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Lamar Advertising Company Announces Third Quarter 2018 Operating Results

November 8, 2018

Three Month Results

-- Net revenue increased 4.8% to $418.5 million -- Net income was $94.1 million -- Adjusted EBITDA increased 5.3% to $192.5 million

Three Month Acquisition-Adjusted Results

-- Acquisition-adjusted net revenue increased 3.1% -- Acquisition-adjusted EBITDA increased 3.0%

BATON ROUGE, La., Nov. 08, 2018 (GLOBE NEWSWIRE) -- Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company’s operating results for the third quarter ended September 30, 2018.

“We delivered healthy revenue growth in the third quarter and are encouraged by our Q4 pacings, which indicate even more robust sales growth,” said Chief Executive Sean Reilly. “Consequently, we are tracking to finish 2018 at the upper end of or slightly above our revised guidance for full year diluted AFFO of $5.30 to $5.40 per share.”

Third Quarter Highlights

-- Same unit digital revenue increased 7.2% -- AFFO increased 9.1% -- Diluted AFFO per share increased 7.9%

Third Quarter Results Lamar reported net revenues of $418.5 million for the third quarter of 2018 versus $399.3 million for the third quarter of 2017, a 4.8% increase. Operating income for the third quarter of 2018 decreased $3.4 million to $128.4 million as compared to $131.7 million for the same period in 2017, primarily due to increases in non-cash stock-based compensation expense of $6.6 million and depreciation and amortization expense of $3.3 million. Lamar recognized net income of $94.1 million for the third quarter of 2018 compared to net income of $96.3 million for same period in 2017. Net income per diluted share was $0.95 and $0.98 for the three months ended September 30, 2018 and 2017, respectively.

Adjusted EBITDA for the third quarter of 2018 was $192.5 million versus $182.8 million for the third quarter of 2017, an increase of 5.3%.

Cash flow provided by operating activities was $154.3 million for the three months ended September 30, 2018, an increase of $28.4 million as compared to the same period in 2017. Free cash flow for the third quarter of 2018 was $130.7 million as compared to $122.2 million for the same period in 2017, a 7.0% increase.

For the third quarter of 2018, Funds From Operations, or FFO, was $146.6 million versus $142.4 million for the same period in 2017, an increase of 3.0%. Adjusted Funds From Operations, or AFFO, for the third quarter of 2018 was $150.1 million compared to $137.5 million for the same period in 2017, an increase of 9.1%. Diluted AFFO per share increased 7.9% to $1.51 for the three months ended September 30, 2018 as compared to $1.40 for the same period in 2017.

Acquisition-Adjusted Three Months Results Acquisition-adjusted net revenue for the third quarter of 2018 increased 3.1% over Acquisition-adjusted net revenue for the third quarter of 2017. Acquisition-adjusted EBITDA for the third quarter of 2018 increased 3.0% as compared to Acquisition-adjusted EBITDA for the third quarter of 2017. Acquisition-adjusted net revenue and Acquisition-adjusted EBITDA include adjustments to the 2017 period for acquisitions and divestitures for the same time frame as actually owned in the 2018 period. See “Reconciliation of Reported Basis to Acquisition-Adjusted Results”, which provides reconciliations to GAAP for Acquisition-adjusted measures.

Nine Months ResultsLamar reported net revenues of $1.20 billion for the nine months ended September 30, 2018 versus $1.14 billion for the same period in 2017, a 4.9% increase. Operating income for the nine months ended September 30, 2018 decreased to $329.9 million as compared to $335.4 million for the same period in 2017, primarily due to increases in non-cash stock-based compensation expense of $15.7 million and depreciation and amortization expense of $12.2 million. Lamar recognized net income of $209.5 million for the nine months ended September 30, 2018 as compared to net income of $230.5 million for the same period in 2017. Net income per diluted share decreased to $2.12 for the nine months ended September 30, 2018 as compared to $2.34 for the same period in 2017. In addition, Adjusted EBITDA for the nine months ended September 30, 2018 was $527.2 million versus $493.0 million for the same period in 2017, a 6.9% increase.

