before January 1, 2026, eliminating or modifying certain previously allowed deductions (including substantially limiting interest deductibility and, for individuals, the deduction for non-business state and local taxes). The TCJA also imposes new limitations on the deduction of net operating losses, which may result in Lamar Advertising having to make additional distributions in order to comply with REIT distribution requirements or avoid taxes on retained income and gains. The effect of the significant changes made by the TCJA is highly uncertain, and administrative guidance will be required in order to fully evaluate the effect of many provisions. The effect of any technical corrections with respect to the TCJA could have an adverse effect on us, Lamar Advertising and its subsidiaries and shareholders.

Additionally, the TCJA may potentially limit Lamar Advertising’s ability to deduct the full amount of its interest expense. For taxable years beginning after December 31, 2017, interest deductions for businesses with average annual gross receipts of over $25 million are capped at 30% of the business’ “adjusted taxable income” plus business interest income pursuant to the TCJA. In calculating “adjusted taxable income” for these purposes, for taxable years beginning after December 31, 2017 and before January 1, 2022, this is computed without regard to deductions allowable for depreciation, amortization, or depletion (EBITDA). For taxable years beginning after December 31, 2021, “adjusted taxable income” is calculated by taking deductions allowable for depreciation, amortization, or depletion into account (EBIT). This limitation, however, does not apply to an “electing real property trade or business.” As a REIT, Lamar Advertising would generally constitute a real property trade or businesses, and thus would retain the ability to fully deduct interest expenses if it makes such an election. However, an entity making such an election must use a longer depreciation cost recovery period for its property. Lamar Advertising has not made such an election at this time but may do so in the future.

Further legislative changes or other actions affecting REITs could have a negative effect on Lamar Advertising and its subsidiaries.

At any time, the U.S. federal income tax laws governing REITs or the administrative and judicial interpretations of those laws may be amended or interpreted in a different manner. Federal and state tax laws are constantly under review by persons involved in the legislative process, the IRS, the U.S. Department of the Treasury, and state taxing authorities. Additional changes to the tax laws, regulations and administrative and judicial interpretations, which may have retroactive application, could adversely affect Lamar Advertising and its subsidiaries. The Company cannot predict with certainty whether, when, in what forms, or with what effective dates, the tax laws, regulations and administrative and judicial interpretations applicable to Lamar Advertising may be changed. Accordingly, the Company cannot assure you that any such change will not significantly affect Lamar Advertising’s ability to qualify for taxation as a REIT or the U.S. federal income tax consequences to it of such qualification.

The ability of the board of directors of Lamar Advertising to revoke its REIT election, without stockholder approval, may cause adverse consequences to its stockholders.

The Lamar Advertising charter provides that the board of directors may revoke or otherwise terminate the REIT election, without the approval of its stockholders, if the board determines that it is no longer in the Company’s best interest to continue to qualify as a REIT. If the Company ceases to be a REIT, it will be subject to U.S. federal income tax at regular corporate rates and applicable state and local corporate taxes, which may have adverse consequences on its total return to its stockholders.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our management headquarters is located in Baton Rouge, Louisiana. We also own 126 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 130 operating facilities at an aggregate lease expense for 2019 of approximately $8.3 million.

We own over 8,900 parcels of property beneath our outdoor advertising structures. As of December 31, 2019, we leased over 74,300 active outdoor sites, accounting for a total annual lease expense of approximately $287.6 million. This amount represented approximately 19% of billboard advertising net revenues for that period. These leases are for varying terms ranging from month-to-month to 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. An important part of our management activity is to manage our lease portfolio and negotiate suitable lease renewals and extensions.

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.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s Class A common stock has been publicly traded since August 2, 1996 and is currently listed on the NASDAQ Global Select Market under the symbol “LAMR.” As of December 31, 2019, the Class A common stock was held by 99 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 Company’s Class B common stock is not publicly traded and is held of record by members of the Reilly family and the Reilly Family, LLC (the “RFLLC”), formerly the Reilly Family Limited Partnership. Kevin P. Reilly, Jr., our President and Chairman of the Board, is the executive manager of the RFLLC and Sean E. Reilly, our Chief Executive Officer, and Wendell Reilly and Anna Reilly, each of whom is a member of our board of directors are also managers of the RFLLC.

The Company’s Series AA preferred stock is entitled to preferential dividends, in an annual aggregate amount of $364,904, before any dividends may be paid on the common stock. All dividends related to the Company’s preferred stock are paid on a quarterly basis. In addition, the Company’s senior credit facility and other indebtedness have terms restricting the payment of dividends.

Dividends

As a REIT, we must annually distribute to our common stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we expect to distribute all or substantially all of our REIT taxable income to avoid being subject to income tax or excise tax on undistributed REIT taxable income. The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will be declared based upon various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, our ability to utilize net operating losses (“NOLs”) to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our TRSs and other factors that our Board of Directors may deem relevant.

Issuer Purchases of Equity Securities

The following table sets forth shares of Class A common stock withheld by the Company to satisfy withholding obligations arising upon the vesting of restricted stock awards:

Period	Total Number of Shares Purchased^(a)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 through October 31, 2019		2,460	$	81.59		—		—
November 1 through November 30, 2019		—		—		—		—
December 1 through December 31, 2019		—		—		—		—
		2,460	$	81.59		—		—

^(a)	Shares purchased consists of shares withheld by the Company for the payment of taxes resulting from the vesting of a restricted stock award made to Jay L. Johnson pursuant to the Company’s 1996 Equity Incentive Plan, as amended.

ITEM 6.

SELECTED FINANCIAL DATA

Lamar Advertising Company

The selected consolidated statement of income, statement of cash flows and balance sheet data presented below are derived from the year ended December 31 audited consolidated financial statements of the Company, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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.

	2019			2018			2017			2016			2015
	(Dollars in Thousands)
Statement of Income Data:
Net revenues	$	1,753,644		$	1,627,222		$	1,541,260		$	1,500,294		$	1,353,396
Operating expenses:
Direct advertising expenses		590,078			561,848			540,880			525,597			473,760
General and administrative expenses		403,038			372,324			338,573			345,789			313,941
Depreciation and amortization		250,028			225,261			211,104			204,958			191,433
(Gain) loss on disposition of assets		(7,241	)		7,233			(4,664	)		(15,095	)		(8,765	)
Total operating expenses		1,235,903			1,166,666			1,085,893			1,061,249			970,369
Operating income		517,741			460,556			455,367			439,045			383,027
Other expense (income):
Loss on extinguishment of debt		—			15,429			71			3,198			—
Interest income		(764	)		(534	)		(6	)		(6	)		(34	)
Interest expense		150,616			129,732			128,396			123,688			98,433
Total other expense		149,852			144,627			128,461			126,880			98,399
Income before income taxes		367,889			315,929			326,906			312,165			284,628
Income tax (benefit) expense		(4,222	)		10,697			9,230			13,356			22,058
Net income		372,111			305,232			317,676			298,809			262,570
Preferred stock dividends		365			365			365			365			365
Net income applicable to common stock	$	371,746		$	304,867		$	317,311		$	298,444		$	262,205
Net income per share basic	$	3.71		$	3.09		$	3.24		$	3.07		$	2.72
Net income per share diluted	$	3.71		$	3.08		$	3.23		$	3.05		$	2.72
Cash dividends declared per common share	$	3.84		$	3.65		$	3.32		$	3.02		$	2.75
Statement of Cash Flow Data:
Cash flows provided by operating activities	$	630,865		$	564,846		$	507,016		$	521,823		$	477,650
Cash flows used in investing activities	$	362,034		$	584,148		$	400,066		$	680,983		$	253,880
Cash flows (used in) provided by financing activities	$	(264,357	)	$	(73,563	)	$	(28,641	)	$	171,908		$	(224,808	)
Balance Sheet Data⁽¹⁾
Cash and cash equivalents	$	26,188		$	21,494		$	115,471		$	35,530		$	22,327
Working capital		(362,639	)		(91,366	)		94,525			36,929			44,902
Total assets		5,941,155			4,544,641			4,214,345			3,898,884			3,363,744
Total debt (including current maturities)		2,980,118			2,888,688			2,556,690			2,349,183			1,891,450
Total long-term obligations		4,088,041			2,957,822			2,784,858			2,552,032			2,105,855
Stockholders’ equity		1,180,306			1,131,784			1,103,493			1,069,528			1,021,059

⁽¹⁾	Certain balance sheet reclassifications were made in order to be comparable to the current year presentation.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements. These statements are subject to risks and uncertainties including those described in Item 1A under the heading “Risk Factors,” and elsewhere in this Annual Report, that could cause actual results to differ materially from those projected in these forward-looking statements. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and the Company undertakes no obligation to update or revise the statements, except as may be required by law.

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, 2019, 2018 and 2017. 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 are derived primarily from the rental of advertising space on outdoor advertising displays owned and operated by the Company. Revenue growth is based on many factors that include the Company’s ability to increase occupancy of its existing advertising displays; raise advertising rates; and acquire new advertising displays and its operating results are therefore affected by general economic conditions, as well as trends in the advertising industry. Advertising spending is particularly sensitive to changes in general economic conditions, which affect the rates the Company is able to charge for advertising on its displays and its ability to maximize advertising sales or occupancy on its displays.

Historically, the Company has made strategic acquisitions of outdoor advertising assets to increase the number of outdoor advertising displays it operates in existing and new markets. The Company continues to evaluate and pursue strategic acquisition opportunities as they arise. The Company has financed its historical acquisitions and intends to finance any future acquisition activity from available cash, borrowings under its senior credit facility or the issuance of debt or equity securities. See “Liquidity and Capital Resources-Sources of Cash,” for more information. During the year ended December 31, 2019, the Company completed acquisitions for a total cash purchase price of approximately $226.3 million. See “Uses of Cash-Acquisitions,” for more information.

The Company’s business requires expenditures for maintenance and capitalized costs associated with the construction of new billboard displays, the entrance into and renewal of logo sign and transit contracts, and the purchase of real estate and operating equipment. The following table presents a breakdown of capitalized expenditures for the past three years:

	2019		2018		2017
	(In thousands)
Billboard — Traditional	$	48,194	$	37,905	$	36,015
Billboard — Digital		57,519		45,938		40,218
Logos		10,762		11,438		9,614
Transit		2,308		5,364		2,863
Land and buildings		13,453		8,420		13,690
PP&E		8,720		8,573		6,929
Total capital expenditures	$	140,956	$	117,638	$	109,329

We expect our 2020 capital expenditures to approximate our 2019 spending.

NON-GAAP FINANCIAL MEASURES

Our management reviews our performance by focusing on several key performance indicators not prepared in conformity with Generally Accepted Accounting Principles in the United States (“GAAP”). We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for their most directly comparable GAAP financial measures.

Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Funds From Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts, Adjusted Funds From Operations (“AFFO”) and acquisition-adjusted net revenue.

We define Adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization, gain or loss on disposition of assets and investments, and the impact of the adoption of ASU NO. 2016-2, “Leases (Codified as ASC 842).”

FFO is defined as net income before gains or losses from the sale or disposal of real estate assets and investments and real estate related depreciation and amortization and including adjustments to eliminate non-controlling interest.

We define AFFO as FFO before (i) straight-line revenue and expense; (ii) impact of ASC 842 adoption; (iii) stock-based compensation expense; (iv) non-cash tax expense (benefit); (v) non-real estate related depreciation and amortization; (vi) amortization of deferred financing and debt issuance costs, (vii) loss on extinguishment of debt; (viii) non-recurring infrequent or unusual losses (gains); (ix) less maintenance capital expenditures; and (x) an adjustment for non-controlling interest.

Acquisition-adjusted net revenue adjusts our net revenue for the prior period by adding to it the net revenue generated by the acquired assets before our acquisition of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted revenue, therefore, we include revenue generated by assets that we did not own in the period but acquired in the current period. We refer to the amount of pre-acquisition revenue generated by the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “acquisition net revenue”. In addition, we also adjust the prior period to subtract revenue generated by the assets that have been divested since the prior period and, therefore, no revenue derived from those assets is reflected in the current period.

Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue are not intended to replace net income or any other performance measures determined in accordance with GAAP. Neither FFO nor AFFO represent cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities as a measure of liquidity or of funds available to fund our cash needs, including our ability to make cash distributions. Rather, Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue are presented as we believe each is a useful indicator of our current operating performance. We believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision making and for evaluating our core operating results; (2) Adjusted EBITDA is widely used in the industry to measure operating performance as depreciation and amortization may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) acquisition-adjusted net revenue is a supplement to net revenue to enable investors to compare period over period results on a more consistent basis without the effects of acquisitions and divestures, which reflects our core performance and organic growth (if any) during the period in which the assets were owned and managed by us; (4) Adjusted EBITDA, FFO and AFFO each provides investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (5) each provides investors with a measure for comparing our results of operations to those of other companies.

Our measurement of Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue to net income, the most directly comparable GAAP measure, have been included herein.

RESULTS OF OPERATIONS

The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2019, 2018 and 2017:

	Year Ended December 31,
	2019			2018			2017
Net revenues		100.0	%		100.0	%		100.0	%
Operating expenses:
Direct advertising expenses		33.6	%		34.5	%		35.1	%
General and administrative expenses		18.2	%		17.8	%		17.9	%
Corporate expenses		4.8	%		5.1	%		4.0	%
Depreciation and amortization		14.3	%		13.8	%		13.7	%
Operating income		29.5	%		28.3	%		29.5	%
Loss on extinguishment of debt		—			0.9	%		—
Interest expense		8.6	%		8.0	%		8.3	%
Income tax (benefit) expense		-0.2	%		0.7	%		0.6	%
Net income		21.2	%		18.8	%		20.6	%

Year ended December 31, 2019 compared to Year ended December 31, 2018

Net revenues increased $126.4 million or 7.8% to $1.754 billion for the year ended December 31, 2019 from $1.627 billion for the same period in 2018. This increase was attributable primarily to an increase in billboard net revenues of $124.6 million or 8.8% over the prior period, which is primarily related to the integration of outdoor assets acquired during 2018 and 2019, and the addition of approximately 330 digital displays during the year ended December 31, 2019. In addition, transit revenue increased $2.1 million, which represents an increase of 1.6% over the prior period.

Net revenues for the year ended December 31, 2019, as compared to acquisition-adjusted net revenues for the comparable period in 2018, increased $45.7 million, or 2.7%. The $45.7 million increase in revenue primarily consisted of a $41.7 million increase in billboard revenue primarily due to increases in digital revenue and a $4.1 million increase in transit revenue over the acquisition-adjusted net revenue for the comparable period in 2018. See “Reconciliations” below.

Total operating expenses, exclusive of depreciation and amortization and (gain) loss on disposition of assets, increased $58.9 million, or 6.3% to $993.1 million for the year ended December 31, 2019 from $934.2 million in the same period in 2018. The $58.9 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) of $58.7 million primarily related to the operations of our outdoor advertising assets.

Depreciation and amortization expense increased $24.8 million to $250.0 million for the year ended December 31, 2019 as compared to $225.3 million for the same period in 2018, primarily related to the addition of approximately $516.2 million of depreciable assets acquired through acquisitions and $258.6 million in capitalized expenditures during fiscal years 2018 and 2019.

For the year ended December 31, 2019, the Company recognized a gain on disposition of assets of $7.2 million primarily resulting from an amendment of a transit contract in the first quarter of 2019. The gain in 2019 represents an increase of $14.5 million over the same period in 2018, largely due to the gain in 2019 coupled with the Company’s loss recognized in 2018 on the sale of its Puerto Rico assets in April 2018 of $7.8 million.

Due primarily to the above factors, operating income increased $57.2 million to $517.7 million for the year ended December 31, 2019 compared to $460.6 million for the same period in 2018.

During the year ended December 31, 2018, the Company recorded a $15.4 million loss on debt extinguishment related to Lamar Media’s prepayment of its 5 7/8% Senior Subordinated Notes due 2022. The $15.4 million loss is comprised of a cash redemption premium of $9.8 million and a non-cash write off of unamortized deferred financing costs of approximately $5.6 million. See “Uses of Cash” for more information. There were no transactions resulting in a loss on debt extinguishment in fiscal year 2019.

Interest expense increased $20.9 million for the year ended December 31, 2019 to $150.6 million as compared to $129.7 million for the year ended December 31, 2018. The increase in interest expense is primarily related to the increased debt outstanding as compared to the same period in 2018.

The increase in operating income and decrease in loss on extinguishment of debt, offset by the increase in interest expense over the comparable period in 2018, resulted in a $52.0 million increase in net income before income taxes.

The Company recorded an income tax benefit of $4.2 million for the year ended December 31, 2019 as compared to income tax expense of $10.7 million for the same period in 2018. The $4.2 million income tax benefit is comprised of a $17.0 million non-cash tax benefit resulting from REIT converted assets offset by income tax expense of $12.8 million. The $12.8 million tax expense equates to an effective tax rate for the year ended December 31, 2019 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

As a result of the above factors, the Company recognized net income for the year ended December 31, 2019 of $372.1 million, as compared to net income of $305.2 million for the same period in 2018.

Reconciliations:

Because acquisitions occurring after December 31, 2017 have contributed to our net revenue results for the periods presented, we provide 2018 acquisition-adjusted net revenue, which adjusts our 2018 net revenue for the year ended December 31, 2018 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2019.

Reconciliations of 2018 reported net revenue to 2018 acquisition-adjusted net revenue for the year ended December 31, 2018 as well as a comparison of 2018 acquisition-adjusted net revenue to 2019 reported net revenue for the year ended December 31, 2019, are provided below:

Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue

	Year ended December 31,
	2019		2018
	(in thousands)
Reported net revenue	$	1,753,644	$	1,627,222
Acquisition net revenue		—		80,745
Adjusted totals	$	1,753,644	$	1,707,967

Key Performance Indicators

Net Income/Adjusted EBITDA

(in thousands)

	Year Ended December 31,					Amount of Increase			Percent Increase
	2019			2018		(Decrease)			(Decrease)
Net income	$	372,111		$	305,232	$	66,879			21.9	%
Income tax (benefit) expense		(4,222	)		10,697		(14,919	)
Loss on extinguishment of debt		—			15,429		(15,429	)
Interest expense (income), net		149,852			129,198		20,654
(Gain) loss on disposition of assets		(7,241	)		7,233		(14,474	)
Depreciation and amortization		250,028			225,261		24,767
Impact of ASC 842 adoption		(5,292	)		—		(5,292	)
Stock-based compensation expense		29,647			29,443		204
Adjusted EBITDA	$	784,883		$	722,493	$	62,390			8.6	%

Adjusted EBITDA for the year ended December 31, 2019 increased 8.6% to $784.9 million. The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and the impact of ASC 842 adoption) of $92.7 million, and was partially offset by an increase in general and administrative and corporate expenses of $30.3 million, excluding the impact of stock-based compensation expense and the impact of ASC 842 adoption.

Net Income/FFO/AFFO

(in thousands)

	Year Ended December 31,						Amount of Increase			Percent Increase
	2019			2018			(Decrease)			(Decrease)
Net income	$	372,111		$	305,232		$	66,879			21.9	%
Depreciation and amortization related to real estate		235,802			212,457			23,345
(Gain) loss from disposition of real estate assets and investments		(6,775	)		8,689			(15,464	)
Non-cash tax benefit for REIT converted assets		(17,031	)		—			(17,031	)
Adjustments for unconsolidated affiliates and non-controlling interest		771			648			123
FFO	$	584,878		$	527,026		$	57,852			11.0	%
Straight-line income		(361	)		(2,036	)		1,675
Impact of ASC 842 adoption		(5,292	)		—			(5,292	)
Stock-based compensation expense		29,647			29,443			204
Non-cash portion of tax provision		2,901			660			2,241
Non-real estate related depreciation and amortization		14,226			12,804			1,422
Amortization of deferred financing costs		5,365			4,920			445
Loss on extinguishment of debt		—			15,429			(15,429	)
Capital expenditures – maintenance		(49,155	)		(43,108	)		(6,047	)
Adjustments for unconsolidated affiliates and non-controlling interest		(771	)		(648	)		(123	)
AFFO	$	581,438		$	544,490		$	36,948			6.8	%

FFO for the year ended December 31, 2019 was $584.9 million as compared to FFO of $527.0 million for the same period in 2018. AFFO for the year ended December 31, 2019 increased 6.8% to $581.4 million as compared to $544.5 million for the same period in 2018. AFFO growth was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and the impact of ASC 842 adoption), offset by increases in general and administrative and corporate expenses (excluding the effect of stock based compensation expense and the impact of ASC 842 adoption).

Year ended December 31, 2018 compared to Year ended December 31, 2017

Net revenues increased $86.0 million or 5.6% to $1.627 billion for the year ended December 31, 2018 from $1.541 billion for the same period in 2017. This increase was attributable primarily to an increase in billboard net revenues of $72.6 million or 5.4% over the prior period, which is primarily related to the integration of outdoor assets acquired during 2017 and 2018, and the addition of over 250 digital displays during the year ended December 31, 2018. In addition, logo sign revenue increased $1.5 million, which represents an increase of 1.8% over the prior period. Transit revenue increased $11.9 million, which represents an increase of 10.1% over the prior period, primarily due to several new transit and airport markets acquired in 2017 and 2018.

Net revenues for the year ended December 31, 2018, as compared to acquisition-adjusted net revenues for the comparable period in 2017, increased $53.1 million, or 3.4%. The $53.1 million increase in revenue primarily consisted of a $45.1 million increase in billboard revenue primarily due to increases in digital and political revenue, a $1.1 million increase in logo revenue and a $6.8 million increase in transit revenue over the acquisition-adjusted net revenue for the comparable period in 2017. See “Reconciliations” below.

Total operating expenses, exclusive of depreciation and amortization and loss (gain) on disposition of assets, increased $54.7 million, or 6.2% to $934.2 million for the year ended December 31, 2018 from $879.5 million in the same period in 2017. The $54.7 million increase over the prior year is comprised of a $19.8 million increase in stock-based compensation expense and a $34.9 million increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) primarily related to the operations of our outdoor advertising assets.

Depreciation and amortization expense increased $14.2 million to $225.3 million for the year ended December 31, 2018 as compared to $211.1 million for the same period in 2017, primarily related to the addition of approximately $774.7 million of assets acquired through acquisitions during fiscal years 2017 and 2018.

For the year ended December 31, 2018, the Company recognized a loss on disposition of assets of $7.2 million primarily related to the $7.8 million loss recognized on the sale of our Puerto Rico assets which closed on April 16, 2018.

Due primarily to the above factors, operating income increased $5.2 million to $460.6 million for the year ended December 31, 2018 compared to $455.4 million for the same period in 2017.

Interest expense increased $1.3 million for the year ended December 31, 2018 to $129.7 million as compared to $128.4 million for the year ended December 31, 2017. The increase in interest expense is primarily related to the increased debt outstanding as compared to the same period in 2017.

The increase in operating income offset by the increases in loss on extinguishment of debt and interest expense over the comparable period in 2017, resulted in a $11.0 million decrease in net income before income taxes. The Company recognized $10.7 million in income tax expense for the year ended December 31, 2018. The effective tax rate for the year ended December 31, 2018 is approximately 3.4%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

As a result of the above factors, the Company recognized net income for the year ended December 31, 2018 of $305.2 million, as compared to net income of $317.7 million for the same period in 2017.

Reconciliations:

Because acquisitions occurring after December 31, 2016 have contributed to our net revenue results for the periods presented, we provide 2017 acquisition-adjusted net revenue, which adjusts our 2017 net revenue for the year ended December 31, 2017 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2018.

Reconciliations of 2017 reported net revenue to 2017 acquisition-adjusted net revenue for the year ended December 31, 2017 as well as a comparison of 2017 acquisition-adjusted net revenue to 2018 reported net revenue for the year ended December 31, 2018, are provided below:

Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue

	Year ended December 31,
	2018		2017
	(in thousands)
Reported net revenue	$	1,627,222	$	1,541,260
Acquisition net revenue		—		32,898
Adjusted totals	$	1,627,222	$	1,574,158

Key Performance Indicators

Net Income/Adjusted EBITDA

(in thousands)

	Year Ended December 31,					Amount of Increase			Percent Increase
	2018		2017			(Decrease)			(Decrease)
Net income	$	305,232	$	317,676		$	(12,444	)		(3.9	)%
Income tax expense		10,697		9,230			1,467
Loss on extinguishment of debt		15,429		71			15,358
Interest expense (income), net		129,198		128,390			808
Loss (gain) on disposition of assets		7,233		(4,664	)		11,897
Depreciation and amortization		225,261		211,104			14,157
Stock-based compensation expense		29,443		9,599			19,844
Adjusted EBITDA	$	722,493	$	671,406		$	51,087			7.6	%

Adjusted EBITDA for the year ended December 31, 2018 increased 7.6% to $722.5 million. The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization) of $65.0 million, and was partially offset by an increase in general and administrative and corporate expenses of $13.9 million, excluding the impact of stock-based compensation expense.

Net Income/FFO/AFFO

(in thousands)

	Year Ended December 31,						Amount of Increase			Percent Increase
	2018			2017			(Decrease)			(Decrease)
Net income	$	305,232		$	317,676		$	(12,444	)		(3.9	)%
Depreciation and amortization related to real estate		212,457			198,630			13,827
Loss (gain) from disposition of real estate assets and investments		8,689			(4,185	)		12,874
Adjustments for unconsolidated affiliates and non-controlling interest		648			839			(191	)
FFO	$	527,026		$	512,960		$	14,066			2.7	%
Straight-line income		(2,036	)		(754	)		(1,282	)
Stock-based compensation expense		29,443			9,599			19,844
Non-cash portion of tax provision		660			804			(144	)
Non-real estate related depreciation and amortization		12,804			12,474			330
Amortization of deferred financing costs		4,920			5,120			(200	)
Loss on extinguishment of debt		15,429			71			15,358
Capital expenditures – maintenance		(43,108	)		(43,119	)		11
Adjustments for unconsolidated affiliates and non-controlling interest		(648	)		(839	)		191
AFFO	$	544,490		$	496,316		$	48,174			9.7	%

FFO for the year ended December 31, 2018 was $527.0 million as compared to FFO of $513.0 million for the same period in 2017. AFFO for the year ended December 31, 2018 increased 9.7% to $544.5 million as compared to $496.3 million for the same period in 2017. AFFO growth was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization), offset by increases in general and administrative and corporate expenses (excluding the effect of stock based compensation expense).

LIQUIDITY AND CAPITAL RESOURCES

Overview

The Company has historically satisfied its working capital requirements with cash from operations and borrowings under its senior credit facility. The Company’s wholly owned subsidiary, Lamar Media Corp., is the principal borrower under the senior credit facility and maintains all corporate operating cash balances. Any cash requirements of the Company, therefore, must be funded by distributions from Lamar Media.

Sources of Cash

Total Liquidity at December 31, 2019. As of December 31, 2019 we had approximately $413.5 million of total liquidity, which is comprised of approximately $26.2 million in cash and cash equivalents and approximately $387.3 million of availability under the revolving portion of Lamar Media’s senior credit facility. On February 6, 2020, Lamar Media completed a comprehensive refinancing transaction, which included an amendment and restatement of its credit facility that, among other things, increased the borrowing capacity under the revolving portion of its credit facility by $200.0 million. We are currently in compliance with the maintenance covenant included in the senior credit facility, and we would remain in compliance after giving effect to borrowing the full amount available to us under the revolving portion of the senior credit facility.

As of December 31, 2019 and 2018, the Company had a working capital deficit of $362.6 million and $91.4 million, respectively. The increase in the working capital deficit of $271.3 million is primarily due to the impact of the new lease accounting standard (see Note 3. Leases to the Consolidated Financial Statements), which resulted in the recognition of short-term operating lease liabilities and a reclassification of prepaid leases to operating lease right of use assets on our Consolidated Balance Sheet.

Cash Generated by Operations. For the years ended December 31, 2019, 2018 and 2017 our cash provided by operating activities was $630.9 million, $564.8 million and $507.0 million, respectively. The increase in cash provided by operating activities for the year ended December 31, 2019 over the same period in 2018 relates to an increase in revenues offset by increases in operating expenses (excluding depreciation and amortization) and a net decrease in operating assets and liabilities. We generated cash flows from operations during 2019 in excess of our cash needs for operations and capital expenditures as described herein. We used the excess cash generated principally to pay dividends and fund our acquisitions. See — “Cash Flows” for more information.

Accounts Receivable Securitization Program. On December 18, 2018, we entered into the Accounts Receivable Securitization Program. The Accounts Receivable Securitization Program provides up to $175.0 million in borrowing capacity, plus an accordion feature that would permit the borrowing capacity to be increased by up to $125.0 million. Borrowing capacity under the Accounts Receivable Securitization Program is limited to the availability of eligible accounts receivable collateralizing the borrowings under the agreements governing the Accounts Receivable Securitization Program. In connection with the Accounts Receivable Securitization Program, Lamar Media and certain of its subsidiaries (such subsidiaries, the “Subsidiary Originators”) sell and/ or contribute their existing and future accounts receivable and certain related assets to one of two special purpose subsidiaries, Lamar QRS Receivables, LLC (the “QRS SPV”) and Lamar TRS Receivables, LLC (the “TRS SPV” and together with the QRS SPV the “Special Purpose Subsidiaries”), each of which is a wholly-owned subsidiary of Lamar Media. Existing and future accounts receivable relating to Lamar Media and its qualified REIT subsidiaries will be sold and/ or contributed to the QRS SPV and existing and future accounts receivable relating to Lamar Media’s taxable REIT subsidiaries will be sold and/ or contributed to the TRS SPV. Each of the Special Purpose Subsidiaries has granted the lenders party to the Accounts Receivable Securitization Program a security interest in all of its assets, which consist of the accounts receivable and related assets sold or contributed to them, as described above, in order to secure the obligations of the Special Purpose Subsidiaries under the agreements governing the Accounts Receivable Securitization Program. Pursuant to the Accounts Receivable Securitization Program, Lamar Media has agreed to service the accounts receivable on behalf of the two Special Purpose Subsidiaries for a fee. Lamar Media has also agreed to guaranty its performance in its capacity as servicer and originator, as well as the performance of the Subsidiary Originators, of their obligations under the agreements governing the Account Receivable Securitization Program. None of Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries guarantees the collectability of the receivables under the Accounts Receivable Securitization Program. In addition, each of the Special Purpose Subsidiaries is a separate legal entity with its own separate creditors who will be entitled to access the assets of such Special Purpose Subsidiary before the assets become available to Lamar Media. Accordingly, the assets of the Special Purpose Subsidiaries are not available to pay creditors of Lamar Media or any of its subsidiaries, although collections from receivables in excess of the amounts required to repay the lenders and the other creditors of the Special Purpose Subsidiaries may be remitted to Lamar Media.

As of December 31, 2019, there were $175.0 million of outstanding aggregate borrowings under the Accounts Receivable Securitization Program at a borrowing rate of approximately 3.3%.

“At-the-Market” Offering Program. On May 1, 2018, the Company entered into an equity distribution agreement (the “Sales Agreement”) with J.P. Morgan Securities LLC, Wells Fargo Securities LLC and SunTrust Robinson Humphrey, Inc. as our sales agents (each a “Sales Agent”, and collectively, the “Sales Agents”). Under the terms of the Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, par value $.001 per share (the “Class A Common Stock”), having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals. Sales of the Class A Common Stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A Common Stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A Common Stock under the Sales Agreement and may at any time suspend solicitations and offers under the Sales Agreement. The Company intends to use the net proceeds, if any, from the sale of the Class A Common Stock pursuant to the Sales Agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital, capital expenditures, acquisition of outdoor advertising assets and businesses and other related investments. During the year ended December 31, 2019, the Company received gross proceeds of approximately $21.4 million, resulting in net proceeds of approximately $21.2 million, in exchange for ‎issuing 266,410 shares of its Class A common stock under this program. During the year ended December 31, 2019, the aggregate ‎commissions paid to the sales agent was approximately $0.2 million. ‎ The Company did not offer any shares of its Class A common stock under this program during the quarter ended December 31, 2019.

Shelf Registration Statement. On August 6, 2018, we filed an automatically effective shelf registration statement (No. 333-226614) that registered the offer and sale of an indeterminate amount of additional shares of our Class A common stock. On August 23, 2018, we filed a prospectus supplement to the shelf registration statement relating to the offer and resale of 163,137 shares of Class A common stock previously issued in connection with an acquisition. During the year ended 2019, the Company did not issue any shares under this shelf registration, however, we may issue additional shares under the shelf registration statement in the future in connection with future acquisitions or for other general corporate purposes.

Sale of Puerto Rico Operations. On April 16, 2018, the Company sold substantially all of its operating assets in Puerto Rico to B-Billboard BB LLC and B-Billboard BG LLC which resulted in a loss on disposition of assets of approximately $7.8 million.

Credit Facilities. On February 6, 2020, Lamar Media entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto, under which the parties agreed to amend and restate Lamar Media’s existing senior credit facility. The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended (the “Third Amended and Restated Credit Agreement”).

As of December 31, 2019, Lamar Media’s senior credit facility (the “senior credit facility”) consisted of (i) a $550.0 million revolving credit facility, (ii) a $450.0 million Term A loan facility, (iii) a $600.0 million Term B loan facility and (iv) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to pro forma compliance with a secured debt ratio financial maintenance covenant. As of December 31, 2019, the aggregate balance outstanding under the senior credit facility was $1.12 billion, consisting of $386.3 million outstanding in Term A loans, $584.2 million in Term B loans and $147.5 million of revolving credit loans under the revolving credit facility. In addition, at December 31, 2019, Lamar Media had approximately $387.3 million of unused capacity under the revolving credit facility.

