LAMAR ADVERTISING CO/NEW - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the period ended March 31, 2003
or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the transition period from _______________ to _______________

Commission File Number 0-30242
LAMAR ADVERTISING COMPANY
Commission File Number 1-12407
LAMAR MEDIA CORP.

(Exact name of registrants as specified in their charters)

Delaware 72-1449411
Delaware 72-1205791
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
5551 Corporate Blvd., Baton Rouge, LA 70808
(Address of principle executive offices) (Zip Code)

Registrants' telephone number, including area code: (225) 926-1000

Indicate by check mark whether each registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (X) No ( )

Indicate by check mark whether Lamar Advertising Company is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act: Yes (X) No ( )

Indicate by check mark whether Lamar Media Corp. is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act: Yes ( ) No (X)

The number of shares of Lamar Advertising Company's Class A common stock
outstanding as of May 8, 2003: 85,718,968

The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of May 8, 2003: 16,417,073

The number of shares of Lamar Media Corp. common stock outstanding as of May 8,
2003: 100

THIS COMBINED FORM 10-Q IS SEPARATELY FILED BY (i) LAMAR ADVERTISING COMPANY AND
(II) LAMAR MEDIA CORP. (WHICH IS A WHOLLY-OWNED SUBSIDIARY OF LAMAR ADVERTISING
COMPANY). LAMAR MEDIA CORP. MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION H(1) (a) AND (b) OF FORM 10-Q AND IS, THEREFORE, FILING THIS FORM
WITH THE REDUCED DISCLOSURE FORMAT PERMITTED BY SUCH INSTRUCTION.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This combined Quarterly Report on Form 10-Q of Lamar Advertising Company and
Lamar Media Corp. contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These are statements that relate to future periods and
include statements about the Company's, and Lamar Media's:

o expected operating results;

o market opportunities;

o acquisition opportunities;

o ability to compete; and

o stock price.

Generally, the words anticipates, believes, expects, intends, estimates,
projects, plans and similar expressions identify forward-looking statements.
These forward-looking statements involve known and unknown risks, uncertainties
and other important factors that could cause the Company's and Lamar Media's
actual results, performance or achievements or industry results, to differ
materially from any future results, performance or achievements expressed or
implied by these forward-looking statements. These risks, uncertainties and
other important factors include, among others:

o the performance of the U.S. economy generally and the level of expenditures
on outdoor advertising particularly;

o the Company's ability to renew expiring contracts at favorable rates;

o the integration of companies that the Company acquires and its ability to
recognize cost savings or operating efficiencies as a result of these
acquisitions;

o risks and uncertainties relating to the Company's significant indebtedness;

o the Company's need for and ability to obtain additional funding for
acquisitions or operations; and

o the regulation of the outdoor advertising industry.

For a further description of these and other risks and uncertainties, the
Company encourages you to carefully read the portion of the combined Annual
Report on Form 10-K for the year ended December 31, 2002 of the Company and
Lamar Media (the "2002 Combined Form 10-K") under the caption "Factors Affecting
Future Operating Results" in Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations filed with the SEC on March 26,
2003.

The forward-looking statements contained in this combined Quarterly Report on
Form 10-Q speak only as of the date of this combined report. Lamar Advertising
Company and Lamar Media Corp. expressly disclaim any obligation or undertaking
to disseminate any updates or revisions to any forward-looking statement
contained in this combined Quarterly Report to reflect any change in their
expectations with regard thereto or any change in events, conditions or
circumstances on which any forward-looking statement is based.

CONTENTS

PART I - FINANCIAL INFORMATION
ITEM 1.- FINANCIAL STATEMENTS

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

See accompanying notes to condensed consolidated financial statements.

-1-

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

See accompanying notes to condensed consolidated financial statements.

-2-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)

See accompanying notes to condensed consolidated financial statements.

-3-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

1. Significant Accounting Policies

The information included in the foregoing interim consolidated financial
statements is unaudited. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
the Company's financial position and results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the entire year. These condensed consolidated financial statements should be
read in conjunction with the Company's consolidated financial statements and the
notes thereto included in the 2002 Combined Form 10-K.

Certain amounts in the prior year's consolidated financial statements have been
reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported net loss.

2. Acquisitions

On March 3, 2003, the Company purchased the stock of Delite Outdoor, Inc. for
$18,000. The purchase price consisted of 588,543 shares of Lamar Advertising
Class A common stock valued at $18,000.

During the three months ended March 31, 2003, the Company completed 13
additional acquisitions of outdoor advertising assets for a cash purchase price
of approximately $6,638.

