<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-K

(Mark One)
(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
                          -----------------

( )  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 its charter)


          Delaware                                   72-1449411
          Delaware                                   72-1205791
(State or other jurisdiction                      (I.R.S. Employer
of incorporation or organization)                 Identification No.)

5551 Corporate Blvd., Baton Rouge, LA                   70808
(Address of principal executive offices)              (Zip Code)

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

                     SECURITIES OF LAMAR ADVERTISING COMPANY
                REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                Name of each Exchange
Title of Each Class:                            On Which Registered:
-------------------                             ----------------------
Class A common stock,                           Nasdaq National Market
 $.001 par value

                     SECURITIES OF LAMAR ADVERTISING COMPANY
                REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                      None

                         SECURITIES OF LAMAR MEDIA CORP.
                REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                Name of each Exchange
Title of Each Class:                            On Which Registered:
-------------------                             --------------------
       None                                              N/A

                         SECURITIES OF LAMAR MEDIA CORP.
                REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                    9 5/8% Senior Subordinated Notes due 2006

Indicate by check mark whether the 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

The aggregate market value of the voting stock held by nonaffiliates of Lamar
Advertising Company as of March 8, 2000: $1,962,907,848

The number of shares of Lamar Advertising Company's Class A common stock
outstanding as of March 8, 2000: 71,555,810

The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of March 8, 2000: 17,000,000

This combined Form 10-K 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 I(1) (A) and (B) of Form 10-K and is, therefore, filing this form
with the reduced disclosure format permitted by such instruction.


<PAGE>   2


On July 20, 1999, Lamar Advertising Company completed a corporate reorganization
to create a new holding company structure. The reorganization was accomplished
through a merger under section 251(g) of the Delaware General Corporation Law.
At the effective time of the merger, all stockholders of Lamar Advertising
Company became stockholders in a new holding company and Lamar Advertising
Company became a wholly-owned subsidiary of the new holding company. The new
holding company took the Lamar Advertising Company name and the old Lamar
Advertising Company was renamed Lamar Media Corp. In the merger, all outstanding
shares of old Lamar Advertising Company's capital stock were converted into
shares of the new holding company with the same voting powers, designations,
preferences and rights, and the same qualifications, restrictions and
limitations, as the shares of old Lamar Advertising Company. Following the
restructuring, the Class A common stock of the new holding company trades under
the symbol "LAMR" on the Nasdaq National Market with the same CUSIP number as
the old Lamar Advertising Company's Class A common stock.

In this annual report, "Lamar," the "Company," "we," "us" and "our" refer to
Lamar Advertising Company and its consolidated subsidiaries with respect to
periods following the reorganization and to old Lamar Advertising Company with
respect to periods prior to the reorganization, except where we make it clear
that we are only referring to Lamar Media Corp. or a particular subsidiary.

In addition, "Lamar Media" and "Media" refer to Lamar Media Corp. and its
consolidated subsidiaries with respect to periods following the reorganization
and to old Lamar Advertising Company with respect to periods prior to the
reorganization, except where we make it clear that we are only referring to
Lamar Media Corp. or a particular subsidiary.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of Lamar Advertising Company's proxy statement for the Annual Meeting
of Stockholders to be held on May 25, 2000 are incorporated by reference into
Part III of this Form 10-K.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

        o         expected operating results;
        o         market opportunities;
        o         acquisition opportunities;
        o         ability to compete; and
        o         stock price.

Generally, the words "anticipates," "believes," "expects," "intends,"
"estimates," "projects," "plans" and similar expressions identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could cause the
Company's 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: (1) risks and uncertainties
relating to the Company's significant indebtedness; (2) the need for additional
funds; (3) the integration of companies that the Company acquires and the
Company's ability to recognize cost savings or operating efficiencies as a
result of

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<PAGE>   3


such acquisitions; (4) the continued popularity of outdoor advertising as an
advertising medium; (5) the regulation of the outdoor advertising industry and
(6) the risks and uncertainties described below under the caption "Factors
Affecting Future Operating Results" under Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations. The forward-looking
statements contained in this Annual Report on Form 10-K speak only as of the
date of this Annual Report. Lamar Advertising Company and Lamar Media expressly
disclaim any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained in this Annual 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.

                                     PART I

ITEM 1.     BUSINESS

GENERAL

Lamar is one of the largest and most experienced owners and operators of outdoor
advertising structures in the United States. The Company conducts a business
that has operated under the Lamar name since 1902. As of December 31, 1999, the
Company operated approximately 116,800 outdoor advertising displays in 42
states. The Company also operates the largest logo sign business in the United
States. Logo signs are signs located near highway exits which deliver brand name
information on available gas, food, lodging and camping services. As of December
31, 1999, the Company maintained over 79,500 logo sign displays in 20 states.
The Company also operates transit advertising displays on bus shelters, bus
benches and buses in several markets.

BUSINESS STRATEGY

OUTDOOR ADVERTISING

The Company's overall business strategy is to be the leading provider of outdoor
advertising in the markets it serves. This strategy includes the following
elements:

OPERATING STRATEGY:

HIGH QUALITY LOCAL SALES AND SERVICE. Local advertising constituted
approximately 86% of the Company's net revenues in 1999, which management
believes is higher than the industry average. The Company attempts to identify
and closely monitor the needs of its customers and seeks to provide them with
quality advertising products at a lower cost than competitive media.

At December 31, 1999, the Company's 526-person sales force was supported by 126
full- service offices. Each salesperson is compensated under a performance-based
compensation system and supervised by a sales manager executing a coordinated
marketing plan. Art departments assist local customers in the development and
production of creative, effective advertisements.

CENTRALIZED CONTROL/DECENTRALIZED MANAGEMENT. Management believes that in 126 of
the 139 markets in which the Company operated at December 31, 1999, the Company
is the only outdoor advertising company offering a full complement of outdoor
advertising services coupled with local production facilities, management and
account executives. Local offices operate in defined geographic areas and
function essentially as independent business units, consistent with senior
management's philosophy that a decentralized organization is more responsive to
particular local market demands.


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<PAGE>   4


The Company maintains centralized accounting and financial control over its
local operations, but local managers are responsible for the day-to-day
operations in each local market and are compensated according to that market's
financial performance. Each local manager reports to one of nine regional
managers who in turn report to the Company's Chief Executive Officer.

GROWTH STRATEGY:

INTERNAL GROWTH. Within its existing markets, the Company enhances revenue and
cash flow growth by employing highly targeted local marketing efforts to improve
display occupancy rates and by increasing advertising rates. This strategy is
facilitated through its local sales and service offices, which allow management
to respond quickly to the demands of its local customer base. In addition, the
Company routinely invests in upgrading its existing structures and constructing
new display faces in order to provide quality service to its current customers
and to attract new advertisers.

ACQUISITIONS. Aggressive internal growth is enhanced by focused strategic
acquisitions, resulting in increased operating efficiencies, greater geographic
diversification and increased market penetration. The Company has completed over
220 acquisitions of outdoor advertising businesses since 1983. In addition to
acquiring positions in new markets, the Company purchases smaller outdoor
advertising properties within existing or contiguous markets. Acquisitions offer
opportunities for inter-market cross-selling and the opportunity to centralize
and combine accounting and administrative functions, thereby achieving economies
of scale. In addition, the Company leverages its reputation for high quality
local sales and service by taking advantage of opportunities to acquire
high-profile bulletin displays that may become available in larger markets.
Although the acquisition market is becoming more competitive, the Company
believes that there will be future opportunities for implementing the Company's
acquisition strategy given the industry's fragmentation and current
consolidation trends.

During 1999, the Company increased the number of outdoor advertising displays it
operates by approximately 62% by acquiring outdoor advertising assets, including
the completion of 77 strategic acquisitions of outdoor advertising businesses as
well as isolated purchases of outdoor advertising displays. Certain of the
Company's principal acquisitions since January 1, 1999 are described below:

American Displays, Inc.

On January 5, 1999, the Company purchased all of the outdoor advertising assets
of American Displays, Inc. for a cash purchase price of approximately $14.5
million. The acquisition consisted of displays in Grand Rapids, Michigan.

KJS, LLC.

On February 1, 1999, the Company purchased all of the outdoor advertising assets
of KJS, LLC for a cash purchase price of $40.5 million. The approximately 1,400
displays were located in Lincoln and Omaha, Nebraska.

Frank Hardie, Inc.

On April 1, 1999, the Company purchased all of the assets of Frank Hardie, Inc.
for a cash purchase price of approximately $20.3 million. The acquisition
included approximately 900 displays in Dubuque and Waterloo, Iowa.


                                      -4-
<PAGE>   5


Vivid, Inc.

On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a cash
purchase price of approximately $22.1 million. The approximately 1,000 displays
are located in Quad Cities, Illinois; Rockford, Illinois; and Rapid City, South
Dakota.

Chancellor Media Outdoor Corporation

On September 15, 1999, Lamar Media Corp. purchased the capital stock of
Chancellor Media Outdoor Corporation and Chancellor Media Whiteco Outdoor
Corporation, ("Chancellor Outdoor") for a combination of approximately $700
million in cash and 26,227,273 shares of the Company's Class A common stock
valued at approximately $947 million. The acquisition included approximately
36,000 outdoor advertising displays which gave the Company a presence in 8
additional states and established 31 new markets.

LOGO SIGNS

The Company entered the business of logo sign advertising in 1988. The Company
is now the largest provider of logo sign services in the United States,
operating 20 of the 25 privatized state logo sign contracts. The Company also
operates the tourism signing contracts in six states and the province of
Ontario, Canada.

The Company plans to pursue additional logo sign contracts, through both new
contract awards and, possibly, the acquisition of other logo sign operators.
Logo sign opportunities arise periodically, both from states initiating new logo
sign programs and states converting from government owned and operated programs
to privately owned and operated programs. Furthermore, the Company plans to
pursue additional tourism signing programs in Canada and is seeking to expand
into other state-authorized signage programs, such as those involving
directional signs providing tourist information.

TRANSIT AND OTHER

The Company has recently expanded into the transit advertising business through
the operation of displays on bus shelters, benches and buses in 22 of its
outdoor advertising markets, three markets in South Carolina, two markets in
Utah, one market in California, one market in Florida and one in Colorado. The
Company plans to continue pursuing transit advertising opportunities that arise
in its primary markets and to expand into other markets.


                                      -5-
<PAGE>   6



MARKETS

As of December 31, 1999, the Company's 139 primary outdoor advertising markets
were:

<TABLE>
<S>                               <C>                              <C>
Birmingham, Alabama               Paducah, Kentucky                Oklahoma City, Oklahoma
Gadsden, Alabama                  Alexandria, Louisiana            Allentown, Pennsylvania
Huntsville, Alabama               Baton Rouge, Louisiana           Altoona, Pennsylvania
Mobile, Alabama                   Hammond, Louisiana               Erie, Pennsylvania
Montgomery, Alabama               Houma, Louisiana                 Harrisburg, Pennsylvania
Shoals, Alabama                   Lafayette, Louisiana             Pittsburgh, Pennsylvania
Tuscaloosa, Alabama               Lake Charles, Louisiana          Reading, Pennsylvania
Phoenix, Arizona                  Monroe, Louisiana                Scranton, Pennsylvania
Yuma, Arizona                     New Orleans, Louisiana           Williamsport, Pennsylvania
Bakersfield, California           Shreveport, Louisiana            York, Pennsylvania
Lancaster, California             Slidell, Louisiana               Providence, Rhode Island
Sacramento, California            Detroit, Michigan                Anderson, South Carolina
San Bernardino, California        Escanaba, Michigan               Columbia, South Carolina
Colorado Springs, Colorado        Muskegon, Michigan               Rapid City, South Dakota
Denver, Colorado                  Port Huron, Michigan             Clarksville, Tennessee
Hartford, Connecticut             Saginaw, Michigan                Cookeville, Tennessee
Daytona Beach, Florida            Traverse City, Michigan          Jackson, Tennessee
Fort Myers, Florida               Duluth, Minnesota                Johnson City, Tennessee
Fort Walton, Florida              St. Cloud, Minnesota             Knoxville, Tennessee
Lakeland, Florida                 Columbus, Mississippi            Murfreesboro, Tennessee
Ocala, Florida                    Corinth, Mississippi             Nashville, Tennessee
Panama City, Florida              Greenville, Mississippi          Abilene, Texas
Pensacola, Florida                Gulfport, Mississippi            Amarillo, Texas
Tallahassee, Florida              Hattiesburg, Mississippi         Beaumont, Texas
Albany, Georgia                   Jackson, Mississippi             Brownsville, Texas
Anderson, Georgia                 Meridian, Mississippi            Corpus Christi, Texas
Athens, Georgia                   Bonne Terre, Missouri            Dallas, Texas
Atlanta, Georgia                  Hannibal, Missouri               Houston, Texas
Augusta, Georgia                  Joplin, Missouri                 Laredo, Texas
Brunswick, Georgia                Kansas City, Missouri            Lubbock, Texas
Macon, Georgia                    Osage Beach, Missouri            Midland, Texas
Rome, Georgia                     Springfield, Missouri            San Angelo, Texas
Savannah, Georgia                 Billings, Montana                Tyler, Texas
Valdosta, Georgia                 Lincoln, Nebraska                Wichita Falls, Texas
Boise, Idaho                      Omaha, Nebraska                  Richmond, Virginia
Decatur, Illinois                 Las Vegas, Nevada                Roanoke, Virginia
Janesville, Illinois              Laughlin/Bullhead, Nevada        Spokane, Washington
Evansville, Indiana               Albany, New York                 Tacoma, Washington
Gary, Indiana                     Buffalo, New York                Bluefield, West Virginia
Terre Haute, Indiana              Rochester, New York              Bridgeport, West Virginia
Cedar Rapids, Iowa                Syracuse, New York               Huntington, West Virginia
Davenport/Quad Cities, Iowa       Asheville, North Carolina        Wheeling, West Virginia
Dubuque, Iowa                     Elizabethtown, N. Carolina       Eau Claire, Wisconsin
Waterloo, Iowa                    Cincinnati, Ohio                 Milwaukee, Wisconsin
Topeka, Kansas                    Columbus, Ohio                   Casper, Wyoming
Lexington, Kentucky               Dayton, Ohio
Louisville, Kentucky              Youngstown, Ohio
</TABLE>


As of December 31, 1999, the Company operated the following logo sign contracts:

<TABLE>
<S>                   <C>             <C>            <C>
         Colorado     Kentucky        Nebraska       Oklahoma
         Delaware     Michigan        Nevada         South Carolina
         Florida      Minnesota       New Jersey     Texas
         Georgia      Mississippi     New Mexico     Utah
         Kansas       Missouri        Ohio           Virginia
                                                     Ontario
</TABLE>


                                      -6-
<PAGE>   7


COMPANY OPERATIONS

OUTDOOR ADVERTISING

INVENTORY:

The Company operates the following types of outdoor advertising displays:

BULLETINS generally are 14 feet high and 48 feet wide (672 square feet) and
consist of panels on which advertising copy is displayed. The advertising copy
is either hand painted onto the panels at the Company's facilities in accordance
with design specifications supplied by the advertiser and attached to the
outdoor advertising structure, or printed with computer-generated graphics on a
single sheet of vinyl that is wrapped around the structure. On occasion, to
attract more attention, some of the panels may extend beyond the linear edges of
the display face and may include three-dimensional embellishments. Because of
their greater impact and higher cost, bulletins are usually located on major
highways.

STANDARDIZED POSTERS generally are 12 feet high by 25 feet wide (300 square
feet) and are the most common type of billboard. Advertising copy for these
posters consists of lithographed or silk-screened paper sheets supplied by the
advertiser that are pasted and applied like wallpaper to the face of the
display, or single sheets of vinyl with computer-generated advertising copy that
are wrapped around the structure. Standardized posters are concentrated on major
traffic arteries.

JUNIOR POSTERS usually are 6 feet high by 12 feet wide (72 square feet).
Displays are prepared and mounted in the same manner as standardized posters,
except that vinyl sheets are not typically used on junior posters. Most junior
posters, because of their smaller size, are concentrated on city streets and
target pedestrian traffic.

For the year ended December 31, 1999, approximately 65% of the Company's outdoor
advertising net revenues were derived from bulletin sales and 35% from poster
sales. The Company regularly donates unoccupied display space for use by
charitable and civic organizations.

The physical structures are owned by the Company and are built on locations the
Company either owns or leases. In each local office one employee typically
performs site leasing activities for the markets served by that office. See
Item 2. -- "Properties."

Bulletin space is generally sold as individually selected displays for the
duration of the advertising contract. Bulletins may also be sold as part of a
rotary plan where advertising copy is periodically rotated from one location to
another within a particular market. Poster space is generally sold in packages
called "showings," which comprise a given number of displays in a market area.
Posters provide advertisers with access either to a specified percentage of the
general population or to a specific targeted audience. Displays making up a
showing are placed in well-traveled areas and are distributed so as to reach a
wide audience in a particular market. Bulletin space is generally sold for 12
month periods. Poster space averages between 30 and 90 days.

PRODUCTION:

The Company's local production staffs in 126 of its markets perform the full
range of activities required to create and install outdoor advertising.
Production work includes creating the advertising copy design and layout,
painting the design or coordinating its printing and installing the designs on
displays. The Company provides its production services to local advertisers and
to advertisers that are not represented by advertising agencies, since national
advertisers represented by advertising agencies often use preprinted designs
that require only installation.


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<PAGE>   8


The Company's creative and production personnel typically develop new designs or
adopt copy from other media for use on billboards. The Company's artists also
often assist in the development of marketing presentations, demonstrations and
strategies to attract new advertisers.

With the increased use of vinyl and pre-printed advertising copy furnished to
the outdoor advertising company by the advertiser or its agency, outdoor
advertising companies require less labor-intensive production work. In addition,
increased use of vinyl and preprinted copy is also attracting more customers to
the outdoor advertising medium. The Company believes that this trend over time
will reduce operating expenses associated with production activities.

CATEGORIES OF BUSINESS:

The following table sets forth the top ten categories of business from which the
Company derived its outdoor advertising revenues for 1999 and the respective
percentages of such revenue. These business categories accounted for
approximately 72% of the Company's total outdoor advertising net revenues in the
year ended December 31, 1999. No one advertiser accounted for more than 3.0% of
the Company's total outdoor advertising net revenues in that period.


<TABLE>
<CAPTION>
                                                    PERCENTAGE NET ADVERTISING
          CATEGORIES                                         REVENUES
<S>                                                 <C>
Restaurants                                                     12%
Retailers                                                       10%
Hotels and motels                                                9%
Automotive                                                       9%
Miscellaneous                                                    8%
Service                                                          7%
Hospitals and medical care                                       5%
Gambling                                                         4%
Amusement - entertainment and sport                              4%
Media                                                            4%
                                                              ----
Total                                                           72%
                                                              ====
</TABLE>


LOGO SIGNS

The Company is the largest provider of logo sign services in the United States
and operates over 24,800 logo sign structures containing over 79,500 logo
advertising displays. The Company has been awarded contracts to erect and
operate logo signs in the states of Colorado, Delaware, Florida, Georgia,
Michigan, Minnesota, Mississippi, Nebraska, New Jersey, New Mexico, Ohio,
Oklahoma, South Carolina, Texas, Utah and Virginia, the providence of Ontario,
Canada, and through a 66.7% owned partnership in the state of Missouri. In
addition, the Company has acquired the logo sign contracts in Kansas, Kentucky,
and Nevada. The Company also operates the tourism signing contracts for the
states of Colorado, Kentucky, Michigan, Nebraska, New Jersey and Ohio as well as
for the province of Ontario, Canada.

State logo sign contracts represent the contract right to erect and operate logo
signs within a state. The term of the contracts vary, but generally range from
ten to twenty years, including renewal terms. The logo sign contracts generally
provide for termination by the state prior to the end of the term of the
contract, in most cases with compensation to be paid to the Company. Typically,
at the end of the term of the contract, ownership of the structures is
transferred to the state without compensation to the Company. Of the Company's
logo sign contracts, one is due to terminate in December, 2000, and three are
subject to renewal over the next year, one in April, 2000, one in June, 2000 and
another in October, 2000.


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<PAGE>   9


The Company also designs and produces logo sign plates for customers throughout
the country, including for use in states which have not yet privatized their
logo sign programs.

EMPLOYEES

The Company employed approximately 2,600 persons at December 31, 1999. Of these,
110 were engaged in overall management and general administration at the
Company's management headquarters and the remainder were employed in the
Company's operating offices. Of these, approximately 526 were direct sales and
marketing personnel.

The Company has 11 local offices covered by collective bargaining agreements,
consisting of painters, billposters and construction personnel. The Company
believes that its relations with its employees, including its 121 unionized
employees, are good, and the Company has never experienced a strike or other
labor dispute.

COMPETITION

OUTDOOR ADVERTISING

The Company competes in each of its markets with other outdoor advertisers as
well as other media, including broadcast and cable television, radio, print
media and direct mail marketers. In addition, the Company also competes with a
wide variety of out-of-home media, including advertising in shopping centers,
malls, airports, stadiums, movie theaters and supermarkets, as well as on taxis,
trains and buses. Advertisers compare relative costs of available media and
cost-per-thousand impressions, particularly when delivering a message to
customers with distinct demographic characteristics. In competing with other
media, outdoor advertising relies on its relative cost efficiency and its
ability to reach a broad segment of the population in a specific market or to
target a particular geographic area or population with a particular set of
demographic characteristics within that market.

The outdoor advertising industry is fragmented, consisting of several large
outdoor advertising and media companies with operations in multiple markets as
well as smaller and local companies operating a limited number of structures in
single or a few local markets. Although some consolidation has occurred over the
past few years, according to the Outdoor Advertising Association of America
("OAAA") there are approximately 600 companies in the outdoor advertising
industry operating approximately 465,000 billboard displays. In several of its
markets, the Company encounters direct competition from other major outdoor
media companies, including Infinity Broadcasting Corp. (formerly Outdoor
Systems, Inc.) and Clear Channel Communications, Inc. (formerly Eller Media)
both of which may have greater total resources than the Company. The Company
believes that its strong emphasis on sales and customer service and its position
as a major provider of advertising services in each of its primary markets
enables it to compete effectively with the other outdoor advertising companies,
as well as other media, within those markets.

LOGO SIGNS

The Company faces competition in obtaining new logo sign contracts and in
bidding for renewals of expiring contracts. The Company faces competition from
two other national providers of logo signs in seeking state-awarded logo service
contracts. In addition, local companies within each of the states that solicit
bids will compete against the Company in the open-bid process. Competition from
these sources is also encountered at the end of each contract period.

In marketing logo signs to advertisers, the Company competes with the other
forms of out-of-home advertising described above.


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<PAGE>   10


REGULATION

Outdoor advertising is subject to governmental regulation at the federal, state
and local levels. Federal law, principally the Highway Beautification Act of
1965 (the "HBA") regulates outdoor advertising on federally aided primary and
interstate highways. The HBA requires, as a condition to federal highway
assistance, states to restrict billboards on such highways to commercial and
industrial areas, and requires certain additional size, spacing and other
limitations. All states have passed state billboard control statutes and
regulations at least as restrictive as the federal requirements, including
removal at the owner's expense and without compensation of any illegal signs on
such highways. The Company believes that the number of its billboards that may
be subject to removal as illegal is immaterial. No state in which the Company
operates has banned billboards, but some have adopted standards more restrictive
than the federal requirements. Municipal and county governments generally also
have sign controls as part of their zoning laws. Some local governments prohibit
construction of new billboards and some allow new construction only to replace
existing structures, although most allow construction of billboards subject to
restrictions on zones, size, spacing and height.

