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LAMAR ADVERTISING CO/NEW - Quarter Report: 2021 September (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 10-Q
________________________________________________________
xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2021
or
¨
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
Commission File Number 1-36756
__________________________________
Lamar Advertising Company
________________________________________________
Commission File Number 1-12407
________________________________________________
Lamar Media Corp.
(Exact name of registrants as specified in their charters)
__________________________________
Delaware47-0961620
Delaware72-1205791
(State or other jurisdiction of incorporation or organization)(I.R.S Employer Identification No.)
  
5321 Corporate Blvd., Baton Rouge, LA
70808
(Address of principal executive offices)(Zip Code)
Registrants’ telephone number, including area code: (225) 926-1000  
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.001 par valueLAMR
The NASDAQ Stock Market, LLC
Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether each registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether Lamar Advertising Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer¨
Non-accelerated filer¨Smaller reporting company¨
Emerging growth company¨
If an emerging growth company, indicate by check mark if Lamar Advertising Company 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. ☐
Indicate by check mark whether Lamar Media Corp. is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☐
Large accelerated filer¨Accelerated filer¨
Non-accelerated filerxSmaller reporting company¨
Emerging growth company¨
If an emerging growth company, indicate by check mark if Lamar Media Corp. 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. ¨
Indicate by check mark whether Lamar Advertising Company is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x
Indicate by check mark whether Lamar Media Corp. is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x
The number of shares of Lamar Advertising Company’s Class A common stock outstanding as of October 29, 2021: 86,819,395 
The number of shares of the Lamar Advertising Company’s Class B common stock outstanding as of October 29, 2021: 14,420,085
The number of shares of Lamar Media Corp. common stock outstanding as of October 29, 2021: 100
This combined Form 10-Q is separately filed by (i) Lamar Advertising Company and (ii) Lamar Media Corp. (which is a wholly owned subsidiary of Lamar Advertising Company). Lamar Media Corp. meets the conditions set forth in general instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this form with the reduced disclosure format permitted by such instruction.



NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information included in this report is forward-looking in nature within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. This report uses terminology such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue” and similar expressions to identify forward-looking statements. Examples of forward-looking statements in this report include statements about:
our future financial performance and condition;
our business plans, objectives, prospects, growth and operating strategies;
our future capital expenditures and level of acquisition activity;
market opportunities and competitive positions;
our future cash flows and expected cash requirements;
estimated risks;
our ability to maintain compliance with applicable covenants and restrictions included in Lamar Media’s senior credit facility, Accounts Receivable Securitization Program and the indentures relating to its outstanding notes;
stock price;
estimated future dividend distributions; and
our ability to remain qualified as a Real Estate Investment Trust (“REIT”).
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors, including but not limited to the following, any of which may cause the actual results, performance or achievements of Lamar Advertising Company (referred to herein as the “Company” or “Lamar Advertising”) or Lamar Media Corp. (referred to herein as “Lamar Media”) to differ materially from those expressed or implied by the forward-looking statements:
the state of the economy and financial markets generally and their effects on the markets in which we operate and the broader demand for advertising;
the magnitude of the impact of the COVID-19 pandemic on our operations and on general economic conditions;
the levels of expenditures on advertising in general and outdoor advertising in particular;
risks and uncertainties relating to our significant indebtedness;
the demand for outdoor advertising and its continued popularity as an advertising medium;
our need for, and ability to obtain, additional funding for acquisitions, operations and debt refinancing;
increased competition within the outdoor advertising industry;
the regulation of the outdoor advertising industry by federal, state and local governments;
our ability to renew expiring contracts at favorable rates;
the integration of businesses and assets that we acquire and our ability to recognize cost savings and operating efficiencies as a result of these acquisitions;
our ability to successfully implement our digital deployment strategy;
the market for our Class A common stock;
changes in accounting principles, policies or guidelines;
our ability to effectively mitigate the threat of and damages caused by hurricanes and other kinds of severe weather;
our ability to maintain our status as a REIT; and
changes in tax laws applicable to REITs or in the interpretation of those laws.
2


The forward-looking statements in this report are based on our current good faith beliefs, however, actual results may differ due to inaccurate assumptions, the factors listed above or other foreseeable or unforeseeable factors. Consequently, we cannot guarantee that any of the forward-looking statements will prove to be accurate. The forward-looking statements in this report speak only as of the date of this report, and Lamar Advertising and Lamar Media expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained in this report, except as required by law.
For a further description of these and other risks and uncertainties, the Company encourages you to read carefully Item 1A to the combined Annual Report on Form 10-K for the year ended December 31, 2020 of the Company and Lamar Media (the “2020 Combined Form 10-K”), filed on February 26, 2021, and as such risk factors may be further updated or supplemented, from time to time, in our future combined Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
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CONTENTS
Page
Lamar Advertising Company
7-8
10-21
Lamar Media Corp.
26-34
35-52

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Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1. — FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
September 30,
2021
December 31,
2020
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$87,569 $121,569 
Receivables, net of allowance for doubtful accounts of $12,458 and $14,946 in 2021 and 2020, respectively
262,661 240,854 
Other current assets20,202 18,147 
Total current assets370,432 380,570 
Property, plant and equipment3,720,040 3,615,505 
Less accumulated depreciation and amortization(2,428,803)(2,333,656)
Net property, plant and equipment1,291,237 1,281,849 
Operating lease right of use assets1,208,425 1,222,013 
Financing lease right of use assets17,604 19,670 
Goodwill1,926,919 1,912,328 
Intangible assets, net909,508 914,446 
Other assets94,562 60,565 
Total assets$5,818,687 $5,791,441 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable$12,655 $12,017 
Current maturities of long-term debt, net of deferred financing costs of $641 and $445 in 2021 and 2020, respectively
174,725 122,434 
Current operating lease liabilities174,659 195,439 
Current financing lease liabilities1,331 1,331 
Accrued expenses114,194 105,288 
Deferred income128,991 111,363 
Total current liabilities606,555 547,872 
Long-term debt, net of deferred financing costs of $37,446 and $39,672 in 2021 and 2020, respectively
2,662,656 2,764,082 
Operating lease liabilities977,941 993,776 
Financing lease liabilities17,609 18,608 
Deferred income tax liabilities6,016 4,854 
Asset retirement obligation267,024 222,876 
Other liabilities39,090 36,605 
Total liabilities4,576,891 4,588,673 
Stockholders’ equity:
Series AA preferred stock, par value $0.001, $63.80 cumulative dividends, 5,720 shares authorized; 5,720 shares issued and outstanding at 2021 and 2020
— — 
Class A common stock, par value $0.001, 362,500,000 shares authorized; 87,505,031 and 87,111,327 shares issued at 2021 and 2020, respectively; 86,819,395 and 86,491,646 outstanding at 2021 and 2020, respectively
88 87 
Class B common stock, par value $0.001, 37,500,000 shares authorized, 14,420,085 shares issued and outstanding at 2021 and 2020
14 14 
Additional paid-in capital1,997,162 1,963,850 
Accumulated comprehensive income850 934 
Accumulated deficit(705,745)(717,331)
Cost of shares held in treasury, 685,636 and 619,681 shares at 2021 and 2020, respectively
(50,573)(44,786)
Stockholders’ equity1,241,796 1,202,768 
Total liabilities and stockholders’ equity$5,818,687 $5,791,441 
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Statements of Income
Net revenues$476,894 $386,110 $1,292,827 $1,140,331 
Operating expenses (income)
Direct advertising expenses (exclusive of depreciation and amortization)147,310 136,309 418,973 419,862 
General and administrative expenses (exclusive of depreciation and amortization)85,946 66,749 234,429 216,361 
Corporate expenses (exclusive of depreciation and amortization)26,028 17,266 64,431 52,507 
Depreciation and amortization84,300 61,237 205,671 187,548 
Gain on disposition of assets(26)(1,304)(1,922)(4,823)
343,558 280,257 921,582 871,455 
Operating income133,336 105,853 371,245 268,876 
Other expense (income)
Loss on extinguishment of debt— 7,051 21,604 25,235 
Interest income(198)(248)(554)(617)
Interest expense26,125 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 expense108,550 63,982 270,698 137,200 
Income tax expense1,712 1,224 5,922 2,520 
Net income106,838 62,758 264,776 134,680 
Cash dividends declared and paid on preferred stock91 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 
Cash dividends declared per share of common stock$1.00 $0.50 $2.50 $2.00 
Weighted average common shares used in computing earnings per share:
Weighted average common shares outstanding basic101,195,158 100,812,570 101,097,124 100,722,859 
Weighted average common shares outstanding diluted101,401,754 100,924,981 101,298,444 100,860,870 
Statements of Comprehensive Income
Net income$106,838 $62,758 $264,776 $134,680 
Other comprehensive (loss) income
Foreign currency translation adjustments(588)330 (84)(528)
Comprehensive income$106,250 $63,088 $264,692 $134,152 
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share and per share data)
Series AA
PREF
Stock
Class A
CMN
Stock
Class B
CMN
Stock
Treasury
Stock
Add’l
Paid in
Capital
Accumulated Comprehensive
Income
Accumulated
Deficit
Total
Balance, December 31, 2020$— $87 $14 $(44,786)$1,963,850 $934 $(717,331)$1,202,768 
Non-cash compensation— — — — 1,060 — — 1,060 
Issuance of 149,000 shares of common stock through stock awards
— — — — 13,376 — — 13,376 
Exercise of 82,101 shares of stock options
— — — — 5,224 — — 5,224 
Issuance of 31,824 shares of common stock through employee purchase plan
— — — — 2,172 — — 2,172 
Purchase of 65,290 shares of treasury stock
— — — (5,717)— — — (5,717)
Foreign currency translation— — — — — 204 — 204 
Net income— — — — — — 38,329 38,329 
Dividends/distributions to common shareholders ($0.75 per common share)
— — — — — — (75,818)(75,818)
Dividends ($15.95 per preferred share)
— — — — — — (91)(91)
Balance, March 31, 2021$— $87 $14 $(50,503)$1,985,682 $1,138 $(754,911)$1,181,507 
Non-cash compensation— — — — 917 — — 917 
Issuance of 4,685 shares of common stock through stock awards
— — — — 594 — — 594 
Exercise of 38,265 shares of stock options
— — — — 2,575 — — 2,575 
Issuance of 30,302 shares of common stock through employee purchase plan
— — — — 2,068 — — 2,068 
Foreign currency translation— — — — — 300 — 300 
Net income— — — — — — 119,609 119,609 
Dividends/distributions to common shareholders ($0.75 per common share)
— — — — — — (75,874)(75,874)
Dividends ($15.95 per preferred share)
— — — — — — (91)(91)
Balance, June 30, 2021$— $87 $14 $(50,503)$1,991,836 $1,438 $(711,267)$1,231,605 
Non-cash compensation— — — — 1,128 — — 1,128 
Issuance of 5,300 shares of common stock through stock awards
— — — — 188 — — 188 
Exercise of 26,880 shares of stock options
— — — 1,748 — — 1,749 
Issuance of shares 25,347 of common stock through employee purchase plan
— — — — 2,262 — — 2,262 
Purchase of 665 shares of treasury stock
— — — (70)— — — (70)
Foreign currency translation— — — — — (588)— (588)
Net income— — — — — — 106,838 106,838 
Dividends/distributions to common shareholders ($1.00 per common share)
— — — — — — (101,225)(101,225)
Dividends ($15.95 per preferred share)
— — — — — — (91)(91)
Balance, September 30, 2021$— $88 $14 $(50,573)$1,997,162 $850 $(705,745)$1,241,796 
See accompanying notes to condensed consolidated financial statements
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Table of Contents
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share and per share data)
Series AA
PREF
Stock
Class A
CMN
Stock
Class B
CMN
Stock
Treasury
Stock
Add’l
Paid in
Capital
Accumulated
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Balance, December 31, 2019$— $87 $14 $(34,294)$1,922,222 $685 $(708,408)$1,180,306 
Non-cash compensation— — — — 1,261 — — 1,261 
Issuance of 279,116 shares of common stock through stock awards
— — — — 24,956 — — 24,956 
Exercise of 14,609 shares of stock options
— — — — 652 — — 652 
Issuance of 58,734 shares of common stock through employee purchase plan
— — — — 2,560 — — 2,560 
Purchase of 110,520 shares of treasury stock
— — — (10,068)— — — (10,068)
Foreign currency translation— — — — — (1,598)— (1,598)
Net income— — — — — — 40,493 40,493 
Dividends/distributions to common shareholders ($1.00 per common share)
— — — — — — (100,687)(100,687)
Dividends ($15.95 per preferred share)
— — — — — — (91)(91)
Balance, March 31, 2020$— $87 $14 $(44,362)$1,951,651 $(913)$(768,693)$1,137,784 
Non-cash compensation— — — — 916 — — 916 
Issuance of 11,008 shares of common stock through stock awards
— — — — 609 — — 609 
Exercise of 13,642 shares of stock options
— — — — 671 — — 671 
Issuance of 31,114 shares of common stock through employee purchase plan
— — — — 1,765 — — 1,765 
Purchase of 1,196 shares of treasury stock
— — — (56)— — — (56)
Foreign currency translation— — — — — 740 — 740 
Net income— — — — — — 31,429 31,429 
Dividends/distributions to common shareholders ($0.50 per common share)
— — — — — — (50,396)(50,396)
Dividends ($15.95 per preferred share)
— — — — — — (91)(91)
Balance, June 30, 2020$— $87 $14 $(44,418)$1,955,612 $(173)$(787,751)$1,123,371 
Non-cash compensation— — — — 1,011 — — 1,011 
Exercise of 6,455 shares of stock options
— — — — 307 — — 307 
Issuance of shares 31,705 of common stock through employee purchase plan
— — — — 1,783 — — 1,783 
Foreign currency translation— — — — — 330 — 330 
Net income— — — — — — 62,758 62,758 
Dividends/distributions to common shareholders ($0.50 per common share)
— — — — — — (50,416)(50,416)
Dividends ($15.95 per preferred share)
— — — — — — (91)(91)
Balance, September 30, 2020$— 87 14 (44,418)1,958,713 157 (775,500)$1,139,053 
See accompanying notes to condensed consolidated financial statements
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Table of Contents
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
20212020
Cash flows from operating activities:
Net income$264,776 $134,680 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization205,671 187,548 
Stock-based compensation22,540 11,046 
Amortization included in interest expense4,405 4,467 
Gain on disposition of assets and investments(1,922)(4,823)
Loss on extinguishment of debt21,604 25,235 
Equity in earnings of investee(1,141)— 
Deferred tax expense (benefit)1,178 (1,870)
Provision for doubtful accounts2,711 9,442 
Changes in operating assets and liabilities
(Increase) decrease in:
Receivables(24,475)19,253 
Prepaid expenses(1,953)1,002 
Other assets(444)2,110 
(Decrease) increase in:
Trade accounts payable(69)(186)
Accrued expenses3,610 (11,597)
Operating lease liabilities(22,560)625 
Other liabilities14,303 (15,475)
Net cash provided by operating activities488,234 361,457 
Cash flows from investing activities:
Acquisitions(107,593)(28,747)
Capital expenditures(71,513)(44,633)
Payment for investments in equity securities(30,000)— 
Proceeds from disposition of assets and investments5,761 5,699 
Decrease in notes receivable107 — 
Net cash used in investing activities(203,238)(67,681)
Cash flows from financing activities:
Cash used for purchase of treasury stock(5,787)(10,124)
Net proceeds from issuance of common stock16,050 7,740 
Principal payments on long-term debt(282)(273)
Borrowings on long-term debt— 8,750 
Principal payments on financing leases(998)— 
Payments on revolving credit facility(25,000)(805,000)
Proceeds received from revolving credit facility25,000 725,000 
Redemption of senior notes and senior subordinated notes(668,688)(1,058,596)
Proceeds received from note offering550,000 1,549,250 
Proceeds received from accounts receivable securitization program120,000 122,500 
Payments on accounts receivable securitization program(67,500)(175,000)
Proceeds received from senior credit facility term loans— 598,500 
Payments on senior credit facility term loans— (978,097)
Debt issuance costs(8,662)(32,667)
Distributions to non-controlling interest(82)(1,475)
Dividends/distributions(253,190)(201,772)
Net cash used in financing activities(319,139)(251,264)
Effect of exchange rate changes in cash and cash equivalents143 (72)
Net (decrease) increase in cash and cash equivalents(34,000)42,440 
Cash and cash equivalents at beginning of period121,569 26,188 
Cash and cash equivalents at end of period$87,569 $68,628 
Supplemental disclosures of cash flow information:
Cash paid for interest$87,729 $115,999 
Cash paid for foreign, state and federal income taxes$7,231 $3,558 
See accompanying notes to condensed consolidated financial statements.
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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)

