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 September 30, 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 (I.R.S. Employer
incorporation or 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 October 31, 2003: 86,868,657

The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of October 31, 2003: 16,417,073

The number of shares of Lamar Media Corp. common stock outstanding as of October
31, 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 (the
"Company") and Lamar Media Corp. ("Lamar Media") 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:

- expected operating results;

- market opportunities;

- acquisition opportunities;

- ability to compete; and

- 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:

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

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

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

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

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

- - the regulation of the outdoor advertising industry by federal, state
and local governments.

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, except as may be
required by law.

CONTENTS

Page
----

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Lamar Advertising Company

Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002 1

Condensed Consolidated Statements of Operations for the three months ended September
30, 2003 and 2002 and nine months ended September 30, 2003 and 2002 2

Condensed Consolidated Statements of Cash Flows for the nine months ended September
30, 2003 and 2002 3

Notes to Condensed Consolidated Financial Statements 4 - 8

Lamar Media Corp.

Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002 9

Condensed Consolidated Statements of Operations for the three months ended September
30, 2003 and 2002 and nine months ended September 30, 2003 and 2002 10

Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2003 and 2002 11

Notes to Condensed Consolidated Financial Statements 12

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 - 20

ITEM 3. Quantitative and Qualitative Disclosures About Market Risks 21

ITEM 4. Controls and Procedures 21

PART II - OTHER INFORMATION

ITEM 6. Exhibits and Reports on Form 8-K 22

Signatures 22

Index to Exhibits 23

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)

September 30, December 31,
2003 2002
------------- -----------

ASSETS
Current assets:
Cash and cash equivalents $ 6,492 $ 15,610
Cash on deposit for debt extinguishment - 266,657
Receivables, net of allowance for doubtful accounts of $5,153 and $4,914
in 2003 and 2002, respectively 98,200 92,382
Prepaid expenses 43,914 30,091
Deferred income tax asset 6,405 6,428
Other current assets 6,821 7,315
------------ -----------
Total current assets 161,832 418,483
------------ -----------

Property, plant and equipment 1,924,603 1,850,657
Less accumulated depreciation and amortization (650,119) (566,889)
------------ -----------
Net property, plant and equipment 1,274,484 1,283,768
------------ -----------

Goodwill 1,237,867 1,178,428
Intangible assets 996,439 988,953
Other assets - non-current 30,531 18,474
------------ -----------
Total assets $ 3,701,153 $ 3,888,106
============ ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 13,751 $ 10,051
Current maturities of long-term debt 5,040 4,687
Current maturities related to debt extinguishment -- 255,000
Accrued expenses 36,606 38,881
Deferred income 15,395 13,942
------------ -----------
Total current liabilities 70,792 322,561
------------ -----------

Long-term debt 1,760,389 1,734,746
Deferred income taxes 100,104 114,260
Other liabilities 44,918 7,366
------------ -----------

Total liabilities 1,976,203 2,178,933
------------ -----------

Stockholders' equity:
Series AA preferred stock, par value $.001, $63.80 cumulative dividends, authorized
5,720 shares; 5,719 shares issued and outstanding at 2003 and 2002 -- --
Class A preferred stock, par value $638, $63.80 cumulative dividends, 10,000 shares
authorized; 0 shares issued and outstanding at 2003 and 2002 -- --
Class A common stock, par value $.001, 175,000,000 shares authorized, 86,867,157
and 85,077,038 shares issued and outstanding at 2003 and 2002, respectively 87 85
Class B common stock, par value $.001, 37,500,000 shares authorized, 16,417,073
shares issued and outstanding at 2003 and 2002 16 16
Additional paid-in capital 2,093,738 2,036,709
Accumulated deficit (368,891) (327,637)
------------ -----------
Stockholders' equity 1,724,950 1,709,173
------------ -----------
Total liabilities and stockholders' equity $ 3,701,153 $ 3,888,106
============ ===========

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)

Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----

Net revenues $ 211,720 $ 201,918 $ 604,119 $ 580,985
------------- ------------- ------------- -------------
Operating expenses (income)
Direct advertising expenses 74,571 71,685 219,489 205,544
General and administrative expenses 36,098 33,721 107,615 101,853
Corporate expenses 6,631 8,604 18,541 21,095
Depreciation and amortization 70,410 70,268 207,483 206,769
Loss (gain) on disposition of assets 242 (33) (616) (203)
------------- ------------- ------------- -------------
187,952 184,245 552,512 535,058
------------- ------------- ------------- -------------

Operating income 23,768 17,673 51,607 45,927

Other expense (income)
Loss on extinguishment of debt 12,566 -- 29,493 --
Interest income (99) (387) (283) (774)
Interest expense 21,524 27,182 67,871 81,199
------------- ------------- ------------- -------------
33,991 26,795 97,081 80,425
------------- ------------- ------------- -------------
Loss before income tax benefit and
cumulative effect of a change in
accounting principle (10,223) (9,122) (45,474) (34,498)
Income tax benefit (3,715) (3,134) (16,172) (12,039)
------------- ------------- ------------- -------------

Loss before cumulative effect of a change
in accounting principle (6,508) (5,988) (29,302) (22,459)

Cumulative effect of a change in
accounting principle, net of tax -- -- (11,679) --
------------- ------------- ------------- -------------
Net loss (6,508) (5,988) (40,981) (22,459)

Preferred stock dividends 91 91 273 273
------------- ------------- ------------- -------------

Net loss applicable to common stock $ (6,599) $ (6,079) $ (41,254) $ (22,732)
------------- ------------- ------------- -------------

Loss per common share:
Loss before cumulative effect of a change
in accounting principle $ (0.06) $ (0.06) $ (0.29) $ (0.23)
Cumulative effect of a change in
accounting principle -- -- (0.11) --
------------- ------------- ------------- -------------
Net loss $ (0.06) $ (0.06) $ (0.40) $ (0.23)
============= ============= ============= =============

Weighted average common shares
outstanding - basic and diluted 103,251,834 101,377,147 102,472,830 100,965,349
============= ============= ============= =============

See accompanying notes to condensed consolidated financial statements.