Cash flow provided by operating activities increased to $370.1 million for the nine months ended September 30, 2018, as compared to $320.6 million in the same period in 2017. Free cash flow for the nine months ended September 30, 2018 increased 8.6% to $345.0 million as compared to $317.7 million for the same period in 2017.

For the nine months ended September 30, 2018, FFO was $376.2 million versus $373.0 million for the same period in 2017, a 0.9% increase. AFFO for the nine months ended September 30, 2018 was $397.0 million compared to $360.5 million for the same period in 2017, a 10.1% increase. Diluted AFFO per share increased to $4.02 for the nine months ended September 30, 2018, as compared to $3.67 in the same period in 2017, an increase of 9.5%.

LiquidityAs of September 30, 2018, Lamar had $342.6 million in total liquidity that consisted of $332.0 million available for borrowing under its revolving senior credit facility and approximately $10.6 million in cash and cash equivalents.

Forward Looking StatementsThis press release contains forward-looking statements, including statements regarding sales trends. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others: (1) our significant indebtedness; (2) the state of the economy and financial markets generally and the effect of the broader economy on the demand for advertising; (3) the continued popularity of outdoor advertising as an advertising medium; (4) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (5) our ability to continue to qualify as a Real Estate Investment Trust (“REIT”) and maintain our status as a REIT; (6) the regulation of the outdoor advertising industry by federal, state and local governments; (7) the integration of companies that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (8) changes in accounting principles, policies or guidelines; (9) changes in tax laws applicable to REITs or in the interpretation of those laws; (10) our ability to renew expiring contracts at favorable rates; (11) our ability to successfully implement our digital deployment strategy; and (12) the market for our Class A common stock. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We caution investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and we undertake no obligation to update or revise the statements, except as may be required by law.

Use of Non-GAAP Financial MeasuresThe Company has presented the following measures that are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”): Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), Free Cash Flow, Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”), Diluted AFFO per share, Outdoor Operating Income and Acquisition-Adjusted Results. Our management reviews our performance by focusing on these key performance indicators not prepared in conformity with GAAP. We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for their most directly comparable GAAP financial measures. Our Non-GAAP financial measures are determined as follows:

-- We define Adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization and gain or loss on disposition of assets and investments. -- Free Cash Flow is defined as Adjusted EBITDA less interest, net of interest income and amortization of deferred financing costs, current taxes, preferred stock dividends and total capital expenditures. -- We use the National Association of Real Estate Investment Trusts definition of FFO, which is defined as net income before gains or losses from the sale or disposal of real estate assets and investments and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest. -- We define AFFO as FFO before (i) straight-line revenue and expense; (ii) stock-based compensation expense; (iii) non-cash portion of tax provision; (iv) non-real estate related depreciation and amortization; (v) amortization of deferred financing costs; (vi) loss on extinguishment of debt; (vii) non-recurring infrequent or unusual losses (gains); (viii) less maintenance capital expenditures; and (ix) an adjustment for unconsolidated affiliates and non-controlling interest. -- Diluted AFFO per share is defined as AFFO divided by Weighted average diluted common shares outstanding. -- Outdoor Operating Income is defined as Operating Income before corporate expenses, stock-based compensation, depreciation and amortization and loss (gain) on disposition of assets. -- Acquisition-Adjusted Results adjusts our net revenue, direct and general and administrative expenses, outdoor operating income, corporate expense and EBITDA for the prior period by adding to, or subtracting from, the corresponding revenue or expense generated by the acquired assets or divested before our acquisition or divestiture of these assets for the same time frame that those assets were owned in the current period. In calculating Acquisition-Adjusted Results, therefore, we include revenue and expenses generated by assets that we did not own in the prior period but acquired in the current period. We refer to the amount of pre-acquisition revenue and expense generated by or subtracted from the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “Acquisition-Adjusted Results”.