1. Significant Accounting Policies
The information included in the foregoing interim condensed consolidated financial statements is unaudited. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and the notes thereto included in the 2020 Combined Form 10-K. Subsequent events, if any, are evaluated through the date on which the financial statements are issued.
2. Revenues
Advertising revenues:  The majority of our revenues are derived from contracts for advertising space on billboard, logo and transit displays. Contracts which do not meet the criteria of a lease under ASC 842, Leases are accounted for under ASC 606, Revenue. The majority of our advertising space contracts do not meet the definition of a lease under ASC 842 and are therefore accounted for under ASC 606. The contract revenues are recognized ratably over their contract life. Costs to fulfill a contract, which include our costs to install advertising copy onto billboards, are capitalized and amortized to direct advertising expenses (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Income and Comprehensive Income.
Other revenues:  Our other component of revenue primarily consists of production services which includes creating and printing the advertising copy. Revenue for production contracts is recognized under ASC 606. Contract revenues for production services are recognized upon satisfaction of the contract which is typically less than one week.
Arrangements with multiple performance obligations:  Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on the relative standalone selling price. We determine standalone selling prices based on the prices charged to customers using expected cost plus margin.
Deferred revenues:  We record deferred revenues when cash payments are received or due in advance of our performance obligation. The term between invoicing and when a payment is due is not significant. For certain services we require payment before the product or services are delivered to the customer. The balance of deferred income is considered short-term and will be recognized in revenue within twelve months.
Practical expedients and exemptions: The Company is utilizing the following practical expedients and exemptions from ASC 606. We generally expense sales commissions when incurred because the amortization period is one year or less. These costs are recorded within direct advertising expenses (exclusive of depreciation and amortization). We do not disclose the value of unsatisfied performance obligations as the majority of our contracts with customers have an original expected length of less than one year. For contracts with customers which exceed one year, the future amount to be invoiced to the customer corresponds directly with the value to be received by the customer.
The following table presents our disaggregated revenue by source for the three and nine months ended September 30, 2021 and 2020.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Billboard advertising$430,103 $348,361 $1,169,426 $1,015,761 
Logo advertising19,720 19,790 58,820 62,235 
Transit advertising27,071 17,959 64,581 62,335 
Net revenues$476,894 $386,110 $1,292,827 $1,140,331 

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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
3. Leases
During the three months ended September 30, 2021 and 2020, we had operating lease costs of $72,789 and $76,739, respectively, and variable lease costs of $22,514 and $13,494, respectively. During the nine months ended September 30, 2021 and 2020, we had operating lease costs of $218,139 and $235,473, respectively, and variable lease costs of $56,507 and $41,238, respectively. These operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization). For the three months ended September 30, 2021 and 2020, we recorded a loss of $349 and a gain of $76, respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. For the nine months ended September 30, 2021 and 2020, we recorded a loss of $296 and $241, respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. Cash payments of $243,690 and $234,400 were made reducing our operating lease liabilities for the nine months ended September 30, 2021 and 2020, respectively, and are included in cash flows provided by operating activities in the Condensed Consolidated Statements of Cash Flows.
We elected the short-term lease exemption which applies to certain of our vehicle agreements. This election allows the Company to not recognize lease right of use assets ("ROU assets") or lease liabilities for agreements with a term of twelve months or less. We recorded $1,579 and $1,172 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the three months ended September 30, 2021 and 2020, respectively. We recorded $4,471 and $3,679 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the nine months ended September 30, 2021 and 2020, respectively.
Our operating leases have a weighted-average remaining lease term of 12.0 years. The weighted-average discount rate of our operating leases is 4.6%. Also, during the periods ended September 30, 2021 and 2020, we obtained $25,401 and $25,250, respectively, of leased assets in exchange for new operating lease liabilities, which includes liabilities obtained through acquisitions.
The following is a summary of the maturities of our operating lease liabilities as of September 30, 2021:
2021$40,519 
2022208,326 
2023176,861 
2024157,270 
2025131,273 
Thereafter817,054 
Total undiscounted operating lease payments1,531,303 
Less: Imputed interest(378,703)
Total operating lease liabilities$1,152,600 
During the three months ended September 30, 2021, $713 of amortization expense and $145 of interest expense relating to our financing lease liabilities were recorded in depreciation and amortization and interest expense, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. During the nine months ended September 30, 2021, $2,140 of amortization expense and $443 of interest expense relating to our financing lease liabilities were recorded in depreciation and amortization and interest expense, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. Cash payments of $998 were made reducing our financing lease liabilities for the nine months ended September 30, 2021 and are included in cash flows used in financing activities in the Condensed Consolidated Statements of Cash Flows. We had no expenses relating to the financing lease liabilities for the nine months ended September 30, 2020. Our financing leases have a weighted-average remaining lease term of 6.2 years and a weighted-average discount rate of 3.5%.


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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
4. Acquisitions
During the nine months ended September 30, 2021, the Company completed several acquisitions of outdoor and transit advertising assets for a total purchase price of $107,593.
Each of these acquisitions was accounted for under the acquisition method of accounting, and, accordingly, the accompanying condensed consolidated financial statements include the results of operations of each acquired entity from the date of acquisition. The acquisition purchase price has been allocated to assets acquired and liabilities assumed based on preliminary fair market value estimates at the dates of acquisition.
The following is a summary of the allocation of the purchase price in the above transactions, which includes the preliminary values for a business combination completed on September 8, 2021 for an aggregate purchase price of $65,500.
Total
Property, plant and equipment$15,949 
Goodwill14,584 
Site locations66,321 
Non-competition agreements440 
Customer lists and contracts10,100 
Asset acquisition costs139 
Current assets218 
Current liabilities(911)
Operating lease right of use assets12,274 
Operating lease liabilities(11,521)
$107,593 
Total acquired intangible assets for the nine months ended September 30, 2021 were $91,584, of which $14,584 was assigned to goodwill. Goodwill is not amortized for financial statement purposes and $14,584 of goodwill related to 2021 acquisitions is expected to be deductible for tax purposes. The acquired intangible assets have a weighted average useful life of approximately 14 years. The intangible assets include customer lists and contracts of $10,100 (7 year weighted average useful life) and site locations of $66,321 (15 year weighted average useful life). The aggregate amortization expense related to the 2021 acquisitions for the nine months ended September 30, 2021 was $1,158.
5. Stock-Based Compensation
Equity Incentive Plan. Lamar Advertising’s 1996 Equity Incentive Plan, as amended, (the “Incentive Plan”) has reserved 17.5 million shares of Class A common stock for issuance to directors and employees, including shares underlying granted options and common stock reserved for issuance under its performance-based incentive program. Options granted under the plan expire ten years from the grant date with vesting terms ranging from three to five years and include 1) options that vest in one-fifth increments beginning on the grant date and continuing on each of the first four anniversaries of the grant date and 2) options that cliff-vest on the fifth anniversary of the grant date. All grants are made at fair market value based on the closing price of our Class A common stock as reported on the Nasdaq Global Select Market on the date of grant.
We use a Black-Scholes-Merton option pricing model to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and expected volatility. The Company granted options for an aggregate of 45,000 shares of its Class A common stock during the nine months ended September 30, 2021. At September 30, 2021 a total of 2,297,290 shares were available for future grant.
Stock Purchase Plan. Lamar Advertising’s 2009 Employee Stock Purchase Plan (the “2009 ESPP”), approved by our shareholders on May 28, 2009, expired by its terms on June 30, 2019. On May 30, 2019, our shareholders approved Lamar Advertising’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”). The 2019 ESPP became effective upon the expiration of
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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
the 2009 ESPP. The number of shares of Class A common stock available under the 2019 ESPP was automatically increased by 86,490 shares on January 1, 2021 pursuant to the automatic increase provisions of the 2019 ESPP.
The following is a summary of 2019 ESPP share activity for the nine months ended September 30, 2021:
Shares
Available for future purchases, January 1, 2021369,771 
Additional shares reserved under 2019 ESPP86,490 
Purchases(87,473)
Available for future purchases, September 30, 2021368,788 
Performance-based stock compensation. Unrestricted shares of our Class A common stock may be awarded to key officers, employees and directors under the Incentive Plan. The number of shares to be issued, if any, will be dependent on the level of achievement of performance measures for key officers and employees, as determined by the Company’s Compensation Committee based on our 2021 results. Any shares issued based on the achievement of performance goals will be issued in the first quarter of 2022. The shares subject to these awards can range from a minimum of 0% to a maximum of 100% of the target number of shares depending on the level at which the goals are attained. For the nine months ended September 30, 2021, the Company has recorded $18,379 as stock-based compensation expense related to performance-based awards.
Restricted stock compensation. Annually, each non-employee director automatically receives a restricted stock award of our Class A common stock upon election or re-election. The awards vest 50% on grant date and 50% on the last day of the directors' one year term. The Company recorded $544 in stock-based compensation expense related to these awards for the nine months ended September 30, 2021.
6. Depreciation and Amortization
The Company includes all categories of depreciation and amortization on a separate line in its Condensed Consolidated Statements of Income and Comprehensive Income. The amounts of depreciation and amortization expense excluded from the following operating expenses in its Condensed Consolidated Statements of Income and Comprehensive Income are:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Direct advertising expenses$80,068 $57,556 $192,816 $176,395 
General and administrative expenses1,068 1,126 3,338 3,558 
Corporate expenses3,164 2,555 9,517 7,595 
$84,300 $61,237 $205,671 $187,548 
The increase in the amount of depreciation and amortization expense excluded from direct advertising expense for the three and nine months ended September 30, 2021 as compared to September 30, 2020 is due to the revision in the cost estimate included in the calculation of asset retirement obligations during the period.
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AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
7. Goodwill and Other Intangible Assets
The following is a summary of intangible assets at September 30, 2021 and December 31, 2020:
Estimated
Life
(Years)
September 30, 2021December 31, 2020
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Amortizable intangible assets:
Customer lists and contracts
7—10
$655,843 $580,671 $645,739 $563,135 
Non-competition agreements
3—15
66,596 64,857 66,156 64,647 
Site locations152,479,103 1,657,456 2,412,745 1,593,805 
Other
2—15
50,157 39,207 50,018 38,625 
$3,251,699 $2,342,191 $3,174,658 $2,260,212 
Unamortizable intangible assets:
Goodwill$2,180,455 $253,536 $2,165,864 $253,536 

8. Asset Retirement Obligations
The Company’s asset retirement obligations include the costs associated with the removal of its structures, resurfacing of the land and retirement cost, if applicable, related to the Company’s outdoor advertising portfolio. The following table reflects information related to our asset retirement obligations:
Balance at December 31, 2020$222,876 
Additions to asset retirement obligations2,363 
Revision in estimates41,363 
Accretion expense3,053 
Liabilities settled(2,631)
Balance at September 30, 2021$267,024 
Revision in estimates of $41,363 reflects changes in cost estimates to remove structures and resurface land for structures that reside on leased land in the Company's outdoor advertising portfolio.
9. Distribution Restrictions
Lamar Media’s ability to make distributions to Lamar Advertising is restricted under both the terms of the indentures relating to Lamar Media’s outstanding notes and by the terms of its senior credit facility. As of September 30, 2021 and December 31, 2020, Lamar Media was permitted under the terms of its outstanding notes to make transfers to Lamar Advertising in the form of cash dividends, loans or advances in amounts up to $3,874,821 and $3,625,712, respectively.
As of September 30, 2021, Lamar Media’s senior credit facility allows it to make transfers to Lamar Advertising in any taxable year up to the amount of Lamar Advertising’s taxable income (without any deduction for dividends paid). In addition, as of September 30, 2021, transfers to Lamar Advertising are permitted under Lamar Media’s senior credit facility and as defined therein up to the available cumulative credit, as long as no default has occurred and is continuing and, after giving effect to such distributions, (i) the total debt ratio is less than 7.0 to 1 and (ii) the secured debt ratio does not exceed 4.5 to 1. As of September 30, 2021, the total debt ratio was less than 7.0 to 1 and Lamar Media’s secured debt ratio was less than 4.5 to 1, and the available cumulative credit was $2,625,301.
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Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
10. Earnings Per Share
The calculation of basic earnings per share excludes any dilutive effect of stock options, while diluted earnings per share includes the dilutive effect of stock options. There were no dilutive shares excluded from this calculation resulting from their anti-dilutive effect for the three and nine months ended September 30, 2021 or 2020.
11. Long-term Debt
Long-term debt consists of the following at September 30, 2021 and December 31, 2020:
September 30, 2021
DebtDeferred
financing costs
Debt, net of
deferred
financing costs
Senior Credit Facility$598,655 $9,873 $588,782 
Accounts Receivable Securitization Program175,000 641 174,359 
3 3/4% Senior  Notes600,000 7,288 592,712 
3 5/8% Senior Notes550,000 7,736 542,264 
4% Senior Notes
549,339 7,390 541,949 
4 7/8% Senior Notes400,000 5,159 394,841 
Other notes with various rates and terms2,474 — 2,474 
2,875,468 38,087 2,837,381 
Less current maturities(175,366)(641)(174,725)
Long-term debt, excluding current maturities$2,700,102 $37,446 $2,662,656 