The new senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “new senior credit facility”), consists of (i) a new $750.0 million senior secured revolving credit facility which will mature on February 6, 2025 (the “revolving credit facility”), (ii) a new $600.0 million Term B loan facility (the “new Term B loans”) which will mature on February 6, 2027, and (iii) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00. Lamar Media borrowed all $600.0 million in new Term B loans on February 6, 2020. The entire amount of the new Term B loans will be payable at maturity. The net proceeds from the Term B loans, together with borrowing under the revolving portion of the senior credit facility and a portion of the proceeds of the issuance of the 3 3/4% Senior Notes due 2028 and 4% Senior Notes due 2030 (both as described below), were used to repay all outstanding amounts under the Third Amended and Restated Credit Agreement, and all revolving commitments under that facility were terminated.

Note Offerings. On February 1, 2019, Lamar Media issued $250.0 million in aggregate principle amount of 5 3/4% Senior Notes due 2026 through an institutional private placement (the “New Notes”). The New Notes were issued as additional notes to the existing $400.0 million aggregate principal amount of 5 3/4% Senior Notes due 2026 that Lamar Media issued on January 28, 2016. The net proceeds after underwriting fees and expenses, was approximately $251.5 million and were used to repay a portion of the borrowings outstanding under the revolving credit facility.

On February 6, 2020, Lamar Media issued, through an institutional private placement, $1.0 billion in aggregate principal amount of new senior notes consisting of $600.0 million in aggregate principal amount of 3 3/4% Senior Notes due 2028 (the “3 3/4% Senior Notes”) and $400.0 million in aggregate principal amount of 4% Senior Notes due 2030 (the “4% Senior Notes”). Lamar Media used the proceeds of this offering to repay its existing Term Loan A loans, redeem in full all $510.0 million in aggregate principal amount of its outstanding 5 3/8% Senior Notes due 2024 and partially repay borrowings under its revolving credit facility. See Uses of Cash-Note Redemption for more information.

Factors Affecting Sources of Liquidity

Internally Generated Funds. The key factors affecting internally generated cash flow are general economic conditions, specific economic conditions in the markets where the Company conducts its business and overall spending on advertising by advertisers.

Credit Facilities and Other Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to the senior credit facility, its outstanding debt securities and its Accounts Receivable Securitization Program.

Restrictions under Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to its outstanding debt securities. As of December 31, 2019, Lamar Media had outstanding $535.0 million 5% Senior Subordinated Notes issued in October 2012 (the “5% Senior Subordinated Notes”), $510.0 million 5 3/8% Senior Notes issued in January 2014 (the “5 3/8% Senior Notes”) and the $650.0 million 5 3/4% Senior Notes issued in January 2016 and February 2019 (the “5 3/4% Senior Notes”). On February 6, 2020, Lamar Media issued the 3 3/4% Senior Notes and the 4% Senior Notes.

The indentures relating to Lamar Media’s outstanding notes restrict its ability to incur additional indebtedness but permit the incurrence of indebtedness (including indebtedness under the senior credit facility), (i) if no default or event of default would result from such incurrence and (ii) if after giving effect to any such incurrence, the leverage ratio (defined as the sum of (x) total consolidated debt plus (y) the aggregate liquidation preference of any preferred stock of Lamar Media’s restricted subsidiaries to trailing four fiscal quarter EBITDA (as defined in the indentures)) would be less than 7.0 to 1. Currently, Lamar Media is not in default under the indentures of any of its outstanding notes and, therefore, would be permitted to incur additional indebtedness subject to the foregoing provision.

In addition to debt incurred under the provisions described in the preceding paragraph, the indentures relating to Lamar Media’s outstanding notes permit Lamar Media to incur indebtedness pursuant to the following baskets:

•

up to $1.5 billion (or up to $2.0 billion in the case of the indentures governing the 3 3/4% Senior Notes and the 4% Senior Notes) of indebtedness under the senior credit facility;

•

indebtedness outstanding on the date of the indentures or debt incurred to refinance outstanding debt;

•

inter-company debt between Lamar Media and its restricted subsidiaries or between restricted subsidiaries;

•

certain purchase money indebtedness and capitalized lease obligations to acquire or lease property in the ordinary course of business that cannot exceed the greater of $50 million or 5% of Lamar Media’s net tangible assets; and

•

additional debt not to exceed $75.0 million.

Restrictions under Senior Credit Facility. Lamar Media is required to comply with certain covenants and restrictions under the senior credit facility. If the Company or Lamar Media fails to comply with these tests, the lenders under the senior credit facility will be entitled to exercise certain remedies, including the termination of the lending commitments and the acceleration of the debt payments under the senior credit facility. At December 31, 2019, and currently, we were in compliance with all such tests under the senior credit facility.

Lamar Media must maintain a secured debt ratio, defined as total consolidated secured debt of Lamar Advertising, Lamar Media and its restricted subsidiaries, minus the lesser of (x) $150 million and (y) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries (as defined above under “Sources of Cash-Accounts Receivable Securitization Program)) to EBITDA, as defined below, for the period of four consecutive fiscal quarters then ended, of less than or equal to 3.5 to 1.0. The Fourth Amended and Restated Credit Agreement increased the secured debt ratio covenant to 4.5 to 1.0.

Lamar Media is restricted from incurring additional indebtedness subject to exceptions, one of which is that it may incur additional indebtedness not exceeding the greater of $250.0 million and 6% of its total assets.

Lamar Media is also restricted from incurring additional unsecured senior indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, it is in compliance with the secured debt ratio covenant and its senior debt ratio, defined as (a) total consolidated debt (excluding subordinated debt) of Lamar Advertising, Lamar Media and its restricted subsidiaries as of any date minus the lesser of (i) $150 million and (ii) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries (as defined above under “Sources of Cash-Accounts Receivable Securitization Program)) to (b) EBITDA, as defined below, for the most recent four fiscal quarters then ended is less than 4.5 to 1.0. The Fourth Amended and Restated Credit Agreement amended this provision to permit the incurrence of additional unsecured senior indebtedness if, after giving effect to the incurrence of such indebtedness, Lamar Media would have a total debt ratio, defined as (a) total consolidated debt (including subordinated debt) of Lamar Advertising, Lamar Media and its restricted subsidiaries as of any date minus the lesser of (i) $150 million and (ii) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries) to (b) EBITDA, as defined below, for the most recent four fiscal quarters then ended, is less than 7.0 to 1.

Lamar Media is also restricted from incurring additional subordinated indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, it is in compliance with the secured debt ratio covenant and its total debt ratio, is less than 6.5 to 1.0. The Fourth Amended and Restated Credit Agreement amended this provision to remove the requirement that Lamar Media be in pro forma compliance with the secured debt ratio covenant and to increase the pro forma total debt ratio requirement to 7.0 to 1.

Under the senior credit facility, “EBITDA” means, for any period, operating income for Lamar Advertising, Lamar Media and its restricted subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP) for such period (calculated (A) before (i) taxes, (ii) interest expense, (iii) depreciation, (iv) amortization, (v) any other non-cash income or charges accrued for such period, (vi) charges and expenses in connection with the senior credit facility, any actual or proposed acquisition, disposition or investment (excluding, in each case, purchases and sales of advertising space and operating assets in the ordinary course of business) and any actual or proposed offering of securities, incurrence or repayment of indebtedness (or amendment to any agreement relating to indebtedness), including any refinancing thereof, or recapitalization and (vii) any loss or gain relating to amounts paid or earned in cash prior to the stated settlement date of any swap agreement that has been reflected in operating income for such period) and for purposes of calculating EBITDA under the Fourth Amended and Restated Credit Agreement, (viii) any loss on sales of receivables and related assets to a Securitization Entity in connection with a Permitted Securitization Financing) and (B) after giving effect to the amount of cost savings, operating expense reductions and other operating improvements or synergies projected by Lamar Media in good faith to be realized as a result of any acquisition, investment, merger, amalgamation or disposition within 18 months of any such acquisition, investment, merger, amalgamation or disposition, net of the amount of actual benefits realized during such period from such action; provided, (a) the aggregate amount for all such cost savings, operating expense reductions and other operating improvements or synergies will not exceed an amount equal to 15% of EBITDA for the applicable four quarter period and (b) any such adjustment to EBITDA may only take into account cost savings, operating expense reductions and other operating improvements or synergies that are (I) directly attributable to such acquisition, investment, merger, amalgamation or disposition, (II) expected to have a continuing impact on Lamar Media and its restricted subsidiaries and (III) factually supportable, in each case all as certified by the chief financial officer of Lamar Media) on behalf of Lamar Media, and excluding (except to the extent received or paid in cash by Lamar Advertising, Lamar Media or any of its restricted subsidiaries income or loss attributable to equity in affiliates for such period), excluding any extraordinary and unusual gains or losses during such period, and excluding the proceeds of any casualty events and dispositions. For purposes hereof, the effect thereon of any adjustments required under Statement of Financial Accounting Standards No. 141R shall be excluded. If during any period for which EBITDA is being determined, Lamar Media has consummated any acquisition or disposition, EBITDA will be determined on a pro forma basis as if such acquisition or disposition had been made or consummated on the first day of such period.

The Company believes that its current level of cash on hand, availability under the senior credit facility and future cash flows from operations are sufficient to meet its operating needs through fiscal year 2020. All debt obligations are reflected on the Company’s balance sheet.

Restrictions under Accounts Receivable Securitization Program. The agreements governing the Accounts Receivable Securitization Program contain customary representations and warranties, affirmative and negative covenants, and termination event provisions, including but not limited to those providing for the acceleration of amounts owed under the Accounts Receivable Securitization Program if, among other things, the Special Purpose Subsidiaries fail to make payments when due, Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries become insolvent or subject to bankruptcy proceedings or certain judicial judgments, breach certain representations and warranties or covenants or default under other material indebtedness, a change of control occurs, or if Lamar Media fails to maintain the maximum secured debt ratio of 3.5 to 1.0 required under Lamar Media’s senior credit facility. On February 6, 2020, we entered into an amendment to the Accounts Receivable Securitization Program that increased the maximum secured debt ratio thereunder to 4.5 to 1.0.

Uses of Cash

Capital Expenditures. Capital expenditures excluding acquisitions were approximately $141.0 million for the year ended December 31, 2019. We anticipate our 2020 total capital expenditures will closely approximate our 2019 spending.

Acquisitions. During the year ended December 31, 2019, the Company completed approximately 30 acquisitions for a total purchase price of approximately $226.3 million, which included the acquisition of more than 3,000 billboard displays across various markets. The acquisitions occurring during the year ended December 31, 2019 were financed using available cash on hand and borrowings under Lamar Media’s revolving credit facility.

Note Redemption. On March 19, 2018, the Company used proceeds from the Term B loans under the senior credit facility, together with cash on hand, to redeem in full all $500.0 million in aggregate principal amount of Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022 and repay a portion of the borrowings outstanding under Lamar Media’s revolving credit facility. The notes were redeemed at a redemption price equal to 101.958% of the aggregate principal amount of the outstanding notes, plus accrued and unpaid interest up to the redemption date. The Company recorded a loss on debt extinguishment of $15.4 million related to this redemption which is comprised of a $9.8 million prepayment penalty and a $5.6 million non-cash write off of unamortized deferred financing costs. See Sources of Cash-Credit Facility for more information.

On February 20, 2020, the Company used a portion of the proceeds from the 3 3/4% Senior Notes and 4% Senior Notes to redeem in full all $510.0 million in aggregate principal amount of Lamar Media’s 5 3/8% Senior Notes. The notes were redeemed at a redemption price equal to 101.792% of the aggregate principal amount of the outstanding notes, plus accrued and unpaid interest up to the redemption date. The Company expects to record a loss on debt extinguishment of approximately $18.5 million in the first quarter of 2020 related to this redemption. See Sources of Cash-Note Offering for more information.

Term Loans. The Term A loans existing as of December 31, 2019 under the Third Amended and Restated Credit Agreement were set to mature on May 15, 2022 and the Term B loans existing as of December 31, 2019 under the Third Amended and Restated Credit Agreement were set to mature on March 16, 2025. As of December 31, 2019, had the term loans remained outstanding, the remaining quarterly installments scheduled to be paid on each March 31, June 30, September 30 and December 31 were as follows:

Principal Payment Date	Term A		Term B
March 31, 2020-June 30, 2020	$	8,438	$	1,500
September 30, 2020-March 31, 2022	$	16,875	$	1,500
Term A Loan Maturity May 15, 2022	$	253,125	$	—
June 30, 2022-December 31, 2024	$	—	$	1,500
Term B Loan Maturity March 16, 2025	$	—	$	559,500

The Term Loans bore interest at rates based on the Adjusted LIBO Rate (“Eurodollar term loans”) or the Adjusted Base Rate (“Base Rate term loans”), at Lamar Media’s option. Eurodollar term loans bore interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.75%; (or the Adjusted LIBO Rate plus 1.50% at any time the Total Debt Ratio is less than or equal to 3.25 to 1 for Term A loans only). Base Rate term loans bore interest at a rate per annum equal to the Adjusted Base Rate plus 0.75% (or the Adjusted Base Rate plus 0.50% at any time the Total Debt Ratio is less than or equal to 3.25 to 1 for Term A loans only). The revolving credit facility under the Third Amended and Restated Credit Agreement bore interest at rates based on the Adjusted LIBO Rate (“Eurodollar revolving loans”) or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option. Eurodollar revolving loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 2.25% (or the Adjusted LIBO Rate plus 2.00% at any time the Total Debt Ratio is less than or equal to 4.25 to 1; or the Adjusted LIBO Rate plus 1.75% at any time the Total Debt Ratio is less than or equal to 3.00 to 1). Base Rate revolving loans bore interest at a rate per annum equal to the Adjusted Base Rate plus 1.25% (or the Adjusted Base Rate plus 1.0% at any time the total debt ratio is less than or equal to 4.25 to 1, or the Adjusted Base Rate plus 0.75% at any time the Total Debt Ratio is less than or equal to 3.00 to 1). The guarantees, covenants, events of default and other terms of the senior credit facility applied to the Term A and B loans and revolving credit facility.

On February 6, 2020, Lamar Media paid in full all of the existing outstanding Term A loan and Term B loan under the Third Amended and Restated Credit Agreement using the proceeds from the $1.0 billion note offering and the proceeds from its new Term B loan. See Sources of Cash-Note Offering and Credit Facility for more information.

Dividends. During the year ended December 31, 2019, the Company declared and paid distributions of $384.8 million or $3.84 per share of common stock. Subject to the approval of the board of directors, the Company expects aggregate quarterly distributions to stockholders in 2020 will be $4.00 per common share.

During the year ended December 31, 2018, the Company declared distributions of $361.1 million or $3.65 per share of common stock. The Company paid distributions of $442.6 million during the year ended December 31, 2018, which includes the January 2, 2018 distribution declared in November 2017.

The Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that the Company otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, the Company’s ability to utilize net operating losses to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to fund distributions using cash generated through its TRSs and other factors that the Board of Directors may deem relevant.

Debt Service and Contractual Obligations. As of December 31, 2019, we had outstanding debt of approximately $2.980 billion. In the future, Lamar Media has principal reduction obligations and revolver commitment reductions under the senior credit facility. In addition, it has fixed commercial commitments. These commitments are detailed on a contractual basis as follows:

			Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years
	(In millions)
Long-Term Debt	$	2,980.1	$	226.5	$	490.6	$	1,053.3	$	1,209.7
Interest obligations on long term debt⁽¹⁾		614.0		144.9		265.2		158.1		45.8
Billboard site, transit and other operating leases		1,786.6		261.1		405.4		317.9		802.2
Total payments due	$	5,380.7	$	632.5	$	1,161.2	$	1,529.3	$	2,057.7

⁽¹⁾	Interest rates on our variable rate instruments are assuming rates at the December 2019 levels.

			Amount of Expiration Per Period
Other Commercial Commitments	Total Amount Committed		Less Than 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years
	(In millions)
Revolving Bank Facility⁽²⁾	$	550.0	$	—	$	550.0	$	—	$	—
Standby Letters of Credit⁽³⁾	$	12.7	$	12.2	$	0.5	$	—	$	—

⁽²⁾	Lamar Media had $150.0 million outstanding under the revolving facility at December 31, 2019.

⁽³⁾	The standby letters of credit are issued under Lamar Media’s revolving credit facility and reduce the availability of the facility by the same amount.

Cash Flows

The Company’s cash flows provided by operating activities increased by $66.0 million for the year ended December 31, 2019, primarily resulting from an increase in revenues of approximately $126.4 million and a decrease in operating net assets of $16.7 million, offset by increases in operating expenses (excluding stock-based compensation and depreciation and amortization) of approximately $58.7 million, as compared to the comparable period in 2018.

Cash flows used in investing activities decreased $222.1 million from $584.1 million in 2018 to $362.0 million in 2019 primarily due to a net decrease in the amount of assets acquired through acquisitions and capital expenditures of $227.8 million, as compared to the same period in 2018.

The Company’s cash flows used in financing activities were $264.4 million for the year ended December 31, 2019 as compared to $73.6 million in 2018. This increase in cash used in financing activities of $190.8 million for the year ended December 31, 2019 is primarily due to financing transactions during the year, offset by decreases in cash paid for dividends and distributions over the comparable period in 2018.

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those related to intangible assets, goodwill impairment and asset retirement obligations. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events and, where applicable, established valuation techniques. These estimates form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from our estimates. We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.

Goodwill Impairment. The Company has a significant amount of goodwill on its consolidated balance sheet and must perform an impairment test of goodwill annually or on a more frequent basis if events and circumstances indicate that the asset might be impaired. We have identified two reporting units (Logo operations and Billboard operations) in accordance with Accounting Standards Codification (“ASC”) 350 and no changes have been made to our reporting units from the prior period.

In our annual or interim measurement for impairment of goodwill, the Company conducts a qualitative assessment by examining relevant events and circumstances that could have a negative impact on the Company’s goodwill, which include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, reporting unit dispositions and acquisitions, the market capitalization of the Company and other relevant events specific to the Company. If, after assessing the totality of events or circumstances described above, the Company determines that it is more likely than not that the fair value of either of the Company's reporting units is less than its carrying amount, the Company will perform a quantitative impairment test. If impairment is indicated as a result of the quantitative impairment test, a goodwill impairment charge would be recorded to write the goodwill down to its implied fair value. Based on the goodwill impairment analysis performed on December 31, 2019, we determined that the fair value of each reporting unit exceeded the carrying value and no impairment charge was recorded.

Asset Retirement Obligations. The Company had an asset retirement obligation of $226.1 million as of December 31, 2019. This liability relates to the Company’s obligation upon the termination or non-renewal of a lease to dismantle and remove its billboard structures from the leased land and to reclaim the site to its original condition. The Company records the present value of obligations associated with the retirement of tangible long-lived assets in the period in which they are incurred. The liability is capitalized as part of the related long-lived asset’s carrying amount. Over time, accretion of the liability is recognized as an operating expense and the capitalized cost is depreciated over the expected useful life of the related asset. In calculating the liability, the Company calculates the present value of the estimated cost to dismantle using an average cost to dismantle, adjusted for inflation and market risk.

This calculation includes 100% of the Company’s billboard structures on leased land (which currently consist of approximately 74,500 structures). The Company uses a 15-year retirement period based on historical operating experience in its core markets, including the actual time that billboard structures have been located on leased land in such markets and the actual length of the leases in the core markets, which includes the initial term of the lease, plus consideration of any renewal period. Historical third-party cost information is used to estimate the cost of dismantling of the structures and the reclamation of the site. The interest rate used to calculate the present value of such costs over the retirement period is based on the Company’s historical credit-adjusted risk free rate.

Acquisitions. The Company accounts for transactions that meet the definition of a business and group asset purchases as acquisitions. For transactions that meet the definition of a business combination, the Company allocates the purchase price, including any contingent consideration, to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition with any excess of the purchase price paid over the estimated fair value of net assets acquired recorded as goodwill. For transactions that meet the definition of a business, the determination of the final purchase price and the acquisition-date fair value of identifiable assets acquired and liabilities assumed may extend over more than one period and result in adjustments to the preliminary estimate recognized in the prior period financial statements. For transactions that meet the definition of asset group purchases, the Company allocates the purchase price to the assets acquired and the liabilities assumed at their estimated relative fair values as of the date of the acquisition. If a transaction is determined to be a group of assets, any direct acquisition costs are capitalized. Transaction costs for transactions determined to be a business combination are expensed as incurred.

The fair value of the assets acquired and liabilities assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the fair value of tangible assets acquired, the Company must estimate the cost to replace the asset with a new asset, adjusted for an estimated reduction in fair value due to age of the asset, and the economic useful life. When determining the fair value of intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future cash flows.

Lease liabilities and right-of-use assets: On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right-of-use assets on our consolidated balance sheet. Our operating lease liabilities (including short-term liabilities) and right-of-use asset balances were $1.265 billion and $1.321 billion as of December 31, 2019, respectively. The balance is recorded based on the present value of the remaining minimum rental payments under the leasing standard for our existing operating leases. The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payments to present value and (2) lease term. Our leases generally do not include a readily determinable implicit rate, therefore, using a portfolio approach, we determine our collateralized incremental borrowing rate to discount the lease payments based on the information available at lease commencement. Our lease terms include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonable certain to exercise, or an option to extend the lease controlled by the lessor. The Company has determined we are not reasonably certain to exercise renewals or termination options, and as a result we use the lease’s initial stated term as the lease term for our lease population.

ACCOUNTING STANDARDS AND REGULATORY UPDATE

Leases

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10 and ASU No. 2019-01, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

We adopted the new standard effective January 1, 2019 using a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity was permitted to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. Consequently, financial information was not updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The new standard provided a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We elected the practical expedient pertaining to land easements. We also elected the short-term lease recognition exemption for certain of our vehicle agreements. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities.

Upon adoption, we recognized additional operating liabilities of $1.2 billion, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for our existing operating leases. In addition to the increase to the operating lease liabilities and right-of-use assets, Topic 842 also resulted in reclassifying the presentation of prepaid and deferred rent to operating lease right-of-use assets. The Company did not have any changes to its opening balance of retained earnings for the adoption of this update.

Other recently released pronouncements

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and other (Topic 350): Simplifying the test for goodwill impairment. The update simplifies how a company completes its goodwill impairment test by eliminating the two-step process, which requires determining the fair value of assets acquired or liabilities assumed in a business combination. The update requires completing the goodwill impairment test by comparing the difference between the reporting unit’s carrying value and fair value. Goodwill charges, if any, would be determined by reducing the goodwill balance by the excess of the reporting unit’s carrying value over its fair value. The update is effective for annual and interim fiscal periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on or after January 1, 2017. The Company adopted this update beginning with its December 31, 2017 goodwill impairment test.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808). The update is to clarify when certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 and when the collaborative arrangement participant is a customer in the context of a unit of account. The update also adds unit-of-account guidance in Topic 808 and requires that a collaborative arrangement participant that is not directly related to sales to a third party, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. The update is effective for annual and interim fiscal periods beginning after December 15, 2019 with early adoption permitted. The adoption of this update did not have a material effect on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“CECL”). The new guidance modifies how entities measure credit losses on most financial instruments. Topic 326 replaces the current “incurred loss” model with an “expected credit loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. The new guidance is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted. The Company adopted this guidance on January 1, 2020 using the modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The adoption did not have a material impact to the consolidated financial statements.

LAMAR MEDIA CORP.

The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the years ended December 31, 2019, 2018 and 2017. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes.

RESULTS OF OPERATIONS

The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2019, 2018 and 2017:

	Year Ended December 31,
	2019			2018			2017
Net revenues		100.0	%		100.0	%		100.0	%
Operating expenses:
Direct advertising expenses		33.6	%		34.5	%		35.1	%
General and administrative expenses		18.2	%		17.8	%		17.9	%
Corporate expenses		4.8	%		5.1	%		4.0	%
Depreciation and amortization		14.3	%		13.8	%		13.7	%
Operating income		29.5	%		28.3	%		29.6	%
Loss on extinguishment of debt		—			0.9	%		—
Interest expense		8.6	%		8.0	%		8.3	%
Income tax (benefit) expense		-0.2	%		0.7	%		0.6	%
Net income		21.2	%		18.8	%		20.6	%

Year ended December 31, 2019 compared to Year ended December 31, 2018

Total operating expenses, exclusive of depreciation and amortization and (gain) loss on disposition of assets, increased $58.9 million, or 6.3% to $992.7 million for the year ended December 31, 2019 from $933.8 million in the same period in 2018. The $58.9 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) of $58.7 million primarily related to the operations of our outdoor advertising assets.

For the year ended December 31, 2019, Lamar Media recognized a gain on disposition of assets of $7.2 million primarily resulting from an amendment of a transit contract in the first quarter of 2019. The gain in 2019 represents an increase of $14.5 million over the same period in 2018, largely due to the gain in 2019 coupled with Media’s loss recognized in 2018 on the sale of its Puerto Rico assets in April of 2018 of $7.8 million.

Due primarily to the above factors, operating income increased $57.2 million to $518.2 million for the year ended December 31, 2019 compared to $461.0 million for the same period in 2018.

During the year ended December 31, 2018, Lamar Media recorded a $15.4 million loss on debt extinguishment related to Lamar Media’s prepayment of its 5 7/8% Senior Subordinated Notes due 2022. The $15.4 million loss is comprised of a cash redemption premium of $9.8 million and a non-cash write off of unamortized deferred financing costs of approximately $5.6 million. See “Uses of Cash” for more information. There were no transactions resulting in a loss on debt extinguishment in fiscal year 2019.

Lamar Media recorded an income tax benefit of $4.2 million for the year ended December 31, 2019 as compared to income tax expense of $10.7 million for the same period in 2018. The $4.2 million benefit is comprised of a $17.0 million non-cash tax benefit resulting from REIT converted assets offset by income tax expense of $12.8 million. The $12.8 million tax expense equates to an effective tax rate for the year ended December 31, 2019 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

As a result of the above factors, Lamar Media recognized net income for the year ended December 31, 2019 of $372.5 million, as compared to net income of $305.6 million for the same period in 2018.

Reconciliations:

Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue

	Year ended December 31,
	2019		2018
	(in thousands)
Reported net revenue	$	1,753,644	$	1,627,222
Acquisition net revenue		—		80,745
Adjusted totals	$	1,753,644	$	1,707,967

Key Performance Indicators

Net Income/Adjusted EBITDA

(in thousands)

	Year Ended December 31,					Amount of Increase			Percent Increase
	2019			2018		(Decrease)			(Decrease)
Net income	$	372,540		$	305,631	$	66,909			21.9	%
Income tax (benefit) expense		(4,222	)		10,697		(14,919	)
Loss on extinguishment of debt		—			15,429		(15,429	)
Interest expense, net		149,852			129,198		20,654
(Gain) loss on disposition of assets		(7,241	)		7,233		(14,474	)
Depreciation and amortization		250,028			225,261		24,767
Impact of ASC 842 adoption		(5,292	)		—		(5,292	)
Stock-based compensation expense		29,647			29,443		204
Adjusted EBITDA	$	785,312		$	722,892	$	62,420			8.6	%

Adjusted EBITDA for the year ended December 31, 2019 increased 8.6% to $785.3 million. The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and the impact of ASC 842 adoption) of $92.7 million, and was partially offset by an increase in general and administrative and corporate expenses of $30.3 million, excluding the impact of stock-based compensation expense and the impact of ASC 842 adoption.

Net Income/FFO/AFFO

(in thousands)

	Year Ended December 31,						Amount of Increase			Percent Increase
	2019			2018			(Decrease)			(Decrease)
Net income	$	372,540		$	305,631		$	66,909			21.9	%
Depreciation and amortization related to real estate		235,802			212,457			23,345
(Gain) loss from disposition of real estate assets and investments		(6,775	)		8,689			(15,464	)
Non-cash tax benefit for REIT converted assets		(17,031	)		—			(17,031	)
Adjustments for unconsolidated affiliates and non-controlling interest		771			648			123
FFO	$	585,307		$	527,425		$	57,882			11.0	%
Straight-line income		(361	)		(2,036	)		1,675
Impact of ASC 842 adoption		(5,292	)		—			(5,292	)
Stock-based compensation expense		29,647			29,443			204
Non-cash portion of tax provision		2,901			660			2,241
Non-real estate related depreciation and amortization		14,226			12,804			1,422
Amortization of deferred financing costs		5,365			4,920			445
Loss on extinguishment of debt		—			15,429			(15,429	)
Capital expenditures – maintenance		(49,155	)		(43,108	)		(6,047	)
Adjustments for unconsolidated affiliates and non-controlling interest		(771	)		(648	)		(123	)
AFFO	$	581,867		$	544,889		$	36,978			6.8	%

FFO for the year ended December 31, 2019 was $585.3 million as compared to FFO of $527.4 million for the same period in 2018. AFFO for the year ended December 31, 2019 increased 6.8% to $581.9 million as compared to $544.9 million for the same period in 2018. AFFO growth was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and the impact of ASC 842 adoption), offset by increases in general and administrative and corporate expenses (excluding the effect of stock based compensation expense and the impact of ASC 842 adoption).

Year ended December 31, 2018 compared to Year ended December 31, 2017

Total operating expenses, exclusive of depreciation and amortization and loss (gain) on disposition of assets, increased $54.7 million, or 6.2% to $933.8 million for the year ended December 31, 2018 from $879.1 million in the same period in 2017. The $54.7 million increase over the prior year is comprised of a $19.8 million increase in stock-based compensation expense and a $34.9 million increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) primarily related to the operations of our outdoor advertising assets.

For the year ended December 31, 2018, Lamar Media recognized a loss on disposition of assets of $7.2 million primarily related to the $7.8 million loss recognized on the sale of its Puerto Rico assets which closed on April 16, 2018.

Due primarily to the above factors, operating income increased $5.2 million to $461.0 million for the year ended December 31, 2018 compared to $455.7 million for the same period in 2017.

During the year ended December 31, 2018, Lamar Media recorded a $15.4 million loss on debt extinguishment related to the prepayment of its 5 7/8% Senior Subordinated Notes due 2022. The $15.4 million loss is comprised of a cash redemption premium of $9.8 million and a non-cash write off of unamortized deferred financing costs of approximately $5.6 million. See “Uses of Cash” for more information.

The increase in operating income offset by the increases in loss on extinguishment of debt and interest expense over the comparable period in 2017, resulted in a $11.0 million decrease in net income before income taxes. Lamar Media recognized $10.7 million in income tax expense for the year ended December 31, 2018. The effective tax rate for the year ended December 31, 2018 is approximately 3.4%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

As a result of the above factors, Lamar Media recognized net income for the year ended December 31, 2018 of $305.6 million, as compared to net income of $318.1 million for the same period in 2017.

Reconciliations:

Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue

	Year ended December 31,
	2018		2017
	(in thousands)
Reported net revenue	$	1,627,222	$	1,541,260
Acquisition net revenue		—		32,898
Adjusted totals	$	1,627,222	$	1,574,158

Key Performance Indicators

Net Income/Adjusted EBITDA

(in thousands)

	Year Ended December 31,					Amount of Increase			Percent Increase
	2018		2017			(Decrease)			(Decrease)
Net income	$	305,631	$	318,058		$	(12,427	)		(3.9	)%
Income tax expense		10,697		9,230			1,467
Loss on extinguishment of debt		15,429		71			15,358
Interest expense (income), net		129,198		128,390			808
Loss (gain) on disposition of assets		7,233		(4,664	)		11,897
Depreciation and amortization		225,261		211,104			14,157
Stock-based compensation expense		29,443		9,599			19,844
Adjusted EBITDA	$	722,892	$	671,788		$	51,104			7.6	%

Adjusted EBITDA for the year ended December 31, 2018 increased 7.6% to $722.9 million. The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization) of $65.0 million, and was partially offset by an increase in general and administrative and corporate expenses of $13.9 million, excluding the impact of stock-based compensation expense.

Net Income/FFO/AFFO

(in thousands)

	Year Ended December 31,						Amount of Increase			Percent Increase
	2018			2017			(Decrease)			(Decrease)
Net income	$	305,631		$	318,058		$	(12,427	)		(3.9	)%
Depreciation and amortization related to real estate		212,457			198,630			13,827
Loss (gain) from disposition of real estate assets and investments		8,689			(4,185	)		12,874
Adjustments for unconsolidated affiliates and non-controlling interest		648			839			(191	)
FFO	$	527,425		$	513,342		$	14,083			2.7	%
Straight-line income		(2,036	)		(754	)		(1,282	)
Stock-based compensation expense		29,443			9,599			19,844
Non-cash portion of tax provision		660			804			(144	)
Non-real estate related depreciation and amortization		12,804			12,474			330
Amortization of deferred financing costs		4,920			5,120			(200	)
Loss on extinguishment of debt		15,429			71			15,358
Capital expenditures – maintenance		(43,108	)		(43,119	)		11
Adjustments for unconsolidated affiliates and non-controlling interest		(648	)		(839	)		191
AFFO	$	544,889		$	496,698		$	48,191			9.7	%

FFO for the year ended December 31, 2018 was $527.4 million as compared to FFO of $513.3 million for the same period in 2017. AFFO for the year ended December 31, 2018 increased 9.7% to $544.9 million as compared to $496.7 million for the same period in 2017. AFFO growth was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization), offset by increases in general and administrative and corporate expenses (excluding the effect of stock based compensation expense).

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 information below summarizes the Company’s interest rate risk associated with its principal variable rate debt instruments outstanding at December 31, 2019, and should be read in conjunction with Note 9 of the Notes to the Company’s Consolidated Financial Statements.

