ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements. These statements are subject to risks and uncertainties including those described in Item 1A under the heading “Risk Factors,” and elsewhere in this Annual Report, that could cause actual results to differ materially from those projected in these forward-looking statements. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and the Company undertakes no obligation to update or revise the statements, except as may be required by law.
LAMAR ADVERTISING COMPANY
The following is a discussion of the consolidated financial condition and results of operations of the Company for the years ended December 31, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements of the Company and the related notes.
Discussion of our results of operations for the years ended December 31, 2024 and 2023 can be found in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.
OVERVIEW
The Company’s net revenues are derived primarily from the rental of advertising space on outdoor advertising displays owned and operated by the Company. We manage our business through three operating segments – billboard, logo and transit advertising. Revenue growth is based on many factors that include the Company’s ability to increase occupancy of its existing advertising displays; raise advertising rates; and acquire new advertising displays and its operating results are therefore affected by general economic conditions, as well as trends in the advertising industry. Advertising spending is particularly sensitive to changes in general economic conditions, which affect the rates the Company is able to charge for advertising on its displays and its ability to maximize advertising sales or occupancy on its displays.
Acquisitions and capital expenditures
Historically, the Company has made strategic acquisitions of outdoor advertising assets to increase the number of outdoor advertising displays it operates in existing and new markets. The Company continues to evaluate and pursue strategic acquisition opportunities as they arise. The Company has financed its historical acquisitions and intends to finance any future acquisition activity from available cash, borrowings under the senior credit facility and the Accounts Receivable Securitization Program or through the issuance of debt or equity securities. See “Liquidity and Capital Resources- Sources of Cash,” for more information.
During the year ended December 31, 2025, the Company completed multiple acquisitions for a total cash purchase price of approximately $191.1 million. See “Uses of Cash-Acquisitions,” for more information. Additionally, Lamar Advertising Limited Partnership (“Lamar LP”), the subsidiary operating partnership of the Company and Lamar Media, acquired Verde Outdoor at a value of $147.6 million through the issuance of 1,187,500 Common Units of Lamar LP. The Common Units were issued to the owners of Verde Outdoor as the consideration in connection with the acquisition, whereby the assets of Verde Outdoor were contributed to Lamar LP. The Verde Outdoor assets include more than 1,500 billboard faces across ten states.
The Company’s business requires expenditures for maintenance and capitalized costs associated with the construction of new billboard displays, the entrance into and renewal of 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 past two years:
(In thousands)
Billboard — Traditional
Billboard — Digital
Logos
Transit
Land and buildings
Total capital expenditures
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We expect our 2026 capital expenditures to be approximately $186 million.
NON-GAAP FINANCIAL MEASURES
Our management reviews our performance by focusing on several key performance indicators not prepared in conformity with Generally Accepted Accounting Principles in the United States (“GAAP”). We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for, their most directly comparable GAAP financial measures.
Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), Funds From Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts, Adjusted Funds From Operations (“AFFO”) and acquisition-adjusted net revenues.
We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), equity in (earnings) loss of investee, loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization, loss (gain) on disposition of assets and investments, transaction expenses and capitalized contract fulfillment costs, net. Our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments.
FFO is defined as net income before (gain) loss from the sale or disposal of real estate assets and investments, net of tax, and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest.
We define AFFO as FFO before (i) straight-line income and expense; (ii) capitalized contract fulfillment costs, net; (iii) stock-based compensation expense; (iv) non-cash portion of tax expense (benefit); (v) non-real estate related depreciation and amortization; (vi) amortization of deferred financing costs; (vii) loss on extinguishment of debt; (viii) transaction expenses; (ix) non-recurring infrequent or unusual losses (gains); (x) less maintenance capital expenditures; and (xi) an adjustment for unconsolidated affiliates and non-controlling interest.
Acquisition-adjusted net revenues adjusts our net revenues for the prior period by adding to it the net revenues generated by the acquired assets before our acquisition of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted revenue, therefore, we include revenue generated by assets that we did not own in the period but acquired in the current period. We refer to the amount of pre-acquisition revenue generated by the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “acquisition net revenues”. In addition, we adjust the prior period to subtract revenue generated by the assets that have been divested since the prior period and, therefore, no revenue derived from those assets is reflected in the current period.
Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues are not intended to replace net income or any other performance measures determined in accordance with GAAP. Neither FFO nor AFFO represents cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities as a measure of liquidity or of funds available to fund our cash needs, including our ability to make cash distributions. Rather, adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues are presented as we believe each is a useful indicator of our current operating performance. We believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision-making and for evaluating our core operating results; (2) adjusted EBITDA is widely used in the industry to measure operating performance as depreciation and amortization may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) acquisition-adjusted net revenues is a supplement to net revenues to enable investors to compare period-over-period results on a more consistent basis without the effects of acquisitions and divestitures, which reflects our core performance and organic growth (if any) during the period in which the assets were owned and managed by us; (4) adjusted EBITDA, FFO and AFFO each provide investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (5) each provides investors with a measure for comparing our results of operations to those of other companies.
Our measurement of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues to net income, the most directly comparable GAAP measure, have been included herein.
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RESULTS OF OPERATIONS
The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2025 and 2024:
Year Ended December 31,
Net revenues
Operating expenses:
Direct advertising expenses
General and administrative expenses
Corporate expenses
Depreciation and amortization
Operating income
Loss on extinguishment of debt
Interest expense
Income tax expense
Net income
Year ended December 31, 2025 compared to Year ended December 31, 2024
Net revenues increased $59.1 million or 2.7% to $2.27 billion for the year ended December 31, 2025 from $2.21 billion for the same period in 2024. This increase was attributable to an increase in billboard net revenues of $57.7 million and an increase in logo net revenues of $5.2 million over the prior year, offset by a decrease in transit net revenues of $3.7 million.
