Form 8-K
LAMAR ADVERTISING CO/NEW LA false 0001090425 0001090425 2019-11-05 2019-11-05

 

 

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 5, 2019

 

LAMAR ADVERTISING COMPANY

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-36756

 

72-1449411

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

5321 Corporate Blvd.

Baton Rouge, Louisiana 70808

(Address of Principal Executive Offices) (Zip Code)

(225) 926-1000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed 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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Class A common stock, $0.001 par value

 

LAMR

 

The NASDAQ Stock Market, LLC

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.  

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 5, 2019, Lamar Advertising Company announced via press release its results for the quarter ended September 30, 2019. 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

   

Press Release of Lamar Advertising Company, dated November 5, 2019, reporting Lamar’s financial results for the quarter ended September 30, 2019.

         
 

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 registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 5, 2019

 

LAMAR ADVERTISING COMPANY

             

 

 

By:

 

/s/ Jay Johnson

 

 

 

Jay Johnson

 

 

 

Treasurer and Chief Financial Officer

EX-99.1

Exhibit 99.1

 

 

LOGO

5321 Corporate Boulevard

Baton Rouge, LA 70808

Lamar Advertising Company Announces

Third Quarter 2019 Operating Results

Three Month Results

 

   

Net revenue increased 9.4% to $457.8 million

 

   

Net income increased $5.7 million to $99.7 million

 

   

Adjusted EBITDA increased 11.8% to $215.2 million

Three Month Acquisition-Adjusted Results

 

   

Acquisition-adjusted net revenue increased 3.4%

 

   

Acquisition-adjusted EBITDA increased 5.6%

Baton Rouge, LA – Tuesday, November 5, 2019 - 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, 2019.

“I am pleased to report that revenue growth accelerated in the third quarter, as advertisers increasingly recognize the power of out-of-home to reach their target audiences in today’s fragmented media landscape,” Chief Executive Sean Reilly said. “We anticipate continued strength in the fourth quarter and are on track to reach the upper end of our previously provided guidance for full-year AFFO per share.”

Third Quarter Highlights

 

   

Local revenue increased 3.1%

 

   

National/Programmatic revenue increased 6.9%

 

   

Same unit digital revenue increased 6.9%

 

   

AFFO increased 8.6%

 

   

Diluted AFFO per share increased 7.3%

Third Quarter Results

Lamar reported net revenues of $457.8 million for the third quarter of 2019 versus $418.5 million for the third quarter of 2018, a 9.4% increase. Operating income for the third quarter of 2019 increased $13.1 million to $141.4 million as compared to $128.4 million for the same period in 2018. Lamar recognized net income of $99.7 million for the third quarter of 2019 compared to net income of $94.1 million for same period in 2018. Net income per diluted share was $0.99 and $0.95 for the three months ended September 30, 2019 and 2018, respectively.

Adjusted EBITDA for the third quarter of 2019 was $215.2 million versus $192.5 million for the third quarter of 2018, an increase of 11.8%.

Cash flow provided by operating activities was $170.9 million for the three months ended September 30, 2019, an increase of $16.6 million as compared to the same period in 2018. Free cash flow for the third quarter of 2019 was $138.2 million as compared to $130.7 million for the same period in 2018, a 5.7% increase.

For the third quarter of 2019, Funds From Operations, or FFO, was $159.5 million versus $146.6 million for the same period in 2018, an increase of 8.8%. Adjusted Funds From Operations, or AFFO, for the third quarter of 2019 was $163.0 million compared to $150.1 million for the same period in 2018, an increase of 8.6%. Diluted AFFO per share increased 7.3% to $1.62 for the three months ended September 30, 2019 as compared to $1.51 for the same period in 2018.

 

1


Acquisition-Adjusted Three Months Results

Acquisition-adjusted net revenue for the third quarter of 2019 increased 3.4% over Acquisition-adjusted net revenue for the third quarter of 2018. Acquisition-adjusted EBITDA for the third quarter of 2019 increased 5.6% as compared to Acquisition-adjusted EBITDA for the third quarter of 2018. Acquisition-adjusted net revenue and Acquisition-adjusted EBITDA include adjustments to the 2018 period for acquisitions and divestitures for the same time frame as actually owned in the 2019 period. See “Reconciliation of Reported Basis to Acquisition-Adjusted Results”, which provides reconciliations to GAAP for Acquisition-adjusted measures.

