What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-23 compared with 2023-02-24 · 76 added, 86 removed, 391 unchanged (29% of the section changed)

31 unchanged sentences

We expect our 2024 capital expenditures to be approximately $125 million.

Umbrella Partnership Real Estate Investment Trust

As previously announced, on July 1, 2022, the Company completed a tax reorganization to a specific type of REIT known as an Umbrella Partnership Real Estate Investment Trust ("UPREIT").

The UPREIT structure allows property owners of appreciated properties to contribute property to the operating partnership of the REIT, on a tax-deferred basis, in exchange for a partnership interest in the form of operating partnership units.

This reorganization is not expected to have any material impact on the Company's combined financial statements or business operations.

NON-GAAP FINANCIAL MEASURES

3 unchanged sentences

We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), equity in (earnings) loss of investee, loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization, loss (gain) on disposition of assets and investments, transaction expenses and capitalized contract fulfillment costs, net.

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

FFO is defined as net income before (gain) loss from the sale or disposal of real estate assets and investments, net of tax, and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest.

We define AFFO as FFO before (i) straight-line income and expense;

32 unchanged sentences

Operating income 32.0 % 28.4 %

Loss on extinguishment of debt — % 1.2 %

Interest expense 8.3 % 6.3 %

7 unchanged sentences

See “ Reconciliations ” below.

Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $123.4 million, or 12.4% to $1.12 billion for the year ended December 31, 2022 from $997.0 million in the same period in 2021.

The $123.4 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation and transaction expenses) of $133.8 million primarily related to an increase in our variable billboard lease costs and transit and airport franchise costs, as well as increases in our workforce.

Depreciation and amortization expense increased $78.2 million to $349.4 million for the year ended December 31, 2022 as compared to $271.3 million for the same period in 2021.

The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2022, as well as acquisitions and capital expenditures that occurred in the second half of 2021 and during 2022.

Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $27.2 million, or 2.4% to $1.15 billion for the year ended December 31, 2023 from $1.12 billion in the same period in 2022.

The $27.2 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation and transaction expenses) of $31.4 million primarily related to the operations of our outdoor advertising assets, partially offset by a $3.8 million decrease in transaction expenses related to acquisitions and the write-off of deferred offering costs.

Depreciation and amortization expense decreased $56.0 million to $293.4 million for the year ended December 31, 2023 as compared to $349.4 million for the same period in 2022.

The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2022.

For the year ended December 31, 2023, the Company recognized a gain on disposition of assets of $5.5 million as compared to a gain on disposition of assets of $15.7 million for the same period in 2022.

The gain on disposition of assets for the year ended December 31, 2023 primarily resulted from transactions related to the sale of billboard locations and displays.

The gain on disposition of assets for the year ended December 31, 2022 primarily resulted from a gain of $12.6 million from a contingent payment received in connection with the Company's 2018 sale of Puerto Rico assets.

Due to the above factors, operating income increased $97.4 million to $675.4 million for the year ended December 31, 2023 compared to $578.0 million for the same period in 2022.

During the year ended December 31, 2021, the Company recorded a $21.6 million loss on debt extinguishment related to Lamar Media's repayment of its 5 3/4% Senior Notes.

There was no loss on debt extinguishment during the year ended December 31, 2022.

Interest expense increased $47.0 million for the year ended December 31, 2023 to $174.5 million as compared to $127.5 million for the year ended December 31, 2022.

The increase in interest expense is primarily related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility.

Equity in earnings of investee was $4.3 million and $3.4 million for the years ended December 31, 2022 and 2021, respectively, as a result of an investment that occurred in July of 2021.

The increase in operating income and the decrease in loss on extinguishment of debt, offset by the increase in interest expense over the comparable period in 2021, resulted in a $58.8 million increase in net income before income taxes.

The Company recorded income tax expense of $17.5 million for the year ended December 31, 2022 as compared to income tax expense of $9.3 million for the same period in 2021.The $17.5 million tax expense includes an expense of $6.6 million for the reduction of Puerto Rico deferred tax assets for the year ended December 31, 2022.

The increase in interest expense is related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility.

Equity in earnings of investee was $3.7 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively.