Net revenues for the year ended December 31, 2025, as compared to acquisition-adjusted net revenues for the comparable period in 2024, increased $45.6 million, or 2.1%. This increase was attributable to an increase of $47.8 million in billboard net revenues and an increase of $3.9 million in logo net revenues, offset by a decrease of $2.7 million in transit net revenues. See “Reconciliations” below.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets and investments, increased $23.6 million, or 1.9% to $1.24 billion for the year ended December 31, 2025 from $1.22 billion in the same period in 2024. The $23.6 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation expense) of $34.2 million primarily related to the operations of our outdoor advertising assets, offset by a decrease in stock-based compensation expense of $10.6 million.
Depreciation and amortization expense decreased $136.6 million to $326.3 million for the year ended December 31, 2025 as compared to $463.0 million for the same period in 2024. The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.
For the year ended December 31, 2025, the Company recognized a gain on disposition of assets and investments of $75.9 million as compared to a gain on disposition of assets and investments of $6.1 million for the same period in 2024. The gain on disposition of assets and investments for the year ended December 31, 2025 primarily resulted from the sale of the Company’s equity interest in Vistar Media, Inc., as well as transactions related to the sale of billboard locations and displays.
Due to the above factors, operating income increased $242.0 million to $774.1 million for the year ended December 31, 2025 compared to $532.0 million for the same period in 2024.
Interest expense decreased $11.3 million for the year ended December 31, 2025 to $160.4 million as compared to $171.7 million for the year ended December 31, 2024. The decrease in interest expense is related to a decrease in interest rates on the senior credit facility and Accounts Receivable Securitization Program.
Equity in earnings of investee was $0.2 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively. The decrease of $4.9 million was primarily due to the sale of the Company’s equity interest in Vistar Media, Inc. in February 2025.
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The increase in operating income as well as the decrease in interest expense, partially offset by the decrease in equity in earnings of investee, over the comparable period in 2024, resulted in a $246.9 million increase in net income before income taxes.
The Company recorded income tax expense of $21.3 million for the year ended December 31, 2025 as compared to income tax expense of $4.5 million for the same period in 2024. The $21.3 million equates to an effective tax rate for the year ended December 31, 2025 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, the Company recognized net income for the year ended December 31, 2025 of $593.1 million, as compared to net income of $362.9 million for the same period in 2024.
Reconciliations:
Because acquisitions occurring after December 31, 2023 have contributed to our net revenues results for the periods presented, we provide 2024 acquisition-adjusted net revenues, which adjusts our 2024 net revenues for the year ended December 31, 2024 by adding to or subtracting from it the net revenues generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2025.
Reconciliations of 2024 reported net revenues to 2024 acquisition-adjusted net revenues for the year ended December 31, 2024 as well as a comparison of 2024 acquisition-adjusted net revenues to 2025 reported net revenues for the year ended December 31, 2025, are provided below:
Reconciliation and Comparison of Reported Net Revenues to Acquisition-Adjusted Net Revenues
Year ended December 31,
(In thousands)
Reported net revenues
Acquisition net revenues
Adjusted totals
Key Performance Indicators
Net Income/Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Income tax expense
Loss on extinguishment of debt
Interest expense, net
Equity in earnings of investee
Gain on disposition of assets
Depreciation and amortization
Capitalized contract fulfillment costs, net
Stock-based compensation expense
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, partially offset by an increase in general and administrative and corporate expenses of $15.2 million, excluding the impact of stock-based compensation expense.
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Segmented Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Billboard adjusted EBITDA
Other adjusted EBITDA (1)
Corporate expenses (2)
Adjusted EBITDA
(1) Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.
(2) Corporate operations are not an operating segment. Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $31.2 million, offset by a decrease in other adjusted EBITDA of $1.7 million and an increase in corporate expenses of $4.4 million, excluding the impact of stock-based compensation expense.
Net Income/FFO/AFFO
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Depreciation and amortization related to real estate
Gain from sale or disposal of real estate, net of tax
Adjustments for unconsolidated affiliates and non-controlling interest
FFO
Straight-line expense
Capitalized contract fulfillment costs, net
Stock-based compensation expense
Non-cash portion of tax provision
Non-real estate related depreciation and amortization
Amortization of deferred financing costs
Loss on extinguishment of debt
Capital expenditures – maintenance
Adjustments for unconsolidated affiliates and non-controlling interest
AFFO
FFO for the year ended December 31, 2025 was $827.3 million as compared to FFO of $798.4 million for the same period in 2024. AFFO for the year ended December 31, 2025 increased 3.4% to $846.7 million as compared to $819.0 million for the same period in 2024. The increase in AFFO was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.3 million, partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense) of $15.2 million.
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LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company has historically satisfied its working capital requirements with cash from operations and borrowings under its senior credit facility and Accounts Receivable Securitization Program. The Company’s wholly owned subsidiary, Lamar Media Corp., is the principal borrower under the senior credit facility and maintains all corporate operating cash balances. Certain subsidiaries of Lamar Media are the principal borrowers under the Accounts Receivable Securitization Program. Any cash requirements of the Company, therefore, must be funded by distributions from Lamar Media.
Sources of Cash
Total Liquidity. As of December 31, 2025 we had $807.0 million of total liquidity, which is comprised of $64.8 million in cash and cash equivalents and $742.2 million of availability under the revolving portion of the senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months. We are currently in compliance with the maintenance covenant included in the senior credit facility and we would remain in compliance after giving effect to borrowing the full amount available to us under the revolving portion of the senior credit facility.
