UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2021
____________________
LAMAR ADVERTISING COMPANY
(Exact name of registrants as specified in its charter)
____________________
(States or other jurisdictions of incorporation) | (Commission File Numbers) | (IRS Employer Identification Nos.) | ||||||||||||
(Address of principal executive offices and zip code) | ||||||||||||||
( (Registrants’ telephone number, including area code) | ||||||||||||||
| N/A (Former name or former address, if change since last report) | ||||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Lamar Advertising Company securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
| Emerging growth company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition.
On November 3, 2021 , Lamar Advertising Company announced via press release its results for the quarter ended September 30, 2021. A copy of Lamar’s press release is hereby furnished to the Commission and incorporated by reference herein as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | ||||
| 99.1 | |||||
| 104 | Cover Page Interactive Data File - (embedded within the Inline XBRL document). | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
Date: | LAMAR ADVERTISING COMPANY | ||||||||||
| By: | /s/ Jay L. Johnson | ||||||||||
| Jay L. Johnson | |||||||||||
| Executive Vice President, Chief Financial Officer, and Treasurer | |||||||||||
5321 Corporate Boulevard
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Third Quarter Ended September 30, 2021 Operating Results
Three Month Results
•Net revenue was $476.9 million
•Net income was $106.8 million
•Adjusted EBITDA was $230.7 million
Nine Month Results
•Net revenue was $1.29 billion
•Net income was $264.8 million
•Adjusted EBITDA was $596.6 million
Baton Rouge, LA – November 3, 2021 - Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company’s operating results for the third quarter ended September 30, 2021.
"We are very pleased with our third-quarter results and the sustained, robust recovery in the US advertising market," Lamar chief executive Sean Reilly said. "Our 2021 billboard revenue is expected to exceed our 2019 total, while transit is well on its way back to pre-pandemic levels and our logos business continues steady. Our pacings indicate the sales momentum should continue through the end of 2021, so we are raising our guidance for full-year diluted AFFO to $6.35 to $6.50 per share."
Third Quarter Highlights
•Net revenue increased 23.5%
•Adjusted EBITDA margin of 48.4%
•Free cash flow increased 36.6%
•Diluted AFFO per share increased 43.9%
Third Quarter Results
Lamar reported net revenues of $476.9 million for the third quarter of 2021 versus $386.1 million for the third quarter of 2020, a 23.5% increase. Operating income for the third quarter of 2021 increased $27.5 million to $133.3 million as compared to $105.9 million for the same period in 2020. Lamar recognized net income of $106.8 million for the third quarter of 2021 as compared to net income of $62.8 million for same period in 2020, an increase of $44.1 million. Net income per diluted share was $1.05 and $0.62 for the three months ended September 30, 2021 and 2020, respectively.
Adjusted EBITDA for the third quarter of 2021 was $230.7 million versus $170.7 million for the third quarter of 2020, an increase of 35.2%.
Cash flow provided by operating activities was $203.0 million for the three months ended September 30, 2021, an increase of $52.2 million as compared to the same period in 2020. Free cash flow for the third quarter of 2021 was $173.7 million as compared to $127.2 million for the same period in 2020, a 36.6% increase.
For the third quarter of 2021, funds from operations, or FFO, was $187.6 million versus $119.9 million for the same period in 2020, an increase of 56.4%. Adjusted funds from operations, or AFFO, for the third quarter of 2021 was $192.5 million compared to $133.4 million for the same period in 2020, an increase of 44.3%. Diluted AFFO per share increased 43.9% to $1.90 for the three months ended September 30, 2021 as compared to $1.32 for the same period in 2020.
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Acquisition-Adjusted Three Months Results
Acquisition-adjusted net revenue for the third quarter of 2021 increased 23.3% over acquisition-adjusted net revenue for the third quarter of 2020. Acquisition-adjusted EBITDA for the third quarter of 2021 increased 33.8% as compared to acquisition-adjusted EBITDA for the third quarter of 2020. Acquisition-adjusted net revenue and acquisition-adjusted EBITDA include adjustments to the 2020 period for acquisitions and divestitures for the same time frame as actually owned in the 2021 period. See “Reconciliation of Reported Basis to Acquisition-Adjusted Results”, which provides reconciliations to GAAP for acquisition-adjusted measures.