Lamar Media Corp. has variable rate debt outstanding under its senior credit facility and its Accounts Receivable Securitization Program. Because interest rates may increase or decrease at any time, the Company is exposed to market risk as a result of the impact that changes in interest rates may have on the applicable borrowings outstanding. Increases in the interest rates applicable to these borrowings would result in increased interest expense and a reduction in the Company’s net income.

At December 31, 2019 there was approximately $1.292 billion of indebtedness outstanding under the senior credit facility and Accounts Receivable Securitization Program, or approximately 46.9% of the Company’s outstanding long-term debt on that date, bearing interest at variable rates. The aggregate interest expense for 2019 with respect to borrowings under the senior credit facility and the Accounts Receivable Securitization Program was $54.6 million, and the weighted average interest rate applicable to these borrowings during 2019 was 4.0%. Assuming that the weighted average interest rate was 200 basis points higher (that is 6.0% rather than 4.0%), then the Company’s 2019 interest expense would have increased by approximately $26.8 million for the year ended December 31, 2019.

The Company attempted to mitigate the interest rate risk resulting from its variable interest rate long-term debt instruments by 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 senior credit facility to fix the interest rates applicable to its borrowings at an amount equal to Adjusted LIBO Rate or Adjusted Base Rate plus the applicable margin for periods of up to twelve months (in certain cases with the consent of the lenders), 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

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Management’s Report on Internal Control Over Financial Reporting			46
Report of Independent Registered Public Accounting Firm — Opinion on Internal Control Over Financial Reporting			47
Report of Independent Registered Public Accounting Firm — Opinion on the Consolidated Financial Statements			48
Consolidated Balance Sheets as of December 31, 2019 and 2018			50
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2019, 2018 and 2017			51
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018 and 2017			52
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017			53
Notes to Consolidated Financial Statements			54-79
Schedule II — Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018 and 2017			80
Schedule III — Schedule of Real Estate and Accumulated Depreciation as of December 31, 2019, 2018 and 2017			81

Management’s Report on Internal Control Over Financial Reporting

The management of Lamar Advertising Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Lamar Advertising’s management assessed the effectiveness of Lamar Advertising’s internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on this assessment, Lamar Advertising’s management has concluded that, as of December 31, 2019, Lamar Advertising’s internal control over financial reporting is effective based on those criteria. The effectiveness of Lamar Advertising’s internal control over financial reporting as of December 31, 2019 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 8 to this Annual Report.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Lamar Advertising Company:

Opinion on Internal Control Over Financial Reporting

We have audited Lamar Advertising Company and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedules II to III (collectively, the consolidated financial statements), and our report dated February 20, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

KPMG LLP

Baton Rouge, Louisiana

February 20, 2020

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Lamar Advertising Company:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Lamar Advertising Company and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2019, and the related notes and financial statement schedules II to III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 20, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue recognition as of January 1, 2018, due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.

As discussed in Note 7 to the consolidated financial statements, the Company changed its method of accounting for leases as of January 1, 2019, due to the adoption of Accounting Standards Codification Topic 842, Leases.

Basis for Opinion

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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the accounting lease term for the portfolio of billboard land leases

As discussed in Note 7 to the consolidated financial statements, a lessee determines the lease term at the commencement date by identifying the non-cancellable period of the lease and then adding any periods for which it is reasonably certain to exercise a renewal option (or not to exercise a termination option). The Company has over 74,000 operating leases in which they determined the lease term using the portfolio approach.

We identified the assessment of the initial lease term for the portfolio of billboard land leases, which affects the discount rate for the lease as well as the measurement of the lease liability and right of use asset, as a critical audit matter. In the Company’s operating leases, the Company typically has both unilateral renewal and termination options. Determining the lease term involved a high degree of subjectivity as to whether the term should or should not include renewal period(s) (including periods after an optional termination date).

The primary procedures performed to address the critical audit matter included the following. We tested certain internal controls over the Company’s lease process, including determination of the stated initial lease term, reconciliation of inputs into the system, approval of operating lease contracts, and annual evaluation of the renewals and terminations exercised by the Company during the year. We evaluated the competence, capabilities, and objectivity of the Company’s real estate team that negotiates the operating lease terms, and that the team considers economic factors that are consistent with those enumerated in ASC 842 when negotiating the initial lease term and associated renewal and termination options. We inspected the Company’s assessment and conclusion of using the portfolio approach for its operating leases. We tested a sample of the Company’s operating lease population and obtained the underlying documentation used in the determination of the lease term to assess that the leases entered into are similar in relation to the lease agreement creation process, purpose, and considerations. We evaluated the impact of leases with early terminations and renewals beyond the stated initial term to assess the Company’s assertions about and use of the portfolio approach for the lease term.

Evaluating the fair value of site locations acquired in the Fairway Outdoor Advertising business combination

As discussed in Note 3 to the consolidated financial statements, the Company completed the acquisition of Fairway Outdoor Advertising on December 21, 2018, for an aggregate purchase price of $418.5 million. The Company finalized the fair value allocation in 2019. The Company acquired multiple intangible and tangible assets, the most significant of which was the site locations intangible asset. The acquisition date fair value allocation for the site locations asset was $153.4 million.

We identified the evaluation of the initial measurement of the site locations intangible asset acquired in the Fairway Outdoor Advertising transaction as a critical audit matter. There was a high degree of subjectivity in the forecasted financial data used in the discounted cash flow model to estimate the acquisition date fair value of the intangible asset. The discounted cash flow model included the following internally-developed assumptions for which there was limited observable market information, and the estimated fair value of such asset was sensitive to possible changes to these assumptions:

- Forecasted revenue;

- Forecasted earnings before interest, taxes, depreciation and amortization (EBITDA); and

- Company-specific risk premium utilized as an input to the discount rate.

The primary procedures we performed to address this critical audit matter included the following. We tested certain controls over the Company’s acquisition date valuation process to develop the relevant assumptions, as listed above, including controls related to the analysis of the assumptions based on market participants’ views. We compared the Company’s forecasted revenue and EBITDA assumptions to those of the Company’s peers using data publicly available. We assessed the assumptions for comparison to those of a market participant, including consideration of recent similar market transactions. We compared the Company’s forecasted revenue and EBITDA assumptions to both actual results and historical results to assess the Company’s ability to accurately forecast. We involved a valuation professional with specialized skills and knowledge to assist in the evaluation of the company-specific risk premium utilized as an input to the discount rate, considering the risk surrounding the forecasted revenue and EBITDA.

/s/ KPMG LLP

KPMG LLP

We have served as the Company’s auditor since 1999.

Baton Rouge, Louisiana

February 20, 2020

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2019 and 2018

(In thousands, except share and per share data)

	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	26,188		$	21,494
Receivables, net of allowance for doubtful accounts of $13,185 and $11,161 as of 2019 and 2018, respectively		254,930			235,576
Prepaid lease and contract expenses		—			80,684
Other current assets		29,051			25,915
Total current assets		310,169			363,669
Property, plant and equipment (note 5)		3,660,311			3,525,725
Less accumulated depreciation and amortization		(2,311,196	)		(2,230,677	)
Net property, plant and equipment		1,349,115			1,295,048
Operating lease right of use assets		1,320,779			—
Goodwill (note 6)		1,912,274			1,919,386
Intangible assets, net (note 6)		992,244			915,453
Other assets		56,574			51,085
Total assets	$	5,941,155		$	4,544,641
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	14,974		$	21,246
Current maturities of long-term debt, net of deferred financing costs of $6,081 and $5,245 in 2019 and 2018, respectively (note 9)		226,514			204,120
Current operating lease liabilities (note 7)		196,841			—
Accrued expenses (note 8)		107,225			122,467
Deferred income		127,254			107,202
Total current liabilities		672,808			455,035
Long-term debt, net of deferred financing costs of $18,333 and $20,619 in 2019 and 2018, respectively (note 9)		2,753,604			2,684,568
Operating lease liabilities (note 7)		1,068,181			—
Deferred income tax liabilities (note 12)		5,713			20,734
Asset retirement obligation (note 10)		226,137			222,989
Other liabilities		34,406			29,531
Total liabilities		4,760,849			3,412,857
Stockholders’ equity (note 14):
Series AA preferred stock, par value $.001, $63.80 cumulative dividends, authorized 5,720 shares; 5,720 shares issued and outstanding at 2019 and 2018		—			—
Class A common stock, par value $.001, 362,500,000 shares authorized, 86,596,498 and 85,551,595 shares issued and 86,093,300 and 85,162,692 outstanding at 2019 and 2018, respectively		87			86
Class B common stock, par value $.001, 37,500,000 shares authorized, 14,420,085 shares issued and outstanding at 2019 and 2018		14			14
Additional paid-in-capital		1,922,222			1,852,421
Accumulated comprehensive income		685			12
Accumulated deficit		(708,408	)		(695,337	)
Cost of shares held in treasury, 503,198 and 388,903 shares in 2019 and 2018, respectively		(34,294	)		(25,412	)
Stockholders’ equity		1,180,306			1,131,784
Total liabilities and stockholders’ equity	$	5,941,155		$	4,544,641

See accompanying notes to consolidated financial statements.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income

Years Ended December 31, 2019, 2018 and 2017

(In thousands, except share and per share data)

	2019			2018			2017
Statements of Income
Net revenues (note 2)	$	1,753,644		$	1,627,222		$	1,541,260
Operating expenses (income):
Direct advertising expenses (exclusive of depreciation and amortization)		590,078			561,848			540,880
General and administrative expenses (exclusive of depreciation and amortization)		318,380			289,428			276,229
Corporate expenses (exclusive of depreciation and amortization)		84,658			82,896			62,344
Depreciation and amortization (note 11)		250,028			225,261			211,104
(Gain) loss on disposition of assets		(7,241	)		7,233			(4,664	)
		1,235,903			1,166,666			1,085,893
Operating income		517,741			460,556			455,367
Other expense (income):
Loss on extinguishment of debt		—			15,429			71
Interest income		(764	)		(534	)		(6	)
Interest expense		150,616			129,732			128,396
		149,852			144,627			128,461
Income before income tax expense		367,889			315,929			326,906
Income tax (benefit) expense (note 12)		(4,222	)		10,697			9,230
Net income		372,111			305,232			317,676
Preferred stock dividends		365			365			365
Net income applicable to common stock	$	371,746		$	304,867		$	317,311
Earnings per share:
Basic earnings per share	$	3.71		$	3.09		$	3.24
Diluted earnings per share	$	3.71		$	3.08		$	3.23
Cash dividends declared per share of common stock	$	3.84		$	3.65		$	3.32
Weighted average common shares used in computing earnings per share:
Weighted average common shares outstanding basic		100,130,721			98,817,525			97,930,555
Weighted average common shares outstanding diluted		100,320,574			99,086,160			98,369,865
Statements of Comprehensive Income
Net income	$	372,111		$	305,232		$	317,676
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		673			(1,290	)		1,926
Comprehensive income	$	372,784		$	303,942		$	319,602

See accompanying notes to consolidated financial statements.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2019, 2018 and 2017

(In thousands, except share and per share data)

	Series AA PREF Stock		Class A CMN Stock		Class B CMN Stock			Treasury Stock			Add’l Paid in Capital		Accumulated Comprehensive Income (Loss)			Accumulated Deficit			Total
Balance, December 31, 2016	$	—		83		15			(12,303	)		1,713,312		(624	)		(630,955	)		1,069,528
Non-cash compensation		—		—		—			—			4,012		—			—			4,012
Issuance of 150,259 shares of common stock through stock awards		—		—		—			—			18,491								18,491
Exercise of 554,049 shares of stock options		—		—		—			—			20,306		—			—			20,306
Issuance of 107,978 shares of common stock through employee purchase plan		—		—		—			—			6,378		—			—			6,378
Conversion of 190,280 shares of Class B common stock to Class A common stock		—		1		(1	)		—			—		—			—			—
Purchase of 115,196 shares of treasury stock		—		—		—			(8,997	)		—		—			—			(8,997	)
Foreign currency translation		—		—		—			—			—		1,926			—			1,926
Net income		—		—		—			—			—		—			317,676			317,676
Dividends/distributions to common shareholders ($3.32 per common share)		—		—		—			—			—		—			(325,462	)		(325,462	)
Dividends ($63.80 per preferred share)		—		—		—			—			—		—			(365	)		(365	)
Balance, December 31, 2017	$	—		84		14			(21,300	)		1,762,499		1,302			(639,106	)		1,103,493
Non-cash compensation		—		—		—			—			4,012		—			—			4,012
Issuance of 150,259 shares of common stock through stock awards		—		—		—			—			11,012		—			—			11,012
Exercise of 361,618 shares of stock options		—		1		—			—			13,432		—			—			13,433
Issuance of 126,012 shares of common stock through employee purchase plan		—		—		—			—			7,115		—			—			7,115
Issuance of 576,002 shares of common stock for cash		—		1		—			—			42,069		—			—			42,070
Issuance of 163,137 shares of common stock for purchase of assets		—		—		—			—			12,282		—			—			12,282
Purchase of 57,619 shares of treasury stock		—		—		—			(4,112	)		—		—			—			(4,112	)
Foreign currency translation		—		—		—			—			—		(1,290	)		—			(1,290	)
Net income		—		—		—			—			—		—			305,232			305,232
Dividends/distributions to common shareholders ($3.65 per common share)		—		—		—			—			—		—			(361,098	)		(361,098	)
Dividends ($63.80 per preferred share)		—		—		—			—			—		—			(365	)		(365	)
Balance, December 31, 2018	$	—		86		14			(25,412	)		1,852,421		12			(695,337	)		1,131,784
Non-cash compensation		—		—		—			—			4,604								4,604
Issuance of 302,507 shares of common stock through stock awards		—		—		—			—			20,956		—			—			20,956
Exercise of 340,684 shares of stock options		—		—		—			—			14,984		—			—			14,984
Issuance of 129,972 shares of common stock through employee purchase plan		—		—		—			—			8,060		—			—			8,060
Issuance of 266,410 shares of common stock for cash		—		1		—			—			21,197		—			—			21,198
Purchase of 114,295 shares of treasury stock		—		—		—			(8,882	)		—		—			—			(8,882	)
Foreign currency translation		—		—		—			—			—		673			—			673
Net income		—		—		—			—			—		—			372,111			372,111
Dividends/distributions to common shareholders ($3.84 per common share)		—		—		—			—			—		—			(384,817	)		(384,817	)
Dividends ($63.80 per preferred share)		—		—		—			—			—		—			(365	)		(365	)
Balance, December 31, 2019	$	—		87		14			(34,294	)		1,922,222		685			(708,408	)		1,180,306

See accompanying notes to consolidated financial statements.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years Ended December 31, 2019, 2018 and 2017

(In thousands)

	2019			2018			2017
Cash flows from operating activities:
Net income	$	372,111		$	305,232		$	317,676
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		250,028			225,261			211,104
Stock-based compensation		29,647			29,443			9,599
Amortization included in interest expense		5,365			4,920			5,120
(Gain) loss on disposition of assets and investments		(7,241	)		7,233			(4,664	)
Loss on extinguishment of debt		—			15,429			71
Deferred income tax (benefit) expense		(14,130	)		1,538			804
Provision for doubtful accounts		10,608			7,985			6,762
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables		(28,357	)		(33,292	)		(17,524	)
Prepaid expenses		275			(5,433	)		309
Other assets		(11,257	)		2,828			(8,410	)
Increase (decrease) in:
Trade accounts payable		700			1,366			309
Accrued expenses		(1,597	)		(6,292	)		(9,508	)
Operating lease liabilities		9,102			—			—
Other liabilities		15,611			8,628			(4,632	)
Cash flows provided by operating activities		630,865			564,846			507,016
Cash flows from investing activities:
Capital expenditures		(140,956	)		(117,638	)		(109,329	)
Acquisitions		(226,278	)		(477,389	)		(297,305	)
(Increase) decrease in notes receivable		(448	)		9			515
Proceeds received from property insurance claims		210			4,222			—
Proceeds from disposition of assets and investments		5,438			6,648			6,053
Cash flows used in investing activities		(362,034	)		(584,148	)		(400,066	)
Cash flows from financing activities:
Net proceeds from issuance of common stock		44,262			62,662			26,684
Cash used for purchase of treasury shares		(8,882	)		(4,112	)		(8,997	)
Proceeds received from revolving credit facility		495,000			563,000			495,000
Payments on revolving credit facility		(625,000	)		(481,000	)		(477,000	)
Principal payments on long-term debt		(34,471	)		(27,328	)		(16,993	)
Proceeds received from senior credit facility term loans		—			599,250			450,000
Proceeds received from accounts receivable securitization program		9,000			175,000			—
Payments on accounts receivable securitization program		(9,000	)		—			—
Debt issuance costs		(4,463	)		(7,616	)		(4,941	)
Proceeds received from note offering		255,000			—			—
Redemption of senior subordinated notes		—			(509,790	)		—
Payment on senior credit facility term loans		—			—			(247,500	)
Distributions to non-controlling interest		(621	)		(541	)		(693	)
Dividends/distributions		(385,182	)		(443,088	)		(244,201	)
Cash flows used in financing activities		(264,357	)		(73,563	)		(28,641	)
Effect of exchange rate changes in cash and cash equivalents		220			(1,112	)		1,632
Net increase (decrease) in cash and cash equivalents		4,694			(93,977	)		79,941
Cash and cash equivalents at beginning of period		21,494			115,471			35,530
Cash and cash equivalents at end of period	$	26,188		$	21,494		$	115,471
Supplemental disclosures of cash flow information:
Cash paid for interest	$	139,585		$	136,711		$	123,213
Cash paid for state and federal income taxes	$	14,449		$	8,563		$	12,640

See accompanying notes to consolidated financial statements.

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 (the Company) is engaged in the outdoor advertising business, operating approximately 157,800 billboard advertising displays in 45 states and Canada. The Company’s operating strategy is to be the leading provider of outdoor advertising services in the markets it serves.

In addition, the Company operates a logo sign business in 24 states throughout the United States and the province of Ontario, Canada and operates approximately 52,800 transit advertising displays in 22 states and 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. The Company provides transit advertising in airport terminals, on bus shelters, benches and buses in the markets it serves.

The Company operates as a Real Estate Investment Trust (“REIT”) for U.S. federal income tax purposes and generally will not be subject to federal income taxes on its income and gains that the Company distributes to its stockholders, including the income derived from advertising rental revenue. However, even as a REIT, the Company will remain obligated to pay income taxes on earnings from the assets of its taxable REIT subsidiaries (“TRSs”). In addition, the Company’s foreign assets and operations continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted.

(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 inter-company transactions and balances have been eliminated in consolidation.

An operating segment is a component of an enterprise:

•

that engages in business activities from which it may earn revenues and incur expenses;

•

whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and

•

for which discrete financial information is available.

We define the term ‘chief operating decision maker’ to be our executive management group, which consist of our Chief Executive Officer, President and Chief Financial Officer. Currently, all operations are reviewed on a consolidated basis for budget and business plan performance by our executive management group. Additionally, operational performance at the end of each reporting period is viewed in the aggregate by our management group. Any decisions related to changes in invested capital, personnel, operational improvement or training, or to allocate other company resources are made based on the combined results.

We operate in a single operating and reporting segment, advertising. We rent advertising space on billboards, buses, shelters, benches, logo plates and in airport terminals.

Property, plant and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.

(d) Goodwill and Intangible Assets

Goodwill is subject to an annual impairment test. The Company designated December 31 as the date of its annual goodwill impairment test. The Company is required to identify its reporting units and determine the carrying value of each reporting unit. The Company has identified two reporting units, Billboard operations and Logo operations, by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. The Company is required to determine the fair value of each reporting unit and compare it to the carrying amount of the reporting unit. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, the Company would be required to book an impairment loss.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

The Company conducts a qualitative assessment by examining relevant events and circumstances which could have a negative impact on the Company’s goodwill, which includes macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, reporting unit dispositions and acquisitions, the market capitalization of the Company and other relevant events specific to the Company. If, after assessing the totality of events or circumstances described above, the Company determines that it is more likely than not that the fair value of either of the Company's reporting units is less than its carrying amount, the Company will perform a quantitative impairment test. If industry and economic conditions deteriorate, the Company may be required to assess goodwill impairment before the next annual test, which could result in impairment charges.

The Company performed its annual measurement for impairment of the goodwill of its reporting units and concluded the fair value of each reporting unit exceeded its carrying amount at its annual impairment test date on December 31, 2019 and 2018; therefore, the Company was not required to recognize an impairment loss.

Intangible assets, consisting primarily of 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 2 to 15 years.

(e) Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate 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 estimated undiscounted future cash flows expected to be generated by the asset or asset group before interest expense. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset or asset group. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

(f) Acquisitions

The Company accounts for transactions that meet the definition of a business and group asset purchases as acquisitions. For transactions that meet the definition of a business combination, the Company allocates the purchase price, including any contingent consideration, to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition with any excess of the purchase price paid over the estimated fair value of net assets acquired recorded as goodwill. The determination of the final purchase price and the acquisition-date fair value of identifiable assets acquired and liabilities assumed may extend over more than one period and result in adjustments to the preliminary estimate recognized in the prior period financial statements For transactions that meet the definition of asset group purchases, the Company allocates the purchase price to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition. If a transaction is determined to be a group of assets, any direct acquisition costs are capitalized. Transaction costs for transactions determined to be a business combination are expensed as incurred.

(g) Lease liabilities

On January 1, 2019, the Company adopted ASC 842, Leases, using a modified retrospective transition with January 1, 2019 as the effective date of our initial application. We also elected the package of practical expedients, which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We also elected the practical expedient pertaining to land easements, which allows the Company not to reassess its accounting treatment for our previously existing land easements as to whether they qualify as a lease under ASC 842.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payment to present value and (2) lease term. Our leases generally do not include a readily determinable implicit rate, therefore, using a portfolio approach, we determine our collateralized incremental borrowing rate to discount the lease payment based on the information available at lease commencement. Our lease terms include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. The Company has determined we are not reasonably certain to exercise renewals or termination options, and as a result we use the lease’s initial stated term as the lease term for our lease population.

(h) Deferred Income

Deferred income consists principally of advertising revenue invoiced in advance. Deferred advertising revenue is recognized in income over the term of the contract.

(i) Revenue Recognition

The Company recognizes outdoor advertising revenue on an accrual basis ratably over the term of the contracts. Production revenue and the related expense for the advertising copy are recognized upon satisfaction of its performance obligation.

The Company engages in barter transactions where the Company trades advertising space for goods and services. The Company recognizes revenues and expenses from barter transactions at fair value, which is determined based on the Company’s own historical practice of receiving cash for similar advertising space from buyers unrelated to the party in the barter transaction. The amount of revenue and expense recognized for advertising barter transactions is as follows:

	2019		2018		2017
Net revenues	$	9,636	$	8,955	$	8,469
Direct advertising expenses	$	3,982	$	3,633	$	3,603
General and administrative expenses	$	4,986	$	4,758	$	4,332

(j) Income Taxes

As a REIT, the Company is generally not subject to federal income taxes on income and gains distributed to the Company’s stockholders. However, the Company remains obligated to pay income taxes on earnings from domestic TRSs. In addition, the Company’s foreign assets and operations continue to be subject to taxation in the foreign jurisdictions where those assets are held or where those operations are conducted, including those designated as Qualified REIT Subsidiaries, or QRSs, for federal income tax purposes. Accordingly, the consolidated financial statements reflect provisions for federal, state, local and foreign income taxes. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities as a result of a change in tax rates is recognized in income in the period that includes the enactment date.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(k) Dividends/Distributions

As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). During the year ended December 31, 2019, the Company declared and paid distributions of its REIT taxable income of $384,817 or $3.84 per share. During the year ended December 31, 2018, the Company paid cash distributions of its REIT taxable income in an aggregate amount of $442,632 or $4.48 per share. The distributions paid during 2018 include distributions declared and accrued as of December 31, 2017 of $81,534 or $0.83 per share. During the year ended December 31, 2017, the Company declared distributions of $325,462 or $3.32 per share, including paid distributions of $243,928 or $2.49 per share. The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including the financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that the Company otherwise would be required to pay, limitations on distributions in its existing and future debt instruments, the Company’s ability to utilize net operating losses (“NOLs”) to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to fund distributions using cash generated through its TRSs and other factors that the Board of Directors may deem relevant. During the year ended December 31, 2019, the Company paid dividend distributions to holders of its Series AA Preferred Stock of $365 or $63.80 per share. During the year ended December 31, 2018, the Company paid cash dividend distributions to holders of its Series AA Preferred Stock in an aggregate amount of $456 or $79.75 per share, including $91, or $15.95 per share, related to distributions accrued for in 2017. During the year ended December 31, 2017 the Company paid cash dividend distributions to holders of its Series AA Preferred Stock of $274 or $47.85 per share.

(l) Earnings Per Share

The calculation of basic earnings per share excludes any dilutive effect of stock options, while diluted earnings per share includes the dilutive effect of stock options. For the years ended December 31, 2019, 2018 and 2017 there were no dilutive shares excluded from the calculation.

(m) Stock Based Compensation

Compensation expense for share-based awards is recognized based on the grant date fair value of those awards. Stock-based compensation expense includes an estimate for pre-vesting forfeitures and is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. Non-cash compensation expense recognized during the years ended December 31, 2019, 2018, and 2017 were $29,647, $29,443 and $9,599, respectively. The $29,647 expensed during the year ended December 31, 2019 consists of (i) $4,226 related to stock options and the employee stock purchase plan, (ii) $25,005 related to stock grants made under the Company’s performance-based stock incentive program in 2019 and (iii) $416 related to stock awards to directors. See Note 15 for information on the assumptions used to calculate the fair value of stock-based compensation.

(n) Cash and Cash Equivalents

The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents.

(o) Foreign Currency Translation

Local currencies generally are considered the functional currencies outside the United States. Assets and liabilities for operations in local-currency environments are translated at year-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Foreign currency translation adjustments are recorded as a component of other comprehensive income (loss) in the Consolidated Statements of Income and Comprehensive Income and as a component of accumulated comprehensive income (loss) in the Consolidated Statements of Stockholders’ Equity.

(p) Asset Retirement Obligations

The Company is required to record the fair value of obligations associated with the retirement of tangible long-lived assets in the period in which it is incurred. The liability is capitalized as part of the related long-lived asset’s carrying amount. Over time, accretion of the liability is recognized as an operating expense and the capitalized cost is depreciated over the expected useful life of the related asset. The Company’s asset retirement obligations relate primarily to the dismantlement, removal, site reclamation and similar activities of its leased properties.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(q) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

(r) Comprehensive Income

Total comprehensive income is presented in the Consolidated Statements of Income and Comprehensive Income and the components of accumulated comprehensive income (loss) are presented in the Consolidated Statements of Stockholders’ Equity. Comprehensive income (loss) is composed of foreign currency translation effects.

(s) Fair Value Measurements

The Company determines the fair value of its financial instruments using the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

(t) Subsequent Events

The Company has performed an evaluation of subsequent events through the date on which the financial statements are issued.

(2) Revenue

On January 1, 2018, we adopted FASB Accounting Standards Update (“ASU”) No. 2014-09 (Codified as ASC 606), Revenue from Contracts with Customers using the cumulative effect transition method applied to those contracts which were not completed as of January 1, 2018 and are not accounted for under ASC 840, Leases. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 or 840, while comparative information has not been adjusted and continues to be reported under ASC 605.

A majority of our billboard, logo, and transit space contracts are accounted for under ASC 840 and continued to be accounted for under the topic until January 1, 2019, our adoption date of ASU No. 2016-02 (Codified as ASC 842), Leases. Contracts which begin prior to January 1, 2019 and are accounted for under ASC 840 continued to be accounted for as a lease until the contract ends or is modified. Contracts beginning or modified on or after January 1, 2019 which do not meet the criteria of a lease under ASC 842 are accounted for under ASC 606, Revenue. The majority of our advertising space contracts do not meet the definition of a lease under ASC 842.

Due to the transition of our advertising space contracts into ASC 606 we are now required to capitalize our costs to fulfill a contract and expense the costs over the contract period. These costs include our costs to install advertising copy onto billboards. These costs were expensed as incurred under ASC 840. During the year ended December 31, 2019, we capitalized $24,920 of costs to fulfill a contract which is included in other current assets on the Consolidated Balance Sheets, net of expensed costs of $15,734. The expensed costs are recorded in direct advertising expenses (exclusive of depreciation and amortization) in the Consolidated Statements of Income and Comprehensive Income.

Revenue Recognition

Advertising revenues: The majority of our revenues are derived from contracts for advertising space on billboard, logo and transit displays and were accounted for under ASC 840, Leases prior to January 1, 2019. Upon the Company’s adoption of ASC 842, Leases on January 1, 2019 the majority of our contracts for advertising space transitioned to being accounted for under ASC 606, Revenue. The contract revenues, under both ASC 840, Leases and ASC 606, Revenue, are recognized ratably over their contract life.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Other revenues: Our other component of revenue primarily consists of production services which includes creating and printing the advertising copy. On and after January 1, 2018 revenue for production contracts are recognized under ASC 606, Revenue. Contract revenues for production services are recognized upon satisfaction of the contract which is typically less than one week.

Arrangements with multiple performance obligations: Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on the relative standalone selling price. We determine standalone selling prices based on the prices charged to customers using expected cost plus margin.

Deferred revenues: We record deferred revenues when cash payments are received or due in advance of our performance obligation. The term between invoicing and when a payment is due is not significant. For certain services we require payment before the product or services are delivered to the customer. The balance of deferred income is considered short-term and will be recognized in revenue within twelve months.

Practical expedients and exemptions: Upon our transition to ASC 606 from ASC 840, the Company utilized the following practical expedients and exemptions from ASC 606. We generally expense sales commissions when incurred because the amortization period is one year or less. These costs are recorded within direct advertising expense (exclusive of depreciation and amortization). We do not disclose the value of unsatisfied performance obligations as the majority of our contracts with customers have an original expected length of less than one year. For contracts with customers which exceed one year, the future amount to be invoiced to the customer corresponds directly with the value to be received by the customer.

The following table presents our disaggregated revenue by source including revenues accounted for under ASC 840, ASC 842 and ASC 606 for the years ended December 31, 2019, 2018 and 2017.

	2019		2018		2017
Billboard Advertising	$	1,537,542	$	1,412,978	$	1,340,422
Logo Advertising		84,201		84,424		82,936
Transit Advertising		131,901		129,820		117,902
Net Revenues	$	1,753,644	$	1,627,222	$	1,541,260

(3) Acquisitions

Year Ended December 31, 2019

During the twelve months ended December 31, 2019, the Company completed several acquisitions of outdoor advertising assets for a total purchase price of $226,278, net of acquired cash of $1,508. This amount includes $227,588 of outdoor advertising assets purchased in 2019, offset by $1,310 in post-closing adjustments to acquired working capital related to the purchase of Fairway Outdoor Advertising (“Fairway”) in 2018.

Each of these acquisitions was accounted for under the acquisition method of accounting, and, accordingly, the accompanying consolidated financial statements include the results of operations of each acquired entity from the date of acquisition. The acquisition purchase price has been allocated to assets acquired and liabilities assumed based on fair market value at the dates of acquisition.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

The following is a summary of the allocation of the purchase price in the above transactions, which includes the final fair value allocation of the asset acquired and liabilities assumed in a business combination completed on July 15, 2019, for an aggregate purchase price of $127,000.

	Total
Property, plant and equipment	$	37,988
Site locations		131,208
Non-competition agreements		240
Customer lists and contracts		23,032
Asset acquisition costs		756
Other intangibles		3,115
Goodwill		29,360
Current assets		1,860
Current liabilities		(832	)
Operating right of use assets		23,934
Operating lease liabilities		(21,573	)
Other liabilities		(1,500	)
	$	227,588

Total acquired intangible assets for the year ended December 31, 2019 were $187,711, of which $29,360 was assigned to goodwill. Goodwill is not amortized for financial statement purposes, and no goodwill related to 2019 acquisitions is expected to be deductible for tax purposes. The remaining $158,351 of acquired intangible assets have a weighted average useful life of approximately 14 years. The intangible assets include customer lists and contracts of $23,032 (7 year weighted average useful life) and site locations of $131,208 (15 year weighted average useful life). The aggregate amortization expense related to the 2019 acquisitions for the year ended December 31, 2019 was approximately $7,570.

As of December 31, 2019, we have finalized our fair value allocation of the assets acquired and liabilities assumed from Fairway on December 21, 2018. Our updated fair value allocation of Fairway during 2019 includes property, plant and equipment, intangibles and goodwill of $96,840, $188,400 and $145,534, respectively. During the period ended December 31, 2019, goodwill was adjusted $36,583 due to updates from the original preliminary purchase price allocation provided as of December 31, 2018. The updated allocation resulted in prior and current period changes to depreciation and amortization. These changes were considered immaterial and recorded during the year ended December 31, 2019. During the year ended December 31, 2019, assets purchased from Fairway, which were initially placed into our taxable REIT subsidiary, were transferred to our qualifying REIT subsidiary. As a result, the Company recorded an income tax benefit of $17,031 in deferred tax liabilities assumed from our purchase.

The following unaudited pro forma financial information for the Company gives effect to the 2019 and 2018 acquisitions as if they had occurred on January 1, 2018. 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.