As of December 31, 2025 and 2024, the Company had a working capital deficit of $334.3 million and $353.2 million, respectively. The working capital deficit for the year ended December 31, 2025 is primarily related to the $249.6 million outstanding under the Accounts Receivable Securitization Program as well as $232.5 million in current operating lease liabilities which has a corresponding right of use asset recorded in long term assets.
Cash Generated by Operations. For the years ended December 31, 2025 and 2024 our cash provided by operating activities was $864.0 million and $873.6 million, respectively. We expect to generate cash flows from operations during 2026 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. We expect to have sufficient liquidity available under our revolving credit facility to meet our operating needs for the next twelve months.
Accounts Receivable Securitization Program. On June 24, 2022, Lamar Media and the Special Purpose Subsidiaries entered into the Sixth Amendment (the "Sixth Amendment") to the Receivables Financing Agreement. The Sixth Amendment increased the Accounts Receivable Securitization Program from $175.0 million to $250.0 million. Additionally, the Sixth Amendment provides for the replacement of LIBOR-based interest rate mechanics with Term Secured Overnight Financing Rate ("Term SOFR") based interest rate mechanics for the Accounts Receivable Securitization Program.
The Accounts Receivable Securitization Program was set to mature on July 21, 2025, but was subsequently extended to October 15, 2027 by the Seventh Amendment to the Receivables Financing Agreement dated October 15, 2024. Lamar Media may amend the facility to further extend the maturity date, enter into a new securitization facility with a different maturity date, or refinance the indebtedness outstanding under the Accounts Receivable Securitization Program using borrowings under its senior credit facility or from other financing sources.
Borrowing capacity under the Accounts Receivable Securitization Program is limited to the availability of eligible accounts receivable collateralizing the borrowings under the agreements governing the Accounts Receivable Securitization Program. In connection with the Accounts Receivable Securitization Program, Lamar Media and certain of its subsidiaries (such subsidiaries, the “Subsidiary Originators”) sell and/or contribute their existing and future accounts receivable and certain related assets to one of two special purpose subsidiaries, Lamar QRS Receivables, LLC (the “QRS SPV”) and Lamar TRS Receivables, LLC (the “TRS SPV” and together with the QRS SPV the “Special Purpose Subsidiaries”), each of which is a wholly-owned subsidiary of Lamar Media. Existing and future accounts receivable relating to Lamar Media and its qualified REIT subsidiaries will be sold and/or contributed to the QRS SPV and existing and future accounts receivable relating to Lamar Media’s TRSs will be sold and/or contributed to the TRS SPV. Each of the Special Purpose Subsidiaries has granted the lenders party to the Accounts Receivable Securitization Program a security interest in all of its assets, which consist of the accounts receivable and related assets sold or contributed to them, as described above, in order to secure the obligations of the Special Purpose Subsidiaries under the agreements governing the Accounts Receivable Securitization Program. Pursuant to the Accounts Receivable Securitization Program, Lamar Media has agreed to service the accounts receivable on behalf of the two Special Purpose Subsidiaries for a fee. Lamar Media has also agreed to guarantee its performance in its capacity as servicer and originator, as well as the performance of the Subsidiary Originators, of their obligations under the agreements governing the Accounts Receivable Securitization Program. None of Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries guarantees the collectability of the receivables under the Accounts Receivable Securitization Program. In addition, each of the Special Purpose Subsidiaries is a separate legal entity with its own separate creditors who will be entitled to access
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the assets of such Special Purpose Subsidiary before the assets become available to Lamar Media. Accordingly, the assets of the Special Purpose Subsidiaries are not available to pay creditors of Lamar Media or any of its subsidiaries, although collections from receivables in excess of the amounts required to repay the lenders and the other creditors of the Special Purpose Subsidiaries may be remitted to Lamar Media.
As of December 31, 2025, there was $250.0 million of outstanding aggregate borrowings under the Accounts Receivable Securitization Program at a borrowing rate of approximately 4.7%. Lamar Media had noadditional availability under the Accounts Receivable Securitization Program as of December 31, 2025.
“ At-the-Marke t” Offering Program. On July 24, 2024, the Company entered into an equity distribution agreement, or At-the-Market Offering agreement (the "2024 Sales Agreement"), with J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Truist Securities, Inc., SMBC Nikko Securities America, Inc. and Scotia Capital (USA) Inc. as our sales agents (each a "Sales Agent", and collectively, the "Sales Agents"), which replaced the prior Sales Agreement with substantially similar terms (the "2021 Sales Agreement"). Under the terms of the 2024 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals. Sales of the Class A common stock, if any, may be conducted in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A common stock under the 2024 Sales Agreement and may at any time suspend solicitations and offers under the 2024 Sales Agreement. The Company intends to use the net proceeds, if any, from the sale of the Class A common stock pursuant to the 2024 Sales Agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital, capital expenditures, acquisition of outdoor advertising assets and businesses and other related investments. The Company did not issue any shares under the 2024 Sales Agreement during the years ended December 31, 2025 and 2024. The Company did not issue any shares under the 2021 Sales Agreement from inception through expiration.
Shelf Registration Statement. On July 24, 2024, the Company filed a new automatically effective shelf registration statement that allows the Company to offer and sell an indeterminate amount of additional shares of its Class A common stock, which replaced a previous shelf registration statement. During the years ended December 31, 2025 and 2024, the Company did not issue any shares under the shelf registration statement.