Adjusted EBITDA, FFO, AFFO, Outdoor Operating Income and Acquisition-Adjusted Results are not intended to replace other performance measures determined in accordance with GAAP. Free Cash Flow, 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. Adjusted EBITDA, Free Cash Flow, FFO, AFFO, Diluted AFFO per share, Outdoor Operating Income and Acquisition-Adjusted Results are presented as we believe each is a useful indicator of our current operating performance. Specifically, we believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision making and for evaluating our core operating results; (2) Adjusted EBITDA is widely used in the industry to measure operating performance as it excludes the impact of depreciation and amortization, which may vary significantly among companies, depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) Adjusted EBITDA, FFO, AFFO and Diluted AFFO per share each provides investors with a meaningful measure for evaluating our period-over-period operating performance by eliminating items that are not operational in nature and reflect the impact on operations from trends in occupancy rates, operating costs, general and administrative expenses and interest costs; (4) Acquisition-Adjusted Results is a supplement to enable investors to compare period-over-period results on a more consistent basis without the effects of acquisitions and divestures, which reflects our core performance and organic growth (if any) during the period in which the assets were owned and managed by us; (5) Free Cash Flow is an indicator of our ability to service debt and generate cash for acquisitions and other strategic investments; (6) Outdoor Operating Income provides investors a measurement of our core results without the impact of fluctuations in stock-based compensation, depreciation and amortization and corporate expenses; and (7) each of our Non-GAAP measures provides investors with a measure for comparing our results of operations to those of other companies.

Our measurement of Adjusted EBITDA, FFO, AFFO, Outdoor Operating Income and Acquisition-Adjusted Results may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of Adjusted EBITDA, FFO, AFFO, Outdoor Operating Income and Acquisition-Adjusted Results to the most directly comparable GAAP measures have been included herein.

Conference Call InformationA conference call will be held to discuss the Company’s operating results on Thursday, November 8, 2018 at 8:00 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call

All Callers: 1-334-323-0520 or 1-334-323-9871 Passcode: Lamar Replay: 1-334-323-0140 or 1-877-919-4059 Passcode: 70196432 Available through Thursday, November 15, 2018 at 11:59 p.m. eastern time Live Webcast: www.lamar.com Webcast Replay: www.lamar.com Available through Thursday, November 15, 2018 at 11:59 p.m. eastern time Company Contact: Buster Kantrow Director of Investor Relations (225) 926-1000 bkantrow@lamar.com

General Information

Founded in 1902, Lamar Advertising (Nasdaq: LAMR) is one of the largest outdoor advertising companies in North America, with more than 348,000 displays across the United States and Canada. Lamar offers advertisers a variety of billboard, interstate logo, transit and airport advertising formats, helping both local businesses and national brands reach broad audiences every day. In addition to its more traditional out-of-home inventory, Lamar is proud to offer its customers the largest network of digital billboards in the United States with over 2,900 displays.

LAMAR ADVERTISING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Three months ended Nine months ended September 30, September 30, ---------------------------- ---------------------------- 2018 2017 2018 2017 ------------- ------------- ------------- ------------- Net revenues $ 418,498 $ 399,345 $ 1,199,324 $ 1,142,785 - ---------- - ---------- - ---------- - ---------- Operating expenses (income) Direct advertising expenses 140,699 134,977 419,776 401,896 General and administrative expenses 70,214 66,588 205,734 200,160 Corporate expenses 15,104 14,983 46,608 47,683 Stock-based compensation 8,624 2,017 22,745 7,060 Depreciation and amortization 55,089 51,796 167,251 155,003 Loss (gain) on disposition of assets 407 (2,734) 7,265 (4,377) - ---------- - ---------- - ---------- - ---------- 290,137 267,627 869,379 807,425 - ---------- - ---------- - ---------- - ---------- Operating income 128,361 131,718 329,945 335,360 Other (income) expense Loss on extinguishment of debt — — 15,429 71 Interest income (157) (2) (313) (6) Interest expense 31,850 32,064 97,321 95,526 - ---------- - ---------- - ---------- - ---------- 31,693 32,062 112,437 95,591 - ---------- - ---------- - ---------- - ---------- Income before income tax expense 96,668 99,656 217,508 239,769 Income tax expense 2,612 3,325 7,969 9,257 - ---------- - ---------- - ---------- - ---------- Net income 94,056 96,331 209,539 230,512 Preferred stock dividends 91 91 273 273 - ---------- - ---------- - ---------- - ---------- Net income applicable to common stock $ 93,965 $ 96,240 $ 209,266 $ 230,239 - ---------- - ---------- - ---------- - ---------- Earnings per share: Basic earnings per share $ 0.95 $ 0.98 $ 2.12 $ 2.35 - ---------- - ---------- - ---------- - ---------- Diluted earnings per share $ 0.95 $ 0.98 $ 2.12 $ 2.34 - ---------- - ---------- - ---------- - ---------- Weighted average common shares outstanding: 98,943,535 98,044,523 98,596,828 97,855,642 - basic 99,253,008 98,490,277 98,870,116 98,340,248 - diluted OTHER DATA $ Free Cash Flow Computation: 192,481 $ 182,797 $ 527,206 $ 493,046 Adjusted EBITDA (30,479) (30,819) (93,346) (91,654) Interest, net (1,474) (3,096) (6,394) (8,998) Current tax expense (91) (91) (273) (273) Preferred stock dividends Total capital expenditures (29,701) (26,610) (82,174) (74,446) - ---------- - ---------- - ---------- - ---------- Free Cash Flow $ 130,736 $ 122,181 $ 345,019 $ 317,675 - ---------- - ---------- - ---------- - ----------