Each of these acquisitions was accounted for under the purchase method of
accounting, and, accordingly, the accompanying consolidated financial statements
include the results of operations of each acquired entity from the date of
acquisition. The acquisition costs have been allocated to assets acquired and
liabilities assumed based on fair market value at the dates of acquisition. The
following is a summary of the preliminary allocation of the acquisition costs in
the above transactions.

-4-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

Summarized below are certain unaudited pro forma statements of operations data
for the three months ended March 31, 2003 and March 31, 2002 as if each of the
above acquisitions and the acquisitions occurring in 2002, which were fully
described in the 2002 Combined Form 10-K, had been consummated as of January 1,
2002 and the adoption of SFAS No. 143 as of January 1, 2002. This pro forma
information does not purport to represent what the Company's results of
operations actually would have been had such transactions occurred on the date
specified or to project the Company's results of operations for any future
periods.

3. Goodwill and Other Intangible Assets

The following is a summary of intangible assets at March 31, 2003 and December
31, 2002.

The changes in the carrying amount of goodwill for the three months ended
March 31, 2003 are as follows:

Balance as of December 31, 2002 $ 1,432,063
Goodwill acquired during the quarter 1,506
Impairment losses --
----------------
Balance as of March 31, 2003 $ 1,433,569
================

-5-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

4. Long-Term Debt

On December 23, 2002, Lamar Media Corp. completed an offering of $260,000 7 1/4%
Senior Subordinated Notes due 2013. These notes are unsecured senior
subordinated obligations and will be subordinated to all of Lamar Media's
existing and future senior debt, rank equally with all of Lamar Media's existing
and future senior subordinated debt and rank senior to any future subordinated
debt of Lamar Media. The net proceeds from the issuance and sale of these notes,
together with additional cash, was used to redeem all of the outstanding
$255,000 principle amount of Lamar Media's 9 5/8% Senior Subordinated Notes due
2006 on January 22, 2003 at a redemption price equal to 103.208% of the
aggregate principle amount thereof plus accrued interest through the redemption
date of approximately $3,477 for a total redemption price of approximately
$266,657. The Company recorded a loss on the extinguishment of debt of $11,173
in the first quarter of 2003 which consists of a prepayment premium of $8,180
and associated debt issuance costs of $2,993.

5. Asset Retirement Obligation

Effective January 1, 2003, the Company adopted Statement of Financial Accounting
Standard (SFAS) No. 143, "Accounting for Asset Retirement Obligations," and
recorded a loss of $11,679 as the cumulative effect of a change in accounting
principle, which is net of a tax benefit of $7,467. Prior to our adoption of
SFAS No. 143, the Company expensed these costs at the date of retirement. Also,
as of January 1, 2003, we recorded additions to property, plant and equipment
totaling $23,114 under the provisions of SFAS No. 143.

All of our asset retirement obligations relate to the Company's structure
inventory that it considers would be retired upon dismantlement of the
advertising structure. The following table reflects information related to our
asset retirement obligations:

The following pro forma data summarizes the Company's net loss and net loss per
common share as if the Company had adopted the provisions of SFAS No. 143 on
January 1, 2002, including an associated pro forma asset retirement obligation
on that date of $30,875.

6. Stock Based Compensation

The Company accounts for its stock option plan under the intrinsic value method
in accordance with the provisions of Accounting Principles Board (APB) Opinion
No. 25, "Accounting for Stock Issued to Employees", and related interpretations.
As such, compensation expense is recorded on the date of grant only if the
current market price of the underlying stock exceeds the exercise price. SFAS
No. 123, "Accounting for Stock-Based Compensation" and SFAS No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure an amendment of FASB
Statement No. 123," permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made in 1995 and
future years as if the fair-value-based method defined in SFAS No. 123 has been
applied.

-6-

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The following table illustrates the effect on net loss and loss per share if we
had applied the fair value recognition provisions of SFAS No. 123 to stock-based
employee compensation:

7. Summarized Financial Information of Subsidiaries

Separate financial statements of each of the Company's direct or indirect
wholly-owned subsidiaries that have guaranteed Lamar Media's obligations with
respect to its publicly issued notes (collectively, the Guarantors) are not
included herein because the Company has no independent assets or operations, the
guarantees are full and unconditional and joint and several and the only
subsidiary that is not a guarantor is considered to be minor. Lamar Media's
ability to make distributions to Lamar Advertising is restricted under the terms
of its bank credit facility and the indentures relating to Lamar Media's
outstanding notes. As of March 31, 2003 and December 31, 2002, the net assets
restricted as to transfers from Lamar Media Corp. to Lamar Advertising Company
in the form of cash dividends, loans or advances were $1,903,292 and $1,915,035,
respectively.