-2-

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

Nine Months Ended
September 30,
2003 2002
---- ----

Cash flows from operating activities:
Net loss $ (40,981) $ (22,459)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 207,483 206,769
Gain on disposition of assets (616) (203)
Deferred tax benefit (15,862) (7,661)
Provision for doubtful accounts 6,454 6,378
Loss on debt extinguishment 29,493 --
Cumulative effect of a change in accounting principle, net of tax 11,679 --
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (11,871) (12,208)
Prepaid expenses (14,120) (12,753)
Other assets (2,229) (4,559)
Increase (decrease) in:
Trade accounts payable 3,700 (2,139)
Accrued expenses (3,378) (1,150)
Other liabilities 1,378 3,481
--------- ---------
Cash flows provided by operating activities 171,130 153,496
--------- ---------

Cash flows from investing activities:
Acquisitions (124,967) (74,041)
Capital expenditures (61,299) (56,938)
Proceeds from disposition of assets 2,913 2,048
--------- ---------
Cash flows used in investing activities (183,353) (128,931)
--------- ---------

Cash flows from financing activities:
Debt issuance costs (9,800) (1,076)
Net proceeds from issuance of common stock 5,451 12,697
Principal payments on long-term debt (667,280) (50,192)
Net borrowings under credit agreements -- 60,000
Cash from deposits for debt extinguishment 266,657 --
Net proceeds from note offerings and new note payable 408,350 40
Dividends (273) (273)
--------- ---------
Cash flows provided by financing activities 3,105 21,196
--------- ---------

Net (decrease) increase in cash and cash equivalents (9,118) 45,761
Cash and cash equivalents at beginning of period 15,610 12,885
--------- ---------
Cash and cash equivalents at end of period $ 6,492 $ 58,646
--------- ---------

Supplemental disclosures of cash flow information:
Cash paid for interest $ 66,010 $ 85,252
========= =========
Cash paid for state and federal income taxes $ 390 $ 481
========= =========
Common stock issuance related to acquisitions $ 50,630 $ 56,100
========= =========

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 condensed 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 condensed 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.

Effective May 1, 2003, the Company purchased the assets of Outdoor Media Group,
Inc. for $40,000. The purchase price consisted of 307,134 shares of Lamar
Advertising Class A common stock as well as approximately $30,000 cash.

On June 2, 2003, the Company purchased the stock of Adams Outdoor, Inc. for
approximately $40,137. The purchase price included 501,626 shares of Lamar
Advertising Class A common stock and approximately $22,637 cash.

During the nine months ended September 30, 2003, the Company completed
additional acquisitions of outdoor advertising assets for a total purchase price
of approximately $78,798, which consisted of the issuance of 152,792 shares of
Lamar Advertising Class A common stock and $73,668 cash.

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.

Delite Adams Outdoor
Outdoor Outdoor Media
Inc. Inc. Group, Inc. Other Total
------- ------- ----------- ------ -------

Current assets 911 1,327 19 435 2,692
Property, plant and equipment 4,580 2,299 2,793 14,015 23,687
Goodwill 43 24,254 17,111 18,031 59,439
Site locations 10,048 16,221 16,335 36,399 79,003
Non-competition agreements 145 -- -- 361 506
Customer lists and contracts 2,732 3,716 3,742 5,856 16,046
Other assets -- -- -- 6,666 6,666
Current liabilities 108 403 -- 445 956
Long-term liabilities 351 7,277 -- 2,520 10,148
------- ------ -------- ------ -------
18,000 40,137 40,000 78,798 176,935
======= ====== ======== ====== =======

-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 and nine months ended September 30, 2003 and September 30,
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.

Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----

Net revenues $ 211,746 $ 208,194 $ 611,753 $ 602,291
--------- --------- --------- ---------
Net loss applicable to common stock $ (6,612) $ (7,779) $ (42,470) $ (27,541)
--------- --------- --------- ---------
Net loss per common share $ (0.06) $ (0.08) $ (0.41) $ (0.27)
--------- --------- --------- ---------

3. Goodwill and Other Intangible Assets

The following is a summary of intangible assets at September 30, 2003 and
December 31, 2002.

September 30, 2003 December 31, 2002
Estimated ------------------ -----------------
Life Gross Carrying Accumulated Gross Carrying Accumulated
(Years) Amount Amortization Amount Amortization
------- -------------- ------------ -------------- ------------

Amortizable Intangible Assets:
Debt issuance costs and fees 7 - 10 $ 51,621 $ 20,976 $ 52,202 $ 27,533
Customer lists and contracts 7 - 10 387,833 235,393 371,787 196,084
Non-competition agreements 3 - 15 57,529 44,608 57,023 39,458
Site locations 15 1,016,775 226,181 937,773 177,016
Other 5 - 15 17,029 7,190 15,997 5,738
------ ---------- --------- ----------- ----------
1,530,787 534,348 1,434,782 445,829
Unamortizable Intangible Assets:
Goodwill $1,491,502 $ 253,635 $ 1,432,063 $ 253,635

The changes in the gross carrying amount of goodwill for the nine months ended
September 30, 2003 are as follows:

Balance as of December 31, 2002 $ 1,432,063
Goodwill acquired during the nine months ending September 30, 2003 59,439
Impairment losses --
----------------
Balance as of September 30, 2003 $ 1,491,502
================

-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 subordinated to all of Lamar Media's existing and any
future senior debt, ranked equally with all of Lamar Media's existing and future
senior subordinated debt and ranked 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 principal 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 principal 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 that consisted of a prepayment premium of $8,180
and associated debt issuance costs of $2,993.

On June 12, 2003, Lamar Media Corp. issued $125,000 7 1/4% Senior Subordinated
Notes due 2013 as an add on to the $260,000 issued in December 2002. The issue
price of the $125,000 7 1/4% Notes was 103.661% of the principal amount of the
notes, which yields an effective rate of 6 5/8% . The proceeds of the issuance
were used to redeem approximately $100,000 of Lamar Media's 8 5/8% senior
subordinated notes for a redemption price equal to 104.313% of the principal
amount of the notes. The Company recorded a loss on extinguishment of debt of
$5,754 in the second quarter of 2003 related to this prepayment. Approximately
$100,000 in aggregate principal amount of Lamar Media's 8 5/8% notes remain
outstanding following this redemption.