Nine Month Results
Lamar reported net revenues of $1.29 billion for the nine months ended September 30, 2021 versus $1.14 billion for the nine months ended September 30, 2020, a 13.4% increase. Operating income for the nine months ended September 30, 2021 increased $102.4 million to $371.2 million as compared to $268.9 million for the same period in 2020. Lamar recognized net income of $264.8 million for the nine months ended September 30, 2021 as compared to net income of $134.7 million for the same period in 2020, an increase of $130.1 million. Net income per diluted share was $2.61 and $1.33 for the nine months ended September 30, 2021 and 2020, respectively.
Adjusted EBITDA for the nine months ended September 30, 2021 was $596.6 million versus $463.7 million for the same period in 2020, an increase of 28.7%.
Cash flow provided by operating activities was $488.2 million for the nine months ended September 30, 2021, an increase of $126.8 million as compared to the same period in 2020. Free cash flow for the nine months ended September 30, 2021 was $444.4 million as compared to $312.4 million for the same period in 2020, a 42.3% increase.
For the nine months ended September 30, 2021, FFO was $459.8 million versus $309.6 million for the same period in 2020, an increase of 48.5%. AFFO for the nine months ended September 30, 2021 was $487.1 million compared to $342.7 million for the same period in 2020, an increase of 42.1%. Diluted AFFO per share increased 41.5% to $4.81 for the nine months ended September 30, 2021 as compared to $3.40 for the same period in 2020.
Liquidity
As of September 30, 2021, Lamar had $823.2 million in total liquidity that consisted of $735.7 million available for borrowing under its revolving senior credit facility and $87.6 million in cash and cash equivalents. There were no amounts outstanding under the Company’s revolving credit facility.
Recent Developments
On September 20, 2021, Lamar’s Board of Directors authorized the extension of the Company’s existing (i) stock repurchase program, which provides for the repurchase of up to $250 million of its Class A common stock and (ii) debt repurchase program, which provides for the repurchase by Lamar Media of up to $250 million in outstanding senior or senior subordinated notes and other indebtedness outstanding from time to time under its senior credit agreement. The repurchase programs, which were previously set to expire on September 30, 2021, have been extended through March 31, 2023. The Company’s management may opt not to make any repurchases under the programs or may make aggregate purchases less than the total amount authorized.
On September 30, 2021, Lamar paid a quarterly cash dividend of $1.00 per common share to its Class A and Class B stockholders, an increase of $0.25 per share over the quarterly cash dividend paid on June 30, 2021.
During the three months ended September 30, 2021, Lamar closed eight acquisitions for a total cash purchase price of $80.4 million, adding over 800 advertising displays. During the nine months ended September 30, 2021, the Company closed 22 acquisitions for a total cash purchase price of $107.6 million, adding approximately 1,500 advertising displays.
On October 20, 2021, Lamar repaid $60.0 million of its outstanding balance under its Accounts Receivable Securitization Program. Currently, the Company has $115.0 million outstanding under the Accounts Receivable Securitization Program. There was $175.0 million in borrowings outstanding under the Accounts Receivable Securitization Program as of September 30, 2021.
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Revised Guidance
We are updating our 2021 guidance issued in August 2021 to reflect our expected continued recovery from the COVID-19 pandemic during 2021. We now expect net income per diluted share for fiscal year 2021 to be between $3.75 and $3.85, with diluted AFFO per share between $6.35 and $6.50. See “Supplemental Schedules Unaudited REIT Measures and Reconciliations to GAAP Measures” for reconciliation to GAAP.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding sales trends. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others: (1) our significant indebtedness; (2) the severity and duration of the COVID-19 pandemic and its impact on our business, financial condition and results of operations; (3) the state of the economy and financial markets generally, including the impact caused by the COVID-19 pandemic and the effect of the broader economy on the demand for advertising; (4) the continued popularity of outdoor advertising as an advertising medium; (5) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (6) our ability to continue to qualify as a Real Estate Investment Trust (“REIT”) and maintain our status as a REIT; (7) the regulation of the outdoor advertising industry by federal, state and local governments; (8) the integration of companies and assets that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (9) changes in accounting principles, policies or guidelines; (10) changes in tax laws applicable to REITs or in the interpretation of those laws; (11) our ability to renew expiring contracts at favorable rates; (12) our ability to successfully implement our digital deployment strategy; and (13) the market for our Class A common stock. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We caution investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and we undertake no obligation to update or revise the statements, except as may be required by law.