The increase in operating income, partially offset by the increase in interest expense over the comparable period in 2022, resulted in a $50.5 million increase in net income before income taxes.

The Company recorded income tax expense of $9.8 million for the year ended December 31, 2023 as compared to income tax expense of $17.5 million for the same period in 2022.

The $17.5 million tax expense for the year ended December 31, 2022 includes an expense of $15.2 million for the reduction of Puerto Rico deferred tax assets.

The $9.8 million equates to an effective tax rate for the year ended December 31, 2023 of approximately 1.9%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

30 unchanged sentences

Depreciation and amortization related to real estate 281,026 337,387 (56,361)

Gain from sale or disposal of real estate (15,415) (1,865) (13,550)

Gain from sale or disposal of real estate, net of tax (5,201) (15,415) 10,214

Adjustments for unconsolidated affiliates and non-controlling interest (4,769) (3,631) (1,138)

13 unchanged sentences

AFFO for the year ended December 31, 2023 increased 1.7% to $762.3 million as compared to $749.7 million for the same period in 2022.

The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net), partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses) and capital expenditures related to the maintenance of our advertising assets.

The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) and a decrease in current tax expense of $6.8 million, partially offset by an increase in interest expense of $47.0 million and an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses).

LIQUIDITY AND CAPITAL RESOURCES

13 unchanged sentences

For the years ended December 31, 2023 and 2022 our cash provided by operating activities was $783.6 million and $781.6 million, respectively.

The increase in cash provided by operating activities for the year ended December 31, 2022 over the same period in 2021 relates to an increase in revenues offset by an increase in operating expenses (excluding depreciation and amortization).

The increase in cash provided by operating activities for the year ended December 31, 2023 over the same period in 2022 relates to an increase in revenues, offset by an increase in operating expenses (excluding depreciation and amortization) and an increase in interest expense.

We expect to generate cash flows from operations during 2024 in excess of our cash needs for operations, capital expenditures and dividends, as described herein.

13 unchanged sentences

As of December 31, 2023, there was $250.0 million of outstanding aggregate borrowings under the Accounts Receivable Securitization Program at a borrowing rate of approximately 6.4%.

Lamar Media has no additional availability under the Accounts Receivable Securitization Program as of December 31, 2022.

Lamar Media had no additional availability under the Accounts Receivable Securitization Program as of December 31, 2023.

The Accounts Receivable Securitization Program will mature on July 21, 2025.

“At-the-Market” Offering Program.

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

Morgan Securities LLC, Wells Fargo Securities LLC and SunTrust Robinson Humphrey, Inc.

as our sales agents.

Under the terms of the Sales Agreement, the Company could have, from time to time, issued and sold shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the sales agents as either agents or principals.

The Sales Agreement expired by its terms on May 1, 2021.

The Company did not issue any shares under this program in 2021.

On June 21, 2021, the Company entered into a new equity distribution agreement (the "2021 Sales Agreement"), with J.P.

On June 21, 2021, the Company entered into an equity distribution agreement (the "2021 Sales Agreement"), with J.P.

Morgan Securities LLC, Wells Fargo Securities LLC, Truist Securities, Inc., SMBC Nikko Securities America, Inc.

1 unchanged sentence

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

Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million

through the Sales Agents as either agents or principals.

Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals.

Sales of the Class A common stock, if any, may be made in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or through a market maker other than on an exchange.

4 unchanged sentences

On June 21, 2021, the Company filed a new automatically effective shelf registration statement (No.

333-257243) that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its Class A common stock.

333-257243) that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its

Class A common stock.

During the year ended December 31, 2023, the Company did not issue any shares under the shelf registration statement.

2 unchanged sentences

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

The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017.

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").

On July 2, 2021, Lamar Media entered into Amendment No.

2 unchanged sentences

The Amendment also amends the definition of "EBITDA" to replace the existing calculation with a net income-based calculation, which excludes the income of non-Subsidiary entities such as the Lamar Partnering Entities, except to the extent that income of such entities is received by Lamar Media in the form of dividends or distributions.

The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on February 6, 2025 (the “revolving credit facility”), (ii) a $600.0 million Term B loan facility (the “Term B loans”) which will mature on February 6, 2027, and (iii) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions, including lender approval.