On June 16, 2003, the Company issued $287,500 2 7/8% Convertible Notes due 2010.
The net proceeds from these notes together with additional cash were used on
July 16, 2003 to redeem all of the Company's outstanding 5 1/4% convertible
notes due 2006 in aggregate principal amount of approximately $287,500 for a
redemption price equal to 103.0% of the principal amount of notes. The Company
recorded a loss on extinguishment of debt in the third quarter of 2003 of
$12,566 related to this redemption.

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 its adoption of
SFAS No. 143, the Company expensed these costs at the date of retirement. Also,
as of January 1, 2003, the Company recorded additions to property, plant and
equipment totaling $23,114 under the provisions of SFAS No. 143.

All of the Company's 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:

Balance at January 1, 2003 $ 33,467
Additions to asset retirement obligations 1,326
Accretion expense 1,745
Liabilities settled (462)
--------
Balance at September 30, 2003 $ 36,076
--------

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.

Nine months ended
September 30, 2002
------------------

Net loss applicable to common stock, as reported $(22,732)
Pro forma adjustments to reflect retroactive adoption
of SFAS No. 143 (11,044)
--------
Pro forma net loss applicable to common stock $(33,776)
========

Net loss per common share - basic and diluted:
Net loss, as reported $ (0.23)
Net loss, pro forma $ (0.33)

-6-

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

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 an 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.

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

Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----

Net loss applicable to common stock, as reported $ (6,599) $ (6,079) $(41,254) $(22,732)
Deduct: Total stock based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects (964) (1,628) (2,942) (5,470)
-------- -------- -------- --------
Pro forma net loss applicable to common stock $ (7,563) $ (7,707) $(44,196) $(28,202)
-------- -------- -------- --------
Net loss per common share - basic and diluted
Net loss, as reported $ (0.06) $ (0.06) $ (0.40) $ (0.23)
Net loss, pro forma $ (0.07) $ (0.08) $ (0.43) $ (0.28)

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 September 30, 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 $1,940,622 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 earnings 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 6,949,954 and 6,547,612 for three months ended
September 30, 2003 and 2002 and 7,000,969 and 6,811,938 for the nine months
ended September 30, 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
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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 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 this Interpretation did not
have a material effect on the Company's financial statements as the Company has
no interest in 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
adopted SFAS No. 149 for all contracts entered into or modified after June 30,
2003. The adoption of SFAS No. 149 did not have a material impact on its
consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." Statement 150
affects the issuer's accounting for three types of freestanding financial
instruments. One type is mandatory redeemable shares, which the issuing company
is obligated to buy back in exchange for cash or other assets. A second type,
which includes put options and forward purchase contracts, involves instruments
that do or may require the issuer to buy back some of its shares in exchange for
cash or other assets. The third type of instruments that are liabilities under
this Statement is obligations that can be settled with shares, the monetary
value of which is fixed, tied solely or predominately to a variable such as a
market index, or varies inversely with the value of the issuers' shares.
Statement 150 does not apply to features embedded in a financial instrument that
is not a derivative in its entirety. Most of the guidance in Statement 150 is
effective for all financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. Because the Company does not have any financial
instruments covered by SFAS No. 150 outstanding, its adoption did not materially
impact the Company's financial position, cash flows or results of operations.

10. Commitments and Contingent Liabilities

In August 2002, a jury verdict was rendered in a lawsuit filed against the
Company in the amount of $32 in compensatory damages and $2,245 in punitive
damages. As a result of the verdict, the Company recorded a $2,277 charge in its
operating expenses during the quarter ended September 30, 2002. In May 2003, the
Court ordered a reduction to the punitive damage award, which was subject to the
plaintiff's consent. The plaintiff rejected the reduced award and the Court
ordered a new trial. Based on legal analysis, management believes the best
estimate of the Company's potential liability related to this claim is currently
$1,277. The $1,000 reduction in the reserve for this liability was recorded as a
reduction of corporate expenses in the second quarter of 2003.

-8-

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

September 30, December 31,
2003 2002
---- ----

ASSETS
Current assets:
Cash and cash equivalents $ 6,492 $ 15,610
Cash on deposit for debt extinguishment -- 266,657
Receivables, net of allowance for doubtful accounts of $5,153 and $4,914 in
2003 and 2002, respectively 98,086 92,295
Prepaid expenses 43,914 30,091
Deferred income tax asset 6,405 6,428
Other current assets 6,821 7,315
----------- -----------
Total current assets 161,718 418,396
----------- -----------

Property, plant and equipment 1,924,603 1,850,657
Less accumulated depreciation and amortization (650,119) (566,889)
----------- -----------
Net property, plant and equipment 1,274,484 1,283,768
----------- -----------

Goodwill 1,230,685 1,171,595
Intangible assets 981,051 975,998
Other assets - non-current 48,050 25,152
----------- -----------
Total assets $ 3,695,988 $ 3,874,909
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Trade accounts payable $ 13,751 $ 10,051
Current maturities of long-term debt 5,040 4,687
Current maturities related to debt extinguishment -- 255,000
Accrued expenses 26,763 25,981
Deferred income 15,395 13,942
----------- -----------
Total current liabilities 60,949 309,661
----------- -----------

Long-term debt 1,472,889 1,447,246
Deferred income taxes 125,890 129,924
Other liabilities 44,918 7,366
----------- -----------

Total liabilities 1,704,646 1,894,197
----------- -----------

Stockholder's equity:
Common stock, $0.01 par value, authorized 3,000 shares; 100 shares issued and
outstanding at September 30, 2003 and December 31, 2002, respectively -- --
Additional paid-in capital 2,333,482 2,281,901
Accumulated deficit (342,140) (301,189)
----------- -----------
Stockholder's equity 1,991,342 1,980,712
----------- -----------
Total liabilities and stockholder's equity $ 3,695,988 $ 3,874,909
=========== ===========

See accompanying notes to condensed consolidated financial statements.