December 31, 2020
DebtDeferred
financing costs
Debt, net of
deferred
financing costs
Senior Credit Facility$598,466 $11,569 $586,897 
Accounts Receivable Securitization Program122,500 445 122,055 
3 3/4% Senior Notes600,000 8,031 591,969 
4% Senior Notes
549,280 7,911 541,369 
4 7/8% Senior Notes400,000 5,586 394,414 
5 3/4% Senior Notes653,631 6,575 647,056 
Other notes with various rates and terms2,756 — 2,756 
 2,926,633 40,117 2,886,516 
Less current maturities(122,879)(445)(122,434)
Long-term debt, excluding current maturities$2,803,754 $39,672 $2,764,082 
Senior Credit Facility
On February 6, 2020, Lamar Media entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto, under which the parties agreed to amend and restate Lamar Media’s existing senior credit facility. The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended (the “Third Amended and Restated Credit Agreement”).
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Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consists of (i) a $750,000 senior secured revolving credit facility which will mature on February 6, 2025 (the “revolving credit facility”), (ii) a $600,000 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 of 4.50 to 1.00, as well as certain other conditions including lender approval. Lamar Media borrowed all $600,000 in Term B loans on February 6, 2020. The entire amount of the Term B loans will be payable at maturity. The net proceeds from the Term B loans, together with borrowings under the revolving portion of the senior credit facility and a portion of the proceeds of the issuance of the 3 3/4% Senior Notes due 2028 and 4% Senior Notes due 2030 (both as described below), were used to repay all outstanding amounts under the Third Amended and Restated Credit Agreement, and all revolving commitments under that facility were terminated. As a result of refinancing our credit facility the Company incurred a loss on debt extinguishment of $5,608 for the nine months ended September 30, 2020.
The Term B loans mature on February 6, 2027 with no required amortization payments. The Term B loans bear interest at rates based on the Adjusted LIBO Rate (“Eurodollar term loans”) or the Adjusted Base Rate (“Base Rate term loans”), at Lamar Media’s option. Eurodollar term loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.50%. Base Rate term loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50%.
The revolving credit facility bears interest at rates based on the Adjusted LIBO Rate (“Eurodollar revolving loans”) or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option. Eurodollar revolving loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.50% (or the Adjusted LIBO Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1). Base Rate revolving loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50% (or the Adjusted Base Rate plus 0.25% at any time the total debt ratio is less than or equal to 3.25 to 1). The guarantees, covenants, events of default and other terms of the senior credit facility apply to the Term B loans and revolving credit facility.
As of September 30, 2021, there were no borrowings outstanding under the revolving credit facility. Availability under the revolving credit facility is reduced by the amount of any letters of credit outstanding. Lamar Media had $14,345 in letters of credit outstanding as of September 30, 2021 resulting in $735,655 of availability under its revolving credit facility. Revolving credit loans may be requested under the revolving credit facility at any time prior to its maturity on February 6, 2025.
The terms of Lamar Media’s senior credit facility and the indentures relating to Lamar Media’s outstanding notes restrict, among other things, the ability of Lamar Advertising and Lamar Media to:
dispose of assets;
incur or repay debt;
create liens;
make investments; and
pay dividends.
The senior credit facility contains provisions that allow Lamar Media to conduct its affairs in a manner that allows Lamar Advertising to qualify and remain qualified as a REIT, including by allowing Lamar Media to make distributions to Lamar Advertising required for the Company to qualify and remain qualified for taxation as a REIT, subject to certain restrictions.
Lamar Media’s ability to make distributions to Lamar Advertising is also restricted under the terms of these agreements. Under Lamar Media’s senior credit facility, the Company must maintain a specified secured debt ratio as long as a revolving credit commitment, revolving loan or letter of credit remains outstanding, and in addition, must satisfy a total debt ratio in order to incur debt, make distributions or make certain investments.
Lamar Advertising and Lamar Media were in compliance with all of the terms of their indentures and the senior credit facility provisions during the periods presented.
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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
Accounts Receivable Securitization Program
On December 18, 2018, Lamar Media entered into a $175,000 Receivable Financing Agreement (the “Receivable Financing Agreement”) with its wholly-owned special purpose entities, Lamar QRS Receivables, LLC and Lamar TRS Receivables, LLC (the “Special Purpose Subsidiaries”) (the "Accounts Receivable Securitization Program"). 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.
Pursuant to two separate Purchase and Sale Agreements dated December 18, 2018, each of which is among Lamar Media as initial Servicer, certain of Lamar Media’s subsidiaries and a Special Purpose Subsidiary, the subsidiaries sold substantially all of their existing and future accounts receivable balances to the Special Purpose Subsidiaries. The Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans pursuant to the Accounts Receivable Securitization Program. Lamar Media retains the responsibility of servicing the accounts receivable balances pledged as collateral under the Accounts Receivable Securitization Program and provides a performance guaranty.
On June 30, 2020, Lamar Media and the Special Purpose Subsidiaries entered into the Third Amendment (the “Third Amendment”) to the Receivables Financing Agreement. The Third Amendment increased the maximum three month average Delinquency Ratio, Dilution Ratio and Days’ Sales Outstanding to 11.00% (from 8.00%), 7.00% (from 4.00%) and 75 days (from 65 days), respectively, for each of the months of June, July and August 2020. The Third Amendment did not modify any other financial covenant. Additionally, the Third Amendment established a new Minimum Funding Threshold, which requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 50.00% of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, though the Special Purpose Subsidiaries had the right to borrow less than the Minimum Funding Threshold during certain periods prior to December 21, 2020 at their election.
On October 23, 2020, Lamar Media and the Special Purpose Subsidiaries entered into the Fourth Amendment (the “Fourth Amendment”) to the Receivables Financing Agreement.  The Fourth Amendment increased the maximum three month average Delinquency Ratio generally to 13.00% (and up to 16.00% for up to two additional periods upon written notice from Lamar Media), and increased the maximum three month average Dilution Ratio to 5.00% for the remaining term of the Accounts Receivable Securitization Program. Additionally, the Fourth Amendment increased the Minimum Funding Threshold which, as amended, requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 70.00% of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, though the Special Purpose Subsidiaries had the right to borrow less than the Minimum Funding Threshold during certain periods prior to December 21, 2020 at their election.
On May 24, 2021, Lamar Media and the Special Purpose Subsidiaries entered into the Fifth Amendment (the "Fifth Amendment") to the Receivables Financing Agreement. The Fifth Amendment extended the maturity date of the Accounts Receivable Securitization Program to July 21, 2024. Additionally, the Fifth Amendment decreased the Minimum Funding Threshold which, as amended, requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 50.00% of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, provided that the Minimum Funding Threshold shall be zero on any day that is a Minimum Funding Threshold Holiday which, as amended, provides for an annual holiday from the requirement of up to sixty days per year. The Fifth Amendment also provides for updated LIBOR replacement procedures.
As of September 30, 2021 there was $175,000 outstanding aggregate borrowings under the Accounts Receivable Securitization Program. Lamar Media had no additional availability for borrowing under the Accounts Receivable Securitization Program as of September 30, 2021. The commitment fees based on the amount of unused commitments under the Accounts Receivable Securitization Program were immaterial during the nine months ended September 30, 2021.
The Accounts Receivable Securitization Program will mature on July 21, 2024. Lamar Media may amend the facility to 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.
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LAMAR ADVERTISING COMPANY
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Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
The Accounts Receivable Securitization Program is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and the borrowings are presented as liabilities on our Condensed Consolidated Balance Sheets, (ii) our Condensed Consolidated Statements of Income and Comprehensive Income reflect the associated charges for bad debt expense (a component of general and administrative expenses) related to the pledged accounts receivable and interest expense associated with the collateralized borrowings and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Condensed Consolidated Statements of Cash Flows.
5 3/4% Senior Notes
On January 28, 2016, Lamar Media completed an institutional private placement of $400,000 aggregate principal amount of 5 3/4% Senior Notes due 2026 (the “Original 5 3/4% Notes”). The institutional private placement on January 28, 2016 resulted in net proceeds to Lamar Media of approximately $394,500.
On February 1, 2019, Lamar Media completed an institutional private placement of an additional $250,000 aggregate principal amount of its 5 3/4% Notes (the “Additional 5 3/4% Notes", and together with the Original 5 3/4% Notes, the "5 3/4% Notes”). Other than with respect to the date of issuance, issue price and CUSIP number, the Additional 5 3/4% Notes have the same terms as the Original 5 3/4% Notes. The net proceeds after underwriting fees and expenses, was approximately $251,500.
On February 3, 2021, Lamar Media redeemed in full all $650,000 aggregate principal amount 5 3/4% Notes. The 5 3/4% Notes redemption was completed using the proceeds received from the 3 5/8% Notes offering completed on January 22, 2021 (as described below), together with cash on hand and borrowings under the revolving credit facility and Accounts Receivable Securitization Program. The 5 3/4% Notes were redeemed at a redemption price equal to 102.875% of the aggregate principal amount of the outstanding notes, plus accrued and unpaid interest to (but not including) the redemption date. During the nine months ended September 30, 2021, the Company recorded a loss on debt extinguishment of approximately $21,604 related to the note redemption, of which $18,700 was in cash.
4% Senior Notes
On February 6, 2020, Lamar Media completed an institutional private placement of $400,000 aggregate principal amount of 4% Senior Notes due 2030 (the “Original 4% Notes”). The institutional private placement on February 6, 2020 resulted in net proceeds to Lamar Media of approximately $395,000.
On August 19, 2020, Lamar Media completed an institutional private placement of an additional $150,000 aggregate principal amount of its 4% Notes (the “Additional 4% Notes”, and together with the Original 4% Notes, the "4% Notes"). Other than with respect to the date of issuance and issue price, the Additional 4% Notes have the same terms as the Original 4% Notes. The institutional private placement on August 19, 2020 resulted in net proceeds to Lamar Media of approximately $146,900.
Lamar Media may redeem up to 40% of the aggregate principal amount of the 4% Notes, at any time and from time to time, at a price equal to 104% of the aggregate principal amount redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before February 15, 2023, provided that following the redemption, at least 60% of the 4% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering. At any time prior to February 15, 2025, Lamar Media may redeem some or all of the 4% Notes at a price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium. On or after February 15, 2025, Lamar Media may redeem the 4% Notes, in whole or in part, in cash at redemption prices specified in the 4% Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder’s 4% Notes at a price equal to 101% of the principal amount of the 4% Notes, plus accrued and unpaid interest, up to but not including the repurchase date.
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Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
3 3/4% Senior Notes
On February 6, 2020, Lamar Media completed an institutional private placement of $600,000 aggregate principal amount of 3 3/4% Senior Notes due 2028 (the “3 3/4% Notes”). The institutional private placement on February 6, 2020 resulted in net proceeds to Lamar Media of approximately $592,500.
Lamar Media may redeem up to 40% of the aggregate principal amount of 3 3/4% Notes, at any time and from time to time, at a price equal to 103.75% of the aggregate principal amount redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before February 15, 2023, provided that following the redemption, at least 60% of the 3 3/4% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering. At any time prior to February 15, 2023, Lamar Media may redeem some or all of the 3 3/4% Notes at a price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium. On or after February 15, 2023, Lamar Media may redeem the 3 3/4% Notes, in whole or in part, in cash at redemption prices specified in the 3 3/4% Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder’s 3 3/4% Notes at a price equal to 101% of the principal amount of the 3 3/4% Notes, plus accrued and unpaid interest, up to but not including the repurchase date.
4 7/8% Senior Notes
On May 13, 2020, Lamar Media completed an institutional private placement of $400,000 aggregate principal amount of 4 7/8% Senior Notes due 2029 (the “4 7/8% Notes”). The institutional private placement on May 13, 2020 resulted in net proceeds to Lamar Media of approximately $395,000.
Lamar Media may redeem up to 40% of the aggregate principal amount of the 4 7/8% Notes, at any time and from time to time, at a price equal to 104.875% of the aggregate principal amount redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before May 15, 2023, provided that following the redemption, at least 60% of the 4 7/8% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering. At any time prior to January 15, 2024, Lamar Media may redeem some or all of the 4 7/8% Notes at a price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium. On or after January 15, 2024, Lamar Media may redeem the 4 7/8% Notes, in whole or in part, in cash at redemption prices specified in the 4 7/8% Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder’s 4 7/8% Notes at a price equal to 101% of the principal amount of the 4 7/8% Notes, plus accrued and unpaid interest, up to but not including the repurchase date.
3 5/8% Senior Notes
On January 22, 2021, Lamar Media completed an institutional private placement of $550,000 aggregate principal amount of 3 5/8% Senior Notes due 2031 (the “3 5/8% Notes”). The institutional private placement on January 22, 2021 resulted in net proceeds to Lamar Media of approximately $542,500.
Lamar Media may redeem up to 40% of the aggregate principal amount of the 3 5/8% Notes, at any time and from time to time, at a price equal to 103.625% of the aggregate principal amount so redeemed, plus accrued and unpaid interest thereon, with the net cash proceeds of certain public equity offerings completed before January 15, 2024 provided that following the redemption, at least 60% of the 3 5/8% Notes that were originally issued remain outstanding and any such redemption occurs within 120 days following the closing of any such public equity offering. At any time prior to January 15, 2026, Lamar Media may redeem some or all of the 3 5/8% Notes at a price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest thereon and a make-whole premium. On or after January 15, 2026, Lamar Media may redeem the 3 5/8% Notes, in whole or in part, in cash at redemption prices specified in the 3 5/8% Notes. In addition, if the Company or Lamar Media undergoes a change of control, Lamar Media may be required to make an offer to purchase each holder's 3 5/8% Notes at a price equal to 101% of the principal amount of the 3 5/8% Notes, plus accrued and unpaid interest, up to but not including the repurchase date.
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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
Debt Repurchase Program
On March 16, 2020, the Company’s Board of Directors authorized Lamar Media to repurchase up to $250,000 in outstanding senior or senior subordinated notes and other indebtedness outstanding from time to time under its Fourth Amended and Restated Credit Agreement. On September 20, 2021, the Board of Directors authorized the extension of the repurchase program through March 31, 2023. There were no repurchases under the program as of September 30, 2021.
12. Fair Value of Financial Instruments
At September 30, 2021 and December 31, 2020, the Company’s financial instruments included cash and cash equivalents, marketable securities, accounts receivable, investments, accounts payable and borrowings. The fair values of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments. Investment contracts are reported at fair values. Fair values for investments held at cost are not readily available, but are estimated to approximate fair value. The estimated fair value of the Company’s long-term debt (including current maturities) was $2,913,841 which exceeds the carrying amount of $2,875,468 as of September 30, 2021. The majority of the fair value is determined using observed prices of publicly traded debt (level 1 in the fair value hierarchy) and the remaining is valued based on quoted prices for similar debt (level 2 in the fair value hierarchy).
13. Investments
On July 12, 2021, Lamar invested $30,000 to acquire a 20% minority interest in Vistar Media, a leading global provider of programmatic technology for the digital out-of-home sector. This investment is accounted for as an equity method investment and is included in other assets on the Condensed Consolidated Balance Sheet. For the three and nine months ended September 30, 2021, the Company recorded $1,141 in equity in earnings of investee on the Condensed Consolidated Statement of Income and Comprehensive Income.
14. New Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing specific exceptions to the general principles in Topic 740 - Income Taxes. This guidance is effective for years beginning after December 15, 2020. The Company adopted this guidance on January 1, 2021 and the impact of the adoption is not material to the Company's consolidated financial statements.
15. Dividends/Distributions
During the three months ended September 30, 2021 and 2020, the Company declared and paid cash distributions in an aggregate amount of $101,225 or $1.00 per share and $50,416 or $0.50 per share, respectively. During the nine months ended September 30, 2021 and 2020, the Company declared and paid cash distributions in an aggregate amount of $252,917 or $2.50 per share and $201,499 or $2.00 per share, respectively. The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including 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 taxable REIT subsidiaries (TRSs), the impact of COVID-19 on the Company’s operations and other factors that the Board of Directors may deem relevant. During the three and nine months ended September 30, 2021 and 2020, the Company paid cash dividend distributions to holders of its Series AA Preferred Stock in an aggregate amount of $91 or $15.95 per share and $273 or $47.85 for each period, respectively.
20

