UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the period ended ~~June~~September 30, 2004

or

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

For the transition period from _______________ to _______________

Commission File Number 0-30242

Lamar Advertising Company

Commission File Number 1-12407

Lamar Media Corp.

(Exact name of registrants as specified in their charters)


	Delaware				72-1449411

Delaware				72-1205791

(State or other jurisdiction of incorporation or		(I.R.S Employer
	organization)		Identification No.)
	5551 Corporate Blvd., Baton Rouge, LA				70808

(Address of principle executive offices)		(Zip Code)

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

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

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

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

The number of shares of Lamar Advertising Company’s Class A common stock outstanding as of ~~August 2,~~November 5, 2004: ~~88,594,472~~88,677,967

The number of shares of the Lamar Advertising Company’s Class B common stock outstanding as of ~~August 2,~~November 5, 2004: 15,672,527

The number of shares of Lamar Media Corp. common stock outstanding as of ~~August 2,~~November 5, 2004: 100

This combined Form 10-Q is separately filed by (i) Lamar Advertising Company and (ii) Lamar Media Corp. (which is a wholly owned subsidiary of Lamar Advertising Company). Lamar Media Corp. meets the conditions set forth in general instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this form with the reduced disclosure format permitted by such instruction.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

• expected operating results;

• market opportunities;

• acquisition opportunities;

• ability to compete; and

• stock price.

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

~~risks and uncertainties relating to the Company’s significant indebtedness;~~

~~the demand for outdoor advertising;~~

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

~~the Company’s ability to renew expiring contracts at favorable rates;~~

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

~~the Company’s need for and ability to obtain additional funding for acquisitions or operations; and~~

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

•		risks and uncertainties relating to the Company’s significant indebtedness;

•		the demand for outdoor advertising;

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

•		the Company’s ability to renew expiring contracts at favorable rates;

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

•		the Company’s need for and ability to obtain additional funding for acquisitions or operations; and

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

For a further description of these and other risks and uncertainties, the Company encourages you to read carefully the portion of the combined Annual Report on Form 10-K for the year ended December 31, 2003 of the Company and Lamar Media (the “2003 Combined Form 10-K”) under the caption “Factors Affecting Future Operating Results” in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations filed with the SEC on March 10, 2004.~~Operations.

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

PART I — FINANCIAL INFORMATION

Restatement of Financial Statements

In connection with the preparation of this Form 10-Q, the Company determined, in consultation with its outside auditors, to change the way it applies Financial Accounting Standard 143, “Accounting for Asset Retirement Obligations,” which the Company adopted effective January 1, 2003. The Company has decided to expand the scope of the outdoor advertising structures that are subject to the calculation of the asset retirement obligations required under Financial Accounting Standard 143, “Accounting for Asset Retirement Obligations” by including steel structures in addition to non-steel structures, instead of accounting for such costs under Financial Accounting Standard 13, “Accounting for Leases.”

As a result, the Company is restating its audited consolidated financial statements for the year ended December 31, 2003 and its unaudited condensed consolidated financial statements for quarters ended March 31, 2004 and June 30, 2004. Amendments to the Company’s previously filed Form 10-K for 2003 and its Forms 10-Q for its first and second quarters of 2004 will be filed to reflect this restatement. In this Form 10-Q, the financial statements and other information for the three months and nine months ended September 30, 2004 are presented on this restated basis. See Note 2 “Restatement of Financial Statements”.

-1-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Three Months Ended Six Months Ended
June 30,
June 30,
2004
2003
2004
2003
Net revenues $ 226,915 $ 208,178 $ 427,891 $ 392,399

Operating expenses (income)
Direct advertising expenses 74,362 73,361 148,153 144,918
General and administrative expenses 38,437 35,216 76,713 71,517
Corporate expenses 7,214 5,364 14,373 11,910
Depreciation and amortization 71,519 69,560 140,839 137,073
Loss (gain) on disposition of assets 3,461 (828 ) 2,532 (858 )

194,993 182,673 382,610 364,560

Operating income 31,922 25,505 45,281 27,839
Other expense (income)
Loss on extinguishment of debt — 5,754 — 16,927
Interest income (62 ) (66 ) (121 ) (184 )
Interest expense 16,833 22,587 34,403 46,347

16,771 28,275 34,282 63,090

Income (loss) before income tax expense (benefit) and cumulative effect of a change in accounting principle 15,151 (2,770 ) 10,999 (35,251 )
Income tax expense (benefit) 6,286 (569 ) 4,581 (12,457 )

Income (loss) before cumulative effect of a change in accounting principle 8,865 (2,201 ) 6,418 (22,794 )
Cumulative effect of a change in accounting principle, net of tax — — — 11,679

Net income (loss) 8,865 (2,201 ) 6,418 (34,473 )
Preferred stock dividends 91 91 182 182

Net income (loss) applicable to common stock $ 8,774 $ (2,292 ) $ 6,236 $ (34,655 )

Earnings (loss) per share:
Basic:
Before cumulative effect of a change in accounting principle $ 0.08 $ ( 0.02 ) $ 0.06 $ (0.23 )
Cumulative effect of a change in accounting principle — — — (0.11 )

Basic earnings (loss) per share $ 0.08 $ (0.02 ) $ 0.06 $ (0.34 )

Diluted:
Before cumulative effect of a change in accounting principle $ 0.08 $ (0.02 ) $ 0.06 $ (0.23 )
Cumulative effect of a change in accounting principle — — — (0.11 )

Diluted earnings (loss) per share $ 0.08 $ (0.02 ) $ 0.06 $ (0.34 )

Weighted average common shares used in computing earnings (loss) per share:
Basic 103,902,268 102,481,555 103,754,925 102,076,725
Incremental common shares 592,146 — 519,641 —

Diluted 104,494,414 102,481,555 104,274,566 102,076,725

~~See accompanying notes to condensed consolidated financial statements.~~

~~LAMAR ADVERTISING COMPANY AND~~
~~SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~

~~(IN THOUSANDS)~~

Six Months Ended
June 30,
2004
2003
Cash flows from operating activities:
Net income (loss) $ 6,418 $ (34,473 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 140,839 137,073
Loss (gain) on disposition of assets 2,532 (858 )
Deferred tax expense (benefit) 3,759 (12,197 )
Provision for doubtful accounts 3,460 4,268
Loss on debt extinguishment — 16,927
Cumulative effect of a change in accounting principle, net of tax — 11,679
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (14,455 ) (10,293 )
Prepaid expenses (14,550 ) (13,038 )
Other assets 1,715 (4,776 )
Increase (decrease) in:
Trade accounts payable (2 ) 370
Accrued expenses (10,186 ) 4,646
Other liabilities (2,299 ) (1,014 )

Net cash provided by operating activities 117,231 98,314

Cash flows from investing activities:
Acquisition of new markets (50,541 ) (102,804 )
Capital expenditures (35,075 ) (40,767 )
Proceeds from disposition of assets 3,526 2,448

Net cash used in investing activities (82,090 ) (141,123 )

Cash flows from financing activities:
Debt issuance costs (1,036 ) (9,050 )
Net proceeds from issuance of common stock 19,549 4,303
Principal payments on long-term debt (3,494 ) (370,939 )
Net (payments) borrowings under credit agreements (40,000 ) 40,000
Cash from deposits for debt extinguishment — 266,657
Deposits for debt extinguishment — (301,198 )
Net proceeds from note offerings and new note payable — 408,300
Dividends (182 ) (182 )

Net cash (used in) provided by financing activities (25,163 ) 37,891

Net increase (decrease) in cash and cash equivalents 9,978 (4,918 )
Cash and cash equivalents at beginning of period 7,797 15,610

Cash and cash equivalents at end of period $ 17,775 $ 10,692

Supplemental disclosures of cash flow information:
Cash paid for interest $ 37,671 $ 36,422

Cash paid for state and federal income taxes $ 423 $ 291

Common stock issuance related to acquisitions $ 4,270 $ 50,630


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
				(Restated)						(Restated)
Net revenues	$	231,622		$	211,720		$	659,513		$	604,119

Operating expenses (income)
Direct advertising expenses (exclusive of depreciation and amortization)		76,390			74,571			224,543			219,489
General and administrative expenses (exclusive of depreciation and amortization)		39,778			36,098			116,491			107,615
Corporate expenses (exclusive of depreciation and amortization)		7,523			6,631			21,896			18,541
Depreciation and amortization		75,163			71,311			217,876			209,408
Loss (gain) on disposition of assets		(468	)		(58	)		1,617			(1,515	)

		198,386			188,553			582,423			553,538

Operating income		33,236			23,167			77,090			50,581
Other expense (income)
Loss on extinguishment of debt		—			12,566			—			29,493
Interest income		(114	)		(99	)		(235	)		(283	)
Interest expense		19,173			22,800			56,208			72,479

		19,059			35,267			55,973			101,689

Income (loss) before income tax expense (benefit) and cumulative effect of a change in accounting principle		14,177			(12,100	)		21,117			(51,108	)
Income tax expense (benefit)		5,892			(4,447	)		8,784			(18,369	)

Income (loss) before cumulative effect of a change in accounting principle		8,285			(7,653	)		12,333			(32,739	)
Cumulative effect of a change in accounting principle, net of tax		—			—			—			(40,240	)

Net income (loss)		8,285			(7,653	)		12,333			(72,979	)
Preferred stock dividends		91			91			273			273

Net income (loss) applicable to common stock	$	8,194		$	(7,744	)	$	12,060		$	(73,252	)

Earnings (loss) per share:
Basic:
Before cumulative effect of a change in accounting principle	$	0.08		$	(0.08	)	$	0.12		$	(0.32	)
Cumulative effect of a change in accounting principle		—			—			—			(0.39	)

Basic earnings (loss) per share	$	0.08		$	(0.08	)	$	0.12		$	(0.71	)

Diluted:
Before cumulative effect of a change in accounting principle		0.08		$	(0.08	)	$	0.12		$	(0.32	)
Cumulative effect of a change in accounting principle		—			—			—			(0.39	)

Diluted earnings (loss) per share	$	0.08		$	(0.08	)	$	0.12		$	(0.71	)

Weighted average common shares used in computing earnings (loss) per share:
Basic		104,288,811			103,251,834			103,934,186			102,472,830
Incremental common shares		584,455			—			533,082			—

Diluted		104,873,266			103,251,834			104,467,268			102,472,830

See accompanying notes to condensed consolidated financial statements.