Nine Months Results

Lamar reported net revenues of $1.29 billion for the nine months ended September 30, 2019 versus $1.20 billion for the same period in 2018, a 7.6% increase. Operating income for the nine months ended September 30, 2019 was $376.3 million as compared to $329.9 million for the same period in 2018. Lamar recognized net income of $269.4 million for the nine months ended September 30, 2019 as compared to net income of $209.5 million for the same period in 2018. Net income per diluted share increased to $2.69 for the nine months ended September 30, 2019 as compared to $2.12 for the same period in 2018. In addition, Adjusted EBITDA for the nine months ended September 30, 2019 was $569.2 million versus $527.2 million for the same period in 2018, an 8.0% increase.

Cash flow provided by operating activities increased to $408.0 million for the nine months ended September 30, 2019, as compared to $370.1 million in the same period in 2018. Free cash flow for the nine months ended September 30, 2019 increased 2.6% to $353.9 million as compared to $345.0 million for the same period in 2018.

For the nine months ended September 30, 2019, FFO was $423.8 million versus $376.2 million for the same period in 2018, a 12.6% increase. AFFO for the nine months ended September 30, 2019 was $416.0 million compared to $397.0 million for the same period in 2018, a 4.8% increase. Diluted AFFO per share increased to $4.15 for the nine months ended September 30, 2019, as compared to $4.02 in the same period in 2018, an increase of 3.2%.

Liquidity

As of September 30, 2019, Lamar had $345.4 million in total liquidity that consisted of $322.1 million available for borrowing under its revolving senior credit facility and approximately $23.3 million in cash and cash equivalents.

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 state of the economy and financial markets generally and the effect of the broader economy on the demand for advertising; (3) the continued popularity of outdoor advertising as an advertising medium; (4) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (5) our ability to continue to qualify as a Real Estate Investment Trust (“REIT”) and maintain our status as a REIT; (6) the regulation of the outdoor advertising industry by federal, state and local governments; (7) 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; (8) changes in accounting principles, policies or guidelines; (9) changes in tax laws applicable to REITs or in the interpretation of those laws; (10) our ability to renew expiring contracts at favorable rates; (11) our ability to successfully implement our digital deployment strategy; and (12) 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/A for the year ended December 31, 2018, 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 EBITDA (earnings before interest, taxes, depreciation and amortization), 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.

 

2


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, stock-based compensation, depreciation and amortization, gain or loss on disposition of assets and investments and the impact of adopting FASB Accounting Standard Update No. 2016-02 Codified as ASC 842, Leases.

 

   

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) impact of ASC 842 adoption; (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.

 

   

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, 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 first to remove the impact of stock-based compensation, depreciation and amortization, gain or loss on disposition of assets and investments and the impact of adopting FASB Accounting Standard Update No. 2016-02 Codified as ASC 842, Leases. The prior period is further 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, 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.

 

3


Our measurement of Adjusted EBITDA, FFO, AFFO, Diluted AFFO per share, 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, Outdoor Operating Income, Acquisition-Adjusted Results and Acquisition-Adjusted Consolidated Expense to the most directly comparable GAAP measures have been included herein.

Conference Call Information

A conference call will be held to discuss the Company’s operating results on Tuesday, November 5, 2019 at 8:00 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call

 

All Callers:    1-334-323-0520 or 1-334-323-9871
Passcode:    Lamar
Replay:    1-334-323-0140 or 1-877-919-4059
Passcode:   

22861794

Available through Tuesday, November 12, 2019 at 11:59 p.m. eastern time

Live Webcast:    www.lamar.com
Webcast Replay:   

www.lamar.com

Available through Tuesday, November 12, 2019 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 360,000 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 over 3,400 displays.

 

4


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,
 
     2019     2018     2019     2018  

Net revenues

   $ 457,786     $ 418,498     $ 1,290,985     $ 1,199,324  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses (income)

        

Direct advertising expenses

     149,550       140,699       442,784       419,776  

General and administrative expenses

     77,370       70,214       230,569       205,734  

Corporate expenses

     15,681       15,104       48,388       46,608  

Stock-based compensation

     10,572       8,624       18,078       22,745  

Impact of ASC 842 adoption (lease accounting standard)

     (581     —         (6,955     —    

Depreciation and amortization

     63,951       55,089       187,150       167,251  

(Gain) loss on disposition of assets

     (199     407       (5,360     7,265  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expense

     316,344       290,137       914,654       869,379  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     141,442       128,361       376,331       329,945  

Other expense (income)

        

Loss on extinguishment of debt

     —         —         —         15,429  

Interest income

     (168     (157     (553     (313

Interest expense

     38,323       31,850       114,240       97,321  
  

 

 

   

 

 

   

 

 

   

 

 

 
     38,155       31,693       113,687       112,437  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

     103,287       96,668       262,644       217,508  

Income tax expense (benefit)

