What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-24 compared with 2022-02-25 · 273 added, 214 removed, 1737 unchanged (22% of the section changed)

69 unchanged sentences

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 69,000 billboard land leases for which they determined the lease term using a portfolio approach, in accordance with which the negotiated stated initial lease term for each billboard land lease was concluded to be the lease term under Accounting Standards Codification Topic 842, Leases (ASC 842).

The Company has approximately 72,500 billboard land leases for which they determined the lease term using a portfolio approach, in accordance with which the negotiated stated initial lease term for each billboard land lease was concluded to be the lease term under Accounting Standards Codification Topic 842, Leases (ASC 842).

We identified the assessment of the 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.

Company’s billboard land leases, the Company typically has both unilateral renewal and termination options.

In the Company’s billboard land 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 lease term should or should not include renewal periods (including periods after an optional termination date), the evaluation of which required subjective auditor judgment.

55 unchanged sentences

Additional paid-in-capital 2,061,671 2,001,399

Accumulated comprehensive income 855 934

Accumulated comprehensive (loss) income ( 659 ) 855

Accumulated deficit ( 804,382 ) ( 734,415 )

28 unchanged sentences

121,902 123,841 162,061

Income before income tax expense (benefit) 397,346 248,046 367,889

Income tax expense (benefit) (note 12) 9,256 4,660 ( 4,222 )

Income before income tax expense 456,099 397,346 248,046

Income tax expense (note 12) 17,452 9,256 4,660

Net income 438,647 388,090 243,386

34 unchanged sentences

— — — — 8,010 — — 8,010

Issuance of 266,410 shares of common stock for cash

— 1 — — 21,197 — — 21,198

Purchase of 116,483 shares of treasury stock

72 unchanged sentences

Payment for investments in equity securities — ( 30,000 ) —

Decrease (increase) in notes receivable 107 — ( 448 )

Proceeds received from property insurance claims — — 210

Decrease in notes receivable 12,124 107 —

Proceeds from disposition of assets and investments 15,649 6,480 10,968

42 unchanged sentences

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.

On July 1, 2022, the Company's direct wholly owned subsidiary Lamar Media Corp.

("Lamar Media") entered into the Amended and Restated Limited Partnership Agreement (the "Partnership Agreement") of Lamar Advertising Limited Partnership (the "OP") as the initial limited partner, along with its wholly owned subsidiary, Lamar Advertising General Partner, LLC, as the general partner of the OP (the "General Partner").

Lamar Media formed the OP and contributed all of its assets to the OP in connection with the Company's reorganization (the "Reorganization") as a specific type of REIT known as an Umbrella Partnership Real Estate Investment Trust ("UPREIT").

The Company completed the Reorganization to facilitate tax-deferred contributions of properties to the OP in exchange for limited partnership interests in the OP.

The Reorganization did not have a material impact on our consolidated financial statements.

(b) Principles of Consolidation

12 unchanged sentences

We rent advertising space on billboards, buses, shelters, benches, logo plates and in airport terminals.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

5 unchanged sentences

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

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.

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.

19 unchanged sentences

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.

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

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 intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future cash flows.

(g) Lease Liabilities

28 unchanged sentences

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

In addition, the Company’s foreign assets and operations continue to be subject to taxation in the foreign jurisdictions where those

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

tax basis, as well as operating loss and tax credit carryforwards.

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 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.

3 unchanged sentences

During the years ended December 31, 2022, 2021 and 2020, the Company declared and paid distributions of its REIT taxable income of $ 508,249 or $ 5.00 per share, $ 404,809 or $ 4.00 per share and $ 251,944 or $ 2.50 per share, respectively.

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.

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, the impact of general economic conditions on the Company's operations and other factors that the Board of Directors may deem relevant.

During each of the years ended December 31, 2022, 2021 and 2020, the Company paid dividend distributions to holders of its Series AA Preferred Stock of $ 365 or $ 63.80 per share.

6 unchanged sentences

Non-cash compensation expense recognized during the years ended December 31, 2022, 2021, and 2020 were $ 23,136 , $ 37,368 and $ 18,772 , respectively.

The $ 37,368 expensed during the year ended December 31, 2021 consists of (i) $ 4,348 related to stock options and the employee stock purchase plan, (ii) $ 31,776 related to stock grants made under the Company’s performance-based stock incentive program in 2021, (iii) $ 622 related to non-performance restricted stock awards and (iv) $ 622 related to restricted stock awards to directors.

The $ 23,136 expensed during the year ended December 31, 2022 consists of (i) $ 4,929 related to stock options and the employee stock purchase plan, (ii) $ 11,545 related to stock grants made under the Company’s performance-based stock incentive program in 2022, (iii) $ 5,897 related to LTIP Units issued to the Company's executive officers, (iv) $ 161 related to non-performance restricted stock awards and (v) $ 604 related to restricted stock awards to directors.

See Note 15 for information on the assumptions used to calculate the fair value of stock-based compensation.

4 unchanged sentences

The allowance for doubtful accounts is estimated based on historical collections, accounts receivable aging, economic indicators, and expected future trends.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(p) Foreign Currency Translation

3 unchanged sentences

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 in the Consolidated Statements of Stockholders’ Equity.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(q) Asset Retirement Obligations

1 unchanged sentence

The liability is capitalized as part of the related long-lived asset’s carrying amount.

Adjustments are made to the asset retirement obligation liability to reflect changes in the estimates of the retirement period and amount of expected cash flows, with an offsetting adjustment made to the related long-lived tangible asset.

The significant assumptions used in estimating the Company's asset retirement obligations include the retirement period, cost of asset dismantlement, credit-adjusted risk-free interest rates, inflation and market risk.

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.

10 unchanged sentences

On July 12, 2021, Lamar invested $ 30,000 to acquire a 20 % minority interest in Vistar Media, a leading global provider of programmatic technology for the digital out-of-home sector.

This investment is accounted for as an equity method investment and is included in other assets on the Consolidated Balance Sheet.

For the year ended December 31, 2021, the Company recorded $ 3,384 in equity in earnings of investee on the Consolidated Statement of Income and Comprehensive Income.

This investment is accounted for as an equity method investment and is included in other assets on the Consolidated Balance Sheets.

