What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-23 · 103 added, 74 removed, 393 unchanged (31% of the section changed)

9 unchanged sentences

The Company’s net revenues are derived primarily from the rental of advertising space on outdoor advertising displays owned and operated by the Company.

We manage our business through three operating segments – billboard, logo and transit advertising.

Revenue growth is based on many factors that include the Company’s ability to increase occupancy of its existing advertising displays;

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The Company continues to evaluate and pursue strategic acquisition opportunities as they arise.

The Company has financed its historical acquisitions and intends to finance any future acquisition activity from available cash, borrowings under the senior credit facility or the issuance of debt or equity securities.

The Company has financed its historical acquisitions and intends to finance any future acquisition activity from available cash, borrowings under the senior credit facility and the Accounts Receivable Securitization Program or the issuance of debt or equity securities.

See “Liquidity and Capital Resources- Sources of Cash, ” for more information.

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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.

Our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments.

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.

4 unchanged sentences

(v) non-real estate related depreciation and amortization;

(vi) amortization of deferred financing costs, (vii) loss on extinguishment of debt;

(vi) amortization of deferred financing costs;

(vii) loss on extinguishment of debt;

(viii) transaction expenses;

36 unchanged sentences

Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $70.5 million, or 6.1% to $1.22 billion for the year ended December 31, 2024 from $1.15 billion in the same period in 2023.

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.

The $70.5 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 expense) of $48.7 million primarily related to the operations of our outdoor advertising assets, as well as an increase in stock-based compensation expense of $21.9 million.

Depreciation and amortization expense increased $169.5 million to $463.0 million for the year ended December 31, 2024 as compared to $293.4 million for the same period in 2023.

The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.

For the year ended December 31, 2024, the Company recognized a gain on disposition of assets of $6.1 million as compared to a gain on disposition of assets of $5.5 million for the same period in 2023.

The gain on disposition of assets for the year ended December 31, 2024 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.

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

Due to the above factors, operating income decreased $143.4 million to $532.0 million for the year ended December 31, 2024 compared to $675.4 million for the same period in 2023.

Interest expense decreased $2.8 million for the year ended December 31, 2024 to $171.7 million as compared to $174.5 million for the year ended December 31, 2023.

The decrease in interest expense is related to the repayment of the Term A loans outstanding under the senior credit facility during the year ended December 31, 2024.

Equity in earnings of investee was $5.1 million and $3.7 million for the years ended December 31, 2024 and 2023, 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 decrease in operating income, partially offset by the decrease in interest expense over the comparable period in 2023, resulted in a $139.1 million decrease in net income before income taxes.

The Company recorded income tax expense of $4.5 million for the year ended December 31, 2024 as compared to income tax expense of $9.8 million for the same period in 2023.

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 $4.5 million equates to an effective tax rate for the year ended December 31, 2024 of approximately 1.2%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

15 unchanged sentences

Loss on extinguishment of debt 270 115 155

Transaction expenses — 3,769 (3,769)

Interest expense (income), net 172,397 126,217 46,180

Interest expense, net 169,394 172,397 (3,003)

Equity in earnings of investee (5,094) (3,696) (1,398)

4 unchanged sentences

Adjusted EBITDA $ 1,033,158 $ 985,724 $ 47,434 4.8 %

Adjusted EBITDA for the year ended December 31, 2023 increased 5.1% to $985.7 million.

The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $49.6 million, and was partially offset by an increase in general and administrative and corporate expenses of $1.9 million, excluding the impact of stock-based compensation expense and transaction expenses.

Adjusted EBITDA for the year ended December 31, 2024 increased 4.8% to $1.03 billion.

The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $65.0 million, and was partially offset by an increase in general and administrative and corporate expenses of $17.6 million, excluding the impact of stock-based compensation expense.