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LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share data)
16. Information about Geographic Areas
Revenues from external customers attributable to foreign countries totaled $17,568 and $16,295 for the nine months ended September 30, 2021 and 2020, respectively. Net carrying value of long-lived assets located in foreign countries totaled $9,957 and $8,727 as of September 30, 2021 and December 31, 2020, respectively. All other revenues from external customers and long-lived assets relate to domestic operations.
17. Stockholders’ Equity
Sales Agreement. On May 1, 2018, the Company entered into an equity distribution agreement (the “Sales Agreement”) with J.P. Morgan Securities LLC, Wells Fargo Securities LLC, and SunTrust Robinson Humphrey, Inc. as its sales agents. Under the terms of the Sales Agreement, the Company could have, from time to time, issued and sold shares of its Class A common stock, having an aggregate offering price of up to $400,000, through the sales agents party thereto as either agents or principals. The Sales Agreement expired by its terms on May 1, 2021 and as of that date, 842,412 shares of our Class A common stock were sold under the Sales Agreement.
On June 21, 2021, the Company entered into a new equity distribution agreement (the "2021 Sales Agreement") with J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Truist Securities, Inc., SMBC Nikko Securities America, Inc. 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. Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400,000, through the Sales Agents as either agents or principals.
Sales of the Class A common stock, if any, may be made in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or directly through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A Common stock under the 2021 Sales Agreement and may at any time suspend solicitations and offers under the 2021 Sales Agreement.
As of September 30, 2021, no shares of our Class A common stock have been sold under the 2021 Sales Agreement and accordingly $400,000 remained available to be sold under the 2021 Sales Agreement as of September 30, 2021.
Shelf Registration. On August 6, 2018, the Company filed an automatically effective shelf registration statement that registered the offer and sale of an indeterminate amount of additional shares of our Class A common stock, which expired in August 2021. There were no shares issued under this shelf registration during the nine months ended September 30, 2021 and the year ended December 31, 2020. On June 21, 2021, the Company filed a new 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 on similar terms as the prior registration statement. During the nine months ended September 30, 2021, the Company did not issue any shares under this shelf registration.
On March 16, 2020, the Company’s Board of Directors authorized the repurchase of up to $250,000 of the Company’s Class A common stock. On September 20, 2021, the Board of Directors authorized the extension of the repurchase program through March 31, 2023. There were no repurchases under the program as of September 30, 2021.
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Table of Contents
LAMAR MEDIA CORP.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
September 30,
2021
December 31,
2020
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$87,069 $121,069 
Receivables, net of allowance for doubtful accounts of $12,458 and $14,946 in 2021 and 2020, respectively
262,661 240,854 
Other current assets20,202 18,147 
Total current assets369,932 380,070 
Property, plant and equipment3,720,040 3,615,505 
Less accumulated depreciation and amortization(2,428,803)(2,333,656)
Net property, plant and equipment1,291,237 1,281,849 
Operating lease right of use assets1,208,425 1,222,013 
Financing lease right of use assets17,604 19,670 
Goodwill1,916,767 1,902,177 
Intangible assets, net909,040 913,978 
Other assets89,219 54,950 
Total assets$5,802,224 $5,774,707 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Trade accounts payable$12,655 $12,017 
Current maturities of long-term debt, net of deferred financing costs of $641 and $445 in 2021 and 2020, respectively
174,725 122,434 
Current operating lease liabilities174,659 195,439 
Current financing lease liabilities1,331 1,331 
Accrued expenses106,686 98,478 
Deferred income128,991 111,363 
Total current liabilities599,047 541,062 
Long-term debt, net of deferred financing costs of $37,446 and $39,672 in 2021 and 2020, respectively
2,662,656 2,764,082 
Operating lease liabilities977,941 993,776 
Financing lease liabilities17,609 18,608 
Deferred income tax liabilities6,016 4,854 
Asset retirement obligation267,024 222,876 
Other liabilities39,090 36,605 
Total liabilities4,569,383 4,581,863 
Stockholder's equity:
Common stock, par value $0.01, 3,000 shares authorized, 100 shares issued and outstanding at 2021 and 2020
— — 
Additional paid-in-capital3,067,669 3,034,357 
Accumulated comprehensive income850 934 
Accumulated deficit(1,835,677)(1,842,447)
Stockholder's equity1,232,842 1,192,844 
Total liabilities and stockholder's equity$5,802,225 $5,774,707 
See accompanying notes to condensed consolidated financial statements.
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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Statements of Income
Net revenues$476,894 $386,110 $1,292,827 $1,140,331 
Operating expenses (income)
Direct advertising expenses (exclusive of depreciation and amortization)
147,310 136,309 418,973 419,862 
General and administrative expenses (exclusive of depreciation and amortization)
85,947 66,749 234,115 216,361 
Corporate expenses (exclusive of depreciation and amortization)
25,891 17,129 64,048 52,141 
Depreciation and amortization84,300 61,237 205,671 187,548 
Gain on disposition of assets(26)(1,304)(1,922)(4,823)
343,422 280,120 920,885 871,089 
Operating income133,472 105,990 371,942 269,242 
Other expense (income)
Loss on extinguishment of debt— 7,051 21,604 25,235 
Interest income(198)(248)(554)(617)
Interest expense26,125 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 expense108,686 64,119 271,395 137,566 
Income tax expense1,712 1,224 5,922 2,520 
Net income$106,974 $62,895 $265,473 $135,046 
Statements of Comprehensive Income
Net income$106,974 $62,895 $265,473 $135,046 
Other comprehensive (loss) income
Foreign currency translation adjustments(588)330 (84)(528)
Comprehensive income$106,386 $63,225 $265,389 $134,518 
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
LAMAR MEDIA CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholder's Equity
(Unaudited)
(In thousands, except share and per share data)
Common
Stock
Additional
Paid-In
Capital
Accumulated
Comprehensive
Income
Accumulated
Deficit
Total
Balance, December 31, 2020$— $3,034,357 $934 $(1,842,447)$1,192,844 
Contribution from parent— 21,831 — — 21,831 
Foreign currency translations— — 204 — 204 
Net income— — — 38,466 38,466 
Dividend to parent— — — (81,535)(81,535)
Balance, March 31, 2021$— 3,056,188 1,138 (1,885,516)$1,171,810 
Contribution from parent— 6,154 — — 6,154 
Foreign currency translations— — 300 — 300 
Net income— — — 120,033 120,033 
Dividend to parent— — — (75,874)(75,874)
Balance, June 30, 2021$— 3,062,342 1,438 (1,841,357)$1,222,423 
Contribution from parent— 5,327 — — 5,327 
Foreign currency translations— — (588)— (588)
Net income— — — 106,974 106,974 
Dividend to parent— — — (101,294)(101,294)
Balance, September 30, 2021$— 3,067,669 850 (1,835,677)$1,232,842 

Common
Stock
Additional
Paid-In
Capital
Accumulated
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Balance, December 31, 2019$— $2,992,729 $685 $(1,823,883)$1,169,531 
Contribution from parent— 29,429 — — 29,429 
Foreign currency translations— — (1,598)— (1,598)
Net income— — — 40,617 40,617 
Dividend to parent— — — (110,755)(110,755)
Balance, March 31, 2020$— 3,022,158 (913)(1,894,021)$1,127,224 
Contribution from parent— 3,962 — — 3,962 
Foreign currency translations— — 740 — 740 
Net income— — — 31,534 31,534 
Dividend to parent— — — (50,453)(50,453)
Balance, June 30, 2020$— 3,026,120 (173)(1,912,940)$1,113,007 
Contribution from parent— 3,101 — — 3,101 
Foreign currency translations— — 330 — 330 
Net income— — — 62,895 62,895 
Dividend to parent— — — (50,416)(50,416)
Balance, September 30, 2020$— 3,029,221 157 (1,900,461)$1,128,917 
See accompanying notes to condensed consolidated financial statements
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Table of Contents
LAMAR MEDIA CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
20212020
Cash flows from operating activities:
Net income$265,473 $135,046 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization205,671 187,548 
Stock-based compensation22,540 11,046 
Amortization included in interest expense4,405 4,467 
Gain on disposition of assets and investments(1,922)(4,823)
Loss on extinguishment of debt21,604 25,235 
Equity in earnings of investee(1,141)— 
Deferred tax expense (benefit)1,178 (1,870)
Provision for doubtful accounts2,711 9,442 
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables(24,475)19,253 
Prepaid expenses(1,953)1,002 
Other assets(444)2,110 
(Decrease) increase in:
Trade accounts payable(69)(186)
Accrued expenses3,610 (11,597)
Operating lease liabilities(22,560)625 
Other liabilities(3,930)(44,865)
Net cash provided by operating activities470,698 332,433 
Cash flows from investing activities:
Acquisitions(107,593)(28,747)
Capital expenditures(71,513)(44,633)
Payment for investments in equity securities(30,000)— 
Proceeds from disposition of assets and investments5,761 5,699 
Decrease in notes receivable107 — 
Net cash used in investing activities(203,238)(67,681)
Cash flows from financing activities:
Principal payments on long-term debt(282)(273)
Borrowings on long-term debt— 8,750 
Principal payments on financing leases(998)— 
Payments on revolving credit facility(25,000)(805,000)
Proceeds received from revolving credit facility25,000 725,000 
Redemption of senior notes and senior subordinated notes(668,688)(1,058,596)
Proceeds received from note offering550,000 1,549,250 
Proceeds received from accounts receivable securitization program120,000 122,500 
Payments on accounts receivable securitization program(67,500)(175,000)
Proceeds received from senior credit facility term loans— 598,500 
Payments on senior credit facility term loans— (978,097)
Debt issuance costs(8,662)(32,667)
Distributions to non-controlling interest(82)(1,475)
Contributions from parent33,312 36,492 
Dividend to parent(258,703)(211,624)
Net cash used in financing activities(301,603)(222,240)
Effect of exchange rate changes in cash and cash equivalents143 (72)
Net (decrease) increase in cash and cash equivalents(34,000)42,440 
Cash and cash equivalents at beginning of period121,069 25,688 
Cash and cash equivalents at end of period$87,069 $68,128 
Supplemental disclosures of cash flow information:
Cash paid for interest$87,729 $115,999 
Cash paid for foreign, state and federal income taxes$7,231 $3,558 
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
1. Significant Accounting Policies
The information included in the foregoing interim condensed consolidated financial statements is unaudited. In the opinion of management all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of Lamar Media’s financial position and results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. These interim condensed consolidated financial statements should be read in conjunction with Lamar Media’s consolidated financial statements and the notes thereto included in the 2020 Combined Form 10-K.
Certain notes are not provided for the accompanying condensed consolidated financial statements as the information in notes 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14 and 16 to the condensed consolidated financial statements of Lamar Advertising included elsewhere in this report is substantially equivalent to that required for the condensed consolidated financial statements of Lamar Media. Earnings per share data is not provided for Lamar Media, as it is a wholly owned subsidiary of the Company.
2. Summarized Financial Information of Subsidiaries
Separate condensed consolidating financial information for Lamar Media, subsidiary guarantors and non-guarantor subsidiaries is presented below. Lamar Media and its subsidiary guarantors have fully and unconditionally guaranteed Lamar Media’s obligations with respect to its publicly issued notes. All guarantees are joint and several. As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information. The following condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes. The condensed consolidating financial information is provided as an alternative to providing separate financial statements for guarantor subsidiaries. Separate financial statements of Lamar Media’s subsidiary guarantors are not included because the guarantees are full and unconditional and the subsidiary guarantors are 100% owned and jointly and severally liable for Lamar Media’s outstanding publicly issued notes. The accounts for all companies reflected herein are presented using the equity method of accounting for investments in subsidiaries.

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Table of Contents
LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Balance Sheet as of September 30, 2021
Lamar
Media Corp.
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries
EliminationsLamar Media
Consolidated
(unaudited)
ASSETS
Total current assets$84,528 $21,427 $263,978 $— $369,933 
Net property, plant and equipment— 1,277,082 14,155 — 1,291,237 
Operating lease right of use assets— 1,179,793 28,632 — 1,208,425 
Intangibles and goodwill, net— 2,808,322 17,485 — 2,825,807 
Other assets4,042,153 310,925 186,517 (4,432,772)106,823 
Total assets$4,126,681 $5,597,549 $510,767 $(4,432,772)$5,802,225 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt$— $366 $174,359 $— $174,725 
Current operating lease liabilities— 167,067 7,592 — 174,659 
Other current liabilities22,086 216,543 11,034 — 249,663 
Total current liabilities22,086 383,976 192,985 — 599,047 
Long-term debt2,660,548 2,108 — — 2,662,656 
Operating lease liabilities— 958,770 19,171 — 977,941 
Other noncurrent liabilities211,205 289,459 291,032 (461,957)329,739 
Total liabilities2,893,839 1,634,313 503,188 (461,957)4,569,383 
Stockholder's equity1,232,842 3,963,236 7,579 (3,970,815)1,232,842 
Total liabilities and stockholder's equity$4,126,681 $5,597,549 $510,767 $(4,432,772)$5,802,225 
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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Balance Sheet as of December 31, 2020
Lamar Media
Corp.
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries
EliminationsLamar Media
Consolidated
ASSETS
Total current assets$110,678 $19,471 $249,921 $— $380,070 
Net property, plant and equipment— 1,268,765 13,084 — 1,281,849 
Operating lease right of use assets— 1,200,115 21,898 — 1,222,013 
Intangibles and goodwill, net— 2,798,343 17,812 — 2,816,155 
Other assets3,912,122 258,433 132,448 (4,228,383)74,620 
Total assets$4,022,800 $5,545,127 $435,163 $(4,228,383)$5,774,707 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt$— $379 $122,055 $— $122,434 
Current operating lease liabilities— 188,712 6,727 — 195,439 
Other current liabilities33,583 170,320 19,286 — 223,189 
Total current liabilities33,583 359,411 148,068 — 541,062 
Long-term debt2,761,705 2,377 — — 2,764,082 
Operating lease liabilities— 979,785 13,991 — 993,776 
Other noncurrent liabilities34,668 245,891 266,968 (264,584)282,943 
Total liabilities2,829,956 1,587,464 429,027 (264,584)4,581,863 
Stockholder's equity1,192,844 3,957,663 6,136 (3,963,799)1,192,844 
Total liabilities and stockholder's equity$4,022,800 $5,545,127 $435,163 $(4,228,383)$5,774,707 

28

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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Statements of Income and Comprehensive Income
for the Three Months Ended September 30, 2021
Lamar Media Corp.Guarantor SubsidiariesNon-
Guarantor Subsidiaries
EliminationsLamar Media Consolidated
Statement of Income(unaudited)
Net revenues$— $466,222 $11,216 $(544)$476,894 
Operating expenses (income)
Direct advertising expenses(1)
— 140,641 7,213 (544)147,310 
General and administrative expenses(1)
— 85,077 870 — 85,947 
Corporate expenses(1)
— 25,366 525 — 25,891 
Depreciation and amortization— 82,577 1,723 — 84,300 
Loss (gain) on disposition of assets— 115 (141)— (26)
— 333,776 10,190 (544)343,422 
Operating income (loss)— 132,446 1,026 — 133,472 
Equity in (earnings) loss of subsidiaries(132,727)— — 132,727 — 
Loss on extinguishment of debt— — — — — 
Interest expense (income), net25,753 (4)178 — 25,927 
Equity in earnings of investee— (1,141)— — (1,141)
Income (loss) before income tax expense (benefit)106,974 133,591 848 (132,727)108,686 
Income tax expense (benefit)(2)
— 1,943 (231)— 1,712 
Net income (loss)$106,974 $131,648 $1,079 $(132,727)$106,974 
Statement of Comprehensive Income
Net income (loss)$106,974 $131,648 $1,079 $(132,727)$106,974 
Total other comprehensive loss, net of tax— — (588)— (588)
Total comprehensive income (loss)$106,974 $131,648 $491 $(132,727)$106,386 
(1)    Caption is exclusive of depreciation and amortization.
(2)    The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.