For the years ended December 31, 2022 and 2021, related to this investment, the Company recorded $ 4,284 and $ 3,384 , respectively, in equity in earnings of investee on the Consolidated Statements of Income and Comprehensive Income.

(v) Subsequent Events

3 unchanged sentences

The majority of our revenues are derived from contracts for advertising space on billboard, logo and transit displays.

Contracts which do not meet the criteria of a lease under ASC 842, are accounted for under ASC 606, Revenue from Contracts with Customers .

The majority of our advertising space contracts do not meet the definition of a lease under ASC 842 and are therefore accounted for under ASC 606.

Contracts which do not meet the criteria of a lease under ASC 842, Leases are accounted for under ASC 606, Revenue from Contracts with Customers .

The majority of our advertising space contracts do not meet the definition of a

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

lease under ASC 842 and are therefore accounted for under ASC 606.

The contract revenues are recognized ratably over their contract life.

5 unchanged sentences

Contract revenues for production services are recognized upon satisfaction of the contract which is typically less than one week.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Arrangements with multiple performance obligations:

21 unchanged sentences

Year Ended December 31, 2022

During the year ended December 31, 2021, the Company completed several acquisitions of outdoor and transit advertising assets for a total cash purchase price of $ 312,257 , net of cash acquired of $ 1,419 .

During the year ended December 31, 2022, the Company completed several acquisitions of outdoor advertising assets for a total purchase price of $ 479,766 , net of cash acquired of $ 6,904 .

Included within this total purchase price were the acquisitions of Burkhart Advertising Inc.

for an aggregate purchase price of $ 130,000 as well as Fairway Outdoor and Standard Outdoor for an aggregate purchase price of $ 92,650 .

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 estimates at the dates of acquisition.

As of December 31, 2021, our fair value allocation of the assets acquired and liabilities assumed in a business combination completed December 3, 2021 is considered preliminary and is subject to revision, which may result in adjustments to this allocation.

As of December 31, 2022, our fair value allocation of the assets acquired and liabilities assumed from Fairway Outdoor and Standard Outdoor in the business combination completed December 9, 2022 is considered preliminary and is subject to revision, which may result in adjustments to this allocation.

The aggregate purchase price of this business combination was $ 92,650 .

We expect to finalize these amounts as soon as possible but not later than the end of 2023.

In order to develop our preliminary fair values, the Company utilized asset information received from the acquired company and fair value allocation benchmarks from similar completed transactions.

Our preliminary allocation of these assets includes property, plant and equipment, intangibles and goodwill of $ 6,022 , $ 53,775 and $ 9,506 , respectively.

In order to develop our preliminary fair values, the Company utilized asset information received from the acquired company and fair

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

value allocation benchmarks from similar completed transactions.

Our preliminary allocation of these assets includes property, plant and equipment, intangibles and goodwill of $ 34,066 , $ 28,130 and $ 30,458 , respectively.

The following is a summary of the allocation of the purchase price in the above transactions, which includes the preliminary values for a business combination completed on December 9, 2022.

4 unchanged sentences

Customer lists and contracts 43,339

Other intangibles 721

Asset acquisition costs 903

3 unchanged sentences

Operating lease liabilities ( 68,867 )

Other assets 486

Total acquired intangible assets for the year ended December 31, 2022 were $ 391,861 , of which $ 99,003 was assigned to goodwill.

3 unchanged sentences

The aggregate amortization expense related to the 2022 acquisitions for the year ended December 31, 2022 was $ 14,605 .

As of December 31, 2022, we finalized our fair value allocation of the assets acquired and liabilities assumed from a business combination completed on December 3, 2021.

The changes to our updated fair value allocation of this business combination were considered immaterial and recorded during the year ended December 31, 2022.

The following unaudited pro forma financial information for the Company gives effect to the 2022 and 2021 acquisitions as if they had occurred on January 1, 2021.

5 unchanged sentences

Year Ended December 31, 2021

During the year ended December 31, 2020, the Company completed several acquisitions of outdoor advertising assets for a total purchase price of $ 46,160 , of which $ 45,584 was in cash and $ 576 in non-cash consideration.

The acquisition purchase price has been proportionally allocated to assets based on relative fair value acquired and liabilities assumed based on fair market value at the dates of acquisition.

The acquisition purchase price has been allocated to assets acquired and liabilities assumed based on fair market value estimates at the dates of acquisition.

LAMAR ADVERTISING COMPANY

2 unchanged sentences

(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.

As of December 31, 2021, our fair value allocation of the assets acquired and liabilities assumed in a business combination completed December 3, 2021 was considered preliminary and subject to revision, which could result in adjustments to this allocation.

The aggregate purchase price of this business combination was $ 75,000 .

In order to develop our preliminary fair values, the Company utilized asset information received from the acquired company and fair value allocation benchmarks from similar completed transactions.

Our preliminary allocation of these assets includes property, plant and equipment, intangibles and goodwill of $ 6,022 , $ 53,775 and $ 9,506 , respectively.

As discussed above, we finalized this fair value allocation during 2022.

The following is a summary of the allocation of the purchase price in the above transactions, which includes the preliminary values for a business combination completed on December 3, 2021.

Property, plant and equipment $ 38,289

Goodwill 24,089

Site locations 206,734

1 unchanged sentence

Customer lists and contracts 31,101

Other intangibles 721

Asset acquisition costs 523

1 unchanged sentence

Current liabilities ( 4,406 )

Operating right of use assets 7,269

Operating lease right of use assets 32,487

Operating lease liabilities ( 30,197 )

The total amount of acquired intangible assets have a weighted average useful life of approximately 14 years.

Other assets 486

Total acquired intangible assets for the year ended December 31, 2021 were $ 266,288 , of which $ 24,089 was assigned to goodwill.

Goodwill is not amortized for financial statement purposes and $ 14,584 of goodwill related to 2021 acquisitions is expected to be deductible for tax purposes.

The acquired intangible assets have a weighted average useful life of approximately 14 years.

The intangible assets include customer lists and contracts of $ 31,101 ( 7 year weighted average useful life) and site locations of $ 206,734 ( 15 year weighted average useful life).

The aggregate amortization expense related to the 2021 acquisitions for the year ended December 31, 2021 was approximately $ 4,335 .