Federal law does not require removal of existing lawful billboards, but does
require payment of compensation if a state or political subdivision compels the
removal of a lawful billboard along a federally aided primary or interstate
highway. State governments have purchased and removed legal billboards for
beautification in the past, using federal funding for transportation enhancement
programs, and may do so in the future. Governmental authorities from time to
time use the power of eminent domain to remove billboards. Thus far, the Company
has been able to obtain satisfactory compensation for any of its billboards
purchased or removed as a result of governmental action, although there is no
assurance that this will continue to be the case in the future. Local
governments do not generally purchase billboards for beautification, but some
have attempted to force removal of legal but nonconforming billboards
(billboards which conformed with applicable zoning regulations when built but
which do not conform to current zoning regulations) after a period of years
under a concept called "amortization," by which the governmental body asserts
that just compensation is earned by continued operation over time. Although
there is some question as to the legality of amortization under federal and many
state laws, amortization has been upheld in some instances. The Company
generally has been successful in negotiating settlements with municipalities for
billboards required to be removed. Restrictive regulations also limit the
Company's ability to rebuild or replace nonconforming billboards. The outdoor
advertising industry is heavily regulated and at various times and in various
markets can be expected to be subject to varying degrees of regulatory pressure
affecting the operation of advertising displays. Accordingly, although the
Company's experience to date is that the regulatory environment can be managed,
no assurance can be given that existing or future laws or regulations will not
materially and adversely affect the Company.

A new national tobacco settlement eliminated outdoor advertising of tobacco
products in the U.S. in November, 1998. As of April 1, 1999, the Company removed
all of its outdoor advertising of tobacco products. Our tobacco revenues as a
percentage of consolidated net revenues were 7% for the year ended December 31,
1998 and 3% for the year ended December 31, 1999. The Company expects to have no
tobacco revenues in fiscal 2000.


                                      -10-
<PAGE>   11


ITEM 1A.    EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
Name                    Age     Title
----                    ---     -----
<S>                     <C>     <C>
Kevin P. Reilly, Jr.    45      Chairman, President and Chief Executive Officer

Keith A. Istre          47      Chief Financial Officer and Treasurer

Sean E. Reilly          38      Director of Mergers and Acquisitions and
                                President of the Real Estate Division
</TABLE>

Each officer's term of office extends until the meeting of the Board of
Directors following the next annual meeting of stockholders and until a
successor is elected and qualified or until his or her earlier resignation or
removal.

Kevin P. Reilly, Jr. has served as the Company's President and Chief Executive
Officer since February 1989 and as a director of the Company since February
1984. Mr. Reilly served as President of the Company's Outdoor Division from 1984
to 1989. Mr. Reilly, an employee of the Company since 1978, has also served as
Assistant and General Manager of the Company's Baton Rouge Region and Vice
President and General Manager of the Louisiana region. Mr. Reilly received a
B.A. from Harvard University in 1977.

Keith A. Istre has been Chief Financial Officer of the Company since February
1989 and a director of the Company since February 1991. Mr. Istre joined the
Company as Controller in 1978. Prior to joining the Company, Mr. Istre was
employed by a public accounting firm in Baton Rouge from 1975 to 1978. Mr. Istre
graduated from the University of Southwestern Louisiana in 1974 with a B.S. in
accounting.

Sean E. Reilly is Director of Mergers and Acquisitions and President of the
Company's real estate division, TLC Properties, Inc. He began working with the
Company as Vice President of Mergers and Acquisitions in 1987 and served in that
capacity until 1994. He served as a director of the Company from 1989 to 1996.
Mr. Reilly was the Chief Executive Officer of Wireless One, Inc., a wireless
cable television company, from 1994 to 1997. Mr. Reilly received a B.A. from
Harvard University in 1984 and a J.D. from Harvard Law School in 1989.

ITEM 2.     PROPERTIES

The Company's 53,500 square foot management headquarters is located in suburban
Baton Rouge, Louisiana. The Company occupies approximately 67% of the space in
this facility and leases the remaining space. The Company owns 66 local
operating facilities with front office administration and sales office space
connected to back-shop poster and bulletin production space. In addition, the
Company leases an additional 106 operating facilities at an aggregate lease
expense for 1999 of approximately $2,125,000.

The Company owns approximately 2,128 parcels of property beneath outdoor
structures. As of December 31, 1999, the Company had approximately 62,755 active
outdoor site leases accounting for a total annual lease expense of $61.1
million. This amount represented 14% of total outdoor advertising net revenues
for that period, which is consistent with the Company's historical lease expense
experience. The Company's leases are for varying terms ranging from
month-to-month to in some cases a term of over ten years, and many provide the
Company with renewal options. There is no significant concentration of displays
under any one lease or subject to negotiation with any one landlord. The Company
believes that an important part of its management activity is to manage its
lease portfolio and negotiate suitable lease renewals and extensions.


                                      -11-
<PAGE>   12



ITEM 3.     LEGAL PROCEEDINGS

The Company from time to time is involved in litigation in the ordinary course
of business, including disputes involving advertising contracts, site leases,
employment claims and construction matters. The Company is also involved in
routine administrative and judicial proceedings regarding billboard permits,
fees and compensation for condemnations. The Company is not a party to any
lawsuit or proceeding which, in the opinion of management, is likely to have a
material adverse effect on the Company.

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

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.


                                      -12-
<PAGE>   13

                                     PART II

ITEM 5.     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS

Since August 2, 1996, the Company's Class A common stock has traded on the
over-the-counter market and prices have been quoted on the Nasdaq National
Market under the symbol "LAMR." Prior to August 2, 1996, the day on which the
Class A common stock was first publicly traded, there was no public market for
the Class A common stock. On December 31, 1997, the Company declared a 3-for-2
stock split of shares of Class A common stock, which was paid in the form of a
50% stock dividend on February 27, 1998. All share and per share amounts
included herein have been restated to reflect this split. As of March 14, 2000,
the Class A common stock was held by 202 shareholders of record. The Company
believes, however, that the actual number of beneficial holders of the Class A
common stock may be substantially greater than the stated number of holders of
record because a substantial portion of the Class A common stock is held in
"street name."

The following table sets forth, for the periods indicated, the high and low bid
prices for the Class A common stock as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
                                                HIGH        LOW
                                               ------      ------
<S>                                            <C>         <C>
Fiscal year ended December 31, 1998:
         First Quarter                         $38.50      $24.42
         Second Quarter                         36.75       29.25
         Third Quarter                          41.50       24.50
         Fourth Quarter                         39.25       19.25

Fiscal year ended December 31, 1999:
         First Quarter                         $41.63      $32.25
         Second Quarter                         43.00       27.75
         Third Quarter                          50.69       35.25
         Fourth Quarter                         64.50       44.63
</TABLE>

The Company's Class B common stock is not publicly traded and is held of record
by one entity.

The Company does not anticipate paying dividends on either class of its common
stock in the foreseeable future. The Company's Series AA preferred stock is
entitled to preferential dividends, in an annual aggregate amount of $364,903,
before any dividends may be paid on the common stock. In addition, the Company's
bank credit facilities and other indebtedness have terms restricting the payment
of dividends. Any future determination as to the payment of dividends will be
subject to such limitations, will be at the discretion of the Company's Board of
Directors and will depend on the Company's results of operations, financial
condition, capital requirements and other factors deemed relevant by the Board
of Directors.

ITEM 6.     SELECTED FINANCIAL DATA

LAMAR ADVERTISING COMPANY

The selected consolidated statement of operations and balance sheet data
presented below are derived from the audited consolidated financial statements
of the Company. Effective January 1, 1997, the Company changed its fiscal year
from a twelve-month period ending October 31 to a twelve-month period ending
December 31. The year end change was made to conform to the predominant fiscal
year end for companies within the outdoor advertising industry. The results of
operations for the two-month transition period ended December 31, 1996 are
presented in the audited consolidated financial statements as filed previously
on Form 10-K. The data presented below should be read in conjunction with the
audited consolidated financial statements, related notes and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included herein.


                                      -13-
<PAGE>   14


STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
                                                                               For the Years Ended
                (Dollars in thousands)                           December 31,                            October 31,
                                                 -------------------------------------------     ---------------------------
                                                     1999           1998            1997            1996           1995
                                                 -----------     -----------     -----------     -----------     -----------
<S>                                              <C>             <C>                 <C>             <C>             <C>
Net revenues                                     $   444,135     $   288,588         201,062         120,602         102,408

Operating expenses:
 Direct advertising expenses                         143,090          92,849          63,390          41,184          34,386
 General & administrative expenses                    94,372          60,935          45,368          29,466          27,057
 Depreciation & amortization                         177,138          88,791          48,317          16,712          15,597
                                                 -----------     -----------     -----------     -----------     -----------
    Total operating expenses                         414,600         242,575         157,075          87,362          77,040
                                                 -----------     -----------     -----------     -----------     -----------
Operating income                                      29,535          46,013          43,987          33,240          25,368
                                                 -----------     -----------     -----------     -----------     -----------
Other expense (income):
 Interest income                                      (1,421)           (762)         (1,723)           (240)           (199)
 Interest expense                                     89,619          60,008          38,230          15,441          15,783
 Loss (gain) on disposition of assets                 (5,481)         (1,152)            (15)             91           1,476
                                                 -----------     -----------     -----------     -----------     -----------
   Total other expense                                82,717          58,094          36,492          15,292          17,060
                                                 -----------     -----------     -----------     -----------     -----------
Earnings (loss) before income taxes,
 extraordinary item and cumulative effect
 of an accounting change                             (53,182)        (12,081)          7,495          17,948           8,308
Income tax expense (benefit)                          (9,596)           (191)          4,654           7,099          (2,390)
                                                 -----------     -----------     -----------     -----------     -----------
Earnings (loss) before extraordinary item
 and cumulative effect of an accounting change       (43,586)        (11,890)          2,841          10,849          10,698
Extraordinary loss on debt extinguishment               (182)             --              --              --              --
                                                 -----------     -----------     -----------     -----------     -----------
Earnings (loss) before cumulative effect
 of an accounting change                             (43,768)        (11,890)          2,841          10,849          10,698
Cumulative effect of an accounting change               (767)             --              --              --              --
                                                 -----------     -----------     -----------     -----------     -----------
Net earnings (loss)                                  (44,535)        (11,890)          2,841          10,849          10,698
Preferred stock dividends                               (365)           (365)           (365)           (365)             --
                                                 -----------     -----------     -----------     -----------     -----------
Net earnings (loss) applicable to common stock   $   (44,900)    $   (12,255)    $     2,476     $    10,484     $    10,698
                                                 ===========     ===========     ===========     ===========     ===========
Earnings (loss) per common share - basic
  and diluted:
Earnings (loss) before extraordinary item
  and accounting change (1)                      $      (.64)    $      (.24)    $      0.05     $      0.25     $      0.21
Extraordinary loss on debt extinguishment (1)             --              --              --              --              --
Cumulative effect of a change in accounting
  principle (1)                                  $      (.01)    $        --     $        --     $        --     $        --
                                                 -----------     -----------     -----------     -----------     -----------
Net earnings (loss) (1)                          $      (.65)    $      (.24)    $      0.05     $      0.25     $      0.21
                                                 ===========     ===========     ===========     ===========     ===========

Other Data:
EBITDA (2)                                       $   206,673     $   134,804          92,304          49,952          40,965
EBITDA margin                                             47%             47%             46%             41%             40%

Cash flows from operating activities (3)         $   110,551     $    72,498          45,783          32,493          25,065
Cash flows from investing activities (3)         $  (950,650)    $  (535,217)       (370,228)        (48,124)        (17,817)
Cash flows from financing activities (3)         $   719,903     $   584,070         250,684          18,175          (9,378)

BALANCE SHEET DATA (4):

Cash & cash equivalents                          $     8,401     $   128,597           7,246           8,430           5,886
Working capital                                       40,787          94,221          18,662           1,540           1,737
Total assets                                       3,206,945       1,413,377         651,336         173,189         133,885
Total debt (including current maturities)          1,615,781         876,532         539,200         131,955         146,051
Total long-term obligations                        1,730,710         857,760         551,865         130,211         143,944
Stockholders' equity (deficit)                     1,391,529         466,779          68,713          19,041         (28,154)
</TABLE>


(1)      After giving effect to the three-for-two split of the Company's Class A
         and Class B common stock effected in February 1998.

(2)      "EBITDA" is defined as operating income before depreciation and
         amortization. It represents a measure which management believes is
         customarily used to evaluate the financial performance of companies in
         the media industry. However, EBITDA is not a measure of financial
         performance under generally accepted accounting principles and should
         not be considered an alternative to operating income or net earnings as
         an indicator of the Company's operating performance or to net cash
         provided by operating activities as a measure of its liquidity.

(3)      Cash flows from operating, investing, and financing activities are
         obtained from the Company's consolidated statements of cash flows
         prepared in accordance with generally accepted accounting principles.

(4)      As of the end of the period.


                                      -14-
<PAGE>   15


ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

LAMAR ADVERTISING COMPANY

The following is a discussion of the consolidated financial condition and
results of operations of the Company for the years ended December 31, 1999, 1998
and 1997. 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. In recent years,
the Company's logo sign business has expanded rapidly and may in the future have
an increasing impact on the Company's revenues and operating income.

The Company has grown significantly during the last three years, primarily as
the result of (i) internal growth in its existing outdoor advertising business
resulting from construction of additional outdoor advertising displays,
operating efficiency and increases in advertising rates, (ii) acquisitions of
outdoor advertising businesses and structures, and (iii) the rapid expansion of
the Company's logo sign business. The Company's net advertising revenues
increased by $243.0 million from $201.1 million for the fiscal year ended
December 31, 1997 to $444.1 million for the fiscal year ended December 31, 1999,
representing a compound annual growth rate of approximately 49%. During the same
period, EBITDA increased $114.4 million from $92.3 million for the fiscal year
ended December 31, 1997 to $206.7 million for the fiscal year ended December 31,
1999, representing a compound annual growth rate of approximately 50%.

The Company plans to continue a strategy of expanding through both internal
growth and acquisitions. As a result of acquisitions, the operating performance
of individual markets and of the Company as a whole are not necessarily
comparable on a year-to-year basis. All recent acquisitions have been accounted
for using the purchase method of accounting and, consequently, operating results
from acquired operations are included from the respective dates of those
acquisitions.

Since December 31, 1998, the Company has increased the number of outdoor
advertising displays it operates by approximately 62% by completing 77 strategic
acquisitions of outdoor advertising and transit assets for an aggregate cash
purchase price of approximately $889 million and the issuance of 26,407,650
shares of Class A common stock valued at approximately $955 million. The Company
has financed its recent acquisitions and intends to finance its acquisition
activity from available cash and borrowings under the New Bank Credit Agreement
(as defined below) which the Company entered into in August, 1999. See
"Liquidity and Capital Resources" below.

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

A national tobacco settlement eliminated outdoor advertising of tobacco products
in the U.S. in November, 1998. As of April 1, 1999, the Company has eliminated
all of its outdoor advertising of tobacco products. As a result the Company's
tobacco revenues, as a percentage of billboard advertising net revenues,
declined from 17% in fiscal 1991 to 3% in fiscal 1999.

The Company expects to have no tobacco revenues in fiscal 2000, but the Company
has been successful in replacing the tobacco advertising removed with substitute
advertising at comparable rates.


                                      -15-
<PAGE>   16


Growth of the Company's business requires capital expenditures for maintenance
and capitalized costs associated with new billboard displays and new logo sign
contracts. The Company expended $36.7 million in fiscal 1997, $55.2 million in
fiscal 1998 and $77.2 million in fiscal 1999. Of these amounts,$10.4 million,
$10.6 million and $11.3 million, respectively, were attributable to the logo
sign business. See "Liquidity and Capital Resources."

The following table presents certain items in the Consolidated Statements of
Operations as a percentage of net revenues for the years ended December 31,
1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                        Year Ended December 31,
                                       ------------------------
                                       1999      1998      1997
                                       ----      ----      ----
<S>                                    <C>       <C>      <C>
Net revenues                           100.0%    100.0%   100.0%
Operating expenses:
 Direct advertising expenses            32.2      32.2     31.5
 General & administrative expenses      21.2      21.1     22.6
EBITDA (1)                              46.5      46.7     45.9
Depreciation and amortization           39.8      30.8     24.0
Operating income                         6.7      15.9     21.9
Interest expense                        20.2      20.8     19.0
Other expense                           18.6      20.1     18.2
Net earnings (loss)                    (10.0)     (4.1)     1.4
</TABLE>

(1)      "EBITDA" is defined as operating income before depreciation and
         amortization. It represents a measure which management believes is
         customarily used to evaluate the financial performance of companies in
         the media industry. However, EBITDA is not a measure of financial
         performance under generally accepted accounting principles and should
         not be considered an alternative to operating income or net earnings as
         an indicator of the Company's operating performance or to net cash
         provided by operating activities as a measure of its liquidity.


                                      -16-
<PAGE>   17


YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Total revenues increased $155.5 million or 53.9% to $444.1 million for the year
ended December 31, 1999 from $288.6 million for the same period in 1998. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $150.5 million or 57.5%, which was attributable to the Company's
acquisitions during 1999 and 1998 and internal growth within the Company's
previously existing markets, and (ii) a $4.0 million increase in logo sign
revenue, which represents a 16.6% increase over the prior year. The increase in
logo sign revenue was due to the completion of development of the new logo sign
contracts awarded in 1999 and 1998 and the continued expansion of the Company's
existing logo sign contracts.

Operating expenses, exclusive of depreciation and amortization, increased $83.7
million or 54.4% to $237.5 million for the year ended December 31, 1999 from
$153.8 million for the same period in 1998. This increase was the result of (i)
an increase in personnel costs, sign site rent and other costs related to the
increase in revenue and (ii) additional operating expenses related to the
Company's recent acquisitions and the continued development of the logo sign
business.

Depreciation and amortization expense increased $88.3 million or 99.4% from
$88.8 million for the year ended December 31, 1998 to $177.1 million for the
year ended December 31, 1999 as a result of an increase in capital assets
resulting from the Company's recent acquisition activity.

Due to the above factors, operating income decreased $16.5 million or 35.8% from
$46.0 million for the year ended December 31, 1998 to $29.5 million for the year
ended December 31, 1999.

Interest income increased $.7 million as a result of an increase in excess cash
investments made during the period. Interest expense increased $29.6 million
from $60.0 million for the year ended December 31, 1998 to $89.6 million for the
year ended December 31, 1999 as a result of interest expense on the Company's 5
1/4% Convertible Notes due 2006 and greater amounts outstanding under the New
Bank Credit Agreement to finance recent acquisitions.

The decrease in operating income and the increase in interest expense described
above resulted in a $41.1 million decrease in earnings before income taxes,
extraordinary item and cumulative effect of a change in accounting principle.

The decrease in earnings before income taxes, resulted in an increase in the
income tax benefit of $9.4 million for the year ended December 31, 1999 over the
same period in 1998.

An extraordinary loss on debt extinguishment of $.2 million net of income tax
benefit of $.1 million, was incurred during the year ended December 31, 1999, as
a result of the extinguishment of a portion of the Company's 9 1/4% Senior
Subordinated Notes due 2007 in connection with a change of control tender offer
in July, 1999.

Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, the Company recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle. This expense is a one
time adjustment to recognize start-up activities and organization costs that
were capitalized in prior periods.

As a result of the foregoing factors, the Company recognized a net loss for the
year ended December 31, 1999 of $44.5 million, as compared to a net loss of
$11.9 million for the same period in 1998.


                                      -17-
<PAGE>   18


YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Total revenues increased $87.5 million or 43.5% to $288.6 million for the year
ended December 31, 1998 from $201.1 million for the same period in 1997. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $84.5 million or 47.6%, which was attributable to the Company's
acquisitions during 1997 and 1998 and internal growth within the Company's
previously existing markets, and (ii) a $3.5 million increase in logo sign
revenue, which represents a 16.8% increase over the prior year. The increase in
logo sign revenue was due to the completion of development of the new logo sign
contracts awarded in 1997 and 1998 and the continued expansion of the Company's
existing logo sign contracts.

Operating expenses, exclusive of depreciation and amortization, increased $45.0
million or 41.4% to $153.8 million for the year ended December 31, 1998 from
$108.8 million for the same period in 1997. This increase was the result of (i)
an increase in personnel costs, sign site rent and other costs related to the
increase in revenue and (ii) additional operating expenses related to the
Company's recent acquisitions and the continued development of the logo sign
business.

Depreciation and amortization expense increased $40.5 million or 83.9% from
$48.3 million for the year ended December 31, 1997 to $88.8 million for the year
ended December 31, 1998 as a result of an increase in capital assets resulting
from the Company's recent acquisition activity.

Due to the above factors, operating income increased $2.0 million or 4.5% from
$44.0 million for the year ended December 31, 1997 to $46.0 million for the
twelve months ended December 31, 1998.

Interest income decreased $1.0 million as a result of a decrease in excess cash
investments made during the period. Interest expense increased $21.8 million
from $38.2 million for the year ended December 31, 1997 to $60.0 million for the
year ended December 31, 1998 as a result of interest expense on the Company's 8
5/8% Senior Subordinated Notes due 2007 (the "1997 Notes") and greater amounts
outstanding under the Senior Credit Facility (as defined below) and the New Bank
Credit Agreement to finance recent acquisitions.

The increase in operating income was offset by the increase in interest expense
described above resulting in a $19.6 million decrease in earnings before income
taxes.

Due to the decrease in earnings before income taxes, income tax expense for the
twelve months ended December 31, 1998 decreased $4.8 million over the same
period in 1997.

As a result of the foregoing factors, the Company recognized a net loss for the
year ended December 31, 1998 of $11.9 million, as compared to net earnings of
$2.8 million for the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically satisfied its working capital requirements with
cash from operations, offerings of its Class A common stock and debt securities
and borrowings under its bank credit facilities. The Company's acquisitions have
been financed primarily with funds borrowed under its bank credit facilities and
issuance of its Class A common stock.

The Company's net cash provided by operating activities increased to $110.6
million in fiscal 1999 due primarily to an increase in noncash items of $79.9
million, which includes an increase in depreciation and amortization of $88.3
million offset by a


                                      -18-
<PAGE>   19


decrease in deferred tax expense of $6.0 million and an increase in gain on
disposition of assets of $4.3 million. There was also a decrease in net earnings
of $32.6 million, an increase in receivables of $16.6 million, an increase in
other assets of $2.2 million, an increase in trade accounts payable of $3.2
million, an increase in accrued expenses of $14.3 million, and a decrease in
deferred income of $9.3 million. Net cash used in investing activities increased
$415.5 million from $535.2 million in fiscal 1998 to $950.7 million in fiscal
1999. This increase was due to a $395.6 million increase in purchase of outdoor
advertising assets and a $22.0 million increase in capital expenditures offset
by an increase in proceeds from the sale of property and equipment of $2.1
million. Net cash provided by financing activities increased $135.8 million in
fiscal 1999 due to a $279.5 million increase in proceeds from issuance of
long-term debt due to the net proceeds from the August, 1999 offering of 5 1/4%
Convertible Notes due 2006 of $279.6 million, and a $335.0 million increase in
principal borrowings under credit agreements, offset by a $395.2 million
decrease in proceeds from issuance of common stock.

During the year ended December 31, 1999, the Company financed its acquisition
activity of approximately $1.9 billion with remaining proceeds from the
December, 1998 equity offering, borrowings under the Company's bank credit
facility and the issuance of approximately 26.4 million shares of common stock.
At December 31, 1999, following these acquisitions, the Company had $223 million
available under the revolving bank credit facility.

On August 13, 1999, the Company replaced the 1998 bank credit facility with a
new bank credit facility under which The Chase Manhattan Bank serves as
administrative agent. The new $1 billion bank credit facility consists of (1) a
$350 million revolving bank credit facility and (2) a $650 million term facility
with two tranches, a $450 million Term A facility and a $200 million Term B
facility. As a result of the holding company reorganization completed on July
20, 1999, the existing bank credit facility and the new bank credit facility are
obligations of Lamar Media Corp., a wholly owned subsidiary, of Lamar
Advertising Company. As of December 31, 1999, Lamar Media had borrowings under
this agreement of $776 million.

On August 10, 1999, the Company completed an offering of $287.5 million 5 1/4%
Convertible Notes due 2006. The net proceeds of approximately $279.6 million of
the convertible notes were used to pay down existing bank debt. The convertible
notes are convertible into Lamar Advertising Company Class A common stock at an
initial conversion price of $46.25 per share.

In connection with the reorganization of Lamar Advertising Company into a new
holding company structure, Lamar Media Corp. (formerly known as Lamar
Advertising Company) made a change of control tender offer to the holders of its
9 1/4% Senior Subordinated Notes due 2007 in aggregate principal amount of
approximately $103.9 million. Pursuant to the change of control tender offer and
in accordance with the Indenture, Lamar Media Corp. offered to repurchase the
Notes for 101% of the principal amount plus accrued interest. A total of $29.9
million aggregate principal amount of Notes were tendered for payment on August
19, 1999, and the related 1% prepayment penalty is reflected as an extraordinary
item in the Company's income statement, net of tax.