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Table of Contents
LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Statements of Income and Comprehensive Income
for the Three Months Ended September 30, 2020
Lamar Media Corp.Guarantor SubsidiariesNon-
Guarantor Subsidiaries
EliminationsLamar Media Consoliated
Statement of Income(unaudited)
Net revenues$— $378,652 $7,825 $(367)$386,110 
Operating expenses (income)
Direct advertising expenses(1)
— 130,496 6,180 (367)136,309 
General and administrative expenses(1)
— 65,340 1,409 — 66,749 
Corporate expenses(1)
— 16,918 211 — 17,129 
Depreciation and amortization— 60,751 486 — 61,237 
Gain on disposition of assets— (1,304)— — (1,304)
— 272,201 8,286 (367)280,120 
Operating income (loss)— 106,451 (461)— 105,990 
Equity in (earnings) loss of subsidiaries(104,769)— — 104,769 — 
Loss on extinguishment of debt7,051 — — — 7,051 
Interest expense (income), net34,823 (92)89 — 34,820 
Income (loss) before income tax expense (benefit)62,895 106,543 (550)(104,769)64,119 
Income tax expense (benefit)(2)
— 1,449 (225)— 1,224 
Net income (loss)$62,895 $105,094 $(325)$(104,769)$62,895 
Statement of Comprehensive Income
Net income (loss)$62,895 $105,094 $(325)$(104,769)$62,895 
Total other comprehensive income, net of tax— — 330 — 330 
Total comprehensive income (loss)$62,895 $105,094 $$(104,769)$63,225 

(1)    Caption is exclusive of depreciation and amortization.
(2)    The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.









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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Statements of Income and Comprehensive Income
for the Nine Months Ended September 30, 2021
Lamar Media
Corp.
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries
EliminationsLamar Media
Consolidated
Statement of Income(unaudited)
Net revenues$— $1,266,818 $27,326 $(1,317)$1,292,827 
Operating expenses (income)
Direct advertising expenses (1)
— 402,260 18,030 (1,317)418,973 
General and administrative expenses (1)
— 231,091 3,024 — 234,115 
Corporate expenses (1)
— 62,897 1,151 — 64,048 
Depreciation and amortization— 202,660 3,011 — 205,671 
Gain on disposition of assets— (1,774)(148)— (1,922)
— 897,134 25,068 (1,317)920,885 
Operating income— 369,684 2,258 — 371,942 
Equity in (earnings) loss of subsidiaries(366,556)— — 366,556 — 
Loss on extinguishment of debt21,604 — — — 21,604 
Interest expense (income), net79,479 (30)635 — 80,084 
Equity in earnings of investee— (1,141)— — (1,141)
Income (loss) before income tax expense265,473 370,855 1,623 (366,556)271,395 
Income tax expense (2)
— 5,826 96 — 5,922 
Net income (loss)$265,473 $365,029 $1,527 $(366,556)$265,473 
Statement of Comprehensive Income
Net income (loss)$265,473 $365,029 $1,527 $(366,556)$265,473 
Total other comprehensive loss, net of tax— — (84)— (84)
Total comprehensive income (loss)$265,473 $365,029 $1,443 $(366,556)$265,389 
(1)Caption is exclusive of depreciation and amortization.
(2)The income tax expense reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.
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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Statements of Income and Comprehensive Income
for the Nine Months Ended September 30, 2020
Lamar Media
Corp.
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries
EliminationsLamar Media
Consolidated
Statement of Income(unaudited)
Net revenues$— $1,116,947 $24,514 $(1,130)$1,140,331 
Operating expenses (income)
Direct advertising expenses (1)
— 402,033 18,959 (1,130)419,862 
General and administrative expenses (1)
— 211,090 5,271 — 216,361 
Corporate expenses (1)
— 51,526 615 — 52,141 
Depreciation and amortization— 186,201 1,347 — 187,548 
(Gain) loss on disposition of assets— (4,878)55 — (4,823)
— 845,972 26,247 (1,130)871,089 
Operating income (loss)— 270,975 (1,733)— 269,242 
Equity in (earnings) loss of subsidiaries(265,353)— — 265,353 — 
Loss on extinguishment of debt25,235 — — — 25,235 
Interest expense (income), net105,072 (151)1,520 — 106,441 
Income (loss) before income tax expense (benefit)135,046 271,126 (3,253)(265,353)137,566 
Income tax expense (benefit) (2)
— 3,373 (853)— 2,520 
Net income (loss)$135,046 $267,753 $(2,400)$(265,353)$135,046 
Statement of Comprehensive Income
Net income (loss)$135,046 $267,753 $(2,400)$(265,353)$135,046 
Total other comprehensive loss, net of tax— — (528)— (528)
Total comprehensive income (loss)$135,046 $267,753 $(2,928)$(265,353)$134,518 
(1)Caption is exclusive of depreciation and amortization.
(2)The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from subsidiaries.
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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2021
Lamar Media
Corp.
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries
EliminationsLamar Media
Consolidated
(unaudited)
Cash flows from operating activities:
Net cash provided by (used in) operating activities$380,225 $584,251 $(26,729)$(467,049)$470,698 
Cash flows from investing activities:
Acquisitions— (107,593)— — (107,593)
Capital expenditures— (67,767)(3,746)— (71,513)
Payment for investments in equity securities— (30,000)— — (30,000)
Proceeds from disposition of assets and investments— 5,761 — — 5,761 
Decrease in notes receivable— 107 — — 107 
Investment in subsidiaries(107,593)— — 107,593 — 
Decrease (increase) in intercompany notes receivable53,515 — — (53,515)— 
Net cash (used in) provided by investing activities(54,078)(199,492)(3,746)54,078 (203,238)
Cash flows from financing activities:
Proceeds received from revolving credit facility25,000 — — — 25,000 
Payment on revolving credit facility(25,000)— — — (25,000)
Principal payments on long-term debt— (282)— — (282)
Principal payments on financing leases— (998)— — (998)
Proceeds received from note offering550,000 — — — 550,000 
Redemption of senior notes(668,688)— — — (668,688)
Payment on accounts receivable securitization program— — (67,500)— (67,500)
Proceeds received from accounts receivable securitization program— — 120,000 — 120,000 
Debt issuance costs(8,224)— (438)— (8,662)
Intercompany loan (payments) proceeds— (24,119)(29,396)53,515 — 
Distributions to non-controlling interest— — (82)— (82)
Dividends (to) from parent(258,703)(467,049)— 467,049 (258,703)
Contributions from (to) parent33,312 107,593 — (107,593)33,312 
Net cash (used in) provided by financing activities(352,303)(384,855)22,584 412,971 (301,603)
Effect of exchange rate changes in cash and cash equivalents— — 143 — 143 
Net decrease in cash and cash equivalents(26,156)(96)(7,748)— (34,000)
Cash and cash equivalents at beginning of period110,588 1,732 8,749 — 121,069 
Cash and cash equivalents at end of period$84,432 $1,636 $1,001 $— $87,069 