The following unaudited pro forma financial information for the Company gives effect to the 2021 and 2020 acquisitions as if they had occurred on January 1, 2020.

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.

Net revenues $ 1,826,448 $ 1,615,855

Net income applicable to common stock $ 379,874 $ 230,035

Net income per common share — basic $ 3.76 $ 2.28

Net income per common share — diluted $ 3.75 $ 2.28

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(4) Non-cash Financing and Investing Activities

14 unchanged sentences

$ 4,109,146 $ 3,782,288

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(6) Goodwill and Other Intangible Assets

17 unchanged sentences

Balance as of December 31, 2020 $ 2,165,864

Goodwill acquired during the year 24,089

Purchase price adjustments and other 9

3 unchanged sentences

Balance as of December 31, 2022 $ 2,288,805

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Amortization expense for the years ended December 31, 2022, 2021 and 2020 was $ 134,256 , $ 114,319 and $ 110,201 , respectively.

10 unchanged sentences

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.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Financing lease right of use assets are amortized over the life of the lease which is recorded in depreciation and amortization on the Consolidated Statements of Income and Comprehensive Income.

7 unchanged sentences

During the year ended December 31, 2020, we had base operating lease costs of $ 298,135 and variable lease costs of $ 43,572 , for a total operating lease cost of $ 341,707 .

Variable operating lease costs above include non-lease transit payments of $ 47,054 , $ 25,670 and $ 27,086 for the years ended December 31, 2021, 2020 and 2019, respectively.

Our operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization).

Also, for the years ended December 31, 2021, 2020 and 2019, we recorded a loss (gain) of $ 241 , ($ 451 ) and ($ 4,061 ) respectively, in gain on disposition of assets related to the amendment and termination of lease agreements.

Also, for the years ended December 31, 2022, 2021 and 2020, we recorded a (gain) loss of ($ 824 ), $ 241 and ($ 451 ) respectively, in gain on disposition of assets related to the amendment and termination of lease agreements.

Cash payments of $ 307,581 , $ 296,460 and $ 286,575 were made reducing our operating lease liabilities for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in cash flows provided by operating activities in the Consolidated Statements of Cash Flows.

2 unchanged sentences

We recorded $ 7,478 , $ 6,184 and $ 4,953 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the years ended December 31, 2022, 2021 and 2020, respectively.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Our operating leases have a weighted-average remaining lease term of 12.5 years.

8 unchanged sentences

Total operating lease liabilities $ 1,241,493

During the year ended December 31, 2020, we obtained $ 19,891 of leased assets in exchange for new financing lease liabilities.

During the years ended December 31, 2022 and 2021, we obtained no new leased assets in exchange for new financing lease liabilities.

Our financing leases have a weighted-average remaining lease term of 4.9 years and a weighted-average discount rate of 3.1 %.

For the years ended December 31, 2021 and 2020, amortization expense of $ 2,853 and $ 222 was recorded within depreciation and amortization, respectively, and interest expense of $ 585 and $ 47 was recorded within interest expense, respectively, on the Consolidated Statements of Income and Comprehensive Income in relation to these financing lease

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Cash payments of $ 1,331 were made reducing our financing lease liabilities for the year ended December 31, 2021 and are included in cash flows used in financing activities in the Consolidated Statements of Cash Flows.

We had no cash payments related to financing lease liabilities for the years ended December 31, 2020 and 2019.

We had no expenses relating to the financing lease liabilities for the year ended December 31, 2019.

For the years ended December 31, 2022, 2021 and 2020, amortization expense of $ 2,853 , $ 2,853 and $ 222 was recorded within depreciation and amortization, respectively, and interest expense of $ 544 , $ 585 and $ 47 , was recorded within interest expense, respectively, on the Consolidated Statements of Income and Comprehensive Income in relation to these financing lease liabilities.

Cash payments of $ 1,331 were made reducing our financing lease liabilities for the years ended December 31, 2022 and 2021 and are included in cash flows used in financing activities in the Consolidated Statements of Cash Flows.

We had no cash payments related to financing lease liabilities for the year ended December 31, 2020.

Due to our election not to reassess conclusions about lease identification as part of the adoption of ASC 842, Leases , our transit agreements were accounted for as leases on January 1, 2019.

As we enter into new or renew current transit agreements, those agreements do not meet the criteria of a lease under ASC 842, therefore they are no longer accounted for as a lease.

For the years ended December 31, 2022, 2021 and 2020, non-lease variable transit payments were $ 78,877 , $ 47,054 and $ 25,670 , respectively.

These transit expenses are recorded in direct advertising expenses (exclusive of depreciation and amortization) on the Consolidated Statements of Income and Comprehensive Income.

(8) Accrued Expenses

7 unchanged sentences

$ 117,593 $ 135,038

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(9) Long-term Debt

14 unchanged sentences

Long-term debt, excluding current maturities $ 3,095,042 $ 32,022 $ 3,063,020

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

December 31, 2021

24 unchanged sentences

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.

as administrative agent and the lenders party thereto, under which the parties agreed to amend and restate Lamar Media’s

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

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”).

8 unchanged sentences

Base Rate term loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50 %.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

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.

2 unchanged sentences

The guarantees, covenants, events of default and other terms of the senior credit facility apply to the Term B loans and revolving credit facility.

On July 29, 2022, Lamar Media entered into Amendment No.

2 (the "Amendment No.

2") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A.

as administrative agent and the lenders party thereto.

Amendment No.

2 establishes a new $ 350,000 Senior Secured Term Loan A loan (the "Term A loans") as a new class of incremental term loans.

The Term A loans will mature on February 6, 2025 with no required amortization payments prior to maturity and bear interest at rates based on the Term Secured Overnight Financing Rate ("Term SOFR") plus 1.25 % and a credit spread adjustment of 0.10 %.

The covenants, events of default and other terms of the senior credit facility apply to the Term A loans.

Lamar Media borrowed all $ 350,000 in Term A loans on July 29, 2022.

The entire amount of the Term A loans will be payable at maturity.

Proceeds from the Term A loans were used to repay outstanding balances on the revolving credit facility and a portion of the outstanding balance on the Accounts Receivable Securitization Program.

As of December 31, 2022, there were $ 45,000 in outstanding borrowings under the revolving credit facility.