4 below) (the “revolving credit facility”), (ii) a $600.0 million senior secured Term B loan facility (the “Term B loans”) which will mature on February 6, 2027, (iii) a $350.0 million senior secured Term A loan facility (the "Term A loans") which will mature on February 6, 2025, and (iv) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions, including lender approval.

Lamar Media borrowed all $600.0 million in Term B loans on February 6, 2020.

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

The Term B loans bear interest at rates based on the Adjusted LIBO Rate (“Eurodollar term loans”) or the Adjusted Base Rate (“Base Rate term loans”), at Lamar Media’s option.

Eurodollar term loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.50%.

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

The revolving credit facility bears interest at rates based on the Adjusted LIBO Rate (“Eurodollar revolving loans”) or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option.

Eurodollar revolving loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.50% (or the Adjusted LIBO Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1).

The Term B loans bear interest at rates based on Term SOFR plus a credit spread adjustment of 0.10% (Term SOFR plus such credit spread adjustment, the "Adjusted Term SOFR Rate") or the Adjusted Base Rate, at Lamar Media's option.

Term B loans bearing interest at a rate based on Term SOFR bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50%.

Term B loans bearing interest at a rate based on the Adjusted Base Rate bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50%.

The revolving credit facility bears interest at rates based on Term SOFR ("Term SOFR revolving loans") or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option.

Term SOFR revolving loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% (or the Adjusted Term SOFR Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1).

Base Rate revolving loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50% (or the Adjusted Base Rate plus 0.25% at any time the total debt ratio is less than or equal to 3.25 to 1).

1 unchanged sentence

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

2 (the "Amendment No.

2 ("Amendment No.

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

as administrative agent and the lenders party thereto.

The Amendment No.

2 establishes a new $350.0 million 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 and bear interest at Term SOFR plus 1.25% and a credit spread adjustment of 0.10%.

Amendment No.

2 established the Term A loans as a new class of incremental term loans.

The Term A loans will mature on February 6, 2025 and bear interest based on Term SOFR ("Term SOFR Term A loans") or the Adjusted Base Rate ("Base Rate Term A loans"), at Lamar Media's option.

Term SOFR Term A loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% (or the Adjusted Term SOFR Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1).

Base Rate Term A loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50% (or the Adjusted Base Rate plus 0.25% at any time the total debt ratio is less than or equal to 3.25 to 1).

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

Lamar Media borrowed all $350.0 million in Term A loans

on July 29, 2022.

Lamar Media borrowed all $350.0 million in Term A loans on July 29, 2022.

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

As of December 31, 2022, the aggregate balance outstanding under the senior credit facility was $995.0 million, consisting of $600.0 million in Term B loans aggregate principal balance, $350.0 million in Term A loans aggregate principal balance and $45.0 million outstanding borrowings under our revolving credit facility.

On April 26, 2023, Lamar Media entered into Amendment No.

3 ("Amendment No.

3") 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.

3 replaced the London Interbank Offered Rates as administered by the ICE Benchmark Administration with Term SOFR as the successor rate, as set in the Fourth Amended and

Restated Credit Agreement.

All other material terms and conditions of the Fourth Amended and Restated Credit Agreement remain unchanged by Amendment No.

On July 31, 2023, Lamar Media entered into Amendment No.

4 (the "Amendment No.

4") 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.

4 extends the maturity date of Lamar Media's $750.0 million revolving credit facility such that the revolving credit facility matures July 31, 2028;

provided, that, if on the date (a "Springing Maturity Test Date") that is 91 days prior to either the then scheduled maturity date of Lamar Media's Term B loans (which is currently February 6, 2027) or the February 15, 2028 maturity date of Lamar Media's 3 3/4% Notes, the Company and its restricted subsidiaries do not have sufficient liquidity (defined as unrestricted cash and cash equivalents of the Company and its restricted subsidiaries plus unused commitments under the revolving credit facility) to repay in full the aggregate outstanding amount (including all accrued and unpaid interest, premiums and make-whole amounts (if any)) of the Term B loans or the 3 3/4% Notes (as applicable), the revolving credit facility will mature on such Springing Maturity Test Date.