-3-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)


	Nine Months Ended
	September 30,
	2004			2003
				(Restated)
Cash flows from operating activities:
Net income (loss)	$	12,333		$	(72,979	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		217,876			209,408
Amortization costs in interest expense		3,996			4,608
Loss (gain) on disposition of assets		1,617			(1,515	)
Deferred tax expense (benefit)		7,408			(18,059	)
Provision for doubtful accounts		5,163			6,454
Loss on debt extinguishment		—			29,493
Cumulative effect of a change in accounting principle, net of tax		—			40,240
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables		(17,073	)		(11,319	)
Prepaid expenses		(14,060	)		(14,120	)
Other assets		(1,968	)		(2,781	)
Increase (decrease) in:
Trade accounts payable		2,590			3,700
Accrued expenses		(8,864	)		(3,378	)
Other liabilities		453			1,378

Net cash provided by operating activities		209,471			171,130

Cash flows from investing activities:
Acquisition of new markets		(129,887	)		(124,967	)
Capital expenditures		(57,975	)		(61,299	)
Proceeds from disposition of assets		6,771			2,913

Net cash used in investing activities		(181,091	)		(183,353	)

Cash flows from financing activities:
Debt issuance costs		(1,513	)		(9,800	)
Net proceeds from issuance of common stock		21,816			5,451
Principal payments on long-term debt		(4,221	)		(667,280	)
Net payments under credit agreements		(40,000	)		—
Cash from deposits for debt extinguishment		—			266,657
Net proceeds from note offerings and new note payable		—			408,350
Dividends		(273	)		(273	)

Net cash (used in) provided by financing activities		(24,191	)		3,105

Net increase (decrease) in cash and cash equivalents		4,189			(9,118	)
Cash and cash equivalents at beginning of period		7,797			15,610

Cash and cash equivalents at end of period	$	11,986		$	6,492

Supplemental disclosures of cash flow information:
Cash paid for interest	$	63,598		$	66,010

Cash paid for state and federal income taxes	$	840		$	390

Common stock issuance related to acquisitions	$	4,270		$	50,630

See accompanying notes to condensed consolidated financial statements.

-4-

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

1.
1. Significant Accounting Policies

The information included in the foregoing interim condensed consolidated financial statements is unaudited. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and the notes thereto included in the 2003 Combined Form 10-K.

~~Certain amounts~~The Company previously included amortization of debt issuance costs under depreciation and amortization in the Consolidated Statement of Operations. The Company is reclassifying this cost to interest expense. The effect of this reclassification is a decrease in depreciation and amortization and an increase in interest expense and operating income in the prior ~~year’s condensed consolidated financial statements have been reclassified to conform with the current year presentation. These reclassifications~~periods. The reclassification had no effect on previously reported ~~results~~net income. The amortization of ~~operations.~~debt issuance fees was $1,276 for the three months ended September 30, 2003 and $4,608 for the nine months ended September 30, 2003, respectively.

2.
2. Restatement of Financial Statements

The Company is restating its financial statements for the fiscal quarter and nine-months ended September 30, 2003. This restatement of the Company’s financial statements is being reported in the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004. The fiscal quarter ended September 30, 2003 was originally filed with the Securities and Exchange Commission on November 5, 2003. The Company will also amend and restate its financial statements and notes thereto included in the Company’s 2003 annual report on Form 10-K and its unaudited condensed consolidated financial statements for the quarters ended March 31, 2004 and June 30, 2004 on Form 10-Q.

This restatement of the financial statements corrects the adoption of Statement of Financial Accounting Standard 143, “Accounting for Asset Retirement Obligations” (Statement 143), effective January 1, 2003. Previously all of the Company’s liabilities for asset retirement obligations related to the Company’s structure inventory that it considers would be retired upon dismantlement of the advertising structure. The Company’s steel structures, unlike its non-steel structures are not typically retired but relocated to another location. As such, the costs associated with the removal of the steel structures and resurfacing of the land were believed to be outside the scope of Statement 143 and were recorded when incurred in accordance with Statement of Financial Accounting Standard 13, “Accounting for Leases”. The Company reconsidered the provisions of Statement 143 and has determined that the liabilities should include costs associated with the removal of the steel structures and resurfacing of the land in the asset retirement obligation.

The effect of the restatement on the condensed consolidated statements of operations for the three-months and nine-months ended September 30, 2003 are set forth below:


	Three months ended						Nine months ended
	September 30, 2003						September 30, 2003
				As Previously						As Previously
	As Restated			Reported			As Restated			Reported
Depreciation and amortization*		71,311			70,410			209,408			207,483
Loss (gain) on disposition of assets		(58	)		242			(1,515	)		(616	)
Operating expenses		188,553			187,952			553,538			552,512
Operating income		23,167			23,768			50,581			51,607
Interest expense*		22,800			21,524			72,479			67,871
Loss before income tax benefit and cumulative effect of a change in accounting principle		(12,100	)		(10,223	)		(51,108	)		(45,474	)
Income tax benefit		(4,447	)		(3,715	)		(18,369	)		(16,172	)
Loss before cumulative effect of a change in accounting principle		(7,653	)		(6,508	)		(32,739	)		(29,302	)
Cumulative effect of a change in accounting principle, net of tax		—			—			(40,240	)		(11,679	)
Net loss		(7,653	)		(6,508	)		(72,979	)		(40,981	)
Net loss applicable to common stock		(7,744	)		(6,599	)		(73,252	)		(41,254	)

The as restated three months and nine months ended September 30, 2003 results have been adjusted for the amortization of deferred financing cost reclassification as discussed in footnote 1 to these quarterly financial statements.

-5-


	Three months ended						Nine months ended
	September 30, 2003						September 30, 2003
				As Previously						As Previously
	As Restated			Reported			As Restated			Reported
Loss per share:
Basic:
Before cumulative effect of a change in accounting principle		(0.08	)		(0.06	)		(0.32	)		(0.29	)
Cumulative effect of a change in accounting principle		—			—			(0.39	)		(0.11	)

Basic loss per share		(0.08	)		(0.06	)		(0.71	)		(0.40	)

Diluted:
Before cumulative effect of a change in accounting principle		(0.08	)		(0.06	)		(0.32	)		(0.29	)
Cumulative effect of a change in accounting principle		—			—			(0.39	)		(0.11	)

Diluted loss per share		(0.08	)		(0.06	)		(0.71	)		(0.40	)

The effect of the restatement of the condensed consolidated balance sheet as of December 31, 2003 is set forth below:


	December 31, 2003
				As Previously
	As Restated			Reported
Property, plant & equipment		1,988,096			1,933,003
Accumulated depreciation		(702,272	)		(679,205	)
Total Assets		3,669,373			3,637,347
Deferred income tax liabilities		73,352			94,542
Asset retirement obligation		123,217			36,857
Total Liabilities		1,979,712			1,914,542
Accumulated Deficit		(407,997	)		(374,853	)
Stockholder’s Equity		1,689,661			1,722,805
Total liabilities and stockholder’s equity		3,669,373			3,637,347

The restatement did not effect cash provided by operations, cash used in investing activities or cash provided by financing activities for the nine-months ended September 30, 2003.

3. Acquisitions

On January 8, 2004, the Company purchased the assets of Advantage Advertising, LLC valued at approximately $7,158. The purchase price consisted of approximately $5,728 cash at closing and the exercise of an option agreement previously entered into, valued at approximately $1,430.

On January 30, 2004, the Company purchased the assets of Action Advertising, Inc. for a cash purchase price of approximately $8,610.

On June 25, 2004, the Company purchased the assets of Pinnacle Media, LLC for a cash purchase price of approximately $10,338.

On July 6, 2004, the Company purchased certain assets of Olympus Media Group for a cash purchase price of approximately $42,011.

During the ~~six~~nine months ended ~~June~~September 30, 2004, the Company completed additional acquisitions of outdoor advertising assets for a total purchase price of approximately ~~$30,135,~~$72,721, which consisted of the issuance of 68,986 shares of Lamar Advertising Class A common stock valued at $2,476, warrants valued at $1,794 and ~~$25,865~~$68,451 in cash.

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


																	Olympus
	Advantage		Action		Pinnacle						Advantage		Action		Pinnacle		Media
	Adv., LLC		Adv., Inc.		Media, LLC		Other		Total		Adv., LLC		Adv., Inc.		Media, LLC		Group		Other		Total
Current assets	$	—		110		207		—		317	$	—		110		207		955		1,189		2,461
Property, plant and equipment		855		2,208		1,699		9,782		14,544		855		2,208		1,714		14,266		24,331		43,374
Goodwill		2,854		—		643		8,977		12,474		2,854		—		628		993		17,342		21,817
Site locations		2,806		5,064		6,386		8,622		22,878		2,806		5,064		6,386		21,677		23,501		59,434
Non-competition agreements		—		40		—		215		255		—		40		—		50		345		435
Customer lists and contracts		643		1,188		1,463		2,896		6,190		643		1,188		1,463		4,966		6,304		14,564
Current liabilities		—		—		60		357		417		—		—		60		896		291		1,247

	$	7,158		8,610		10,338		30,135		56,241	$	7,158		8,610		10,338		42,011		72,721		140,838

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

Summarized below are certain unaudited pro forma statements of operations data for the three months and ~~six~~nine months ended ~~June~~September 30, 2004 and ~~June~~September 30, 2003 as if each of the above acquisitions and the acquisitions occurring in 2003, which were fully described in the 2003 Combined Form 10-K, had been consummated as of January 1, 2003. This pro forma information does not purport to represent what the Company’s results of operations actually would have been had such transactions occurred on the date specified or to project the Company’s results of operations for any future periods.


											Three Months Ended					Nine Months Ended
	Three Months Ended					Six Months Ended					September 30,					September 30,
	June 30,					June 30,					2004		2003			2004		2003
	2004		2003			2004		2003					(restated)					(restated)
Net revenues	$	227,443	$	211,153		$	429,341	$	401,660		$	232,012	$	216,221		$	667,723	$	624,197

Net income (loss) applicable to common stock	$	9,065	$	(2,032	)	$	6,954	$	(34,364	)	$	8,161	$	(7,925	)	$	11,993	$	(74,252	)

Net loss per common share - basic	$	0.09	$	(0.02	)	$	0.07	$	(0.33	)
Net income (loss) per common share — basic											$	0.08	$	(0.08	)	$	0.12	$	(0.72	)

Net loss per common share - diluted	$	0.09	$	(0.02	)	$	0.07	$	(0.33	)
Net income (loss) per common share — diluted											$	0.08	$	(0.08	)	$	0.11	$	(0.72	)

The Company includes all categories of depreciation and amortization on a separate line in its Statement of Operations. The amount of depreciation and amortization expense excluded from the following operating expenses in its Statement of Operations are:

The following is a summary of intangible assets at ~~June~~September 30, 2004 and December 31, 2003.

