Lamar Advertising REIT : CO/NEW MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

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 months ended March 31, 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 have reduced demand for out-of-home advertising. Beginning
in late March 2020, large public events were cancelled, and governments began
imposing restrictions on non-essential activities, which in turn led to
advertisers suspending, delaying or cancelling their advertising
campaigns. While government-imposed restrictions have eased, they continue to
have an adverse impact on the volume of vehicles on roadways (particularly in
larger markets), pedestrians in airports and riders on public transit and
numerous advertising customer segments including, but not limited to,
entertainment, retail, restaurant and amusement advertisers.
As a result, demand for billboard, transit and airport advertising declined,
which has had an adverse impact on our revenues and financial position. The
decrease in outdoor advertising demand during the three months ended March 31,
2021 resulted in a 8.8% decrease in our consolidated net revenues as compared to
the same period in 2020. As revenues declined, the Company responded through a
variety of cost saving and liquidity measures, which included reductions in our
transit and airport franchise costs and billboard lease costs. As a result of
these cost saving measures, our consolidated operating costs (exclusive of
depreciation and amortization and gain on disposition of assets) decreased by
$28.6 million, or 11.4%, for the three months ended March 31, 2021 over the same
period in 2020.
We observed an improvement in customer activity beginning in June 2020 and
through March 2021 as the government-imposed restrictions on travel were eased
and more of the population became vaccinated. Accordingly, we are not actively
pursuing additional cost saving measures, and are resuming acquisition
activities and spending on capital projects. However, we cannot predict the
length or strength of the recovery in advertising demand due to continued impact
of the pandemic on the overall U.S. and global economy, and new or renewed
government-imposed restrictions on travel that may be enacted in the future.
We will continue to evaluate the impact of the COVID-19 pandemic on our business
and we may access the debt and/or equity capital markets for additional
liquidity, if necessary.
The Company's management and Board of Directors are continuing to evaluate our
quarterly dividend plans for 2021. This evaluation includes ensuring the Company
remains in compliance with its REIT dividend requirements for the year. On
February 25, 2021, the Board of Directors declared a quarterly cash dividend of
$0.75 per common share, paid on March 31,
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2021. Subject to the approval of the Board of Directors, the Company expects
aggregate dividends for 2021 to be $3.00 per common share, including the
dividend paid on March 31, 2021.
As of March 31, 2021, we did not incur any impairment charges related to
goodwill or long-lived assets (including operating lease right of use assets).
We also did not incur any significant credit losses for the three months ended
March 31, 2021.
While some of our corporate, front office and sales workforce continues to work
from home, a large majority has 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 three months ended March 31, 2021, the Company
completed acquisitions for a total cash purchase price of approximately $3.3
million. See Uses of Cash - Acquisitions for more information.
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 months ended March 31, 2021 and 2020:
                                        Three Months Ended
                                            March 31,
                                                       2021          2020
Total capital expenditures:
Billboard - traditional                             $  2,767      $  6,520
Billboard - digital                                    9,074        11,575
Logos                                                  1,923         2,875
Transit                                                  453         1,566
Land and buildings                                       974         1,236
Operating equipment                                    1,141         1,937
Total capital expenditures                          $ 16,332      $ 25,709