OTHER DATA (continued): September December 31, 30, Selected Balance Sheet Data: 2018 2017 ----------- ------------ Cash and cash equivalents $ 10,609 $ 115,471 Working capital $ 109,914 $ 94,525 Total assets $ 4,124,620 $ 4,214,345 Total debt, net of deferred financing costs (including current $ 2,545,881 $ 2,556,690 maturities) Total stockholders’ equity $ 1,096,959 $ 1,103,493 Three months ended Nine months ended September 30, September 30, ------------------------ 2018 2017 2018 2017 - ------- - ------- - --------- - --------- Selected Cash Flow Data: Cash flows provided by operating activities $ 154,305 $ 125,885 $ 370,089 $ 320,638 Cash flows used in investing activities $ 58,904 $ 117,669 $ 120,326 $ 191,029 Cash flows used in financing activities $ 104,381 $ 22,650 $ 353,943 $ 137,487

SUPPLEMENTAL SCHEDULES UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES (IN THOUSANDS)

Three months ended Nine months ended September 30, September 30, ------------------------ ------------------------ 2018 2017 2018 2017 - ------- - - ------- - - ------- - - ------- - Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow: Cash flows provided by operating activities $ 154,305 $ 125,885 $ 370,089 $ 320,638 Changes in operating assets and liabilities 7,830 25,610 62,924 77,765 Total capital expenditures (29,701 ) (26,610 ) (82,174 ) (74,446 ) Preferred stock dividends (91 ) (91 ) (273 ) (273 ) Other (1,607 ) (2,613 ) (5,547 ) (6,009 ) - ------- - ------- - ------- - ------- Free cash flow $ 130,736 $ 122,181 $ 345,019 $ 317,675 - ------- - ------- - ------- - ------- Reconciliation of Net Income to Adjusted EBITDA: Net Income $ 94,056 $ 96,331 $ 209,539 $ 230,512 Loss on extinguishment of debt — — 15,429 71 Interest income (157 ) (2 ) (313 ) (6 ) Interest expense 31,850 32,064 97,321 95,526 Income tax expense 2,612 3,325 7,969 9,257 - ------- - ------- - ------- - ------- Operating Income 128,361 131,718 329,945 335,360 Stock-based compensation 8,624 2,017 22,745 7,060 Depreciation and amortization 55,089 51,796 167,251 155,003 Loss (gain) on disposition of assets 407 (2,734 ) 7,265 (4,377 ) - ------- - ------- - ------- - ------- Adjusted EBITDA $ 192,481 $ 182,797 $ 527,206 $ 493,046 - ------- - ------- - ------- - ------- Capital expenditure detail by category: Billboards - traditional $ 8,715 $ 10,161 $ 23,922 $ 23,700 Billboards - digital 13,093 8,605 33,210 29,568 Logo 1,895 2,498 7,000 6,409 Transit 3,637 290 4,377 578 Land and buildings 593 3,682 6,622 8,196 Operating equipment 1,768 1,374 7,043 5,995 - ------- - ------- - ------- - ------- Total capital expenditures $ 29,701 $ 26,610 $ 82,174 $ 74,446 - ------- - ------- - ------- - -------

