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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 8K/A filed June 8, 1999) and the acquisition by Lamar (the
"Stock Purchase") of Chancellor Outdoor as if the transactions had occurred on
January 1, 1998. The unaudited pro forma condensed consolidated statement of
operations for the six months ended June 30, 1999 gives effect to the
acquisition of Chancellor Outdoor as if the transaction had occurred at the
beginning of the period. The unaudited pro forma condensed consolidated balance
sheet as of June 30, 1999 gives effect to the acquisition of Chancellor Outdoor
as if the transaction had occurred on June 30, 1999.
For purposes of the pro forma financial information (i) the pro forma
statement of operations of the Company for the year ended December 31, 1998 (as
adjusted for the OCI 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. for the seven months ended July 31, 1998 and the
statement of income of the Outdoor Division of Whiteco Industries ("Whiteco")
the eleven months ended November 30, 1998 (ii) the statement of operations of
the Company for the six month period ended June 30, 1999 has been combined with
the statement of operations of Chancellor Outdoor for the same period and (iii)
the balance sheet of the Company as of June 30, 1999 has been combined with the
balance sheet of Chancellor Outdoor as of June 30, 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 the Company
believes reasonable under the circumstances.
The unaudited pro forma condensed consolidated financial statements
have been prepared by the Company's management. The unaudited pro forma data are
not designed to represent and do not represent what the Company's results of
operations or financial position would have been had the aforementioned
acquisition been completed on or as of the dates assumed, and are not intended
to project the Company'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 the Company, Chancellor Outdoor,
Martin Media, Martin & Macfarlane, Inc., Whiteco and Outdoor Communications,
Inc., included in the Current Report on Form 8-K filed by Lamar Advertising
Company on July 7, 1999.
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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
FOR OCI THE JULY 22, 1998 TO JAN 1, 1998 TO JAN 1, 1998 TO
ACQUISITION DECEMBER 31, 1998 JULY 31, 1998 JULY 31, 1998
---------------- ---------------- ---------------- ----------------
Revenues, net $ 332,754 47,605 29,655 16,576
---------------- ---------------- ---------------- ----------------
Direct advertising expenses 108,781 23,505 14,364 10,526
General and administrative expenses 69,662 1,981 6,450 4,193
Depreciation and amortization 112,805 25,990 11,223 3,471
---------------- ---------------- ---------------- ----------------
291,248 51,476 32,037 18,190
---------------- ---------------- ---------------- ----------------
Operating income 41,506 (3,871) (2,382) (1,614)
---------------- ---------------- ---------------- ----------------
Other expense (income):
Interest income (762) -- (20) --
Interest expense 80,581 105 8,527 2,244
Loss (gain) on disposition of assets (729) -- -- (465)
Other expenses (income) 314 (156) (473) (537)
---------------- ---------------- ---------------- ----------------
79,404 (51) 8,034 1,242
---------------- ---------------- ---------------- ----------------
Income (Loss) before income taxes (37,898) (3,820) (10,416) (2,856)
Income tax expense (benefit) (6,368) 345 -- 10
---------------- ---------------- ---------------- ----------------
Net Income (loss) (31,530) (4,165) (10,416) (2,866)
================ ================ ================
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
WHITECO CHANCELLOR
JAN 1, 1998 TO OUTDOOR ACQUISITION PRO FORMA
NOV 30, 1998 12/31/98 ADJUSTMENTS COMBINED
---------------- ---------------- ---------------- ----------------
Revenues, net 119,630 213,466 (9,656)(6) 536,564
---------------- ---------------- ---------------- ----------------
Direct advertising expenses 43,665 92,060 (4,865)(6) 195,976
General and administrative expenses 26,296 38,920 (2,734)(1) 105,848
Depreciation and amortization 10,342 51,026 97,179 (2) 261,010
---------------- ---------------- ---------------- ----------------
80,303 182,006 89,580 562,834
---------------- ---------------- ---------------- ----------------
Operating income 39,327 31,460 (99,236) (26,270)
---------------- ---------------- ---------------- ----------------
Other expense (income):
Interest income (134) (154) 154 (3) (762)
Interest expense 35 10,911 40,032 (4) 131,524
Loss (gain) on disposition of assets (1,418) (1,883) -- (2,612)
Other expenses -- (1,166) -- (852)
---------------- ---------------- ---------------- ----------------
(1,517) 7,708 40,186 127,298
---------------- ---------------- ---------------- ----------------
Income (Loss) before income taxes 40,844 23,752 (139,422) (153,568)
Income tax expense (benefit) -- 355 (42,698)(5) (48,711)
---------------- ---------------- ---------------- ----------------
Net income (loss) 40,844 23,397 (96,724) (104,857)
================ ================ ================
Preferred stock dividends 365
----------------
Net loss applicable to common stock $ (105,222)
================
Net loss per common share $ (1.36)
================
Weighted average number of shares outstanding 26,227,273 77,588,795
================ ================
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LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CHANCELLOR ACQUISITION PRO FORMA
LAMAR OUTDOOR ADJUSTMENTS COMBINED
---------------- ---------------- ---------------- ----------------
Revenues, net $ 183,575 110,889 (4,052)(6) 290,412
---------------- ---------------- ---------------- ----------------
Direct advertising expenses 60,245 58,734 (2,076)(6) 116,903
General and administrative expenses 40,853 5,884 -- 46,737
Depreciation and amortization 64,213 63,527 10,575 (2) 138,315
---------------- ---------------- ---------------- ----------------
165,311 128,145 8,499 301,955
---------------- ---------------- ---------------- ----------------
Operating income 18,264 (17,256) (12,551) (11,543)