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), loss (gain) on extinguishment of debt and
investments, stock-based compensation, depreciation and amortization, gain or
loss on disposition of assets and investments and capitalized contract
fulfillment costs, net.
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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 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 divestures, 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
Three months ended March 31, 2021 compared to three months ended March 31, 2020
Net revenues decreased $35.7 million or 8.8% to $370.9 million for the three
months ended March 31, 2021 from $406.6 million for the same period in 2020.
This decrease was primarily attributable to a decrease in billboard and transit
net revenues of $21.3 million and $12.4 million, respectively, over the same
period in 2020, which related to the effects of the ongoing COVID-19 pandemic.
For the three months ended March 31, 2021, there was a $33.3 million decrease in
net revenues as compared to acquisition-adjusted net revenue for the three
months ended March 31, 2020, which represents a decrease of 8.2%. See
"Reconciliations" below. The $33.3 million decrease in revenue is primarily due
to a $21.8 million and $11.2 million decrease in billboard and transit net
revenues, respectively, which are due to the effects of the ongoing COVID-19
pandemic.
Total operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, decreased $28.6 million, or 11.4%, to $221.6 million for
the three months ended March 31, 2021 from $250.2 million in the same period in
2020. The $28.6 million decrease over the prior year is comprised of a $28.8
million decrease in total direct, general and administrative and corporate
expenses (excluding stock-based compensation) primarily related to the
operations of our outdoor advertising assets, offset by a $0.2 million increase
in stock-based compensation.
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Depreciation and amortization expense decreased $1.6 million to $60.7 million
for the three months ended March 31, 2021 as compared to $62.3 million for the
same period in 2020.
For the three months ended March 31, 2021, the Company recognized a gain on
disposition of assets of $0.4 million primarily resulting from transactions
related to billboard locations.
Due to the above factors, operating income decreased by $7.6 million to
$88.9 million for the three months ended March 31, 2021 as compared to
$96.6 million for the same period in 2020.
The Company recognized a loss on debt extinguishment of $21.6 million during the
three months ended March 31, 2021, a $3.4 million increase over the same period
in 2020. The loss on debt extinguishment during the three months ended March 31,
2021 relates to the early repayment of our 5 3/4% Senior Notes.
Interest expense decreased $8.4 million for the three months ended March 31,
2021 to $28.2 million as compared to $36.6 million for the three months ended
March 31, 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.
The decrease in operating income and increase in loss on extinguishment of debt,
offset by the decrease in interest expense, resulted in a $2.7 million decrease
in net income before income taxes. The effective tax rate for the three months
ended March 31, 2021 was 2.6%, 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 March 31, 2021 of $38.3 million, as compared to net income of
$40.5 million for the same period in 2020.
Reconciliations:
Because acquisitions occurring after December 31, 2019 (the "acquired assets")
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 March 31, 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 March 31, 2021.
Reconciliations of 2020 reported net revenue to 2020 acquisition-adjusted net
revenue for the three months ended March 31, as well as a comparison of 2020
acquisition-adjusted net revenue to 2021 reported net revenue for the three
months ended March 31, are provided below:
Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted
Net Revenue
                                 Three Months Ended
                                     March 31,
                                2021           2020
                                   (in thousands)
Reported net revenue         $ 370,881      $ 406,569
Acquisition net revenue              -         (2,401)
Adjusted totals              $ 370,881      $ 404,168


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Key Performance Indicators
Net Income/Adjusted EBITDA
(in thousands)

                                                            Three Months Ended                 Amount of
                                                                 March 31,                     Increase                 Percent
                                                          2021               2020             (Decrease)          Increase (Decrease)
Net income                                            $  38,329          $  40,493          $     (2,164)                     (5.3) %
Income tax expense                                        1,010              1,536                  (526)
Loss on debt extinguishment                              21,604             18,179                 3,425
Interest expense (income), net                           27,980             36,363                (8,383)
Gain on disposition of assets                              (415)            (2,504)                2,089
Depreciation and amortization                            60,749             62,313                (1,564)
Capitalized contract fulfillment costs, net                (500)                 -                  (500)
Stock-based compensation expense                          3,675              3,437                   238
Adjusted EBITDA                                       $ 152,432          $ 159,817          $     (7,385)                     (4.6) %


Adjusted EBITDA for the three months ended March 31, 2021 decreased 4.6% to
$152.4 million. The decrease in adjusted EBITDA was primarily attributable to a
decrease in our gross margin (net revenue less direct advertising expense,
exclusive of depreciation and amortization and capitalized contract fulfillment
costs, net) of $16.9 million, and was offset by a decrease in total general and
administrative and corporate expenses of $10.5 million, excluding the impact of
stock-based compensation expense.
Net Income/FFO/AFFO
(in thousands)