Use of Non-GAAP Financial Measures
The Company has presented the following measures that are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”): adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), free cash flow, funds from operations (“FFO”), adjusted funds from operations (“AFFO”), diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense. Our management reviews our performance by focusing on these key performance indicators not prepared in conformity with GAAP. We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for their most directly comparable GAAP financial measures.
Our Non-GAAP financial measures are determined as follows:
•We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), loss (gain) on extinguishment of debt and investments, equity in earnings (loss) of investees, stock-based compensation, depreciation and amortization, gain or loss on disposition of assets and investments and capitalized contract fulfillment costs, net.
•Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenues.
•Free cash flow is defined as adjusted EBITDA less interest, net of interest income and amortization of deferred financing costs, current taxes, preferred stock dividends and total capital expenditures.
•We use the National Association of Real Estate Investment Trusts definition of FFO, which 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.
•We define AFFO as FFO before (i) straight-line revenue and expense; (ii) capitalized contract fulfillment costs, net; (iii) stock-based compensation expense; (iv) non-cash portion of tax provision; (v) non-real estate related depreciation and amortization; (vi) amortization of deferred financing costs; (vii) loss on extinguishment of debt; (viii) non-recurring infrequent or unusual losses (gains); (ix) less maintenance capital expenditures; and (x) an adjustment for unconsolidated affiliates and non-controlling interest.
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•Diluted AFFO per share is defined as AFFO divided by weighted average diluted common shares outstanding.
•Outdoor operating income is defined as operating income before corporate expenses, stock-based compensation, capitalized contract fulfillment costs, net, depreciation and amortization and loss (gain) on disposition of assets.
•Acquisition-adjusted results adjusts our net revenue, direct and general and administrative expenses, outdoor operating income, corporate expense and EBITDA for the prior period by adding to, or subtracting from, the corresponding revenue or expense generated by the acquired or divested assets before our acquisition or divestiture of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted results, therefore, we include revenue and expenses generated by assets that we did not own in the prior period but acquired in the current period. We refer to the amount of pre-acquisition revenue and expense generated by or subtracted from the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “acquisition-adjusted results”.
•Acquisition-adjusted consolidated expense adjusts our total operating expense to remove the impact of stock-based compensation, depreciation and amortization, capitalized contract fulfillment costs, net and loss (gain) on disposition of assets and investments. The prior period is also adjusted to include the expense generated by the acquired or divested assets before our acquisition or divestiture of such assets for the same time frame that those assets were owned in the current period.
Adjusted EBITDA, FFO, AFFO, diluted AFFO per share, free cash flow, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense are not intended to replace other performance measures determined in accordance with GAAP. Free cash flow, FFO and AFFO do not represent cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities as a measure of liquidity or of funds available to fund our cash needs, including our ability to make cash distributions. Adjusted EBITDA, free cash flow, FFO, AFFO, diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense are presented as we believe each is a useful indicator of our current operating performance. Specifically, we believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision making and for evaluating our core operating results; (2) adjusted EBITDA is widely used in the industry to measure operating performance as it excludes the impact of depreciation and amortization, which may vary significantly among companies, depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) adjusted EBITDA, FFO, AFFO, diluted AFFO per share and acquisition-adjusted consolidated expense each provides investors with a meaningful measure for evaluating our period-over-period operating performance by eliminating items that are not operational in nature and reflect the impact on operations from trends in occupancy rates, operating costs, general and administrative expenses and interest costs; (4) acquisition-adjusted results is a supplement to enable investors to compare period-over-period results on a more consistent basis without the effects of acquisitions and divestitures, which reflects our core performance and organic growth (if any) during the period in which the assets were owned and managed by us; (5) free cash flow is an indicator of our ability to service debt and generate cash for acquisitions and other strategic investments; (6) outdoor operating income provides investors a measurement of our core results without the impact of fluctuations in stock-based compensation, depreciation and amortization and corporate expenses; and (7) each of our Non-GAAP measures provides investors with a measure for comparing our results of operations to those of other companies.