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LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In Thousands, Except for Share Data)
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2020
Lamar Media
Corp.
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries
EliminationsLamar Media
Consolidated
(unaudited)
Cash flows from operating activities:
Net cash provided by (used in) operating activities$310,395 $436,270 $4,949 $(419,181)$332,433 
Cash flows from investing activities:
Acquisitions577 (29,324)— — (28,747)
Capital expenditures— (42,792)(1,841)— (44,633)
Proceeds from disposition of assets and investments— 5,699 — — 5,699 
Investment in subsidiaries(29,324)— — 29,324 — 
(Increase) decrease in intercompany notes receivable(57,807)— — 57,807 — 
Net cash (used in) provided by investing activities(86,554)(66,417)(1,841)87,131 (67,681)
Cash flows from financing activities:
Proceeds received from revolving credit facility725,000 — — — 725,000 
Payment on revolving credit facility(805,000)— — — (805,000)
Principal payments on long-term debt— (273)— — (273)
Borrowings on long-term debt— 8,750 — — 8,750 
Proceeds received from note offering1,549,250 — — — 1,549,250 
Payment on accounts receivable securitization program— — (175,000)— (175,000)
Proceeds received from accounts receivable securitization program— — 122,500 — 122,500 
Redemption of senior notes and senior subordinated notes(1,058,596)— — — (1,058,596)
Proceeds received from senior credit facility term loans598,500 — — — 598,500 
Payments on senior credit facility term loans(978,097)— — — (978,097)
Debt issuance costs(32,667)— — — (32,667)
Intercompany loan proceeds (payments)— 4,111 53,696 (57,807)— 
Distributions to non-controlling interest— — (1,475)— (1,475)
Dividends (to) from parent(211,624)(419,181)— 419,181 (211,624)
Contributions from (to) parent36,492 29,324 — (29,324)36,492 
Net cash (used in) provided by financing activities(176,742)(377,269)(279)332,050 (222,240)
Effect of exchange rate changes in cash and cash equivalents— — (72)— (72)
Net increase (decrease) in cash and cash equivalents47,099 (7,416)2,757 — 42,440 
Cash and cash equivalents at beginning of period13,185 8,278 4,225 — 25,688 
Cash and cash equivalents at end of period$60,284 $862 $6,982 $— $68,128 
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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements. Actual results could differ materially from those anticipated by the forward-looking statements due to risks and uncertainties described in the section of this combined report on Form 10-Q entitled “Note Regarding Forward-Looking Statements” and in Item 1A to the 2020 Combined Form 10-K filed on February 26 2021, and as such risk factors may be further updated or supplemented, from time to time, in our future combined Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You should carefully consider each of these risks and uncertainties in evaluating the Company’s and Lamar Media’s financial conditions and results of operations. Investors are cautioned 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 the Company undertakes no obligation to update or revise the statements, except as may be required by law.
LAMAR ADVERTISING COMPANY
The following is a discussion of the consolidated financial condition and results of operations of the Company for the three and nine months ended September 30, 2021 and 2020. This discussion should be read in conjunction with the consolidated financial statements of the Company and the related notes thereto.
Overview
The Company’s net revenues are derived primarily from the rental of advertising space on outdoor advertising displays owned and operated by the Company. Revenue growth is based on many factors that include the Company’s ability to increase occupancy of its existing advertising displays; raise advertising rates; and acquire new advertising displays and its operating results are therefore affected by general economic conditions, as well as trends in the advertising industry. Advertising spending is particularly sensitive to changes in general economic conditions which affect the rates that the Company is able to charge for advertising on its displays and its ability to maximize advertising sales or occupancy on its displays.
Impact of the COVID-19 Pandemic
The unprecedented and rapid spread of COVID-19 and the related government-imposed restrictions and social distancing measures implemented throughout the world negatively affected our business in 2020. During the nine months ended September 30, 2021, our business has generally improved as the economy has recovered. While some of our corporate, front office and sales workforce continues to work from home, a large majority have returned to their offices while adhering to the Centers for Disease Control and Prevention and state and local governmental guidelines and recommendations. The impacts of working from home have been minimal on productivity. Also, while working from home has minimally impacted our processes, there have been no material impacts to our internal control environment.
We continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of our employees, customers, partners and stockholders.
Acquisitions and capital expenditures
Historically, the Company has made strategic acquisitions of outdoor advertising assets to increase the number of outdoor advertising displays it operates in existing and new markets. 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 its senior credit facility or the issuance of debt or equity securities. See “Liquidity and Capital Resources-Sources of Cash” for more information. During the nine months ended September 30, 2021, the Company completed acquisitions for a total cash purchase price of approximately $107.6 million. See Uses of Cash – Acquisitions for more information.
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The Company’s business requires expenditures for maintenance and capitalized costs associated with the construction of new billboard displays, the entrance into and renewal of logo sign and transit contracts, and the purchase of real estate and operating equipment. The following table presents a breakdown of capitalized expenditures for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Total capital expenditures:
Billboard — traditional$5,706 $678 $13,077 $8,701 
Billboard — digital15,140 2,620 37,841 19,422 
Logos2,898 1,853 7,465 5,398 
Transit564 817 1,774 2,672 
Land and buildings2,871 1,210 5,233 3,468 
Operating equipment2,918 1,181 6,123 4,972 
Total capital expenditures$30,097 $8,359 $71,513 $44,633 
Non-GAAP Financial Measures
Our management reviews our performance by focusing on several key performance indicators not prepared in conformity with Generally Accepted Accounting Principles in the United States (“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.
Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts, adjusted funds from operations (“AFFO”) and acquisition-adjusted net revenue.
We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), equity in earnings (loss) of investees, loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization, loss (gain) on disposition of assets and investments and capitalized contract fulfillment costs, net.
FFO is defined as net income before gains or losses from the sale or disposal of real estate assets and investments and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest.
We define AFFO as FFO before (i) straight-line income and expense; (ii) capitalized contract fulfillment costs, net (iii) stock-based compensation expense; (iv) non-cash portion of tax expense (benefit); (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.
Acquisition-adjusted net revenue adjusts our net revenue for the prior period by adding to it the net revenue generated by the acquired assets before our acquisition of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted revenue, therefore, we include revenue generated by assets that we did not own in the period but acquired in the current period. We refer to the amount of pre-acquisition revenue generated by 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 net revenue”. In addition, we also adjust the prior period to subtract revenue generated by the assets that have been divested since the prior period and, therefore, no revenue derived from those assets is reflected in the current period.
Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue are not intended to replace net income or any other performance measures determined in accordance with GAAP. Neither FFO nor AFFO 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. Rather, adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue are presented as we believe each is a useful indicator of our current operating performance. 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
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for evaluating our core operating results; (2) adjusted EBITDA is widely used in the industry to measure operating performance as depreciation and amortization may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) acquisition-adjusted net revenue is a supplement to net revenue 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; (4) adjusted EBITDA, FFO and AFFO each provide investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (5) each provides investors with a measure for comparing our results of operations to those of other companies.
Our measurement of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue to net income, the most directly comparable GAAP measure, have been included herein.
RESULTS OF OPERATIONS
Nine months ended September 30, 2021 compared to nine months ended September 30, 2020
Net revenues increased $152.5 million or 13.4% to $1.29 billion for the nine months ended September 30, 2021 from $1.14 billion for the same period in 2020. This increase was primarily attributable to an increase in billboard net revenues of $153.7 million and an increase in transit net revenues of $2.2 million, offset by a decrease in logo net revenues of $3.4 million over the same period in 2020.
For the nine months ended September 30, 2021, there was a $156.5 million increase in net revenues as compared to acquisition-adjusted net revenue for the nine months ended September 30, 2020, which represents an increase of 13.8%. See “Reconciliations” below. The $156.5 million increase in revenue is primarily due to an increase of $151.1 million in billboard net revenues as well as an increase in transit net revenues of $5.1 million over the same period in 2020.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $29.1 million, or 4.2%, to $717.8 million for the nine months ended September 30, 2021 from $688.7 million for the same period in 2020. The $29.1 million increase over the prior year is comprised of a $17.6 million increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) primarily related to the operations of our outdoor advertising assets, as well as an $11.5 million increase in stock-based compensation.
Depreciation and amortization expense increased $18.1 million to $205.7 million for the nine months ended September 30, 2021 as compared to $187.5 million for the same period in 2020. The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during the period.
For the nine months ended September 30, 2021, the Company recognized a gain on disposition of assets of $1.9 million primarily resulting from transactions related to the sale of billboard locations and displays.
Due to the above factors, operating income increased by $102.4 million to $371.2 million for the nine months ended September 30, 2021 as compared to $268.9 million for the same period in 2020.
The Company recognized a loss on debt extinguishment of $21.6 million during the nine months ended September 30, 2021, which is a $3.6 million decrease over the same period in 2020. The loss on debt extinguishment during the nine months ended September 30, 2021 relates to the early repayment of our 5 3/4% Senior Notes during the period.
Interest expense decreased $26.4 million for the nine months ended September 30, 2021 to $80.6 million as compared to $107.1 million for the nine months ended September 30, 2020. The decrease is primarily related to the Company’s debt transactions completed in 2020 and 2021, as well as a reduction in our senior credit facility interest rates.
Equity in earnings of investee was $1.1 million for the nine months ended September 30, 2021 as a result of the investment in Vistar Media that occurred in July 2021. There was no equity in earnings of investee for the nine months ended September 30, 2020.
The increase in operating income, as well as the decrease in interest expense and the decrease in loss on extinguishment of debt, resulted in an $133.5 million increase in net income before income taxes. The effective tax rate for the nine months ended September 30, 2021 was 2.2%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
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As a result of the above factors, the Company recognized net income for the nine months ended September 30, 2021 of $264.8 million, as compared to net income of $134.7 million for the same period in 2020.
Reconciliations:
Because acquisitions occurring after December 31, 2019 have contributed to our net revenue results for the periods presented, we provide 2020 acquisition-adjusted net revenue, which adjusts our 2020 net revenue for the nine months ended September 30, 2020 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the nine months ended September 30, 2021.
Reconciliations of 2020 reported net revenue to 2020 acquisition-adjusted net revenue for the nine months ended September 30, as well as a comparison of 2020 acquisition-adjusted net revenue to 2021 reported net revenue for the nine months ended September 30, are provided below:
Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue
Nine Months Ended
September 30,
20212020
(in thousands)
Reported net revenue$1,292,827 $1,140,331 
Acquisition net revenue— (3,958)
Adjusted totals$1,292,827 $1,136,373 
Key Performance Indicators
Net Income/Adjusted EBITDA
(in thousands)
Nine Months Ended
September 30,
Amount of
Increase (Decrease)
Percent
Increase (Decrease)
20212020
Net income$264,776 $134,680 $130,096 96.6 %
Income tax expense5,922 2,520 3,402 
Loss on debt extinguishment21,604 25,235 (3,631)
Interest expense (income), net80,084 106,441 (26,357)
Equity in earnings of investee(1,141)— (1,141)
Gain on disposition of assets(1,922)(4,823)2,901 
Depreciation and amortization205,671 187,548 18,123 
Capitalized contract fulfillment costs, net(900)1,036 (1,936)
Stock-based compensation expense22,540 11,046 11,494 
Adjusted EBITDA$596,634 $463,683 $132,951 28.7 %
Adjusted EBITDA for the nine months ended September 30, 2021 increased 28.7% to $596.6 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $155.3 million, offset by an increase in total general and administrative and corporate expenses of $18.5 million, excluding the impact of stock-based compensation expense.
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Net Income/FFO/AFFO
(in thousands)
Nine Months Ended
September 30,
Amount of
Increase
(Decrease)
Percent
Increase
(Decrease)
20212020
Net income$264,776 $134,680 $130,096 96.6 %
Depreciation and amortization related to real estate197,395 178,884 18,511 
Gain from sale or disposal of real estate, net of tax(1,712)(4,422)2,710 
Adjustments for unconsolidated affiliates and
   non-controlling interest
(618)456 (1,074)
FFO$459,841 $309,598 $150,243 48.5 %
Straight line expense2,195 2,615 (420)
Capitalized contract fulfillment costs, net(900)1,036 (1,936)
Stock-based compensation expense22,540 11,046 11,494 
Non-cash portion of tax provision1,178 (1,870)3,048 
Non-real estate related depreciation and amortization8,276 8,664 (388)
Amortization of deferred financing costs4,405 4,467 (62)
Loss on extinguishment of debt21,604 25,235 (3,631)
Capital expenditures – maintenance(32,697)(17,616)(15,081)
Adjustments for unconsolidated affiliates and
   non-controlling interest
618 (456)1,074 
AFFO$487,060 $342,719 $144,341 42.1 %
FFO for the nine months ended September 30, 2021 increased from $309.6 million in 2020 to $459.8 million for the same period in 2021, an increase of 48.5%. AFFO for the nine months ended September 30, 2021 increased 42.1% to $487.1 million as compared to $342.7 million for the same period in 2020. The increase in AFFO was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense).
Three months ended September 30, 2021 compared to three months ended September 30, 2020
Net revenues increased $90.8 million or 23.5% to $476.9 million for the three months ended September 30, 2021 from $386.1 million for the same period in 2020. This increase was primarily attributable to an increase in billboard and transit net revenues of $81.7 million and $9.1 million, respectively, over the same period in 2020.
For the three months ended September 30, 2021, there was a $90.0 million increase in net revenues as compared to acquisition-adjusted net revenue for the three months ended September 30, 2020, which represents an increase of 23.3%. See "Reconciliations" below. The $90.0 million increase in revenue is primarily due to a $80.5 million and $9.7 million increase in billboard and transit net revenues, respectively.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $39.0 million, or 17.7%, to $259.3 million for the three months ended September 30, 2021 from $220.3 million in the same period in 2020. The $39.0 million increase over the prior year is comprised of a $30.8 million increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) primarily related to the operations of our outdoor advertising assets and a $8.2 million increase in stock-based compensation.
Depreciation and amortization expense increased $23.1 million to $84.3 million for the three months ended September 30, 2021 as compared to $61.2 million for the same period in 2020. The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during the period.
For the three months ended September 30, 2021, the Company recognized a gain on disposition of assets of $0.03 million primarily resulting from transactions related to billboard locations.
Due to the above factors, operating income increased by $27.5 million to $133.3 million for the three months ended September 30, 2021 as compared to $105.9 million for the same period in 2020.
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Interest expense decreased $8.9 million for the three months ended September 30, 2021 to $26.1 million as compared to $35.1 million for the three months ended September 30, 2020. The decrease is primarily related to the Company's debt transactions completed in 2020 and 2021, as well as a reduction in our senior credit facility interest rates.
Equity in earnings of investee was $1.1 million for the three months ended September 30, 2021 as a result of the investment in Vistar Media that occurred in July 2021. There was no equity in earnings of investee for the three months ended September 30, 2020.
The increase in operating income and decrease in interest expense resulted in a $44.6 million increase in net income before income taxes. The effective tax rate for the three months ended September 30, 2021 was 1.6%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, the Company recognized net income for the three months ended September 30, 2021 of $106.8 million, as compared to net income of $62.8 million for the same period in 2020.
Reconciliations
Because acquisitions occurring after December 31, 2019 have contributed to our net revenue results for the periods presented, we provide 2020 acquisition-adjusted net revenue, which adjusts our 2020 net revenue for the three months ended September 30, 2020 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the three months ended September 30, 2021.
Reconciliations of 2020 reported net revenue to 2020 acquisition-adjusted net revenue for the three months ended September 30, as well as a comparison of 2020 acquisition-adjusted net revenue to 2021 reported net revenue for the three months ended September 30, are provided below:
Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue
Three Months Ended
September 30,
20212020
(in thousands)
Reported net revenue$476,894 $386,110 
Acquisition net revenue— 771 
Adjusted totals$476,894 $386,881 