                                                              Three Months Ended                Amount of                Percent
                                                                   March 31,                     Increase               Increase
                                                            2021               2020             (Decrease)             (Decrease)
Net income                                              $  38,329          $  40,493          $    (2,164)                     (5.3) %
Depreciation and amortization related to real
estate                                                     57,963             59,364               (1,401)
Gain from sale or disposal of real estate, net of
tax                                                          (383)            (2,543)               2,160

Adjustments for unconsolidated affiliates and

  non-controlling interest                                    153                249                  (96)
FFO                                                     $  96,062          $  97,563          $    (1,501)                     (1.5) %
Straight line expense                                         775              1,054                 (279)
Capitalized contract fulfillment costs, net                  (500)                 -                 (500)
Stock-based compensation expense                            3,675              3,437                  238
Non-cash portion of tax provision                          (1,020)              (419)                (601)
Non-real estate related depreciation and
amortization                                                2,786              2,949                 (163)
Amortization of deferred financing costs                    1,371              1,378                   (7)
Loss on extinguishment of debt                             21,604             18,179                3,425
Capital expenditures - maintenance                         (7,904)           (10,629)               2,725

Adjustments for unconsolidated affiliates and

  non-controlling interest                                   (153)              (249)                  96
AFFO                                                    $ 116,696          $ 113,263          $     3,433                       3.0  %