Our measurement of adjusted EBITDA, FFO, AFFO, diluted AFFO per share, free cash flow, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of adjusted EBITDA, FFO, AFFO, diluted AFFO per share, free cash flow, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense to the most directly comparable GAAP measures have been included herein.
4
Conference Call Information
A conference call will be held to discuss the Company’s operating results on Wednesday, November 3, 2021 at 8:00 a.m. central time. Instructions for the conference call and Webcast are provided below:
Conference Call
| All Callers: | 1-334-777-6991 or 1-800-338-4880 | ||||
| Passcode: | 36341506 | ||||
| Replay: | 1-334-323-0140 or 1-877-919-4059 | ||||
| Passcode: | 55208290 | ||||
| Available through Wednesday, November 10, 2021 at 11:59 p.m. eastern time | |||||
| Live Webcast: | www.lamar.com | ||||
| Webcast Replay: | www.lamar.com | ||||
| Available through Wednesday, November 10, 2021 at 11:59 p.m. eastern time | |||||
| Company Contact: | Buster Kantrow | ||||
| Director of Investor Relations | |||||
| (225) 926-1000 | |||||
bkantrow@lamar.com | |||||
General Information
Founded in 1902, Lamar Advertising (Nasdaq: LAMR) is one of the largest outdoor advertising companies in North America, with over 352,000 displays across the United States and Canada. Lamar offers advertisers a variety of billboard, interstate logo, transit and airport advertising formats, helping both local businesses and national brands reach broad audiences every day. In addition to its more traditional out-of-home inventory, Lamar is proud to offer its customers the largest network of digital billboards in the United States with approximately 3,800 displays.
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LAMAR ADVERTISING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||
| Net revenues | $ | 476,894 | $ | 386,110 | $ | 1,292,827 | $ | 1,140,331 | ||||||||||||||||||||||||
| Operating expenses (income) | ||||||||||||||||||||||||||||||||
| Direct advertising expenses | 147,310 | 136,309 | 419,873 | 418,826 | ||||||||||||||||||||||||||||
| General and administrative expenses | 80,245 | 63,039 | 223,514 | 208,651 | ||||||||||||||||||||||||||||
| Corporate expenses | 18,653 | 16,092 | 52,806 | 49,171 | ||||||||||||||||||||||||||||
| Stock-based compensation | 13,076 | 4,884 | 22,540 | 11,046 | ||||||||||||||||||||||||||||
| Capitalized contract fulfillment costs, net | — | — | (900) | 1,036 | ||||||||||||||||||||||||||||
| Depreciation and amortization | 84,300 | 61,237 | 205,671 | 187,548 | ||||||||||||||||||||||||||||
| Gain on disposition of assets | (26) | (1,304) | (1,922) | (4,823) | ||||||||||||||||||||||||||||
| Total operating expense | 343,558 | 280,257 | 921,582 | 871,455 | ||||||||||||||||||||||||||||
| Operating income | 133,336 | 105,853 | 371,245 | 268,876 | ||||||||||||||||||||||||||||
| Other expense (income) | ||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | — | 7,051 | 21,604 | 25,235 | ||||||||||||||||||||||||||||
| Interest income | (198) | (248) | (554) | (617) | ||||||||||||||||||||||||||||
| Interest expense | 26,125 | 35,068 | 80,638 | 107,058 | ||||||||||||||||||||||||||||
| Equity in earnings of investee | (1,141) | — | (1,141) | — | ||||||||||||||||||||||||||||
| 24,786 | 41,871 | 100,547 | 131,676 | |||||||||||||||||||||||||||||
| Income before income tax expense | 108,550 | 63,982 | 270,698 | 137,200 | ||||||||||||||||||||||||||||
| Income tax expense | 1,712 | 1,224 | 5,922 | 2,520 | ||||||||||||||||||||||||||||