The changes in the gross carrying amount of goodwill for the ~~six~~nine months ended ~~June~~September 30, 2004 are as follows:

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

4.
6. Long-Term Debt

On February 6, 2004, Lamar Media amended its credit agreement dated March 7, 2003 whereby it changed its $975,000 term facility to include a $425,000 Tranche A and a $550,000 Tranche C facility. The proceeds were used to pay off the Tranche B facility and the total debt outstanding remained unchanged.

5.
7. Asset Retirement Obligation

Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standard 143, “Accounting for Asset Retirement Obligations” (Statement 143), and recorded a loss of ~~$11,679~~$40,240 (restated) as the cumulative effect of a change in accounting principle, which is net of an income tax benefit of ~~$7,467.~~$25,727. Prior to its adoption of Statement 143, the Company expensed these costs at the date of retirement.

~~All of the~~The Company’s asset retirement ~~obligations relate~~obligation includes the costs associated with the removal of its structures, resurfacing of the land and retirement cost, if applicable, related to the Company’s ~~structure inventory that it considers would be retired upon dismantlement of the~~outdoor advertising ~~structure.~~portfolio. The following table reflects information related to our asset retirement obligations:


Balance at December 31, 2003	$	36,857
Balance at December 31, 2003 (restated)				$	123,217
Additions to asset retirement obligations		3,053			3,226
Accretion expense		1,355			6,003
Liabilities settled		(872	)		(2,272	)

Balance at June 30, 2004	$	40,393
Balance at September 30, 2004				$	130,174

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

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

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

7.
9. Summarized Financial Information of Subsidiaries

Separate financial statements of each of the Company’s direct or indirect wholly owned subsidiaries that have guaranteed Lamar Media’s obligations with respect to its publicly issued notes (collectively, the Guarantors) are not included herein because the Company has no independent assets or operations, the guarantees are full and unconditional and joint and several and the only subsidiary that is not a guarantor is considered to be minor. Lamar Media’s ability to make distributions to Lamar Advertising is restricted under the terms of its bank credit facility and the indenture relating to Lamar Media’s outstanding notes. As of ~~June~~September 30, 2004 and December 31, 2003 (restated), the net assets restricted as to transfers from Lamar Media Corp. to Lamar Advertising Company in the form of cash dividends, loans or advances were ~~$1,962,069~~$1,936,853 and ~~$1,937,244,~~$1,903,600, respectively.

8.
10. Earnings Per Share

Earnings per share are computed in accordance with SFAS No. 128, “Earnings Per Share.” Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if the Company’s convertible debt, options and warrants were converted to common stock. The number of potentially dilutive shares excluded from the calculation because of their antidilutive effect is 5,581,755 and ~~7,513,583~~6,949,954 for the three months ended ~~June~~September 30, 2004 and 2003 and 5,581,755 and ~~7,033,955~~7,000,969 for the ~~six~~nine months ended ~~June~~September 30, 2004 and 2003, respectively.

The following table reconciles the net income (loss) and common shares outstanding used in the calculations of basic and diluted earnings per share for the three month and ~~six~~nine month periods ended ~~June~~September 30, 2004 and 2003.


	Three months ended June 30, 2004						Six months ended June 30, 2004						Three months ended September 30, 2004						Nine months ended September 30, 2004
			Weighted						Weighted						Weighted						Weighted
	Net Income		Average				Net Income		Average				Net Income		Average				Net Income		Average
	Available		Common				Available		Common				Available		Common				Available		Common
	to Common		Shares		Earnings		to Common		Shares		Earnings		to Common		Shares		Earnings		to Common		Shares		Earnings
	Stockholders		Outstanding		Per Share		Stockholders		Outstanding		Per Share		Stockholders		Outstanding		Per Share		Stockholders		Outstanding		Per Share
Basic	$	8,774		103,902,268	$	0.08	$	6,236		103,754,925	$	0.06	$	8,194		104,288,811	$	0.08	$	12,060		103,934,186	$	0.12
Effect of dilutive securities:
Preferred stock		—		—				—		—				—		—				—		—
Stock options		—		585,166				—		514,043				—		577,367				—		526,965
Warrants		—		6,980				—		5,598				—		7,088				—		6,117

Diluted	$	8,774		104,494,414	$	0.08	$	6,236		104,274,566	$	0.06	$	8,194		104,873,266	$	0.08	$	12,060		104,467,268	$	0.12

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

9.
11. Accounting Pronouncements

In December 2003, the FASB issued Interpretation No. 46R, “Consolidation of Variable Interest Entities, (revised December 2003) an interpretation of ARB No. 51.” This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. The Interpretation applies immediately to variable interests in variable interest entities created after January 31, 2003 and existing variable interest entities at the end of the period ending after March 15, 2004. The application of this Interpretation did not have an effect on the Company’s financial statements as the Company has no interest in variable interest entities.

On March 31, 2004, the FASB published an Exposure Draft, “Share-Based Payment, an Amendment of FASB Statement No. 123 and APB No. 25.” The proposed change in accounting would replace the existing requirements under FAS No. 123 and APB No. 25. Under the proposal, all forms of share-based payments to employees, including employee stock options and employee stock purchase plans, would be treated the same as other forms of compensation by recognizing the related cost in the statement of income. This proposed Statement would eliminate the ability to account for stock-based compensation transactions using the intrinsic value methods of APB No. 25 and generally would require that such transactions be accounted for using a fair-value based method, with binomial or lattice model preferred to the Black-Scholes valuation model. The comment period for the exposure draft ended June 30, 2004. We are currently analyzing what impact the adoption of the exposure draft will have on our financial position and results of ~~operations.~~operations in 2005.

~~-8-~~-10-

LAMAR MEDIA CORP.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

June 30, December 31,
2004
2003
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 17,775 $ 7,797
Receivables, net of allowance for doubtful accounts of $5,000 and 4,914 in 2004 and 2003, respectively 101,575 90,072
Prepaid expenses 46,731 32,377
Deferred income tax asset 6,166 6,051
Other current assets 5,998 7,665

Total current assets 178,245 143,962

Property, plant and equipment 1,959,219 1,933,003
Less accumulated depreciation and amortization (733,109 ) (679,205 )

Net property, plant and equipment 1,226,110 1,253,798

Goodwill 1,245,233 1,232,857
Intangible assets 916,121 952,347
Other assets 35,929 50,744

Total assets $ 3,601,638 $ 3,633,708

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Trade accounts payable $ 8,810 $ 8,813
Current maturities of long-term debt 37,924 5,044
Accrued expenses 28,507 38,068
Deferred income 12,073 14,372

Total current liabilities 87,314 66,297

Long-term debt 1,335,944 1,412,319
Deferred income tax liabilities 122,711 121,440
Asset retirement obligation 40,393 36,857
Other liabilities 8,549 9,109

Total liabilities 1,594,911 1,646,022

Stockholder’s equity:
Common stock, $0.01 par value, authorized 3,000 shares; 100 shares issued and outstanding at June 30, 2004 and December 31, 2003 — —
Additional paid-in capital 2,343,210 2,333,951
Accumulated deficit (336,483 ) (346,265 )

Stockholder’s equity 2,006,727 1,987,686

Total liabilities and stockholder’s equity $ 3,601,638 $ 3,633,708

~~See accompanying notes to condensed consolidated financial statements.~~

~~-9-~~

~~LAMAR MEDIA CORP.~~
~~AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(UNAUDITED)~~
~~(IN THOUSANDS)~~

Three Months Ended Six Months Ended
June 30,
June 30,
2004
2003
2004
2003
Net revenues $ 226,915 $ 208,178 $ 427,891 $ 392,399

Operating expenses
Direct advertising expenses 74,362 73,361 148,153 144,918
General and administrative expenses 38,437 35,216 76,713 71,517
Corporate expenses 7,128 5,226 14,203 11,745
Depreciation and amortization 70,604 68,654 139,392 135,336
Loss (gain) on disposition of assets 3,461 (828 ) 2,532 (858 )

193,992 181,629 380,993 362,658

Operating income 32,923 26,549 46,898 29,741
Other expense (income)
Loss on debt extinguishment — 5,754 — 16,927
Interest income (62 ) (66 ) (121 ) (184 )
Interest expense 14,767 18,470 30,271 38,456

14,705 24,158 30,150 55,199

Income (loss) before income tax expense (benefit) and cumulative effect of a change in accounting principle 18,218 2,391 16,748 (25,458 )
Income tax expense (benefit) 7,570 1,455 6,966 (8,628 )

Income (loss) before cumulative effect of a change in accounting principle 10,648 936 9,782 (16,830 )
Cumulative effect of a change in accounting principle, net of tax — — — (11,679 )

Net income (loss) $ 10,648 $ 936 $ 9,782 $ (28,509 )

~~See accompanying notes to condensed consolidated financial statements.~~

~~-10-~~

~~LAMAR MEDIA CORP.~~
~~AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~
~~(IN THOUSANDS)~~

Six Months Ended
June 30,
2004
2003
Cash flows from operating activities:
Net income (loss) $ 9,782 $ (28,509 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 139,392 135,336
Loss (gain) on disposition of assets 2,532 (858 )
Deferred tax expense (benefit) 6,144 (8,368 )
Provision for doubtful accounts 3,460 4,268
Loss on debt extinguishment — 16,927
Cumulative effect of a change in accounting principle, net of tax — 11,679
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (13,922 ) (10,165 )
Prepaid expenses (14,550 ) (13,038 )
Other assets 15,561 (15,922 )
Increase (decrease) in:
Trade accounts payable (2 ) 370
Accrued expenses (9,626 ) 5,451
Other liabilities (2,299 ) (1,014 )

Net cash provided by operating activities 136,472 96,157

Cash flows from investing activities:
Acquisition of new markets (50,541 ) (101,599 )
Capital expenditures (34,949 ) (40,767 )
Proceeds from disposition of assets 3,526 2,448

Net cash used in investing activities (81,964 ) (139,918 )

Cash flows from financing activities:
Debt issuance costs (1,036 ) (9,050 )
Dividend — (15,813 )
Principal payments on long-term debt (3,494 ) (370,939 )
Net (payments) borrowings under credit agreements (40,000 ) 40,000
Cash from deposits for debt extinguishment — 266,657
Net proceeds from note offering and new note payable — 127,988

Net cash (used in) provided by financing activities (44,530 ) 38,843

Net increase (decrease) in cash and cash equivalents 9,978 (4,918 )
Cash and cash equivalents at beginning of period 7,797 15,610

Cash and cash equivalents at end of period $ 17,775 $ 10,692

Supplemental disclosures of cash flow information:
Cash paid for interest $ 33,538 $ 28,875