8. Earnings Per Share

Earnings per share are computed in accordance with SFAS No. 128, "Earnings Per
Share." The calculations of basic earnings per share exclude any dilutive effect
of stock options and convertible debt while diluted earning per share includes
the dilutive effect of stock options and convertible debt. The number of
potentially dilutive shares excluded from the calculation because of their
anti-dilutive effect are 6,590,096 and 6,957,782 for three months ended March
31, 2003 and 2002, respectively.

9. Accounting Pronouncements

In June 2002, the Financial Accounting Standards Board (FASB) issued SFAS No.
146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS
No. 146 addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullified Emerging Issues Task Force (EITF)
Issue 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity." The provisions of this Statement are effective
for exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. The adoption of SFAS No. 146 did not have a
material effect on the Company's financial statements.

-7-

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57, and 107
and a rescission of FASB Interpretation No. 34." This Interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. The Interpretation
also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of the Interpretation are
applicable to guarantees issued or modified after December 31, 2002 and did not
have a material effect on the Company's financial statements.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51." This
Interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interest in variable interest entities created after
January 31, 2003 and to variable interest entities obtained after January 31,
2003. The application of this Interpretation is not expected to have a material
effect on the Company's financial statements as the Company has no variable
interest entities. The Interpretation requires certain disclosures in financial
statements issued after January 31, 2003, if it is reasonably possible that the
Company will consolidate or disclose information about variable interest
entities when the Interpretation becomes effective.

In April 2003, the FASB issued Statement of Financial Accounting Standard (SFAS)
No 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities," which amends and clarifies financial accounting and reporting for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The Company is required to adopt SFAS No. 149 for all
contracts entered into or modified after June 30, 2003, except for certain
hedging relationships designated after June 30, 2003 pursuant to the guidance in
SFAS No. 149. The Company does not expect adoption to have an impact on its
consolidated financial statements.

-8-

LAMAR MEDIA CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

See accompanying notes to condensed consolidated financial statements.

-9-

LAMAR MEDIA CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)

See accompanying notes to condensed consolidated financial statements.

-10-

LAMAR MEDIA CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)

See accompanying notes to condensed consolidated financial statements.

-11-

LAMAR MEDIA CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE DATA)

1. Significant Accounting Policies

The information included in the foregoing interim consolidated financial
statements is unaudited. In the opinion of management all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
Lamar Media's financial position and results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the entire year. These condensed consolidated financial statements should be
read in conjunction with Lamar Media's consolidated financial statements and the
notes thereto included in the 2002 Combined Form 10-K.

Certain amounts in the prior year's condensed consolidated financial statements
have been reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported results of operations.

Certain footnotes are not provided for the accompanying consolidated financial
statements as the information in notes 2, 3, 4, 5, 7, 8 and 9 to the condensed
consolidated financial statements of Lamar Advertising Company included
elsewhere in this report is substantially equivalent to that required for the
condensed consolidated financial statements of Lamar Media Corp. Earnings per
share data is not provided for the operating results of Lamar Media Corp. as it
is a wholly-owned subsidiary of Lamar Advertising Company.

-12-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This discussion contains forward-looking statements. Actual results could differ
materially from those anticipated by the forward-looking statements due to the
risks and uncertainties described in the section of this combined report on Form
10-Q entitled "Note Regarding Forward-Looking Statements" and described in the
2002 Combined 10-K under the caption "Factors Affecting Future Operating
Results." You should consider carefully each of these risks and uncertainties in
evaluating the Company's and Lamar Media's financial condition and results of
operations.

LAMAR ADVERTISING COMPANY

The following is a discussion of the consolidated financial condition and
results of operations of the Company for the three months ended March 31, 2003
and 2002. This discussion should be read in conjunction with the condensed
consolidated financial statements of the Company and the related notes.

OVERVIEW

The Company's net revenues, which represent gross revenues less commissions paid
to advertising agencies that contract for the use of advertising displays on
behalf of advertisers, are derived primarily from the sale of advertising on
outdoor advertising displays owned and operated by the Company.