-9-

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

Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----

Net revenues $ 211,720 $ 201,918 $ 604,119 $ 580,985
--------- --------- --------- ---------
Operating expenses (income)
Direct advertising expenses 74,571 71,685 219,489 205,544
General and administrative expenses 36,098 33,722 107,615 101,854
Corporate expenses 6,541 8,531 18,286 20,884
Depreciation and amortization 69,632 69,455 204,968 204,332
Loss (gain) on disposition of assets 242 (33) (616) (203)
--------- --------- --------- ---------
187,084 183,360 549,742 532,411
--------- --------- --------- ---------

Operating income 24,636 18,558 54,377 48,574

Other expense (income)
Loss on debt extinguishment -- -- 16,927 --
Interest income (99) (387) (283) (774)
Interest expense 18,786 23,408 57,242 69,878
--------- --------- --------- ---------
18,687 23,021 73,886 69,104
--------- --------- --------- ---------

Income (loss) before income tax expense
(benefit) and cumulative effect of a
change in accounting principle 5,949 (4,463) (19,509) (20,530)

Income tax expense (benefit) 2,578 (1,318) (6,050) (6,596)
--------- --------- --------- ---------

Income (loss) before cumulative effect of
a change in accounting principle 3,371 (3,145) (13,459) (13,934)

Cumulative effect of a change in
accounting principle, net of tax -- -- (11,679) --
--------- --------- --------- ---------

Net income (loss) $ 3,371 $ (3,145) $ (25,138) $ (13,934)
========= ========= ========= =========

See accompanying notes to condensed consolidated financial statements.

-10-

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

Nine Months Ended
September 30,
2003 2002
---- ----

Cash flows from operating activities:
Net loss $ (25,138) $ (13,934)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 204,968 204,332
Gain on disposition of assets (616) (203)
Deferred tax benefit (5,740) (2,218)
Provision for doubtful accounts 6,454 6,378
Loss on debt extinguishment 16,927 --
Cumulative effect of change in accounting principle, net of tax 11,679 --
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (11,844) (13,652)
Prepaid expenses (14,120) (12,753)
Other assets (13,070) (4,740)
Increase (decrease) in:
Trade accounts payable 3,700 (2,139)
Accrued expenses (320) 1,368
Other liabilities 1,378 3,481
--------- ---------
Cash flows provided by operating activities 174,258 165,920
--------- ---------

Cash flows from investing activities:
Acquisitions (123,666) (74,041)
Capital expenditures (61,299) (56,938)
Proceeds from disposition of assets 2,913 2,048
--------- ---------
Cash flows used in investing activities (182,052) (128,931)
--------- ---------

Cash flows from financing activities:
Debt issuance costs (9,051) (1,076)
Dividend (15,813) --
Principal payments on long-term debt (371,155) (50,192)
Net borrowings under credit agreements -- 60,000
Cash from deposits for debt extinguishment 266,657 --
Net proceeds from note offering and new note payable 128,038 40
--------- ---------
Cash flows (used in) provided by financing activities (1,324) 8,772
--------- ---------

Net (decrease) increase in cash and cash equivalents (9,118) 45,761
Cash and cash equivalents at beginning of period 15,610 12,885
--------- ---------
Cash and cash equivalents at end of period $ 6,492 $ 58,646
========= =========

Supplemental disclosures of cash flow information:
Cash paid for interest $ 53,390 $ 70,159
========= =========
Cash paid for state and federal income taxes $ 390 $ 481
========= =========
Parent company stock contributed for acquisitions $ 50,630 $ 56,100
========= =========

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 condensed 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, 9 and 10 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 Lamar Media Corp. as it is a wholly owned
subsidiary of Lamar Advertising Company.

2. Note Offering for Lamar Advertising Company

On June 16, 2003, Lamar Advertising Company issued $287,500 2 7/8% Convertible
Notes due 2010. The net proceeds from these notes together with additional cash
were used to redeem all of Lamar Advertising Company's outstanding 5 1/4%
convertible notes due 2006 in aggregate principal amount of approximately
$287,500 on July 16, 2003 for a redemption price equal to 103.0% of the
principal amount of notes. In connection with this offering, Lamar Media paid
dividends to Lamar Advertising Company in the amount of $15,813 to fund the
additional cash necessary for Lamar Advertising Company to complete this
transaction.

-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 Form 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 nine months and three months ended
September 30, 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 13% by completing acquisitions
of outdoor advertising and transit assets for an aggregate purchase price of
approximately $642 million, which included the issuance of 3,680,559 shares of
Lamar Advertising Company Class A common stock valued at the time of issuance at
approximately $136 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 includes 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. The
following table presents a breakdown of capitalized expenditures for the three
months and nine months ended September 30, 2003 and 2002:

Three months ended Nine months ended
September 30, September 30,
(in thousands) (in thousands)
2003 2002 2003 2002
---- ---- ---- ----

Billboard $14,512 $11,952 $39,733 $32,798
Logos 1,470 1,205 5,538 3,335
Transit 422 1,520 1,353 3,900
Land and buildings 2,181 4,194 8,100 11,600
PP&E 1,947 1,987 6,575 5,305
------- ------- ------- -------
Total capital expenditures $20,532 $20,858 $61,299 $56,938
======= ======= ======= =======

-13-

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2002

Net revenues increased $23.1 million or 4.0% to $604.1 million for the nine
months ended September 30, 2003 from $581.0 million for the same period in 2002.
This increase was attributable primarily to (i) an increase in billboard net
revenues of $19.9 million or 3.6%, (ii) a $1.9 million increase in logo sign
revenue, which represents an increase of 6.7% over the prior year, and (iii) a
$1.0 million increase in transit revenue, which represents a 16.7% increase over
the prior year.

The increase in billboard net revenues of $19.9 million was due to both
acquisition activity and internal growth while the increase in logo sign revenue
of $1.9 million and transit revenue growth of $1.0 million was generated by
internal growth across various markets within the logo sign and transit
programs. Net revenues for the nine months ended September 30, 2003 as compared
to acquisition-adjusted net revenue(1) for the nine months ended September 30,
2002, which includes adjustments for acquisitions for the same time frame as
actually owned in 2003, increased $9.0 million or 1.5% as a result of net
revenue internal growth.

Operating expenses, exclusive of depreciation and amortization and gain on sale
of assets, increased $17.1 million or 5.2% to $345.6 million for the nine months
ended September 30, 2003 from $328.5 million for the same period in 2002. There
was a $19.7 million increase as a result of additional operating expenses
related to the operations of acquired outdoor advertising assets and increases
in costs in operating the Company's core assets. This increase was offset by a
$2.6 million decrease in corporate expenses due to the partial reversal in the
second quarter of 2003 of a charge related to a jury verdict rendered against
the Company in the third quarter of 2002, which is discussed below.

