GlobeNewswire Inc | Nov 5, 2020 06:00AM EST

November 05, 2020

Three Month Results

-- Net revenue was $386.1 million -- Net income was $62.8 million -- Adjusted EBITDA was $170.7 million

Nine Month Results

-- Net revenue was $1.1 billion -- Net income was $134.7 million -- Adjusted EBITDA was $463.7 million

BATON ROUGE, La., Nov. 05, 2020 (GLOBE NEWSWIRE) -- Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Companys operating results for the third quarter ended September 30, 2020.

The rebound in our advertising revenue continued through the third quarter, buoyed by spending from local businesses and election-year political dollars. We were also pleased to see national accounts pick up their activity as the quarter went on," Chief Executive Sean Reilly said. "Given the sales recovery and our progress on expense savings, we are raising our guidance range for full-year diluted AFFO per share to $4.65 to $4.85.

Third Quarter Highlights

-- Total operating expenses decreased 11.4% -- Adjusted EBITDA margin of 44.2% -- Total liquidity of $770.8 million as of September 30, 2020

Third Quarter Results

Lamar reported net revenues of $386.1 million for the third quarter of 2020 versus $457.8 million for the third quarter of 2019, a 15.7% decrease. Operating income for the third quarter of 2020 decreased $35.6 million to $105.9 million as compared to $141.4 million for the same period in 2019. Lamar recognized net income of $62.8 million for the third quarter of 2020 as compared to net income of $99.7 million for same period in 2019, a decrease of $37.0 million. Net income per diluted share was $0.62 and $0.99 for the three months ended September 30, 2020 and 2019, respectively.

Adjusted EBITDA for the third quarter of 2020 was $170.7 million versus $215.2 million for the third quarter of 2019, a decrease of 20.7%.

Cash flow provided by operating activities was $150.8 million for the three months ended September 30, 2020, a decrease of $20.1 million as compared to the same period in 2019. Free cash flow for the third quarter of 2020 was $127.2 million as compared to $138.2 million for the same period in 2019, an 8.0% decrease.

For the third quarter of 2020, funds from operations, or FFO, was $119.9 million versus $159.5 million for the same period in 2019, a decrease of 24.8%. Adjusted funds from operations, or AFFO, for the third quarter of 2020 was $133.4 million compared to $163.0 million for the same period in 2019, a decrease of 18.2%. Diluted AFFO per share decreased 18.5% to $1.32 for the three months ended September 30, 2020 as compared to $1.62 for the same period in 2019.

Acquisition-AdjustedThree Months Results

Acquisition-adjusted net revenue for the third quarter of 2020 decreased 15.5% as compared to acquisition-adjusted net revenue for the third quarter of 2019. Acquisition-adjusted EBITDA for the third quarter of 2020 decreased 20.1% as compared to acquisition-adjusted EBITDA for the third quarter of 2019. Acquisition-adjusted net revenue and acquisition-adjusted EBITDA include adjustments to the 2019 period for acquisitions and divestitures for the same time frame as actually owned in the 2020 period. See Reconciliation of Reported Basis to Acquisition-Adjusted Results, which provides reconciliations to GAAP for acquisition-adjusted measures.

Nine Months Results

Lamar reported net revenues of $1.140 billion for the nine months ended September 30, 2020 versus $1.291 billion for the same period in 2019, an 11.7% decrease. Operating income for the nine months ended September 30, 2020 was $268.9 million as compared to $376.3 million for the same period in 2019. Lamar recognized net income of $134.7 million for the nine months ended September 30, 2020 as compared to net income of $269.4 million for the same period in 2019. Net income per diluted share decreased to $1.33 for the nine months ended September 30, 2020 as compared to $2.69 for the same period in 2019. In addition, adjusted EBITDA for the nine months ended September 30, 2020 was $463.7 million versus $569.2 million for the same period in 2019, an 18.5% decrease.

Cash flow provided by operating activities decreased to $361.5 million for the nine months ended September 30, 2020, as compared to $408.0 million in the same period in 2019. Free cash flow for the nine months ended September 30, 2020 decreased 11.7% to $312.4 million as compared to $353.9 million for the same period in 2019.