Cash paid for state and federal income taxes $ 423 $ 291

Parent company stock contributed for acquisitions $ 4,270 $ 50,630


	September 30,			December 31,
	2004			2003
				(Restated)
ASSETS
Current assets:
Cash and cash equivalents	$	11,986		$	7,797
Receivables, net of allowance for doubtful accounts of $5,000 and 4,914 in 2004 and 2003, respectively		103,260			90,072
Prepaid expenses		47,035			32,377
Deferred income tax asset		6,494			6,051
Other current assets		8,784			7,665

Total current assets		177,559			143,962

Property, plant and equipment		2,065,458			1,988,096
Less accumulated depreciation and amortization		(800,668	)		(702,272	)

Net property, plant and equipment		1,264,790			1,285,824

Goodwill		1,253,853			1,232,857
Intangible assets		916,116			938,062
Deferred financing costs (net of accumulated amount of $14,034 and $11,864, respectively)		13,959			14,285
Other assets		27,496			50,744

Total assets	$	3,653,773		$	3,665,734

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Trade accounts payable	$	11,403		$	8,813
Current maturities of long-term debt		55,228			5,044
Accrued expenses		27,622			38,068
Deferred income		15,135			14,372

Total current liabilities		109,388			66,297

Long-term debt		1,317,914			1,412,319
Deferred income tax liabilities		106,042			100,250
Asset retirement obligation		130,174			123,217
Other liabilities		8,424			9,109

Total liabilities		1,671,942			1,711,192

Stockholder’s equity:
Common stock, $0.01 par value, authorized 3,000 shares; 100 shares issued and outstanding at September 30, 2004 and December 31, 2003		—			—
Additional paid-in capital		2,343,640			2,333,951
Accumulated deficit		(361,809	)		(379,409	)

Stockholder’s equity		1,981,831			1,954,542

Total liabilities and stockholder’s equity	$	3,653,773		$	3,665,734

See accompanying notes to condensed consolidated financial statements.

-11-

LAMAR MEDIA CORP.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
				(Restated)						(Restated)

Net revenues	$	231,622		$	211,720		$	659,513		$	604,119

Operating expenses
Direct advertising expenses (exclusive of depreciation and amortization)		76,390			74,571			224,543			219,489
General and administrative expenses (exclusive of depreciation and amortization)		39,778			36,098			116,491			107,615
Corporate expenses (exclusive of depreciation and amortization)		7,437			6,541			21,640			18,286
Depreciation and amortization		75,163			71,311			217,876			209,408
Loss (gain) on disposition of assets		(468	)		(58	)		1,617			(1,515	)

		198,300			188,463			582,167			553,283

Operating income		33,322			23,257			77,346			50,836
Other expense (income)
Loss on debt extinguishment		—			—			—			16,927
Interest income		(114	)		(99	)		(235	)		(283	)
Interest expense		16,382			19,284			47,838			59,335

		16,268			19,185			47,603			75,979

Income (loss) before income tax expense (benefit) and cumulative effect of a change in accounting principle		17,054			4,072			29,743			(25,143	)
Income tax expense (benefit)		6,866			1,846			12,143			(8,247	)

Income (loss) before cumulative effect of a change in accounting principle		10,188			2,226			17,600			(16,896	)
Cumulative effect of a change in accounting principle, net of tax		—			—			—			(40,240	)

Net income (loss)	$	10,188		$	2,226		$	17,600		$	(57,136	)

See accompanying notes to condensed consolidated financial statements.

-12-

LAMAR MEDIA CORP.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)


	Nine Months Ended
	September 30,
	2004			2003
				(Restated)
Cash flows from operating activities:
Net income (loss)	$	17,600		$	(57,136	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		217,876			209,408
Amortization included in interest expense		1,826			2,093
Loss (gain) on disposition of assets		1,617			(1,515	)
Deferred tax expense (benefit)		10,768			(7,937	)
Provision for doubtful accounts		5,163			6,454
Loss on debt extinguishment		—			16,927
Cumulative effect of a change in accounting principle, net of tax		—			40,240
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables		(17,073	)		(11,319	)
Prepaid expenses		(14,060	)		(14,120	)
Other assets		15,146			(13,595	)
Increase (decrease) in:
Trade accounts payable		2,590			3,700
Accrued expenses		(11,217	)		(320	)
Other liabilities		453			1,378

Net cash provided by operating activities		230,689			174,258

Cash flows from investing activities:
Acquisition of new markets		(129,887	)		(123,666	)
Capital expenditures		(57,650	)		(61,299	)
Proceeds from disposition of assets		6,771			2,913

Net cash used in investing activities		(180,766	)		(182,052	)

Cash flows from financing activities:
Debt issuance costs		(1,513	)		(9,051	)
Dividend		—			(15,813	)
Principal payments on long-term debt		(4,221	)		(371,155	)
Net payments under credit agreements		(40,000	)		—
Cash from deposits for debt extinguishment		—			266,657
Net proceeds from note offering and new note payable		—			128,038

Net cash used in financing activities		(45,734	)		(1,324	)

Net increase (decrease) in cash and cash equivalents		4,189			(9,118	)
Cash and cash equivalents at beginning of period		7,797			15,610

Cash and cash equivalents at end of period	$	11,986		$	6,492

Supplemental disclosures of cash flow information:
Cash paid for interest	$	47,838		$	53,390

Cash paid for state and federal income taxes	$	840		$	390

Parent company stock contributed for acquisitions	$	4,270		$	50,630

See accompanying notes to condensed consolidated financial statements.

-13-

LAMAR MEDIA CORP.
AND SUBSIDIARIES

NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE DATA)

1.
1. Significant Accounting Policies

The information included in the foregoing interim condensed consolidated financial statements is unaudited. In the opinion of management all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of Lamar Media’s financial position and results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with Lamar Media’s consolidated financial statements and the notes thereto included in the 2003 Combined Form 10-K.

~~Certain amounts~~Lamar Media previously included amortization of debt issuance costs under depreciation and amortization in the Consolidated Statement of Operations. Prospectively, the Company is reclassifying this cost to interest expense. The effect of this reclassification is a decrease in depreciation and amortization and an increase in interest expense and operating income in the prior ~~year’s condensed consolidated financial statements have been reclassified to conform with the current year presentation. These reclassifications~~periods. The reclassification had no effect on previously reported ~~results~~net income. The amortization of ~~operations.~~debt issuance fees was $498 for the three months ended September 30, 2003 and $2,093 for the nine months ended September 30, 2003, respectively.

Certain notes are not provided for the accompanying consolidated financial statements as the information in notes 2, 3, 4, 5, 6, 7 and 9 to the condensed consolidated financial statements of Lamar Advertising Company included elsewhere in this report is substantially equivalent to that required for the condensed consolidated financial statements of Lamar Media Corp. Earnings per share data is not provided for Lamar Media Corp. as it is a wholly owned subsidiary of Lamar Advertising Company.

~~-12-~~-14-

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

This discussion contains forward-looking statements. Actual results could differ materially from those anticipated by the forward-looking statements due to risks and uncertainties described in the section of this combined report on Form 10-Q entitled “Note Regarding Forward–Looking Statements” and in the 2003 Combined Form 10-K under the caption “Factors Affecting Future Operating Results.” You should carefully consider each of these risks and uncertainties in evaluating the Company’s and Lamar Media’s financial conditions and results of operations. Investors are cautioned 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 ~~six~~nine months and three months ended ~~June~~September 30, 2004 and 2003. This discussion should be read in conjunction with the consolidated financial statements of the Company and the related notes.

OVERVIEW

The Company’s net revenues, which represent gross revenues less commissions paid to advertising agencies that contract for the use of advertising displays on behalf of advertisers, are derived primarily from the sale of advertising on outdoor advertising displays owned and operated by the Company. The Company relies on sales of advertising space for its revenues, and its operating results are therefore affected by general economic conditions, as well as trends in the advertising industry. Advertising spending is particularly sensitive to changes in general economic conditions.

Since December 31, 2001, the Company has increased the number of outdoor advertising displays it operates by approximately 3%5.3% by completing over ~~190~~217 strategic acquisitions of outdoor advertising and transit assets for an aggregate purchase price of approximately ~~$378.2~~$457.6 million, which included the issuance of 3,024,545 shares of Lamar Advertising Company Class A common stock valued at the time of issuance of approximately $109.2 million and warrants valued at the time of issuance of approximately $1.8 million. The Company has financed its recent acquisitions and intends to finance its future acquisition activity from available cash, borrowings under its bank credit agreement, as amended, and the issuance of Class A common stock. See “Liquidity and Capital Resources” below. As a result of acquisitions, the operating ~~performance~~performances of individual markets and of the Company as a whole are not necessarily comparable on a year-to-year basis. The acquisitions completed during the nine months ended September 30, 2004 were in existing markets and have caused no material integration issues. The Company expects to continue to pursue acquisitions that complement the Company’s existing operations.

Growth of the Company’s business requires expenditures for maintenance and capitalized costs associated with new billboard displays, logo sign and transit contracts, and the purchase of real estate and operating equipment. The following table presents a breakdown of capitalized expenditures for the three and ~~six~~nine months ended ~~June~~September 30, 2004 and 2003:


	Three months ended				Six months ended				Three months ended				Nine months ended
	June 30,				June 30,				September 30,				September 30,
	(in thousands)				(in thousands)				(in thousands)				(in thousands)
	2004		2003		2004		2003		2004		2003		2004		2003
Billboard	$	14,067	$	15,121	$	24,185	$	25,221	$	16,540	$	14,512	$	40,725	$	39,733
Logos		475		1,550		1,152		4,068		2,496		1,470		3,648		5,538
Transit		444		221		775		931		234		422		1,009		1,353
Land and buildings		2,462		3,030		5,765		5,919		2,183		2,181		7,948		8,100
Other PP&E		1,736		3,037		3,198		4,628		1,447		1,947		4,645		6,575

Total capital expenditures	$	19,184	$	22,959	$	35,075	$	40,767	$	22,900	$	20,532	$	57,975	$	61,299

RESULTS OF OPERATIONS

~~Six~~Nine Months ended ~~June~~September 30, 2004 compared to ~~Six~~Nine Months ended ~~June~~September 30, 2003

Net revenues increased ~~$35.5~~$55.4 million or ~~9.0%~~9.2% to ~~$427.9~~$659.5 million for the ~~six~~nine months ended ~~June~~September 30, 2004 from ~~$392.4~~$604.1 million for the same period in 2003. This increase was attributable primarily to ~~(i)~~ an increase in billboard net revenues of ~~$34.3~~$54.6 million or ~~9.3%~~9.6%, ~~(ii)~~ a ~~$0.8~~$1.0 million increase in logo sign revenue, which represents an increase of ~~4.3%~~3.3% over the prior period, ~~and (iii) a $0.7 million~~while there was no increase in transit revenue ~~which represents a 16.8% increase~~ over the prior period.