     3,578       2,612       (6,714     7,969  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     99,709       94,056       269,358       209,539  

Preferred stock dividends

     91       91       273       273  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income applicable to common stock

   $ 99,618     $ 93,965     $ 269,085     $ 209,266  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

        

Basic earnings per share

   $ 0.99     $ 0.95     $ 2.69     $ 2.12  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.99     $ 0.95     $ 2.69     $ 2.12  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding:

        

- basic

     100,329,262       98,943,535       100,019,765       98,596,828  

- diluted

     100,522,177       99,253,008       100,210,143       98,870,116  

OTHER DATA

        

Free Cash Flow Computation:

        

Adjusted EBITDA

   $ 215,185     $ 192,481     $ 569,244     $ 527,206  

Interest, net

     (36,813     (30,479     (109,675     (93,346

Current tax expense

     (2,916     (1,474     (7,745     (6,394

Preferred stock dividends

     (91     (91     (273     (273

Total capital expenditures

     (37,120     (29,701     (97,680     (82,174
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

   $ 138,245     $ 130,736     $ 353,871     $ 345,019  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5


OTHER DATA (continued):

          
                   September 30,     December 31,  
                   2019     2018  

Selected Balance Sheet Data:

                                                          

Cash and cash equivalents

         $ 23,287     $ 21,494  

Working capital deficit

         $ (303,620   $ (91,366

Total assets

         $ 5,931,736     $ 4,544,641  

Total debt, net of deferred financing costs (including current maturities)

         $ 3,053,801     $ 2,888,688  

Total stockholders’ equity

         $ 1,167,821     $ 1,131,784  

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2019      2018     2019     2018  

Selected Cash Flow Data:

         

Cash flows provided by operating activities

   $ 170,921      $ 154,305     $   407,970     $   370,089  

Cash flows used in investing activities

   $ 172,674      $ 58,904     $ 309,819     $ 120,326  

Cash flows provided by (used in) financing activities

   $ 7,845      $ (104,381   $ (96,502   $ (353,943

 

6


SUPPLEMENTAL SCHEDULES

UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES

(IN THOUSANDS)

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2019     2018     2019     2018  

Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow:

        

Cash flows provided by operating activities

   $ 170,921     $ 154,305     $ 407,970     $ 370,089  

Changes in operating assets and liabilities

     8,066       7,830       58,416       62,924  

Total capital expenditures

     (37,120     (29,701     (97,680     (82,174

Preferred stock dividends

     (91     (91     (273     (273

Impact of ASC 842 adoption (lease accounting standard)

     (581     —         (6,955     —    

Other

     (2,950     (1,607     (7,607     (5,547
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 138,245     $ 130,736     $ 353,871     $ 345,019  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Net Income to Adjusted EBITDA:

        

Net Income

   $ 99,709     $ 94,056     $ 269,358     $ 209,539  

Loss on extinguishment of debt

     —         —         —         15,429  

Interest income

     (168     (157     (553     (313

Interest expense

     38,323       31,850       114,240       97,321  

Income tax expense (benefit)

     3,578       2,612       (6,714     7,969  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     141,442       128,361       376,331       329,945  

Stock-based compensation

     10,572       8,624       18,078       22,745  

Impact of ASC 842 adoption (lease accounting standard)

     (581     —         (6,955     —    

Depreciation and amortization

     63,951       55,089       187,150       167,251  

(Gain) loss on disposition of assets

     (199     407       (5,360     7,265  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 215,185     $ 192,481     $ 569,244     $ 527,206  
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital expenditure detail by category:

        

Billboards - traditional

   $ 11,894     $ 8,715     $ 34,587     $ 23,922  

Billboards - digital

     14,461       13,093       40,498       33,210  

Logo

     3,249       1,895       7,153       7,000  

Transit

     497       3,637       2,293       4,377  

Land and buildings

     4,818       593       6,514       6,622  

Operating equipment

     2,201       1,768       6,635       7,043  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures

   $ 37,120     $ 29,701     $ 97,680     $ 82,174  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7


SUPPLEMENTAL SCHEDULES

UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES

(IN THOUSANDS)

 

     Three months ended
September 30,
        
     2019      2018      % Change  

Reconciliation of Reported Basis to Acquisition-Adjusted Results (a):

        

Net revenue

   $ 457,786      $ 418,498        9.4

Acquisitions and divestitures

     —          24,439     
  

 

 

    

 

 

    

Acquisition-adjusted net revenue

   $ 457,786      $ 442,937        3.4

Reported direct advertising and G&A expenses (b)