For the nine months ended September 30, 2020, FFO was $309.6 million versus $423.8 million for the same period in 2019, a 26.9% decrease. AFFO for the nine months ended September 30, 2020 was $342.7 million compared to $416.0 million for the same period in 2019, a 17.6% decrease. Diluted AFFO per share decreased to $3.40 for the nine months ended September 30, 2020, as compared to $4.15 in the same period in 2019, a decrease of 18.1%.

Liquidity

As of September 30, 2020, Lamar had $770.8 million in total liquidity that consisted of $666.9 million available for borrowing under its revolving senior credit facility, $35.3 million available under the Accounts Receivable Securitization Program and approximately $68.6 million in cash and cash equivalents. There was $70.0 million and $122.5 million in borrowings outstanding under each of the Companys revolving credit facility and Accounts Receivable Securitization Program as of September 30, 2020, respectively.

Recent Developmentsand COVID-19 Update

During the three months ended September 30, 2020 Lamar Media redeemed all of its outstanding $535.0 million 5% Senior Subordinated Notes due 2023. The redemption was funded through a combination of cash on hand, borrowings under our revolving credit facility, borrowings under our Accounts Receivable Securitization Program and proceeds received from the additional 4% Senior Notes issued August 17, 2020. The above transactions resulted in a net neutral total debt outstanding position for the Company.

Lamar continues to actively monitor the effects of the COVID-19 pandemic on our business, employees and the business of our advertisers. In response to the viruss effect on the overall economy and decreased demand for outdoor advertising we have taken measures to reduce our operating costs and increase our liquidity. During the three months ended September 30, 2020, we saw an increase in revenues and customer activity across all divisions compared to the three months ended June 30, 2020, which has continued into the fourth quarter of 2020.

As we continue to actively monitor the situation, we may take further actions to alter our business operations as may be required by federal, state or local authorities, or that we determine are in the best interest of our employees, customers, partners and shareholders.

Revised Guidance

We are updating our revised 2020 guidance issued in August 2020 to reflect our expected recovery from the COVID-19 pandemic during the fourth quarter 2020. We now expect net income per diluted share for fiscal year 2020 to be between $1.99 and $2.16, with diluted AFFO per share between $4.65 and $4.85. See Supplemental Schedules and Unaudited Reconciliations of Non-GAAP Measures for a reconciliation to GAAP.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding sales trends. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others: (1) our significant indebtedness; (2) the severity and duration of the novel coronavirus (COVID-19) pandemic and its impact on our business, financial condition and results of operations; (3) the state of the economy and financial markets generally, including the impact caused by the novel coronavirus (COVID-19) pandemic and the effect of the broader economy on the demand for advertising; (4) the continued popularity of outdoor advertising as an advertising medium; (5) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (6) our ability to continue to qualify as a Real Estate Investment Trust (REIT) and maintain our status as a REIT; (7) the regulation of the outdoor advertising industry by federal, state and local governments; (8) the integration of companies and assets that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (9) changes in accounting principles, policies or guidelines; (10) changes in tax laws applicable to REITs or in the interpretation of those laws; (11) our ability to renew expiring contracts at favorable rates; (12) our ability to successfully implement our digital deployment strategy; and (13) the market for our Class A common stock. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We caution 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 we undertake no obligation to update or revise the statements, except as may be required by law.

Use of Non-GAAP Financial Measures

The Company has presented the following measures that are not measures of performance under accounting principles generally accepted in the United States of America (GAAP): adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), free cash flow, funds from operations (FFO), adjusted funds from operations (AFFO), diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense. Our management reviews our performance by focusing on these key performance indicators not prepared in conformity with 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.

Our Non-GAAP financial measures are determined as follows:

-- We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization, gain or loss on disposition of assets and investments, capitalized contract fulfillment costs, net and the impact of adopting FASB Accounting Standard Update No. 2016-02 Codified as ASC 842, Leases. -- Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenues. -- Free cash flow is defined as adjusted EBITDA less interest, net of interest income and amortization of deferred financing costs, current taxes, preferred stock dividends and total capital expenditures. -- We use the National Association of Real Estate Investment Trusts definition of FFO, which is defined as net income before gains or losses from the sale or disposal of real estate assets and investments 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) impact of ASC 842 adoption;(iii) capitalized contract fulfillment costs, net (iv) stock-based compensation expense; (v)non-cash portion of tax provision; (vi)non-real estate related depreciation and amortization; (vii)amortization of deferred financing costs; (viii)loss on extinguishment of debt; (ix)non-recurring infrequent or unusual losses (gains); (x)less maintenance capital expenditures; and (xi)an adjustment for unconsolidated affiliates and non-controlling interest. -- Diluted AFFO per share is defined as AFFO divided by weighted average diluted common shares outstanding. -- Outdoor operating income is defined as operating income before corporate expenses, stock-based compensation, depreciation and amortization and loss (gain) on disposition of assets. -- Acquisition-adjusted results adjusts our net revenue, direct and general and administrative expenses, outdoor operating income, corporate expense and EBITDA for the prior period by adding to, or subtracting from, the corresponding revenue or expense generated by the acquired or divested assets before our acquisition or divestiture of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted results, therefore, we include revenue and expenses generated by assets that we did not own in the prior period but acquired in the current period. We refer to the amount of pre-acquisition revenue and expense generated by or subtracted from 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-adjusted results. -- Acquisition-adjusted consolidated expense adjusts our total operating expense to remove the impact of stock-based compensation, depreciation and amortization, capitalized contract fulfillment costs, net and loss (gain) on disposition of assets and investments. The prior period is also adjusted for the impact of adopting FASB Accounting Standard Update No. 2016-02 Codified as ASC 842, Leases and to include the expense generated by the acquired or divested assets before our acquisition or divestiture of such assets for the same time frame that those assets were owned in the current period.

Adjusted EBITDA, FFO, AFFO, diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense are not intended to replace other performance measures determined in accordance with GAAP. Free cash flow, FFO and AFFO do not represent 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. Adjusted EBITDA, free cash flow, FFO, AFFO, diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense are presented as we believe each is a useful indicator of our current operating performance. Specifically, 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 it excludes the impact of depreciation and amortization, which may vary significantly among companies, depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) adjusted EBITDA, FFO, AFFO, diluted AFFO per share and acquisition-adjusted consolidated expense each provides investors with a meaningful measure for evaluating our period-over-period operating performance by eliminating items that are not operational in nature and reflect the impact on operations from trends in occupancy rates, operating costs, general and administrative expenses and interest costs; (4)acquisition-adjusted results is a supplement 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; (5) free cash flow is an indicator of our ability to service debt and generate cash for acquisitions and other strategic investments;(6) outdoor operating income provides investors a measurement of our core results without the impact of fluctuations in stock-based compensation, depreciation and amortization and corporate expenses; and (7) each of our Non-GAAP measures provides investors with a measure for comparing our results of operations to those of other companies.

Our measurement of adjusted EBITDA, FFO, AFFO, diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of adjusted EBITDA, FFO, AFFO, diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense to the most directly comparable GAAP measures have been included herein.

Conference Call Information

A conference call will be held to discuss the Companys operating results on Thursday, November 5, 2020 at 8:00 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call

All Callers: 1-334-777-6991 or 1-800-338-4880

Passcode: 65248056 Replay: 1-334-323-0140 or 1-877-919-4059Passcode: 61368192 Available through Thursday, November 12, 2020 at 11:59 p.m. eastern time Live Webcast: www.lamar.com Webcast Replay: www.lamar.com Available through Thursday, November 12, 2020 at 11:59 p.m. eastern time Company Contact: Buster Kantrow Director of Investor Relations (225) 926-1000 bkantrow@lamar.com

General Information

Founded in 1902, Lamar Advertising (Nasdaq: LAMR) is one of the largest outdoor advertising companies in North America, with over 357,500 displays across the United States and Canada. Lamar offers advertisers a variety of billboard, interstate logo, transit and airport advertising formats, helping both local businesses and national brands reach broad audiences every day. In addition to its more traditional out-of-home inventory, Lamar is proud to offer its customers the largest network of digital billboards in the United States with over 3,600 displays.