Segmented Adjusted EBITDA

(in thousands)

Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease)

Billboard adjusted EBITDA $ 1,085,547 $ 1,024,911 $ 60,636

Other adjusted EBITDA (a)

50,137 56,179 (6,042)

Corporate expenses (b)

(102,526) (95,366) (7,160)

Adjusted EBITDA $ 1,033,158 $ 985,724 $ 47,434 4.8 %

(a) Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.

(b) Corporate operations are not an operating segment.

Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.

Adjusted EBITDA for the year ended December 31, 2024 increased 4.8% to $1.03 billion.

The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $60.6 million, offset by a decrease in other adjusted EBITDA of $6.0 million and an increase in corporate expenses of $7.2 million, excluding the impact of stock-based compensation expense.

Net Income/FFO/AFFO

13 unchanged sentences

Loss on extinguishment of debt 270 115 155

Transaction expenses — 3,769 (3,769)

Capital expenditures – maintenance (51,986) (58,820) 6,834

3 unchanged sentences

AFFO for the year ended December 31, 2024 increased 7.4% to $819.0 million as compared to $762.3 million for the same period in 2023.

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).

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).

LIQUIDITY AND CAPITAL RESOURCES

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For the years ended December 31, 2024 and 2023 our cash provided by operating activities was $873.6 million and $783.6 million, respectively.

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.

The increase in cash provided by operating activities for the year ended December 31, 2024 over the same period in 2023 relates to an increase in revenues, offset by an increase in operating expenses (excluding depreciation and amortization).

We expect to generate cash flows from operations during 2025 in excess of our cash needs for operations, capital expenditures and dividends, as described herein.

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Additionally, the Sixth Amendment provides for the replacement of LIBOR-based interest rate mechanics with Term Secured Overnight Financing Rate ("Term SOFR") based interest rate mechanics for the Accounts Receivable Securitization Program.

The Accounts Receivable Securitization Program was set to mature on July 21, 2025, but was subsequently extended to October 15, 2027 by the Seventh Amendment to the Receivables Financing Agreement dated October 15, 2024;

provided, that, if on the date (a “Securitization Springing Maturity Test Date”) that is 91 days prior to the then scheduled maturity date of Lamar Media’s Term Loan B loans (which is currently February 6, 2027), (a) any of the outstanding Term B loans has a scheduled maturity date prior to the date that is 91 days prior to the then scheduled maturity date of Lamar Media’s revolving credit facility (which is currently July 31, 2028) and (b) the Company and its restricted subsidiaries do not have sufficient liquidity (defined as (i) unused commitments under the revolving credit facility plus (ii) unrestricted cash and cash equivalents of the Company and its restricted subsidiaries plus (iii) borrowing availability under the Accounts Receivable Securitization Program) to repay in full the aggregate outstanding amount (including all accrued and unpaid interest, premiums and make-whole amounts (if any)) of the Term Loan B loans, then the Accounts Receivable Securitization Program will mature on such Securitization Springing Maturity Test Date.

Lamar Media may amend the facility to further extend the maturity date, enter into a new securitization facility with a different maturity date, or refinance the indebtedness outstanding under the Accounts Receivable Securitization Program using borrowings under its senior credit facility or from other financing sources.

Borrowing capacity under the Accounts Receivable Securitization Program is limited to the availability of eligible accounts receivable collateralizing the borrowings under the agreements governing the Accounts Receivable Securitization Program.

In connection with the Accounts Receivable Securitization Program, Lamar Media and certain of its subsidiaries (such subsidiaries, the “Subsidiary Originators”) sell and/or contribute their existing and future accounts receivable and certain related assets to one of two special purpose subsidiaries, Lamar QRS Receivables, LLC (the “QRS SPV”) and Lamar TRS Receivables, LLC (the “TRS SPV” and together with the QRS SPV the “Special Purpose Subsidiaries”), each of which is a wholly-owned subsidiary of Lamar Media.

Existing and future accounts receivable relating to Lamar Media and its qualified REIT subsidiaries will be sold and/or contributed to the QRS SPV and existing and future accounts receivable relating to Lamar Media’s TRSs will be sold and/or contributed to the TRS SPV.