Since December 31, 2000, the Company has increased the number of outdoor
advertising displays it operates by approximately 12% by completing over 190
strategic acquisitions of outdoor advertising and transit assets for an
aggregate purchase price of approximately $491 million, which included the
issuance of 2,719,007 shares of Lamar Advertising Company Class A common stock
valued at the time of issuance at approximately $103.1 million. The Company has
financed its recent acquisitions and intends to finance its future acquisition
activity from available cash, borrowings under its bank credit agreement and the
issuance of Class A common stock. See "Liquidity and Capital Resources" below.
As a result of acquisitions, the operating performance of individual markets and
of the Company as a whole are not necessarily comparable on a year-to-year
basis. The Company also provides acquisition-adjusted net revenue that include
adjustments to the 2002 results for acquisitions for the same time frame as
actually owned in 2003. The Company's management believes that this additional
information is useful in evaluating the Company's performance and provides
investors and financial analysts with a better understanding of the Company's
core operating results. In addition, it may be useful to investors when
assessing the Company's period to period results. The Company's presentation of
these measures, however, may not be comparable to similarly titled measures used
by other companies and they should not be used as alternatives to net revenue or
other GAAP measures as indicators of the Company's performance. The Company has
provided a reconciliation of acquisition-adjusted net revenue to reported net
revenue below.

The Company relies on sales of advertising space for its revenues, and its
operating results are therefore affected by general economic conditions, as well
as trends in the advertising industry.

Growth of the Company's business requires expenditures for maintenance and
capitalized costs associated with new billboard displays, logo sign and transit
contracts, and the purchase of real estate and operating equipment. Capitalized
expenditures for the three months ended 2003 and 2002, respectively, were $17.8
million and $14.1 million. The following table presents a breakdown of
capitalized expenditures for three months ended March 31, 2003 and 2002:

-13-

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THREE MONTHS ENDED MARCH 31, 2002

Net revenues increased $7.7 million or 4.4% to $184.2 million for the three
months ended March 31, 2003 from $176.5 million for the same period in 2002.
This increase was attributable primarily to (i) an increase in billboard net
revenues of $6.3 million or 3.8%, (ii) a $0.6 million increase in logo sign
revenue, which represents an increase of 7.0% over the prior year, and (iii) a
$0.7 million increase in transit revenue, which represents a 53% increase over
the prior year.

The increase in billboard net revenues of $6.3 million was due to both
acquisition activity and internal growth while the increase in logo sign revenue
of $0.6 million and transit revenue growth of $0.7 million was generated by
internal growth across various markets within the logo sign and transit
programs. Net revenues for the three months ended March 31, 2003 as compared to
acquisition-adjusted net revenue(1) for the three months ended March 31, 2002,
which includes adjustments for acquisitions for the same time frame as actually
owned in 2003, increased $5.3 million or 2.9% as a result of net revenue
internal growth.

Operating expenses, exclusive of depreciation and amortization and gain on sale
of assets, increased $6.0 million or 5.5% to $114.4 million for the three months
ended March 31, 2003 from $108.4 million for the same period in 2002. There was
a $5.8 million increase as a result of additional operating expenses related to
the operations of acquired outdoor advertising assets and increases in
personnel, sign site rent, insurance costs and property taxes. The remaining
$0.2 million increase in operating expenses is a result of increases in
corporate overhead expenses.

Depreciation and amortization expense increased $0.4 million or 0.6% from $67.1
million for the three months ended March 31, 2002 to $67.5 million for the three
months ended March 31, 2003.

Due to the above factors, operating income increased $1.2 million to $2.3
million for three months ended March 31, 2003 compared to $1.1 million for the
same period in 2002.

In January 2003, the Company's wholly-owned subsidiary, Lamar Media Corp.,
redeemed all of its outstanding 9 5/8% Senior Subordinated Notes due 2006 in
aggregate principle amount of approximately $255.0 million for a redemption
price equal to 103.208% of the principle amount of the Notes. In the first
quarter of 2003, the Company recorded approximately $11.2 million as a loss on
extinguishment of debt related to the prepayment of the 9 5/8% Senior
Subordinated Notes due 2006 and the write-off of related debt issuance costs.

Interest expense decreased $3.0 million from $26.8 million for the three months
ended March 31, 2002 to $23.8 million for the three months ended March 31, 2003
as a result of lower interest rates both on existing and recently refinanced
debt.

The increase in operating income and the decrease in interest expense offset by
the loss on extinguishment of debt described above resulted in a $7.0 million
increase in loss before income taxes and cumulative effect of a change in
accounting principle. The increase in this loss, resulted in an increase in the
income tax benefit of $2.6 million for the three months ended March 31, 2003
over the same period in 2002. The effective tax rate for the three months ended
March 31, 2003 is 36.6%.