In the third quarter of 2002, the Company recorded a charge of $2.3 million
related to a jury verdict rendered in August 2002 against the Company for
compensatory and punitive damages. In May 2003, the Court ordered a reduction to
the punitive damage award, which was subject to the plaintiff's consent. The
plaintiff rejected the reduced award and the Court ordered a new trial. Based on
legal analysis, management believes the best estimate of the Company's potential
liability related to this claim is currently $1.3 million. The $1.0 million
reduction in the reserve for this liability was recorded as a reduction of
corporate expenses in the second quarter of 2003.

Depreciation and amortization expense increased $0.7 million or 0.3% from $206.8
million for the nine months ended September 30, 2002 to $207.5 million for the
nine months ended September 30, 2003.

Due to the above factors, operating income increased $5.7 million to $51.6
million for nine months ended September 30, 2003 compared to $45.9 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 principal amount of approximately $255.0 million for a redemption
price equal to 103.208% of the principal 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. In
June 2003, Lamar Media Corp., redeemed $100.0 million in principal amount of its
8 5/8% Senior Subordinated Notes due 2007, for a redemption price equal to
104.313% of the principal amount of the notes. In the second quarter of 2003,
the Company recorded a loss on extinguishment of debt of $5.8 million, related
to this prepayment. Approximately $100.0 million in aggregate principal amount
of our 8 5/8% notes remain outstanding following this redemption. In July, the
Company redeemed all of it's outstanding 5 1/4 % Convertible Notes due 2006 in
aggregate principal amount of approximately $287.5 million for a redemption
price equal to 103.0% of the principal amount of the notes. As a result of this
redemption, the Company recorded a loss on extinguishment of debt of $12.6
million.

Interest expense decreased $13.3 million from $81.2 million for the nine months
ended September 30, 2002 to $67.9 million for the nine months ended September
30, 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 described
above offset by the loss on extinguishment of debt resulted in a $11.0 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 $4.1 million for the nine months ended September 30, 2003
over the same period in 2002. The effective tax rate for the nine months ended
September 30, 2003 is 35.6%.

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

Nine months ended September 30,
(in thousands)
2003 2002
---- ----

Reported net revenue $ 604,119 $ 580,985
Acquisition net revenue - 14,164
--------- ---------
Acquisition-adjusted net revenue $ 604,119 $ 595,149
========= =========

-14-

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 nine
months ended September 30, 2003 of $41.0 million, as compared to a net loss of
$22.5 million for the same period in 2002.

THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2002

Net revenues increased $9.8 million or 4.9% to $211.7 million for the three
months ended September 30, 2003 from $201.9 million for the same period in 2002.
This increase was attributable primarily to (i) an increase in billboard net
revenues of $8.7 million or 4.6%, (ii) a $0.7 million increase in logo sign
revenue, which represents an increase of 7.3% over the prior year, and (iii) a
$0.3 million increase in transit revenue, which represents a 11.8% increase over
the prior year.

The increase in billboard net revenues of $8.7 million was due to acquisition
activity while the increase in logo sign revenue of $0.7 million and transit
revenue growth of $0.3 million was generated by internal growth across various
markets within the logo sign and transit programs. Net revenues for the three
months ended September 30, 2003 as compared to acquisition-adjusted net
revenue(2) for the three months ended September 30, 2002, which includes
adjustments for acquisitions for the same time frame as actually owned in 2003
increased $3.5 million or 1.7% as a result of net revenue internal growth.

Operating expenses, exclusive of depreciation and amortization and gain or loss
on sale of assets, increased $3.3 million or 2.9% to $117.3 million for the
three months ended September 30, 2003 from $114.0 million for the same period in
2002. There was a $5.3 million increase as a result of additional operating
expenses related to the operations of acquired outdoor advertising assets and
increases in costs in operating the Company's core assets. This increase was
offset by a $2.0 million decrease in corporate expenses primarily due to a jury
verdict rendered against the Company in the third quarter of 2002, which is
discussed below.

In the third quarter of 2002, the Company recorded a charge of $2.3 million
related to a jury verdict rendered in August 2002 against the Company for
compensatory and punitive damages. In May, 2003, the Court ordered a reduction
to the punitive damage award, which was subject to the plaintiff's consent. The
plaintiff rejected the reduced award and the Court ordered a new trial. Based on
legal analysis, management believes the best estimate of the Company's potential
liability related to this claim is currently $1.3 million. The $1.0 million
reduction in the reserve for this liability was recorded as a reduction of
corporate expenses in the second quarter of 2003.

Depreciation and amortization expense increased $0.1 million from $70.3 million
for the three months ended September 30, 2002 to $70.4 million for the three
months ended September 30, 2003.

Due to the above factors, operating income increased $6.1 million to $23.8
million for three months ended September 30, 2003 compared to $17.7 million for
the same period in 2002.

In July 2003, the Company, redeemed all of its 5 1/4% Convertible Notes due
2006, for a redemption price equal to 103.0% of the principal amount of the
notes. The redemption was funded by the issuance on June 16, 2003 of $287.5
million of 2 7/8% Convertible Notes due 2010. In the third quarter of 2003, the
Company recorded a loss on extinguishment of debt of $12.6 million related to
this prepayment.

Interest expense decreased $5.7 million from $27.2 million for the three months
ended September 30, 2002 to $21.5 million for the three months ended September
30, 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 described
above offset by the loss on extinguishment of debt resulted in a $1.1 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 $0.6 million for the three months ended September 30, 2003
over the same period in 2002. The effective tax rate for the three months ended
September 30, 2003 is 36.3%.

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

Three months ended September 30,
(in thousands)
2003 2002
---- ----

Reported net revenue $ 211,720 $ 201,918
Acquisition net revenue -- 6,255
--------- ----------
Acquisition-adjusted net revenue $ 211,720 $ 208,173
========= ==========

-15-

As a result of the above factors, the Company recognized a net loss for the
three months ended September 30, 2003 of $6.5 million, as compared to a net loss
of $6.0 million for the same period in 2002.