Media’s TRSs will be sold and/or contributed to the TRS SPV.

Each of the Special Purpose Subsidiaries has granted the lenders party to the Accounts Receivable Securitization Program a security interest in all of its assets, which consist of the accounts receivable and related assets sold or contributed to them, as described above, in order to secure the obligations of the Special Purpose Subsidiaries under the agreements governing the Accounts Receivable Securitization Program.

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Lamar Media had no additional availability under the Accounts Receivable Securitization Program as of December 31, 2024.

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

“At-the-Market” Offering Program.

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

On July 24, 2024, the Company entered into an equity distribution agreement, or At-the-Market Offering agreement, (the "2024 Sales Agreement"), with J.P.

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

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 prior Sales Agreement with substantially similar terms (the "2021 Sales Agreement".

Under the terms of the 2024 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.

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The Company intends to use the net proceeds, if any, from the sale of the Class A common stock pursuant to the 2024 Sales Agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital, capital expenditures, acquisition of outdoor advertising assets and businesses and other related investments.

The Company did not issue any shares under this program from its inception through December 31, 2023.

The Company did not issue any shares under this program during the twelve months ended December 31, 2024.

The Company did not issue any shares under the 2021 Sales Agreement from inception through expiration.

Shelf Registration Statement .

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.

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

On June 21, 2021, the Company filed an automatically effective shelf registration statement that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its Class A common stock.

The shelf registration statement expired on June 21, 2024.

On July 24, 2024, the Company filed a new automatically effective shelf registration statement that allows the Company to offer and sell an indeterminate amount of additional shares of its Class A common stock, which replaces the previous shelf registration statement.

During the year ended December 31, 2024, the Company did not issue any shares under either of the shelf registration statements.

Credit Facilities.

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The Amendment amends the definition of "Subsidiary" to exclude each of Lamar Partnering Sponsor LLC and Lamar Partnering Corporation and any of their subsidiaries (collectively, the "Lamar Partnering Entities") such that, after the giving effect to the Amendment, none of the Lamar Partnering Entities are subject to the Fourth Amended and Restated Credit Agreement covenants and reporting requirements, but any investment by Lamar Media in any of the Lamar Partnering Entities would be subject to the Fourth Amended and Restated Credit Agreement covenants.

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 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 July 31, 2028, subject to certain conditions (see description of Amendment No.

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.

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, 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.

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

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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 Term A loans were set to mature on February 6, 2025 and bore 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 bore 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 bore 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.

1 unchanged sentence

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.

The Term A loans were subsequently repaid in full on July 31, 2024.

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

3 unchanged sentences

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.

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.

8 unchanged sentences

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.

As of December 31, 2024, the aggregate balance outstanding under the senior credit facility was $884.0 million, consisting of $600.0 million in Term B loans aggregate principal balance and $284.0 million outstanding borrowings under our revolving credit facility.

Lamar Media had approximately $457.2 million of unused capacity under the revolving credit facility.

2 unchanged sentences

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

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.

We expect to generate cash flows from operations during 2025 in excess of our cash needs for operations, capital expenditures and dividends, as described herein, and we believe we have sufficient liquidity with cash on hand and availability under our revolving credit facility to meet our operating cash needs for the next twelve months.

Credit Facilities and Other Debt Securities.

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

Lamar Media's outstanding Term A loans were set to mature on February 6, 2025.

On July 31, 2024, Lamar Media paid in full its $350.0 million in Term A loans outstanding under its Senior Credit facility.

The repayment of the Term A loans was completed using a combination of borrowings under our revolving credit facility and cash on hand.

Restrictions under Debt Securities.

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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.

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.

Long-term debt prepayments .

On July 31, 2024, Lamar Media paid in full its $350.0 million in Term A loans outstanding under its Senior Credit Facility.

The repayment of the Term A loans was completed using a combination of borrowings under our revolving credit facility and cash on hand.

Capital Expenditures.