Due to the adoption of SFAS No. 143, the Company recorded a cumulative effect of
a change in accounting principle, net of tax of $11.7 million.

As a result of the above factors, the Company recognized a net loss for the
three months ended March 31, 2003 of $32.3 million, as compared to a net loss of
$16.2 million for the same period in 2002.

- ----------

(1) Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue:

-14-

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically satisfied its working capital requirements with
cash from operations and borrowings under its bank credit facility. The
Company's wholly owned subsidiary, Lamar Media, is the borrower under the bank
credit facility and maintains all corporate cash balances. Any cash requirements
of Lamar Advertising, therefore, must be funded by distributions from Lamar
Media. The Company's acquisitions have been financed primarily with funds
borrowed under its bank credit facility and issuance of its Class A common stock
and debt securities. If an acquisition is made by one of the Company's
subsidiaries using the Company's Class A common stock, a permanent contribution
of additional paid-in-capital of Class A common stock is distributed to that
subsidiary.

The Company's net cash provided by operating activities increased to $21.1
million for the three months ended March 31, 2003 due primarily to an increase
in net loss of $16.1 million offset by an increase in noncash items of $15.0
million, which primarily includes an increase in depreciation and amortization
of $0.4 million offset by an increase in deferred income tax benefit of $8.0
million, the loss on early extinguishment of debt of $11.2 million and the
cumulative effect of a change in accounting principle of $11.7 million. In
addition as compared to the same period in 2002, there was a decrease in
receivables of $5.2 million, a decrease in other assets of $6.7 million, a
decrease in trade accounts payable of $1.3 million, a decrease in accrued
expenses of $5.1 million and a decrease in deferred income of $0.9 million. Net
cash provided by operating activities for the three months ended March 31, 2003,
as described above differs from the amount used in the reconciliation tables
included in the Company's first quarter earnings release. This difference was
due to the reclassification of the loss from extinguishment of debt included in
cash flows from operations in that release to cash flows from financing
activities.

Net cash used in investing activities decreased $28.1 million from $51.6 million
in 2002 to $23.5 million in 2003 primarily due to the decrease in merger and
acquisition activity by the Company in 2003 of $31.6 million, offset by a $3.7
million increase in capital expenditures. Net cash used in financing activities
increased to $5.3 million for the three months ended March 31, 2003 due to a
$247.8 million increase in principle payments of long-term debt due primarily to
the redemption of Lamar Media's 9 5/8% Senior Subordinated Notes, offset by cash
from deposits for debt extinguishment of $266.7 million. In addition, there was
a $5.4 million decrease in proceeds from issuance of the Company's Class A
common stock and a $60 million decrease in borrowings from credit agreements.

During the three months ended March 31, 2003, the Company financed its
acquisition activity of approximately $24.6 million with cash on hand of
approximately $6.6 million and the issuance of 588,543 shares of the Company's
Class A common stock. As of March 31, 2003, the Company had $219.6 million
available under its revolving credit facility.

The Company's wholly-owned subsidiary, Lamar Media Corp., replaced its old bank
credit facility with a new bank credit facility on March 7, 2003. The new bank
credit facility is comprised of a $225.0 million revolving bank credit facility
and a $975.0 million term facility. The new bank credit facility also includes a
$500.0 million incremental facility, which permits Lamar Media to request that
its lenders enter into commitments to make additional term loans to it, up to a
maximum aggregate amount of $500.0 million. The lenders have no obligation to
make additional term loans to Lamar Media under the incremental facility, but
may enter into such commitments in their sole discretion.

In the future, Lamar Media has principle reduction obligations and revolver
commitment reductions under its new bank credit agreement. In addition it has
fixed commercial commitments. These commitments are detailed as follows:

- ----------

(2) Lamar Media had no balance outstanding at March 31, 2003.

-15-

In January 2003, Lamar Media redeemed all of its outstanding 9 5/8% Senior
Subordinated Notes due 2006 in aggregate principle amount of approximately $255
million for a redemption price equal to 103.208% of the principle amount of the
Notes. As a result of this redemption, the Company recorded a loss on
extinguishment of debt of $11.2 million which consisted of a prepayment penalty
of $8.2 million and associated debt issuance costs of approximately $3.0
million.

Currently Lamar Media has outstanding approximately $200.0 million 8 5/8% Senior
Subordinated Notes due 2007 and $260.0 million 7 1/4% Senior Subordinated Notes
due 2013. The indentures relating to Lamar Media's outstanding notes restrict
its ability to incur indebtedness other than:

o up to $1.3 billion of indebtedness under its bank credit facility;

o currently outstanding indebtedness or debt incurred to refinance
outstanding debt;

o inter-company debt between Lamar Media and its subsidiaries or between
subsidiaries; and

o certain other debt incurred in the ordinary course of business (provided
that all of the above ranks junior in right of payment to the notes that
has a maturity or mandatory sinking fund payment prior to the maturity
of the notes).