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

Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Net revenues $ 386,110 $ 457,786 $ 1,140,331 $ 1,290,985 Operatingexpenses (income)Directadvertising 136,309 149,550 418,826 442,784 expensesGeneral andadministrative 63,039 77,370 208,651 230,569 expensesCorporate 16,092 15,681 49,171 48,388 expensesStock-based 4,884 10,572 11,046 18,078 compensationImpact of ASC842 adoption(lease ? 1,099 ? 3,029 accountingstandard)Capitalizedcontract ? (1,680 ) 1,036 (9,984 )fulfillmentcosts, netDepreciationand 61,237 63,951 187,548 187,150 amortizationGain ondisposition of (1,304 ) (199 ) (4,823 ) (5,360 )assetsTotaloperating 280,257 316,344 871,455 914,654 expenseOperating 105,853 141,442 268,876 376,331 incomeOther expense (income)Loss onextinguishment 7,051 ? 25,235 ? of debtInterest (248 ) (168 ) (617 ) (553 )incomeInterest 35,068 38,323 107,058 114,240 expense 41,871 38,155 131,676 113,687 Income beforeincome tax 63,982 103,287 137,200 262,644 expense(benefit)Income taxexpense 1,224 3,578 2,520 (6,714 )(benefit)Net income 62,758 99,709 134,680 269,358 Preferredstock 91 91 273 273 dividendsNet incomeapplicable to $ 62,667 $ 99,618 $ 134,407 $ 269,085 common stockEarnings per share:Basic earnings $ 0.62 $ 0.99 $ 1.33 $ 2.69 per shareDilutedearnings per $ 0.62 $ 0.99 $ 1.33 $ 2.69 shareWeightedaverage common sharesoutstanding:- basic 100,812,570 100,329,262 100,722,859 100,019,765 - diluted 100,924,981 100,522,177 100,860,870 100,210,143 OTHER DATA Free Cash Flow Computation:Adjusted $ 170,670 $ 215,185 $ 463,683 $ 569,244 EBITDAInterest, net (33,231 ) (36,813 ) (101,974 ) (109,675 )Current tax (1,781 ) (2,916 ) (4,390 ) (7,745 )expensePreferredstock (91 ) (91 ) (273 ) (273 )dividendsTotal capital (8,359 ) (37,120 ) (44,633 ) (97,680 )expendituresFree cash flow $ 127,208 $ 138,245 $ 312,413 $ 353,871

September December31, 30,Selected Balance 2020 2019 Sheet Data:Cash and cash $ 68,628 $ 26,188 equivalentsWorking capital $ (192,121 ) $ (362,639 )deficitTotal assets $ 5,778,403 $ 5,941,155 Total debt, netof deferredfinancing costs $ 2,964,188 $ 2,980,118 (includingcurrentmaturities)Totalstockholders? $ 1,139,053 $ 1,180,306 equity Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Selected Cash Flow Data:Cash flowsprovided by $ 150,780 $ 170,921 $ 361,457 $ 407,970 operatingactivitiesCash flows usedin investing $ 10,004 $ 172,674 $ 67,681 $ 309,819 activitiesCash flows (usedin) provided by $ (249,361 ) $ 7,845 $ (251,264 ) $ (96,502 )financingactivities

SUPPLEMENTAL SCHEDULESUNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES (IN THOUSANDS)

Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Reconciliation of CashFlows Provided by Operating Activities toFree Cash Flow:Cash flows provided by $ 150,780 $ 170,921 $ 361,457 $ 407,970 operating activitiesChanges in operating (14,011 ) 8,066 4,268 58,416 assets and liabilitiesTotal capital (8,359 ) (37,120 ) (44,633 ) (97,680 )expendituresPreferred stock (91 ) (91 ) (273 ) (273 )dividendsImpact of ASC 842adoption (lease ? 1,099 ? 3,029 accounting standard)Capitalized contract ? (1,680 ) 1,036 (9,984 )fulfillment costs, netOther (1,111 ) (2,950 ) (9,442 ) (7,607 )Free cash flow $ 127,208 $ 138,245 $ 312,413 $ 353,871 Reconciliation of NetIncome to Adjusted EBITDA:Net income $ 62,758 $ 99,709 $ 134,680 $ 269,358 Loss on extinguishment 7,051 ? 25,235 ? of debtInterest income (248 ) (168 ) (617 ) (553 )Interest expense 35,068 38,323 107,058 114,240 Income tax expense 1,224 3,578 2,520 (6,714 )(benefit)Operating income 105,853 141,442 268,876 376,331 Stock-based 4,884 10,572 11,046 18,078 compensationImpact of ASC 842adoption (lease ? 1,099 ? 3,029 accounting standard)Capitalized contract ? (1,680 ) 1,036 (9,984 )fulfillment costs, netDepreciation and 61,237 63,951 187,548 187,150 amortizationGain on disposition of (1,304 ) (199 ) (4,823 ) (5,360 )assetsAdjusted EBITDA $ 170,670 $ 215,185 $ 463,683 $ 569,244 Capital expenditure detail by category:Billboards - $ 678 $ 11,894 $ 8,701 $ 34,587 traditionalBillboards - digital 2,620 14,461 19,422 40,498 Logo 1,853 3,249 5,398 7,153 Transit 817 497 2,672 2,293 Land and buildings 1,210 4,818 3,468 6,514 Operating equipment 1,181 2,201 4,972 6,635 Total capital $ 8,359 $ 37,120 $ 44,633 $ 97,680 expenditures