7 unchanged sentences

• make investments;

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

• pay dividends.

9 unchanged sentences

Lamar Media retains the responsibility of servicing the accounts receivable balances pledged as collateral under the Accounts Receivable Securitization Program and provides a performance guaranty.

On June 30, 2020, Lamar Media and the Special Purpose Subsidiaries entered into the Third Amendment (the “Third Amendment”) to the Receivables Financing Agreement.

The Third Amendment increased the maximum three month average

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Delinquency Ratio, Dilution Ratio and Days’ Sales Outstanding to 11.00 % (from 8.00 %), 7.00 % (from 4.00 %) and 75 days (from 65 days), respectively, for each of the months of June, July and August 2020.

The Third Amendment did not modify any other financial covenant.

Additionally, the Third Amendment established a new Minimum Funding Threshold, which requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 50.00 % of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, though the Special Purpose Subsidiaries had the right to borrow less than the Minimum Funding Threshold during certain periods prior to December 21, 2020 at their election.

On October 23, 2020, Lamar Media and the Special Purpose Subsidiaries entered into the Fourth Amendment (the “Fourth Amendment”) to the Receivables Financing Agreement.

The Fourth Amendment increased the maximum three month average Delinquency Ratio generally to 13.00 % (and up to 16.00 % for up to two additional periods upon written notice from Lamar Media), and increased the maximum three month average Dilution Ratio to 5.00 % for the remaining term of the Accounts Receivable Securitization Program.

Additionally, the Fourth Amendment increased the Minimum Funding Threshold which, as amended, requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 70.00 % of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, though the Special Purpose Subsidiaries had the right to borrow less than the Minimum Funding Threshold during certain periods prior to December 21, 2020 at their election.

On May 24, 2021, Lamar Media and the Special Purpose Subsidiaries entered into the Fifth Amendment (the "Fifth Amendment") to the Receivables Financing Agreement.

The Fifth Amendment extended the maturity date of the Accounts Receivable Securitization Program to July 21, 2024.

Additionally, the Fifth Amendment decreased the Minimum Funding Threshold which, as amended, requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 50.00 % of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, provided that the Minimum Funding Threshold shall be zero on any day that is a Minimum Funding Threshold Holiday which, as amended, provides for an annual holiday from the requirement of up to sixty days per year.

The Fifth Amendment also provides for updated LIBOR replacement procedures.

On June 24, 2022, Lamar Media and the Special Purpose Subsidiaries entered into the Sixth Amendment (the "Sixth Amendment") to the Receivables Financing Agreement.

The Sixth Amendment increased the Accounts Receivable Securitization Program from $ 175,000 to $ 250,000 and extended the maturity date of the Accounts Receivable Securitization Program to July 21, 2025.

Additionally, the Sixth Amendment provides for the replacement of LIBOR-based interest rate mechanics with Term SOFR based interest rate mechanics for the Accounts Receivable Securitization Program.

As of December 31, 2022, there was $ 250,000 outstanding aggregate borrowings under the Accounts Receivable Securitization Program.

5 unchanged sentences

(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.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

5% Senior Subordinated Notes

3 unchanged sentences

On September 16, 2020 Lamar Media redeemed the remaining aggregate principal amount of $ 267,500 of the outstanding 5 % Notes at a redemption price of 100.833 %, plus accrued and unpaid interest up to but not including the redemption date.

These redemptions

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

were funded using cash on hand, borrowings under the revolving credit facility and the Accounts Receivable Securitization Program and proceeds from the additional 4% Senior Notes issued on August 19, 2020.

These redemptions were funded using cash on hand, borrowings under the revolving credit facility and the Accounts Receivable Securitization Program and proceeds from the additional 4 % Senior Notes issued on August 19, 2020.

These redemptions combined resulted in a loss on debt extinguishment of $ 7,051 , of which $ 4,456 was cash, for the year ended December 31, 2020.

20 unchanged sentences

The institutional private placement on August 19, 2020 resulted in net proceeds to Lamar Media of approximately $ 146,900 .

Lamar Media may redeem up to 40 % of the aggregate principal amount of the 4% Notes, at any time and from time to time, at a price equal to 104 % of the aggregate principal amount redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before February 15, 2023, provided that following the redemption, at least 60 % of the 4% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering.

At any time prior to February 15, 2025, Lamar Media may redeem some or all of the 4% Notes at a price equal to 100 % of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium.

On or after February 15, 2025, Lamar Media may redeem the 4% Notes, in whole or in part, in cash at redemption prices specified in the 4% 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 4% Notes at a price equal to 101 % of the principal amount of the 4% Notes, plus accrued and unpaid interest, up to but not including the repurchase date.

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

Lamar Media may redeem up to 40 % of the aggregate principal amount of the 4 % Notes, at any time and from time to time, at a price equal to 104 % of the aggregate principal amount redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before February 15, 2023, provided that following the redemption, at least 60 % of the 4 % Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering.

At any time prior to February 15, 2025, Lamar Media may redeem some or all of the 4 % Notes at a price equal to 100 % of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium.

On or after February 15, 2025, Lamar Media may redeem the 4 % Notes, in whole or in part, in cash at redemption prices specified in the 4 % 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 4 % Notes at a price equal to 101 % of the principal amount of the 4 % Notes, plus accrued and unpaid interest, up to but not including the repurchase date.

3 3/4% Senior Notes

15 unchanged sentences

The institutional private placement on January 22, 2021 resulted in net proceeds to Lamar Media of approximately $ 542,500 .

Lamar Media may redeem up to 40 % of the aggregate principal amount of the 3 5/8% Notes, at any time and from time to time, at a price equal to 103.625 % of the aggregate principal amount so redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before January 15, 2024 provided that following the redemption, at least 60 % of the 3 5/8% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering.

At any time prior to January 15, 2026, Lamar Media may redeem some or all of the 3 5/8% Notes at a price equal to 100 % of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium.

On or after January 15, 2026, Lamar Media may redeem the 3 5/8% Notes, in whole or in part, in cash at redemption prices specified in the 3 5/8% 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 3 5/8% Notes at a price equal to 101 % of the principal amount of the 3 5/8% Notes, plus accrued and unpaid interest, up to but not including the repurchase date.