LAMAR MEDIA CORP.

On July 20, 1999, Lamar Advertising Company completed a corporate reorganization
to create a new holding company structure. The reorganization was accomplished
through a merger under section 251(g) of the Delaware General Corporation Law.
At the effective time of the merger, all stockholders of Lamar Advertising
Company became stockholders in a new holding company and Lamar Advertising
Company became a wholly-owned subsidiary of the new holding company. The new
holding company took the Lamar Advertising Company


                                      -19-
<PAGE>   20


name and the old Lamar Advertising Company was renamed Lamar Media Corp. In the
merger, all outstanding shares of old Lamar Advertising Company's capital stock
were converted into shares of the new holding company with the same voting
powers, designations, preferences and rights, and the same qualifications,
restrictions and limitations, as the shares of old Lamar Advertising Company.

The following is a discussion of the consolidated financial condition and
results of operations of Lamar Media for the years ended December 31, 1999 and
1998. This discussion should be read in conjunction with the consolidated
financial statements of Lamar Media and the related notes.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Total revenues increased $155.5 million or 53.9% to $444.1 million for the year
ended December 31, 1999 from $288.6 million for the same period in 1998. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $150.5 million or 57.5%, which was attributable to Lamar Media's
acquisitions during 1999 and 1998 and internal growth within Lamar Media's
previously existing markets, and (ii) a $4.0 million increase in logo sign
revenue, which represents a 16.6% increase over the prior year. The increase in
logo sign revenue was due to the completion of development of the new logo sign
contracts awarded in 1999 and 1998 and the continued expansion of Lamar Media's
existing logo sign contracts.

Operating expenses, exclusive of depreciation and amortization, increased $83.6
million or 54.3% to $237.4 million for the year ended December 31, 1999 from
$153.8 million for the same period in 1998. This increase was the result of (i)
an increase in personnel costs, sign site rent and other costs related to the
increase in revenue and (ii) additional operating expenses related to Lamar
Media's recent acquisitions and the continued development of the logo sign
business.

Depreciation and amortization expense increased $87.4 million or 98.5% from
$88.8 million for the year ended December 31, 1998 to $176.2 million for the
year ended December 31, 1999 as a result of an increase in capital assets
resulting from Lamar Media's recent acquisition activity.

Due to the above factors, operating income decreased $15.5 million or 33.6% from
$46.0 million for the year ended December 31, 1998 to $30.5 million for the year
ended December 31, 1999.

Interest income increased $.7 million as a result of an increase in excess cash
investments made during the period. Interest expense increased $29.6 million
from $60.0 million for the year ended December 31, 1998 to $89.6 million for the
year ended December 31, 1999 as a result of interest expense on Lamar Media's
obligation to Lamar Advertising Company and greater amounts outstanding under
the New Bank Credit Agreement to finance recent acquisitions.

The decrease in operating income and the increase in interest expense described
above resulted in a $40.1 million decrease in earnings before income taxes,
extraordinary item and cumulative effect of a change in accounting principle.

The decrease in earnings before income taxes, resulted in an increase in the
income tax benefit of $9.0 million for the year ended December 31, 1999 over the
same period in 1998.

An extraordinary loss on debt extinguishment of $.2 million net of income tax
benefit of $.1 million, was incurred during the year ended December 31, 1999, as
a result of the extinguishment of a portion of Lamar Media's 9 1/4% Senior
Subordinated Notes due 2007 in connection with a change of control tender offer
in July, 1999.


                                      -20-
<PAGE>   21


Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, Lamar Media recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle. This expense is a one
time adjustment to recognize start-up activities and organization costs that
were capitalized in prior periods.

As a result of the foregoing factors, Lamar Media recognized a net loss for the
year ended December 31, 1999 of $43.9 million, as compared to a net loss of
$11.9 million for the same period in 1998.

FACTORS AFFECTING FUTURE OPERATING RESULTS

THE SIGNIFICANT FIXED PAYMENTS ON THE COMPANY'S DEBT INCREASES UNCERTAINTY AND
REDUCES FLEXIBILITY IN ITS OPERATIONS.

The Company has borrowed substantial amounts of money in the past and may borrow
more money in the future. At December 31, 1999, the Company had approximately
$1.6 billion of debt outstanding consisting of approximately $776 million in
bank debt, $528 million in various series of senior subordinated notes, $287.5
million in convertible notes and $24 million in various other short-term and
long-term debt.

A large part of the Company's cash flow from operations must be used to make
principal and interest payments on its debt. If the Company's operations make
less money in the future, it may need to borrow to make these payments. In
addition, the Company finances most of its acquisitions through borrowings under
Lamar Media's bank credit facility which has a total committed amount of $1.0
billion in term and revolving credit loans. As of December 31, 1999, the Company
had approximately $223 million available to borrow under this credit facility.
Since its borrowing capacity under its credit facility is limited, the Company
may not be able to continue to finance future acquisitions at its historical
rate with borrowings under its credit facility. The Company may need to borrow
additional amounts or seek other sources of financing to fund future
acquisitions. The Company cannot guarantee that such additional financing will
be available on favorable terms. The Company may need the consent of the banks
under its credit facility, or the holders of other indebtedness, to borrow
additional money.

RESTRICTIONS IN THE COMPANY'S, AND ITS WHOLLY-OWNED, DIRECT SUBSIDIARY LAMAR
MEDIA'S DEBT AGREEMENTS REDUCE OPERATING FLEXIBILITY AND CONTAIN COVENANTS AND
RESTRICTIONS THAT CREATE THE POTENTIAL FOR DEFAULTS.

The terms of the indenture relating to Lamar Advertising's outstanding notes,
Lamar Media's bank credit facility and the indentures relating to Lamar Media's
outstanding notes restrict, among other things, the ability of Lamar Advertising
and Lamar Media to:

        o         dispose of assets;
        o         incur or repay debt;
        o         create liens;
        o         make investments; and
        o         pay dividends.

Lamar Media's ability to make distributions to Lamar Advertising is also
restricted under the terms of these agreements.

Under the Lamar Media's credit facility the Company must maintain specified
financial ratios and levels including:

        o         cash interest coverage;
        o         fixed charge coverage;
        o         senior debt ratios; and
        o         total debt ratios.


                                      -21-
<PAGE>   22


Failure to comply with these tests may cause all amounts outstanding under the
credit facility to become immediately due. If this were to occur, it would
create serious financial problems for the Company. The Company's ability to
comply with these restrictions, and any similar restrictions in future
agreements, depends on its operating performance. Because its performance is
subject to prevailing economic, financial and business conditions and other
factors that are beyond the Company's control, it may be unable to comply with
these restrictions in the future.

NEGATIVE TRENDS IN ADVERTISING EXPENDITURES COULD HURT THE COMPANY'S BUSINESS.

The Company sells advertising space to generate revenues. A decrease in demand
for advertising space could adversely affect the Company's business. General
economic conditions and trends in the advertising industry affect the amount of
advertising space purchased. A reduction in money spent on its displays could
result from:

         o        a general decline in economic conditions;

         o        a decline in economic conditions in particular markets where
                  the Company conducts business;

         o        a reallocation of advertising expenditures to other available
                  media by significant users of the Company's displays; or

         o        a decline in the amount spent on advertising in general.

THE REGULATION OF OUTDOOR ADVERTISING IMPACTS THE COMPANY'S OPERATIONS.

The Company's operations are significantly impacted by federal, state and local
government regulation of the outdoor advertising business.

The federal government conditions federal highway assistance on states imposing
location restrictions on the placement of billboards on primary and interstate
highways. Federal laws also impose size, spacing and other limitations on
billboards. Some states have adopted standards more restrictive than the federal
requirements. Local governments generally control billboards as part of their
zoning regulations. Some local governments have enacted ordinances which require
removal of billboards by a future date. Others prohibit the construction of new
billboards and the reconstruction of significantly damaged billboards, or allow
new construction only to replace existing structures.

Local laws which mandate removal of billboards at a future date often do not
provide for payment to the owner for the loss of structures that are required to
be removed. Certain federal and state laws require payment of compensation in
such circumstances. Local laws that require the removal of a billboard without
compensation have been challenged in state and federal courts with conflicting
results. Accordingly, the Company may not be successful in negotiating
acceptable arrangements when the Company's displays have been subject to removal
under these types of local laws.

Additional regulations may be imposed on outdoor advertising in the future.
Legislation regulating the content of billboard advertisements has been
introduced in Congress from time to time in the past. Additional regulations or
changes in the current laws regulating and affecting outdoor advertising at the
federal, state or local level may have a material adverse effect on the
Company's results of operations.


                                      -22-
<PAGE>   23


CONTINUING THE COMPANY'S GROWTH BY ACQUISITIONS MAY BECOME MORE DIFFICULT AND
INVOLVES COSTS AND UNCERTAINTIES.

The Company has substantially increased its inventory of advertising displays
through acquisitions. The Company's operating strategy involves making purchases
in markets where it currently competes as well as in new markets. However, the
following factors may affect the Company's ability to continue to pursue this
strategy effectively.

         o        The outdoor advertising market has been consolidating, and
                  this may adversely affect the Company's ability to find
                  suitable candidates for purchase.

         o        The Company is also likely to face increased competition from
                  other outdoor advertising companies for the companies or
                  assets it wishes to purchase. Increased competition may lead
                  to higher prices for outdoor advertising companies and assets
                  and decrease those it is able to purchase.

         o        The Company does not know if it will have sufficient capital
                  resources to make purchases, obtain any required consents from
                  the Company's lenders, or find acquisition opportunities with
                  acceptable terms.

         o        From January 1, 1999 to December 31, 1999, the Company
                  completed 77 transactions involving the purchase of
                  complementary outdoor advertising businesses, the most
                  significant of which was the acquisition on September 15,
                  1999, of Chancellor Outdoor for $1.6 billion. The Company has
                  integrated these acquired assets and businesses into its
                  existing operations, but cannot be certain that the benefits
                  and cost savings that it anticipates from these purchases will
                  develop.

COMPETITION FROM LARGER OUTDOOR ADVERTISERS AND OTHER FORMS OF ADVERTISING COULD
HURT THE COMPANY'S PERFORMANCE.

The Company cannot be sure that in the future it will compete successfully
against the current and future sources of outdoor advertising competition and
competition from other media. The competitive pressure that it faces could
adversely affect the Company's profitability or financial performance. The
Company faces competition from other outdoor advertising companies, some of
which may be larger and better financed than it is, as well as from other forms
of media, including television, radio, newspapers and direct mail advertising.
It must also compete with an increasing variety of other out-of-home advertising
media that include advertising displays in shopping centers, malls, airports,
stadiums, movie theaters and supermarkets, and on taxis, trains and buses.

In the Company's logo sign business, it currently faces competition for
state-awarded service contracts from two other logo sign providers as well as
local companies. Initially, the Company competed for state-awarded service
contracts as they are privatized. Because these contracts expire after a limited
time, the Company must compete to keep its existing contracts each time they are
up for renewal.

POTENTIAL LOSSES RESULTING FROM THE FAILURE OF THE COMPANY'S CONTINGENCY PLANS
RELATING TO HURRICANES COULD HURT THE COMPANY'S BUSINESS.

Although the Company has developed contingency plans designed to deal with the
threat posed to advertising structures by hurricanes, it cannot guarantee that
these plans will work. If these plans fail, significant losses could result.

A significant portion of its structures are located in the Mid-Atlantic and Gulf
Coast regions of the United States. These areas are highly susceptible to
hurricanes during the late summer and early fall. In the past, the Company has
incurred significant losses


                                      -23-
<PAGE>   24


due to severe storms. These losses resulted from structural damage, overtime
compensation, loss of billboards that could not be replaced under applicable
laws and reduced occupancy because billboards were out of service.

The Company has determined that it is not economical to obtain insurance against
losses from hurricanes and other storms. Instead, contingency plans have been
developed to deal with the threat of hurricanes. For example, an attempt is made
to remove the advertising faces on billboards at the onset of a storm, when
possible, which permits the structures to better withstand high winds during a
storm. These advertising faces are then replaced after the storm has passed.
However, these plans may not be effective in the future and, if they are not,
significant losses may result.

NEW LOGO SIGN CONTRACTS ARE SUBJECT TO STATE AWARD AND MAY NOT BE AWARDED TO THE
COMPANY; EXISTING CONTRACTS ARE SUBJECT TO RENEWAL AND MAY NOT BE RENEWED.

A portion of the Company's revenues and operating income come from our
state-awarded service contracts for logo signs. The Company cannot predict what
remaining states, if any, will start logo sign programs or convert state-run
logo sign programs to privately operated program. The Company competes with
other parties for new state-awarded service contracts for logo signs. Even when
it is awarded such a contract, the award may be challenged under state contract
bidding requirements. If an award is challenged, the Company may incur delays
and litigation costs.

Generally, state-awarded logo sign contracts have a term, including renewal
options, of ten to twenty years. States may terminate a contract early, but in
most cases must pay compensation to the logo sign provider for early
termination. Typically, at the end of the term of the contract, ownership of the
structures is transferred to the state without compensation to the logo sign
provider. Of our 20 logo sign contracts in place at December 31, 1999, three are
subject to renewal in April, June and October, 2000 and one is due to terminate
in December, 2000. There is no guarantee that the Company will be able to obtain
new logo sign contracts or renew its existing contracts. In addition, after a
new state-awarded logo contract is received, the Company generally incurs
significant start-up costs. The Company cannot guarantee that it will continue
to have access to the capital necessary to finance those costs.

THE LOSS OF KEY EXECUTIVES COULD AFFECT THE COMPANY'S OPERATIONS.

The Company's success depends to a significant extent upon the continued
services of its executive officers and other key management and sales personnel.
Kevin P. Reilly, Jr., the Chief Executive Officer, the nine regional managers
and the manager of the logo sign business, in particular, are essential to the
Company's continued success. Although incentive and compensation programs have
been designed to retain key employees, there are no employment contracts with
any employees and none of the executive officers have signed non-compete
agreements. The Company does not maintain key man insurance on its executives.
If any of the executive officers or other key management and sales personnel
stopped working with the Company in the future, it could have an adverse effect
on its business.

INFLATION

In the last three years, inflation has not had a significant impact on the
Company.

SEASONALITY

The Company's revenues and operating results have exhibited some degree of
seasonality in past periods. Typically, the Company experiences its strongest
financial performance in the summer and its lowest in the winter. The Company
expects this trend to continue in the future. Because a significant portion of
the Company's expenses are fixed, a


                                      -24-
<PAGE>   25


reduction in revenues in any quarter is likely to result in a period to period
decline in operating performance and net earnings.

IMPACT OF YEAR 2000

The Company has not experienced significant disruptions to its financial or
operating activities caused by failure of its computerized systems resulting
from Year 2000 issues. All missions critical systems and links with key
suppliers and vendors operated as expected and execution of contingency plans
was not required.


                                      -25-
<PAGE>   26


ITEM 7A.    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 Company does not enter into market risk sensitive instruments for
trading purposes. The information below summarizes the Company's interest rate
risk associated with its principal variable rate debt instruments outstanding at
December 31, 1999, and should be read in conjunction with Note 8 of the Notes to
the Company's Consolidated Financial Statements.

Loans under Lamar Media Corp.'s New Bank Credit Agreement bear interest at
variable rates equal to the Chase Prime Rate or LIBOR plus the applicable
margin. Because the 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 New Bank Credit Agreement. Increases in the interest rates
applicable to borrowings under the New Bank Credit Agreement would result in
increased interest expense and a reduction in the Company's net income and after
tax cash flow.

At December 31, 1999, there was approximately $776 million of aggregate
indebtedness outstanding under the New Bank Credit Agreement, or approximately
48.0% of the Company's outstanding long-term debt on that date, bearing interest
at variable rates. The aggregate interest expense for 1999 with respect to
borrowings under the New Bank Credit Agreement and Senior Credit Facility was
$30.5 million, and the weighted average interest rate applicable to borrowings
under these credit facilities during 1999 was 7.3%. Assuming that the weighted
average interest rate was 200-basis points higher (that is 9.3% rather than
7.3%), then the Company's 1999 interest expense would have been approximately
$8.2 million higher resulting in a $5.0 million decrease in the Company's 1999
net income and after tax cash flow.

The Company attempts to mitigate the interest rate risk resulting from its
variable interest rate long-term debt instruments by also 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 New Bank Credit Agreement to fix the
interest rates applicable to its borrowings at an amount equal to LIBOR plus the
applicable margin for periods of up to twelve months, which would allow the
Company to mitigate the impact of short-term fluctuations in market interest
rates. In the event of an increase in interest rates, the Company may take
further actions to mitigate its exposure. The Company cannot guarantee, however,
that the actions that it may take to mitigate this risk will be feasible or
that, if these actions are taken, that they will be effective.

ITEM 8.     FINANCIAL STATEMENTS (FOLLOWING ON NEXT PAGE)


                                      -26-
<PAGE>   27

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

<TABLE>
<S>                                                                      <C>
Independent Auditors' Report..............................................   28

Consolidated Balance Sheets as of December 31, 1999 and 1998 .............   29

Consolidated Statements of Operations for the years ended December 31,
      1999, 1998 and 1997.................................................   30

Consolidated Statements of Comprehensive Income for the years ended
     December 31, 1999, 1998 and 1997.....................................   31

Consolidated Statements of Stockholders' Equity for the years ended
     December 31, 1999, 1998 and 1997.....................................   32

Consolidated Statements of Cash Flows for the years ended December 31,
      1999, 1998 and 1997.................................................   33

Notes to Consolidated Financial Statements ...............................34-54
</TABLE>


                                      -27-
<PAGE>   28
                          Independent Auditors' Report


Board of Directors
Lamar Advertising Company:

We have audited the accompanying consolidated balance sheets of Lamar
Advertising Company and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, comprehensive income,
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lamar Advertising
Company and subsidiaries as of December 31, 1999 and 1998, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.

As discussed in Note 17 to the consolidated financial statements, the Company
changed its method of accounting for the costs of start-up activities in
1999.

                                        KPMG LLP


New Orleans, Louisiana
March 17, 2000


                                      -28-
<PAGE>   29


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                           Consolidated Balance Sheets
                 (In thousands, except share and per share data)

                           December 31, 1999 and 1998

<TABLE>
<CAPTION>
Assets                                                                 1999            1998
------                                                             -----------    -----------
<S>                                                                <C>            <C>
Current assets:
  Cash and cash equivalents                                        $     8,401    $   128,597
  Receivables, net                                                      81,226         40,380
  Prepaid expenses                                                      21,524         12,346
  Other current assets                                                  14,342          1,736
                                                                   -----------    -----------
          Total current assets                                         125,493        183,059
                                                                   -----------    -----------

Property, plant and equipment (note 4)                               1,412,605        661,324
  Less accumulated depreciation and amortization                      (218,893)      (153,972)
                                                                   -----------    -----------
          Net property plant and equipment                           1,193,712        507,352
                                                                   -----------    -----------

Intangible assets (note 5)                                           1,874,177        705,934
Other assets - non-current                                              13,563         17,032
                                                                   -----------    -----------
          Total assets                                             $ 3,206,945    $ 1,413,377
                                                                   ===========    ===========
Liabilities and Stockholders' Equity

Current liabilities:
  Trade accounts payable                                           $    11,492    $     4,258
  Current maturities of long-term debt (note 8)                          4,318         49,079
  Accrued expenses (note 7)                                             57,653         25,912
  Deferred income                                                       11,243          9,589
                                                                   -----------    -----------
          Total current liabilities                                     84,706         88,838

Long-term debt (note 8)                                              1,611,463        827,453
Deferred income taxes (note 9)                                         112,412         25,613
Deferred income                                                          1,222          1,293
Other liabilities                                                        5,613          3,401
                                                                   -----------    -----------
          Total liabilities                                          1,815,416        946,598
                                                                   -----------    -----------

Stockholders' equity (note 11):
  Series AA preferred stock, par value $.001, $63.80 cumulative
    dividends, authorized $1,000,000 shares; 5,719.49 shares and
    no shares issued and outstanding at 1999 and 1998,
    respectively                                                            --             --
  Class A preferred stock, par value $638, $63.80 cumulative
    dividends, 10,000 shares authorized, 0 shares and 5,719
    shares issued and outstanding at 1999 and 1998 respectively             --          3,649
  Class A common stock, par value $.001, 125,000,000 shares
    authorized, 70,576,251 and 43,392,876 shares issued and
    outstanding at 1999 and 1998, respectively                              71             43
  Class B common stock, par value $.001, 37,500,000 shares
    authorized, 17,449,997 and 17,699,997 shares issued and
    outstanding at 1999 and 1998, respectively                              17             18
  Additional paid-in capital                                         1,478,916        505,644
  Accumulated deficit                                                  (87,475)       (42,575)
                                                                   -----------    -----------
          Stockholders' equity                                       1,391,529        466,779
                                                                   -----------    -----------

          Total liabilities and stockholders' equity               $ 3,206,945    $ 1,413,377
                                                                   ===========    ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -29-
<PAGE>   30


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                      Consolidated Statements of Operations
                 (In thousands, except share and per share data)

                  Years ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                                        1999             1998            1997
                                                                     ------------    ------------    ------------
<S>                                                                  <C>             <C>             <C>
Net revenues                                                         $    444,135    $    288,588    $    201,062
                                                                     ------------    ------------    ------------
Operating expenses:
  Direct advertising expenses                                             143,090          92,849          63,390
  General and administrative expenses                                      94,372          60,935          45,368
  Depreciation and amortization                                           177,138          88,791          48,317
                                                                     ------------    ------------    ------------
                                                                          414,600         242,575         157,075
                                                                     ------------    ------------    ------------
          Operating income                                                 29,535          46,013          43,987
                                                                     ------------    ------------    ------------
Other expense (income):
  Interest income                                                          (1,421)           (762)         (1,723)
  Interest expense                                                         89,619          60,008          38,230
  Gain on disposition of assets                                            (5,481)         (1,152)            (15)
                                                                     ------------    ------------    ------------
                                                                           82,717          58,094          36,492
                                                                     ------------    ------------    ------------
  Earnings (loss) before income taxes, extraordinary
    item and cumulative effect of a change in accounting principle        (53,182)        (12,081)          7,495

  Income tax expense (benefit) (note 9)                                    (9,596)           (191)          4,654
                                                                     ------------    ------------    ------------

Earnings (loss) before extraordinary item and cumulative
 effect of a change in accounting principle                               (43,586)        (11,890)          2,841

Extraordinary loss on debt extinguishment net of
 income tax benefit of $117                                                  (182)             --              --
                                                                     ------------    ------------    ------------
Earnings (loss) before cumulative effect of a change in
 accounting principle                                                     (43,768)        (11,890)          2,841

Cumulative effect of a change in accounting principle                        (767)             --              --
                                                                     ------------    ------------    ------------
Net earnings (loss)                                                       (44,535)        (11,890)          2,841
Preferred stock dividends                                                    (365)           (365)           (365)
                                                                     ------------    ------------    ------------
Net earnings (loss) applicable to common stock                       $    (44,900)   $    (12,255)   $      2,476
                                                                     ============    ============    ============

Earnings (loss) per common share - basic and diluted:

 Earnings (loss) before extraordinary item and
   accounting change                                                 $       (.64)   $       (.24)   $        .05
 Extraordinary loss on debt extinguishment                                     --              --              --
 Cumulative effect of a change in accounting principle                       (.01)             --              --
                                                                     ------------    ------------    ------------
          Net earnings (loss)                                        $       (.65)   $       (.24)   $        .05
                                                                     ============    ============    ============

Weighted average common shares outstanding                             69,115,764      51,361,522      47,037,497
Incremental common shares from dilutive stock options                          --              --         363,483
Incremental common shares from convertible debt                                --              --              --
                                                                     ------------    ------------    ------------
Weighted average common shares assuming dilution                       69,115,764      51,361,522      47,400,980
                                                                     ============    ============    ============
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -30-
<PAGE>   31


                          LAMAR ADVERTISING COMPANY AND
                                  SUBSIDIARIES

                 Consolidated Statements of Comprehensive Income
                                 (In Thousands)