FFO for the three months ended March 31, 2021 decreased from $97.6 million in
2020 to $96.1 million for the same period in 2021, a decrease of 1.5%. AFFO for
the three months ended March 31, 2021 increased 3.0% to $116.7 million as
compared to $113.3 million for the same period in 2020. The increase in AFFO was
primarily attributable to the decrease in total general and administrative and
corporate expenses (excluding the effect of stock-based compensation expense)
offset by a decrease in our gross margin (net revenue less direct advertising
expense, exclusive of depreciation and amortization and capitalized contract
fulfillment costs, net).
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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 March 31, 2021 we had approximately $765.1 million of
total liquidity, which is comprised of approximately $43.0 million in cash and
cash equivalents and approximately $710.6 million of availability under the
revolving portion of Lamar Media's senior credit facility and $11.4 million of
availability under our Accounts Receivable Securitization Program. We expect our
total liquidity to be adequate for the Company to meet its operational
requirements for the next twelve months. We will continue to monitor the impacts
of the COVID-19 pandemic and, if necessary, may access the debt and/or equity
markets for additional liquidity. 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 March 31, 2021 and December 31, 2020, the Company had a working capital
deficit of $229.1 million and $167.3 million, respectively. The decrease in
working capital of $61.8 million is primarily due to an increase in current
maturities of long-term debt of $32.6 million and a decrease in receivables, net
of $22.3 million as of March 31, 2021.
Cash Generated by Operations. For the three months ended March 31, 2021 and
2020, our cash provided by operating activities was $83.3 million and $62.9
million, respectively. The increase in cash provided by operating activities for
the three months ended March 31, 2021 over the same period in 2020 relates to a
decrease in accounts receivables offset by an increase in operating lease
liabilities. 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. However, we will continue to monitor the impacts of the
COVID-19 pandemic and if we are not able to generate sufficient cash flows from
operations during 2021 to meet our cash needs, 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.
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On June 30, 2020 Lamar Media and the Special Purpose Subsidiaries entered into
the Third Amendment of the Accounts Receivable Securitization Program which
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. Additionally, the Amendment establishes a new
Minimum Funding Threshold, which requires the Special Purpose Subsidiaries to
maintain 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 have 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 "Subsequent Amendment") to the Accounts
Receivable Securitization Program. The Subsequent Amendment increases 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 increases the maximum three month average Dilution Ratio to 5.00% for the
remaining term of the Accounts Receivable Securitization Program. Additionally,
the Subsequent Amendment increases 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 have the right to
borrow less than the Minimum Funding Threshold during certain periods prior to
December 21, 2020 at their election.
As of March 31, 2021, there was $155.0 million in outstanding aggregate
borrowings under the Accounts Receivable Securitization Program. Lamar Media had
approximately $11.4 million of unused availability under the Accounts Receivable
Securitization Program as of March 31, 2021.
The Accounts Receivable Securitization Program will mature on December 17, 2021.
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.
"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 (each a "Sales Agent", and collectively, the "Sales
Agents"). Under the terms of the 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 Sales Agreement and
may at any time suspend solicitations and offers under the Sales Agreement. The
Company intends to use the net proceeds, if any, from the sale of the Class A
common stock pursuant to the 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. During
the three months ended March 31, 2021, the Company did not issue any shares
under this program. The Sales Agreement expired by its terms on May 1, 2021. The
Company may enter into a new sales agreement to consummate
"at-the-market-offerings" in the future.
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.  During the three months ended March 31, 2021, the
Company did not issue any shares under this shelf registration, however, we may
issue additional shares under the shelf registration statement in the future in
connection with future acquisitions or for other general corporate purposes.
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").
The senior credit facility, as established by the Fourth Amended and Restated
Credit Agreement (the "senior credit facility"), consists of (i) a new $750.0
million senior secured revolving credit facility which will mature on February
6, 2025 (the "revolving credit facility"), (ii) a new $600.0 million Term B loan
facility (the "Term B loans") which will mature on February
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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 March 31, 2021 the aggregate balance outstanding under the senior credit
facility was $625.0 million, consisting of $600.0 million in Term B loans
aggregate principal balance and $25.0 million outstanding under our revolving
credit facility. Lamar Media had approximately $710.6 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. However, we will continue to monitor the impacts
of the COVID-19 pandemic and if we are not able to generate sufficient cash
flows from operations during 2021 to meet our cash needs we believe we have
sufficient liquidity available 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.
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;
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•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 March 31, 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, it is in compliance with the secured debt ratio
covenant and if, 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, "EBITDA" means, for any period, operating
income for Lamar Advertising, Lamar Media and its restricted subsidiaries
(determined on a consolidated basis without duplication in accordance with GAAP)
for such period (calculated (A) before (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 and (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) and (B) after giving effect to 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 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 certified by the chief financial officer of Lamar Media) on behalf
of Lamar Media, and excluding (except to the extent received or paid in cash by
Lamar Advertising, Lamar Media or any of its restricted subsidiaries (other than
the special purpose subsidiaries) income or loss attributable to equity in
affiliates for such period), excluding any extraordinary and unusual gains or
losses during such period, and excluding the proceeds of any casualty events and
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dispositions. For purposes hereof, the effect thereon of any adjustments
required under Statement of Financial Accounting Standards No. 141R shall be
excluded. If during any period for which EBITDA is being determined, Lamar Media
has 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.
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 $16.3 million for the three months ended March 31, 2021. We
anticipate our 2021 total capital expenditures to be approximately $150.0
million.
Acquisitions. During the three months ended March 31, 2021, the Company
completed acquisitions for an aggregate purchase price of approximately $3.3
million, which were financed using available cash on hand.
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 three months ended March 31, 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. Subject to approval of the Company's Board of Directors, the
Company expects aggregate quarterly distributions to stockholders in 2021 will
be $3.00 per common share, including the dividend paid on March 31, 2021.
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. 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
March 31, 2021 the Company incurred $0.6 million in deferred offering costs
related to the proposed offering, which is included in Other assets on our
Condensed Consolidated Balance Sheet.
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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. The repurchase program will expire on September 30,
2021 unless extended by the Board of Directors. There were no repurchases under
the program as of March 31, 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 March 31, 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
                                                              Less Than                                                        After
Contractual Obligations                     Total              1 Year             1 - 3 Years           3 - 5 Years           5 Years
                                                                                  (In millions)
Long-term debt                           $ 2,840.1          $    155.0