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Key Performance Indicators
Net Income/Adjusted EBITDA
(in thousands)
Three Months Ended
September 30,
Amount of Increase (Decrease)Percent Increase (Decrease)
20212020
Net income $106,838 $62,758 $44,080 70.2 %
Income tax expense1,712 1,224 488 
Loss on debt extinguishment— 7,051 (7,051)
Interest expense (income), net25,927 34,820 (8,893)
Equity in earnings of investee(1,141)— (1,141)
Gain on disposition of assets(25)(1,304)1,279 
Depreciation and amortization84,299 61,237 23,062 
Stock-based compensation expense13,076 4,884 8,192 
Adjusted EBITDA$230,686 $170,670 $60,016 35.2 %
Adjusted EBITDA for the three months ended September 30, 2021 increased 35.2% to $230.7 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $79.8 million, and was offset by an increase in total general and administrative and corporate expenses of $19.8 million, excluding the impact of stock-based compensation expense.
Net Income/FFO/AFFO
(in thousands)
Three Months Ended
September 30,
Amount of Increase (Decrease)Amount of Increase (Decrease)
20212020
Net income$106,838 $62,758 $44,080 70.2 %
Depreciation and amortization related to real estate81,580 58,431 23,149 
Gain from sale or disposal of real estate, net of tax83 (1,324)1,407 
Adjustments for unconsolidated affiliates and non-controlling interest(903)67 (970)
FFO$187,598 $119,932 $67,666 56.4 %
Straight line expense466 882 (416)
Stock-based compensation expense13,076 4,884 8,192 
Non-cash portion of tax provision(565)(557)(8)
Non-real estate related depreciation and amortization2,720 2,806 (86)
Amortization of deferred financing costs1,443 1,589 (146)
Loss on extinguishment of debt— 7,051 (7,051)
Capital expenditures - maintenance(13,094)(3,124)(9,970)
Adjustments for unconsolidated affiliates and non-controlling interest903 (67)970 
AFFO$192,547 $133,396 $59,151 44.3 %
FFO for the three months ended September 30, 2021 increased from $119.9 million in 2020 to $187.6 million in 2021, an increase of 56.4%. AFFO for the three months ended September 30, 2021 increased 44.3% to $192.5 million as compared to $133.4 million for the same period in 2020. The increase in AFFO was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized fulfillment costs, net) offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense).
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LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company has historically satisfied its working capital requirements with cash from operations and borrowings under the senior credit facility. The Company’s wholly owned subsidiary, Lamar Media Corp., is the borrower under the senior credit facility and maintains all corporate operating cash balances. Any cash requirements of the Company, therefore, must be funded by distributions from Lamar Media.
Sources of Cash
Total Liquidity. As of September 30, 2021 we had $823.2 million of total liquidity, which is comprised of $87.6 million in cash and cash equivalents and $735.7 million of availability under the revolving portion of Lamar Media’s senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months. We are currently in compliance with the maintenance covenant included in the senior credit facility and we would remain in compliance after giving effect to borrowing the full amount available to us under the revolving portion of the senior credit facility.
As of September 30, 2021 and December 31, 2020, the Company had a working capital deficit of $236.1 million and $167.3 million, respectively. The decrease in working capital of $68.8 million is primarily due to a decrease in cash and cash equivalents of $34.0 million as well as an increase of $52.3 million in current maturities of long-term debt due to the additional borrowings on the Accounts Receivable Securitization Program, offset by an increase in receivables, net of $21.8 million as of September 30, 2021.
Cash Generated by Operations. For the nine months ended September 30, 2021 and 2020, our cash provided by operating activities was $488.2 million and $361.5 million, respectively. The increase in cash provided by operating activities for the nine months ended September 30, 2021 over the same period in 2020 primarily relates to an increase in revenues of $152.5 million. We expect to generate cash flows from operations during 2021 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. We believe we have sufficient liquidity available under our revolving credit facility to meet our operating cash needs for the next twelve months.
Accounts Receivable Securitization Program.  On December 18, 2018, we entered into the Accounts Receivable Securitization Program. The Accounts Receivable Securitization Program provides up to $175.0 million in borrowing capacity, plus an accordion feature that would permit the borrowing capacity to be increased by up to $125.0 million. 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 taxable REIT subsidiaries 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. Pursuant to the Accounts Receivable Securitization Program, Lamar Media has agreed to service the accounts receivable on behalf of the two Special Purpose Subsidiaries for a fee. Lamar Media has also agreed to guaranty its performance in its capacity as servicer and originator, as well as the performance of the Subsidiary Originators, of their obligations under the agreements governing the Account Receivable Securitization Program. None of Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries guarantees the collectability of the receivables under the Accounts Receivable Securitization Program. In addition, each of the Special Purpose Subsidiaries is a separate legal entity with its own separate creditors who will be entitled to access the assets of such Special Purpose Subsidiary before the assets become available to Lamar Media. Accordingly, the assets of the Special Purpose Subsidiaries are not available to pay creditors of Lamar Media or any of its subsidiaries, although collections from receivables in excess of the amounts required to repay the lenders and the other creditors of the Special Purpose Subsidiaries may be remitted to Lamar Media. 
On May 24, 2021, Lamar Media and the Special Purpose Subsidiaries entered into the Fifth Amendment (the "Fifth Amendment") to the Accounts Receivable Securitization Program, as amended. The Fifth Amendment extends the maturity date of the Accounts Receivable Securitization Program to July 21, 2024. Additionally, the Fifth Amendment decreases the
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Minimum Funding Threshold which, as amended, requires the Special Purpose Subsidiaries to maintain minimum borrowings under the Accounts Receivable Securitization Program on any day equal to the lesser of (i) 50.00% of the aggregate Commitment of all Lenders or (ii) the Borrowing Base, provided that the Minimum Funding Threshold shall be zero on any day that is a Minimum Funding Threshold Holiday which, as amended, provides for an annual holiday from the requirement of up to sixty days per year. The Fifth Amendment also provides for updated LIBOR replacement procedures. Lamar Media may amend the facility to 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.
As of September 30, 2021, there was $175.0 million in outstanding aggregate borrowings under the Accounts Receivable Securitization Program. Lamar Media had no additional availability under the Accounts Receivable Securitization Program as of September 30, 2021. The Accounts Receivable Securitization Program will mature on July 21, 2024. 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.
“At-the-Market” Offering Program. On May 1, 2018, the Company entered into an equity distribution agreement (the “Sales Agreement”) with J.P. Morgan Securities LLC, Wells Fargo Securities LLC and SunTrust Robinson Humphrey, Inc. as our sales agents. Under the terms of the Sales Agreement, the Company could have, from time to time, issued and sold shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the sales agents as either agents or principals. The Sales Agreement expired by its terms on May 1, 2021. The Company did not issue any shares under this program in 2021.
On June 21, 2021, the Company entered into a new equity distribution agreement (the "2021 Sales Agreement"), with J.P. 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. Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals. Sales of the Class A common stock, if any, may be made in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A common stock under the 2021 Sales Agreement and may at any time suspend solicitations and offers under the 2021 Sales Agreement. The Company intends to use the net proceeds, if any, from the sale of the Class A common stock pursuant to the 2021 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 September 30, 2021.
Shelf Registration Statement. On August 6, 2018, the Company filed an automatically effective shelf registration statement (No. 333-226614) that registered the offer and sale of an indeterminate amount of additional shares of our Class A common stock which expired by its term in August 2021. 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 on similar terms as the prior registration statement. During the nine months ended September 30, 2021, the Company did not issue any shares under either shelf registration. 
Credit Facilities. On February 6, 2020, Lamar Media entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto, under which the parties agreed to amend and restate Lamar Media’s existing senior credit facility. The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended (the “Third Amended and Restated Credit Agreement”).
On July 2, 2021, Lamar Media entered into Amendment No. 1 (the "Amendment"), to the Fourth Amended and Restated Credit Agreement. 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
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non-Subsidiary entities such as the Lamar Partnering Entities, except to the extent that income of such entities is received by Lamar Media in the form of dividends or distributions.
The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on February 6, 2025 (the “revolving credit facility”), (ii) a $600.0 million Term B loan facility (the “Term B loans”)  which will mature on February 6, 2027, and (iii) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions including lender approval. Lamar Media borrowed all $600.0 million in Term B loans on February 6, 2020. The entire amount of the Term B loans will be payable at maturity.
The Term B loans bear interest at rates based on the Adjusted LIBO Rate (“Eurodollar term loans”) or the Adjusted Base Rate (“Base Rate term loans”), at Lamar Media’s option. Eurodollar term loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.50%. Base Rate term loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50%. The revolving credit facility bears interest at rates based on the Adjusted LIBO Rate (“Eurodollar revolving loans”) or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option. Eurodollar revolving loans bear interest at a rate per annum equal to the Adjusted LIBO Rate plus 1.50% (or the Adjusted LIBO Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1). Base Rate revolving loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50% (or the Adjusted Base Rate plus 0.25% at any time the total debt ratio is less than or equal to 3.25 to 1). The guarantees, covenants, events of default and other terms of the senior credit facility apply to the Term B loans and revolving credit facility.
As of September 30, 2021 the aggregate balance outstanding under the senior credit facility was $600.0 million, consisting of $600.0 million in Term B loans aggregate principal balance and no outstanding borrowings under our revolving credit facility. Lamar Media had approximately $735.7 million of unused capacity under the revolving credit facility.
Note Offerings. On January 22, 2021, Lamar Media completed, an institutional private placement of $550.0 million in aggregate principal amount of 3 5/8% Senior Notes due 2031 (the “3 5/8% Senior Notes”). The institutional private placement on January 22, 2021 resulted in net proceeds to Lamar Media of approximately $542.5 million. Lamar Media used the proceeds of this offering, together with cash on hand and borrowings under the revolving credit facility and Accounts Receivable Securitization Program, to redeem all of its outstanding $650.0 million aggregate principal amount 5 3/4% Senior Notes due 2026. See Uses of Cash- Note Redemption for more information.
Factors Affecting Sources of Liquidity
Internally Generated Funds. 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 2021 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.
Restrictions Under Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to its outstanding debt securities. Currently, Lamar Media has outstanding the $600.0 million 3 3/4% Senior Notes issued February 2020, the $550.0 million 4% Senior Notes issued February 2020 and August 2020, the $400.0 million 4 7/8% Senior Notes issued in May 2020 and the $550.0 million 3 5/8% Senior Notes issued in January 2021.
The indentures relating to Lamar Media’s outstanding notes restrict its ability to incur additional indebtedness, but permit the incurrence of indebtedness (including indebtedness under the senior credit facility), (i) if no default or event of default would result from such incurrence and (ii) if after giving effect to any such incurrence, the leverage ratio (defined as the sum of (x) total consolidated debt plus (y) the aggregate liquidation preference of any preferred stock of Lamar Media’s restricted subsidiaries to trailing four fiscal quarter EBITDA (as defined in the indentures)) would be less than 7.0 to 1.0. Currently, Lamar Media is not in default under the indentures of any of its outstanding notes and, therefore, would be permitted to incur additional indebtedness subject to the foregoing provision.
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In addition to debt incurred under the provisions described in the preceding paragraph, the indentures relating to Lamar Media’s outstanding notes permit Lamar Media to incur indebtedness pursuant to the following baskets:
up to $2.0 billion of indebtedness under the senior credit facility;
indebtedness outstanding on the date of the indentures or debt incurred to refinance outstanding debt;
inter-company debt between Lamar Media and its restricted subsidiaries or between restricted subsidiaries;
certain purchase money indebtedness and capitalized lease obligations to acquire or lease property in the ordinary course of business that cannot exceed the greater of $50.0 million or 5% of Lamar Media’s net tangible assets;
additional debt not to exceed $75.0 million; and
up to $500.0 million of permitted securitization financings.
Restrictions Under Senior Credit Facility. Lamar Media is required to comply with certain covenants and restrictions under the senior credit facility. If the Company or Lamar Media fails to comply with these tests, the lenders under the senior credit facility will be entitled to exercise certain remedies, including the termination of the lending commitments and the acceleration of the debt payments under the senior credit facility. At September 30, 2021 we were, and currently, we are, in compliance with all such tests under the senior credit facility.
Lamar Media must maintain a secured debt ratio, defined as total consolidated secured debt of Lamar Advertising, Lamar Media and its restricted subsidiaries (including capital lease obligations), minus the lesser of (x) $150.0 million and (y) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries (as defined above under Sources of Cash – Accounts Receivable Securitization Program)) to EBITDA, as defined below, for the period of four consecutive fiscal quarters then ended, of less than or equal to 4.5 to 1.0.
Lamar Media is restricted from incurring additional indebtedness subject to exceptions, one of which is that it may incur additional indebtedness not exceeding the greater of $250.0 million or 6% of its total assets.
Lamar Media is also restricted from incurring additional unsecured senior indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, Lamar Media would have a total debt ratio, defined as (a) total consolidated debt (including subordinated debt) of Lamar Advertising, Lamar Media and its restricted subsidiaries as of any date minus the lesser of (i) $150.0 million and (ii) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries) to (b) EBITDA, as defined below, for the most recent four fiscal quarters then ended, is less than 7.0 to 1.0. 
Lamar Media is also restricted from incurring additional subordinated indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, it is in compliance with the secured debt ratio covenant and its total debt ratio is less than 7.0 to 1.0.
Under the senior credit facility, as amended, “EBITDA” means, for any period, net income, plus (a) to the extent deducted in determining net income for such period, the sum determined without duplication and in accordance with GAAP, of (i) taxes, (ii) interest expense, (iii) depreciation, (iv) amortization, (v) any other non-cash income or charges accrued for such period, (vi) charges and expenses in connection with the senior credit facility, any actual or proposed acquisition, disposition or investment (excluding, in each case, purchases and sales of advertising space and operating assets in the ordinary course of business) and any actual or proposed offering of securities, incurrence or repayment of indebtedness (or amendment to any agreement relating to indebtedness), including any refinancing thereof, or recapitalization, (vii) any loss or gain relating to amounts paid or earned in cash prior to the stated settlement date of any swap agreement that has been reflected in operating income for such period), and (viii) any loss on sales of receivables and related assets to a securitization entity in connection with a permitted securitization financing, plus (b) the amount of cost savings, operating expense reductions and other operating improvements or synergies projected by Lamar Media in good faith to be realized as a result of any acquisition, investment, merger, amalgamation or disposition within 18 months of any such acquisition, investment, merger, amalgamation or disposition, net of the amount of actual benefits realized during such period from such action; provided, (a) the aggregate amount for all such cost savings, operating expense reductions and other operating improvements or synergies will not exceed an amount equal to 15% of EBITDA for the applicable four quarter period and (b) any such adjustment to EBITDA pursuant to this clause (b) may only take into account cost savings, operating expense reductions and other operating improvements or synergies that are (I) directly attributable to such acquisition, investment, merger, amalgamation or disposition, (II) expected to have a continuing impact on Lamar Media and its restricted subsidiaries and (III) factually supportable, in each case all as
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certified by the chief financial officer of Lamar Media) on behalf of Lamar Media, minus (c) to the extent included in net income for such period (determined without duplication and in accordance with GAAP) (i) any extraordinary and unusual gains or losses during such period, and (ii) the proceeds of any casualty events and dispositions. For purposes of this EBITDA definition, the effect thereon of any adjustments required under Statement of Financial Accounting Standards No. 141R will be excluded. If during any period for which EBITDA is being determined, we have consummated any acquisition or disposition, EBITDA will be determined on a pro forma basis as if such acquisition or disposition had been made or consummated on the first day of such period.
Under the senior credit facility, “net income” means for any period, the consolidated net income (or loss) of Lamar Advertising, us, and our restricted subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that following is excluded from net income: the (a) the income (or deficit) of any person accrued prior to the date it becomes a restricted subsidiary or is merged into or consolidated with Lamar Advertising, us or any of our restricted subsidiaries, and (b) the income (or deficit) of any person (other than any of our restricted subsidiaries) in which Lamar Advertising, we or any of our subsidiaries has an ownership interest, except to the extent that any such income is received by Lamar Advertising, us or any of our restricted subsidiaries in the form of dividends or similar distributions.
The Company believes that its current level of cash on hand, availability under the senior credit facility and future cash flows from operations are sufficient to meet its operating needs for the next twelve months. All debt obligations are reflected on the Company’s balance sheet.
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 Lamar Media’s senior credit facility.
Uses of Cash
Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $71.5 million for the nine months ended September 30, 2021. We anticipate our 2021 total capital expenditures to be approximately $120.0 million.
Acquisitions. During the nine months ended September 30, 2021, the Company completed acquisitions for an aggregate purchase price of approximately $107.6 million, which were financed using available cash on hand and borrowings on the Accounts Receivable Securitization Program.
Investments. 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.
Note Redemption. On February 3, 2021, the Company redeemed in full all $650.0 million aggregate principal amount 5 3/4% Senior Notes due 2026. The 5 3/4% Senior Notes redemption was completed using the proceeds received from the 3 5/8% Senior Notes offering completed on January 22, 2021, together with cash on hand and borrowings under the revolving credit facility and Accounts Receivable Securitization Program. The notes were redeemed at a redemption price equal to 102.875% of the aggregate principal amount of the outstanding notes, plus accrued and unpaid interest to (but not including) the redemption date. During the nine months ended September 30, 2021, the Company recorded a loss on debt extinguishment of approximately $21.6 million related to the note redemption. See Sources of Cash- Note Offerings for more information.
Dividends. On February 25, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.75 per share, paid on March 31, 2021 to its stockholders of record of its Class A common stock and Class B common stock on March 22, 2021. On May 20, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.75 per share, paid on June 30, 2021 to its stockholders of record of its Class A common stock and Class B common stock on June 21, 2021. On September 7, 2021, the Company's Board of Directors declared a quarterly cash dividend of $1.00 per share, paid on September 30, 2021 to its stockholders of record of its Class A common stock and Class B common stock on September 20, 2021. Subject to approval of the Company's Board of Directors, the Company expects to declare a quarterly dividend of $1.00 per share of common stock for the upcoming fourth quarter 2021 distributions to stockholders.