                  Years ended December 31, 1999, 1998 and 1997


<TABLE>
<CAPTION>
                                          1999        1998       1997
                                        --------    --------   --------
<S>                                     <C>         <C>        <C>
Net earnings (loss) applicable
     to common stock                    $(44,900)   $(12,255)  $  2,476

Other comprehensive income -
     change in unrealized gain
     (loss) on investment securities
     (net of deferred tax expense
     (benefit) of $0, $217 and $(596)
     for the years ended December 31,
     1999, 1998 and 1997                      --         354       (974)
                                        --------    --------   --------
Comprehensive income (loss)             $(44,900)   $(11,901)  $  1,502
                                        ========    ========   ========
</TABLE>


                                      -31-
<PAGE>   32


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity
                 (In thousands, except share and per share data)

                  Years ended December 31, 1999, 1998 and 1997


<TABLE>
<CAPTION>
                                       Series                                                              Unrealized
                                         AA       Class A     Class A   Class B  Additional                 Gain (Loss)
                                     Preferred   Preferred     Common    Common   Paid-in    Accumulated   On Investment
                                       Stock       Stock       Stock     Stock   Capital      Deficit       Securities      Total
                                     ---------   ---------    -------   ------- -----------  -----------   -------------  ---------
<S>                                   <C>        <C>          <C>       <C>     <C>          <C>           <C>            <C>
Balance, December 31, 1996            $    --       3,649        18       14      92,258        (32,796)          620        63,763
 Exercise of stock options                 --          --        --       --       3,448             --            --         3,448
 Conversion of 1,811,552
  shares of Class B common
  stock to Class A common
  stock                                    --          --         1       (1)         --             --            --            --
 Net earnings                              --          --        --       --          --          2,841            --         2,841
 Dividends ($63.80 per
  preferred share)                         --          --        --       --          --           (365)           --          (365)
 Unrealized loss on investment
  securities, net of deferred
  taxes of $596                            --          --        --       --          --             --          (974)         (974)
 Three-for-two stock split
  (Note 11)                                --          --         9        6         (15)            --            --            --
                                      -------     -------    ------    -----   ---------       --------      --------     ---------

Balance, December 31, 1997                 --       3,649        28       19      95,691        (30,320)         (354)       68,713
                                      -------     -------    ------    -----   ---------       --------      --------     ---------
 Issuance of 13,338,005 shares
  of common stock                          --          --        13       --     399,288             --            --       399,301
 Exercise of stock options                 --          --         1       --      10,665             --            --        10,666
 Conversion of 1,062,912
  shares of Class B common
  stock to Class A common
  stock                                    --          --         1       (1)         --             --            --            --
 Net loss                                  --          --        --       --          --        (11,890)           --       (11,890)
 Dividends ($63.80 per
  preferred share)                         --          --        --       --          --           (365)           --          (365)
 Realized loss on investment
  securities, net of tax                   --          --        --       --          --             -            354           354
                                      -------     -------    ------    -----   ---------       --------      --------     ---------

 Balance December 31, 1998                 --       3,649        43       18     505,644        (42,575)           --       466,779
                                      -------     -------    ------    -----   ---------       --------      --------     ---------
 Issuance of 26,407,650 shares
  of common stock in
  acquisitions                             --          --        26       --     954,946             --            --       954,972
 Exercise of stock options                 --          --         1       --      14,677             --            --        14,678
 Conversion of 250,000 shares
  of Class B common stock to
  Class A common stock                     --          --         1       (1)         --             --            --            --
 Conversion of Class A
  preferred stock into Series
  AA preferred stock                       --      (3,649)       --       --       3,649             --            --            --
 Net loss                                  --          --        --       --          --        (44,535)           --       (44,535)
 Dividends ($63.80 per
  preferred share)                         --          --        --       --          --           (365)           --          (365)
                                      -------     -------    ------    -----   ---------       --------      --------     ---------
Balance December 31, 1999             $    --          --        71       17   1,478,916        (87,475)           --     1,391,529
                                      =======     =======    ======    =====   =========       ========      ========     =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -32-
<PAGE>   33


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                 (In thousands)

                  Years ended December 31, 1999, 1998 and 1997


<TABLE>
<CAPTION>
                                                        1999         1998         1997
                                                     ---------    ---------    ---------
<S>                                                  <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings (loss)                                $ (44,535)     (11,890)       2,841
  Adjustments to reconcile net earnings (loss)
   to net cash provided by operating activities:
   Depreciation and amortization                       177,138       88,791       48,317
   Gain on disposition of assets                        (5,481)      (1,152)         (15)
   Cumulative effect of accounting change                  767           --           --
   Deferred tax expense (benefit)                      (13,579)      (7,537)      (2,839)
   Provision for doubtful accounts                       4,065        2,883        2,098
  Changes in operating assets and liabilities:
   (Increase) decrease in:
     Receivables                                       (19,091)      (2,464)      (7,646)
     Prepaid expenses                                      782         (521)        (367)
     Other assets                                       (4,337)      (2,148)        (251)
   Increase (decrease) in:
     Trade accounts payable                              3,438          250       (1,951)
     Accrued expenses                                   18,597        4,326        6,063
     Deferred income                                    (7,184)       2,132         (425)
     Other liabilities                                     (29)        (172)         (42)
                                                     ---------    ---------    ---------
        Net cash provided by operating activities      110,551       72,498       45,783
                                                     ---------    ---------    ---------

Cash flows from investing activities:
  Capital expenditures                                 (77,186)     (55,196)     (36,654)
  Purchase of new markets                             (881,067)    (485,514)    (386,842)
  Proceeds from sale of property and equipment           7,603        5,493       53,268
                                                     ---------    ---------    ---------
        Net cash used in investing activities         (950,650)    (535,217)    (370,228)
                                                     ---------    ---------    ---------

Cash flows from financing activities:
  Net proceeds from issuance of common stock             7,418      402,629        2,403
  Proceeds from issuance of long-term debt             279,594           70      193,926
  Principal payments on long-term debt                 (79,667)      (6,229)          --
  Debt issuance costs                                  (13,077)      (3,035)          --
  Net borrowing (payments) under credit agreements     526,000      191,000       54,720
  Dividends                                               (365)        (365)        (365)
                                                     ---------    ---------    ---------
       Net cash provided by financing activities       719,903      584,070      250,684
                                                     ---------    ---------    ---------
       Net increase (decrease) in cash and
        cash equivalents                              (120,196)     121,351      (73,761)

  Cash and cash equivalents at beginning
   of period                                           128,597        7,246       81,007
                                                     ---------    ---------    ---------

  Cash and cash equivalents at end of period         $   8,401      128,597        7,246
                                                     =========    =========    =========
Supplemental disclosures of cash flow information:
  Cash paid for interest                             $  83,837       56,960       33,284
                                                     =========    =========    =========

  Cash paid for income taxes                         $   6,919        1,107        8,792
                                                     =========    =========    =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -33-
<PAGE>   34
                           LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
            (Dollars in thousands, except share and per share data)

(1)      Significant Accounting Policies

         (a)      Nature of Business Lamar

                  Advertising Company ("LAC" or the "Company") is engaged in the
                  outdoor advertising business operating approximately 116,800
                  outdoor advertising displays in 42 states. The Company's
                  operating strategy is to be the leading provider of outdoor
                  advertising services in most of the markets it serves.

                  In addition, the Company operates a logo sign business in 20
                  states throughout the United States and in 1 province of
                  Canada. Logo signs are erected pursuant to state-awarded
                  service contracts on public rights-of-way near highway exits
                  and deliver brand name information on available gas, food,
                  lodging and camping services. Included i the Company's logo
                  sign business are tourism signing contracts.

         (b)      Principles of Consolidation

                  The accompanying consolidated financial statements include
                  Lamar Advertising Company, its wholly-owned subsidiary, Lamar
                  Media Corp. ("Lamar Media"), and its majority-owned
                  subsidiaries. All intercompany transactions and balances have
                  been eliminated in consolidation.

         (c)      Property, Plant and Equipment

                  Property, plant and equipment are stated at cost. Depreciation
                  is calculated using accelerated and straight-line methods over
                  the estimated useful lives of the assets.

         (d)      Intangible Assets

                  Intangible assets, consisting primarily of goodwill, site
                  locations, customer lists and contracts, and non-competition
                  agreements are amortized using the straight-line method over
                  the assets estimated useful lives, generally from 5 to 15
                  years.


                                                                     (Continued)


                                      -34-
<PAGE>   35
                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

                  Debt issuance costs are deferred and amortized over the terms
                  of the related credit facilities using the interest method.

         (e)      Investment Securities

                  Investment securities at December 31, 1997 consisted of the
                  Company's investment in approximately 340,000 shares of common
                  stock of Wireless One, Inc., a publicly-held company in the
                  wireless cable business.

                  The Wireless One, Inc. shares were classified as
                  available-for-sale at December 31, 1997 and were carried at
                  fair value with the unrealized gain or loss, net of the
                  related tax effect, reported as a separate component of
                  stockholders' equity. These shares were sold in May, 1998,
                  resulting in a realized loss of $875.

         (f)      Impairment of Long-Lived Assets and Long-Lived Assets to be
                  Disposed of

                  The Company accounts for long-lived assets in accordance with
                  the provisions of Statement of Financial Accounting Standards
                  (SFAS) No. 121, "Accounting for the Impairment of Long-Lived
                  Assets and Long Lived Assets to be Disposed of." SFAS No. 121
                  requires that long-lived assets and certain identifiable
                  intangibles be reviewed for impairment whenever events or
                  changes in circumstances indicated that the carrying amount of
                  an asset may not be recoverable. Recoverability of assets to
                  be held and used is measured by a comparison of the carrying
                  amount of an asset to future net cash flows expected to be
                  generated by the asset. If such assets are considered to be
                  impaired, the impairment to be recognized is measured by the
                  amount by which the carrying amount of the assets exceeds the
                  fair value of the assets. Assets to be disposed of are
                  reported at the lower of the carrying amount or fair value
                  less costs to sell.

                  The Company assesses the recoverability of enterprise level
                  goodwill by determining whether the unamortized goodwill
                  balance can be recovered through undiscounted future results
                  of the Company's operations. The amount of enterprise-level
                  goodwill impairment, if any, is measured based on projected
                  discounted future results using a discount rate reflecting the
                  Company's average cost of funds.

         (g)      Deferred Income

                  Deferred income consists principally of advertising revenue
                  received in advance and gains resulting from the sale of
                  certain assets to related parties. Deferred advertising
                  revenue is recognized in income as services are provided over
                  the term of the contract. Deferred gains are recognized in
                  income in the consolidated financial statements at the time
                  the assets are sold to an unrelated party or otherwise
                  disposed of.

         (h)      Revenue Recognition

                  The Company recognizes revenue from outdoor and logo sign
                  advertising contracts, net of agency commissions, on an
                  accrual basis ratably over the term of the contracts, as
                  advertising services are provided.

         (i)      Income Taxes

                  The Company uses the asset and liability method of accounting
                  for income taxes. Under the asset and liability method,
                  deferred tax assets and liabilities are recognized for the
                  future tax consequences attributable to differences between
                  the financial statement carrying amounts of existing assets
                  and liabilities and their respective tax bases. Deferred tax
                  assets

                                                                     (Continued)




                                      -35-
<PAGE>   36


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

                  and liabilities are measured using tax rates expected to apply
                  to taxable income in the years in which those temporary
                  differences are expected to be recovered or settled. The
                  effect on deferred tax assets and liabilities of a change in
                  tax rates is recognized in income in the period that includes
                  the enactment date.

         (j)      Earnings Per Share

                  Earnings per share are computed in accordance with SFAS No.
                  128, "Earnings Per Share." The calculation of basic earnings
                  per share excludes any dilutive effect of stock options and
                  convertible debt, while diluted earnings per share includes
                  the dilutive effect of stock options and convertible debt.

         (k)      Stock Option Plan

                  The Company accounts for its stock option plan 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", permits
                  entities to recognize as expense over the vesting period the
                  fair value of all stock- based awards on the date of grant.
                  Alternatively, SFAS No. 123 also allows entities to continue
                  to apply the provisions of APB Opinion No. 25 and provide pro
                  forma net income and pro forma earnings per share disclosures
                  for employee stock option grants made in 1995 and future years
                  as if the fair-value-based method defined in SFAS No. 123 has
                  been applied. The Company has elected to continue to apply the
                  provisions of APB Opinion No. 25 and provide the pro forma
                  disclosure provisions of SFAS No. 123.

         (l)      Cash and Cash Equivalents

                  The Company considers all highly-liquid investments with
                  original maturities of three months or less to be cash
                  equivalents.

         (m)      Reclassification of Prior Year Amounts

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

         (n)      Use of Estimates

                  The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect the reported
                  amounts of assets and liabilities and disclosure of contingent
                  assets and liabilities at the date of the financial statements
                  and the reported amounts of revenues and expenses during the
                  reporting period. Actual results could differ from those
                  estimates.


                                      -36-
<PAGE>   37

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(2)      Acquisitions

         Year ended December 31, 1997

         Effective April 1, 1997, the Company acquired all of the outstanding
         capital stock of Penn Advertising, Inc. for a cash purchase price of
         approximately $167,000. The Company subsequently sold approximately 16%
         of the outdoor displays acquired to Universal Outdoor, Inc. for a cash
         purchase price of $46,500.

         On June 3, 1997, the Company purchased substantially all of the assets
         of Headrick Outdoor, Inc. for a cash purchase price of approximately
         $76,600. Simultaneous with the acquisition, the Company sold
         approximately 9% of the outdoor displays acquired for a total purchase
         price of $6,000.

         On August 15, 1997, the Company purchased from Outdoor Systems, Inc.
         ("OSI") for a cash purchase price of approximately $116,000 (excluding
         approximately $2,000 in capitalized costs), certain outdoor advertising
         assets that OSI had acquired from National Advertising Company, a
         division of Minnesota Mining and Manufacturing Company.

         During the year ended December 31, 1997, the Company completed 21
         additional acquisitions of outdoor advertising assets, none of which
         were individually significant, for an aggregate cash purchase price of
         approximately $21,000.

         Each of these acquisitions were accounted for under the purchase method
         of accounting, and, accordingly, the accompanying 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 allocation of
         the acquisition costs in the above transactions.


<TABLE>
<CAPTION>
                                           Property
                               Current      Plant &                  Other        Current       Long-term
                               Assets      Equipment   Goodwill   Intangibles   Liabilities    Liabilities
                              --------     ---------   --------   -----------   -----------    -----------
<S>                           <C>            <C>         <C>          <C>           <C>            <C>
Penn Advertising, Inc.        $  4,645       47,745      72,435       19,200        (1,144)        (22,208)
Headrick Outdoor, Inc.             825       46,553       1,640       22,585             --              --
Outdoor Systems, Inc.            6,243       27,091      63,148       23,611        (2,640)              --
Other                              370       17,106       5,132        3,378          (132)         (5,127)
                              $ 12,083      138,495     142,355       68,774        (3,916)        (27,335)
                              ========      =======     =======       ======        ======         =======
</TABLE>


                                                                     (Continued)

                                      -37-
<PAGE>   38


                            LAMAR ADVERTISING COMPANY
                            AND SUBSIDIARIES COMPANY

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         Year Ended December 31, 1998

         On January 2, 1998, the Company purchased all the outdoor advertising
         assets of Ragan Outdoor Advertising Company, Ragan Outdoor Advertising
         Company of Cedar Rapids, and Ragan Outdoor Advertising Company of
         Rockford, L.L.C. for a cash purchase price of $25,000.

         On January 30, 1998, the Company acquired all of the outdoor
         advertising assets of three related outdoor advertising companies
         (Pioneer Advertising Company, Superior Outdoor Advertising Company and
         Overland Outdoor Advertising Company, Inc.) located in Missouri and
         Arkansas for a cash purchase price of $19,200.

         On April 30, 1998, the Company purchased all the outdoor advertising
         assets of Northwest Outdoor Advertising, L.L.C. for a cash purchase
         price of approximately $70,000. The acquired displays are located in
         the states of Washington, Montana, Oregon, Idaho, Wyoming, Nebraska,
         Nevada and Utah.

         On May 15, 1998, the Company purchased the assets of Odegard Outdoor
         Advertising, L.L.C., for a cash purchase price of approximately $8,500.
         This acquisition increases the Company's presence in the Kansas City,
         Missouri market.

         On May 29, 1998, the Company entered into an agreement to purchase from
         Rainier Evergreen, Inc. or through its affiliates (i) all of the issued
         and outstanding common stock of American Signs, Inc., (ii) the assets
         of the Sun Media division and (iii) the assets of Sun Media of the
         Rockies, Inc. The asset purchases were closed on that date; while the
         stock purchase was delayed due to lease transfer issues involving the
         Bureau of Interior Affairs. The stock purchase was completed in
         September, 1998. The total purchase price was $26,550.

         On September 1, 1998, the Company entered into an agreement to purchase
         all of the outdoor advertising assets of Nichols & Vann Advertising.
         The Company paid a cash purchase price of $11,000 of which $6,100 is
         held on deposit as of December 31, 1998, and is included in other
         assets in the accompanying balance sheet at December 31, 1998.

         On October 1, 1998, the Company purchased all of the outstanding stock
         of OCI for a purchase price of $385,000. The purchase price included
         approximately $235,000 in cash, the assumption of OCI debt of
         approximately $105,000 and the issuance of notes in the aggregate
         amount of $45,000 to certain principal stockholders of OCI. Pursuant to
         this acquisition, the Company acquired approximately 14,700 displays in
         12 states. Funds for this acquisition were provided from borrowings
         under the New Revolving Credit Facility and the Term Facility.

         During the year ended December 31, 1998, the Company completed 60
         additional acquisitions of outdoor advertising assets, none of which
         were individually significant, for an aggregate cash purchase price of
         approximately $89 million and issuance of 63,005 shares of Class A
         common stock valued at approximately $2,400.


                                                                     (Continued)


                                      -38-
<PAGE>   39

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         Each of these acquisitions were accounted for under the purchase method
         of accounting, and accordingly, the accompanying 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 allocation of
         the acquisition costs in the above transactions.

<TABLE>
<CAPTION>
                                                Property
                                     Current    Plant &                 Other      Other      Current     Long-term
                                      Assets    Equipment  Goodwill  Intangibles   Assets   Liabilities  Liabilities
                                     -------    ---------  --------  -----------   ------   -----------  -----------
<S>                                  <C>        <C>        <C>       <C>           <C>      <C>          <C>
Ragan Companies                      $    694      9,634     13,275      1,573         --        (176)          --
Pioneer and related companies             307     15,062        264      4,046         --        (479)          --
Northwest Outdoor Advertising, LLC      2,176     23,667     36,199      8,861         --        (697)        (273)
Odegard Outdoor Advertising, LLC          285      1,633      5,959      1,095         --        (272)        (300)
Rainier Evergreen, Inc.                   359      3,205     21,681      1,855         --        (550)         (50)
Nichols & Vann Advertising                 --        300      3,944        575      6,181          --           --
Outdoor Communications, Inc.            9,957     97,058    266,856     37,334        291     (54,112)    (121,296)
Other                                   1,036     33,227     46,756     14,405      2,010      (3,506)      (2,549)
                                     --------    -------    -------     ------      -----     -------     --------
                                     $ 14,814    183,786    394,934     69,744      8,482     (59,792)    (124,468)
                                     ========    =======    =======     ======      =====     =======     ========
</TABLE>

         Year Ended December 31, 1999

         On January 5, 1999, the Company purchased all of the outdoor
         advertising assets of American Displays, Inc. for a cash purchase price
         of approximately $14,500.

         On February 1, 1999, the Company purchased all of the outdoor
         advertising assets of KJS, LLC for a cash purchase price of $40,500.

         On April 1, 1999, the Company purchased all of the assets of Frank
         Hardie, Inc. for a cash purchase price of approximately $20,300.

         On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a
         cash purchase price of approximately $22,100.

         On September 15, 1999, Lamar Media Corp. purchased the capital stock of
         Chancellor Media Outdoor Corporation and Chancellor Media Whiteco
         Outdoor Corporation, ("Chancellor Outdoor") for a combination of
         approximately $703,000 in cash and 26,227,273 shares of Class A common
         stock valued at approximately $947,000. The stock purchase agreement
         also contains a post-closing adjustment in the event that the net
         working capital of Chancellor Outdoor as shown on the closing balance
         sheet is greater or less than $12,000. As of December 31, 1999, the
         working capital adjustment to be paid by the Company is $15,750, and is
         included in accrued expenses in the accompanying balance sheet.


                                                                     (Continued)


                                      -39-
<PAGE>   40


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         During the year ended December 31, 1999, the Company completed 72
         additional acquisitions of outdoor advertising and transit assets for
         an aggregate cash purchase price of approximately $93,873 and the
         issuance of 180,377 shares of Class A common stock valued at
         approximately $7,981.

         Each of these acquisitions were accounted for under the purchase method
         of accounting, and, accordingly, the accompanying financial statements
         include the results of operations of each acquired entity from the date
         of acquisition. The purchase price has 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 allocation of
         the purchase price in the above transactions.


<TABLE>
<CAPTION>
                               Property
                    Current    Plant &                 Other      Other      Current     Long-term
                     Assets    Equipment  Goodwill  Intangibles   Assets   Liabilities  Liabilities
                    -------    ---------  --------  -----------   ------   -----------  -----------
<S>                 <C>        <C>        <C>       <C>           <C>      <C>          <C>
American Displays   $     87        899     10,532      3,277        --        (284)           --
KJS, LLC                  20      9,468     30,543      4,489        --      (2,079)       (1,921)
Frank Hardie             187      6,582     10,464      3,630        --        (525)           --
Vivid, Inc.              357      9,706      8,526      4,085        --        (593)
Chancellor            39,242    645,151    298,486    779,775(a)    169      (6,014)     (106,102)
Other                    310     22,411     74,976      8,678        --      (1,301)       (3,218)
                    --------    -------    -------     ------       ---     -------      --------
                    $ 40,203    694,217    433,527    803,934       169     (10,796)     (111,241)
                    ========    =======    =======    =======       ===     =======      ========
</TABLE>

(a)      Includes $615,946 of site locations.

         The following unaudited pro forma financial information for the Company
         gives effect to the 1999 and 1998 acquisitions as if they had occurred
         on January 1, 1998. These pro forma results do not purport to be
         indicative of the results of operations which actually would have
         resulted had the acquisitions occurred on such date or to project the
         Company's results of operations for any future period.


<TABLE>
<CAPTION>
                                    1999           1998
                                  ---------     --------
<S>                               <C>            <C>
Net revenues                      $ 601,584      576,838
                                  =========     ========

Loss before extraordinary items   $ (92,969)     (93,822)
                                  =========     ========

Net loss applicable to
  common stock                    $ (94,283)     (94,187)
                                  =========     =========

Net loss per common share         $   (1.00)       (1.83)
  (basic and diluted)             =========     =========
</TABLE>


                                                                     (Continued)


                                      -40-
<PAGE>   41


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(3)      Noncash Financing and Investing Activities

         A summary of significant noncash financing and investing activities for
         the years ended December 31, 1999, 1998 and 1997 follows:


<TABLE>
<CAPTION>
                                            1999        1998       1997
                                          -------      ------     ------
<S>                                       <C>              <C>     <C>
Disposition of assets                     $  5,387         30      1,300
Acquisitions of assets                     954,972      2,706         --
Issuance of Series AA preferred stock
in exchange for Class A preferred stock      3,649         --         --
Conversion of note receivable to equity
 investment                                     --         --        500
Debt issuance costs                          7,906         --      4,750
</TABLE>

(4)      Property, Plant and Equipment

         Major categories of property, plant and equipment at December 31, 1999
         and 1998 are as follows:

<TABLE>
<CAPTION>
                            Estimated life
                                (years)        1999         1998
                            --------------  ----------   ----------
<S>                         <C>             <C>          <C>
Land                               --       $   48,024   $   25,543
Building and improvements        10-39          42,292       28,924
Advertising structures             15        1,240,020      576,676
Automotive and other equipment    3-7           82,269       30,181
                                            ----------   ----------
                                            $1,412,605   $  661,324
                                            ==========   ==========
</TABLE>

(5)      Intangible Assets

         The following is a summary of intangible assets at December 31, 1999
and 1998:

<TABLE>
<CAPTION>
                            Estimated life
                                (years)        1999         1998
                            --------------  ----------   ----------
<S>                         <C>            <C>          <C>
Debt issuance costs and fees   7-10         $   40,945   $   19,962
Customer lists and contracts   7-10            286,301      108,903
Non-compete agreements         7-15             50,277       19,318
Goodwill                        15           1,037,385      554,685
Site locations and other       5-15            630,585        3,066
                                            ----------   ----------
                                            $2,045,493   $  705,934
                                            ==========   ==========

Cost                                         2,045,493      778,655
Accumulated amortization                      (171,316)     (72,721)

                                            $1,874,177   $  705,934
                                            ==========   ==========
</TABLE>

                                                                     (Continued)


                                      -41-
<PAGE>   42


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(6)      Leases

         The Company is party to various operating leases for production
         facilities and sites upon which advertising structures are built. The
         leases expire at various dates, generally during the next five years,
         and have varying options to renew and to cancel. The following is a
         summary of minimum annual rental payments required under those
         operating leases that have original or remaining lease terms in excess
         of one year as of December 31:

<TABLE>
<S>                                         <C>
                          2000              $ 73,410
                          2001                57,634
                          2002                51,121
                          2003                44,528
                          2004                37,834
                          Thereafter         211,178
</TABLE>

         Rental expense related to the Company's operating leases were $63,193,
         $43,440 and $31,411 for the years ended December 31, 1999, 1998 and
         1997, respectively.