$ 0.8 $ 21.6 $ 2,662.7 Interest obligations on long-term debt(1)

                                      754.4                92.6                 188.4                 187.8              285.6
Billboard site, transit and other
operating and financing leases             1,650.6               162.5                 397.9                 304.4              785.8
Total payments due                       $ 5,245.1          $    410.1          $      587.1          $      513.8          $ 3,734.1

(1)Interest rates on our variable rate instruments are assuming rates at the March 2021 levels.

                                                                                       Amount of Expiration Per Period
                                           Total Amount          Less Than 1                                                        After
Other Commercial Commitments                Committed               Year              1 - 3 Years           3 - 5 Years            5 Years
                                                                                    (In millions)
Revolving Bank Facility(2)               $       750.0          $        -          $          -          $      750.0          $        -
Standby Letters of Credit(3)             $        14.4          $     13.9          $        0.5          $          -          $        -


(2)Lamar Media had $25.0 million outstanding under the revolving credit facility
as of March 31, 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.
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 presentation of these
financial statements requires us to make estimates and judgements 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.



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LAMAR MEDIA CORP.
The following is a discussion of the consolidated financial condition and
results of operations of Lamar Media for the three months ended March 31, 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
Three Months Ended March 31, 2021 compared to three months ended March 31, 2020
Net revenues decreased $35.7 million or 8.8% to $370.9 million for the three
months ended March 31, 2021 from $406.6 million for the same period in 2020.
This decrease was primarily attributable to a decrease in billboard and transit
net revenues of $21.3 million and $12.4 million, respectively, over the same
period in 2020, which related to the effects of the ongoing COVID-19 pandemic.
For the three months ended March 31, 2021, there was a $33.3 million decrease in
net revenues as compared to acquisition-adjusted net revenue for the three
months ended March 31, 2020, which represents a decrease of 8.2%. See
"Reconciliations" below. The $33.3 million decrease in revenue is primarily due
to a $21.8 million and $11.2 million decrease in billboard and transit net
revenues, respectively, which are due to the effects of the ongoing COVID-19
pandemic.
Total operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, decreased $28.6 million, or 11.4%, to $221.5 million for
the three months ended March 31, 2021 from $250.1 million in the same period in
2020. The $28.6 million decrease over the prior year is comprised of a $28.8
million decrease in total direct, general and administrative and corporate
expenses (excluding stock-based compensation) primarily related to the
operations of our outdoor advertising assets, offset by a $0.2 million increase
in stock-based compensation.
Depreciation and amortization expense decreased $1.6 million to $60.7 million
for the three months ended March 31, 2021 as compared to $62.3 million for the
same period in 2020.
For the three months ended March 31, 2021, Lamar Media recognized a gain on
disposition of assets of $0.4 million, primarily resulting from transactions
related to billboard locations.
Due to the above factors, operating income decreased by $7.6 million to $89.1
million for the three months ended March 31, 2021 as compared to $96.7 million
for the same period in 2020.
Lamar Media recognized a loss on debt extinguishment of $21.6 million for the
three months ended March 31, 2021, a $3.4 million increase over the same period
in 2020. The loss on debt extinguishment during the three months ended March 31,
2021 relates to the early repayment of our 5 3/4% Senior Notes during the
period.
Interest expense decreased $8.4 million for the three months ended March 31,
2021 to $28.2 million as compared to $36.6 million for the three months ended
March 31, 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.
The decrease in operating income and increase in loss on extinguishment of debt,
offset by the decrease in interest expense, resulted in a $2.7 million decrease
in net income before income taxes. The effective tax rate for the three months
ended March 31, 2021 was 2.6%, 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 March 31, 2021 of $38.5 million, as compared to net income of
$40.6 million for the same period in 2020.
Reconciliations:
Because acquisitions occurring after December 31, 2019 (the "acquired assets")
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 March 31, 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 March 31, 2021.
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Reconciliations of 2020 reported net revenue to 2020 acquisition-adjusted net
revenue for the three months ended March 31, as well as a comparison of 2020
acquisition-adjusted net revenue to 2021 reported net revenue for the three
months ended March 31, are provided below:
Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted
Net Revenue
                                 Three Months Ended
                                     March 31,
                                2021           2020
                                   (in thousands)
Reported net revenue         $ 370,881      $ 406,569
Acquisition net revenue              -         (2,401)
Adjusted totals              $ 370,881      $ 404,168