The increase in billboard net ~~revenues~~revenue of ~~$34.3~~$54.6 million was due to both growth generated by acquisition activity of approximately $13.6 million and internal growth ~~generated by increases in both billboard occupancy and rates~~of approximately $41.0 while the increase in logo sign revenue of ~~$0.8 million and transit revenue growth of $0.7~~$1.0 million was generated by internal growth across various markets within the logo sign ~~and~~programs of approximately $1.5 million offset by a decrease related to divestitures of approximately $.5 million. There was an increase in transit ~~programs.~~revenue due to internal growth of approximately $1.0 million but this was offset by a decrease related to divestitures in approximately the same amount. Net revenues for the ~~six~~nine months ended ~~June~~September 30, 2004 as compared to ~~adjusted~~acquisition-adjusted net revenue⁽¹⁾ for the ~~six~~nine months ended ~~June~~September 30, 2003, ~~which includes adjustments for acquisitions and divestitures for the same time frame as actually owned in 2004,~~ increased ~~$27.3~~$43.3 million or ~~6.8%~~7.0% as a result of net revenue internal growth. See “Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue”.

Operating expenses, exclusive of depreciation and amortization and gain (loss) on sale of assets, increased ~~$10.9~~$17.3 million or ~~4.8%~~5.0% to ~~$239.2~~$362.9 million for the ~~six~~nine months ended ~~June~~September 30, 2004 from ~~$228.3~~$345.6 million for the same period in 2003. There was an ~~$8.4~~$13.9 million increase as a result of additional operating expenses related to the operations of acquired outdoor advertising assets and increases in costs in operating the Company’s core assets and a ~~$2.5~~$3.4 million increase in corporate expenses. The increase in corporate expenses is primarily related to the new national sales department established in 2004 at the corporate headquarters, increased legal fees, additional accounting and ~~a $1.0 million reduction in our legal reserve, which was recorded as a reduction of corporate~~professional fees related to Sarbanes-Oxley compliance and additional expenses related to expanded efforts in the ~~second quarter of 2003.~~company’s business development.

Depreciation and amortization expense increased ~~$3.7~~$8.5 million or ~~2.7%~~4.1% from ~~$137.1~~$209.4 million for the ~~six~~nine months ended ~~June~~September 30, 2003 to ~~$140.8~~$217.9 million for the ~~six~~nine months ended ~~June~~September 30, 2004.

Due to the above factors, operating income increased ~~$17.5~~$26.5 million to ~~$45.3~~$77.1 million for ~~six~~nine months ended ~~June~~September 30, 2004 compared to ~~$27.8~~$50.6 million for the same period in 2003.

In the first quarter of 2003, the Company recorded approximately $11.2 million as a loss on extinguishment of debt related to the prepayment of the 9 5/8% Senior Subordinated Notes due 2006 and the write-off of related debt issuance costs. In the second quarter of 2003, the Company recorded a loss on extinguishment of debt of $5.8 million, related to the prepayment of $100 million in principal amount of its 8 5/8% Senior Subordinated Notes due 2007. In the third quarter of 2003, the Company redeemed all of its outstanding 5¼% Convertible Notes due 2006 in aggregate principal amount of approximately $287.5 million for a redemption price equal to 103.0% of the principal amount of the notes. As a result of this redemption, the Company recorded a loss on extinguishment of debt of $12.6 million. During the ~~six~~nine months ended ~~June~~September 30, 2004, there were no refinancing activities resulting in a loss on extinguishment of debt.

As a result of our refinancing activities and lower interest rates, interest expense decreased ~~$11.9~~$16.3 million from ~~$46.3~~$72.5 million for the ~~six~~nine months ended ~~June~~September 30, 2003 to ~~$34.4~~$56.2 million for the ~~six~~nine months ended ~~June~~September 30, 2004.

-16-

The increase in operating income, the absence of a loss on extinguishment of debt and the decrease in interest expense described above resulted in a ~~$46.3~~$72.2 million increase in income before income taxes and cumulative effect of a change in accounting principle. This increase in income resulted in an increase in the income tax expense of ~~$17.0~~$27.2 million for the ~~six~~nine months ended ~~June~~September 30, 2004 over the same period in 2003. The effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2004 was 41.6%.

Due to the adoption of SFAS No. 143, the Company recorded a cumulative effect of a change in accounting principle, net of tax, of ~~$11.7~~$40.2 million (restated) during the ~~six~~nine months ended ~~June~~September 30, 2003.

As a result of the above factors, the Company recognized net income for the ~~six~~nine months ended ~~June~~September 30, 2004 of ~~$6.4~~$12.3 million, as compared to a net loss of ~~$34.5~~$73.0 million for the same period in 2003.

~~(1)~~

~~Reconciliation of Reported Net Revenue to Adjusted Net Revenue:~~

Six months ended June 30,
(in thousands)
2004
2003
Reported net revenue $ 427,891 $ 392,399
Acquisition net revenue, net of divestitures — 8,162

Adjusted net revenue $ 427,891 $ 400,561

~~-14-~~

Three Months ended ~~June~~September 30, 2004 compared to Three Months ended ~~June~~September 30, 2003

Net revenues increased ~~$18.7~~$19.9 million or ~~9.0%~~9.4% to ~~$226.9~~$231.6 million for the three months ended ~~June~~September 30, 2004 from ~~$208.2~~$211.7 million for the same period in 2003. This increase was attributable primarily to an increase in billboard net revenues of ~~$17.7~~$20.5 million or ~~9.1%~~10.4%, a $0.1 million increase in logo sign revenue, which represents an increase of 1.4% over the prior period, while there was a decrease in transit revenue of $0.7 million which represents a 3.7% decrease over the prior period.

The increase in billboard net ~~revenues~~revenue of ~~$17.7~~$20.5 million was due to both growth generated by acquisition activity of approximately $4.7 million and internal growth of approximately $15.8 million while the increase in logo sign revenue of $0.1 million was generated by ~~increases~~internal growth across various markets within the logo sign programs of approximately $0.3 million offset by a decrease related to divestitures of approximately $0.2 million. The decrease in ~~both billboard occupancy and rates.~~transit revenue of approximately $0.7 million was generated internally across various markets of approximately $0.2 million in addition to a decrease related to divestitures of approximately $0.5 million. Net revenues for the three months ended ~~June~~September 30, 2004 as compared to ~~adjusted~~acquisition-adjusted net revenue⁽²⁾ for the three months ended ~~June~~September 30, 2003, ~~which includes adjustments for acquisitions and divestitures for the same time frame as actually owned in 2004,~~ increased ~~$16.2~~$16.0 million or ~~7.7%~~7.4% as a result of net revenue internal growth. See “Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue”.

Operating expenses, exclusive of depreciation and amortization and gain (loss) on sale of assets, increased ~~$6.1~~$6.4 million or 5.4% to ~~$120.0~~$123.7 million for the three months ended ~~June~~September 30, 2004 from ~~$113.9~~$117.3 million for the same period in 2003. There was a ~~$4.2~~$5.5 million increase as a result of additional operating expenses related to the operations of acquired outdoor advertising assets and increases in costs in operating the Company’s core assets and a ~~$1.9~~$0.9 million increase in corporate expenses. The increase in corporate expenses is primarily related to the new national sales department established in 2004 at the corporate headquarters, increased legal fees, additional accounting and ~~a $1.0 million reduction in our legal reserve, which was recorded as a reduction of corporate~~professional fees related to Sarbanes-Oxley compliance and additional expenses related to expanded efforts in the ~~second quarter of 2003.~~company’s business development.

Depreciation and amortization expense increased ~~$1.9~~$3.9 million or ~~2.7%~~5.5% from ~~$69.6~~$71.3 million for the three months ended ~~June~~September 30, 2003 to ~~$71.5~~$75.2 million for the three months ended ~~June~~September 30, ~~2004, due to continued acquisition activity and capital expenditures.~~2004.

Due to the above factors, operating income increased ~~$6.4~~$10.0 million to ~~$31.9~~$33.2 million for ~~the~~ three months ended ~~June~~September 30, 2004 compared to ~~$25.5~~$23.2 million for the same period in 2003.

-17-

In the ~~second~~third quarter of 2003, the Company redeemed all of its outstanding 5¼% Convertible Notes due 2006 in aggregate principal amount of approximately $287.5 million for a redemption price equal to 103.0% of the principal amount of the notes. As a result of this redemption, the Company recorded a loss on extinguishment of debt of ~~$5.8 million, related to the prepayment of $100 million in principal amount of its 8 5/8% Senior Subordinated Notes due 2007.~~$12.6 million. During the ~~three~~nine months ended ~~June~~September 30, 2004, there were no refinancing activities resulting in a loss on extinguishment of debt.

As a result of our refinancing activities and lower interest rates, interest expense decreased ~~$5.8~~$3.6 million from ~~$22.6~~$22.8 million for the three months ended ~~June~~September 30, 2003 to ~~$16.8~~$19.2 million for the three months ended ~~June~~September 30, 2004.

The increase in operating income, the absence of ~~the~~a loss on extinguishment of debt and the decrease in interest expense described above resulted in a ~~$17.9~~$26.3 million increase in income before income taxes and cumulative effect of a change in accounting principle. ~~There was~~This increase in income resulted in an increase in the income tax expense of ~~$6.9~~$10.3 million for the three months ended ~~June~~September 30, 2004 over the same period in 2003. The effective tax rate for the three months ended ~~June~~September 30, 2004 was ~~41.5%~~41.6%.

As a result of the above factors, the Company recognized net income for the three months ended ~~June~~September 30, 2004 of ~~$8.9~~$8.3 million, as compared to a net loss of ~~$2.2~~$7.7 million for the same period in 2003.

Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue:

Because acquisitions occurring after December 31, 2002 (the “Acquired Assets”) have contributed to our net revenue results for the periods presented, we provide 2003 acquisition-adjusted net revenue, which adjusts our 2003 net revenue by adding to it the net revenue generated by the Acquired Assets in 2003 prior to our acquisition of them for the same time frame that those assets were owned in 2004. We provide this information as a supplement to net revenues to enable investors to compare periods in 2004 and 2003 on a more consistent basis without the effects of acquisitions. Management uses this comparison to assess how well we are performing with our existing assets. Acquisition-adjusted net revenue is not determined in accordance with generally accepted accounting principles (GAAP). For this adjustment, we measure the amount of pre-acquisition revenue generated by the assets during the period in 2003 that corresponds with the actual period we have owned the assets in 2004 (to the extent within the period to which this report relates). We refer to this adjustment as “acquisition net revenue” A reconciliation of reported net revenue to acquisition-adjusted net revenue is provided below:

Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue:


	Three Months ended September 30				Nine Months ended September 30
	2004		2003		2004		2003
	(in thousands)
Reported net revenue	$	231,622	$	211,720	$	659,513	$	604,119
Acquisition net revenue		—		3,887		—		12,049

Acquisition-adjusted net revenue	$	231,622	$	215,607	$	659,513	$	616,168

LIQUIDITY AND CAPITAL RESOURCES

Overview

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

~~(2)~~

~~Reconciliation of Reported Net Revenue to Adjusted Net Revenue:~~

Three months ended June 30,
(in thousands)
2004
2003
Reported net revenue $ 226,915 $ 208,178
Acquisition net revenue, net of divestitures — 2,541

Adjusted net revenue $ 226,915 $ 210,719

Sources of Cash

The Company’s management believes that adjusted net revenue is useful in evaluating the Company’s performance and provides investors and financial analysts a better understanding of the Company’s core operating results. The acquisition adjustments are intended to provide information that may be useful for investors when assessing period to period results. Our presentations of this measure, however, may not be comparable to similarly titled measures used by other companies.
Total Liquidity at September 30, 2004. As of September 30, 2004 we had approximately $228.1 million of total liquidity, which is comprised of approximately $12.0 million in cash and cash equivalents and the ability to draw approximately $216.1 million under our revolving bank credit facility.

~~-15-~~

~~The Company’s~~Cash Generated by Operations. For the nine months ended September 30, 2004, and 2003 our cash ~~flows~~ provided by operating activities ~~increased by $18.9~~was $209.5 million, and $171.1 million, respectively. While our net income was approximately $12.3 million for the ~~six~~nine months ended ~~June~~September 30, ~~2004. The increase was~~2004, we generated cash from operating activities during 2004 of $209.5 million primarily due ~~primarily~~ to ~~a change in net income (loss) of $40.9 million offset by a decrease in~~ adjustments needed to reconcile net ~~loss~~income to cash provided by operating activities, ~~of $6.3 million,~~ which primarily includes a decrease in the loss on extinguishment of debt of $16.9 million; a decrease in the cumulative effect of a change in accounting principle of $11.7 million offset by a decrease in deferred income tax benefit of $16.0 million; and an increase inis depreciation and amortization of ~~$3.7 million and an increase in loss (gain) on disposition of assets of $3.4~~$217.9 million. In addition, as compared to the same period in 2003, there were increases in the change in receivables of $4.1 million and prepaid expenses of $1.6 million, and decreases in other liabilities of $1.3 million, trade accounts payable of $0.3 million and in accrued expenses of $14.9 million offset by a decrease in other assets of $6.5 million.

Cash flows used in investing activities decreased $59.0 million from $141.1 million in 2003 to $82.1 million in 2004 primarily due to the decreases in cash used in acquisition activity of $52.3 million and capital expenditures of $5.7 million and an increase in proceeds from disposition of assets of $1.0 million.

Cash flows used in financing activities decreased by $63.1 million for the six months ended June 30, 2004 due to decreases in cash from deposits for debt extinguishment of $266.7 million and net proceeds from note offerings and new notes payable of $408.3 million offset by decreases of $287.4 million in principal payments of long-term debt and deposits for debt extinguishment of $301.2 million related to the Company’s refinancing activity in 2003. In addition, there was a ~~$15.2 million increase in proceeds from issuance of the Company’s Class A common stock related to option activity, and an $8.1 million~~ decrease in ~~debt issuance costs.~~working capital of $38.9 million. We expect to generate cash flows from operations during 2004 in excess of our cash needs for operations and capital expenditures as described herein. We expect to use the excess cash generated principally for acquisitions and to reduce debt. See “— Cash Flows” for more information.

~~During the six months ended June~~Credit Facilities. As of September 30, 2004 ~~the Company financed its acquisition activity~~we had approximately $216.1 million of ~~approximately $54.8 million with borrowings~~unused capacity under ~~Lamar Media’s~~our revolving credit ~~facility and cash on hand totaling $50.5 million as well as~~facility. On March 7, 2003, the ~~issuance of the Company’s Class A common stock and warrants valued at the time of issuance at approximately $4.3 million.~~

~~The~~ Company’s wholly owned subsidiary, Lamar Media Corp., ~~amended~~replaced its bank credit facility and subsequently amended it in February 2004 whereby it changed its $975.0 million term facility, which included a $300.0 million Tranche A facility and a $675.0 million Tranche B facility, to a $425.0 million Tranche A and a $550.0 million Tranche C facility.2004. The bank credit facility is comprised of a $225.0 million revolving bank credit facility and a $975.0 million term facility. The bank credit facility also includes a $500.0 million incremental facility, which permits Lamar Media to request that its lenders enter into commitments to make additional term loans to it, up to a maximum aggregate amount of $500.0 million. The lenders have no obligation to make additional term loans to Lamar Media under the incremental facility, but may enter into such commitments in their sole ~~discretion. At June 30, 2004, Lamar Media had $216.6 million available under its revolving bank credit facility.~~discretion.

In the future, Lamar Media has principal reduction obligations and revolver commitment reductions under its bank credit agreement. In addition it has fixed commercial commitments. These commitments were detailed-18-

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 ~~Company’s Annual Report~~markets where the Company conducts its business and overall spending on ~~Form 10-K for the year ended December 31, 2003, which was filed on March 10, 2004,~~advertising by advertisers.

Restrictions Under Credit Facilities and ~~there have been no material changes during the six months ended June 30, 2004.~~

Other Debt Securities.Currently Lamar Media has outstanding approximately $385.0 million 7 1/4% Senior Subordinated Notes due 2013 issued in December 2002 and June 2003. The ~~indenture~~indentures relating to Lamar Media’s outstanding notes restrict its ability to incur indebtedness other than:

• up to ~~$1.3~~$1.2 billion of indebtedness under its bank credit facility;

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

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

• certain ~~purchase money indebtedness and capitalized lease obligations to acquire or lease property~~other debt incurred in the ordinary course of business (provided that ~~cannot exceed~~all of the ~~greater~~above ranks junior in right of ~~$20 million~~payment to the notes that has a maturity or 5%mandatory sinking fund payment prior to the maturity of ~~Lamar Media’s net tangible assets; and~~
• ~~additional debt not to exceed $40 million.~~the notes).

Lamar Media is required to comply with certain covenants and restrictions under its bank credit agreement. If the Company fails to comply with these tests, the payments ~~due under~~set forth in the ~~bank credit agreement~~above table may be accelerated. At ~~June~~September 30, 2004 and currently Lamar Media is in compliance with all such tests.

~~-16-~~

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

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

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

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

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

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

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

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

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

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

As defined under Lamar Media’s bank credit facility, EBITDA is for any period, operating income for Lamar Media and its restricted subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP) for such period (calculated before taxes, interest expense, depreciation, amortization and any other non-cash income or charges accrued for such

-19-

period and (except to the extent received or paid in cash by Lamar Media or any of its restricted subsidiaries) income or loss attributable to equity in affiliates for such period) excluding any extraordinary and unusual gains or losses during such period and excluding the proceeds of any casualty events whereby insurance or other proceeds are received and certain dispositions not in the ordinary course. Any dividend payment made by Lamar Media or any of its restricted subsidiaries to Lamar Advertising Company during any period to enable Lamar Advertising Company to pay certain qualified expenses on behalf of Lamar Media and its subsidiaries shall be treated as operating expenses of Lamar Media for the purposes of calculating EBITDA for such period. EBITDA under the bank credit agreement is also adjusted to reflect certain acquisitions or dispositions as if such acquisitions or dispositions were made on the first day of such period.

The Company believes that its current level of cash on hand, availability under its bank credit agreement and future cash flows from operations are sufficient to meet its operating needs through the year 2004. All debt obligations are on the Company’s balance sheet.

Uses of Cash

Capital Expenditures.Capital expenditures excluding acquisitions were approximately $58.0 million for the nine months ended September 30, 2004. We anticipate our 2004 total capital expenditures for construction and improvements to be approximately $80 to $85 million of which approximately $8 million is related to additional capitalized expenditures outlaid because of hurricane damage.

Acquisitions.During the nine months ended September 30, 2004, the Company financed its acquisition activity of approximately $134.2 million with borrowings under Lamar Media’s revolving credit facility and cash on hand totaling $129.9 million as well as the issuance of the Company’s Class A common stock valued at the time of issuance at approximately $4.3 million. In 2004, we expect to spend approximately between $125 and $175 million on acquisitions, which we may finance through borrowings, cash on hand, the issuance of Class A common stock, or some combination of the foregoing, depending on market conditions.

We plan on continuing to invest in both capital expenditures and acquisitions that can provide high returns in light of existing market conditions.

Debt Service and Contractual Obligations.As of September 30, 2004, we had outstanding debt of approximately $1.7 billion. For the year ending December 31, 2004 we are obligated to make a total of approximately $74 million in interest and principal payments on outstanding debt. In the future, Lamar Media has principal reduction obligations and revolver commitment reductions under its bank credit agreement.

Cash Flows

The Company’s cash flows provided by operating activities increased by $38.3 million for the nine months ended September 30, 2004 due primarily to an increase in net income of $85.3 million as described in Results of Operations offset by a decrease in adjustments to reconcile net income (loss) to cash provided by operating activities of $34.6 million, which primarily is an increase in depreciation and amortization of $8.5 million resulting from the acquisitions described under “– Uses of Cash –Acquisitions” and an increase in deferred income tax expense of $25.5 million offset by the absence of the cumulative effect of a change in accounting principle of $40.2 million (restated) and loss on debt extinguishment of $29.5 million. In addition, as compared to the same period in 2003, there were increases in the change in receivables of $5.8 million, and decreases in the change in accrued expenses of $5.5 million.

Cash flows used in investing activities decreased $2.3 million from $183.4 million in 2003 to $181.1 million in 2004 primarily due to the increase in cash used in acquisition activity by the Company in 2004 of $4.9 million offset by an increase in capital expenditures of $3.3 million and, proceeds from disposition of assets of $3.9 million related to the proceeds received from the transit markets sale. See “–Uses of Cash –Acquisitions”.

Cash flows used in financing activities increased by $27.3 million for the nine months ended September 30, 2004 primarily due to a $40.0 million increase in payments under credit agreements offset by a $16.4 million increase in proceeds from issuance of the Company’s Class A common stock.

