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What changed in LAMAR ADVERTISING CO/NEW's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of LAMAR ADVERTISING CO/NEW's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+190 added−194 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in LAMAR ADVERTISING CO/NEW's 2023 10-K

190 paragraphs added · 194 removed · 172 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+2 added−0 removed67 unchanged
Biggest changeMarkets with less than 1% of total displays are grouped in the category “all other United States.” Percentage of Revenues for the year ended, December 31, 2022 Number of Displays for the year ended, December 31, 2022 Market Static Billboard Displays Digital Billboard Displays Transit Displays Logo Displays Total Displays Static Billboard Displays Digital Billboard Displays Transit Displays Logo Displays Total Displays Percentage of Total Displays Las Vegas, NV 1.7 % 2.2 % 17.6 % — 2.8 % 748 83 1,504 — 2,335 0.6 % New York, NY 2.6 % 2.5 % — — 2.3 % 917 70 — — 987 0.3 % Chicago, IL 2.0 % 2.7 % — — 1.9 % 2,094 156 — — 2,250 0.6 % Pittsburgh, PA 1.9 % 2.5 % 0.5 % — 1.9 % 2,884 62 339 — 3,285 0.9 % Cleveland, OH 1.7 % 1.9 % 1.8 % — 1.7 % 2,275 58 2,528 — 4,861 1.3 % Nashville, TN 1.6 % 2.3 % — — 1.6 % 2,131 83 — — 2,214 0.6 % San Bernardino, CA 1.4 % 2.2 % 1.3 % — 1.6 % 638 51 1,145 — 1,834 0.5 % Seattle, WA 1.9 % 0.8 % 2.0 % — 1.5 % 1,600 19 1,745 — 3,364 0.9 % Dallas, TX 1.8 % 1.0 % 1.7 % — 1.5 % 1,307 27 459 — 1,793 0.5 % Atlanta, GA 1.1 % 2.7 % — — 1.4 % 772 87 — — 859 0.2 % Knoxville, TN 1.7 % 0.9 % — — 1.3 % 2,407 60 — — 2,467 0.7 % Phoenix, AZ 0.3 % 2.5 % 6.6 % — 1.3 % 146 56 4,062 — 4,264 1.2 % Indianapolis, IN 1.4 % 1.0 % 1.3 % — 1.2 % 2,555 32 123 — 2,710 0.8 % Reading, PA 1.1 % 1.9 % — — 1.2 % 1,373 107 — — 1,480 0.4 % Raleigh, NC 1.5 % 0.8 % — — 1.1 % 2,564 45 — — 2,609 0.7 % Richmond, VA 1.1 % 1.7 % — — 1.1 % 1,267 47 — — 1,314 0.4 % Greenville-Spartanburg, SC 1.2 % 1.2 % — — 1.1 % 1,854 51 — — 1,905 0.5 % Hartford, CT 1.0 % 1.8 % — — 1.1 % 839 50 — — 889 0.2 % Birmingham, AL 1.1 % 1.3 % 0.5 % — 1.1 % 1,507 47 273 — 1,827 0.5 % Oklahoma City, OK 1.2 % 1.1 % — — 1.1 % 2,053 39 — — 2,092 0.6 % Denver, CO 0.7 % 0.5 % 5.9 % — 1.0 % 215 10 3,374 — 3,599 1.0 % Cincinnati, OH 0.9 % 1.5 % — — 1.0 % 1,135 39 — — 1,174 0.3 % Providence, RI 0.9 % 1.5 % — — 1.0 % 533 32 — — 565 0.2 % Austin, TX 1.4 % 0.4 % — — 1.0 % 895 9 — — 904 0.3 % All US Logo Programs* — — — 92.3 % 3.6 % — — — 144,623 144,623 39.8 % All Other United States 66.8 % 61.1 % 44.3 % — 61.2 % 121,052 3,145 21,606 — 145,803 40.2 % All Other Canada* — — 16.5 % 7.7 % 1.4 % — — 10,352 10,685 21,037 5.8 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 155,761 4,465 47,510 155,308 363,044 100.0 % Total Revenue (in millions) $ 1,292.3 $ 521.7 $ 138.0 $ 80.1 $ 2,032.1 * Logo displays at December 31, 2022 include 16,352 displays related to the tourist oriented direction signing ("TODS") programs.
Biggest changeMarkets with less than 1% of total displays are grouped in the category “all other United States.” Percentage of Revenues for the year ended, December 31, 2023 Number of Displays for the year ended, December 31, 2023 Market Static Billboard Displays Digital Billboard Displays Transit Displays Logo Displays Total Displays Static Billboard Displays Digital Billboard Displays Transit Displays Logo Displays Total Displays Percentage of Total Displays Las Vegas, NV 1.4 % 2.2 % 18.2 % — 2.8 % 742 90 1,504 — 2,336 0.6 % New York, NY 2.3 % 2.2 % — — 2.0 % 1,009 69 — — 1,078 0.3 % Chicago, IL 1.9 % 2.4 % — — 1.8 % 2,074 157 — — 2,231 0.6 % Pittsburgh, PA 1.9 % 1.9 % 0.4 % — 1.7 % 2,866 64 327 — 3,257 0.9 % Cleveland, OH 1.6 % 1.7 % 1.6 % — 1.6 % 2,250 58 2,535 — 4,843 1.3 % Nashville, TN 1.6 % 2.2 % — — 1.6 % 2,096 89 — — 2,185 0.6 % San Bernardino, CA 1.4 % 2.2 % 1.6 % — 1.6 % 624 56 1,158 — 1,838 0.5 % Dallas, TX 1.8 % 0.9 % 2.2 % — 1.5 % 1,268 30 459 — 1,757 0.5 % Atlanta, GA 1.1 % 2.6 % — — 1.4 % 838 91 — — 929 0.3 % Knoxville, TN 1.8 % 1.0 % — — 1.4 % 2,360 64 — — 2,424 0.7 % Phoenix, AZ 0.3 % 2.4 % 7.0 % — 1.3 % 149 69 4,048 — 4,266 1.2 % Birmingham, AL 1.4 % 1.3 % 0.3 % — 1.3 % 2,096 51 273 — 2,420 0.7 % Seattle, WA 1.5 % 0.7 % 1.4 % — 1.2 % 1,547 19 1,736 — 3,302 0.9 % Indianapolis, IN 1.3 % 1.0 % 1.4 % — 1.2 % 2,504 35 123 — 2,662 0.7 % Raleigh, NC 1.5 % 0.8 % — — 1.1 % 2,550 47 — — 2,597 0.7 % Oklahoma City, OK 1.2 % 1.3 % 0.3 % — 1.1 % 2,008 43 35 — 2,086 0.6 % Richmond, VA 1.1 % 1.5 % — — 1.1 % 1,260 51 — — 1,311 0.4 % Greenville-Spartanburg, SC 1.3 % 1.1 % — — 1.1 % 1,837 50 — — 1,887 0.5 % Reading, PA 1.1 % 1.6 % — — 1.1 % 1,373 104 — — 1,477 0.4 % Hartford, CT 1.0 % 1.7 % — — 1.1 % 835 53 — — 888 0.2 % Cincinnati, OH 0.9 % 1.8 % — — 1.0 % 1,118 44 — — 1,162 0.3 % Baton Rouge, LA 1.1 % 1.2 % — — 1.0 % 1,364 53 — — 1,417 0.4 % All US Logo Programs* — — — 92.6 % 3.6 % — — — 144,503 144,503 39.8 % All Other United States 69.5 % 64.3 % 49.7 % — 64.0 % 120,869 3,372 25,155 — 149,396 41.1 % All Other Canada* — — 15.9 % 7.4 % 1.4 % — — 10,514 10,730 21,244 5.8 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 155,637 4,759 47,867 155,233 363,496 100.0 % Total Revenue (in millions) $ 1,315.4 $ 562.4 $ 150.9 $ 82.3 $ 2,111.0 * Logo displays at December 31, 2023 include 15,995 displays related to the tourist oriented direction signing ("TODS") programs.
We regularly provide on-site training and remote sales training videos to enhance the skills of our sales and management team members. 13 Table of Contents We employ approximately 1,150 operations employees, including operations management. These employees are responsible for installing advertising copy, maintaining our billboard inventory and ensuring our billboards, logos and transit displays are in safe operating condition.
We regularly provide on-site training and remote sales training videos to enhance the skills of our sales and management team members. 13 Table of Contents We employ approximately 1,100 operations employees, including operations management. These employees are responsible for installing advertising copy, maintaining our billboard inventory and ensuring our billboards, logos and transit displays are in safe operating condition.
We also operate the tourist oriented directional signing (“TODS”) programs for the states of Colorado, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, Ohio, South Carolina, Utah, and the province of Ontario, Canada, providing approximately 16,400 advertising displays. Our logo and TODS operations are decentralized.
We also operate the tourist oriented directional signing (“TODS”) programs for the states of Colorado, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, Ohio, South Carolina, Utah, and the province of Ontario, Canada, providing approximately 16,000 advertising displays. Our logo and TODS operations are decentralized.
We seek to identify and closely monitor the needs of our tenants and to provide them with a full complement of high quality advertising services. Local advertising constituted approximately 78% of our outdoor net revenues for the year ended December 31, 2022, which management believes is higher than the industry average.
We seek to identify and closely monitor the needs of our tenants and to provide them with a full complement of high quality advertising services. Local advertising constituted approximately 78% of our outdoor net revenues for the year ended December 31, 2023, which management believes is higher than the industry average.
Approximately 300 employees were engaged in overall management and general administration at our corporate headquarters in Baton Rouge, Louisiana, and the remainder, including approximately 950 local account executives, were employed in our operating offices. Fifteen of our local offices employ billposters and construction personnel who are covered by collective bargaining agreements.
Approximately 300 employees were engaged in overall management and general administration at our corporate headquarters in Baton Rouge, Louisiana, and the remainder, including approximately 985 local account executives, were employed in our operating offices. Fifteen of our local offices employ billposters and construction personnel who are covered by collective bargaining agreements.
An important part of our management activity is to manage our lease portfolio and negotiate suitable lease renewals and extensions. 12 Table of Contents The following table illustrates the number of leased and owned sites by state as of December 31, 2022, which is sorted from greatest to least in number and percentage of leased sites.
An important part of our management activity is to manage our lease portfolio and negotiate suitable lease renewals and extensions. 12 Table of Contents The following table illustrates the number of leased and owned sites by state as of December 31, 2023, which is sorted from greatest to least in number and percentage of leased sites.
During 2022, as a result of the inflationary environment in the U.S., we experienced increases in our direct and general and administrative costs, including increases in labor costs and utilities. Increases in expenses were largely offset by increases in our advertising rates. We also experienced increased interest expenses related to rising interest rates.
INFLATION During 2022 and 2023, as a result of the inflationary environment in the U.S., we experienced increases in our direct and general and administrative costs, including increases in labor costs and utilities. Increases in expenses were largely offset by increases in our advertising rates. We also experienced increased interest expenses related to rising interest rates.
Depending on the contract, we may or may not be entitled to compensation at that time. Of our 24 logo sign contracts in place, in the United States and Canada, at December 31, 2022, 4 are subject to renewal or expiration in 2023.
Depending on the contract, we may or may not be entitled to compensation at that time. Of our 24 logo sign contracts in place, in the United States and Canada, at December 31, 2023, 4 are subject to renewal or expiration in 2024.
The table below sets forth the industries from which we derived most of our billboard advertising revenues for the year ended December 31, 2022, as well as the percentage of billboard advertising revenues attributable to the advertisers in those industries.
The table below sets forth the industries from which we derived most of our billboard advertising revenues for the year ended December 31, 2023, as well as the percentage of billboard advertising revenues attributable to the advertisers in those industries.
Digital billboards are capable of generating over one billion colors and vary in brightness based on ambient conditions. They display completely digital advertising copy from various advertisers in a slide show fashion, rotating each advertisement approximately every 6 to 8 seconds. At December 31, 2022, our inventory included approximately 4,500 digital display billboards in various markets.
Digital billboards are capable of generating over one billion colors and vary in brightness based on ambient conditions. They display completely digital advertising copy from various advertisers in a slide show fashion, rotating each advertisement approximately every 6 to 8 seconds. At December 31, 2023, our inventory included approximately 4,750 digital display billboards in various markets.
Our contracts with customers generally cover periods ranging from one week to one year and are generally billed every four weeks. Since contract terms are short-term in nature, we do not consider revenues by year of contract expiration to be meaningful. HUMAN CAPITAL RESOURCES Our People. We employed approximately 3,500 people as of December 31, 2022.
Our contracts with customers generally cover periods ranging from one week to one year and are generally billed every four weeks. Since contract terms are short-term in nature, we do not consider revenues by year of contract expiration to be meaningful. HUMAN CAPITAL RESOURCES Our People. We employed approximately 3,550 people as of December 31, 2023.
We offer our customers a fully integrated service, satisfying all aspects of their display requirements from ad copy production to placement and maintenance. We operate three types of outdoor advertising displays: billboards, logo signs and transit advertising displays. Billboards. As of December 31, 2022, we owned and operated approximately 160,200 billboard advertising displays in 45 states and Canada.
We offer our customers a fully integrated service, satisfying all aspects of their display requirements from ad copy production to placement and maintenance. We operate three types of outdoor advertising displays: billboards, logo signs and transit advertising displays. Billboards. As of December 31, 2023, we owned and operated approximately 160,400 billboard advertising displays in 45 states and Canada.
As Lamar’s business continues to grow, so does the Company’s strong commitment to recruiting a work force with diverse talents, as well as to developing and retaining the successful members of our sales and management teams. Our 950 local account executives and approximately 175 local management employees have been with the Company for an average of 12 years.
As Lamar’s business continues to grow, so does the Company’s strong commitment to recruiting a work force with diverse talents, as well as to developing and retaining the successful members of our sales and management teams. Our 985 local account executives and approximately 170 local management employees have been with the Company for an average of 12 years.
These 4,500 digital billboards generated approximately 30% of billboard advertising net revenue. We own the physical structures on which the advertising copy is displayed. We build the structures on locations we either own or lease. In each local office, one employee typically performs site leasing activities for the markets served by that office.
These 4,750 digital billboards generated approximately 31% of billboard advertising net revenue. We own the physical structures on which the advertising copy is displayed. We build the structures on locations we either own or lease. In each local office, one employee typically performs site leasing activities for the markets served by that office.
Posters are concentrated on major traffic arteries and target vehicular traffic, and junior posters are concentrated on city streets and target hard-to-reach pedestrian traffic and nearby residents. At December 31, 2022, we operated approximately 81,600 poster displays. We generally rent poster space for 4 to 26 weeks, determined by the advertiser’s campaign needs.
Posters are concentrated on major traffic arteries and target vehicular traffic, and junior posters are concentrated on city streets and target hard-to-reach pedestrian traffic and nearby residents. At December 31, 2023, we operated approximately 81,000 poster displays. We generally rent poster space for 4 to 26 weeks, determined by the advertiser’s campaign needs.
In addition to traditional billboards, we also rent space on digital billboards, which are generally located on major traffic arteries and city streets. As of December 31, 2022, we owned and operated approximately 4,500 digital billboard advertising displays in 43 states and Canada. Logo signs.
In addition to traditional billboards, we also rent space on digital billboards, which are generally located on major traffic arteries and city streets. As of December 31, 2023, we owned and operated approximately 4,750 digital billboard advertising displays in 43 states and Canada. Logo signs.
As of December 31, 2022, we operated approximately 139,000 logo sign advertising displays in 23 states and the province of Ontario, Canada. Transit advertising displays. We also rent advertising space on the exterior and interior of public transportation vehicles, in airport terminals, and on transit shelters and benches in over 80 markets.
As of December 31, 2023, we operated approximately 139,250 logo sign advertising displays in 23 states and the province of Ontario, Canada. Transit advertising displays. We also rent advertising space on the exterior and interior of public transportation vehicles, in airport terminals, and on transit shelters and benches in over 80 markets.
As of December 31, 2022, we operated approximately 47,500 transit advertising displays in 24 states and Canada. CORPORATE HISTORY We have operated under the Lamar name since our founding in 1902 and have been publicly traded on NASDAQ under the symbol “LAMR” since 1996.
As of December 31, 2023, we operated approximately 47,850 transit advertising displays in 24 states and Canada. CORPORATE HISTORY We have operated under the Lamar name since our founding in 1902 and have been publicly traded on NASDAQ under the symbol “LAMR” since 1996.
In addition, we routinely invest in upgrading our existing displays and constructing new displays. Since January 1, 2013, we have invested approximately $1.2 billion in capitalized expenditures, which include improvements to our existing real estate portfolio, improvements to recently acquired locations and the construction of new locations.
In addition, we routinely invest in upgrading our existing displays and constructing new displays. Since January 1, 2014, we have invested approximately $1.23 billion in capitalized expenditures, which include improvements to our existing real estate portfolio, improvements to recently acquired locations and the construction of new locations.
We believe that the experience of our regional, territory and local managers has contributed greatly to our success. For example, our regional managers have been with us for an average of 31 years. In an effort to provide high quality sales and service at the local level, we employed approximately 950 local account executives as of December 31, 2022.
We believe that the experience of our regional, territory and local managers has contributed greatly to our success. For example, our regional managers have been with us for an average of 32 years. In an effort to provide high quality sales and service at the local level, we employed approximately 985 local account executives as of December 31, 2023.
To attract more attention, some of the panels may extend beyond the linear edges of the display face and may include three-dimensional embellishments. Because of their greater impact and higher cost, bulletins are usually located on major highways and target vehicular traffic. At December 31, 2022, we operated approximately 78,600 bulletin displays.
To attract more attention, some of the panels may extend beyond the linear edges of the display face and may include three-dimensional embellishments. Because of their greater impact and higher cost, bulletins are usually located on major highways and target vehicular traffic. At December 31, 2023, we operated approximately 79,400 bulletin displays.
As of December 31, 2022, approximately 36% of our work force was female, 17% of our employees and 33% of our named executive offices identified themselves as minorities, while 33% of our Board of Directors was female and one of our nine directors was a member of a minority group.
As of December 31, 2023, approximately 36% of our work force was female, 18% of our employees and 33% of our named executive offices identified themselves as minorities, while 33% of our Board of Directors was female and one of our nine directors was a member of a minority group.
We erect logo signs, which generally advertise nearby gas, food, camping, lodging and other attractions, and directional signs, which direct vehicle traffic to nearby services and tourist attractions, near highway exits. As of December 31, 2022, we operated approximately 42,400 logo sign structures containing approximately 139,000 logo advertising displays in the United States and Canada.
We erect logo signs, which generally advertise nearby gas, food, camping, lodging and other attractions, and directional signs, which direct vehicle traffic to nearby services and tourist attractions, near highway exits. As of December 31, 2023, we operated approximately 42,200 logo sign structures containing approximately 139,250 logo advertising displays in the United States and Canada.
The individual advertisers in these industries accounted for approximately 70% of our billboard advertising net revenues in the year ended December 31, 2022. No individual tenant accounted for more than 2% of our billboard advertising net revenues in that period.
The individual advertisers in these industries accounted for approximately 73% of our billboard advertising net revenues in the year ended December 31, 2023. No individual tenant accounted for more than 2% of our billboard advertising net revenues in that period.
As of December 31, 2022, we leased approximately 72,500 outdoor sites, accounting for an annualized lease expense of approximately $319.3 million. This amount represented approximately 18% of billboard advertising net revenues for that period. These leases are for varying terms ranging from month-to-month to a term of over ten years, and many provide us with renewal options.
As of December 31, 2023, we leased approximately 72,350 outdoor sites, accounting for an annualized lease expense of approximately $335.4 million. This amount represented approximately 18% of billboard advertising net revenues for that period. These leases are for varying terms ranging from month-to-month to a term of over ten years, and many provide us with renewal options.
Categories Percentage of Net Billboard Advertising Revenues Service 14 % Health Care 11 % Restaurants 9 % Retailers 8 % Automotive 5 % Gaming 5 % Amusement — Entertainment/Sports 4 % Financial — Banks, Credit Unions 4 % Education 4 % Insurance 3 % Real Estate 3 % 70 % REGULATION Outdoor advertising is subject to governmental regulation at the federal, state and local levels.
Categories Percentage of Net Billboard Advertising Revenues Service 16 % Health Care 11 % Restaurants 10 % Retailers 8 % Automotive 5 % Amusement — Entertainment/Sports 5 % Gaming 4 % Financial — Banks, Credit Unions 4 % Education 4 % Public Service 3 % Insurance 3 % 73 % REGULATION Outdoor advertising is subject to governmental regulation at the federal, state and local levels.
We also own 128 local operating facilities with front office administration and sales office space connected to back-shop poster and bulletin production space. In addition, we lease an additional 149 operating facilities at an aggregate lease expense for 2022 of approximately $9.2 million. We own approximately 10,500 parcels of property beneath our advertising displays.
We also own 128 local operating facilities with front office administration and sales office space connected to back-shop poster and bulletin production space. In addition, we lease an additional 160 operating facilities at an aggregate lease expense for 2023 of approximately $10.1 million. We own approximately 10,750 parcels of property beneath our advertising displays.
COMPANY OPERATIONS Billboard Advertising We rent most of our advertising space on two types of billboard advertising displays: bulletins and posters. As of December 31, 2022, we owned and operated approximately 160,200 billboard advertising displays in 45 states and Canada. In 2022, we derived approximately 76% of our billboard advertising net revenues from bulletin rentals and 24% from poster rentals.
COMPANY OPERATIONS Billboard Advertising We rent most of our advertising space on two types of billboard advertising displays: bulletins and posters. As of December 31, 2023, we owned and operated approximately 160,400 billboard advertising displays in 45 states and Canada. In 2023, we derived approximately 77% of our billboard advertising net revenues from bulletin rentals and 23% from poster rentals.
The industry is comprised of several large outdoor advertising and media companies with operations in multiple markets, as well as smaller, local companies operating a limited number of structures in one or a few local markets.
COMPETITION Although the outdoor advertising industry has encountered a wave of consolidation, the industry remains fragmented. The industry is comprised of several large outdoor advertising and media companies with operations in multiple markets, as well as smaller, local companies operating a limited number of structures in one or a few local markets.
As of December 31, 2022, the annual revenue generated by our TRSs in the aggregate was approximately $323.2 million. 10 Table of Contents ADVERTISING TENANTS Our tenant base is diverse.
As of December 31, 2023, the annual taxable revenue generated by our TRSs in the aggregate was approximately $350.8 million. 10 Table of Contents ADVERTISING TENANTS Our tenant base is diverse.
This includes growth and maintenance capital expenditures associated with the construction of new and existing billboard displays, the entrance into and renewal of logo sign and transit contracts, technology-related investments and the purchase of real estate and operating equipment. • Acquisitions. We will seek to pursue strategic acquisitions of outdoor advertising businesses and assets.
We will continue to reinvest in our existing assets and expand our outdoor advertising display portfolio through new construction. This includes growth and maintenance capital expenditures associated with the construction of new and existing billboard displays, the entrance into and renewal of logo sign and transit contracts, technology-related investments and the purchase of real estate and operating equipment. • Acquisitions.
Our talented design staff uses state-of-the-art technology to prepare creative, eye-catching displays for our tenants. We can also help with the strategic placement of advertisements throughout an advertiser’s market by using software that allows us to analyze the target audience and its demographics. Our artists also assist in developing marketing presentations, demonstrations and strategies to attract new tenant advertisers.
Our talented design staff uses state-of-the-art technology to prepare creative, eye-catching displays for our tenants. We can also help with the strategic placement of advertisements throughout an 7 Table of Contents advertiser’s market by using software that allows us to analyze the target audience and its demographics.
This includes acquisitions in our existing markets and in new markets where we can meet our return on investment 6 Table of Contents criteria. When evaluating investments in new markets, our return on investment criteria reflects the additional risks inherent to the particular geographic area.
We will seek to pursue strategic acquisitions of outdoor advertising businesses and assets. This includes acquisitions in our existing markets and in new markets where we can meet our return on investment criteria. When evaluating investments in new markets, our return on investment criteria reflects the additional risks inherent to the particular geographic area.
We rent transit advertising displays in airport terminals and on bus shelters, benches and buses in over 80 transit markets, and our production staff provides a full range of creative and installation services to our transit advertising tenants. As of December 31, 2022, we operated approximately 47,500 transit advertising displays in 24 states and Canada.
We rent transit advertising displays in airport terminals and on bus shelters, benches and buses in over 80 transit markets, and our production staff provides a full range of creative and installation services to our transit advertising tenants.
When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers which are described in the section titled — “Competition” below. COMPETITION Although the outdoor advertising industry has encountered a wave of consolidation, the industry remains fragmented.
When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers, which are described in the section titled — “Competition” below.
Our Executive Vice President of Human Resources, who also serves as our Chief Diversity Officer, is charged with providing training that reinforces our commitment to treat all of our employees with dignity and respect. INFLATION During 2020 and 2021 inflation did not have a significant impact on our business.
Our Executive Vice President of Human Resources, who also serves as our Chief Diversity Officer, is charged with providing training that reinforces our commitment to treat all of our employees with dignity and respect.
In marketing billboard displays to advertisers, we compete with other forms of out-of-home advertising and other media.
Our artists also assist in developing marketing presentations, demonstrations and strategies to attract new tenant advertisers. In marketing billboard displays to advertisers, we compete with other forms of out-of-home advertising and other media.
When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers, which are described in the section titled — “Competition” below. 7 Table of Contents Logo Sign Advertising We entered the logo sign advertising business in 1988 and have become the largest provider of logo sign services in the United States, operating 23 of the 26 privatized state logo contracts.
Logo Sign Advertising We entered the logo sign advertising business in 1988 and have become the largest provider of logo sign services in the United States, operating 23 of the 26 privatized state logo contracts.
We expect the inflationary environment and these pressures to continue into 2023. SEASONALITY Our revenues and operating results are subject to seasonality.
We will continue to monitor the inflationary environment and these pressures in 2024 and any resulting impacts on our financial position and results of operations. SEASONALITY Our revenues and operating results are subject to seasonality.
To maintain our REIT status, we are required to distribute to our stockholders annually an amount equal to at least 90% of our REIT taxable income, excluding net capital gains. After complying with our REIT distribution requirements, we plan to continue to allocate our available capital among investment alternatives that meet our return on investment criteria.
CAPITAL ALLOCATION STRATEGY The objective of our capital allocation strategy is to simultaneously increase adjusted funds from operations and our return on invested capital. To maintain our REIT status, we are required to distribute to our stockholders annually an amount equal to at least 90% of our REIT taxable income, excluding net capital gains.
Transit advertising operators incur significant start-up costs to build and install the advertising structures (such as transit shelters) upon being awarded contracts. 8 Table of Contents In marketing transit advertising displays to advertisers, we compete with other forms of out-of-home advertising and other media.
In bidding for new and renewal contracts, we compete against national outdoor advertising providers and local, on-premise sign providers and sign construction companies. Transit advertising operators incur significant start-up costs to build and install the advertising structures (such as transit shelters) upon being awarded contracts.
State # of billboard leased sites % of total # of owned billboard sites % of total Texas 5,110 7.0 % 1,019 9.7 % Pennsylvania 4,850 6.7 % 1,607 15.3 % California 4,461 6.2 % 150 1.4 % Ohio 4,148 5.7 % 594 5.7 % North Carolina 3,897 5.4 % 279 2.7 % Georgia 3,365 4.6 % 309 2.9 % Indiana 3,122 4.3 % 627 6.0 % Alabama 3,112 4.3 % 513 4.9 % Tennessee 2,994 4.1 % 471 4.5 % Louisiana 2,978 4.1 % 534 5.1 % Wisconsin 2,572 3.5 % 341 3.3 % Florida 2,480 3.4 % 431 4.1 % South Carolina 2,298 3.2 % 150 1.4 % New York 2,158 3.0 % 219 2.1 % Missouri 2,046 2.8 % 297 2.8 % Michigan 1,931 2.7 % 285 2.7 % Mississippi 1,855 2.6 % 412 3.9 % Oklahoma 1,700 2.3 % 136 1.3 % Virginia 1,582 2.2 % 175 1.7 % Illinois 1,483 2.0 % 336 3.2 % All Other States and Canada 14,365 19.9 % 1,607 15.3 % 72,507 100.0 % 10,492 100.0 % CONTRACT EXPIRATIONS We derive revenues primarily from renting advertising space to customers on our advertising displays.
State # of billboard leased sites % of total # of owned billboard sites % of total Texas 5,007 6.9 % 1,048 9.7 % Pennsylvania 4,819 6.7 % 1,617 15.0 % California 4,374 6.1 % 151 1.4 % Ohio 4,091 5.7 % 593 5.5 % North Carolina 3,824 5.3 % 282 2.6 % Alabama 3,369 4.7 % 521 4.8 % Georgia 3,353 4.6 % 318 3.0 % Indiana 3,084 4.3 % 629 5.9 % Louisiana 2,947 4.1 % 541 5.0 % Tennessee 2,941 4.1 % 488 4.5 % Florida 2,901 4.0 % 493 4.6 % Wisconsin 2,495 3.4 % 411 3.8 % South Carolina 2,260 3.1 % 151 1.4 % New York 2,131 2.9 % 221 2.1 % Missouri 1,985 2.7 % 301 2.8 % Michigan 1,946 2.7 % 287 2.7 % Mississippi 1,842 2.5 % 414 3.9 % Oklahoma 1,676 2.3 % 140 1.3 % Virginia 1,554 2.1 % 178 1.7 % Illinois 1,492 2.1 % 338 3.1 % All Other States and Canada 14,252 19.7 % 1,635 15.2 % 72,343 100.0 % 10,757 100.0 % CONTRACT EXPIRATIONS We derive revenues primarily from renting advertising space to customers on our advertising displays.
During 2022, we generated $781.6 million of cash from operating activities, which was used to fund capital expenditures, acquisitions, and dividends to our stockholders. • Capital expenditures program. We will continue to reinvest in our existing assets and expand our outdoor advertising display portfolio through new construction.
After complying with our REIT distribution requirements, we plan to continue to allocate our available capital among investment alternatives that meet our return on investment criteria. During 2023, we generated $783.6 million of cash from operating activities, which was used to fund capital expenditures, acquisitions, and dividends to our stockholders. 6 Table of Contents • Capital expenditures program.
Municipalities usually award new transit advertising contracts and renew expiring transit advertising contracts through an open bidding process. In bidding for new and renewal contracts, we compete against national outdoor advertising providers and local, on-premise sign providers and sign construction companies.
As of December 31, 2023, we operated approximately 47,850 transit advertising displays in 24 states and Canada. 8 Table of Contents Municipalities usually award new transit advertising contracts and renew expiring transit advertising contracts through an open bidding process.
We spent approximately $167.1 million in total capital expenditures in fiscal year 2022, of which approximately $81.1 million was spent on digital technology. We expect our 2023 capitalized expenditures to be approximately $185 million. CAPITAL ALLOCATION STRATEGY The objective of our capital allocation strategy is to simultaneously increase adjusted funds from operations and our return on invested capital.
We spent approximately $178.3 million in total capital expenditures in fiscal year 2023, of which approximately $75.5 million was spent on digital technology. We expect our 2024 capitalized expenditures to be approximately $125 million. Growing our out-of-home programmatic channel. We offer a portion of our unsold digital display inventory to advertisers via our programmatic partners.
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Through these programmatic partners, advertisers can buy advertising space across multiple channels, allowing them to complement their existing campaigns by leasing our digital out-of-home offerings. While the programmatic out-of-home channel is relatively new and a small portion of our existing business, we believe it represents a growth area for our industry and our business.
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In marketing transit advertising displays to advertisers, we compete with other forms of out-of-home advertising and other media. When selecting the media and provider through which to advertise, advertisers consider a number of factors and advertising providers which are described in the section titled — “Competition” below.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company may have available net operating loss (“NOL”) carry forwards that could reduce or substantially eliminate its REIT taxable income, and thus it may not be required to distribute material amounts of cash to qualify for taxation as a REIT.
Biggest changeThe Company may have available net operating loss (“NOL”) carry forwards that could reduce or substantially eliminate its REIT taxable income, and thus it may not be required to distribute material amounts of cash to qualify for taxation as a REIT. The Company expects that it may utilize available NOL carry forwards to reduce its REIT taxable income.
Lamar Advertising structured the Operating Partnership to be classified as a partnership for federal income tax purposes. However, no assurance can be given the IRS will not challenge Lamar Advertising’s position or will classify the Operating Partnership as a “publicly traded partnership” for federal income tax purposes.
Lamar Advertising structured the Operating Partnership to be classified as a partnership for federal income tax purposes. However, no assurance can be given the IRS will not challenge Lamar Advertising’s position or will not classify the Operating Partnership as a “publicly traded partnership” for federal income tax purposes.
The future success of our acquisition strategy could be adversely affected by many factors, including the following: • the pool of suitable acquisition candidates is dwindling, and we may have a more difficult time negotiating acquisitions on favorable terms; • we may face increased competition for acquisition candidates from other outdoor advertising companies and private equity funds (particularly funds that are focused on investing in media and/or infastruc, some of which may have greater financial resources than we do, which may result in higher prices for those businesses and assets; • we may not have access to the capital needed to finance potential acquisitions and may be unable to obtain any required consents from our current lenders to obtain alternate financing; • compliance with REIT requirements may hinder our ability to make certain investments and may limit our acquisition opportunities; • we may be unable to integrate acquired businesses and assets effectively with our existing operations and systems as a result of unforeseen difficulties that could divert significant time, attention and effort from management that could otherwise be directed at developing existing business; • we may be unable to retain key personnel of acquired businesses; • we may not realize the benefits and cost savings anticipated in our acquisitions; and • as the industry consolidates further, larger mergers and acquisitions may face substantial scrutiny under antitrust laws.
The future success of our acquisition strategy could be adversely affected by many factors, including the following: • the pool of suitable acquisition candidates is dwindling, and we may have a more difficult time negotiating acquisitions on favorable terms; • we may face increased competition for acquisition candidates from other outdoor advertising companies and private equity funds (particularly funds that are focused on investing in media and/or infrastructure, some of which may have greater financial resources than we do, which may result in higher prices for those businesses and assets; • we may not have access to the capital needed to finance potential acquisitions and may be unable to obtain any required consents from our current lenders to obtain alternate financing; • compliance with REIT requirements may hinder our ability to make certain investments and may limit our acquisition opportunities; • we may be unable to integrate acquired businesses and assets effectively with our existing operations and systems as a result of unforeseen difficulties that could divert significant time, attention and effort from management that could otherwise be directed at developing existing business; • we may be unable to retain key personnel of acquired businesses; • we may not realize the benefits and cost savings anticipated in our acquisitions; and • as the industry consolidates further, larger mergers and acquisitions may face substantial scrutiny under antitrust laws.
These obstacles to our opportunistic acquisition strategy may have an adverse effect on our future financial results. The Company could suffer losses due to asset impairment charges for goodwill and other intangible assets. The Company tested goodwill for impairment on December 31, 2022. Based on the Company’s review at December 31, 2022, no impairment charge was required.
These obstacles to our opportunistic acquisition strategy may have an adverse effect on our future financial results. The Company could suffer losses due to asset impairment charges for goodwill and other intangible assets. The Company tested goodwill for impairment on December 31, 2023. Based on the Company’s review at December 31, 2023, no impairment charge was required.
At December 31, 2022, the terms of Lamar Media’s senior credit facility and of its Accounts Receivable Securitization Program also restrict the Company from exceeding a specified secured debt ratio. Lamar Media is also subject to certain other financial covenants relating to the incurrence of additional debt.
At December 31, 2023, the terms of Lamar Media’s senior credit facility and of its Accounts Receivable Securitization Program also restrict the Company from exceeding a specified secured debt ratio. Lamar Media is also subject to certain other financial covenants relating to the incurrence of additional debt.
Depending on the contract, the logo provider may or may not be entitled to compensation for the structures at the end of the contract term. Of the Company’s 24 logo sign contracts in place at December 31, 2022, 4 are subject to renewal or expiration in 2023. The Company may be unable to renew its expiring contracts.
Depending on the contract, the logo provider may or may not be entitled to compensation for the structures at the end of the contract term. Of the Company’s 24 logo sign contracts in place at December 31, 2023, 4 are subject to renewal or expiration in 2024. The Company may be unable to renew its expiring contracts.
The Company is controlled by significant stockholders who have the power to determine the outcome of all matters submitted to the stockholders for approval and whose interest in the Company may be different than yours. As of December 31, 2022, members of the Reilly family, including Kevin P.
The Company is controlled by significant stockholders who have the power to determine the outcome of all matters submitted to the stockholders for approval and whose interest in the Company may be different than yours. As of December 31, 2023, members of the Reilly family, including Kevin P.
Any such charge could have a material adverse effect on the Company’s net earnings. 17 Table of Contents The Company’s logo sign contracts are subject to state award and renewal. In 2022, the Company generated approximately 4% of its revenues from state-awarded logo sign contracts.
Any such charge could have a material adverse effect on the Company’s net earnings. 17 Table of Contents The Company’s logo sign contracts are subject to state award and renewal. In 2023, the Company generated approximately 4% of its revenues from state-awarded logo sign contracts.
However, REITs are excluded from the definition of an “applicable corporation” and therefore are not subject to the corporate alternative minimum tax. Additionally, the 1% excise tax specifically does not apply to stock repurchases by REITs. Any taxable REIT subsidiaries of Lamar Advertising operate as standalone corporations and therefore could be adversely affected by the IRA.
However, REITs are excluded from the definition of an “applicable 23 Table of Contents corporation” and therefore are not subject to the corporate alternative minimum tax. Additionally, the 1% excise tax specifically does not apply to stock repurchases by REITs. Any taxable REIT subsidiaries of Lamar Advertising operate as standalone corporations and therefore could be adversely affected by the IRA.
The individual and collective impact of the changes made by the TCJA, the CARES Act and the IRA on REITs and their security holders are uncertain and may not become evident for some period of time.
The individual and collective impact of the changes made by the TCJA, the CARES Act and the IRA on REITs and their security holders is uncertain and may not become evident for some period of time.
In addition, Section 203 of the DGCL generally limits the Company’s ability to engage in any business combination with certain persons who own 15% or more of its outstanding voting stock or any of its associates or affiliates who at any time in the past three years have owned 15% or more of its outstanding voting stock. 18 Table of Contents These provisions may have the effect of entrenching the Company’s management team and may deprive the Company’s stockholders of the opportunity to sell their shares to potential acquirers at a premium over prevailing prices.
In addition, Section 203 of the Delaware General Corporation Law generally limits the Company’s ability to engage in any business combination with certain persons who own 15% or more of its outstanding voting stock or any of its associates or affiliates who at any time in the past three years have owned 15% or more of its outstanding voting stock. 18 Table of Contents These provisions may have the effect of entrenching the Company’s management team and may deprive the Company’s stockholders of the opportunity to sell their shares to potential acquirers at a premium over prevailing prices.
If the Company ceases to be a REIT, it will be subject to U.S. federal income tax at regular corporate rates and applicable state and local corporate taxes, which may have adverse consequences on its total return to its stockholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 24 Table of Contents
If the Company ceases to be a REIT, it will be subject to U.S. federal income tax at regular corporate rates and applicable state and local corporate taxes, which may have adverse consequences on its total return to its stockholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Thus, compliance with these tests will require Lamar Advertising and its subsidiaries to refrain from certain activities and may hinder their ability to make certain attractive investments, including investments in the businesses to be conducted by TRSs, and to that extent limit their opportunities.
Thus, compliance with these tests will require Lamar Advertising and its subsidiaries to refrain from certain activities and may hinder their ability to make certain attractive investments, including investments in the businesses to be conducted by TRSs, and to that extent limit their 22 Table of Contents opportunities.
The CARES Act repealed such 80% limitation for carryforwards to taxable years beginning before 23 Table of Contents January 1, 2021. The CARES Act also allows a five-year carryback for NOLs arising in 2018, 2019, or 2020.
The CARES Act repealed such 80% limitation for carryforwards to taxable years beginning before January 1, 2021. The CARES Act also allows a five-year carryback for NOLs arising in 2018, 2019, or 2020.
These actions may reduce its income and amounts available for distribution to its stockholders. 22 Table of Contents Complying with REIT requirements may cause Lamar Advertising, its subsidiaries (other than TRSs) to forego otherwise attractive opportunities.
These actions may reduce its income and amounts available for distribution to its stockholders. Complying with REIT requirements may cause Lamar Advertising, its subsidiaries (other than TRSs) to forego otherwise attractive opportunities.
In addition, if we are unable to successfully integrate any completed acquisitions, our financial performance would also be adversely affected. The Company has historically grown through acquisitions. During the year ended December 31, 2022, we completed acquisitions for a total cash purchase price of approximately $479.8 million.
In addition, if we are unable to successfully integrate any completed acquisitions, our financial performance would also be adversely affected. The Company has historically grown through acquisitions. During the year ended December 31, 2023, we completed acquisitions for a total cash purchase price of approximately $139.0 million.
Despite the level of debt presently outstanding, the terms of the indentures governing Lamar Media’s notes and the terms of the senior credit facility and Accounts Receivable Securitization Program allow Lamar Media to incur substantially more debt, including approximately $694.0 million available for borrowing under the revolving credit facility as of December 31, 2022.
Despite the level of debt presently outstanding, the terms of the indentures governing Lamar Media’s notes and the terms of the senior credit facility and Accounts Receivable Securitization Program allow Lamar Media to incur substantially more debt, including approximately $671.2 million available for borrowing under the revolving credit facility as of December 31, 2023.
The Company may also lose the bidding on new contracts. If the Company’s contingency plans relating to hurricanes and other natural disasters fail, the resulting losses could hurt the Company’s business. The Company has determined that it is uneconomical to insure against losses resulting from hurricanes and other natural disasters.
The Company may also lose the bidding on new contracts. If the Company’s contingency plans relating to hurricanes and other natural disasters fail, the resulting losses could hurt the Company’s business. The Company has determined that it is uneconomical to insure against losses resulting from hurricanes and other natural disasters for its outdoor or logo structure assets.
At December 31, 2022, Lamar Advertising Company’s wholly owned subsidiary, Lamar Media, had approximately $3.31 billion of total debt outstanding, net of deferred financing costs, consisting of approximately $985.8 million in bank debt outstanding under Lamar Media’s senior credit facility, $2.08 billion in various series of senior notes, $249.4 million under the Accounts Receivable Securitization Program and $2.0 million in other seller notes.
At December 31, 2023, Lamar Advertising Company’s wholly owned subsidiary, Lamar Media, had approximately $3.34 billion of total debt outstanding, net of deferred financing costs, consisting of approximately $1.01 billion in bank debt outstanding under Lamar Media’s senior credit facility, $2.08 billion in various series of senior notes, $249.6 million under the Accounts Receivable Securitization Program and $1.6 million in other seller notes.
In the event of such a default under the senior credit facility, the lenders under the senior credit facility could accelerate all of the debt outstanding, could elect to institute foreclosure proceedings against Lamar Media’s assets, and it could be forced into bankruptcy or liquidation. Any of these events could adversely affect Lamar Media’s business, financial condition and financial results.
In the event of such a default under the senior credit facility, the lenders under the senior credit facility could accelerate all of the debt outstanding, could elect to institute foreclosure proceedings against Lamar Media’s assets, and the Company could be forced into bankruptcy or liquidation.
Removed
The Company expects that, for the foreseeable future, it may utilize available NOL carry forwards to reduce its REIT taxable income.
Added
Any of these events could adversely affect Lamar Media’s business, financial condition and financial results.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own approximately 10,500 parcels of property beneath our outdoor advertising structures. As of December 31, 2022, we leased approximately 72,500 active outdoor sites, accounting for a total annual lease expense of approximately $319.3 million. This amount represented approximately 18% of billboard advertising net revenues for the year ended December 31, 2022.
Biggest changeWe own approximately 10,750 parcels of property beneath our outdoor advertising structures. As of December 31, 2023, we leased approximately 72,350 active outdoor sites, accounting for a total annual lease expense of approximately $335.4 million. This amount represented approximately 18% of billboard advertising net revenues for the year ended December 31, 2023.
ITEM 2. PROPERTIES Our management headquarters is located in Baton Rouge, Louisiana. We also own 128 local operating facilities with front office administration and sales office space connected to back-shop poster and bulletin production space. In addition, the Company leases an additional 149 operating facilities at an aggregate lease expense for 2022 of approximately $9.2 million.
ITEM 2. PROPERTIES Our management headquarters is located in Baton Rouge, Louisiana. We also own 128 local operating facilities with front office administration and sales office space connected to back-shop poster and bulletin production space. In addition, the Company leases an additional 160 operating facilities at an aggregate lease expense for 2023 of approximately $10.1 million.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities 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. On September 20, 2021, the Board of Directors authorized the extension of the repurchase program through March 31, 2023. There were no repurchases under the program as of December 31, 2022.
Biggest changeIssuer Purchases of Equity Securities 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. On February 23, 2023, the Company’s Board of Directors authorized the extension of the repurchase program through September 30, 2024.
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Class A common stock has been publicly traded since August 2, 1996 and is currently listed on the NASDAQ Global Select Market under the symbol “LAMR.” As of December 31, 2022, the Class A common stock was held by 86 stockholders of record.
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Class A common stock has been publicly traded since August 2, 1996 and is currently listed on the NASDAQ Global Select Market under the symbol “LAMR.” As of December 31, 2023, the Class A common stock was held by 84 stockholders of record.
On February 23, 2023, the Company’s Board of Directors authorized the renewal of the repurchase program through September 30, 2024. 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. ITEM 6. [RESERVED]
There were no repurchases under the program as of December 31, 2023. 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. ITEM 6. [RESERVED]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations 26 Lamar Advertising Company 27 Overview 27 Non-GAAP Financial Measures 27 Results of Operations: Years Ended December 31, 202 2 and 20 2 1 29 Liquidity and Capital Resources 31 Critical Accounting Estimates 38 Accounting Standards and Regulatory Update 39 Lamar Media 39 Results of Operations: Years Ended December 31, 2022 and 2021 39 ITEM 7A.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations 26 Lamar Advertising Company 26 Overview 27 Non-GAAP Financial Measures 27 Results of Operations: Years Ended December 31, 202 3 and 20 2 2 28 Liquidity and Capital Resources 31 Critical Accounting Estimates 38 Accounting Standards and Regulatory Update 39 Lamar Media 39 Results of Operations: Years Ended December 31, 2023 and 2022 39 ITEM 7A.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeReconciliations of 2021 reported net revenue to 2021 acquisition-adjusted net revenue for the year ended December 31, 2021 as well as a comparison of 2021 acquisition-adjusted net revenue to 2022 reported net revenue for the year ended December 31, 2022, are provided below: Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue Year ended December 31, 2022 2021 (in thousands) Reported net revenue $ 2,032,140 $ 1,787,401 Acquisition net revenue — 64,114 Adjusted totals $ 2,032,140 $ 1,851,515 Key Performance Indicators Net Income/Adjusted EBITDA (in thousands) Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease) 2022 2021 Net income $ 438,647 $ 388,090 $ 50,557 13.0 % Income tax expense 17,452 9,256 8,196 Loss on extinguishment of debt — 21,604 (21,604) Transaction expenses 3,769 — 3,769 Interest expense (income), net 126,217 105,621 20,596 Equity in earnings of investee (4,315) (3,384) (931) Gain on disposition of assets (15,721) (2,115) (13,606) Depreciation and amortization 349,449 271,294 78,155 Capitalized contract fulfillment costs, net (555) (445) (110) Stock-based compensation expense 23,136 37,368 (14,232) Adjusted EBITDA $ 938,079 $ 827,289 $ 110,790 13.4 % 30 Table of Contents Adjusted EBITDA for the year ended December 31, 2022 increased 13.4% to $938.1 million.
Biggest changeReconciliations: Because acquisitions occurring after December 31, 2021 have contributed to our net revenue results for the periods presented, we provide 2022 acquisition-adjusted net revenue, which adjusts our 2022 net revenue for the year ended December 31, 2022 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 year ended December 31, 2023. 29 Table of Contents Reconciliations of 2022 reported net revenue to 2022 acquisition-adjusted net revenue for the year ended December 31, 2022 as well as a comparison of 2022 acquisition-adjusted net revenue to 2023 reported net revenue for the year ended December 31, 2023, are provided below: Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue Year ended December 31, 2023 2022 (in thousands) Reported net revenue $ 2,110,987 $ 2,032,140 Acquisition net revenue — 35,428 Adjusted totals $ 2,110,987 $ 2,067,568 Key Performance Indicators Net Income/Adjusted EBITDA (in thousands) Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease) 2023 2022 Net income $ 496,836 $ 438,647 $ 58,189 13.3 % Income tax expense 9,782 17,452 (7,670) Loss on extinguishment of debt 115 — 115 Transaction expenses — 3,769 (3,769) Interest expense (income), net 172,397 126,217 46,180 Equity in earnings of investee (3,696) (4,315) 619 Gain on disposition of assets (5,474) (15,721) 10,247 Depreciation and amortization 293,423 349,449 (56,026) Capitalized contract fulfillment costs, net (308) (555) 247 Stock-based compensation expense 22,649 23,136 (487) Adjusted EBITDA $ 985,724 $ 938,079 $ 47,645 5.1 % Adjusted EBITDA for the year ended December 31, 2023 increased 5.1% to $985.7 million.
The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017. On July 2, 2021, Lamar Media entered into Amendment No. 1 (the "Amendment"), to the Fourth Amended and Restated Credit Agreement.
The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended (the "Third Amended and Restated Credit Agreement"). On July 2, 2021, Lamar Media entered into Amendment No. 1 (the "Amendment"), to the Fourth Amended and Restated Credit Agreement.
Restrictions under Senior Credit Facility. Lamar Media is required to comply with certain covenants and restrictions under the senior credit facility.
Lamar Media is required to comply with certain covenants and restrictions under the senior credit facility.
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 36 Table of Contents fund distributions using cash generated through its TRSs, the impact of general economic conditions on the Company's operations and other factors that the Board of Directors may deem relevant.
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 36 Table of Contents 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 TRSs, the impact of general economic conditions on the Company's operations and other factors that the Board of Directors may deem relevant.
The gain on disposition of assets for the year ended December 31, 2022 primarily resulted from a gain of $12.6 million from a contingent payment received in connection with the Company's 2018 sale of Puerto Rico assets.
The gain on disposition of assets for the year ended December 31, 2022 primarily resulted from a gain of $12.6 million from a contingent payment received in connection with the Company's 2018 sale of Puerto Rico assets.
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.
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 agreements governing the Accounts Receivable Securitization Program contain customary representations and warranties, affirmative and negative covenants, and termination 35 Table of Contents 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 the senior credit facility.
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 the senior credit facility.
Reconciliations: Because acquisitions occurring after December 31, 2020 have contributed to our net revenue results for the periods presented, we provide 2021 acquisition-adjusted net revenue, which adjusts our 2021 net revenue for the year ended December 31, 2021 by adding to or subtracting from it the net revenue generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2022.
Reconciliations: Because acquisitions occurring after December 31, 2021 have contributed to our net revenue results for the periods presented, we provide 2022 acquisition-adjusted net revenue, which adjusts our 2022 net revenue for the year ended December 31, 2022 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 year ended December 31, 2023.
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 34 Table of Contents 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 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.
We expect to generate cash flows from operations during 2023 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. Accounts Receivable Securitization Program. On June 24, 2022, Lamar Media and the Special Purpose Subsidiaries entered into the Sixth Amendment (the "Sixth Amendment") to the Accounts Receivable Securitization Program, as amended.
We expect to generate cash flows from operations during 2024 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. Accounts Receivable Securitization Program. On June 24, 2022, Lamar Media and the Special Purpose Subsidiaries entered into the Sixth Amendment (the "Sixth Amendment") to the Accounts Receivable Securitization Program, as amended.
In calculating the liability, the Company calculates the present value of the estimated cost to dismantle using an average cost to dismantle, adjusted for inflation and market risk. This calculation includes 100% of the Company’s billboard structures on leased land (which currently consist of approximately 72,500 structures).
In calculating the liability, the Company calculates the present value of the estimated cost to dismantle using an average cost to dismantle, adjusted for inflation and market risk. This calculation includes 100% of the Company’s billboard structures on leased land (which currently consist of approximately 72,350 structures).
In addition to debt incurred under the provisions described in the preceding paragraph, the indentures relating to Lamar Media’s outstanding notes permit Lamar Media to incur indebtedness pursuant to the following baskets: • up to $2.0 billion of indebtedness under the senior credit facility; • indebtedness outstanding on the date of the indentures or debt incurred to refinance outstanding debt; • inter-company debt between Lamar Media and its restricted subsidiaries or between restricted subsidiaries; • certain purchase money indebtedness and capitalized lease obligations to acquire or lease property in the ordinary course of business that cannot exceed the greater of $50.0 million or 5% of Lamar Media’s net tangible assets; • additional debt not to exceed $75.0 million; and • up to $500.0 million of permitted securitization financings.
In addition to debt incurred under the provisions described in the preceding paragraph, the indentures relating to Lamar Media’s outstanding notes permit Lamar Media to incur indebtedness pursuant to the following baskets: • up to $2.0 billion of indebtedness under the senior credit facility; • indebtedness outstanding on the date of the indentures or debt incurred to refinance outstanding debt; • inter-company debt between Lamar Media and its restricted subsidiaries or between restricted subsidiaries; • certain purchase money indebtedness and capitalized lease obligations to acquire or lease property in the ordinary course of business that cannot exceed the greater of $50.0 million or 5% of Lamar Media’s net tangible assets; • additional debt not to exceed $75.0 million; and • up to $500.0 million of permitted securitization financings. 34 Table of Contents Restrictions under Senior Credit Facility.
The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the years ended December 31, 2022 and 2021. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes.
The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the years ended December 31, 2023 and 2022. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes.
(2) Interest rates on our variable rate instruments assume rates at the December 2022 levels. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" for further discussion on interest rate risk. Required Annual Distributions.
(2) Interest rates on our variable rate instruments assume rates at the December 2023 levels. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" for further discussion on interest rate risk. Required Annual Distributions.
Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million 32 Table of Contents through the Sales Agents as either agents or principals.
Under the terms of the 2021 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals.
At December 31, 2022 we were, and currently, we are in compliance with all such tests under the senior credit facility.
At December 31, 2023 we were, and currently, we are in compliance with all such tests under the senior credit facility.
The covenants, events of default and other terms of the senior credit facility apply to the Term A loans. Lamar Media borrowed all $350.0 million in Term A loans 33 Table of Contents on July 29, 2022.
The covenants, events of default and other terms of the senior credit facility apply to the Term A loans. Lamar Media borrowed all $350.0 million in Term A loans on July 29, 2022.
When determining the fair value of intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future cash flows. Lease Liabilities and Right of Use Assets.
When determining the fair value of intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future cash flows. 38 Table of Contents Lease Liabilities and Right of Use Assets.
Lamar Media recorded income tax expense of $17.5 million for the year ended December 31, 2022 as compared to an income tax expense of $9.3 million for the same period in 2021. The $17.5 million tax expense includes an expense of $15.2 million for the reduction of Puerto Rico deferred tax assets for the year ended December 31, 2022.
Lamar Media recorded income tax expense of $9.8 million for the year ended December 31, 2023 as compared to income tax expense of $17.5 million for the same period in 2022. The $17.5 million tax expense for the year ended December 31, 2022 includes an expense of $15.2 million for the reduction of Puerto Rico deferred tax assets.
This discussion should be read in conjunction with the consolidated financial statements of the Company and the related notes. Discussion of our results of operations for the years ended December 31, 2021 and 2020 can be found in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.
This discussion should be read in conjunction with the consolidated financial statements of the Company and the related notes. 26 Table of Contents Discussion of our results of operations for the years ended December 31, 2022 and 2021 can be found in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $153.8 million, and was partially offset by an increase in general and administrative and corporate expenses of $43.1 million, excluding the impact of stock-based compensation expense and transaction expenses.
The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $49.6 million, and was partially offset by an increase in general and administrative and corporate expenses of $1.9 million, excluding the impact of stock-based compensation expense and transaction expenses.
The increase in cash provided by operating activities for the year ended December 31, 2022 over the same period in 2021 relates to an increase in revenues offset by an increase in operating expenses (excluding depreciation and amortization).
The increase in cash provided by operating activities for the year ended December 31, 2023 over the same period in 2022 relates to an increase in revenues, offset by an increase in operating expenses (excluding depreciation and amortization) and an increase in interest expense.
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).
Term SOFR revolving loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% (or the Adjusted Term SOFR Rate plus 1.25% at any time the Total Debt Ratio is less than or equal to 3.25 to 1).
The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on February 6, 2025 (the “revolving credit facility”), (ii) a $600.0 million Term B loan facility (the “Term B loans”) which will mature on February 6, 2027, and (iii) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions, including lender approval.
The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on July 31, 2028, subject to certain conditions (see description of Amendment No. 4 below) (the “revolving credit facility”), (ii) a $600.0 million senior secured Term B loan facility (the “Term B loans”) which will mature on February 6, 2027, (iii) a $350.0 million senior secured Term A loan facility (the "Term A loans") which will mature on February 6, 2025, and (iv) 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.
Uses of Cash Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $167.1 million for the year ended December 31, 2022. Our capital expenditures are categorized as growth or maintenance as described below. • Growth capital expenditures include discretionary capital expenditures incurred primarily for the expansion or development of new advertising markets and construction of new advertising sites.
Uses of Cash Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $178.3 million for the year ended December 31, 2023. Our capital expenditures are categorized as growth or maintenance as described below. • Growth capital expenditures include discretionary capital expenditures incurred primarily for the expansion or development of new advertising markets and construction of new advertising sites.
On July 29, 2022, Lamar Media entered into Amendment No. 2 (the "Amendment No. 2") to 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.
On July 29, 2022, Lamar Media entered into Amendment No. 2 ("Amendment No. 2") to 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. Amendment No. 2 established the Term A loans as a new class of incremental term loans.
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). On February 23, 2023, the Company’s Board of Directors approved a dividend of $1.25 per common share to be paid on March 31, 2023.
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). On February 22, 2024, the Company’s Board of Directors approved a dividend of $1.30 per common share to be paid on March 28, 2024.
The working capital deficit for the year ended December 31, 2022 is primarily related to the $249.4 million outstanding under the Accounts Receivable Securitization Program as well as $205.8 million in current operating lease liabilities which has a corresponding right of use asset recorded in long term assets.
The working capital deficit for the year ended December 31, 2023 is primarily related to the $249.6 million outstanding under the Accounts Receivable Securitization Program as well as $210.6 million in current operating lease liabilities which has a corresponding right of use asset recorded in long term assets.
We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others. Asset Retirement Obligations. The Company had an asset retirement obligation of $390.4 million as of December 31, 2022.
We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others. Asset Retirement Obligations. The Company had an asset retirement obligation of $398.0 million as of December 31, 2023.
For the year ended December 31, 2022, the Company recognized a gain on disposition of assets of $15.7 million as compared to a gain on disposition of assets of $2.1 million for the same period in 2021.
For the year ended December 31, 2023, the Company recognized a gain on disposition of assets of $5.5 million as compared to a gain on disposition of assets of $15.7 million for the same period in 2022.
We expect to have enough cash on hand and availability under our revolving credit facility to meet our operating needs for the next twelve months. Cash Generated by Operations. For the years ended December 31, 2022 and 2021 our cash provided by operating activities was $781.6 million and $734.4 million, respectively.
We expect to have enough cash on hand and availability under our revolving credit facility to meet our operating needs for the next twelve months. 31 Table of Contents Cash Generated by Operations. For the years ended December 31, 2023 and 2022 our cash provided by operating activities was $783.6 million and $781.6 million, respectively.
The $17.5 million equates to an effective tax rate for the year ended December 31, 2022 of approximately 3.8%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
The $9.8 million equates to an effective tax rate for the year ended December 31, 2023 of approximately 1.9%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
The $17.5 million equates to an effective tax rate for the year ended December 31, 2022 of approximately 3.8%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
The $9.8 million equates to an effective tax rate for the year ended December 31, 2023 of approximately 1.9%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As of December 31, 2022, there was $250.0 million of outstanding aggregate borrowings under the Accounts Receivable Securitization Program at a borrowing rate of approximately 5.3%. Lamar Media has no additional availability under the Accounts Receivable Securitization Program as of December 31, 2022. The Accounts Receivable Securitization Program will mature on July 21, 2025. “At-the-Market” Offering Program.
As of December 31, 2023, there was $250.0 million of outstanding aggregate borrowings under the Accounts Receivable Securitization Program at a borrowing rate of approximately 6.4%. Lamar Media had no additional availability under the Accounts Receivable Securitization Program as of December 31, 2023. The Accounts Receivable Securitization Program will mature on July 21, 2025. “At-the-Market” Offering Program.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $123.7 million, or 12.4% to $1.12 billion for the year ended December 31, 2022 from $996.2 million in the same period in 2021.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $27.2 million, or 2.4% to $1.15 billion for the year ended December 31, 2023 from $1.12 billion in the same period in 2022.
See “ Reconciliations ” below. Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $123.4 million, or 12.4% to $1.12 billion for the year ended December 31, 2022 from $997.0 million in the same period in 2021.
See “ Reconciliations ” below. Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $27.2 million, or 2.4% to $1.15 billion for the year ended December 31, 2023 from $1.12 billion in the same period in 2022.
As a result of the above factors, Lamar Media recognized net income for the year ended December 31, 2022 of $439.1 million, as compared to net income of $388.9 million for the same period in 2021.
As a result of the above factors, Lamar Media recognized net income for the year ended December 31, 2023 of $497.3 million, as compared to net income of $439.1 million for the same period in 2022.
The Company recorded income tax expense of $17.5 million for the year ended December 31, 2022 as compared to income tax expense of $9.3 million for the same period in 2021.The $17.5 million tax expense includes an expense of $6.6 million for the reduction of Puerto Rico deferred tax assets for the year ended December 31, 2022.
The Company recorded income tax expense of $9.8 million for the year ended December 31, 2023 as compared to income tax expense of $17.5 million for the same period in 2022. The $17.5 million tax expense for the year ended December 31, 2022 includes an expense of $15.2 million for the reduction of Puerto Rico deferred tax assets.
As a result of the above factors, the Company recognized net income for the year ended December 31, 2022 of $438.6 million, as compared to net income of $388.1 million for the same period in 2021.
As a result of the above factors, the Company recognized net income for the year ended December 31, 2023 of $496.8 million, as compared to net income of $438.6 million for the same period in 2022.
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) transaction expenses; (ix) non-recurring infrequent or unusual losses (gains); (x) less maintenance capital expenditures; and (xi) an adjustment for unconsolidated affiliates and non-controlling interest.
FFO is defined as net income before (gain) loss from the sale or disposal of real estate assets and investments, net of tax, and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest. 27 Table of Contents 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) transaction expenses; (ix) non-recurring infrequent or unusual losses (gains); (x) less maintenance capital expenditures; and (xi) an adjustment for unconsolidated affiliates and non-controlling interest.
During the year ended December 31, 2022, the Company completed multiple acquisitions for a total cash purchase price of approximately $479.8 million. See “ Uses of Cash-Acquisitions ,” for more information.
During the year ended December 31, 2023, the Company completed multiple acquisitions for a total cash purchase price of approximately $139.0 million. See “ Uses of Cash-Acquisitions ,” for more information.
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.
The revolving credit facility bears interest at rates based on Term SOFR ("Term SOFR revolving loans") or the Adjusted Base Rate (“Base Rate revolving loans”), at Lamar Media’s option.
As of December 31, 2022 we had $746.6 million of total liquidity, which is comprised of $52.6 million in cash and cash equivalents and $694.0 million of availability under the revolving portion of the senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months.
As of December 31, 2023 we had $715.8 million of total liquidity, which is comprised of $44.6 million in cash and cash equivalents and $671.2 million of availability under the revolving portion of the senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months.
As of December 31, 2022, the aggregate balance outstanding under the senior credit facility was $995.0 million, consisting of $600.0 million in Term B loans aggregate principal balance, $350.0 million in Term A loans aggregate principal balance and $45.0 million outstanding borrowings under our revolving credit facility.
As of December 31, 2023, the aggregate balance outstanding under the senior credit facility was $1.02 billion, consisting of $600.0 million in Term B loans aggregate principal balance, $350.0 million in Term A loans aggregate principal balance and $70.0 million outstanding borrowings under our revolving credit facility.
The Company’s cash flows used in financing activities were $209.3 million for the year ended December 31, 2022 as compared to $294.5 million in 2021.
The Company’s cash flows used in financing activities were $481.6 million for the year ended December 31, 2023 as compared to $209.3 million in 2022.
RESULTS OF OPERATIONS The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Net revenues 100.0 % 100.0 % Operating expenses: Direct advertising expenses 32.8 % 32.3 % General and administrative expenses 17.3 % 18.3 % Corporate expenses 5.0 % 5.2 % Depreciation and amortization 17.2 % 15.2 % Operating income 28.5 % 29.2 % Loss on extinguishment of debt — % 1.2 % Interest expense 6.3 % 6.0 % Income tax expense 0.9 % 0.5 % Net income 21.6 % 21.8 % Year ended December 31, 2022 compared to Year ended December 31, 2021 Net revenues increased $244.7 million or 13.7% to $2.03 billion for the year ended December 31, 2022 from $1.79 billion for the same period in 2021.
RESULTS OF OPERATIONS The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net revenues 100.0 % 100.0 % Operating expenses: Direct advertising expenses 33.0 % 32.8 % General and administrative expenses 16.3 % 17.3 % Corporate expenses 5.0 % 5.0 % Depreciation and amortization 13.9 % 17.2 % Operating income 32.0 % 28.5 % Interest expense 8.3 % 6.3 % Income tax expense 0.5 % 0.9 % Net income 23.6 % 21.6 % Year ended December 31, 2023 compared to Year ended December 31, 2022 Net revenues increased $78.8 million or 3.9% to $2.11 billion for the year ended December 31, 2023 from $2.03 billion for the same period in 2022.
Under the senior credit facility, "net income" means for any period, the consolidated net income (or loss) of Lamar Advertising, Lamar Media, and its restricted subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that the following is excluded from net income: (a) the income (or deficit) of any person accrued prior to the date it becomes a restricted subsidiary or is merged into or consolidated with Lamar Advertising, Lamar Media or any of its restricted subsidiaries, and (b) the income (or deficit) of any person (other than any of our restricted subsidiaries) in which Lamar Advertising, Lamar Media or any of its subsidiaries has an ownership interest, except to the extent that any such income is received by Lamar Advertising, Lamar Media or any of its restricted subsidiaries in the form of dividends or similar distributions.
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. 35 Table of Contents Under the senior credit facility, "net income" means for any period, the consolidated net income (or loss) of Lamar Advertising, Lamar Media, and its restricted subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that the following is excluded from net income: (a) the income (or deficit) of any person accrued prior to the date it becomes a restricted subsidiary or is merged into or consolidated with Lamar Advertising, Lamar Media or any of its restricted subsidiaries, and (b) the income (or deficit) of any person (other than any of our restricted subsidiaries) in which Lamar Advertising, Lamar Media or any of its subsidiaries has an ownership interest, except to the extent that any such income is received by Lamar Advertising, Lamar Media or any of its restricted subsidiaries in the form of dividends or similar distributions.
The Company did not issue any shares under this program from its inception through December 31, 2022. Shelf Registration Statement . On June 21, 2021, the Company filed a new automatically effective shelf registration statement (No. 333-257243) that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its Class A common stock.
On June 21, 2021, the Company filed a new automatically effective shelf registration statement (No. 333-257243) that allows Lamar Advertising to offer and sell an indeterminate amount of additional shares of its 32 Table of Contents Class A common stock. During the year ended December 31, 2023, the Company did not issue any shares under the shelf registration statement.
AFFO for the year ended December 31, 2022 increased 12.3% to $749.7 million as compared to $667.7 million for the same period in 2021.
AFFO for the year ended December 31, 2023 increased 1.7% to $762.3 million as compared to $749.7 million for the same period in 2022.
As of December 31, 2022, Lamar Media has outstanding all of the 3 3/4% Senior Notes, the 4% Senior Notes, the 4 7/8% Senior Notes and the 3 5/8% Senior Notes.
Restrictions under Debt Securities. As of December 31, 2023, Lamar Media has outstanding all of the 3 3/4% Senior Notes, the 4% Senior Notes, the 4 7/8% Senior Notes and the 3 5/8% Senior Notes.
The increase in interest expense is primarily related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility. Equity in earnings of investee was $4.3 million and $3.4 million for the years ended December 31, 2022 and 2021, respectively, as a result of an investment that occurred in July of 2021.
The increase in interest expense is related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility. Equity in earnings of investee was $3.7 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively.
The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue 41 Table of Contents less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net), offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses) and capital expenditures related to the maintenance of our advertising assets. 42 Table of Contents
The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue 41 Table of Contents less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) and a decrease in current tax expense of $6.8 million, partially offset by an increase in interest expense of $47.0 million and an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses). 42 Table of Contents
The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net), partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses) and capital expenditures related to the maintenance of our advertising assets.
The increase in AFFO was primarily attributable to the increase in our gross margin (net revenue less direct advertising expense, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) and a decrease in current tax expense of $6.8 million, partially offset by an increase in interest expense of $47.0 million and an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense and transaction expenses).
The following table summarizes our future debt maturities, interest payment obligations, and contractual obligations including required payments under operating and financing leases as of December 31, 2022 (in millions): 2023 Thereafter Debt maturities (1) $ 249.8 $ 3,063.0 Interest obligations on long-term debt (2) 155.0 620.9 Contractual obligations, including operating and financing leases 285.9 1,624.3 Total payments due $ 690.7 $ 5,308.2 (1) Debt maturities assume there is no refinancing prior to the existing maturity date.
The following table summarizes our future debt maturities, interest payment obligations, and contractual obligations including required payments under operating and financing leases as of December 31, 2023 (in millions): 2024 Thereafter Debt maturities (1) $ 250.0 $ 3,091.1 Interest obligations on long-term debt (2) 169.8 498.8 Contractual obligations, including operating and financing leases 313.1 1,698.2 Total payments due $ 732.9 $ 5,288.1 (1) Debt maturities assume there is no refinancing prior to the existing maturity date.
We anticipate our 2023 total capital expenditures will be approximately $185 million. Acquisitions. During the year ended December 31, 2022, the Company completed 73 acquisitions for a total cash purchase price of approximately $479.8 million.
We anticipate our 2024 total capital expenditures will be approximately $125 million. Acquisitions. During the year ended December 31, 2023, the Company completed 36 acquisitions for a total cash purchase price of approximately $139.0 million.
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%.
Term B loans bearing interest at a rate based on Term SOFR bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50%. Term B loans bearing interest at a rate based on the Adjusted Base Rate bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50%.
This increase was attributable to an increase in billboard net revenues of $200.4 million, an increase in transit net revenues of $42.3 million and an increase in logo net revenues of $2.0 million over the prior year.
This increase was attributable to an increase in billboard net revenues of $63.8 million, an increase in transit net revenues of $12.8 million and an increase in logo net revenues of $2.2 million over the prior year.
This increase was attributable to an increase in billboard net revenues of $200.4 million, an increase in transit net revenues of $42.3 million and an increase in logo net revenues of $2.0 million over the prior year.
This increase was attributable to an increase in billboard net revenues of $63.8 million, an increase in transit net revenues of $12.8 million and an increase in logo net revenues of $2.2 million over the prior year.
Cash Flows The Company’s cash flows provided by operating activities increased $47.2 million from $734.4 million in 2021 to $781.6 million for the year ended December 31, 2022, primarily resulting from an increase in revenues of approximately $244.7 million offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets and depreciation and amortization) of approximately $137.6 million, as well as increases in interest expense of $21.1 million and income tax expense and $8.2 million as compared to the comparable period in 2021. 37 Table of Contents Cash flows used in investing activities increased $157.3 million from $461.8 million in 2021 to $619.1 million in 2022 primarily due to a net increase in the amount of assets acquired through acquisitions, investments and capital expenditures of $178.5 million, offset by decreases in notes receivable, as compared to the same period in 2021.
Cash Flows The Company’s cash flows provided by operating activities increased $2.0 million from $781.6 million in 2022 to $783.6 million for the year ended December 31, 2023, primarily resulting from an increase in revenues of approximately $78.8 million, offset by an increase in operating expenses (excluding stock-based compensation, gain on disposition of assets and depreciation and amortization) of approximately $27.7 million and an increase in interest expense of $47.0 million as compared to the comparable period in 2022. 37 Table of Contents Cash flows used in investing activities decreased $309.0 million from $619.1 million in 2022 to $310.1 million in 2023 primarily due to a net decrease in the amount of assets acquired through acquisitions, investments and capital expenditures of $329.6 million, as compared to the same period in 2022.
This decrease in cash used in financing activities of $85.2 million for the year ended December 31, 2022 is primarily due to increased borrowings on the senior credit facility and accounts receivable securitization program in 2022, offset by an increase in cash paid for dividends and distributions in 2022 over the comparable period in 2021.
This increase in cash used in financing activities of $272.3 million for the year ended December 31, 2023 is primarily due to no additional borrowings on the senior credit facility and a decrease in net borrowings on the accounts receivable securitization program in 2023, partially offset by an increase in net borrowings on the revolving credit facility in 2023 over the comparable period in 2022.
Net revenues for the year ended December 31, 2022, as compared to acquisition-adjusted net revenues for the comparable period in 2021, increased $180.6 million, or 9.8%. This increase was attributable to an increase of $142.5 million in billboard net revenues, an increase of $36.3 million in transit net revenues and an increase of $1.8 million in logo net revenues.
Net revenues for the year ended December 31, 2023, as compared to acquisition-adjusted net revenues for the comparable period in 2022, increased $43.4 million, or 2.1%. This increase was attributable to an increase of $28.4 million in billboard net revenues, an increase of $12.8 million in transit net revenues and an increase of $2.2 million in logo net revenues.
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.
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.
The increase in interest expense is primarily related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility. 29 Table of Contents Equity in earnings of investee was $4.3 million and $3.4 million for the years ended December 31, 2022 and 2021, respectively, as a result of an investment that occurred in July of 2021.
The increase in interest expense is related to the increase in interest rates on the Accounts Receivable Securitization Program and senior credit facility. Equity in earnings of investee was $3.7 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively.
On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right of use assets on our consolidated 38 Table of Contents balance sheet.
On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right of use assets on our consolidated balance sheet. Our operating lease liabilities (including short-term liabilities) and right of use asset balances were $1.29 billion and $1.32 billion as of December 31, 2023, respectively.
On February 23, 2023, the Company’s Board of Directors approved a dividend of $1.25 per common share to be paid on March 31, 2023. Subject to the approval of the Company’s Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2023 will be $5.00 per common share, including the dividend payable on March 31, 2023.
Subject to the approval of the Company’s Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2024 will be $5.20 per common share, including the dividend payable on March 28, 2024.
Net revenues for the year ended December 31, 2022, as compared to acquisition-adjusted net revenues for the comparable period in 2021, increased $180.6 million, or 9.8%.
Net revenues for the year ended December 31, 2023, as compared to acquisition-adjusted net revenues for the comparable period in 2022, increased $43.4 million, or 2.1%.
AFFO for the year ended December 31, 2022 increased 12.2% to $750.2 million as compared to $668.6 million for the same period in 2021.
AFFO for the year ended December 31, 2023 increased 1.7% to $762.8 million as compared to $750.2 million for the same period in 2022.
Reconciliations of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenue to net income, the most directly comparable GAAP measure, have been included herein. 28 Table of Contents RESULTS OF OPERATIONS The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Net revenues 100.0 % 100.0 % Operating expenses: Direct advertising expenses 32.8 % 32.3 % General and administrative expenses 17.3 % 18.3 % Corporate expenses 5.0 % 5.2 % Depreciation and amortization 17.2 % 15.2 % Operating income 28.4 % 29.2 % Loss on extinguishment of debt — % 1.2 % Interest expense 6.3 % 6.0 % Income tax expense 0.9 % 0.5 % Net income 21.6 % 21.7 % Year ended December 31, 2022 compared to Year ended December 31, 2021 Net revenues increased $244.7 million or 13.7% to $2.03 billion for the year ended December 31, 2022 from $1.79 billion for the same period in 2021.
RESULTS OF OPERATIONS The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net revenues 100.0 % 100.0 % Operating expenses: Direct advertising expenses 33.0 % 32.8 % General and administrative expenses 16.3 % 17.3 % Corporate expenses 5.0 % 5.0 % Depreciation and amortization 13.9 % 17.2 % Operating income 32.0 % 28.4 % Interest expense 8.3 % 6.3 % Income tax expense 0.5 % 0.9 % Net income 23.5 % 21.6 % 28 Table of Contents Year ended December 31, 2023 compared to Year ended December 31, 2022 Net revenues increased $78.8 million or 3.9% to $2.11 billion for the year ended December 31, 2023 from $2.03 billion for the same period in 2022.
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.
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 following table presents a breakdown of capitalized expenditures for the past two years: 2022 2021 (In thousands) Billboard — Traditional $ 45,415 $ 31,894 Billboard — Digital 81,145 55,285 Logos 13,151 12,926 Transit 4,734 2,514 Land and buildings 11,462 14,077 PP&E 11,171 9,394 Total capital expenditures $ 167,078 $ 126,090 We expect our 2023 capital expenditures to be approximately $185 million.
The following table presents a breakdown of capitalized expenditures for the past two years: 2023 2022 (In thousands) Billboard — Traditional $ 54,965 $ 45,415 Billboard — Digital 75,535 81,145 Logos 12,039 13,151 Transit 3,595 4,734 Land and buildings 15,494 11,462 PP&E 16,643 11,171 Total capital expenditures $ 178,271 $ 167,078 We expect our 2024 capital expenditures to be approximately $125 million.
The $180.6 million increase in net revenues is due to a $142.5 million increase in billboard net revenues, a $36.3 million increase in transit net revenues and an increase of $1.8 million in logo net revenues. See “Reconciliations” below.
The $43.4 million increase in net revenues is due to a $28.4 million increase in billboard net revenues, a $12.8 million increase in transit net revenues and an increase of $2.2 million in logo net revenues. See “Reconciliations” below.
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. 31 Table of Contents As of December 31, 2022 and 2021, the Company had a working capital deficit of $361.5 million and $274.4 million, respectively.
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.
The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payments to present value and (2) lease term.
The balance is recorded based on the present value of the remaining minimum rental payments under the leasing standard for our existing operating leases. The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payments to present value and (2) lease term.
For the year ended December 31, 2022, Lamar Media recognized a gain on disposition of assets of $15.7 million as compared to a gain on disposition of assets of $2.1 million for the same period in 2021.
The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2022. For the year ended December 31, 2023, Lamar Media recognized a gain on disposition of assets of $5.5 million as compared to a gain on disposition of assets of $15.7 million for the same period in 2022.
Net Income/FFO/AFFO (in thousands) Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease) 2022 2021 Net income $ 439,149 $ 388,908 $ 50,241 12.9 % Depreciation and amortization related to real estate 337,387 259,933 77,454 Gain from sale or disposal of real estate (15,415) (1,865) (13,550) Adjustments for unconsolidated affiliates and non-controlling interest (3,631) (2,756) (875) FFO $ 757,490 $ 644,220 $ 113,270 17.6 % Straight-line expense 3,986 2,443 1,543 Capitalized contract fulfillment costs, net (555) (445) (110) Stock-based compensation expense 23,136 37,368 (14,232) Non-cash portion of tax provision 3,212 1,574 1,638 Non-real estate related depreciation and amortization 12,062 11,361 701 Amortization of deferred financing costs 6,158 5,877 281 Loss on extinguishment of debt — 21,604 (21,604) Transaction expenses 3,769 — 3,769 Capital expenditures – maintenance (62,659) (58,196) (4,463) Adjustments for unconsolidated affiliates and non-controlling interest 3,631 2,756 875 AFFO $ 750,230 $ 668,562 $ 81,668 12.2 % FFO for the year ended December 31, 2022 was $757.5 million as compared to FFO of $644.2 million for the same period in 2021.
Net Income/FFO/AFFO (in thousands) Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease) 2023 2022 Net income $ 497,333 $ 439,149 $ 58,184 13.2 % Depreciation and amortization related to real estate 281,026 337,387 (56,361) Gain from sale or disposal of real estate, net of tax (5,201) (15,415) 10,214 Adjustments for unconsolidated affiliates and non-controlling interest (4,769) (3,631) (1,138) FFO $ 768,389 $ 757,490 $ 10,899 1.4 % Straight-line expense 4,658 3,986 672 Capitalized contract fulfillment costs, net (308) (555) 247 Stock-based compensation expense 22,649 23,136 (487) Non-cash portion of tax provision 2,384 3,212 (828) Non-real estate related depreciation and amortization 12,397 12,062 335 Amortization of deferred financing costs 6,538 6,158 380 Loss on extinguishment of debt 115 — 115 Transaction expenses — 3,769 (3,769) Capital expenditures – maintenance (58,820) (62,659) 3,839 Adjustments for unconsolidated affiliates and non-controlling interest 4,769 3,631 1,138 AFFO $ 762,771 $ 750,230 $ 12,541 1.7 % FFO for the year ended December 31, 2023 was $768.4 million as compared to FFO of $757.5 million for the same period in 2022.
Reconciliations of 2021 reported net revenue to 2021 acquisition-adjusted net revenue for the year ended December 31, 2021 as well as a comparison of 2021 acquisition-adjusted net revenue to 2022 reported net revenue for the year ended December 31, 2022, are provided below: Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue Year ended December 31, 2022 2021 (in thousands) Reported net revenue $ 2,032,140 $ 1,787,401 Acquisition net revenue — 64,114 Adjusted totals $ 2,032,140 $ 1,851,515 40 Table of Contents Key Performance Indicators Net Income/Adjusted EBITDA (in thousands) Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease) 2022 2021 Net income $ 439,149 $ 388,908 $ 50,241 12.9 % Income tax expense 17,452 9,256 8,196 Loss on extinguishment of debt — 21,604 (21,604) Transaction expenses 3,769 — 3,769 Interest expense (income), net 126,217 105,621 20,596 Equity in earnings of investee (4,315) (3,384) (931) Gain on disposition of assets (15,721) (2,115) (13,606) Depreciation and amortization 349,449 271,294 78,155 Capitalized contract fulfillment costs, net (555) (445) (110) Stock-based compensation expense 23,136 37,368 (14,232) Adjusted EBITDA $ 938,581 $ 828,107 $ 110,474 13.3 % Adjusted EBITDA for the year ended December 31, 2022 increased 13.3% to $938.6 million.
Reconciliations of 2022 reported net revenue to 2022 acquisition-adjusted net revenue for the year ended December 31, 2022 as well as a comparison of 2022 acquisition-adjusted net revenue to 2023 reported net revenue for the year ended December 31, 2023, are provided below: Reconciliation and Comparison of Reported Net Revenue to Acquisition-Adjusted Net Revenue Year ended December 31, 2023 2022 (in thousands) Reported net revenue $ 2,110,987 $ 2,032,140 Acquisition net revenue — 35,428 Adjusted totals $ 2,110,987 $ 2,067,568 40 Table of Contents Key Performance Indicators Net Income/Adjusted EBITDA (in thousands) Year Ended December 31, Amount of Increase (Decrease) Percent Increase (Decrease) 2023 2022 Net income $ 497,333 $ 439,149 $ 58,184 13.2 % Income tax expense 9,782 17,452 (7,670) Loss on extinguishment of debt 115 — 115 Transaction expenses — 3,769 (3,769) Interest expense (income), net 172,397 126,217 46,180 Equity in earnings of investee (3,696) (4,315) 619 Gain on disposition of assets (5,474) (15,721) 10,247 Depreciation and amortization 293,423 349,449 (56,026) Capitalized contract fulfillment costs, net (308) (555) 247 Stock-based compensation expense 22,649 23,136 (487) Adjusted EBITDA $ 986,221 $ 938,581 $ 47,640 5.1 % Adjusted EBITDA for the year ended December 31, 2023 increased 5.1% to $986.2 million.
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. 27 Table of Contents 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.
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.
On September 20, 2021, the Board of Directors authorized the extension of the repurchase program through March 31, 2023. There were no repurchases under the program as of December 31, 2022. On February 23, 2023, the Company’s Board of Directors authorized the renewal of the repurchase program through September 30, 2024.
On February 23, 2023, the Company’s Board of Directors authorized the extension of the repurchase program through September 30, 2024. There were no repurchases under the program as of December 31, 2023. 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.
The increase in operating income and the decrease in loss on extinguishment of debt, offset by the increase in interest expense over the comparable period in 2021, resulted in a $58.8 million increase in net income before income taxes.
The increase in operating income, partially offset by the increase in interest expense over the comparable period in 2022, resulted in a $50.5 million increase in net income before income taxes.
The increase in operating income and the decrease in loss on extinguishment of debt, offset by the increase in interest expense over the comparable period in 2021, resulted in a $58.4 million increase in net income before income taxes.
The increase in operating income, partially offset by the increase in interest expense over the comparable period in 2022, resulted in a $50.5 million increase in net income before income taxes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAssuming that the weighted average interest rate was 200 basis points higher (that is 5.1% rather than 3.1%), then the Company’s 2022 interest expense would have increased by approximately $21.2 million for the year ended December 31, 2022.
Biggest changeAssuming that the weighted average interest rate was 200 basis points higher (that is 8.4% rather than 6.4%), then the Company’s 2023 interest expense would have increased by approximately $25.2 million for the year ended December 31, 2023.
In addition, the Company has the capability under the senior credit facility to fix the interest rates applicable to its borrowings at an amount equal to Adjusted LIBO Rate or Adjusted Term SOFR Rate (as applicable), or Adjusted Base Rate plus the applicable margin for periods of up to twelve months (in certain cases with the consent of the lenders), which would allow the Company to mitigate the impact of short-term fluctuations in market interest rates.
In addition, the Company has the capability under the senior credit facility to fix the interest rates applicable to its borrowings at an amount equal to the Adjusted Term SOFR Rate (as applicable), or Adjusted Base Rate plus the applicable margin for periods of up to twelve months (in certain cases with the consent of the lenders), which would allow the Company to mitigate the impact of short-term fluctuations in market interest rates.
The information below summarizes the Company’s interest rate risk associated with its principal variable rate debt instruments outstanding at December 31, 2022, and should be read in conjunction with Note 9 of the Notes to the Company’s Consolidated Financial Statements. Lamar Media Corp. has variable rate debt outstanding under the senior credit facility and its Accounts Receivable Securitization Program.
The information below summarizes the Company’s interest rate risk associated with its principal variable rate debt instruments outstanding at December 31, 2023, and should be read in conjunction with Note 9 of the Notes to the Company’s Consolidated Financial Statements. Lamar Media Corp. has variable rate debt outstanding under the senior credit facility and its Accounts Receivable Securitization Program.
At December 31, 2022 there was approximately $1.24 billion of indebtedness outstanding under the senior credit facility and Accounts Receivable Securitization Program, or approximately 37.2% of the Company’s outstanding long-term debt (including current maturities) on that date, bearing interest at variable rates.
At December 31, 2023 there was approximately $1.27 billion of indebtedness outstanding under the senior credit facility and Accounts Receivable Securitization Program, or approximately 37.7% of the Company’s outstanding long-term debt (including current maturities) on that date, bearing interest at variable rates.
The aggregate interest expense for 2022 with respect to borrowings under the senior credit facility and the Accounts Receivable Securitization Program was $35.7 million, and the weighted average interest rate applicable to these borrowings during 2022 was 3.1%.
The aggregate interest expense for 2023 with respect to borrowings under the senior credit facility and the Accounts Receivable Securitization Program was $82.4 million, and the weighted average interest rate applicable to these borrowings during 2023 was 6.4%.

Other LAMR 10-K year-over-year comparisons