SUPPLEMENTAL SCHEDULESUNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES (IN THOUSANDS)

Three months ended Nine months ended September 30, September 30, 2020 2019 % 2020 2019 % Change ChangeReconciliation ofReported Basis to Acquisition-AdjustedResults ^(a):Net revenue $ 386,110 $ 457,786 (15.7 ) $ 1,140,331 $ 1,290,985 (11.7 ) % %Acquisitions and ? (694 ) ? 9,515 divestituresAcquisition-adjusted $ 386,110 $ 457,092 (15.5 ) $ 1,140,331 $ 1,300,500 (12.3 )net revenue % % Reported direct ) )advertising and G&A $ 199,348 $ 226,920 (12.2 % $ 627,477 $ 673,353 (6.8 %expenses ^(b)Acquisitions and ? 899 ? 8,540 divestituresAcquisition-adjusted ) )direct advertising $ 199,348 $ 227,819 (12.5 % $ 627,477 $ 681,893 (8.0 %and G&A expenses Outdoor operating $ 186,762 $ 230,866 (19.1 ) $ 512,854 $ 617,632 (17.0 )income % %Acquisitions and ? (1,593 ) ? 975 divestituresAcquisition-adjusted ) )outdoor operating $ 186,762 $ 229,273 (18.5 % $ 512,854 $ 618,607 (17.1 %income Reported corporate $ 16,092 $ 15,681 2.6 % $ 49,171 $ 48,388 1.6 %expenses^(b)Acquisitions and ? ? ? ? divestituresAcquisition-adjusted $ 16,092 $ 15,681 2.6 % $ 49,171 $ 48,388 1.6 %corporate expenses Adjusted EBITDA $ 170,670 $ 215,185 (20.7 ) $ 463,683 $ 569,244 (18.5 ) % %Acquisitions and ? (1,593 ) ? 975 divestituresAcquisition-adjusted $ 170,670 $ 213,592 (20.1 ) $ 463,683 $ 570,219 (18.7 )EBITDA % %

(a) Acquisition-adjusted net revenue, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and EBITDA include adjustments to 2019 for acquisitions and divestitures for the same time frame as actually owned in 2020.

(b) Does not include expenses (income) of $1,036 for the nine months ended September 30, 2020 and $(581) and $(6,955) for the three and nine months ended September 30, 2019, respectively, related to the impact of ASC 842 for lease accounting and capitalization contract fulfillment costs, net.

Three months ended Nine months ended September 30, September 30, 2020 2019 % 2020 2019 % Change ChangeReconciliationof Net Incometo Outdoor OperatingIncome:Net income $ 62,758 $ 99,709 (37.1 ) $ 134,680 $ 269,358 (50.0 ) % %Loss onextinguishment 7,051 ? 25,235 ? of debtInterest 34,820 38,155 106,441 113,687 expense, netIncome taxexpense 1,224 3,578 2,520 (6,714 ) (benefit)Operating 105,853 141,442 (25.2 ) 268,876 376,331 (28.6 )income % %Corporate 16,092 15,681 49,171 48,388 expensesStock-based 4,884 10,572 11,046 18,078 compensationImpact of ASC842 adoption(lease ? 1,099 ? 3,029 accountingstandard)Capitalizedcontract ? (1,680 ) 1,036 (9,984 ) fulfillmentcosts, netDepreciationand 61,237 63,951 187,548 187,150 amortizationGain ondisposition of (1,304 ) (199 ) (4,823 ) (5,360 ) assetsOutdoor ) )operating $ 186,762 $ 230,866 (19.1 % $ 512,854 $ 617,632 (17.0 %income