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 Corp., 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 the 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 cash flows provided by operating activities increased to $171.1
million for the nine months ended September 30, 2003 due primarily to an
increase in adjustments to reconcile net loss to cash provided by operating
activities of $33.3 million, which primarily includes the loss on early
extinguishment of debt of $29.5 million and the cumulative effect of a change in
accounting principle of $11.7 million offset by an increase in deferred income
tax benefit of $8.2 million. This increase was offset by an increase in net loss
of $18.5 million. In addition, as compared to the same period in 2002, there
were decreases in the change in receivables of $0.3 million, in other assets of
$2.3 million, in other liabilities of $2.1 million and in accrued expenses of
$2.2 million, and increases in the change in trade accounts payable of $5.8
million and prepaid expenses of $1.4 million.

Cash flows used in investing activities increased $54.5 million from
$128.9 million in 2002 to $183.4 million in 2003 primarily due to the increase
in acquisition activity by the Company in 2003 of $50.9 million, and a $4.4
million increase in capital expenditures. Cash flows provided by financing
activities decreased to $3.1 million for the nine months ended September 30,
2003 due to a $408.3 million increase in net proceeds from note offerings and
new note payable, which is due to the issuance of Lamar Advertising's $287.5
million 2 7/8% Convertible Notes and Lamar Media's issuance of $125.0 million 7
1/4% Senior Subordinated Notes and cash from deposits for debt extinguishment of
$266.7 million offset by a $617.1 million increase in principal payments of
long-term debt due primarily to the redemption of Lamar Media's 9 5/8% Senior
Subordinated Notes, 8 5/8% Senior Subordinated Notes and the Company's 5 1/4%
Convertible Notes. In addition, there was a $7.2 million decrease in proceeds
from issuance of the Company's Class A common stock, a $8.7 million increase in
debt issuance costs and a $60.0 million decrease in borrowings from credit
agreements.

During the nine months ended September 30, 2003, the Company financed its
acquisition activity of approximately $175.6 million with borrowings under Lamar
Media's revolving credit facility and cash on hand totaling $125.0 million as
well as the issuance of shares of the Company's Class A common stock valued at
the time of issuance at approximately $50.6 million. As of September 30, 2003,
the Company had $219.3 million available under its revolving credit facility.

The Company's wholly owned subsidiary, Lamar Media Corp., replaced its 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 principal 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:

Payments Due by Period
(in millions)
----------------------------------------------
Contractual Balance at Less than 1 - 3 4 - 5 After 5
Obligations September 30, 2003 1 Year Years Years Years
- ---------------------------------- --------------------- --------- ----- ----- -------

Long-Term Debt $ 1,765.4 5.0 110.0 261.3 1,389.1
Billboard site and building leases $ 839.3 112.6 178.4 136.3 412.0
--------------------- ----- ----- ----- -------
Total Payments due $ 2,604.7 117.6 288.4 397.6 1,801.1
===================== ===== ===== ===== =======

Amount of Commitment
Expiration Per Period
---------------------------------------------
Other Commercial Total Amount Less than 1 - 3 4 - 5 After 5
Commitments Committed 1 Year Years Years Years
- ------------------------- ------------ --------- ------ ----- -------

Revolving Bank Facility * $ 225.0 -- -- -- 225.0
============ === === == =====
Standby Letters of Credit $ 5.7 1.4 4.3 -- --
============ === === == =====

* Lamar Media had $0 outstanding at September 30, 2003.

-16-

In January 2003, Lamar Media redeemed all of its outstanding 9 5/8% Senior
Subordinated Notes due 2006 in aggregate principal amount of approximately $255
million for a redemption price equal to 103.208% of the principal 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.

In June 2003, Lamar Media Corp. called for redemption $100.0 million of its
$200.0 million 8 5/8% Senior Subordinated Notes due 2007. The redemption was
funded by the issuance on June 12, 2003 of a $125.0 million add on to its $260.0
million 7 1/4% Notes due 2013 issued in December 2002. The issue price of the
$125.0 million 7 1/4% Notes was 103.661% of the principal amount of the notes,
which yields an effective rate of 6 5/8%. The redemption price of the $100.0
million 8 5/8% senior subordinated notes was equal to 104.313% of the principal
amount of the notes. As a result of this redemption, the Company recorded a loss
on extinguishment of debt of $5.8 million which consisted of a prepayment
penalty of $4.3 million and associated debt issuance costs of approximately $1.5
million. Lamar Media intends to call its remaining $100.0 million of 8 5/8%
Senior Subordinated Notes due 2007 during the fourth quarter of 2003 and fund
the redemption with cash on hand and borrowings under its bank credit facility.

In July 2003, the Company redeemed all of its $287.5 million 5 1/4% Convertible
Notes due 2006. The redemption was funded by the issuance on June 16, 2003 of
$287.5 million 2 7/8% Convertible Notes due 2010. The redemption price of the
notes was equal to 103.0% of the principal amount of the notes. As a result of
this redemption, the Company recorded a loss on extinguishment of debt of $12.6
million, which consisted of a prepayment penalty of $8.6 million and associated
debt issuance costs of approximately $4.0 million.

Currently Lamar Media has outstanding approximately $100.0 million 8 5/8% Senior
Subordinated Notes due 2007 and $385.0 million 7 1/4% Senior Subordinated Notes
due 2013 issued in December 2002 and June 2003. The indentures relating to Lamar
Media's outstanding notes restrict its ability to incur indebtedness other than:

- up to $1.2 billion of indebtedness under its bank credit
facility;

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

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

- 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 bank credit agreement. If the Company fails to comply with these tests, the
payments set forth in the above table may be accelerated. At September 30, 2003
and currently Lamar Media is in compliance with all such tests.

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

- - 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

- - 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 bank credit facility requires that Lamar Media must maintain
the following financial ratios:

- - 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

- - 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 principal 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 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

-17-

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 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 bank credit agreement and future cash flows from operations are sufficient
to meet its operating needs through the year 2004. 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 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 did not
have a material effect on the Company's consolidated financial statements as the
Company has no 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
adopted 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 adoption of SFAS No. 149 did not
have a material impact on its consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." Statement 150
affects the issuer's accounting for three types of freestanding financial
instruments. One type is mandatory redeemable shares, which the issuing company
is obligated to buy back in exchange for cash or other assets. A second type,
which includes put options and forward purchase contracts, involves instruments
that do or may require the issuer to buy back some of its shares in exchange for
cash or other assets. The third type of instruments that are liabilities under
this Statement is obligations that can be settled with shares, the monetary
value of which is fixed, tied solely or predominately to a variable such as a
market index, or varies inversely with the value of the issuers' shares.
Statement 150 does not apply to features embedded in a financial instrument that
is not a derivative in its entirety. Most of the guidance in Statement 150 is
effective for all financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. Because the Company does not have any financial
instruments covered by SFAS No. 150 outstanding, its adoption did not materially
impact the Company's financial position, cash flows or results of operations.