   $ 226,920      $ 210,913        7.6

Acquisitions and divestitures

     —          13,192     
  

 

 

    

 

 

    

Acquisition-adjusted direct advertising and G&A expenses

   $ 226,920      $ 224,105        1.3

Outdoor operating income

   $ 230,866      $ 207,585        11.2

Acquisitions and divestitures

     —          11,247     
  

 

 

    

 

 

    

Acquisition-adjusted outdoor operating income

   $ 230,866      $ 218,832        5.5

Reported corporate expenses

   $ 15,681      $ 15,104        3.8

Acquisitions and divestitures

     —          —       
  

 

 

    

 

 

    

Acquisition-adjusted corporate expenses

   $ 15,681      $ 15,104        3.8

Adjusted EBITDA

   $ 215,185      $ 192,481        11.8

Acquisitions and divestitures

     —          11,247     
  

 

 

    

 

 

    

Acquisition-adjusted EBITDA

   $ 215,185      $ 203,728        5.6
  

 

 

    

 

 

    

 

(a)

Acquisition-adjusted net revenue, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and EBITDA include adjustments to 2018 for acquisitions and divestitures for the same time frame as actually owned in 2019.

(b)

Does not include a $581 reduction of expense due to impact of ASC 842 for lease accounting.

 

     Three months ended
September 30,
        
     2019     2018      % Change  

Reconciliation of Net Income to Outdoor Operating Income:

       

Net Income

   $ 99,709     $ 94,056        6.0

Interest expense, net

     38,155       31,693     

Income tax expense

     3,578       2,612     
  

 

 

   

 

 

    

Operating Income

     141,442       128,361        10.2

Corporate expenses

     15,681       15,104     

Stock-based compensation

     10,572       8,624     

Impact of ASC 842 adoption (lease accounting standard)

     (581     —       

Depreciation and amortization

     63,951       55,089     

(Gain) loss on disposition of assets

     (199     407     
  

 

 

   

 

 

    

Outdoor Operating Income

   $ 230,866     $ 207,585        11.2
  

 

 

   

 

 

    

 

     Three months ended
September 30,
       
     2019     2018     % Change  

Reconciliation of Total Operating Expense to Acquisition-Adjusted Consolidated Expense:

      

Total Operating Expense

   $ 316,344     $ 290,137       9.0

Gain (loss) on disposition of assets

     199       (407  

Depreciation and amortization

     (63,951     (55,089  

Impact of ASC 842 adoption (lease accounting standard)

     581       —      

Stock-based compensation

     (10,572     (8,624  

Acquisitions and divestitures

     —         13,192    
  

 

 

   

 

 

   

Acquisition-Adjusted Consolidated Expense

   $ 242,601     $ 239,209       1.4
  

 

 

   

 

 

   

 

8


SUPPLEMENTAL SCHEDULES

UNAUDITED REIT MEASURES

AND RECONCILIATIONS TO GAAP MEASURES

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Adjusted Funds From Operations:

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2019     2018     2019     2018  

Net income

   $ 99,709     $ 94,056     $ 269,358     $ 209,539  

Depreciation and amortization related to real estate

     59,742       52,032       175,920       157,941  

(Gain) loss from disposition of real estate assets

     (164     505       (5,048     8,350  

Non-cash tax benefit for REIT converted assets

     —         —         (17,031     —    

Adjustment for unconsolidated affiliates and non-controlling interest

     207       43       561       385  
  

 

 

   

 

 

   

 

 

   

 

 

 

Funds From Operations

   $ 159,494     $ 146,636     $ 423,760     $ 376,215  
  

 

 

   

 

 

   

 

 

   

 

 

 

Straight-line (income) expense

     (1     737       (217     (220

Impact of ASC 842 adoption (lease accounting standard)

     (581     —         (6,955     —    

Stock-based compensation expense

     10,572       8,624       18,078       22,745  

Non-cash portion of tax provision expense

     662       1,138       2,572       697  

Non-real estate related depreciation and amortization

     4,209       3,057       11,230       9,310  

Amortization of deferred financing costs

     1,342       1,214       4,012       3,662  

Loss on extinguishment of debt

     —         —         —         15,429  

Capitalized expenditures—maintenance

     (12,492     (11,248     (35,888     (30,453

Adjustment for unconsolidated affiliates and non-controlling interest

     (207     (43     (561     (385
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Funds From Operations

   $ 162,998     $ 150,115     $ 416,031     $ 397,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

Divided by weighted average diluted common shares outstanding

     100,522,177       99,253,008       100,210,143       98,870,116  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted AFFO per share

   $ 1.62     $ 1.51     $ 4.15     $ 4.02  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

9