Key Performance Indicators
Net Income/Adjusted EBITDA
(in thousands)

                                                           Three Months Ended                 Amount of
                                                                March 31,                     Increase                 Percent
                                                         2021               2020             (Decrease)          Increase (Decrease)
Net income                                           $  38,466          $  40,617          $     (2,151)                     (5.3) %
Income tax expense                                       1,010              1,536                  (526)
Loss on debt extinguishment                             21,604             18,179                 3,425
Interest expense (income), net                          27,980             36,363                (8,383)
Gain on disposition of assets                             (415)            (2,504)                2,089
Depreciation and amortization                           60,749             62,313                (1,564)
Capitalized contract fulfillment costs, net               (500)                 -                  (500)
Stock-based compensation expense                         3,675              3,437                   238
Adjusted EBITDA                                      $ 152,569          $ 159,941          $     (7,372)                     (4.6) %


Adjusted EBITDA for the three months ended March 31, 2021 decreased 4.6% to
$152.6 million. The decrease in adjusted EBITDA was primarily attributable to a
decrease in our gross margin (net revenue less direct advertising expense,
exclusive of depreciation and amortization and capitalized contract fulfillment
costs, net) of $16.9 million, and was offset by a decrease in total general and
administrative and corporate expenses of $10.5 million, excluding the impact of
stock-based compensation expense.
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Net Income/FFO/AFFO
(in thousands)

                                                             Three Months Ended                Amount of                Percent
                                                                  March 31,                     Increase               Increase
                                                           2021               2020             (Decrease)             (Decrease)
Net income                                             $  38,466          $  40,617          $    (2,151)                     (5.3) %
Depreciation and amortization related to real
estate                                                    57,963             59,364               (1,401)
Gain from sale or disposal of real estate, net
of tax                                                      (383)            (2,543)               2,160

Adjustments for unconsolidated affiliates and

  non-controlling interest                                   153                249                  (96)
FFO                                                    $  96,199          $  97,687          $    (1,488)                     (1.5) %
Straight line expense                                        775              1,054                 (279)
Capitalized contract fulfillment costs, net                 (500)                 -                 (500)
Stock-based compensation expense                           3,675              3,437                  238
Non-cash portion of tax provision                         (1,020)              (419)                (601)
Non-real estate related depreciation and
amortization                                               2,787              2,949                 (162)
Amortization of deferred financing costs                   1,371              1,378                   (7)
Loss on extinguishment of debt                            21,604             18,179                3,425
Capital expenditures - maintenance                        (7,904)           (10,629)               2,725

Adjustments for unconsolidated affiliates and

  non-controlling interest                                  (153)              (249)                  96
AFFO                                                   $ 116,834          $ 113,387          $     3,447                       3.0  %


FFO for the three months ended March 31, 2021 decreased from $97.7 million in
2020 to $96.2 million for the same period in 2021, a decrease of 1.5%. AFFO for
the three months ended March 31, 2021 increased 3.0% to $116.8 million as
compared to $113.4 million for the same period in 2020. The increase in AFFO was
primarily attributable to the decrease in total general and administrative and
corporate expenses (excluding the effect of stock-based compensation expense)
offset by a decrease in our gross margin (net revenue less direct advertising
expense, exclusive of depreciation and amortization and capitalized contract
fulfillment costs, net).
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