Lamar Media is required to comply with certain covenants and restrictions under
its new bank credit agreement. If the Company fails to comply with these tests,
the payments set forth in the above table may be accelerated. At March 31, 2003
and currently Lamar Media is in compliance with all such tests.

Lamar Media cannot exceed the following financial ratios under its new bank
credit facility:

o a total debt ratio, defined as total consolidated debt to EBITDA, as
defined below, for the most recent four fiscal quarters, of 6.00 to 1
(through December 30, 2004) and 5.75 to 1 (after December 30, 2004); and

o a senior debt ratio, defined as total consolidated senior debt to EBITDA,
as defined below, for the most recent four fiscal quarters, of 4.00 to 1
(through December 30, 2004) and 3.75 to 1 (after December 30, 2004).

In addition, the new bank credit facility requires that Lamar Media must
maintain the following financial ratios:

o an interest coverage ratio, defined as EBITDA, as defined below, for the
most recent four fiscal quarters to total consolidated accrued interest
expense for that period, of at least 2.25 to 1; and

o a fixed charges coverage ratio, defined as the ratio of EBITDA, as defined
below, for the most recent four fiscal quarters to (1) the total payments
of principle and interest on debt for such period (2) capital expenditures
made during such period and (3) income and franchise tax payments made
during such period, of at least 1.05 to 1.

As defined under Lamar Media's new bank credit facility, EBITDA is, for any
period, operating income for Lamar Media and its restricted subsidiaries
(determined on a consolidated basis without duplication in accordance with GAAP)
for such period (calculated before taxes, interest expense, depreciation,
amortization and any other non-cash income or charges accrued for such period
and (except to the extent received or paid in cash by Lamar Media or any of its
restricted subsidiaries) income or loss attributable to equity in affiliates for
such period) excluding any extraordinary and unusual gains or losses during such
period and excluding the proceeds of any casualty events whereby insurance or
other proceeds are received and certain dispositions not in the ordinary course.
Any dividend payment made by Lamar Media or any of its restricted subsidiaries
to Lamar Advertising Company during any period to enable Lamar Advertising
Company to pay certain qualified expenses on behalf of Lamar Media and its
subsidiaries, shall be treated as operating expenses of Lamar Media for the
purposes of calculating EBITDA for such period. EBITDA under the new bank credit
agreement is also adjusted to reflect certain acquisitions or dispositions as if
such acquisitions or dispositions were made on the first day of such period.

The Company believes that its current level of cash on hand, availability under
its new bank credit agreement and future cash flows from operations are
sufficient to meet its operating needs through the year 2003. All debt
obligations are on the Company's balance sheet.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities", ("Statement 146") which addresses financial
accounting and reporting for costs associated with exit or disposal activities.
It nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." The principle difference between Statement
146 and Issue 94-3 relates to the recognition of a

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liability for a cost associated with an exit or disposal activity. Statement 146
requires that a liability be recognized for those costs only when the liability
is incurred, that is, when it meets the definition of a liability in the FASB's
conceptual framework. In contrast, under Issue 94-3, a company recognized a
liability for an exit cost when it committed to an exit plan. Statement 146 also
establishes fair value as the objective for initial measurement of liabilities
related to exit or disposal activities. The Statement is effective for exit or
disposal activities that are initiated after December 31, 2002 and did not have
an impact on the Company's consolidated financial statements. The Company
adopted the provisions related to Statement No. 146 as of January 1, 2003.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB Interpretation No. 34". This Interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. The Interpretation
also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of the Interpretation are
applicable to guarantees issued or modified after December 31, 2002 and did not
have a material effect on the Company's consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51." This
interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interests in variable interest entities created after
January 31, 2003, and to variable interests in variable interest entities
obtained after January 31, 2003. The application of the Interpretation is not
expected to have an effect on the Company's consolidated financial statements as
the Company has no variable interest entities. The Interpretation requires
certain disclosures in financial statements issued after January 31, 2003 if it
is reasonably possible that the Company will consolidate or disclose information
about variable interest entities.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under FASB Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The Company is
required to adopt SFAS No. 149 for all contracts entered into or modified after
June 30, 2003, except for certain hedging relationships designated after June
30, 2003 pursuant to the guidance in SFAS No. 149. The Company does not expect
adoption to have an impact on its consolidated financial statements.

