What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-24 compared with 2022-02-25 · 49 added, 34 removed, 247 unchanged (25% of the section changed)

13 unchanged sentences

Lamar Media has variable rate debt outstanding under the senior credit facility and its Accounts Receivable Securitization Program.

Increases in the interest rates applicable to these borrowings would result in increased interest expense and a reduction in the Company's net income.

Interest rates may increase as a result of macroeconomic factors outside of our control.

In the event of an increase in interest rates, the Company may take actions to mitigate its exposure, however, it cannot guarantee that the actions that it takes to mitigate these risks will be effective.

Increases in the interest rates applicable to these borrowings have recently resulted in increased interest expense, which has impacted the Company's net income.

Interest rates may continue to increase as a result of macroeconomic factors outside of our control.

The Company may take actions in the future to mitigate its interest rate exposure, however, it cannot guarantee that the actions that it takes to mitigate these risks will be effective.

Additionally, to the extent we refinance existing debt obligations or seek to enter into new debt financing arrangements in the current interest rate environment, we expect that such arrangements would be subject to higher interest rates than our existing debt obligations, which would further increase our interest expense.

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

1 unchanged sentence

The Company’s ability to generate cash flow from operations to make principal and interest payments on its debt will depend on its future performance, which will be affected by a range of economic, competitive and business factors.

The Company cannot control many of these factors, including general economic conditions (including, but not limited to, the impact of the ongoing COVID-19 pandemic on the general economy), its customers’ allocation of advertising expenditures among available media and the amount spent on advertising in general, and its business would be negatively impacted if the general economy were to deteriorate in the future.

The Company cannot control many of these factors, including general economic conditions, its customers’ allocation of advertising expenditures among available media and the amount spent on advertising in general, and its business would be negatively impacted if the general economy were to deteriorate in the future.

If its operations do not generate sufficient cash flow from operations to satisfy its debt service obligations, the Company may need to borrow additional funds to make these payments or undertake alternative financing plans, such as refinancing or restructuring its debt, or reducing or delaying capital investments and acquisitions.

30 unchanged sentences

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

Our UPREIT structure may result in potential conflicts of interest.

We are structured as an “UPREIT,” which stands for “umbrella partnership real estate investment trust.” While limited partners of Lamar Advertising Limited Partnership (the “Operating Partnership”) do not generally have any right to participate in or exercise management power over the business and affairs of the Operating Partnership, they do have the right to vote on certain amendments to the partnership agreement of the Operating Partnership, as well as on certain other matters.

Persons holding such voting rights may exercise them in a manner that conflicts with the interests of our stockholders.

The partnership agreement of the Operating Partnership provides that, for so long as we own a controlling interest in the Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or the limited partners shall be resolved by the general partner in favor of our stockholders.

Circumstances may arise in the future when the interests of limited partners in the Operating Partnership may conflict with the interests of our stockholders.

Risks Related to Our Business

5 unchanged sentences

• 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 may have greater financial resources than we do, which may result in higher prices for those businesses and assets;

• we may face increased competition for acquisition candidates from other outdoor advertising companies and private equity funds (particularly funds that are focused on investing in media and/or infastruc, some of which may 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;

21 unchanged sentences

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 24 logo sign contracts in place at December 31, 2021, five are subject to renewal or expiration in 2022.

Of the Company’s 24 logo sign contracts in place at December 31, 2022, 4 are subject to renewal or expiration in 2023.

The Company may be unable to renew its expiring contracts.

3 unchanged sentences

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.

To the extent that such natural disaster events become more frequent or destructive because of climate change, we may incur increased costs related to storm remediation and preparation.

Our cash distributions are not guaranteed and may fluctuate.

21 unchanged sentences

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

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

• a decline in the amount spent on advertising, in general, or outdoor advertising in particular as a result of macroeconomic factors.

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

24 unchanged sentences

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 also 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 continued to expand the deployment of digital billboards, which 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.

The results of future studies may result in regulations at the federal or state level that impose greater restrictions on digital billboards.

However, new regulations could be enacted to impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety.

The findings of future studies related to the impact of digital billboards on driver safety issues, if any, 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.

Pandemics or disease outbreaks, such as COVID-19, have affected and may materially affect our business, results of operations and financial condition in the future.

Any outbreaks of contagious diseases and other adverse public health developments could have a significant adverse effect on our business, results of operations and financial condition.

The outbreak of COVID-19 in 2020 resulted in the implementation of significant governmental measures to control the spread of the virus.

Such restrictions had an adverse impact on the audience for out-of-home advertising in certain jurisdictions.

The restrictions also negatively affected the financial condition of numerous advertising customer segments, and caused certain of our advertisers to decrease or eliminate the amount they spend on advertising.

The Company’s business was adversely effected as a result.

While economic conditions and the Company’s business have improved significantly as compared to the onset of the COVID-19 pandemic, the continuing effects of the pandemic are unknown.

Future COVID-19 variants may cause disruptions in our industry.

Additionally, macro-economic factors related to the ongoing pandemic, like inflation and overall market volatility, may negatively impact our business and financial results, and heighten many of the other risks described in this “Risk factors” section.

Our business and operations could suffer in the event of cybersecurity breaches and we may incur significant legal and financial exposure.

8 unchanged sentences

however, to date they have not had a material impact on our business, results of operations or financial condition.