On the maturity date of the revolving credit facility, the entire principal amount of revolving loans outstanding under the revolving credit facility, together with all accrued and unpaid interest on such revolving loans, will be due and payable.

Amendment No.

4 also establishes a $75.0 million swingline as a sublimit of the revolving credit facility, which allows Lamar Media to borrow revolving loans on a same-day basis, in an aggregate outstanding principal amount of up to $75.0 million.

In addition, Amendment No.

4 amends the provisions of the Fourth Amended and Restated Credit Agreement related to incremental facilities to allow Lamar Media to establish, from time to time, one or more new incremental revolving facilities on the terms, and subject to the conditions, set forth therein.

As of December 31, 2023, the aggregate balance outstanding under the senior credit facility was $1.02 billion, consisting of $600.0 million in Term B loans aggregate principal balance, $350.0 million in Term A loans aggregate principal balance and $70.0 million outstanding borrowings under our revolving credit facility.

Lamar Media had approximately $671.2 million of unused capacity under the revolving credit facility.

Note Offerings.

On January 22, 2021, Lamar Media issued, through an institutional private placement, $550.0 million in aggregate principal amount of 3 5/8% Senior Notes due 2031 (the “3 5/8% Senior Notes”).

The issuance of the 3 5/8% Senior Notes resulted in net proceeds to Lamar Media of approximately $542.5 million.

Lamar Media used the proceeds of this offering, together with cash on hand and borrowings under the revolving credit facility and Accounts Receivable Securitization Program, to redeem all of its outstanding $650.0 million aggregate principal amount 5 3/4% Senior Notes due 2026.

See Uses of Cash-Note Redemption for more information.

Factors Affecting Sources of Liquidity

19 unchanged sentences

At December 31, 2023 we were, and currently, we are in compliance with all such tests under the senior credit facility.

subsidiaries (other than the Special Purpose Subsidiaries (as defined above under “ Sources of Cash-Accounts Receivable Securitization Program )) to EBITDA, as defined below, for the period of four consecutive fiscal quarters then ended, of less than or equal to 4.5 to 1.0.

Lamar Media must maintain a secured debt ratio, defined as total consolidated secured debt of Lamar Advertising, Lamar Media and its restricted subsidiaries (including capital lease obligations), minus the lesser of (x) $150.0 million and (y) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries (as defined above under “ Sources of Cash- Accounts Receivable Securitization Program )) to EBITDA, as defined below, for the period of four consecutive fiscal quarters then ended, of less than or equal to 4.5 to 1.0.

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

12 unchanged sentences

Restrictions under Accounts Receivable Securitization Program.

The agreements governing the Accounts Receivable Securitization Program contain customary representations and warranties, affirmative and negative covenants, and termination

event provisions, including but not limited to those providing for the acceleration of amounts owed under the Accounts Receivable Securitization Program if, among other things, the Special Purpose Subsidiaries fail to make payments when due, Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries become insolvent or subject to bankruptcy proceedings or certain judicial judgments, breach certain representations and warranties or covenants or default under other material indebtedness, a change of control occurs, or if Lamar Media fails to maintain the maximum secured debt ratio of 4.5 to 1.0 required under the senior credit facility.

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

Capital Expenditures.

8 unchanged sentences

The acquisitions occurring during the year ended December 31, 2023 were financed using available cash on hand, borrowings under the revolving credit facility and borrowings under the Accounts Receivable Securitization Program.

On May 4, 2022, the Company acquired Burkhart Advertising Inc.

which included more than 1,500 billboard structures and 3,200 billboard faces, including 23 digital displays.

On December 9, 2022, the Company acquired assets from Fairway Outdoor and Standard Outdoor which included approximately 1,600 billboard structures and 3,600 billboard displays.

These acquisitions were funded with a combination of cash on hand, borrowings under our revolving credit facility and borrowings under the Accounts Receivable Securitization Program.

On July 12, 2021, Lamar acquired a minority stake in Vistar Media ("Vistar"), a leading global provider of programmatic technology for the digital out-of-home sector.

1 unchanged sentence

Lamar received a seat on Vistar's Board of Directors.