Capital expenditures, excluding acquisitions, were approximately $125.3 million for the year ended December 31, 2024.

Our capital expenditures are categorized as growth or maintenance as described below.

Our capital expenditures are categorized as growth, maintenance, and other as described below.

• Growth capital expenditures include discretionary capital expenditures incurred primarily for the expansion or development of new advertising markets and construction of new advertising sites.

Growth capital expenditures also include certain technology-related investments necessary to support and scale for future customer demand of our outdoor advertising services, and other capital projects.

• Maintenance capital expenditures include capital expenditures not otherwise categorized as growth capital expenditures, including costs incurred to enhance existing advertising sites, general asset improvements, and ordinary corporate capital expenditures.

Growth capital expenditures were $63.5 million for the year ended December 31, 2024.

• Maintenance capital expenditures include recurring capital expenditures not otherwise categorized as growth or other non-recurring capital expenditures, including costs incurred to enhance existing advertising sites, general asset improvements, and ordinary corporate capital expenditures.

Maintenance capital expenditures were $52.0 million for the year ended December 31, 2024.

• Other non-recurring capital expenditures include capital expenditures to develop new non-revenue generating assets, such as office space in our local markets and the costs to re-develop advertising sites impacted by hurricanes.

Other non-recurring capital expenditures were $9.8 million for the year ended December 31, 2024.

• We anticipate our 2025 total capital expenditures will be approximately $195 million.

1 unchanged sentence

During the year ended December 31, 2024, the Company completed 24 acquisitions for a total cash purchase price of approximately $45.4 million.

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 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.

Management believes that Lamar's investment of $30.0 million will help Vistar strengthen its balance sheet, expand its research and development and extend its reach into new markets.

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

The acquisitions occurring during the year ended December 31, 2024 were financed using available cash on hand.

During the year ended December 31, 2024, the Company declared and paid distributions of $578.8 million, or $5.65 per share of common stock.

1 unchanged sentence

On February 19, 2025, the Company’s Board of Directors approved a dividend of $1.55 per common share to be paid on March 28, 2025.

Subject to the approval of the Company’s Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2024 will be $5.20 per common share, including the dividend payable on March 28, 2024.

Subject to the approval of the Company’s Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2025 will be at least $6.20 per common share (excluding any distributions related to the sale of Vistar Media, Inc.), including the dividend payable on March 28, 2025.

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).

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 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.

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

Special Purpose Acquisition Company.

On April 6, 2021, Lamar Partnering Corporation ("LPC"), a newly formed special purpose acquisition company and indirect wholly-owned subsidiary of the Company, filed a Registration Statement on Form S-1, with the Securities and Exchange Commission (the "SEC").

On June 21, 2022, LPC filed its request to withdraw its registration statement with the SEC.

In conjunction with the withdrawn offering, the Company incurred a transaction expense of $1.2 million for the write-off of deferred offering costs incurred on behalf of LPC's registration statement.

The $1.2 million in expenses are included in Corporate expenses in our Consolidated Statement of Income and Comprehensive Income at December 31, 2022.

Stock and Debt Repurchasing Program.

1 unchanged sentence

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

On September 24, 2024, the Board of Directors authorized the extension of the repurchase program through March 31, 2026.

There were no repurchases under the program as of December 31, 2024.

21 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 $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 provided by operating activities increased $90.0 million from $783.6 million in 2023 to $873.6 million for the year ended December 31, 2024, primarily resulting from an increase in revenues of approximately $96.1 million.

Cash flows used in investing activities decreased $145.2 million from $310.1 million in 2023 to $164.9 million in 2024 primarily due to a net decrease in the amount of assets acquired through acquisitions and capital expenditures of $146.6 million, as compared to the same period in 2023.

The Company’s cash flows used in financing activities were $703.4 million for the year ended December 31, 2024 as compared to $481.6 million in 2023.

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.

This increase in cash used in financing activities of $221.8 million for the year ended December 31, 2024 is primarily due to the repayment of the Term A loans outstanding on the senior credit facility as well as an increase in dividends/distributions during the year, offset by additional borrowings on the revolving credit facility.