| Net income | 106,838 | 62,758 | 264,776 | 134,680 | ||||||||||||||||||||||||||||
| Preferred stock dividends | 91 | 91 | 273 | 273 | ||||||||||||||||||||||||||||
| Net income applicable to common stock | $ | 106,747 | $ | 62,667 | $ | 264,503 | $ | 134,407 | ||||||||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | 1.05 | $ | 0.62 | $ | 2.62 | $ | 1.33 | ||||||||||||||||||||||||
| Diluted earnings per share | $ | 1.05 | $ | 0.62 | $ | 2.61 | $ | 1.33 | ||||||||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic | 101,195,158 | 100,812,570 | 101,097,124 | 100,722,859 | ||||||||||||||||||||||||||||
| Diluted | 101,401,754 | 100,924,981 | 101,298,444 | 100,860,870 | ||||||||||||||||||||||||||||
| OTHER DATA | ||||||||||||||||||||||||||||||||
| Free Cash Flow Computation: | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 230,686 | $ | 170,670 | $ | 596,634 | $ | 463,683 | ||||||||||||||||||||||||
| Interest, net | (24,484) | (33,231) | (75,679) | (101,974) | ||||||||||||||||||||||||||||
| Current tax expense | (2,277) | (1,781) | (4,744) | (4,390) | ||||||||||||||||||||||||||||
| Preferred stock dividends | (91) | (91) | (273) | (273) | ||||||||||||||||||||||||||||
| Total capital expenditures | (30,097) | (8,359) | (71,513) | (44,633) | ||||||||||||||||||||||||||||
| Free cash flow | $ | 173,737 | $ | 127,208 | $ | 444,425 | $ | 312,413 | ||||||||||||||||||||||||
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SUPPLEMENTAL SCHEDULES
SELECTED BALANCE SHEET AND CASH FLOW DATA
(IN THOUSANDS)
| September 30, 2021 | December 31, 2020 | ||||||||||
| Selected Balance Sheet Data: | |||||||||||
| Cash and cash equivalents | $ | 87,569 | $ | 121,569 | |||||||
| Working capital deficit | $ | (236,123) | $ | (167,302) | |||||||
| Total assets | $ | 5,818,687 | $ | 5,791,441 | |||||||
| Total debt, net of deferred financing costs (including current maturities) | $ | 2,837,381 | $ | 2,886,516 | |||||||
| Total stockholders’ equity | $ | 1,241,796 | $ | 1,202,768 | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Selected Cash Flow Data: | |||||||||||||||||||||||
| Cash flows provided by operating activities | $ | 202,977 | $ | 150,780 | $ | 488,234 | $ | 361,457 | |||||||||||||||
| Cash flows used in investing activities | $ | 138,568 | $ | 10,004 | $ | 203,238 | $ | 67,681 | |||||||||||||||
| Cash flows used in financing activities | $ | 45,496 | $ | 249,361 | $ | 319,139 | $ | 251,264 | |||||||||||||||
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SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow: | |||||||||||||||||||||||
| Cash flows provided by operating activities | $ | 202,977 | $ | 150,780 | $ | 488,234 | $ | 361,457 | |||||||||||||||
| Changes in operating assets and liabilities | 2,413 | (14,011) | 31,588 | 4,268 | |||||||||||||||||||
| Total capital expenditures | (30,097) | (8,359) | (71,513) | (44,633) | |||||||||||||||||||
| Preferred stock dividends | (91) | (91) | (273) | (273) | |||||||||||||||||||
| Capitalized contract fulfillment costs, net | — | — | (900) | 1,036 | |||||||||||||||||||
| Other | (1,465) | (1,111) | (2,711) | (9,442) | |||||||||||||||||||
| Free cash flow | $ | 173,737 | $ | 127,208 | $ | 444,425 | $ | 312,413 | |||||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||||||||||
| Net income | $ | 106,838 | $ | 62,758 | $ | 264,776 | $ | 134,680 | |||||||||||||||
| Loss on extinguishment of debt | — | 7,051 | 21,604 | 25,235 | |||||||||||||||||||
| Interest income | (198) | (248) | (554) | (617) | |||||||||||||||||||
| Interest expense | 26,125 | 35,068 | 80,638 | 107,058 | |||||||||||||||||||