Three months ended Nine months ended September 30, September 30, 2020 2019 % 2020 2019 % Change ChangeReconciliation ofTotal OperatingExpense to Acquisition-AdjustedConsolidatedExpense:Total operating $ 280,257 $ 316,344 (11.4 ) $ 871,455 $ 914,654 (4.7 )expense % %Gain on disposition 1,304 199 4,823 5,360 of assetsDepreciation and (61,237 ) (63,951 ) (187,548 ) (187,150 ) amortizationImpact of ASC 842adoption (lease ? (1,099 ) ? (3,029 ) accounting standard)Capitalized contractfulfillment costs, ? 1,680 (1,036 ) 9,984 netStock-based (4,884 ) (10,572 ) (11,046 ) (18,078 ) compensationAcquisitions and ? 899 ? 8,540 divestituresAcquisition-adjusted $ 215,440 $ 243,500 (11.5 ) $ 676,648 $ 730,281 (7.3 )consolidated expense % %

SUPPLEMENTAL SCHEDULESUNAUDITED REIT MEASURESAND RECONCILIATIONS TO GAAP MEASURES(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Adjusted Funds From Operations:Net income $ 62,758 $ 99,709 $ 134,680 $ 269,358 Depreciation andamortization related to 58,431 59,742 178,884 175,920 real estateGain from disposition of (1,324 ) (164 ) (4,422 ) (5,048 )real estate assetsNon-cash tax benefit for ? ? ? (17,031 )REIT converted assetsAdjustment forunconsolidated 67 207 456 561 affiliates andnon-controlling interestFunds from operations $ 119,932 $ 159,494 $ 309,598 $ 423,760 Straight-line expense 882 (1 ) 2,615 (217 )(income)Impact of ASC 842adoption (lease ? 1,099 ? 3,029 accounting standard)Capitalized contract ? (1,680 ) 1,036 (9,984 )fulfillment costs, netStock-based compensation 4,884 10,572 11,046 18,078 expenseNon-cash portion of tax (557 ) 662 (1,870 ) 2,572 provisionNon-real estate relateddepreciation and 2,806 4,209 8,664 11,230 amortizationAmortization of deferred 1,589 1,342 4,467 4,012 financing costsLoss on extinguishment 7,051 ? 25,235 ? of debtCapitalized (3,124 ) (12,492 ) (17,616 ) (35,888 )expenditures?maintenanceAdjustment forunconsolidated (67 ) (207 ) (456 ) (561 )affiliates andnon-controlling interestAdjusted funds from $ 133,396 $ 162,998 $ 342,719 $ 416,031 operations Divided by weightedaverage diluted common 100,924,981 100,522,177 100,860,870 100,210,143 shares outstandingDiluted AFFO per share $ 1.32 $ 1.62 $ 3.40 $ 4.15

SUPPLEMENTAL SCHEDULESAND UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Revised projected 2020 Adjusted Funds From Operations:

Year ended December 31, 2020 Low High Net income $ 201,200 $ 217,700 Depreciation and amortization related to 237,600 237,600 real estateGain from disposition of real estate assets (6,000 ) (6,000 )and investmentsAdjustment for unconsolidated affiliates 700 700 and non-controlling interestFunds From Operations $ 433,500 $ 450,000 Straight-line expense 3,000 3,000 Capitalized contract fulfillment costs, net 1,000 1,000 Stock-based compensation expense 14,500 18,000 Non-cash portion of tax provision (2,000 ) (2,000 )Non-real estate related depreciation and 12,400 12,400 amortizationAmortization of deferred financing costs 6,000 6,000 Loss on extinguishment of debt 25,300 25,300 Capitalized expenditures?maintenance (24,000 ) (24,000 )Adjustment for unconsolidated affiliates (700 ) (700 )and non-controlling interestAdjusted Funds From Operations $ 469,000 $ 489,000 Weighted average diluted shares outstanding 100,900,000 100,900,000 Diluted earnings per share $ 1.99 $ 2.16 Diluted AFFO per share $ 4.65 $ 4.85

The guidance provided above is based on a number of assumptions that management believes to be reasonable and reflects our expectations as of November 2020. Actual results may differ materially from these estimates as a result of various factors, and we refer to the cautionary language regarding forward-looking statements included in the press release when considering this information.