-18-

LAMAR MEDIA CORP.

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2002

Net revenues increased $23.1 million or 4.0% to $604.1 million for the nine
months ended September 30, 2003 from $581.0 million for the same period in 2002.
This increase was attributable primarily to (i) an increase in billboard net
revenues of $19.9 million or 3.6%, (ii) a $1.9 million increase in logo sign
revenue, which represents an increase of 6.7% over the prior year, and (iii) a
$1.0 million increase in transit revenue, which represents a 16.7% increase over
the prior year.

The increase in billboard net revenues of $19.9 million was due to both
acquisition activity and internal growth while the increase in logo sign revenue
of $1.9 million and transit revenue growth of $1.0 million was generated by
internal growth across various markets within the logo sign and transit
programs. Net revenues for the nine months ended September 30, 2003 as compared
to acquisition-adjusted net revenue(3) for the nine months ended September 30,
2002, which includes adjustments for acquisitions for the same time frame as
actually owned in 2003, increased $9.0 million or 1.5% as a result of net
revenue internal growth.

Operating expenses, exclusive of depreciation and amortization and gain or loss
on sale of assets, increased $17.1 million or 5.2% to $345.4 million for the
nine months ended September 30, 2003 from $328.3 million for the same period in
2002. There was a $19.7 million increase as a result of additional operating
expenses related to the operations of acquired outdoor advertising assets and
increases in costs in operating the Company's core assets. This increase was
offset by a $2.6 million decrease in corporate expenses that is primarily due to
the partial reversal in the second quarter of 2003 of a charge related to a jury
verdict rendered against Lamar Media in the third quarter 2002, which is
discussed below.

In the third quarter of 2002, Lamar Media recorded a charge of $2.3 million
related to a jury verdict rendered in August 2002 against Lamar Advertising
Company for compensatory and punitive damages. In May 2003, the Court ordered a
reduction to the punitive damage award, which was subject to the plaintiff's
consent. The plaintiff rejected the reduced award and the Court ordered a new
trial. Based on legal analysis, management believes the best estimate of the
Company's potential liability related to this claim is currently $1.3 million.
The $1.0 million reduction in the reserve for this liability was recorded as a
reduction of corporate expenses in the second quarter of 2003.

Due to the above factors, operating income increased $5.8 million to $54.4
million for the nine months ended September 30, 2003 compared to $48.6 million
for the same period in 2002.

In January 2003, Lamar Media redeemed all of its outstanding 9 5/8% Senior
Subordinated Notes due 2006 in aggregate principal amount of approximately
$255.0 million for a redemption price equal to 103.208% of the principal 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 and the write-off of related debt
issuance costs.

In June 2003, Lamar Media redeemed $100.0 million in principal amount of its
8 5/8% Senior Subordinated Notes due 2007, for a redemption price equal to
104.313% of the principal amount of the notes. In the second quarter of 2003,
Lamar Media recorded a loss on extinguishment of debt of $5.8 million, related
to this prepayment. Approximately $100.0 million in aggregate principal amount
of our 8 5/8% notes remain outstanding following this redemption.

Interest expense decreased $12.7 million from $69.9 million for the nine months
ended September 30, 2002 to $57.2 million for the nine months ended September
30, 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 $1.0 million
decrease in loss before income taxes and cumulative effect of a change in
accounting principle. The decrease in this loss, resulted in a decrease in the
income tax benefit of $0.5 million for the nine months ended September 30, 2003
over the same period in 2002. The effective tax rate for the nine months ended
September 30, 2003 is 31.0%.

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 nine
months ended September 30, 2003 of $25.1 million, as compared to a net loss of
$13.9 million for the same period in 2002.

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

Nine months ended September 30,
(in thousands)
2003 2002
---- ----

Reported net revenue $ 604,119 $ 580,985
Acquisition net revenue - 14,164
--------- ---------
Acquisition-adjusted net revenue $ 604,119 $ 595,149
========= =========

-19-

THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2002

Net revenues increased $9.8 million or 4.9% to $211.7 million for the three
months ended September 30, 2003 from $201.9 million for the same period in 2002.
This increase was attributable primarily to (i) an increase in billboard net
revenues of $8.7 million or 4.6%, (ii) a $0.7 million increase in logo sign
revenue, which represents an increase of 7.3% over the prior year, and (iii) a
$0.3 million increase in transit revenue, which represents a 11.8% increase over
the prior year.

The increase in billboard net revenues of $8.7 million was due to acquisition
activity while the increase in logo sign revenue of $0.7 million and transit
revenue growth of $0.3 million was generated by internal growth across various
markets within the logo sign and transit programs. Net revenues for the three
months ended September 30, 2003 as compared to acquisition-adjusted net
revenue(4) for the three months ended September 30, 2002, which includes
adjustments for acquisitions for the same time frame as actually owned in 2003
increased $3.5 million or 1.7% as a result of net revenue internal growth.

Operating expenses, exclusive of depreciation and amortization and gain or loss
on sale of assets, increased $3.3 million or 2.9% to $117.2 million for the
three months ended September 30, 2003 from $113.9 million for the same period in
2002. There was a $5.3 million increase as a result of additional operating
expenses related to the operations of acquired outdoor advertising assets and
increases in costs in operating the Company's core assets. This increase was
offset by a $2.0 million decrease in corporate overhead expenses that is
primarily due to a jury verdict rendered against Lamar Media in the third
quarter of 2002, which is discussed below.