(7)      Accrued Expenses

         The following is a summary of accrued expenses at December 31, 1999 and
         1998:


<TABLE>
<CAPTION>
                                    1999      1998
                                  -------   -------
<S>                               <C>       <C>
Payroll                           $ 7,406   $ 4,863
Interest                           17,411    11,629
Insurance benefits                  4,460     3,715
Purchase price payable (note 2)    15,750        --
Other                              12,626     5,705
                                  -------   -------
                                  $57,653   $25,912
                                  =======   =======
</TABLE>

(8)      Long-term Debt

         Long-term debt consists of the following at December 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                    1999           1998
                                                -----------    -----------
<S>                                             <C>            <C>
5-1/4% Convertible notes                        $   287,500    $        --
9-5/8% Senior subordinated notes (1996 Notes)       255,000        255,000
8-5/8% Senior subordinated notes (1997 Notes)       198,882        198,785
Bank Credit Agreement                               776,000        250,000
9-1/4% Senior subordinated notes                     74,073        103,949
8% unsecured subordinated notes (see note 12)        13,333         15,333
Other notes with various rates and terms             10,993         53,465
                                                -----------    -----------
                                                  1,615,781        876,532

Less current maturities                              (4,318)       (49,079)
                                                -----------    -----------
Long-term debt, excluding current
 maturities                                     $ 1,611,463    $   827,453
                                                ===========    ===========
</TABLE>

                                                                     (Continued)


                                      -42-
<PAGE>   43

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         Long-term debt matures as follows:

<TABLE>
<S>                                              <C>
                           2000                  $    4,318
                           2001                      50,200
                           2002                      49,950
                           2003                      99,125
                           2004                     116,772
                           Later years            1,295,416
</TABLE>

         In November 1996, the Company issued $255,000 in principal amount of
         9 5/8% Senior Subordinated Notes due 2006 (the "1996 Notes"), with
         interest payable semi-annually on June 1 and December 1 of each year.
         The 1996 Notes are senior subordinated unsecured obligations of the
         Company and are subordinated in right of payment to all senior
         indebtedness of the Company, pari passu with the 1997 Notes (as defined
         below), and are senior to all existing and future subordinated
         indebtedness of the Company.

         In September 1997, the Company issued $200,000 in principal amount of
         8 5/8% Senior Subordinated Notes due 2007 (the "1997 Notes") with
         interest payable semi-annually on March 15 and September 15 of each
         year, commencing March 15, 1998. The 1997 Notes were issued at a
         discount for $198,676. The Company is using the effective interest
         method to recognize the discount over the life of the 1997 Notes. The
         1997 Notes are senior subordinated unsecured obligations of the
         Company, subordinated in right of payment to all senior indebtedness of
         the Company, pari passu with the 1996 Notes and are senior to all
         existing and future subordinated indebtedness of the Company.

         The 1996 and 1997 Notes are redeemable at the Company's option at any
         time on or after December 31, 2001 and September 15, 2002,
         respectively, at redemption prices specified by the indentures, and are
         required to be repurchased earlier in the event of a change of control
         of the Company. The indentures covering the 1996 and 1997 Notes include
         certain restrictive covenants which limit the Company's ability to
         incur additional debt, pay dividends and make other restricted
         payments, consummate certain transactions and other matters.

         In July, 1998, the Company replaced its previous credit agreement with
         a new Bank Credit Agreement (the "1998 Bank Credit Agreement") which
         consists of a committed $250,000 revolving credit facility (the "1998
         Revolving Credit Facility"), a $150,000 term facility (the "Term
         Facility") and a $100,000 incremental facility (The 1998 "Incremental
         Facility") funded at the discretion of the lenders. As of December 31,
         1998, the Company had borrowings outstanding of $150 million under the
         1998 Term Facility, $100 million under the 1998 Incremental Facility,
         and $0 under the 1998 Revolving Credit Facility. The Incremental
         Facility and the Term Facility bear interest at a variable rate of
         interest based on the applicable margin over LIBOR or the prime rate.
         The weighted average interest rate on borrowings under the Bank Credit
         Agreement at December 31, 1998, was 7.37%

                                                                     (Continued)


                                      -43-
<PAGE>   44

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         In August 1999, the Company replaced the 1998 Bank Credit Agreement
         with a new bank credit facility under which The Chase Manhattan Bank
         serves as administrative agent. The new $1,000,000 bank credit facility
         consists of (1) a $350,000 revolving bank credit facility and (2) a
         $650,000 term facility with two tranches, a $450,000 Term A facility
         and a $200,000 Term B facility. As a result of the holding company
         reorganization completed on July 20, 1999 and explained in footnote 12,
         the existing bank credit facility and the new bank credit facility are
         obligations of Lamar Media Corp., a wholly owned subsidiary of Lamar
         Advertising Company. As of December 31, 1999, the Company had
         borrowings under this agreement of $776,000.

         Availability of the line under the New Revolving Credit Facility is
         reduced quarterly beginning with the quarter ended March 31, 2002, in
         the following amounts:
<TABLE>
<S>                        <C>                     <C>                <C>
                           March 31, 2002      -   December 31, 2003  $  8,750
                           March 31, 2004      -   December 31, 2004    26,250
                           March 31, 2005      -   December 31, 2005    30,625
                           March 31, 2006                               52,500
</TABLE>

         The Tranch A Term Facility will begin to amortize quarterly beginning
         September 30, 2001 in the following quarterly amounts:
<TABLE>
<S>                        <C>                     <C>                <C>
                           September 30, 2001  -   December 31, 2001  $  22,500
                           March 31, 2002      -   December 31, 2002     11,250
                           March 31, 2003      -   December 31, 2003     22,500
                           March 31, 2004      -   December 31, 2004     28,125
                           March 31, 2005      -   December 31, 2005     31,500
                           March 31, 2006      -   December 31, 2006     31,500
</TABLE>

         The Tranch B Term facility will begin to amortize quarterly beginning
         with the quarter ended September 30, 2001, in the following quarterly
         amounts:

<TABLE>
<S>                        <C>                     <C>                <C>
                           September 30, 2001  -   December 31, 2001  $     500
                           March 31, 2002      -   December 31, 2002        500
                           March 31, 2003      -   December 31, 2003        500
                           March 31, 2004      -   December 31, 2004        500
                           March 31, 2005      -   December 31, 2005        500
                           March 31, 2006      -   June 30, 2006            500
                           August 1, 2006                               190,000
</TABLE>

                                                                     (Continued)



                                      -44-
<PAGE>   45


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         Revolving credit loans may be requested under the New Revolving Credit
         Facility at any time prior to maturity. The loans bear interest, at the
         Company's option, at the LIBOR Rate or Chase Prime Rate plus applicable
         margins, such margins being set from time to time based on the
         Company's ratio of debt to trailing twelve month EBITDA, as defined in
         the agreement. The terms of the indenture relating to Lamar
         Advertising's outstanding notes, Lamar Media's bank credit facility and
         the indentures relating to Lamar Media's outstanding notes restrict,
         among other things, the ability of Lamar Advertising and Lamar Media
         to:

                 o         dispose of assets;
                 o         incur or repay debt;
                 o         create liens;
                 o         make investments; and
                 o         pay dividends.


         Lamar Media's ability to make distributions to Lamar Advertising is
         also restricted under the terms of these agreements.

         Under Lamar Media's credit facility the Company must maintain specified
         financial ratios and levels including:

                 o         cash interest coverage;
                 o         fixed charge coverage;
                 o         senior debt ratios; and
                 o         total debt ratios.

         On August 10, 1999, Lamar Advertising Company, the new holding company,
         completed an offering of $287,500 5 1/4% Convertible Notes due 2006.
         The net proceeds of approximately $279,594 of the convertible notes
         were used to pay down existing bank debt.

         In connection with the reorganization of Lamar Advertising Company into
         a new holding company structure, Lamar Media Corp. (formerly known as
         Lamar Advertising Company) made a change of control tender offer to the
         holders of its 9 1/4% Senior Subordinated Notes due 2007 in aggregate
         principal amount of approximately $103,900. Pursuant to the change of
         control tender offer and in accordance with the Indenture, Lamar Media
         Corp. offered to repurchase the Notes for 101% of the principal amount
         plus accrued interest. A total of $29,876 aggregate principal amount of
         Notes were tendered for payment on August 19, 1999, and the related 1%
         prepayment penalty is reflected as an extraordinary item in the
         Company's statement of operations for the year ended December 31, 1999.

         The Company's obligations with respect to its publicly issued notes are
         not guaranteed by the Company's direct or indirect wholly-owned
         subsidiaries. Certain obligations of the Company's wholly-owned
         subsidiary, Lamar Media Corp. are guaranteed by its subsidiaries.

                                                                     (Continued)


                                      -45-
<PAGE>   46


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(9)      Income Taxes

         Income tax expense (benefit) for the years ended December 31, 1999,
         1998 and 1997, consists of:

<TABLE>
<CAPTION>
                                            Current     Deferred     Total
                                            --------    --------    --------
<S>                                         <C>         <C>         <C>
Year ended December 31, 1999:
 U.S. federal                               $  3,083     (11,838)     (8,755)
 State and local                                 900      (1,741)       (841)
                                            --------    --------    --------
                                               3,983     (13,579)     (9,596)
                                            ========    ========    ========
Year ended December 31, 1998:
 U.S. federal                               $  6,269      (6,074)        195
 State and local                               1,077      (1,463)       (386)
                                            --------    --------    --------
                                               7,346      (7,537)       (191)
Change in deferred tax attributable
 to unrealized losses on investment
 securities, included in stockholders'
 equity                                           --         217         217
                                            --------    --------    --------
                                            $  7,346      (7,320)         26
                                            ========    ========    ========
Year ended December 31, 1997:
 U.S. federal                               $  6,108      (2,475)      3,633
 State and local                               1,385        (364)      1,021
                                            --------    --------    --------
                                               7,493      (2,839)      4,654
Change in deferred tax attributable
 to unrealized losses on investment
 securities, included in stockholders'
 equity                                           --        (596)       (596)
                                            --------    --------    --------
                                            $  7,493      (3,435)      4,058
                                            ========    ========    ========
</TABLE>

         Income tax expense (benefit) attributable to continuing operations for
         the years ended December 31, 1999, 1998 and 1997, differs from the
         amounts computed by applying the U.S. federal income tax rate of 34
         percent to earnings before income taxes as follows:

<TABLE>
<CAPTION>
                                              1999        1998        1997
                                            --------    --------    --------
<S>                                         <C>           <C>          <C>
Computed "expected" tax expense (benefit)   $(18,081)     (4,108)      2,548
Increase (reduction) in income taxes
 resulting from:
  Book expenses not deductible for tax
   purposes                                      121         450          92
  Amortization of non-deductible goodwill      8,841       3,752       1,730
  State and local income taxes, net
   of federal income tax benefit                (555)       (255)        674
  Other differences, net                          78         (30)       (390)
                                            --------    --------    --------
                                            $ (9,596)       (191)      4,654
                                            ========    ========    ========
</TABLE>


                                                                     (Continued)


                                      -46-
<PAGE>   47

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         The tax effects of temporary differences that give rise to significant
         portions of the deferred tax assets and deferred tax liabilities at
         December 31, 1999 and 1998 are presented below:

<TABLE>
<CAPTION>
                                               1999         1998
                                            ---------    ---------
<S>                                         <C>          <C>
Deferred tax liabilities:
 Plant and equipment, principally
  due to differences in depreciation        $  (3,942)   $  (4,915)
 Plant and equipment, due to basis
  differences on acquisitions                (134,323)     (28,556)
 Employee benefit plans                        (1,058)          --
                                            ---------    ---------
 Deferred tax liabilities                    (139,323)     (33,471)

Deferred tax assets:
 Intangibles, due to differences
  in amortizable lives                          3,796       (5,058)
 Receivables, principally due to
  allowance for doubtful accounts               1,514        1,151
 Plant and equipment, due to basis
  differences on acquisitions and costs
  capitalized for tax purposes                  4,614        4,530
 Investment in affiliates and plant and
  equipment, due to gains recognized for
  tax purposes and deferred for financial
  reporting purposes                              941          941
 Accrued liabilities not deducted for tax
  purposes                                      3,121        2,125
 Net operating loss carryforward               11,844        3,563
 Minimum tax credit                               357
 Other, net                                       724          606
                                            ---------    ---------
         Deferred tax assets                   26,911        7,858
                                            ---------    ---------
         Net deferred tax liability         $(112,412)   $ (25,613)
                                            =========    =========
</TABLE>

         In assessing the realizability of deferred tax assets, management
         considers whether it is more likely than not that some portion or all
         of the deferred tax assets will not be realized. The ultimate
         realization of deferred tax assets is dependent upon the generation of
         future taxable income during the periods in which those temporary
         differences become deductible.

         Management considers the scheduled reversal of deferred tax
         liabilities, projected future taxable income, and tax planning
         strategies in making this assessment. Based upon the level of
         historical taxable income and projections for future taxable income
         over the periods in which the deferred tax assets are deductible,
         management believes it is more likely than not the Company will realize
         the benefits of these deductible differences. The amount of the
         deferred tax assets considered realizable, however, could be reduced in
         the near term if estimates of future taxable income during the
         carryforward period are reduced.

                                                                     (Continued)


                                      -47-
<PAGE>   48


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(10)     Related Party Transactions

         Affiliates, as used within these statements, are persons or entities
         that are affiliated with Lamar Advertising Company or its subsidiaries
         through common ownership and directorate control.

         As of December 31, 1999 and 1998, debentures and ten year subordinated
         notes totaling $14,318 and $16,749, respectively, are owned by
         shareholders, directors and employees. Interest expense under the
         debentures and ten year subordinated notes during the years ended
         December 31, 1999, 1998, and 1997 was $1,290, $1,497, and $1,719
         respectively.

         In addition, the Company had receivables from affiliates, related
         parties and employees of $833 and $378 at December 31, 1999 and 1998,
         respectively.

         During 1999, the Company purchased a sign easement for approximately
         $94 from Jennifred Holdings, LLC, of which Kevin Reilly and Sean Reilly
         each hold a 50% interest.

         The Company purchased approximately $1,951, $1,810 and $3,462 of
         highway signs used in its logo sign business from Interstate Highway
         Signs Corp., ("IHS") during the years ended December 31, 1999, 1998 and
         1997, respectively. IHS is a wholly-owned subsidiary of Sign
         Acquisition Corp. Kevin R. Reilly, Jr. has voting control over a
         majority of the outstanding shares of Sign Acquisition Corp. through a
         voting trust.

(11)     Stockholders' Equity

         On December 31, 1997, the Board of Directors approved a three-for-two
         split of its Class A and Class B common stock subject to the approval
         by the shareholders of an increase in the authorized number of shares
         of Class A and Class B common stock. On February 26, 1998, the
         shareholders approved an increase in the authorized number of shares of
         Class A common stock to 75,000,000 and Class B common stock to
         37,500,000. The stock split, which was effected by means of a 50% stock
         dividend, was paid to shareholders on February 27, 1998. Par value of
         the common stock remained unchanged at $.001. Common stock and
         additional paid in capital were adjusted to reflect the split as of
         December 31, 1997. All references to share and per share information in
         the consolidated financial statements and related footnotes have been
         restated to reflect the effect of the split for all periods presented.

         During 1995 and 1996, the Company repurchased 3.6% and 12.9%,
         respectively, of its then outstanding common stock (1,830,750 and
         5,427,305 shares, respectively) from certain of its existing
         stockholders for an aggregate purchase price of approximately $4
         million. The terms of such repurchases entitled the selling
         stockholders to receive additional consideration from the Company in
         the event that the Company consummated a public offering of its common
         stock at a higher price within 24 months of the repurchase. In
         satisfaction of that obligation, upon completion of the Company's
         initial public equity offering in August 1996, the Company paid the
         selling stockholders an aggregate of $5.0 million in cash


                                                                     (Continued)


                                      -48-
<PAGE>   49


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         and issued to them ten-year subordinated notes in the aggregate
         principal amount of $20,000. The notes bear interest at 8% (1% above
         the ten-year treasury note rate when issued) and are payable in monthly
         installments of $167, plus interest. The balance outstanding under
         these notes at December 31, 1999 and 1998, was $13,333 and $15,333,
         respectively.

         In June, 1998, the Company completed a public offering of 6,375,000
         shares of Class A common stock at $29.00 per share. Net proceeds to the
         Company after underwriting discounts from the equity offering were
         $177.5 million. These proceeds were used to pay down outstanding bank
         debt of approximately $173.0 million with the remainder used for
         operations.

         In December, 1998, the Company completed a public offering of 6,900,000
         shares of Class A common stock at $35 per share. Net proceeds to the
         Company after underwriting discounts from the equity offering were
         $219.8 million. These proceeds were used to pay down outstanding bank
         debt of approximately $99.0 million with the remainder used for debt
         reduction and acquisitions in 1999.

         On July 16, 1999, the Board of Directors amended the preferred stock of
         the Company by designating 5,720 shares of the 1,000,000 shares of
         previously undesignated preferred stock, par value $.001 as "Series AA
         preferred stock". The previously issued Class A preferred stock par
         value $638 was exchanged for the new Series AA preferred stock. The new
         Series AA preferred stock have the same liquidation preferences,
         dividends and other rights as the previously issued Class A preferred
         stock. Series AA preferred stock has a liquidation preference over
         Class A & B common stock. Liquidation value of the Series AA preferred
         stock at December 31, 1999 was $3,649. The new shares of Series AA
         preferred stock, however, are entitled to one vote per share.

         The rights of the Class A and Class B common stock are equal in all
         respects, except holders of Class B common stock have ten votes per
         share on all matters in which the holders of common stock are entitled
         to vote and holders of Class A common stock have one vote per share on
         such matters. The Class B common stock will convert automatically into
         Class A common stock upon the sale or transfer to persons other than
         permitted transferees (as defined in the Company's certificate of
         incorporation, as amended).

         On July 20, 1999, Lamar Advertising Company completed a corporate
         reorganization to create a new holding company structure. The
         reorganization was accomplished through a merger under section 251(g)
         of the Delaware General Corporation Law. At the effective time of the
         merger, all stockholders of Lamar Advertising Company became
         stockholders in a new holding company and Lamar Advertising Company
         became a wholly-owned subsidiary of the new holding company. The new
         holding company took the Lamar Advertising Company name and the old
         Lamar Advertising Company was renamed Lamar Media Corp. In the merger,
         all outstanding shares of old Lamar Advertising Company's capital stock
         were converted into shares of the new holding company with the same
         voting powers, designations, preferences and rights, and the same
         qualifications, restrictions and limitations, as the shares of old
         Lamar Advertising Company. Following the restructuring, the Class A
         common stock of the new holding company trades under the symbol "LAMR"
         on the Nasdaq National Market with the same CUSIP number as the old
         Lamar Advertising Company's Class A common stock.

                                                                     (Continued)


                                      -49-
<PAGE>   50


                           LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
            (Dollars in thousands, except share and per share data)

(12)     Stock Option Plan

         In 1996, the Company adopted the 1996 Equity Incentive Plan (the "1996
         Plan"). The purpose of the 1996 Plan is to attract and retain key
         employees and consultants of the Company. The 1996 Plan authorizes the
         grant of stock options, stock appreciation rights and restricted stock
         to employees and consultants of the Company capable of contributing to
         the Company's performance. Options granted under the 1996 Plan
         generally become exercisable over a five-year period and expire 10
         years from the date of grant. The Company initially reserved an
         aggregate of 3,000,000 shares of Class A common stock (as adjusted for
         the Company's February 1998 three-for-two stock split) for awards under
         the 1996 Plan. In September, 1998, the Board of Directors of the
         Company voted to increase the number of shares reserved for issuance
         under the 1996 Plan by 1,000,000 shares to 4,000,000 shares.

         In August, 1999, the Board of Directors voted subject to stockholder
         approval, to increase the number of shares of Class A common stock
         reserved for issuance under the 1996 plan by 1,000,000 shares to
         5,000,000 shares.

         The Company has adopted the disclosure-only provisions of Statement of
         Financial Accounting Standards No. 123, "Accounting for Stock-Based
         Compensation." Accordingly, no compensation cost has been recognized
         for the stock option grants. Had compensation cost for the Company's
         stock option plan been determined based on the fair value at the grant
         date consistent with the provisions of SFAS No. 123, the Company's net
         earnings (loss) and earnings (loss) per share would have been reduced
         to the pro forma amounts indicated below:


<TABLE>
<CAPTION>
                                           1999        1998       1997
                                         --------    -------    --------
<S>                                      <C>          <C>        <C>
Net earnings (loss) applicable
 to common stock - as reported           $(44,900)   (12,255)      2,476
                                         ========    =======    ========
Net earnings (loss) applicable
 to common stock - pro forma             $(50,073)   (15,145)       (603)
                                         ========    =======    ========
Net earnings (loss) per common share -
 as reported (basic and diluted)         $   (.65)      (.24)        .05
                                         ========    =======    ========
Net earnings (loss) per common share -
 pro forma (basic and diluted)           $   (.73)      (.29)       (.01)
                                         ========    =======    ========
</TABLE>

       The fair value of each option grant is estimated on the date of grant
       using the Black-Scholes option-pricing model with the following
       weighted-average assumptions used:


<TABLE>
<CAPTION>
        Grant     Dividend    Expected       Risk Free     Expected
         Year      Yield      Volatility   Interest Rate    Lives
        -----     --------    ----------   -------------   -------
<S>               <C>         <C>          <C>             <C>
        1999        0%           54%            6%           4
        1998        0%           59%            5%           4
        1997        0%           40%            6%           3
</TABLE>


                                                                     (Continued)


                                      -50-
<PAGE>   51


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         Information regarding the 1996 Plan for the years ended December 31,
         1999, 1998 and 1997, is as follows:


<TABLE>
<CAPTION>
                                              1999                    1998                      1997
                                      ----------------------   --------------------    ------------------------
                                                    Weighted               Weighted                   Weighted
                                                    Average                Average                    Average
                                                    Exercise               Exercise                   Exercise
                                       Shares        Price      Shares      Price       Shares        Price
                                       ------        -----     ---------   --------    ---------      --------
<S>                                   <C>            <C>       <C>          <C>        <C>            <C>
Outstanding, beginning of year        2,240,567      $19.25    1,868,804    $11.60     1,774,896       $10.85
Granted                               1,115,000       37.94      950,500     29.88       399,000        15.20
Exercised                              (525,725)      15.16     (538,154)    10.84      (225,256)       10.67
Canceled                                (71,888)      30.84      (40,583)    18.24       (79,836)       10.96
                                      ---------      ------    ---------    ------      ---------      ------
Outstanding, end of year              2,757,954      $27.14    2,240,567    $19.25      1,868,804      $11.60
                                      =========      ======    =========    ======      =========      ======

Price for exercised shares            $   15.16                $   10.84                $   10.67

Shares available for grant, end of
 year                                   920,570                  963,682                  873,599
Weighted average fair value of
 options granted during the year      $   23.19                $   13.09                $    7.18
</TABLE>

         The following table summarizes information about fixed-price stock
         options outstanding at December 31, 1999:


<TABLE>
<CAPTION>
                                                                    Weighted
       Range             Number           Average     Weighted        Number         Weighted
        Of            Outstanding       Remaining     Average      Exercisable       Average
     Exercise              At          Contractual    Exercise          At           Exercise
      Prices       December 31, 1999      Life         Price     December 31, 1999    Price
 ---------------   -----------------   -----------    --------   -----------------   --------
<S>                <C>                 <C>            <C>        <C>                 <C>
 $         10.67        583,704           6.62         $10.67        276,204          $10.67
   10.67 - 30.34        556,900           7.95          21.24         30,875           24.26
           30.34        545,000           8.42          30.34        133,700           30.34
           33.38        651,550           9.41          33.38        105,550           33.38
   34.16 - 47.75        420,800           9.57          43.99          1,800           47.75
</TABLE>

         No stock appreciation rights or restricted stock authorized by the 1996
         Plan have been granted.