Credit Facilities. On February 6, 2020, Lamar Media entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto, under which the parties agreed to amend and restate Lamar Media’s existing senior credit facility. The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended (the "Third Amended and Restated Credit Agreement").
The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (as amended by the Amendments, as defined below) (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on July 31, 2028, subject to certain conditions (see description of Amendment No. 4 below) (the “revolving credit facility”), (ii) a $700.0 million senior secured Term B loan facility (the “Term B loans”) which will mature on September 23, 2032, and (iii) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or additional incremental revolving facilities or increase its existing revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions, including lender approval.
On July 2, 2021, Lamar Media entered into Amendment No. 1 (the "Amendment No. 1"), to the Fourth Amended and Restated Credit Agreement. The Amendment No. 1 amends the definition of "Subsidiary" to exclude each of Lamar Partnering Sponsor LLC and Lamar Partnering Corporation and any of their subsidiaries (collectively, the "Lamar Partnering Entities") such that, after giving effect to the Amendment, none of the Lamar Partnering Entities are subject to the Fourth Amended and Restated Credit Agreement covenants and reporting requirements, but any investment by Lamar Media in any of the Lamar Partnering Entities would be subject to the Fourth Amended and Restated Credit Agreement covenants. The Amendment No. 1 also amends the definition of "EBITDA" to replace the existing calculation with a net income-based calculation, which excludes the income of non-Subsidiary entities such as the Lamar Partnering Entities, except to the extent that income of such entities is received by Lamar Media in the form of dividends or distributions.
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On July 29, 2022, Lamar Media entered into Amendment No. 2 ("Amendment No. 2") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto. Amendment No. 2 established the Term A loans as a new class of incremental term loans. The Term A loans were set to mature on February 6, 2025. Lamar Media borrowed all $350.0 million in Term A loans on July 29, 2022 and proceeds from the Term A loans were used to repay outstanding balances on the revolving credit facility and a portion of the outstanding balance on our Accounts Receivable Securitization Program. The Term A loans were subsequently repaid in full on July 31, 2024.
On April 26, 2023, Lamar Media entered into Amendment No. 3 ("Amendment No. 3") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank N.A. as administrative agent and the lenders party thereto. Amendment No. 3 replaced the London Interbank Offered Rate as administered by the ICE Benchmark Administration with Term SOFR as the successor rate, as set in the Fourth Amended and Restated Credit Agreement. All other material terms and conditions of the Fourth Amended and Restated Credit Agreement remain unchanged by Amendment No. 3.
On July 31, 2023, Lamar Media entered into Amendment No. 4 (the "Amendment No. 4") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto. Amendment No. 4 extends the maturity date of Lamar Media's $750.0 million revolving credit facility such that the revolving credit facility matures July 31, 2028; provided, that, if on the date (a "Springing Maturity Test Date") that is 91 days prior to the February 15, 2028 maturity date of Lamar Media's 3 3/4% Notes, the Company and its restricted subsidiaries do not have sufficient liquidity (defined as unrestricted cash and cash equivalents of the Company and its restricted subsidiaries plus unused commitments under the revolving credit facility) to repay in full the aggregate outstanding amount (including all accrued and unpaid interest, premiums and make-whole amounts (if any)) of the 3 3/4% Notes (as applicable), the revolving credit facility will mature on such Springing Maturity Test Date. On the maturity date of the revolving credit facility, the entire principal amount of revolving loans outstanding under the revolving credit facility, together with all accrued and unpaid interest on such revolving loans, will be due and payable.
Amendment No. 4 also establishes a $75.0 million swingline as a sublimit of the revolving credit facility, which allows Lamar Media to borrow revolving loans on a same-day basis, in an aggregate outstanding principal amount of up to $75.0 million. In addition, Amendment No. 4 amends the provisions of the Fourth Amended and Restated Credit Agreement related to incremental facilities to allow Lamar Media to establish, from time to time, one or more new incremental revolving facilities on the terms, and subject to the conditions, set forth therein.
On September 23, 2025, Lamar Media entered into Amendment No. 5 (the “Amendment No. 5”, and together with the Amendment, the Amendment No. 2, the Amendment No. 3 and the Amendment No. 4, the “Amendments”) to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto. Amendment No. 5 established the Term B loans as a new class of incremental term loans. Lamar Media borrowed all $700.0 million in Term B loans on September 23, 2025. Proceeds from the Term B loans were used to repay $600.0 million in Term B loans previously outstanding, with the remainder used to repay a portion of the outstanding balance on the revolving credit facility. The Term B loans will mature on September 23, 2032 (or if such day is not a Business Day, the next Business Day) and the entire principal amount of the Term B loans then outstanding, together with all accrued and unpaid interest on the Term B loans, will be due and payable on such date. The Term B loans bear interest at rates based on the Adjusted Term SOFR Rate (“Term Benchmark Term B Loans”) or the Adjusted Base Rate (“Base Rate Term B Loans”) at Lamar Media’s option. For purposes of the Term B Loans, the “Adjusted Term SOFR Rate” is a rate per annum equal to the Term SOFR Rate for the applicable interest period, plus 0.00%. Term Benchmark Term B Loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% and Base Rate Term B Loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50%. The covenants, events of default and other terms of the senior credit facility (all of which are unchanged by Amendment No. 5) apply to the Term B loans.
As of December 31, 2025, the aggregate balance outstanding under the senior credit facility was $700.0 million, consisting of $700.0 million in Term B loans aggregate principal balance and nooutstanding borrowings under our revolving credit facility. Lamar Media had approximately $742.2 million of unused capacity under the revolving credit facility.