	2019		2018
	(unaudited)
Net revenues	$	1,764,493	$	1,724,821
Net income applicable to common stock	$	369,300	$	292,012
Net income per common share — basic	$	3.69	$	2.96
Net income per common share — diluted	$	3.68	$	2.95

Year Ended December 31, 2018

During the twelve months ended December 31, 2018, the Company completed several acquisitions of outdoor advertising assets for a total purchase price of $489,671, net of acquired cash of $8,554. The total purchase price consisted of the issuance of 163,137 shares of its Class A common stock for $12,282 and cash of $477,389. The purchases included the acquisition of assets in five U.S markets from Fairway Outdoor Advertising (“Fairway”) on December 21, 2018 for an aggregate purchase price of $418,500.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

As of December 31, 2018, our fair value allocation of the assets acquired and liabilities assumed from Fairway was considered preliminary and subject to revision, which could result in adjustments to this allocation. In order to develop our preliminary fair values, the Company utilized asset information received from Fairway and fair value allocation benchmarks from similar completed transactions. Our preliminary allocation of Fairway included property, plant and equipment, intangibles and goodwill of $91,173, $156,319 and $182,117, respectively. As discussed above, we finalized the Fairway fair value allocation during 2019.

Each of these acquisitions was accounted for under the acquisition method of accounting, and, accordingly, the accompanying consolidated 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, excluding the preliminary allocation of Fairway.

	Total
Property, plant and equipment	$	8,648
Site locations		57,105
Non-competition agreements		342
Customer lists and contracts		6,521
Asset acquisition costs		336
Current assets		1,041
Current liabilities		(355	)
	$	73,638

Total acquired intangible assets for the year ended December 31, 2018 were $402,740, of which $182,117 was assigned to goodwill. Goodwill is not amortized for financial statement purposes, and no goodwill related to 2018 acquisitions is expected to be deductible for tax purposes. The remaining $220,623 of acquired intangible assets have a weighted average useful life of approximately 14 years. The intangible assets include customer lists and contracts of $33,310 (7 year weighted average useful life) and site locations of $186,635 (15 year weighted average useful life). The aggregate amortization expense related to the 2018 acquisitions for the year ended December 31, 2018 was approximately $2,681.

The following unaudited pro forma financial information for the Company gives effect to the 2018 and 2017 acquisitions as if they had occurred on January 1, 2017. 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.

	2018		2017
	(unaudited)
Net revenues	$	1,699,052	$	1,647,445
Net income applicable to common stock	$	299,493	$	306,900
Net income per common share — basic	$	3.03	$	3.13
Net income per common share — diluted	$	3.02	$	3.12

(4) Non-cash Financing and Investing Activities

For the year ended December 31, 2019, there were no significant non-cash investing activities. For the year ended December 31, 2018, the Company had non-cash investing activities for the issuance of 163,137 shares of its Class A common stock related to acquisition purchases. The issuance had an approximate value of $12,282. For the year ended December 31, 2017, the Company had $2,879 non-cash investing activities related to acquisitions of outdoor advertising assets. There were no significant non-cash financing activities during the years ended December 31, 2019 and 2018. During the year ended December 31, 2017, the Company had non-cash financing activities related to declared distributions of $81,625 which were paid to shareholders in January 2018.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(5) Property, Plant and Equipment

Major categories of property, plant and equipment at December 31, 2019 and 2018 are as follows:

	Estimated Life (Years)		2019		2018
Land		—	$	406,884	$	384,264
Building and improvements	10 — 39			181,797		173,306
Advertising structures	5 — 15			2,926,706		2,817,170
Automotive and other equipment	3 — 7			144,924		150,985
			$	3,660,311	$	3,525,725

(6) Goodwill and Other Intangible Assets

The following is a summary of intangible assets at December 31, 2019 and 2018:

	Estimated		2019				2018
	Life (Years)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable Intangible Assets:
Customer lists and contracts	7 — 10		$	641,714	$	539,405	$	610,376	$	514,928
Non-competition agreements	3 — 15			66,014		64,379		65,771		64,119
Site locations		15		2,384,520		1,509,335		2,228,767		1,422,794
Other	2 — 15			49,864		36,749		45,992		33,612
			$	3,142,112	$	2,149,868	$	2,950,906	$	2,035,453
Unamortizable Intangible Assets:
Goodwill			$	2,165,810	$	253,536	$	2,172,922	$	253,536

The changes in the gross carrying amount of goodwill for the years ended December 31, 2019 and 2018 are as follows:

Balance as of December 31, 2017	$	1,993,990
Goodwill acquired during the year		182,117
Purchase price adjustments and other		(3,185	)
Impairment losses		—
Balance as of December 31, 2018	$	2,172,922
Goodwill acquired during the year		29,360
Purchase price adjustments and other		(36,472	)
Impairment losses		—
Balance as of December 31, 2019	$	2,165,810

Amortization expense for the years ended December 31, 2019, 2018 and 2017 was $113,679, $95,010 and $85,257, respectively. The following is a summary of the estimated amortization expense for future years:

2020	$	108,323
2021		104,332
2022		99,480
2023		88,649
2024		84,835
Thereafter		506,625
Total	$	992,244

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(7) Leases

On January 1, 2019 the Company adopted ASC 842, Leases, using a modified retrospective transition with January 1, 2019 as the effective date of our initial application. We also elected the package of practical expedients, which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We also elected the practical expedient pertaining to land easements, which allows the Company not to reassess its accounting treatment for our previously existing land easements as to whether they qualify as a lease under ASC 842.

The Company is party to various operating leases for production facilities, vehicles and sites upon which advertising structures are built, including our billboard land leases, leases of logo structures and leases of transit advertising space. The leases expire at various dates, have varying options to renew and cancel, and may contain escalation provisions. We expense our non-variable lease payments ratably over the lease term. Also, certain of our leases contain variable lease payments based on percentage of revenue or consumer price index or other inflation-based indices. The variable lease costs are expensed in the period incurred. Due to our election not to reassess conclusions about lease identification, as noted above, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements will not likely meet the criteria of a lease under ASC 842, therefore they will no longer be accounted for as a lease.

During the year ended December 31, 2019, we had base operating lease costs of $312,883 and variable operating lease costs of $76,492, for a total operating lease cost of $389,375. During the years ended December 31, 2018 and 2017 we had total operating lease costs of $381,890 and $366,892, respectively. Our operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization). Also, for the year ended December 31, 2019, we recorded a gain of $4,061 in (gain) loss of disposition of assets related to the amendment and termination of lease agreements. Cash payments of $316,527 were made reducing our operating lease liabilities for the year ended December 31, 2019 and are included in cash flows provided by operating activities in the Consolidated Statements of Cash Flows.

We elected the short-term lease exemption which applies to certain of our vehicle agreements. This election allows the Company to not recognize lease right of use assets (ROU assets) or lease liabilities for agreements with a term of twelve months or less. We recorded $4,691 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the year ended December 31, 2019.

Our operating leases have a weighted-average remaining lease term of 12.0 years. The weighted-average discount rate of our operating leases is 4.8%. Also, during the year ended December 31, 2019, we obtained $35,813 of leased assets in exchange for new operating lease liabilities, which includes liabilities obtained through acquisitions.

The following is a summary of the maturities of our operating lease liabilities as of December 31, 2019:

2020	$	240,438
2021		196,099
2022		175,598
2023		152,470
2024		135,234
Thereafter		800,876
Total undiscounted operating lease payments		1,700,715
Less: Imputed interest		(435,693	)
Total operating lease liabilities	$	1,265,022

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

The following is a summary of minimum annual rental payments required under our operating lease that have original or remaining lease terms in excess of one year as of December 31, 2018:

2019	$	254,866
2020	$	188,138
2021	$	165,642
2022	$	144,814
2023	$	122,814
Thereafter	$	819,004

(8) Accrued Expenses

The following is a summary of accrued expenses at December 31, 2019 and 2018:

	2019		2018
Payroll	$	20,223	$	20,667
Interest		32,734		27,067
Insurance benefits		11,554		12,633
Accrued variable lease and contract expense		12,559		36,158
Stock-based compensation		23,297		19,211
Other		6,858		6,731
	$	107,225	$	122,467

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(9) Long-term Debt

Long-term debt consists of the following at December 31, 2019 and 2018:

	December 31, 2019
	Debt			Deferred financing costs			Debt, net of deferred financing costs
Senior Credit Facility	$	1,127,069		$	9,077		$	1,117,992
Accounts Receivable Securitization Program		175,000			846			174,154
5% Senior Subordinated Notes		535,000			3,237			531,763
5 3/8% Senior Notes		510,000			3,502			506,498
5 3/4% Senior Notes		654,345			7,752			646,593
Other notes with various rates and terms		3,118			—			3,118
		3,004,532			24,414			2,980,118
Less current maturities		(232,595	)		(6,081	)		(226,514	)
Long-term debt, excluding current maturities	$	2,771,937		$	18,333		$	2,753,604


	December 31, 2018
	Debt			Deferred financing costs			Debt, net of deferred financing costs
Senior Credit Facility	$	1,291,088		$	11,576		$	1,279,512
Accounts Receivable Securitization Program		175,000			1,168			173,832
5% Senior Subordinated Notes		535,000			4,104			530,896
5 3/8% Senior Notes		510,000			4,262			505,738
5 3/4% Senior Notes		400,000			4,754			395,246
Other notes with various rates and terms		3,464			—			3,464
		2,914,552			25,864			2,888,688
Less current maturities		(209,365	)		(5,245	)		(204,120	)
Long-term debt, excluding current maturities	$	2,705,187		$	20,619		$	2,684,568

Long-term debt contractual maturities are as follows:

	Debt		Deferred financing costs		Debt, net of deferred financing costs
2020	$	232,595	$	6,081	$	226,514
2021	$	74,487	$	6,205	$	68,282
2022	$	426,971	$	4,677	$	422,294
2023	$	541,989	$	3,480	$	538,509
2024	$	517,008	$	2,216	$	514,792
Later years	$	1,211,482	$	1,755	$	1,209,727

Senior Credit Facility

Lamar Media’s Third Amended and Restated Credit Agreement dated as of May 15, 2017 (as amended, the “senior credit facility”) originally consisted of (i) a $450,000 senior secured revolving credit facility which will mature on May 15, 2022 (the “revolving credit facility”), (ii) a $450,000 Term A loan facility (the “Term A loans”) which will mature on May 15, 2022, and (iii) an incremental facility pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to pro forma compliance with the secured debt ratio financial maintenance covenant (the “Incremental Facility”). Lamar Media borrowed all $450,000 in Term A loans on May 15, 2017. The net proceeds of the Term A loans, together with borrowing under the revolving portion of senior credit facility and cash on hand, were used to repay all outstanding amounts under the existing senior credit facility, and all revolving commitments under that facility were terminated.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

On March 16, 2018, Lamar Media entered into Amendment No. 1 to the Third Amended and Restated Credit Agreement dated May 15, 2017, which amended the existing senior credit facility to establish a new $600,000 Term B Loan Facility (the “Term B loan”), which will mature on March 16, 2025. Lamar Media borrowed the full amount of the Term B loan on March 16, 2018. The proceeds from the Term B loan, together with available cash on hand were used to redeem in full Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.

On January 17, 2019, Lamar Media entered into an incremental amendment to the senior credit facility to include $100,000 in additional revolving commitments, thereby increasing the total borrowing capacity under the revolving credit facility to $550,000.

As of December 31, 2019, the senior credit facility consisted of (i) the revolving credit facility, (ii) the Term A loans, (iii) the Term B loans and (iv) the Incremental Facility.

The Term A loans mature on May 15, 2022 and the Term B loans mature on March 16, 2025. The remaining quarterly installments are scheduled to be paid on each March 31, June 30, September 30 and December 31 as follows:

Principal Payment Date	Term A		Term B
March, 31 2020-June 30, 2020	$	8,438	$	1,500
September 30, 2020-March 31, 2022	$	16,875	$	1,500
Term A Loan Maturity May 15, 2022	$	253,125	$	—
June 30, 2022-December 31, 2024	$	—	$	1,500
Term B Loan Maturity March 16, 2025	$	—	$	559,500

The Term loans bear interest at rates based on the Adjusted LIBO Rate (“Eurodollar term loans”) or the Adjusted Base Rate (“Base Rate term loans”), at Lamar Media’s option. Eurodollar term loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.75%; (or the Adjusted LIBO Rate plus 1.50% at any time the Total Debt Ratio is less than or equal to 3.25 to 1 for Term A loans only). Base Rate term loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.75% (or the Adjusted Base Rate plus 0.50% at any time the Total Debt Ratio is less than or equal to 3.25 to 1 for Term A loans only). The revolving credit facility bears interest at rates based on the Adjusted LIBO Rate (“Eurodollar revolving loans”) or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option. Eurodollar revolving loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 2.25% (or the Adjusted LIBO Rate plus 2.00% at any time the Total Debt Ratio is less than or equal to 4.25 to 1; or the Adjusted LIBO Rate plus 1.75% at any time the Total Debt Ratio is less than or equal to 3.00 to 1). Base Rate revolving Loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 1.25% (or the Adjusted Base Rate plus 1.0% at any time the total debt ratio is less than or equal to 4.25 to 1, or the Adjusted Base Rate plus 0.75% at any time the Total Debt Ratio is less than or equal to 3.00 to 1). The guarantees, covenants, events of default and other terms of the senior credit facility apply to the Term A and B loans and revolving credit facility.

As of December 31, 2019, there was $150,000 outstanding under the revolving credit facility. Availability under the revolving facility is reduced by the amount of any letters of credit outstanding. Lamar Media had $12,709 letters of credit outstanding as of December 31, 2019 resulting in $387,291 of availability under its revolving facility. Revolving credit loans may be requested under the revolving credit facility at any time prior to its maturity on May 15, 2022.

The terms of Lamar Media’s senior 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:

•

dispose of assets;

•

incur or repay debt;

•

create liens;

•

make investments; and

•

pay dividends.

The senior credit facility contains provisions that would allow Lamar Media to conduct its affairs in a manner that would allow Lamar Advertising to qualify and remain qualified as a REIT, including by allowing Lamar Media to make distributions to Lamar Advertising required for the Company to qualify and remain qualified for taxation as a REIT, subject to certain restrictions.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Lamar Media’s ability to make distributions to Lamar Advertising is also restricted under the terms of these agreements. Under Lamar Media’s senior credit facility the Company must maintain a specified senior debt ratio at all times and in addition, must satisfy a total debt ratio in order to incur debt, make distributions or make certain investments.

Lamar Advertising and Lamar Media were in compliance with all of the terms of their indentures and the applicable senior credit agreement provisions during the periods presented.

Accounts Receivable Securitization Program

On December 18, 2018 Lamar Media entered into a $175,000 Receivable Financing Agreement (the “AR Program”) with its wholly-owned special purpose entities, Lamar QRS Receivables, LLC and Lamar TRS Receivables, LLC (the “Special Purpose Subsidiaries”) maturing on December 17, 2021. The AR Program is limited to the availability of eligible accounts receivable collateralizing the borrowings under the agreements governing the AR Program.

Pursuant to two separate Purchase and Sale Agreements dated December 18, 2018, each of which is among Lamar Media as initial Servicer, certain of Lamar Media’s subsidiaries and a Special Purpose Subsidiary, the subsidiaries sold substantially all of their existing and future accounts receivable balances to the Special Purpose Subsidiaries. The Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans pursuant to the AR Program. Lamar Media retains the responsibility of servicing the accounts receivable balances pledged as collateral under the AR Program and provides a performance guaranty.

As of December 31, 2019 there was $175,000 outstanding on the AR Program bearing interest at approximately 3.3%. Proceeds from the AR Program were used primarily to repay outstanding amounts under our revolving credit facility. The commitment fee based on the amount of unused commitments under the AR Program was immaterial in 2019.

The AR Program is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and the borrowings are presented as liabilities on our Consolidated Balance Sheets, (ii) our Consolidated Statements of Income and Comprehensive Income reflect the associated charges for bad debt expense (a component of general and administrative expenses) related to the pledged accounts receivable and interest expense associated with the collateralized borrowings and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Consolidated Statements of Cash Flows.

5 7/8% Senior Subordinated Notes

On February 9, 2012, Lamar Media completed an institutional private placement of $500,000 aggregate principal amount of 5 7/8% Senior Subordinated Notes, due 2022 (the “5 7/8% Senior Subordinated Notes”). The institutional private placement resulted in net proceeds to Lamar Media of approximately $489,000. The Company used the proceeds from the Term B loans to redeem all of the 5 7/8% Notes on March 19, 2018 at a redemption price of 101.958% of the aggregate principal amount of the outstanding 5 7/8% Notes, plus accrued and unpaid interest up to but not including the redemption date. In conjunction with the redemption the Company recorded a loss on debt extinguishment of $15,429, of which $9,790 was cash, for the year ended December 31, 2018.

5% Senior Subordinated Notes

On October 30, 2012, Lamar Media completed an institutional private placement of $535,000 aggregate principal amount of 5% Senior Subordinated Notes due 2023 (the “5% Senior Subordinated Notes”). The institutional private placement resulted in net proceeds to Lamar Media of approximately $527,100.

Lamar Media may redeem the 5% Senior Subordinated Notes, in whole or in part, in cash at redemption prices specified in the 5% Senior Subordinated Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder’s 5% Senior Subordinated Notes at a price equal to 101% of the principal amount of the 5% Senior Subordinated Notes, plus accrued and unpaid interest, up to but not including the repurchase date.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

5 3/8% Senior Notes

On January 10, 2014, Lamar Media completed an institutional private placement of $510,000 aggregate principal amount of 5 3/8% Senior Notes due 2024 (the “5 3/8% Senior Notes”). The institutional private placement resulted in net proceeds to Lamar Media of approximately $502,300.

Lamar Media may redeem the 5 3/8% Senior Notes, in whole or in part, in cash at redemption prices specified in the 5 3/8% Senior Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder’s 5 3/8% Senior Notes at a price equal to 101% of the principal amount of the 5 3/8% Senior Notes, plus accrued and unpaid interest, up to but not including the repurchase date.

5 3/4% Senior Notes

On January 28, 2016, Lamar Media completed an institutional private placement of $400,000 aggregate principal amount of 5 3/4% Senior Notes due 2026 (the “5 3/4 % Senior Notes”). The institutional private placement resulted in net proceeds to Lamar Media of approximately $394,500.

On February 1, 2019, Lamar Media completed an institutional private placement of an additional $250,000 aggregate principal amount under its 5 3/4% Notes (the “New Notes”). Other than with respect to the date of issuance, issue price and CUSIP number, the New Notes have the same terms as the 5 3/4% Notes. The net proceeds after underwriting fees and expenses, was approximately $251,500 and were used to repay a portion of the borrowings outstanding under the revolving credit facility.

At any time prior to February 1, 2021, Lamar Media may redeem some or all of the 5 3/4% Senior Notes at a price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest thereon plus a make-whole premium. On or after February 1, 2021, Lamar Media may redeem the 5 3/4% Senior Notes, in whole or in part, in cash at redemption prices specified in the 5 3/4% Senior Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder’s 5 3/4% Senior Notes at a price equal to 101% of the principal amount of the 5 3/4% Senior Notes, plus accrued and unpaid interest, up to but not including the repurchase date.

(10) Asset Retirement Obligation

The Company’s asset retirement obligation includes the costs associated with the removal of its structures, resurfacing of the land and retirement cost, if applicable, related to the Company’s outdoor advertising portfolio. The following table reflects information related to our asset retirement obligations:

Balance at December 31, 2017	$	215,089
Additions to asset retirement obligations		7,583
Accretion expense		4,404
Liabilities settled		(4,087	)
Balance at December 31, 2018	$	222,989
Additions to asset retirement obligations		2,529
Accretion expense		4,260
Liabilities settled		(3,641	)
Balance at December 31, 2019	$	226,137

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(11) Depreciation and Amortization

The Company includes all categories of depreciation and amortization on a separate line in its Statements of Income. The amounts of depreciation and amortization expense excluded from the following operating expenses in its Statements of Income are:

	Year Ended December 31,
	2019		2018		2017
Direct expenses	$	235,544	$	212,585	$	196,107
General and administrative expenses		4,416		4,134		4,151
Corporate expenses		10,068		8,542		10,846
	$	250,028	$	225,261	$	211,104

(12) Income Taxes

Commencing January 1, 2014, the Company began operating as a REIT for U.S. income tax purposes. Since operating as a REIT, the Company filed, and intends to continue to file, as a REIT, and its TRSs filed, and intend to continue to file, as C corporations. The Company also files tax returns in various states and countries. The Company’s state tax returns reflect different combinations of the Company’s subsidiaries and are dependent on the connection each subsidiary has with a particular state. The following information pertains to the Company’s income taxes on a consolidated basis.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) was signed into law, making significant changes to the Internal Revenue Code. As a result of the TCJA, a tax benefit of $3,372 and $466 was recorded to current tax expense and deferred tax expense, respectively, for the year ended December 31, 2017.

Income tax expense (benefit) consists of the following:

	Current		Deferred			Total
Year ended December 31, 2019:
U.S. federal	$	6,045	$	(13,450	)	$	(7,405	)
State and local		2,699		(2,654	)		45
Foreign		1,164		1,974			3,138
	$	9,908	$	(14,130	)	$	(4,222	)
Year ended December 31, 2018:
U.S. federal	$	4,952	$	435		$	5,387
State and local		2,615		(123	)		2,492
Foreign		1,592		1,226			2,818
	$	9,159	$	1,538		$	10,697
Year ended December 31, 2017:
U.S. federal	$	4,174	$	359		$	4,533
State and local		2,706		(170	)		2,536
Foreign		1,546		615			2,161
	$	8,426	$	804		$	9,230

As of December 31, 2019 and 2018, the Company had income taxes payable of $384 and $458, respectively.

The U.S. and foreign components of earnings before income taxes are as follows:

	2019		2018			2017
U.S.	$	357,445	$	317,695		$	332,607
Foreign		10,444		(1,766	)		(5,701	)
Total	$	367,889	$	315,929		$	326,906

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21 percent to income before taxes for the 2019 and 2018 tax years and 35 percent for the 2017 tax year, is as follows:

	2019			2018			2017
Income tax expense at U.S. federal statutory rate	$	77,257		$	66,345		$	114,417
Tax adjustment related to REIT^(a)		(70,619	)		(63,669	)		(109,294	)
State and local income taxes, net of federal income tax benefit		2,039			1,461			1,193
Book expenses not deductible for tax purposes		4,144			1,926			2,635
Stock-based compensation		(1,177	)		1,090			(121	)
Valuation allowance^(b)		(1,032	)		3,813			3,953
Rate change^(c)		—			(80	)		(466	)
Undistributed earnings of foreign subsidiaries^(d)		(102	)		(393	)		1,363
Minimum tax credit refundable^(e)		—			—			(4,108	)
Deferred tax adjustment due to REIT conversion^(f)		(17,031	)		—			—
Other differences, net^(g)		2,299			204			(342	)
Income tax expense	$	(4,222	)	$	10,697		$	9,230

^(a)	Includes dividend paid deduction of $76,688, $69,818 and $110,442 for the tax years ended December 31, 2019, 2018 and 2017, respectively.

^(b)	For the years ended December 31, 2019, 2018 and 2017, a non-cash valuation allowance of $(1,031), $3,813 and $3,953, respectively, was recorded to income tax expense due to our limited ability to utilize Puerto Rico deferred tax assets in future years.

^(c)	Under the TCJA, the U.S. corporate income tax rate was lowered from 35% to 21%. As a result, a non-cash benefit of $466 to income tax expense was recorded for the reduction of the U.S. net deferred tax liability for the year ended December 31, 2017.

^(d)

In periods prior to December 31, 2017, the undistributed earnings of our Canadian subsidiaries were designated as permanently reinvested. As of December 31, 2017, however, management did not assert that the undistributed earnings of our Canadian subsidiaries will be permanently reinvested. For the years ended December 31, 2019, 2018 and 2017, we recognized a deferred tax (benefit) charge of $(102), $(393) and $1,363, respectively, for future foreign withholding taxes related to undistributed earnings.

^(e)

Under the TCJA, the corporate alternative minimum tax was repealed and any minimum tax carryforwards not utilized become fully refundable in 2021. The Company does not expect to utilize its minimum tax credit carryforward. As a result, a cash benefit of $4,108 to income tax expense was recorded for the year ended December 31, 2017.

^(f)	The income tax provision for the year ended December 31, 2019 is net of the deferred tax benefit of $17,031, which relates to the transfer of assets purchased from Fairway into our qualifying REIT subsidiary on June 28, 2019. The Fairway assets were initially placed in the TRS.

^(g)	Upon enactment, the TCJA includes a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings, net of foreign tax credits. As a result, a cash charge of $736 to income tax expense was recorded for the year ended December 31, 2017.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and (liabilities) are presented below:

	2019			2018
Deferred tax assets:
Allowance for doubtful accounts	$	499		$	654
Accrued liabilities not deducted for tax purposes		3,431			7,022
Net operating loss carry forwards		19,522			34,716
Tax credit carry forwards		1,140			320
Charitable contributions carry forward		5			47
Investment in partnerships		382			—
Gross deferred tax assets		24,979			42,759
Less: valuation allowance		(22,902	)		(23,934	)
Net deferred tax assets		2,077			18,825
Deferred tax liabilities:
Intangibles		(5,898	)		(6,565	)
Investment in partnerships		—			(31,746	)
Property, plant and equipment		(701	)		(366	)
Undistributed earnings of foreign subsidiaries		(1,191	)		(882	)
Gross deferred tax liabilities		(7,790	)		(39,559	)
Net deferred tax liabilities	$	(5,713	)	$	(20,734	)

As of December 31, 2019, we have approximately $244,121 of U.S. net operating loss carry forwards to offset future taxable income. Of this amount, $47,358 is subject to Internal Revenue Code §382 limitation but will be available to be fully utilized by no later than 2027. These carry forwards expire between 2026 through 2037. In addition, we have $2,745 of various credits available to offset future U.S. federal income tax. Under the TCJA, the corporate alternative minimum tax was repealed and any minimum tax credit carryforwards not utilized become fully refundable in 2021. We do not expect to utilize our minimum tax credit of $2,054 before 2021.

As of December 31, 2019, we have approximately $831,791 of state net operating loss carry forwards before valuation allowances. These state net operating losses are available to reduce future taxable income and expire at various times and amounts. In addition, we have $135 of various credits available to offset future state income tax. There was no valuation allowance related to state net operating loss carry forwards as of December 31, 2019 and 2018. There were no net changes in the total state valuation allowance for the years ended December 31, 2019 and 2018.

As of December 31, 2019, we had approximately $48,135 of Puerto Rico net operating loss carry forwards before valuation allowances. These Puerto Rico net operating losses are available to offset future taxable income. These carry forwards expire between 2020 and 2028. In addition, we have $153 of alternative minimum tax credits available to offset future Puerto Rico income tax.

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 in those jurisdictions during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income, and tax-planning strategies in making this assessment. In order to fully realize the deferred tax assets, the Company will need to generate future taxable income before the expiration of the carry forwards governed by the tax code. Based on the current level of pretax earnings, the Company will not generate the minimum amount of future taxable income to support the realization of the deferred tax assets. As a result, management has determined that a valuation allowance related to Puerto Rico net operating loss carry forwards and other deferred tax assets is necessary. The valuation allowance for these deferred tax assets as of December 31, 2019 and 2018 was $22,902 and $23,934, respectively. The net change in the total valuation allowance for the years ended December 31, 2019 and 2018 was an increase (decrease) of $(1,032) and $3,814, respectively. The amount of the deferred tax asset considered realizable, however, could be adjusted in the near term if estimates of future taxable income during the carry forward period increase.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

As of December 31, 2019, the Company has accumulated undistributed earnings generated by our foreign subsidiaries of approximately $23,811. Management does not designate these earnings as permanently reinvested and has recognized a deferred tax liability of approximately $1,191 related to foreign withholding taxes on these earnings. We have recognized a current year tax expense of $180 related to 2019 earnings and a tax benefit of $(170) related to prior year earnings repatriated in 2019.

Under ASC 740 Income Taxes, we provide for uncertain tax positions, and the related interest, and adjust recognized tax benefits and accrued interest accordingly. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance as of December 31, 2017	$	2,067
Additions for tax positions related to current year		932
Additions for tax positions related to prior years		238
Reductions for tax positions related to prior years		—
Lapse of statute of limitations		(30	)
Settlements		—
Balance as of December 31, 2018	$	3,207
Additions for tax positions related to current year		974
Additions for tax positions related to prior years		386
Reductions for tax positions related to prior years		—
Lapse of statute of limitations		(117	)
Settlements		—
Balance as of December 31, 2019	$	4,450

Included in the balance of unrecognized benefits at December 31, 2019 is $4,450 of tax benefits that, if recognized in future periods, would impact our effective tax rate. During the years ended December 31, 2019 and 2018, we recognized interest and penalties of $334 and $411, respectively, as a component of income tax expense in connection with our liabilities related to uncertain tax positions.

Within the next twelve months, we expect to decrease our unrecognized tax benefits by approximately $970 as a result of the expiration of statute of limitations.

We are subject to income taxes in the U.S. and nearly all states. In addition, the Company is subject to income taxes in Canada and the Commonwealth of Puerto Rico. We are no longer subject to U.S federal income tax examinations by tax authorities for years prior to 2016, or for any U.S. state income tax audit prior to 2013. With respect to Canada and Puerto Rico, we are no longer subject to income tax audits for years before 2016 and 2015, respectively.

(13) 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.

The Company had receivables from employees of $80 at December 31, 2018. There were no receivables from employees at December 31, 2019. These receivables are primarily relocation loans for employees. The Company does not have any receivables from its current executive officers.

RTC Holdings, LLC (“RTC”), a telecommunications company, is 100% owned by entities owned by members of the Reilly family. Entities owned by Sean E. Reilly, Chief Executive Officer of the Company; Kevin P. Reilly, Jr., Chairman of the Board of Directors and President of the Company; and members of their respective immediate families hold a majority stake in RTC of approximately 89%. The Reilly Family, LLC, which is owned by Sean E. Reilly, Kevin P. Reilly, Jr., our directors Anna Reilly and Wendell Reilly, and entities owned by each of them and members of their respective immediate families, holds the remaining minority stake in RTC of approximately 11%. On May 31, 2019, RTC acquired EATELCORP, LLC (“EATEL”) and its subsidiaries. EATEL provides phone and internet services to consumers and businesses in Louisiana. EATEL also provides data back-up and recovery services to businesses. During the year ended December 31, 2019, the Company was a customer of EATEL for data back-up and recovery services. The aggregate amount paid by the Company to EATEL for such services was $302 for the year ended December 31, 2019. The Company was also contracted by EATEL to provide advertising services in the aggregate amount of $137 for the year ended December 31, 2019.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(14) Stockholders’ Equity

On July 16, 1999, the Board of Directors designated 5,720 shares of the 1,000,000 shares of previously undesignated preferred stock, par value $.001, as Series AA preferred stock, which shares were subsequently exchanged on a one for one basis in the REIT conversion. The Series AA preferred stock ranks senior to the Class A common stock and Class B common stock with respect to dividends and upon liquidation. Holders of Series AA preferred stock are entitled to receive, on a pari passu basis, dividends at the rate of $15.95 per share per quarter when, as and if declared by the Board of Directors. The Series AA preferred stock is entitled to receive, on a pari passu basis, $638 plus a further amount equal to any dividend accrued and unpaid to the date of distribution before any payments are made or assets distributed to the Class A common stock or Class B stock upon voluntary or involuntary liquidation, dissolution or winding up of the Company. The liquidation value of the outstanding Series AA preferred stock at December 31, 2019 was $3,649. The Series AA preferred stock is entitled to one vote per share.

All of the outstanding shares of common stock are fully paid and nonassessable. In the event of the liquidation or dissolution of the Company, following any required distribution to the holders of outstanding shares of preferred stock, the holders of common stock are entitled to share pro rata in any balance of the corporate assets available for distribution to them. The Company may pay dividends if, when and as declared by the Board of Directors from funds legally available therefore, subject to the restrictions set forth in the Company’s existing indentures and the senior credit facility. Subject to the preferential rights of the holders of any class of preferred stock, holders of shares of common stock are entitled to receive such dividends as may be declared by the Company’s Board of Directors out of funds legally available for such purpose. No dividend may be declared or paid in cash or property on any share of either class of common stock unless simultaneously the same dividend is declared or paid on each share of the other class of common stock, provided that, in the event of stock dividends, holders of a specific class of common stock shall be entitled to receive only additional shares of such class.

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 May 1, 2018, the Company entered into an equity distribution agreement (the “Sales Agreement”) with J.P. Morgan Securities LLC, Wells Fargo Securities LLC, and SunTrust Robinson Humphrey, Inc. as its sales agents (each a “Sales Agent”, and collectively, the “Sales Agents”). Under the terms of the Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, par value $0.001 per share (the “Class A Common Stock”), having an aggregate offering price of up to $400,000, through the Sales Agents as either agents or principals. As of December 31, 2019, 842,412 shares of our Class A Common Stock have been sold under the Sales Agreement and accordingly $336,668 remains available to be sold under the Sales Agreement.

Sales of the Class A Common Stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A Common Stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A Common Stock under the Sales Agreement and may at any time suspend solicitations and offers under the Sales Agreement.

On August 6, 2018, the Company filed an automatically effective shelf registration statement that registered the offer and sale of an indeterminate amount of additional shares of our Class A common stock. During the year ended December 31, 2018, the Company issued 163,137 shares of its Class A common stock in connection with acquisitions occurring during the period. The Company filed a prospectus supplement to the shelf registration statement relating to the offer and resale of such shares of Class A common stock. There were no shares issued under this shelf registration during the year ended December 31, 2019.