-20-

NEW ACCOUNTING PRONOUNCEMENTS

On March 31, 2004, the FASB published an Exposure Draft, “Share-Based Payment, an Amendment of FASB Statement No. 123 and APB No. 25.” The proposed change in accounting would replace the existing requirements under FAS No. 123 and APB No. 25. Under the proposal, all forms of share-based payments to employees, including employee stock options and employee stock purchase plans, would be treated the same as other forms of compensation by recognizing the related cost in the statement of income. This proposed Statement would eliminate the ability to account for stock-based compensation transactions using the intrinsic value methods of APB No. 25 and generally would require that such transactions be accounted for using a fair-value based method, with binomial or lattice models preferred to the Black-Scholes valuation model. The comment period for the exposure draft ended June 30, 2004. We are currently analyzing what impact, if any, the adoption of the exposure draft, if issued as a final standard, will have on our financial position and results of operations.

~~-17-~~-21-

Lamar Media Corp.

The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the ~~six~~nine months and the three months ended ~~June~~September 30, 2004 and 2003. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes.

~~Six~~Nine Months ended ~~June~~September 30, 2004 compared to ~~Six~~Nine Months ended ~~June~~September 30, 2003

Net revenues increased ~~$35.5~~$55.4 million or ~~9.0%~~9.2% to ~~$427.9~~$659.5 million for the ~~six~~nine months ended ~~June~~September 30, 2004 from ~~$392.4~~$604.1 million for the same period in 2003. This increase was attributable primarily to ~~(i)~~ an increase in billboard net revenues of ~~$34.3~~$54.6 million or ~~9.3% over the prior period, (ii)~~9.6%, a ~~$0.8~~$1.0 million increase in logo sign revenue, which represents an increase of ~~4.3%~~3.3% over the prior period, ~~and (iii) a $0.7 million~~while there was no increase in transit revenue ~~which represents a 16.8% increase~~ over the prior period.

The increase in billboard net ~~revenues~~revenue of ~~$34.3~~$54.6 million was due to both growth generated by acquisition activity of approximately $13.6 million and internal growth ~~generated by increases in both billboard occupancy and rates~~of approximately $41.0 while the increase in logo sign revenue of ~~$0.8 million and transit revenue growth of $0.7~~$1.0 million was generated by internal growth across various markets within the logo sign ~~and~~programs of approximately $1.5 million offset by a decrease related to divestitures of approximately $0.5 million. There was an increase in transit ~~programs.~~revenue due to internal growth of approximately $1.0 million but this was offset by a decrease related to divestitures in approximately the same amount. Net revenues for the ~~six~~nine months ended ~~June~~September 30, 2004 as compared to ~~adjusted~~acquisition-adjusted net revenue⁽³⁾ for the ~~six~~nine months ended ~~June~~September 30, 2003, ~~which includes adjustments for acquisitions and divestitures for the same time frame as actually owned in 2004,~~ increased ~~$27.3~~$43.3 million or ~~6.8%~~7.0% as a result of net revenue internal growth. See “—Lamar Advertising Company – Results of Operations — Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue”.

Operating expenses, exclusive of depreciation and amortization and gain (loss) on sale of assets, increased ~~$10.9~~$17.3 million or ~~4.8%~~5.0% to ~~$239.1~~$362.7 million for the ~~six~~nine months ended ~~June~~September 30, 2004 from ~~$228.2~~$345.4 million for the same period in 2003. There was a ~~$8.4~~$13.9 million increase as a result of additional operating expenses related to the operations of acquired outdoor advertising assets and increases in costs in operating ~~the Company’s~~Lamar Media’s core assets and a ~~$2.5~~$3.4 million increase in corporate expenses. The increase in corporate expenses is primarily related to the new national sales department established in 2004 at the corporate headquarters, increased legal fees, additional accounting and ~~a $1.0 million reduction in our legal reserve, which was recorded as a reduction of corporate~~professional fees related to Sarbanes Oxley compliance and additional expenses related to expanded efforts in the ~~second quarter of 2003.~~company’s business development.

Depreciation and amortization expense increased ~~$4.1~~$8.5 million or ~~3.0%~~4.1% from ~~$135.3~~$209.4 million for the ~~six~~nine months ended ~~June~~September 30, 2003 to ~~$139.4~~$217.9 million for the ~~six~~nine months ended ~~June~~September 30, 2004.

Due to the above factors, operating income increased ~~$17.2~~$26.5 million to ~~$46.9~~$77.3 million for ~~six~~nine months ended ~~June~~September 30, 2004 compared to ~~$29.7~~$50.8 million for the same period in 2003.

In the first quarter of 2003, ~~the Company~~Lamar Media recorded approximately $11.2 million as a loss on extinguishment of debt related to the prepayment of the 9 5/8% Senior Subordinated Notes due 2006 and the write-off of related debt issuance costs. In the second quarter of 2003, ~~the Company~~Lamar Media recorded a loss on extinguishment of debt of $5.8 million, related to the prepayment of $100 million in principal amount of its 8 5/8% Senior Subordinated Notes due 2007. During the ~~six~~nine months ended ~~June~~September 30, 2004, there were nonot refinancing activities resulting in a loss on extinguishment of debt.

As a result of our refinancing activities and lower interest rates, interest expense decreased ~~$8.2~~$11.5 million from ~~$38.5~~$59.3 million for the ~~six~~nine months ended ~~June~~September 30, 2003 to ~~$30.3~~$47.8 million for the ~~six~~nine months ended ~~June~~September 30, 2004.

The increase in operating income, the absence of a loss on extinguishment of debt and the decrease in interest expense described above resulted in a ~~$42.2~~$54.9 million increase in income before income taxes and cumulative effect of a change in accounting principle. This increase in income resulted in an increase in the income tax expense of ~~$15.6~~$20.4 million for the ~~six~~nine months ended ~~June~~September 30, 2004 over the same period in 2003. The effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2004 was ~~41.6%~~40.8%.

~~(3)~~

~~Reconciliation of Reported Net Revenue to Adjusted Net Revenue:~~

Six months ended June 30,
(in thousands)
2004
2003
Reported net revenue $ 427,891 $ 392,399
Acquisition net revenue, net of divestitures — 8,162

Adjusted net revenue $ 427,891 $ 400,561

~~-18-~~

Three Months ended ~~June~~September 30, 2004 compared to Three Months ended ~~June~~September 30, 2003

The increase in billboard net ~~revenues~~revenue of ~~$17.7~~$20.5 million was due to both growth generated by acquisition activity of approximately $4.7 million and internal growth of approximately $15.8 million while the increase in logo sign revenue of $0.1 million was generated by ~~increases~~internal growth across various markets within the logo sign programs of approximately $0.3 million offset by a decrease related to divestitures of approximately $0.2 million. The decrease in ~~both billboard occupancy and rates.~~transit revenue of approximately $0.7 million was generated internally across various markets of approximately $0.2 million in addition to a decrease related to divestitures of approximately $0.5 million. Net revenues for the three months ended ~~June~~September 30, 2004 as compared to ~~adjusted~~acquisition-adjusted net revenue⁽⁴⁾ for the three months ended ~~June~~September 30, 2003, ~~which includes adjustments for acquisitions and divestitures for the same time frame as actually owned in 2004,~~ increased ~~$16.2~~$16.0 million or ~~7.7%~~7.4% as a result of net revenue internal growth. See “—Lamar Advertising Company – Results of Operations — Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue”.

Operating expenses, exclusive of depreciation and amortization and gain (loss) on sale of assets, increased ~~$6.1~~$6.4 million or ~~5.4%~~5.5% to ~~$119.9~~$123.6 million for the three months ended ~~June~~September 30, 2004 from ~~$113.8~~$117.2 million for the same period in 2003. There was a ~~$4.2~~$5.5 million increase as a result of additional operating expenses related to the operations of acquired outdoor advertising assets and increases in costs in operating ~~the Company’s~~Lamar Media’s core assets and a ~~$1.9~~$0.9 million increase in corporate expenses. The increase in corporate expenses is primarily related to the new national sales department established in 2004 at the corporate headquarters, increased legal fees, additional accounting and ~~a $1.0 million reduction in our legal reserve which, was recorded as a reduction of corporate~~professional fees related to Sarbanes Oxley compliance and additional expenses related to expanded efforts in the ~~second quarter of 2003.~~company’s business development.

Depreciation and amortization expense increased ~~$1.9~~$3.9 million or ~~2.8%~~5.5% from ~~$68.7~~$71.3 million for the three months ended ~~June~~September 30, 2003 to ~~$70.6~~$75.2 million for the three months ended ~~June~~September 30, ~~2004, due to continued acquisition activity and capital expenditures.~~2004.

Due to the above factors, operating income increased ~~$6.4~~$10.0 million to ~~$32.9~~$33.3 million for ~~the~~ three months ended ~~June~~September 30, 2004 compared to ~~$26.5~~$23.3 million for the same period in 2003.

In the second quarter of 2003, the Company recorded a loss on extinguishment of debt of $5.8 million, related to the prepayment of $100 million in principal amount of its 8 5/8% Senior Subordinated Notes due 2007. During the three months ended June 30, 2004, there were no refinancing activities resulting in a loss on extinguishment of debt.

As a result of our refinancing activities and lower interest rates, interest expense decreased ~~$3.7~~$2.9 million from ~~$18.5~~$19.3 million for the three months ended ~~June~~September 30, 2003 to ~~$14.8~~$16.4 million for the three months ended ~~June~~September 30, 2004.

The increase in operating income, ~~the absence of the loss on extinguishment of debt~~ and the decrease in interest expense described above resulted in a ~~$15.8~~$13.0 million increase in income before income taxes and cumulative effect of a change in accounting principle. ~~There was~~This increase in income resulted in an increase in income tax expense of ~~$6.1~~$5.0 million for the three months ended ~~June~~September 30, 2004 over the same period in 2003. The effective tax rate for the three months ended ~~June~~September 30, 2004 was ~~41.6%~~40.3%.

As a result of the above factors, the Company recognized net income for the three months ended ~~June~~September 30, 2004 of ~~$10.6~~$10.2 million, as compared to net income of ~~$0.9~~$2.2 million for the same period in 2003.

~~(4)~~

~~Reconciliation of Reported Net Revenue to Adjusted Net Revenue:~~

~~-19-~~-23-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Lamar Advertising Company and Lamar Media Corp.

Lamar Advertising Company is exposed to interest rate risk in connection with variable rate debt instruments issued by its wholly owned subsidiary Lamar Media Corp. The information below summarizes the Company’s interest rate risk associated with its principal variable rate debt instruments outstanding at ~~June~~September 30, 2004, and should be read in conjunction with Note 8 of the Notes to the Company’s Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, ~~2003, which was filed on March 10, 2004.~~2003.