Note Offering. On September 25, 2025, Lamar Media completed an institutional private placement of $400.0 million aggregate principal amount of 5 3/8% Senior Notes due 2033 (the “5 3/8% Notes”). The institutional private placement on September 25, 2025 resulted in net proceeds to Lamar Media of approximately $393.5 million. Lamar Media used the proceeds from this offering, together with borrowings on the Term B loans, to pay off the balance outstanding on the revolving credit facility as well as pay down a portion of the balance on the Accounts Receivable Securitization Program.
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Factors Affecting Sources of Liquidity
Internally Generated Funds. The key factors affecting internally generated cash flow are general economic conditions, specific economic conditions in the markets where the Company conducts its business and overall spending on advertising by advertisers. We expect to generate cash flows from operations during 2026 in excess of our cash needs for operations, capital expenditures and dividends, as described herein, and we believe we have sufficient liquidity with cash on hand and availability under our revolving credit facility to meet our operating cash needs for the next twelve months.
Credit Facilities and Other Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to the senior credit facility, its outstanding debt securities and its Accounts Receivable Securitization Program.
Restrictions under Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to its outstanding debt securities. Currently, Lamar Media has outstanding the $600.0 million 3 3/4% Senior Notes issued February 2020, the $550.0 million 4% Senior Notes issued February 2020 and August 2020, the $400.0 million 4 7/8% Senior Notes issued in May 2020, the $550.0 million 3 5/8% Senior Notes issued in January 2021 and the $400.0 million 5 3/8% Senior Notes issued September 2025.
The indentures relating to Lamar Media’s outstanding notes restrict its ability to incur additional indebtedness, but permit the incurrence of indebtedness (including indebtedness under the senior credit facility), (i) if no default or event of default would result from such incurrence and (ii) if after giving effect to any such incurrence, the leverage ratio (defined as the sum of (x) total consolidated debt plus (y) the aggregate liquidation preference of any preferred stock of Lamar Media’s restricted subsidiaries (and in the case of the 5 3/8% Notes, minus (z) unrestricted cash of Lamar Media and its restricted subsidiaries) to trailing four fiscal quarter EBITDA (as defined in the indentures)) would be less than 7.0 to 1.0. Currently, Lamar Media is not in default under the indentures of any of its outstanding notes and, therefore, would be permitted to incur additional indebtedness subject to the foregoing provision.
In addition to debt incurred under the provisions described in the preceding paragraph, the indentures relating to Lamar Media’s outstanding notes permit Lamar Media to incur indebtedness pursuant to the following baskets:
• up to $2.0 billion of indebtedness under the senior credit facility;
• indebtedness outstanding on the date of the indentures or debt incurred to refinance outstanding debt;
• inter-company debt between Lamar Media and its restricted subsidiaries or between restricted subsidiaries;
• certain purchase money indebtedness and capitalized lease obligations to acquire or lease property in the ordinary course of business that cannot exceed the greater of $50.0 million or 5% of Lamar Media’s net tangible assets;
• additional debt not to exceed $75.0 million; and
• up to $500.0 million of permitted securitization financings.
Restrictions Under Senior Credit Facility. Lamar Media is required to comply with certain covenants and restrictions under the senior credit facility. If the Company or Lamar Media fails to comply with these tests, the lenders under the senior credit facility will be entitled to exercise certain remedies, including the termination of the lending commitments and the acceleration of the debt payments under the senior credit facility. As of December 31, 2025 we were, and currently we are, in compliance with all such tests under the senior credit facility.
Lamar Media must maintain a secured debt ratio, defined as total consolidated secured debt of Lamar Advertising, Lamar Media and its restricted subsidiaries (including capital lease obligations), minus the lesser of (x) $150.0 million and (y) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries (as defined above under S ources of Cash – Accounts Receivable Securitization Program)) to EBITDA, as defined below, for the period of four consecutive fiscal quarters then ended, of less than or equal to 4.5 to 1.0.
Lamar Media is restricted from incurring additional indebtedness subject to exceptions, one of which is that it may incur additional indebtedness not exceeding the greater of $250.0 million or 6% of its total assets.
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Lamar Media is also restricted from incurring additional unsecured senior indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, Lamar Media would have a total debt ratio, defined as (x) total consolidated debt (including subordinated debt) of Lamar Advertising, Lamar Media and its restricted subsidiaries as of any date minus the lesser of (i) $150.0 million and (ii) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries) to (y) EBITDA, as defined below, for the most recent four fiscal quarters then ended, of less than 7.0 to 1.0.
Lamar Media is also restricted from incurring additional subordinated indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, it is in compliance with the secured debt ratio covenant and its total debt ratio is less than 7.0 to 1.0.