(13)     Commitments and Other Contingencies

         The Company sponsors a partially self-insured group health insurance
         program. The Company is obligated to pay all claims under the program,
         which are in excess of premiums, up to program limits of $150 per
         employee, per claim, per year. The Company is also self-insured with
         respect to its income disability benefits and against casualty losses
         on advertising structures. Amounts for expected losses, including a
         provision for losses incurred but not reported, is included in accrued
         expenses in the accompanying consolidated financial statements. The
         Company maintains a $500 letter of credit with a bank to meet
         requirements of the Company's worker's compensation insurance carrier.

                                                                     (Continued)


                                      -51-
<PAGE>   52


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         The Company sponsors The Lamar Corporation Savings and Profit Sharing
         Plan covering employees who have completed one year of service and are
         at least 21 years of age. The Company matches 50% of employees'
         contributions up to 5% of related compensation. Employees can
         contribute up to 15% of compensation. Full vesting on the Company's
         matched contributions occurs after five years. Annually, at the
         Company's discretion, an additional profit sharing contribution may be
         made on behalf of each eligible employee. In total, for the years ended
         December 31, 1999, 1998 and 1997 the Company contributed $2,403, $1,608
         and $1,192, respectively.

         The Company sponsors a Deferred Compensation Plan for the benefit of
         certain of its senior management who meet specific age and years of
         service criteria. Employees who have attained the age of 30 and have a
         minimum of 10 years of service are eligible for annual contributions to
         the Plan generally ranging from $3 to $8, depending on the employee's
         length of service. LAC's contributions to the Plan are maintained in a
         "rabbi" trust and, accordingly, the assets and liabilities of the Plan
         are reflected in the balance sheet of LAC. Upon termination, death or
         disability, participating employees are eligible to receive an amount
         equal to the fair market value of the assets in the employee's deferred
         compensation account. The Company has contributed $448, $406 and $190
         to the Plan during the years ended December 31, 1999, 1998 and 1997,
         respectively. Contributions to the Deferred Compensation Plan are
         discretionary and are determined by the Board of Directors.

         The Company is the subject of litigation arising during the normal
         course of business. In the opinion of management and the general
         counsel of the Company, those claims will not have a material impact on
         the financial position, results of operations or liquidity of the
         Company.

(14)     Summarized Financial Information of Subsidiaries

         Except as set forth below, separate financial statements of each of the
         Company's direct or indirect subsidiaries that have guaranteed the
         Company's obligations under the 1996 Notes and the 1997 Notes
         (collectively, the "Guarantors") are not included herein because the
         Guarantors are jointly and severally liable under the guarantees, and
         the aggregate assets, liabilities, earnings and equity of the
         Guarantors are substantially equivalent to the assets, liabilities,
         earnings and equity of the Company on a consolidated basis.

         Summarized financial information for Missouri Logos, a Partnership, a
         66-2/3% owned subsidiary of the Company and the only subsidiary of the
         Company that is not a Guarantor, is set forth below:


<TABLE>
<CAPTION>
Balance Sheet Information:       1999     1998
                                ------    -----
<S>                             <C>       <C>
 Current assets                 $  288    $ 248
 Total assets                      333      297
 Current liabilities                 6        7
 Total liabilities                   6        7
 Venturers' equity                 327      290
</TABLE>

<TABLE>
<CAPTION>
Income Statement Information:     1999     1998     1997
                                ------    -----     ----
<S>                             <C>       <C>        <C>
 Revenues                       $1,152    1,038      991
 Net income                        671      523      540
</TABLE>


                                                                     (Continued)


                                      -52-
<PAGE>   53

                            LAMAR ADVERTISING COMPANY
                            AND SUBSIDIARIES COMPANY

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)


(15)     Disclosures About Fair Value of Financial Instruments

         The following table presents the carrying amounts and estimated fair
         values of the Company's financial instruments at December 31, 1999 and
         1998. The fair value of the financial instrument is defined as the
         amount at which the instrument could be exchanged in a current
         transaction between willing parties.

<TABLE>
<CAPTION>
                            1999                      1998
                    ----------------------     ----------------------
                     Carrying   Estimated       Carrying   Estimated
                      Amount    Fair Value       Amount    Fair Value
                    ----------  ----------     ---------   ----------
<S>                 <C>         <C>            <C>        <C>
Long-term debt      $1,611,463  $1,613,209     $ 827,453   $ 874,091
</TABLE>

         The estimated fair value amounts have been determined by the Company
         using available market information and appropriate valuation
         methodologies as follows:

         o    The carrying amounts of cash and cash equivalents, receivables,
              trade accounts payable, accrued expenses, and deferred income
              approximate fair value because of the short term nature of these
              items.

         o    The fair value of long-term debt is based upon market quotes
              obtained from dealers where available and by discounting future
              cash flows at rates currently available to the Company for similar
              instruments when quoted market rates are not available.

         Fair value estimates are subject to inherent limitations. Estimates of
         fair values are made at a specific point in time, based on relevant
         market information and information about the financial instrument. The
         estimated fair values of financial instruments presented above are not
         necessarily indicative of amounts the Company might realize in actual
         market transactions. Estimates of fair value are subjective in nature
         and involve uncertainties and matters of significant judgement and
         therefore cannot be determined with precision. Changes in assumptions
         could significantly affect the estimates.

(16)     Quarterly Financial Data (Unaudited)


<TABLE>
<CAPTION>
                                             Fiscal Year 1999 Quarters

                                 March 31     June 30   September 30  December 31
                                 --------     -------   ------------  -----------
<S>                              <C>           <C>        <C>           <C>
Net revenues                     $ 85,766      97,809     111,039       149,521
Net revenues less direct
 advertising expenses              56,002      67,328      77,803        99,912
Net earnings (loss)
 applicable to common stock       (10,797)     (5,161)     (3,575)      (25,367)
Net earnings (loss) per common
 share (basic and diluted)           (.18)       (.08)       (.05)         (.29)
</TABLE>


                                                                     (Continued)


                                      -53-
<PAGE>   54


                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                           Fiscal Year 1998 Quarters

                                 March 31     June 30   September 30  December 31
                                 --------     -------   ------------  -----------
<S>                              <C>           <C>        <C>           <C>
Net revenues                     $ 58,397      69,675      73,528     86,988
Net revenues less direct
 advertising expenses              37,567      48,066      51,271     58,835
Net earnings (loss)
 applicable to common stock        (4,682)     (1,253)      1,538     (7,858)
Net earnings (loss) per common
 share (basic and diluted)           (.10)       (.02)        .03       (.15)
</TABLE>

(17)     New Accounting Pronouncements

         In April 1998, the American Institute of Certified Public Accountants
         issued Statement of Position ("SOP") 98-5, Reporting on the Costs of
         Start-Up Activities. SOP 98-5 is effective for financial statements for
         fiscal years beginning after December 15, 1998, and requires that the
         costs of start-up activities, including organizational costs, be
         expensed as incurred.

         The effect of SOP 98-5 was recorded in the first quarter of fiscal 1999
         as the cumulative effect of a change in accounting principle in the
         amount of $(767), net of tax, as described in Accounting Principles
         Board Opinion No. 20 "Accounting Changes".



                                      -54-
<PAGE>   55

SCHEDULE 2

                           Lamar Advertising Company
                       Valuation and Qualifying Accounts
                The Years Ended December 31, 1999, 1998 and 1997
                                   (in 000's)


<TABLE>
<CAPTION>
                                                Balance at    Charged to
                                                Beginning     Costs and                    Balance at
                 Description                    of Period     Expenses       Deductions    End of Period
                 -----------                    ---------     -----------    ----------    -------------
<S>                                             <C>           <C>            <C>           <C>
Year ended December 31, 1999
Deducted in balance sheet from trade accounts
  receivable: Allowance for doubtful accounts    $ 2,722          4,065         2,859            3,928

Deducted in balance sheet from intangible
  assets: Amortization of intangible assets      $72,721        100,019           824          171,316

Year ended December 31, 1998
Deducted in balance sheet from trade accounts
  receivable: Allowance for doubtful accounts    $ 1,311          2,883         1,472            2,722

Deducted in balance sheet from intangible
  assets: Amortization of intangible assets      $29,698         43,023            --           72,721

Year ended December 31, 1997
Deducted in balance sheet from trade accounts
  receivable: Allowance for doubtful accounts    $   814          2,098         1,601            1,311

Deducted in balance sheet from intangible
  assets: Amortization of intangible assets      $ 9,273         20,425            --           29,698
</TABLE>


                                      -55-
<PAGE>   56


                                LAMAR MEDIA CORP.

<TABLE>
<S>                                                                                   <C>
Independent Auditors' Report .........................................................   57

Consolidated Balance Sheets as of December 31, 1999 and 1998 .........................   58

Consolidated Statements of Operations for the years ended December 31, 1999,
     1998 and 1997 ...................................................................   59

Consolidated Statements of Comprehensive Income for the years ended
     December 31, 1999, 1998 and 1997 ................................................   60

Consolidated Statements of Stockholders' Equity for the years ended
     December 31, 1997, 1998 and 1999 ................................................   61

Consolidated Statements of Cash Flows for the years ended December 31,
     1999, 1998 and 1997 .............................................................   62

Notes to Consolidated Financial Statements ...........................................63-68
</TABLE>


                                      -56-
<PAGE>   57



                          Independent Auditors' Report

Board of Directors
Lamar Media Corp.:

We have audited the accompanying consolidated balance sheets of Lamar Media
Corp. and subsidiaries as of December 31, 1999, and 1998, and the related
consolidated statements of operations, comprehensive income, stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lamar Media Corp.
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1999, in conformity with generally accepted accounting
principles.


As discussed in note 17 to the consolidated financial statements of Lamar
Advertising Company, the Company changed its method of accounting for the costs
of start-up activities in 1999.





                                        KPMG LLP


New Orleans, Louisiana
March 17, 2000


                                      -57-
<PAGE>   58


                                LAMAR MEDIA CORP.
                           Consolidated Balance Sheets

                           December 31, 1999 and 1998
                 (In thousands, except share and per share data)



<TABLE>
<CAPTION>
Assets                                                              1999           1998
------                                                           -----------    -----------
<S>                                                              <C>            <C>
Current assets:
  Cash and cash equivalents                                      $     8,401    $   128,597
  Receivables, net                                                    80,671         40,380
  Prepaid expenses                                                    21,524         12,346
  Other current assets                                                25,193          1,736
                                                                 -----------    -----------
          Total current assets                                       135,789        183,059
                                                                 -----------    -----------

Property, plant and equipment                                      1,412,605        661,324
  Less accumulated depreciation and amortization                    (218,893)      (153,972)
                                                                 -----------    -----------
          Net property plant and equipment                         1,193,712        507,352
                                                                 -----------    -----------

Intangible assets (note 3)                                         1,851,965        705,934
Other assets - non-current                                            13,563         17,032
                                                                 -----------    -----------
          Total assets                                           $ 3,195,029    $ 1,413,377
                                                                 ===========    ===========

Liabilities and Stockholders' Equity

Current liabilities:
  Trade accounts payable                                         $    11,492    $     4,258
  Current maturities of long-term debt (note 5)                        4,318         49,079
  Accrued expenses (note 4)                                           54,031         25,912
  Deferred income                                                     11,243          9,589
                                                                 -----------    -----------
          Total current liabilities                                   81,084         88,838

Long-term debt (note 5)                                            1,611,463        827,453
Deferred income taxes (note 6)                                       112,776         25,613
Deferred income                                                        1,222          1,293
Other liabilities                                                      5,613          3,401
                                                                 -----------    -----------
          Total liabilities                                        1,812,158        946,598
                                                                 -----------    -----------

Stockholders' equity:
  Common stock, $.01 par value, authorized 3000 shares; issued
    and outstanding 100 shares at December 31, 1999                       --             --
  Class A preferred stock, par value $638, $63.80 cumulative
    dividends, 10,000 shares authorized, 5,719 shares issued
    and outstanding at December 31, 1998                                  --          3,649
  Class A common stock, par value $.001, 125,000,000 shares
    authorized, 43,392,876 shares issued and outstanding at
    December 31, 1998                                                     --             43
  Class B common stock, par value $.001, 37,500,000 shares
    authorized, 17,699,997 shares at December 31, 1998                    --             18
  Additional paid-in capital                                       1,469,606        505,644
  Accumulated deficit                                                (86,735)       (42,575)
                                                                 -----------    -----------
          Stockholders' equity                                     1,382,871        466,779
                                                                 -----------    -----------

          Total liabilities and stockholders' equity             $ 3,195,029    $ 1,413,377
                                                                 ===========    ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -58-
<PAGE>   59


                                LAMAR MEDIA CORP.
                      Consolidated Statements of Operations

                  Years ended December 31, 1999, 1998 and 1997
                 (In thousands, except share and per share data)


<TABLE>
<CAPTION>
                                                                      1999        1998          1997
                                                                   ---------    ---------    ---------
<S>                                                                <C>          <C>          <C>
Net revenues                                                       $ 444,135    $ 288,588    $ 201,062
                                                                   ---------    ---------    ---------
Operating expenses:
  Direct advertising expenses                                        143,090       92,849       63,390
  General and administrative expenses                                 94,264       60,935       45,368
  Depreciation and amortization                                      176,233       88,791       48,317
                                                                   ---------    ---------    ---------
                                                                     413,587      242,575      157,075
                                                                   ---------    ---------    ---------
          Operating income                                            30,548       46,013       43,987
                                                                   ---------    ---------    ---------
Other expense (income):
  Interest income                                                     (1,421)        (762)      (1,723)
  Interest expense                                                    89,619       60,008       38,230
  Gain on disposition of assets                                       (5,481)      (1,152)         (15)
                                                                   ---------    ---------    ---------
                                                                      82,717       58,094       36,492
                                                                   ---------    ---------    ---------
Earnings (loss) before income taxes, extraordinary
  item and cumulative effect of a change in accounting principle     (52,169)     (12,081)       7,495

  Income tax expense (benefit) (note 6)                               (9,232)        (191)       4,654
                                                                   ---------    ---------    ---------

Earnings (loss) before extraordinary item and cumulative
 effect of a change in accounting principle                          (42,937)     (11,890)       2,841

Extraordinary loss on debt extinguishment net of income tax
 benefit of $117                                                        (182)          --           --
                                                                   ---------    ---------    ---------

Earnings (loss) before cumulative effect of a change in
 accounting principle                                                (43,119)     (11,890)       2,841

Cumulative effect of a change in accounting principle                   (767)          --           --
                                                                   ---------    ---------    ---------
Net earnings (loss)                                                  (43,886)     (11,890)       2,841
Preferred stock dividends                                               (274)        (365)        (365)
                                                                   ---------    ---------    ---------
Net earnings (loss) applicable to common stock                     $ (44,160)   $ (12,255)   $   2,476
                                                                   =========    =========    =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -59-
<PAGE>   60


                                LAMAR MEDIA CORP.
                 Consolidated Statements of Comprehensive Income

                  Years ended December 31, 1999, 1998 and 1997
                                 (In Thousands)


<TABLE>
<CAPTION>
                                          1999        1998         1997
                                        --------    --------     --------
<S>                                     <C>         <C>         <C>
Net earnings (loss) applicable
   to common stock                      $(44,160)   $(12,255)   $  2,476

Other comprehensive income -
     change in unrealized gain
     (loss) on investment securities
     (net of deferred tax expense
     (benefit) of $0, $217, and
     $(596), for the years ended
     December 31, 1999, 1998 and 1997         --         354        (974)
                                        --------    --------    --------

Comprehensive income (loss)             $(44,160)    (11,901)      1,502
                                        ========    ========    ========
</TABLE>


                                      -60-
<PAGE>   61


                                LAMAR MEDIA CORP.
                 Consolidated Statements of Stockholders' Equity

                  Years ended December 31, 1999, 1998 and 1997
                 (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                                          Unrealized
                                                Class A    Class A   Class B   Additional                 Gain (Loss)
                                      Common   Preferred   Common    Common    Paid-in     Accumulated    On Investment
                                      Stock      Stock      Stock     Stock     Capital      Deficit      Securities        Total
                                      ------   ---------   -------   -------   ----------  -----------    -------------   ---------
<S>                                   <C>      <C>         <C>       <C>       <C>         <C>            <C>             <C>
Balance, December 31, 1996            $  --      3,649        18         14      92,258     (32,796)            620         63,763
 Exercise of stock options               --         --        --         --       3,448          --              --          3,448
 Conversion of 1,811,552
  shares of Class B common
  stock to Class A common
  stock                                  --         --         1         (1)         --          --              --             --
 Net earnings                            --         --        --         --          --       2,841              --          2,841
 Dividends ($63.80 per
  preferred share)                       --         --        --         --          --        (365)             --           (365)
 Unrealized loss on investment
  securities, net of deferred
  taxes of $596                          --         --        --         --          --          --            (974)          (974)
 Three-for-two stock split               --         --         9          6         (15)         --              --             --
                                      -----     ------     -----     ------   ---------     -------        --------       --------

Balance, December 31, 1997               --      3,649        28         19      95,691     (30,320)           (354)        68,713
                                      -----     ------     -----     ------   ---------     -------        --------       --------
 Issuance of 13,338,005 shares
  of common stock                        --         --        13         --     399,288          --              --        399,301
 Exercise of stock options               --         --         1         --      10,665          --              --         10,666
 Conversion of 1,062,912
  shares of Class B common
  stock to Class A common
  stock                                  --         --         1         (1)         --          --              --             --
 Net loss                                --         --        --         --          --     (11,890)             --        (11,890)
 Dividends ($63.80 per
  preferred share)                       --         --        --         --          --        (365)             --           (365)
 Realized loss on investment
  securities, net of tax                 --         --        --         --          --          --             354            354
                                      -----     ------     -----     ------   ---------     --------       --------       --------

Balance December 31, 1998                --      3,649        43         18     505,644     (42,575)             --        466,779
                                      -----     ------     -----     ------   ---------     -------        --------       --------
 Issuance of 13,023 shares
  of common stock in
  acquisitions                           --         --        --         --         475          --              --            475
 Exercise of stock options               --         --        --         --       3,833          --              --          3,833
 Effect of Corporate
  restructuring                          --     (3,649)      (43)       (18)      3,710          --              --             --
 Contributions from parent               --         --        --         --     955,944          --              --        955,944
 Net loss                                --         --        --         --          --     (43,886)             --        (43,886)
 Dividends ($63.80 per
  preferred share)                       --         --        --         --          --        (274)             --           (274)
                                      -----     ------     -----     ------   ---------     -------        --------      ---------
Balance December 31, 1999             $  --         --        --         --   1,469,606     (86,735)             --      1,382,871
                                      =====     ======     =====     ======   =========     =======        ========      =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -61-
<PAGE>   62


                                LAMAR MEDIA CORP.
                      Consolidated Statements of Cash Flows

                  Years ended December 31, 1999, 1998 and 1997
                                 (In thousands)


<TABLE>
<CAPTION>
                                                       1999          1998         1997
                                                     ---------    ---------    ---------
<S>                                                  <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings (loss)                                $ (43,886)     (11,890)       2,841
  Adjustments to reconcile net earnings (loss)
   to net cash provided by operating activities:
   Depreciation and amortization                       176,233       88,791       48,317
   Loss (gain) on disposition of assets                 (5,481)      (1,152)         (15)
   Cumulative effect of accounting change                  767           --           --
   Deferred tax expense (benefit)                      (13,215)      (7,537)      (2,839)
   Provision for doubtful accounts                       4,065        2,883        2,098
  Changes in operating assets and liabilities:
   (Increase) decrease in:
     Receivables                                       (19,091)      (2,464)      (7,646)
     Prepaid expenses                                      782         (521)        (367)
     Other assets                                      (10,937)      (2,148)        (251)
   Increase (decrease) in:
     Trade accounts payable                              3,438          250       (1,951)
     Accrued expenses                                   14,974        4,326        6,063
     Deferred income                                    (7,184)       2,132         (425)
     Other liabilities                                     (29)        (172)         (42)
                                                     ---------    ---------    ---------
        Net cash provided by operating activities      100,436       72,498       45,783
                                                     ---------    ---------    ---------

Cash flows from investing activities:
  Capital expenditures                                 (77,186)     (55,196)     (36,654)
  Purchase of new markets                             (878,933)    (485,514)    (386,842)
  Proceeds from sale of property and equipment           7,603        5,493       53,268
                                                     ---------    ---------    ---------
        Net cash used in investing activities         (948,516)    (535,217)    (370,228)
                                                     ---------    ---------    ---------
Cash flows from financing activities:
  Net proceeds from issuance of common stock             2,231      402,629        2,403
  Proceeds from issuance of long-term debt             279,594           70      193,926
  Principal payments on long-term debt                 (79,667)      (6,229)          --
  Debt issuance costs                                       --       (3,035)          --
  Net borrowing (payments) under credit agreements     526,000      191,000       54,720
  Dividends                                               (274)        (365)        (365)
                                                     ---------    ---------    ---------
       Net cash provided by financing activities       727,884      584,070      250,684
                                                     ---------    ---------    ---------
       Net increase (decrease) in cash and
        cash equivalents                              (120,196)     121,351      (73,761)

Cash and cash equivalents at beginning
  of period                                            128,597        7,246       81,007
                                                     ---------    ---------    ---------

Cash and cash equivalents at end of period           $   8,401      128,597        7,246
                                                     =========    =========    =========

Supplemental disclosures of cash flow information:
  Cash paid for interest                             $  83,837       56,960       33,284
                                                     =========    =========    =========

  Cash paid for income taxes                         $   6,919        1,107        8,792
                                                     =========    =========    =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -62-
<PAGE>   63


                                LAMAR MEDIA CORP.
                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(1)      Significant Accounting Policies

         (a)      Nature of Business

                  On July 20, 1999, Lamar Advertising Company reorganized into a
                  new holding company structure. As a result of this
                  reorganization (1) the former Lamar Advertising Company became
                  a wholly owned subsidiary of a newly formed holding company,
                  (2) the name of the former Lamar Advertising Company was
                  changed to Lamar Media Corp., (3) the name of the new holding
                  company became Lamar Advertising Company, (4) the outstanding
                  shares of capital stock of the former Lamar Advertising
                  Company, including the Class A common stock, were
                  automatically converted, on a share for share basis, into
                  identical shares of capital stock of the new holding company
                  and (5) the Class A common stock of the new holding company
                  commenced trading on the Nasdaq National Market under the
                  symbol "LAMR" instead of the Class A common stock of the
                  former Lamar Advertising Company. In addition, following the
                  holding company reorganization, substantially all of the
                  former Lamar Advertising Company's debt obligations, including
                  the bank credit facility and other long-term debt remained the
                  obligations of Lamar Media. Under Delaware law, the
                  reorganization did not require the approval of the
                  stockholders of the former Lamar Advertising Company. The
                  purpose of the reorganization was to provide Lamar Advertising
                  Company with a more flexible capital structure and to enhance
                  its financing options. The business operations of the former
                  Lamar Advertising Company and its subsidiaries, including the
                  Company, has not changed as a result of the reorganization.

                  Lamar Media Corp. is engaged in the outdoor advertising
                  business operating approximately 116,800 outdoor advertising
                  displays in 42 states. Lamar Media's operating strategy is to
                  be the leading provider of outdoor advertising services in
                  most of the markets it serves.

