Lamar Advertising Company · NASDAQ:LAMR
Lamar Advertising — Lamar Advertising Co/New — Merger or Acquisition (November 2014)
33 slides from Lamar Advertising's merger presentation, Nov 5, 2014
Slide 1: Filed by Lamar Advertising Company Pursuant to Rule 425
Filed by Lamar Advertising Company Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Lamar Advertising Company Commission File No. 000-30242 November 5, 2014 Lamar Advertising Company intends to use the following presentation in meetings with investors beginning on November 5, 2
Slide 2: Investor Presentation November 2014
November 2014 INVESTOR PRESENTATION
Slide 3: Forward-looking Statements Disclaimer
Forward-looking Disclaimer the 2014; as of ability (9) to “Risk statements Use Adjusted in financial Company’s measures Additional In Advertising Lamar definitive THE BECAUSE addition, We, Information SEC Investors carefully 2This these differ the connection athe REIT REIT, of our presentation commu
Slide 4: Agenda
Company Agenda REIT Value 3Appendix conversion creation background 29 andhighlights opportunities 3 22 for growth 26
Slide 5: Experienced management team
Experienced Introduction Name Kevin Sean Keith Regional 4Lamar’s Reilly Istre Title Reilly, management Managers Chief Years Chief management Jr. Chairman Financial with Executive (average team Lamar team of Officer has Officer years) the been Board and 31 23 with Treasurer and thePresident company 3
Slide 6: Company profile
Company Established Largest Operates behind 78% Leading 5Approximately of CBS revenue outdoor out approximately over profile in of Outdoor 130,000 40,000 1902 home 825 generated advertising local –provider transit over logo 145,000 account from 110 company sign advertising inyears less the advertisi
Slide 7: Key investment considerations
Key REIT Largest Significant Diversified Approximately OOH Flexible Strong Potential 6Experienced, media balance pure-play business toinvestment barriers base expand effectively goal-oriented sheet 20% ofmodel outdoor 40,000+ to market of with entry considerations billboard complements allows no ope
Slide 8: Expansive national footprint
Expansive 7Puerto Canada Riconational footprint with approximately 145,000 billboards
Slide 9: Largest provider of logo signs
Largest provider 8Operates nearly 89% of logo of privatized signs in the state USlogo contracts covering over 130,000 displays
Slide 10: Lamar market share and potential
LamarMarket Other $1.5bn Potential 18% 20% Source: 9Note: 44% maintains inCompany acquisitions high-quality, share afilings; leading based could REIT-eligible on Outdoor share expand Lamar, ofAdvertising the market CBS billboard U.S. Outdoor share outdoor assets Association and and advertising incre
Slide 11: Out-of-home barriers to entry
Out-of-home Lamar Control Permits Lamar’s Federal, Rules Many 10 govern existing typically of are state permits permit the regulations where and structures most owns have protects local and valuable been permits regulations how have provide current collected billboards assets that been high inventor
Slide 12: Diversified tenant base
No advertising Net FY Restaurants Retailers Healthcare Service Amusement Automotive Gaming Financial Telecom Hotels Education Real Total Top Long-standing Contracts “One-stop-shopping” 11 2007 advertising 10 Estate 72% & tenants 6% 6% 5% FY 10% Motels –range –68% 7% –9% 6% 10% 9% –6% 5% 2008 5% 5% –
Slide 13: Diversified real estate portfolio
Diversified 20% 80% Diversification Lamar 12 ofowns has billboard opportunistically underlying approximately and revenue regulatory real-estate generated from 10% purchased regime structures ofportfolio its onhelp billboard easements structures onpreserve property locations on beneath footprint Lama
Slide 14: Focus on local sales
Focusmember Large Lamar’s Clear Yields Local National Diversified, Fifty Recent Lamar Note: 13 share As focus demand 78% on-the-ground on optimized isacquisitions local 22% performance the of local leader December blue-chip leading sales revenue less advertising atin influenced team local and out-of
Slide 15: Outdoor remains a low cost medium
Outdoor Major $35 $40 $24.60 $30 $15 $20 $25 $10 $10.40 $5 $5.21 $6.92 Posters TV $0 $1.90 Transit OOH Source: 14 $3.11 $33.85 $13.50 $8.99 Radio media $24.76 General Bulletins Wall remains $3.45 $32.50 $14.00 Online CPM Street $3.00 Premium aShelter low (cost research, TV cost, Print per Spot Onlin
Slide 16: Diverse revenue profile
Diverse Company Revenue ($mm) Analog Digital bulletins Transit Logos Total 15 $1,246 67 (%) posters displays bulletin poster product 184 contribution 5% profile 100% 15% displays &displays 75 mix6%across FYE 263 $657 2013 21% digital 53%and analog assets
Slide 17: Economic downturn growth generator