| Equity in earnings of investee | (1,141) | — | (1,141) | — | |||||||||||||||||||
| Income tax expense | 1,712 | 1,224 | 5,922 | 2,520 | |||||||||||||||||||
| Operating income | 133,336 | 105,853 | 371,245 | 268,876 | |||||||||||||||||||
| Stock-based compensation | 13,076 | 4,884 | 22,540 | 11,046 | |||||||||||||||||||
| Capitalized contract fulfillment costs, net | — | — | (900) | 1,036 | |||||||||||||||||||
| Depreciation and amortization | 84,300 | 61,237 | 205,671 | 187,548 | |||||||||||||||||||
| Gain on disposition of assets | (26) | (1,304) | (1,922) | (4,823) | |||||||||||||||||||
| Adjusted EBITDA | $ | 230,686 | $ | 170,670 | $ | 596,634 | $ | 463,683 | |||||||||||||||
| Capital expenditure detail by category: | |||||||||||||||||||||||
| Billboards - traditional | $ | 5,706 | $ | 678 | $ | 13,077 | $ | 8,701 | |||||||||||||||
| Billboards - digital | 15,140 | 2,620 | 37,841 | 19,422 | |||||||||||||||||||
| Logo | 2,898 | 1,853 | 7,465 | 5,398 | |||||||||||||||||||
| Transit | 564 | 817 | 1,774 | 2,672 | |||||||||||||||||||
| Land and buildings | 2,871 | 1,210 | 5,233 | 3,468 | |||||||||||||||||||
| Operating equipment | 2,918 | 1,181 | 6,123 | 4,972 | |||||||||||||||||||
| Total capital expenditures | $ | 30,097 | $ | 8,359 | $ | 71,513 | $ | 44,633 | |||||||||||||||
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SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
Reconciliation of Reported Basis to Acquisition-Adjusted Results(a): | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 476,894 | $ | 386,110 | 23.5 | % | $ | 1,292,827 | $ | 1,140,331 | 13.4 | % | |||||||||||||||||||||||
| Acquisitions and divestitures | — | 771 | — | (3,958) | |||||||||||||||||||||||||||||||
| Acquisition-adjusted net revenue | $ | 476,894 | $ | 386,881 | 23.3 | % | $ | 1,292,827 | $ | 1,136,373 | 13.8 | % | |||||||||||||||||||||||
Reported direct advertising and G&A expenses(b) | $ | 227,555 | $ | 199,348 | 14.1 | % | $ | 643,387 | $ | 627,477 | 2.5 | % | |||||||||||||||||||||||
| Acquisitions and divestitures | — | (929) | — | (5,710) | |||||||||||||||||||||||||||||||
| Acquisition-adjusted direct advertising and G&A expenses | $ | 227,555 | $ | 198,419 | 14.7 | % | $ | 643,387 | $ | 621,767 | 3.5 | % | |||||||||||||||||||||||
| Outdoor operating income | $ | 249,339 | $ | 186,762 | 33.5 | % | $ | 649,440 | $ | 512,854 | 26.6 | % | |||||||||||||||||||||||
| Acquisition and divestitures | — | 1,700 | — | 1,752 | |||||||||||||||||||||||||||||||
| Acquisition-adjusted outdoor operating income | $ | 249,339 | $ | 188,462 | 32.3 | % | $ | 649,440 | $ | 514,606 | 26.2 | % | |||||||||||||||||||||||
| Reported corporate expense | $ | 18,653 | $ | 16,092 | 15.9 | % | $ | 52,806 | $ | 49,171 | 7.4 | % | |||||||||||||||||||||||
| Acquisitions and divestitures | — | — | — | — | |||||||||||||||||||||||||||||||
| Acquisition-adjusted corporate expenses | $ | 18,653 | $ | 16,092 | 15.9 | % | $ | 52,806 | $ | 49,171 | 7.4 | % | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 230,686 | $ | 170,670 | 35.2 | % | $ | 596,634 | $ | 463,683 | 28.7 | % | |||||||||||||||||||||||
| Acquisitions and divestitures | — | 1,700 | — | 1,752 | |||||||||||||||||||||||||||||||
| Acquisition-adjusted EBITDA | $ | 230,686 | $ | 172,370 | 33.8 | % | $ | 596,634 | $ | 465,435 | 28.2 | % | |||||||||||||||||||||||
(a) Acquisition-adjusted net revenue, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and EBITDA include adjustments to 2020 for acquisitions and divestitures for the same time frame as actually owned in 2021.