LAMAR MEDIA CORP.

THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THREE MONTHS ENDED MARCH 31, 2002

Net revenues increased $7.7 million or 4.4% to $184.2 million for the three
months ended March 31, 2003 from $176.5 million for the same period in 2002.
This increase was attributable primarily to (i) an increase in billboard net
revenues of $6.3 million or 3.8%, (ii) a $0.6 million increase in logo sign
revenue, which represents an increase of 7.0% over the prior year, and (iii) a
$0.7 million increase in transit revenue, which represents a 53% increase over
the prior year.

The increase in billboard net revenues of $6.3 million was due to both
acquisition activity and internal growth while the increase in logo sign revenue
of $0.6 million and transit revenue growth of $0.7 million was generated by
internal growth across various markets within the logo sign and transit
programs. Net revenues for the three months ended March 31, 2003 as compared to
acquisition-adjusted net revenue (3) for the three months ended March 31, 2002,
which includes adjustments for acquisitions for the same time frame as actually
owned in 2003, increased $5.3 million or 2.9% as a result of net revenue
internal growth.

Operating expenses, exclusive of depreciation and amortization and gain on sale
of assets, increased $6.0 million or 5.5% to $114.4 million for the three months
ended March 31, 2003 from $108.4 million for the same period in 2002. There was
a $5.8 million increase as a result of additional operating expenses related to
the operations of acquired outdoor advertising assets and increases in
personnel, sign site rent, insurance costs and property taxes. The remaining
$0.2 million increase in expenses is a result of increases in corporate overhead
expenses.

- ----------

(3) Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue:

-17-

Depreciation and amortization expense increased $0.4 million or 0.6% from $66.3
million for the three months ended March 31, 2002 to $66.7 million for the three
months ended March 31, 2003.

Due to the above factors, operating income increased $1.2 million to $3.2
million for three months ended March 31, 2003 compared to $2.0 million for the
same period in 2002.

In January 2003, Lamar Media Corp., redeemed all of its outstanding 9 5/8%
Senior Subordinated Notes due 2006 in aggregate principle amount of
approximately $255 million for a redemption price equal to 103.208% of the
principle amount of the Notes. In the first quarter of 2003, Lamar Media
recorded approximately $11.2 million as a loss on extinguishment of debt related
to the prepayment of the 9 5/8% Senior Subordinated Notes due 2006.

Interest expense decreased $3.0 million from $23.0 million for the three months
ended March 31, 2002 to $20.0 million for the three months ended March 31, 2003
as a result of lower interest rates both on existing and recently refinanced
debt.

The increase in operating income, the decrease in interest expense offset by the
loss on extinguishment of debt described above resulted in a $7.0 million
increase in loss before income taxes and cumulative effect of change in
accounting principle. The increase in this loss, resulted in an increase in the
income tax benefit of $2.6 million for the three months ended March 31, 2003
over the same period in 2002. The effective tax rate for the three months ended
March 31, 2003 is 36.2%.

Due to the adoption of SFAS 143, Lamar Media recorded a cumulative effect of a
change in accounting principle, net of tax of $11.7 million.

As a result of the above factors, Lamar Media recognized a net loss for the
three months ended March 31, 2003 of $29.4 million, as compared to a net loss of
$13.3 million for the same period in 2002.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

LAMAR ADVERTISING COMPANY AND LAMAR MEDIA CORP.

Lamar Advertising Company is exposed to interest rate risk in connection with
variable rate debt instruments issued by its wholly owned subsidiary Lamar Media
Corp. The information below summarizes the Company's interest rate risk
associated with its principle variable rate debt instruments outstanding at
March 31, 2003.

Loans under Lamar Media Corp.'s bank credit agreement bear interest at variable
rates equal to the JPMorgan Chase Prime Rate or LIBOR plus the applicable
margin. Because the JPMorgan Chase Prime Rate or LIBOR may increase or decrease
at any time, the Company is exposed to market risk as a result of the impact
that changes in these base rates may have on the interest rate applicable to
borrowings under the bank credit agreement. Increases in the interest rates
applicable to borrowings under the bank credit agreement would result in
increased interest expense and a reduction in the Company's net income.