(15) Stock Compensation Plans

Equity Incentive Plan. Lamar’s 1996 Equity Incentive Plan, as amended, (the “1996 Plan”) has reserved 17.5 million shares of common stock for issuance to directors and employees, including options granted and common stock reserved for issuance under its performance-based incentive program. Options granted under the 1996 Plan expire ten years from the grant date with vesting terms ranging from three to five years which primarily includes 1) options that vest in one-fifth increments beginning on the grant date and continuing on each of the first four anniversaries of the grant date and 2) options that cliff-vest on the fifth anniversary of the grant date. All grants are made at fair market value based on the closing price of our Class A common stock as reported on the NASDAQ Global Select Market on the date of grant.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

In February 2013, the 1996 Plan was amended to eliminate the provision that limited the amount of Class A common stock, including shares retained from an award, that could be withheld to satisfy tax withholding obligations to the minimum tax obligations required by law (except with respect to option awards). In accordance with ASC 718, Compensation – Stock Compensation, the Company is required to classify the awards affected by the amendment as liability-classified awards at fair value each period prior to their settlement. As of December 31, 2019 and 2018, the Company recorded a liability, in accrued expenses, of $23,297 and $19,211, respectively, related to its equity incentive awards affected by this amendment.

We use a Black-Scholes-Merton option pricing model to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various highly subjective assumptions, including expected term and expected volatility. We have reviewed our historical pattern of option exercises and have determined that meaningful differences in option exercise activity existed among vesting schedules. Therefore, for all stock options granted after January 1, 2006, we have categorized these awards into two groups of vesting 1) 5-year cliff vest and 2) 4-year graded vest, for valuation purposes. We have determined there were no meaningful differences in employee activity under our ESPP due to the nature of the plan.

We estimate the expected term of options granted using an implied life derived from the results of a hypothetical mid-point settlement scenario, which incorporates our historical exercise, expiration and post-vesting employment termination patterns, while accommodating for partial life cycle effects. We believe these estimates will approximate future behavior.

We estimate the expected volatility of our Class A common stock at the grant date using a blend of 90% historical volatility of our Class A common stock and 10% implied volatility of publicly traded options with maturities greater than six months on our Class A common stock as of the option grant date. Our decision to use a blend of historical and implied volatility was based upon the volume of actively traded options on our common stock and our belief that historical volatility alone may not be completely representative of future stock price trends.

Our risk-free interest rate assumption is determined using the Federal Reserve nominal rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. We assumed an expected dividend yield of 5%.

We estimate option forfeitures at the time of grant and periodically revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We record stock-based compensation expense only for those awards expected to vest using an estimated forfeiture rate based on our historical forfeiture data.

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:

Grant Year	Dividend Yield	Expected Volatility	Risk Free Interest Rate	Expected Lives
2019	5%	46%	2%		6
2018	5%	46%	2%		6
2017	5%	45%	2%		6

Information regarding the 1996 Plan for the year ended December 31, 2019 is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Contractual Life
Outstanding, beginning of year		836,859		$	49.65
Granted		117,000			76.92
Exercised		(340,684	)		43.98
Forfeited		(4,800	)		61.23
Expired		—			—
Outstanding, end of year		608,375			57.97		5.71
Exercisable at end of year		401,375			50.64		4.31

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

At December 31, 2019 there was $3,173 of unrecognized compensation cost related to stock options granted which is expected to be recognized over a weighted-average period of 1.77 years.

Shares available for future stock option and restricted share grants to employees and directors under existing plans were 2,669,471 at December 31, 2019. The aggregate intrinsic value of options outstanding as of December 31, 2019 was $19,034, and the aggregate intrinsic value of options exercisable was $15,502. Total intrinsic value of options exercised was $12,433 for the year ended December 31, 2019.

Stock Purchase Plan. Lamar Advertising’s 2009 Employee Stock Purchase Plan (the “2009 ESPP”) was approved by our shareholders on May 28, 2009. The number of shares of Class A common stock available under the 2009 ESPP was automatically increased by 85,162 shares on January 1, 2019 pursuant to the automatic increase provisions of the 2009 ESPP. The 2009 ESPP expired by its terms on June 30, 2019. On May 30, 2019, our shareholders approved Lamar Advertising’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”). The 2019 ESPP became effective upon the expiration of the 2009 ESPP. The number of shares of Class A common stock available for issuance under the 2019 ESPP consists of (1) 300,000 shares of Class A common stock and (2) any shares of Class A common stock available for future purchase under the 2009 ESPP at June 30, 2019.

The following is a summary of 2009 and 2019 ESPP share activity for the year ended December 31, 2019:

	Shares
Available for future purchases, January 1, 2019		183,244
Additional shares reserved under 2009 ESPP		85,162
Additional shares reserved under 2019 ESPP		300,000
Purchases		(129,972	)
Available for future purchases, December 31, 2019		438,434

Performance-based compensation. Unrestricted shares of our Class A common stock may be awarded to key officers and employees under our 1996 Plan based on certain Company performance measures for fiscal year 2019. The number of shares to be issued, if any, are dependent on the level of achievement of these performance measures as determined by the Company’s Compensation Committee based on our 2019 results and were issued in the first quarter of 2020. The shares subject to these awards can range from a minimum of 0% to a maximum of 100% of the target number of shares depending on the level at which the goals are attained. Based on the Company’s performance measures achieved through December 31, 2019, the Company has accrued $22,838 as compensation expense related to these agreements.

(16) Benefit Plans

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. 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. As of December 31, 2019, the Company maintained $8,091 in letters of credit with a bank to meet requirements of the Company’s worker’s compensation and general liability insurance carrier.

Savings and Profit Sharing Plan

The Company sponsors The Lamar Corporation Savings and Profit Sharing Plan covering eligible employees who have completed one year of service and are at least 21 years of age. The Company has the option to match 50% of employees’ contributions up to 5% of eligible compensation. Employees can contribute up to 100% of compensation. Full vesting on the Company’s matched contributions occurs after three years for contributions made after January 1, 2002. Annually, at the Company’s discretion, an additional profit sharing contribution may be made on behalf of each eligible employee. The Company matched contributions of $5,688, $4,966 and $4,715 for the years ended December 31, 2019, 2018 and 2017, respectively.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Deferred Compensation Plan

The Company sponsors a Deferred Compensation Plan for the benefit of certain of its board-elected officers who meet specific age and years of service and other criteria. Officers that have attained the age of 30 and have a minimum of 10 years of service to the Company and satisfy additional eligibility guidelines are eligible for annual contributions to the plan generally ranging from $3 to $8, depending on the employee’s length of service. The Company’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 the Company in other assets and other liabilities. 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. For the years ended December 31, 2019, 2018 and 2017, the Company contributed $1,675, $1,585 and $1,526, respectively.

On December 8, 2005, the Company’s Board of Directors approved an amendment to the Lamar Deferred Compensation Plan in order to (1) to comply with the requirements of Section 409A of the Internal Revenue Code (“Section 409A”) applicable to deferred compensation and (2) to reflect changes in the administration of the plan. The Company’s Board of Directors also approved the adoption of a grantor trust pursuant to which amounts may be set aside, but remain subject to claims of the Company’s creditors, for payments of liabilities under the new plan, including amounts contributed under the old plan. The plan was further amended in August 2007 to make certain amendments to reflect Section 409A regulations issued on April 10, 2007. An additional clarifying amendment was made to the plan in December 2013.

(17) Commitment and Contingencies

Off balance sheet arrangements

Our off-balance sheet commitments consist of guaranteed minimum payments to local transit municipalities and airport authorities for agreements which entitle us to rent advertising space to customers, in airports and on buses, benches or shelters. These agreements no longer meet the criteria of a lease under ASC 842, Leases, adopted on January 1, 2019 and are a result from our normal course of business. The following is a summary of the minimum payments related to these agreements.

2020	$	20,621
2021	$	16,965
2022	$	16,702
2023	$	15,614
2024	$	14,624
Thereafter	$	1,289

Legal matters

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

(18) Distribution Restrictions

Lamar Media’s ability to make distributions to Lamar Advertising is restricted under both the terms of the indentures relating to Lamar Media’s outstanding notes and by the terms of its senior credit facility. As of December 31, 2019 and 2018, Lamar Media was permitted under the terms of its outstanding senior subordinated and senior notes to make transfers to Lamar Advertising in the form of cash dividends, loans or advances in amounts up to $3,389,763 and $3,156,061, respectively.

As of December 31, 2019, Lamar Media’s senior credit facility allows it to make transfers to Lamar Advertising in any taxable year up to the amount of Lamar Advertising’s taxable income (without any deduction for dividends paid). In addition, as of December 31, 2019, transfers to Lamar Advertising are permitted under Lamar Media’s senior credit facility and as defined therein up to the available cumulative credit, as long as no default has occurred and is continuing and, after giving effect to such distributions, (i) the total debt ratio is less than 6.5 to 1 and (ii) the secured debt ratio does not exceed 3.5 to 1. As of December 31, 2019, the total debt ratio was less than 6.5 to 1 and Lamar Media’s secured debt ratio was less than 3.5 to 1, and the available cumulative credit was $2,140,441.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(19) Fair Value of Financial Instruments

At December 31, 2019 and 2018, the Company’s financial instruments included cash and cash equivalents, marketable securities, accounts receivable, investments, accounts payable and borrowings. The fair values of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments. Investments and initial recognition of asset retirement obligations are reported at fair values. Fair values for investments held at cost are not readily available, but are estimated to approximate fair value. The estimated fair value of the Company’s long term debt (including current maturities) was $3,064,068, which is greater than both the gross and carrying amount of $3,004,532 as of December 31, 2019. The majority of the fair value is determined using observed prices of publicly traded debt (level 1 in the fair value hierarchy) and the remaining is valued based on quoted prices for similar debt (level 2 in the fair value hierarchy).

(20) Information about Geographic Areas

Revenues from external customers attributable to foreign countries totaled $34,517, $35,146 and $33,424 for the years ended December 31, 2019, 2018 and 2017, respectively. Net carrying value of long lived assets located in foreign countries totaled $4,549 and $2,387 as of December 31, 2019 and 2018, respectively. All other revenues from external customers and long lived assets relate to domestic operations.

(21) New Accounting Pronouncements

Leases

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Other recently released pronouncements

(22) Quarterly Financial Data (Unaudited)

The tables below represent the balances for the selected quarterly financial data of the Company for each reporting period in the years ended December 31, 2019 and 2018.

	Year 2019 Quarters
	March 31		June 30		September 30		December 31
Net revenues	$	384,457	$	448,742	$	457,786	$	462,659
Net revenues less direct advertising expenses	$	243,987	$	302,352	$	308,940	$	308,287
Net income applicable to common stock	$	51,162	$	118,305	$	99,618	$	102,661
Net income per common share basic	$	0.51	$	1.18	$	0.99	$	1.02
Net income per common share diluted	$	0.51	$	1.18	$	0.99	$	1.02

	Year 2018 Quarters
	March 31		June 30		September 30		December 31
Net revenues	$	361,026	$	419,800	$	418,498	$	427,898
Net revenues less direct advertising expenses	$	222,733	$	279,016	$	277,799	$	285,826
Net income applicable to common stock	$	14,961	$	100,340	$	93,965	$	95,601
Net income per common share basic	$	0.15	$	1.02	$	0.95	$	0.97
Net income per common share diluted	$	0.15	$	1.02	$	0.95	$	0.96

(23) Divestiture of Assets

On April 16, 2018 the Company sold its assets in Puerto Rico for $3,000 in cash and non-cash consideration consisting of a note receivable for $9,250 due April 2024. The Company recorded a loss on the sale of $7,809 for the year ended December 31, 2018. There were no significant divestitures of assets for the year ended December 31, 2019.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(24) Subsequent Events

On February 6, 2020, Lamar Media completed a refinancing transaction involving (i) the issuance of an additional $1,000,000 in aggregate principal amount of new senior notes, consisting of $600,000 in aggregate principal amount of 3 3/4% Senior Notes due 2028 and $400,000 in aggregate principal amount of 4% Senior Notes due 2030 and (ii) the entry into the Fourth Amended and Restated Credit Agreement, which amended and restated its existing senior credit facility. The new senior credit facility created under the Fourth Amended and Restated Credit Agreement consists of (i) a new $750,000 senior secured revolving credit facility, (ii) a new $600,000 Term B loan facility (the “new Term B loans”), and (iii) an incremental facility pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio. Lamar Media borrowed all $600,000 of the new Term B loans on February 6, 2020.

Proceeds from the refinancing transactions, after the payment of fees and expenses, were used to (1) redeem Lamar Media’s 5 3/8% Senior Notes on February 20, 2020 and (2) repay amounts outstanding under the Third Amended and Restated Senior Credit Agreement, including the existing Term A loans and Term B loans thereunder.

SCHEDULE II

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Valuation and Qualifying Accounts

Years Ended December 31, 2019, 2018 and 2017

(In thousands)

	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions		Balance at End of Period
Year ended December 31, 2019
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	11,161		11,608		9,584	$	13,185
Deducted in balance sheet from deferred tax assets:
Valuation allowance	$	23,934		—		1,032	$	22,902
Year ended December 31, 2018
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	10,055		8,472		7,366	$	11,161
Deducted in balance sheet from deferred tax assets:
Valuation allowance	$	20,120		3,814		—	$	23,934
Year ended December 31, 2017
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	9,356		6,762		6,063	$	10,055
Deducted in balance sheet from deferred tax assets:
Valuation allowance	$	16,167		3,953		—	$	20,120

SCHEDULE III

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Schedule of Real Estate and Accumulated Depreciation

December 31, 2019, 2018 and 2017

(In thousands)

Description⁽¹⁾

Encumbrances

Initial Cost⁽²⁾

Gross Carrying

Amount⁽³⁾

Accumulated

Depreciation

Construction

Date

Acquisition

Date

Useful Lives

391,456 Displays

—

3,333,590

(2,166,579

)

Various

5 to 20 years

⁽¹⁾	No single asset exceeded 5% of the total gross carrying amount at December 31, 2019

⁽²⁾	This information is omitted, as it would be impracticable to compile such information on a site-by-site basis

⁽³⁾	Includes sites under construction

The following table summarizes activity for the Company’s real estate assets, which consists of advertising displays and the related accumulated depreciation.

	December 31,			December 31,			December 31,
	2019			2018			2017
Gross real estate assets:
Balance at the beginning of the year	$	3,201,434		$	3,074,046		$	2,998,540
Capital expenditures on new advertising displays⁽⁴⁾		59,604			54,151			49,946
Capital expenditures on improvements/redevelopments of existing advertising displays		25,025			12,781			6,265
Capital expenditures other recurring		36,354			34,758			32,523
Land acquisitions⁽⁶⁾		22,965			15,368			14,904
Acquisition of advertising displays^{(5) (6)}		23,589			82,617			32,109
Assets sold or written-off		(35,320	)		(70,494	)		(61,306	)
Foreign exchange		(61	)		(1,793	)		1,065
Balance at the end of the year	$	3,333,590		$	3,201,434		$	3,074,046
Accumulated depreciation:
Balance at the beginning of the year	$	2,082,335		$	2,025,251		$	1,973,958
Depreciation		111,531			106,700			102,494
Assets sold or written-off		(27,890	)		(48,488	)		(51,976	)
Foreign exchange		603			(1,128	)		775
Balance at the end of the year	$	2,166,579		$	2,082,335		$	2,025,251

⁽⁴⁾	Includes non-cash amounts of $554, $446 and $921 at December 31, 2019, 2018 and 2017, respectively

⁽⁵⁾	Includes non-cash amounts of $1,928, $7,199 and $3,043 at December 31, 2019, 2018 and 2017, respectively

⁽⁶⁾	Includes preliminary allocation of assets acquired from Fairway at December 31, 2018

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Management’s Report on Internal Control Over Financial Reporting	83
Report of Independent Registered Public Accounting Firm — Opinion on Internal Control Over Financial Reporting	84
Report of Independent Registered Public Accounting Firm — Opinion on the Consolidated Financial Statements	85
Consolidated Balance Sheets as of December 31, 2019 and 2018	86
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2019, 2018 and 2017	87
Consolidated Statements of Stockholder’s Equity for the years ended December 31, 2019, 2018 and 2017	88
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017	89
Notes to Consolidated Financial Statements	90-101
Schedule II — Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018 and 2017	102
Schedule III — Schedule of Real Estate and Accumulated Depreciation as of December 31, 2019, 2018 and 2017	103

Management’s Report on Internal Control Over Financial Reporting

The management of Lamar Media Corp. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Lamar Media Corp.’s management assessed the effectiveness of Lamar Media Corp.’s internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on this assessment, Lamar Media Corp.’s management has concluded that, as of December 31, 2019, Lamar Media Corp.’s internal control over financial reporting is effective based on those criteria. The effectiveness of Lamar Media Corp.’s internal control over financial reporting as of December 31, 2019 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 8 to this Annual Report.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Lamar Media Corp.:

Opinion on Internal Control Over Financial Reporting

We have audited Lamar Media Corp. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, stockholder’s equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedules II to III (collectively, the consolidated financial statements), and our report dated February 20, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

Definition and Limitations of Internal Control Over Financial Reporting

/s/ KPMG LLP

KPMG LLP

Baton Rouge, Louisiana

February 20, 2020

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Lamar Media Corp.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Lamar Media Corp. and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, stockholder’s equity, and cash flows for each of the years in the three‑year period ended December 31, 2019, and the related notes and financial statement schedules II to III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, which refers to Note 2 to the consolidated financial statements of Lamar Advertising Company, the Company changed its method of accounting for revenue recognition as of January 1, 2018, due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.

As discussed in Note 1 to the consolidated financial statements, which refers to Note 7 to the consolidated financial statements of Lamar Advertising Company, the Company changed its method of accounting for leases as of January 1, 2019, due to the adoption of Accounting Standards Codification Topic 842, Leases.

Basis for Opinion

/s/ KPMG LLP

KPMG LLP

We have served as the Company’s auditor since 1992.

Baton Rouge, Louisiana

February 20, 2020

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2019 and 2018

(In thousands, except share and per share data)

	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	25,688		$	20,994
Receivables, net of allowance for doubtful accounts of $13,185 and $11,161 as of 2019 and 2018, respectively		254,930			235,576
Prepaid lease and contract expenses		—			80,684
Other current assets		29,051			25,915
Total current assets		309,669			363,169
Property, plant and equipment		3,660,311			3,525,725
Less accumulated depreciation and amortization		(2,311,196	)		(2,230,677	)
Net property, plant and equipment		1,349,115			1,295,048
Operating lease right of use assets		1,320,779			—
Goodwill (note 3)		1,902,123			1,909,235
Intangible assets, net (note 3)		991,776			914,984
Other assets		50,959			45,450
Total assets	$	5,924,421		$	4,527,886
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Trade accounts payable	$	14,974		$	21,246
Current maturities of long-term debt, net of deferred financing costs of $6,081 and $5,245 in 2019 and 2018, respectively (note 5)		226,514			204,120
Current operating lease liabilities		196,841			—
Accrued expenses (note 4)		101,266			117,300
Deferred income		127,254			107,202
Total current liabilities		666,849			449,868
Long-term debt, net of deferred financing costs of $18,333 and $20,619 in 2019 and 2018, respectively (note 5)		2,753,604			2,684,568
Operating lease liabilities		1,068,181			—
Deferred income tax liabilities		5,713			20,734
Asset retirement obligation		226,137			222,989
Other liabilities		34,406			29,531
Total liabilities		4,754,890			3,407,690
Stockholder’s equity:
Common stock, $.01 par value, authorized 3,000 shares; 100 shares issued and outstanding at 2019 and 2018		—			—
Additional paid-in-capital		2,992,729			2,922,907
Accumulated comprehensive income		685			12
Accumulated deficit		(1,823,883	)		(1,802,723	)
Stockholder’s equity		1,169,531			1,120,196
Total liabilities and stockholder’s equity	$	5,924,421		$	4,527,886

See accompanying notes to consolidated financial statements.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income

Years Ended December 31, 2019, 2018 and 2017

(In thousands)

	2019			2018			2017
Statements of Income
Net revenues	$	1,753,644		$	1,627,222		$	1,541,260
Operating expenses (income):
Direct advertising expenses (exclusive of depreciation and amortization)		590,078			561,848			540,880
General and administrative expenses (exclusive of depreciation and amortization)		318,380			289,428			276,229
Corporate expenses (exclusive of depreciation and amortization)		84,229			82,497			61,962
Depreciation and amortization		250,028			225,261			211,104
(Gain) loss on disposition of assets		(7,241	)		7,233			(4,664	)
		1,235,474			1,166,267			1,085,511
Operating income		518,170			460,955			455,749
Other expense (income):
Loss on extinguishment of debt		—			15,429			71
Interest income		(764	)		(534	)		(6	)
Interest expense		150,616			129,732			128,396
		149,852			144,627			128,461
Income before income tax expense		368,318			316,328			327,288
Income tax (benefit) expense		(4,222	)		10,697			9,230
Net income	$	372,540		$	305,631		$	318,058
Statements of Comprehensive Income
Net income	$	372,540		$	305,631		$	318,058
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		673			(1,290	)		1,926
Comprehensive income	$	373,213		$	304,341		$	319,984

See accompanying notes to consolidated financial statements.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Consolidated Statements of Stockholder’s Equity

Years Ended December 31, 2019, 2018 and 2017

(In thousands, except share and per share data)

	Common Stock		Additional Paid-In Capital		Accumulated Comprehensive Income (Loss)			Accumulated Deficit			Total
Balance, December 31, 2016	$	—		2,783,753		(624	)		(1,726,743	)		1,056,386
Contribution from parent		—		49,187		—			—			49,187
Foreign currency translations		—		—		1,926			—			1,926
Net income		—		—		—			318,058			318,058
Dividend to parent		—		—		—			(334,459	)		(334,459	)
Balance, December 31, 2017	$	—		2,832,940		1,302			(1,743,144	)		1,091,098
Contribution from parent		—		89,967		—			—			89,967
Foreign currency translations		—		—		(1,290	)		—			(1,290	)
Net income		—		—		—			305,631			305,631
Dividend to parent		—		—		—			(365,210	)		(365,210	)
Balance, December 31, 2018	$	—		2,922,907		12			(1,802,723	)		1,120,196
Contribution from parent		—		69,822		—			—			69,822
Foreign currency translations		—		—		673			—			673
Net income		—		—		—			372,540			372,540
Dividend to parent		—		—		—			(393,700	)		(393,700	)
Balance, December 31, 2019	$	—		2,992,729		685			(1,823,883	)		1,169,531

See accompanying notes to consolidated financial statements.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years Ended December 31, 2019, 2018 and 2017

(In thousands)

	2019			2018			2017
Cash flows from operating activities:
Net income	$	372,540		$	305,631		$	318,058
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		250,028			225,261			211,104
Non-cash compensation		29,647			29,443			9,599
Amortization included in interest expense		5,365			4,920			5,120
(Gain) loss on disposition of assets and investments		(7,241	)		7,233			(4,664	)
Loss on extinguishment of debt		—			15,429			71
Deferred income tax (benefit) expense		(14,130	)		1,538			804
Provision for doubtful accounts		10,608			7,985			6,762
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables		(28,357	)		(33,292	)		(17,524	)
Prepaid expenses		275			(5,433	)		309
Other assets		(11,257	)		3,270			(8,410	)
Increase (decrease) in:
Trade accounts payable		700			1,366			309
Accrued expenses		(1,597	)		(6,292	)		(9,416	)
Operating lease liabilities		9,102			—			—
Other liabilities		(10,743	)		(19,974	)		(27,882	)
Cash flows provided by operating activities		604,940			537,085			484,240
Cash flows from investing activities:
Capital expenditures		(140,956	)		(117,638	)		(109,329	)
Acquisitions		(226,278	)		(477,389	)		(297,305	)
(Increase) decrease in notes receivable		(448	)		9			515
Proceeds received from property insurance claims		210			4,222			—
Proceeds from disposition of assets and investments		5,438			6,648			6,053
Cash flows used in investing activities		(362,034	)		(584,148	)		(400,066	)
Cash flows from financing activities:
Proceeds received from revolving credit facility		495,000			563,000			495,000
Payments on revolving credit facility		(625,000	)		(481,000	)		(477,000	)
Principal payments on long-term debt		(34,471	)		(27,328	)		(16,993	)
Proceeds received from senior credit facility term loans		—			599,250			450,000
Proceeds received from accounts receivable securitization program		9,000			175,000			—
Payments on accounts receivable securitization program		(9,000	)		—			—
Debt issuance costs		(4,463	)		(7,616	)		(4,941	)
Proceeds received from note offering		255,000			—			—
Redemption on senior subordinated notes		—			(509,790	)		—
Payment on senior credit facility term loans		—			—			(247,500	)
Distributions to non-controlling interest		(621	)		(541	)		(693	)
Dividends to parent		(393,700	)		(446,744	)		(252,925	)
Contributions from parent		69,822			89,967			49,187
Cash flows used in financing activities		(238,433	)		(45,802	)		(5,865	)
Effect of exchange rate changes in cash and cash equivalents		221			(1,112	)		1,632
Net increase (decrease) in cash and cash equivalents		4,694			(93,977	)		79,941
Cash and cash equivalents at beginning of period		20,994			114,971			35,030
Cash and cash equivalents at end of period	$	25,688		$	20,994		$	114,971
Supplemental disclosures of cash flow information:
Cash paid for interest	$	139,585		$	136,711		$	123,213
Cash paid for state and federal income taxes	$	14,449		$	8,563		$	12,640

See accompanying notes to consolidated financial statements.

LAMAR MEDIA CORP.

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 Media Corp. (“Lamar Media”) is a wholly owned subsidiary of Lamar Advertising Company. Lamar Media is engaged in the outdoor advertising business operating approximately 157,800 outdoor advertising displays in 45 states and Canada. Lamar Media’s operating strategy is to be the leading provider of outdoor advertising services in the markets it serves.

In addition, Lamar Media operates a logo sign business in 24 states throughout the United States as well as the province of Ontario, 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. The Company provides transit advertising in airport terminals, on bus shelters, benches and buses in the markets it serves.

Certain footnotes are not provided for the accompanying financial statements as the information in notes 2, 3, 5, 7, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23 and 24 and portions of note 1 to the consolidated financial statements of Lamar Advertising Company included elsewhere in this filing are 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.

(b) Principles of Consolidation

The accompanying consolidated financial statements include Lamar Media, its wholly owned subsidiaries, The Lamar Company, L.L.C., Lamar Central Outdoor, LLC, Lamar TRS Holdings, LLC, Lamar Advertising Southwest, Inc., Interstate Logos, L.L.C., Lamar Obie Company, LLC, Lamar Canadian Outdoor Company, Lamar Advertising of Puerto Rico, Inc. and their majority-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.

(2) Non-cash Financing and Investing Activities

There were no significant non-cash investing activities for Lamar Media during the years ended December 31, 2019 and 2018. For the year ended December 31, 2017, the Company had non-cash investing activities of $2,879 related to acquisitions of outdoor advertising assets. There were no significant non-cash financing activities during the years ended December 31, 2019 and 2018. During the year ended December 31, 2017, Lamar Media had non-cash financing activities related to dividends to Lamar Advertising Company of $81,534 which were paid in January 2018.

(3) Goodwill and Other Intangible Assets

The following is a summary of intangible assets at December 31, 2019 and 2018:

	Estimated		2019				2018
	Life (Years)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable Intangible Assets:
Customer lists and contracts	7—10		$	641,714	$	539,405	$	610,376	$	514,928
Non-competition agreement	3—15			66,014		64,379		65,771		64,119
Site locations		15		2,384,520		1,509,335		2,228,767		1,422,794
Other	2—15			49,318		36,671		45,446		33,535
			$	3,141,566	$	2,149,790	$	2,950,360	$	2,035,376
Unamortizable Intangible Assets:
Goodwill			$	2,154,790	$	252,667	$	2,161,902	$	252,667

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

The changes in the gross carrying amount of goodwill for the years ended December 31, 2019 and 2018 are as follows:

Balance as of December 31, 2017	$	1,982,970
Goodwill acquired during the year		182,117
Purchase price adjustments and other		(3,185	)
Impairment losses		—
Balance as of December 31, 2018	$	2,161,902
Goodwill acquired during the year		29,360
Purchase price adjustments and other		(36,472	)
Impairment losses		—
Balance as of December 31, 2019	$	2,154,790

(4) Accrued Expenses

The following is a summary of accrued expenses at December 31, 2019 and 2018:

	2019		2018
Payroll	$	20,223	$	20,667
Interest		32,734		27,067
Accrued variable lease and contract expense		12,559		36,158
Stock-based compensation		23,297		19,211
Other		12,453		14,197
	$	101,266	$	117,300

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

(5) Long-term Debt

Long-term debt consists of the following at December 31, 2019 and 2018:

	December 31, 2019
	Debt			Deferred financing costs			Debt, net of deferred financing costs
Senior Credit Facility	$	1,127,069		$	9,077		$	1,117,992
Accounts Receivable Securitization Program		175,000			846			174,154
5% Senior Subordinated Notes		535,000			3,237			531,763
5 3/8% Senior Notes		510,000			3,502			506,498
5 3/4% Senior Notes		654,345			7,752			646,593
Other notes with various rates and terms		3,118			—			3,118
		3,004,532			24,414			2,980,118
Less current maturities		(232,595	)		(6,081	)		(226,514	)
Long-term debt, excluding current maturities	$	2,771,937		$	18,333		$	2,753,604


	December 31, 2018
	Debt			Deferred financing costs			Debt, net of deferred financing costs
Senior Credit Facility	$	1,291,088		$	11,576		$	1,279,512
Accounts Receivable Securitization Program		175,000			1,168			173,832
5% Senior Subordinated Notes		535,000			4,104			530,896
5 3/8% Senior Notes		510,000			4,262			505,738
5 3/4% Senior Notes		400,000			4,754			395,246
Other notes with various rates and terms		3,464			—			3,464
		2,914,552			25,864			2,888,688
Less current maturities		(209,365	)		(5,245	)		(204,120	)
Long-term debt, excluding current maturities	$	2,705,187		$	20,619		$	2,684,568

Long-term debt contractual maturities are as follows:

	Debt		Deferred financing costs		Debt, net of deferred financing costs
2020	$	232,595	$	6,081	$	226,514
2021	$	74,487	$	6,205	$	68,282
2022	$	426,971	$	4,677	$	422,294
2023	$	541,989	$	3,480	$	538,509
2024	$	517,008	$	2,216	$	514,792
Later years	$	1,211,482	$	1,755	$	1,209,727

(6) 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, 2019 and 2018, there was a payable to Lamar Advertising Company, its parent, in the amount of $4,779 and $5,571, respectively.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Effective December 31, 2019 and 2018, Lamar Advertising Company contributed $69,822 and $89,967, respectively, to Lamar Media which resulted in an increase in Lamar Media’s additional paid-in capital.

(7) Quarterly Financial Data (Unaudited)

The tables below represent the balances for the selected quarterly financial data of the Company for each reporting period in the years ended December 31, 2019 and 2018.

	Year 2019 Quarters
	March 31		June 30		September 30		December 31
Net revenues	$	384,457	$	448,742	$	457,786	$	462,659
Net revenues less direct advertising expenses	$	243,987	$	302,352	$	308,940	$	308,287
Net income	$	51,362	$	118,485	$	99,832	$	102,861

	Year 2018 Quarters
	March 31		June 30		September 30		December 31
Net revenues	$	361,026	$	419,800	$	418,498	$	427,898
Net revenues less direct advertising expenses	$	222,733	$	279,016	$	277,799	$	285,826
Net income	$	15,158	$	100,520	$	94,165	$	95,788

(8) Summarized Financial Information of Subsidiaries

Separate condensed consolidating financial information for Lamar Media, subsidiary guarantors and non-guarantor subsidiaries are presented below. Lamar Media and its subsidiary guarantors have fully and unconditionally guaranteed Lamar Media’s obligations with respect to its publicly issued notes. All guarantees are joint and several. As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information. The following condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes. The condensed consolidating financial information is provided as an alternative to providing separate financial statements for guarantor subsidiaries. Separate financial statements of Lamar Media’s subsidiary guarantors are not included because the guarantees are full and unconditional and the subsidiary

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

guarantors are 100% owned and jointly and severally liable for Lamar Media’s outstanding publicly issued notes. The accounts for all companies reflected herein are presented using the equity method of accounting for investments in subsidiaries.

Condensed Consolidating Balance Sheet as of December 31, 2019


	Lamar Media Corp.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Lamar Media Consolidated

ASSETS
Total current assets	$	13,859	$	53,756	$	242,054	$	—		$	309,669
Net property, plant and equipment		—		1,340,675		8,440		—			1,349,115
Operating lease right of use assets		—		1,293,674		27,105		—			1,320,779
Intangibles and goodwill, net		—		2,875,644		18,255		—			2,893,899
Other assets		4,193,629		229,905		184,805		(4,557,380	)		50,959
Total assets	$	4,207,488	$	5,793,654	$	480,659	$	(4,557,380	)	$	5,924,421
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt	$	51,480	$	34	$	175,000	$	—		$	226,514
Current operating lease liabilties		—		189,071		7,770		—			196,841
Other current liabilities		26,960		196,689		19,845		—			243,494
Total current liabilities		78,440		385,794		202,615		—			666,849
Long-term debt		2,753,570		34		—		—			2,753,604
Operating lease liabilities		—		1,049,220		18,961		—			1,068,181
Other noncurrent liabilities		205,947		231,416		250,859		(421,966	)		266,256
Total liabilities		3,037,957		1,666,464		472,435		(421,966	)		4,754,890
Stockholders’ equity		1,169,531		4,127,190		8,224		(4,135,414	)		1,169,531
Total liabilities and stockholders’ equity	$	4,207,488	$	5,793,654	$	480,659	$	(4,557,380	)	$	5,924,421

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Balance Sheet as of December 31, 2018


	Lamar Media Corp.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Lamar Media Consolidated

ASSETS
Total current assets	$	4,653	$	121,549	$	236,967	$	—		$	363,169
Net property, plant and equipment		—		1,289,348		5,700		—			1,295,048
Intangibles and goodwill, net		—		2,804,915		19,304		—			2,824,219
Other assets		4,056,288		230,504		184,247		(4,425,589	)		45,450
Total assets	$	4,060,941	$	4,446,316	$	446,218	$	(4,425,589	)	$	4,527,886
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt	$	29,086	$	34	$	175,000	$	—		$	204,120
Other current liabilities		27,067		204,103		14,578		—			245,748
Total current liabilities		56,153		204,137		189,578		—			449,868
Long-term debt		2,684,500		68		—		—			2,684,568
Other noncurrent liabilities		200,092		246,312		251,835		(424,985	)		273,254
Total liabilities		2,940,745		450,517		441,413		(424,985	)		3,407,690
Stockholders’ equity		1,120,196		3,995,799		4,805		(4,000,604	)		1,120,196
Total liabilities and stockholders’ equity	$	4,060,941	$	4,446,316	$	446,218	$	(4,425,589	)	$	4,527,886

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Statements of Income and Comprehensive Income for the Year Ended December 31, 2019


	Lamar Media Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Lamar Media Consolidated
Statement of Income
Net revenues	$	—		$	1,709,691		$	46,804		$	(2,851	)	$	1,753,644
Operating expenses
Direct advertising expenses ⁽¹⁾		—			564,877			28,052			(2,851	)		590,078
General and administrative expenses ⁽¹⁾		—			310,813			7,567			—			318,380
Corporate expenses ⁽¹⁾		—			82,652			1,577			—			84,229
Depreciation and amortization		—			247,191			2,837			—			250,028
Gain on disposition of assets		—			(3,103	)		(4,138	)		—			(7,241	)
		—			1,202,430			35,895			(2,851	)		1,235,474
Operating income		—			507,261			10,909			—			518,170
Equity in (earnings) loss of subsidiaries		(517,516	)		—			—			517,516			—
Interest expense (income), net		144,976			(149	)		5,025			—			149,852
Income (loss) before income tax expense		372,540			507,410			5,884			(517,516	)		368,318
Income tax (benefit) expense ⁽²⁾		—			(7,360	)		3,138			—			(4,222	)
Net income (loss)	$	372,540		$	514,770		$	2,746		$	(517,516	)	$	372,540

Statement of Comprehensive Income
Net income (loss)	$	372,540		$	514,770		$	2,746		$	(517,516	)	$	372,540
Total other comprehensive income, net of tax		—			—			673			—			673
Total comprehensive income (loss)	$	372,540		$	514,770		$	3,419		$	(517,516	)	$	373,213

(1) Caption is exclusive of depreciation and amortization.
(2) The income tax expense reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Statements of Income and Comprehensive Income for the Year Ended December 31, 2018


	Lamar Media Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Lamar Media Consolidated
Statement of Income
Net revenues	$	—		$	1,579,619		$	50,352		$	(2,749	)	$	1,627,222
Operating expenses
Direct advertising expenses ⁽¹⁾		—			537,269			27,307			(2,728	)		561,848
General and administrative expenses ⁽¹⁾		—			280,874			8,554			—			289,428
Corporate expenses ⁽¹⁾		—			80,861			1,636			—			82,497
Depreciation and amortization		—			219,341			5,920			—			225,261
(Gain) loss on disposition of assets		—			(576	)		7,809			—			7,233
		—			1,117,769			51,226			(2,728	)		1,166,267
Operating income (loss)		—			461,850			(874	)		(21	)		460,955
Equity in (earnings) loss of subsidiaries		(450,791	)		—			—			450,791			—
Interest expense (income), net		129,731			(99	)		(413	)		(21	)		129,198
Other expenses		15,429			—			—			—			15,429
Income (loss) before income tax expense		305,631			461,949			(461	)		(450,791	)		316,328
Income tax expense ⁽²⁾		—			7,879			2,818			—			10,697
Net income (loss)	$	305,631		$	454,070		$	(3,279	)	$	(450,791	)	$	305,631

Statement of Comprehensive Income
Net income (loss)	$	305,631		$	454,070		$	(3,279	)	$	(450,791	)	$	305,631
Total other comprehensive loss, net of tax		—			—			(1,290	)		—			(1,290	)
Total comprehensive income (loss)	$	305,631		$	454,070		$	(4,569	)	$	(450,791	)	$	304,341

(1) Caption is exclusive of depreciation and amortization.
(2) The income tax expense reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Statements of Income and Comprehensive Income for the Year Ended December 31, 2017


	Lamar Media Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Lamar Media Consolidated
Statement of Income
Net revenues	$	—		$	1,494,275		$	51,332		$	(4,347	)	$	1,541,260
Operating expenses
Direct advertising expenses ⁽¹⁾		—			512,247			31,277			(2,644	)		540,880
General and administrative expenses ⁽¹⁾		—			266,798			9,431			—			276,229
Corporate expenses ⁽¹⁾		—			60,830			1,132			—			61,962
Depreciation and amortization		—			201,424			9,680			—			211,104
(Gain) loss on disposition of assets		—			(5,704	)		1,040			—			(4,664	)
		—			1,035,595			52,560			(2,644	)		1,085,511
Operating income (loss)		—			458,680			(1,228	)		(1,703	)		455,749
Equity in (earnings) loss of subsidiaries		(446,520	)		—			—			446,520			—
Interest expense (income), net		128,391			(5	)		1,707			(1,703	)		128,390
Other expenses		71			—			—			—			71
Income (loss) before income tax expense		318,058			458,685			(2,935	)		(446,520	)		327,288
Income tax expense ⁽²⁾		—			7,069			2,161			—			9,230
Net income (loss)	$	318,058		$	451,616		$	(5,096	)	$	(446,520	)	$	318,058

Statement of Comprehensive Income
Net income (loss)	$	318,058		$	451,616		$	(5,096	)	$	(446,520	)	$	318,058
Total other comprehensive income, net of tax		—			—			1,926			—			1,926
Total comprehensive income (loss)	$	318,058		$	451,616		$	(3,170	)	$	(446,520	)	$	319,984

(1) Caption is exclusive of depreciation and amortization.
(2) The income tax expense reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Statement of Cash Flows for the Year Ended December 31, 2019


	Lamar Media Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Lamar Media Consolidated

Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	469,907		$	738,030		$	6,660		$	(609,657	)	$	604,940
Cash flows from investing activities:
Capital expenditures		—			(136,696	)		(4,260	)		—			(140,956	)
Acquisitions		—			(226,278	)		—			—			(226,278	)
Proceeds from disposition of assets and investments		—			5,438			—			—			5,438
Proceeds received from insurance claims		—			210			—			—			210
Investment in subsidiaries		(226,278	)		—			—			226,278			—
Decrease in intercompany notes receivable		3,787			—			—			(3,787	)		—
Increase in notes receivable		(448	)		—			—			—			(448	)
Net cash (used in) provided by investing activities		(222,939	)		(357,326	)		(4,260	)		222,491			(362,034	)
Cash flows from financing activities:
Proceeds received from revolving credit facility		495,000			—			—			—			495,000
Payment on revolving credit facility		(625,000	)		—			—			—			(625,000	)
Principal payments on long-term debt		(34,471	)		—			—			—			(34,471	)
Proceeds received from accounts receivable securitization program		—			—			9,000			—			9,000
Payments on accounts receivable securitization program		—			—			(9,000	)		—			(9,000	)
Debt issuance costs		(4,463	)		—			—			—			(4,463	)
Proceeds received from note offering		255,000			—			—			—			255,000
Intercompany loan proceeds (payments)		—			(702	)		(3,085	)		3,787			—
Distributions to non-controlling interest		—			—			(621	)		—			(621	)
Dividends (to) from parent		(393,700	)		(609,657	)		—			609,657			(393,700	)
Contributions from (to) parent		69,822			226,278			—			(226,278	)		69,822
Net cash (used in) provided by financing activities		(237,812	)		(384,081	)		(3,706	)		387,166			(238,433	)
Effect of exchange rate changes in cash and cash equivalents		—			—			221			—			221
Net increase in cash and cash equivalents		9,156			(3,377	)		(1,085	)		—			4,694
Cash and cash equivalents at beginning of period		4,029			11,655			5,310			—			20,994
Cash and cash equivalents at end of period	$	13,185		$	8,278		$	4,225		$	—		$	25,688

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Statement of Cash Flows for the Year Ended December 31, 2018


	Lamar Media Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Lamar Media Consolidated

Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	430,896		$	689,718		$	(17,143	)	$	(566,386	)	$	537,085
Cash flows from investing activities:
Acquisitions		—			(477,389	)		—			—			(477,389	)
Capital expenditures		—			(113,259	)		(4,379	)		—			(117,638	)
Proceeds from disposition of assets and investments		—			3,839			2,809			—			6,648
Proceeds received from insurance claims		—			—			4,222			—			4,222
Investment in subsidiaries		(498,226	)		—			—			498,226			—
Decrease in intercompany notes receivable		30,034			—			—			(30,034	)		—
Decrease in notes receivable		9			—			—			—			9
Net cash (used in) provided by investing activities		(468,183	)		(586,809	)		2,652			468,192			(584,148	)
Cash flows from financing activities:
Proceeds received from revolving credit facility		563,000			—			—			—			563,000
Payment on revolving credit facility		(481,000	)		—			—			—			(481,000	)
Principal payments on long-term debt		(27,297	)		(31	)		—			—			(27,328	)
Proceeds received from senior credit facility term loans		599,250			—			—			—			599,250
Proceeds received from accounts receivable securitization program		—			—			175,000			—			175,000
Debt issuance costs		(7,616	)		—			—			—			(7,616	)
Redemption on senior subordinated notes		(509,790	)		—			—			—			(509,790	)
Intercompany loan proceeds (payments)		175,000			(24,688	)		(180,346	)		30,034			—
Distributions to non-controlling interest		—			—			(541	)		—			(541	)
Contributions from (to) parent		89,967			498,226			—			(498,226	)		89,967
Dividends (to) from parent		(446,744	)		(566,386	)		—			566,386			(446,744	)
Net cash (used in) provided by financing activities		(45,230	)		(92,879	)		(5,887	)		98,194			(45,802	)
Effect of exchange rate changes in cash and cash equivalents		—			—			(1,112	)		—			(1,112	)
Net increase in cash and cash equivalents		(82,517	)		10,030			(21,490	)		—			(93,977	)
Cash and cash equivalents at beginning of period		86,546			1,625			26,800			—			114,971
Cash and cash equivalents at end of period	$	4,029		$	11,655		$	5,310		$	—		$	20,994

100

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

Condensed Consolidating Statement of Cash Flows for the Year Ended December 31, 2017


	Lamar Media Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Lamar Media Consolidated

Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	383,370		$	602,504		$	2,174		$	(503,808	)	$	484,240
Cash flows from investing activities:
Acquisitions		3,750			(298,901	)		(2,154	)		—			(297,305	)
Capital expenditures		—			(104,325	)		(5,004	)		—			(109,329	)
Proceeds from disposition of assets and investments		—			6,053			—			—			6,053
Investment in subsidiaries		(301,055	)		—			—			301,055			—
(Increase) decrease in intercompany notes receivable		(7,624	)		—			—			7,624			—
Decrease in notes receivable		515			—			—			—			515
Net cash (used in) provided by investing activities		(304,414	)		(397,173	)		(7,158	)		308,679			(400,066	)
Cash flows from financing activities:
Principal payments on long-term debt		(16,993	)		—			—			—			(16,993	)
Payment on revolving credit facility		(477,000	)		—			—			—			(477,000	)
Proceeds received from revolving credit facility		495,000			—			—			—			495,000
Payment on senior credit facility		(247,500	)		—			—			—			(247,500	)
Proceeds received from senior credit facility		450,000			—			—			—			450,000
Debt issuance costs		(4,941	)		—			—			—			(4,941	)
Intercompany loan proceeds (payments)		—			—			7,624			(7,624	)		—
Distributions to non-controlling interest		—			—			(693	)		—			(693	)
Contributions from (to) parent		49,187			298,901			2,154			(301,055	)		49,187
Dividends (to) from parent		(252,925	)		(503,808	)		—			503,808			(252,925	)
Net cash (used in) provided by financing activities		(5,172	)		(204,907	)		9,085			195,129			(5,865	)
Effect of exchange rate changes in cash and cash equivalents		—			—			1,632			—			1,632
Net increase in cash and cash equivalents		73,784			424			5,733			—			79,941
Cash and cash equivalents at beginning of period		12,762			1,201			21,067			—			35,030
Cash and cash equivalents at end of period	$	86,546		$	1,625		$	26,800		$	—		$	114,971

101

SCHEDULE II

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Valuation and Qualifying Accounts

Years Ended December 31, 2019, 2018 and 2017

(In thousands)

	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions		Balance at End of Period
Year ended December 31, 2019
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	11,161		11,608		9,584	$	13,185
Deducted in balance sheet from deferred tax assets:
Valuation allowance	$	23,934		—		1,032	$	22,902
Year ended December 31, 2018
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	10,055		8,472		7,366	$	11,161
Deducted in balance sheet from deferred tax assets:
Valuation allowance	$	20,120		3,814		—	$	23,934
Year ended December 31, 2017
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	9,356		6,762		6,063	$	10,055
Deducted in balance sheet from deferred tax assets:
Valuation allowance	$	16,167		3,953		—	$	20,120

102

SCHEDULE III

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Schedule of Real Estate and Accumulated Depreciation

December 31, 2019, 2018 and 2017

(In thousands)

Description⁽¹⁾

Encumbrances

Initial Cost⁽²⁾

Gross Carrying

Amount⁽³⁾

Accumulated

Depreciation

Construction

Date

Acquisition

Date

Useful Lives

391,456 Displays

—

3,333,590

(2,166,579

)

Various

5 to 20 years

⁽¹⁾	No single asset exceeded 5% of the total gross carrying amount at December 31, 2019

⁽²⁾	This information is omitted, as it would be impracticable to compile such information on a site-by-site basis

⁽³⁾	Includes sites under construction

The following table summarizes activity for the Company’s real estate assets, which consists of advertising displays and the related accumulated depreciation.

	December 31, 2019			December 31, 2018			December 31, 2017
Gross real estate assets:
Balance at the beginning of the year	$	3,201,434		$	3,074,046		$	2,998,540
Capital expenditures on new advertising displays⁽⁴⁾		59,604			54,151			49,946
Capital expenditures on improvements/redevelopments of existing advertising displays		25,025			12,781			6,265
Capital expenditures other recurring		36,354			34,758			32,523
Land acquisitions⁽⁶⁾		22,965			15,368			14,904
Acquisition of advertising displays⁽⁵⁾⁽⁶⁾		23,589			82,617			32,109
Assets sold or written-off		(35,320	)		(70,494	)		(61,306	)
Foreign exchange		(61	)		(1,793	)		1,065
Balance at the end of the year	$	3,333,590		$	3,201,434		$	3,074,046
Accumulated depreciation:
Balance at the beginning of the year	$	2,082,335		$	2,025,251		$	1,973,958
Depreciation		111,531			106,700			102,494
Assets sold or written-off		(27,890	)		(48,488	)		(51,976	)
Foreign exchange		603			(1,128	)		775
Balance at the end of the year	$	2,166,579		$	2,082,335		$	2,025,251

⁽⁴⁾	Includes non-cash amounts of $554, $446 and $921 at December 31, 2019, 2018 and 2017, respectively

⁽⁵⁾	Includes non-cash amounts of $1,928, $7,199 and $3,043 at December 31, 2019, 2018 and 2017, respectively

⁽⁶⁾	Includes preliminary allocation of assets acquired from Fairway at December 31, 2018

103

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Lamar Advertising Company

None.

Lamar Media Corp.

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures.

The Company’s and Lamar Media’s management, with the participation of the principal executive officer and principal financial officer of the Company and Lamar Media, have evaluated the effectiveness of the design and operation of the Company’s and Lamar Media’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the principal executive officer and principal financial officer of the Company and Lamar Media concluded, as of December 31, 2019, that these disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in the Company’s and Lamar Media’s reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the requisite time periods.

Management’s Report on Internal Control Over Financial Reporting

Lamar Advertising Company

The Company’s Management Report on Internal Control Over Financial Reporting is set forth on page 47 of this combined Annual Report and is incorporated herein by reference.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well designed and operated, can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Lamar Media Corp.

Lamar Media’s Management Report on Internal Control Over Financial Reporting is set forth on page 82 of this combined Annual Report and is incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s or Lamar Media’s internal control over financial reporting identified in connection with the evaluation of the Company’s and Lamar Media’s internal controls performed during the fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s or Lamar Media’s internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

Lamar Advertising Company

None.

Lamar Media Corp.

None.

104

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to Lamar Advertising Company’s Proxy Statement for its 2020 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2019.

We have adopted a Code of Business Conduct and Ethics (the “code of ethics”) that applies to all of our directors, officers and employees. The code of ethics is filed as an exhibit that is incorporated by reference into this Annual Report. In addition, if we make any substantive amendments to the code of ethics or grant any wavier, including any implicit wavier, from a provision of the code to any of our executive officers or directors, we will disclose the nature of such amendment or waiver in a report on Form 8-K.

ITEM 11.

EXECUTIVE COMPENSATION

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(A) 1. FINANCIAL STATEMENTS

The financial statements are listed under Part II, Item 8 of this Annual Report.

2. FINANCIAL STATEMENT SCHEDULES

The financial statement schedules are included under Part II, Item 8 of this Annual Report.

3. EXHIBITS

The exhibits filed as part of this report are listed on the Exhibit Index immediately following the signature page hereto, which Exhibit Index is incorporated herein by reference.

(B) Exhibits required by Item 601 of Regulation S-K are listed on the Exhibit Index immediately following the signature page hereto.

ITEM 16.

FORM 10-K SUMMARY

None.

105

INDEX TO EXHIBITS

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING

2(a)	Agreement and Plan of Merger by and between Lamar Advertising Company (the “Company”) and Lamar Advertising REIT Company dated August 27, 2014.	Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on September 2, 2014 and incorporated herein by reference.

2(b)	Equity Purchase Agreement dated January 7, 2016 by and among CCOI Holdco Parent I, LLC, CCOI Holdco Sub I, LLC, and Lamar Media Corp (“Lamar Media”).	Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on January 13, 2016 and incorporated herein by reference.

2(c)	Equity Purchase Agreement dated January 7, 2016 by and among CCOI Holdco Parent II, LLC, CCOI Holdco Sub II, LLC, and Lamar Media.	Previously filed as Exhibit 2.2 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on January 13, 2016 and incorporated herein by reference.

2(d)	Equity Purchase Agreement, dated December 21, 2018, by and among Lamar Media, FMG Outdoor Holdings, LLC, GTCR/FMG Blocker Corp., NCP Fairway, Inc., GTCR Fund XI/C LP, Newstone Capital Partners II, L.P., each of the Selling Members party thereto, and GTCR Partners XI/B LP, solely in its capacity as the Representative.	Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on December 28, 2018 and incorporated herein by reference.

3(a)	Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of the State of Delaware effective as of November 18, 2014.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on November 19, 2014 and incorporated herein by reference.

3(b)	Certificate of Merger, effective as of November 18, 2014.	Previously filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on November 19, 2014 and incorporated herein by reference.

3(c)	Amended and Restated Bylaws of the Company, adopted as of November 18, 2014.	Previously filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on November 19, 2014 and incorporated herein by reference.

3(d)	Amended and Restated Certificate of Incorporation of Lamar Media.	Previously filed as Exhibit 3.2 to Lamar Media’s Quarterly Report on Form 10-Q for the period ended March 31, 2007 (File No. 0-30242) filed on May 10, 2007 and incorporated herein by reference.

3(e)	Amended and Restated Bylaws of Lamar Media.	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(a)(1)	Specimen certificate for the shares of Class A common stock of the Company.	Previously filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on November 19, 2014 and incorporated herein by reference.

4(a)(2)	Specimen certificate for the shares of Class B common stock of the Company.	Previously filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on November 19, 2014 and incorporated herein by reference.

4(a)(3)	Description of Securities Registered Under Section 12 of the Exchange Act.	Filed herewith.

106

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING

4(b)(1)	Indenture, dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on February 14, 2012 and incorporated herein by reference.

4(b)(2)	Form of 5 7/8% Senior Subordinated Notes due 2022.	Previously filed with the Indenture dated February 9, 2012, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on February 14, 2012, and incorporated herein by reference.

4(b)(3)	Form of 5 7/8% Senior Subordinated Exchange Notes due 2022.	Previously filed with the Indenture dated February 9, 2012, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on February 14, 2012, and incorporated herein by reference.

4(b)(4)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 30, 2012, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4(g)(4) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

4(b)(5)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 30, 2012, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4(g)(5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

4(b)(6)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 30, 2012, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4(g)(6) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

4(b)(7)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of May 31, 2013, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013 (File No. 0-30242) filed on August 8, 2013 and incorporated herein by reference.

4(b)(8)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of January 2, 2014, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 (File No. 0-30242) filed on May 7, 2014 and incorporated herein by reference.

4(b)(9)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of July 28, 2015, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (File No. 1-36756) filed on November 5, 2015 and incorporated herein by reference.

4(b)(10)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4(b)(10) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

4(b)(11)	Supplemental Indenture to the Indenture dated as of February 9, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5 7/8% Senior Subordinated Notes due 2022.	Previously filed as Exhibit 4(b)(11) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

107

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
4(c)(1)	Indenture, dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on October 31, 2012 and incorporated herein by reference.

4(c)(2)	Form of 5% Senior Subordinated Notes due 2023.	Previously filed with the Indenture dated October 30, 2012, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on October 31, 2012, and incorporated herein by reference.

4(c)(3)	Form of 5% Senior Subordinated Exchange Notes due 2023.	Previously filed with the Indenture dated October 30, 2012, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on October 31, 2012, and incorporated herein by reference.

4(c)(4)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 30, 2012, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4(h)(4) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

4(c)(5)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 30, 2012, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4(h)(5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

4(c)(6)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 30, 2012, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4(h)(6) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

4(c)(7)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of May 31, 2013, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013 (File No. 0-30242) filed on August 8, 2013 and incorporated herein by reference.

4(c)(8)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of January 2, 2014, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4.5 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 (File No. 0-30242) filed on May 7, 2014 and incorporated herein by reference.

4(c)(9)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of July 28, 2015, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (File No. 1-36756) filed on November 5, 2015 and incorporated herein by reference.

4(c)(10)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4(c)(10) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

4(c)(11)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5% Senior Subordinated Notes due 2023.	Previously filed as Exhibit 4(c)(11) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

108

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
4(c)(12)	Supplemental Indenture to the Indenture dated as of ‎ October 30, 2012, among Lamar Media, the Guarantors ‎named therein and The Bank of New York Mellon Trust ‎Company, N.A., as Trustee, dated as of January 22, 2019, relating to Lamar Media’s 5% Senior Subordinated ‎Notes due 2023.‎	Previously filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

4(c)(13)	Supplemental Indenture to the Indenture dated as of October 30, 2012, among Lamar Media, the Guarantors ‎named therein and The Bank of New York Mellon Trust ‎Company, N.A., as Trustee, dated as of January 22, 2019, relating to Lamar Media’s 5% Senior Subordinated ‎Notes due 2023.‎	Previously filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

4(c)(14)	Supplemental Indenture to the Indenture dated as of ‎ October 30, 2012, among Lamar Media, the Guarantors ‎named therein and The Bank of New York Mellon Trust ‎Company, N.A., as Trustee, dated as of August 15, 2019, relating to Lamar Media’s 5% Senior Subordinated ‎Notes due 2023.‎	Previously filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019 (File No. 1-36756) filed on November 5, 2019, and incorporated herein by reference.

4(d)(1)	Indenture, dated as of January 10, 2014, between Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Lamar Media’s 5 3/8% Senior Notes due 2024.	Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on January 15, 2014 and incorporated herein by reference.

4(d)(2)	Form of 5 3/8% Senior Notes due 2024.	Previously filed with the Indenture dated January 10, 2014, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on January 15, 2014 and incorporated herein by reference.

4(d)(3)	Form of 5 3/8% Senior Exchange Notes due 2024.	Previously filed with the Indenture dated January 10, 2014, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on January 15, 2014 and incorporated herein by reference.

4(d)(4)	Supplemental Indenture to the Indenture dated as of January 10, 2014, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of July 28, 2015, relating to Lamar Media’s 5 3/8% Senior Notes due 2024.	Previously filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (File No. 1-36756) filed on November 5, 2015 and incorporated herein by reference.

4(d)(5)	Supplemental Indenture to the Indenture dated as of January 10, 2014, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5 3/8% Senior Notes due 2024.	Previously filed as Exhibit 4(d)(5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

4(d)(6)	Supplemental Indenture to the Indenture dated as of January 10, 2014, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5 3/8% Senior Notes due 2024.	Previously filed as Exhibit 4(d)(6) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

4(d)(7)	Supplemental Indenture to the Indenture dated as of ‎January 10, 2014, among Lamar Media, the Guarantors ‎named therein and The Bank of New York Mellon Trust ‎Company, N.A., as Trustee, dated as of January 22, 2019, relating to Lamar Media’s 5 3/8% Senior Notes due ‎‎2024.‎	Previously filed as Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

4(d)(8)	Supplemental Indenture to the Indenture dated as of ‎January 10, 2014, among Lamar Media, the Guarantors ‎named therein and The Bank of New York Mellon Trust ‎Company, N.A., as Trustee, dated as of January 22, 2019, relating to Lamar Media’s 5 3/8% Senior Notes due ‎‎2024.‎	Previously filed as Exhibit 4.5 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

109

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
4(d)(9)	Supplemental Indenture to the Indenture dated as of ‎January 10, 2014, among Lamar Media, the Guarantors ‎named therein and The Bank of New York Mellon Trust ‎Company, N.A., as Trustee, dated as of August 15, 2019, relating to Lamar Media’s 5 3/8% Senior Notes due ‎‎2024.‎	Previously filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019 (File No. 1-36756) filed on November 5, 2019, and incorporated herein by reference.

4(e)(1)	Indenture, dated as of January 28, 2016, between Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on February 1, 2016 and incorporated herein by reference.

4(e)(2)	Form of 5 3/4% Senior Notes due 2026.	Previously filed with the Indenture dated January 28, 2016, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on February 1, 2016 and incorporated herein by reference.

4(e)(3)	Form of 5 3/4% Senior Exchange Notes due 2026.	Previously filed with the Indenture dated January 28, 2016, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on February 1, 2016 and incorporated herein by reference.

4(e)(4)	Supplemental Indenture to the Indenture dated as of January 28, 2016, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4(e)(4) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

4(e)(5)	Supplemental Indenture to the Indenture dated as of January 28, 2016, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 14, 2017, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4(e)(5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. ‎1-36756‎) filed on February 27, 2018 and incorporated herein by reference.

4(e)(6)	Supplemental Indenture to the Indenture dated as of January 28, 2016, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of January 22, 2019, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

4(e)(7)	Supplemental Indenture to the Indenture dated as of January 28, 2016, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of January 22, 2019, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4.7 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

4(e)(8)	Supplemental Indenture, dated as of February 1, 2019, between Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4.1 to Lamar Advertising’s Current Report on Form 8-K ‎‎(File No. 1-36756) filed on February 6, 2019 and incorporated herein by reference.‎

4(e)(9)	Supplemental Indenture to the Indenture dated as of January 28, 2016, among Lamar Media, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 15, 2019, relating to Lamar Media’s 5 3/4% Senior Notes due 2026.	Previously filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019 (File No. 1-36756) filed on November 5, 2019, and incorporated herein by reference.

10(a)(1)*	Lamar Advertising Company 1996 Equity Incentive Plan, as amended and restated by the Board of Directors on December 12, 2019.	Filed herewith.

10(a)(2)*	Form of Stock Option Agreement under the 1996 Equity Incentive Plan, as amended and restated.	Filed herewith.

110

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
10(a)(3)*	Form of Restricted Stock Agreement.	Previously filed as Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 0-30242) filed on March 15, 2006 and incorporated herein by reference.

10(a)(4)*	Form of Restricted Stock Agreement for Non-Employee directors.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on May 30, 2007 and incorporated herein by reference.

10(b)(1)*	2009 Employee Stock Purchase Plan, as amended.	Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2017 (File No. 1-36756) filed on November 6, 2017 and incorporated herein by reference.

10(b)(2)*	Lamar Advertising Company 2019 Employee Stock ‎Purchase Plan.	Previously filed as Exhibit 10.2 to Lamar ‎Advertising’s Current Report on Form 8-K ‎‎(File No. 1-‎‎36756) filed on June 5, 2019 and incorporated herein by ‎reference.‎

10(c)(1)*	Lamar Deferred Compensation Plan (as amended).	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on August 27, 2007 and incorporated herein by reference.

10(c)(2)*	Form of Trust Agreement for the Lamar Deferred Compensation Plan.	Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on December 14, 2005 and incorporated herein by reference.

10(c)(3)*	Amendment to the Lamar Deferred Compensation Plan dated December 13, 2013.	Previously filed as Exhibit 10(d)(3) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 0-30242) filed on February 27, 2014 and incorporated herein by reference.

10(c)(1)*	Summary of Management Compensatory Arrangements, dated March 28, 2016.	Previously filed on the Company’s Current Report on Form 8-K (File No. 1-36756) filed on March 29, 2016 and incorporated herein by reference.

10(d)(2)*	Summary of Non-Management Director Compensatory Arrangements, dated May 26, 2016.	Previously filed on the Company’s Current Report on Form 8-K (File No. 1-36756) filed on May 31, 2016 and incorporated herein by reference.

10(e)(1)	Receivables Financing Agreement, dated December 18, 2018, by and among Lamar Media, as initial Servicer, Lamar TRS Receivables, LLC and Lamar QRS	Previously filed as Exhibit 10.1 to the ‎Company’s Current Report on Form 8-K (File No. 1-36756) filed on December 21, 2018 and incorporated herein by reference.

10(e)(2)	Purchase and Sale Agreement, dated December 18, 2018, by and among certain subsidiaries of Lamar Media, Lamar Media, as initial Servicer, and Lamar QRS Receivables, LLC as Buyer.	Previously filed as Exhibit 10.2 to the ‎Company’s Current Report on Form 8-K (File ‎No. 1-36756) filed on December 21, 2018 ‎and incorporated herein by reference.‎

10(e)(3)	Purchase and Sale Agreement, dated December 18, 2018, by and among certain subsidiaries of Lamar Media, Lamar Media, as initial Servicer, and Lamar TRS Receivables, LLC as Buyer.	Previously filed as Exhibit 10.3 to the ‎Company’s Current Report on Form 8-K (File ‎No. 1-36756) filed on December 21, 2018 ‎and incorporated herein by reference.‎

10(e)(4)	Performance Guaranty of Lamar Media dated December 18, 2018 in favor of PNC Bank, National Association.	Previously filed as Exhibit 10.4 to the ‎Company’s Current Report on Form 8-K (File ‎No. 1-36756) filed on December 21, 2018 ‎and incorporated herein by reference.‎

111

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
10(f)(1)	Credit Agreement dated as of April 28, 2010 by and among Lamar Media, Lamar Advertising of Puerto Rico, Inc., the Subsidiary Guarantors named therein, each additional Subsidiary Borrower that may be designated as such thereunder, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on May 3, 2010, and incorporated herein by reference.

10(f)(2)	Amendment No. 1, dated as of June 11, 2010, to the Credit Agreement dated as of April 28, 2010 by and among Lamar Media, Lamar Advertising of Puerto Rico, Inc., the Subsidiary Guarantors named therein, each additional Subsidiary Borrower that may be designated as such thereunder, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent.	Previously filed as Exhibit 10(p)(2) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 0-30242) filed on February 25, 2011 and incorporated herein by reference.

10(f)(3)	Amendment No. 2, dated as of November 18, 2010, to the Credit Agreement dated as of April 28, 2010 by and among Lamar Media, Lamar Advertising of Puerto Rico, Inc., the Subsidiary Guarantors named therein, each additional Subsidiary Borrower that may be designated as such thereunder, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent.	Previously filed as Exhibit 10(p)(3) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 0-30242) filed on February 25, 2011 and incorporated herein by reference.

10(f)(4)	Restatement Agreement, dated as of February 9, 2012, to the Credit Agreement dated as of April 28, 2010 by and among Lamar Media, Lamar Advertising of Puerto Rico, Inc., the Subsidiary Guarantors named therein, each additional Subsidiary Borrower that may be designated as such thereunder, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent (including the Amended and Restated Credit Agreement).	Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on February 14, 2012 and incorporated herein by reference.

10(f)(5)	Amendment No. 1, dated as of October 24, 2013, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.	Previously filed as Exhibit 10(f)(11) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 0-30242) filed on February 27, 2014 and incorporated herein by reference.

10(f)(6)	Second Restatement Agreement, dated as of February 3, 2014, by and among Lamar Media, the Company, the Subsidiary Guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent (including the Second Amended and Restated Credit Agreement as Exhibit A thereto).	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on February 7, 2014 and incorporated herein by reference.

112

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING

10(f)(7)	Amendment No. 1, dated as of April 18, 2014, to the Second Amended and Restated Credit Agreement, dated as of February 3, 2014, by and among Lamar Media, the Company, the Subsidiary Guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on April 22, 2014 and incorporated herein by reference.