                  In addition, Lamar Media operates a logo sign business in 20
                  states throughout the United States and in 1 province of
                  Canada. Logo signs are erected pursuant to state-awarded
                  service contracts on public rights-of-way near highway exits
                  and deliver brand name information on available gas, food,
                  lodging and camping services. Included in the Company's logo
                  sign business are tourism signing contracts.

                  Certain footnotes are not provided for the accompanying
                  financial statements as the information in notes 2, 4, 6, 11
                  through 15, 17 and portions of notes 1, 8 and 10 to the
                  consolidated financial statements of Lamar Advertising Company
                  included elsewhere in this Report is substantially equivalent
                  to that required for the consolidated financial statements of
                  Lamar Media Corp. Earnings per share data is not provided for
                  the operating results of Lamar Media Corp. as it is a wholly
                  owned subsidiary of Lamar Advertising Company.


                                                                     (Continued)


                                      -63-
<PAGE>   64


                                LAMAR MEDIA CORP.
                   Notes to Consolidated Financial Statements
            (Dollars in thousands, except share and per share data)


(2)      Noncash Financing and Investing Activities

         A summary of significant noncash financing and investing activities for
         the years ended December 31, 1999, 1998 and 1997 follows:


<TABLE>
<CAPTION>
                                         1999     1998     1997
                                        ------   ------   ------
<S>                                     <C>      <C>      <C>
Disposition of assets                   $5,387       30    1,300
Acquisitions of assets                     475    2,706       --
Recapitalization related to corporate
  restructure (note 1)                   3,710       --       --
Conversion of note receivable
  to equity investment                      --       --      500
Debt issuance costs                         --       --    4,750
</TABLE>


(3)      Intangible Assets

         The following is a summary of intangible assets at December 31, 1999
         and 1998:


<TABLE>
<CAPTION>
                               Estimated life
                                  (years)          1999           1998
                               ---------------  -----------    -----------
<S>                            <C>              <C>            <C>
Debt issuance costs and fees       7-10         $    24,059    $    20,081
Customer lists and contracts       7-10             286,301        108,903
Non-compete agreements             7-15              50,277         19,318
Goodwill                             15           1,033,287        554,685
Site locations and other           5-15             628,451          2,947
                                                -----------    -----------
                                                $ 2,022,375    $   705,934
                                                ===========    ===========

Cost                                              2,022,375        778,655
Accumulated amortization                           (170,410)       (72,721)
                                                -----------    -----------
                                                $ 1,851,965    $   705,934
                                                ===========    ===========
</TABLE>


                                                                     (Continued)


                                      -64-
<PAGE>   65

                                LAMAR MEDIA CORP.
                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

(4)      Accrued Expenses

         The following is a summary of accrued expenses at December 31, 1999 and
         1998:


<TABLE>
<CAPTION>
                                    1999     1998
                                  -------   -------
<S>                               <C>       <C>
Payroll                           $ 7,406   $ 4,863
Interest                           17,411    11,629
Insurance benefits                    838     3,715
Purchase price payable (note 2)    15,750        --
Other                              12,626     5,705
                                  -------   -------
                                  $54,031   $25,912
                                  =======   =======
</TABLE>


(5)      Long-term Debt

         Long-term debt consists of the following at December 31, 1999 and 1998:


<TABLE>
<CAPTION>
                                                    1999           1998
                                                -----------    -----------
<S>                                             <C>            <C>
5-1/4% Note to Lamar Advertising Company        $   287,500    $        --
9-5/8% Senior subordinated notes (1996 Notes)       255,000        255,000
8-5/8% Senior subordinated notes (1997 Notes)       198,882        198,785
Bank Credit Agreement                               776,000        250,000
9-1/4% Senior subordinated notes                     74,073        103,949
8% unsecured subordinated notes (see Note 12)        13,333         15,333
Other notes with various rates and terms             10,993         53,465
                                                -----------    -----------
                                                  1,615,781        876,532

Less current maturities                              (4,318)       (49,079)
                                                -----------    -----------
Long-term debt, excluding current maturities    $ 1,611,463    $   827,453
                                                ===========    ===========
</TABLE>


         Long-term debt matures as follows:

<TABLE>
<S>                                               <C>
                            2000                  $    4,318
                            2001                      50,200
                            2002                      49,950
                            2003                      99,125
                            2004                     116,772
                            Later years            1,295,416
</TABLE>

                                                                     (Continued)


                                      -65-
<PAGE>   66


         On August 10, 1999, Lamar Media Corp. borrowed from Lamar Advertising
         Company, its parent, $287,500 in exchange for a note payable bearing
         interest at 5 1/4% due 2006. The proceeds were used to pay down
         existing bank debt of the Company.

(6)      Income Taxes

         Income tax expense (benefit) for the years ended December 31, 1999,
         1998 and 1997, consists of:

<TABLE>
<CAPTION>
                                          Current    Deferred      Total
                                         --------    --------    --------
<S>                                      <C>          <C>          <C>
Year ended December 31, 1999:
 U.S. federal                            $  3,083     (11,521)     (8,438)
 State and local                              900      (1,694)       (794)
                                         --------    --------    --------
                                         $  3,983     (13,215)     (9,232)
                                         ========    ========    ========

Year ended December 31, 1998:
 U.S. federal                            $  6,269      (6,074)        195
 State and local                            1,077      (1,463)       (386)
                                         --------    --------    --------
                                            7,346      (7,537)       (191)
Change in deferred tax attributable
 to unrealized losses on investment
 securities, included in stockholders'
 equity                                        --         217         217
                                         --------    --------    --------
                                         $  7,346      (7,320)         26
                                         ========    ========    ========

Year ended December 31, 1997:
 U.S. federal                            $  6,108      (2,475)      3,633
 State and local                            1,385        (364)      1,021
                                         --------    --------    --------
                                            7,493      (2,839)      4,654
Change in deferred tax attributable
 to unrealized losses on investment
 securities, included in stockholders'
 equity                                        --        (596)       (596)
                                         --------    --------    --------
                                         $  7,493      (3,435)      4,058
                                         ========    ========    ========
</TABLE>

                                                                     (Continued)




                                      -66-
<PAGE>   67


                                LAMAR MEDIA CORP.
                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         Income tax expense (benefit) attributable to continuing operations for
         the years ended December 31, 1999, 1998 and 1997, differs from the
         amounts computed by applying the U.S. federal income tax rate of 34
         percent to earnings before income taxes as follows:


<TABLE>
<CAPTION>
                                                1999        1998        1997
                                              --------    --------    --------
<S>                                           <C>           <C>          <C>
Computed "expected" tax expense (benefit)     $(17,737)     (4,108)      2,548
Increase (reduction) in income taxes
 resulting from:
  Book expenses not deductible for tax
   purposes                                        122         450          92
  Amortization of non-deductible goodwill        8,814       3,752       1,730
  State and local income taxes, net
   of federal income tax benefit                  (534)       (255)        674
  Other differences, net                           103         (30)       (390)
                                              --------    --------    --------
                                              $ (9,232)       (191)      4,654
                                              ========    ========    ========
</TABLE>

         The tax effects of temporary differences that give rise to significant
         portions of the deferred tax assets and deferred tax liabilities at
         December 31, 1999 and 1998 are presented below:


<TABLE>
<CAPTION>
                                               1999         1998
                                            ---------    ---------
<S>                                         <C>          <C>
Deferred tax liabilities:
 Plant and equipment, principally
  due to differences in depreciation        $  (3,942)   $  (4,915)
 Plant and equipment, due to basis
  differences on acquisitions                (134,323)     (28,556)
 Employee benefit plans                        (1,058)          --
                                            ---------    ---------
 Deferred tax liabilities                    (139,323)     (33,471)

Deferred tax assets:
 Intangibles, due to differences
  in amortizable lives                          3,935       (5,058)
 Receivables, principally due to
  allowance for doubtful accounts               1,514        1,151
 Plant and equipment, due to basis
  differences on acquisitions and costs
  capitalized for tax purposes                  4,614        4,530
 Investment in affiliates and plant and
  equipment, due to gains recognized for
  tax purposes and deferred for financial
  reporting purposes                              941          941
 Accrued liabilities not deducted for tax
  purposes                                      3,121        2,125
 Net operating loss carryforward               11,340        3,563
 Minimum tax credit                               357           --
 Other, net                                       725          606
                                            ---------    ---------
         Deferred tax assets                   26,547        7,858
                                            ---------    ---------
         Net deferred tax liability         $(112,776)   $ (25,613)
                                            =========    =========
</TABLE>

                                                                     (Continued)


                                      -67-
<PAGE>   68


                                LAMAR MEDIA CORP.
                   Notes to Consolidated Financial Statements
             (Dollars in thousands, except share and per share data)

         In assessing the realizability of deferred tax assets, management
         considers whether it is more likely than not that some portion or all
         of the deferred tax assets will not be realized. The ultimate
         realization of deferred tax assets is dependent upon the generation of
         future taxable income during the periods in which those temporary
         differences become deductible.

         Management considers the scheduled reversal of deferred tax
         liabilities, projected future taxable income, and tax planning
         strategies in making this assessment. Based upon the level of
         historical taxable income and projections for future taxable income
         over the periods in which the deferred tax assets are deductible,
         management believes it is more likely than not the Company will realize
         the benefits of these deductible differences. The amount of the
         deferred tax assets considered realizable, however, could be reduced in
         the near term if estimates of future taxable income during the
         carryforward period are reduced.

(7)      Related Party Transactions

         Affiliates, as used within these statements, are persons or entities
         that are affiliated with Lamar Media Corp. or its subsidiaries through
         common ownership and directorate control.

         As of December 31, 1999, there was a receivable from Lamar Advertising
         Company, its parent, in the amount of $10,851.

(8)      Quarterly Financial Data (Unaudited)


<TABLE>
<CAPTION>
                                        Fiscal Year 1999 Quarters

                              March 31     June 30   September 30  December 31
                              --------     -------   ------------  -----------
<S>                           <C>           <C>        <C>           <C>
Net revenues                  $ 85,766      97,809     111,039       149,521
Net revenues less direct
 advertising expenses           56,002      67,328      77,803        99,912
Net earnings (loss)
 applicable to common stock    (10,797)     (5,161)     (3,221)      (24,981)
</TABLE>


<TABLE>
<CAPTION>
                                        Fiscal Year 1998 Quarters

                              March 31     June 30   September 30  December 31
                              --------     -------   ------------  -----------
<S>                           <C>           <C>         <C>          <C>
Net revenues                  $ 58,397      69,675      73,528       86,988
Net revenues less direct
 advertising expenses           37,567      48,066      51,271       58,835
Net earnings (loss)
 applicable to common stock     (4,682)     (1,253)      1,538       (7,858)
</TABLE>


                                      -68-
<PAGE>   69


SCHEDULE 2

                                Lamar Media Corp.
                        Valuation and Qualifying Accounts
                The Years Ended December 31, 1999, 1998 and 1997
                                   (in 000's)

<TABLE>
<CAPTION>
                                                Balance at    Charged to
                                                Beginning     Costs and                    Balance at
                 Description                    of Period     Expenses       Deductions    End of Period
                 -----------                    ---------     -----------    ----------    -------------
<S>                                             <C>           <C>            <C>           <C>
Year ended December 31, 1999
Deducted in balance sheet from trade accounts
  receivable: Allowance for doubtful accounts    $ 2,722          4,065         2,859            3,928

Deducted in balance sheet from intangible
  assets: Amortization of intangible assets      $72,721         99,113           824          170,410

Year ended December 31, 1998
Deducted in balance sheet from trade accounts
  receivable: Allowance for doubtful accounts    $ 1,311          2,883         1,472            2,722

Deducted in balance sheet from intangible
  assets: Amortization of intangible assets      $29,698         43,023            --           72,721

Year ended December 31, 1997
Deducted in balance sheet from trade accounts
  receivable: Allowance for doubtful accounts    $   814          2,098         1,601            1,311

Deducted in balance sheet from intangible
  assets: Amortization of intangible assets      $ 9,273         20,425            --           29,698
</TABLE>


                                      -69-
<PAGE>   70



ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

Lamar Advertising Company

None

Lamar Media Corp.

None

                                    PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The response to this item is contained in part under the caption "Executive
Officers of the Registrant" in Part I, Item 1A hereof and the remainder is
incorporated herein by reference from the discussion responsive thereto under
the captions "Election of Directors" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Company's Proxy Statement relating to the 2000
Annual Meeting of Stockholders.

ITEM 11.    EXECUTIVE COMPENSATION

The response to this item is incorporated herein by reference from the
discussion responsive thereto under the following captions in the Company's
Proxy Statement relating to the 2000 Annual Meeting of Stockholders: "Election
of Directors - Director Compensation," "Executive Compensation" and
"Compensation Committee Interlocks and Insider Participation."

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The response to this item is incorporated herein by reference from the
discussion responsive thereto under the caption "Share Ownership" in the
Company's Proxy Statement relating to the 2000 Annual Meeting of Stockholders.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The response to this item is incorporated herein by reference from the
discussion responsive thereto under the caption "Certain Relationships and
Related Transactions" in the Company's Proxy Statement relating to the 2000
Annual Meeting of Stockholders.



                                      -70-
<PAGE>   71


                                     PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)      1.     FINANCIAL STATEMENTS

         The financial statements are listed under Part II, Item 8 of this
         Report.

         2.     FINANCIAL STATEMENT SCHEDULES

         The financial statement schedules are included under Part II, Item 8 of
         this Report.

         3.     EXHIBITS

         The exhibits are listed below under Part IV, Item 14(c) of this Report.

(B)      REPORTS ON FORM 8-K

         Reports on Form 8-K were filed with the Commission during the fourth
         quarter of 1999 to report the following items as of the dates
         indicated:

                  On November 23, 1999, the Company and Lamar Media each filed a
                  report on Form 8-K to announce the acquisition of all of the
                  outstanding capital stock of Chancellor Media Outdoor
                  Corporation and Chancellor Media Whiteco Outdoor Corporation
                  for consideration consisting of approximately $700 million of
                  cash and 26,227,273 shares of Lamar Advertising Company Class
                  A common stock. In addition, the report presented under Item 7
                  the historical financial statements and related notes for
                  Chancellor Outdoor as well as included pro forma financial
                  information of the Company giving effect to the acquisition.


                                      -71-
<PAGE>   72

(C)  EXHIBITS

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       ------------
<S>               <C>
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               Amended and Restated Bylaws of the 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.

3.4               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               Specimen certificate for the shares of Class A common stock of
                  the Company. Previously filed as Exhibit 4.1 to the Company's
                  Registration Statement on Form S-1 (File No. 333-05479), and
                  incorporated herein by reference.

4.2               Senior Secured Note dated May 19, 1993. Previously filed as
                  Exhibit 4.1 to the Company's Registration Statement on Form
                  S-1 (File No. 33-59624), and incorporated herein by reference.

4.3               Indenture dated May 15, 1993 relating to the Company's 11%
                  Senior Secured Notes due May 15, 2003. Previously filed as
                  Exhibit 4.3 to the Company's Registration Statement on Form
                  S-1 (File No. 33-59624), and incorporated herein by reference.

4.4               First Supplemental Indenture dated July 30, 1996 relating to
                  the Company's 11% Senior Secured Notes due May 15, 2003.
                  Previously filed as Exhibit 4.5 to the Company's Registration
                  Statement on Form S-1 (File No. 333-05479), and incorporated
                  herein by reference.

4.5               Form of Second Supplemental Indenture in the form of an
                  Amended and Restated Indenture dated November 8, 1996 relating
                  to the Company's 11% Senior Secured Notes due May 15, 2003.
                  Previously filed as Exhibit 4.1 to the Company's Current
                  Report on Form 8-K filed on November 15, 1996 (File No.
                  1-12407), and incorporated herein by reference.
</TABLE>

                                      -72-
<PAGE>   73


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
4.6               Notice of Trustee dated November 8, 1996 with respect to the
                  release of the security interest in the Trustee on behalf of
                  the holders of the Company's 11% Senior Secured Notes due May
                  15, 2003. Previously filed as Exhibit 4.2 to the Company's
                  Current Report on Form 8-K filed on November 15, 1996 (File
                  No. 1-12407), and incorporated herein by reference.

4.7               Form of Subordinated Note. Previously filed as Exhibit 4.8 to
                  the Company's Registration Statement on Form S-1 (File No.
                  333-05479), and incorporated herein by reference.

4.8               Indenture dated as of November 15, 1996 between the Company,
                  certain of its subsidiaries and State Street Bank and Trust
                  Company, as trustee, relating to the Company's 9 5/8% Senior
                  Subordinated Notes due 2006. Previously filed as Exhibit 4.11
                  to the Company's Registration Statement on Form S-3 (File No.
                  333-14789), and incorporated herein by reference.

4.9               Form of 9 5/8% Senior Subordinated Note due 2006. Previously
                  filed as Exhibit 4.12 to the Company's Registration Statement
                  on Form S-3 (File No. 333-14789), and incorporated herein by
                  reference.

4.10              Form of 8 5/8% Senior Subordinated Note due 2007. Previously
                  filed as Exhibit 4.10 to the Company's Annual Report on Form
                  10-K for fiscal year ended December 31, 1997, (File No.
                  1-12407), and incorporated herein by reference.

4.11              Indenture dated as of September 25, 1997 between the Company,
                  certain of its subsidiaries, and State Street Bank and Trust
                  Company, as trustee, relating to the Company's 8 5/8% Senior
                  Subordinated Notes due 2007. Previously filed as Exhibit 4.2
                  to the Company's Current Report on Form 8-K filed on September
                  30, 1997 (File No. 1-12407), and incorporated herein by
                  reference.

4.12              Indenture dated August 15, 1997, relating to Outdoor
                  Communications, Inc. 9 1/4% Senior Subordinated Notes.
                  Previously filed as Exhibit 4.1 to the Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1998,
                  (File No. 1-12407) and incorporated herein by reference.

4.13              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank as Trustee, dated
                  October 1, 1998. Previously filed as Exhibit 4.2 to the
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1998, (File No. 1-12407) and incorporated herein
                  by reference.

4.14              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  October 23, 1998. Previously filed as Exhibit 4.3 to the
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1998, (File No. 1-12407) and incorporated herein
                  by reference.

4.15              Supplemental Indenture to the Indenture dated November 15,
                  1996 among the Company, certain of its subsidiaries and State
                  Street Bank and Trust Company, as Trustee, dated October 23,
                  1998. Previously filed as Exhibit 4.4 to the Company's
                  Quarterly Report on Form 10-Q for the period ended September
                  30, 1998, (File No. 1-12407) and incorporated herein by
                  reference.
</TABLE>


                                      -73-
<PAGE>   74


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
4.16              Supplemental Indenture to the Indenture dated September 25,
                  1997 among the Company, certain of its subsidiaries and State
                  Street Bank and Trust Company, as Trustee, dated October 23,
                  1998. Previously filed as Exhibit 4.5 to the Company's
                  Quarterly Report on Form 10-Q for the period ended September
                  30, 1998, (File No. 1-12407) and incorporated herein by
                  reference.

4.17              Indenture dated as of August 10, 1999 between the Company and
                  State Street Bank and Trust Company, as Trustee. Previously
                  filed as Exhibit 4.1 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.

4.18              First Supplemental Indenture dated as of August 10, 1999
                  between the Company and State Street Bank and Trust Company,
                  as Trustee. Previously filed as Exhibit 4.2 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.

4.19              Supplemental Indenture to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated July
                  20, 1999. Previously filed as Exhibit 4.1 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-30242) filed on November 12,
                  1999 and incorporated herein by reference.

4.20              Supplemental Indenture to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  September 15, 1999. Previously filed as Exhibit 4.2 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.

4.21              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  September 15, 1999. Previously filed as Exhibit 4.3 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.

4.22              Supplemental Indenture to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated July
                  20, 1999. Previously filed as Exhibit 4.4 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-30242) filed on November 12,
                  1999 and incorporated herein by reference.

4.23              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  July 20, 1999. Previously filed as Exhibit 4.5 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.
</TABLE>


                                      -74-
<PAGE>   75



<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
4.24              Supplemental Indenture to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  September 15, 1999. Previously filed as Exhibit 4.6 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.

4.25              Supplemental Indentures to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee. Previously
                  filed as Exhibit 4.7 to Lamar Advertising Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1999
                  (File No. 0-30242) filed on November 12, 1999 and incorporated
                  herein by reference.

4.26              Supplemental Indentures to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee. Previously
                  filed as Exhibit 4.8 to Lamar Advertising Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1999
                  (File No. 0-30242) filed on November 12, 1999 and incorporated
                  herein by reference.

4.27              Supplemental Indentures to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee.
                  Previously filed as Exhibit 4.9 to Lamar Advertising Company's
                  Quarterly Report on Form 10-Q for the period ended September
                  30, 1999 (File No. 0-30242) filed on November 12, 1999 and
                  incorporated herein by reference.

4.28              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  December 23, 1999. Filed herewith.

4.29              Supplemental Indenture to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  December 23, 1999. Filed herewith.

4.30              Supplemental Indenture to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  December 23, 1999. Filed herewith.

10.1              Consulting Agreement dated July 1, 1996 between the Lamar
                  Texas Limited Partnership and the Reilly Consulting Company,
                  L.L.C., of which Kevin P. Reilly, Sr. is the manager.
                  Previously filed as Exhibit 10.2 to the Company's Registration
                  Statement on Form S-1 (File No. 33-05479), and incorporated
                  herein by reference.

10.2              Indenture dated as of September 24, 1986 relating to the
                  Company's 8% Unsecured Subordinated Debentures. Previously
                  filed as Exhibit 10.3 to the Company's Registration Statement
                  on Form S-1 (File No. 33-59624), and incorporated herein by
                  reference.

10.3*             The Lamar Savings and Profit Sharing Plan Trust. Previously
                  filed as Exhibit 10.4 to the Company's Registration Statement
                  on Form S-1 (File No. 33-59624), and incorporated herein by
                  reference.
</TABLE>


                                      -75-
<PAGE>   76


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
10.4              Trust under The Lamar Corporation, its Affiliates and
                  Subsidiaries Deferred Compensation Plan dated October 3, 1993.
                  Previously filed as Exhibit 10.11 to the Company's Annual
                  Report on Form 10-K for the fiscal year ended October 31, 1995
                  (File No. 33-59624), and incorporated herein by reference.

10.5*             1996 Equity Incentive Plan. Previously filed as Exhibit 10.14
                  to the Company's Registration Statement on Form S-1 (File No.
                  333-05479), and incorporated herein by reference.

10.6              Bank Credit Agreement dated December 18, 1996 between the
                  Company, certain of its subsidiaries, the lenders party
                  thereto and The Chase Manhattan Bank, as administrative agent.
                  Previously filed as Exhibit 10.18 to the Company's Annual
                  Report on Form 10-K for the fiscal year ended October 31, 1996
                  (File No. 1-12407), and incorporated herein by reference.

10.7              Amendment No. 1 to the Bank Credit Agreement dated as of March
                  31, 1997 between the Company, the Subsidiary Guarantors party
                  thereto, the Lenders party thereto and the Chase Manhattan
                  Bank, as administrative agent. Previously filed as Exhibit
                  10.1 to the Company's Quarterly Report on Form 10-Q for the
                  period ended March 31, 1997 (File No. 1-12407), and
                  incorporated herein by reference.

10.8              Amendment No. 2 to the Bank Credit Agreement dated as of
                  September 12, 1997 between the Company, certain of its
                  subsidiaries, the lenders party thereto and The Chase
                  Manhattan Bank, as administrative agent. Previously filed as
                  Exhibit 10.2 to the Company's Current Report on Form 8-K filed
                  on September 30, 1997 (File No. 1-12407), and incorporated
                  herein by reference.

10.9              Amendment No. 3 to the Bank Credit Agreement dated as of
                  December 31, 1997 between the Company, certain of its
                  subsidiaries, the lenders party thereto and The Chase
                  Manhattan Bank, as administrative agent. Previously filed as
                  Exhibit 10.9 to the Company's Annual Report on Form 10-K for
                  fiscal year ended December 31, 1997, (File No. 1-12407), and
                  incorporated herein by reference.

10.10             Contract to Sell and Purchase, dated as of October 9, 1996,
                  between the Company and Outdoor East L.P. Previously filed as
                  Exhibit 10.16 to the Company's Registration Statement on Form
                  S-3 (File No. 333-14677), and incorporated herein by
                  reference.