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

following the redemption, at least 60 % of the 3 5/8% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering.

On or after January 15, 2026, Lamar Media may redeem the 3 5/8% Notes, in whole or in part, in cash at redemption prices specified in the 3 5/8% Notes.

Debt Repurchase Program

7 unchanged sentences

Additions to asset retirement obligations 3,662

Revision in estimates 41,644

Accretion expense 4,476

6 unchanged sentences

Balance at December 31, 2022 $ 390,442

Revision in estimates of $ 41,644 reflects changes in cost estimates to remove structures and resurface land for structures that reside on leased land in the Company's outdoor advertising portfolio.

Revision in estimates in December 31, 2022 and 2021 of $ 110,321 and $ 41,644 , respectively, reflects changes in cost estimates to remove structures and resurface land for structures that reside on leased land in the Company's outdoor advertising portfolio.

(11) Depreciation and Amortization

7 unchanged sentences

$ 349,449 $ 271,294 $ 251,296

The increase in the amount of depreciation and amortization expense excluded from direct advertising expense for the year ended December 31, 2021 as compared to the year ended December 31, 2020 is due to the revision in the cost estimate included in the calculation of asset retirement obligations during the period.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

The increase in the amount of depreciation and amortization expense excluded from direct advertising expense for the years ended December 31, 2022 and 2021 as compared to the year ended December 31, 2020 is due to the revision in the cost estimate included in the calculation of asset retirement obligations during each period.

(12) Income Taxes

5 unchanged sentences

The following information pertains to the Company’s income taxes on a consolidated basis.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Income tax expense (benefit) consists of the following:

21 unchanged sentences

Total $ 456,099 $ 397,346 $ 248,046

A reconciliation of significant differences between the reported amount of income tax expense (benefit) and the expected amount of income tax expense that would result from applying the U.S.

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 2022, 2021 and 2020 tax years is as follows:

12 unchanged sentences

( 84 ) 292 ( 78 )

Deferred tax adjustment due to REIT conversion (e)

Other differences, net (e)

20,976 1,873 1,911

Other differences, net 1,873 1,911 2,299

Income tax expense (benefit) $ 9,256 $ 4,660 $ ( 4,222 )

Income tax expense $ 17,452 $ 9,256 $ 4,660

(a) Includes dividend paid deduction of $ 106,129 , $ 85,087 and $ 52,985 for the tax years ended December 31, 2022, 2021 and 2020, respectively.

(b) For the years ended December 31, 2022, 2021 and 2020, a non-cash valuation allowance of ($ 14,984 ), ($ 1,564 ) and ($ 1,031 ), respectively, was recorded to income tax expense due to our limited ability to utilize Puerto Rico deferred tax assets in future years.

As a result, a non-cash benefit of $ 182 to income tax expense was recorded for the reduction of the Puerto Rico net deferred tax liability for the year ended December 31, 2020.

(d) Management does not assert that the undistributed earnings of our Canadian subsidiaries will be permanently reinvested.

For the years ended December 31, 2022, 2021 and 2020, we recognized a deferred tax (benefit) expense of ($ 84 ), $ 292 and ($ 78 ), respectively, for future foreign withholding taxes related to undistributed earnings.

(e) Under Section 1031.01(b)(10) of the 2011 Puerto Rico Code, net operating losses and the tax basis of any other assets shall be reduced for forgiveness of debt to the extent by which the taxpayer is insolvent.

As a result, a non-cash expense of $ 15,201 was recorded to income tax expense for the reduction of Puerto Rico deferred tax assets for the year ended December 31, 2022.

The Puerto Rico income tax withholding rate applicable on the accrued interest of the debt is 29%.

As a result, a cash expense of $ 5,068 was recorded to income tax expense.

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

(b) For the years ended December 31, 2021, 2020 and 2019, a non-cash valuation allowance of ($ 1,564 ), ($ 1,031 ) and ($ 1,032 ), respectively, was recorded to income tax expense (benefit) due to our limited ability to utilize Puerto Rico deferred tax assets in future years.

As a result, a non-cash benefit of $ 182 to income tax expense (benefit) was recorded for the reduction of the Puerto Rico net deferred tax liability for the year ended December 31, 2020.

(d) Management does not assert that the undistributed earnings of our Canadian subsidiaries will be permanently reinvested.

For the years ended December 31, 2021, 2020 and 2019, we recognized a deferred tax expense (benefit) of $ 292 , ($ 78 ) and ($ 102 ), respectively, for future foreign withholding taxes related to undistributed earnings.

(e) 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.

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

11 unchanged sentences

Intangibles ( 5,016 ) ( 5,209 )

Accrued liabilities not deducted for tax purposes ( 2,222 ) —

Investment in partnerships ( 1,758 ) —

Property, plant and equipment ( 2,234 ) ( 1,765 )

12 unchanged sentences

The valuation allowance related to state net operating loss carry forwards as of December 31, 2022 and 2021 was $ 0 and $ 334 , respectively.

The net changes in the total state valuation allowance for the years ended December 31, 2021 and 2020 was an increase of $ 13 and $ 320 , respectively.

The net changes in the total state valuation allowance for the years ended December 31, 2022 and 2021 was a (decrease) increase of ($ 334 ) and $ 13 , respectively.

As of December 31, 2022, we had approximately $ 4,413 of Canadian net operating loss carry forwards before valuation allowances.

1 unchanged sentence

These carry forwards expire between 2040 and 2041.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

As of December 31, 2022, we had approximately $ 8,651 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 2022 and 2029.

These carry forwards expire in 2032.

In addition, we have $ 850 of alternative minimum tax credits available to offset future Puerto Rico income tax.

3 unchanged sentences

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.

Based on the current level of pretax earnings, the Company will not generate the minimum

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

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.

10 unchanged sentences

Additions for tax positions related to prior years 381

Lapse of statute of limitations ( 1,013 )

Reductions for tax positions related to prior years ( 1,388 )

Balance as of December 31, 2021 $ 5,125

1 unchanged sentence

Additions for tax positions related to prior years 1,142

Reductions for tax positions related to prior years ( 1,388 )

Lapse of statute of limitations ( 1,441 )

Balance as of December 31, 2022 $ 5,544

Included in the balance of unrecognized benefits at December 31, 2022 is $ 5,544 of tax benefits that, if recognized in future periods, would impact our effective tax rate.