10(f)(8)	Incremental Amendment No. 1 dated January 7, 2016 to the Second Amended and Restated Credit Agreement, dated as of February 3, 2014, as amended by and among Lamar Media, the Company, the Subsidiary Guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on January 13, 2016 and incorporated herein by reference.

10(f)(9)	Amendment No. 2, dated as of March 4, 2016, to the Second Amended and Restated Credit Agreement, dated as of February 3, 2014, as amended by and among Lamar Media, the Company, certain of Lamar Media’s subsidiaries as Guarantors, JPMorgan Chase Bank, N.A. as Administrative Agent and the Lenders party thereto.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on March 8, 2016 and incorporated herein by reference.

10(f)(10)	Third Restatement Agreement, dated as of May 15, 2017, by and among Lamar Media, the Company, the Subsidiary Guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent (including the Third Amended and Restated Credit Agreement as Exhibit A thereto).	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on May 19, 2017 and incorporated herein by reference.

10(f)(11)	Amendment No. 1 dated as of March 16, 2018 to the Third Restatement Agreement, by and among Lamar Media, the Company, the subsidiary guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent (including the Third Amended and Restated Credit Agreement, as amended for Amendment No. 1, as Exhibit A thereto).	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on March 21, 2018 and incorporated herein by reference.
10(f)(12)	Amendment No. 2 dated as of December 6, 2018 to the Third Restatement Agreement, by and among Lamar Media, the Company, the subsidiary guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent (including the Third Amended and Restated Credit Agreement, as amended for Amendment No. 2, as Exhibit A thereto).	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on December 12, 2018 and incorporated herein by reference.
10(f)(13)	Incremental Amendment No. 1, dated January 17, 2019, by and among Lamar Media, Lamar Advertising, the ‎subsidiary guarantors named therein, the Lenders named therein, and JPMorgan Chase Bank, N.A., as ‎Administrative Agent.	Previously filed as Exhibit 10.1 to Lamar ‎Advertising’s Current Report on Form 8-K ‎‎(File No. ‎‎1-36756) filed on January 22, ‎‎2019 and incorporated herein by reference.‎

10(f)(14)	Joinder Agreement, dated as of July 19, 2010, to the Credit Agreement dated as of April 28, 2010 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Arizona Logos, L.L.C.	Previously filed as Exhibit 10(p)(4) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-30242) filed on February 27, 2012 and incorporated herein by reference.

10(f)(15)	Joinder Agreement, dated as of April 21, 2011, to the Credit Agreement dated as of April 28, 2010 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Wisconsin Logos, LLC.	Previously filed as Exhibit 10(p)(5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-30242) filed on February 27, 2012 and incorporated herein by reference.

10(f)(16)	Joinder Agreement, dated as of August 26, 2011, to the Credit Agreement dated as of April 28, 2010 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Montana Logos, LLC.	Previously filed as Exhibit 10(p)(6) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-30242) filed on February 27, 2012 and incorporated herein by reference.

113

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING

10(f)(17)	Joinder Agreement, dated as of November 14, 2012, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by NextMedia Outdoor, Inc.	Previously filed as Exhibit 10(f)(9) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

10(f)(18)	Joinder Agreement, dated as of November 14, 2012, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by NextMedia Outdoor, Inc.	Previously filed as Exhibit 10(f)(9) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

10(f)(19)	Joinder Agreement, dated as of November 14, 2012, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by NMG Outdoor I Corp.	Previously filed as Exhibit 10(f)(10) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 0-30242) filed on February 28, 2013 and incorporated herein by reference.

10(f)(20)	Joinder Agreement, dated as of December 5, 2013, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Lamar TRS Holdings, LLC.	Previously filed as Exhibit 10(f)(12) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 0-30242) filed on February 27, 2014 and incorporated herein by reference.

10(f)(21)	Joinder Agreement, dated as of December 5, 2013, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Lamar Service Company, LLC.	Previously filed as Exhibit 10(f)(13) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 0-30242) filed on February 27, 2014 and incorporated herein by reference.

10(f)(22)	Joinder Agreement, dated as of December 5, 2013, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Lamar Investments, LLC.	Previously filed as Exhibit 10(f)(14) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 0-30242) filed on February 27, 2014 and incorporated herein by reference.

10(f)(23)	Joinder Agreement, dated as of December 5, 2013, to the Amended and Restated Credit Agreement dated as of February 9, 2012 among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Lamar Transit, LLC.	Previously filed as Exhibit 10(f)(15) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 0-30242) filed on February 27, 2014 and incorporated herein by reference.

10(f)(24)	Joinder Agreement, dated as of July 28, 2015, to the Second Amended and Restated Credit Agreement dated as of February 3, 2014, as amended, among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Lamar Alliance Airport Advertising Company.	Previously filed as Exhibit 10(f)(20) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-36756) filed on February 24, 2017 and incorporated herein by reference.

114

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
10(f)(25)	Joinder Agreement, dated as of January 30, 2018, to the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended, among Lamar Media, the subsidiary borrower party thereto, the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, by Interstate Logos TRS, LLC.	Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2018 (File No. 1-36756) filed on May 5, 2018 and incorporated herein by reference.‎

10(f)(26)	Joinder Agreement, dated as of January 15, 2019, to the ‎Third Amended and Restated Credit Agreement dated as ‎of May 15, 2017, as amended, among Lamar Media, the ‎subsidiary borrower party thereto, the subsidiary ‎guarantors party thereto, the lenders party thereto and ‎JPMorgan Chase Bank, N.A., as administrative agent, by ‎FMG Outdoor Holdings, LLC, Lamar-Fairway Blocker 1, Inc.‎, Lamar-Fairway Blocker 2, Inc.‎, Magic Media, Inc.‎, Fairway Media Group, LLC, Fairway Outdoor Advertising, LLC, Fairway Outdoor Funding Holdings, LLC, Fairway Outdoor Funding, LLC, MCC Outdoor, LLC, Magic Media Real Estate, LLC, FMO Real Estate, LLC, Douglas Outdoor Advertising of GA., Inc., ‎Olympus Media/Indiana, LLC and Fairway CCO Indiana, LLC.	Previously filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

10(f)(27)	Joinder Agreement, dated as of January 15, 2019, to the ‎‎Third Amended and Restated Credit Agreement dated as ‎of ‎May 15, 2017, as amended, among Lamar Media, the ‎‎subsidiary borrower party thereto, the subsidiary ‎guarantors ‎party thereto, the lenders party thereto and ‎JPMorgan ‎Chase Bank, N.A., as administrative agent, by ‎ New Hampshire Logos, L.L.C.‎	Previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 (File No. 1-36756) filed on May 2, 2019, and incorporated herein by reference.

10(f)(28)	Joinder Agreement, dated as of August 15, 2019, to the ‎Third Amended and Restated Credit Agreement dated as ‎of May 15, 2017, as amended, among Lamar Media, the ‎subsidiary borrower party thereto, the subsidiary ‎guarantors party thereto, the lenders party thereto and ‎JPMorgan Chase Bank, N.A., as administrative agent, by Ashby Street Outdoor Holdings LLC, Ashby Street Outdoor CC, LLC and Ashby Street Outdoor LLC‎.	Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019 (File No. 1-36756) filed on November 5, 2019, and incorporated herein by reference.

10(h)	Registration Rights Agreement, dated as of October 30, 2012, between Lamar Media, the Guarantors named therein and the Initial Purchasers named therein.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on October 31, 2012 and incorporated herein by reference.

10(i)	Registration Rights Agreement, dated as of January 10, 2014, between Lamar Media, the Guarantors named therein and J.P. Morgan Securities LLC, as representative for the Initial Purchasers named therein.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 0-30242) filed on January 15, 2014 and incorporated herein by reference.

10(j)	Registration Rights Agreement, dated as of January 28, 2016, between Lamar Media, the Guarantors named therein and J.P. Morgan Securities LLC, as representative for the Initial Purchasers named therein.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on February 1, 2016 and incorporated herein by reference.

10(k)	Registration Rights Agreement, dated as of February 1, 2019, between Lamar Media, the Guarantors named therein and J.P. Morgan Securities LLC, as representative for the Initial Purchasers named therein.	Previously filed as Exhibit 10.1 to Lamar ‎Advertising’s Current Report on Form 8-K ‎‎(File No. 1-36756) filed on February 6, ‎‎2019 and incorporated herein by reference.‎

10(l)*	Form of Indemnification Agreement between the Company and the directors and executive officers of the Company, dated as of November 18, 2014.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-36756) filed on November 19, 2014 and incorporated herein by reference.

115

EXHIBIT NUMBER	DESCRIPTION	METHOD OF FILING
14(a)	Lamar Advertising Company Code of Business Conduct and Ethics.	Previously filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-30242) filed on March 10, 2004 and incorporated herein by reference.

21(a)	Subsidiaries of the Company.	Filed herewith.

23(a)	Consent of KPMG LLP.	Filed herewith.

31(a)	Certification of the Chief Executive Officer of the Company and Lamar Media pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.	Filed herewith.

31(b)	Certification of the Chief Financial Officer of the Company and Lamar Media pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

32(a)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

101	The following materials from the combined Annual Report of the Company and Lamar Media Corp. on Form 10-K for the year ended December 31, 2019, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2019 and 2018 of the Company and Lamar Media, (ii) Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2019, 2018 and 2017 of the Company and Lamar Media, (iii) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018 and 2017 of the Company and Lamar Media, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017 of the Company and Lamar Media, and (v) Notes to Consolidated Financial Statements of the Company and Lamar Media.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Denotes management contract or compensatory plan or arrangement in which the executive officers or directors of the Company participate.

116

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

February 20, 2020	By:	/s/ Sean E. Reilly
		Sean E. Reilly
		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.

Signature	Title	Date

/s/ Sean E. Reilly	Chief Executive Officer (Principal Executive Officer)	2/20/20
Sean E. Reilly

/s/ Jay L. Johnson	Chief Financial Officer (Principal Financial and Accounting Officer)	2/20/20
Jay L. Johnson

/s/ Kevin P. Reilly, Jr.	President and Director	2/20/20
Kevin P. Reilly, Jr.

/s/ Wendell S. Reilly	Director	2/20/20
Wendell S. Reilly

/s/ Stephen P. Mumblow	Director	2/20/20
Stephen P. Mumblow

/s/ Marshall A. Loeb	Director	2/20/20
Marshall A. Loeb

/s/ Thomas Reifenheiser	Director	2/20/20
Thomas Reifenheiser

/s/ Anna Reilly	Director	2/20/20
Anna Reilly

/s/ John E. Koerner, III	Director	2/20/20
John E. Koerner, III

/s/ Elizabeth Thompson	Director	2/20/20
Elizabeth Thompson

117

SIGNATURES

	LAMAR MEDIA CORP.

February 20, 2020	By:	/s/ Sean E. Reilly
		Sean E. Reilly
		Chief Executive Officer

Signature	Title	Date

/s/ Kevin P. Reilly, Jr.	President and Director	2/20/20
Kevin P. Reilly, Jr.

/s/ Sean E. Reilly	Chief Executive Officer and Director (Principal Executive Officer)	2/20/20
Sean E. Reilly

/s/ Jay L. Johnson	Chief Financial and Accounting Officer and Director (Principal Financial and Accounting Officer)	2/20/20
Jay L. Johnson

/s/ C. Brent McCoy	Executive Vice President of Business Development and Director	2/20/20
C. Brent McCoy

118

Exhibit 4(a)(3)

DESCRIPTION OF CLASS A COMMON STOCK

The following description of Lamar Advertising Company’s (the “Company”, “we” or “our”) Class A common stock is based upon our amended and restated certificate of incorporation, as amended and in effect (the “Charter”), our amended and restated bylaws (the “Bylaws”), and applicable provisions of law. We have summarized certain portions of the Charter and Bylaws below. The summary is not complete. The Charter and Bylaws are incorporated by reference herein. We encourage you to read carefully this summary, the Charter, the Bylaws and the other documents we refer to herein for a more complete understanding of the Company’s Class A common stock.

Authorized and Outstanding Capital Stock

The Charter authorizes us to issue up to 500 million shares of capital stock consisting of 362.5 million shares of Class A common stock, par value $0.001 per share, 37.5 million shares of Class B common stock, par value $0.001 per share, and 100 million shares of undesignated preferred stock, par value $0.001 per share, of which 5,720 shares are designated Series AA preferred stock. We refer to the Class A common stock and the Class B common stock collectively as our common stock.

As of December 31, 2019, there were ‎86,093,300‎ shares of Class A common stock outstanding, 14,420,085 shares of Class B common stock outstanding and 5,720 shares of our Series AA preferred stock outstanding. The shares of common stock and preferred stock outstanding are fully paid and nonassessable. Under Delaware law, stockholders generally are not personally liable for a corporation’s acts or debts.

Dividends

As a real estate investment trust (“REIT”), we must annually distribute to our common stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we expect to distribute all or substantially all of our REIT taxable income to avoid being subject to income tax or excise tax on undistributed REIT taxable income. The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will be declared based upon various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, our ability to utilize net operating losses (“NOLs”) to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our taxable REIT subsidiaries (“TRSs”) and other factors that our Board of Directors may deem relevant.

Our Series AA preferred stock is entitled to preferential dividends, in an annual aggregate amount of $364,904, before any dividends may be paid on the common stock. All dividends related to the Company’s preferred stock are paid on a quarterly basis. In addition, the Company’s senior credit facility and other indebtedness have terms restricting the payment of dividends.

Redemption Provisions

Our common stock is redeemable in the manner and on the conditions permitted under Delaware law and as may be authorized by our Board of Directors. Holders of our common stock have no right to subscribe to new issuances of common stock. Any outstanding shares of Class A common stock or Class B common stock that we subdivide by stock split or recapitalization, or combine by reverse stock split or otherwise, will be subdivided or combined on an equal basis.

Voting Rights

Our Class A common stock and Class B common stock have the same rights and powers, except that a share of Class A common stock entitles the holder to one vote and a share of Class B common stock entitles the holder to ten votes. Except as required by Delaware law, the Class A common stock, Class B common stock and Series AA preferred stock vote together as a single class. Generally, all matters to be voted on by stockholders must be approved

by a majority (or by a plurality in the case of election of directors) of the votes entitled to be cast by all shares of our common stock and preferred stock present in person or by proxy. Under Delaware law, the affirmative vote of the holders of a majority of the outstanding shares of any class of common stock is required to approve any amendment to the certificate of incorporation that would increase or decrease the par value of that class, or modify or change the powers, preferences or special rights of the shares of any class so as to affect that class adversely. The Charter, however, allows for amendments to increase or decrease the number of authorized shares of Class A common stock or Class B common stock without a separate vote of either class.

Liquidation Rights

Upon the liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily, the holders of our common stock will be entitled to share ratably in all assets available for distribution after payment in full to creditors and payment in full to holders of any class of preferred stock then outstanding of any amount required to be paid to them.

Restrictions on Ownership and Transfer

In order for us to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year (other than the first year for which an election to be a REIT has been made). Also, not more than 50% of the value of the outstanding shares of our stock (after taking into account certain options to acquire shares of stock) may be owned, directly or indirectly or through application of certain attribution rules by five or fewer “individuals” (as defined in the Code to include certain entities such as private foundations) at any time during the last half of a taxable year (other than the first taxable year for which an election to be a REIT has been made).

The Charter contains restrictions on the ownership and transfer of our stock that are intended to assist us in complying with these requirements. The relevant sections of the Charter provide that, subject to the exceptions described below, no person or entity may actually own or be deemed to own by virtue of the applicable constructive ownership provisions more than 5% of the outstanding shares of our common stock (based on the total combined number of Class A common stock and Class B common stock), excluding any shares of our stock that are not treated as outstanding for federal income tax purposes. We refer to these restrictions as the “ownership limitation provisions.”

The Charter further prohibits:

•

any person from owning shares of our stock if such ownership would result in our failing to qualify as a REIT for federal income tax purposes; and

•

any person from transferring shares of our stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code, generally without reference to any rules of attribution).

In establishing the ownership limitations the Board of Directors considered the relative values of the Class A common stock and the Class B common stock and the value of the Company’s stock owned by the Reilly family, including Kevin P. Reilly, Jr., Sean E. Reilly and their affiliates. The Board of Directors established a separate share ownership limitation for certain Permitted Transferees (as in the Charter) that allows them, subject to certain limitations, to own actually and by virtue of the applicable constructive ownership provisions no more than 19% of the outstanding shares of our common stock and, during the second half of any taxable year other than our first taxable year as a REIT, no more than 33% in value of the aggregate of the outstanding shares of all classes and series of our stock, in each case excluding any shares of our stock that are not treated as outstanding for federal income tax purposes. In determining the foregoing values the Board of Directors, among other things, consulted with an independent nationally recognized valuation advisor.

A person or entity that would have acquired actual, beneficial or constructive ownership of our stock but for the application of the ownership limitation provisions or any of the other restrictions on ownership and transfer of our

stock discussed below, and, if appropriate in the context, any person or entity that would have been the record owner of such shares, is referred to as a “prohibited owner.”

The applicable constructive ownership rules under the Code are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be treated as owned constructively by one individual or entity. As a result, the acquisition of less than 5% in the number of shares of our common stock (or the acquisition of an interest in an entity that owns, actually or constructively, our stock) by an individual or entity could nevertheless cause that individual or entity, or another individual or entity, to own, constructively or beneficially, in excess of the applicable ownership limits described above.

The Charter provides that, upon request, the Board of Directors will, prospectively or retroactively, waive the ownership limitation provisions with respect to a particular stockholder, and establish a different ownership limit for the stockholder, unless the Board of Directors determines in its sole judgment that such stockholder’s increased ownership could result in any of our rental income failing to qualify as such for REIT testing purposes as a result of the “related party tenant” rules that apply to REITs. In granting such waiver, the Board of Directors may also require the stockholder receiving such waiver to make certain representations, warranties and covenants related to our ability to qualify as a REIT. In addition, the Charter provides that the Board of Directors may waive the ownership limitation provisions in circumstances where a stockholder’s ownership could result in rental income failing to qualify as such for REIT testing purposes, provided that the Board of Directors determines that receipt of such income would not adversely affect our ability to qualify as a REIT.

As a condition of such waiver, the Board of Directors may require an opinion of counsel or IRS ruling, in either case in form and substance satisfactory to the Board of Directors, in its sole and absolute discretion, in order to determine or ensure our status as a REIT and such representations and undertakings as are reasonably necessary to make the determinations above.

Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our stock that will or may violate the ownership limitation provisions or any of the other restrictions on ownership and transfer of our stock described above must give written notice immediately to us or, in the case of a proposed or attempted transaction, provide us at least 15 days prior written notice, and provide us with such other information as we may request in order to determine the effect of such transfer on our status as a REIT.

The ownership limitation provisions and other restrictions on ownership and transfer of our stock described above will not apply if the Board of Directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

Pursuant to the Charter, if any purported transfer of our stock or any other event otherwise would result in any person violating the ownership limitation provisions or such other limitation as established by the Board of Directors or would result in our failing to qualify as a REIT, then that number of shares in excess of the ownership limit or causing us to fail to qualify as a REIT (rounded up to the nearest whole share) will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us. However, if any purported violation applies to a holder (actual or constructive) of shares of Class B common stock, generally before the application of any trust transfer provisions the number of shares of Class B common stock sufficient to cure or prevent the ownership limitation violation (rounded up to the nearest whole share) will be automatically converted into shares of Class A common stock. The prohibited owner will have no rights in shares of our stock held by the trustee. The automatic transfer will be effective as of the close of business on the business day prior to the date of the purported transfer or other event that results in the transfer to the trust. Any dividend or other distribution paid to the prohibited owner, prior to our discovery that the shares had been automatically transferred to a trust as described above, must be repaid to the trustee upon demand for distribution to the beneficiary of the trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or other restriction in the Charter or our failing to qualify as a REIT, then the Charter provides that the transfer of shares resulting in such violation will be void. If any transfer of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code, generally without reference to any rules of attribution), then any such purported transfer will be automatically void and of no force or effect and the intended transferee will acquire no rights in the shares.

The trustee must sell the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limitation provisions or other restrictions on ownership and transfer of our stock; provided that the right of the trustee to sell the shares will be subject to the rights of any person or entity to purchase such shares from the trust that we establish by an agreement entered into prior to the date the shares are transferred to the trust. Upon such sale, the trustee must distribute to the prohibited owner an amount equal to the lesser of: (a) the price paid by the prohibited owner for the shares (or, if the prohibited owner did not give value for the shares in connection with the transfer or other event that resulted in the transfer to the trust (e.g., a gift, devise or other such transaction), the fair market value of such shares on the day of the transfer or other event that resulted in the transfer of such shares to the trust), and (b) the sales proceeds (net of commissions and other expenses of sale) received by the trustee for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of any dividends or other distributions paid to the prohibited owner and owed by the prohibited owner before our discovery that the shares had been transferred to the trust and that is owed by the prohibited owner to the trustee. Any net sales proceeds in excess of the amount payable to the prohibited owner will be immediately paid to the charitable beneficiary, together with any dividends or other distributions thereon. In addition, if prior to discovery by us that shares of our stock have been transferred to the trust, such shares of stock are sold by a prohibited owner, then such shares shall be deemed to have been sold on behalf of the trust and, to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount shall be paid to the trustee upon demand. The prohibited owner has no rights in the shares held by the trustee.

The trustee will be designated by us and will be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the trust, the trustee will receive, in trust for the charitable beneficiary, all dividends and other distributions paid by us with respect to such shares and may also exercise all voting rights with respect to such shares for the exclusive benefit of the charitable beneficiary.

Subject to Delaware law, effective as of the date that the shares have been transferred to the trust, the trustee shall have the authority, at the trustee’s sole discretion:

•

to rescind as void any vote cast by a prohibited owner prior to our discovery that the shares have been transferred to the trust; and

•

to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust.

However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote.

If the Board of Directors determines in good faith that a proposed transfer or other event has taken place that would violate the restrictions on ownership and transfer of our stock set forth in the Charter, the Board of Directors will take such action as it deems advisable in its sole discretion to refuse to give effect to or to prevent such transfer, including, but not limited to, causing us to redeem shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer.

Following the end of each REIT taxable year, every owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of the outstanding shares of any class or series of our stock must give written notice to us stating the name and address of such owner, the number of shares of each class and series of our stock that the owner beneficially owns and a description of the manner in which the shares are held. Each such owner also must provide us with any additional information that we request in order to determine the effect, if any, of the person’s actual or beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limitation provisions. In addition, any person or entity that is an actual owner, beneficial owner or constructive owner of shares of our stock and any person or entity (including the stockholder of record) who is holding shares of our stock for an actual owner, beneficial owner or constructive owner must, upon request, disclose to us such information as we may request in good faith in order to determine our qualification as a REIT and comply with requirements of any taxing authority or governmental authority or to determine such compliance.

Any certificates representing shares of our stock bear a legend referring to the restrictions on ownership and transfer of our stock described above.

These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change of control of the Company that might involve a premium price for our common stock that our stockholders believe to be in their best interest.

Board of Directors

The Bylaws provide that our business and affairs be managed by the Board of Directors, which must consist of not less than one director, none of whom needs to be a stockholder.

The number of directors may be increased at any time, such increase to be effective immediately unless otherwise specified in the resolution, by vote of a majority of the directors then in office. Directors must be elected at each annual meeting of stockholders by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present to hold office until the next annual meeting of stockholders and until the election and qualification of their respective successors. Election of directors need not be by written ballot.

The Bylaws provide that, unless and until filled by the stockholders and except as otherwise provided by the Charter, any vacancy on the Board of Directors, including one created by an increase in the number of directors and an unfilled vacancy resulting from the removal of any director, will be filled by a majority vote of the directors then in office, even if less than a quorum, or by a sole remaining director. Under Delaware law, directors may be removed, with or without cause, by the stockholders. The vacancy or vacancies created by the removal of a director may be filled by the stockholders at the meeting held for the purpose of removal, or if not so, by the directors as described above.

Meeting of Stockholders; Right to Call Special Meetings; Action by Written Consent

Under the Bylaws, annual meetings of stockholders are to be held at a date and time as determined by the Board of Directors or by an officer designated by the Board of Directors. Special meetings of the stockholders may be called at any time by the president or by a majority of the Board of Directors. The Board of Directors may postpone or reschedule any previously scheduled annual or special meeting of the stockholders. At any meeting of stockholders, only business that was properly brought before the meeting will be conducted. The Bylaws provide that any action required or permitted by Delaware to be taken at any annual or special meeting may be taken without a meeting by the written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote on such action were present and voted.

Advance Notice Requirements for Director Nominations and Stockholder Proposals

The Bylaws establish an advance notice procedure for stockholders to make nominations of candidates for directors or bring other business before a stockholder meeting. Nominations for persons as directors may be made only by or at the direction of the Board of Directors or by any stockholder who is a stockholder of record at the time of giving of notice who is entitled to vote in the election of directors if the stockholder timely complies with the notice procedures set forth in the Bylaws. The stockholder’s written notice also must set forth certain information regarding the stockholder and the nominee and certain other information as set forth in the Bylaws. Stockholder proposals, other than nominations of persons for election as directors, may be made by a stockholder (i) who is a stockholder of record at the time of the giving of notice, (ii) who is entitled to vote at the meeting, (iii) who has given timely notice of the business in writing to the secretary of the Company and (iv) such business is properly brought forth before the meeting, in accordance with the Bylaws. The stockholder’s written notice also must set forth a brief description of the business desired to be brought before the meeting and certain other information as set forth in the Bylaws.

To be timely, a stockholder’s notice must be delivered to or mailed and received at our principal executive offices (i) in the case of an annual meeting only, not earlier than the 120th day and not later than the close of business on the 90th day prior to the anniversary date of the prior year’s annual meeting or (ii) if there was no annual meeting

in the prior year, or the date of the current year’s annual meeting is more than 30 days before or more than 70 days after the anniversary date of the prior year’s annual meeting, or if clause (i) does not apply, not earlier than the 120th day prior to the date of the current year’s annual meeting or a special meeting and not later than the close of business on the later of the 90th day prior to the date of such annual or special meeting or the date 10 days after the day on which notice of the date of the current year’s annual meeting or the special meeting was mailed or public disclosure was made.

Amendments to Governing Documents

The Charter may be amended by the Company in the manner prescribed by Delaware law. Under Delaware law, the affirmative vote of the holders of a majority of the outstanding shares of any class of common stock is required to approve any amendment to the certificate of incorporation that would increase or decrease the par value of that class, or modify or change the powers, preferences or special rights of the shares of any class so as to affect that class adversely. The Charter, however, allows for amendments to increase or decrease the number of authorized shares of Class A common stock or Class B common stock without a separate vote of either class. The Bylaws provide that the Bylaws may be altered, amended or repealed or new bylaws may be adopted by (i) the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present or (ii) the affirmative vote of a majority of the votes represented by the shares of the stockholders constituting a quorum present at any regular meeting of the stockholders, or at any special meeting of the stockholders, provided that notice of such alteration, amendment, repeal or adoption of new bylaws have been stated in the notice of such special meeting.

Certain Anti-Takeover Effects of our Governing Documents

Certain provisions of the Charter, described below, as well as the ability of the Board of Directors to issue additional classes and shares of preferred stock and to set voting rights, preferences and other terms of the preferred stock, could delay, defer, or prevent a transaction or a change in control of the Company that might involve a premium for holders of the Company’s common stock or might otherwise be in their best interests.

Removal of Directors

Delaware law provides that any or all of the directors may be removed at any time, either with or without cause by a vote of our stockholders, provided, however that a vote of a majority of the shares outstanding and entitled to vote is required to effect any such removal. This provision may delay or prevent our stockholders from removing incumbent directors.

Advance Notice of Director Nominations and Stockholder Proposals

The Bylaws include advance notice and informational requirements and time limitations on any director nomination or proposal that a stockholder wishes to make at a meeting of stockholders. A failure to comply with these timing and informational requirements can result in a stockholder’s director nomination or proposal not being considered at a meeting of stockholders.

Ownership Limitations

Primarily to protect us against the risk of losing our status as a REIT, the Charter contains provisions that limit the ownership by any person or entity of shares of any class or series of our capital stock. These provisions may have the effect of inhibiting or impeding a change in control.

Transfer Agent and Registrar

The transfer agent and registrar for our Class A common stock is the American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219, telephone number (718) 921-8124.

Exhibit 10(a)(1)

LAMAR ADVERTISING COMPANY

1996 EQUITY INCENTIVE PLAN

(as amended and restated through December 12, 2019)

Purpose

The purpose of the Lamar Advertising Company 1996 Equity Incentive Plan (the “Plan”) is to attract and retain directors, key employees and consultants of the Company and its Affiliates, to provide an incentive for them to achieve long-range performance goals, and to enable them to participate in the long-term growth of the Company by granting Awards with respect to the Company’s Class A Common Stock (the “Common Stock”). Certain capitalized terms used herein are defined in Section 9 below.

2.	Administration

The Plan shall be administered by the Committee. The Committee shall select the Participants to receive Awards and shall determine the terms and conditions of the Awards. The Committee shall have authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as it shall from time to time consider advisable, and to interpret the provisions of the Plan. The Committee’s decisions shall be final and binding. To the extent permitted by applicable law, the Committee may delegate to one or more executive officers of the Company the power to make Awards to Participants who are not Reporting Persons or Covered Employees and all determinations under the Plan with respect thereto, provided that the Committee shall fix the maximum amount of such Awards for all such Participants and a maximum for any one Participant. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under this Plan except with respect to matters which under Rule 16b-3 or Section 162(m) of the Internal Revenue Code (the “Code”), or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee. In this regard, to the extent that the guidelines pursuant to Section 162(m) are applicable, not only will the Committee consist solely of two or more outside directors but said Committee shall be required to certify that any Performance Goals and/or other material terms associated with any Award have been satisfied prior to the payment of any Award.

3.	Eligibility

All directors, employees and consultants of the Company or any Affiliate capable of contributing significantly to the successful performance of the Company, other than a person who has irrevocably elected not to be eligible, are eligible to be Participants in the Plan. Incentive Stock Options may be granted only to persons eligible to receive such Options under the Code.

4.	Stock/Cash Available for Awards

(a)Amount. Subject to adjustment under subsection (b), Awards may be made under the Plan for up to 17,500,000 shares of Common Stock. If any Award expires or is terminated unexercised or is forfeited or settled in a manner that results in fewer shares outstanding than were awarded, the shares subject to such Award, to the extent of such expiration, termination, forfeiture or decrease, shall again be available for award under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

(b)Adjustment.

(i)For Awards issued prior to January 1, 2020, in the event that the Committee determines that any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other transaction affects the Common Stock such that an adjustment is required in order to preserve the benefits intended to be provided by the Plan, then the Committee (subject in the case of Incentive Stock Options to any limitation required under the Code) shall

equitably adjust any or all of (i) the number and kind of shares in respect of which Awards may be made under the Plan, (ii) the number and kind of shares subject to such outstanding Awards and (iii) the exercise price with respect to any of the foregoing, and if considered appropriate, the Committee may make provision for a cash bonus with respect to an outstanding Award, provided that the number of shares subject to any Award shall always be a whole number.

(ii)For Awards issued on or after January 1, 2020, subject to Section 8(e) below, in the event that the Committee determines that any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other transaction affects the Common Stock such that an adjustment is required in order to preserve the benefits intended to be provided by the Plan, then the Committee (subject in the case of Incentive Stock Options to any limitation required under the Code), in its sole discretion and on such terms and conditions as it deems appropriate, either by ‎amendment of the terms of any outstanding Awards or by action taken prior to the occurrence of ‎such transaction or event, and is hereby authorized to take any one or more of the following ‎actions:‎

(1)‎Provide for either (A) termination of any such Award in exchange for ‎an amount of cash, if any, equal to the amount that would have been attained upon the exercise ‎of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of ‎the date of the occurrence of the transaction or event described in this Subsection (b)(ii) the ‎Committee determines in good faith that no amount would have been attained upon the exercise ‎of such Award or realization of the Participant’s rights, then such Award may be terminated by ‎the Company without payment), or (B) the replacement of such Award with other rights or ‎property selected by the Committee in its sole discretion; ‎

(2)‎To provide that such Award be assumed by the successor or survivor ‎corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights ‎or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary ‎thereof, with appropriate adjustments as to the number and kind of shares and prices; ‎

(3)‎To make adjustments in the number and type of shares of common stock ‎‎(or other securities or property) subject to outstanding Awards, and in the number and kind of ‎outstanding Awards and/or in the terms and conditions of (including the grant or exercise price), ‎and the criteria included in, outstanding Awards and Awards which may be granted in the ‎future; ‎or

(4)‎To provide that the Award cannot vest, be exercised or become payable ‎after such event. ‎

Notwithstanding the foregoing: (x) any adjustments made pursuant to this subsection to Awards that are considered “deferred compensation” within the meaning of ‎Section 409A of the Code shall be made in compliance with the requirements of Section 409A of ‎the Code unless the Participant consents otherwise; (y) any such adjustments made to Awards ‎that are not considered “deferred compensation” subject to Section 409A of the Code shall be ‎made in such a manner as to ensure that after such adjustment, the Awards either continue not to ‎be subject to Section 409A of the Code or comply with the requirements of Section 409A of the ‎Code unless the Participant consents otherwise; and (z) the Committee shall not have the ‎authority to make any such adjustments to the extent that the existence of such authority would ‎cause an Award that is not intended to be subject to Section 409A of the Code to be subject ‎thereto.‎

(c)Limit on Individual Grants. The maximum number of shares of Common Stock subject to Options and Stock Appreciation Rights that may be granted to any Participant in the aggregate in any calendar year shall not exceed 350,000 shares and the maximum number of shares of Common Stock that may be granted as Restricted Stock, Unrestricted Stock Awards, Restricted Stock Units with respect to which Performance Goals apply under Section 7 below, to any Participant in the aggregate in any calendar year shall not exceed 350,000, subject to adjustment under subsection (b). The maximum cash Award that may be issued to any Participant in any calendar year shall be $2,000,000.