(b) Does not include income of $900 for the nine months ended September 30, 2021 and expense of $1,036 for the nine months ended September 30, 2020, related to capitalization contract fulfillment costs, net.
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SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
| Reconciliation of Net Income to Outdoor Operating Income: | |||||||||||||||||||||||||||||||||||
| Net income | $ | 106,838 | $ | 62,758 | 70.2 | % | $ | 264,776 | $ | 134,680 | 96.6 | % | |||||||||||||||||||||||
| Loss on extinguishment of debt | — | 7,051 | 21,604 | 25,235 | |||||||||||||||||||||||||||||||
| Interest expense, net | 25,927 | 34,820 | 80,084 | 106,441 | |||||||||||||||||||||||||||||||
| Equity in earnings of investee | (1,141) | — | (1,141) | — | |||||||||||||||||||||||||||||||
| Income tax expense | 1,712 | 1,224 | 5,922 | 2,520 | |||||||||||||||||||||||||||||||
| Operating income | 133,336 | 105,853 | 26.0 | % | 371,245 | 268,876 | 38.1 | % | |||||||||||||||||||||||||||
| Corporate expenses | 18,653 | 16,092 | 52,806 | 49,171 | |||||||||||||||||||||||||||||||
| Stock-based compensation | 13,076 | 4,884 | 22,540 | 11,046 | |||||||||||||||||||||||||||||||
| Capitalized contract fulfillment costs, net | — | — | (900) | 1,036 | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 84,300 | 61,237 | 205,671 | 187,548 | |||||||||||||||||||||||||||||||
| Gain on disposition of assets | (26) | (1,304) | (1,922) | (4,823) | |||||||||||||||||||||||||||||||
| Outdoor operating income | $ | 249,339 | $ | 186,762 | 33.5 | % | $ | 649,440 | $ | 512,854 | 26.6 | % | |||||||||||||||||||||||
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SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
| Reconciliation of Total Operating Expense to Acquisition-Adjusted Consolidated Expense: | |||||||||||||||||||||||||||||||||||
| Total operating expense | $ | 343,558 | $ | 280,257 | 22.6 | % | $ | 921,582 | $ | 871,455 | 5.8 | % | |||||||||||||||||||||||
| Gain on disposition of assets | 26 | 1,304 | 1,922 | 4,823 | |||||||||||||||||||||||||||||||
| Depreciation and amortization | (84,300) | (61,237) | (205,671) | (187,548) | |||||||||||||||||||||||||||||||
| Capitalized contract fulfillment costs, net | — | — | 900 | (1,036) | |||||||||||||||||||||||||||||||
| Stock-based compensation | (13,076) | (4,884) | (22,540) | (11,046) | |||||||||||||||||||||||||||||||
| Acquisitions and divestitures | — | (929) | — | (5,710) | |||||||||||||||||||||||||||||||
| Acquisition-adjusted consolidated expense | $ | 246,208 | $ | 214,511 | 14.8 | % | $ | 696,193 | $ | 670,938 | 3.8 | % | |||||||||||||||||||||||
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SUPPLEMENTAL SCHEDULES
UNAUDITED REIT MEASURES
AND RECONCILIATIONS TO GAAP MEASURES
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Adjusted Funds from Operations: | |||||||||||||||||||||||
| Net income | $ | 106,838 | $ | 62,758 | $ | 264,776 | $ | 134,680 | |||||||||||||||
| Depreciation and amortization related to real estate | 81,580 | 58,431 | 197,395 | 178,884 | |||||||||||||||||||
| Gain from disposition of real estate assets | 83 | (1,324) | (1,712) | (4,422) | |||||||||||||||||||
| Adjustment for unconsolidated affiliates and non-controlling interest | (903) | 67 | (618) | 456 | |||||||||||||||||||