10.11             Stock Purchase Agreement, dated as of September 25, 1996,
                  between the Company and the shareholders of FKM Advertising,
                  Co., Inc. Previously filed as Exhibit 10.17 to the Company's
                  Registration Statement on Form S-3 (File No. 333-14677), and
                  incorporated herein by reference.

10.12             Stock Purchase Agreement dated as of February 7, 1997 between
                  the Company and the stockholders of Penn Advertising, Inc.
                  named therein. Previously filed as Exhibit 2.1 to the
                  Company's Current Report on Form 8-K filed on April 14, 1997
                  (File No. 1-12407), and incorporated herein by reference.

10.13             Asset Purchase Agreement dated as of August 15, 1997 between
                  The Lamar Corporation and Outdoor Systems, Inc. Previously
                  filed as Exhibit 2.1 to the Company's Current Report on Form
                  8-K filed on August 27, 1997 (File No. 1-12407), and
                  incorporated herein by reference.
</TABLE>


                                      -76-
<PAGE>   77


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
10.14             Bank Credit Agreement dated July 16, 1998, between the
                  Company, certain of its subsidiaries, the lenders party
                  thereto and The Chase Manhattan Bank, as administrative agent.
                  Previously filed as Exhibit 10.1 to the Company's Quarterly
                  Report on Form 10-Q for the period ended June 30, 1998, (File
                  No. 0-020833), and incorporated herein by reference.

10.15             Amendment No. 1 to the Amended and Restated Bank Credit
                  Agreement dated September 15, 1998, between the Company,
                  certain of its subsidiaries, the lenders party thereto and The
                  Chase Manhattan Bank, as administrative agent. Previously
                  filed as Exhibit 10.4 to the Company's Quarterly Report on
                  Form 10-Q for the period ended September 30, 1998 (File No.
                  0-20833) and incorporated herein by reference.

10.16             Stock Purchase Agreement dated as of October 1, 1998, between
                  the Company and the stockholders of Outdoor Communications,
                  Inc. named therein. Previously filed as Exhibit 2.1 to the
                  Company's Current Report on Form 8-K filed on October 15, 1998
                  (File No. 0-20833), and incorporated herein by reference.

10.17             Amendment No. 4 to Credit Agreement dated as of March 31,
                  1998, between Lamar Advertising Company, certain of its
                  subsidiaries, the lenders party thereto and The Chase
                  Manhattan Bank, as administrative agent. Previously filed as
                  Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
                  for the period ended March 31, 1998 (File No. 1-12407), and
                  incorporated herein by reference.

10.18             Second Amended and Restated Stock Purchase Agreement dated as
                  of August 11, 1999 among the Company, Lamar Media Corp.,
                  Chancellor Media Corporation of Los Angeles and Chancellor
                  Mezzanine Holdings Corporation. Previously filed as Appendix A
                  to the Company's Schedule 14C Information Statement filed on
                  August 13, 1999 and incorporated herein by reference. Pursuant
                  to Item 601(b)(2) of Regulation S-K, the Schedules and Annexes
                  A and B referred to in the Second Amended and Restated Stock
                  Purchase Agreement are omitted. The Company hereby undertakes
                  to furnish supplementary a copy of any omitted Schedule or
                  Annex to the Commission upon request.

10.19             Bank Credit Agreement dated August 13, 1999, between Lamar
                  Media Corp., certain of its subsidiaries, the lenders party
                  thereto and The Chase Manhattan Bank, as administrative agent.
                  Previously filed as Exhibit 10.1 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-30242) filed on November 12,
                  1999 and incorporated herein by reference.

10.20             Stockholders Agreement dated as of September 15, 1999 by and
                  among Lamar Advertising Company, Chancellor Media Corporation
                  of Los Angeles, Chancellor Mezzanine Holdings Corporation and
                  the Reilly Family Limited Partnership. Previously filed as
                  Exhibit 10.2 to Lamar Advertising Company's Quarterly Report
                  on Form 10-Q for the period ended September 30, 1999 (File No.
                  0-030242) filed on November 12, 1999 and incorporated herein
                  by reference.

10.21             Registration Rights Agreement dated as of September 15, 1999
                  among Lamar Advertising Company, Chancellor Media Corporation
                  of Los Angeles and Chancellor Mezzanine Holdings Corporation.
                  Previously filed as Exhibit 10.3 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-030242) filed on November 12,
                  1999 and incorporated herein by reference.
</TABLE>


                                      -77-
<PAGE>   78


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
10.22             Assumption Agreement dated as of July 20, 1999 is by and among
                  Lamar Advertising Company, Lamar Media Corp., and the direct
                  and indirect subsidiaries of such corporations. Previously
                  filed as Exhibit 10.4 to Lamar Advertising Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1999
                  (File No. 0-030242) filed on November 12, 1999 and
                  incorporated herein by reference.

10.23             Joinder Agreement to the Lamar Media Corp. Credit Agreement
                  dated August 13, 1999 by Lamar Florida, Inc. in favor of The
                  Chase Manhattan Bank, as Administrative Agent dated December
                  23, 1999. Filed herewith.

11.1              Statement regarding computation of per share earnings. Filed
                  herewith.

21.1              Subsidiaries of the Company. Filed herewith.

23.1              Consent of KPMG LLP. Filed herewith.

27.1              Financial Data Schedule for the Company. Filed herewith.

27.2              Financial Data Schedule for Lamar Media Corp. Filed herewith.
</TABLE>

--------------

*        Management contract or compensatory plan or arrangement in which the
         executive officers or directors of the Company participate.



                                      -78-
<PAGE>   79




                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                      LAMAR ADVERTISING COMPANY

March 27, 2000                        By: /s/ Kevin P. Reilly, Jr.
                                          ------------------------
                                          Kevin P. Reilly, Jr.
                                          President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
        SIGNATURE                           TITLE                                     DATE
        ---------                           -----                                     ----
<S>                            <C>                                             <C>
/s/ Kevin P. Reilly, Jr.       Chief Executive Officer and Director                March 27,2000
--------------------------
Kevin P. Reilly, Jr.

/s/ Keith A. Istre             Chief Financial and Accounting Officer and
--------------------------     Director                                            March 27,2000
Keith A. Istre

/s/ Charles W. Lamar, III      Director                                            March 27,2000
--------------------------
Charles W. Lamar, III

/s/ Gerald H. Marchand         Director                                            March 27,2000
--------------------------
Gerald H. Marchand

/s/ T. Everett Stewart, Jr.    Director                                            March 27,2000
--------------------------
T. Everett Stewart, Jr.

/s/ Sean E. Reilly             Director                                            March 27,2000
--------------------------
Sean E. Reilly

/s/ Wendell Reilly             Director                                            March 27,2000
--------------------------
Wendell Reilly

                               Director                                            March __,2000
--------------------------
Stephen P. Mumblow

                               Director                                            March __,2000
--------------------------
Thomas O. Hicks

                               Director                                            March __,2000
--------------------------
R. Steven Hicks
</TABLE>


                                      -79-
<PAGE>   80


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                       LAMAR MEDIA CORP.

March 27, 2000                         By: /s/ Kevin P. Reilly, Jr.
                                           ------------------------
                                           Kevin P. Reilly, Jr.
                                           President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
        SIGNATURE                           TITLE                                     DATE
        ---------                           -----                                     ----
<S>                            <C>                                             <C>
/s/ Kevin P. Reilly, Jr.       Chief Executive Officer and Director                  March 27,2000
--------------------------
Kevin P. Reilly, Jr.

/s/ Keith A. Istre             Chief Financial and Accounting Officer and
--------------------------     Director                                              March 27,2000
Keith A. Istre

/s/ Charles W. Lamar, III      Director                                              March 27,2000
--------------------------
Charles W. Lamar, III

/s/ Gerald H. Marchand         Director                                              March 27,2000
--------------------------
Gerald H. Marchand

/s/ T. Everett Stewart, Jr.    Director                                              March 27,2000
--------------------------
T. Everett Stewart, Jr.

/s/ Sean E. Reilly             Director                                              March 27,2000
--------------------------
Sean E. Reilly

/s/ Wendell Reilly             Director                                              March 27,2000
--------------------------
Wendell Reilly

                               Director                                              March __,2000
--------------------------
Stephen P. Mumblow
</TABLE>


                                      -80-
<PAGE>   81


                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
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               Amended and Restated Bylaws of the 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.

3.4               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               Specimen certificate for the shares of Class A common stock of
                  the Company. Previously filed as Exhibit 4.1 to the Company's
                  Registration Statement on Form S-1 (File No. 333-05479), and
                  incorporated herein by reference.

4.2               Senior Secured Note dated May 19, 1993. Previously filed as
                  Exhibit 4.1 to the Company's Registration Statement on Form
                  S-1 (File No. 33-59624), and incorporated herein by reference.

4.3               Indenture dated May 15, 1993 relating to the Company's 11%
                  Senior Secured Notes due May 15, 2003. Previously filed as
                  Exhibit 4.3 to the Company's Registration Statement on Form
                  S-1 (File No. 33-59624), and incorporated herein by reference.

4.4               First Supplemental Indenture dated July 30, 1996 relating to
                  the Company's 11% Senior Secured Notes due May 15, 2003.
                  Previously filed as Exhibit 4.5 to the Company's Registration
                  Statement on Form S-1 (File No. 333-05479), and incorporated
                  herein by reference.

4.5               Form of Second Supplemental Indenture in the form of an
                  Amended and Restated Indenture dated November 8, 1996 relating
                  to the Company's 11% Senior Secured Notes due May 15, 2003.
                  Previously filed as Exhibit 4.1 to the Company's Current
                  Report on Form 8-K filed on November 15, 1996 (File No.
                  1-12407), and incorporated herein by reference.
</TABLE>

<PAGE>   82


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
4.6               Notice of Trustee dated November 8, 1996 with respect to the
                  release of the security interest in the Trustee on behalf of
                  the holders of the Company's 11% Senior Secured Notes due May
                  15, 2003. Previously filed as Exhibit 4.2 to the Company's
                  Current Report on Form 8-K filed on November 15, 1996 (File
                  No. 1-12407), and incorporated herein by reference.

4.7               Form of Subordinated Note. Previously filed as Exhibit 4.8 to
                  the Company's Registration Statement on Form S-1 (File No.
                  333-05479), and incorporated herein by reference.

4.8               Indenture dated as of November 15, 1996 between the Company,
                  certain of its subsidiaries and State Street Bank and Trust
                  Company, as trustee, relating to the Company's 9 5/8% Senior
                  Subordinated Notes due 2006. Previously filed as Exhibit 4.11
                  to the Company's Registration Statement on Form S-3 (File No.
                  333-14789), and incorporated herein by reference.

4.9               Form of 9 5/8% Senior Subordinated Note due 2006. Previously
                  filed as Exhibit 4.12 to the Company's Registration Statement
                  on Form S-3 (File No. 333-14789), and incorporated herein by
                  reference.

4.10              Form of 8 5/8% Senior Subordinated Note due 2007. Previously
                  filed as Exhibit 4.10 to the Company's Annual Report on Form
                  10-K for fiscal year ended December 31, 1997, (File No.
                  1-12407), and incorporated herein by reference.

4.11              Indenture dated as of September 25, 1997 between the Company,
                  certain of its subsidiaries, and State Street Bank and Trust
                  Company, as trustee, relating to the Company's 8 5/8% Senior
                  Subordinated Notes due 2007. Previously filed as Exhibit 4.2
                  to the Company's Current Report on Form 8-K filed on September
                  30, 1997 (File No. 1-12407), and incorporated herein by
                  reference.

4.12              Indenture dated August 15, 1997, relating to Outdoor
                  Communications, Inc. 9 1/4% Senior Subordinated Notes.
                  Previously filed as Exhibit 4.1 to the Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1998,
                  (File No. 1-12407) and incorporated herein by reference.

4.13              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank as Trustee, dated
                  October 1, 1998. Previously filed as Exhibit 4.2 to the
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1998, (File No. 1-12407) and incorporated herein
                  by reference.

4.14              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  October 23, 1998. Previously filed as Exhibit 4.3 to the
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1998, (File No. 1-12407) and incorporated herein
                  by reference.

4.15              Supplemental Indenture to the Indenture dated November 15,
                  1996 among the Company, certain of its subsidiaries and State
                  Street Bank and Trust Company, as Trustee, dated October 23,
                  1998. Previously filed as Exhibit 4.4 to the Company's
                  Quarterly Report on Form 10-Q for the period ended September
                  30, 1998, (File No. 1-12407) and incorporated herein by
                  reference.
</TABLE>


<PAGE>   83


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
4.16              Supplemental Indenture to the Indenture dated September 25,
                  1997 among the Company, certain of its subsidiaries and State
                  Street Bank and Trust Company, as Trustee, dated October 23,
                  1998. Previously filed as Exhibit 4.5 to the Company's
                  Quarterly Report on Form 10-Q for the period ended September
                  30, 1998, (File No. 1-12407) and incorporated herein by
                  reference.

4.17              Indenture dated as of August 10, 1999 between the Company and
                  State Street Bank and Trust Company, as Trustee. Previously
                  filed as Exhibit 4.1 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.

4.18              First Supplemental Indenture dated as of August 10, 1999
                  between the Company and State Street Bank and Trust Company,
                  as Trustee. Previously filed as Exhibit 4.2 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.

4.19              Supplemental Indenture to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated July
                  20, 1999. Previously filed as Exhibit 4.1 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-30242) filed on November 12,
                  1999 and incorporated herein by reference.

4.20              Supplemental Indenture to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  September 15, 1999. Previously filed as Exhibit 4.2 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.

4.21              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  September 15, 1999. Previously filed as Exhibit 4.3 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.

4.22              Supplemental Indenture to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated July
                  20, 1999. Previously filed as Exhibit 4.4 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-30242) filed on November 12,
                  1999 and incorporated herein by reference.

4.23              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  July 20, 1999. Previously filed as Exhibit 4.5 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.
</TABLE>


<PAGE>   84



<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
4.24              Supplemental Indenture to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  September 15, 1999. Previously filed as Exhibit 4.6 to Lamar
                  Advertising Company's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1999 (File No. 0-30242) filed on
                  November 12, 1999 and incorporated herein by reference.

4.25              Supplemental Indentures to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee. Previously
                  filed as Exhibit 4.7 to Lamar Advertising Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1999
                  (File No. 0-30242) filed on November 12, 1999 and incorporated
                  herein by reference.

4.26              Supplemental Indentures to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee. Previously
                  filed as Exhibit 4.8 to Lamar Advertising Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1999
                  (File No. 0-30242) filed on November 12, 1999 and incorporated
                  herein by reference.

4.27              Supplemental Indentures to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee.
                  Previously filed as Exhibit 4.9 to Lamar Advertising Company's
                  Quarterly Report on Form 10-Q for the period ended September
                  30, 1999 (File No. 0-30242) filed on November 12, 1999 and
                  incorporated herein by reference.

4.28              Supplemental Indenture to the Indenture dated August 15, 1997
                  among Outdoor Communications, Inc., certain of its
                  subsidiaries and First Union National Bank, as Trustee, dated
                  December 23, 1999. Filed herewith.

4.29              Supplemental Indenture to the Indenture dated November 15,
                  1996 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  December 23, 1999. Filed herewith.

4.30              Supplemental Indenture to the Indenture dated September 25,
                  1997 among Lamar Media Corp., certain of its subsidiaries and
                  State Street Bank and Trust Company, as Trustee, dated
                  December 23, 1999. Filed herewith.

10.1              Consulting Agreement dated July 1, 1996 between the Lamar
                  Texas Limited Partnership and the Reilly Consulting Company,
                  L.L.C., of which Kevin P. Reilly, Sr. is the manager.
                  Previously filed as Exhibit 10.2 to the Company's Registration
                  Statement on Form S-1 (File No. 33-05479), and incorporated
                  herein by reference.

10.2              Indenture dated as of September 24, 1986 relating to the
                  Company's 8% Unsecured Subordinated Debentures. Previously
                  filed as Exhibit 10.3 to the Company's Registration Statement
                  on Form S-1 (File No. 33-59624), and incorporated herein by
                  reference.

10.3*             The Lamar Savings and Profit Sharing Plan Trust. Previously
                  filed as Exhibit 10.4 to the Company's Registration Statement
                  on Form S-1 (File No. 33-59624), and incorporated herein by
                  reference.
</TABLE>


<PAGE>   85


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
10.4              Trust under The Lamar Corporation, its Affiliates and
                  Subsidiaries Deferred Compensation Plan dated October 3, 1993.
                  Previously filed as Exhibit 10.11 to the Company's Annual
                  Report on Form 10-K for the fiscal year ended October 31, 1995
                  (File No. 33-59624), and incorporated herein by reference.

10.5*             1996 Equity Incentive Plan. Previously filed as Exhibit 10.14
                  to the Company's Registration Statement on Form S-1 (File No.
                  333-05479), and incorporated herein by reference.

10.6              Bank Credit Agreement dated December 18, 1996 between the
                  Company, certain of its subsidiaries, the lenders party
                  thereto and The Chase Manhattan Bank, as administrative agent.
                  Previously filed as Exhibit 10.18 to the Company's Annual
                  Report on Form 10-K for the fiscal year ended October 31, 1996
                  (File No. 1-12407), and incorporated herein by reference.

10.7              Amendment No. 1 to the Bank Credit Agreement dated as of March
                  31, 1997 between the Company, the Subsidiary Guarantors party
                  thereto, the Lenders party thereto and the Chase Manhattan
                  Bank, as administrative agent. Previously filed as Exhibit
                  10.1 to the Company's Quarterly Report on Form 10-Q for the
                  period ended March 31, 1997 (File No. 1-12407), and
                  incorporated herein by reference.

10.8              Amendment No. 2 to the Bank Credit Agreement dated as of
                  September 12, 1997 between the Company, certain of its
                  subsidiaries, the lenders party thereto and The Chase
                  Manhattan Bank, as administrative agent. Previously filed as
                  Exhibit 10.2 to the Company's Current Report on Form 8-K filed
                  on September 30, 1997 (File No. 1-12407), and incorporated
                  herein by reference.

10.9              Amendment No. 3 to the Bank Credit Agreement dated as of
                  December 31, 1997 between the Company, certain of its
                  subsidiaries, the lenders party thereto and The Chase
                  Manhattan Bank, as administrative agent. Previously filed as
                  Exhibit 10.9 to the Company's Annual Report on Form 10-K for
                  fiscal year ended December 31, 1997, (File No. 1-12407), and
                  incorporated herein by reference.

10.10             Contract to Sell and Purchase, dated as of October 9, 1996,
                  between the Company and Outdoor East L.P. Previously filed as
                  Exhibit 10.16 to the Company's Registration Statement on Form
                  S-3 (File No. 333-14677), and incorporated herein by
                  reference.

10.11             Stock Purchase Agreement, dated as of September 25, 1996,
                  between the Company and the shareholders of FKM Advertising,
                  Co., Inc. Previously filed as Exhibit 10.17 to the Company's
                  Registration Statement on Form S-3 (File No. 333-14677), and
                  incorporated herein by reference.

10.12             Stock Purchase Agreement dated as of February 7, 1997 between
                  the Company and the stockholders of Penn Advertising, Inc.
                  named therein. Previously filed as Exhibit 2.1 to the
                  Company's Current Report on Form 8-K filed on April 14, 1997
                  (File No. 1-12407), and incorporated herein by reference.

10.13             Asset Purchase Agreement dated as of August 15, 1997 between
                  The Lamar Corporation and Outdoor Systems, Inc. Previously
                  filed as Exhibit 2.1 to the Company's Current Report on Form
                  8-K filed on August 27, 1997 (File No. 1-12407), and
                  incorporated herein by reference.
</TABLE>


<PAGE>   86


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
10.14             Bank Credit Agreement dated July 16, 1998, between the
                  Company, certain of its subsidiaries, the lenders party
                  thereto and The Chase Manhattan Bank, as administrative agent.
                  Previously filed as Exhibit 10.1 to the Company's Quarterly
                  Report on Form 10-Q for the period ended June 30, 1998, (File
                  No. 0-020833), and incorporated herein by reference.

10.15             Amendment No. 1 to the Amended and Restated Bank Credit
                  Agreement dated September 15, 1998, between the Company,
                  certain of its subsidiaries, the lenders party thereto and The
                  Chase Manhattan Bank, as administrative agent. Previously
                  filed as Exhibit 10.4 to the Company's Quarterly Report on
                  Form 10-Q for the period ended September 30, 1998 (File No.
                  0-20833) and incorporated herein by reference.

10.16             Stock Purchase Agreement dated as of October 1, 1998, between
                  the Company and the stockholders of Outdoor Communications,
                  Inc. named therein. Previously filed as Exhibit 2.1 to the
                  Company's Current Report on Form 8-K filed on October 15, 1998
                  (File No. 0-20833), and incorporated herein by reference.

10.17             Amendment No. 4 to Credit Agreement dated as of March 31,
                  1998, between Lamar Advertising Company, certain of its
                  subsidiaries, the lenders party thereto and The Chase
                  Manhattan Bank, as administrative agent. Previously filed as
                  Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
                  for the period ended March 31, 1998 (File No. 1-12407), and
                  incorporated herein by reference.

10.18             Second Amended and Restated Stock Purchase Agreement dated as
                  of August 11, 1999 among the Company, Lamar Media Corp.,
                  Chancellor Media Corporation of Los Angeles and Chancellor
                  Mezzanine Holdings Corporation. Previously filed as Appendix A
                  to the Company's Schedule 14C Information Statement filed on
                  August 13, 1999 and incorporated herein by reference. Pursuant
                  to Item 601(b)(2) of Regulation S-K, the Schedules and Annexes
                  A and B referred to in the Second Amended and Restated Stock
                  Purchase Agreement are omitted. The Company hereby undertakes
                  to furnish supplementary a copy of any omitted Schedule or
                  Annex to the Commission upon request.

10.19             Bank Credit Agreement dated August 13, 1999, between Lamar
                  Media Corp., certain of its subsidiaries, the lenders party
                  thereto and The Chase Manhattan Bank, as administrative agent.
                  Previously filed as Exhibit 10.1 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-30242) filed on November 12,
                  1999 and incorporated herein by reference.

10.20             Stockholders Agreement dated as of September 15, 1999 by and
                  among Lamar Advertising Company, Chancellor Media Corporation
                  of Los Angeles, Chancellor Mezzanine Holdings Corporation and
                  the Reilly Family Limited Partnership. Previously filed as
                  Exhibit 10.2 to Lamar Advertising Company's Quarterly Report
                  on Form 10-Q for the period ended September 30, 1999 (File No.
                  0-030242) filed on November 12, 1999 and incorporated herein
                  by reference.

10.21             Registration Rights Agreement dated as of September 15, 1999
                  among Lamar Advertising Company, Chancellor Media Corporation
                  of Los Angeles and Chancellor Mezzanine Holdings Corporation.
                  Previously filed as Exhibit 10.3 to Lamar Advertising
                  Company's Quarterly Report on Form 10-Q for the period ended
                  September 30, 1999 (File No. 0-030242) filed on November 12,
                  1999 and incorporated herein by reference.
</TABLE>


<PAGE>   87


<TABLE>
<CAPTION>
Exhibit No.       Description
-----------       -----------
<S>               <C>
10.22             Assumption Agreement dated as of July 20, 1999 is by and among
                  Lamar Advertising Company, Lamar Media Corp., and the direct
                  and indirect subsidiaries of such corporations. Previously
                  filed as Exhibit 10.4 to Lamar Advertising Company's Quarterly
                  Report on Form 10-Q for the period ended September 30, 1999
                  (File No. 0-030242) filed on November 12, 1999 and
                  incorporated herein by reference.

10.23             Joinder Agreement to the Lamar Media Corp. Credit Agreement
                  dated August 13, 1999 by Lamar Florida, Inc. in favor of The
                  Chase Manhattan Bank, as Administrative Agent dated December
                  23, 1999. Filed herewith.

11.1              Statement regarding computation of per share earnings. Filed
                  herewith.

21.1              Subsidiaries of the Company. Filed herewith.

23.1              Consent of KPMG LLP. Filed herewith.

27.1              Financial Data Schedule for the Company. Filed herewith.

27.2              Financial Data Schedule for Lamar Media Corp. Filed herewith.
</TABLE>

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*        Management contract or compensatory plan or arrangement in which the
         executive officers or directors of the Company participate.