5.	Stock Options

(a)Grant of Options. Subject to the provisions of the Plan, the Committee may grant options (“Options”) to purchase shares of Common Stock (i) complying with the requirements of Section 422 of the Code or any successor provision and any regulations thereunder (“Incentive Stock Options” or “ISOs”), and (ii) not intended to comply with such requirements (“Nonstatutory Stock Options” or “NSOs”). The Committee shall determine the number of shares subject to each Option and the exercise price therefor, which shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant. No Incentive Stock Options may be granted hereunder more than ten years after the last date on which the Plan was approved for purposes of Section 422 of the Code.

(b)Terms and Conditions. Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable grant or thereafter. The Committee may impose such conditions with respect to the exercise of Options, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. If, after grant of an Option, the price of shares subject to such Option is reduced, the transaction shall be treated as a cancellation of the Option and a grant of a new Option.

(c)Payment. No shares shall be delivered pursuant to any exercise of an Option until payment in full of the exercise price therefor is received by the Company. Such payment may be made in whole or in part in cash or, to the extent permitted by the Committee at or after the grant of the Option, by delivery of a note or other commitment satisfactory to the Committee or shares of Common Stock owned by the optionee, including Restricted Stock, Restricted Stock Units or by retaining shares otherwise issuable pursuant to the Option, in each case valued at their Fair Market Value on the date of delivery or retention, or such other lawful consideration as the Committee may determine.

(d)Unexercised Options and Other Rights. To the extent that (i) a Stock Option expires or is otherwise terminated without being exercised, or (ii) any shares of Stock subject to any other Award granted hereunder are forfeited, such shares shall again be available for issuance in connection with future awards under the Plan. If any shares of Stock have been pledged as collateral for indebtedness incurred by a Participant in connection with the exercise of a Stock Option and such shares are returned to the Company in satisfaction of such indebtedness, such shares shall again be available for issuance in connection with future awards under the Plan. To the extent that a share is subject to an outstanding Option, Stock Appreciation Right or other stock-based Award, such share shall reduce the share authorization by one share of stock.

(e)Annual Limit on Incentive Stock Options. Each eligible employee may be granted Options treated as ISOs only to the extent that, in the aggregate under this Plan and all incentive stock option plans of the Company, ISOs do not become exercisable for the first time by such employee during any calendar year with respect to stock having a fair market value (determined at the time the ISOs were granted) in excess of $100,000. The Company intends to designate any Options granted in excess of such limitation as NSOs.

(f)Restrictions on Repricing of Options. Except as provided in Sections 4(b), 8(e), or 8(h), the terms of outstanding Options may not be amended to reduce the exercise price of ‎outstanding Options or cancel, exchange, substitute, buyout or surrender outstanding Options in ‎exchange for cash, other Awards or Options with an exercise price that is less than the exercise ‎price of the original Options without stockholder approval to the extent that stockholder approval ‎is required by law or applicable exchange requirement.‎

6.	Stock Appreciation Rights

(a)Grant of SARs. Subject to the provisions of the Plan, the Committee may grant rights to receive any excess in value of shares of Common Stock over the exercise price (“Stock Appreciation Rights” or “SARs”) in tandem with an Option (at or after the award of the Option), or alone and unrelated to an Option. SARs in tandem with an Option shall terminate to the extent that the related Option is exercised, and the related Option shall terminate to the extent that the tandem SARs are exercised. The Committee shall determine at the time of grant or thereafter whether SARs are settled in cash, Common Stock or other securities of the Company, Awards or other property, and may define the manner of determining the excess in value of the shares of Common Stock.

(b)Exercise Price. The Committee shall fix the exercise price of each SAR or specify the manner in which the price shall be determined. An SAR granted in tandem with an Option shall have an exercise price not less than the exercise price of the related Option. SARs granted alone and unrelated to an Option may be granted at such exercise prices as the Committee may determine, but no less than Fair Market Value.

(c)Treatment of Dividend Rights. No SAR shall include a right to dividends between the date of grant and date of exercise in the absence of a separate agreement in compliance with the requirements of Section 409A of the Code.

7.	Stock Awards

(a)Grant of Restricted or Unrestricted Stock. Subject to the provisions of the Plan, the Committee may grant shares of Common Stock subject to forfeiture (“Restricted Stock”) and determine the duration of the period (the “Restricted Period”) during which, and the conditions under which, the shares may be forfeited to the Company and the other terms and conditions of such Awards. Shares of Restricted Stock may be issued for no cash consideration, such minimum consideration as may be required by applicable law or such other consideration as the Committee may determine. Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Committee or the applicable Restricted Stock Agreement during the Restricted Period. Shares of Restricted Stock shall be evidenced in such manner as the Committee may determine. Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant and unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company. At the expiration of the Restricted Period, the Company shall deliver such certificates to the Participant or if the Participant has died, to the Participant’s Designated Beneficiary. The Committee also may make Awards of shares of Common Stock that are not subject to restrictions or forfeiture, on such terms and conditions as the Committee may determine from time to time (“Unrestricted Stock”).

(b)Performance Awards. The Committee may grant Performance Awards to eligible individuals. The value of such Performance Awards may be linked to the market value, book value, net profits or other measure of the value of Common Stock or other specific performance criteria determined appropriate by the Committee, or may be based upon the appreciation in the market value, book value, net profits or other measure of the value of a specified number of shares of Common Stock over a fixed period or periods determined by the Committee.

(c)Performance-Based Compensation. The Committee may establish Performance Goals for the granting of Restricted Stock, Unrestricted Stock, Restricted Stock Unit Awards, the lapse of risk of forfeiture of Restricted Stock, cash incentives or other Performance Award. The achievement of the Performance Goals shall be determined by the Committee. Shares of Restricted Stock or Unrestricted Stock may be issued for no cash consideration, such minimum consideration as may be required by applicable law or such other consideration as the Committee may determine. If the Committee determines at the time an Award is granted to a Participant that such Participant is, or may be as of the end of the tax year for which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that the Participant’s right to receive cash, shares, or other property pursuant to such Award shall be subject to the satisfaction of Performance Goals during a performance period, which for these purposes means the period of service designated by the Committee applicable to an Award. Notwithstanding the attainment of Performance Goals by a Covered Employee, the Committee shall have the right to reduce (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant. With respect to awards issued prior to November 2, 2017, the Committee shall have the power to impose such other restrictions on Awards as it deems necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m) of the Code. In this regard, any performance criterion based on performance over time will be determined by reference to a period of at least one year.

(d)Other Stock Based Awards. The Committee shall have the right to grant such Awards based upon the Common Stock having terms and conditions as the Board may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of securities convertible into Common Stock, the grant of warrants to purchase Common Stock or grant Restricted Stock Units.

8.	General Provisions Applicable to Awards

(a)Documentation. Each Award under the Plan shall be evidenced by a writing delivered to the Participant or agreement executed by the Participant (an “Award Agreement”) specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable tax and regulatory laws and accounting principles.

(b)Committee Discretion. Each type of Award may be made alone, in addition to or in relation to any other Award. The terms of each type of Award need not be identical, and the Committee need not treat Participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time of grant or at any time thereafter.

(c)Dividends and Cash Awards. In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividends or dividend equivalents payable (in cash or in the form of Awards under the Plan) currently or deferred with or without interest and (ii) cash payments in lieu of or in addition to an Award.

(d)Termination of Employment. The Committee shall determine the effect on an Award of the disability, death, retirement or other termination of employment of a Participant and the extent to which, and the period during which, the Participant’s legal representative, guardian or Designated Beneficiary may receive payment of an Award or exercise rights thereunder.

(e)Change in Control.

(i)For Awards issued prior to January 1, 2020, in order to preserve a Participant’s rights under an Award in the event of a change in control of the Company (as defined by the Committee), the Committee in its discretion may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (i) provide for the acceleration of any time period relating to the exercise or payment of the Award, (ii) provide for payment to the Participant of cash or other property with a Fair Market Value equal to the amount that would have been received upon the exercise or payment of the Award had the Award been exercised or paid upon the change in control, (iii) adjust the terms of the Award in a manner determined by the Committee to reflect the change in control, (iv) cause the Award to be assumed, or new rights substituted therefor, by another entity, or (v) make such other provision as the Committee may consider equitable to Participants and in the best interests of the Company.

(ii)For Awards issued on or after January 1, 2020, notwithstanding any other provisions of the Plan, the provisions of this Section 8(e)(ii) shall apply to equity settled compensation awards in the event a Change in Control. The Committee may, in any individual Award Agreement, provide for less favorable vesting provisions with respect to an equity settled Award, including forfeiture upon closing of a Change in Control, but may not provide for accelerated vesting in the absence of termination of employment in connection with or following a Change in Control.

(1)If a Participant is employed by the Company or one of its Affiliates on the date a Change in Control occurs and such employment is, within the 24 month period commencing on the effective date of such Change in Control, either involuntarily terminated by the Company or, if the Participant has an employment agreement which permits resignation for “good reason” the Participant resigns for “good reason” as defined in such employment agreement (each referred to as a “Qualifying Termination”), then immediately prior to such termination (A) each Award granted under this Plan to the Participant shall become immediately vested and fully exercisable and any restrictions applicable to the Award shall lapse; provided that any Performance Award shall be determined under subparagraph (3) below; and (B) if the Award is an Option or SAR, the Award shall remain exercisable until the expiration of the remaining term of the Award. The amount payable under clause (A) shall be paid in cash, shares or a combination thereof as provided for under the applicable Award Agreement within thirty (30) days following the date of the Participant’s Qualifying Termination (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Section 409A of the Code), notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied.

(2)Notwithstanding the provisions of Section 8(e)(ii), if any Award constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, the timing of settlement of such Award pursuant to this Section 8(e)(ii) shall be in accordance with the settlement terms set forth in the applicable Award Agreement if such Change in Control fails to constitute a “change in the ownership of the corporation,” a “change in effective control of the corporation” or a “change in the ownership of a substantial portion of the assets of the corporation,” within the meaning of Section 409A(a)(2)(A)(v) of the Code.

(3)The vesting and settlement of Performance Awards in connection with a Change in Control shall be made in accordance with the following:

a.The amount payable with respect to Award shall be equal to the greater of (x) the amount payable if each of the Performance Goals shall be deemed to be satisfied at the target payment level, provided the Award shall be prorated based on the total number of days during the performance period prior to date of the Participant’s Qualifying Termination in relation to the total number of days during the performance period, or (y) the amount payable based on the actual performance for each of the performance criteria through the date of the Participant’s Qualifying Termination.

b.The amount payable under subparagraph (1) shall be paid in cash, shares or a combination thereof as provided for under the applicable Award Agreement within thirty (30) days following the date of the Participant’s Qualifying Termination (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Section 409A of the Code), notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied.

(f)Transferability. In the discretion of the Committee, any Award may be made transferable upon such terms and conditions and to such extent as the Committee determines, provided that Incentive Stock Options may be transferable only to the extent permitted by the Code. The Committee may in its discretion waive any restriction on transferability.

(g)Loans. The Committee may authorize the making of loans or cash payments to Participants in connection with the grant or exercise any Award under the Plan, which loans may be secured by any security, including Common Stock, underlying or related to such Award (provided that the loan shall not exceed the Fair Market Value of the security subject to such Award), and which may be forgiven upon such terms and conditions as the Committee may establish at the time of such loan or at any time thereafter.

(h)Withholding Taxes. The Participant shall pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant hereunder or otherwise. In addition, a Participant may direct the Company to satisfy such Participant’s tax obligations through the withholding of shares of Common Stock otherwise to be acquired upon the exercise of payment of an Award, but only to the extent such withholding does not cause a charge to the Company’s financial earnings.

(i)Foreign Nationals. Awards may be made to Participants who are foreign nationals or employed outside the United States on such terms and conditions different from those specified in the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable laws.

(j)Amendment of Award. Subject to Section 5(f), the Committee may amend, modify or terminate any outstanding Award, including substituting therefor another Award of the same or a different type, changing the date of exercise or realization and converting an Incentive Stock Option to a Nonstatutory Stock Option and enter into and execute any repricing transaction including but not limited to reducing the exercise price of such Award. Any such action shall require the Participant’s consent unless:

(i)In the case of a termination of, or a reduction in the number of shares issuable under, an Option, any time period relating to the exercise of such Option or the eliminated portion, as the case may be, is waived or accelerated before such termination or reduction (and in such case the Committee may provide for the Participant to receive cash or other property equal to the net value that would have been received upon exercise of the terminated Option or the eliminated portion, as the case may be); or

(ii)In any other case, the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

(k)Prohibition on Cash Settlement of Awards. Except as provided in Sections 4(b), 8(e), or 8(h), the Company shall not cancel, buyout, or surrender all or any portion of an outstanding Award in ‎exchange for cash.

(l)Limitations Applicable to Section 16 Persons and Performance-Based Compensation. Notwithstanding any other provision of this Plan, any Option, Performance Award or other Award or Restricted Stock or Restricted Stock Unit granted to a Reporting Person who is subject to Section 16 of the Exchange Act shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule, and this Plan shall be deemed amended to the extent necessary to conform to such limitations. Furthermore, notwithstanding any other provision of this Plan, any Option or other Awards intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code shall be subject to any additional limitations set forth in Section 162(m) of the Code (including any amendment to Section 162(m) of the Code) or any Treasury regulations or rulings issued thereunder that are requirements for qualification as performance-based compensation as described in Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the extent necessary to conform to such requirements.

(l)Approval of Plan by Stockholders. This Plan will be submitted for the approval of the Company’s stockholders within twelve months after the date of the Board’s initial adoption of this Plan. All Options, Awards, Restricted Stock and Restricted Units granted under the Plan prior to this restatement, which was approved by Shareholders, shall not be effected by the following sentence. Options or other Awards may be granted and Restricted Stock or Restricted Stock Units may be awarded prior to such stockholder approval, provided that such Options or other Awards shall not be exercisable and such Restricted Stock or Restricted Stock Units shall not vest prior to the time when this Plan is approved by the stockholders, and provided further that if such approval has not been obtained at the end of said twelve (12) month period, all Options previously granted shall be deemed Non-Qualified Options.

9.	Certain Definitions

“Affiliate” means any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee.

“Award” means any cash bonus, Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Restricted Stock Unit or other Performance Awards granted under the Plan.

“Board” means the Board of Directors of the Company.

‎“Change in Control” means the occurrence of one of the following events: (a) a report is ‎filed with the SEC on Schedule 13D or Schedule 14D-1 (or any successor schedule, form, or ‎report), each as promulgated pursuant to the Exchange Act, disclosing that any “person” (as the ‎term “person” is used in Section 13(d) or Section 14(d)(2) of the Exchange Act), other than any Permitted Transferee (as such term is defined in the certificate of incorporation of the Company), is or has become ‎a beneficial owner, directly or indirectly, of securities of the Company representing 35% or more ‎of the combined voting power of the Company’s then outstanding securities; (b) the Company is ‎merged or consolidated with another corporation and, as a result thereof, securities representing ‎less than 50% of the combined voting power of the surviving or resulting corporation’s securities ‎‎(or of the securities of a parent corporation in case of a merger in which the surviving or resulting ‎corporation becomes a wholly-owned subsidiary of the parent corporation) are owned in the ‎aggregate by holders of the Company’s securities immediately before such merger or ‎consolidation; (c) all or substantially all of the assets of the Company are sold in a single ‎transaction or a series of related transactions to a single purchaser or a group of affiliated ‎purchasers; or (d) during any period of 24 consecutive

months, individuals who were members of the Board of Directors who are not employees (“Directors”) at ‎the beginning of the period cease to constitute at least a majority of the Board unless the election, ‎or nomination for election by the Company’s shareholders, of more than one half of any new ‎Directors was approved by a vote of at least two-thirds of the Directors then still in office who ‎were Directors at the beginning of the 24 month period.‎

Notwithstanding the foregoing provisions, to the extent that any payment or acceleration ‎hereunder is subject to Section 409A of the Code as deferred compensation, the term Change in ‎Control shall mean an event described in the foregoing definition of Change in Control that also ‎constitutes a change in control event as defined in Treasury Regulation Section 1.409A-3(i)(5).‎

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor law.

“Committee” means one or more committees each comprised of not less than two members of the Board appointed by the Board to administer the Plan or a specified portion thereof. Unless otherwise determined by the Board, if a Committee is authorized to grant Awards to a Reporting Person or a Covered Employee, each member shall be a “non-employee director” or the equivalent within the meaning of applicable Rule 16b-3 under the Exchange Act or an “outside director” within the meaning of Section 162(m) of the Code, respectively.

“Common Stock” or “Stock” means the Class A Common Stock, $0.001 par value, of the Company.

“Company” means Lamar Advertising Company, a Delaware corporation.

“Covered Employee” means a “covered employee” within the meaning of Section 162(m) of the Code.

“Designated Beneficiary” means the beneficiary designated by a Participant, in a manner determined by the Committee, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death. In the absence of an effective designation by a Participant, “Designated Beneficiary” means the Participant’s estate.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor law.

“Fair Market Value” means, with respect to a share of Common Stock as of any date of determination, in the discretion of the Committee, (i) the closing price (on that date) of the Common Stock on the NASDAQ Stock Market, or any other principal national securities exchange the Common Stock is traded on; or (ii) the closing bid price (or average of bid prices) last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common Stock is not reported on the NASDAQ Stock Market or another national securities exchange; or (iii) if shares of Common Stock are not publicly traded, the fair market value of such a share as determined by the Board in good faith after taking into consideration all facts which it deems appropriate and in accordance with applicable statutory and regulatory guidelines.

“Participant” means a person selected by the Committee to receive an Award under the Plan.

“Performance Award” means a cash bonus, stock bonus or other performance or incentive award that is paid in cash, Common Stock or a combination of both.

“Performance Goals” means with respect to any designated performance period, one or more Performance Measures established by the Committee prior to the beginning of such performance period or within such period after the beginning of the performance period as shall meet the requirements to be considered “pre-established objective performance goals” for purposes of the regulations issued under Section 162(m) of the Code. Such Performance Goals may be particular to a Participant or may be based, in whole or in part, on the performance of the division, department, line of business, subsidiary, or other business unit, whether or not legally constituted, in which the Participant works or on the performance of the Company generally.

“Performance Measures” shall include, but not be limited to (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): sales; revenues; assets; expenses; earnings

before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; stockholder return; sales of particular products or services; customer acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings.

“Reporting Person” means a person subject to Section 16 of the Exchange Act.

10.	Miscellaneous

(a)No Right to Employment. No person shall have any claim or right to be granted an Award. Neither the adoption, maintenance, nor operation of the Plan nor any Award hereunder shall confer upon any employee or consultant of the Company or of any Affiliate any right with respect to the continuance of his/her employment by or other service with the Company or any such Affiliate nor shall they interfere with the rights of the Company (or Affiliate) to terminate any employee at any time or otherwise change the terms of employment, including, without limitation, the right to promote, demote or otherwise re-assign any employee from one position to another within the Company or any Affiliate.

(b)No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed under the Plan until he or she becomes the holder thereof. A Participant to whom Restricted Stock, Unrestricted Stock or Restricted Stock Unit is awarded shall be considered a stockholder of the Company at the time of the Award except as otherwise provided in the applicable Award.

(c)Section 409A. It is the intention of the Company that no Award shall be “deferred compensation” ‎subject to Section 409A of the Code unless and to the extent that the Committee specifically ‎determines otherwise and so provides in the terms of an Award Agreement, and the Plan and the ‎terms and conditions of all Awards shall be interpreted accordingly. The terms and conditions ‎governing any Awards that the Committee determines will be subject to Section 409A of the ‎Code, including any rules for elective or mandatory deferral of the delivery of cash or Shares ‎pursuant thereto, shall be set forth in the applicable Award Agreement, and shall comply in all ‎respects with Section 409A of the Code. Notwithstanding any provision herein to the contrary, ‎any Award issued under the Plan that constitutes a deferral of compensation under a ‎‎“nonqualified deferred compensation plan” as defined under Section 409A(d)(1) of the Code ‎and is not specifically designated as such by the Committee shall be modified or cancelled to ‎comply with the requirements of Section 409A of the Code, including any rules for elective or ‎mandatory deferral of the delivery of cash or Shares pursuant thereto.‎

(d)‎Forfeiture in Certain Circumstances (“Clawback”). All Awards granted under the Plan ‎will be subject to recoupment in accordance with any Clawback policy that the Company is specifically ‎required to adopt pursuant to the listing standards of any national securities exchange or association on ‎which the Company’s securities are listed or as is otherwise specifically required by the Dodd-Frank ‎Wall Street Reform and Consumer Protection Act or other applicable law. ‎

(e)Effective Date. The Plan, as amended, shall be effective on January 1, 2020.

(f)Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, subject to such stockholder approval as the Board determines to be necessary or advisable.

(g)Governing Law. The provisions of the Plan shall be governed by and interpreted in accordance with the laws of Delaware.

As amended and restated by the Board of Directors on December 12, 2019.

* * * *

Exhibit 10(a)(2)



	LAMAR ADVERTISING COMPANY
Notice of Grant of Stock Options	P O BOX 66338
and Option Agreement	BATON ROUGE, LA 70896



Name	Option Number:
Address	Plan:
City, State Zip	ID:

Effective mm/dd/yyyy, you have been granted an Option to buy # shares of LAMAR ADVERTISING COMPANY (the Company) Class A common stock at $00.00 per share.

The total option price of the shares granted is $00.00

Shares in each period will become fully vested on the date shown.


Shares	Vest Type	Full Vest	Expiration
#	On Vest Date	mm/dd/yyyy	mm/dd/yyyy
#	On Vest Date	mm/dd/yyyy	mm/dd/yyyy
#	On Vest Date	mm/dd/yyyy	mm/dd/yyyy
#	On Vest Date	mm/dd/yyyy	mm/dd/yyyy
#	On Vest Date	mm/dd/yyyy	mm/dd/yyyy

By your signature and the Company's signature below, you and the Company agree that these options are granted under and governed by the terms and conditions of the Company's 1996 Equity Incentive Plan, as amended (the “Plan”) and the Option Agreement, all of which are attached and made a part of this document.



LAMAR ADVERTISING COMPANY		Date


NAME		Date

LAMAR ADVERTISING COMPANY 1996 EQUITY INCENTIVE PLAN

Non‑Qualified Stock Option Terms and Conditions

1.Plan Incorporated by Reference. This option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan. Capitalized terms used and not otherwise defined in this certificate have the meanings given to them in the Plan. This certificate does not set forth all the terms and conditions of the Plan, which are incorporated herein by reference. The Committee administers the Plan and its determinations regarding the operation of the Plan are final and binding. Copies of the Plan may be obtained upon written request without charge from the Company.

2.Option Price. The price to be paid for each share of Common Stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of this certificate.

3.Exercisability Schedule. This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of this certificate, but only for the purchase of whole shares. The Option may not be exercised as to any shares after the Expiration Date.

4.Method of Exercise. To exercise this Option, the Optionholder shall deliver written notice of exercise to the Company specifying the number of shares with respect to which Option is being exercised accompanied by payment of the Option Price for such shares in cash, by certified check or in such other form, including shares of Common Stock of the Company valued at their Fair Market Value on the date of delivery, as the Committee may approve. If the Optionholder is a resident of Canada for purposes of the Income Tax Act (Canada), such notice shall be accompanied by a properly completed election to defer the inclusion of the benefit from the exercise in the Optionholder’s employment income in the year of exercise. Promptly following receipt of such notice (and election, if applicable), the Company will deliver to the Optionholder a certificate representing the number of shares with respect to which the Option is being exercised.

5.Rights as a Stockholder or Employee. The Optionholder shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above. The Optionholder shall not have any rights to continued employment by the Company or its Affiliates by virtue of the grant of this Option.

6.Recapitalization, Mergers, Etc. In the event of corporate transactions affecting the Company’s outstanding Common Stock, the Committee may adjust the Option as outlined in the Plan. If such transaction involves a Change in Control of the Company, the provisions of the Plan shall govern.

7.Option Not Transferable. Except as otherwise approved by the Committee, this Option is not transferable by the Optionholder otherwise than by the will or the laws of descent and distribution, and is exercisable, during the Optionholder’s lifetime, only by the Optionholder. The naming of a Designated Beneficiary does not constitute a transfer.

8.Exercise of Option After Termination of Employment. Except as otherwise provided in the Plan, if the Optionholder’s employment with (a) the Company, (b) an Affiliate, or (c) a corporation (or parent or subsidiary corporation of such corporation) issuing or assuming a stock option in a transaction to which section 424(a) of the Code applies, is terminated for any reason other than by disability (within the meaning of section 22 (e)(3) of the Code) or death, the Optionholder may exercise the rights which were available to the Optionholder at the time of such termination only within three months from the date of termination. If Optionholder’s employment is terminated as a result of disability, such rights may be exercised within twelve months from the date of termination. Upon the death of Optionholder, his or her Designated Beneficiary shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights that were available to the Optionholder at the time of death. Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

9.Compliance with Securities Laws. It shall be a condition to the Optionholder’s right to purchase shares of Common Stock hereunder that the Company may, in its discretion, require (a) that the shares of Common Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Common Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionholder shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionholder, or both. The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

10.Payment of Taxes. The Optionholder shall pay to the Company, or make provision satisfactory to the Company for payment of, any taxes required by law to be withheld with respect to the exercise of this Option in accordance with the Plan. The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Optionholder.

11.Notice of Sale of Shares Required. The Optionholder agrees to notify the Company in writing within 30 days of the disposition of any shares purchased upon exercise of this Option if such disposition occurs within two years of the date of the grant of this Option or within one year after such purchase.

Exhibit 21(a)

SUBSIDIARIES OF LAMAR ADVERTISING

Exact Name of Entity as Specified in its Charter		State or Other Jurisdiction of Incorporation or Organization
Lamar Media Corp.		Delaware
Arizona Logos, L.L.C.		Arizona
Canadian TODS Limited		Nova Scotia, Canada
Colorado Logos, Inc.		Colorado
Delaware Logos, L.L.C.		Delaware
Douglas Outdoor Advertising of GA, Inc.‎		Georgia ‎
Fairway CCO Indiana, LLC		Delaware ‎
Fairway Media Group, LLC		Delaware
Fairway Outdoor Advertising, LLC		Delaware
Fairway Outdoor Funding, LLC		Delaware ‎
Fairway Outdoor Funding Holdings, LLC		Delaware
Florida Logos, LLC		Florida
FMG Outdoor Holdings, LLC		Delaware
FMO Real Estate, LLC		Delaware
Georgia Logos, L.L.C.		Georgia
Interstate Logos, L.L.C.		Louisiana
Interstate Logos TRS, LLC		Delaware
Kansas Logos, Inc.		Kansas
Kentucky Logos, LLC		Kentucky
Lamar Advantage GP Company, LLC		Delaware
Lamar Advantage Holding Company		Delaware
Lamar Advantage LP Company, LLC		Delaware
Lamar Advantage Outdoor Company, L.P.		Delaware
Lamar Advertising of Colorado Springs, L.L.C.		Colorado
Lamar Advertising of Louisiana, L.L.C.		Louisiana
Lamar Advertising of Michigan, Inc.		Michigan
Lamar Advertising of Penn, LLC		Delaware
Lamar Advertising of Puerto Rico, Inc.		Puerto Rico
Lamar Advertising of South Dakota, L.L.C.		South Dakota
Lamar Advertising of Youngstown, Inc.		Delaware
Lamar Advertising Southwest, Inc.		Nevada
Lamar Air, L.L.C.		Louisiana
Lamar Airport Advertising Company		Nevada
Lamar Canadian Outdoor Company		Ontario, Canada
Lamar Central Outdoor, LLC		Delaware
Lamar Electrical, Inc.		Louisiana
Lamar-Fairway Blocker 1, Inc.‎		Delaware
Lamar-Fairway Blocker 2, Inc.‎		Delaware
Lamar Florida, L.L.C.		Florida
Lamar Investments, LLC		Delaware
Lamar Obie Company, LLC		Delaware
Lamar OCI North, L.L.C.		Delaware
Lamar OCI South Corporation		Mississippi
Lamar Ohio Outdoor Holding Corp.		Ohio
Lamar Pensacola Transit, Inc.		Florida
Lamar QRS Receivables, LLC		Delaware
Lamar Tennessee, L.L.C.		Tennessee
Lamar Service Company, LLC		Delaware
Lamar Transit, LLC		Delaware
Lamar Texas Limited Partnership		Texas
Lamar Transit Advertising Canada Ltd.		British Columbia, Canada
Lamar TRS Holdings, LLC		Delaware
Lamar TRS Receivables, LLC		Delaware
Louisiana Interstate Logos, L.L.C.		Louisiana

Exact Name of Entity as Specified in its Charter		State or Other Jurisdiction of Incorporation or Organization
Magic Media, Inc.‎		Delaware
Magic Media Real Estate, LLC		Delaware
Maine Logos, L.L.C.		Maine
MCC Outdoor, LLC		Georgia
Michigan Logos, Inc.		Michigan
Minnesota Logos, Inc.		Minnesota
Mississippi Logos, L.L.C.		Mississippi
Missouri Logos, LLC		Missouri
Montana Logos, L.L.C.		Montana
Nebraska Logos, Inc.		Nebraska
Nevada Logos, Inc.		Nevada
New Hampshire Logos, L.L.C.‎		New Hampshire ‎
New Jersey Logos, L.L.C.		New Jersey
New Mexico Logos, Inc.		New Mexico
Ohio Logos, Inc.		Ohio
Oklahoma Logos, L.L.C.		Oklahoma
Olympus Media/Indiana, LLC		Delaware ‎
Outdoor Marketing Systems, L.L.C.		Pennsylvania
Outdoor Promotions West, LLC		Delaware
QMC Transit, Inc.		Puerto Rico
South Carolina Logos, Inc.		South Carolina
Tennessee Logos, Inc.		Tennessee
The Lamar Company, L.L.C.		Louisiana
TLC Farms, L.L.C.		Louisiana
TLC Properties II, LLC		Texas
TLC Properties, Inc.		Louisiana
TLC Properties, L.L.C.		Louisiana
Triumph Outdoor Holdings, LLC		Delaware
Triumph Outdoor Rhode Island, LLC		Delaware
Utah Logos, Inc.		Utah
Virginia Logos, LLC		Virginia
Washington Logos, L.L.C.		Washington
Wisconsin Logos, L.L.C.		Wisconsin

Exhibit 23(a)

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Lamar Advertising Company and Lamar Media Corp.:

We consent to the incorporation by reference in the registration statement Nos. 333‑89034, 333-37858, 333-116008, 333-160945, 333-190603, 333-232687, and 333-232686 on Form S-8 and 333-224579 and 333-226614 on Form S-3 of Lamar Advertising Company of (a) our reports dated February 20, 2020, with respect to the consolidated balance sheets of Lamar Advertising Company as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedules II to III, and the effectiveness of internal control over financial reporting as of December 31, 2019, and (b) our reports dated February 20, 2020, with respect to the consolidated balance sheets of Lamar Media Corp. as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, stockholder’s equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedules II to III, and the effectiveness of internal control over financial reporting as of December 31, 2019, which reports appear in the December 31, 2019 annual report on Form 10‑K of Lamar Advertising Company and Lamar Media Corp. Our reports on the consolidated financial statements refer to a change in the method of accounting for revenue recognition and a change in the method of accounting for leases.

/s/ KPMG LLP

KPMG LLP

Baton Rouge, Louisiana
February 20, 2020

Exhibit 31(a)

CERTIFICATION

I, Sean E. Reilly, certify that:

1.	I have reviewed this combined annual report on Form 10-K of Lamar Advertising Company and Lamar Media Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5.	The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants’ abilities to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants’ internal control over financial reporting.

Date: February 20, 2020

/s/ Sean E. Reilly

Sean E. Reilly

Chief Executive Officer, Lamar Advertising Company

Chief Executive Officer, Lamar Media Corp.

Exhibit 31(b)

CERTIFICATION

I, Jay L. Johnson, certify that:

1.	I have reviewed this combined annual report on Form 10-K of Lamar Advertising Company and Lamar Media Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants’ internal control over financial reporting.

Date: February 20, 2020

/s/ Jay L. Johnson

Jay L. Johnson

Chief Financial Officer, Lamar Advertising Company

Chief Financial Officer, Lamar Media Corp.

Exhibit 32(a)

LAMAR ADVERTISING COMPANY

LAMAR MEDIA CORP.

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Each of the undersigned officers of Lamar Advertising Company (“Lamar Advertising”) and Lamar Media Corp. (“Lamar Media”) certifies, to his knowledge and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the combined Annual Report on Form 10-K of Lamar Advertising and Lamar Media for the year ended December 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in that combined Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Lamar Advertising and Lamar Media.

Dated: February 20, 2020	By:	/s/ Sean E. Reilly
		Sean E. Reilly
		Chief Executive Officer, Lamar Advertising Company
		Chief Executive Officer, Lamar Media Corp.

Dated: February 20, 2020	By:	/s/ Jay L. Johnson
		Jay L. Johnson
		Chief Financial Officer, Lamar Advertising Company
		Chief Financial Officer, Lamar Media Corp.