Note Redemption.

On February 3, 2021, the Company redeemed in full all $650.0 million aggregate principal amount 5 3/4% Senior Notes due 2026.

The 5 3/4% Senior Notes redemption was completed using the proceeds received from the 3 5/8% Senior Notes offering completed on January 22, 2021, together with cash on hand and borrowings under the revolving credit facility and Accounts Receivable Securitization Program.

The notes were redeemed at a redemption price equal to 102.875% of the aggregate principal amount of the outstanding notes, plus accrued and unpaid interest to (but not including) the redemption date.

During the year ended December 31, 2021, the Company recorded a loss on debt extinguishment of $21.6 million related to the note redemption.

See Sources of Cash- Note Offerings for more information.

During the year ended December 31, 2023, the Company declared and paid distributions of $510.3 million, or $5.00 per share of common stock.

3 unchanged sentences

As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain).

The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that the Company otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, the Company’s ability to utilize net operating losses to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to

fund distributions using cash generated through its TRSs, the impact of general economic conditions on the Company's operations and other factors that the Board of Directors may deem relevant.

utilize net operating losses to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to fund distributions using cash generated through its TRSs, the impact of general economic conditions on the Company's operations and other factors that the Board of Directors may deem relevant.

The foregoing factors may also impact management's recommendations to the Board of Directors as to the timing, amount and frequency of future distributions.

7 unchanged sentences

Additionally, the Board of Directors has authorized Lamar Media to repurchase up to $250.0 million in outstanding senior or senior subordinated notes and other indebtedness outstanding from time to time under the senior credit facility.

On September 20, 2021, the Board of Directors authorized the extension of the repurchase program through March 31, 2023.

On February 23, 2023, the Company’s Board of Directors authorized the extension of the repurchase program through September 30, 2024.

There were no repurchases under the program as of December 31, 2023.

On February 23, 2023, the Company’s Board of Directors authorized the renewal of the repurchase program through September 30, 2024.

The Company's management may opt not to make any repurchases under the program, or may make aggregate purchases less than the total amount authorized.

20 unchanged sentences

This includes acquisitions in our existing markets and in new markets where we can meet our return on investment criteria.

The Company’s cash flows provided by operating activities increased $47.2 million from $734.4 million in 2021 to $781.6 million for the year ended December 31, 2022, primarily resulting from an increase in revenues of approximately $244.7 million offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets and depreciation and amortization) of approximately $137.6 million, as well as increases in interest expense of $21.1 million and income tax expense and $8.2 million as compared to the comparable period in 2021.

Cash flows used in investing activities increased $157.3 million from $461.8 million in 2021 to $619.1 million in 2022 primarily due to a net increase in the amount of assets acquired through acquisitions, investments and capital expenditures of $178.5 million, offset by decreases in notes receivable, as compared to the same period in 2021.

The Company’s cash flows provided by operating activities increased $2.0 million from $781.6 million in 2022 to $783.6 million for the year ended December 31, 2023, primarily resulting from an increase in revenues of approximately $78.8 million, offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets and depreciation and amortization) of approximately $27.7 million and an increase in interest expense of $47.0 million as compared to the comparable period in 2022.

Cash flows used in investing activities decreased $309.0 million from $619.1 million in 2022 to $310.1 million in 2023 primarily due to a net decrease in the amount of assets acquired through acquisitions, investments and capital expenditures of $329.6 million, as compared to the same period in 2022.

The Company’s cash flows used in financing activities were $481.6 million for the year ended December 31, 2023 as compared to $209.3 million in 2022.

This decrease in cash used in financing activities of $85.2 million for the year ended December 31, 2022 is primarily due to increased borrowings on the senior credit facility and accounts receivable securitization program in 2022, offset by an increase in cash paid for dividends and distributions in 2022 over the comparable period in 2021.

This increase in cash used in financing activities of $272.3 million for the year ended December 31, 2023 is primarily due to no additional borrowings on the senior credit facility and a decrease in net borrowings on the accounts receivable securitization program in 2023, partially offset by an increase in net borrowings on the revolving credit facility in 2023 over the comparable period in 2022.