At March 31, 2003, there was $975.0 million of aggregate indebtedness
outstanding under the new bank credit agreement, or approximately 56.2% of the
Company's outstanding long-term debt on that date, bearing interest at variable
rates. The aggregate interest expense for 2003 with respect to borrowings under
the bank credit agreement was approximately $9.0 million, and the weighted
average interest rate applicable to borrowings under this credit facility during
2003 was 3.6%. Assuming that the weighted average interest rate was 200-basis
points higher (that is 5.6% rather than 3.6%), then the Company's 2003 interest
expense would have been approximately $4.8 million higher resulting in a $2.9
million increase in the Company's 2003 net loss.

The Company has mitigated the interest rate risk resulting from its variable
interest rate long-term debt instruments by issuing fixed rate long-term debt
instruments and maintaining a balance over time between the amount of the
Company's variable rate and fixed rate indebtedness. In addition, the Company
has and had the capability under the old and new bank credit agreement to fix
the interest rates applicable to its borrowings at an amount equal to LIBOR plus
the applicable margin for periods of up to twelve months, which would allow the
Company to mitigate the impact of short-term fluctuations in market interest
rates. In the event of an increase in interest rates, the Company may take
further actions to mitigate its exposure. The Company cannot guarantee, however,
that the actions that it may take to mitigate this risk will be feasible or
that, if these actions are taken, that they will be effective.

ITEM 4.

CONTROLS AND PROCEDURES.

a) Evaluation of disclosure controls and procedures. Within 90 days prior to the
date of this report, the Company and Lamar Media carried out an evaluation under
the supervision and with the participation of their management, including the
Company's and Lamar Media's Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of the Company's and Lamar
Media's disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) under the Securities Exchange Act of 1934). Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's and Lamar Media's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company and Lamar Media required to be included in the Company's and Lamar
Media's reports filed with or submitted to the Securities and Exchange
Commission under the Securities Exchange Act of 1934.

b) Changes in internal controls. Since the date of that evaluation, there have
been no significant changes in the internal controls of the Company or Lamar
Media or in other factors that could significantly affect those controls.

-19-

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) The Exhibits filed as part of this report are listed on the Exhibit Index
immediately following the signature page hereto, which Exhibit Index is
incorporated herein by reference.

(b) Reports on Form 8-K

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

LAMAR ADVERTISING COMPANY

DATED: May 14, 2003 BY: /s/ KEITH A. ISTRE
----------------------------------------
Chief Financial and Accounting Officer,
Treasurer and Director

LAMAR MEDIA CORP.

DATED: May 14, 2003 BY: /s/ KEITH A. ISTRE
----------------------------------------
Chief Financial and Accounting Officer,
Treasurer and Director

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CERTIFICATIONS

I, Kevin P. Reilly, Jr., certify that:

1. I have reviewed this combined quarterly report on Form 10-Q of Lamar
Advertising Company and Lamar Media Corp.;

2. Based on my knowledge, this combined quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this combined quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this combined quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrants as of, and for, the periods presented in this
combined quarterly report;

4. The registrants' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrants and we have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrants,
including their consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this combined quarterly report is being
prepared;

b) evaluated the effectiveness of the registrants' disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this combined quarterly report (the
"Evaluation Date"); and

c) presented in this combined quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrants' other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants' auditors and the audit
committee of registrants' board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrants' ability to record, process, summarize and report
financial data and have identified for the registrants'
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrants' internal controls; and

6. The registrants' other certifying officer and I have indicated in this
combined quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

DATED: May 14, 2003 BY: /s/ KEVIN P. REILLY, JR.
--------------------------------------------------
Kevin P. Reilly, Jr.
Chief Executive Officer, Lamar Advertising Company
Chief Executive Officer, Lamar Media Corp.

-21-

I, Keith A. Istre, certify that:

1. I have reviewed this combined quarterly report on Form 10-Q of Lamar
Advertising Company and Lamar Media Corp.;

2. Based on my knowledge, this combined quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this combined quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this combined quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrants as of, and for, the periods presented in this
combined quarterly report;

4. The registrants' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrants and we have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrants,
including their consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this combined quarterly report is being
prepared;

b) evaluated the effectiveness of the registrants' disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this combined quarterly report (the
"Evaluation Date"); and

c) presented in this combined quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrants' other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants' auditors and the audit
committee of registrants' board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrants' ability to record, process, summarize and report
financial data and have identified for the registrants'
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrants' internal controls; and

6. The registrants' other certifying officer and I have indicated in this
combined quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

DATED: May 14, 2003 BY: /s/ KEITH A. ISTRE
--------------------------------------------------
Keith A. Istre
Chief Financial Officer, Lamar Advertising Company
Chief Financial Officer, Lamar Media Corp.

-22-

INDEX TO EXHIBITS

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