We could be negatively impacted by environmental, social and governance (ESG) and sustainability matters.

Governments, shareholders, customers, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving and growing.

We may incur costs related to ESG initiatives, including those related to producing enhanced mandatory or voluntary disclosures about our business.

If we are unable to respond effectively to ESG matters, our reputation, business, financial condition and results of operations could be adversely impacted.

Risks Related to Our Status as a REIT

2 unchanged sentences

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.

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.

5 unchanged sentences

• 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;

• it and its corporate 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;

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

23 unchanged sentences

For taxable years beginning before January 1, 2026, non-corporate taxpayers may generally deduct 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations.

Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends.

Although this deduction

reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends.

This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of the stock of REITs, including our stock.

2 unchanged sentences

Gain from this kind of sale will generally be subject to a 100% tax.

Whether an asset is held "primarily for sale to customers in the ordinary course of a trade or business" depends on the particular

facts and circumstances of the sale.

Whether an asset is held "primarily for sale to customers in the ordinary course of a trade or business" depends on the particular facts and circumstances of the sale.

Although we will attempt to comply with the terms of safe-harbor provisions in the Internal Revenue Code prescribing when asset sales will not be so characterized, we cannot assure you that we will be able to do so.

25 unchanged sentences

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.

1 unchanged sentence

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 Tax Cuts and Jobs Act and the CARES Act, as well as any future tax legislation, may impact the Company’s business and security holders.

If Lamar Advertising’s operating partnership does not qualify as a partnership, its income may be subject to taxation, and Lamar Advertising would no longer qualify as a REIT.

The Internal Revenue Code classifies “publicly traded partnerships” as associations taxable as corporations (rather than as partnerships), unless substantially all of their taxable income consists of specified types of passive income.

Lamar Advertising structured the Operating Partnership to be classified as a partnership for federal income tax purposes.

However, no assurance can be given the IRS will not challenge Lamar Advertising’s position or will classify the Operating Partnership as a “publicly traded partnership” for federal income tax purposes.

To minimize this risk, Lamar Advertising has placed certain restrictions on the transfer and/or redemption of partnership units in the Amended and Restated Limited Partnership Agreement of the Operating Partnership.

If the IRS would assert successfully that the Operating Partnership should be treated as a “publicly traded partnership” and substantially all of the Operating Partnership’s gross income did not consist of the specified types of passive income, the Internal Revenue Code would treat the Operating partnership as an association taxable as a corporation.

In such event, Lamar Advertising would cease to qualify as a REIT.

In addition, the imposition of a corporate tax on the Operating Partnership would reduce the amount of distributions the Operating Partnership could make to Lamar Advertising and, in turn, reduce the amount of cash available to Lamar Advertising to pay dividends to our shareholders.

The Tax Cuts and Jobs Act, the CARES Act and the Inflation Reduction Act, as well as any future tax legislation, may impact the Company’s business and security holders.

On December 22, 2017, H.R.

6 unchanged sentences

With respect to NOLs, effective for taxable years beginning on or after January 1, 2018, the TCJA limited the deduction for NOL carryforwards to 80% of taxable income (before the deduction) and eliminated NOL carrybacks for individuals and non-REIT corporations (NOL carrybacks did not apply to REITs under prior law), but allows for indefinite NOL carryforwards.

The CARES Act repealed such 80% limitation for carryforwards to taxable years beginning before January 1, 2021.

The CARES Act repealed such 80% limitation for carryforwards to taxable years beginning before

January 1, 2021.

The CARES Act also allows a five-year carryback for NOLs arising in 2018, 2019, or 2020.

The TCJA’s NOL limitations (even as modified by the CARES Act) 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 individual and collective impact of the changes made by the TCJA and the CARES Act on REITs and their security holders are uncertain and may not become evident for some period of time.

The effect of any technical corrections with respect to the TCJA and the CARES Act could have an adverse effect on Lamar Advertising, its subsidiaries, and holders of its securities.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “IRA”).

The IRA includes numerous tax provisions that impact corporations, including the implementation of a 15% corporate alternative minimum tax based on “adjusted financial statement income” exceeding $1 billion, as well as a 1% excise tax on certain stock repurchases and economically similar transactions.

However, REITs are excluded from the definition of an “applicable corporation” and therefore are not subject to the corporate alternative minimum tax.

Additionally, the 1% excise tax specifically does not apply to stock repurchases by REITs.

Any taxable REIT subsidiaries of Lamar Advertising operate as standalone corporations and therefore could be adversely affected by the IRA.

Lamar Advertising will continue to analyze and monitor the application of the IRA to its business;

however, the effect of these changes on the value of Lamar Advertising’s assets, shares of Lamar Advertising stock or market conditions, generally, is uncertain.

The individual and collective impact of the changes made by the TCJA, the CARES Act and the IRA on REITs and their security holders are uncertain and may not become evident for some period of time.

The effect of any technical corrections with respect to the TCJA, the CARES Act or the IRA could have an adverse effect on Lamar Advertising, its subsidiaries, and holders of its securities.

It is also possible additional tax legislation could be enacted in the future, as a result of the COVID-19 pandemic or otherwise, which could have an adverse effect on Lamar Advertising, its subsidiaries, and holders of its securities.

13 unchanged sentences

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.

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.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors