EXHIBIT 99.2
LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The following sets forth unaudited pro forma condensed consolidated
financial information for Lamar Advertising Company ("Lamar"). The unaudited
pro forma condensed consolidated statement of operations for the year ended
December 31, 1998 gives effect to the acquisition of Outdoor Communications,
Inc. (as filed in Lamar's Form 8-K/A filed June 8, 1999) and the proposed
acquisition by Lamar (the "Stock Purchase") of all of the outstanding capital
stock of Chancellor Media Outdoor Corporation ("Chancellor Outdoor") as if the
transactions had occurred on January 1, 1998. The unaudited pro forma
condensed consolidated statement of operations for the three months ended March
31, 1999 gives effect to the proposed Stock Purchase as if the transaction had
occurred on January 1, 1998. The unaudited pro forma condensed consolidated
balance sheet as of March 31, 1999 gives effect to the Stock Purchase as if the
transaction had occurred on March 31, 1999.
For purposes of the pro forma financial information: (i) the pro forma
statement of operations of Lamar for the year ended December 31, 1998 (as
adjusted for the Outdoor Communications, Inc. acquisition) has been combined
with the statement of operations of Chancellor Outdoor for the period July 22,
1998 (inception) to December 31, 1998, the statement of operations of Martin
Media L.P. ("Martin Media") for the seven months ended July 31, 1998, the
statement of operations of Martin & MacFarlane, Inc. ("Martin & MacFarlane")
for the seven months ended July 31, 1998 and the statement of income of the
outdoor advertising division of Whiteco Industries, Inc. ("Whiteco") for the
eleven months ended November 30, 1998; (ii) the statement of operations of
Lamar for the three month period ended March 31, 1999 has been combined with
the statement of operations of Chancellor Outdoor for the same period, and (iii)
the balance sheet of Lamar as of March 31, 1999 has been combined with the
balance sheet of Chancellor Outdoor as of March 31, 1999.
The unaudited pro forma condensed consolidated financial statements give
effect to the acquisitions under the purchase method of accounting. The pro
forma adjustments are described in the accompanying notes and are based on
preliminary estimates and certain assumptions that management of Lamar believes
reasonable under the circumstances.
The unaudited pro forma condensed consolidated financial statements have
been prepared by Lamar's management. The unaudited pro forma data is not
designed to represent and does not represent what Lamar's results of operations
or financial position would have been had the Stock Purchase and the acquisition
of Outdoor Communications, Inc. been completed on or as of the dates assumed,
and is not intended to project Lamar's results of operations for any future
period or as of any future date. The unaudited pro forma condensed
consolidated financial statements should be read in conjunction with the
audited and unaudited consolidated financial statements and notes of Lamar,
Chancellor Outdoor, Martin Media, Martin & MacFarlane, Whiteco and
Outdoor Communications, Inc.
LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
(dollars in thousands, except per share data)
PRO FORMA
LAMAR CHANCELLOR MARTIN MARTIN &
ADJUSTED OUTDOOR MEDIA MACFARLANE WHITECO
FOR THE OCI JULY 22, 1998 TO JAN 1, 1998 TO JAN 1, 1998 TO JAN 1, 1998 TO
ACQUISITION DECEMBER 31, 1998 JULY 31, 1998 JULY 31, 1998 NOV 30, 1998
--------------- ----------------- -------------- -------------- --------------
Revenues, net $ 332,754 $ 47,605 $ 29,655 $ 16,576 $ 119,630
--------------- ----------------- -------------- -------------- --------------
Direct advertising expenses 108,781 23,505 14,364 10,526 43,665
General and administrative expenses 69,662 1,981 6,450 4,193 26,296
Depreciation and amortization 112,805 25,990 11,223 3,471 10,342
--------------- ----------------- -------------- -------------- --------------
291,248 51,476 32,037 18,190 80,303
--------------- ----------------- -------------- -------------- --------------
Operating income (loss) 41,506 (3,871) (2,382) (1,614) 39,327
--------------- ----------------- -------------- -------------- --------------
Other expense (income):
Interest income (762) - - (20) - - (134)
Interest expense 80,581 105 8,527 2,244 35
Loss (gain) on disposition of assets (729) - - - - (465) (1,418)
Other expenses 314 (156) (473) (537) - -
--------------- ----------------- -------------- -------------- --------------
79,404 (51) 8,034 1,242 (1,517)
--------------- ----------------- -------------- -------------- --------------
Income (loss) before income taxes (37,898) (3,820) (10,416) (2,856) 40,844
Income tax expense (benefit) (6,368) 345 - - 10 - -
--------------- ----------------- -------------- -------------- --------------
Net income (loss) (31,530) $ (4,165) $ (10,416) $ (2,866) $ 40,844
================= ============== ============== ==============
Preferred stock dividends 365
---------------
Net loss applicable to common stock $ (31,895)
===============
Net loss per common share $ (0.62)
===============
Weighted average number of shares
outstanding 51,361,522
===============
COMBINED
CHANCELLOR
OUTDOOR ACQUISITION PRO FORMA
12/31/98 ADJUSTMENTS COMBINED
--------------- --------------- ---------------
Revenues, net $ 213,466 $ (3,810) (6) $ 542,410
--------------- --------------- ---------------
Direct advertising expenses 92,060 (1,993) (6) 198,848
General and administrative expenses 38,920 (2,734) (1) 105,848
Depreciation and amortization 51,026 97,754 (2) 261,585
--------------- --------------- ---------------
182,006 93,027 566,281
--------------- --------------- ---------------
Operating income (loss) 31,460 (96,837) (23,871)
--------------- --------------- ---------------
Other expense (income):
Interest income (154) 154 (3) (762)
Interest expense 10,911 40,046 (4) 131,538
Loss (gain) on disposition of assets (1,883) - - (2,612)
Other expenses (1,166) - - (852)
--------------- --------------- ---------------
7,708 40,200 127,312
--------------- --------------- ---------------
Loss before income taxes 23,752 (137,037) (151,183)
Income tax benefit 355 (44,536) (5) (50,549)
--------------- --------------- ---------------
Net income (loss) $ 23,397 $ (92,501) (100,634)
=============== ===============
Preferred stock dividends 365
---------------
Net loss applicable to common stock $ (100,999)
===============
Net loss per common share $ (1.30)
===============
Weighted average number of shares
outstanding 26,227,273 77,588,795
=============== ===============
LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999
(dollars in thousands, except per share data)
CHANCELLOR ACQUISITION PRO FORMA
LAMAR OUTDOOR ADJUSTMENTS COMBINED
-------------- -------------- -------------- --------------
Revenues, net $ 85,766 $ 53,601 $ (847) (6) $ 138,520
-------------- -------------- -------------- --------------
Direct advertising expenses 29,764 28,451 (480) (6) 57,735
General and administrative expenses 20,099 2,825 - - 22,924
Depreciation and amortization 31,561 31,396 5,799 (2) 68,756
-------------- -------------- -------------- --------------
81,424 62,672 5,319 149,415
-------------- -------------- -------------- --------------
Operating income (loss) 4,342 (9,071) (6,166) (10,895)
-------------- -------------- -------------- --------------
Other expense (income):
Interest income (686) - - - - (686)
Interest expense 18,145 64 12,501 (4) 30,710
Loss on disposition of assets (336) - - - - (336)
Other expenses - - 86 - - 86
-------------- -------------- -------------- --------------
17,123 150 12,501 29,774
-------------- -------------- -------------- --------------
Loss before income taxes (12,781) (9,221) (18,667) (40,669)
Income tax benefit (2,842) (3,076) (7,800) (5) (13,718)
-------------- -------------- -------------- --------------
Loss before cumulative effect of a change
in accounting principle $ (9,939) $ (6,145) $ (10,867) $ (26,951)
============== ============== ============== ==============
Loss before cumulative effect of a change
in accounting principle per common share $ (0.16) $ (0.31)
============== ==============
Weighted average number of shares
outstanding 61,143,351 26,227,273 87,370,624
============== ============== ==============
LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
(dollars in thousands)
CHANCELLOR PRO FORMA PRO FORMA
LAMAR OUTDOOR ADJUSTMENTS COMBINED
--------------- --------------- --------------- ---------------
Cash $ 8,171 $ 3,620 $ - - $ 11,791
Net receivables 41,042 29,015 - - 70,057
Other current assets 17,573 18,945 (2,243) (7) 34,275
--------------- --------------- --------------- ---------------
Total current assets 66,786 51,580 (2,243) 116,123
--------------- --------------- --------------- ---------------
Property, plant and equipment, net 521,495 1,213,218 (571,627) (8) 1,163,086
--------------- --------------- --------------- ---------------
Intangibles 752,809 499,852 610,013 (9) 1,862,674
Other assets 17,447 1,168 - - 18,615
--------------- --------------- --------------- ---------------
Total assets $ 1,358,537 $ 1,765,818 $ 36,143 $ 3,160,498
=============== =============== =============== ===============
Current maturities of long-term debt $ 4,165 $ 671 $ - - $ 4,836
Other current liabilities 36,404 22,169 22,000 (10) 80,573
--------------- --------------- --------------- ---------------
40,569 22,840 22,000 85,409
--------------- --------------- --------------- ---------------
Long-term debt 829,288 1,854 700,000 (11) 1,531,142
Deferred income - Long term 1,313 - - - - 1,313