Lamar Annual Economic 1991 Y/Y revenue Adj. ¹growth¹ margin 16 Represents net EBITDA 1992 ispro 1% a downturn consistent 1993 forma (2)% organic 32% 1994 4% financials 31% Economic growth generator 11% 1995 35% 9% 1996 of37% 7% the downturn of1997 organic 7% Company 40%8% 1998 41% Economic growth 6%
Slide 18: Historical financials
Historical Lamar FY Net Operating Adjusted Capital ³²¹% the 17 Adjusted Not Excludes growth of appendix 20071 revenues net adjusted Advertising expenditures revenues EBITDA3 8.0% financial FY expenses2 EBITDA non-cash for $1,209.6 20081 for (0.9%) a daily 54.0% 46.0% 18.2% reconciliation Co. informa
Slide 19: Adjusted free cash flow
9Adjusted FY Sept ended Adjusted Interest Less: Current Preferred (benefit) Capital Free ¹Lamar the 18months appendix 2007 cash Advertising isexpenditures has expense, tax FY aEBITDA1 dividends flow EBITDA the strong expense 2008 for ability $148.7 anet free FY reconciliation Co. 0.4 is 31.0 $155.3
Slide 20: Capital expenditures
9Capital $mm Sept ended Billboards–Traditional Billboards–Digital Logos Transit Land Other Total FY 19months 2007 2014: capex and PP&E 10.2 2.0 expenditures FY buildings ~$100mm 1.0 7.6 $220.5 2008 16.1 5.4 5.316.5 FY 0.9 92.1 8.5 $198.1 31.4 consisting overview 2009 0.8 10.1 4.9 68.7 103.7 11.2 0.3
Slide 21: Strong balance sheet
Strong As $mm Cash $400mm Term 5.375% Other 5.000% 5.875% Total Net LTM Memo: Maturity $500 $15 $203 2015 Capital Redeemed Lamar Very Simple Annual 20 of debt $15 strong $535 2016 $28.0 9/30/14 secured senior debt Loan September debt maintains balance and structure Interest dividends senior $23 $1,9
Slide 22: Key focus areas
Keynear Focus Limited Continue No January Through 21 business on1, strategic term numerous financial to2014 use invest plans initiatives free acquisition in discipline to initiatives, cash highly increase flow profitable activity and Lamar headcount; to reduce capital has digital debt allocation dem
Slide 23: Agenda
Company Agenda REIT Value Appendix 22 conversion creation background 29 andhighlights opportunities 3 22 for growth 26
Slide 24: REIT conversion highlights
REIT Favorable Shareholder Lamar Expect No Composition TRS QRS Significant Higher Dividends Potential Continued 23 impact comprised comprised conversion REIT to netto complete elect IRS initiated strong on income increase expand vote structural of customer PLR REIT of qualified ofon highlights acces
Slide 25: REIT conversion highlights (cont'd)
REIT Non-REIT Accumulated Plan On 2014 ~$100mm Targeting ¹Estimated 24 Subject track to financial expected capital conversion distribute toannual total consisting E&P reach declaration expenditures non-REIT guidance annual REIT dividend dividend in highlights previously-disclosed cash of one-time di
Slide 26: Indicative timeline for distributions
Indicative May September June End 25 December 22, 2014 30, timeline 30, Quarterly Cash 2014 2014for dividend Quarterly Quarterly 2014 dividend Distributions announced dividend cash paid dividend ($0.83) paid ($0.83) expected to be paid
Slide 27: Agenda
Company Agenda REIT Value Appendix 26 conversion creation background 29 andhighlights opportunities 3 22 for growth 26
Slide 28: Significant opportunities for growth
Significant Organic Continued Rate select 27 and M&A growth occupancy investment opportunities investment potential increases in ROI-efficient for without earnings driven the by need growth digital focused to raise and displays local value newand in capital creation new national and existing sales f
Slide 29: Lamar's dividend and capital allocation policy
Lamar’s Maintain Expected $0.83 Additional Reflects Paid AFFO Invest Opportunistic Since ¹Expect 28 Subject out the dividend in for available toannualized of capital display to ample beginning 2014 increase dividend distribution internally declaration M&A dividends paid allocation liquidity for acqu
Slide 30: Agenda
Company Agenda REIT Value Appendix 29 conversion creation background 29 andhighlights opportunities 3 22 for growth 26
Slide 31: Adjusted EBITDA reconciliation summary
Summary For months September FY 2007² Adjusted Non-cash Depreciation Gain amortization Interest assets/investments (Gain) Loss extinguishment temporary Income investment Net ¹(benefit) ²assets 30 Adjusted NotFY 2009 the income from on adjusted 2008² and loss Q3 nine ended expense, tax disposition FY
Slide 32: FFO and AFFO reconciliation
Reconciliation For $mm 2013¹ Net Real (Gain) Funds Straight-line Stock-based Non-cash Non-real Amortization Loss Capitalized Adjustment Adjusted Divided ¹AFFO net comparable differently for effective 31 TheU.S. income the income estate on from calculation 2014¹ From per losses nine debt Federal by t
Slide 33: NASDAQ
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