SUPPLEMENTAL SCHEDULES UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES (IN THOUSANDS)

Three months ended September 30, -------------------- 2018 2017 % Change - ------- - ------- ----- Reconciliation of Reported Basis to Acquisition-Adjusted Results(a): Net revenue $ 418,498 $ 399,345 4.8 % Acquisitions and divestitures — 6,672 - ------- - ------- Acquisition-adjusted net revenue $ 418,498 $ 406,017 3.1 % Reported direct advertising and G&A expenses $ 210,913 $ 201,565 4.6 % Acquisitions and divestitures — 2,549 - ------- - ------- Acquisition-adjusted direct advertising and G&A expenses $ 210,913 $ 204,114 3.3 % Outdoor operating income $ 207,585 $ 197,780 5.0 % Acquisitions and divestitures — 4,123 - ------- - ------- Acquisition-adjusted outdoor operating income $ 207,585 $ 201,903 2.8 % Reported corporate expenses $ 15,104 $ 14,983 0.8 % Acquisitions and divestitures — — - ------- - ------- Acquisition-adjusted corporate expenses $ 15,104 $ 14,983 0.8 % Adjusted EBITDA $ 192,481 $ 182,797 5.3 % Acquisitions and divestitures — 4,123 - ------- - ------- Acquisition-adjusted EBITDA $ 192,481 $ 186,920 3.0 % - ------- - -------

(a) Acquisition-adjusted net revenue, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and EBITDA include adjustments to 2017 for acquisitions and divestitures for the same time frame as actually owned in 2018.

Three months ended September 30, ---------------------- 2018 2017 - ------- - ------- - Reconciliation of Net Income to Outdoor Operating Income: Net Income $ 94,056 $ 96,331 Interest expense, net 31,693 32,062 Income tax expense 2,612 3,325 Operating Income 128,361 131,718 Corporate expenses 15,104 14,983 Stock-based compensation 8,624 2,017 Depreciation and amortization 55,089 51,796 Loss (gain) on disposition of assets 407 (2,734 ) - ------- - ------- - Outdoor Operating Income $ 207,585 $ 197,780 - ------- - ------- -

SUPPLEMENTAL SCHEDULESUNAUDITED REIT MEASURESAND RECONCILIATIONS TO GAAP MEASURES(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Adjusted Funds From Operations:

Three months ended Nine months ended September 30, September 30, ------------------------------ ------------------ ----------- 2018 2017 2018 2017 - ---------- - - ---------- - - ---------- - - ---------- - Net income $ 94,056 $ 96,331 $ 209,539 $ 230,512 Depreciation and amortization related to real 52,032 48,613 157,941 145,999 estate Loss (gain) from disposition of real estate 505 (2,707 ) 8,350 (4,114 ) assets and investments (tax effected) Adjustment for unconsolidated affiliates and 43 190 385 580 non-controlling interest - ---------- - - ---------- - - ---------- - - ---------- - Funds From Operations $ 146,636 $ 142,427 $ 376,215 $ 372,977 - ---------- - - ---------- - - ---------- - - ---------- - Straight-line expense (income) 737 (287 ) (220 ) (382 ) Stock-based compensation expense 8,624 2,017 22,745 7,060 Non-cash portion of tax provision 1,138 229 697 259 Non-real estate related depreciation and 3,057 3,183 9,310 9,004 amortization Amortization of deferred financing costs 1,214 1,243 3,662 3,866 Loss on extinguishment of debt — — 15,429 71 Capitalized expenditures—maintenance (11,248 ) (11,082 ) (30,453 ) (31,760 ) Adjustment for unconsolidated affiliates and (43 ) (190 ) (385 ) (580 ) non-controlling interest - ---------- - - ---------- - - ---------- - - ---------- - Adjusted Funds From Operations $ 150,115 $ 137,540 $ 397,000 $ 360,515 - ---------- - - ---------- - - ---------- - - ---------- - Divided by weighted average diluted common 99,253,008 98,490,277 98,870,116 98,340,248 shares outstanding - ---------- - - ---------- - - ---------- - - ---------- - Diluted AFFO per share $ 1.51 $ 1.40 $ 4.02 $ 3.67 - ---------- - - ---------- - - ---------- - - ---------- -

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