Other liabilities 4,464 - - - - 4,464
Deferred tax liability 23,998 95,554 12,721 (12) 132,273
--------------- --------------- --------------- ---------------
Total Liabilities 899,632 120,248 734,721 1,754,601
--------------- --------------- --------------- ---------------
Stockholders' equity 458,905 1,645,570 (698,578) (13) 1,405,897
--------------- --------------- --------------- ---------------
Total liabilities and stockholders'
equity $ 1,358,537 $ 1,765,818 $ 36,143 $ 3,160,498
=============== =============== =============== ===============
LAMAR ADVERTISING COMPANY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(dollars in thousands)
For purposes of determining the pro forma effect of the Chancellor Outdoor
acquisition on Lamar's Condensed Consolidated Statements of Operations for
the year ended December 31, 1998 and the three months' ended March 31, 1999,
the following adjustments have been made:
12/31/98 03/31/99
--------------- ---------------
(1) To eliminate expenses in Chancellor Outdoor's combined financial
statement related to management fees that would not have existed had
the Stock Purchase taken place at the beginning of the year
General and administrative expenses (2,734) - -
=============== ===============
(2) To record incremental amortization and depreciation
due to the application of purchase accounting.
Depreciation and amortization are calculated using
accelerated and straight line methods over the estimated
useful lives of the assets generally from 5-15 years. 97,754 5,799
=============== ===============
(3) To eliminate historical interest income that would not
have existed had the Stock Purchase taken place on
January 1, 1998 154 - -
=============== ===============
(4) To eliminate historical interest expense
in Chancellor Outdoor's combined financial statements
and record interest expense related to the debt acquired
and incurred in the Stock Purchase. (A difference of .125% in the
rate of interest would have changed income by $875 and
$216 for the year ended December 31, 1998 and three months
ended March 31, 1999, respectively.)
Historical interest expense (10,911) (64)
Interest expense on debt acquired and incurred in the Stock Purchase. 50,957 12,565
--------------- ---------------
40,046 12,501
=============== ===============
(5) To record the tax effect on pro forma statements
for the Stock Purchase. (44,536) (7,800)
=============== ===============
(6) To record the effect on net revenues and direct expenses of the
divestiture required of Chancellor Outdoor by the Department of Justice
in May 1999.
Net revenues (3,810) (847)
=============== ===============
Direct advertising expenses (1,993) (480)
=============== ===============
The terms of the Stock Purchase Agreement include the issuance of 26,227,273
Class A Common Stock at an average stock price of $36.11 per share and $700
million in cash for a total purchase price of $1,646,992. The acquisition
will be accounted for under the purchase method of accounting. The following
is a summary of the preliminary allocation of the purchase price of the
acquisition:
Current assets 49,337
Property, plant and equipment 641,591
Goodwill 312,371
Customer lists 132,913
Structure locations 628,649
Other intangibles 35,932
Other assets 1,168
Current liabilities (44,840)
Long-term liabilities (110,129)
--------------------------
1,646,992
For purposes of determining the pro forma effect of the Stock Purchase on
Lamar's unaudited Condensed Consolidated Balance Sheet as of March 31, 1999,
the following adjustments have been made:
Pro Forma
Adjustments
---------------
(7) Other current assets
To eliminate historical deferred tax assets not acquired in the
Stock Purchase. (2,243)
===============
(8) Property, Plant and Equipment, net:
To record the decrease in property, plant and equipment
from the allocation of the Purchase Price for the Stock Purchase (571,627)
===============
(9) Intangibles:
To record the increase in intangibles resulting from the
allocation of the Purchase Price of the Stock Purchase. 610,013
===============
(10) Other current liabilities:
To record the increase in the accrual of severance and other liabilities
assumed in the Stock Purchase. 22,000
===============
(11) Long-term debt:
To record the increase in debt related to financing
the Stock Purchase.
Borrowings under the Credit Facility 700,000
===============
(12) Deferred Tax Liability:
To record the increase in the deferred tax liability
created as a result of the application of purchase
accounting. 12,721
===============
(13) Stockholders' Equity
To eliminate Chancellor Outdoor's historical stockholders' equity
as a result of the Stock Purchase. (1,645,570)
To record the issuance of Class A Common Stock as a result
of the Stock Purchase. 946,992
---------------
(698,578)
===============