CRITICAL ACCOUNTING ESTIMATES

30 unchanged sentences

On January 1, 2019, the Company adopted ASU No.

2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right of use assets on our consolidated

balance sheet.

2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right of use assets on our consolidated balance sheet.

Our operating lease liabilities (including short-term liabilities) and right of use asset balances were $1.29 billion and $1.32 billion as of December 31, 2023, respectively.

19 unchanged sentences

Operating income 32.0 % 28.5 %

Loss on extinguishment of debt — % 1.2 %

Interest expense 8.3 % 6.3 %

7 unchanged sentences

See “Reconciliations” below.

Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $123.7 million, or 12.4% to $1.12 billion for the year ended December 31, 2022 from $996.2 million in the same period in 2021.

The $123.7 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation and transaction expenses) of $134.2 million primarily related to an increase in our variable billboard lease costs and transit and airport franchise costs, as well as increases in our workforce.

Depreciation and amortization expense increased $78.2 million to $349.4 million for the year ended December 31, 2022 as compared to $271.3 million for the same period in 2021.

The increase is due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2022, as well as acquisitions and capital expenditures that occurred in the second half of 2021 and during 2022.

The $27.2 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation and transaction expenses) of $31.5 million primarily related to the operations of our outdoor advertising assets, partially offset by a $3.8 million decrease in transaction expenses related to acquisitions and the write-off of deferred offering costs.

Depreciation and amortization expense decreased $56.0 million to $293.4 million for the year ended December 31, 2023 as compared to $349.4 million for the same period in 2022.

The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2022.

For the year ended December 31, 2023, Lamar Media recognized a gain on disposition of assets of $5.5 million as compared to a gain on disposition of assets of $15.7 million for the same period in 2022.

The gain on disposition of assets for the year ended December 31, 2023 primarily resulted from transactions related to the sale of billboard locations and displays.

Due to the above factors, operating income increased $97.4 million to $675.9 million for the year ended December 31, 2023 compared to $578.5 million for the same period in 2022.

During the year ended December 31, 2021, Lamar Media recorded a $21.6 million loss on debt extinguishment related to the repayment of its 5 3/4% Senior Notes.

There was no loss on debt extinguishment during the year ended December 31, 2022.

Interest expense increased $47.0 million for the year ended December 31, 2023 to $174.5 million as compared to $127.5 million for the year ended December 31, 2022.

The increase in interest expense is primarily related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility.

Equity in earnings of investee was $4.3 million and $3.4 million for the years ended December 31, 2022 and 2021, respectively, as a result of an investment that occurred in July of 2021.

The increase in operating income and the decrease in loss on extinguishment of debt, offset by the increase in interest expense over the comparable period in 2021, resulted in a $58.4 million increase in net income before income taxes.

Lamar Media recorded income tax expense of $17.5 million for the year ended December 31, 2022 as compared to an income tax expense of $9.3 million for the same period in 2021.

The $17.5 million tax expense includes an expense of $15.2 million for the reduction of Puerto Rico deferred tax assets for the year ended December 31, 2022.

The increase in interest expense is related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility.

Equity in earnings of investee was $3.7 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively.

The increase in operating income, partially offset by the increase in interest expense over the comparable period in 2022, resulted in a $50.5 million increase in net income before income taxes.

Lamar Media recorded income tax expense of $9.8 million for the year ended December 31, 2023 as compared to income tax expense of $17.5 million for the same period in 2022.

The $17.5 million tax expense for the year ended December 31, 2022 includes an expense of $15.2 million for the reduction of Puerto Rico deferred tax assets.

31 unchanged sentences

Depreciation and amortization related to real estate 281,026 337,387 (56,361)

Gain from sale or disposal of real estate (15,415) (1,865) (13,550)

Gain from sale or disposal of real estate, net of tax (5,201) (15,415) 10,214

Adjustments for unconsolidated affiliates and non-controlling interest (4,769) (3,631) (1,138)

14 unchanged sentences

The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue

less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net), offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses) and capital expenditures related to the maintenance of our advertising assets.

less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) and a decrease in current tax expense of $6.8 million, partially offset by an increase in interest expense of $47.0 million and an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses).

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 7. Management’s Discussion and Analysis