During the years ended December 31, 2021 and 2020, we recognized interest and penalties of ($ 42 ) and $ 173 , respectively, as a component of income tax expense (benefit) in connection with our liabilities related to uncertain tax positions.

During the years ended December 31, 2022 and 2021, we recognized interest and penalties of $ 212 and ($ 42 ), 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 $ 1,732 as a result of the expiration of statute of limitations.

5 unchanged sentences

With respect to Canada and Puerto Rico, we are no longer subject to income tax audits for years before 2018 and 2017, respectively.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(13) Related Party Transactions

11 unchanged sentences

EATEL also provides data back-up and recovery services to businesses.

During the years ended December 31, 2021 and 2020, the Company was a customer of EATEL for data back-up and recovery services.

During the years ended December 31,

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

2022 and 2021, 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 $ 228 and $ 315 for the years ended December 31, 2022 and 2021, respectively.

The Company was also contracted by EATEL to provide advertising services in the aggregate amount of $ 154 and $ 139 for the years ended December 31, 2022 and 2021, respectively.

The Company had $ 1,066 and no receivables from employees or executive officers at December 31, 2021 and 2020, respectively.

The Company had $ 158 and $ 1,066 receivables from employees or executive officers at December 31, 2022 and 2021, respectively.

On July 12, 2021, Lamar invested $ 30,000 to acquire a 20 % minority interest in Vistar Media, a leading global developer of programmatic technology for the digital out-of-home sector.

For the year ended December 31, 2021, the Company recognized revenue of $ 10,586 from advertisements generated through Vistar's programmatic technology platform.

We also incurred expenses of $ 880 related to these advertisements for the year ended December 31, 2021.

For the years ended December 31, 2022 and 2021, the Company recognized revenue of $ 13,074 and $ 10,586 , respectively, from advertisements generated through Vistar's programmatic technology platform.

We also incurred expenses of $ 1,167 and $ 880 related to these advertisements for the years ended December 31, 2022 and 2021, respectively.

(14) Stockholders’ Equity

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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).

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

On May 1, 2018, the Company entered into an equity distribution agreement (the “Sales Agreement”) with J.P.

6 unchanged sentences

and Scotia Capital (USA) Inc.

as our sales agents (each a "Sales Agent", and collectively, the "Sales Agents"), which replaced the prior Sales Agreement with substantially similar terms.

as our sales agents (each a "Sales Agent", and collectively, the "Sales Agents"), which replaced the

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

prior Sales Agreement with substantially similar terms.

Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $ 400,000 , through the Sales Agents as either agents or principals.

18 unchanged sentences

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

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

expected volatility.

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.

3 unchanged sentences

We believe these estimates will approximate future behavior.

LAMAR ADVERTISING COMPANY

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

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.

25 unchanged sentences

Total intrinsic value of options exercised was $ 10,475 for the year ended December 31, 2022.

Stock Purchase Plan.

On May 30, 2019, our shareholders approved Lamar Advertising’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”).

The number of shares of Class A common stock available for issuance under the 2019 ESPP was automatically increased by 86,853 shares on January 1, 2022 pursuant to the automatic increase provisions of the 2019 ESPP.

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

Stock Purchase Plan.

Lamar Advertising’s 2009 Employee Stock Purchase Plan (the “2009 ESPP”), approved by our shareholders on May 28, 2009, 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 was automatically increased by 86,490 shares on January 1, 2021 pursuant to the automatic increase provisions of the 2019 ESPP.

The following is a summary of 2019 ESPP share activity for the year ended December 31, 2022:

7 unchanged sentences

The shares subject to these awards generally can range from a minimum of 0 % to a maximum of either 100 % of the target number of shares or 150 % of a target dollar amount depending on the level at which the goals are attained.

Based on the Company’s performance measures achieved through December 31, 2021, the Company has accrued $ 29,324 as stock-based compensation expense related to these agreements.

Based on the Company’s performance measures achieved through December 31, 2022, the Company recorded $ 11,545 as stock-based compensation expense related to these agreements.

In addition to performance-based compensation, the Company may issue LTIP Units of the OP, a subsidiary of the Company, to certain officers, employees and directors under the 1996 Plan.

Such LTIP Units are subject to vesting and forfeiture conditions based on performance criteria approved by the Compensation Committee, which mirrors the performance criteria applicable to the Company's performance-based compensation, as described above.

LTIP Units are a class of units intended to qualify as "profits interests" of the OP.

The LTIP Units convert into Common Units of the OP upon the occurrence of certain events.

Common Units are redeemable by the holder for shares of the Company's Class A common stock after a holding period of twelve months, or may be paid out in cash at the option of the general partner of the OP.

On July 1, 2022, the OP issued a total of 88,000 LTIP Units to the Company's executive officers.

For the year ended December 31, 2022, the Company recorded $ 5,897 as stock-based compensation expense related to these LTIP Units.

(16) Benefit Plans

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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, 2021, 2020 and 2019, the Company contributed $ 1,540 , $ 1,616 and $ 1,675 , respectively.

Upon termination, death or disability, participating employees are eligible to receive an amount

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

equal to the fair market value of the assets in the employee’s deferred compensation account.

For the years ended December 31, 2022, 2021 and 2020, the Company contributed $ 1,637 , $ 1,540 and $ 1,616 , 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.

11 unchanged sentences

2026 $ 24,180

2027 $ 16,442

Thereafter $ 49,590

11 unchanged sentences

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 $ 3,059,961 , which is greater than both the gross and carrying amount of $ 3,050,454 as of December 31, 2021.

The majority of the fair value is

Investments and initial recognition of asset retirement obligations

LAMAR ADVERTISING COMPANY

2 unchanged sentences

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

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).

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 $ 3,054,174 , which is less than both the gross and carrying amount of $ 3,345,420 as of December 31, 2022.

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

3 unchanged sentences

(21) New Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing specific exceptions to the general principles in Topic 740 - Income Taxes.

This guidance is effective for years beginning after December 15, 2020.

The Company adopted this guidance on January 1, 2021 and the impact of the adoption is not material to the Company's consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

2 unchanged sentences

ASU 2020-04 may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

As of December 31, 2021, the Company has not modified any contracts as a result of reference rate reform and is evaluating the impact this standard may have on its financial statements.