Under the senior credit facility, as amended, “EBITDA” means, for any period, net income, plus (a) to the extent deducted in determining net income for such period, the sum determined without duplication and in accordance with GAAP, of (i) taxes, (ii) interest expense, (iii) depreciation, (iv) amortization, (v) any other non-cash income or charges accrued for such period, (vi) charges and expenses in connection with the senior credit facility, any actual or proposed acquisition, disposition or investment (excluding, in each case, purchases and sales of advertising space and operating assets in the ordinary course of business) and any actual or proposed offering of securities, incurrence or repayment of indebtedness (or amendment to any agreement relating to indebtedness), including any refinancing thereof, or recapitalization, (vii) any loss or gain relating to amounts paid or earned in cash prior to the stated settlement date of any swap agreement that has been reflected in operating income for such period, and (viii) any loss on sales of receivables and related assets to a securitization entity in connection with a permitted securitization financing, plus (b) the amount of cost savings, operating expense reductions and other operating improvements or synergies projected by Lamar Media in good faith to be realized as a result of any acquisition, investment, merger, amalgamation or disposition within 18 months of any such acquisition, investment, merger, amalgamation or disposition, net of the amount of actual benefits realized during such period from such action; provided, (A) the aggregate amount for all such cost savings, operating expense reductions and other operating improvements or synergies will not exceed an amount equal to 15% of EBITDA for the applicable four quarter period and (B) any such adjustment to EBITDA pursuant to this clause (b) may only take into account cost savings, operating expense reductions and other operating improvements or synergies that are (I) directly attributable to such acquisition, investment, merger, amalgamation or disposition, (II) expected to have a continuing impact on Lamar Media and its restricted subsidiaries and (III) factually supportable, in each case all as certified by the Chief Financial Officer of Lamar Media on behalf of Lamar Media, minus (c) to the extent included in net income for such period (determined without duplication and in accordance with GAAP) (i) any extraordinary and unusual gains or losses during such period, and (ii) the proceeds of any casualty events and dispositions. For purposes of this EBITDA definition, the effect thereon of any adjustments required under Statement of Financial Accounting Standards No. 141R shall be excluded. If during any period for which EBITDA is being determined, Lamar Media has consummated any acquisition or disposition, EBITDA will be determined on a pro forma basis as if such acquisition or disposition had been made or consummated on the first day of such period.
Under the senior credit facility, "net income" means for any period, the consolidated net income (or loss) of Lamar Advertising, Lamar Media, and its restricted subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that the following is excluded from net income: (a) the income (or deficit) of any person accrued prior to the date it becomes a restricted subsidiary or is merged into or consolidated with Lamar Advertising, Lamar Media or any of its restricted subsidiaries, and (b) the income (or deficit) of any person (other than any of our restricted subsidiaries) in which Lamar Advertising, Lamar Media or any of its subsidiaries has an ownership interest, except to the extent that any such income is received by Lamar Advertising, Lamar Media or any of its restricted subsidiaries in the form of dividends or similar distributions.
The Company believes that its current level of cash on hand, availability under the senior credit facility and future cash flows from operations are sufficient to meet its operating needs for the next twelve months. All debt obligations are reflected on the Company’s balance sheet.
Restrictions under Accounts Receivable Securitization Program. The agreements governing the Accounts Receivable Securitization Program contain customary representations and warranties, affirmative and negative covenants, and termination event provisions, including but not limited to those providing for the acceleration of amounts owed under the Accounts Receivable Securitization Program if, among other things, the Special Purpose Subsidiaries fail to make payments when due, Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries become insolvent or subject to bankruptcy proceedings or certain judicial judgments, breach certain representations and warranties or covenants or default under other material indebtedness, a change of control occurs, or if Lamar Media fails to maintain the maximum secured debt ratio of 4.5 to 1.0 required under the senior credit facility.
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Uses of Cash
Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $180.8 million for the year ended December 31, 2025. Our capital expenditures are categorized as growth or maintenance as described below.
• Growth capital expenditures include discretionary capital expenditures incurred primarily for the expansion or development of new advertising markets and construction of new advertising sites. Growth capital expenditures also include certain technology-related investments necessary to support and scale for future customer demand of our outdoor advertising services, and other capital projects. Growth capital expenditures were $111.8 million for the year ended December 31, 2025.
• Maintenance capital expenditures include recurring capital expenditures not otherwise categorized as growth or other non-recurring capital expenditures, including costs incurred to enhance existing advertising sites, general asset improvements, and ordinary corporate capital expenditures. Maintenance capital expenditures were $57.3 million for the year ended December 31, 2025.
• Other non-recurring capital expenditures include capital expenditures to develop new non-revenue generating assets, such as office space in our local markets and the costs to re-develop advertising sites impacted by hurricanes. Other non-recurring capital expenditures were $11.6 million for the year ended December 31, 2025.
• We anticipate our 2026 total capital expenditures will be approximately $186 million.
Acquisitions. During the year ended December 31, 2025, the Company completed over 50 acquisitions for a total cash purchase price of approximately $191.1 million. The acquisitions occurring during the year ended December 31, 2025 were financed using available cash on hand, borrowings under the revolving credit facility and borrowings under the Accounts Receivable Securitization Program.
Dividends. During the year ended December 31, 2025, the Company declared and paid distributions of $655.9 million, or $6.45 per share of common stock. During the year ended December 31, 2024, the Company declared and paid distributions of $578.8 million, or $5.65 per share of common stock. Subject to the approval of the Company’s Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2026 will be at least $6.40 per common share.
As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that the Company otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, the Company’s ability to utilize net operating losses to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to fund distributions using cash generated through its TRSs, the impact of general economic conditions on the Company’s operations and other factors that the Board of Directors may deem relevant. The foregoing factors may also impact management’s recommendations to the Board of Directors as to the timing, amount and frequency of future distributions.
Stock and Debt Repurchasing Program. Prior to May 15, 2025, the Company’s Board of Directors had authorized the repurchase of up to $250.0 million of the Company’s Class A common stock. Additionally, the Board of Directors has authorized Lamar Media to repurchase up to $250.0 million in outstanding senior or senior subordinated notes and other indebtedness outstanding from time to time under its senior credit agreement. The repurchase programs are currently authorized through March 31, 2026. On May 15, 2025, the Company's Board of Directors approved the increase of the amount authorized under the Stock Repurchase Program by $150.0 million, bringing the total amount authorized under the Program to $400.0 million. The Company’s management may opt not to make any repurchases under the program, or may make aggregate purchases less than the total amount authorized. During the year ended December 31, 2025, the Company repurchased 1,388,091 shares of the Company's Class A common stock outstanding for a total purchase price of $150.0 million.