CRITICAL ACCOUNTING ESTIMATES

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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.

The $70.5 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding non-cash compensation expense) of $48.6 million primarily related to the operations of our outdoor advertising assets, as well as an increase in stock-based compensation expense of $21.9 million.

Depreciation and amortization expense increased $169.5 million to $463.0 million for the year ended December 31, 2024 as compared to $293.4 million for the same period in 2023.

The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.

For the year ended December 31, 2024, Lamar Media recognized a gain on disposition of assets of $6.1 million as compared to a gain on disposition of assets of $5.5 million for the same period in 2023.

The gain on disposition of assets for the year ended December 31, 2024 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.

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

Due to the above factors, operating income decreased $143.3 million to $532.6 million for the year ended December 31, 2024 compared to $675.9 million for the same period in 2023.

Interest expense decreased $2.8 million for the year ended December 31, 2024 to $171.7 million as compared to $174.5 million for the year ended December 31, 2023.

The decrease in interest expense is related to the repayment of the Term A loans outstanding under the senior credit facility during the year ended December 31, 2024.

Equity in earnings of investee was $5.1 million and $3.7 million for the years ended December 31, 2024 and 2023, 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 decrease in operating income, partially offset by the decrease in interest expense over the comparable period in 2023, resulted in a $139.1 million decrease in net income before income taxes.

Lamar Media recorded income tax expense of $4.5 million for the year ended December 31, 2024 as compared to income tax expense of $9.8 million for the same period in 2023.

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.

16 unchanged sentences

Loss on extinguishment of debt 270 115 155

Transaction expenses — 3,769 (3,769)

Interest expense (income), net 172,397 126,217 46,180

Interest expense, net 169,394 172,397 (3,003)

Equity in earnings of investee (5,094) (3,696) (1,398)

2 unchanged sentences

Capitalized contract fulfillment costs, net (317) (308) (9)

Stock-based compensation expense 22,649 23,136 (487)

Non-cash compensation expense 44,525 22,649 21,876

Adjusted EBITDA $ 1,033,726 $ 986,221 $ 47,505 4.8 %

Adjusted EBITDA for the year ended December 31, 2023 increased 5.1% to $986.2 million.

Adjusted EBITDA for the year ended December 31, 2024 increased 4.8% to $1.03 billion.

The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $65.0 million, and was partially offset by an increase in general and administrative and corporate expenses of $17.5 million, excluding the impact of non-cash compensation expense.

Segmented Adjusted EBITDA

(in thousands)

Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease)

Billboard adjusted EBITDA $ 1,085,547 $ 1,024,911 $ 60,636

Other adjusted EBITDA (a)

50,137 56,179 (6,042)

Corporate expenses (b)

(101,958) (94,869) (7,089)

Adjusted EBITDA $ 1,033,726 $ 986,221 $ 47,505 4.8 %

(a) Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.

(b) Corporate operations are not an operating segment.

Adjusted EBITDA for the year ended December 31, 2024 increased 4.8% to $1.03 billion.

The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $60.6 million, offset by a decrease in other adjusted EBITDA of $6.0 million and an increase in corporate expenses of $7.1 million, excluding the impact of non-cash compensation expense.

Net Income/FFO/AFFO

8 unchanged sentences

Capitalized contract fulfillment costs, net (317) (308) (9)

Stock-based compensation expense 22,649 23,136 (487)

Non-cash compensation expense 44,525 22,649 21,876

Non-cash portion of tax provision (4,036) 2,384 (6,420)

2 unchanged sentences

Loss on extinguishment of debt 270 115 155

Transaction expenses — 3,769 (3,769)

Capital expenditures – maintenance (51,986) (58,820) 6,834

3 unchanged sentences

AFFO for the year ended December 31, 2024 increased 7.4% to $819.6 million as compared to $762.8 million for the same period in 2023.

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).

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 non-cash compensation expense).

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