---------------- ---------------- ---------------- ----------------
Other expense (income):
Interest income (955) -- -- (955)
Interest expense 36,379 126 25,136(4) 61,641
Gain on disposition of assets (477) -- -- (477)
Other expenses -- 69 -- 69
---------------- ---------------- ---------------- ----------------
34,947 195 25,136 60,278
---------------- ---------------- ---------------- ----------------
Loss before income taxes (16,683) (17,451) (37,687) (71,821)
Income tax expense (benefit) (1,766) (4,823) (15,297)(5) (21,886)
---------------- ---------------- ---------------- ----------------
Loss before cumulative effect of a change in (14,917) (12,628) (22,390) (49,935)
accounting principle ================ ================ ================ ================
Loss before cumulative effect of a change in
accounting principle per common share $ (0.25) $ (0.57)
================ ================
Weighted average number of shares outstanding 61,185,610 26,227,273 87,412,883
================ ================ ================
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LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(DOLLARS IN THOUSANDS)
CHANCELLOR PROFORMA PRO FORMA
LAMAR OUTDOOR ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
Cash $ 4,249 726 (3,714)(7) 1,261
Net receivables 46,593 33,795 -- 80,388
Other current assets 15,648 23,327 (2,711)(8) 36,264
------------ ------------ ------------ ------------
Total current assets 66,490 57,848 (6,425) 117,913
------------ ------------ ------------ ------------
Property, plant and equipment, net 546,128 1,173,743 (527,818)(9) 1,192,053
------------ ------------ ------------ ------------
Intangibles 781,217 495,571 582,140 (10) 1,858,928
Other assets 17,099 134 -- 17,233
------------ ------------ ------------ ------------
Total assets $ 1,410,934 1,727,296 47,897 3,186,127
============ ============ ============ ============
Current maturities of long-term debt 4,078 645 -- 4,723
Other current liabilities 38,456 13,828 5,500 (11) 57,784
------------ ------------ ------------ ------------
42,534 14,473 5,500 62,507
------------ ------------ ------------ ------------
Long-term debt 885,306 1,753 700,000 (12) 1,587,059
Deferred income 1,283 -- -- 1,283
Other liabilities 4,833 -- -- 4,833
Deferred tax liability 21,848 93,526 12,949 (13) 128,323
------------ ------------ ------------ ------------
Total Liabilities 955,804 109,752 718,449 1,784,005
------------ ------------ ------------ ------------
Stockholders' equity 455,130 1,617,544 (670,552)(14) 1,402,122
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity $ 1,410,934 1,727,296 47,897 3,186,127
============ ============ ============ ============
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For purposes of determining the pro forma effect of the Chancellor
Outdoor acquisition on the Company's Condensed Consolidated Statements of
Operations for the year ended December 31, 1998 and the six months ended
June 30, 1999, the following adjustments have been made:
12/31/98 06/30/99
--------- ---------
(1) To eliminate expenses in Chancellor Outdoor's combined financial
statement related to management fees that would not have existed
had the transaction 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. 97,179 10,575
========= =========
(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 acquisition. (A difference
of .125% in the rate of interest would have changed income by $875
and $434 for the year ended December 31, 1998 and six months ended
June 30, 1999, respectively.)
Historical interest expense (10,911) (126)
Interest expense on debt acquired and incurred in the Stock Purchase 50,943 25,262
--------- ---------
40,032 25,136
========= =========
(5) To record the tax effect on pro forma statements for the
Stock Purchase (42,698) (15,297)
========= =========
(6) To record the effect on net revenues and direct expenses of the
Chancellor Outdoor divestiture required by the Department of
Justice in May 1999 and the divestiture required by the Department
of Justice as a condition of this Stock Purchase
Net revenues (9,656) (4,052)
========= =========
Direct advertising expenses (4,865) (2,076)
========= =========
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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 $704 million in cash for a total purchase price of $1,650,706.
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 $ 55,137
Property, plant and equipment 645,925
Goodwill 287,051
Other intangibles 790,660
Other assets 134
Current liabilities (19,973)
Long-term liabilities (108,228)
---------
1,650,706
=========
For purposes of determining the pro forma effect of the Chancellor
Outdoor acquisition on the Company's unaudited Condensed Consolidated
Balance Sheet as of June 30, 1999, the following adjustments have been
made:
Pro Forma
Adjustments
-----------
(7) Cash
To record the net effect on cash as a result of the Stock
Purchase and related divestures. (3,714)
===========
(8) Other current assets
To eliminate historical deferred tax assets not acquired in the
Stock Purchase. (2,711)
===========
(9) 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. (527,818)
===========
(10) Intangibles:
To record the increase in intangibles resulting from the
allocation of the purchase price of the Stock Purchase. 582,140
===========
(11) Other current liabilities:
To record the accrual of transition costs and other liabilities
assumed in the Stock Purchase. 5,500
===========
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(12) Long-term debt:
To record the increase in debt related to financing the
Stock Purchase
Borrowings under the Credit Facility 700,000
===========
(13) Deferred Tax Liability:
To record the increase in the deferred tax liability
created as a result of the application of purchase
accounting. 12,949
===========
(14) Stockholders' Equity
To eliminate Chancellor Outdoor's historical stockholders' equity
as a result of the Stock Purchase (1,617,544)
To record the issuance of Class A Common Stock as a result of the
acquisition. 946,992
-----------
(670,552)
===========
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