Material Cash Requirements
Our expected material cash requirements for the twelve months ended December 31, 2026 and thereafter are comprised of contractual obligations, required annual distributions and other opportunistic expenditures.
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Debt and Contractual Obligations. The following table summarizes our future debt maturities, interest payment obligations, and contractual obligations including required payments under operating and financing leases as of December 31, 2025:
(In millions)
Thereafter
Debt maturities (1)
Interest obligations on long-term debt (2)
Contractual obligations, including operating and financing leases
Total payments due
(1) Debt maturities assume there is no refinancing prior to the existing maturity date.
(2) Interest rates on our variable rate instruments assume rates at the December 31, 2025 levels. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" for further discussion on interest rate risk.
Required Annual Distributions. As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Our Board of Directors will continue to evaluate future dividends in order to continue to satisfy the requirements needed to maintain our REIT status.
Opportunistic Expenditures. As part of our capital allocation strategy, we plan to continue to allocate our available capital among investment alternatives that meet our return on investment criteria. We will continue to reinvest in our existing assets and expand our outdoor advertising display portfolio through new construction. We will also continue to pursue strategic acquisitions of outdoor advertising businesses and assets. This includes acquisitions in our existing markets and in new markets where we can meet our return on investment criteria.
Cash Flows
The Company’s cash flows provided by operating activities decreased $9.6 million from $873.6 million in 2024 to $864.0 million for the year ended December 31, 2025, primarily resulting from a decrease in the change in operating assets and liabilities in 2025 as compared to 2024.
Cash flows used in investing activities increased $79.7 million from $164.9 million in 2024 to $244.6 million in 2025 primarily due to a net increase in the amount of assets acquired through acquisitions and capital expenditures of $79.7 million, as compared to the same period in 2024.
The Company’s cash flows used in financing activities were $604.3 million for the year ended December 31, 2025 as compared to $703.4 million in 2024. This decrease in cash used in financing activities of $99.1 million for the year ended December 31, 2025 is primarily due to the proceeds received in the issuance of the 5 3/8% Senior Notes and net borrowings on the Term B loan, offset by an increase in cash paid for dividends and distributions, cash used for stock repurchases, and payments on the revolving credit facility.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those related to intangible assets, goodwill impairment and asset retirement obligations. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events and, where applicable, established valuation techniques. These estimates form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from our estimates. We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.
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Asset Retirement Obligations. The Company had an asset retirement obligation of $624.9 million as of December 31, 2025. This liability relates to the Company’s obligation upon the termination or non-renewal of a lease to dismantle and remove its billboard structures from the leased land and to restore the site to its original condition. The Company records the present value of obligations associated with the retirement of tangible long-lived assets in the period in which they are incurred. The liability is capitalized as part of the related long-lived asset’s carrying amount. Over time, accretion of the liability is recognized as an operating expense and the capitalized cost is depreciated over the expected useful life of the related asset. In calculating the liability, the Company calculates the present value of the estimated cost to dismantle using an average cost to dismantle, adjusted for inflation and market risk.
This calculation includes 100% of the Company’s billboard structures on leased land (which currently consist of approximately 71,500 structures). The Company uses a 15-year retirement period based on historical operating experience in its core markets, including the actual time that billboard structures have been located on leased land in such markets and the actual length of the leases in the core markets, which includes the initial term of the lease, plus consideration of any renewal period. Historical third-party cost information is used to estimate the cost of dismantling of the structures and the reclamation of the site. The interest rate used to calculate the present value of such costs over the retirement period is based on the Company’s historical credit-adjusted risk free rate.
Acquisitions. The Company accounts for transactions that meet the definition of a business combination and asset group purchases as acquisitions. For transactions that meet the definition of a business combination, the Company allocates the purchase price, including any contingent consideration, to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition with any excess of the purchase price paid over the estimated fair value of net assets acquired recorded as goodwill. For transactions that meet the definition of a business, the determination of the final purchase price and the acquisition-date fair value of identifiable assets acquired and liabilities assumed may extend over more than one period and result in adjustments to the preliminary estimate recognized in the prior period financial statements. For transactions that meet the definition of asset group purchases, the Company allocates the purchase price to the assets acquired and the liabilities assumed at their estimated relative fair values as of the date of the acquisition. If a transaction is determined to be a group of assets, any direct acquisition costs are capitalized. Transaction costs for transactions determined to be a business combination are expensed as incurred.
The fair value of the assets acquired and liabilities assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the fair value of tangible assets acquired, the Company must estimate the cost to replace the asset with a new asset, adjusted for an estimated reduction in fair value due to age of the asset, and the economic useful life. When determining the fair value of intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future cash flows.
Lease Liabilities and Right of Use Assets. On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right of use assets on our consolidated balance sheet. Our operating lease liabilities (including short-term liabilities) and right of use asset balances were $1.49 billion and $1.50 billion as of December 31, 2025, respectively. The balances are recorded based on the present value of the remaining minimum rental payments under the leasing standard for our existing operating leases. The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payments to present value and (2) lease term. Our leases generally do not include a readily determinable implicit rate, therefore, using a portfolio approach, we determine our collateralized incremental borrowing rate to discount the lease payments based on the information available at lease commencement. Our lease terms include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. The Company has determined we are not reasonably certain to exercise renewals or termination options, and as a result we use the lease’s initial stated term as the lease term for our lease population.
ACCOUNTING STANDARDS AND REGULATORY UPDATE
See Note 22, "New Accounting Pronouncements" to our consolidated financial statements included in Part II, Item 8 of this report for a discussion of our Accounting Standards and Regulatory Update.