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

At ~~June~~September 30, 2004, there was approximately $975.0 million of aggregate indebtedness outstanding under the bank credit agreement, or approximately ~~60.1%~~60.7% of the Company’s outstanding long-term debt on that date, bearing interest at variable rates. The aggregate interest expense for the ~~six~~nine months ended ~~June~~September 30, 2004 with respect to borrowings under the bank credit agreement was ~~$16.2~~$24.8 million, and the weighted average interest rate applicable to borrowings under this credit facility during the ~~six~~nine months ended ~~June~~September 30, 2004 was ~~3.0%~~3.1%. Assuming that the weighted average interest rate was 200-basis points higher (that is ~~5.0%~~5.1% rather than ~~3.0%~~3.1%), then the Company’s ~~six~~nine months ended ~~June~~September 30, 2004 interest expense would have been approximately ~~$10.3~~$15.3 million higher resulting in a ~~$6.0~~$8.9 million decrease in the Company’s ~~six~~nine months ended ~~June~~September 30, 2004 net income.

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

ITEM 4. CONTROLS AND PROCEDURES

a)Evaluation of disclosure controls and procedures.

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

b)Changes in internal controls.

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

~~-20-~~-24-

PART II — OTHER INFORMATION

ITEM ~~4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.~~

The Company held its annual meeting of stockholders on Thursday, May 27, 2004. Kevin P. Reilly, Jr., Charles W. Lamar, III, Anna Reilly Cullinan, Stephen P. Mumblow, John Maxwell Hamilton, Thomas Reifenheiser and Robert Jelenic were elected as directors of the Company, each to hold office until the next annual meeting of stockholders or until his or her successor has been elected and qualified. The stockholders also approved an amendment to the Company’s 1996 Equity Incentive Plan to increase the number of shares of the Company’s Class A common stock available for issuance from 8,000,000 to 10,000,000 shares.

~~The results of voting at the Company’s annual meeting of stockholders were as follows:~~

~~Proposal No. 1 Election of Directors~~

VOTES VOTES
Nominee
FOR
WITHHELD
Kevin P. Reilly, Jr. 239,033,483 376,866
Charles W. Lamar, III 238,595,883 814,466
Anna Reilly Cullinan 239,033,483 376,866
Stephen P. Mumblow 238,585,533 824,816
John Maxwell Hamilton 239,033,483 376,866
Thomas V. Reifenheiser 239,033,483 376,866
Robert M. Jelenic 239,195,363 214,986

~~Proposal No. 2. Amendment of the Company’s 1996 Equity Incentive Plan~~

VOTES VOTES VOTES BROKER
FOR
AGAINST
ABSTAIN
NON-VOTES
201,803,772 30,884,463 3,627 6,718,487

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

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

~~(b) Reports on Form 8-K~~

~~On May 6, 2004, Lamar Advertising Company filed a Current Report on Form 8-K (Item 12) in order to furnish to the Commission its earnings press release for the quarter ended March 31, 2004.~~^*

^* ~~Information furnished under Item 9 or Item 12 of Form 8-K is not incorporated by reference, is not deemed filed and is not subject to liability~~
~~under Section 11 of the Securities Act of 1933 or Section 18 of the Securities exchange Act of 1934.~~

~~-21-~~

INDEX TO EXHIBITS


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

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

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

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

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

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

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

~~4.1~~10.1		~~Supplemental Indenture to the Indenture~~Tranche D Term Loan Agreement dated ~~December 23, 2002~~August 12, 2004 among Lamar Media Corp., ~~Lamar Canadian Outdoor Company and Wachovia Bank of Delaware, National Association, as Trustee, dated April 5, 2004. Filed herewith.~~

~~10.1~~		~~Joinder Agreement dated as of April 19, 2004 to Credit Agreement dated as of March 7, 2003 between Lamar Media Corp. and Lamar Canadian Outdoor Company,~~the Subsidiary Guarantors thereunder, the Lenders party thereto and ~~JPMorgan~~JP Morgan Chase Bank, as Administrative Agent. ~~Filed herewith.~~

~~10.2~~		~~1996 Equity Incentive Plan, as amended.~~ Filed herewith.

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

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

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

~~-23-~~-26-


				Page
PART I — FINANCIAL INFORMATION
ITEM 1.			FINANCIAL STATEMENTS
	Lamar Advertising Company
			Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2004 and December 31, 2003		12
			Condensed Consolidated Statements of Operations for the three months and ~~six~~nine months ended ~~June 30, 2004 and 2003~~		2
~~Condensed Consolidated Statements of Cash Flows for the six months ended June~~September 30, 2004 and 2003		3
			Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003		4
			Notes to Condensed Consolidated Financial Statements		45 - 810
	Lamar Media Corp.
			Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2004 and December 31, 2003		911
			Condensed Consolidated Statements of Operations for the three months and ~~six~~nine months ended ~~June~~September 30, 2004 and 2003		1012
			Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2004 and 2003		1113
			Note to Condensed Consolidated Financial Statements		1214
ITEM 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		1315 - 1923
ITEM 3.			Quantitative and Qualitative Disclosures About Market Risks		2024
ITEM 4. ~~Controls and Procedures~~		20	Controls and Procedures		24
PART II — OTHER INFORMATION
ITEM ~~4. Submission of Matters to a Vote of Security Holders~~6.		21
~~ITEM 6.~~ Exhibits ~~and Reports on Form 8-K~~		21
~~Signatures~~		22
~~Index to Exhibits~~		2325
~~Supplemental Indenture~~
~~Joinder~~Tranche D Term Loan Agreement
~~1996 Equity Incentive Plan~~
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification Pursuant to 18 U.S.C. Section ~~906~~1350


			June 30, 2004				December 31, 2003
	Estimated										Estimated	September 30, 2004				December 31, 2003
	Life		Gross Carrying		Accumulated		Gross Carrying		Accumulated		Life	Gross Carrying		Accumulated		Gross Carrying		Accumulated
	(Years)		Amount		Amortization		Amount		Amortization		(Years)	Amount		Amortization		Amount		Amortization
Amortizable Intangible Assets:
Debt issuance costs and fees		7 – 10	$	50,174	$	23,415	$	49,138	$	20,783
Customer lists and contracts		7 – 10		394,981		274,013		388,791		248,617	7 – 10	$	403,355	$	286,197	$	388,791	$	248,617
Non-competition agreements		3 - 15		57,919		49,371		57,664		46,197	3 – 15		58,098		50,779		57,664		46,197
Site locations		15		1,043,915		277,595		1,021,037		243,170	15		1,080,471		295,543		1,021,037		243,170
Other		5 - 15		13,611		6,852		17,578		8,443	5 – 15		13,611		6,828		17,578		8,443

				1,560,600		631,246		1,534,208		567,210			1,555,535		639,347		1,485,070		546,427
Unamortizable Intangible Assets:
Goodwill			$	1,506,384	$	253,635	$	1,493,910	$	253,635		$	1,515,727	$	253,635	$	1,493,910	$	253,635


Balance as of December 31, 2003	$	1,493,910	$	1,493,910
Goodwill acquired during the six months ending June 30, 2004		12,474
Goodwill acquired during the nine months ending September 30, 2004				21,817
Impairment losses		—		—

Balance as of June 30, 2004	$	1,506,384
Balance as of September 30, 2004			$	1,515,727


		LAMAR ADVERTISING COMPANY

DATED: ~~August 5,~~November 15, 2004		BY: /s/ Keith A. Istre

		Chief Financial and Accounting Officer and Treasurer


		LAMAR MEDIA CORP.

DATED: ~~August 5,~~November 15, 2004		BY: /s/ Keith A. Istre

		Chief Financial and Accounting Officer and Treasurer

	•		expected operating results;

	•		market opportunities;

	•		acquisition opportunities;

	•		ability to compete; and

	•		stock price.


	Three months ended June 30, 2003								Six months ended June 30, 2003								Three months ended September 30, 2003								Nine months ended September 30, 2003
				Weighted								Weighted					Net Loss			Weighted						Net Loss		Weighted
	Net Loss			Average					Net Loss			Average					Available			Average					Available			Average
	Available			Common					Available			Common					to Common			Common					to Common			Common
	to Common			Shares		Loss			to Common			Shares		Loss			Stockholders			Shares		Loss			Stockholders			Shares		Loss
	Stockholders			Outstanding		Per Share			Stockholders			Outstanding		Per Share			(restated)			Outstanding		Per Share			(restated)			Outstanding		Per Share
Basic	$	(2,292	)		102,481,555	$	(0.02	)	$	(34,655	)		102,076,725	$	(0.34	)	$	(7,744	)		103,251,834	$	(0.08	)	$	(73,252	)		102,472,830	$	(0.71	)
Effect of dilutive securities:
Preferred stock		—			—					—			—					—			—					—			—
Stock options		—			—					—			—					—			—					—			—
Warrants		—			—					—			—					—			—					—			—


Diluted	$	(2,292	)		102,481,555	$	(0.02	)	$	(34,655	)		102,076,725	$	(0.34	)	$	(7,744	)		103,251,834	$	(0.08	)	$	(73,252	)		102,472,830	$	(0.71	)


	Six months ended June 30,
	(in thousands)
	2004		2003
Reported net revenue	$	427,891	$	392,399
Acquisition net revenue, net of divestitures		—		8,162

Adjusted net revenue	$	427,891	$	400,561


	Three months ended June 30,
	(in thousands)
	2004		2003
Reported net revenue	$	226,915	$	208,178
Acquisition net revenue, net of divestitures		—		2,541

Adjusted net revenue	$	226,915	$	210,719

	•		up to ~~$1.3~~$1.2 billion of indebtedness under its bank credit facility;

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

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

	•		certain ~~purchase money indebtedness and capitalized lease obligations to acquire or lease property~~other debt incurred in the ordinary course of business (provided that ~~cannot exceed~~all of the ~~greater~~above ranks junior in right of ~~$20 million~~payment to the notes that has a maturity or 5%mandatory sinking fund payment prior to the maturity of ~~Lamar Media’s net tangible assets; and~~

•		~~additional debt not to exceed $40 million.~~the notes).


	VOTES		VOTES
Nominee	FOR		WITHHELD
Kevin P. Reilly, Jr.		239,033,483		376,866
Charles W. Lamar, III		238,595,883		814,466
Anna Reilly Cullinan		239,033,483		376,866
Stephen P. Mumblow		238,585,533		824,816
John Maxwell Hamilton		239,033,483		376,866
Thomas V. Reifenheiser		239,033,483		376,866
Robert M. Jelenic		239,195,363		214,986