As of December 31, 2022, the Company has modified the Accounts Receivable Securitization Program to provide for the replacement of LIBOR-based interest rates with Term SOFR based interest rates.

The Term A loans established July 29, 2022 also bear interest using Term SOFR rates.

This modification is not expected to have a material impact on the Company's consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which provides guidance on the recognition and measurement of contract assets and contract liabilities acquired in a business combination.

At the acquisition date, the acquirer should account for the related revenue contracts as if the acquirer had originated the contracts.

The guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination.

This guidance is effective for public entities as of December 15, 2022.

We do not anticipate the adoption of this guidance will have a material impact on the Company's consolidated financial statements.

(22) Subsequent Events

On February 23, 2023, the Company’s Board of Directors authorized the renewal to repurchase up to $ 250 million of the Company’s Class A common stock through September 30, 2024.

The Board of Directors also authorized the renewal of Lamar Media’s ability to repurchase up to $ 250 million outstanding senior notes and other indebtedness outstanding through September 30, 2024.

LAMAR ADVERTISING COMPANY

59 unchanged sentences

(4) Includes non-cash amounts of $ 2,367 , $ 1,541 and $ 621 at December 31, 2022, 2021 and 2020, respectively

(5) Includes non-cash amounts of $ 48,848 at December 31, 2021 related to the revision in cost estimate included in the calculation of asset retirement obligations

(6) Includes preliminary allocation of assets acquired during 2021

(5) Includes non-cash amounts of $ 103,019 and $ 48,848 at December 31, 2022 and 2021, respectively, related to the revision in cost estimate included in the calculation of asset retirement obligations

(6) Includes preliminary allocation of assets acquired during 2022 and 2021

(7) Includes non-cash amounts of $ 11,132 and $ 3,843 at December 31, 2022 and 2021, respectively

71 unchanged sentences

As discussed in Note 1 to the consolidated financial statements, which refers to Note 7 to the consolidated financial statements of Lamar Advertising Company, 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).

53 unchanged sentences

Additional paid-in-capital 3,132,178 3,071,905

Accumulated comprehensive income 855 934

Accumulated comprehensive (loss) income ( 659 ) 855

Accumulated deficit ( 1,944,018 ) ( 1,864,414 )

24 unchanged sentences

121,902 123,841 162,061

Income before income tax expense (benefit) 398,164 248,533 368,318

Income tax expense (benefit) 9,256 4,660 ( 4,222 )

Income before income tax expense 456,601 398,164 248,533

Income tax expense 17,452 9,256 4,660

Net income $ 439,149 $ 388,908 $ 243,873

64 unchanged sentences

Payment for investments in equity securities — ( 30,000 ) —

Decrease (increase) in notes receivable 107 — ( 448 )

Proceeds received from property insurance claims — — 210

Decrease in notes receivable 12,124 107 —

Proceeds from disposition of assets and investments 15,649 6,480 10,968

39 unchanged sentences

The Company provides transit advertising in airport terminals, on bus shelters, benches and buses in the markets it serves.

On July 1, 2022, Lamar Media entered into the Amended and Restated Limited Partnership Agreement (the "Partnership Agreement") of Lamar Advertising Limited Partnership (the "OP") as the initial limited partner, along with its wholly owned subsidiary, Lamar Advertising General Partner, LLC, as the general partner of the OP (the "General Partner").

The Company completed the Reorganization to facilitate tax-deferred contributions of properties to the OP in exchange for limited partnership interests in the OP.

The Reorganization did not have a material impact on our consolidated financial statements.

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 and 22 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.

2 unchanged sentences

(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., Lamar QRS Receivables, LLC, Fairway Media Group, LCC, Ashby Street Outdoor Holdings, LLC and their majority-owned subsidiaries.

The accompanying consolidated financial statements include Lamar Media, its subsidiary, Lamar Advertising Limited Partnership, and Lamar Advertising Limited Partnerships' 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., Lamar QRS Receivables, LLC, Fairway Media Group, LCC, Ashby Street Outdoor Holdings, LLC and their majority-owned subsidiaries.

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

2 unchanged sentences

There were no significant non-cash financing activities during the years ended December 31, 2022 and 2021.

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(3) Goodwill and Other Intangible Assets

12 unchanged sentences

Goodwill $ 2,277,784 $ 252,667 $ 2,178,941 $ 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, 2022 and 2021 are as follows:

Balance as of December 31, 2020 $ 2,154,844

Goodwill acquired during the year 24,089

Purchase price adjustments and other 8

11 unchanged sentences

$ 108,724 $ 127,318

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(5) Long-term Debt

12 unchanged sentences

Long-term debt, excluding current maturities $ 3,095,042 $ 32,022 $ 3,063,020

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

December 31, 2021

18 unchanged sentences

Later years $ 2,099,464 $ 23,851 $ 2,075,613

LAMAR MEDIA CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

(6) Related Party Transactions

12 unchanged sentences

The accounts for all companies reflected herein are presented using the equity method of accounting for investments in subsidiaries.

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, 2022

69 unchanged sentences

Equity in earnings of investee — ( 4,315 ) — — ( 4,315 )

Income (loss) before income tax expense (benefit) 388,908 523,648 896 ( 515,288 ) 398,164

Income tax expense (benefit) (2)

Income (loss) before income tax expense 439,149 572,596 6,401 ( 561,545 ) 456,601

Income tax expense (2)

— 10,970 6,482 — 17,452

5 unchanged sentences

(1) Caption is exclusive of depreciation and amortization.

(2) The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.

(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.