In the third quarter of 2002, Lamar Media recorded a charge of $2.3 million
related to a jury verdict rendered in August 2002 against Lamar Advertising
Company for compensatory and punitive damages. In May 2003, the Court ordered a
reduction to the punitive damage award, which was subject to the plaintiff's
consent. The plaintiff rejected the reduced award and the Court ordered a new
trial. Based on legal analysis, management believes the best estimate of the
Company's potential liability related to this claim is currently $1.3 million.
The $1.0 million reduction in the reserve for this liability was recorded as a
reduction of corporate expenses in the second quarter of 2003.

Due to the above factors, operating income increased $6.0 million to $24.6
million for three months ended September 30, 2003 compared to $18.6 million for
the same period in 2002.

Interest expense decreased $4.6 million from $23.4 million for the three months
ended September 30, 2002 to $18.8 million for the three months ended September
30, 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 described
above resulted in a $10.4 million increase in income before income taxes and
cumulative effect of a change in accounting principle.

As a result of the above factors, Lamar Media recognized net income for the
three months ended September 30, 2003 of $3.4 million, as compared to a net loss
of $3.1 million for the same period in 2002.

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

Three months ended September 30,
(in thousands)
2003 2002
---- ----

Reported net revenue $ 211,720 $ 201,918
Acquisition net revenue - 6,255
--------- ---------
Acquisition-adjusted net revenue $ 211,720 $ 208,173
========= =========

-20-

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 principal variable rate debt instruments outstanding at
September 30, 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 September 30, 2003, there was $975.0 million of aggregate indebtedness
outstanding under the bank credit agreement, or approximately 55.4% 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 $27.4 million, and the weighted
average interest rate applicable to borrowings under this credit facility during
2003 was 3.5%. Assuming that the weighted average interest rate was 200-basis
points higher (that is 5.5% rather than 3.5%), then the Company's 2003 interest
expense would have been approximately $15.1 million higher resulting in a $9.2
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 the capability under the 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.

The Company's and Lamar Media's management, with the participation of the
principal executive officer and principal financial officer of the Company and
Lamar Media, have evaluated the effectiveness of the design and operation of the
Company's and Lamar Media's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended) as of the end of the period covered by this quarterly report. Based on
this evaluation, the principal executive officer and principal financial officer
of the Company and Lamar Media concluded that these disclosure controls and
procedures are effective and designed to ensure that the information required to
be disclosed in the Company's and Lamar Media's reports filed or submitted under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the requisite time periods.

b) Changes in internal controls.

There was no change in the internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
amended) of the Company and Lamar Media identified in connection with the
evaluation of the Company's and Lamar Media's internal control performed during
the last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's and Lamar Media's internal control over
financial reporting.

-21-

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

On July 29, 2003, in connection with the filing by Lamar Media Corp. of a
Registration Statement on Form S-4 to register $125 million of its 7 1/4% Senior
Subordinated Notes due 2013, Lamar Media and the Company filed a Current Report
on Form 8-K disclosing certain unaudited pro forma financial information that
related to its and Lamar Advertising's adoption, of Statement of Financial
Accounting Standard (SFAS) No. 143, "Accounting for Asset Retirement
Obligations" on January 1, 2003.

On August 6, 2003, Lamar Advertising Company filed a Current Report on Form 8-K
in order to furnish to the Commission its earnings press release for the second
quarter ended June 30, 2003.

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: November 5, 2003 BY: /s/ Keith A. Istre
----------------------
Chief Financial and Accounting Officer
and Treasurer

LAMAR MEDIA CORP.

DATED: November 5, 2003 BY: /s/ Keith A. Istre
----------------------
Chief Financial and Accounting Officer
and Treasurer

-22-

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

2.1 Agreement and Plan of Merger dated as of July 20, 1999 among
Lamar Media Corp., Lamar New Holding Co., and Lamar Holdings
Merge Co. Previously filed as exhibit 2.1 to the Company's
Current Report on Form 8-K filed on July 22, 1999 (File No.
0-30242) and incorporated herein by reference.

3.1 Certificate of Incorporation of Lamar New Holding Co.
Previously filed as exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1999 (File
No. 0-20833) filed on August 16, 1999 and incorporated herein
by reference.

3.2 Certificate of Amendment of Certificate of Incorporation of
Lamar New Holding Co. (whereby the name of Lamar New Holding
Co. was changed to Lamar Advertising Company). Previously
filed as exhibit 3.2 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by reference.

3.3 Certificate of Amendment of Certificate of Incorporation of
Lamar Advertising Company. Previously filed as Exhibit 3.3 to
the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 2000 (File No. 0-30242) filed on August 11,
2000 and incorporated herein by reference.

3.4 Certificate of Correction of Certificate of Incorporation of
Lamar Advertising Company. Previously filed as Exhibit 3.4 to
the Company's Quarterly Report on Form 10-Q for the period
ended September 30, 2000 (File No. 0-30242) filed on November
14, 2000 and incorporated herein by reference.

3.5 Bylaws of the Lamar Advertising Company. Previously filed as
Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for
the period ended June 30, 1999 (File No. 0-20833) filed on
August 16, 1999 and incorporated herein by reference.

3.6 Amended and Restated Bylaws of Lamar Media Corp. Previously
filed as Exhibit 3.1 to Lamar Media's Quarterly Report on Form
10-Q for the period ended September 30, 1999 (File No.
1-12407) filed on November 12, 1999 and incorporated herein by
reference.

4.1 Supplemental Indenture to the Indenture dated December 23,
2002 among Lamar Media Corp., certain of its subsidiaries and
Wachovia Bank of Delaware, National Association, as Trustee,
dated October 7, 2003. Filed herewith.

4.2 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated October
7, 2003. Filed herewith.

10.1 Joinder Agreement dated as of October 7, 2003 to Credit
Agreement dated as of March 7, 2003 between Lamar Media Corp.
and the Subsidiary Guarantors party thereto, the Lenders party
thereto, and JPMorgan Chase Bank, as Administrative Agent by
Premere Outdoor, Inc. Filed herewith.

31.1 Certification of the Chief Executive Officer of Lamar
Advertising Company and Lamar Media Corp. pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as
adopted pursuant to Section 302 of the Sarbanes- Oxley Act of
2002. Filed herewith.

31.2 Certification of the Chief Financial Officer of Lamar
Advertising Company and Lamar Media Corp. pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as
adopted pursuant to Section 302 of the Sarbanes- Oxley Act of
2002. Filed herewith.

32 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.

-23-