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LAMAR MEDIA CORP.
The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the years ended December 31, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes.
RESULTS OF OPERATIONS
The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2025 and 2024:
Year Ended December 31,
Net revenues
Operating expenses:
Direct advertising expenses
General and administrative expenses
Corporate expenses
Depreciation and amortization
Operating income
Loss on extinguishment of debt
Interest expense
Income tax expense
Net income
Year ended December 31, 2025 compared to Year ended December 31, 2024
Net revenues increased $59.1 million or 2.7% to $2.27 billion for the year ended December 31, 2025 from $2.21 billion for the same period in 2024. This increase was attributable to an increase in billboard net revenues of $57.7 million and an increase in logo net revenues of $5.2 million over the prior year, offset by a decrease in transit net revenues of $3.7 million.
Net revenues for the year ended December 31, 2025, as compared to acquisition-adjusted net revenues for the comparable period in 2024, increased $45.6 million, or 2.1%. The $45.6 million increase in net revenues is due to a $47.8 million increase in billboard net revenues and an increase of $3.9 million in logo net revenues, offset by a $2.7 million decrease in transit net revenues. See “Reconciliations” below.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $23.6 million, or 1.9% to $1.24 billion for the year ended December 31, 2025 from $1.22 billion in the same period in 2024. The $23.6 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding non-cash compensation expense) of $34.2 million primarily related to the operations of our outdoor advertising assets, offset by a decrease in non-cash compensation expense of $10.6 million.
Depreciation and amortization expense decreased $136.6 million to $326.3 million for the year ended December 31, 2025 as compared to $463.0 million for the same period in 2024. The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.
For the year ended December 31, 2025, Lamar Media recognized a gain on disposition of assets of $75.9 million as compared to a gain on disposition of assets of $6.1 million for the same period in 2024. The gain on disposition of assets for the year ended December 31, 2025 primarily resulted from the sale of its equity interest in Vistar Media, Inc., as well as transactions related to the sale billboard locations and displays.
Due to the above factors, operating income increased $242.0 million to $774.6 million for the year ended December 31, 2025 compared to $532.6 million for the same period in 2024.
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Interest expense decreased $11.3 million for the year ended December 31, 2025 to $160.4 million as compared to $171.7 million for the year ended December 31, 2024. The decrease in interest expense is related to the repayment of the Term A loans outstanding under the senior credit facility during the year ended December 31, 2024 as well as a decrease in the interest rate on the senior credit facility and Accounts Receivable Securitization Program.
Equity in earnings of investee was $0.2 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively. The decrease of $4.9 million was primarily due to the sale of its equity interest in Vistar Media, Inc. in February 2025.
The increase in operating income as well as the decrease in interest expense, partially offset by the decrease in equity in earnings of investee, over the comparable period in 2024, resulted in a $246.9 million increase in net income before income taxes.
Lamar Media recorded income tax expense of $21.3 million for the year ended December 31, 2025 as compared to income tax expense of $4.5 million for the same period in 2024. The $21.3 million equates to an effective tax rate for the year ended December 31, 2025 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, Lamar Media recognized net income for the year ended December 31, 2025 of $593.6 million, as compared to net income of $363.5 million for the same period in 2024.
Reconciliations:
Because acquisitions occurring after December 31, 2023 have contributed to our net revenues results for the periods presented, we provide 2024 acquisition-adjusted net revenues, which adjusts our 2024 net revenues for the year ended December 31, 2024 by adding to or subtracting from it the net revenues generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2025.
Reconciliations of 2024 reported net revenues to 2024 acquisition-adjusted net revenues for the year ended December 31, 2024 as well as a comparison of 2024 acquisition-adjusted net revenues to 2025 reported net revenues for the year ended December 31, 2025, are provided below:
Reconciliation and Comparison of Reported Net Revenues to Acquisition-Adjusted Net Revenues
Year ended December 31,
(In thousands)
Reported net revenues
Acquisition net revenues
Adjusted totals
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Key Performance Indicators
Net Income/Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Income tax expense
Loss on extinguishment of debt
Interest expense, net
Equity in earnings of investee
Gain on disposition of assets
Depreciation and amortization
Capitalized contract fulfillment costs, net
Non-cash compensation expense
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, and was partially offset by an increase in general and administrative and corporate expenses of $15.2 million, excluding the impact of non-cash compensation expense.
Segmented Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Billboard adjusted EBITDA
Other adjusted EBITDA (1)
Corporate expenses (2)
Adjusted EBITDA
(1) Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.
(2) Corporate operations are not an operating segment. Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $31.2 million, offset by a decrease in other adjusted EBITDA of $1.7 million and an increase in corporate expenses of $4.4 million, excluding the impact of non-cash compensation expense.
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Net Income/FFO/AFFO
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Depreciation and amortization related to real estate
Gain from sale or disposal of real estate, net of tax
Adjustments for unconsolidated affiliates and non-controlling interest
FFO
Straight-line expense
Capitalized contract fulfillment costs, net
Non-cash compensation expense
Non-cash portion of tax provision
Non-real estate related depreciation and amortization
Amortization of deferred financing costs
Loss on extinguishment of debt
Capital expenditures – maintenance
Adjustments for unconsolidated affiliates and non-controlling interest
AFFO
FFO for the year ended December 31, 2025 was $827.9 million as compared to FFO of $799.0 million for the same period in 2024. AFFO for the year ended December 31, 2025 increased 3.4% to $847.2 million as compared to $819.6 million for the same period in 2024. The increase in AFFO was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of non-cash compensation expense) of $15.2 million.
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