16 unchanged sentences

Depreciation and amortization — 267,141 4,153 — 271,294

(Gain) loss on disposition of assets — ( 9,036 ) 10 — ( 9,026 )

Gain on disposition of assets — ( 1,965 ) ( 150 ) — ( 2,115 )

— 1,231,886 35,270 ( 1,760 ) 1,265,396

Operating income (loss) — 411,697 ( 1,103 ) — 410,594

Operating income — 520,220 1,785 — 522,005

Loss on debt extinguishment 21,604 — — — 21,604

1 unchanged sentence

Interest expense (income), net 104,776 ( 44 ) 889 — 105,621

Equity in earnings of investee — ( 3,384 ) — — ( 3,384 )

Income (loss) before income tax expense (benefit) 388,908 523,648 896 ( 515,288 ) 398,164

4 unchanged sentences

Net income (loss) $ 388,908 $ 514,092 $ 1,196 $ ( 515,288 ) $ 388,908

Total other comprehensive income, net of tax — — 249 — 249

Total other comprehensive loss, net of tax — — ( 79 ) — ( 79 )

Total comprehensive income (loss) $ 388,908 $ 514,092 $ 1,117 $ ( 515,288 ) $ 388,829

19 unchanged sentences

Depreciation and amortization — 249,299 1,997 — 251,296

Gain on disposition of assets — ( 3,103 ) ( 4,138 ) — ( 7,241 )

(Gain) loss on disposition of assets — ( 9,036 ) 10 — ( 9,026 )

— 1,124,837 35,068 ( 1,643 ) 1,158,262

Operating income — 507,261 10,909 — 518,170

Operating income (loss) — 411,697 ( 1,103 ) — 410,594

Loss on debt extinguishment 25,235 — — — 25,235

Equity in (earnings) loss of subsidiaries ( 404,332 ) — — 404,332 —

Interest expense (income), net 135,224 ( 175 ) 1,777 — 136,826

Income (loss) before income tax (benefit) expense 372,540 507,410 5,884 ( 517,516 ) 368,318

Income tax (benefit) expense (2)

Income (loss) before income tax expense (benefit) 243,873 411,872 ( 2,880 ) ( 404,332 ) 248,533

Income tax expense (benefit) (2)

— 5,203 ( 543 ) — 4,660

5 unchanged sentences

(1) Caption is exclusive of depreciation and amortization.

(2) The income tax (benefit) expense reflected in each column does not include any tax effect of the equity in earnings from subsidiari es.

(2) The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from subsidiari es.

LAMAR MEDIA CORP.

10 unchanged sentences

Acquisitions — ( 479,766 ) — — ( 479,766 )

Payment for investments in equity securities — ( 30,000 ) — — ( 30,000 )

Proceeds from disposition of assets and investments — 3,358 12,291 — 15,649

8 unchanged sentences

Principal payments on financing leases — ( 1,331 ) — — ( 1,331 )

Proceeds received from note offering 550,000 — — — 550,000

Redemption of senior notes and senior subordinated notes ( 668,688 ) — — — ( 668,688 )

Proceeds received from senior credit facility term loans 350,000 — — — 350,000

Payment on accounts receivable securitization program — — ( 190,000 ) — ( 190,000 )

22 unchanged sentences

Acquisitions — ( 312,257 ) — — ( 312,257 )

Payment for investments in equity securities — ( 30,000 ) ( 30,000 )

Proceeds from disposition of assets and investments — 6,480 — — 6,480

Investment in subsidiaries ( 342,257 ) — — 342,257 —

(Increase) decrease in intercompany notes receivable ( 60,183 ) — — 60,183 —

Decrease (increase) in intercompany notes receivable 51,976 — — ( 51,976 ) —

Decrease in notes receivable — 107 — — 107

Net cash (used in) provided by investing activities ( 290,281 ) ( 455,398 ) ( 6,362 ) 290,281 ( 461,760 )

3 unchanged sentences

Principal payments on long-term debt — ( 378 ) — — ( 378 )

Borrowings on long-term debt — 8,750 — — 8,750

Principal payments on financing leases — ( 1,331 ) — — ( 1,331 )

Proceeds received from note offering 550,000 — — — 550,000

Redemption of senior notes and senior subordinated notes ( 668,688 ) — — — ( 668,688 )

Proceeds received from senior credit facility term loans 598,500 — — — 598,500

Payments on senior credit facility term loans ( 978,097 ) — — — ( 978,097 )

Proceeds received from accounts receivable securitization program — — 180,000 — 180,000

7 unchanged sentences

Effect of exchange rate changes in cash and cash equivalents — — 81 — 81

Net increase (decrease) in cash and cash equivalents 97,403 ( 6,546 ) 4,524 — 95,381

Net (decrease) increase in cash and cash equivalents ( 19,565 ) 1,762 ( 3,978 ) — ( 21,781 )

Cash and cash equivalents at beginning of period 110,588 1,732 8,749 — 121,069

13 unchanged sentences

Proceeds from disposition of assets and investments — 10,968 — — 10,968

Proceeds received from insurance claims — 210 — — 210

Investment in subsidiaries ( 46,161 ) — — 46,161 —

Decrease (increase) in intercompany notes receivable 3,787 — — ( 3,787 ) —

Increase in notes receivable ( 448 ) — — — ( 448 )

(Increase) decrease in intercompany notes receivable ( 60,183 ) — — 60,183 —

Net cash (used in) provided by investing activities ( 105,767 ) ( 91,965 ) ( 5,500 ) 106,344 ( 96,888 )

3 unchanged sentences

Principal payments on long-term debt — ( 9,112 ) — — ( 9,112 )

Borrowings on long-term debt 8,750 8,750

Proceeds received from senior credit facility term loans 598,500 — — — 598,500

Payments on senior credit facility term loans ( 978,097 ) — — — ( 978,097 )

Proceeds received from accounts receivable securitization program — — 122,500 — 122,500

2 unchanged sentences

Proceeds received from note offering 1,549,250 — — — 1,549,250

Redemption of senior notes and senior subordinated notes ( 1,058,596 ) — — — ( 1,058,596 )

Intercompany loan (payments) proceeds — ( 9,176 ) 69,359 ( 60,183 ) —

65 unchanged sentences

(4) Includes non-cash amounts of $ 2,367 , $ 1,541 and $ 621 at December 31, 2022, 2021 and 2020, respectively

(5) Includes non-cash amounts of $ 48,848 at December 31, 2021 related to the revision in cost estimate included in the calculation of asset retirement obligations

(6) Includes preliminary allocation of assets acquired during 2021

(6) Includes preliminary allocation of assets acquired during 2022 and 2021

(7) Includes non-cash amounts of $ 11,132 and $ 3,843 and at December 31, 2022 and 2021, respectively

3 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 8. Financial Statements and Supplementary Data