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As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that the Company otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, the Company’s ability to utilize net operating losses to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to fund distributions using cash generated through its Taxable REIT Subsidiaries (“TRSs”), the impact of COVID-19 on the Company’s operations and other factors that the Board of Directors may deem relevant.
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. Subject to market conditions, LPC’s proposed public offering is expected to have a base offering size of $300.0 million, or up to $345.0 million if the underwriters’ over-allotment is exercised in full. The Company, through an indirect wholly-owned subsidiary, would own approximately 20% of LPC’s issued and outstanding ordinary shares upon the consummation of the proposed offering. The Company intends to commit to acquire up to $100.0 million of forward purchase units in a forward purchase agreement that would close concurrently with LPC’s consummation of an initial business combination. As of September 30, 2021, the Company incurred $1.0 million in deferred offering costs related to the proposed offering, which is included in other assets on our Condensed Consolidated Balance Sheet.
Stock and Debt Repurchasing Program. On March 16, 2020, the Company’s Board of Directors authorized the repurchase of up to $250.0 million of the Company’s Class A common stock. 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 its senior credit agreement. On September 20, 2021, the Board of Directors authorized the extension of the repurchase program through March 31, 2023. There were no repurchases under the program as of September 30, 2021. The Company’s management may opt not to make any repurchases under the program, or may make aggregate purchases less than the total amount authorized.
Off-Balance Sheet Arrangements
Our off-balance sheet commitments consist of guaranteed minimum payments to local transit municipalities and airport authorities for agreements which entitle us to rent advertising space to customers, in airports and on buses, benches or shelters.
Commitments and Contingencies
As of September 30, 2021, we had outstanding debt of approximately $2.84 billion. In the future, Lamar Media has principal reduction obligations and revolver commitment reductions under the senior credit facility. In addition, it has fixed commercial commitments. These commitments are detailed on a contractual basis as follows: 
Payments Due by Period
Contractual ObligationsTotalLess Than
1 Year
1 - 3 Years3 - 5 YearsAfter
5 Years
(In millions)
Long-term debt$2,837.4 $174.7 $0.8 $0.9 $2,661.0 
Interest obligations on long-term debt(1)
729.4 101.1 202.1 187.5 238.7 
Billboard site, transit and other operating and financing leases1,656.2 238.9 390.7 276.8 749.8 
Total payments due$5,223.0 $514.7 $593.6 $465.2 $3,649.5 
(1)    Interest rates on our variable rate instruments are assuming rates at the September 2021 levels.
Amount of Expiration Per Period
Other Commercial CommitmentsTotal Amount
Committed
Less Than 1
Year
1 - 3 Years3 - 5 YearsAfter
5 Years
(In millions)
Revolving Bank Facility(2)
$750.0 $— $— $750.0 $— 
Standby Letters of Credit(3)
$14.3 $11.8 $1.7 $0.8 $— 
(2)    Lamar Media had no outstanding borrowings under the revolving credit facility as of September 30, 2021.
(3)    The standby letters of credit are issued under the revolving credit facility and reduce the availability of the facility by the same amount.
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Critical Accounting Estimates
Our discussion and analysis of our results of operations and liquidity and capital resources are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. There have been no material changes to the critical accounting policies and estimates as previously disclosed in Item 7 of our 2020 Combined Form 10-K.
Accounting Standards Update
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing specific exceptions to the general principles in Topic 740 - Income Taxes. This guidance is effective for years beginning after December 15, 2020. The Company adopted this guidance on January 1, 2021 and the impact of the adoption is not material to the Company's consolidated financial statements.
LAMAR MEDIA CORP.
The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the three and nine months ended September 30, 2021 and 2020. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes thereto.
RESULTS OF OPERATIONS
Nine months ended September 30, 2021 compared to nine months ended September 30, 2020
Net revenues increased $152.5 million or 13.4% to $1.29 billion for the nine months ended September 30, 2021 from $1.14 billion for the same period in 2020. This increase was primarily attributable to an increase in billboard net revenues of $153.7 million and an increase in transit net revenues of $2.2 million, offset by a decrease in logo net revenues of $3.4 million over the same period in 2020.
For the nine months ended September 30, 2021, there was a $156.5 million increase in net revenues as compared to acquisition-adjusted net revenue for the nine months ended September 30, 2020, which represents an increase of 13.8%. See “Reconciliations” below. The $156.5 million increase in revenue is primarily due to an increase of $151.1 million in billboard net revenues as well as an increase in transit net revenues of $5.1 million over the same period in 2020.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $28.8 million, or 4.2%, to $717.1 million for the nine months ended September 30, 2021 from $688.4 million in the same period in 2020. The $28.8 million increase over the prior year is comprised of a $17.3 million increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) primarily related to the operations of our outdoor advertising assets, as well as an $11.5 million increase in stock-based compensation.
Depreciation and amortization expense increased $18.1 million to $205.7 million for the nine months ended September 30, 2021 as compared to $187.5 million for the same period in 2020. The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during the period.
For the nine months ended September 30, 2021, Lamar Media recognized a gain on disposition of assets of $1.9 million, primarily resulting from transactions related to billboard locations and displays.
Due to the above factors, operating income increased by $102.7 million to $371.9 million for the nine months ended September 30, 2021 as compared to $269.2 million for the same period in 2020.
Lamar Media recognized a loss on debt extinguishment of $21.6 million for the nine months ended September 30, 2021, a $3.6 million decrease over the same period in 2020. The loss on debt extinguishment during the nine months ended September 30, 2021 relates to the early repayment of our 5 3/4% Senior Notes during the period.
Interest expense decreased $26.4 million for the nine months ended September 30, 2021 to $80.6 million as compared to $107.1 million for the nine months ended September 30, 2020. The decrease is primarily related to Lamar Media's debt transactions completed in 2020 and 2021, as well as a reduction in our senior credit facility interest rates.
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Equity in earnings of investee was $1.1 million for the nine months ended September 30, 2021 as a result of the investment in Vistar Media that occurred in July 2021. There was no equity in earnings of investee for the nine months ended September 30, 2020.
The increase in operating income, as well as the decrease in interest expense and the decrease in loss on extinguishment of debt, resulted in an $133.8 million increase in net income before income taxes. The effective tax rate for the nine months ended September 30, 2021 was 2.2%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, Lamar Media recognized net income for the nine months ended September 30, 2021 of $265.5 million, as compared to net income of $135.0 million for the same period in 2020.
Reconciliations:
Because acquisitions occurring after December 31, 2019 have contributed to our net revenue results for the periods presented, we provide 2020 acquisition-adjusted net revenue, which adjusts our 2020 net revenue for the nine months ended September 30, 2020 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the nine months ended September 30, 2021.
Reconciliations of 2020 reported net revenue to 2020 acquisition-adjusted net revenue for the nine months ended September 30, as well as a comparison of 2020 acquisition-adjusted net revenue to 2021 reported net revenue for the nine months ended September 30, are provided below:
Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue
Nine Months Ended
September 30,
20212020
(in thousands)
Reported net revenue$1,292,827 $1,140,331 
Acquisition net revenue— (3,958)
Adjusted totals$1,292,827 $1,136,373 
Key Performance Indicators
Net Income/Adjusted EBITDA
(in thousands)
Nine Months Ended
September 30,
Amount of
Increase (Decrease)
Percent
Increase (Decrease)
20212020
Net income$265,473 $135,046 $130,427 96.6 %
Income tax expense5,922 2,520 3,402 
Loss on debt extinguishment21,604 25,235 (3,631)
Interest expense (income), net80,084 106,441 (26,357)
Equity in earnings of investee(1,141)— (1,141)
Gain on disposition of assets(1,922)(4,823)2,901 
Depreciation and amortization205,671 187,548 18,123 
Capitalized contract fulfillment costs, net(900)1,036 (1,936)
Stock-based compensation expense22,540 11,046 11,494 
Adjusted EBITDA$597,331 $464,049 $133,282 28.7 %
Adjusted EBITDA for the nine months ended September 30, 2021 increased 28.7% to $597.3 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $155.3 million, offset by an increase in total general and administrative and corporate expenses of $18.2 million, excluding the impact of stock-based compensation expense.
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Net Income/FFO/AFFO
(in thousands) 
Nine Months Ended
September 30,
Amount of
Increase
(Decrease)
Percent
Increase
(Decrease)
20212020
Net income$265,473 $135,046 $130,427 96.6 %
Depreciation and amortization related to real estate197,395 178,884 18,511 
Gain from sale or disposal of real estate, net of tax(1,712)(4,422)2,710 
Adjustments for unconsolidated affiliates and
   non-controlling interest
(618)456 (1,074)
FFO$460,538 $309,964 $150,574 48.6 %
Straight line expense2,195 2,615 (420)
Capitalized contract fulfillment costs, net(900)1,036 (1,936)
Stock-based compensation expense22,540 11,046 11,494 
Non-cash portion of tax provision1,178 (1,870)3,048 
Non-real estate related depreciation and amortization8,276 8,664 (388)
Amortization of deferred financing costs4,405 4,467 (62)
Loss on extinguishment of debt21,604 25,235 (3,631)
Capital expenditures – maintenance(32,697)(17,616)(15,081)
Adjustments for unconsolidated affiliates and
   non-controlling interest
618 (456)1,074 
AFFO$487,757 $343,085 $144,672 42.2 %
FFO for the nine months ended September 30, 2021 increased from $310.0 million in 2020 to $460.5 million for the same period in 2021, an increase of 48.6%. AFFO for the nine months ended September 30, 2021 increased 42.2% to $487.8 million as compared to $343.1 million for the same period in 2020. The increase in AFFO was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense).
Three months ended September 30, 2021 compared to three months ended September 30, 2020
Net revenues increased $90.8 million or 23.5% to $476.9 million for the three months ended September 30, 2021 from $386.1 million for the same period in 2020. This increase was primarily attributable to an increase in billboard and transit net revenues of $81.7 million and $9.1 million, respectively, over the same period in 2020.
For the three months ended September 30, 2021, there was a $90.0 million increase in net revenues as compared to acquisition-adjusted net revenue for the three months ended September 30, 2021, which represents an increase of 23.3%. See "Reconciliations" below. The $90.0 million increase in revenue is primarily due to a $80.5 million and $9.7 million increase in billboard and transit net revenues, respectively.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $39.0 million, or 17.7%, to $259.1 million for the three months ended September 30, 2021 from $220.2 million in the same period in 2020. The $39.0 million increase over the prior year is comprised of a $30.8 million increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation) primarily related to the operations of our outdoor advertising assets, as well as a $8.2 million increase in stock-based compensation.
Depreciation and amortization expense increased $23.1 million to $84.3 million for the three months ended September 30, 2021 as compared to $61.2 million for the same period in 2020. The increase is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during the period.
For the three months ended September 30, 2021, Lamar Media recognized a gain on disposition of assets of $0.03 million, primarily resulting from transactions related to billboard locations.
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Due to the above factors, operating income increased by $27.5 million to $133.5 million for the three months ended September 30, 2021 as compared to $106.0 million for the same period in 2020.
Interest expense decreased $8.9 million for the three months ended September 30, 2021 to $26.1 million as compared to $35.1 million for the three months ended September 30, 2020. The decrease is primarily related to Lamar Media's debt transactions completed in 2020 and 2021, as well as a reduction in our senior credit facility interest rates.
Equity in earnings of investee was $1.1 million for the three months ended September 30, 2021 as a result of the investment in Vistar Media that occurred in July 2021. There was no equity in earnings of investee for the three months ended September 30, 2020.
The increase in operating income and decrease in interest expense resulted in a $44.6 million increase in net income before income taxes. The effective tax rate for the three months ended September 30, 2021 was 1.6%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, Lamar Media recognized net income for the three months ended September 30, 2021 of $107.0 million, as compared to net income of $62.9 million for the same period in 2020.
Reconciliations:
Because acquisitions occurring after December 31, 2019 have contributed to our net revenue results for the periods presented, we provide 2020 acquisition-adjusted revenue, which adjusts our 2020 net revenue for the three months ended September 30, 2021 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the three months ended September 30, 2021.
Reconciliations of 2020 reported net revenue to 2020 acquisition-adjusted net revenue for the three months ended June 30, as well as a comparison of 2020 acquisition-adjusted net revenue to 2021 reported net revenue for the three months ended June 30, are provided below:
Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue
Three Months Ended
September 30,
20212020
(in thousands)
Reported net revenue$476,894 $386,110 
Acquisition net revenue— 771 
Adjusted totals$476,894 $386,881 
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Key Performance Indicators
Net Income/Adjusted EBITDA
(in thousands)
Three Months Ended
September 30,
Amount of Increase (Decrease)Percent of Increase (Decrease)
20212020
Net income$106,974 $62,895 $44,079 70.1 %
Income tax expense1,712 1,224 488 
Loss on debt extinguishment— 7,051 (7,051)
Interest expense (income), net25,927 34,820 (8,893)
Equity in earnings of investee(1,141)— (1,141)
Gain on disposition of assets(26)(1,304)1,278 
Depreciation and amortization84,300 61,237 23,063 
Stock-based compensation expense13,076 4,884 8,192 
Adjusted EBITDA$230,822 $170,807 $60,015 35.1 %
Adjusted EBITDA for the three months ended September 30, 2021 increased 35.1% to $230.8 million. The increase in adjusted EBITDA was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $79.8 million, and was offset by an increase in total general and administrative and corporate expenses of $19.8 million, excluding the impact of stock-based compensation expense.
Net Income/FFO/AFFO
(in thousands)
Three Months Ended
September 30,
Amount of Increase (Decrease)Percent of Increase (Decrease)
20212020
Net income$106,974 $62,895 $44,079 70.1 %
Depreciation and amortization related to real estate81,580 58,431 23,149 
Gain from sale or disposal of real estate, net of tax83 (1,324)1,407 
Adjustments for unconsolidated affiliates and non-controlling interest(903)67 (970)
FFO$187,734 $120,069 $67,665 56.4 %
Straight line expense466 882 (416)
Stock-based compensation expense13,076 4,884 8,192 
Non-cash portion of tax provision(565)(557)(8)
Non-real estate related depreciation and amortization2,720 2,806 (86)
Amortization of deferred financing costs1,443 1,589 (146)
Loss on extinguishment of debt— 7,051 (7,051)
Capital expenditures - maintenance(13,094)(3,124)(9,970)
Adjustments for unconsolidated affiliates and non-controlling interest903 (67)970 
AFFO$192,683 $133,533 $59,150 44.3 %
FFO for the three months ended September 30, 2021 increased from $120.1 million in 2020 to $187.7 million in 2021, an increase of 56.4%. AFFO for the three months ended September 30, 2021 increased 44.3% to $192.7 million as compared to $133.5 million for the same period in 2020. The increase in AFFO was primarily attributable to an increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense).
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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Lamar Advertising Company and Lamar Media Corp.
Lamar Advertising is exposed to interest rate risk in connection with variable rate debt instruments issued by its wholly owned subsidiary Lamar Media. The information below summarizes the Company’s interest rate risk associated with its principal variable rate debt instruments outstanding at September 30, 2021, and should be read in conjunction with Note 11 of the Notes to the Company’s Condensed Consolidated Financial Statements.
Lamar Media has variable-rate debt outstanding under its senior credit facility and its Accounts Receivable Securitization Program. Because interest rates may increase or decrease at any time, the Company is exposed to market risk as a result of the impact that changes in interest rates may have on the applicable borrowings outstanding. Increases in the interest rates applicable to these borrowings would result in increased interest expense and a reduction in the Company’s net income.
At September 30, 2021 there was approximately $773.7 million of indebtedness outstanding under the senior credit facility and the Accounts Receivable Securitization Program, or approximately 26.9% of the Company’s outstanding long-term debt on that date, bearing interest at variable rates. The aggregate interest expense for 2021 with respect to borrowings under the senior credit facility and the Accounts Receivable Securitization Program was $9.8 million, and the weighted average interest rate applicable to these borrowings during 2021 was 1.4%. Assuming that the weighted average interest rate was 200 basis points higher (that is 3.4% rather than 1.4%), then the Company’s 2021 interest expense would have increased by approximately $11.2 million for the nine months ended September 30, 2021.
The Company attempts to mitigate the interest rate risk resulting from its variable interest rate long-term debt instruments by issuing fixed rate long-term debt instruments and maintaining a balance over time between the amount of the Company’s variable rate and fixed rate indebtedness. In addition, the Company has the capability under the senior credit facility to fix the interest applicable to its borrowings at an amount equal to Adjusted LIBO Rate or Adjusted Base Rate plus the applicable margin for periods of up to twelve months (in certain cases with the consent of the lenders), which would allow the Company to mitigate the impact of short-term fluctuations in market interest rates. In the event of an increase in interest rates, the Company may take further actions to mitigate its exposure. The Company cannot guarantee, however, that the actions that it may take to mitigate this risk will be feasible or that, if these actions are taken, that they will be effective.
ITEM 4.    CONTROLS AND PROCEDURES
a) Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures.
The Company’s and Lamar Media’s management, with the participation of the principal executive officer and principal financial officer of the Company and Lamar Media, have evaluated the effectiveness of the design and operation of the Company’s and Lamar Media’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on this evaluation, the principal executive officer and principal financial officer of the Company and Lamar Media concluded that these disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in the Company’s and Lamar Media’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods.
b) Changes in Internal Control Over Financial Reporting.
There have been no changes in the internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) of the Company and Lamar Media identified in connection with the evaluation of the Company’s and Lamar Media’s internal control performed during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s and Lamar Media’s internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1A.    RISK FACTORS
Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our combined Annual Report on Form 10-K for the year ended December 31, 2020, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our Class A common stock. There have been no material changes to our risk factors since our combined Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 5.    OTHER INFORMATION
None
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ITEM 6.    EXHIBITS
Exhibit
Number
Description
3.1
3.2
3.3
3.4
3.5
10.1
31.1
31.2
32.1
101The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income and Comprehensive Income, (iii) Condensed Consolidated Statements of Stockholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: November 3, 2021BY:/s/ Jay L. Johnson
Executive Vice President, Chief Financial Officer and Treasurer
LAMAR MEDIA CORP.
DATED: November 3, 2021BY:/s/ Jay L. Johnson
Executive Vice President, Chief Financial Officer and Treasurer

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