| Funds from operations | $ | 187,598 | $ | 119,932 | $ | 459,841 | $ | 309,598 | |||||||||||||||
| Straight-line expense | 466 | 882 | 2,195 | 2,615 | |||||||||||||||||||
| Capitalized contract fulfillment costs, net | — | — | (900) | 1,036 | |||||||||||||||||||
| Stock-based compensation expense | 13,076 | 4,884 | 22,540 | 11,046 | |||||||||||||||||||
| Non-cash portion of tax provision | (565) | (557) | 1,178 | (1,870) | |||||||||||||||||||
| Non-real estate related depreciation and amortization | 2,720 | 2,806 | 8,276 | 8,664 | |||||||||||||||||||
| Amortization of deferred financing costs | 1,443 | 1,589 | 4,405 | 4,467 | |||||||||||||||||||
| Loss on extinguishment of debt | — | 7,051 | 21,604 | 25,235 | |||||||||||||||||||
| Capitalized expenditures-maintenance | (13,094) | (3,124) | (32,697) | (17,616) | |||||||||||||||||||
| Adjustment for unconsolidated affiliates and non-controlling interest | 903 | (67) | 618 | (456) | |||||||||||||||||||
| Adjusted funds from operations | $ | 192,547 | $ | 133,396 | $ | 487,060 | $ | 342,719 | |||||||||||||||
| Divided by weighted average diluted common shares outstanding | 101,401,754 | 100,924,981 | 101,298,444 | 100,860,870 | |||||||||||||||||||
| Diluted AFFO per share | $ | 1.90 | $ | 1.32 | $ | 4.81 | $ | 3.40 | |||||||||||||||
12
SUPPLEMENTAL SCHEDULES
UNAUDITED REIT MEASURES
AND RECONCILIATIONS TO GAAP MEASURES
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Revised projected 2021 Adjusted Funds From Operations:
| Year ended December 31, 2021 | ||||||||||||||
| Low | High | |||||||||||||
| Net income | $ | 380,550 | $ | 390,550 | ||||||||||
| Depreciation and amortization related to real estate | 253,000 | 253,000 | ||||||||||||
| Gain from disposition of real estate assets and investments | (6,000) | (6,000) | ||||||||||||
| Adjustment for unconsolidated affiliates and non-controlling interest | (2,500) | (2,500) | ||||||||||||
| Funds From Operations | $ | 625,050 | $ | 635,050 | ||||||||||
| Straight-line expense | 3,000 | 3,000 | ||||||||||||
| Capitalized contract fulfillment costs, net | (900) | (900) | ||||||||||||
| Stock-based compensation expense | 30,000 | 35,000 | ||||||||||||
| Non-cash portion of tax provision | 750 | 750 | ||||||||||||
| Non-real estate related depreciation and amortization | 12,000 | 12,000 | ||||||||||||
| Amortization of deferred financing costs | 6,000 | 6,000 | ||||||||||||
| Loss on extinguishment of debt | 21,600 | 21,600 | ||||||||||||
| Capitalized expenditures—maintenance | (55,000) | (55,000) | ||||||||||||
| Adjustment for unconsolidated affiliates and non-controlling interest | 2,500 | 2,500 | ||||||||||||
| Adjusted Funds From Operations | $ | 645,000 | $ | 660,000 | ||||||||||
| Weighted average diluted shares outstanding | 101,500,000 | 101,500,000 | ||||||||||||
| Diluted earnings per share | $ | 3.75 | $ | 3.85 | ||||||||||
| Diluted AFFO per share | $ | 6.35 | $ | 6.50 | ||||||||||
The guidance provided above is based on a number of assumptions that management believes to be reasonable and reflects our
expectations as of November 2021. Actual results may differ materially from these estimates as a result of various factors, and we refer to the cautionary language regarding “forward-looking statements” included in the press release when considering this information.
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